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t 1.Brands
.
1. Whatarevisiblepartsofmarketing?Whatarebrandmanagers andsalesteamsresponsible for?
2. Whotakespartindistributionchannels?
3. Whydosomecompaniesmakeluxuryproductsabroadratherthanathome?Giveexamples.
4. SomepeoplebelievethatluxuryfashionproductsshouldalwaysbemadeinEurope. What's youropinion?Giveexamples.
1.Whatarevisiblepartsofmarketing?Whatarebrandmanagersandsalesteamsresponsiblefor?
AsthemarketingexpertPhilipKotlerhas said, 'Themost distinctiveskillofprofessionalmarketersistheir abilityto create,maintain, protect andenhancebrands.'Thereareanawfullotofmisunderstandingsabout
‘marketing’. Manypeopleseeit purelyasthevariousways in whichabusinessororganisationadvertises
and promotesitself-awebsite,abrochure,corporatehospitality,advertisementsandsalesliterature...But theseareonlythevisiblepartsofmarketing.
Professionalliteraturedefinesmarketingas'themanagementprocessresponsibleforidentifying,anticipating and satisfying customerrequirementsprofitably'.Inotherwords, it is not just about producinga pieceof
promotionalmaterialto support a salesactivity, it'sabouta systematicand carefulprocessofensuringthateverythingthatthe business developsand provides,whetheritbea productoraservice,is done withthe
customerinmind.
Thinkofthe processofmarketingratherlikeaniceberg.The topeighthisthe part thatisvisible-seven
eighthsareunseen!Whatgoesonbelowthesurfaceisawholerangeofactivitiesandprocessesdesignedto ensurethatanymarketingcommunicationsaredesignedanddeliveredinthebestwaytoachievethedesired results,usuallythat's profitable sales.
Themain brandmanager’sand salesteams’responsibilitiesinclude:
- Developingandmanagingbrandmarketingplan
- Understandingandexpressingbrand’spositioning,designingappropriatemarketingmixtools
- Brief&agreeannualmediaplan, superviseworkwithadvertisingagencies
- Generateandanalyzeconsumerinsights,integratefindings intobrandactivities
- Managepricing
- Enliststrongsalessupportforallbrandmarketingactivities
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.Whotakespartindistributionchannels?
Distribution(orplacement)isoneofthefour aspectsofmarketing. A distributoristhemiddlemanbetween
the manufacturerandretailer. Afteraproduct ismanufactured it maybe warehousedorshippedto the next echeloninthesupplychain,typicallyeitheradistributor,retailerorconsumer.
Anumberofalternate'channels'ofdistributionmaybeavailable:
·Sellingdirect,suchasviamailorder,Internetandtelephonesales
·Agent,whotypicallysells directon behalfoftheproducer
·Distributor(alsocalledwholesaler),whosells toretailers
·Retailer(alsocalleddealerorreseller),whosellstoendcustomers
·Advertisementtypicallyusedforconsumergoods
Distribution channels canthushave anumberof levels.Kotlerdefinedthe simplestlevel,thatofdirectcontactwithnointermediariesinvolved,asthe'zero-level'channel.
Thenextlevel,the'one-level'channel,featuresjustoneintermediarybetweenproducerandcustomer-a retailer.Insmallmarkets(suchassmallcountries)itis practicaltoreachthewholemarketusingjust
one-andzero-levelchannels.
Inlargemarkets(suchaslargercountries)asecondlevel,awholesalerforexample,isnowmainlyused
toextenddistributiontothelargenumberofsmall,neighborhoodretailers.
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.Whydosomecompaniesmakeluxuryproductsabroadratherthanathome?Giveexamples.
1
Somecompaniesprefertomakeluxuryproductsabroadratherthanathomebecausetheywanttolowerthefirmcosts.The processofsubcontracting toa third-partycompanyis named outsourcing.The reasons for outsourcingaremanyandvaried,suchascostsaving,costrestructuring,improvingquality,knowledge andmanyothers.Theclassicalexamplesofcompaniesmaking theirproductsabroadareCoach, theUS
leathergoods maker,whichoutsourcesallitsproductsto Asia,andBurberry,whichalsohasmanyAsian
licensingarrangements.
4.SomepeoplebelievethatluxuryfashionproductsshouldalwaysbemadeinEurope. What's youropinion?Giveexamples.
Althoughoutsourcingisawidespreadpracticenowadaysconsumershavedualattitudetoit.Thereisa strongpublicopinionregardingoutsourcing(especiallywhencombinedwithoffshoring-thepracticeof
movingacompany'soperatingbasetoaforeigncountrywherelabourcostsarecheaper)thatoutsourcing damagesaproductqualitydramatically.Tobehonest,Isupportthispointofview.Forexample,about
tenyearsagoallproductsofBritishcosmeticscompanyAvonweremadeinEurope.Butnowabout70%
ofitsproductionis outsourcedin Russiaandnearabroad.Ofcourcethepriceof Avon cosmeticsbecame
muchcheaperbutit’snotasecretthatthequalitychangeddramaticallytoo.
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it 2. Travel
1.Whattypes ofairlinesdoyouknow?
2.Howdoyouunderstandtheterm“code-sharing”?
3.Whatformsofcooperationbetweencompaniesarethere?
4.Whydopeoplesometimesbehavebadlyonplanes?Whatcausessuchbehaviour?
1.Whattypesofairlinesdoyouknow?
Formerlyairlineswereclassifiedintolocal,regional,national andinternational.Todaytheyareclassified accordingtotheirannualturnover.Thebiggestcompanieshavetheturnoverfrom$100millionto$1
billion,thebigregional-$10-$100million,theaverage–lessthan$10million.
It’s very important to remember that there are two kinds ofairline operations-scheduled and
nonscheduled.Ascheduledairlineoperatesonfixedroutsatfixedtimesaccordingtoatimetablethatis availabletopublic.
Anonscheduledairlineoperateson routsatatimewhenthereis a demandfortheservice.The nonscheduledairlineisinotherwordsacharteroperationthatrentsanaircraft.
2.Howdoyouunderstandtheterm“code-sharing”?
Codesharingisabusinesstermwhichwasfirstoriginatedintheairlineindustryin1990whenthe
Australianairline,Qantas Airways andtheUS'sAmerican Airlinescombinedservicesbetweenanarray
ofUS domesticcitiesandAustraliancities.Thecodesharewaspartofa"cooperativeservices" agreementbetweenthetwocarriersbeforethevariousairlineallianceswereformed.Codesharingisa commercial agreementbetweentwoairlinesthatallows passengers to useaticketfromoneairlinetotravelon another.Mostmajorairlines todayhave code sharingpartnershipswith otherairlines,andcode sharingisakeyfeature ofthemajorairlinealliances.
Lotsofairlines,includingallthebiglegacylines,areinvolvedwithcodesharingarrangements.Those
arrangementspermityoutobuythroughtickets on routsthat nosingleairlinecanserve.Theymayalso provideopportunitiestocutthecostofyourairfare.
3.Whatformsofcooperationbetweencompaniesarethere?
Therearedifferenttypesofcooperationbetweenairlines:associations(likeInternationalAssociationof
AirTransport(IATA)whichdeals withtheairnavigation,thesecurityofairtransportandthe
coordinationofflightservices),particularglobalairlinealliancesandcodeshareagreementsthathave multiplied over the pastyears.
4.Whydopeoplesometimesbehavebadlyonplanes?Whatcausessuchbehaviour?
The psychologyofairrageis anewareaofstudy,andthere are almostasmanyexplanations as
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examples.Mostanalystsofthephenomenon blamealcohol,butmanypeoplenowthinkthat theairlinesareatfault.Tocutcosts,theyarecramming evermorepassengersintotheiraircraft,whilereducing cabincrew,training andqualityofservice,allofwhichincreasepassengerfrustration.Inaddition,there
isincreasingconcernaboutanothercost-cutting exercise,which couldseriouslyharmpassengers’health:
cabinventilation.
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t3.Organisation.
1.Whattypesofcompaniesdoyouknow?
2.Speakaboutflexibilityanditstypes.
3.Whatismeantby"teleworking"?
4.WhatdoyouknowaboutSOL company?Whyisitunusual?
1.Whattypesofcompaniesdoyouknow?
Historicallytherewereonly soleproprietorships. Thencamepartnershipsandthencorporations.
Corporations areaseveralcenturiesoldphenomena. Partnershipswerearrangementsbetweentwoormoreindividualsinwhichtheypooledresources,andsplitexpenses andprofits. Atfirstcorporations werecharteredbymonarchies. Historicallycorporationsofferedlimitedliabilityandpartnershipsdid not. Inotherwords,iftheventurefailed,theorganizersandpromotersofacorporation retainedtheir personalassets,whiletheowners andorganizers ofapartnershipcouldlosetheirpersonal assets tothe creditors ofthe business venture.
Wecannowdefinesoleproprietorship
as abusiness enterprise exclusivelyowned,managedand controlledbyasingleperson with allauthority,responsibilityandrisk.
Supposeyouwanttoopenarestaurantinyourlocality.Youwillneedtoorganizealotofthings.You mayfind thatitis notpossible toarrangethemoneyrequiredtostartandrunthebusiness alone. You
maythentalktoyourfriendsandallofyouagreeto runtherestaurantbycontributingacertainamount
ofmoneyandtheotherthingsrequired.Soallofyou jointobecometheowners andsharetheprofitsand
losses.Thisisanotherformofbusinessorganization–partnership
.
Acompanyformof business organizationis knownasaJointStockCompany
.Itis avoluntary
association ofpersons whogenerallycontributecapitaltocarryon a particulartypeofbusiness,whichis establishedby lawand canbedissolvedonly bylaw.Persons whocontribute capitalbecomemembersofthecompany.Thisformofbusinesshas alegalexistenceseparatefromitsmembers,whichmeanseven
ifitsmembersdie,thecompanyremainsinexistence.Thisformofbusinessorganizationsgenerally
requireshugecapitalinvestment,whichiscontributedbyitsmembers. Thetotalcapitalofajointstock companyis calledsharecapitalanditis dividedintoanumberofunitscalledshares.Thus,everymemberhassomesharesinthebusinessdependingupontheamountofcapitalcontributedbyhim. PrivateLimitedCompany
.Thesecompanies canbeformedbyatleasttwoindividualshavingminimum fixedpaid–upcapital(theamountofmoneyisdeterminedbylegislationofthecountry).Thetotal membership ofthesecompaniescannotexceedacertainnumberofpeople(thisnumbercanbedifferent indifferentcountries).Thesharesallottedto itsmembers arealsonotfreelytransferablebetweenthem.
Thesecompaniesarenotallowedtoraisemoneyfromthepublicthroughopeninvitationandarerequired
touse“PrivateLimited”aftertheirnames.
PublicLimitedCompany.
Aminimumofsevenmembersarerequiredtoformapubliclimitedcompany.
Itmusthaveminimum paid–up capital.Thereis norestriction onmaximum numberof members.The sharesallottedtothemembersarefreelytransferable.Thesecompaniescanraisefundsfromgeneral publicthroughopeninvitationsbysellingitssharesoracceptingfixeddeposits.Thesecompaniesare requiredtowriteeither‘publiclimited’or‘limited’aftertheirnames.These are themain,butnot the onlytypesofbusinessorganization.
2.Speakaboutflexibilityanditstypes.
Flexibilityisthecurrentbuzzwordtoday.Flexibilityisunderstoodastheabilitytochangeorbechanged
easilytosuitadifferentsituation.This hasanumberofrelatedmeanings.One typeofflexibilityhas
existedforsometimeintheformofflexitimeorflextime,wherepeoplecanchoosewhentheyworkwithincertain limits.Thenthereis theflexibleworking oftheBritishAirways officeinthemaincourse
3
unit, with someofitsstaffhot-desking,particularlythosewhoarehomeworking,teleworkingortelecommuting andonlyneedtocomeintotheofficeoccasionally.Athirdtypeofflexibilityiswhere employeesarerecruitedon shortcontractsto workon specificprojects,maybepart-time.Perhaps the organisation onlyhasacorestaff,andoutsourcesorcontractsoutworkfromoutsideasandwhenrequired.Somemanagementexpertssaythat thisis thefuture,withself-employmentasthenorm,andportfolioworkerswhohaveanumber ofdifferentclients.
3.Whatismeantby"teleworking"?
Teleworking,alsoknownastelecommuting,meansusinginformationtechnologyand
telecommunications to replace work-relatedtravel. Simpleput, itmeans workingathomeorclosertohome. Withteleworking,employeesworkathomeorperhaps at alocalteleworkcenteroneormore daysperweek.Communicationisaccomplished byphone,fax,modem,andteleconferencing. Nationwide,morethan20millionworkersaregoingtoworksimplybypickingupthephoneorturning ontheir computers.
4.WhatdoyouknowaboutSOLcompany?Whyisitunusual?
SOL isaFinland'sCleaningServicecompanywhichcombinesradicalinnovationwithdisciplined
execution–awinningformulathatmopsupthecompetition.Locatedinarenovatedfilmstudiointhe heartofHelsinki,theofficeexplodeswithcolor,creativity,andchaos.Thewalls arebrightred,white,andyellow;theemployees wanderthehalls talking on portablephones(alsoyellow).Fewpeopledream
aboutbecomingacleaner.Butthatdoesn'tmeancleanerscan'tfindsatisfactionintheirwork.Thekeysto
satisfaction,Joronenbelieves,arefun andindividual freedom.SOL's cultureisbuiltrelentlessly--almost excessively--aroundoptimismandgoodcheer.Itscleanerswearred-and-yellowjumpsuitsthatreinforce thecompany'supbeatimage.SOL'slogo,ayellowhappyface,isplasteredoneverythingfromherblazer tothecompany'sstationerytoitsmostimportantbudgetreports.
Freedommeans abolishing alltherulesandregulations ofconventional corporatelife.TherearenotitlesorsecretariesatSOL,noindividualofficesorsetworkinghours.Thecompanyhaseliminatedallperks and status symbols.
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t4.Change.
1. Whatchangeshavetakenplaceinorganizationsrecently?
2. Explainthemeaning ofBPR.
3. Howdoyouunderstand theterm'companyculture'?Whatissuesshouldbeincludedinto it?
4. SpeakaboutthechangestheUSandUKdepartmentstoreshavegonethrough.
1.Whatchangeshavetakenplaceinorganizationsrecently?
Recent yearshaveseenmassiverestructuring.Companiesdownsizedanddelayered, gettingridoflevels ofmiddle-managementinordertobecomeleaner,flatter,supposedlymoreefficientorganisations.Often thereasoningwasthatcomputernetworksallowtopmanagersinstantaccesstoinformationthatwas previouslygatheredandtransmittedupwardsbymiddlemanagers,whoseothermainfunctionwasto communicateexecutives'keymessagesdownwardstotheworkforceandinthistheywereaccusedof dilutingorconfusing themessages,orworse.Withfewerorganisational layers,topmanagers saytheycancommunicatemoredirectlywithfront-lineemployees,thepeoplewhoactuallyproducethegoods or
services,anddealwithcustomers.Withlessdirectsupervision,employeeshaveoftenbeenencouragedto makemoredecisionsforthemselvesinaprocessofempowerment.
Another trendwasre-engineering, theideathatanorganisationshouldnotchangeincrementally, butshouldstartagain fromscratchwithnopreconceptionsabouthowthings-shouldbedone,notjustin manufacturingbutinalltheprocessesthatcontribute to whatanorganization does,hencebusinessprocessre-engineering,orBPR.
The humansideofthis,again,wasthattherewouldprobablyberedundancies.Thepeople remainingwouldprobablyfeeldemoralized,wonderingwhenthenextwaveofchangewasgoingto
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comeandwhetheritwouldbetheirturntobethrownout.
2.ExplainthemeaningofBPR.
Businessprocessreengineering(BPR)isamanagementapproachaimingatimprovementsbymeansof
elevatingefficiencyandeffectivenessofthe processesthatexistwithinandacrossorganizations.BPRis arestructuringanorganizationby meansofaradicalreconsiderationofitscoreprocesses.ThekeybenefitsofBPRare:
·optimizationofbusinessprocesses:
·integration ofITsystems;
· structuringandguidingofreorganization;
·businesscontinuityplanning;
·managementknowledge.
3.Howdoyouunderstandtheterm'companyculture'?Whatissuesshouldbeincludedintoit?
Acultureis thevaluesandpracticessharedbythemembers ofthe group. CompanyCulture,therefore,is thesharedvaluesandpracticesofthecompany'semployees.
Companycultureisimportantbecauseitcanmake orbreakyourcompany.Companieswithanadaptive culturethatis alignedto theirbusiness goals routinelyoutperformtheircompetitors. Companycultures
evolveandtheychangeovertime.Asemployeeleavethecompanyandreplacementsarehired the companyculturewillchange.Ifitis astrong culture,itmaynotchangemuch.
Herearesomecharacteristicsofcompanyculturesthatothershaveusedsuccessfully.
·Missionclarity
·Employeecommitment
·Fullyempoweredemployees
·Highintegrity workplace
·Strongtrustrelationships
·Highly effectiveleadership
·Effectivesystemsandprocesses
·Performance-basedcompensationandrewardprograms
·Customer-focused
·Effective360-degreecommunications
·Emphasisonrecruitingandretainingoutstandingemployees
·Highdegreeofadaptability
·Highaccountabilitystandards
·Demonstratedsupportforinnovationanddevelopment
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. SpeakaboutthechangestheUSandUKdepartmentstoreshavegonethrough.
TheUS andUKdepartmentstores facedwith declineinpopularity.Itcanbeexplainedbyconsumers
demandingbettervalueandamoreinterestingandstimulatingexperiencewhileshopping.Department storesfacedstrongcompetitionfromspecialityretailers anddiscounters.Theirsteady lossofmarket sharemaybepartlybecausetheconceptwasborninadifferentera,atimewhen,forfamilies,atriptothestores combinedshoppingwithentertainment.Andnow,what is neededis anewapproach.Atypicalexample ofthis approachworkingis seenatSelfridges.This UKgrouphasrecastitselffroma sleepy
70s-styledepartmentstoreintoaretailinggood-structuredmoderndepartmentstore.
Oneofthemainchangesis thatmorefloorspaceis rentedtovendors,inwhatis sometimesreferredtoas theshowcasebusinessmodel:vendorsdesigntheirownboothsandareencouragedtobecreative.The problemisthatalldepartmentstoreslookthesame.
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it 5. Money.
1. Howdoes moneywork?
2. Whatmoneyinstitutions can youmention?
3. Describedifferentkindsofsecuritiesanddifferentkindsofmarkets.
4. Whatcanyousayabouttheattitude to moneyinourculture?Hasitchangedinrecentyears?
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5. HowhaveWal-MartandTargetstoresperformedlately?
1.Howdoesmoneywork.
Moneymakestheworldgoround,theysay.Perhapsitiseventruerthattheworldmakesmoneygo
round,especiallyinaneraofglobalizationwhencapitalcanflowfreelytoandfromalmosteverywhere.Moneyisalways lookingforplaceswhereitwillbemostprofitableandearnthegreatestreturnon investment.
Asanindividual,youcanputyourmoneyondepositinabank,andaslongasthebankdoesn'tfailand
theeconomykeepsfunctioning,youwillgetinterest.Yourmoneyislentouttopeople,businessesand governmentswho need it to financetheirownprojects, andthebankwillmakeitsmoneyonthedifferencebetweenwhatitpays outininterest ondepositsand whatitgetsininterestfrom itsloans.
Ifyouwant tolivemoredangerouslyyoucouldbuysomebonds,andaslongastheorganizationor
countryyou'veinvestedinbylendingitmoneydoesn'tdefault,youwillgetyourinterestpayments,and lateryourbondswilleventuallyberepaid.Toliveevenmoredangerously,buysomesharesandsharein the profitabilityofyourchosencompany.Ingoodtimes,the dividendswillbemorethanwhatyouwould getfrombonds,andtheshares themselves willincreaseinvalue, givingyoua capitalgainifyousell them.Butifthecompanyrunsintotroubleandgoesbankrupt,youwillbeamongthelasttobepaidback, andyoumaygetonlypartofwhatyouputin,oryoumaylose allyourmoney.
2.Whatmoneyinstitutionscanyoumention?
Thisisforexamplebanks,insurancecompanies,mutual funds (unittrusts intheUK)andpensionfunds whomay, ofcourse,beinvesting themoney ofprivateindividualsindirectly.
Themarketsthey investininclude themoneyandcurrencymarkets,stockmarketsforshares(also
knownasequities),commoditiesmarketsforanythingfromgoldtoporkbellies(usedformakingbacon),
andproperty(buildingsandland). Let’s stopon several institutions.
Themostfamousmoneyinstitutionineverycountryisbank.Bank
is afinancial institution thatactsas apaymentagentforcustomers,andborrows andlendsmoney.Banksborrowmoneybyacceptingfunds
depositedoncurrentaccount,acceptingtermdepositsandbyissuingdebtsecuritiessuchasbanknotes andbonds.Bankslendmoneybymakingadvancestocustomersoncurrentaccount, bymaking
installmentloans,andby investingin marketabledebtsecuritiesandotherforms oflending.
Amutualfund
is aprofessionally-managedfirmofcollectiveinvestments thatpoolsmoneyfrommany
investorsandinvestsitin stocks,bonds,short-termmoneymarketinstruments,orothersecurities. Ina mutualfund,thefundmanager,tradesthefund'sunderlyingsecurities,realizingcapitalgainsorlosses, andcollectsthedividendorinterestincome.
3
.Describedifferentkindsofsecurities anddifferentkindsofmarkets.
Fromthepointofviewofinvestors,theworld'sfinancialmarketsexistinordertochannelmoneyto profitableinvestmentactivities and projects.Fromthepoint ofviewofborrowerssuchascompanies and governments,financial centresexistso thattheycanfind capitalon thebestterms.
Most investorsarenotprivateindividualsbutinstitutionslikebanks,insurancecompanies,mutualfunds andpensionfunds whomay,ofcourse,beinvestingthemoneyofprivateindividualsindirectly.The markets theyinvestinincludethemoneyandcurrencymarkets
,stockmarkets
forshares(alsoknownasequities),commoditiesmarkets
foranythingfromgoldto porkbellies(usedformakingbacon),and property(buildings andland).
Therearealsomarketsforfutures
incurrencies,equities,bondsandcommodities:afutureisafixed- pricecontracttobuyacertainamountofsomethingfordeliveryatafixedfuturedate.
Therearemarketsforoptions
incurrencies,equities,andbonds.Here,aninvestorbuystherightto buy orsellacertainamountofthesethingsatacertainpriceandparticulardateinthefuture.Thisisa formofbetting on howpriceswillmove.
Someofthesemarkets,likestockmarkets,arebasedinparticularbuildings,somewith tradingfloors,but
mosttradingisnowscreenand telephonebased. Others,likebond and currencymarkets,are'virtual',inthesensethatsellingandtradingtakesplacebyphoneandcomputerbetweenthepremisesofissuers, brokersandtraders.
Securities
constitute theobjectswhichinvestmentsaremadeof.Therearevarious kinds ofsecurities.
Theyare tradedinmarkets,eachone withspecificrules.
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Stocks
arethemostpopularsecurityforinvestment.Theyactuallyrepresentownershipinaspecific company.Themostcommonwaystocks appearinthemarketis byoperations calledinitialpublicofferings (IPO)
.Thesehappenwhenacompanydecidestoissuestocks,butgivingawaypartofittothe public,inreturnformoneypaidbythenewshareholders.Thepublicgainsapartofthecompany,bythe costofpayingmoneyforit,whilethecompanyobtains amassiveamount ofmoney,bythecostofhavingtogiveawaypartofitsownership,aswellaspartofitsprofitsintheformofdividends.
OutsideIPO's,stockcanbeboughtandsoldinstockexchanges
.Theseareplaces(physicalorvirtual)
wherestocks are assignedaselling priceandabuying price.Anyonecanbuyorsell stocks with the help ofbrokers.
Companies oftenneedmoneyforvarious ends,suchasimprovingitself, expanding,buyingother companies, andsoon.There aremanyforms ofdoing this.One ofitis using abond
.Abondisacontract
betweenanissuingcompanyandabuyer.Inthiscontract,thebuyerlendsacertainamountofmoneyto the company,foracertainnumberof years.Inreturn,thecompanyis obligedtopayinteresttothebuyer,
periodically,ataspecifiedrate.
F
u
n
ds
becomeaninterestinginvestmenttoolforeveryonewhoisnotinterestedinwasting timewith
stockorbondpicking, trading,andsoon. Investmentcompaniesmanageoneormorefunds,where moneyfrommanyinvestorsismanagedbyprofessionals.Oneinvestmentfundusuallyholds aportfolio ofsecurities.Thedecisionstobuyorsellthosesecuritiesaretakenbytheinvestmentcompanybehind thefund.
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.Whatcanyousayabouttheattitude tomoneyinourculture?Hasitchangedinrecentyears?
Moneycan beacurseorablessinginourlives.Ifwedealwithitaccordingtotheworld’sstandards,it canbeacurse.Moneyisthenumberonesourceofstressandtheprimarycausefordivorce.
People'sattitudestowardsmoneyvaryenormouslyandarelargelyinfluencedbythevaluestheywere
broughtupwithandhowmuchmoneytheyhavenow.
Assuming there's enough moneytokeepa roofoveryourheadandbuy basicfoodstuffs,whatyoudo
withtherestofyourmoneywilldependonyourparticularattitude.Thefollowingthreestatements broadlysumup themostcommonattitudestomoneyintoday'sculture:
1.Moneyisforenjoying
-moneyisforspendingonthethings thatmakeyouhappy.Nooneknows whatthefuturemayholdorwhatcanhappentomorrow, soyoushouldenjoywhatyouhave whenyou
haveit.Money'snousewhenyou'redead,solivefortoday.
2.Moneyisforsecurity
-moneyshouldbespentonmakinglifecomfortable.Onceyouhavethebasic
homecomforts,it'simportanttohavemoneyputasideforarainyday.Nooneknowswhatthefuture mayhold,soit'ssensibletobeprepared.
3.Moneyisforsharing
-moneyshouldbe sharedgenerouslywiththoseyoulove andthoseless fortunatethanyourself.Buyingpresents,entertainingothersandgivingmoneytocharitycreatesfeelings
inyourselfandothers thatarepriceless.Nooneknows what thefuturemayhold,andsomedayyoumayneedthefavourreturned.
Soherearethemainattitudestomoneyinourculturetomymind andIdon’tthinkthatmyopinion differsfrommostpeople,so theattitudetomoneydoesn’tchangethroughyears.
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.HowhaveWal-MartandTargetstoresperformedlately?
Wal-MartStores
is anAmericanpubliccorporationthatruns achainoflarge,discountdepartment stores.Itistheworld'slargestpubliccorporationbyrevenue.Itisthelargestprivateemployerinthe
world and thefourth largestutilityorcommercial employer.Wal-Martis thelargestgroceryretailerin theUnitedStates.
OnSeptember12,2007,Wal-Martintroducednewadvertisingwiththeslogan,"Save
MoneyLive
Bett
er
," replacing the"Always LowPrices,Always
"slogan,whichithadusedfortheprevious19years.
GlobalInsight,whichconductedtheresearchthatsupportedtheads,foundthatWal-Mart'spricelevel reductionresultedinsavingsforconsumers.
Savingpeoplemoneytohelp themlivebetteristhegoalofWal-Mart.It’sthefocusthatunderlieseverything atWal-Mart.Andfor themillionsofcustomerswhoshopinthese storesitmeans alot. By
offering thebestpossible priceson the productscustomersneed,Wal-Martcanhelpthemaffordsomethingalittleextra.
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TargetCorporation'smainretailingsubsidiary,TargetStores
,is aUnitedStatesdiscountretailchain consistingof1,591(morethan1500)
stores.Ithasunitsinall statesexceptforAlaska,Hawaii,and Vermont,operatingundertheheadsofTarget,TargetGreatland,andSuperTarget.TargetCorporationhasaggressiveplanstohave2,000storesopenbytheyear2010,includingexpandingtoAlaskaand Hawaii.
Targetstorestendtoattractyoungerandmoreeducatedandaffluentcustomersthanitscompetitors. Targethascultivatedamoreupmarketandstyle-consciousimagethanotherdiscountretailers.Itis the third-largestgeneralretailerintheUSbyrevenues.
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it 6. Advertising.
1. Whatformsofadvertisingdoyouknow?
2. Explainthemeaningof'directmarketing'.Whyisitconsideredtargetedmeansofadvertising?
3. Whatisthedifferencebetween'productplacement'and'productendorsement'?
4. WhatmakesMike'sadvertisingtick?
5. Howshouldyouplananadvertisingcampaign?
6. Giveexamplesofgoodandbadadvertisements.
1.Whatformsofadvertisingdoyouknow?
Themainformofadvertisingismedia.
Itcanincludewallpaintings,billboards,streetfurniture
components,printedflyers,radio,cinemaandtelevisionads,webbanners,mobiletelephonescreens, magazines,newspapers,sides ofbusesorcars, andsoon.Anyplacean"identified" sponsorpays todelivertheirmessagethroughamedium is advertising.So youcanseealotofadvertisinginthestreets. Anotherfamoustypeofadvertisingnowadaysisproductplacement
. Itis whenaproductorbrandis noticedinentertainmentandmedia.Forexample,inafilm,themain charactercanuseanitemor otherofadefinitebrand.Itisverypopularnowadaysforcars,watches,clothes.Forexample,product placementforFord,BMWand Aston-MartincarsarefeaturedinrecentJamesBondfilms,mostnotably CasinoRoyale
.
TheTVcomm
ercial
isgenerallyconsideredthemosteffectivemass-marketadvertisingformat,asis reflected bythehigh pricesTVnetworks chargeforcommercial airtimeduringpopularTVevents.Forexample,football.
Increasingly,othermediaareovertakingtelevisionbecauseofmoreconsumer'susageoftheinternet.
AdvertisingontheWorldWideWeb
isarecentphenomenon.Pricesof Web-basedadvertisingspaceare dependentonthe"relevance" ofthesurroundingwebcontentandthetrafficthatthewebsite receives.
E-mailadvertising
isanotherrecentphenomenon.UnsolicitedbulkE-mail advertisingisknownas
"spam".Sothesearethe mostfamousforms ofadvertising nowadays tomymind.
2.
Explain
themeaningof'directmarketing'.Whyisitconsideredtargetedmeansofadvertising? Directmarketing
is oneofthetypeofmarketing.Therearetwomaincharacteristicswhichdiffersit fromothertypes ofmarketingoradvertising.Thefirstis thatitattemptstosenditsmessages directlyto consumers,withouttheuseofothermedia.Thisinvolvesunsolicitedcommercialcommunication(spam, junkmail,etc.)with consumers orbusinesses.Thesecondcharacteristicis thatitisfocusedon drivingpurchases thatcanbeattributed toaspecific"call-to-action."Iftheadvertaskstheprospecttotakea specific action,forexample callafree phonenumberor visitawebsite, thenthe effortis consideredtobe directresponseadvertising.
Directmarketingisattractivetomanymarketers,becausein manycasesitspositiveeffect(butnot
negativeresults)canbemeasureddirectly.Forexample,ifamarketersendsoutonemillionsolicitations bymail,andtenthousandcustomerscanbetrackedashavingrespondedtothepromotion,themarketer cansaywith someconfidencethat thecampaignleddirectlyto theresponses.Thenumberofrecipientswhoareoffendedbythejunkmail/spam,however,isnoteasilymeasured.Bycontrast,measurementof othermediamustoftenbeindirect,asthereisnodirectresponsefromaconsumer.
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.Whatis the difference between'product placement'and 'product endorsement'?
8
P
r
oduc
tplacement
advertisementsarepromotionaladsplacedbymarketersusingrealcommercial productsandservicesinmedia,wherethepresenceofaparticularbrandistheresultofaneconomic exchange.Whenfeaturingaproductis notpartofaneconomic exchange,itis calledap
roductplug
. Productplacementappearsinplays,film,televisionseries,music videos,videogamesandbooks.
Productplacementislinkedwith theinclusion ofabrand'slogoin shot,orjustappearanceofa productin
shot. Thisis donewithoutanyspecial mention,itis donesothat itlookslikeanaturalpartofwork. Mostmoviestodaycontainproductplacements.Sothemostcommonform ismovieandtelevisionplacements andmorerecentlycomputerandvideogames.
Inpromotionandofadvertising,arecomendat
i
o
n
orendorsement
consistsofawrittenorspoken
statement,sometimesfromapublicfigure,sometimesfromaprivatecitizen.Soproductendorsementit is whena well-knownperson sayshowgoodaproductisinadvertisements.Andpeople willbuy the productbecausetheylikeortrusttheperson.
Todayendorsementsappearmostlyintelevisionadvertising.Forexample,asmiling starmay
demonstrateanddescribethebenefitsthatshereceivesfromusing this orthatproduct.Inthecaseofcelebrityendorsements advertisers aimtousetherecognition-factortodrawonthehaloeffect.Intheory, thissourcetransfersfromthecelebritytotheadvertisedproduct,brand,andmanufacturer.Aproblem with usingcelebrityendorsementsinvolvesanynegativepublicitythatthecelebrity mightget:itwillalsotransferbacktotheproduct,therebyreducingbrandequity.
4
.Whatmakes Nike'sadvertisingtick?
PhilKnight,the co-founderandformerChiefExecutive ofNike,hasanabsolutelyclearandcommitted
strategytousecelebrityathleteendorsement.HehasbuiltNike’sexpansionintosport aftersportfromits athleticsrootsonthebackofsportingmasters.FromthebeginningNikehasbeenpreparedtotakea gambleonsportingbadboys others wouldnottouch.Itwasastrategythatbeganwith IlieNastase,the originaltennisbadboy.TheRomanianhad thequalitythathascometorepresentNikeandits
advertising:attitude.Afterextraordinarygrowth,Nikebecamenumberonetrainermanufacturerinthe US.Butthenitexperimented unsuccessfullywithexpansionintonon-athleticshoes,andlostitsnumberonepositiontoReebok.
Knightbet thefutureofthecompanyon anewfeature:a newairtechnologyinsidethetrainer.Salestook
offandthe restishistory.Thisbringstoglobalizationandthe question ofhowAmericanthebrandcanbe.Nikeusesamixofglobaladcampaigns suchas ‘good vevil’andlocaladvertising suchasitsfamouspostercampaignsintheUK.MarketingdirectorsatNikedonotrelyonmarketresearchpre-testing
whichoftenreducestheimpactofmoreexperimentalcommercials.Thereisalsothelongrelationship
with one ofthe world’sbestadagencies. ThingsonlyhappeninNikeads thatsportsmenandwomencan reallydo.
5.How shouldyouplanan advertisingcampaign?
Anadvertisingcampaign
is aseriesofadvertisementmessagesthatsharea singleidea andthemewhichmakeupanintegratedmarketingcommunication(IMC).Advertisingcampaignsappearindifferent
mediaacrossaspecifictimeframe.
Thecriticalpartofmakinganadvertisingcampaignisdeterminingacampaigntheme
,asitsetsthetone
fortheindividualadvertisementsandotherformsofmarketingcommunicationsthatwillbeused.The campaignthemeisthecentralmessagethatwillbecommunicatedinthepromotionalactivities.
Takingonyourownadvertisingcampaignisnoeasytask.You cando itonyourownbutyoushouldbe readytorollupyoursleevesandget towork.
YourMarketingPlan
Nothingcanhelpyouidentifyyourgoalsmore thanyourmarketingplan.You learnalotabout your
company,yourcompetitorsandyourlong-termgoals bycreatingandfollowingyourmarketingplan. Thisiscrucialtoknowingwhattypeofadvertisingisbestforyou.
CreateaPlanofAction
Onceyouhaveyourmarketingplan,youmustcreateaplanofaction.Yourplanofaction also gives you
crucialinfoyoucanuseinexecutingyouradstrategy.
De
f
in
eYourAdvertisingBudget
Howyouadvertisedependsonyouradbudget.Youneedtostrategicallyuseyouradvertisingmoney.If you'reonlyallowing asmallportion ofmoneytoadvertising,youwouldn'twanttothrowitallintothe
9
production ofonecommercialthatruns at2a.m.Knowexactlyhowmuchyouwillspend onyour advertisingfirstsoyoucanmakewisedecisionsinthecreationandplacementofalladmediums. HuntforAffordableOpportunities
Runningyourownadcampaignmeansyouhavetobeyourownmediadirector.You'vegottofindthe bestadplacementandthemostaffordableopportunitiestofitintoyourbudget.Ifyou'relimitedtoavery
smallbudget,youcanfindmanywaystobypasshighadvertisingcosts.
K
no
wYourTargetAudience
You can'tadvertiseeffectivelyifyoudon'thityourtargetaudience.Knowwhotheyarebeforeyoustart creatingyourads.Ifyourcompanysellsscooterstoseniors,youdon'twanttoinvestincableadstorun
onMTV.
Adv
e
r
tis
einAppropriateMediums
Ofallthe differentadvertisingmediumsyoucanuse,youhave tobe able tousethesemediums toyourbenefit.Spending allofyourmoneyonadirectmailcampaignwhenyouraddollarswouldbebetter
spentonprintadsisgoingtolimithowmanycustomersyoucould'vegained.Takealookateach medium,thinkaboutyourtargetaudience,takealookatyourmarketingplanandyourplanofactionand
decide which medium(s)will bebestforyouraddollars.
Don'
tBeAfraidtoHireFreelancers
Ifyoucan'tturnyouradvertisingovertoanagency,stillconsiderhiringafreelancecopywriterand/or graphicdesigner.Theseprofessionalsknowwhatmakesagoodadvertisement.
Manyfreelancershave workedinadvertising agenciessoyougetthebenefitoftheirexpertise. Plus,freelancerscangiveyouprofessionalcopyandmaterialsatanaffordable cost.
Co
n
sist
e
nc
yisKey
Ifyou'rerunning TVandradiocommercials,printadsandadirectmailcampaign,keepthemconsistent.
Use thesame announcerandmusicforyourcommercials.Printmaterials shoulduse thesame colorsand fonts.Usethesametagline.Youwanttokeepeverythingconsistentsoyourpotentialcustomersstart identifyingyourtagline,yourcolors,yourfont,yourannouncer,jingle-everything-thatrelatestoyour company'sadcampaign.
Freque
n
cy
Buying spacefor oneradiocommercialthatairs onceat4:30 inthemorningisn'tgoingtogetmuchofa
response.Youwantcommercialstohavealargerfrequencysoyoucan increaseyourchancesofhittingthattargetaudience.Ifyou'rerunningadirectmailcampaign,decidethefrequencyofyourmaterialsup front.Onceyousendyourinitialmaterials out,howmanytimeswillyousendoutfollowupmaterials? Knowtheanswersbeforeyoubegintohelpmaximizeyourstrategy'ssuccess.
Books
Whenallelsefails andyoustillrunintoquestions,thereareplentyofbooksyoucanusetogiveyou
guidance.Alsobeonthelookoutfortitlesthathavejustbeenreleasedsoyoucankeepon topofcurrent advertisingtrends.
6.Giveexamplesofgoodandbadadvertisements.
Anadvertisingcampaign
is aseriesofadvertisementmessagesthatsharea singleidea andthemewhichmakeupanintegratedmarketingcommunication(IMC).Advertisingcampaignsappearindifferent
mediaacrossaspecifictimeframe.
Thecriticalpartofmakinganadvertisingcampaignisdeterminingacampaigntheme
,asitsetsthetone
fortheindividualadvertisementsandotherformsofmarketingcommunicationsthatwillbeused.The campaignthemeisthecentralmessagethatwillbecommunicatedinthepromotionalactivities.
Good orbadwillbethis advertisementit’sanotherquestion.Itis difficulttoidentifywhich advertisementisgoodandwhichnot,becauseeveninthesurroundingsofpitchmentherearedisputes
aboutit.Onepeopleconsiderthemostimportantinadvertisementis thatitcouldselltheproduct,the othersmorecreativepersonsmake uselessfromthepointofsalesbutinterestingforpeople
advertisements.
From mypointofviewthegood examplesofadvertisementsit’sthe advertising ofalmostallperfumes.
Itis alwaysstylish,charming trailerwith goodselected music.ForexampletheadvertisementofChannel
№5withNicoleKidman.Itisshort,fascinated,low-pressuredadvertising.
Anothergoodexample ofadvertisementis classic advertising ofNewYearCoca-Cola. Itis good looking advertisement,funnywhichhelpsyoutofeelthe approachingofholiday.
10
Asforbadexamples,tomymind eachadvertisementinitstrailershouldcontainthe shortmessage ofthe theme ofthis or that advertising.Butthismessageshouldbe on theme,itshouldcontaintherightsense
oftheadvertising subject.ForexamplethetrailerofVanish.Attheendofadvertisementthereis a
phrase:“Pinkcolor,trustitandtherewillbenospots”.Whomshouldwetrust?Thecolororthefeature inthepinkpot?It’snotcorrectmessageoftheproduct.
U
n
i
t7.Cultures
1. Giveexamplesofcross-culturalissues.
2. Inwhat
3. Isthereadifferencebetweenculturesandsubcultures?
4. Explainthemeaning oftheterm‘culturalawareness’.Whyisitimportant?
5. Whatadvicewouldyougivetoa business visitorcoming to Italy,theUAE, toRussia?
1.Giveexamplesofcross-culturalissues.
Anindividual'sculturalbackgroundwillaffect thespecificwayinwhichheorsheseestheenvironment andalsohow theindividual mightshowhis orherfeelings,emotion,distress,orconflictinbehavior,
thoughtoraction.Therefore,culturewill influencetheexperienceof mentaldisorders andhowtheymightpresent.
Miscommunicationisthemostpopularexample ofcross-culturalissues.
Miscommunicationacrossculturallinesisusuallythemostimportantcauseofcross-culturalproblems.
Miscommunicationcanbecausedbyseveralproblems:
•differencesinbodylanguageorgestures
.Thesamegesturecan havedifferentmeaningsindifferent
partsoftheworld.Forexample,Bulgariansshaketheirheadsupanddowntomeanno.Inaddition,the waypeoplecountontheirfingersisnotuniversal:TheChinesecountfromonetotenononehand,and eightisdisplayedbyextendingthethumbandthefingernexttoit.Thesamegestureisinterpretedas meaning twoinFranceandas pointingaguninNorth America.
•differentmeanings forthesameword
.Likegestures,words canhavedifferentmeaningsorconnotationsindifferentpartsoftheworld.TheFrenchword"char"meansArmytankinFranceandcar inQuebec.Theword"exciting"hasdifferentconnotationsinBritishEnglishandinNorthAmerican English.WhileNorth American executives talkabout"exciting challenges"repeatedly,British
executivesusethiswordtodescribeonlychildren’sactivities(childrendoexcitingthingsinEngland,not executives).
•differentassumptionsmadeinthesamesituation
.Thesameeventcanbeinterpretedmanydifferent ways dependingonwhereonecomesfrom.Forexample,althoughthesightofablackcatis considereda
luckyeventinBritain,itis considered unluckyinmany othercountriesparticularlyinRussia. Soinextremecases,miscommunicationcanleadtocasualties.
2
.In what way should cultural stereotypesbehandled?
Weusestereotypesinpartbecauseit’ssohardtotakeinallofthecomplicatedinformationaboutotherpeopleintheworld.It’s difficulttospendtheamountoftimenecessarytounderstandwhyorinwhat
differentways peoplebehave. Soinstead,welearnearlyinourlivestoacceptstereotypesofgroups,orindividuals.Wedevelopstereotypesnotjustforlarge cultures,but smallerones.
Stereotypes eliminatethechallengesofunderstanding peoplewhoare differentfromourselves;they supposedlygiveusageneraloverviewofwholegroupsofpeoplesoweknowwhattoexpectandhowto
act.Unfortunately,somany stereotypesareinaccurate(неточный)andareusedasamethodof scapegoating(козел отпущения),ortoseparate"their"behaviorfrom"my"behavior.Wedon’talways
agree with,orlikethe wayanothercultures behavebecauseitis different,andwe thereforeperceiveitas wrong,anddevelopnegative/uglydescriptions (stereotypes).Whenwehaveproblems with someoneofa
differentgroup,wetendtoidentifytheproblemashavingtodowiththegroup,ratherthanourselvesor thespecificperson.Sostereotypesdogetinthewayofhowwethinkandfeel.Itmakesus very
judgmentalaboutothersandunfortunatelyoftenerroneouslyso.Stereotypespreventusfromidentifying thefeelings thatarereallygo on insideofus.Withstereotypes,thebeliefwillremainthatsomeonedid
somethingtous,ratherthantheproblem,fear,orrigidity/closedthinkingbeingwithinourselves.When
11
we’restereotypingwegetcaughtupintheissueofthat’swhat"theydo",that’show"thosepeople"are,insteadofbeingintouchwithouractualfeelingsofhurt,confusion,beingslighted,left-out,anger,etc.
3
.Is thereadifference betweenculturesand subcultures?
Culturecanbedefinedasallthewaysoflifeincludingarts,beliefsandinstitutionsofapopulationthat arepasseddownfromgeneration togeneration.Culturehasbeencalled"the wayof lifeforanentire
society." Assuch,itincludes codesofmanners,dress,language,religion,rituals,norms ofbehaviorsuch aslawandmorality,and systems ofbeliefaswell astheart.
Variousdefinitionsofculturereflectdifferingtheoriesforunderstanding,orcriteriaforevaluating, humanactivity.
Asubculture
is aset ofpeoplewith aset ofbehaviorsandbeliefs,culture,whichcouldbedistinctor hidden,thatdifferentiatethemfromthelargerculturetowhichtheybelong.Ifthesubcultureis
characterizedbyasystematic oppositiontothedominantculture,thenitmaybedescribedasa counterculture.
Subcultures canbedistinctivebecause ofthe age,race, ethnicity,class,and/orgenderofthemembers.The qualitiesthatdetermineasubcultureasdistinctmaybe aesthetic, religious,political,sexualora
combination offactors.Members ofasubcultureoftensignaltheirmembershipthroughadistinctiveand symbolicuseofstyle, whichincludesfashions,mannerisms, andargot.
Thestudyofsubcultures oftenconsistsofthestudyofsymbolismattachedtoclothing,musicandothervisible affectations by members ofsubcultures, andalsothe waysinwhichthesesame symbols are interpretedbymembersofthedominantculture.
Sosubcultureitis thestreaminsidethemaincultureandtheyareconnected with eachotherin soorthatway.
4
.Explainthemeaningoftheterm‘culturalawareness’.Whyisitimportant?
CulturalAwareness
isdevelopingsensitivityandunderstandingofanotherethnicgroup.Awareness
extendstospecialfoods,manners ofdress,language,religious preferencesandobservances,and differencesincommunication styles.(Forexample,in someculturesitisimpolitetomakeeyecontact,especiallywith someoneyoudonot knowwell.)Toenhancethe qualityofthe visit,itishelpful tobe awareofculturaldifferencesandbesensitivetothosedifferences.
Culturalawarenessrecognisesthatweareallshapedbyourculturalbackground,whichinfluenceshow weinterprettheworldaroundus,perceiveourselves andrelateto otherpeople.Youdon’tneedtobean expertineverycultureorhavealltheanswerstobeculturallyaware; rather,culturalawarenesshelpsyoutoexploreculturalissueswithyour recipientsmoresensitively.
Informationaboutspecificculturalpracticeswillhelptoincreaseyourculturalknowledgebyproviding anoverviewofculturalcharacteristicsandissues.However,itisalwaysimportanttoidentifyindividual needsandpreferences andrememberthatnoindividualcanbereducedtoa setofcultural norms.
Withinanyculture,peoples’values,behaviourandbeliefs canvaryenormously.Differencesmayoccur due to time ofarrival inAustralia,length ofsettlement,socio-economicbackground,level ofeducation,
wayof life,identification withculturalandreligiousbackground,anddifferentlife experiences. KeyConsiderations
·Beawareofyourownculturalinfluences.
·Beawareofjudgingotherpeople'sbehaviourandbeliefsaccordingtothestandardsofyourown
culture.
·Beawareofmakingassumptionsaboutculturalinfluences andapplyinggeneralisationsto
individuals.
·Understandthat thebehaviourandbeliefs ofpeoplewithineachculturecanvaryconsiderably.
·Understandthat theextenttowhichpeopleadopt practicesoftheirnewcountryandretainthosefromtheirculturalbackgroundcan varywithincommunities,evenwithinfamilies.
·Understandthatnotallpeopleidentifywiththeirculturalorreligiousbackground.
·Increaseyourknowledgeaboutdifferentculturalpracticesandissues throughculturalbackground
informationsessionsand/orresourcesandculturalawarenesstraining.
·Understandtheimportanceofappropriatecommunication.
5
.Whatadvicewould yougive toabusinessvisitorcomingtoItaly,theUAE,toRussia?
12
I
t
aly
LivelyconversationiscommoninItaly.WelcometopicsofconversationincludeItalianarchitecture,art
andfilms,sports(especiallyfootball),operaandpraisingthehospitalityofthe country.Itis besttoavoid
criticizing Italianculture,evenifyourItaliancounterpartsaredoingso.Don’tgiveabusiness giftuntilyoureceiveone. Yourgiftshouldbea wellknownbrandname. giftsofalcoholor craftsfrom your countryareoftengoodchoices.Otherpossiblegiftsarefinepens,aframedprintorpicture,silverkey ringsorcalculators.Avoidgiving gifts showingyourcompany’slogo.Hospitalityplays akeyrolein Italianbusiness culture.Regardlessofhowyoufeel,refusing aninvitation ofanykindmaygiveoffence.Thebusiness breakfastis almostunheard of.Rareexceptionsmaybefoundinthemajorcities.Business dinnersinvolveonlyasmall,exclusivegroup. Ifyou arethehost,checkwithyourItaliancontactbeforemaking anyinvitations.Lunchis stillthemainmealofthedayinmostareasofthecountry.Itis usually servedafter12:30p.m.andoftenhasmanycourses.
United
A
r
ab
Em
i
r
ates
Thehostsusuallyset thesubjectofconversation.Theywillnormallybeginwithpoliteenquiries(Howareyou?Howareyouenjoyingyourvisit?etc.). Ifothers arrivedbeforeyou,yourhostswilloftentell
youthesubjectofthepreviousconversationandinviteyoutocontribute.GivinggiftsintheUAEismore complexthaninothercountries.Thisispartlybecause ofthemixture ofnationalities:eachnationality
has differenttastes andcustoms.Also,nearlyeverything canbepurchasedintheUAElessexpensively thanelsewhereintheworld.As agestureofrespect,yourhostislikelyto openandcarefullyexamine
yourgiftinyourpresence.Itisimportantthatyourgiftis thebestyoucanaffordtoavoid embarrassment.Sharingamealis consideredthebestwayforpeopletogettoknowoneanother.Locals
oftenentertainathomebut theywillacceptaforeigner'sinvitation toahotelorrestaurant.Hospitalityin theUAEisveryimportantbutshouldnotbeinterpretedasfuturecommercialsuccess. Therearelocal
customs tobeawareof,forexample,itis consideredbadmanners toeithereatoroffersomething withthelefthand.
Russia
Obtaining
anappointmentcanbeatremendouschallenge,sopersistenceandpatienceareessential.Once
yourappointmentisscheduled,doeverythingyoucantoavoidcancellation.
Whenmaking appointments,besuretoschedulethem farinadvance.Itwillalsobeinyourbestinterests
toconfirmanyappointmentseveraltimes,asthescheduleddateapproaches.
TheRussiandaybeginsearly,butitcanbe difficulttoforeseewhenallotherdailyactivitieswillbegin
andend.Schedulesareconstantly subjecttochange,oftenat thelastminute.Any visitorshouldstrivetobepunctual,butatthesametimeflexible.
Alwaysbepunctual,butdonotbesurprisedifyourRussiancontactsarenot.Itisnotunusual fora
Russiantobeoneortwohourslateforanappointment.Generally,themoreimportantthemeetingisfor
yourRussiancounterparts,themorepunctualtheywillbe.Allowplentyoftimeforeachappointment. Notonlymayappointmentsstartlate,theymaylastfarlongerthanoriginallyplanned.
Business hours aregenerally from9:00 a.m.to5:00p.m.,MondaythroughFriday.
ThereisanoldRussianproverb
--"theymeetyoudependingonhowyou'redressedandtheysaygood
byedependingonhowwiseyouseem."
Nowadays,Russianbusinesspeoplepayalotofattentiontohowtheyaredressed.Russianpeoplein
general probablyspendmoremoneyfromtheirfamilybudgetonclothing thenanyothernationin the world.
Thosewhocan'taffordtobuytopfashionbrandclothing(suchasVersace,Armani,Gucci,CalvinKlein orHugoBoss)prefertobedressedincheaperbutstillwellmadesuitsratherthanwearthefakeproducts
widelyavailableinnumerousmarketsacrossthecountry.
Ifyou'reaman,yourbestbetwillbetowearasuitandtie(make surenot towearthesameonesevery
day)forallyourmeetings,whetherit'sinanofficeor restaurant.Darkcolours andwhiteshirtsareonlyforspecialocasions.Otherwise,choosetonesinlightblue,gray,orbrown.
Visitorsshould
trytospeakinacalm,moderate, toneofvoiceatalltimes.
Usually,yourRussiancolleagueswillbedelightedifyoumaketheefforttospeakevenafew sentences
oftheirlanguage.Nevertheless,ifyourRussian partyspeaksyourlanguge,yourdecisiontospeak
Russianmaycauseconfusion(e.g.--theymightthinkthattheirEnglishisnotgoodenough).
13
Russiansaresometimesverycarefulaboutwhattheysay,andmayreverttospeakingmetaphorically,symbolically,andperhaps evencryptically.Consequently,thereis a great dealofrelianceon nonverbalcommunication.Atothertimes,however,theycan be extremelyfrank;italldependson the situation. WhenaRussiantouchesanotherperson duringconversation,itis usuallyasign ofconfidence.
YouwillsometimesfindtheRussianstobeenthusiasticaboutdiscussingpoliticsandthechallengesof
livinginRussia.Participatinginthiskind ofdiscussionandexpressingyourviews(eveniftheyare opposite)ismorewelcome thanjustbeingan activelistener.
BringingupthesubjectofRussiancultureandhistorycanbeanappreciatedgesture.Russiansare extremelyeducated--sodon'tbesurprisediftheystarttotalkaboutthehistory(morelikelythanculture)
ofyourowncountry.Beprepared.
Personalquestions arebestavoided,although youmaybesubjecttotheseinquiries.Maketheeffort to
answerthesequestions asbestasyouarewilling to allow,sinceyourRussiancompanionsmaypressyoufordetails.
Thereis tremendous affectionforchildreninthis culture;ifyouareaparent,showingphotographs of yourchildrencanbeaneffectivewayofbuilding good will.
Inconversation,itcanbepermissibleto discussyourfeelingsandhopesforthefuture.Sometimes,your
Russiancompanionswillbefarmoreinterestedinthepersonalsideofyourcharacterthanyourbusiness
agenda.
WelcomeTopicsofConversation
thechangestakingplaceinRussiacurrentevents
WorldWarII
economicdifficulties
positivecontrastsandcomparisonsbetweenRussiaandyourcountry[letyourRussiancompanionsbring upthissubjectfirst]
books films
TopicstoAvoid
complaintsaboutRussiatheHolocaust
theCzarandthemonarchy
ethnicminorities religion
comparing/contrastingRussiatootherdevelopingcountries comparing/contrastingMoscowandSaintPetersburg
Generallyspeaking
,Russianstakepleasureingivingandreceiving gifts.Besuretobringanassortment ofgifts,sothatyouwillalwayshavesomethingappropriatetogive.
Cheapergiftsdonothavetobewrapped,whilemoreexpensive onesshouldbe.
Giftsforchildrenareusuallyopenedinprivate,while giftsforadultsaregenerallyopenedinthe
presenceofothers.Ifyourgiftwas ahit,youwillhearmany'thank-yous.'
Russiansspendalot ofmoneyon gifts.Avoidgivinggiftssuchaspencils,pens,lighters(unless theyare
expensiveones),cheapwineorvodka,notebooks,etc.
WheninvitedtoaRussianhome,bring agiftofchocolates,dessertitems,goodwine,orotheralcohol
[trytoselectsomethingotherthanvodka,whichiswidelyavailable].
Bringingabouquetofflowers(nottooexpensivethough)forwomenyouarevisiting(doesn'treally matterhowmanyofthemareinthefamilyyou'revisiting)is agood idea.Makesureyouhaveanoddnumberof flowers.Evennumbers usuallyareforfunerals.
Ap
p
r
ecia
t
e
dGifts
wineorotheralcohol[trytoselectsomethingotherthanvodka]
finechocolates[wheninvitedtoahome]
afooditemthatisscarce towels
cameras watches
14
perfume,cologne[asathank-youforanovernightstay]
clothing[asathank-youforanovernightstay]
U
n
i
t 8. Employment
1. Howdopersonnelmanagersactintheircompanies?Whataretheirresponsibilities?
2. Whatis thewaytheprofessionalpeoplecanmakealivingiftheyweremaderedundant?
3. Howcanorganizationsretainhigh-performers?
4. Whatshouldyourememberaboutwhileattendingajobinterview?
1.Howdopersonnelmanagersactintheircompanies?Whataretheirresponsibilities?
Theyactmoreas facilitators forotherdepartments:theydeal withrecruitmentinconjunction with
departmentmanagers,theyadministerpaymentsystemsintandemwithaccounts.Theymaybe responsibleforprovidingtraining,inindustrialrelations theyareinvolvedincomplaints anddisputes procedures.Theyhavetobreakthenewswhenpeoplearedismissed.
Personnelmanagersmaybeinvolvedinactions toeliminateracialandsexualdiscriminationinhiring
andpromotionandtofightharassmentintheworkplace:bullyingandsexualharassment.Theycreate remunerationsystems(schemesofrewards)inordertoincreasemotivation.
2.Whatisthewaytheprofessionalpeoplecanmakealivingiftheyweremaderedundant?
Peoplewhoaremaderedundantshouldtrytofindanotherjob.Organizationwhichmakesredundancy oftentrytohelptheirex-employeesandsometimesHRspecialistsofferoutplacementservices.Theyorganizemeetingsforjob-seekers withpotentialemployers.
Professionalpeoplewhoaremaderedundantcanmakealivingasfreelancers,orportfolioworkers,
workingforanumberofclients.
3.Howcanorganizationsretainhigh-performers?
Moneyremainsanimportantmotivatorbutinpracticehigh performers tendtothinkthatitgoeswithout
sayingthattheymustgetagoodfinancialpackage.
Empowermentis anotherimportantmotivatingforce.Ahigh performerwantstofeelthatheorshe
“owns”aproject.
High performers trytodevelop theirskills sothat’s whyworkneedsto bevariedandtimeshouldbe
availableforcreativethinkingand developingnewskills.
Above all,high performers –especially iftheyareyoung– wanttofeelthat organization theyworkfor
regardsthemasspecial.Iftheyfindthatcompanyisn’tinterestedinthemaspeoplebutonlyashigh- performingcommoditiestheywillleavetheirposition.
4.Whatshouldyourememberaboutwhileattendingajobinterview?
Interviewisagoodopportunityforyoutoevaluatethecompany.Goodpreparationforinterviewisakey to success.It’s veryimportanttobringextracopiesofyourCVandtypedlistofreferences.Tomymind
itis veryimportanttofindout asmuchasyoucanaboutyouremployers andthebusiness theyarein. Alsopreparingfortheinterviewthinkaboutyourarrivingatleast15minutesearly.Itisveryimportant
tothinkaboutyourappearanceanddressbeforeinterview.Ofcourseweprefertobehiredbecauseofour skills andabilities,notbecause ofourdress.Butlikeitornotappearanceisimportantanditcreates
image.Yourappearancecanexpressmotivationandprofessionalism.
Ithinkthatit’sveryimportantnottocriticizeyourpreviousemployers.It’spossibletoexplainyour
leavingsayingthatyoudidn’tthinkthatyoucoulduseallofyourabilitiesandskills.Duringthe interviewit’simportanttoexplainwhyyouwouldliketoworkforthiscompanyemphasizing allthe thingsinyourpreviousexperiencethatyouthinkwillbeusefulinthenewjob.It’s importanttorelaxandbeyourself,lookattheinterviewerwhenhe orsheasksyouquestionsandshowgreatinterestinthejob.
U
n
i
t9. Trade
1. Whatarethelatesttrendsininternationaltrade?
15
2. Whydomanycountriesargueforprotectionistmeasuresfortheirindustries?Howdotheydothat?
3. Whatisthemajorconcernininternationaltradeandhowtodealwithit?
4. Whatdoyouknowabout“fairtrade”?
1.Whatarethelatesttrendsininternationaltrade?
Industrialization,globalization,multinational corporations,andoutsourcingarethelatesttrendsin
internationaltrade.Globalizationistheprocessenablingfinancialandinvestmentmarketstooperate internationally,largelyasaresultofderegulationandimprovedcommunications.Itistheemergence sincethe1980sofasingleworldmarketdominatedby multinationalcompanies,leadingtoadiminishing capacityfornationalgovernments tocontroltheireconomies.Consequencesofglobalization: globalizationincreases competitionamongcompanies,globalizationimprovesinternational communicationandunderstanding,tradeliberalization-tradebarriersbecomelower,shippingcosts decrease(costsonsendingordeliverygoods),globalizationdamageslocalgoods,servicesandcultures, ecologicalproblems.
2.Whydomanycountriesargueforprotectionistmeasuresfortheirindustries?Howdotheydo that?
Protectionism
isnolongertheorderoftheday inmostplaces;evenifsomedevelopingcountriesargue
that protectionistmeasures arethewaytogettheireconomiesgoing,theyavoidusing theterm.Tradenegotiationsarewell-knownfortheirepiceleventh-hournegotiatingsessions,whereindividualnations argueforwhat theyseeastheirspecificinterests.Countriesargueforprotection oftheirstrategic industries,onestheyconsidervitaltofutureprosperitysuchastheelectronicsindustryinthedeveloped world.Alessdevelopedcountry beginning carassemblymightwanttoprotectitasaninfantindustry. Europeanfarmersarguefortheirsubsidies,wheregovernmentsguaranteefarmersahigherpricethan theywouldnormallygel,makingithardfordevelopingnationstocompeteinagriculturalproducts.The Frenchargueforculturalprotection,pointingouttheuniquenessoftheirfilm industryandwinning restrictions,orquotas,onthenumberofHollywoodproductsthatEuropeimports.
3.Whatisthemajorconcernininternationaltradeandhowtodealwithit?
Onemajorconcern
ininternationaltradebetweensmallercompaniesis payment.Theexporterwantsto
besureaboutgettingpaidandtheimporterwantstobesureofgettingthegoods.Acommonsolutionis theletterofcredit,whereabankguaranteespaymenttotheexporter'sbankonceitreceivestherelated shippingdocuments,includingthecleanbillsoflading,showingthegoodshavebeenshippedwithout damageorotherproblems.ShippingtermslikeCIF,orCarriageinsurancefreight,wheretheexporter paysforinsuranceofgoodswhiletheyarebeingtransported,arepartofthestandardincotermsdefined bytheInternationalChamberofCommerce.Theseterms areusedin standardcontractsthat formthe basis,with adaptations,formostinternational tradecontracts.
4.Whatdoyouknowabout“fairtrade”?
Fairtrade
isanorganizedsocialmovementandmarket-basedapproachtoalleviatingglobalpovertyand
promotingsustainability.Themovementadvocatesthepaymentofafairpriceas wellas socialand environmentalstandardsinareasrelatedtotheproductionofawidevarietyofgoods.Itfocusesin particularonexportsfromdevelopingcountriestodevelopedcountries,mostnotablyhandicrafts,coffee, cocoa,sugar, tea, bananas,honey,cotton,wine,freshfruit,andso on.Fairtrade's strategicintentis to deliberatelyworkwithmarginalizedproducersandworkersinordertohelpthemmovefromapositionofvulnerabilitytosecurityandeconomicself-sufficiency.Italsoaims atempoweringthemtobecome stakeholdersintheirownorganizations andactivelyplaya widerroleinthe global arena toachieve greater equityininternationaltrade.
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it 10.Quality
1. Whatis TQM?Whatdoesitinvolve?(kanban, justintimemanufacturing, kaizen)
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2. WhatisBPR?Whatisitsconcept?Whatisbenchmarking?
3. Whichfeaturesexpresstheideaofqualityinthebestway?Why?
4. Howcanmanufacturersguaranteeproductquality?
1.WhatisTQM?Whatdoesitinvolve?(kanban, justintimemanufacturing,kaizen)
TotalqualitymanagementorTQMwasawatchwordofthe1980s.Thisofteninvolvedemployee
participation,withqualitycirclesofworkersencouragedtosuggestwaysofmakingthingsinbetter ways,Itwas associatedwith aninflux ofotherJapaneseideas,suchasthe kanbansystemofjust-in-time manufacturingorleanmanufacturing,where partsare onlymade andsuppliedwhentheyareneeded,so thatinventories (stocks) ofparts and theneedto financeand storethemareeliminated.A relatedobjectiveisthatofzerodefects,wherethingsaremaderightfirsttime,eliminatingtheneedfor inspectionandreworking.Allthisispartofkaizen:strivingforcontinuousimprovement.
2.WhatisBPR?Whatisitsconcept?Whatisbenchmarking?
TQMgavewayinthe19905tobusinessprocessre-engineeringorBPR,whencompaniesweretoldby theirconsultantsnotjusttotinkerinapiecemealwaywithhowgoodsorservicesareproducedbutto
abolisheverything andtostartagainfromscratch.Theconcept ofleannesswas nowalsoappliedto reducingthenumberofmanagementlayers,andalotofmiddlemanagerslost theirjobs.
Itwasalsointheninetiesthatbenchmarking emerged:theideathatafirmshouldseewhichcompanyperformedaparticulartaskbest,andmodeltheirperformanceonthisbestpractice.
3.Whichfeaturesexpresstheideaofqualityinthebestway?Why?
Tomymindsuchfeaturesofproducts(orservices)asvalueformoney,reliability,durabilityexpressthe ideaofqualityinthebestway.It’sveryimportantforcustomertobesurethathepaysmoneynotonly forbrandbutforqualityofproduct(orservice).WhenIbuysomethingIpaymuchattentiontosuch featuresasafter-salesserviceandguarantee.Ifproducercanprovideitscustomers withlong-continued guaranteeandgoodafter-salesserviceitcanmakenodoubtthatithasa goodcompetitiveadvantage.
4.Howcanmanufacturersguaranteeproductquality?
TheyapplyforthecertificationoftheInternationalOrganizationforStandardizationinordertoreassure theircustomers.Theyprovidecustomerswithlong-continuedguaranteeinordertoreassurethemin product’sdurability.Andofcoursegoodcompanieswhichtakecareoftheircustomersprovidethem withgoodafter-salesservice.
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t11.Ethics
1. Whatisthepurposeofanybusiness?Isitjusttomakemoney?
2. Why iscorruptionmorecommon in somecountriesthan inothers?Whataretheconsequencesofit?
3. Whichareasofbusinessdonotgiveenoughinformationaboutsocialandenvironmental matters?
4. Howdocompanies dealwithdifferentethicalissues?
1.Whatisthepurposeofanybusiness?Isitjusttomakemoney?
Frommypointofview“moneymaking”isnottheonlyonepurposeofthecommercialcompanies.Any
business wouldliketo obtaintherecognition oftheircustomers andeventheircompetitors. So,themain functionofanyorganizationistomakelivesofitscustomerseasier.Inotherwords,organizationsshould clearlydefinedresponsibilitiestowardsits"clients".
Alltheissuesmentionedabovearecontainedinorganisation’smissionstatement.Sothatmission
statementis abriefstatementofthepurposeofthecompany.Companiessometimes usetheirmission statementasanadvertising slogan,but theintention ofamission statementis tokeepmembers andusers
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awareoftheorganization'spurpose.(Example-"Organizetheworld'sinformationandmakeituniversally accessibleanduseful."—Google)
2.Whyiscorruptionmorecommon insomecountriesthaninothers?Whataretheconsequences ofit?
Tomyminditdependsontwofactors:thegrowthofinternationaltradeandthebusinessandthe economicchangesthathave takenplaceinmanycountriesandespeciallyintheeconomiesintransition.
Thus,countries whereis highconcentrationofmoneyandopportunities arepronetodifferentformsofcorruption.Representativeexampleofsuchcountry canbeRussia.
Consequences:
-Reducingpublicsectorwages
-Dissatisfaction with standardofliving
-highlevelofbureaucracy
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.Whichareasofbusinessdonotgiveenoughinformationaboutsocialandenvironmental matters?
Everyyearmoreandmorecompaniesareblamedforgivingalackofinformationaboutsocialand environmentalissues.Inotherwords,whenwetalkabouthowtomakeaprofit,onlyminoritythinking
aboutpollution,socialenvironment,ethicetc.Forexample,factories,producingmanufacturedgoods, don’tpayenoughattention toharmtheycausetoenvironmentandsavemoneyonfilters.Thefood
industryisblamedforobesity.Mobilephoneoperatorsarechallengedtoprotectteenagersfromonline pornography.Recordcompaniesareattackedwhentheysuemusic-loversforsharingillegalfileson the
Internet.Fortunately,nowmorecompaniestakeintoconsiderationenvironmentalandsocialissuesand takeactionastheyregularlyfacerealorpotentialthreattotheirreputation.Now100oftheFTSE250
coverenvironmental,socialandethicalissues.
4.Howdocompaniesdealwithdifferentethicalissues?
Allbusinessesincreasinglywanttobe perceivedasgood citizens.Differenttypes ofbusinessface
differentethicalissues:
•Financialinstitutionstrytopreventinsider tradingbyerectingnotionalbarrierscalledChinesewalls
betweendifferentdepartments(forexample,topreventsomeoneinsharetradingfromdiscoveringfrom themergersdepartmentthataparticularcompanyisinvolvedinmergertalksand thatitsshareprice willsoonrise).
•Companiessellingpersonalfinancepromisetoensurethatclientsaresoldappropriateproductsfortheir
needs,and thusavoidmisselling.
•Manufacturers claimthat theirproductsaregreenorenvironmentallyfriendlyinall stages oftheir
production,useanddisposal.
•Cosmeticscompaniessaythattheirproductsarenottestedonanimals.
•Clothingcompaniesclaimtotradefairlyandthattheirproductsarenotmadeinsweatshopspaying subsistencewagesandusingchildlabour.
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t 12.Leadership
1. Whydocompaniesincreasinglynurturetheirpotentialleaders?
2. Whatmakesagoodleader? Whatarethedifferencesbetweenmenandwomenleaders?
3. Whatisthe differencebetweenamanagerandaleader?
4. Aretheleadersbornoremade?
1.Whydocompaniesincreasinglynurturetheirpotentialleaders?
Companiesareincreasinglythinkingabouthow tonurturetheirleaders. Forexample,inUS corporate
governancehasbecomeakeyissuewithshareholders.Thehaverejected theprevious cosyarrangments,wheredirectorsappointedpeopletheyknew,to theboard, andnowdemandmuchgeaterscrutinyoverwhois chosenandhow.Itmeans thatleadershouldhave theempowermentandcharismatomotivateto
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othersinthe achievementofthegoals,but their qualitiescannotbeseeninisolation.Theremustbe the rightchemistrybetweentheleaderandothertoppeople,andtheymusthavetherightmixof complementaryskills. IfyourCEOleaves aftersixmonthsinthejob,perhaps,afterwhat the papersdescribesas“irreconcilabledifferences”,orasaboardroombattle,thecompanyandtheperceptionofit willsuffer,andso,probably,willitsshareprice.Bythetimeyoufindanotherone,twoorthreeyearsmayhavebeenlost,aneternityin strategicterms.That’s why nurturingleadersis anextremlysensitivetask.
2.Whatmakesagoodleader? Whatarethedifferencesbetweenmenandwomenleaders?
a)Aneffectiveleaderisbynatureaself-confidentpersonwhohasthecouragetoovercomedoubts, uncertainties andfearswhilebeingupbeatevenbeyondofhim/herpersonallimitations,business constraints,oddappreciations andenvyofco-workers.Leadershouldbecharismatic,humble,decisive,motivating,opportunistic,sometimesunpredictable.
b)There arelotofstereotypesaboutdifferencesinhowmenandwomenwork.Mostpeople donotacceptwomenasbossesbecause theythink theyhaveaweakcharacter.Womenaremore relationshiporiented
atworkthanmen.Theyarealsousinganeasierandamorestraightforwardlanguage comparedwithmen.Thelanguage ofwomenis alsomoreemotional andflowery.So,whena womanis aheadofthe
companyit’smorelikelythatintheorganization there’llbethefeelingof“togetherness” andeven informalityand thelack of hierarchy.Itmakes theemployeesfeelprotected and work in
cosy/comfortableconditionswhichwillstimulatetheir efficiency.
Asfarasmenconcerned,theyare, asa rule, are physicallyandemotionallystrongerthanwomen.
Usuallyithelpstokeepsituation undercontrol.Mostofthetime,menarethebreadwinners.Theyworkreallyseriouslyand seethe world asitreally is-itis perfectleadership quality;therefore,menmakecorrectdecisionsquickly.
Butweshouldn’tforgetthatitisourpersonalitythatmakesuscompetent,notourgender.
3.Whatisthedifferencebetweenamanagerandaleader?
1) Firstofall,leadershipis apersonalitytraitwhereasmanageris ajob title.
2)Aleaderisaninspirational,passionateandproactiveprofessional whodueto his/hertalentis a
benchmarktootherco-workers, whowantsucceedlikethem andlearntobeinfluentialinthe enterprise’s framework.Aleaderhasthewillingnesstofeelhim/herencouragedandfaceproactivelyanykindof situationneverthelessoftheriskandcostinvolved.Additionally,atrueleaderhasnomatterhow challengingandtoughthesecouldbe.
Amanagerisanoperationaland/orfunctionaldrivenprofessionalwhosefocusisorientedtoensure operationalexcellenceinthoseoperationalissues,financialperformance,talentmanagementand marketingstrategiesrelevanttohis/hermanagerialfunction.
Managerstendtobereactive,blendinwiththeenvironment,keepthefuturethesameasthepresent,
maintainimage,keepwhattheyhave,andnotalwayscomfortablebeingaccountableforthe responsibilitiestheywield.
3) Some differences:
- Managers workinginthesystemandleadersworkingonthesystem;
-Managersreduceweaknessesandleadersamplifystrengths;
But, bothofthemworkingonprogress, on company’s prosperity. So,youneedboth.Botharerequired foreffectivecorporategrowth.
4.Aretheleadersbornoremade?
Ibelieve thatnothinginourlife comeseasily.Ifyou wanttoachieve smthsignificant,becomea
founderofanorganization,leadernotonlyofyourcompany,butofthepublicopinion,youshould make
great efforts.So,from mypointofview, leaders aremade ratherthanborn.But it’sundoubtfullythatleadershipis amatterofpersonality. To becomeleaderyoushould possess charisma andotherabove mentionedcharacteristics.
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it 13. Innovation
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1. Whatis themain roleofR&D?
2. Whydodifferentindustrieshavedifferentlead-times?
3. Whatmaythelaunchofanewproductinvolve?
4. Howis Procter&Gamblerbetterthanitscompetitorsinterms ofinnovation?
1.WhatisthemainroleofR&D?
ThemainroleofResearchandDevelopmentdepartmentis provisionofresultsofscientific researchin
ordertodevelopnewproductsandimproveexistingones.Forexampletheinitialideaforacarwillbe
turnedintoaseriesofprototypesandtested.Insoftwaredevelopment,thefinal'prototype'isthebeta version,whichisbeta-tested.Pharmaceuticalgothroughaseriesoftrials.
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.Whydodifferentindustrieshavedifferentlead-times?
Differentindustrieshavedifferentlead-times,thetimebetweenconceptionandproductlaunch;anew drugmighttake10or15yearstodevelop. Inconsumergoods,marketresearchwillbeakeypartofthe developmentprocess,withfocusgroups:smallgroupsrepresentingcross-sections ofconsumerstalking
abouttheirreactions toproposeddesigns,andconsumersurveys.Aftermarketresearchtherecanbetrialrun ofproducts. After that therecan be researches ofconsumer’s reactions onthis product, researches of sales.Soallresearchesrequiredifferentperiodoftimefordifferentproducts.
3.Whatmaythelaunchofanewproductinvolve?
Thelaunchofanewproductmightinvolveanational,internationalorglobal rollout.Awell-oiledpublic
relationsmachinewillhavepreparedthewayforthenewproductbygettingtherequiredmedia
coverage,wherethetermsleadingedgeandstateoftheartwillperhapsappear.Anyteethingproblems willhopefullybeironedoutduringdevelopmentratherthanafterthelaunch.Theultimatenightmareis whenacompanyhastorecallproductsbecauseofdesigndefects.Thecoveragethismightgetistheleast welcomeimaginable.
4.HowisProcter&Gamblerbetterthanitscompetitorsintermsofinnovation?
AccordingtoLafley,theCEOofP&G,organicgrowth strengthens acompany’sabilitytoinnovate.
Organicgrowth–meaninggrowthfromcorebusinesses.Lafleyhasamodelforinnovatinginabig company:
1.One-on-oneconsumerresearch–marketersmustspendlotsoftimewithconsumersintheirhomes,watchingthewaystheyweartheir clothesandaskingthemabouttheirhabitsandfrustration.
2.Getemployeestoexchangeideas– employeesfromninecountriespostproblemsonaninternal website.CEOevaluatestheideasofemployeesandpresentsthebestfindingseachyear.
3.Stoptestingsomuch–Onecannotbut agreewith factthat puttingouta productcan'tbewithouttest-marketing.Butit’snecessarytoreduceproductlaunchtimefromlaboratorytoroll-out.
4. Givedesignersmorepower–it’snecessarythatdesigners wouldbeinvolvedinallaspectsofproduct development.
5.Knowwhatnot to do– accordingtoLafley,it’simpossibletoofferfatbonusesforinnovation ortohirestarsfromoutside.Managerswhofailtoshareideas simplydonotgetpromoted.
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it 14.Competition
1. Whatarethemostcommoncompetitionpractices?
2. Whatis MichaelPorter’smodelofcompetitors’types?
3. Whyis Nokianolongertheleaderinthemobile phonemarket?
4. Whyaresomeproductsunsuitableforforeignmarkets?
1.Whatarethemostcommoncompetitionpractices?
Competition betweencompaniescan betough,aggressive,evenferocious or cut-throat.Firmsmay
accuse eachotherofusingunfairmethods suchasdumping,wherea competitor(usuallyforeign)sells
productsforlessthanwhattheycosttoproduce,oratlessthanthepricechargedinthehomemarket. Firmsdumpinordertobuildmarketshareandrecouptheirlosseslaterwhen,havingestablished
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themselves tobenefitfromeconomiesofscale (producinginlargerquantitiessothatthe costofeachunit goesdown),theyareabletochargemarketpriceswithahealthyprofitmarginoneachunitsold.Competition canalsobegentlemanlyorevencosy,socosythatcompaniesmaybe accusedofforming a carteltoagreeonpricesinapricefixingarrangement.Theymaythenbeinvestigatedbyagovernment departmentthatlooksintounfairtradingpractices.
Competitorsmayalsoenterintootherperfectlylegitimateformsofcooperation,suchasjointventures forspecificprojects.Theymayeventalkaboutstrategic alliances.But likemergers,these cangoawryandleadtorecriminationbetweentheerstwhilepartners.
2.WhatisMichaelPorter’smodelofcompetitors’types?
MichaelPorter'smodelcontaining:
•cost-leaders,whoare low-costproducers with abroadscopeandcostadvantage,appealing tomany
industrysegments(manygroupsofbuyerswithdifferentneeds)
•differentiators,whoappealtobuyerswhoarelookingforparticularproductattributes
(characteristics)andpositionthemselvesasthemostabletomeetthoseneeds
•focussers,whoconcentrateononeparticularsegmentandtrytofindcompetitiveadvantageby
satisfying theneeds ofbuyersinthatsegmentbetterthananyone else.Focussers are,ineffect,nichers.These are the available choices,accordingtoPorter,that acommercialorganisationhasifitwantsto competeeffectively,andnotget'stuckinthemiddle'.
3.WhyisNokianolongertheleaderinthemobilephonemarket?
AlthoughNokia'sshareoftheglobalmarketformobilehandsetsismorethancompetitor’sshare,but
Samsunghasmomentum.Samsung's cameraphones,with twistingflip-upscreens thatallowuserstotake, sendanddisplayphotosquicklyandeasily,arehot;Nokia's arenot. Thehigh endofthemarket- phonesthatretailfor$300ormoreintheUS-isnolongerNokia's. Samsungmakestheexpensive cameraphonethatayoungconsumerwantstohave.Design shouldbeNokia's strength,sinceitovertook Motorolabyturninghandsetsintohandsomeanddesirableconsumergoods,ratherthantechnological objects.But initsrecentmodels,Nokiaforgotthefirstrule ofmodernistdesign -that formfollowsfunction.Instead,ithasplacedmostemphasis on makingitshandsetscolourful andzappy,with snap-oncovers.AndofcoursethemainNokia’s disadvantageis sizeofhandsets.Itis ratherbigincomparisonwithSamsung.
Samsunghasmainadvantage–itis thefactthatitis willingtopayhigh pricesfordevelopmentnew
electronicdevices.
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.Whyaresomeproductsunsuitablefor foreignmarkets?
Nowadaysmanynewhightechproductsappearonworldmarket.Producersoftheseproductstryto
distributethemintodifferentcountriesinordertoincreaseprofitsbuttheydonottakeforeignconditions
andtraditionsintoaccount.ForexampleJapanese robot-toys.IntheRussianmarketsuchtoyshaven’t greatdemand.Maybebecauseofratherhighprice.ButalsomaybebecauseofRussianmentality,habits
–weliketocommunicatenotwithrobotpetsbutwithalivepets.
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