Monthly Archives: November, 2012

Stages in Marketing Research Process

Marketing research exercise may take many forms but systematic inquiry is feature common to all such forms. Being a systematic inquiry it requires careful planning of the orderly investigation process. Though it is an over simplification to assume that all research processes would necessarily follow a given sequence marketing research often follows a generalized pattern which can be broken down and studied as sequential stages.

Below figure gives the stages in the marketing research process.

As shown in the above diagram research process begins with the identification. The research task may clarify a problem or define an opportunity. The clear cut statement of problem may not be possible at the very outset of research process as often only the symptoms of the problem are apparent at that point. Thus the problem statement may be made only in general terms to be made specific later after some exploratory research has been done to clarify the problem situation.

Defining the Problem

Clear problem definition is of crucial importance in marketing research as in terms of both time and money research is a costly process. Careful attention to problem definition allows the researcher to set the proper research objectives which in turn facilitate relevant and economic data collection.

Problem definition in specific terms must precede the determination of the purpose of the research.

In order to define the problem more precisely, some sort of exploratory research may also be undertaken. The methods popularly in use are survey of secondary data, experience survey or pilot studies.

Statement of Research Objectives

After clarifying and identifying the research problem with or without exploratory research, the researcher must make a formal statement of research objectives. Research objectives may be state in qualitative or quantitative terms and expressed as research question statements or hypothesis. For example, the research objective “To find out the extent to which the sales promotion programs affected sales” is a research objective expressed as a statement.

A hypothesis on the other hand is a statement that can be refuted or supported by empirical findings. The same research objective could be stated as: “To test the hypothesis that sales are -positively affected by the sales promotion program undertaken this summer.” Example of another hypothesis may be “Concentrating advertising efforts in monthly waves (rather than advertising continuously) would cause an increase in sales and profits.” Once the objectives or the hypothesis are developed the researcher is ready to choose the research design.

Planning the Research Design

Once the research problem has been defined and the objectives decided, the research design must be developed. A research design is a piaster plan specifying the procedure for collecting and analyzing the needed information. It represents framework for the research plan of action. The objectives of the study discussed in the preceding step are included in the research design to ensure that data collected are relevant to the objectives.

The researcher must, at this stage, also determine the type of sources of information needed, the data collection methods (surveys or interviews for example), the sampling methodology and the timing and possible costs of research. The design chosen play be from exploratory, descriptive, quasi-experimental or experimental design categories which again include a number of alternative methods.

Planning the Sample

Although the sample plan is included in the research design, the actual sampling is a separate and important stage in the research process, Sampling involves procedures that use a small number of items or parts of the population to make conclusion regarding the whole population. The first sampling question that needs to be asked is who is to be sampled, which follow from what is the target population. Defining the population may not be as simple as it seems. For example, if you are interested in finding the association between savings and loans, you may survey the people who already have accounts and the selected sample will not represent potential customers.

The next important issue is regarding sample size. How large or how small should a sample be? Generally speaking, larger samples give more reliable information then smaller ones but if probability sampling is used, a small proportion of the population may give a reliable measure of the universe. Unit 5 on `sampling’ gives a detailed account of determination of sample size as well as different sampling methods used. The researcher is also required to know how to select the various unit to make up the sample.

Data Collection

The data collection process follows the formulation of research design including the sampling plan. Data which can be secondary or primary, can be collected using variety of tools. These tools are classified into two broad categories, the observation methods and the communication methods, all of which have their inherent advantages and disadvantages.

Data Processing and Analysis

Once the data has been collected it has to be converted to a format that will suggest answers to the problem identified in the first step, Data processing begins with the editing of data and coding. Editing involved inspecting the data collection forms for omission, legibility and consistency in classification.

Before tabulation, responses need to be classified into meaningful categories. The rules for categorizing, recording and transferring the data to data storage media are called codes. The coding process facilitates the manual or computer tabulation. If computer analysis is being used, the data can be key-punched and verified.

Analysis represents the application of logic to the understanding of data collected about the subject. In its simplest forms, analysis may involve determination of consistent patterns and summarizing of appropriate details. The appropriate analytical techniques chosen would depend upon informational requirements of the problem, characteristics of the research designs and the nature of the data gathered. The statistical analysis may range from simple univariate analysis to very complex multivariate analysis.

Formulating Conclusion, Preparing & Presenting the Report

The final sate in the research process is that of interpreting the information mid drawing conclusions for use in managerial decisions. The research report should effectively communicate the research findings and need not necessarily include complicated statements about the technical aspect of the study and research methods. Often the management is not interested in details of research design and statistical analysis but in the concrete findings of the research. If executives are to act on these findings they must be convinced of the value of the findings. Researchers, therefore, must make the presentation technically accurate, understandable and useful.

Frequently, the researchers are required to make both an oral and a written presentation. Since each project is different, the presentation in each case requires originality. However, the better the earlier steps in the research process have been executed, the more likely it is that a good presentation would result, While the oral presentation depends a great deal on the personal style of the presenter and the management expectation.

Importance of Communication

Communication is easily overlooked, but the ability to communicate effectively is necessary to carry out the thoughts and visions of an organization to the people. The importance of speech and words whether through a paper or a voice is a communication medium to convey directions and provide synchronization. Without communication, there is no way to express thoughts, ideas and feelings.

Communication in its simplest sense involve two or more persons who come together to share, to dialogue and to commune, or just to be together for a festival or family gathering. Dreaming, talking with someone, arguing in a discussion, speaking in public, reading a newspaper, watching TV etc. are all different kinds of communication that we are engaged in every day. Communication is thus not so much an act or even a process but rather social and cultural ‘togetherness’. Communication can be with oneself, god, and nature and with the people in our environment. Interaction, interchange, transaction, dialogue, sharing, communion, and commonness are ideas that crop up in any attempt to define the term communication.

Communication is important both for an individual and also for the society. A person’s need for communication is as strong and as basic as the need to eat, sleep, and love. Communication is the requirement of social existence and a resource in order to engage in the sharing of experiences, through ‘symbol mediated interaction’. Isolation is in fact the severest punishment for human being. Grown-ups, children, and old people all need to communicate. Society punishes criminals by locking them up in solitary cells, thus starving them of the basic need, and indeed the fundamental right to communicate. Communication thus involves active interaction with our environments -physical, biological and social. Deprived of this interaction we would not be aware of whether we are safe or in danger, whether hated or loved, or satisfied or hungry. However, most of us take this interaction and this relationship for granted, unless we experience some deprivation of it. When that happens we adapt ourselves to the environment so that we do not lose touch, in both the literal and figurative senses. For, to lose touch is to suffer isolation.

The basic human need for communication can perhaps be traced to the process of mankind’s evolution from lower species. Animals, for instance, have to be in sensory communication with their physical and biological surroundings to find food, protect themselves and reproduce their species. A loss of sensation-the inability to hear a predator for instance can mean loss of life. Thus, it is said that the biology of human beings and other living organisms is such that they have to depend upon each other. This dependence give rise to a situation where it is the biological necessity for the human beings to live in groups. Society is therefore, the outcome of the evolution of the human race and man is a social animal not by option but by compulsion.

In organizations managers devote a great part of their time in communication. They generally devote approximately 6 hours per day in communicating. They spend great time on face to face or telephonic communication with their superiors, subordinates, colleagues, customers or suppliers. Managers also use Written Communication in form of letters, reports or memos wherever oral communication is not feasible. We can say that communication acts as the blood of the organization

The importance of communication in an organization can be summarized as follows:

  1. Communication promotes motivation by informing and clarifying the employees about the task to be done, the manner they are performing the task, and how to improve their performance if it is not up to the mark.
  1. Communication is a source of information to the organizational members for decision-making process as it helps identifying and assessing alternative course of actions.
  1. Communication also plays a crucial role in altering individual’s attitudes, i.e., a well-informed individual will have better attitude than a less-informed individual. Organizational magazines, journals, meetings and various other forms of oral and written communication help in molding employee’s attitudes.
  1. Communication also helps in socializing. In today’s life the only presence of another individual fosters communication. It is also said that one cannot survive without communication.
  1. As discussed earlier, communication also assists in controlling process. It helps controlling organizational member’s behavior in various ways. There are various levels of hierarchy and certain principles and guidelines that employees must follow in an organization. They must comply with organizational policies, perform their job role efficiently and communicate any work problem and grievance to their superiors. Thus, communication helps in controlling function of management.

Essentially, the primary function of communication is to inform, educate, entertain and persuade people. Following are the basic functions of communication:

Education and Instruction

This function of education starts early in life, at home and in school and continues throughout life. Communication provides knowledge,  expertise,  and  skills  for  smooth  functioning  by  people  in  the society. It creates awareness and gives opportunity to people to actively participate in public life.

Information

Quality of our life will be poor without information. The more informed we are the more powerful we become. Communication provides information about our surroundings. Information regarding wars, danger, crisis, famine, etc. are important for the safety and wellbeing of our life.

Entertainment

To break the routine life and divert our attention from the stressful life we lead today, entertainment is an essential part of everybody’s life. Communication provide endless entertainment to people through films, television, radio, drama, music, literature, comedy, games, etc.

Discussion

Debates and discussions clarify different viewpoints on issues of interest to the people. Through communication, we find out reasons for varying viewpoints and impart new ideas to others.

Persuasion

It helps in reaching for a decision on public policy so that it is helpful to govern the people. Though it is possible, that one can resort to persuasion for a bad motive. Thus, the receiver must be careful about the source of persuasion.

Cultural promotion

Communication provides an opportunity for the promotion and preservation of culture and traditions. It makes the people fulfill their creative urges.

Integration

It is through communication that a large number of people across countries come to know about each other’s traditions and appreciate each other’s ways of life. It develops integration and tolerance towards each other.

The ability and the importance of communication become much more crucial when you are on a mission or need to fulfill a goal. Without a means to communicate, your organization will become isolated. The ability to effectively communicate is very important when it is usually underestimated and overlooked.

Communication is a necessity as we use it to network, spread ideas, and promote. Communicate effectively through well-known mediums and convey it simply and precisely. The importance of communication is crucial to the success of your organization because you need to reach out in order to fulfill your mission.

The PEST Analysis

The PEST analysis is not as widely used as the SWOT analysis but is nonetheless an extremely valuable tool which, when applied in tandem with a SWOT analysis can provide a more in-depth understanding of the overall environment your organization is operating within and might face in the future; vital considerations when developing strategy.

PEST Analysis is a simple but important and widely-used tool that helps you understand the big picture of the Political, Economic, Socio-Cultural and Technological environment you are operating in. PEST is used by business leaders worldwide to build their vision of the future.

Identifying PEST influences is a useful way of summarizing the external environment in which a business operates. However, it must be followed up by consideration of how a business should respond to these influences.

It is important for these reasons:

  • By making effective use of PEST Analysis, you ensure that what you are doing is aligned positively with the forces of change that are affecting our world. By taking advantage of change, you are much more likely to be successful than if your activities oppose it.
  • Good use of PEST Analysis helps you avoid taking action that is condemned to failure for reasons beyond your control.
  • PEST is useful when you start operating in a new country or region. Use of PEST Analysis helps you break free of unconscious assumptions, and helps you quickly adapt to the realities of the new environment.

PEST is a simple mnemonic standing for Political, Economic, Socio-Cultural and Technological.

Political:

  • Government type and stability.
  • Freedom of press, rule of law and levels of bureaucracy and corruption.
  • Regulation and de-regulation trends.
  • Social and employment legislation.
  • Tax policy, and trade and tariff controls.
  • Environmental and consumer-protection legislation.
  • Likely changes in the political environment

Economic:

  • Stage of business cycle.
  • Current and projected economic growth, inflation and interest rates.
  • Unemployment and labor supply.
  • Labor costs.
  • Levels of disposable income and income distribution.
  • Impact of globalization.
  • Likely impact of technological or other change on the economy.
  • Likely changes in the economic environment.

Socio-Cultural:

  • Population growth rate and age profile.
  • Population health, education and social mobility, and attitudes to these.
  • Population employment patterns, job market freedom and attitudes to work.
  • Press attitudes, public opinion, social attitudes and social taboos.
  • Lifestyle choices and attitudes to these.
  • Socio-cultural changes.

Technological Environment:

  • Impact of emerging technologies.
  • Impact of Internet, reduction in communications costs and increased remote working.
  • Research & Development activity.
  • Impact of technology transfer.

Other forms of PEST – PESTLE, PESTLIED, STEEPLE and SLEPT:

Some people prefer to use different flavors of PEST Analysis. These are:

  1. PESTLE/PESTEL: Political, Economic, Sociological, Technological, Legal, Environmental.
  2. PESTLIED: Political, Economic, Social, Technological, Legal, International, Environmental, Demographic.
  3. STEEPLE: Social/Demographic, Technological, Economic, Environmental, Political, Legal, Ethical.
  4. SLEPT: Social, Legal, Economic, Political, Technological.

Choose the flavor that most suits you!

Dumping – The Concept

Dumping is an informal name for the practice of selling a product in a foreign country for less than either

  1. The price in the domestic country, or
  2. The cost of making the product.

 

Dumping is a special case of price discrimination. Dumping is a situation in which the price, firm charges for its goods in a foreign market is lower than either the price it charges in its home market or the production cost. Dumping thus is the sale of surplus output of a firm on foreign markets at below cost price. Dumping also occurs when a firm sells its products at a higher price in the home market and at a lower price in the foreign market.

 

It is illegal in some countries to dump certain products into them, because they want to protect their own industries from such competition. Dumping is legal under GATT (now WTO) rule sunless its injurious effect on the importing country’s producers can be established. If injury is established, GATT rules allow imposition of anti-dumping duty equal to the difference between the exporter’s home-market price and the importer’s FOB price.

 

Reasons for Dumping

  1. The aim of the discriminating monopolist is to maximize profits.  Initially he earns higher MR for his product when he sells in the home market.  But if he continues to sell more in the home market then the MR from home market will be much lower than MR from the world market and hence to maximize profits he cuts short his sales in the home market to OH and prefers to sell HM in the world market.  Thus, he can sell larger output and also hope to maximize profits.
  2. There is the possibility that as the producer goes on producing more units, he enjoys economies of scale which would help him in lowering the average cost.  To minimize cost and optimize output he will produce upto the point where AC is minimum.  Now all that he produces may not be demanded in the home market and therefore he will sell as much is needed to be sold at home and the remaining could be sold (dumped) in the foreign market even at a little lower price than the price at which it is sold in the home market.
  3. Thirdly the producer wants to penetrate the foreign market and hence sells his product there at a relatively lower price.
  4. An important reason for dumping is that the producer may not just want to enter the foreign market but even try to capture the foreign market.  This will be disadvantageous to these foreign markets where the product is dumped.  The buyers there may then turn to buy the foreign product which is being sold at a lower price than the product of their home industry.  The infant-industries there tend to suffer.  Due to fall in their domestic demand industries have to close down.  There will be threat of unemployment and all this may lead to recession and even depression.  The country where the product is dumped will resort to imposing tariffs on imports as an important anti-dumping measure.

Retailing Formats

Regardless of the particular type of retailer (such as a supermarket or a department store), retailers can be categorized by

  1. Ownership
  2. Store strategy mix
  3. Non store operations

1. Form of Ownership

A retail business like any other type of business, can be owned by a sole proprietor, partners or a corporation. A majority of retail business in India are sole proprietorships and partnerships.

a. Independent Retailer

Generally operates one outlet and offers personalized service, a convenient location and close customer contact. Roughly 98% of all the retail businesses in India, are managed and run by independents, including barber shops, drycleaners, furniture stores, bookshops, LPG Gas Agencies and neighbourhood stores. This is due to the fact that entry into retailing is easy and it requires low investment and little technical knowledge. This obviously results in a high degree of competition..

Most independent retailers fail because of the ease of entry, poor management skills and inadequate resources.

b. Retail Chain

It involves common ownership of multiple units. In such units, the purchasing and decision making are centralized.Chains often rely on, specialization, standardization and elaborate control- systems. Consequently chains are able to serve a large dispersed target market and maintain a well known company name. Chain stores have been successful, mainly because they have the opportunity to take advantage of “economies of scale” in buying and selling goods. They can maintain their prices, thus increasing their margins, or they can cut prices and attract greater sales volume. Unlike smaller, independent retailers with lesser financial means, they can also take advantage of such tools as computers and information technology. Examples of retail chains in India are Shoppers stop; West side and IOC, convenience stores at select petrol filling stations.

c. Retail Franchising

Is a contractual arrangement between a “franchiser” (which may be a manufacturer, wholesaler, or a service sponsor) and a “franchisee” or franchisees, which allows the latter to conduct a certain form of business under an established name and according to a specific set of rules. The franchise agreement gives the franchiser much discretion in controlling the operations of small retailers. In exchange for fees, royalties and a share of the profits, the franchiser offers assistance and very often supplies as well. Classic examples of franchising are; McDonalds, PizzaHut and Nirulas.

d. Cooperatives

A retail cooperative is a group of independent retailers that have combined their financial resources and their expertise in order to effectively control their wholesaling needs. They share purchases, storage, shopping facilities, advertising planning and other functions. The individual retailers retain their independence, but agree on broad common policies. Amul is a typical example of a cooperative in India.

2. Store Strategy Mix

Retailers can be classified by retail store strategy mix, which is an integrated combination of hours, location, assortment, service, advertising, and prices etc. The various categories are:

a. Convienence Store

Is generally a well situated, food oriented store with long operating house and a limited number of items. Consumers use a convenience store; for fill in items such as bread, milk, eggs, chocolates and candy etc.

b. Super markets

Is a diversified store which sells a broad range of food and non food items. A supermarket typically carries small house hold appliances, some apparel items, bakery, film developing, jams, pickles, books, audio/video CD’s etc. The Govt. run Super bazaar, and Kendriya Bhandar in Delhi are good examples of a super market. Similarly in Mumbai, we have Apna Bazar and Sahakari Bhandar.

c. Department Stores

A department store usually sells a general line of apparel for the family, household linens, home furnishings and appliances. Large format apparel department stores include Pantaloon, Ebony and Pyramid. Others in this category are: Shoppers Stop and Westside.

d. Speciality Store

Concentrates on the sale of a single line of products or services, such as Audio equipment, Jewellery, Beauty and Health Care, etc. Consumers are not confronted with racks of unrelated merchandise. Successful speciality stores in India include, Music World for audio needs, Tanishq for jewellery and McDonalds, Pizza Hut and Nirula’s for food services.

e. Hyper Markets

Is a special kind of combination store which integrates an economy super market with a discount department store. A hyper market generally has an ambience which attracts the family as whole. Pantaloon Retail India Ltd. (PRIL) through its hypermarket “Big Bazar”, offers products at prices which are 25% – 30% lower than the market price.

3. Non Store Retailing

In non-store retailing, customers do not go to a store to buy. This type of retailing is growing very fast. Among the reasons are; the ability to buy merchandise not available in local stores, the increasing number of women workers, and the presence of unskilled retail sales persons who cannot provide information to help shoppers make buying decisions. The major type of non-store retailing are:

a. In Home Retailing

Where, a sales transaction takes place in a home setting – including door-door selling. It gives the sales person an opportunity to demonstrate products in a very personal manner. He/She has the prospect’s attention and there are fewer distractions as compared to a store setting. Examples of in home retailing include, Eureka Forbes vaccum cleaners and water filters.

b. Telesales/Telephone Retailing

This involves contact between the prospect and the retailer over the phone, for the purpose of making a sale or purchase. A large number of mobile phone service providers use this method. Other examples are private insurance companies, and credit companies etc.

c. Catalog Retailing

This is a type of non-store retailing in which the retailers offers the merchandise in a catalogue, which includes ordering instructions and customer orders by mail. The basic attraction for shoppers is convenience. The advantages to the retailers include lover operating costs, lower rents, smaller sales staff and absence of shop lifting. This trend is catching up fast in India. Burlington’s catalogue shopping was quite popular in recent times. Some multilevel marketing companies like Oriflame also resort to catalogue retailing.

d. Direct Response Retailing

Here the marketers advertise these products/ services in magazines, newspapers, radio and/or television offering an address or telephone number so that consumers can write or call to place an order. It is also sometimes referred to as “Direct response advertising.” The availability of credit cards and toll free numbers stimulate direct response by telephone. The goal is to induce the customer to make an immediate and direct response to the advertisement to “order now.” Telebrands is a classic example of direct response retailing. Times shopping India is another example.

e. Automatic Vending

Although in a very nascent stage in India, is the ultimate in non-personal, non-store retailing. Products are sold directly to customers/buyers from machines. These machines dispense products which enable customers to buy after closing hours. ATM’s dispensing cash at odd hours represent this form of non-store retailing. Apart from all the multinational banks, a large number of Indian banks also provide ATM services, countrywide.

f. Electronic Retailing/E-Tailing: Is a retail format in which retailers communicate with customers and offer products and services for sale, over the internet. The rapid diffusion of internet access and usage, and the perceived low cost of entry has stimulated the creation of thousands of entrepreneurial electronic retailing ventures during the last 10 years or so. Amazon.com, E-bay and Bazee.com HDFCSec.com are some of the many etailers operating today.

The Hawthorne Studies

As human beings, all of us yearn for recognition – be it at home or at work. A lot of studies have been conducted to understand the correlation between human psychology and personal productivity. One of the earliest and most quoted ones, popularly known as the Hawthorne Study, dates back to the 1920s.

The aim behind the Hawthorne study was to find out the effect of physical environment changes on employees in an organization. Various factors were considered during the research, most importantly the psychological aspects such as working hours, managerial leadership, group pressure etc. During the course of research it was found that the biggest impact came from the attention paid to the employees.

The Hawthorne studies were conducted between 1927 and 1932 at Western Electric`s Hawthorne plant near Chicago. (General Electric initially sponsored the research but withdrew its support after the first study was finished.) Several researchers were involved, the best known being Elton Mayo and Fritz Roethlisberger, Harvard faculty members and consultants, and William Dickson, chief of Hawthorne`s Employee Relations Research Department.

The studies were intended to examine the influence of environmental variables on a group of production workers. The group of workers was divided into two subgroups: a test group, which would undergo environmental changes, and a control group. The members of the control group would work under normal, constant environment conditions.

The first major experiment at Hawthorne studied the effects of different levels of lighting on productivity. The researchers systematically manipulated the lighting in the area in which a group of women worked. The group`s productivity was measured and compared with that of another group (the control group) whose lighting was left unchanged. As lighting was increased for the experimental group, productivity went up-but, interestingly, so did the productivity of the control group. Even when lighting was subsequently reduced, the productivity of both groups continued to increase. Not until the lighting had become almost as dim as moonlight did productivity start to decline. This led the researchers to conclude that lighting had no relationship to productivity-and at this point General Electric withdrew its sponsorship of the project!

The next experiment utilized a mainstay of scientific management: incentive-based, piecework system. The researchers expected, according to the conventional wisdom of the day, that this would inspire the employees to dramatically increase their pace. However, rather than working as fast as they could individually, the workers calibrated themselves as a group. Employees who worked more slowly than average were derided as “chiselers.” Employees who attempted to work faster than the group were called “rate busters.” In other words, any significant deviation from the collectively imposed norm was punished.

These results were, of course, a major blow to the position of scientific management, which held that employees were only motivated by individual economic interest. The Hawthorne studies drew attention to the social needs as an additional source of motivation. Taylor’s emphasis on economic incentives was not wholly discredited, but economic incentives were now viewed as one factor–not the sole factor–to which employees responded.

Four general conclusions were drawn from the Hawthorne studies:

  1. The aptitudes of individuals are imperfect predictors of job performance. Although they give some indication of the physical and mental potential of the individual, the amount produced is strongly influenced by social factors.
  2. Informal organization affects productivity. The Hawthorne researchers discovered a group life among the workers. The studies also showed that the relations that supervisors develop with workers tend to influence the manner in which the workers carry out directives.
  3. Work-group norms affect productivity. The Hawthorne researchers were not the first to recognize that work groups tend to arrive at norms of what is a fair day’s work; however, they provided the best systematic description and interpretation of this phenomenon.
  4. The workplace is a social system. The Hawthorne researchers came to view the workplace as a social system made up of interdependent parts.

The Hawthorne Experiments are mainly criticized on the following grounds:

1. Lacks Validity:

The Hawthorne experiments were conducted under controlled situations. These findings will not work in real setting. The workers under observation knew about the experiments. Therefore, they may have improved their performance only for the experiments.

2. More Importance to Human Aspects:

The Hawthorne experiment gives too much importance to human aspects. Human aspects alone cannot improve production. Production also depends on technological and other factors.

3. More Emphasis on Group Decision-making:

The Hawthorne experiments placed too much emphasis on group decision-making. In real situation, individual decision-making cannot be totally neglected especially when quick decisions are required and there is no time to consult others.

4. Over Importance to Freedom of Workers:

The Hawthorne experiment gives a lot of importance to freedom of the workers. It does not give importance to the constructive role of the supervisors. In reality too much of freedom to the workers can lower down their performance or productivity.

Conclusion

In modern business, the Hawthorne effect is still considered vital in team management. Managers can help employees increase their work output by paying attention to their daily work and recognizing and rewarding accomplishments. These gestures provide a sense of enhanced self-worth value for the employee. This is a huge motivational factor and can be applied to individuals and teams for increased performance levels.

Like the work of Taylor, the Hawthorne studies have recently been called into question. Critics cite deficiencies in research methods and offer alternative explanations of the findings. Again, however, these studies were a major factor in the advancement of organizational behavior and are still among its most frequently cited works.

References:

http://www.beechmontcrest.com/hawthorne_studies.htm

http://worldacademyonline.com/article/27/383/the_hawthorne_studies.html

Maps and Models of Human Resources Model

There are numerous widely different interpretations of Human Resource Management; some are in shape of formal models. There is confusion over the definition but these also have some common elements.

 

HRM models can be said was the underlying facts which were unnoticed for many years. But it took it roots in 1970 when big companies came to know that Human Resource is the best resource which companies have.

 

But these HRM models have been made after an intensive research. That is why these principles were made and developed. These are the HRM models which forms the base of the HRM development. Basically HR concentrates on factors like ideology and philosophy. The models and maps of HRM include factors like comprehensiveness which includes strategies for pre and post recruitment. After that there is credibility which is the strongest factor in any company. Credibility includes trust and honesty which makes it complete.

 

Storey (1999) has distinguished between hard and soft forms of HRM, typified by the Michigan and Harvard models respectively. Hard HRF focuses on the resource side of human resource. It emphasizes on cost in the form of ‘headcount’ and places control firmly in the hand of the manager. Their role is to manage numbers effectively, keeping the workforce closely matched in terms of both bodies and behavior.  Soft HRM, on other hand stresses on ‘human’ aspect of HRM. It is concerned with communication and motivation. People are led rather than managed. They are involved in determining and realizing strategic objectives.

 

 

Sisson (1990) contends that there are four major features that appear to some degree in all HRM models and theories:

  • Integration of human resource policies with each other and with the organization’s business plan. HRM is a key instrument of business strategy, viewing employees as important assets.
  • Responsibility for managing people moves from personnel specialists to senior (line) managers. Specialists provide a consultancy service for line managers.
  • Employee relations shift away from collective bargaining – dialogue between management and unions. Instead, direct discussion between management and individual employees is encouraged.
  • A stress on commitment to the organization and personal initiative.

 

Softer models of HRM typically suggest that HR managers should become:

  • Enablers – structuring organizations to allow employees to achieve objectives.
  • Empowerers – devolving decision-making to the lowest level.
  • Facilitators – encouraging and assisting employees.

 

From this perspective, managers are no longer supervisors. The organizations move away from rigid hierarchies and power distinctions towards people taking responsibility for their own work.

 

Guest (1987) provides a fusion of various HRM approaches into a theory of HRM which incorporates a number of policy goals:

  • Aim for a high level of commitment from employees, so that workers identify with the organization’s goals and contribute actively to its improvement and success.
  • This enables the organization to obtain a high quality output from workers who want to continually improve standards.
  • An expectation of flexibility from workers – willingness to depart from fixed job definitions, working practices and conditions.

 

  • Strategic integration – all these strands link the organization’s strategy. They are directed towards agreed objectives and interact with each other in a cohesive way.

Elements of Entrepreneurship

The two basic elements of entrepreneurship are as follows

Innovation

Innovation, i.e. doing something new or something different is a necessary condition to be called a person as an entrepreneur. The entrepreneurs are constantly on the lookout to do something different and unique to meet the requirements of the customers. They may or may not be inventors of new products or new methods of production but they possess the ability to foresee the possibility of making use of the inventions for their enterprises.

 

Innovation is the process of doing new things.  This distinction is important.  While creativity relates to the ability to conceive, the innovation is doing new things.  Ideas have little value until they are converted into useful products or services.  Innovation transforms creative ideas into useful applications.  Hence, creativity is a pre-requisite to innovation.

 

As per Schumpeter a person is an entrepreneur only when he is engaged in innovative behavior.  This innovative behavior is an entrepreneurial function.  According to Schumpeter, entrepreneurship is a creative activity. An entrepreneur is an innovator who introduces something new in an economy.  Entrepreneurship is doing things that are generally not done in the ordinary course of business.  Innovation may be in:

  • Introducing a new manufacturing process that has not yet been tested and commercially exploited.
  • Introduction of a new product with which the consumers are not familiar or introducing a new quality in an existing product.
  • Locating a new source of raw material or semi-finished product that was not exploited earlier.
  • Opening a new market, hitherto unexploited, where the company products were not sold earlier.
  • Developing a new combination of means of production.

 

In order to satisfy the changing preference of customers nowadays many enterprises have adopted the technique of innovation. For instance, pidilite industries innovated the new 5.rs pack of fevi quick which was accepted by the customers as it was easy to use when it was needed. Other example would be of the mobile enterprise which came up with the scheme for the customers of refill pack of Rs. 99 which says “Zindagi bhar mobile raho” which was accepted by the customers. Since customers taste and preferences always keep on changing, hence the entrepreneur needs to apply invention on a continuous basis to meet the customers changing demand for products.

 

Risk bearing

Entrepreneurship is the propensity of mind to take calculated risks with confidence to achieve a predetermined business or Industrial objective. The capacity to take risk independently and individually with a view to making profits and seizing the opportunity to make more earnings in the market-oriented economy is the dominant characteristic of modern entrepreneurship. In fact he needs to be a risk taker, not risk avoider. His risk bearing ability enables him even if he fails in one succeed.

 

Entrepreneurship is a process in which the entrepreneur establishes new jobs and firms, new Creative and growing organizations associated with risk – taking by new and creative ideas and entrepreneurship identification of the new opportunities and resources mobilization. It results in introducing a new product or service to society. In Britain encyclopedia entrepreneur means “a person who organizes and manages a job or economic association and receives its risks”

 

The Japanese proverb says “Fall seven times, stand up eight”. Though the term entrepreneur is often used interchangeably with entrepreneurship, yet they are conceptually different. The relationship between the two is just like the two sides of the same coin. Thus, entrepreneurship is concerned with the performance and co-ordination of the entrepreneurial functions. This also means that entrepreneur precedes entrepreneurship.

 

The Four A’s

Each company is making its way to Rural India. Most of them have studied the market and analyzed the things over there and are ready to fight Rural India.

The rural market may be alluring but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income; large number of daily wage earners, acute dependence on the vagaries of the monsoon; seasonal consumption linked to harvests and festivals and special occasions; poor roads; power problems; and inaccessibility to conventional advertising media.

There are companies like HLL, ITC, LG and Mahindra who have written their success stories in Rural markets, they have given a new format for rural marketing

Marketing in Rural India is different than marketing in Urban India, which makes companies think over the traditional marketing mix. Marketing mix is such an element in rural market which gives a sense to think of marketing activities. The 4A model on the similar lines of 4C model has been developed for rural markets. This constitutes of:

  1. Availability
  2. Affordability
  3. Awareness
  4. Acceptability

Availability

India’s 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas. The greatest problem here is to reach the consumer or the retailer. It is the logistics way to make the product available there. Once the product reaches the retailers self, it will sell itself as the number of brands available in rural markets is limited.

Over the years, India’s largest MNC, Hindustan Lever, a subsidiary of Unilever, has built a strong distribution system, which helps its brands reach the interiors of the rural market.  To service remote village, stockiest use auto-rickshaws, bullock-carts and even boats in the backwaters of Kerela. Coca-Cola, which considers rural India as a future growth driver, has evolved a hub and spoke distribution model to reach the villages. LG Electronics defines all cities and towns other than the seven metros cities as rural and semi-urban market.

Study on buying behavior of rural consumer indicates that the rural retailers influences 35% of purchase occasions. Therefore sheer product availability can affect decision of brand choice, volumes and market share. Some of the FMCG giants like HLL took out project streamline to significantly enhance the control on the rural supply chain through a network of rural sub-stockiest, who are based in the villages only. Apart from this to acquire further edge in distribution HLL started Project “SHAKTHI” in partnership with Self Help groups of rural women.

Affordability

Here affordability does not mean that cheaper products should be made and marketed, the meaning is to reach the customers by satisfying their needs. It is to ensure affordability of the product or service. With low disposable incomes, products need to be affordable to the rural consumer, most of whom are on daily wages. Customers should not think that they cannot buy it that means it should be in their buying capacity. The income in rural markets is from different ways, so keeping this in mind companies should design the product in such a way that it reaches the customers.

Some companies have addressed the affordability problem by introducing small unit packs. Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh – the so-called `BIMARU’ States.

Hindustan Lever, among the first MNCs to realise the potential of India’s rural market, has launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm. The move is mainly targeted at the rural market. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5. The initiative has paid off: Eighty per cent of new drinkers now come from the rural markets. Coca-Cola has also introduced Sunfill, a powdered soft-drink concentrate. The instant and ready-to-mix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2 and multiserve sachet of 200 gm priced at Rs 15.

Acceptability

The third challenge is to gain acceptability for the product or service. Therefore, there is a need to offer products that suit the rural market. One company, which has reaped rich dividends by doing so, is LG Electronics. In 1998, it developed a customized TV for the rural market and christened it Sampoorna. Because of the lack of electricity and refrigerators in the rural areas, Coca-Cola provides low-cost ice-boxes – a tin box for new outlets and thermocol box for seasonal outlets.

The insurance companies that have tailor-made products for the rural market have performed well. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3.5 crore in total premia. The company tied up with non-governmental organisations and offered reasonably priced policies in the nature of group insurance covers.

Awareness

This is the most important aspect of the marketing mix, the customer should think that he can but that product by putting an extra money on that. Mass media is able to reach only to 57% of the rural population. Creating awareness then, means utilizing targeted, unconventional media including ambient media.

For generating awareness, events like fairs and festivals, Haats, etc., are used as occasions for brand communication. Cinema vans, shop-fronts, walls and wells are other media vehicles that have been utilized to increase brand and pack visibility. innovative media used by personal wash like Lux and Lifebuoy and fabric wash items like Rin and Wheel. Idea was to advertise not only at the point of purchase but also at the time of consumption.

With large parts of rural India inaccessible to conventional advertising media – only 41 per cent rural households have access to TV – building awareness is another challenge. However, the rural consumer expressions differ from his urban counterpart. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned channels. Consumption of branded products is treated as a special treat or indulgence.

Hindustan Lever relies heavily on its own company-organised media. These are promotional events organised by stockists. Godrej Consumer Products, which is trying to push its soap brands into the interior areas, uses radio to reach the local people in their language.

Coca-Cola uses a combination of TV, cinema and radio to reach 53.6 per cent of rural households. Since price is a key issue in the rural areas, Coca-Cola advertising stressed its `magical’ price point of Rs 5 per bottle in all media.LG Electronics uses vans and road shows to reach rural customers. The company uses local language advertising.

The key dilemma for MNCs eager to tap the large and fast-growing rural market is whether they can do so without hurting the company’s profit margins. In case of nestle, company’s product portfolio is essentially designed for urban consumers which cautions companies from plunging headlong into the rural market as capturing rural consumers can be expensive.

To conclude, unlike urban consumer rural consumer go for value driven and cost consciounessly for any product instead of lifestyle and impulsive buying. Also they can be more loyal to brands if four A concept being fulfilled

Objective of Research

Green and Tull have defined marketing research as follows:

“Marketing research is the systematic and objective search for, and analysis of, information relevant to the identification and solution of any problem in the field of marketing.”

 

The purpose of research is to discover answers to questions through the application of scientific procedures. The main aim of research is to find out the truth which is hidden and which has not been discovered as yet. Though each research study has its own specific purpose, we may think of research objectives as falling into a number of following broad groupings:

  1. To gain familiarity with a phenomenon or to achieve new insights into it (studies with this object in view are termed as exploratory or formulative research studies);
  2. To portray accurately the characteristics of a particular individual, situation or a group (studies with this object in view are known as descriptive research studies);
  3. To determine the frequency with which something occurs or with which it is associated with something else (studies with this object in view are known as diagnostic research studies);
  4. To test a hypothesis of a causal relationship between variables (such studies are known as hypothesis-testing research studies).