Archive for Economics

Posted in B2B, Brand Managment, Consumer Behavior, CRM, eMarketing, Management, Marketing Mix (New Concepts), Search Engine Optimization with tags , , , , , , , , , , on December 1, 2011 by Consultant

Disadvantages of Planning

Internal Limitations

There are several limitations of planning. Some of them are inherit in the process of planning like rigidity and other arise due to shortcoming of the techniques of planning and in the planners themselves.

  1. Rigidity
    1. Planning has tendency to make administration inflexible.
    2. Planning implies prior determination of policies, procedures and programmes and a strict adherence to them in all circumstances.
    3. There is no scope for individual freedom.
    4. The development of employees is highly doubted because of which management might have faced lot of difficulties in future.
    5. Planning therefore introduces inelasticity and discourages individual initiative and experimentation.

     

     

  2. Misdirected Planning
    1. Planning may be used to serve individual interests rather than the interest of the enterprise.
    2. Attempts can be made to influence setting of objectives, formulation of plans and programmes to suit ones own requirement rather than that of whole organization.
    3. Machinery of planning can never be freed of bias. Every planner has his own likes, dislikes, preferences, attitudes and interests which is reflected in planning.

     

     

  3. Time consuming

     

    1. Planning is a time consuming process because it involves collection of information, it’s analysis and interpretation thereof. This entire process takes a lot of time specially where there are a number of alternatives available.
    2. Therefore planning is not suitable during emergency or crisis when quick decisions are required.

     

     

  4. Probability in planning
    1. Planning is based on forecasts which are mere estimates about future.
    2. These estimates may prove to be inexact due to the uncertainty of future.
    3. Any change in the anticipated situation may render plans ineffective.
    4. Plans do not always reflect real situations inspite of the sophisticated techniques of forecasting because future is unpredictable.
    5. Thus, excessive reliance on plans may prove to be fatal.

     

     

  5. False sense of security
    1. Elaborate planning may create a false sense of security to the effect that everything is taken for granted.
    2. Managers assume that as long as they work as per plans, it is satisfactory.
    3. Therefore they fail to take up timely actions and an opportunity is lost.
    4. Employees are more concerned about fulfillment of plan performance rather than any kind of change.

     

     

  6. Expensive
    1. Collection, analysis and evaluation of different information, facts and alternatives involves a lot of expense in terms of time, effort and money
    2. According to Koontz and O’Donell, ’ Expenses on planning should never exceed the estimated benefits from planning. ’

     

External Limitations of Planning

  1. Political Climate- Change of government from Congress to some other political party, etc.
  2. Labour Union- Strikes, lockouts, agitations.
  3. Technological changes- Modern techniques and equipments, computerization.
  4. Policies of competitors- Eg. Policies of Coca Cola and Pepsi.
  5. Natural Calamities- Earthquakes and floods.
  6. Changes in demand and prices- Change in fashion, change in tastes, change in income level, demand falls, price falls, etc.
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Posted in Consumer Behavior, eMarketing, Marketing Mix (New Concepts) with tags , , , , , , , , , on November 28, 2011 by Consultant

Consumer Behavior and Marketing Strateg

 The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how
  • The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products);
  • The the psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media);
  • The behavior of consumers while shopping or making other marketing decisions;
  • Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome;
  • How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and
  • How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.

Understanding these issues helps us adapt our strategies by taking the consumer into consideration. For example, by understanding that a number of different messages compete for our potential customers’ attention, we learn that to be effective, advertisements must usually be repeated extensively. We also learn that consumers will sometimes be persuaded more by logical arguments, but at other times will be persuaded more by emotional or symbolic appeals. By understanding the consumer, we will be able to make a more informed decision as to which strategy to e

Posted in Consumer Behavior, eMarketing, Marketing Mix (New Concepts) with tags , , , , , , , , on November 28, 2011 by Consultant

 Marketing Tracks in  Consumer Behavior

Consumer behaviour is key to the impact that society is having on the environment.As well as what people consume directly in the home and elsewhere, our fulfilment of needs and wants lies behind many of the activities that create environmental impacts, such as the production of food and other goods.While new and more sustainable technologies offer great promise, they cannot in themselves ensure sustainability. Only people’s choices can lead us away from unsustainable patterns of consumption.

But there are many conflicting explanations as to why people consume:

  • some economic (to do with prices and technology)
  • some environmental (fulfilling physical needs such as shelter and food)
  • and some cultural (consumption as central to social identity).
Methodologically, consumer behaviour research uses the following types of research designs:
Based on questioning:
  • Qualitative marketing research – generally used for exploratory purposes – small number of respondents – not generalizable to the whole population – statistical significance and confidence not calculated – examples include focus groups, in-depth interviews, and projective techniques
  • Quantitative marketing research – generally used to draw conclusions – tests a specific hypothesis – uses random sampling techniques so as to infer from the sample to the population – involves a large number of respondents – examples include surveys and questionnaires
Based on observations:

  • Ethnographic studies -, by nature qualitative, the researcher observes social phenomena in their naturalsetting – observations can occur cross-sectionally (observations made at one time) or longitudinally (observations occur over several time-periods) – examples include product-use analysis and computer cookie traces
  • Experimental techniques -, by nature quantitative, the researcher creates a quasi-artificial environment to try to control spurious factors, then manipulates at least one of the variables – examples include purchase laboratories and test markets

Researchers often use more than one research design. They may start with secondary research to get background information, then conduct a focus group (qualitative research design) to explore the issues. Finally they might do a full nation-wide survey (quantitative research design) in order to devise specific recommendations for the client.

Posted in Consumer Behavior, eMarketing, Marketing Mix (New Concepts) with tags , , , , , , , , , , , on November 28, 2011 by Consultant

 Decision Makers

 Finally, a point to consider is, given the characteristics of your offering, what type of decision maker will most likely be interested in purchasing from you. It may be beneficial to rank your prospects based on the following classifications. While you may not be able to make this classification of the prospect prior to the first contact, if your sales personnel are sensitive to these characteristics it can strongly influence your sales strategy.
Ultra Conservative – don’t rock the boat, whatever they purchase must be consistent with their current way of doing things.

  • They are most likely interested in products/services that are improvements to existing offerings rather than something new.
  • Once established as a customer they are seldom inclined to review alternatives.
  • Very negative to technically complex offerings or offerings requiring extensive user education.
  • Cost effective offerings are only of interest if they don’t disturb the status quo.
  • They are likely to react positively to any volume purchasing opportunities.

Conservatives – are willing to change, but only in small increments and only in a very cost effective manner.

  • Will consider new products/services but only if related concept has been proven to be effective. More likely to purchase improvements to existing offerings.
  • Will probably want to review competitive offerings, but will gravitate to best known offering with lowest risk decision.
  • Negative to neutral when considering technically complex offerings or offerings requiring extensive user education.
  • Strongly influenced by cost effective offerings and/or ‘best price’ opportunities

Liberals – regularly looking for new solutions, willing to make change (even major change) if the benefit can be shown.

  • Will usually consider new products/services even if the related concept has not yet been proven to be effective, but only if the potential benefits can be specified and understood.
  • Wants offerings that make effective use of technology, but is not interested in offerings just because they use a certain technology.
  • Will always want to review competitive offerings, but will usually choose the one offering the greatest benefit, even if there is some risk involved.
  • Neutral to positive when considering technically complex offerings or offerings requiring extensive user education.
  • Usually concerned with keeping employees informed and educated, so will often consider educational offerings.
  • Strongly influenced by offerings that most closely deliver the ‘end results’ desired, even if they are not the most cost effective.
  • Often are on social trend bandwagons so react positively to offerings that address these needs.

Technical Liberals – enamored with the benefits provided by high tech solutions and any purchase decision will be biased by the technical content of the offering.

  • Usually consider new products/services even if the related concept has not yet been proven to be effective.
  • Often consider just because they use a certain technology.
  • Will always want to review competitive offerings, but will usually choose the one offering the most hi-tech features, even if there is some risk involved.
  • Consider themselves technically competent and will expect leading edge use of technology.
  • Positive to fanatic when considering technically complex offerings even when requiring extensive user education.
  • Conversion costs usually not a major concern if technical benefits are there.
  • Not particularly concerned with keeping employees informed and educated, so educational offerings are not of great interest.
  • Strongly influenced by offerings that most closely deliver the ‘end results’ desired, even if they are not the most cost effective.

Self Helpers – consistently defines/designs solutions to their problems, likes to acquire tools that help in the innovation process.

  • Will usually consider new products/services, but the related concept must have been proven to be effective.
  • Often consider just because they use a certain technology that is relevant to the development program they have underway.
  • Will always want to review competitive offerings, but will usually choose the one offering the most effective ‘do it yourself’ features.
  • Usually consider themselves technically competent and will expect very effective use of proven technology.
  • Not especially inclined toward technically complex offerings, would rather have user friendly, but thought provoking, offerings.
  • Conversion costs usually not a major concern if offering promises potential for innovation.
  • Usually concerned with keeping employees informed and educated, so educational offerings are of interest.

Posted in Consumer Behavior, eMarketing, Marketing Mix (New Concepts) with tags , , , , , , , , , on November 27, 2011 by Consultant

Why Is the Expectation of a Consumer Important in Marketing?

Small businesses often spend time and effort developing marketing strategies for reaching consumers. These marketing strategies attempt to inform consumers about various attributes of a company’s products, but they may also be affected by the target market, or demographic groups at which the marketing is aimed. An important part of a marketing strategy is meeting consumer expectations.

Facts

Consumer expectation generally refers to the needs and wants of individuals in the economic marketplace. Such expectations are usually driven by people’s preconceived ideas regarding goods or services. These ideas drive consumers to purchase one item over another or avoid companies with which they’ve had a previous bad experience. Consumers may also have high expectations for new products that have been given a lot of exposure through professional reviews or other media commentary.

Purchase Decisions

Marketing strategies often focus on consumer expectations in order to influence the purchase decisions made by consumers. Consumers can be broken down into three groups: those who are expected to buy, those who are not expected to buy, and those who are undecided about making a purchase. Businesses often focus on the latter two groups in order to persuade them to purchase their products.

Dispel Rumors

Negative consumer expectations are an important focus for marketing strategies, because companies may need to dispel rumors or bad impressions about their goods or services. These may be spread by competitors or individuals who have had a previous poor experience with the company. Since such rumors can lower consumer expectations, marketing strategies must address them and focus on correcting consumer expectations regarding a company’s products.

Promote Customer Service

Companies may use marketing strategies to promote their customer service and how it will meet consumer expectations. While consumers may feel wary about purchasing a product from a company, marketing strategies focusing on customer service techniques such as efficiency, reliability and competence may help soothe this uneasiness. Consumers may also have naturally high expectations regarding customer service, and companies can try to meet this expectation by touting their strong customer service department.

Expert Insight

A professional marketing or advertising agency can help companies understand current consumer expectations and tailor advertisements accordingly. Professional advertising agencies may also provide specific resources relating to target markets or demographic groups and the expectations each group has toward specific goods or services. These resource can save companies valuable time when developing new marketing strategies and promoting products.

Posted in Consumer Behavior, Marketing Mix (New Concepts) with tags , , , on November 27, 2011 by Consultant

The Importance of Consumer Spending

A national economy is a broad amalgamation of individual, business and government spending or investment. Governments typically pay close attention to economic factors to measure the strength of an economy. Consumers represent a major factor in economies. According to Henry Hazlitt, author of “Economics in One Lesson,” U.S. consumers account for approximately 70 percent of the national economy. Spending is an important role of consumers. Free market economies rely on consumer demand to gauge the allocation and distribution of economic resources.

Facts

Consumer spending is an important economic factor because it usually coincides with the overall consumer confidence in a nation’s economy. High consumer confidence indicators usually relate to higher levels of consumer spending in the economic market. Consumer confidence provides governments and businesses with an analysis on consumer perception. In the United States, The Conference Board measures consumer confidence by conducting a survey of 5,000 households. Consumers respond to a few questions from which The Conference Board calculates consumer confidence.

Types

Several types of consumer spending are found in the economic market. Necessities, non-durable goods, durable goods and luxury items are types of consumer spending. Necessities represent the food, shelter and clothing individuals need to maintain a certain quality of life. Non-durable goods last less than three years; these include gasoline, paper products and office supplies. Cars and houses are examples of durable goods, which last more than three years. Luxury items include jewelry, high-priced cars and other items not necessary for living a standard lifestyle.

Function

Significant changes to consumer spending in durable and luxury goods can be an important economic indicator. Consumer spending increases in these two categories usually represent individuals with higher income. Conversely, spending decreases may indicate lower individual income or consumer confidence. These spending categories can help businesses and governments determine if consumer spending is expanding or contracting based on the number of purchases.

Benefits

Businesses use consumer spending data in their supply and demand economic calculations. Supply and demand helps businesses produce goods or services at the most favorable consumer price points. Businesses who can achieve the equilibrium price will sell the maximum amount of goods with the highest available profit margin. Consumer spending helps companies determine which products have the most value in the economic marketplace. Businesses can also use information to find unmet consumer needs and develop new products.

Considerations

Consumer spending is the result of many factors, including monetary or fiscal policy, inflation, purchasing power and supply of goods. Businesses and governments should review economic indicators relating to these other items when gauging the overall health of the economy. While consumer spending plays an important role in the economy, these other factors can also provide information for businesses creating corporate or business strategies.