Communication Is A Crucial Determinant Of Business Relationships Marketing Essay

Marketing » Communication Is A Crucial Determinant Of Business Relationships Marketing Essay

Explain the communication process. How does one ensure that the intended audience has received the right message?

What is communication? Communication is the process of relaying the message such as idea or information that is sent and perceive by the others. It involves speaker and receiver. When the receiver understood the meaning of which send by sender, the communication is completed. People, animals or devices can be the sender and the receiver.

Effective communication is meant by receive and understand information in a manner intended by the sender of the receiver to do so, stimulate other to take actions, and encourage people to think in new ways that is the process of effective communication. That mean we are able to express ourselves by verbally and non-verbally in the ways to appropriate to our cultures and situations. We also need our fears to ask for advice and helps.

Communication can be formal or informal, spoken or written and internal or external. In fact, it can even be a simple smile. Communication can be divided into verbal communication and non-verbal communication.

Verbal communication is meant that the communication is with words. It is quite complex because different country have different languages and each languages have millions of words. To make language exchange is meaningful, but generally have a voice in the series likely to be accepted meaning of understanding. In other words, voice and text communication is not enough: people send messages and receive messages and the general must have a shared cultural background or knowledge, so that they understand these sounds to mean.

Non-verbal communication is means the communication without words which is by body signal. For example is gesture, body language or posture; facial expression and eye contact, object communication such as clothing, hairstyles, architecture, symbols, and by the above combined.

 Communication occurs in many forms. You can pick up the phone and have a conversation with your supervisor or leave her voice-mail message if she is unavailable. You can choose, instead, to write her a memo and send it by e-mail. In turn, she can respond to your message in the form of her choice. Your supervisor may decide to forward your message to other employees or managers, and they may communicate it to customers and other outsiders. The process is fluid; the form in which a message is communicated changes constantly.

In the communication, there has the communication process. Communication process is meant that the process which consist of a message being sent and received. The message can be verbal or non-verbal communication. This is the feedback element, in order to ensure that you receive the message as intended. Communication is the lifeblood of an organization. It includes the structure through which message pass and the way information is presented, as well as the actual content of the message them. Whether you are speaking or writing, listening or reading, communication is more than a single act. The communication process consists of 4 main key components such as encoding, channel and medium, decoding and feedback. Thus there are also have others components which is sender and receiver in the communication process.

Receiver sends feedback to sender.

Receiver interprets message. (decoding)

Receiver gets message.

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Sender transmit message.

Sender transforms idea into message. (encoding)

Sender has an idea.

Sender as the instructor of the message, we need to formulate the message that you intend to communicate. There are two factors will determine how effective the communicator will be that is the communicator’s attitude and selection of meaningful symbols. You conceive an idea and want to share it. And the sender transforms the idea into a message. External barriers such as noise must also be considered. 

Message is the communication in writing, in speech, or by signals. And also it is both sent by the information source and received by the destination. To physically transmit your message to your receiver, you select a communication channel and medium. 

Carrier or channel, which is no label from a small box in the model represented. The most common sources of air, light, electricity, radio waves, paper and postal systems. If so, and the students own internal barriers. Possible internal barriers may include the student's level of experience, their understanding of the terms used, their attitude toward the material, or the way they feel about you. Third, your students, through the use of psychological decoding image information. For example, when you say the word circus, the receiver does not "see" the letters constitute a word. On the contrary, there is some kind of mental image.

The receiver is simply the person receiving the message, making sense of it, or understanding and translating it into meaning.  For communication to occur, your receiver must first get the message. 

The receiver interprets the message. Your receiver must cooperate by decoding your message, absorbing and understanding it. Then the decoded message has to be stored in the receiver's mind. If all goes well, the message is interpreted correctly; that is, the receiver assigns the same basic meaning to the words as you intended and responds in the desired way.

Feedback is that reaction I just mentioned. It can be a verbal or nonverbal reaction or response. It can be external feedback (something we see) or internal feedback (something we can’t see), like self-examination. It’s the feedback that allows the communicator to adjust his message and be more effective. Without feedback, there would be no way of knowing if meaning had been shared or if understanding had taken place.

The communication process is repeated until both parties have finished expressing themselves. The process is effective only when each step is successful. In other words, idea cannot be communication if any step in this process is skipped or is completed incorrectly.

The barriers of communication in between of people can ensure that the intended audience has received the right message. The barriers of communication which can ensure that the intended audience has received the right message such as differences in perception, incorrect filtering, language problems, poor listening, different emotional states and different background.

 These annoyances don't generally block communication, but they may reduce the receiver's concentration. Communication barriers, even if you successfully complete these six steps, other hurdles may prevent you from communicating affectively. Communication barriers, even if you successfully complete these six steps, other hurdles may prevent you from communicating affectively. Communication is successful only when the receiver understands the message as intended by the sender. Noise is any interference in the communication process that distorts or obscures the sender's meaning. Noise takes the form of various communication barriers and can exist between individual as well as within organization.

For a businessman, communication is very important for them to do the business. The success of any business is to network as much as possible and establish a sound, because it is not personal skills and business savvy professional relationship. Communication is a crucial determinant of business relationships. This is very important to say, at the right time, in the appropriate locations, with partners, customers and stakeholders to address the right thing. Any improper or ambiguous communication can pour your hard work, a bucket of cold damage in today's competitive business environment, the chance of survival. Maintenance of oral and written business communication is the most important professional etiquette must not be taken lightly. We should be grateful that we are in an enlightened age, we have in the sun for any training opportunities to live! Today, many courses are available, for development of communication skills on how to improve business communication skills and correspondence courses, and training. Effective communication skills in business in a very long way to go to cover your success.

As the Product Manager of a soon-to-be-launched product, explain the methods, the medium, and the vehicles that you would use to communicate with your target audience to persuade them to buy your product. Produce one (1) advertisement for your product. *student may decide on whatever product that they wish.

A pencil case or pencil box is a container used to carry pencils. A pencil case can also contain a variety of other stationery such as a pencil sharpener, pens, erasers, a stapler, and a calculator.

Pencil cases are usually made of either hard or soft plastic. Soft versions are typically fastened with a zipper. Decorated versions are popular with school children, often with licensed character artwork. In some regions, guidelines during examinations for students require for pencil cases to be transparent, to prevent the hiding of notes within for the purposes of cheating.

Pencil boxes are usually made of hard plastic or wood, while the term pencil case is broader and often refers to a container made of soft material such as fabric, leather or soft plastic.

Now we want to change the pencil case to become a cosmetic bag also. It will bring more benefits to others to earn more and more money. The bags can do it in many where.

As a pencil case’s product manager, we will soon to launch out a new pencil case product to make sure it can bring more benefit to others. Our pencil case named as YMY. It is a case that consumer can take care of their things carefully, this is the function of the pencil case. Beside, consumer can also to keep things nicely, and won’t be an untidy people. And then, the product material has passed the Societe Generale de Surveillance (SGS) test, meet European standard and have excellent experience exporting to Euro and USA countries.

Recently, the target of pencil case is children. But now, we add on a new target which is woman. For ladies, they like to keep on their cosmetic such as mascalar, eyeliner, lipstick and so on inside their cosmetic bag. Thus they can put the cosmetic case into their handbag, and become nicely. When we need it, we no need to search and find it every where, it will be keep in nice in bag so that we can easy to find it.

Next is price of the product. The price of the product, we will set it as cheap as possible because not everyone has ability to buy it if we set the price too high. Pricing must be competitive and must entail profit. The pricing strategy can comprise discounts, offers and others. So we set the price of pencil case as RM14.90 only. We won’t set it at very high, just set it at normal price, so that it can give an opportunity for everyone to buy it.

When buying children's products are not limited to stationery, in addition to the preferences of children themselves, the parents pay only a selection of its leadership. In addition to children with can cause Xing, boom on the eve of the new semester started, but also all kinds of new goods is the market a great opportunity to attract consumers attention.

Even today most prices of pencil case are decided on the basis of the competition in the market. Discount price YMY products are often marked down during sale periods and special occasions. This will follow it: Generate sales Increase profits. We can put our product in the shop such as Guardian and Watsons because these shop have selling cosmetic for lady. Lady likes to spend more time to shopping this type of shop to buy their cosmetics. Thus we put our product near to the lady cosmetic also.

First of all, we design a leaflet with colourful to attract the consumer especially is for the children. After that, we put the leaflet into the newspaper, lady magazines, and so on. Besides that, we also can distribute the leaflet around the offices and stationery shop and also explain the benefit of our product and let them take it back to home and consider it can or buy or not.

We also can use this type of promotion to promote our product: buy one free one. For example: when consumer buys something that above RM100.00, the cashier prepares it to send for the consumer as a free gift. It is based on consumer behavior, because many people like the small gift. Besides that, consumer can take it to send to her friend or whatever as a souvenir to them.

If they buy more, they can have a cheaper price or maybe will receive some free gift. It will be the best to attract the consumer to willing to buy the product. If really buy more, we have to prepare a van to send the goods to your house. This is another service for those who are buying many goods from us.

We can also advertising it in the prime media such as television, newspaper, magazines, and so on. After we promote it by our promotion, we can take the feedback about the product that we sale from the consumer and then to alter our product and make it become more perfectly and usefully to all consumer.

Our product material has passed the Societe Generale de Surveillance (SGS) test, meet European standard and have excellent experience exporting to Euro and other countries. This can protect consumers by choosing our product. Combination of sewing skills of the design of the small case. The design of our product is owned by our designer. They design it accordingly to the taste of the consumer. We offer our product in justice price so that consumer will think that it is value for money. The box size is big and it will help to keep a lot of things in our product.

Businesses must think about products on three different levels, which are the core product, the actual product and the augmented product. Consumers will buy YMY pencil case because of the high standards and high quality material of our product. Actual Product-Marketer must then build the actual product around the core product. We could about it in the marketing mix. Augmented product-offer additional consumer benefits and services. But YMY pencil case provide the warranty of the pencil case, if have any problems within one year, we will give the service for customers who are not satisfied with product or wish to give feedback on the products.

Production needs in time and meet the requirements of the places from the wholesalers. It must also be effective, so as not to build inventory and inventory stock prices. Marketing needs to be inspired and the product knowledge. Such as advertising promotions forms, must attract and attractive target market to get the most exposure possible product. This will ensure the success of products in the store. The distribution of the product must be valid.

As a conclusion, the company must determine for different market segments and to keep in the forefront. Most marketing programs started to provide the company's marketing strategy of the overall situation, and then down into the details of how the practical realization of these goals and objectives. Most business owners should set a goal of the marketing budget, and provide the plan will be implemented in different ways. Another smart technique to use in a marketing plan is delegated responsibility to a specific person within the company. 

The plan should determine what type of customers targeted and the reason is for these particular clients. How to attract these customers will be the details of the products or services should be included in the program, and how these specific marketing strategy, will help to preserve and maintain existing customer loyalty. Customers are top priority within the company, how is the digital marketing plans to attract customers within a priority. 



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Consumers Products And Services Value Perception

 


Value is defined in the pricing literature as the trade-off between customers' perceptions of benefits received and sacrifices incurred (e.g. Leszinski and Marn, 1997). Monroe (1990) and Gale (1994) cited quality as customers' primary benefit. Monroe (1990) proposed that the sacrifice component exerts the greater influence on buyers' value perceptions. All noted that the role of price is complex and customers do not buy solely on the basis of low price. The context, customers' access to information and past associations also affect price perceptions and consequently customers' value determination (Monroe, 1990).


Other definitions of value have a broader interpretation of sacrifice, in which non-monetary factors such as time and effort are included (e.g. Butz and Goodstein, 1996; Carothers and Adams, 1991; GroÈnroos, 1997; Kotler, 1996; Naumann, 1995; Treacy and Wiersema, 1995; Zeithaml, 1988). Sacrifice is again defined from the customer's perspective, as emphasised by Doyle's (1989, p. 78) definition of value as ``not what the producer puts in, but what the consumer gets out''.


Many authors have acknowledged the difficulties involved in defining value (e.g. Piercy and Morgan, 1997; Woodruff, 1997). These stem from the subjectivity of value (Hardy, 1987), variations between customers (WikstroÈm and Normann, 1994), within customers (Parasuraman, 1997), between cultures (Assael, 1995), in different situations (Ravald and GroÈnroos, 1996), pre- and post-purchase (Gardial et al., 1994), and between tangible and intangible offerings (Naumann, 1995).


This is compounded by customer value being a dynamic concept that evolves over time (Jaworski and Kohli, 1993). Indeed it has been claimed that customer value is inherently ambiguous (Naumann, 1995) and that value could be considered “one of the most overused and misused terms in marketing and pricing today” (Leszinski andMarn, 1997, p. 99).


In an attempt to consolidate the diverse definitions, Woodruff (1997, p. 142) proposed: ``Customer value is a customer's perceived preference for and evaluation of those product attributes, attribute performances, and consequences arising from use that facilitate (or block) achieving the customer's goals and purposes in use situations''. Although the multiple contexts, tasks and criteria in Woodruff's definition reflect the richness and complexity of the concept, they impede its translation into a measurable operational definition (Parasuraman, 1997).


Most consumers will adopt all of these buying behaviors, but to varying degrees, behaving in different ways according to the type of product they are purchasing and the purchase situation. However each buying behavior group has different triggers in terms of information, support and persuasion.


Marketing communications across the differing buying behavior groups vary enormously. For the brand-focused group, traditional advertising, such as posters, press and TV, will continue to play a part and a key message will be emotional reassurance that they are buying the ‘right' brand. The brand should be dominant in all communications, but especially when presenting the brand in nontraditional media such as the internet.


Brand-focused consumers respond to strongly-branded consumer offers and merchandise via the post - good news for the direct marketing industry. But this group requires constant reassurance and the dissemination of information will be particularly vital should the sector undergo rapid change or suffer some crisis. Maintaining brand trust is critical to this behavior group.


Price-sensitive consumers need to experience value for money at every stage of the buying process. Marketers should build and maintain everyday low-price brand perceptions, and advertising should play a key part in this. Direct communications should be simple, appear inexpensive and emphasise special offers, moneyback deals and price comparisons with competitive brands. And if you want to drive this traditionally less new-media savvy behavior group on to the internet, demonstrate the low prices they can expect to find there. Everybody loves a bargain but none more so than this group. Communications must highlight value, and news of special prices or invitations to events such as special sales evenings will work well.


Feature-savvy consumers are information-hungry and will respond to direct marketing that offers product information such as comparisons with competitors and independent product reviews. Internet sites are ideal for presenting this information.


Independent editorial will carry greater weight than paid-for advertising, so effective public relations will pay dividends.


Call centre personnel must be highly trained and knowledgeable about the brand they are representing. They should be able to answer complex questions and provide comparative details. Brand is least important to these consumers.


Personal interaction is key to influencing the buying behavior of advice-led consumers. Testimonials, access to online chat rooms and online shopping guides will also play their part. Word of mouth will be the best reference, and in this respect, telephone operators will need to be both authoritative and reassuring at the same time. Reassurance can also be conveyed through moneyback guarantees and returns policies, and can help to overcome post-purchase dissonance. It is widely anticipated that these buying behaviors can be applied in different markets, although to varying degrees, and the communications applied ‘tweaked' accordingly.


Higher-level needs approach the status of values, which are critical determinants of behaviour (Baier, 1969). Rokeach (1968) regarded a value as “an enduring belief that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or end-state of existence'. For Schwartz and Bilsky (1987) values transcend specific situations and one of the most widely accepted value inventory is the Rokeach Value Survey (RVS). The RVS measures 18 instrumental values and the same number of terminal values. Instrumental values are related to preferred modes of conduct such as honesty and friendliness which people know can lead to being accepted by others and to having good relations with others. Instrumental values are thus means to reach a goal. Terminal values are more related to end-state goals such as wisdom, happiness and freedom.


Instrumental values are: ambitious, broad-minded, capable, cheerful, clean, courageous, forgiving, helpful, honest, imaginative, independent, Intellectual, logical, loving, obedient, polite, responsible, self-controlled.


Terminal values are: a comfortable life, an exciting life, a sense of accomplishment, a world at peace, a world of beauty, equality, family security, freedom, happiness, inner harmony, mature love, national security, pleasure, salvation, self-respect, social recognition, true friendship, wisdom.


Vinson and Lamont (1977) devised a model of consumer value systems (fig.1) by arranging values at three different levels and giving a hierarchical arrangement to them.


People are not born with their values. Rather, values are passed from one generation to another; they are learned. Engel (1986) point out that some values are relatively constant while others are subject to change. They propose that the triad of families, religious institutions and school plus early lifetime experiences leads to a model of intergenerational value transmission.


Products and services quality perceptions represent consumer judgment about the superiority of a product or service, which the user-based approaches think is essential in describing quality. Bundles of attributes together represent a certain level of quality, which therefore provide utility to the customer. The benefits are measured through a perceived level of quality (level of working superiority), a bundle of attributes in comparison with the consumer's expectations. Schiffman and Kanuk (2004) stated consumers often judge the quality of a product on the basis of a variety of informational cues that they associate with the product. They also stated that the cues can either be intrinsic or extrinsic. Intrinsic cues are related to the physical characteristics of the product itself, like size, colour, flavour, aroma etc. The extrinsic cues on the other hand are related to elements that are put together with the actual product like packaging, pricing, advertising etc. The perceived quality of products and services is central to the theory that strong brands add value to consumers' purchase evaluations.


Brand loyalty is the ultimate desired outcome of consumer learning. Brand loyalty is the likelihood of positive attitudes and behaviors of consumers towards a particular brand, this could amount to repeat purchase and positive word of mouth. A loyal customer base is an asset for a company and it reduces the need for seeking new customers. It is also a known fact that retaining current customers requires less money and effort than getting new ones. The strongest measure of brand value is the loyalty a company produces among customers.


Because product quality perceptions influence value, efforts of marketers focus on improving product quality in order to enhance perceptions of value, and consequently purchase intentions leading to loyalty.


The most functional and fundamental means of identifying a market is by its systems of needs. By literally seeing the purchase decision maker's problem through the decision maker's eyes, it is quite easy to determine:

what combination of product characteristics represent real value,how to communicate the product for the maximum perception of value, and, once that's done,how likely the respondent will be to buy.

1. Assael, H. (1995), Consumer Behavior and Marketing Action, 5th ed., South-Western College Publishing, Cincinnati, OH;


2. Band, W.A. (1991), Creating Value for Customers, John Wiley & Sons, New York, NY;


3. Bhat, S. and Reddy, S.K. (1998), ``Symbolic and functional positioning of brands'', Journal of Consumer Marketing, Vol. 15 No. 1, pp. 32-43;


4. Brandenburger, A.M. and Stuart, H.W. (1996), ``Value-based business strategy'', Journal of Economics and Management Strategy, Vol. 5 No. 1, pp. 5-24;


5. Butz, H.E. and Goodstein, L.D. (1996), ``Measuring customer value: gaining the strategic advantage'', Organizational Dynamics, Vol. 24, Winter, pp. 63-77;


6. Carothers, G.H. Jr and Adams, M. (1991), ``Competitive advantage through customer value: the role of value-based strategies'', in Stahl, M.J. and Bounds, G.M. (Eds), Competing Globally through Customer Value. The Management of Strategic Suprasystems, Quorum Books, New York, NY;


7. Doyle, P. (1989), ``Building successful brands: the strategic objectives'', Journal of Marketing Management, Vol. 5 No. 1, pp. 77-95;


8. Durgee, J.F., O'Connor, G.C. and Veryzer, R.W. (1996), ``Observations: translating values into product wants'', Journal of Advertising Research, November/December, pp. 90-110;


9. Engel, J.F., Blackwell, R.D. and Miniard, P.W. (1995), Consumer Behavior, 8th ed., The Dryden Press, Fort Worth, TX;


10. Farquhar, P.H. (1994), ``Strategic challenges for branding'', Marketing Management, Vol. 3 No. 2, pp. 8-15;


11. Fournier, S. and Yao, J.L. (1997), ``Reviving brand loyalty: a reconceptualization within the framework of consumer-band relationships'', International Journal of Research in Marketing, Vol. 14, pp. 451-72;


12. Gale, B.Y. (1994), Managing Customer Value. Creating Quality and Service that Customers Can See, The Free Press, New York, NY;


13. Gardial, S.F., Clemons, D.S., Woodruff, R.B., Schumann, D.W. and Burns, M.J. (1994), ``Comparing consumers' recall of prepurchase and postpurchase product evaluation experiences'', Journal of Consumer Research, Vol. 20, March, pp. 548-60;


14. GroÈnroos, C. (1997), ``Value-driven relational marketing: from products to resources and competencies'', Journal of Marketing Management, Vol. 13, pp. 407-19;


15. Hansen, F. (1972), Consumer Choice Behavior: A Cognitive Theory, The Free Press, New York, NY;


16. Keller, K.L. (1998), Strategic Brand Management. Building, Measuring and Managing Brand Equity, Prentice-Hall, Upper Saddle River, NY;


17. Kotler, P. (1996), Marketing Management, 9th ed., Prentice-Hall, Upper Saddle River, NY;


18. Leszinski, R. and Marn, M.V. (1997), ``Setting value, not price'', The McKinsey Quarterly, Vol. 1, pp. 99-115;


19. Levitt, T. (1980), ``Marketing success through differentiation of anything'', Harvard Business Review, January-February, pp. 83-91;


20. Mathur, S.S. and Kenyon, A. (1997), Creating Value, Butterworth-Heinemann, Oxford;



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Analysis Of Sales Promotion Marketing Essay

 


Successful promotion campaigns dont happen by chance. To realize goals, promotional products programs must be carefully planned, taking into consideration the audience, budget and, of course, the ultimate result to be gained.


1. Define a specific objective.


Whether the goal is to increase traffic at a trade show exhibit or to boost sales with current clients, the first step in any campaign is to clarify the purpose of the program.


2. Determine a workable distribution plan to a targeted audience.


Distribution of a promotional product is as important as the item itself. Research shows that a carefully executed distribution plan significantly increases the effectiveness of promotional products. For example, a pre-show mailing to a select audience delivers more trade show traffic and qualified leads than simply distributing items to passerby at the show.


3. Create a central theme.


Linking a recognizable logo and color to all aspects of a campaign, from promotional products to sales sheets to product packaging, helps create an instantly recognizable image.


4. Develop a message to support the theme.


Supporting a campaign's theme with a message helps to solidify a company's name, service or products in the target audience's mind. For instance, to promote its services to small businesses, a bank created the theme "Are you tired of being treated like a small fish?" and sent fish-related products to its prospects along with promotional literature.


5. Select a promotional product that bears a natural relationship to your profession or communications theme.


A good example is a company that developed a magic motif for its conference at Disney World. Attendees received magic-related products to tie in with the theme "Experience the magic at Disney."


6. Don't pick an item based solely on uniqueness, price or perceived value.


Don't fall prey to the latest trends or fads. The most effective promotional products are used in a cohesive, well-planned campaign


Promotion: This includes advertising, sales promotion, publicity, and personal selling, branding and refers to the various methods of promoting the product, brand, or company


Sales promotion is one of the four aspects of promotional mix.


Sales promotions are non-personal promotional efforts that are designed to have an immediate impact on sales. Media and non-media marketing communications are employed for a pre-determined limited time to increase consumer demand, stimulate market demand or improve product availability. Examples include:


coupons


discounts and sales, including Indonesia food store Sale


contests


point of purchase displays


rebates


free samples (in the case of food items)


· gifts and incentive items


· free travel, such as free flights


Sales promotions can be directed at either the customer, and / or distribution channel members (such as retailers).


Sales promotions targeted at the consumer are called consumer sales promotions.


Sales promotions targeted at retailers and wholesale are called trade sales promotions. Some sale promotions, particularly ones with unusual methods, are considered gimmick by many.


Consumer promotions are targeted towards end consumers. Tools include samples, coupons, cash refunds, price packs, premiums, advertising specialties, patronage rewards, point-of-purchase displays and demonstrations, and contests, sweepstakes and games.


Trade promotion is directed to the retailer and/or wholesaler. The point of a trade promotion is to persuade resellers to carry a brand, give it shelf space, promote and push it. Tools used for consumer promotions can also be used as trade promotions. In addition, manufacturers will do things like offering discounts off list price, advertising allowances and display allowances as trade promotion tools.


They try to promote itby :


-stockholding bonus


-sales target


-bonus for performance


-retailer contests.


-special rebate for above target performance.


What sales Promotions would u recommend for :


1.Tv Media service like Media TV


CONSUMERS


consumer coupons


consumer contests


point of purchase displays


gifts


incentive items


free travel, such as free flights


-sales target


-bonus for performance


-retailer contests.


Company Proposing Launch of new car (BMW)


CONSUMERS


consumer contests


point of purchase displays


gifts


incentive items


free travel, such as free flights


RESELLERS


-stockholding bonus


-sales target


-bonus for performance


-retailer contests.


Company launching coffee makers,


consumer coupons


consumer volume discounts and sales,


consumer contests


point of purchase displays


free samples


gifts


-stockholding bonus


-sales target


-bonus for performance


-retailer contests.


-special rebate for above target performance.


Consumer durable product like Air conditioner, where dealer support is necessary to achieve target, they can try to do as follows :


consumer contests


point of purchase displays


free samples


gifts


incentive items


-stockholding bonus


-sales target


-bonus for performance


-retailer contests.


-special rebate for above target performance.


Bus way trans Jakarta ,


consumer coupons


consumer contests


incentive items


free monthly cards,


Lux Soaps, A detergent facing Heavy Competition.


CONSUMERS


consumer coupons


consumer volume discounts and sales,


consumer contests


point of purchase displays


free samples


gifts


incentive items


free travel, such as free flights


RESELLERS


-stockholding bonus


-sales target


-bonus for performance


-retailer contests.


-special rebate for above target performance.


Small hand tools are mostly sold through independent acehardware STORES


and hardware chains. Most of the customers are


-garage owners


-small builders


-renovators


-handyman


-repairers


-tool makers


-small workshops


-major workshops


etc etc


We need to do :


-stockholding bonus


-sales target


-bonus for performance


-retailer contests.


-special rebate for above target performance.


3. Program for consumer


consumer coupons


consumer volume discounts and sales,


consumer contests


point of purchase displays


rebates


free samples


gifts


incentive items


free travel, such as free flights



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Customer Loyalty In The Malaysian Hotel Industry Marketing Essay

Evaluation of customers’ perception and satisfaction of service quality is widely acknowledged as being a favourable strategy in the hotel industry, especially its significant impact on business performance, corporate image, customer satisfaction, customer loyalty and profitability (Kandampully & Hu, 2007; Ladhari, 2009b; Mohsin & Lockyer, 2010). This research proposal aims to provide an assessment of service quality suggested by Grönroos (1982; 1990) by empirically examining hotel guests’ perception of process quality and outcome quality; and the relationships between the perceived service quality, customer satisfaction, corporate image and customer loyalty in the Malaysian hotel industry. This research proposal contains few different parts to provide a further understanding of the whole research. First, it outlines the background of the study with enclose the information related to the examined industry. It follows by discussions of problem statement, research questions and research objectives and the significance of the study to provide a fundamental understanding of the whole research. The next part of this research proposal is the literature review, proposed theoretical framework, and hypotheses development. The research paper will end with a list of related references.

The hotel industry in Malaysia has experienced successful growth that was brought by the fantastic economic performance from the travel and tourism industry. The hotel industry will continue to offer unlimited commercial opportunities for the country and businesses alike. In 2010, it has been forecasted that approximately 24 million tourists are expected to visit our shores. With this influx of tourists to Malaysia, the potential tourism receipts has been estimated to reach RM54 billion by the end of 2010 (Bernama, 2010). Furthermore, the United Nations World Tourism Organisation (UNWTO) had placed Malaysia in the top ten list in terms of tourist arrivals for 2009 (Bernama, 2010). In line with the growing number of tourists, the hotel industry in Malaysia has also stepped-up its development and upgrade programmes. As of February 2010, the Malaysian Association of Hotels (MAH) recorded a total of 522 hotels with 99,443 hotel rooms to cater for more tourist arrivals. Their commitment towards the industry is very encouraging and has stirred many hotel operators to strive harder in improving their respective standards.

The competitive nature of this industry in achieving service excellence is continuing to lead hotel operators to constantly sort new methods in building strong positive experiences amongst their patrons. The delicate balance between handling the most basic needs while creating pampering and memorable moments is an essential touch which every customer looks for when living away from home. Thus, it is important for hotel operators to keep abreast of the current and future needs of the ever-evolving industry, and respond to the demands of the increasingly sophisticated hotel guests. Innovation and creativity is crucial in maintaining a competitive edge in the hotel industry. Thus, hotel operators need to work with a spirit of originality and ingenuity; especially in creating unique and distinctive service elements to exceed the hotel guests’ expectations; translating their experiences into a favourable corporate image and creating customer loyalty.

Service quality has been a frequently studied topic in the literature of service marketing. Grönroos (1982; 1990) argued that the quality of a service as perceived by customers has two dimensions: process (functional) dimension and outcome (technical) dimension. Reviews of past literature revealed that much of the earlier research in the hospitality service quality have concentrated mainly on the process quality dimension, and consequently on the SERVQUAL instrument (Chitty, Ward & Chua, 2007; Ladhari, 2009a). Less effort has been made to incorporate both process quality and outcome quality in the hospitality industry (Chitty et al., 2007), especially in the Malaysian context. Thus, the literature to date fails to offer much insight on how service process and outcome may be differentially related to various types of service evaluation, such as service quality and customer satisfaction (Dabholkar & Overby, 2005).

Customer satisfaction is a result of comparison of the service performance with expectation. The consequences of customer dissatisfaction are overwhelming and hotel operators should concern themselves with their customer’s level of satisfaction. Therefore, the elements of a truly satisfied customer must be determined, and only then is it possible to implement a programme to attain and maintain a higher level of service quality (O’Neill & Palmer, 2004; Torres & Kline, 2006). However, as noted by Sidin, Rashid and Zainal (2001) there is still misunderstanding between the hotel operators and customers in perceiving the service quality; research revealed that many service organisations develop their own perceptions of what customers want, which often differ from what the customers really want. For the implementation of customer satisfaction measurement to be a success, one must choose the appropriate customer satisfaction model.

Customer satisfaction is a result of comparison of the service performance with expectation. In general, most scholars (e.g., Oliver, 1997; Bowen & Shoemaker, 1998; Gustafsson & Johnson, 2004) testify that satisfaction is a necessary step towards customer loyalty. However, it is interesting to know that customer satisfaction does not always translate into customer loyalty in the hospitality industry. Studies conducted by several researchers in the hotel industry (e.g., Bowen & Chen, 2001; Skogland & Siguaw, 2004) revealed that customer satisfaction may not always lead to customer loyalty. Results of the study did not support customer satisfaction as an indicator of customer loyalty (Olsen, 2002). The diversity has led to a gap which needs to be studied.

The findings of previous research (e.g. Faullant, Matzler, & Füller, 2008; Kandampully & Suhartanto, 2003, 2007; Kandampully & Hu, 2007) revealed that image in addition to overall satisfaction executes a strong impact on loyalty intention; and the inclusion of image and customer satisfaction in a research model provides a better explanation for customer loyalty. While a number of studies address the significant role of corporate image in determining consumer perception and consequent behaviour in hospitality literature (e.g. Back, 2006; Faullant et al., 2008; Kandampully & Suhartanto 2000, 2003; Kandampully & Hu, 2007; Nguyen & Leblanc, 2002); there is little empirical evidence to support the mediating role of corporate image for customer satisfaction and customer loyalty especially in the Malaysian hotel industry. As such, this research attempts to evaluate the mediating role of corporate image on customer satisfaction and customer loyalty; at the same time to further examine the relationships between (1) customer satisfaction and customer loyalty, (2) customer satisfaction and corporate image; and (3) corporate image and customer loyalty within the hotel industry in Malaysia.

In response to the research problems, this study would explore the research questions as stated below:

Do process quality (consists of reliability, assurance, tangible, empathy and responsiveness) and outcome quality affect the overall guests’ perceived service quality of hotels in Malaysia?

What is the relationship between the overall guests’ perceived service quality and their satisfaction level with the hotels in Malaysia?

What is the relationship between guests’ satisfaction and customer loyalty with the hotels in Malaysia?

What is the relationship between guests’ satisfaction and corporate image with the hotels in Malaysia?

What is the mediating effect of image on hotel guests’ satisfaction and their loyalty with the hotels in Malaysia?

This research aims to provide an assessment of service quality by empirically examining hotel guests’ perception of process quality and outcome quality; and the relationships between the perceived service quality, customer satisfaction, corporate image and customer loyalty in the Malaysian hotel industry. In order to achieve the aim, a number of research objectives have been designed. These objectives are stated as below:

To assess the influence of process and outcome service quality dimensions on the hotel guests’ perceived service quality in the Malaysian hotel industry.

To evaluate the relationship between the hotel guests’ perceived service quality and their satisfaction level with the hotels in Malaysia.

To explore the impact of hotel guests’ satisfaction level on their loyalty with the hotels in Malaysia.

To evaluate the influence of hotel guests’ satisfaction level on corporate image in the Malaysian hotel industry.

To identify the influence of corporate image on customer loyalty with the hotel in Malaysia.

To examine the mediating role of image on customer satisfaction and customer loyalty in the hotel industry in Malaysia.

Overall, this proposed research attempts to contribute to several fields of study relating to the objectives. In terms of theoretical contribution, this research seeks to further develop this construct (i.e. hotel outcome quality), in order to contribute to the service quality body of knowledge by providing insight on the effect of process quality and outcome quality on hotel guests’ perceptions of service quality; and to examine the relationships between the perceived service quality, customer satisfaction, corporate image and customer loyalty of hotel industry in Malaysia. For managerial contribution, this research will determine aspects of hotel services which are important to customers, and to suggest ways to improve the hotel service quality, customer satisfaction, corporate image and customer loyalty. At the same time, to address practical implications by recommending relevant and effective micro-marketing strategies for the hotel industry in Malaysia. This knowledge is useful for benchmarking better practices in hotel service concept among hotel operators in Malaysia.

In policy contribution, the intended outcomes of this research is important to provide more empirical evidence and guidelines for the Ministry of Culture, Arts and Tourism in drafting relevant policies for the hotel industry in Malaysia to identify the effective ways to improve service quality, and more importantly how the perceived service quality translates into customer satisfaction, corporate image and customer loyalty among hotel operators in the country. For methodological contribution on the other hand, this research will examine and validate service quality suggested by Grönroos (1982; 1990) by empirically examining hotel guests’ perception on process quality and outcome quality. Evaluation of the customer’s perception of hotel service quality and their level of satisfaction are essential to ascertain effective strategies for hotel operators, more importantly to improve customer loyalty and to strengthen corporate image.

Service quality incorporates the concept of meeting and exceeding the expectations of the customer, and has been a frequently studied topic in the service marketing literature since its inception in the late 1970s (Antony, Antony & Ghosh, 2004). During the past few decades service quality has become a main area of attention among practitioners, managers and researchers due to its significant impact on business performance, lower cost, customer satisfaction, customer loyalty and profitability (Seth, Deshmukh & Vrat, 2005). According to Atilgan, Akinci and Aksay (2003), in both domestic and international markets, the importance of service concept is increasingly recognised in parallel with economic development and increasing standards of living. The hospitality industry, especially hotels, is not exception to this rule (Claver, Tarí & Pereira, 2006; Ladhari, 2009b; Mohsin & Lockyer, 2010). Evaluation of customers’ perception and satisfaction of service quality is widely acknowledged as being a favourable strategy in the hotel industry. Consequently, hotel operators are now directing their efforts to understanding how guests perceive the quality of services, and more importantly how these perceptions translate into customer satisfaction and customer loyalty (Ekinci, Dawes & Massey, 2008; Kandampully & Hu, 2007; Ladhari, 2009b; Olorunniwo, Hsu & Udo, 2006).

It is now more than 20 years since the SERVQUAL instrument was first introduced in the service marketing literature by Parasuraman, Zeithaml and Berry (1985). From that time on, its structure and conceptualisation have been replicated, modified and refuted by many scholars (Seth et al., 2005). The previous research using the SERVQUAL instrument has enhanced our understanding in the measurement of service quality. However, one common criticism of SERVQUAL has been the point that the instrument highly emphasises the process quality or service delivery process (Grönroos, 1990; Mongold & Babakus, 1991; Richard & Allaway, 1993). Although, there is no agreement in general as to the basis or content of the service quality dimensions (Brady & Cronin, 2001). Nevertheless, there is a general viewpoint that service quality should be a multidimensional or multi-attribute construct (Cronin & Taylor, 1992; Ekinci et al., 1998; Grönroos, 1990; Kang & James, 2004; Parasuraman et al., 1985, 1988). Richard and Allaway (1993) argued that utilising only process quality attributes to explain and/or predict consumer’s behaviour might be a misspecification of service quality and have low predictive validity.

To this respect, Ekinci et al. (1998) noted that service quality theories which are dominated by multidimensional structures can be formed under two schools of thought, namely the American or European perspective; researchers generally adopt one conceptualisation in their research, (Brady & Cronin, 2001; Ladhari, 2009a; Kang & James, 2004). The focus on process quality attributes is referred to as the American perspective of service quality. Whereas, the European perspective suggests that service quality considers both process quality and outcome quality components. Process quality focuses on “how”, and dictates how the service and its concurrent production and consumption process are received and experienced by customers. Whereas, outcome quality focuses on “what”, and considers issues as after the completion of the service production process when the interactions between providers and their customers have ceased (Chitty et al., 2007; Kang, 2006). Reviews of the past literatures indicate that much of the earlier research in hotel service quality has concentrated on the SERVQUAL instrument, and consequently, on the process quality dimension (Kang & James, 2004). Less effort has been made to the service quality dimensions suggested by Grönroos (1982; 1990) (Ekinci et al., 1998; Kang & James, 2004, Kumar, Smart, Maddern & Maull, 2008), especially in the Malaysian hotel industry.

Customers evaluate quality of service by comparing their expectation with their perception (Parasuraman et al., 1988). In this case, customer satisfaction arises when services, as seen by customers, meets or surpass their anticipation (Reid & Bojanic, 2001). Pittsburgh and Salomon (1994) predicted that a hotel which cannot meet customers’ expectations or fail to fulfil customers’ service requirements would be out of business in seven to nine years. Thus, in order to survive, hotel operators need to build appropriate service standards regarding customers’ wishes and desires (Min, Min, & Chung, 2002). Being able to successfully judge customers’ perceptions and meet their satisfaction would provide hotel operators great advantages over competitors; particularly in terms of product differentiation, increasing tourist retention, encouraging repeat and new customers, positive word of mouth promotion, as well as to enhance the firm’s image in the marketplace (Kandampully and Hu, 2007).

Imagery studies have a long tradition in tourism research (Faullant et al., 2008). The concept of corporate image should incorporate an individual’s overall impression of a company versus it counterparts in the same industry (Keller, 2002). The association between corporate image and a hotel’s offering is much more difficult to pinpoint because of the large intangible component of the hotel’s offer. Kandampully and Hu (2007) noted that a hotel’s corporate image is influence by both service quality and customer satisfaction, they strengthen the hotel’s corporate image in gaining customer loyalty. Thus, the main drive to customer loyalty appears to be through favourable image of the hotel as perceived by the guests. Favourable corporate image of a hotel is created by improving service quality and customer satisfaction. In general, previous empirical studies (Faullant et al., 2008; Kandampully and Hu, 2007) have supported the influence of corporate image on a customer’s hotel decision making process. The results of their empirical investigation in the hospitality setting revealed that an organisation’s corporate image has a critical role in forming perceived service quality, customer satisfaction and more importantly behavioural intentions.

Practitioners as well as academic understood the central importance of customer loyalty to business success (Faullant et al,, 2008). With an understanding of what makes customers return to a hotel, managers can develop a strategy to improve service quality and customer loyalty (Schall, 2003). In general, most researchers agreed that customer satisfaction is likely to have a strong influence on customer loyalty in the hospitality industry (e.g. Back, 2005; Faullant et al., 2008; Kandampuly & Hu, 2007; Mason, Manson, Tideswell & Roberts, 2006). However, the relationship between customer satisfaction and customer loyalty does not seem to be linear, researchers have reported doubts about the predictability of loyalty solely due to customer satisfaction ratings which ignore image as predictor of loyalty (Faullant et al., 2008). This indicates that it is not mere cognitive evaluation of service quality and in turn customer satisfaction but also the more emotional perception of the corporate image that drives loyalty. Inclusion of image and customer satisfaction in one model not only serves to highlight the important of image, but also provides a better explanation for customer loyalty (Faullant et al., 2008; Kandampuly & Hu, 2007; Kandampully & Suhartanto; 2003).

With the identified problem statement, research questions and research objectives in mind; the proposed conceptual framework is constructed on theoretical foundations in perceived service quality (consists of process quality and outcome quality), customer satisfaction, corporate image and customer loyalty. The proposed conceptual framework for this study is presented as below:

As noted in the previous discussions, very few hospitality research has been conducted to investigate the service quality dimensions as proposed by Grönroos (1982; 1990), especially in the Malaysian context. Therefore, this research proposal aims to provide an assessment of service quality by empirically examining hotel guests’ perception of process quality and outcome quality. According to Ekinci et al. (2008, p. 36) “despite a long-term interest in the understanding of customer satisfaction, its relationship with service quality and the consumers’ overall attitude to a service firm is still unclear”. Thus, the literature on hotel service quality to date fails to offer much insight on how perceived service quality may be differentially related to various types of service evaluation, such as service quality and customer satisfaction. As such, the first hypothesis for the proposed study is postulated as below:

The relationship between customer satisfaction and customer loyalty has enjoyed a surge of popularity in the service marketing literature; researchers generally testify that satisfaction is an indicator of customer loyalty (Chitty, 2007; Kandampully & Suhartanto, 2000; Olorunniwo et al., 2006; Schall, 2003). In contrast, it is interesting to note that customer satisfaction may not always be the direct impact in generating favourable customer loyalty in the hotel industry (Bowen & Chen, 2001; Olsen, 2002; Skogland & Siguaw, 2004). The diversity has lead to a gap which needs to be studied. As such, the second hypothesis is postulated as below:

Customer satisfaction not only helps the firm to sustain loyalty from its customers but, more importantly to enhance the firm’s image in the marketplace. According to Kandampully and Hu (2007) the relationship between customer satisfaction and corporate image was also found to be statically significant in the hotel industry. However, the impact of customer satisfaction on corporate image especially in the hospitality literature becomes rare (e.g. Kandampully and Hu, 2007). As such, the third hypothesis is postulated as below:

In general many researchers have reported that the perception of corporate image has an impact that drives hotel loyalty (e.g. Founllant et al., 2008; Han, Hsu & Lee, 2009; Kandampully and Hu, 2007; Kandampully and Suharhanto, 2000, 2003). However, the relationship between corporate image and customer loyalty does not seem to be linear, and may not directly impact on loyalty (Chi & Qu, 2007; Faullant, et al., 2008). This however is rather derived empirically and is less persuasive from a theoretical perspective. Thus, concerning the relationship between image and loyalty there is little agreement among researchers (Faullant et al., 2008; Ryu, Han and Kim, 2008). As such, the forth hypothesis is postulated as below:

According to Faullant et al. (2008), customer satisfaction is an important driver of loyalty. However, it is not a very reliable and not the only determinant of loyalty. Added to this, some researchers have reported doubts about the predictability of loyalty solely due to customer satisfaction ratings which ignore corporate image as predictor of customer loyalty in the hotel industry (e.g. Kandampully and Hu, 2007; Kandampully and Suharhanto, 2000, 2003; Han et al., 2009). They suggested that both corporate image and customer satisfaction should be included when measuring customer loyalty, as this will provide a better explanation for customer loyalty. In view of that, the fifth hypothesis is postulated as below:

Four constructs consisting of perceived service quality, customer satisfaction, corporate image and customer loyalty are operationalised in order to test the proposed research model. For the research design, descriptive research will be used in the research. Convenience sampling will be adopted in this research because the potential sampling units are drawn from those guests who stayed overnight at the hotels in Malaysia during the survey period. The proposed sample size of 400 potential respondents will be taken for the research. The data will be collected through self-administrated questionnaire with multiple scales of each construct and demographic enquiries. The survey questionnaire contains 49 questions relate to hotel guests’ perceptions of service quality, customer satisfaction, corporate image and customer loyalty toward the hotel that they most recently stayed in Malaysia. Respondents are required to indicate their perceptions on each statements based on a 7-point Likert scales, ranging from 1 (strongly disagree) to 7 (strongly agree). The constructs illustrated in Appendix 1 are operationalised by adapting existing items found within a wide range of research literature.

Before assessing the research model it is necessary to establish the validity and reliability of the modified items developed for this research. In order to have a valid construct, the items comprising a construct must be unidimensional. That is, all scales must be congeneric (i.e. measure one and only one latent construct) even though the latent constructs themselves may be intercorrelated. An initial exploratory factor analysis will be conducted for the variables developed for the purpose of this research using SPSS to ascertain the factor structure of the model relative to the hotel industry and other context under study. Structural Equation Modelling (SEM) will be used to analyse the reliability and validity of data and the hypothesised relationships in the proposed research model.

With the identified problem statement, research questions, research objectives and research hypotheses in mind; this research aims to empirically examine hotel guests’ perception of process quality and outcome quality; and to explore the relationships between hotel guests’ perceived service quality, customer satisfaction, corporate image and customer loyalty in the Malaysian hotel industry as proposed in the research model. Hence, this research will determine aspects of services which are important to customers, and to suggest ways to improve the hotel service quality, customer satisfaction, corporate image and customer loyalty. At the same time, to address some practical implications by recommending relevant micro-marketing strategies for the hotel industry in Malaysia.



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Factors Affecting Average Spending Power Marketing Essay

Krajewski & Ritzman (1987) Operation management is the systematic direction and control of the process that transforms inputs into finished goods and services. Operations management involves the responsibility to ensure that business operations are efficient in terms of resource use as little as a necessary and effective in terms of customer requirements. At this current age, hospitality has grown up much bigger than even it was expected in last couple of decades. It is one of the most leading business sectors in the business world but in many different forms where efficient service is being offered to the clients using as little resources as possible to gain the client satisfaction.

Throughout this report we will be finding how the hospitality operations management performs in the practical business market and necessary theoretical evident discussion will be done to emphasis the aspects of the topic.

The average spending power is a compromise or could be called as a joint decision between equal partners in the pricing process such as between the hotel or restaurant and the customers.

In the context of hospitality, the customers are usually offered with a wide range of food and beverage items of different price labels which actually brings about average spending power. Generally the average spending power is very much depended on the customer or guests’ whims or impulse.

The spending power could be affected by the following factors -

Size of income

Status

Socio/cultural influences

Economic situation

There are number of stages in product and service development process, the key stages are follows -

Market research,

Market segmentation,

Idea evaluation,

Concept development

Product development

Advertising objectives

Create

Desire

Create awareness

Sell

Increase market share

Develop brand loyalty

Customer awareness

(http://churchill.ac/moodle/file.php/52/Stages_of_Product_Development.ppt)

are follows –

The market research is a systematic way to meet, to store and to analyze of data in markets, competition, future tendencies and other factors affect the business operational process. It is done generally to be to more clients oriented and in other way to advance the efficiency and the effectiveness of the whole operational process.

Market Segmentation could be defined as the identification of a subset of consumers, so that a combination of the marketing thinks up to satisfy specifically its demand.

Advertising are generally a paid way of non-personal form of presentation and promoting the idea or ideas, goods or services by a particular company or sponsor intended to reach their desired set of customers. It is the leading marketing weapon in the market place. This process requires objectives like other marketing elements.

The advertising objective varies for individual organisation depending on the time of advertising. Using this process advertiser expect short or long time benefits. Competition, consumer behaviour, revenue and profits will all influence the advertising objectives from time to time.

The following issues are affecting the product and service development -

Availability of resources; human, financial, and physical resources

standardisation,

style of service,

space utilisation

The opportunities are -

Persuade customers to patronise the hotel or restaurant often.

Create desire for product/service in the winds of potential customers

Emphasise benefits and advantages of the products/ services (http://churchill.ac/moodle/mod/resource/view.php?id=665)

Create an awareness of the product

Increase the market share

Improve revenue

Influence the attitude of the public towards the product

Improve brand loyalty

Confirm in the minds of customers that they have made the correct choice

Enhance the desired image of the hotel or restaurant

(http://churchill.ac/moodle/mod/resource/view.php?id=665)

Cost-oriented pricing involves the determination of all fixed and variable costs associated with a product or service. After the total costs attributable to the product or service have been determined, managers add a desired profit margin to each unit.

Cost-oriented pricing method could be summarized as –

Cost + Fixed profit percentage = Selling price

Market-oriented pricing determines Pricing at the same level as the competition. The organization has to assess how its product relates to a competitive product and set its price at a comparable level to stay competitive in the market place. 

Service Charge,

Cover Charge,

Minimum Charge

A system.

(http://churchill.ac/moodle/mod/resource/view.php?id=744)

The following factors affect Revenue Generation and Profitability in Hospitality Operations –

Sales mix

It is a way of mixing the relative set of products together and setting up a comparatively lower price than the sum of individual products together as promotion to raise the organizational total sale, but it is actually less than the total amount it could be if it was sold as individual, therefore it affect the revenue generation at the end.

Customer turnover

Revenue generation depend on customer turnover, if the customer are not attracted by the product or satisfied with the service, they would not come back to organization again and therefore sales will be very badly affected and revenue generation at the same time.

Average spending power (ASP)

Average spending power is completely depend on the customers will; customers are free to decide whether to spend extra or not. If the average spending power of the customer or guests lower down, the sales will go down as well therefore the revenue will be affected as where there is no sales there is no revenue.

Labour intensity

To produce goods or to delivered service large amounts of human effort is required specially the industry like hospitality where they are very much people oriented. The larger the human effort against the product or service the larger the amount would be paid and would lower the profitability.

Shelf-life

Self-life determines the length of time a product may be stored or preserved without deterioration; the length of time it remains usable. If the product or service is not suitable to use it will be left as waste and therefore it will affect the profitability very badly.

Elasticity of demand

If the availability against demand is not met properly the profitability will go down as sales will go down.

Building trust and rapport

Objectivity

Balancing praise and criticism

Getting buy-in

Making them motivational

Career plans

(http://churchill.ac/moodle/file.php/52/Appraisal_and_improved_performance.ppt)

The organizations take decisions time to time to carry on developing their products or to improve the service they usually offer. This sort of decision should be taken based on their management and development strategy set by the organisation earlier. The set of decisions has to be structured or arranged in a sorted manner so that they can be used in the future to keep their standards of the product or services.

In order to produce or offer a quality service the organisation must set the objectives targeting the goal which they are intended to achieve. The objectives could couple in numbers depending on the organisation and the label of their product and services. After setting up the objectives the organisation will follow the production or operation strategy to achieve the objectives for that particular stage.

To identify areas for improvement on operations.

Identify areas where products and services are thriving as well as areas of failure.

To improve on performances

To identify constraints and capitalise on opportunities (http://churchill.ac/moodle/file.php/52/Appraisal_and_improved_performance.ppt)

Method adopted by a firm to set its selling price. It usually depends on the firm's average costs, and on the customer's perceived value of the product in comparison to his or her perceived value of the competing products. Different pricing methods place varying degree of emphasis on selection, estimation, and evaluation of costs, comparative analysis, and market situation. See also pricing strategy. (http://www.businessdictionary.com/definition/pricing.html)

In other word, Pricing is a fundamental aspect of financial modelling, and is one of the four Ps of the marketing mix. The other three aspects are product, promotion, and place. Price is the only revenue generating element amongst the four Ps. Pricing is the manual or automatic process of applying prices to purchase and sales orders. (http://churchill.ac/moodle/file.php/52/price_and_profitability.ppt)

To develop the price for a new product the following strategy would be followed -

Developing marketing strategy – perform marketing analysis, segmentation, targeting and positioning.

Make marketing mix decision – define the product, distribution, and promotional tactics.

Estimate the demand curve – understand how quantity demanded varies with price.

Calculate Cost – include fixed and variable costs associated with the products.

Understand environmental factors – evaluate likely competition actions, understanding legal constraints etc.

Set Pricing Objective – for example, profit maximization, revenue maximization, or price stabilization.

Determine Pricing – Using information collected in the above steps, select a pricing method, develop the pricing structure and define discounts (http://churchill.ac/moodle/file.php/52/price_and_profitability.ppt)

In this part of the report, I will be discussing the relevant practical issues required by the project and presenting some evidential information found throughout my individual research on TESCO PLC, Hancock Road, Broomly –By – Bow, London E3 3DA.

Tesco plc is a British international grocery and general merchandising retail chain founded by Jack Cohen in 1919. The brand first appeared after Cohen bought a shipment of tea from T.E. Stockwell and he used those initials and added the first two letters of his own surname. The first Tesco store was opened in 1929 in Burnt Oak, Edgware, Middlesex. During the 1950s and the 1960s Tesco grew organically, and also through acquisitions, until it owned more than 800 stores. Originally specialising in food and drink, it has diversified into areas such as clothing, electronics, financial services, telecoms, home, health, car and dental insurance, retailing and renting DVDs, CDs, music downloads, Internet services and software. It is the largest British retailer by both global sales and domestic market share, with profits exceeding £3 billion, and the third largest global retailer based on revenue, after Wal-Mart and Carrefour and second largest in profit behind Wal-Mart. (http://www.thefree4all.com)

Figure and information extracted from (http://en.wikipedia.org/wiki/Tesco)

Figure: The Current information about TESCO PLC

Tesco Broomly-By-Bow offers Food, Beverage, and quality services. They also offers non-food items including holiday accessories, travel insurance etc. The food range comprised with frozen, chilled, regular item. Fresh produce (Fruit, Vegetable) items are even offered there.

Clothes, World Foods, Asian, Halal, Afro Caribbean, Greek, Polish

There are number of influences affecting the patterns of demand

External Factor

Several National customers – Several different expectation

Religious aspects on foods – Halal Food

Competitive price offered by the competitor

Range of product

Current financial crisis etc.

Internal Factor

Product Packaging

Competitive Price offered by Tesco

Multi buy product mix offered

Product design

Value product to attract the customer with low spending budget

Tesco’s backlog Policy

The profile of the client could be defined as description of client that includes demographic, geographical, and characteristics of psychographic, buying guideline, the reliability, and the history of purchase.

A complete survey been done to the TESCO Broom-By-Bow branch among the customer and the details are bellow -

Research Method

Primary research (Field research, fresh data)

Questionnaire survey (Close ended)

Sampling (Selecting set of customer from a larger number of customers)

Location: Broomly-By-Bow

Secondary research (Existing data)

Internet

After surveying 100 customer of different age group the following result is been found -

Figure: Top chart describes the likings on different age group; Bottom Chart shows the overall product expectation to the TESCO Broomly-By-Bow.



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Consumers Whole Buying Process Marketing Essay

 


As an astute marketer, it takes responsibilities to consider consumers whole buying process rather than just the purchase decision, due toloyal consumers represent the company assets. These studies indicate the important factors for marketer to understand each stages of consumer decision making process in order to compete in the intensive market and gain competitive advantage (Sousa et al., 2010).Thus, firms are able to generate more cash flows and consumers repetition.Besides, marketer should understand the consumer’s characteristic that will shape consumer behavior.


In need recognition stage, consumers may realise that its current mobile phone unable to access internet and plan to purchase for a new smart phones to satisfy internal needs. Thus, marketer should create consumers awareness regarding the benefits that its product can offer and how well it can offer compare to competitors.To stimulate market demand, marketer need to list out the products attributes, for example Third-I transform the ordinary surface into an interactive touch screen display and allow users to access internet at anytime, anywhere.


Consumers tend to acquire for solutions to their needs. Hence, information search can be categorized into two phase, internal or external search. To purchase high involvement products, consumers are more likely to conduct external search (Orth, 2005). To illustrate, the target market is focus on tech-savvy users, users from this segment normally involve heavily in the use of internet, so they may obtain information from websites. Thus, marketers can create an interactive website that allows consumers to connect with sales force to obtain pre-purchase information and ensure information accessible and visible for consumers who are actively seeking for information.


Consumers will consider variety of factors to make a decision before purchase. Consequently, they will consider in terms of pricing, brand reputation, product features, or even compare the benefits offer by competitors. Therefore, marketer should position its products against competitors byorganizing special events or road show to attract crowdandstrongly stress its products benefitsor distribute brochure to reach potential customers.Besides this, marketer can also allow consumers to test use the real product during the events, so consumers are familiar on the product features and more confidentto make a purchase.


Consumers may have desire or intention to purchase after conduct evaluation. Therefore, consumers will consider where to purchase the products, methodof payment or any discount or free gift provided. So, marketer must understandthe consumers need and be aggressive to satisfy thoseneeds. In the hope of securing sales, marketer must clearly identify where to purchase Third-I and either cash or credit card can be accepted in order to make payment. Besides this, to grab consumer’s attractiveness to purchase Third-I, an instant cash rebate and free gifts will offer tofirst 50 potential customers if they purchase the product during the particular events.


Once the consumers used the product for a period of time, they will start to evaluate their purchasing decision.If the product’s performance did not meet their expectation, consumers will experience in some level of discomfort, which is post purchase dissonance. Therefore, marketer must explore various marketing effort to try to prevent consumer’s remorse, otherwise consumers might tell everyone how bad the product was, as wordof mouth consider very important issues that mightruinthe brand image and reputation. In order to minimise cognitive dissonance and maximise consumer’s credibility, marketer might offer extend warranty to potential customer, along with the instruction user manual in a multilingual form or provide a 24 hours toll-free troubleshooting line for consumers to give feedback. In addition, after sales service is critical important, customers who satisfy will lead to repeat purchases in the future (Heitmann et al., 2007).


Reference group have a direct or indirect influence on a person’s attitude or behavior (Orth, 2005). If celebrities expose a new behavior or lifestyle towards particular stylish products, such as Third-I, this may create conformity for consumers to follow the celebrities act, therefore the greater group’s influence will have powerful force in creating consumers purchasing interest.


Family members have a strong influence on the consumer behavior.To purchase expensive products, husband and wife usually engage in the joint decision making. If a husband purchase Third-I and used it for period of time and recognize that Third-I have a good performance, the wife will normally consider to make a purchase.


Perception is the way by which individual selects, organizes and interprets information into a meaningful experience. Sometimes, customers might expose to Third-I advertisements in the billboards while driving on the road (Bergman, 2006) or being attract by the selective attention such as Third-I slogan, “Your Brand New Digital Era” in the radio advertisement. So, the present of advertisements is the way to get public attention.


Motivation is an inner drive that stimulates need and buyerseeksfor solutions to satisfy, whereas it need to have intense aroused or stimulation before it comes into a motive. Through the purchase of products, it is the drive to satisfy needs and wants. To illustrate, psychological factors motivate customers to purchase smart phones to satisfy acquired needs such as status or ego needs. Therefore, consumers will be motivated to purchase Third-I because they feel keep pace with the tide species by using Third-I.


Lifestyle refers to pattern of living and it can be analysed through purchasing behaviors, demographics, activities, interests and opinions (AIOs). Consumers with tech-savvy behavior normally sensitive towards the advance technological change and they may consider themselves as early adopters and to be on the leading edge in the advanced society. Ultimately, the invention of Third-I is to keep pace with the technology era and aims to be more seamlessly integrate online information and technology into daily life.


Consumer behavior strongly influence by the buyer’s decision making process and buyer’s characteristics. Most of these factors hardly to control by the marketers, thus marketers should identify and keen understanding toward the consumers’ needs and wants.


Nowadays, customers are more knowledgeable, more demanding and more discerning. Some customers response to purchase products based on feeling, emotions or focus on making the wisest economic decision. Therefore it is critical important for marketers to understand what compels the customer to make actual purchase. By understanding the various elements that stimulate customers purchase activity, it definitely helps marketers to design an appropriate marketing strategy for each target market.


(1100 words)



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Plastics Are Organic High Polymers Marketing Essay

 


Plastics are organic high polymers, consisting of large chainlike molecules containing carbon. They are formed when the short-chain molecules of chemicals and monomers are blended together by the process of polymerisation to form large chain-like molecules. Plastics are known for their light weight, anti-rust and good insulation properties and are increasingly becoming substitutes for major commodities such as metals, stones, wood, glass and cotton.


Plastics can exhibit a wide variety of properties from being flexible and soft, to rugged and hard. This is mainly due to the different types of polymers used in the manufacturing process. Polymers are categorised into thermoset, thermoplastics and elastomers.


Thermosets become permanently hard and rigid when heated or cured. Thermoplastics become soft when heated harden when cooled and hence, thermoplastic scraps can be reused and reprocessed through repeated melting and solidification by heating and cooling. Elastomers, also called synthetic rubber are polymers that have the elastic properties of natural rubber. Depending on the type of polymer used in the manufacturing of plastic, the characteristics of the end product vary. The following key segments that form the main constituents of the plastics industry are:


• Polymers


• Performance plastics


The plastic industry of India has a big market potentiality and is gradually prospering. This potentiality of the market will surely actuate the entrepreneurs to invest in this industry. Entrepreneurs are trying to provide high quality plastic products, so that it becomes a booming industry.


The potentiality of plastic industry India propels other associated industries to grow side by side. One of such growing industry is petrochemical industry. Both these industries are reciprocal to each other. The petrochemical industry facilitates the plastic industry to produce plastic products that will meet the domestic demand as well as that of the overseas market.


The plastic processing industry consist of over 30,000 units which are producing a wide range of plastic products through the process of injection moulding, then blow moulding, extrusion, and finally calendaring. Some of the common markets, where plastic products are used are:


End user markets: These are the plastic products basically used for domestic purposes. Some of the end user plastic products are plastic balls, plastic bags, polypropylene bags, polyethylene bags, plastic barrels, plastic caps, plastic bottles, plastic baskets, plastic basins, plastic basins, plastic bowls.


Appliances: These are basically the plastic mechanical components like plastic bearings, plastic bellows, plastic belting etc.


Some other industries, where plastic materials are used are automotive, building & construction, electrical and electronics, industrial, medical, packaging, transportation etc.


The government of India is trying to set up the economic reforms to elevate and boost the plastic industry by joint venturing, foreign investments.


Plastic industry India symbolizing a promising industry and at the same time creating new employment opportunities for the people of India. The per capita consumption of plastic products in India is growing and is moving towards 8% GDP growth.


The Indian plastic industry is highly fragmented with an estimate of around 25,000 firms and over 400,000 employees. The top 100 players of Indian plastic industry account for just 20% of the industry turnover. Barring 10 to 15% of the firms that can be categorized as medium scale enterprises, most of the units operate on a small – scale basis.


Indian plastic industry has made significant achievements in the country ever since it made a promising beginning with the start of production of polystyrene in 1957. The industry is growing at a rapid pace and the per capita consumption of plastics in the country has increased several times as compared to the earlier decade.


The immense potential of Indian plastic industry has motivated Indian manufacturers to acquire technical expertise, achieve superior quality standards and build capacities in different facets of the booming plastic industry. Substantial developments in the plastic machinery sector coupled with matching developments in the petrochemical sector, both of which support the plastic processing industry, have facilitated the plastic processors to develop capacities to cater both the domestic as well as overseas exports.


The Indian plastic industry has taken great strides. In the last few decades, the industry has grown to the status of a leading sector in the country with a sizable base. The material is gaining notable importance in different spheres of activity and the per capita consumption is increasing at a fast pace. Continuous advancements and developments in polymer technology, processing machineries, expertise, and cost effective manufacturing is fast replacing the typical materials in different segments with plastics.


On the basis of value added, share of India's plastic products industry is about 0.5% of India's GDP. The export of plastic products also yields about 1% of the country's exports. The sector has a large presence of small scale companies in the industry, which account for more than 50% turnover of the industry and provides employment to an estimate of about 0.4 million people in the country. Approximately Rs 100 billion are invested in the form of fixed assets in the plastic processing industry.


The Indian plastics industry comprises around 55,000 plastic processing units, spread over both the organised and unorganised sectors, employing an estimated 0.4 million people. About 75 per cent of plastic processing units are in the small-scale sector and these account for about 25 per cent of the total production. There are about 2000 fibre processors, of which 80 per cent are in the smallscale sector. Globally the degree of fragmentation is large and despite the small size of operations of the players, they are able to operate profitably.


More than 95 per cent of firms in the Indian plastics industry operate in the form of partnership, proprietorship or as private limited companies. The key organised sector players include VIP Industries, Nilkamal Plastics Limited and Supreme Industries Limited.


Indian trade was impacted by the global recession of 2007-2009. Indian exports fell from $200.9 billion in 2008 to $165 billion in 2009. India ranked 22nd in the world in terms of export volume.


Being a country with a huge workforce, India has seen its trade being boosted by the production of precious stones and metals. The various other export commodities that India exports are:


Petroleum products


Machinery


Iron and steel


Chemicals


Vehicles


Apparel


India’s main export partners are:


UAE


US


China


Singapore


The following graph shows how the above countries have contributed to the total volume:


In the calendar year 2006, the value of world plastic export was US$ 375 billion. However the share of India was less than 1 % with exports of worth US$ 3.187 billion. The percentage of growth in export was 21 %. During this trend of growth in exports, the export of plastics raw material increased from 55 % to 60 % of the total export of plastic goods, while the export of processed plastic goods has registered a negative growth from 45 % to 9 %. According to recent reports, the industry is said to be losing an opportunity of USD 300 million through value addition on the raw materials that are exported.


USA


UAE


Italy


UK


Belgium


Germany


Singapore


Saudi Arabia


China


Hong Kong


The Indian plastic exports were valued at about US$ 532 million during FY 2004 (1st half FY2005 exports US $ 295 million). With significant capacity additions leading to over-capacity in domestic markets during FY2001 and beyond, polymer exports have increased considerably. However, due to the lower competitiveness of the plastic products industry, polymers have been exported directly.


1. Plastic injection moulds.


2. Compression moulds


3. Investment die casting moulds


4. Blow moulds


5. Pressure die casting moulds.


In the automobile, home-appliances, engineering, oil and paint, refrigerator, irrigation and lighting applications.


Process % Share in Total


Consumption in India


Extrusion 75.6


Injection Moulding 18.0


Blow Moulding 5.1


Rotomoulding 1.3


Total (‘000 tonnes) 4,070


Polymers are processed in a number of ways, to arrive at the end products. The different types of processing include:


• Extrusion – Typical extruded products include films, sheets, piles and filaments


• Injection moulding – This is largely used for industrial applications and making moulded luggage


• Blow moulding – Bottles, containers, toys, etc, are manufactured using the blow moulding process


• Roto moulding – Large circular containers such as water tanks are made using this process


High intensity mixers offer a series of mixers especially for master batch manufacturing. In addition to PVC compounding, powder coating, coloring, granulating, homogenizing, size reduction, dispersing, pulverizing, sintering, drying, toner manufacturing etc. These mixers are proven to manufacture masterbatch from maximum different components (pulverized polymers, wax, lubricants, processing aids etc.), which are heated upto 70 to 130 degree Celsius with frictional heat. The perfect mixing tool, suitable for specific product requirement, is incorporated to gentle and efficient mixing process through optimization of the flow relation within the mixer.


In India there is no duty laid on the export of High Speed/Intensity Mixers. The country I have selected to export is Bangladesh. There is a 20% import duty on High Intensity Mixers at Bangladesh. In India the government is supporting the plastic industry as a whole and the reasons for them have been explained above, that is owing to the tremendous growth and potential of this industry in India. Today the consumption of plastic in India is calculated to be approximately 1kg per person which is assumed to rise by 10kg per person by the year 2012.


Plastic is the substitute to Metal, Wood and other such commodities which are very costly in comparison to plastic. The plastic manufacturers get a subsidy of DEPB license against export done which comes to around 11 to 13% value of the sale and thus the plastic machinery manufacturers are benefitted with it.


A. Plastics & Articles thereof, not elsewhere specified.


(a) When CENVAT facility has not been availed


Rs.8.00 per kg.


3.00


5.00


(b) When CENVAT facility has been availed


Rs.3.00 per kg


All customs


(a) When CENVAT facility has not been availed


Rs.4.00 per kg


2.00


2.00


(b) When CENVAT facility has been availed


Rs.2.00 per kg


All customs


(a)When CENVAT facility has not been availed


Rs.4.50 per kg.


All C.Excise


(a) when CENVAT facility has not been availed


Rs.7.50 per kg.


All C.Excise


(a) When CENVAT facility has not been availed


Rs.19.00 per kg.


9.50


9.50


(b) When CENVAT facility has been availed.


Rs.9.50 per kg.


All Customs


(a) When CENVAT facility has not been availed


Rs.15.00 per kg.


4.00


11.00


(b) When CENVAT facility has been availed


Rs.4.00 per kg.


All Customs


(a) CENVAT facility has not been availed.


Rs.6.00 per kg.


All C.Excise


when CENVAT facility has not been availed


Rs.7.00 per kg.


All C.Excise


when CENVAT facility has not been availed.


Rs 4.50 per kg.


All C.Excise


(a) when CENVAT facility has not been availed


Rs.1.20 per kg.


All C.Excise


(a) Flexible, when CENVAT facility has not been availed


Rs.5.50 per kg.


All C.Excise


(b) Rigid PVC Pipes/conduits and accessories of pipes(Rigid) when CENVAT facility has been not availed


Rs.8.50 per kg.


All C.Excise


(c) Rigid other than (b) above, when CENVAT facility has not been availed


Rs.8.00 per kg.


All C.Excise


when CENVAT facility has not been availed.


Rs.60.00 per kg.


All C. Excise


(a) when CENVAT facility has not been availed.


Rs.9.00 per kg.


All C.Excise


Rs.70.00 per kg.


All C.Excise


Rs.17.00 per kg.


All C.Excise


Rs.28.00 per kg.


All Customs


B. PVC Transparent Hose when


Rs.6.00 per kg.


All Customs


CENVAT facility has not been availed.


C. Woven sacks and bags made of plastic materials other than reinforced plastics 


(a) when CENVAT facility has been not availed  


Rs 18.00 per kg. of net weight of export product.


12.00  


6.00  


when CENVAT facility has been availed.


Rs. 12.00 per kg of net weight of export product.


All Customs


D. Insulated Ware mainly made of plastics.


3% of fob value


All C. Excise


E. Fabrics Tarpaulines and other made up articles made of plastic materials (other than reinforced plastic articles) covered under Ch.39 of theSchedule to the central


Excise Tariff act 1985.


(a)when CENVAT facility has not been availed


Rs.18.00 per k.g on net weight of the product


12.00


6.00


(b) When CENVAT facility has been availed


Rs.12 per k.g of net weight of the export product


All


customs


Jumbo bags/Box bags/flexible Intermediatebulk Containers (FIBC) made of plastic materials other than reinforced plastic


(a) When CENVAT facility has not been availed


Rs.23.00 per k.g of net weight of export product


16.00


7.00


(b) When CENVAT facility has been availed


Rs.16.00 per k.g of net weight of export product


All


Customs


As known, there are many models of these mixers and thus the requirement is based from company to company and product to product. Similarly the pricing is an issue which depends from model to model. In India the models that are manufactured generally range from Rs. 2 lakh to Rs. 2 crores. In India there are approximately 15-18 different types of such models which are manufactured and sold locally as well as exported worldwide.


The machines that are supplied to Bangladesh are generally in the range of Rs. 2 lakh to Rs. 1.5 crores. The foreign market dealings for this product was initially done in dollars but now as the dollar fluctuates a lot, Euros are a more popular medium of dealing with foreign countries for exports.


Plastic Industries of Bangladesh are mainly engaged in manufacture of different products like PVC pipe, Garments accessories, Hanger, poly bag, Polythene bag, and leather, plastic household products, Jute and Textile spares Toys, plastic waste recycling, computer Accessories, auto lighting, plastic Furniture, Poly Propylene woven, Flexible packaging and many. Total resin import in 2005 was 5,40,000 tons and per capita plastic consumption is 3.4 Kgs. Import of plastic resin is increasing by 10% per annum. For export government provides duty free import of raw materials. Plastic goods are mainly exporting to USA, CANADA, UK, JAPAN, AUSTRALIA, FRANCE etc.


Investment Policy of Bangladesh is free and open for foreign investment. Bangladesh gives most attraction Packages of FDI. Countries export growth is 22% in 2006 for all products whereas the national GDP growth was 6.71%.


No matter what race or religion a Bangladeshi belongs to, they have coexisted peacefully for thousand years. It is the friendliest country for investors, with trainable, enthusiastic, diligent and inexpensive labors. It is suitable for development of labor-intensive industries.


The sea and aerial transportation is very convenient hence it is an ideal site of international trade. Although the GDP is still low, but the most important is that there are many middle bourgeoisie who have certain purchasing power. Following the step of economic development, they have become stronger and more competitive. Thus it is an important consumptive market which full of business opportunities.


Bangladesh government is keen on participation of foreign investment for stimulating production and economic growth. Since 1990, the government has announced a number of incentives such as tax holidays, unhindered repatriation of profits, withdrawal of non-tariff barriers in all aspects and duty-free import of capital machinery by export-oriented industries. Bangladesh has been experiencing a major paradigm shift towards industrialization. Gradually, it is transforming towards a more competitive destination for foreign investment.


A vast majority (98 percent) of the people of Bangladesh are Bengalis and they speak the Bengali language. Minorities include Biharis numbering 250,000 and other tribes numbering about a million, with the Chakma being most numerous in number. About 83 percent of Bangladeshis are profess Islam as their religion. The next major religion is Hinduism (16 precent). Other major religions include Buddhism and Christianity.


East Bengal--the region that was to become East Pakistan and now Bangladesh -- was a prosperous region of South Asia until modern times. It had the advantages of a mild, almost tropical climate, fertile soil, ample water, and an abundance of fish, wildlife, and fruit. The standard of living compared favorably with other parts of South Asia. As early as the thirteenth century, the region was developing as an agrarian economy. It was not entirely without commercial centers, and Dhaka in particular grew into an important entrepôt during the Mughal Empire. The British, however, on their arrival in the early seventeenth century, chose to develop Calcutta as their commercial and administrative center in South Asia. The development of East Bengal was thereafter limited to agriculture. The colonial infrastructure of the eighteenth and nineteenth centuries reinforced East Bengal's function as the primary producer--chiefly of rice and jute--for processors and traders in Calcutta and beyond.


The partition of British India and the emergence of India and Pakistan in 1947 severely disrupted the former colonial economic system that had preserved East Bengal (now East Pakistan) as a producer of jute and rice for the urban industrial economy around Calcutta. East Pakistan had to build a new industrial base and modernize agriculture in the midst of a population explosion. Pakistan's five-year plans opted for a development strategy based on industrialization, but the major share of the development budget went to West Pakistan, that is, contemporary Pakistan. Blame was placed by various observers on the West Pakistani leaders who not only dominated the government but also most of the fledgling industries in East Pakistan. More information about the economic exploitation is available.


Post Independence Bangladesh had to face the devastation wrought by earlier economic exploitation during the Pakistan era as well as destruction of critical infrastructure during the war. After many years of economic problems, Bangladesh has started to rebound with steady growth in recent years.


The export method used for plastic machinery is generally only Business to Business. There are not many trade houses. There is a tendency in this business that the employees in a certain manufacturing unit would establish himself as agent and get orders for the company.


There are a few industry associations in India which help the plastic industry as a whole.


AIPMA House, A-52, Street No. 1, M.I.D.C.,


Marol, Andheri (E), Mumbai - 400093, India


http://www.aipma.net/


Plastic machineries are promoted or can be promoted by the following marketing activities or promotional measure:


Newsletters to potential buyers


Websites


Product listing on major internet search engines


Advertisement in magazines (Modern Plastic Worldwide – 2.5lakh copies of this magazine are distributed)


Exhibitions


Trade Fairs


Polymers production in India has been growing at a CAGR of 5.4 per cent between 2001-02 and 2006-07 from 3.9 million tonnes to 5.2 million tonnes, respectively. Performance plastics have been growing, at a CAGR of 8 per cent during the same period. Consumption of polymers in India closely matches production, however in performance the consumption of plastics exceeds domestic production the gap being addressed through imports.


Exports of polymers from India form a small percentage of overall consumption. However, polymer exports have been growing from 5,67,900 tonnes in 2001-02 to 6,94,700 tonnes in 2005-06, CAGR of 5 per cent. Exports of performance plastics have grown more rapidly from just 944 tonnes in 2001-02 to 4,550 tonnes in 2005-06, at a CAGR of close to 50 per cent.


The per capita consumption of plastics in India is very low, at about 4 kilograms per year. The USA and China have an average consumption at 120 kilograms and 17 kilograms, respectively. The world average in per capita consumption of plastics is 25 kilograms per year. Hence, there is significant potential for growth in plastics consumption in India. It is expected that the consumption will nearly double, to about 12 million tonnes by 2010.


Plastics find application in a wide range of products, in industrial and agricultural applications and consumer use. Hence, the demand for plastics depends largely on growth in user segments and overall macro-economic growth. It has been seen that the consumption of polymers is closely linked to the economic development of a country. In this respect, plastics are similar to rubber and driven by the same factors.


Some key drivers for the plastics industry include:


1. Growth in industrial production/manufacturing, especially in consumer durables and automotive sectors, which are key consumers of plastics;


2. Growth in income levels and demographic shifts, leading to increased consumption of plastic products.


The Government of India has been playing a proactive role in supporting the plastics industry. The Task Force on Petrochemicals has envisioned the following:


• Development of value-added, quality petrochemical products at globally competitive prices using eco-friendly processes and technologies.


• Innovation of newer applications and products with focus on sustainable development.


Thrust areas for the plastics industry include, modern farming through plasticulture, packaging for processed foods and consumer non-durables, better performing plastics for automobiles and consumer durables, infrastructure development through cost effective plastics and innovative products for telecommunications and information technology services sector.


The Indian government has reserved certain categories of plastic products for Small-Scale Industries (SSI). The small-scale sector accounts for more than 50 per cent of the plastic industry turnover. Some of the key products reserved include soap cases, buckets, cups, water jugs, plastic cane, mugs, flexible PUF products, PS foam products upto 110 mm diameter, PVC pipes, rain coats, polyester sheets, thermo welded plastic products, monofilaments and tubular PP films. Typically these are relatively lowtechnology, low-cost items. Most high-end plastic products are not reserved.


Plastics find application in a very wide range of user segments, each with its own characteristics and dynamics. Plastics manufacturers need to identify segments and products that align with their own strategy and capabilities. For example, if the manufacturer has invested significantly in capital equipment, say moulding machines, the product mix needs to ensure there is consistent high volume demand so that the machines are fully utilised.


This is a key requirement for organised players to address consumer markets. Given the high number of units producing similar products in the industry, it is important to have a strong brand that will differentiate the product and influence customer mind-set. For example, VIP in moulded luggage and Nilkamal in moulded furniture are well-known brands and are therefore able to attract customers through their brand strength.


Nearly 63 per cent of costs for plastics processing go towards raw materials. Hence, it is important for manufacturers to continuously improve productivity and reduce waste, so as to safeguard margins amid increasing competition.


More than 85 per cent of the conversion cost (difference between the value of finished good sales and the raw material costs) is fixed in nature. This implies that a larger scale of operations would yield economies of scale. For manufacturers not covered under the SSI policy, it is important to look for avenues to grow operations and scale up and at the same time control costs.


The consumption patterns change with time and new end uses keep evolving. For instance, the Kerala Government, has enforced a ban on plastic items such as, carry bags, glasses and cups, in view of harm to the environment and public health. The players need to keep themselves abreast of such changes, as these would directly affect demand in particular geographies. At the same time players also need to upgrade their processes to reduce harm to the environment and public health.


The plastics industry offers several opportunities for growth, as most of the user segments such as auto components, consumer durables and telecom are growing rapidly. Growth in food & beverage and FMCG segments offer significant opportunities in packaging. Another avenue for potential investors could be plastics processing machinery. As the industry grows further and aims at improving productivity and adopting new technology, there will be an increase in the demand for modern processing machinery. It has been estimated that the industry will need nearly 30,000 new machines over the next three years.


Plastic sector is fragmented in structure, but for a few large players in the organised sector. However, the sector is getting increasingly aligned with global market developments. This is the focus sector and the Government is actively involved in devising plans to support growth. Significant progress has been made post the Tenth Five- Year Plan since more thrust was provided on processing and marketing.


With India poised to emerge as the third largest consumer of plastics by 2010 and the industry growing at a rapid pace, the players need to gear up along with Government support, to take advantage of the new opportunities offered by the sector.



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