A Basic Model Of Consumer Decision Making Marketing Essay

A Basic Model Of Consumer Decision Making Marketing Essay The demographic environment is defined as the demographic factors that marketers used to analyze market trends by segmenting the targeted population. BusinessDictionary.com, 2013. It consists of six factors which are; population ethnic mix, education levels, population size and rate of growth, age distribution and migration shifts and attributes. According to statistics, Singapore Residents Growth Rate has decreased from 0.9 to 0.8 from 2010 to 2011 (Department Of Statistics Singapore [DOSS], 2012). However, the growth rate is insignificant as compared to the Non-Residents which grew from 4.1 to 6.9 ( DOSS, 2012). As most of the non-residents are workers that cater to the low end jobs in Singapore, they do not earn high income and may find Singapore Airlines (SIA) too expensive. Therefore, SIA view it as an opportunity to launch a budget airline service to cater to this group. The age distribution of the Singapore population also affects the marketing strategies of SIAs decision to launch Scoot. Singapores population percentage for ages between 45 and over accounted for 38.4% (DOSS, 2012). This is a significant result and it indicates a trend to an ageing population. It is projected that by 2030, there will be a 2.1 replacement ratio to each citizen above age 65 (Our Demographic Challenges And What These Mean To Us, n.d.). Therefore, compared to SIA, the lower cost fare of Scoot is able to cater to this group of consumers as many of the aged are retirees who may not be able to afford the standard flight fare. This may be due to reasons such as not having stable incomes, high medical and living expenses. The other group of consumers that may opt for cheaper ticket fares are the young adults. They are aged between 15 to 34 and accounted for 28.4% of the population (DOSS, 2012). They represent an opportunity for Scoot as their commitments to family, work and study means they may have to control their expenses. Thus, they may have lower purchasing power and might be unable to afford SIAs travel fares. In addition, foreigners are projected to take up half of Singapores population by 2030 (Singapore Population Half Foreigners By 2030, 2013). This trend can be attributed to the migratory movement of foreigners from developing countries such as India and China to Singapore. They come from different parts of China and India and pose an opportunity for Scoot. Thus, this provides a wider targeted consumer group for marketers to promote their services. Citing from the case study, it states that Scoot, which will compete in the growing low-cost travel sector, will fill a gap that now exists within the group. This group of commuters may travel back to their own countries annually for festive seasons or visiting of families and would not desire an expensive trip to exotic countries for holidays such as Europe or Japan. Therefore, SIA launched Scoot to provide low cost travels for these expanding targeted consumers to increase its profitability. To further maximize its market potential, the c ase study also states that Scoot will do longer flights, to Australia, China, India and eventually Europe. Thus, SIA aims to create more opportunities by increasing services to this group of people. The political-legal environment is defined as the legal and political factors that affect marketing decision making strategies. The factors are; changes in business legislation and laws, the number and strength of special interest groups and market reforms and corruption. The recent growth of special interest groups over the years may have contributed to SIAs decision to launch Scoot to serve the lower income consumers needs. The groups such as CASE (Consumer Association Of Singapore) serves to protect the consumers interest, educate and inform the consumers. It also ensures business ethics within the company by advocating fairer legislation. Since SIA is a private competitive firm with no government intervention, it has to maintain constant good services to consumers. Since such consumerist movement is increasing and SIA being one of largest airline company, it will need to establish relationships with consumers and formulate policies to increase consumers interest and reduce custom er complaints. With regards to the political-legal factor, Singapore is liberal in its aviation policy and has continue to adopt this policy in recent times by signing agreements with more countries such as United Kingdom, United States, United Arab Emirates , New Zealand and other countries (The impact of international air service liberalization on Singapore, 2009). This allows Scoot with its bigger aircrafts to fly to more destinations and longer distances where other budget airline competitors cannot reach. The economic environment is defined as the economic factors that affect the marketing decision making strategies. The economic factors include income distribution and savings, debt and credit availability of the population. As per reported, the income levels of all classes have risen over the years. The median monthly household income has risen from 5,600 SGD per month per household in 2010 to 6,310 SGD per month per household in 2011 (DOSS, 2012). Although median income has increased, majority of the increment is due to a raise in the income for the higher income group. The middle and lower income groups might not have higher income and might even be worse off due to inflation. The rich are getting wealthier and the poor are getting poorer. Hence SIA can cater to the wealthier consumers who want premium air travel services and Scoot can cater to people who need to travel at a budget air fare (Scoot: Asias Newest Low-Cost Airline, 2012). The other factor is Singapore populations savings, debt, and credit availability. The Singapore economy has contracted in the 2nd quarter in 2011 triggered by the economic crisis that happened in 2008 (Singapore may escape technical recession but downside risks remain, 2011). This uncertain outlook of the economy combined with inflation rate at 5.7%, (Global recession likely, Singapore says, 2011) may have contributed to SIAs launch of Scoot. With higher inflation rate and slower economic growth, people may be worried about the future and cut back on unnecessary expenditures. Consumers may choose to travel by other cheaper alternatives hence, demand for SIAs flight services will decrease. However, the trend of Singapores future economy and inflation rate remains uncertain as economists have forecasted that for 2013, median inflation rate for CPI would be high at 3.0% (Monetary Authority Of Singapore, 2012). Singapores GDP forecasted growth is expected to be between 1% to 3% indicating a slow economic growth ( Singapore economy expected to grow 1-3% in 2013, 2012). Thus, majority of the people in Singapore are most likely going to save more and spend less on luxury goods and services like expensive air fares which will lead to a decrease in the demand for SIA air travel. As disposable income reduces, more people would opt for budget airlines such as Scoot, Tiger Airways and Jetstar Asia for air traveling. This presents an opportunity for Scoot to expand its services. However, it might be a threat if competitors pricing of tickets are comparatively lower and economy continues to shrink in the future. Question 2 All companies which render services to customers should be highly sensitive to their own service quality and achieved level of customer satisfaction. Service quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs (Kotler, Keller, Ang, Leong, Tan, 2009). Companies performances may fall short, meet or exceed customers expectations. Therefore, companies performances and customers expectations determine customer satisfaction which is customers feelings of pleasure or disappointment resulting from comparing a product or services perceived performance (or outcome) in relation to his or her expectations (Kotler et al., 2009). A business entitys main aim should be to generate consistent profits for its shareholders or owners. Sustained profitability is achieved when companies yield revenue streams that exceed the cost streams of attracting, selling and servicing the customers over time (Kotler et al., 2009). Scoot is a budget airline which strives to be sustainable, at the same time retaining and expanding its market share through ensuring desired service quality and achieving customer satisfaction. For cost reduction purposes, Scoot emphasizes to its customer that they are no-frills. With the removal of certain features which are prominent in full-service airlines, it is unavoidable that customers will make comparisons and mark down the service quality of Scoots flights. Scoot has made conscious efforts to distance itself from its parent company Singapore Airlines (SIA), as well as to create deeper impressions in its customer that it is a budget airline, by having its cabin crew to wear casual crew uniform (Kaur, 2011). With the use of Boeing 777 aircrafts, Scoot provides its customers with more leg space and rooms in the aircrafts to maneuver. This gives Scoot a comparative advantage over its budget airlines, which usually operate smaller aircrafts. Air travelers are expected to be more hands-on when they travel on budget airlines. With no dedicated customer service platform available to these air travelers, they have to navigate the budget airlines websites and online systems themselves, in order to obtain information or make amendments to their bookings. With large pool of available resources and experience, SIA has an efficient and comprehensive online system for its customer. Through the introduction of SIA, Scoot can discuss with SIAs service providers on how to design and implement a user-friendly online system, which is cost effective at the same time. Even though Scoot will not respond to complaints from its customers, they must take note of the complaints and implement corrective and preventive measures, in order to maintain or even improve service quality. Additionally, Scoot can also provide Feedback forms to its customers. This will give quick and accurate information on their service quality, at relatively low costs. Like most if not all budget airlines, Scoot does not offer flight packages which include free in-flight entertainment, food and drinks. With the limited services provided, it is difficult for Scoot to achieve customer satisfaction. Therefore, Scoot has to focus on constantly improving its performances, as well as to mitigate the expectations of its customers. SIA is world renowned to provide great services to its customers, therefore meeting or even exceeding the expectations of its customers. Scoot can leverage on SIAs experiences and methods, as well as the trainings regimes provided to its staff, in order to achieve similar results and have a pool of well-trained staff. Scoot has vigorously tried to shed the public impression of it being a subsidiary of SIA. The marketing strategy of Scoot has to continue in this line, that is to distance itself from premium, full-service carriers and to be in the same market as other budget airlines. Scoot can distance itself from full-service carriers, by having its customer to board and alight from its aircrafts in the same airline terminals also utilized by other budget airlines. This could also prevent customers from using full-service carrier expectations, to judge the performances of Scoot. Scoot will be able to achieve fuel-efficiency by using Boeing 777 aircrafts. This allows Scoot to have lower costs than its competitors who are using older and less fuel-efficient aircrafts. With greater savings from less fuel consumption, Scoot should pass on some of the cost-saving benefits to its consumers. For example, Scoot can afford to reduce its air ticket prices due to lower costs. This will enable Scoot to maintain and capture a bigger market share through securing new customers from its competitors. With the advancement in technology and the popularized use of social media, many companies have turn to social media and internet to advertise their products and services. Scoot has actively tried to portray a lively and young image. Therefore, they should further strengthen this image, as well as to reach out to greater market of potential customers, by exploring and utilizing the social media platform. For example, Scoot can engage fresh-faced foreign celebrities with positive images who are active on the social media platforms, to be their spokespersons in destinations where they wish to gain greater market share. This couples with more online advertising spending, could assist Scoot to reach out to greater diversity of air travelers who are not based in Singapore. Budget airlines like Scoot face mammoth tasks in achieving desired levels of customer satisfaction and service quality, while cutting costs and maximizing revenues to ensure sustained profitability. With concerted efforts in providing basic and necessary services, as well as improving performances and lowering expectations, Scoot can secure its customer base and reduce operating costs which will in turn result in Scoot meeting its main aim of earning consistent revenues and profits. Question 3(a) With the availability of a wide range of choices for air traveling, which includes budget and full-service airlines, air travelers will make thorough comparisons to decide on the most value for money option for leisure travel and business purposes. The procedure from recognizing a need to fulfilling it is shown in Figure 3.1 which is a form of cognitive learning that depicts the five-stage decision making process model. The definition of consumer learning is the process by which individuals acquire the purchase and consumption knowledge and experience they apply to future related behaviour (Belch, Belch, Guolla, 2011). Figure 3.1 A basic model of consumer decision making. (Source) According to Bauer, Consumer behavior involves risk in the sense that any action of a consumer will produce consequences which he cannot anticipate with anything approximating certainty, and some of which at least are likely to be unpleasant (1960, p. 24). Thus, consequences and uncertainty are the two basic factors that are used to determine the level of perceived risks. Bauer stresses that his main concern is only with subjective (perceived) risk and not real world (objective) risk. This is because consumers will only buy a product that he believes to be good and trustworthy. Perceived risk might not be actual risk but the amount of risk a consumer believes that could be incurred when he buys a certain product from a certain vendor (Kotler et al., 2009). The risks include functional, physical, psychological, financial and time risks. Functional risk occurs when the product is not up to consumers perceived level of service. As Scoot is a subsidiary of Singapore Airlines (SIA), most of us will expect it to be exceptional. However, Scoot is a budget airline and hence, like all other budget airlines, its main concern is to provide cheap air transportation. The basic air fare covers only transportation from one point to another. So, one has to pay for whatever is desired. The utilitarian approach is to ensure that all costs are reduced to the minimum which allows the air fare to be low, yet, profitable. Thus, consumers who expect regular amenities on budget airlines will be greatly disappointed. If a person thinks that consuming a certain product can be harmful to him or his loved ones, then this is a physical risk perceived and he would probably never consume that product. When travelling with budget airlines, the usual complaint would be limited space and uncomfortable seats. When one has to sit in a cramped aircraft with little moving space for a few hours, it can be very uncomfortable and may cause backaches and other minor aches or even death (space adaption syndrome). These are physical risks of travelling with budget airlines that travellers might want to avoid. Psychological risk is defined as the product that affects the mental well-being of the user (Kotler et al., 2009, p. 186). Some conservative consumers may feel that flying in bigger aircrafts would give them more sense of security and comfort. Hence, they would avoid by travelling by budget airlines such as Scoot. If one purchases a product and it is defective, he will incur financial losses when he has to pay extra money to repair or find a replacement. Hence, the cost exceeds the value of this product. If one intents to travel by budget flight, then he must be prepared to carry extra cash in case he gets stuck in a foreign country when his flight is delayed or cancelled. This is because budget airlines do not provide any other recompense besides ticket refund. That means, one needs to pay for whatever expenses incurred, be it lodging or purchase of another ticket to fly to the next destination. It is believed that budget air flights experiences frequent delays and cancellations. Thus, it is commonly believed that one should avoid budget flights to avoid financial risks. Moreover, with frequent cancellations and delays for budget flight is time wasted. One needs to wait indefinitely or buy another air ticket, which requires extra time and effort. In addition, one could miss an important appointment which might have undesirable consequences. Question 3(b) In order to overcome the perceived risks, marketers should know that consumers are worried about risks that they believe are true and not necessarily real. As per Gordon Allport (1935), Attitudes are learned predispositions to respond to an object in a consistently favorable or unfavorable way.. Consumers hold attitude toward many things that are vital to the marketer. Moreover, their attitudes indicate their emotions, assessment and behavioral tendencies towards a product. Therefore, we need to change the consumers attitude regarding budget airlines. To overcome perceived risks, Scoot could publish statistics of the level of customers satisfaction, of light delays, cancellations and the amount of money saved compared to the cheapest flight available. This can be done through the market research process in which marketers could identify the problem caused by the five perceived risks and provide decision alternatives. When consumers realise that the level of statistics shown is actually similar to other regular carriers, plus the incentive of the amount of money saved, they will feel more encouraged to travel on Scoot. The proven performance will help to build customers confidence in Scoots ability to meet their expectations. Hence, the perceived functional risk is solved. The growth of competitors such as Tiger Airways, Jetstar , Airasia and Webjet may influence consumers purchasing decision with extremely competitive prices and numerous attractive promotions. Scoot marketers could identify the consumers needs and wants and apply differentiation strategies through product improvement, better services and well trained personnel. Some of the frequent complaints while flying budget airlines are poor services, cramped spaces and uncomfortable chairs. Scoot uses product differentiation by offering wider spaces in planes and more comfortable seats. Also, there are pictures of the aircraft interior posted in their website to allow people to see their offerings. Additionally, on-line forums or memo boards on Scoots website allows consumers who have used Scoots service to post their reviews and share their experiences. This marketing strategy could alleviate the conservative consumers psychological risk. These include good and bad experiences and tips when fly ing Scoot. The feedback and control system also allows Scoot to track its results such as customer satisfaction and retention rate and sales. This will also allow Scoot to adapt to a shift in consumers expectations such as better services or technological access. In this way, Scoot has addressed perceived physical risks of the consumers. The purpose of using budget airlines is to save money. It defeats the purpose if consumers have to pay extra money in order to proceed with the journey. However, occasional delays are inevitable and the worst case scenario would be stuck without accommodation. Since budget airlines sustain with minimum expenses, it is impossible to make allowance for lodgings. Thus, Scoot could make a list of cozy corners or cafes that offer comfortable resting venues at minimum or no cost for the passengers as a reference. Hence, the consumers will not need to spend extra money on contingency plans. This will reduce financial risk of a consumer. It is true that delays and cancellations are possible when flying on budget flights. This is because budget flight operates like a bus and travels the identical path to and fro many times daily. Minor delays could occur but, after a long day, the slight delays become significant when many delays build up into major time lapse and even cancellations. However, delays could also happen to any regular air flights. So, it should be made very clearly to passengers that punctuality is very important and any delays will affect subsequent flights. As Scoot target consumers are the young and young at heart, a comic strip could be used to illustrate this scenario to make it fun but not offensive. In conclusion, perceived risks are what consumers believe are true but not necessarily real. In order to overcome these perceptions effectively, we need to understand their worries and help them to correct their perceptions and gain a positive Scootitude. Hence, we gain attention from hesitant potential customers and retain current customers. Question 4 Every business needs effective strategies to meet ever changing demands of the market. For a business to be sustainable, it needs to satisfy its customers expectations and build a lasting relationship. This means it needs to fulfill the customers perceived value (CPV) which is the difference between the prospective customers evaluation of all the benefits and all the costs of an offering and the perceived alternatives (Kotler et al., 2009, p. 133). Hence, long term strategies must be implemented to cultivate strong customer relationships. Customer relationship management (CRM) is essential in cultivation of long term customer relationship. It is defined as the process of carefully managing detailed information about individual customers and all customers touch points to maximize customer loyalty (Kotler et al., 2009, p. 144). There are four ways to good CRM which are: identify its prospects and customers, differentiate customer in terms of their needs and their value to the company, interact with individual customers and customize products, services, and messages to each customer (Kotler et al., 2009). When booking air tickets on-line, consumers are already giving their personal details to the airlines. The information includes: gender, date of birth, billing address, nationality, passport number and payment methods. We can use the customer data base to identify the different market types and establish effective communications to the respective consumers. Through such data mining, we can identify the trend and segments to forecast the needs and wants of different consumers. The consumers could be segmented into different nationality, gender and age distribution. With the market segmentation, Scoot could differentiate customers in terms of their needs and values brought to the company. Scoot has limited financial resources, so it needs to attract more good customers, and retain profitable existing customers. In order to build customer loyalty, Scoot need to implement special benefits for long term customers. The main objective for travelling with budget airline is to save money. Customers will have their personal accounts with Scoot upon successful purchase and they will be able to access this account to check their transactions. Hence, Scoot can emphasize this point by letting consumers know how much they have saved by frequently travelling with Scoot. The amount saved will be translated to reward points for reward redemptions. Loyal customers will be able to redeem rewards with Scoot and its overseas partners like getting free transportation at pick up points and drop off at desired destinations. This will make members feel privileged that they are rewarded for their loyalty. This also acts as a one-stop comprehensive portal that provides cost savings to these loyal customers by providing cheap lodging options and discounted ticket prices to places of interest in other countries, offered by working partners of Scoot. This is in line with Scoots objective of providing low cost and no-fr ills travel for consumers and maximise customer perceived value. Scoot needs to interact with individual customers in order to understand the requirements of different customers and implement changes where required. However, a budget airline is operating within budget constraints; hence it will not be viable to maintain a customer service department to entertain consumers enquiries and complains. Booking fees or administrative fees usually incurred when online transactions are performed. In order to encourage consumers to fill up questionnaires and survey forms designed by Scoot, Scoot can offer customers waiver of these fees when they book air tickets, after the completion of the questionnaires and survey forms. With incentives, consumers will be more willing to provide feedbacks which can help to enhance Scoots services. With data collected from these surveys, Scoot can customize communications to each customer by sending them information only for what they are interested in. This will allow Scoot to identify and differentiate customers in terms of their needs and wants. These include promotions for certain locations which are of interest, special occasions in certain countries and new exciting happenings in certain countries. As such, consumers will not feel frustrated when receiving mail trailers but will be anticipating what Scoot can offer them. In conclusion, while Scoot can lookout for potential consumers and offer them some encouragement to become its customers, the focus is still to establish and strengthen long term relationship with current customers. As such, Scoot needs to identify prospects and customers to differentiate their preferences and allocate resources effectively to enhance profitability and retain customers simultaneously. Interaction is essential to understand customers requirements which will allow Scoot to customize their services to loyal customers who will continue to patronize Scoot with its incentives and loyalty programmes which maximizes perceived customer value.

Business partnerships and their benefits to organizations, suppliers, and customers Essay

Introduction A business partnership is an alliance of two or more parties that take on in a business venture in which the earnings and losses are divided equally. The legal description of a partnership business is an alliance of two or more people to collaborate as co-owners of a company for income. The formation of a partnership necessitates a deliberate alliance of parties or businesses that co own the company and aim to conduct it for profit. Partners can shape the partnership by written or verbal agreement. A partnership accord often directs the partners’ dealings with each other and to the company. Each partner has a right to share in the profits of the partnership. Unless the company accord asserts otherwise, associates share profits equally. Additionally, partners must donate equally to joint venture losses except if a partnership accord offers another arrangement. Each partner is also required to participate equally in the management of the partnership. A popular vote settles disagreements involving the administration of the partnership. On the other hand, some choices such as letting in a new partner or force out a partner entail all the partners’ undivided consent. Every partner owes a fiduciary obligation to the firm and to copartners. This duty necessitates that an associate ought to deal with copartners in good faith. It also requires that an associate should report to copartners for any profit that he or she obtains while engaged in partnership business. Each partner also has a responsibility of trustworthiness to the partnership. Unless the copartners assent, a partner’s obligation of loyalty constrains the partner from utilizing partnership assets for personal benefit. It also constrains the partner from rivaling with the partnership, taking on in self-dealing, or seizing partnership opportunities. It is a fact that firms that participates in the business system as partners complement the company and its suppliers, thereby increasing the value to customers. Business partnerships’ benefits to companies, suppliers, and consumers Firms that participate in the business system as partners allow for minimal formalities and regulatory and reporting requirements required in conducting business deals. Although partnerships are governed by statute, the required statutory formalities are few. A concise written partnership agreement is a good investment in almost any circumstance. However, it is not required, and a partnership may be formed by a verbal agreement between two or more people and can be implied by behavior. State statutes vary with regard to partnerships filing requirements and other formalities. The pertinent state statutes must always be reviewed and must be complied with. Most states do not require partnership registration with the secretary of state or other state official before commencing business. However, a certificate of assumed name or similar document is usually required when the partnership will be transacting business under an assumed name, trade name, or fictitious name (Schneeman, 2007, p.73). Minimal formalities ensure that a partnership business is able to do business with its suppliers smoothly without having to jump major hurdles. This saves a lot of time and resources for both the organization and its suppliers (Practicing Law Institute., and United States, 1971, p.47). This smooth operation between the company and its suppliers ensures that the customers are provided with quality services or products in a timely fashion, thus benefiting the organization, its suppliers, and customers. With partnerships, there is participation and flexibility in management. Unless one or more partners waive their rights, every partner has equal power and authority to manage the partnership affair. Partners of smaller partnerships may find this appealing if they have varied backgrounds and areas of expertise, and all wish to participate actively. All partners are allowed to act freely on behalf of the partnership, with few restrictions. Larger partnerships on the other hand are allowed the flexibility of putting the management of the partnership into the hands of the best individual or group of individuals for the job. According to Bradley, firms which participate in the business system as partners are both competitors and collaborates with respect to their suppliers. Participation and flexibility in the management of an organization ensures that only the best suppliers are targeted as partners. For example, British Airways and Singapore Airlines compete for passengers but they played a partnership role in the development of the Airbus superjumbo for which both are major customers. Organizations need to develop partnerships with the best suppliers to leverage their expertise and technologies to create a competitive advantage. Learning how an organization’s suppliers are performing can lead to superior visibility, which can offer prospects for more collaborative involvement in value-added activities. Many organizations are tracking product and services quality, on-time deliveries, customer service efforts and cost-control programs as part of the supplier rating system. This information can be used to develop supplier programs that will improve supply chain management, thus creating more value for consumers. Participation and flexibility in management creates knowledge environments for managers in firms that participate as business partners. Knowledge environments for administrators look like experience environments for clients. Innovations in knowledge environments must reflect the granularity of managerial experiences, just like innovations in experience environments must reflect the depth of consumer experiences. To create more value for consumers, organizations must continually create new knowledge. The opportunities to do so may come from solving a particular problem, for example, reducing the recharge time for a battery pack in a particular cell phone configuration. The opportunity may also come from identifying major emerging opportunities, for example, the explosive growth of market for cell phones in China and India. To make this happen, organizations must create knowledge environments that facilitate the discovery and action in the new competitive space through participation of partners and flexibility in management processes. This creates value for the company, its suppliers, and its customers. Firms in a business system that participate as partners have the added advantage of shared management. A partner will have other partners to rely on to provide expertise in needed areas. Decisions can be made jointly after thorough discussion. This feature of shared decision-making can also be a disadvantage when a quick decision is needed. Partners must consult with each other on significant issues. Partners have the advantage of appointing a certain partner as managers of the business. They can be delegated the authority to make certain decisions by themselves. Shared organizational management by business partners enables purchasing management. This refers to all activities necessary to manage supplier relationships in such a way that their activities are aligned with the company’s overall business strategies and interests. It focuses on structuring and continuously improving purchasing processes within the organization and between the organization and its suppliers. For example, before applying to be a Volvo supplier, an interested supplier must understand and agree on Volvo’s core values. This helps to eliminate any misunderstandings on the quality of products that the company offers. This benefits the company, its selected suppliers and creates value for its customers. In the business system, shared organizational management by firms in a business partnership enables the development of customer loyalty. Customer relationships are built on the basis of trust. Repeat business gets generated only when customers believe their suppliers and perceive them as creating more value. Loyalty is created only when the customer perceives fairness, equity, and transparency in his or her relationship with the seller. This is possible with a shared organizational management by businesses in a partnership agreement because all parties involved create strategies that improve customer relations, ensuring that they remain loyal to the organization. This generates more profits for the organization. Business partnerships require a low cost of organization. There are no minimum requirements for starting a partnership. The startup costs, including any required state filing fees, tend to be lower than those for corporations are. This in itself is a great advantage for small businesses wishing to form business partnerships. Additionally, the low cost of organization ensures that the partnership business has enough resources to conduct numerous transactions with many suppliers. This means that the supply of any needed raw materials is constant. This ensures that the production of goods or services goes on smoothly without hitches. For the company’s consumers, this is a great advantage for them because the production of goods or services will be relatively cheaper. This means that consumers will have access to the products or services at a relatively cheaper price as compared with other organizations, thus benefitting the organization, its suppliers, and customers. In the business system, business partnerships enable the partner organizations to raise capital easily. Because two or more firms contribute financial resources, business partnerships can raise funds more easily for operating expenses and business expansion. The partners’ combined financial strength also increases the firm’s ability to raise funds from outside sources. This ability of a firm to raise capital easily is an advantage for nonfinancial stakeholders such as suppliers, customers, employees, and the community in which the firm operates. They have no direct monetary stake in the company and no direct influence on the firm’s financial policy. This means that they have no decision or voting power. They only have a state in the firm’s financial health. Nonfinancial stakeholders are interested in the firm’s investment options because they can be hurt by its financial difficulties. Specifically, a firm’s capital structure choices can affect nonfinancial stakeholders by affecting the probability of default on their explicit and implicit claims on the firm and by influencing the firm’s production and pricing decisions. Consequently, firms in partnership may be forced implicitly to take the interests of their nonfinancial stakeholders into account in formulating financial policy. The capital structure of a business partnership can serve as a signaling device to these nonfinancial stakeholders and thereby affect their behavior. A firm’s financial condition can affect how suppliers and customers perceive its reliability. Therefore, the ability of a business partnership to raise capital easily from many different sources means that its suppliers and customers trust its ability to make profitable business for all involved parties. This benefits the firm and its suppliers, and consequently, creates value for its customers. Firms participating in the business system as partners combine a variety of diverse skills and expertise. Partners share the responsibilities of managing and operating the business. Combining partner skills to set goals, manage the overall direction of the firm, and solve problems increases the chances for the partnership’s success. Ideal business partnerships bring together people with complementary backgrounds rather than those with similar experience, skills, and talents. This enables the firm to view the diversity of skills in labor as an asset rather than a cost. These are the skills and expertise in employees that contribute to the firm’s level of productivity. With a business partnership therefore, production of goods or services is of a high quality. This benefits the organization and creates worth for its customers, thus leading to its success. Firms that participate in the business system as business partners increase the size of the organization. In businesses, size matters. Corporations that are big enough to control significant shares of sales and profits in one or more industries and enjoy tremendous financial and organizational advantages over small businesses. Financially, large revenue streams mean big budgets, enormous purchasing power, and great bargaining advantage with suppliers of goods and services. Organizationally, the bigness of an organization facilitates the development and application of specialized human and technological resources. Additionally, this enables the organization to determine its future sourcing strategy for every spend category. The organization is able to decide whether to reduce or expand its supply base, and where the suppliers should come from. The company is also able to decide on the type of relationship it would need to pursue with its suppliers. The company is then able to decide on the type of contract it would put in place in its dealings with suppliers. This ensures that the company has a constant supply of raw materials throughout the year. This means that the products and services produced by the company will be of high quality and would meet the consumer demands. This benefits the organization and its suppliers, and creates value for its customers. In the business system, business partnerships lead to reduced price competition. This according to Bradley means that the decisions made by one company affect and are affected by decisions made by other firms. If one company decides to reduce its prices, it will force other companies to do the same. Modern industries remain full of aggressively price-slashing firms. Modern corporate capitalists are compelled by the market to pass the benefits of productivity improvements to customers through price cuts. Failure to do so would mean that rival firms would soon copy an organization’s innovations and lower their prices, thus forcing them to run out of business. Full-fledged price wars are now so anathema that, even in the most competitive industries, corporate wisdom is to try anything and everything before entering into even a single round of unrestrained price-cutting. Corporate capitalism means price inflation. From a corporate capitalist’s perspective, such steady, mild inflation is a good thing. Major firms can bank on being able to charge a bit more for next year’s model than for this year’s and on taking in a bit more revenue for the same output. This is achievable when corporations form partnerships (Dawson, 2003, p.24). The bargaining power of a firm over its suppliers is crucial because it can improve the price, quantity, reliability, and timely delivery of raw materials. The company’s power increases the more the inputs are commodity items and are subject to price competition. The company, rather than the supplier should add the value. For example, a restaurant buys commodity items like vegetables, meat and drinks, all of which are readily available and subject to intense competition. It has power over suppliers and adds the value by processing them into expensive meals. This also creates value for the consumers because the company will have the ability to produce top quality products. Business partners enjoy income tax benefits. The net income or loss of the partnership is passed through to the associates, according to the partnership accord. The partnership is required to file a partnership return form annually with the revenue services in their countries, but no income tax is owed by the partnership itself. Rather, the partnership’s return indicates the income earned by the partnership and allocated to the individual partners. A partnership is not taxable as a separate entity. The partners on income derived from the partnership pay a single tax. Additionally, because the income of the partnership flows through to the individual partners, if the partnership experiences a net loss, each partner’s share of that loss may be written off on the partner’s individual income tax return. Conclusion A business partnership is an association of two or more parties engaged in a business enterprise where all parties involved share the profits and losses equally. This type of association creates benefits for the organizations involved and its suppliers, thereby creating more value for its customers. The minimal formalities required in starting a business partnership enable the company to deal easily with its suppliers without major red tapes. This enables the company to produce products and services in a much quicker way. Partnerships enable flexibility in management. This ensures that only the targeted suppliers are selected for business partnerships. There are many more benefits of businesses joining in partnership as seen from the points above, all of which enable the company to make profits and create value for their customers. References Top of Form Top of Form Top of Form Top of Form Top of Form Top of Form Top of Form Top of Form Top of Form Top of Form Top of Form Top of Form Top of Form Baker, H. K., & Martin, G. S. (2011). Capital Structure & Corporate Financing Decisions:   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Valuation, Strategy and Risk Analysis for Creating Long-Term Shareholder Value.   Ã‚   Chichester: John Wiley & Sons. Bouchoux, D. E. (2010). Business organizations for paralegals (5th Ed.). New York: Aspen   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Publishers/Wolters Kluwer Law & Business. Bradley, F. (2005). International marketing strategy. New York: FT/Prentice Hall. Business 2.0. (1998). Brisbane, CA: Imagine Media. Campbell, D., Netzer, A., & Center for International Legal Studies. (2009). International joint    ventures. Alphen aan den Rijn, The Netherlands: Kluwer Law International. Coffey, J., & Garrow, V. (2012). Reaping the Benefits of Mergers and Acquisitions. Hoboken:    Taylor & Francis. Dawson, M. (2003). The consumer trap: big business marketing in American life. Urbana:   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   University of Illinois Press. Gilmore, S., & Williams, S. (2012). Human resource management. Oxford: Oxford University Press. Gitman, L. J., & McDaniel, C. D. (2008). The future of business: the essentials (3rd ed.). Mason,   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   OH: Thomson South-Western. Gitman, L. J., & McDaniel, C. D. (2009). The future of business: the essentials (4th, student ed.).   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Mason, OH: South-Western Cenage Learning. Practising Law Institute., & United States. (1971). The local economic development corporation;   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   legal and financial guidelines. Washington: U.S. Economic Development   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Administration]; for sale by the Supt. of Docs., U.S. Govt. Print. Off. Prahalad, C. K., & Ramaswamy, V. (2005). The future of competition: Co-creating unique value   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   with customers. Boston, Mass: Harvard Business School Press. Saxena, R. (2009). Marketing management. New Delhi: Tata McGraw-Hill. Schneeman, A. (2007). The law of corporations and other business organizations (4th ed.).   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Clifton Park, NY: West Legal Studies/Thomson Delmar Learning. Watson, D., & Serious Investor Groups. (2005). Business models: Investing in companies and   Ã‚   sectors with strong competitive advantage. Petersfield [England: Harriman House Pub. Weele, A. J. (2010). Purchasing & supply chain management: Analysis, strategy, planning and practice. Andover: Cengage Learning. Weele, A. J. (2010). Purchasing & supply chain management: Analysis, strategy, planning and practice. Andover: Cengage Learning. Wisner, J. D., Tan, K.-C., & Leong, G. K. (2011). Principles of supply chain management: A   Ã‚  Ã‚   balanced approach. Mason, OH: South-Western. Bottom of Form    Bottom of Form    Bottom of Form    Bottom of Form    Bottom of Form   

Statistical Applications

The pie chart shows percentage among adults with diagnosed diabetes receiving treatment of insulin or oral medication. It is normally used to present the data. I believe that this was a proper graph used to present the data. The information is clear. The data was presented in a good visual that I could recognize the patterns and trends. The colors used to differentiate type of treatment are helpful. Was this the best way to display the data? What other types of graphs could have been used? This is the most appropriate chart for this type of data presentation. The Pie chart was the best way to present and display the data. Another type of graph or chart that could have been used is the bar graph. Both are graphs showing proportion. They produce the same information just in different forms Is the scope and scale of the graph appropriate? Why or why not? The scale of the chart was appropriate for the article and how it was presented. This article was part of a journal article and the chart had to be inserted into the article so the scale was appropriate. Does the chart or graph support the findings in the article? Why or why not? The pie chart was described clearly in the article with percentage and the type of treatment. The article also unclouded the source of data, it has the credential to the reader.

Theories and Trends in Identity Theft - 2054 Words

This essay strives explains certain aspects of identity theft. The work has first defined identity theft as basically the act of impersonating people so as to gain access to their financial statements. On the other hand, some theories and concepts explain the origin of certain behaviours and acts like identity theft. These theories include social systems theory and theft identity theory. There are trends in this type crime that are worth noting and UK is a good reference to this trend. The crime also has some effects on businesses and consumers that must also be put into consideration. Some case studies like Nigerian and Romanian examples have acted as points of references for identity crimes in the online business environment. Finally, the report has given certain recommendations on how to reduce the incidences of online identity theft. 2.0 Introduction Identity theft is the impersonating of an individual mainly for financial benefit. It results to a person loosing their personal data like passwords, banking information, user names and credit card information (Savirimuthu A Savirimuthu J 2007). It is basically an online theft or crime. This type of theft has resulted because the modern business environment is online oriented where people leave their important personal information like name, address, cell number, phone number (OECD 2008). If a cyber thief is able to hack such information, then he or she can use it fraudulently. These thieves have been using socialShow MoreRelatedOrganizational Issues In Criminal Justice1009 Words   |  5 PagesIn this new age of consciousness evoking the notion of progress and continuity with new ideas in the field of administration of justice is truly a remarkable phenomenon (Taylor, 2013). Overtime numerous theories have been posited regarding the causes of crime and deterring criminal behavior. 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