PANDORA Consumer Behavior

Introduction

PANDORA is global fashion jewelry from Denmark. It has at least ten thousand retailers in the international market. It reflects in its stable brand loyalty from its customers. The PANDORA brand is unique and of high quality. It has made PANDORA get the brand awareness regarding marketing. In the year 2015, as it was disclosed on 2012 financial reports, three hundred and seventy-five PANDORA concepts stores were opened. Opening more stores aimed to create PANDORA brand image.

Hence, they were keen to visual effects of showcase so as to attract the target customers in sensitivity manner and motivate them to minimize the decision-making steps and purchase it as soon as possible, (Bucuta, and Balgaradean, 2016). Due to their lower pricing, fast fashion trends, friendly and relaxed customer services in their stores make customer’s decision making simple and improve the trust for the management.

PANDORA have benefited from fast fashion, flexible strategies, renewal of goods which make it simple for the customers to believe their perceived risk so as to have product involvement highly when making informed decisions, (Howeidi, and Nguyen, 2016). PANDORA has more than a thousand products that satisfy the individual expression. Their brand does express personality.

For example; their essence bracelet is assumed to bring different inspiration or wishes. On every festive season or holiday, PANDORA will come up with new products that are related to the gift giving, holiday and cultural value in ritual ways to cover on grooming, (Anca, and Cristina-Maria, 2016). It makes people relate to reality and loves the brand of PANDORA.

In Europe, PANDORA recorded a twenty-eight percent revenue growth. The primary market that contributed in large part to this was the United Kingdom. The revenue of Pandora in the United Kingdom rose by seven percent through the second quarter of this fiscal year. The income was heightened by an opening of seven subsidiaries concepts stores which brought the number of the PANDORA concept stores to two hundred and nine.

Andersen stated that “these are another set of fantastic which we are all incredibly proud of- to be a presence in every major UK town and city is a phenomenal achievement.” Additionally, he proceeded by saying that “After eight years at Pandora, it has been both challenging and immensely rewarding, watching the brand grow and resonate so well with women of all ages.”I am delighted with the progress the brand has made in the UK, in particular in such a competitive industry and on what is widely considered a tough high street to crack.”

The company had a steady momentum in Europe where they recorded a 28% increase in sales revenue. Among the 28%, the United Kingdom contributed a half of the growth of income. The high momentum was fostered by three factors that influence consumer behavior, and they are Motivation, Perception, and Identity, (http%3A%2F%2Fwww.retailgazette.co.uk%2Fblog%2F2016%2F08%2Fpandoras-uk-sales-account-for-a-quarter-of-companys-emea-region-growth&usg)

Motivation

Consumer motivation is the force to satisfy wants and both psychological and physiological during the acquisition of products and services. PANDORA recognized motivation as a compelling and impelling force that is required in its concepts stores. To understand how motivation applies it’s important to comprehend three behavioral models and foresee on how customers will act to them, (Grunert, Hieke, and Wills, 2014)

First is the Maslow’s Hierarchy of Needs. Abraham Maslow describes personal development through satisfaction and identification of the hierarchy of needs from basic needs to complex psychological needs, (Anderson, 2014). Maslow suggested that these motivating drives work more or less one after the other. If one level is entirely or partially met, there is always hunger to next level and the feeling is more intensely. PANDORA used the Maslow’s hierarchy comprehensively to comprehend what motivates their target customers and how the motivation can be utilized in a broader variety of ways to clients and individuals across the globe.

Secondly is the Dichter’s Major Consumption Motives. It was established in 1950 where Dichter on behalf of Procter and Gamble conducted research on customers’ demands that motivates the buying of the Ivory Soap, (Ahn, Duan, and Mela, 2013). He deduced that “bathing as a cleansing ritual has a symbolic appeal among consumers, signifying purification from the taints of the world.”

From the research, Dichter steered the growth of a tremendously winning advertising campaign. According to Dichter, the consumption of goods is determined by twelve vital motives which are security, eroticism, power-masculinity virility, individuality, social acceptance, moral purity, magic mastery, and social connectedness, mastery over the environment, femininity, and status.

Lastly is the Sheth’s Consumer Motives. The incentives were developed to foresee customer’s decisions. Although it was meant for traveling decisions, Sheth’s model also applies to other goods and services. Sheth secluded five dimensions of motivation, each leaning to an attainment of particular goals, (Wind, Thomas, and Sheth, 2014). Also, the functional motive entails the utility of goods or services or the work it performs.

Besides, the emotional motive is attained by the attractiveness or appearance of a good or service. Furthermore, the social motive is revealed in the esteem or status value of a good or service. Additionally, the situational motive is activated by unforeseen advantages of a good or services and lastly the curiosity motive which is simply the concern aroused by a good or a service.

PANDORA has used the Sheth’s models to foresee the brand choices by customers. Various brands, for example, the ones with charms are associated with the emotional motives. It gives the customer the power to decide what kind of a meaning their jewelry possesses and they make them buy or not to buy. The choice of PANDORA brand whether golden or silver or silk is associated with functional and social motives.

By comprehending the customer’s motivation, PANDORA can better target products and services to attain the demands of particular market segments such as the United Kingdom. For example, PANDORA can advertise about the charm jewelry that has meaning of given personalities and incidences, pleasing the demand of the traditional or older customers who used to purchase jewelry with no meaning at all.

Perception

Consumer perception measures the growth of perception through various variables and recognizes those factors that influence the buying decision of the customer. Customer usage and purchasing of any good depend on with their perception towards the goods, (Font, and Guerrero, 2014). Perception is widely developed regarding how effectively and efficiently a product has been marketed or advertised.

PANDORA has employed all its hard work in marketing so that to acquire or attain the consumer’s attention and the positive feeling on the consumer’s thoughts. The customer perception can be well recognized by the taste and preference of the good, color, and shape, (Tieman, Ghazali, and Van Der Vorst, 2013)

There are several physical factors that affect perception. Those are a mode of payment, availability, regular supply of product, accessibility, durability and quality, (Fall Diallo, Chandon, Cliquet, and Philippe, 2013). Product quality is categorized into two. First is the perfect quality and second is the expected quality. The special quality contains the real benefits attained from the buying of the product. On the contrary, the apparent quality contains the customer expectations from the goods.

At first, the perception qualities of the good of PANDORA were weighed as customer’s perception of the quality of good offered by Denmark. Researchers and scholars argue that expectations, country of origin and perception fosters to cognitions. It also puts importance on specific goods and marketing characteristics. These were regarded as the factors that drove customers to marketplace or the concept store where the jewelry was marketed or sold.

Price determines the purchasing power of the customer. Normally, a price is regarded as the primary determinant of the customer’s brand choice when selecting a good or service. It is comprehended that when a customer is experiencing a purchasing decision for good buying, then the consumer is more concerned about the prices of the goods and scrutinize prices keenly, (Jin, He, and Zhang, 2014).

The pricing strategy assists the consumers to maximize direct utility that they possess from the buying. On the contrary, when the customer come into contact with PANDORA brand that has fluctuating prices and apparent quality levels, the consumer will have to make the informed decision about the favorite they make on the ground of characteristics of the goods.

Customer favorite of good features differs according to the nature of the product as well as its economic and social nature of consumer. Goods characteristics are frequently eye-catching in nature. The characteristics model that was proposed by the Gwin and Gwin in two thousand and three posits that customer preference of good is based on maximizing their utility from the goods attributes subject to the financial shortage.

Some scholars argued that customer services and store images stimulated the consumer store choices and at the same time, location and parking facilities always have a negative effect on the consumer choice. On the case of PANDORA, the two hundred and nine concepts stores are strategically relocated, and they offer incredible customer services like free delivery of the jewelry. The consumer perception of store pictures and the characteristics pressured by types of goods, formats, shopping need and cultural value explains the store nature, parking facilities, place, kindliness of staffs are among the factors that pressure the customer’s choice of stores, (Claiborne, and Sirgy, 2015).

From the record, PANDORA added seven concept stores in the United Kingdom bringing the number to two hundred and nine. It means that PANDORA has offered or provided their customers will all basic needs that affect the choice of stores. The effect of store setting such as the eye-catching shelf, incredible services activities and facilities attract more customers to purchase more.

Store images are an important factor in store loyalty and store alternative. The perception towards stores is established significantly by visual attributes of a store such as a distance of store from home, size, and intangible factors such as the atmosphere of the store.

Although the store picture has been comprehensively analyzed all over the globe, there is a lot to be analyzed for the developing retail nature where consumers, as well as the store owners, are in solid phase and different and large retail formats by the prearranged retailers being moved out. What might build the high image and what forces the choice of a store in the long-term is the myth. The PANDORA new stores have the capacity to attract more customers into the stores because of their notions.

Identity

Identity construction is a significant improving sector in consumption theory. Description of how the customer makes choices among goods and services assist in describing the connection between the consumption and identity. The demand concept proposes that customers should select the goods which offer them maximum utility for their disposable income they possess where their utility is the pleasure of consuming the product, (McAlexander, Dufault, Martin, and Schouten, 2014).

An option to this perspective is that customers select goods which are closely equivalent to their aspired or popular personalities. The post-modern theorists like the Sartre would recommend that possession is significant to identifying who we are and offering a sense of being, (Hatch, and Cunliffe, 2013). Customers might select goods based upon their valued but offered multiple choices in the concepts stores; they may still choose the same product since it fits their personality.

For example, if a customer is to choose a PANDORA charm bracelet over A PANDORA jewelry with no charm, given another chance will still choose the PANDORA bracelet with charm since it warms his or her personality. Scholars argue that selecting goods is relatively simple since one thing is likely to strike us “symbolically more harmonious with our goals, feelings, and self-definitions than other.” The choice of goods and services offers the customers a chance to express their originality and act a way of communicating with others.

In the United Kingdom, there is so much relative wealth and choice. It makes it almost not surprising that consumption and shopping are the major leisure acts. Researchers suggest that culture and society are very significance to identity and consumption of products and services.

The detection of consumers’ identity building is significant for the retailers. It enables them to advertise to the right individuals at the right time while targeting their market group. It can only be achieved through close monitoring of the retail shopping behaviors, (Thompson, 2014). Inducements such as the loyalty cards can be used to gather data on consumption habit and attempt to recognize potentially loyal customers and profitable customers.

Additional processed data entailing the demographic, socio-economic and geographical data such as marital status, income bracket, postcode, age, and gender can be used to analyze the customers. For example, PANDORA target customers are women of all ages. They have products that suit the taste and preference of each woman no matter their age.

Identity is transformed through consumption. It is argued that the significance of the b body image to the self-theory regarding an evaluation of size and attractiveness and perception is mostly drastic and symbolic, (Tuškej, Golob, and Podnar, 2013). PANDORA focuses mainly on young population. It is because young people are more into consumption and identity. The goods they buy frequently have stable and strong representation as well as the social work.

The information about the PANDORA brand is used to build an identity based on the understanding of the “consumption ideals prevalent in popular culture.” It is believed that with time and culture changes, the identity is expected to adjust.

The connection between identity and consumption activities are described through the consumption the significance of possession, various selves, group identities and consumption concepts. Consumption choices assist in describing the identities of both the group and people either at unconscious or conscious level, (Ekinci, Sirakaya-Turk, and Preciado, 2013).Equally, an identity by itself may pressure the consumption behaviors.

Even if the relationship between identity and consumption might be controversial, it is motivating to consider the reason as to why we purchase goods and services over the others. The frequent asked questions whether they provide greater utility or not or are they cheaper or do they imitate our personalities? With the question above, PANDORA has been able to provide answers to their customers making them want to purchase more and more product from their concepts stores.

Conclusion

Conclusively, the three factors which are motivation, perception and identity have helped PANDORA to increase its sale revenue in the second quarter by 28%. PANDORA marketing strategy has been comprehensively effective because after analyzing their target market and population, they established a structure and mechanism which they could use to attract more customers. For example, establishing the jewelry with charms led to many people purchasing the products because they believed that the message possessed by the jewelry reflects their personalities.

It motivated a lot of its customers to purchase the jewelry even though the sense of being never changed, (Solomon, Russell-Bennett, and Previte, 2013). Their marketing strategies changed customer’s perception on how they viewed the concepts stores. When customers recognized the jewelry with charms, they would purchase the product with different images or visual effects to portray a meaning. For example, since they targeted the young population, they introduced love jewelry.

If friends or couples purchase the love jewelry, it changed their perception of how they are affected by each other. Their personalities drove them to purchase more and more products. Lastly, the store images bring the sense of what goes inside the store. It creates the identity that every customer wants to be associated with. PANDORA concepts store are modernized, and most of them are of glass. It makes it clear for every person to view from outside what is sold inside.

Since identity is majored on group personalities and peers have different opinion about the PANDORA jewelry brand, it attracts the potential customers to purchase the products so that to be identified as part of the PANDORA loyalty customers. Due to these consumer behavior tactics by the PANDORA, it was able to record a sales revenue increase of twenty-eight percent as compared to other quarters in the year 2015.

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THE USE OF POLYSEMY, INTERTEXTUALITY, AND SYMBOLISM IN ADVERTISING

The use of polysemy, intertextuality, and symbolism in advertising

Introduction

Advertising has become the most powerful tool in marketing for business and organizations. It’s an essential factor in the creation of brand awareness and enhancing trust among the consumers of advertising products. It is the process of communicating with current customers and potential buyers about goods and services (Linda Carlson, 2007). Given that the primary objective of advertising is to make people aware of certain products within the market, different companies have various approaches to ensuring they make more profits through advertising and keep off competition (Skorupa and Dubovičienė, 2015; Hackley, 2010).

These firms, for instance, Coca-Cola, Snickers, and Heinz -use sophisticated strategies and theories of advertising to accomplish their goals. Looking at some of the multinational companies ads, it’s easy to discern the creativity used by directors in making the commercials. Some of the concepts used by these companies include polysemy, intertextuality, and symbolism. The three concepts – as seen in some of Coca-Cola, Heinz, and Snickers advertisements and they offer strategic ways for the firms to ensure people relate well to the message put across in a simple way.

Advertising and polysemy

Advertisers and media practitioners have expressed difficulty in the interpretation of advertisement messages (Mark Ritson,Stepano, & Jonathan, 2010). More so, the current trends in advertising have focused on the ever-growing role of metaphors and its complexity. While the creators of advertisements have one or two messages to all the audiences, different people perceive the information differently (Hackley, 2010).

The perception of the adverts is associated with people’s beliefs, ideas, indoctrination, and attitudes. Polysemy refers to the presence of varying interpretations of the same advertisement message by the recipients. While advertising meaning refers to the decoding of a commercial that is influenced by the consumer’s culture, polysemy here implies the existence of more than two interpretations in the same advertisement by different audiences over time.

It simply means that two people can consume the same advert and get varying understanding of the message put across. It is, therefore, paramount that companies understand the concept of polysemy in advertising to ensure their advertising objectives have been well understood.

The Coca-Cola “Taste the feeling” commercial is a good example of advertisements that may bring both synchronic and diachronic polysemy’s in interpretation of the meaning. The advert begins with a bottle of Coke which is already full of the product and more coke is being poured until it overfills. There is no narration but a smooth, relaxing song by Swedish musician Avicii. We are then shown a scene of a lady with the bicycle helmet and eyeglasses.

She looks happy and gives her viewers a smile while sipping coke using a straw. After the drink, she looks even more energetic and starts playing with snowflakes. The interpretation here is that drinking coke makes one happy and lively. Other scenes from the advertisement follow, and one can see visuals of two young ladies sharing a coke, and immediately after they start smiling. One can also see happy- looking girls taking a ‘selfie’ after drinking coke.

The advert takes the viewers to a beach where a man and a woman are carrying a basket full of Coke filled bottles. Additionally, there is a scene of two people, a lady and a gentleman, who are seen taking a product from the same bottle using straws. Shortly after sharing the drink, they look directly at each other in an intimate manner. It appears they are going to kiss but the video changes to a different a scene.

Towards the end, viewers can see a well-dressed man using a mobile phone and holding a bottle of Coke in his left hand-likely waiting for someone. It’s then that a lady comes, and the scene again changes to a love-making part. This time the woman making love to the man is holding a bottle of coke. The last scenes are filed with happy looking people; the lady on the beach and another scene where people are dancing after taking the coke drink.

The Coca-Cola Anthem advertisement, used with the “Taste the Feeling Slogan,” has multiple interpretations, both synchronic and diachronic. At, first, one would believe that Coca-Cola product makes the consumer energetic, lively and happy. In another form of understanding, one would believe taking the drink makes the consumer active in love making.

Also, the two interpretations can occur between two different individuals, resulting to a synchronic polysemy. One can also interpret that the benefit of drinking coke is enhancing a lively and happy mood, but after watching the commercial several times, one might infer that the drink enhances love making, resulting to a diachronic polysemy.

Advertisers can intentionally use polysemy commercials to appeal to different audiences. Due to the fact that levels of understanding are influenced by variables such as beliefs, geographical location, social, and economic aspects, viewers will tend to interpret adverts differently.

The Snicker advertisements “You are not you when Hungry” is set in the ancient Chinese context, but with characters who look modern like Mr. Bean. The story in the advert is that of Mr. Bean in the company of Chinese Martial artists who appears to be intruding a highly guarded compound at night. Mr. Beans give the impression that he is a foreigner, and the skills of martial arts do not go well with him. While running on rooftops, he regularly falls and almost makes the team get caught.

After a failed jump from one roof top to the other, he accidentally lands down on the enemy’s chamber. Its then that he gets a snicker to eat. The advert ends by saying that “you lose focus when you are hungry.” So it seems that eating snickers makes one to be more focused. This is the basic and the most common interpretation of the Snicker commercial, but other interpretation can be seen. For a Chinese brought up into the culture of martial arts, the interpretation is that Snickers makes one an accomplished martial artists.

According to Punton (2006), consumers of advertisement usually read things that never existed and that were not intended by the creators of the commercials. However, there is a standard interpretation in the market shared by all people, although modern day commercials will always possess difficult rhetorical devices. Also, all forms of commercials encompass polysemy concept. Polysemy can either be synchronic or diachronic. The former refers to advertising that happens to two audiences at a certain point in time.

As such, the intended meaning is interpreted differently by different consumers. This is usually the case when the audiences have varying cultural backgrounds and beliefs. The latter, on the other hand refers to polysemy that occurs within an individual. The audience may have varying interpretations of the same commercial. The consumer sees the advert firsthand and then tries to decode the meaning, but with time and after watching the advert several times, other interpretations begin to emerge. Both synchronic and diachronic polysemy’s are critical in determining the success of an advert.

The HEINZ Ketchup, “Game Day 2016” hot dog commercial is extremely difficult to decipher. Dogs are seen running towards a team of men and women. The animals have loads of sack, and they seem to be in a competition. The individuals who stand to wait for the dogs in a finish line, have clothes labeled Heinz.

It’s not possible to tell whether the dogs are running to the people who have Heinz labels, or they are just competing in a race. One meaning is that Heinz Ketchup motivates people do compete favorably. Another possible interpretation is that the HEINZ product makes collaboration much easier by triggering a good feeling. The dogs are running together, and people are waiting to embrace them.

Use of Intertextuality

Advertisers have a way of engaging consumers through the application of intertextuality. Intertextuality is an important and very useful technique in advertising that involves a combination of quotations, parody and sometimes allusion. According to Liu and Thao (2013), intertextuality “is a network of textual relation.” Jinxia (2014) defines this concept in advertising as the relations that exist between texts. It refers to how one text depends on each other.

In other words, it explains how different texts in a piece of art refer relate with each other in deciphering a message. To make advertisements effective and for the readers to grasp the meaning, Jinxia notes that “Intertextuality connection in advertising language is important to make an advertisement easy-accepted and understood by the consumers.” The three aspects of intertextuality advertising, parody, allusion, and quotations, are traditional elements of intertextuality.

Citation, parody, and allusion make the consumers relate the texts given with previous ones (Withalm, 2003). Not only do they impress the viewers, but also grab the attention of the audience. The purpose of any advertisement is to persuade the consumers of the commercials into buying the product. This cannot be achieved without relating the advert and the audience in a good manner.

More so, the advertisers always seek to arouse people’s desire for the product promoting attention. This concentration value is made possible through intertextuality, where the consumers can relate certain aspects of the advertisements to their daily environmental conditions (Karlsson, 2007). This, in the long run, ensures that the audience remembers the advertisements. Most advertisements usually contain memes such as idioms, phrases, songs and other works that the consumers can relate to.

In the Snicker advertisement that features Mr. Bean’s, the characters seem to possess martial artistry. For an Asian audience, the advertisement uses the culture of Chinese martial arts to impress Asian audience. For a person outside China who does know of martial arts, the advert may look impossible to relate with. However, any Chinese person will always remember the commercial as it appeals to their way of living.

“Brotherly love business”- part of Coca-Cola global ‘Taste the Feeling’ campaign uses a version of Avicii song “Hey Brother.” To people who love Avicii songs, they will more likely relate with the advertisement and end up remembering the commercial. The theme of the initial Avicii “Hey Brother” is about love among family members, and especially the one between two brothers.

The song is calling for brothers to believe in their families, as “blood is thicker than water.” Likewise, the commercial by Coca-Cola depicts a brother who is being protected from bullies by his brother. The lyrics of the song used in the advertisement are also inter-texts of Avicii “Hey Brother Song.” The concept of using two related works in ads makes it easier for the advertisers to achieve their intended objectives; creation of a memorable and easy to remember advert.

Symbolism usage in ad commercials

Advertisers convey complex meanings by the use of symbols (Homes, 2008). Most of these symbols are visuals and they are usually are polysemy in nature. They therefore have the potential of inferring different messages to the consumers. While some are easy to interpret, others will require a comprehensive analysis (Percyand Elliott, 2009). Companies and organizations use logos as a way of branding. Symbols are things used to represent other things. They are signs and fall under the broad topic of semiotics (Holmes 2008).

In his book, “Fallibilism, Continuity, and Evolution” Pierce referred to semiotics as the analysis of the structures of meaning in verbal and non-verbal forms (Akpan, 2013). One of the most fundamental components of semiotics, according to Holmes (2008), is a sign. While a sign stands for something else, it is usually connected to an idea that it represents. This concept of the sign is interpreted by the person consuming the artwork and the sign, the object it represents, and the interpreter.

Some symbols are just simple logo-types like Coca-Cola and Siemens while others are complex like Subaru car manufacturers. The Subaru logo seen in most of the firm’s adverts contains six stars, with one bigger than the rest. The meaning of the stars requires an understanding of Japanese culture, and it’s difficult just to look at the logo for the first time and decrypt the meaning.

The stars are also symbolic. In astronomy and Japanese belief systems, there is a cluster of seven stars in the sky that is made up of seven sister stars. They are the nearest to the earth, and one of the seven stars is invisible. The Subaru logo, therefore, has seven stars, but visually there are six since one is invisible.

There are three categories of signs, icons, index and symbols. An icon represents an object by virtue of the features it has to the object. This includes a curved a drawing of stones falling to warn people that the area has stones that fall. An index sign, on the other hand, shows the connection that exists between the object and the sign. An example of index sign is smoke that is used to represent fire.

Finally, symbolism sign represents an object with the acceptance that the individual’s beliefs portrayed in the object (Elliott, and Wattanasuwan, 1998.). One good example is the use of color to represent different ideas and agendas of the advertisers. Black represents darkness and evil, while red represents blood and danger. One of the most important types of symbols used in advertising is use of color to.

For a good advertisement, the symbols used must relate to the company’s brand (Meenaghan, 1995; Jenkins, 2008). The Coca-Cola’s “A Coke for Christmas” commercial uses a character dressed like Father Christmas to symbolize the period and event of Christian’s 25th celebrations of Jesus Christ. To the Christian audience, the colors, and dressing of the character relates to Christmas.

There are also Christmas trees, and people are seen preparing in a similar version for Christmas season. The meaning of these symbols used in advertising will transfer to a brand, and the consumers will therefore desire to purchase the goods and services hoping to experience some of the emotions communicated in the advertisements.

“The brotherly love advertisement” by Coca-Cola where an older brother always bullies the younger one is full of symbols. However, the signs are not easy to relate and interpret. The story is a conflict between two brothers, where one is using his physical attributes to harass the smaller one. In most of the scenes, the older brother is dressed in blue whereas the smaller one is in red outfits.

While the choice of the color of cloth may look unimportant when interpreting the advertisements, it’s good to understand that the branding color of coca cola is red. Consumers of the product are always aware that red is the brand color for Coca-Cola. On the other hand, a rival company, Pepsi, uses blue as its brand color. As such, the colors symbolizes lack of formality in society (Leigh, and Gabel, 1992)

It therefore seems that the creators of the advertisement had the unintended message by giving the older brother blue colors and letting the younger one have a red color. In reality, both Coca-Cola and Pepsi have been for years been in a conflict which is also similar to the one depicted in the advertisements. If this statement is the true, the colors used imply that Coca-Cola is a “well behaved” company, younger brother, while Pepsi is the bully.

Interestingly, towards the end, the older brother saves the boy from other bullies yet he had been harassing in the beginning of the advert. In this last scene, the color of the older brother’s cloths changes to red, while the three boys harassing the smaller one are dressed in blue. While the roles have changed and there is harmony, the idea of the conflict between Coca-Cola and Pepsi is still intact.

The antagonist in the advertisement is in blue which symbolizes Pepsi while the protagonist is in the red symbolizing Coca-Cola. Finally, the opponents are trying their best to steal the drink from the young boy. This expresses the concept that Coca-Cola rivals are always trying to steal the firm’s ideas and intelligence. The fact that the bottle of coke is worth fighting for, the young boy feels bad when it’s taken away from him, signifies the idea and belief that coca-cola is something worthy possessing.

Conclusion

The purpose of any advertisement commercial is to create more awareness about a product and therefore increase sales revenue. However, the messages being portrayed in the advertisements are subject to varying interpretation and consumers are likely to react differently. There are key variables that are determinants of how people perceive meaning, ranging from education, age, beliefs, location, and attitudes.

For this reason, advertisers are forced to use a combination of different strategic concepts to drive their point home and subsequently achieve their objectives (Jenkins, 2008). These strategies include polysemy, intertextuality, and symbolism. The three strategies are meant to give the audience an effective advert that is memorable, engaging and relates to their way of living. They are used with powerful audios, a visual and technical device to sell the commodities and relate with consumer’s cultural settings. How well companies make use of these advertising concepts serves as a critical determinant of how far the advertisement will go in winning people’s loyalty to a firm’s brands.

References

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Holmes, G.R., 2008. Symbolic Visuals In Advertising: The Role of Relevance. ProQuest

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Hackley, C. (2010) “Theorizing Advertising: Managerial, Scientific and Cultural Approaches”, Chapter 6

Jenkins, H. (2008) Convergence Culture- where old and new media collide. NYU.Cook, G. (2001) The Discourse of Advertising, London, Routledge.

Karlsson, L., 2007. Advertising Theories and Models-How well can these be transferred from text into reality?

Liu, J. and Thao, L., 2013. Intertextual techniques in advertisements. International Journal, 21, pp. 11-19.

Logica, Dialogica, Ideologica. I Segni Tra Funzionalitá ed Eccedenza. Mimesis, pp.425-36.

Leigh, J.H. and Gabel, T.G., 1992. Symbolic interactionism: Its effects on consumer behavior and implications for marketing strategy. Journal of Consumer Marketing, 9(1), pp.27-38.

Ritson., M, Jonathan,.S, and Stefano, P. 2010. Meaning Matters: Polysemy in advertising. Journal of Advertising, 39(2): 51-64. https://www.researchgate.net/publication/255602160_Meaning_Matters_Polysemy_in_Advertising

Meenaghan, T., 1995. The role of advertising in brand image development. Journal of Product & Brand Management, 4(4), pp.23-34.

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Percy, L., and R. Elliott (2009) Strategic Advertising Management, 3rd ed, Oxford, Oxford University Press

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Social Advertising Slogans. Santalka: Filologija, Edukologija, 23(2), pp.108-118.

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SOCIAL ECONOMIC BENEFITS OF MARKETING

Social Economic Benefits of Marketing

The article Marketing’s Contributions to Society by Willkie and Moore (1999) is a farfetched reflection of the numerous impacts of marketing to the society. I find the authors presentation of the benefits of the aggregate marketing system and how it continues to benefit the society argumentative and convincing. The article is largely a celebration of some of the aspects of marketing field to the society.

The authors, Willkie and Moore present the benefits of marketing by discussing its contribution to the larger economic issues .They further examine some of arguments raised by critics of an aggregate marketing system. Three of the major issues that have widely been covered in the article are marketing and economic development, effects on consumers and impacts of unethical marketing activities.

However, the article does not delve much into the benefits of engaging in ethical marketing, but rather focuses on the general economic and social benefits of aggregate marketing system. Perhaps the greatest benefit a firm can accrue from ethical marketing activity is not only propelling the

aspect forward, but that it may never be entangled in a legal lawsuit or ethical dilemma that can lead to losses and unnecessary cover up expenses.

Marketing and economic development

Aggregate marketing system has largely benefited the area of economic development. The articles argue that marketing is an entrepreneur and an organizer of resources. Areas with increased population in marketing tend to have a higher Gross Domestic product. In support of this argument, Patterson (2012) note that on an average of £1 spent on advertising- a form of marketing- the UK economy gains £6. This implies that for £16 billion of UK advertising in 2011, £100 was generated for the UK economy.

Advertising in UK helps export more than £2 billion in addition to presenting a strong international recognition where the UK can export a wide range of goods and services. This type of marketing has successfully supported advertising sectors of the economy such as photography, film production, music and entertainment. Patterson states that there are over 550 000 people employed by advertising, or involved in creation and production of advertising (2012).

Through marketing practices such as advertising, businesses are able to deliver a wide range of innovative and high quality products and service that can help match buyers and sellers more efficiently. This allows business with novel ideas to succeed faster and in a unique manner (Binsardi and Ekwulugo, 2003). The revue generated form advertising provides help provide valuable services to consumer’s such as news, entertainment and travel information.

These services are highly beneficial to the economy as they support online and high street sales. Nonetheless, it’s insufficient to define the role of marketing in terms of advertising alone. The role is broader with a critical role in the making of key economical functions. It’s at the core of diferent cycles of competition and innovation.

The treatment of aggregate marketing economy, according to Willkie and Moore (1999) is a complex political context. Government policies help determine opportunities for the contribution of marketing to the society (Theorell, 1996). Governments will usually pursue five possibly contradictory goals: income distribution, price control, payments balance and fuller employment. In social terms, marketing must be ethical and embedded in the society’s culture.

However this can be difficulty where diferent cultures fail to synchronize with prevailing marketing systems. Certain consumer characteristics like handling of finance, saving, ethical orientation and persuasion must be learned for the marketing system to function well.

Marketing has a critical effect on the aggregate demand although so many business persons have not realized the full contribution of marketing to the wellbeing of the economy (Min and Mentzer, 2000). Kinnear (1994) argues the reason is that benefits are not seen in the classic macroeconomic equation. They fail to look into efficiencies and skills form wholesaling, retailing and logistics.

The aggregate supply depends on capital stock, labor, raw materials and technology. Willkie and Moore (1999) argue that if economists’ equation were to identify the effects autonomous consumption and the value of marketing efforts in the economic system would be clear. This would in the end stimulate interest in calibrating that magnitude of these conditions.

Both regional and national marketing are a powerful tool for economic development. When done properly, regional marketing has the potential to attract foreign and domestic investment through effective policies (Bordaskaya, 2012; Thorne and Ferrell, 2002.). The marketing will further lead to preservation and development of intellectual capacity through the development of science and education.

Other benefits range from creation of favorable conditions for the development of small and medium sized firms, enlarging of existing institutions for economic and social expansion. Additionally, marketing encourages increased production by organizing and operating networks for communication and exchange (Weerawardena, 2003).

The equalization of demand and supply occurs through transport, storage and price where a special connectivity joins different locales in larger market. This ensures there is a place to provide efficiencies of scale and reduce the price of goods and services for the consumers. With time, these will serve as springboard for marketing and entrepreneurs.

Contributions to Buyers from Specific Marketing Activities

The article agrees that there are numerous competing firms in the aggregate system at time that presents uncountable benefits to the society in parallel. To understand the scope of these benefits, the article starts by examining the concept of utility. Distributing series add more value to the economy than production, and elementary utility which refers to extraction of crops and raw materials is arguably beyond market purview.

Other form of utility results from operations where marketing activities contribute by supplying essential inputs to the production process and the provision of insights from the marketplace. Place utility on the other hand represents the value added by offering goods needed by the buyers while marketing utility contributes to time utility by preplanning, and promotion activities. This ensures customers obtain goods when they need them. The final utility is possession utility which is offered through marketing transactions and allows customers use goods for the right purpose.

Marketers have paid significant attention to the purchase process given that they benefit from payments of purchases. Yet, the benefits received by customers result from consumption. Interestingly, each usage occasion creates an opportunity for another delivery from the system. The consumers will get multiple benefits from single purchase since one product can present more than one benefit. For example, a car can not only provide transportation service, but also music entertainment or shelter when it’s raining.

Also, facilitation of transaction process is one of the most powerful aspects of the marketing system in any given society. This saves consumers time and effort while maximizing purchase opportunities. Some of these benefits include extended store hours, free parking, stocked shelves, displays ad smooth checkout. Process for buyers credit enables some of the expensive purchases to be realized which would have otherwise been delayed. The channels of distributions at entry point for new products and services.

Ethical aspects of marketing

It’s not easy to understand the numerous benefits and implications of marketing without looking at the interplay between the ethical and legal aspects of the sector. Although the article fails to sufficiently diagnose ethical marketing and its role in the society, there is a clear argument by the critics of an aggregate marketing system. Some of these practices noted by the Willkie and Moore (1999) include stress conformity and promotion of materialism.

Furthermore, marketing discourages participation in non-economic activities like arts while undermining family ties, altering socialization and the enabling the practice of manipulative persuasion. Additionally, aggregate marketing leads to creation of artificial needs and wants, causes depletion of resources through continued exploitation of resources (Caudill and Murphy, 2000).

To maintain their competitive advantage and maximize market presence, firms might be entangled in illegal and unethical practices. Harris (2001) notes that marketing is either part of the law, or subject to the law. Consumers should be concerned about marketing of products and how companies present information (Carrigan and, 2001; Shaw, and Shiu, 2003.).

How do oil producing firm’s influence environmental research that goes against increased carbon dioxide emission? What is the role of big pharmaceuticals in health related researches? Do alcohol manufactures have a hand in research that supports moderate alcohol consumption? Even if the article seemed to avoid this aspect of marketing, there is a need for consumers to question the morality of marketing practices noting that many firms are primarily driven by desire make more profit.

According to Friedman (2000), firms are plunged in a universe of relationships where there are many stakeholders. The emergence of global groups of stakeholders has further complicated the globalization scenario. The competition has seen companies rush to identify creative and workable solutions to create a competitive edge. Marketing ethics therefore becomes a prerequisite for running any type of activity in the market place.

Verhezen (2005) adds that the role of ethics in marketing has been understood using two approaches. The first states that business executives have a sole responsibility to increase the shareholders’ value. The article contends that ethical business activities are rewarding, suggesting that choosing to engage in ethical marketing can enhance shareholder wealth. Due to the sensitivity of ethics and its implications, governments have lately established strict regulation measures to protect consumers from unethical marketing behavior (Azmi, 2006; Eon and Van Vuuren, 2010).

However these regulations are not sufficient enough. According to Geoghegan & Azmi (2005), a company that boasts of having a good regulation must have found ways to fit the ethical values of an individual agent and when it’s appropriate. One of the major functions of marketing is to create a positive corporate reputation.

Companies will spend a lot of money to improve their public image but all the effort is meaningless if it’s unethical. Fan (2005) defines s corporate reputation in terms of various attributes that form in the consumer’s perception about a products reliability, goodness, trustworthiness and reputation. Corporate reputation has also been referred to by (Fombrun, 2000) as being concerned with how people feel about a company based on the information they have the firms activities and past performance.

Conclusion

As seen in the article, Marketing’s Contributions to Society, marketing plays a key role in the development of social economic activity of any given society. There are several benefits ranging from advertisers, transporters, distributers manufacturers and wholesalers who get employed in marketing activities. This in turn leads to creation employment in news, entertainment, fashion, design and transport sectors.

Willkie and Moore have consistently held that marketing is the key driver of the economy that leads to economic development. If well played out well, marketing has the potential to attract foreign and domestic investment for the upward mobility of the society. Furthermore, marketing is a leading promoter of competition and product differentiation.

Coupled with innovation, marketing helps new entrants penetrate the market and remain competitive. Not only do consumers demand the products at a higher rate thorough marketing, but also become price sensitive. This benefit can be seen clearly in every market type ranging from transportation, flight, entertainment, tourism and manufacturing. At the core of marketing are the legal ad ethical aspects that have the capacity to ruin or polish any firm’s corporate reputation. Global competition and increased awareness of product features by the consumer’s has resulted to unhealthy competition for market dominance. However, only firms that understand proper marketing strategies while engaging in ethical and legal activities can sustain their customer base for a long time.

Reference

Azmi, R.A., 2006. Business ethics as competitive advantage for companies in the globalization era.

Binsardi, A. and Ekwulugo, F., 2003. International marketing of British education: research on the students’ perception and the UK market penetration. Marketing Intelligence & Planning, 21(5), pp.318-327.

Bondarskaya, T.А., The Role Of Marketing In Socio-Economic Development Of The Territory. Tambov State Technical University, Tambov

Carrigan, M. and Attalla, A., 2001. The myth of the ethical consumer–do ethics matter in purchase behaviour?. Journal of consumer marketing, 18(7), pp.560-578.

Caudill, E.M. and Murphy, P.E., 2000. Consumer online privacy: Legal and ethical issues. Journal of Public Policy & Marketing, 19(1), pp.7-19.

Eon Rossouw, D. and Van Vuuren, L., 2010. Business ethics. Oxford University Press, 2010.pp 341. Available at: https://books.google.co.za/books/about/Business_Ethics.html?id=cXn2RAAACAAJ

Fan, Y., 2005. Ethical branding and corporate reputation. Corporate communications: An international journal, 10(4), pp.341-350.

Fombrun, C. (2000) “The value to be found in corporate reputation”, Financial Times, 4 December

Friedman, Douglas (2000). “Ethics needed to be Part of the Cutting Edge”, Erlanger, Vol. 104, pp. 2-14.

Geoghegan, J. and Azmi, R. (2005). “Corporate Governance Enforcement: Between Institutional Investors and Social Pressure”, the Fifth Annual Conference of the Faculty of Commerce – Alexandria University on Corporate Governance, Alexandria, pp. 545-560.

Harris, H., 2001. Making business ethics a competitive advantage. Hawke Institute, University of South Australia.

Min, S. and Mentzer, J.T., 2000. The role of marketing in supply chain management. International Journal of Physical Distribution & Logistics Management, 30(9), pp.765-787.

Moore, Elizabeth S. and William L. Wilkie (2000), “Criticisms, Con- troversies and Problems in the Aggregate Marketing System,” working paper, Graduate School of Business, University of Notredame

Patterson, Gavin . 2012. Advertising Pays: How advertising fuels the UK economy, Deloitte LLP, Advertising Association, London

Shaw, D. and Shiu, E., 2003. Ethics in consumer choice: a multivariate modelling approach. European journal of marketing, 37(10), pp.1485-1498.

Thorelli, Hans B. (1996), “Marketing, Open Markets and Political Democracy: The Experience of the PACRIM Countries,” Ad- vances in International Marketing, 7, 33

Thorne McAlister, D. and Ferrell, L., 2002. The role of strategic philanthropy in marketing strategy. European Journal of Marketing, 36(5/6), pp.689-705.

Verhezen, Peter (2005). “Integrity as Good Reputation”, International Conference on Ethics and Integrity of Governance: A Transatlantic Dialogue, Belgium

Weerawardena, J., 2003. The role of marketing capability in innovation-based competitive strategy. Journal of strategic marketing, 11(1), pp.15-35.

Wilkie, W.L. and Moore, E.S., 1999. Marketing’s contributions to society. The Journal of Marketing, pp.198-218.

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ORGANIZATIONAL CHANGE AND DEVELOPMENT

Organizational change and development

Executive summary

The need to embrace workable and sustainable strategies as touching organizational development and change has been pressing for modern day organizations. Whereas organizational development encompasses the efforts made by firms over duration of time to come up with better problem solving abilities organizational change connotes the process that enables organizations to optimize their performance whilst working towards an ideal and projected state.

Dyson, a multinational company has had to consider embracing strategies for effective development and change due to the changing strategic situation engraved in the current global economic turbulence that has challenged the firms operations, sales, and profitability. The existing strategy for the company being based on cost leadership and differentiation has thus necessitated the adoption of a future strategy entrenched in e-commerce. The internal and external environment of the firm is captured by economic aspects, technology, and low prices.

Introduction

Organizational development and organizational change are directly related. However, the two differ in terms of their definitions. Scholars have repeatedly concurred that organizational development connotes a planned process to stir up change within the culture of a firm by utilizing research, theory, and behavioral science expertise. Additionally, other scholars have defined organizational development as corporate efforts made over a long duration with the intention of enhancing the ability of a firm to solve problems as well as its capacity to deal with alterations in the external environment.

Further, others have argued that the term connotes a systemic process performed via collection of data, analysis, action planning, intercession, and assessment in order to improve congruence in structure, procedure, stratagem, human resource, and culture culminating in the development of more effective problem solving as carried out through organizational team work with the assistance of change agents.

On the other hand, organizational change is a process that enables organizations to optimize their performance whilst working towards an ideal and projected state (Meyers 2013, p. 43). Moreover, studies indicate that organizational change is usually triggered by the business environment that is ever-changing causing organizations to respond in order to avert a crisis. In most cases, organizational development precedes organizational change except in cases where firms are forced to change and adopt new strategies in order to deal with a foreseen problem.

In both cases of development and change, the processes involved always encounter resistance to change as firms seek to make adjustments in operational strategies and culture. This paper takes the form of a report and focuses on Dyson, a multinational company in order to explore its changing strategic situation engraved in the current global economic turbulence that has challenged the firms operations, sales, and profitability.

Review of Literature

Review of literature indicates that in the light of the current turbulent times, companies, and especially multinationals need to come up with new strategies for development and change. Studies also indicate that organizations are fastly adopting to such strategies in order to acquire the ability to stay afloat amidst the unpredictable economic changes. Conversely, Sullivan (2001, p. 7) argues that only few of modern multinationals have fully embraced the need to see change as an organizational project rather than viewing it from the traditional perspective of it being a core organizational process.

Further review of literature also suggests that unless organizations develop the ability to merge development and change into a single process they may not be able to stand the test of time during the turbulent economic times (Weissenberger& Kotch 2007, p. 7). Additionally, firms need to realize the importance of developing the competencies of their core personnel in a way that helps them enhance their objectivity, imagination, consistency, and flexibility (Balzac, 2011, p. 14). However, Sridhar (2011, p. 2) argues that this alone will not help enhance development and change strategies without multinationals embracing the requirements entrenched in efficient collection of data, assessment, forecasting, diagnostics, , design, and implementation procedures.

The company

Dyson is a company based in Britain and has grown over the years since its inception in the year 1974 into one of the largest multinational. The organization basically operates many stores currently having infiltrated markets in over 70 countries with over 7,000 employees. By the year 2014, the company had already been crowned as the number one corporation in terms of annual revenues. However, the current global economic turbulence has recently caught up with the company causing it to experience declines in sales, efficiency in operations, and profitability in virtually all the 70 countries within which it operates.

Actually, records indicate that in the year 2015, the company for the first time since its inception recorded a decline in both sales and revenues. Despite spending over 11 million dollars to advertise in the 70 countries, the company has not been able to produce the level of sales and revenues it anticipates. This as studies indicate is because the target clients in these countries no longer have the financial capability to make purchases as they did before because of the global economic crisis.

Existing strategy

According to Sridhar (2011, p. 3), companies should always ensure that proper strategies are in place. Strategies define the output of a company (Meyers 2013, p. 45). The existing strategy for Dyson is based on cost leadership and differentiation. This simply means that the company endeavors to provide their clients with an assortment of products and services offering similar or improved quality with their competitors at prices that are much more relatively cheaper.

The company took up this strategy since the day it went public having realized that it could source raw materials and acquire products at prices that could pose a threat to its competitors. However, critics have argued that despite the strategy having worked well for the organization in the past decades it may not be sufficient to help it maintain its competitive supremacy given the current agitating global economic problems (Balzac, 2011, p. 18).

This is because despite its low prices the purchasing ability of its target clients is gradually dwindling making them unable to make the same volumes of purchases. Nevertheless, the organization has kept up with this strategy by always looking out for newer ways to provide products and services at lower prices. Additionally, Dyson is relentlessly rethinking new ways via which it can complete its primary and support activities so that it can further lower the costs while simultaneously preserving competitive echelons in terms of differentiation.

Actually, studies indicate that this is the reason why its competitors have not been able to gain the upper hand over the last three decades because they have not appreciated the need to lower their prices due to the emphasis they have been giving to the maintenance of escalating revenues. The role of the firms supply chain in terms of fostering efficiency in this strategy is evidenced by the efficient internal logistics made possible by the usage of just in time inventory .

Consequently, the company has been able to reduce the costs emanating from outbound logistics. This explains the creation of better levels of fuel efficacy in the firm’s trucks and the bulk purchases that have also served to enable the organization cut down its costs. It is also imperative to consider the role played by technology in advancing and implementing the strategy under discussion.

Technology has given the organization the capacity to forecast demand in an accurate manner and has also sharpened its ability to come up with routes of transport that are more efficient than those used by its competitors. Additionally, technology has also enhanced the ability of Dyson to manage its clients. Conclusively, the cost leadership and differentiation strategy has given the organization the upper hand due by placing high barriers of entry to its competitors (Meyers 2013, p. 49).

Future strategy

The future strategy of Dyson is entrenched in E-commerce. The company came up with this strategy having realized that its sales and revenues had declined greatly over the last few years. By using this strategy, the company intends to rely on technology by setting up a framework that will use the internet as a platform to serve its customers across all conduits. The agenda behind the strategy is to come up with a unique shopping experience (Weissenberger& Kotch 2007, p. 7).

However, one would wonder whether the same strategy will enable the organization to lower its costs below the current ones being offered. However, there is a possibility that this could enable the company to do so bearing in mind that it will lead to a reduction in operational costs. Thus, the strategy could well enable Dyson to lower its prices by approximately 10-15% compared to those offered by its competitors (Sullivan 2001, p. 8). Whereas critics argue that this may not be possible, some scholars believe that it could work with clients that make bulk purchases.

The use of this strategy is also aimed at positioning the firm to become the future of retail as well as catering for the declining purchasing abilities of its globally positioned clients by enabling them to save money. Nevertheless, before agreeing to this possibility one would have to consider the existence of competitors in e-commerce such as Amazon.

Evidently, Dyson will have to do more than just enter into e-commerce because Amazon is currently the giant in this line of business making around 60 billion dollars per year. Whereas Dyson has built its reputation based on logistics, it is almost impossible to achieve the echelons of delivery that Amazon has when it comes to e-commerce. Nonetheless, Dyson intends to start relying on computer sales and the growth of e-commerce by lessening the investments made in starting new stores to focus more on directing capital towards e-commerce.

Transition process

The transition process for Dyson to move from emphasizing on cost leadership and differentiation strategy to directing its resources towards e-commerce must first take into consideration redirecting the company’s resources towards expansion of its e-commerce infrastructure (Riley 2013, p. 23). This means that the organization has to forego its previous efforts geared towards opening new physical stores and focus more on enhancing its online business.

Actually, Dyson has already embarked on the acquisition of jet.com as it seeks to pursue its digital aspirations (Zogjani & Raçi, 2015, p. 3). However, pumping financial resources towards e-commerce alone is not enough to ensure an effective transition. As studies indicate, transition processes only prove effective when organizations realize the need to focus on the needs of target clients by ensuring that the needs of the customers become the platform for business growth.

Bearing in mind the fact that the need for strategy change has been triggered by the adversity of global economic conditions that have decreased the sales and profitability of the company, the transition process must involve a careful consideration of how shifting to e-commerce will enable Dyson to lower its prices to levels that global clients can afford bulk purchases. In addition, the transition process must involve the training of personnel so that the people deployed to work in the digital line will have full comprehension of their duty related obligations (Sharma & Vredenburg 2009, p. 11).

As such, functional training will be necessary so that the e-commerce personnel will have the skills needed as well as the new process information for the transition to be fruitful. Nevertheless, studies indicate that functional training works best when an organization has particular people in mind. This means that prior to the training exercise Dyson will have to identify and recruit specific individuals and sharpen their performance standards based on the e-commerce strategy (Denyer, 2013, p. 135).

Further, the transition process must encapsulate a communication strategy. This means that the current employees must be involved and updated concerning the new changes in order to give each of them the ability to leverage their knowledge, decipher probable pitfalls, and make a commitment towards working with the new strategy.

More importantly, the process of transition should not be considered as an opportunity for the organization to lay down its former strategy entirely but should rather be viewed as an opportunity to merge the useful attributes of the old with the new strategy. Studies indicate that organizations that have viewed the process of strategy transition as an opportunity to completely do away with old strategies have seldom reaped the projected benefits of their new strategy (Denyer, 2013, p. 137).

Consequently, for the e-commerce strategy to help the organization deal with the challenge posed by the turbulent economic crisis Dyson must be able to adopt the new strategy while simultaneously seeking to implement useful and workable aspects of the cost leadership and differentiation strategy it has been using (Suriyamathi, Velavan & Radhiga 2013, p. 31).

Analysis of internal and external environment

The most significant factor in the organizations external environment with regard to the turbulent economic times is the economic aspect. Consequently, Dyson is undergoing a lot of pressure as it seeks to adapt its new e-commerce strategy to the prices of its products and services (Windapo & Goulding, 2013, p. 10). This single factor has led to the reduction of revenues since the countries within which the organization operates are having problems with economic stability.

However, the economic factor still presents an opportunity for the company because of the levels of economic growth being experienced by developing countries in which Dyson has not yet started to operate. Technology is another external factor since the organization must now focus on addressing the current technological trends and especially with regards to e-commerce. Additionally, there is an opportunity because the company can automate its operations and increase its revenue levels.

The aspect of technology also presents an opportunity for Dyson because of the escalating levels of mobile device usage. The threat however is that companies like Amazon have already made their successful entry into e-commerce and it may take a lot of time and effort before Dyson catches up. The most significant internal factor for the company is its low prices. This is a great advantage for the organization because customers have become accustomed to the fact that its products and services are lower than those of its competitors.

Critical analysis of the changing situation

The changing situation as engraved in the turbulent economic times and the future strategy of e-commerce is more of a planned than emergent change. It is a planned change because the company is currently making intentional changes to make its products available over the internet. However, Ali (2008, p. 56) argues that he change is more of emergent than planned because the company has been forced to make amendments in order to respond to the changing customer preferences for online shopping as well as the turbulent economic times.

Although the company has decided to use e-commerce as the future strategy for combating the effects of the turbulent economic times, this may not remedy the situation because of the presence of already existing online companies like Amazon.

While some deem the move to adopt the new strategy the best option for the company to respond, Ali (2008 p. 7) says that it may not be possible for the company to reap the anticipated results unless it persists and focuses on delivery. The ability of Dyson to deal effectively with the challenges emanating from the turbulent economic times will depend on how well it is able to make fitting structural changes that are aligned with the new strategy.

The most significant structural change that will be experienced by Dyson as it seeks to adopt the e-commerce strategy will affect teams and team work in the organization. This is because Dyson will have to come up with technology efficient teams that will work together for the success of the strategy. Additionally, this structural change will influence the culture of the organization.

According to Strazewski (2009, p. 137), e-commerce teams have to be so cohesive that any changes in the customer demands and prices are passed to each member of the team to help businesses stay afloat. This means that the organization will have to focus more on the culture of timeliness and transparency. However, the company is likely to experience problems in entrenching this culture because its current employees have not been accustomed to online business.

The cultural web of Dyson has played a major role in the past in helping achieve organizational competence (Prasad & Nori 2008, p. 50). For instance, the control systems of the firm have enabled the company to effectively monitor and sustain its supply chain (Zendg 2009, p.44). However, the current control system may not be compatible with the strategy that the company aims to deploy.

According to Cloutier and others (2015, p. 21), it is impossible for companies that have engaged in e-business before to expect success by deploying the same control system. Further, the current rituals in the organization have been focusing on the supply chain as well. This means that the firm will have to adopt a new set of rituals that emphasize more on the performance of e-business.

The role of technology at Dyson as the company seeks to introduce the e-commerce strategy is irreplaceable. Firstly, this is because the organization will most likely have to make some changes in terms of human resource in order for the strategy to work. This means that the company may have to replace some of its employees with others that are technology efficient (Loo 2009, p. 9).

Further, there will be need for constant training so that the strategy works as anticipated. Although Dyson expects the new strategy to lead to higher profit margins, this may not be the case in the short-run. According to Huang (2010, p. 140), e-commerce forces organizations to lower their prices more than expected because customers can easily find the same products at similar or lower prices over the internet. Nevertheless, the catch is that technology will help Dyson to do business in every country of the world. This is because of the ability of technology to break geographical barriers (Jones & Parry 2011, p. 16).

This means that the organization will have the capacity to increase the volume of sales and consequently the profit margins due to the global expansion of its market (Theodore, 2014, p. 71). There is however a possible problem in that the use of technology has a way of altering consumer loyalty and purchasing behaviors. This is because of the increasing presence of online retailers causing clients to begin evaluating their options and may opt to go for retailers that have already made their impact in online business like Amazon (Ling. 2015, p. 75).

Recommendations

It is highly recommendable for Dyson that the company instead of completely doing away with the cost leadership and differentiation strategy to try and merge the existing strategy with the future strategy based on e-commerce. This is because the existing strategy has helped the company achieve the current levels of competitiveness and completely setting it aside will deprive the company of the benefits attached. Due to the presence of competitors like Amazon the company should also consider taking time to research on better online platforms although this will take time.

Conclusion

Business strategies should be set up in line with structures of businesses. Well selected strategies always thrust businesses into good performances. Change management should be handled properly till completion. This should be guided by organization culture and company leadership as seen in the case of Dyson company.

References

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Risk and Return

1. Risk and its measurement

Risk is the probability of variation in actual return from the expected return on investment. It is related to future uncertainty of gaining or losing of investment value. The basic principle of investment is higher the risk, higher is the profit (Fidelity International, 2017). Broadly the risk can be classified in two categories: systematic risk and unsystematic risk. Systematic risk is also known as market risk and it is uncontrollable. Unsystematic risk is a specific risk which is controllable through diversification.

Management of risk is very crucial in any investment decision and it starts with the measurement of risk. There are various methods to measure the risk level. The most commonly used method is computation of standard deviation and variance of distribution of return on investment. The standard deviation measures the volatility of returns or the degree of fluctuation of actual risks from the expected returns.

The higher value of standard deviation denotes higher volatility and thus depicts high level of risk whereas the low value of standard deviation denotes lower volatility and thus depicts low level of risk.

2. Source of firm specific risk and market risk

Firm specific risk is a risk which is specific to a particular firm or group of firms. It arises due to factors which are specific to a firm or group of firms. It is an unsystematic risk which can be controlled by making investment in portfolios instead of making investment in single security.

The main source of specific risk is business risk and financial risk. Business risk is the possibility of lower profits in a business than the expected one. It may be due to competition, low demand of product, high cost of production, bad management decision and input cost etc.

Financial risk is associated with liquidity position as well solvency position of company. In other words it is related to the capacity of the company to repay its short term liabilities as well as long term liabilities in time. For example, UK based banking organization Banco Espirito Santo (BES) failed in 2014 due to its financial irregularities. It is firm specific risk.

Market risk is the systematic risk which arises due to macro events which have impact on all firms (Weaver & Weston, 2001). The degree of impact may vary from industry to industry. It cannot be controlled with diversification that is why it is also known as undiversifiable risk. Sources of market risk can be any natural disaster, change in government regulation, political change, market recession, changes in foreign exchange rates and interest rates. For example, demonetization of currency in India in 2016 had same impact on all industries. It is market related risk.

3. Coefficient of variation

Coefficient of variation is a statistical measure which expresses the ratio of standard deviation to average return of the data distribution (Damodaran, 2014). It is calculated as follows:

Coefficient of variation = Standard deviation of data distribution

Mean of data distribution

It measures the dispersion of data points in a data distribution around its average. It is also known as relative standard deviation as it can be used to measure and compare the degree of variation of two different data series with different number of samples. The higher value of coefficient of variation depicts higher degree of variation and thus higher risk and vice versa. For example stock A has return of 8% and its standard deviation is 25%. Stock B has return of 9% and its standard deviation is 30%.

The coefficient of variation will be as follows:

Stock A = 25% = 3.13%

Stock B = 30% = 3.33%

The coefficient of variation of stock A is low as compared to stock B, so the level of risk is low in stock A as compared to stock B.

References

Damodaran, A. (2014). The Investment Principle – risk and Return Model. Retrieved from http://people.stern.nyu.edu: http://people.stern.nyu.edu/adamodar/pdfiles/acf3E/presentations/risk&ret.pdf

Fidelity International. (2017). About risk and return. Retrieved from https://www.fidelity.co.uk: https://www.fidelity.co.uk/investor/getting-started/the-basics/understanding-investing/property/risk-return.page

Weaver, S., & Weston, J. F. (2001). Finance and accounting for non financial managers (3rd ed.). New York: NY: Mc Graw Hill.

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Strategic Planning and Strategic Performance

IMPLICATIONS OF STRATEGIC PLANNING OF FINANCIAL INSTITUTIONS ON STRATEGIC PERFORMANCE AT FAMILY BANK (KENYA)

Abstract

Financial institutions presently implement strategic planning with the aim that this will lead to better performance. Previous research focused on the strategic planning and performance direct relationship and not the guidelines followed that make up the process of strategic planning. The manner and extent to which each of the steps is practised could have implications on the expected strategic planning results. The study’s purpose is to establish the effects of strategic implementation on a bank’s financial performance.

The effectiveness of strategic planning is measured by the extent to which it affects organisational performance and its survival rate. The study has a primary aim of looking into the relationship between planning and fulfilment in a financial organisation and determines the extent to which strategic planning affects performance in an enterprise, of which the Family Bank of Kenya, will be used as case study. Based on the above objective, relevant kinds of literature were thoroughly reviewed, and three research questions were formulated for this study.

The study is aimed at proving that Strategic planning enhances better financial institution performance, which at the end last has an effect on its survival and that strategic planning intensity is determined by managerial, environmental and organisational factors. This research is to help the management and administration of the Family Bank of Kenya as a guide to implementing an effective strategic planning for improved corporate performance.

The findings of this research work will also help the public who would want to know about some advantages and disadvantages of strategic planning and its effect on organisational performance. The research tools included; interview, reading the corporation’s journals, reading research books and e-books and also use of questionnaires.

CHAPTER ONE: BACKGROUND OF THE STUDY

Introduction

Although strategic planning began with military war decades ago, it has become a central element to many organisations today (Efendioglu and Karabulut, 2010). Strategic planning is the organisational process of defining its strategy and taking up decisions on the allocation of resources to implement policies (Thompson and Strickland, 2004). Robert and Duncan (2007) asserted that strategic planning offers directions to organization’s departments according to their identified strategies to achieve success.

There has been a rise in scholars’ opinions in the past concerning strategic planning and how it is effective in competition and firm performance. (Schmenner, 1995) asserted that financial institutions which are in the service industry are susceptible to the threat of entrants to the market and therefore need strategic thinking for designing and implementing projects that will make the firms stand out in the market.

Thompson and Strickland (2003), regard strategic management as a critical process that leads to formulated strategies being implemented to ensure the achievement of organisational objectives. Efendioglu and Karabulut (2010) said that suggestions were made concerning the use of formal plans to control market forces and competition for a firm’s effectiveness and performance. Educational institutions, business administrators and researchers have paid attention to strategic planning due to its effect on competition and organisations performance (Efendioglu and Karabulut, 2010).

Strategic planning has granted opportunities to the Family Bank of Kenya in the creation of projects that are aligned with plans and in the daily activities of the firm. The strategies therefore used by the Family Bank of Kenya acts as a guide in this study as the researcher aims to identify whether strategic planning has implications on the strategic performance of firms.

General objective: The researcher intends to find out the implications of strategic planning of financial institutions on strategic performance.

1.1 Background of the organization

The family Bank is also known as the family bank limited and is a financial institution started in 1984 by the name Family Finance Building Society Limited. Later in the year 2007, its name changed to Family Bank Limited. The bank has its headquarters in Nairobi and a total of 93 branches. The key leaders in the Family Bank are the Chairman of the BOD, the managing director and the chief executive officer. The Bank states its aim as meeting the needs of people ignored by other banks. The financial institution has concentrated on small income earners such as fishermen, farmers and the Jua kali sector.

The mission of the bank is to liberate people from poverty and financial bondage. Family Bank offers loans, savings, checking, and investment and debit cards as its products to its consumers. The bank also has a purpose to helping people obtain and sustain wealth through the financial services it offers.

Strategic importance is a necessary tool for the Family Bank of Kenya as it has a strategic thrust of becoming a premier lender. The key areas of strategic planning by the bank include infrastructure, the organisational structure, offering innovative products and services and quality customer service.

1.2 Statement of the problem

Though the importance of strategic planning on the performance of the Family Bank of Kenya is to satisfy the needs of its customers, nevertheless several obstacles are militating against the effective execution of such strategic planning. These issues include competition from other financial institution operators. There also is inadequate and ineffective information systems and overemphasis on short-term results to the neglect of long-term goals.

These problems mostly associated with the Family Bank of Kenya and therefore required solutions as revealed from the study done so as to encourage the performances of the Bank economically through the development and implementation of strategic planning.

1.3 Objectives of the Study

• To establish the extent to which leadership with strategic implementation has influenced organisational performance.

• To determine the degree to which corporate structures on strategic implementation has affected organisational performance.

• To establish the extent to which resource on strategic implementation has influenced organisational performance

1.4 Research Questions

1. How does leadership on strategic implementation influence organisational performance in Family Bank?

2. What is the extent to which corporate structures on strategic implementation has an impact on the organisational performance of Family Bank?

3. What is the extent to which resource on strategic implementation impact corporate performance?

1.5 Significance of the Study

The Family Bank of Kenya has maintained a first rating with the capacity to meet obligations as and when they fall due since 1984. The expectation is that the study will yield information that may be useful for future proper planning and decision making in the Family Bank of Kenya to improve competence and customer satisfaction. The findings and recommendations of the study may also be useful to the management and directors of other financial institutions.

This study will assist them not to rely on haphazard personal experience or subjective expert judgment or tradition or fashion in their management tasks but base their methods, decision and actions on concrete knowledge of issues of their strategy implementation supported by the findings. It is my hope that the study will form a basis for further research on how to enhance the competence of not only the Family Bank of Kenya but other organisations. Further research may lead to the generation of new ideas for better and more efficient management of banks and other organisations in Kenya and globally.

1.6 Scope of the Study

As an enterprise with a new status, the Family Bank of Kenya presents a tremendous responsibility to provide leadership in innovation, the products and services offered, creative thinking, value production and the implementation of globally accepted best practices through the adoption of strategic plans.

Hence, this study will focus on strategic plan employed by the Family Bank of Kenya and the criteria tools used in evaluating the performance of the Bank with particular reference to other organisations involved in the competition.

CHAPTER TWO: LITERATURE REVIEW.

2.1 The Concept of Strategy

Scholars have put forth different explanations of how they define strategy. The strategy is a crucial aspect of an organisation as it used as a tool to offer directions in the firm. Aremu (2010) defined strategy as a formula for organisational competition and a guide to what policies are to use for success. Mintzberg (1994) referred to strategic planning as a systematic criterion of implementation, formulation and control of strategies to meet organisations objectives.

Arasa and Obonyo (2012) states that most corporations are taking strategic planning as a tool used to show the level of a firm’s performance. Studies on strategic planning have been done in the past, but they did not consider steps in the strategic planning procedure. Ansoff (1970) explains strategic planning as a process of searching the relationship between making plans and performance in a firm.

Drucker (1954) implied that strategic planning involved managing programs in a process that is meant to make best strategic decisions. Strategic planning is an environment affected by consumers, changes in technology, competitor and social-political factors (Drucker 1954). Steiner (1979) refers to strategic planning as a formal systematic effort used in establishing enterprise policies, objectives and purposes.

Planning entails the creation of a detailed course of actions to enable implementation of strategies to achieve a firm’s goals and objectives. Wendy (1997) breaks strategic planning into three components that lead to achievements of the mission and visions of an organisation. The three elements are setting of the enterprise directions on its goals, defining the company’s strategic intentions and putting efforts in understanding the business environment.

2.2 Strategic planning and performance

Ansoff (1971) proved that strategic planning could result in excellent financial performance which is measured by various accounting measures such as the net income and internal rate of return. Porter (1987) outline cost strategies, differentiation strategies, focus and generic strategies that would enhance performance in businesses. Mintzberg 1994 argues that good outcomes do not originate only from planning but the effort put by the commitment from people.

Hopkins (1997) also claim that high performance can be discovered through planning but only with managers input or participation. Miller and Cardinal (1994) are said to put strategic planning to test and approved that it leads to positive performance. The strategic planning process is defined by many as entailing three major steps. (Armstrong 1982) Policy planning involves formulation, implementation and control.

Dimma (1985) claimed that performance is greater when managers place more emphasis to the stages of strategic planning. Hopkins (1997) stated that the financial performance of a firm cannot be directly linked to strategic planning. However, it arises from the different manager skills contained in the enterprise. The skills by managers show the kind of experience and expertise that they have in policy planning.

Managers are not so much into the process of strategic planning as they do not understand the significant impact it has on output. (Steiner 1979). Bird (1991) stated that the environmental change and intensity has led to the need for strategic planning in banks.

2.3 Theoretical framework

2.3.1 Thompson and Strickland Model

According to Thompson and Strickland Model (2003) implementation processes and activities or consumption sets up processes that can be used to gear an organization towards a set objective.

Table 2.1: Steps for implementing strategies

Step	Special tasks
Creating an organization which can implement the strategies.	Creating a structure which supports implementation of strategies. Reinforcing skills and capabilities on which strategies are planned. Positioning most appropriate people for occupations in organizations.
Providing financial resources (budgeting) which can support strategies.	Being sure that financial resources are allocating to units in appropriate to their contribution of strategic role. Being sure that consuming resources (inputs) will cause desired outputs.
Establishing inter support units.	Developing and managing policies and procedures that facilitate implementation of strategies. Creating operational and administrational systems which can empower strategies.
Innovating motivation and remunerations in close relationship with objectives and strategies.	Motivating people and units for implementation of strategies. Designing remunerations can cause optimal level of performance. Encouraging tendencies for achievement of aims.
Forming organization’s culture to adjust strategies.	Creating common values. Defining ethical criteria Creating a workplace which supports strategies. Creating highly achievement motives in culture of organization.
Establishing inter support units.	Developing and managing policies and procedures that facilitate implementation of strategies. Creating operational and administrational systems which can empower strategies.
Performing leadership strategies.	Leading process of value formation, culture development and empowering implementation. Developing and saving innovations, responsibility to environment and using opportunities. Considering political aspects of strategies, confronting to power conflicts, and creating consensus. Posing ethical criteria and behaviour. Innovating modifications for improving implementation of strategies.

Source: Thompson and Strickland (2003)

According to this model, there are several steps that an organisation should undertake to have a successful strategic plan implementation. Each step has a unique task taken. The factors in this model are relevant to this study because they show what an organisation should undertake to have successful implementation towards business performance. It has step by step plans with a particular task that companies can follow to influence their capabilities.

The following dimension of this model was selected and considered relevant to this study: Creating an organisation which can implement strategies. This dimension is appropriate this study while looking at organisation structures. It has particular tasks that should be undertaken to influence a company’s performance.

Providing inter-support unit is considered relevant to the study because it shows us that an enterprise can go about setting the appropriate policies, procedures and rules that can influence proper administration and operation functioning that can lead to good organisation performance. Performing leadership dimension is considered because it shows group leadership should go about in its endeavours to influence performance in a firm.

It shows how leadership leads to values formation, culture development, conflict resolution, and motivation in an organisation providing financial resources (budgeting). This dimension is considered because it shows financial allocation and budgeting is relevant to the contribution of strategic goals in the business.

2.4 Empirical review

Strategic planning researchers and academicians have contributed to the literature by examining the conditions under which specific practices, resources or structural arrangements contribute to sustainable competitive advantage. However, strategic management or strategy is a relatively young field facing all the problems and difficulties associated with a growing academic discipline.

Historically, the field of policy was viewed as ‘integrative’. Most scholars actively involved in the study of strategy hail from a host of disciplines – anthropology, sociology, population ecology, finance, marketing, political science, and theology to name only a limited number.

A study by Kaplan and Norton (2008), suggests that the management of operations and strategies involves five steps. The first phase is forming of the strategy with alignment to the company’s policies. The second step is translating the set strategies to objectives.

Thirdly, an operational process is created to facilitate the achievement of initiatives. The fourth step entails the implementation of the plans as well as monitoring performance. The last step is putting the strategy to the test by an analysis of profitability and cost in comparison to the outcome or performance.

A lot of scholars are now researching on the central role of firm processes in the improvement of financial performance. According to Spanyi (2004), the book by Kaplan and Norton on “Strategy Maps” puts business processes at the centre of their approach of measuring a firm’s progress in implementing the plan (Spanyi, 2004). They wanted to put emphasis on that in a procedure of changing to a processing company, and they thus kept a focus on thorough analysis in the implementation of processes which would, in turn, affect the organisational success.

2.5 Conceptual Framework

Strategic management practices are useful only when they make a positive difference in output from the traditional management practices. In this study performance is the dependent variable and independent variable include leadership, policies and procedures, structures and resource allocation

Figure 2.1: Conceptual Framework Showing Relationship between Strategic plan Implementation and Performance Source.

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Introduction

This section gives a detailed procedure of the methods to use in this study. It focused on a clear and concise description of the methods and manner through which this research work is to be conducted. Data has to be gathered for proper analysis of the effect of strategic planning on organisational performance using the Family Bank of Kenya as my case study. Therefore, an attempt is made in this chapter to show the results of this study by considering areas such as the design of the survey, research instruments, the population of the study, sample and sampling techniques, the method of data analysis and reliability of the instrument.

3.2 Research Design

According to Heron (1998), a research design refers to a method for managing and utilising information to get the desired precision. This study adopted a cross-sectional survey research approach. A cross-sectional approach is an approach where information on a population is gathered at a single point in time which is the case for this study. The study design uses the family bank of Kenya as the case study. The method chosen for the study is appropriate for obtaining in-depth knowledge of the policies utilised by the Family Bank for competitive advantage. Kothari (1990) agrees to the fact that a case study gives insight into issues that may be less known or not known by many.

3.3 Target Population

The target population for the study will be all departments within the headquarters of the Family Bank situated in Nairobi. The departments included in the survey will consist of the Operations/ Customer Service, Treasury, Risk Management, Inspection, Information Technology and the Human resource Department. Most importantly, financial managers and accountants who are involved in financial planning functions of the bank will be interviewed.

Five managers from the departments and 20 employees from the various departments that get affected by the financial planning of the bank will be interviewed. Before the interview, the researcher will seek permission from the respondents by explaining the nature and reason for undertaking the research so that none of the interviewers will be undue pressure to participate.

3.4 Sampling procedure

The sampling method used is stratified random sampling to select the respondents. This design allows the population to have an equal chance of being selected in the different strata. The strata, in this case, are the various categories within the company. The sample was chosen to ensure that the sampling size had a symbolic representation of the population.

The formula to find the sample size is:

n = N /1 + (N * e2)

Where;

N= population size

e= Tolerance, take 0.05 at 95% confidence level

n= sample size.

The distribution of the sample across the categories will be done using the formula:-

Number of individuals in the category x the sample size

The researcher intends to interview 5 managers from the company’s departments and 20 employees distributed across the departments.

3.5 Data Collection

The study uses both secondary and primary data. Secondary data is obtained from existing literature such the financial statements and records found at the Family Bank of Kenya. Primary data is gathered by the use of interviews. The study will however rely mainly on primary data collected using a questionnaire. The respondent consists of senior management, middle management and operational staff of Family Bank.

Structured questionnaires, where the study participants are asked to respond to same questions, will be used to aid the study (Mugenda and Mugenda, 2003). Five concept questionnaires will be used with multiple variables under each concept. The concepts will consist of Strategic Leadership, Organisation Structure, Resource Allocation and Performance. Books and journals from Family Bank will act as reference in this study.

The questionnaires will be semi-structured to allow attainment of diverse opinions and views regarding the research question. Interviewees will be given the ability to demonstrate their understanding of the topic by explaining their opinions such that questions may lead to other questions or dimensions for answering them. By getting diverse opinions, it’s possible to critically evaluate the research question and provide a detailed and conclusive analysis.

3.6 Validity of the Research Instrument

According to Mugenda and Mugenda (2003), reliability refers to the degree to which the research instrument can yield consistent results and data from repeated trials. Validity, on the other hand, is the extent to which results from the analysis of the data represent the phenomenon under study. To maximise the reliability of the instrument the researcher with the help of experts in measurements and evaluation will ensure that the questions in the questionnaire are not ambiguously presented to the respondents. In other words, to ascertain the reliability of the instrument, questionnaires have been used by several researchers who have come out with reliable solution to the problems

3.7 Data Analysis and Presentation of Findings

The study will apply descriptive statistics which describes and summarises data so that patterns are made visible. Inferential statistics are used to analyse the relationship between the factor and the service quality and multiple regressions to evaluate the contribution of all the factors to the dependent variable. Multiple regression methods use the correlations between a dependent variable and independent variables as a criterion to determine which variables would be included in the regression model.

3.8 Ethical issues

The researcher will upfront inform the respondents that taking part in the survey is voluntary and that they are also not forced to disclose information that they are unwilling to. The researcher expects to get resistance or difficulty with some of the respondents. Trust will be obtained from respondents by explaining to them the purpose of the research and the benefits it has on the firm. The interviewees will be given an opportunity to ask questions which will be answered by the interviewer.

3.9 Chapter summary

This section explores the research design and methods to be used by the researcher in the study. The researcher will use company records as secondary data together with semi-structured interviews and questionnaires, which of form part of the primary data, to collect data. The respondents will consist of the managers and employees distributed within the different departments of the bank.

For ethical purposes, the respondents will be asked to sign non-disclosure forms to ascertain that researcher will ensure confidentiality. Moreover, the researcher will follow the required guidelines as stipulated in the company’s policy to select respondents, like through the gatekeepers including the management, so that the research will be openly conducted. Respondents will deliberately decide to participate in the research.

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Efendioglu, A. M., & Karabulut, T. (2010). Impact of Strategic Planning on Financial Performance

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CONSUMER BEHAVIOUR

Marketing activity in the modern day makes up a central aspect of social life with branding and advertising influencing consumption and shaping economic, cultural and political identifications of society. Understanding consumer behaviour is essential for marketers in targeting increased product sales as well as understanding the phenomenon of changing markets.

One of important hypothesis in economics and marketing is that economic decisions follow a rational process that enable consumers to maximize their utility given resource constraints of price and cost. Many people however make decisions based rather on their short-sighted judgment than on long-term plans for optimizing utility. Behavioural economics is founded on the claim that human decision process is driven more by emotions as opposed to only rational reasoning.

The recognition that emotions can manage our subconscious reactions to conscious perceptions has led to the need to adopt a more modernist understanding of consumer behaviour as it affects purchase decisions and marketing (Foxall, 2015). This report presents a critique of the traditional understanding of consumer behaviour and discusses how desire may be a more relevant way for marketers to understand contemporary consumer behaviour. Marketers require an understanding of consumer decision making in designing appropriate marketing strategies and promotional messages that would be more effective in influencing purchase decisions.

Background and Statement of the Problem

Customer behaviour is an integral concept in strategic marketing and planning, and is based in the context of consumer buying behaviour. In order to develop a framework for studying consumer behaviour, it is helpful to considering the evolution of the concept in research and marketing discipline. The concept of consumer behaviour emerged during the 1960s as a distinct field of study characterized by two broad paradigms, the positivist and non-positivist.

The positivist paradigm defines consumer behaviour using economic, behavioural, cognitive, motivational, trait or attitudinal and situational perspectives. These are referred to as the traditional perspectives of consumer behaviour and they pave the way for the development of the non-positivist paradigm. Positivism is typical of neoclassical economics that seek to describe and explain economic phenomena without referring to moral and ethical judgements.

The positivist paradigm is still the dominant paradigm explaining consumer behaviour. The traditional positivist perspective takes a utilitarian approach to consumption and emphasizes the supremacy of human reason and rationality in selecting the alternative with the highest utility value. The non-positivist paradigm represents an opposing view to positivist understanding of consumer behaviour.

Non-positivism encompasses the interpretive and postmodern perspectives of consumer behaviour that have emerged more recently after 1980. Non-positivist research into consumer behaviour seeks to arrive at a better understanding of human behaviour as it influences consumption processes and purchase decisions. The non-positivist perspective places greater emphasis on the symbolic dimensions of consumer choice rather than rational economic decision process (Deepa & Murugan, 2015).

Comparing the two perspectives yields a set of paradigms that frame the contrasting view of the postmodernist understanding of consumer behaviour as compared to the traditional understanding. Five dialectics of consumption can be identified in academic and research literature for understanding the contrasting ideas of consumer behaviour in the traditional and the modernist perspectives.

These are materialism versus symbolic consumer culture, the social versus the self, desire versus satisfaction, rationality versus irrationality, and creativity versus constraint (Brosekhan, Velayutham & Phil, 2013). This report will focus on understanding irrational desire in the modernist view as it compares to rational satisfaction in the traditional view of the consumer decision process. The report compares how the two perspectives influence purchasing behaviour and consequently effectiveness of marketing strategy.

Traditional Understanding of Consumer Purchase Behaviour

The traditional understanding of consumer behaviour views the customer as an economic man or rational consumer that is motivated into purchasing by facts, and reasonably considers the facts in making the purchase decision to possessively get the maximal benefit while expending the least work. As identified in classical economic writings, man is entirely rational and self-interested, and makes decisions based upon his ability to maximise utility whilst expending the minimum effort (Jemma, Zwick & Neville, 2016).

The rational consumer theory has become the basis of understanding the customer in the field of marketing and marketing communications. The rational consumer theory is not only applied in economics but is also used in other professional fields to interpret human decisions and actions that result from consumer behaviour following rational choice by the economically-minded man.

In order to make rational purchase decisions, a consumer would have to be aware of all available alternatives for purchase and consumption, and be able to rate each option correctly and select the most favourable alternative. This is however not the case in many decision situations and is no longer accepted as a realistic account of the human decision making process.

As put forward in such theories as the Satisficing Theory by Herbert Simons (1997, 1991), Prospect Theory by Kahneman and Tversky (1979) and other such theories that embrace bounded rationality, individuals are further described as seeking satisfaction rather than pursuing optimum choices (Trandafilovic, Pasic & Perunovic, 2013).

Consumers rarely have adequate market information and lack the motivation and time to make the most perfect decision. As a result, the decision-making process of consumers is often affected by less rational influences such as personal attitudes and perceptions, and social relationships and values (Diglel & Yazdanifard, 2014).

Desire in Contemporary Consumer Behaviour

Recent research studies in consumer behaviour show quite different findings from those expected following a rational man or positivist perspective. Different academic and professional disciplines, primarily in psychology and more recently neurology, have attempted to offer and define the possibility of irrational man in decision situations that supposedly require rational thinking.

The combination of economics and psychology has given rise to “behavioural economics” a scientific field that gives a completely different perspective on consumer behaviour. The field of behavioural economics especially offers an explanation of the various irrational influences that can impact the decision-making process of humans (Cisek et al., 2014).

Although a person is naturally motivated to make effective and rational decisions, humans often confirm their limited willpower and inadequate or incomplete account of information relating to the decision. These necessitate taking into account the other irrational component of the human decision making process, which are composed of different emotions that influence human thought process.

These include the desire for money, fashion and vanity, fear, pride of possession, health and comfort, and love and affection (Kovac, Grubor & Maric, 2016). Irrational elements in many cases exceed the expected rationality as has been proven in many behavioural studies experiments and researches such as McDaniel, Lamb & Hair (2006), Gobe (2006), Dunne (2005), Hanna & Wozniak (2001) and Stewart (1994).

Such studies have shown that emotions are strong psychological processes that get involved in subjective decisions in interpreting experiences of pleasure and displeasure, physiological impression, motor symptoms, and changes in the availability and orientation (Olivera & Kustrak, 2013).

According to recent researches by behavioural science experts including Kotler& Arm-strong (2008), Du Plessis (2007, 1991) and Altman (2006),emotions play an important role in the perception of advertising messages (Trandafilovic, Pasic & Perunovic, 2013). Emotions are called upon and used to assess the facts, events, situations and results of the decision and experience based on the subjective state of mind, and are used to evaluate the relationship that would lead to taking a position on the given purchase decision or marketing situation (Hill & Fombelle, 2013).

They therefore cause and affect other psychological processes including purchasing decisions, and can even cause a paradigm change in a person following an encounter with an advertising message.

Implications for Marketing

Economics is regarded as a non-experimental science that cannot rely on laboratory experiments and utilizes only field observations to arrive at theoretical postulates. In contrast, behavioural economics advocates for controlled experiments as an important part of research for verifying economic theory (Wei & Lu, 2013).In understanding the consumer purchase decisions-process that should be rational following logical and predictable steps, behavioural economics offers a completely different perspective.

In many consumer purchase situations such as insurance, saving, health care, fashion, and employment relationships, some elements of irrational behaviour are evident. The consumer has certain preformed expectations for these products that rational reasoning marketing messages might find impossible to change if the marketing message does not address the emotions and feelings of the customer (Srikant, 2013).

Application of knowledge contained in the postmodern perception of human behaviour has been labelled as neuro-marketing, which offers an alternative way of presenting marketing communication to customers. Behavioural economics applied in marketing deals with incorporating symbolism and stories in a reconstruction of the world in which consumers live.

Irrational factors that influence customer purchase behaviour are derived from human feelings, emotions and other sources in the environment such as class, social image, fashion, heritage and concern for the environment amongst others. Innovative marketing companies are using methods such as environmental awareness and social responsibility to better communicate their brand value (Foxall, 2015; Walz, Hingston & Andehn, 2014).

Instead of focusing on only communicating the rational properties of the product, marketers can offer a story behind the brand that will arouse emotions in the consumer to associate with and purchase the brand. Such an approach offers the opportunity for the customer to become part of the new constructed world by consuming the brand (Lee, Gregg & Park, 2013).

Conclusion

In the contemporary world, consumption, advertising and branding constitute central aspects of social life that continue to shape the economic, cultural and even political identifications of organizations and the people relating with them. Certainly, social and behavioural theory is now focusing on consumption as playing a central role in the way the economic world is constructed. Studying consumer behaviour enables marketers and market researchers to understand and predict how consumers would react to promotional advertising messages, and by extension, why they would make purchase decisions.

Reference list

Brosekhan, Abdul A., Velayutham, Muthu C & Phil, M. (2013). Consumer buying behaviour – a literature review”, IOSR Journal of Business and Management, 08-16. Accessed from http://www.iosrjournals.org/iosr-jbm/papers/ncibppte-volume-1/1014.pdf

Cisek, Sylwia Z., Sedikides, C., Hart, Claire M., Godwin, Hayward J., Benson, V. & Liversedge, Simon P. (2014). “.Narcissism and consumer behaviour –are view and preliminary findings”, Frontiers in Psychology.5 (232). Hypothesis and Theory Article. Accessed from http://eprints.soton.ac.uk/363407/1/__filestore.soton.ac.uk_users_gg_mydocuments_constantine%20publications%20pdf’s_2014_Cisek%20Sedikides%20Hart%20et%20al%20%202014%20Frontiers.pdf

Deepa, N & Murugan, M. (2015). “A study on consumer behaviour towards international brand of home appliances at Vellore city”, CLEAR International Journal of Research in Commerce & Management”, 6(4), 9-11. Accessed from http://web.b.ebscohost.com/abstract?direct=true&profile=ehost&scope=site&authtype=crawler&jrnl=22494561&AN=119728097&h=Y201Vmgm%2f9ZMKnMIVPHBBN3eFJx0GkoMzEB9hDC4Q3AZqbGF9RqNWEBeWSWFcj149P1FTPEEAUlCz87Gom0Yhg%3d%3d&crl=c&resultNs=AdminWebAuth&resultLocal=ErrCrlNotAuth&crlhashurl=login.aspx%3fdirect%3dtrue%26profile%3dehost%26scope%3dsite%26authtype%3dcrawler%26jrnl%3d22494561%26AN%3d119728097

Diglel, Aman & Yazdanifard, Rashad (2014). “Green Marketing: It’s Influence on Buying Behavior and Attitudes of the Purchasers towards Eco-Friendly Products”, Global Journal of Management and Business Research: E Marketing, 14(7). Accessed from https://globaljournals.org/GJMBR_Volume14/2-Green-Marketing-Its-Influence-on-Buying-Behavior.pdf

Foxall, Gordon R. (2015). The Routledge Companion to Consumer Behavior Analysis. Routledge Publishers. Accessed from https://books.google.co.ke/books?id=u8xmCgAAQBAJ&pg=PA19&lpg=PA19&dq=consumer+behaviour+in+marketing+2013+201*&source=bl&ots=p392f1yun-&sig=HUIfNR25OqrLLBikoJv7AuvA3nI&hl=en&sa=X&redir_esc=y#v=onepage&q&f=false

Hill, Krista M. & Fombelle, Paul W. (2013). “The role of curiosity in consumer behavior”, AMA Summer Educators’ Conference Proceedings, 24, 12-23. Accessed from http://connection.ebscohost.com/c/articles/90022196/role-curiosity-consumer-behavior

Jemma, Michal C., Zwick, D. & Neville, B. (2016). “The ideology of the ethical consumption gap”, Marketing Theory, 16(1), 21-38. UK: Sage Publications. Accessed from http://www.gla.ac.uk/media/media_451526_en.pdf

Kovac, Ruzica Z., Grubor, Aleksandar & Maric, Drazen (2016). “Impulsive consumer behavior”, International Journal of Multidisciplinarity in Business and Science, 2(2), 81-89. Accessed from http://hrcak.srce.hr/file/195744

Lee, S.Y., Gregg, A. P. & Park, S.H. (2013). “The person in the purchase: narcissistic consumers prefer products that positively distinguish them”, Journal of Personal and Social Psychology, 05, 335-352. Accessed from https://www.ncbi.nlm.nih.gov/pubmed/23773040

Meenakshi, Kukreja, R. (2016). “Consumer’s behaviour while purchasing apparels in sale period”, Management Dynamics, 16(1), 1-40. Accessed from http://web.b.ebscohost.com/abstract?direct=true&profile=ehost&scope=site&authtype=crawler&jrnl=09725067&AN=118351573&h=e%2fv0AAqK4mrauG2OMxKukfAAZHwsw0ySOFEktaHDWi%2fYu9rHbSIGW64bROUG7PCtedHdRDW4tJkNRnfwzgXFVQ%3d%3d&crl=c&resultNs=AdminWebAuth&resultLocal=ErrCrlNotAuth&crlhashurl=login.aspx%3fdirect%3dtrue%26profile%3dehost%26scope%3dsite%26authtype%3dcrawler%26jrnl%3d09725067%26AN%3d118351573

Olivera, Majic J. & Kustrak, A. (2013). “The influence of religion to consumer behaviour and further implications to international marketing”, International Journal of Management Cases, 15(4), 287-300. Accessed from http://web.b.ebscohost.com/abstract?direct=true&profile=ehost&scope=site&authtype=crawler&jrnl=17416264&AN=89544329&h=b6WPO0iDkHcMPhbyn%2bfxyK5mtMsDPaY%2faFn0q8Mt%2bEuN%2f6w23BY8JWr4bERNntYc3YxtpDgVUTvsi3hCJ1F8aQ%3d%3d&crl=c&resultNs=AdminWebAuth&resultLocal=ErrCrlNotAuth&crlhashurl=login.aspx%3fdirect%3dtrue%26profile%3dehost%26scope%3dsite%26authtype%3dcrawler%26jrnl%3d17416264%26AN%3d89544329

Srikant, Manchiraju (2013). “Materialism in consumer behavior and marketing – are view”, Management and Marketing Challenges for the Knowledge Society, 8(2), 329-352. Accessed from http://www.managementmarketing.ro/pdf/articole/315.pdf

Trandafilovic, I., Pasic, V. &Perunovic, S. (2013). “The research of cognitive and affective behaviour during shopping”, Economics and Organization, 10(2), 147-164. Accessed from http://facta.junis.ni.ac.rs/eao/eao201302/eao201302-05.pdf

Walz, M., Hingston, S. &Andehn, M. (2014). “The magic of ethical brands: interpassivity and the thievish joy of delegated consumption”, Ephemera: Theory and Politics in Organization, 14(1), 57-80. Accessed from http://www.ephemerajournal.org/contribution/magic-ethical-brands-interpassivity-and-thievish-joy-delegated-consumption\

Wei, Pei-Shan & Lu, Hsi-Peng (2013). “An examination of the celebrity endorsements and online customer reviews influence female consumers’ shopping behavior”, Computers in Human Behavior, 29(1), 193-201. Accessed from https://pdfs.semanticscholar.org/bd6b/3ef8cab804823b4ede2c9ceb6118a5dd9f0f.pdf

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Ethical Marketing framework: Case Study of Land Rover

Ethical Marketing framework

Case Study

An Analysis of Land Rover’s marketing activities using ethical framework

Land rover is a car company that is owned by Jaguar Land rover, which is a multinational car manufacturer. The company specializes in four wheel drive, and is currently one of the largest car manufacture in the world, operating in more than 100 countries.uit is one of several auto manufactures that are owned by Tata industry. In 2013, Jaguar land rover was crowned the Responsible Business of the Year Award due to its investment in new technologies that reduce emissions.

This helped the company gain recognition worldwide; therefore increasing is sales and profit turn out. This is one of the key distinguishing factors of the company from other manufacturers. Another factor that makes the company stand out is its undertaking in corporate social responsibility, where it has empowered many young people globally through helping them learn engineering and other technical courses.

Despite its many achievements, the company faces many ethical issues especially regarding its usage of leather to manufacture interiors. Leather is a major cause of environment pollution due to the harmful chemicals used driving tanning.

Ethical issues at stake

Ethical standards are critical to the reputation and brand image of any firm that seeks to retain its market base. Contemporary ethical issues revolve around marketing behavior, such as false advertising, stereotyping, subliminal messages, post purchase dissonance, exploitation of workers and environmental pollution. However, practicing ethical standards will not only guide an organization through its daily operations but increase production and corporate reputation (Kelchne, 2015). Ethical issues relate to various problems that will require an organization to choose between many available alternatives. One of the main ethical issues facing Land River is its use of leather for interior designs.

An ethical challenge facing Land rover is that it advocates for protection of the environment, yet its usage of leather does the contrary. The company terms the products used in the manufacturing processes as ecofriendly, but its usage of leather results in harmful chemicals that are bad for the environment. Leather has been regarded by the US Environmental Protection Agency as the greatest form of pollution to waterways and the environment in general. Leather is a hide of dead animals, and it therefore decomposes naturally.

To prevent the decomposition, leather companies use very harmful chemicals which when released to the environment, can pose serious health problems as they are great pollutants. Due to this, the company fails to maintain ethical standards that advocate against usage of harmful chemicals and pollution of the environment.

Harmful chemicals used by Land Rover

Due to the use of leather in interior designs, land rover uses harmful chemicals to naturally decompose the leather, which are great environmental pollutants. However, leather is made from animals hide and is vulnerable to decomposition. To prevent this decomposition, the materials are treated using harmful chemicals like trivalent chromium suphide and other pollutants ranging from sodium sulfhydration and cyanide.

The leather is also subjected to procedures that involve large amounts of pollutants like hair, salt, lime sludge, and protein. The use of leather not only puts the lives of Land Rover consumers at risk but also endangers the surrounding community by polluting the air, water supplies, and the land. As a result, the company fails to achieve the good rating in pollution and toxic category and hence experiences a diminishing public image and lost support from animal rights advocates.

There has been a wide concern over the significant range of chemicals in the interior of vehicles by Land rover and sometimes the chemicals exceed the normal level. The drivers who drive these vehicles are exposed to these harmful chemicals mostly through inhalation. This could cause a range of health problems ranging from cancer, breathing problems and allergies. These harmful chemicals by the leather manufactures include:

Trivalent chromium sulphate

During leather tanning, the manufactures use trivalent chromium sulphate, which contains high levels of chromium. Chromium has been acknowledged as one of the most toxic chemicals used by leather manufactures. T5he interiors of land rover are manufactured using this toxic chemical, which poses serious threats to the wellbeing of all those involved in the company affairs. Usage of chromium has been prohibited in most countries due to its toxicity and the health hazard it causes. The fact that Land Rover uses leather to make its interior decoration implies that the company does not practice ethical guidelines.

Arsenic

Arsenic is a toxic chemical used during leather tanning. The chemical has been associated with lung cancer for workers who are daily exposed to it. It is a harmful; chemical which when in contact with the skin, causes burning sensations and could have long term effects.

Animal rights

Another ethical issue facing land rover is failure to advocate for animal rights, especially since it uses leather which is a slaughter house by product. Animal Rights Organizations are against companies who manufacture their products using leather as doing so is killing innocent animals. The company does not engage in animal protection and this reflects negatively on it.

Leather comes from animals such as goat, buffalo, ostrich, lamb, and deer, among others. Other places also use kangaroos to manufacture bicycle tyres. These animals are endangered as they are subject to killing and slaughter by leather organizations. Land rover is subject to this ethical challenge since killing of innocent animals is a not ethical. The process of tanning entails using chemicals stabilizes the animal skins so they will not decompose.

Ethical principles

Ethical principles guide organizations to act in a professional manner so as to balance ethical considerations with the relevant professional values and to deal with consumers ethically. Businesses that behave ethically have been seen to have higher consumer loyalty than those who do not.

These businesses are concerned about the environmental issues surrounding them, and deal with day to day basis in the required ethical and professional standards. There are four major principles of ethics guiding organizations and these include the principle of autonomy, the beneficence principle, non-maleficience and the principle of justice.

The first principle is the principle of autonomy which states that organizations have a duty to respect the autonomy of other persons no matter the circumstances. It gives people a duty of not interfering with the decision of others but instead to empower and support those that they are responsible for. There should be honesty in their dealings and keeping promises made. Land Rover Motors, for instance, has an obligation to its consumers and all other stakeholders to provide quality designs from products that are safe and that conform to the laws of the environment.

The principle of justice states that everyone has an obligation to provide other people with whatever we owe them, or whatever they deserve accordingly. All people should be treated fairly and equally and no unfair burdens should be imposed on others. Organization wise, all organizations should treat all their stakeholders fairly by providing them with quality products, as they truly deserve. Doing so will foster good relationships with all those involved in the operations of the organization.

Beneficience principle states that we have a duty to bring about good in all our doings. People must take all necessary steps to prevent harm, by any means possible. The automotive industry has an obligation to use non toxic substances in their products, and provide commodities that are totally safe, to prevent any harm to the customers and workers handling them, and pollution of the environment by undertaking proper waste disposal . By using harmful substances in leather tanning, Land Rover goes against this ethical principle.

Principle of nonmaleficience states that people have an obligation to not harm others. If harm can be avoided, we are obligated to prevent or minimize the harm. We should not increase the risk of harm to others and should employ all necessary measures to prevent harm. For instance, organizations that pollute the environment go contrary to this principle. The company should therefore engage in other ecofriendly activities and do away with leather.

Ethical theories

Egoism theory

Egoism model states that an act is morally right if the person making the decision decides to pursue short goals and long term interests (Crane, 2007). Ethical theory, according to Ardakanini and Sharraf (2014) is one the most significant theories in the study of normative ethics. The theory gives people a right to increase their benefits in any situation.

However, the provisions made by this theory seem to approve Jaguar Land Rover’s decision to replace the plastic interior material with a leather ones despite the negative effects it may have on the environment. The moral significance of any action is described based on the same goal and only applies to a man who can decide between valuable and invaluable goals.

The life of living things is the primary criterion for determining their moral value; living things must make choices which make possibility the achievement of the concept of value. Ethical egoism is founded on the idea that life is the criterion of value for all living things; therefore any action taken by man must be directed at preserving life (Hartenian and Lilly, 2009).

Any action that undermines living things and leads to one’s destruction is unacceptable. This approach considers plants to be the simplest among all living things; they were created to keep themselves alive automatically and involuntary. This leads to the conclusion that any marketing activity that results to endangering of life, such as using leather interior with harmful chemicals, is unethical according to egoistic approach. Also, materials employed by Jaguar Land Rover have serious implications to living creatures in the air, land, and water.

Utilitarianism

According to the utilitarian theory of ethics, a state of affairs is the only thing that exhibits value. Utilitarian deny the claim that some actions have an inherent moral dimension, as deontologists believe. If an act has a wrong or right, then it can only be derivative, given by the right or bad states of affairs it produces. The core idea of utilitarian, according to Hinman (2014), is that an act should always be undertaken in a way that it will provide the greatest amount of good in the world.

Morality, which is about producing good consequences, exists to make sure the world is a better place. People should strive to do whatever will bring the most benefit. Utilitarianism is one of the consequentialism perspectives which state that people should seek the greatest happiness for the greatest number. The determinant of the value of an action is the amount of joy it brings, the number of people it gives happiness and the time that happiness lasts. This theory suggests that people find the meaning of ethics by considering the consequences of actions they take. Something is right if it brings goodness to the greatest number of individuals (Mil, 1993).

Ethical implications

Land Rover is a big multinational company that is composed of a variety of both internal and external employees, and these are the most affected by the ethical issues facing the company. The company has interactive relationship with all its stakeholders and the ethical challenges could affect these stakeholders negatively. These stakeholders include customers, suppliers, the government, employees, and the general public among others. Stakeholders are all the people directly or indirectly affected by the operations of n organizations, and these stand to be affected by the ethical issues facing the company.

The above woes facing Jaguar Land Rover have critical implications for not only then stakeholders, but for the company’s marketing activities, and can greatly influence how audiences respond to marketing messages. While the use of leather for the interior was justified as a reason to avoid giving consumers plastics, the alternative chosen is not only harmful but also pollutes the environment. This comes to the issue of marketing ethics, what is morally right and wrong, and what is ethical marketing and what is not (Smith and Murphy, 2015). It is important in marketing decorum, but also one of the most controversial concepts in marketing

Suppliers

The major ethical issue facing the company is its usage of leather, and the suppliers of these are perhaps the most affected by these ethical challenges. The chemicals used in turning skin into leather are very harmful and a combination of these results in the pollution of the environment. With these issues, the suppliers stand to lose. This is because these ethical issues could make the company result in recalling designs manufactured from leather and use other materials instead.

If this happens, the suppliers will count huge losses, as they will have lost potential customers. The supply of harmful chemicals poses a big ethical issue for the suppliers of these chemicals. With the company accused of using chemicals that pollute the environment, suppliers are faced with a problem on whether their products are really safe.

Customers

The customers are the most affected by the activities of the business. The usage of leather by the company to make interior designs implies that harmful chemicals are used in preventing natural decomposition. This reflects negatively to the consumers because nobody wants to purchase from a company that pollutes the environment.

Customers who advocate fro human rights will not purchase from the company due to the usage of leather, as this encourages the killing of animals. Pollution of the environment by the harmful chemicals used by Land rover will result in the damage of customer’s health, and this will lower the reputation of the company.

Employees

The employees who work in leather tanneries are at a risk of being in contact with the harmful chemicals, which could pose a challenge to their health and general well-being. These workers come in direct contact with the harmful chemicals, which could harm their health in the long run. In fact, many employees die of cancer that is possibly caused from exposure to these toxic chemicals. One major ingredient used in preventing decomposition of leather is Arsenic, which has been associated with lung cancer.

Course of action

Today’s business environment is at a constant state of change, and the consumers have the power to affect the future success of any given company. With these changes, organizations should aim at pleasing the consumers since they have the final say on whether to purchase the products offered by the company. The ethical issues facing Land Rover may reelect negatively to the consumers, who are more attracted to organizations that behave ethically.

Land Rover should thereafter implement measures and strategies that will reduce pollution of the environment, and that advocate for animal’s’ rights. More than ever before, consumers are concerned about ethics and will go fro the companies who care for the environment and the rights of animals. Environmental organizations should intervene in the company.

These should advise against or completely restrict the use of certain ingredients to manufacture their products. The competitors of Lush have come up with amazing products without the use of toxic ingredients, and Lush should also follow suit, so as to remain relevant in the highly competitive industry.

The company should go for more favorable means of tanning, such as vegetable tanned leather. This uses elements such as bark from trees and other natural plants, which pose less environmental risks. This will reduce the effects of harmful chemicals while at the same time protecting the environment. Land Rover should adhere to the rules and regulations that address the usage of harmful chemicals by the leather industries.

The company should also use other industry proven techniques such as recycling. Recycling reduces the levels of harmful chemicals in waste water by more than 21 percent. It involves reclaiming the harmful chemicals, such as chromium and this will capture the original chromium level by 25 percent. Advanced technologies should be used to reduce toxic chemical levels so as to reduce pollution and illnesses resulting from their use.

There are other designs for making interiors that do not involve the use of leather. New technologies and innovations have been implemented by other companies to manufacture parts, which are friendly to the environment. The company should invest in the latest technologies for manufacturing that will see it establish new designs that have no leather in them. Doing so will reduce the usage of toxic chemicals used during leather tanning, and will protect the health of all employees.

Conclusion

Over the past twenty years, changes in technology and introduction of new innovations have led to change in preferences, and today, consumers are keener to purchase produces from ethically responsible company. Land Rover as a multinational company should embrace new methods of production, which are ethical and environmental friendly as this will woo consumers to their side.

It is clear that organizations that are keen on environmental conservation of animal rights have more customers than those who do not. The company should therefore implement new strategies to ensure that they are more ethical in future, and this will lead to an increase in sales.

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E-COMMERCE STRATEGIES

E-COMMERCE STRATEGIES IN THE UK FASHION INDUSTRY. A CASE STUDY OF BURBERRY

Burberry is one of the most popular online retail brands and this success can be attributed to utilization of e-commerce strategies by establishing online marketing websites. E-commerce is attaining relevance in the fashion industry with progress being made online by the large fashion retailers. With the evolution of technology and introduction of new innovations, companies must strive to adapt to the new changes so as to survive in the stiff competition.

However, despite these changes, many businesses have not fully utilized e-commerce as the utilization is still underdeveloped. Organizations that have utilized e-commerce have proven to be successful and such is Burberry. Burberry is the perfect example of an organization that has fully utilized digital marketing strategy through e-commerce.

The brand utilizes the social platforms such as twitter and Facebook to reach out to all its customers by optimizing the content to suit each platform. For instance, it uses Facebook to showcase live streams of their products, a method that has seen it gain very many followers online.

There are various e-commerce strategies used by ten companies to advertise its brand and reach out to the customers, all of which have increased the profitability of the organization. Burberry is the one brand that has exemplified an outstanding digital marketing performance by using the various social media channels to attract young customers.

The result demonstrated further the influence e-commerce strategies and attitudes held by people have on the modernization of a company. The best strategies for e-commerce which proved to have a positive impact on modernization of a company include maintaining effective communication with employees of the company, always informing them about matters that pertain to the organization, paying attention to workers and slotting them in when making decisions, encouraging creativity along with innovation, creating an environment which is positive and maintaining motivation for employees, which was the case with Burberry.;;:;

Cosby, Peter (2016). Overcoming the Top E-Commerce Challenges for Brands. Contemporary E-commerce;. Available at: http://www.salsify.com/blog/3-biggest-ecommerce-challenges-and-how-to-overcome-themsx

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