Market

Financial market is a market for buying and selling of capital and credit securities. It consists of the money market which is the trade of short term securities that mature in less than a year such as treasury bills and capital market which consists of trade of long term assets with maturity period of more that one year. Financial market security valuation essentially reflects the maximum discounted price the traders are willing to pay at present time for future cash payments taking into consideration uncertainty and market projections (Han, 2002).

Therefore, valuation of current security prices accounts for uncertainty and thus a higher interest rate or return is included to compensate uncertainty in the financial market. Uncertainty in the financial market introduces forecasting and market projections thus investors fundamentally base their decisions on available information about the securities in the market. According to Han, (2002) “what investors are trading is actually information as a “commodity” in financial market for the future cash flows and information about the degree of certainty”.

There are several theories that postulate decision making and the nature of financial market, one of the most important theories is efficient market hypothesis (EMH). This paper is an evaluation strength and weaknesses of EMH theory as it is applied in the market by testing the theory using statistical data of Britain and world Returns from the financial markets. Efficient Market Hypothesis (EMH). EMH postulates that in an efficient market available information is quickly assimilated in to the valuation of the security so that current prices reflect all available information in the market.

Thus, the hypothesis stipulates that prices at any point in time reflect all past information thus it would be useless to analyze past information to predict future price movements in an efficient market. There are various versions of EMH that have different implications as far as market prediction and future price movement are concerned;

• The weak version of EMH holds that current asset prices in the market fully reflect the past information; it is named weak because it considers past prices only, it simply implies that one cannot benefit from what everybody knows.
• The semi strong form considers public information and financial reports and holds that nobody can benefit from what is already known and from the financial statements released in the market.
• The strong form of EMH holds that in an efficient markets both public and private information (Insider information). It holds that the market assimilates the information too quickly thus even insider information cannot be used to make super-normal profit. (Han, 2002 & Khan, 2004).

Efficient market hypothesis is one of the most important concepts in the science and art of investment management as it provides a deeper insight into how the markets responds to the external as well as internal information and as a result how the prices shall actually behave while incorporating this information. It has also been argued that the efficient market hypothesis fails to integrate the behavioral and psychological aspects of the stock price movements and as such may not prove as an empirically valid theoretical construct.

However, despite such arguments, it is considered as one of the most important contributions ever made to the finance. Market efficiency is considered as the ability of the markets to fully integrate the currently publically available information into the market prices and as such basic idea is how quickly competition force to drive all the information to be reflected into the market prices. (han,2009). It is also determined as the inability of the market participants to outweigh the market by trading based on the information available to all market participants.

According to this postulates, investors therefore can not earn abnormal economic profits and as such under perfect market conditions, all market participants only earn normal profits. The fundamental assumptions behind the efficient market hypothesis were based on the fact that the financial markets are extremely efficient because it was generally believed that the investors have put in place an in-build mechanism which allowed them to automatically integrate the publically available information into the prices and market itself therefore discount such information into the prices of the stocks.

The basic idea therefore was that since the stock prices follow the random walk therefore today’s prices will reflect the information available today and tomorrow’s information will be reflected in the prices of tomorrow. According to the efficient market hypothesis, there are three types of efficiencies reflected by the market and studies on the major developed markets indicate that these markets are semi- strong efficient in nature. The three types of efficiencies include weak form of efficiency, semi strong efficiency and strong efficiency.

In a weak form of efficiency, share prices reflect all the publically available information that has been contained in the past price movements and as such it technical analysis will be of no use to the investors. Weak form of efficiency also outline that the investors can predict the price movements based on the past variations in the past thus all the efforts to read between the lines of price movements of yesterday would hardly affect any price movements of today.

In semi- strong market efficiency, the stock prices also reflect all the publically available information including any announcements of the dividends as well as other information. This therefore also means that the fundamental analysis will be of no use and investors will not be able to gain any insight into how the future prices will behave. (Malkiel, 2003). Semi-strong form of efficiency is also important in the sense that most of the investors tend to predict the future behavior of the market prices based on the fundamentals of the company thus attempt to exploit the opportunities available for very short period of time i.

e. the time lag between the release of information and its discounting into the stock prices. Investors, in this form of efficiency can take advantage of arbitrage pricing also because it is often believed that the prices tend to move into an arbitrage band therefore if investors have the ability to spot that arbitrage band than there are chances that the investors may be able to earn abnormal profits under this form of efficiency.

Finally, the strong form of efficiency indicates that all the information whether publically available or private information is fully integrated into the stock prices and as such investors can only gain abnormal economic profits if they have the insider information which is not available to others. In this form of efficiency, investors therefore can take benefit if they have the insider information. The subsequent empirical studies performed on major markets suggested variable results as some markets indicated strong form of efficiency and others showed weak or semi- strong form of efficiency.

One study performed on sixteen developed and four emerging markets indicated that the market efficiency in countries like UK and Germany is complying with the most stringent random walk criteria and hence are considered as the strong form of market efficiency. Further, it has also been empirically validated that most of the IPOs tend to be underpriced no matter what form of market efficiency is existing in any given market. Given this, it is however, also collectively believed that markets are basically inefficient and offer opportunities to the market participants to take advantage of such opportunities.

(Kaen,2003). Reference list 1. Malkiel, Burton G. (2003). The Efficient Market Hypothesis and Its Critics [online]. [Accessed 1st May 2009]. Available from World Wide Web: <www. princeton. edu/~ceps/workingpapers/91malkiel. pdf>. 2. Han, Alvin (2009). http://www. alvinhan. com/ [online]. [Accessed 01 May 2009]. Available from World Wide Web: <http://www. alvinhan. com/Efficient-Market-Hypothesis. htm>. 3. Worthington, Andrew C. (2003). Weak-form market efficiency in European emerging and developed stock markets.

School of Economics and Finance Discussion Papers and Working Papers Series. 159 (0), 34. 4. David Wighton. (2009). Efficient market hypothesis is dead – for now. Available: http://business. timesonline. co. uk/tol/business/columnists/article5607960. ece. Last accessed 1st May 2009. 5. Kaen, Fred R. (2003). A blueprint for corporate governance: strategy, accountability, and the preservation of shareholder value. New York: AMACOM Div American Mgmt Assn. 45. .

The Theory of Efficient Market Hypothesis The Efficient Market Hypothesis (MME) was first defined by Eugene Fame in his financial literature in 1965. He defined the term “efficient market” as one in which security prices fully reflects all available information. MME is the theory describing the behavior of an assumed “perfect” market which states that: Securities are fairly priced and that their expected returns equal their required return. Security prices, at any one point, fully reflect all public information available and react swiftly to new information.

Because stocks are fully and fairly priced, investors need not waste time raying to find and capitalize on misperceived (undervalued and overvalued) securities. Therefore, the market is efficient if the reaction of market prices to new information should be instantaneous and unbiased. The efficient market hypothesis states that it is not possible to consistently outperform the market by using any information that the market already knows, except through luck. Information or news in the MME is defined as anything that may affect prices that is unknown in the present and thus appears randomly in the future.

Evidence in favor Efficient Market Hypothesis Theory I. Stock prices are close to random walks it. Stock returns have low linear correlation iii. Stock returns are very hard to predict ‘v. Portfolio managers do not beat the market on average and almost no one beats the market consistently. Assumptions on the Market Efficiency I. Information is available and all investors have access to the available information about the future ‘I. All investors pay close attention to market price and adjust their portfolio appropriately iii. All of information is fully and immediately reflected in market prices ‘v.

Investors make a fair return on their investments . Investors believe that the market is not efficient, investors spend time analyzing securities searching for undervalued securities and consequently security prices react instantaneously to released information, which in turn makes the market efficient. Efficient Market Theories By bombastic There are three common forms in which the efficient market theory is commonly stated. They include:The weak form, the semi strong form and the strong form. I) Weak Form of Efficient Market The weak form MME stipulates that current asset prices already reflect past price and volume information.

The information contained in the past sequence of prices of a security is fully reflected in the current market price of that security. It is named weak form because the security prices are the most publicly and easily accessible pieces of information. It implies that no one should be able to outperform the market using something that “everybody else knows”. This technique is so called technical analysis that is asserted by MME as useless for predicting future price changes. It asserts that it should be possible to predict future stock price movement from historical patterns e. G. A company’s Stock at NOSE has increased steadily over the past few months to the current price of SSH. 30, then this price will already fully reflect the information about the company’s growth and therefore the next change in the stock price could either be upward, downward, or constant with equal probability. It therefore follows that technical analysis or Chartist will not enable investors to make arbitrage profits. In markets that have achieved this level then security prices follow a trend less random walk Studies to test this level have been based on the principle that: The share price changes are random

That there is no connection between stock price movement and new stock price changes. It is possible to prove statistically that there is no correlation between successive changes in price of securities and therefore trend in stock price changes cannot be detected. This can be done using linear correlation (auto-correlation) test such as Durbin Watson Statistics. It) The Semi Strong Form of Efficient Market The semi strong form MME states that all publicly available information is similarly already incorporated into asset prices.

In another words, all publicly available information is fully reflected in a security’s current market price. The public information stated not only past prices but also data reported in a company’s financial statements, company’s announcement, economic factors and others. It also implies that no one should be able to outperform the market using something that “everybody else knows”. This indicates that a company’s financial statements are of no help in forecasting future price movements and securing high investment returns.

If the market has achieved this level, then fundamental analysis will not enable involves the study of company’s accounts to determine its net value and therefore find any undervalued stock. Fundamental theory states that every stock in the market has an intrinsic value, which is equal to the present value of cash flows expected from the security. Tests on Semi Strong Form of Efficient Market To test for semi-strong form efficiency, the adjustments to previously unknown information must be of a reasonable size and instantaneous.

To test for this, consistent upward or downward adjustments after the initial change must be looked for. If there are any such adjustments it would suggest that investors had interpreted the information in a biased fashion and hence in an inefficient manner. Tests to prove semi-strong form of efficiency have concentrated on the ability of the market to anticipate stock price changes before new information is formally announced. These tests are referred to as Event studies e. G. If two companies plan to merge, stock prices of the two companies will change once the merger plans are made public.

The market would show semi-strong form of efficiency if it were able to anticipate such changes so that stock prices of the company would change in advance of the merger plans being confirmed. Other events that can affect stock prices are: Stock splits Changes in dividend policy Investment in major profitable projects Share repurchase programs Other stocks and bond sales Examples of publicly available information are Annual reports of companies Capital market reports Central Bank reports Earnings estimate disseminated by companies and security analysts. Ii) Strong Form of Efficient Market Theory The strong form MME stipulates that private information or insider information too, is quickly incorporated by market prices and therefore cannot be used to reap abnormal trading profits (past, present and future information). Thus, all information, whether public or private, is fully reflected in a security’s current market price. That means, even the company’s management (insider) are not able to make gains from inside information they hold.

For example, they are not able to take the advantages to profit from information such as take over decision which has been made ten minutes ago. The rationale behind this support is that the market anticipates in an unbiased manner, future development and therefore information has been incorporated and evaluated into market price in much more objective and informative way than insiders. If the theory is correct, then the mere publication of information that was previously confidential should not have impact on stock prices.

This implies that insider trading is impossible. Tests on the Strong Form of Efficient Market Theory To test for strong form efficiency, a market needs to exist where investors cannot are consistently observed to beat the market, no refutation even of strong-form efficiency follows: with tens of thousands of fund managers worldwide even a normal distribution of returns (as efficiency predicts) should be expected to produce a few ozone “star” performers Tests that have been carried out on this level have concentrated on activities of fund managers and individual investors.

If the markets have reached the strong form levels, then fund managers cannot consistently perform better than individual investors in the market. Examples of strong form of efficient market information are: Imminent corporate takeover plans; Extra ordinary positive or negative future earnings announcements; Mergers and acquisitions. Implications of MME for financial decision makers I) The timing of investment policy: If the market is efficient, price follows a trend less random walk and it is impossible for managers to know whether today’s price is the highest or lowest in order to issue new stocks.

Timing other policies e. G. Release of financial statements; announcement of stock splits, e. T. C. Has no effect on Share prices. It) Project Evaluation Based upon NP When evaluating the projects, investment managers use the required rate of return particular project may be determined by observing the rate of return by shareholders of firms investing in projects of similar risk. This assumes that securities arc fairly priced for the risks that they carry (I. E. The market is efficient).

If the market is inefficient, however financial managers should be appraising projects on a wrong basis and therefore making bad investment decisions since their estimate on NP is unreliable. Iii) Creative Accounting: In an efficient market, prices are based upon expected future cash flows and therefore they reflect all current information. There is no point therefore in a firm attempting to distort current information to their advantage since investors will quickly see through such attempts.

Studies have been done for example to show hat changes from straight line depreciation to reducing balance method, although it may result to increasing profit, may have no long-term effect on share prices. ‘v) Mergers and Takeovers If shares are correctly priced then the purchase of a share is a zero NP transaction. If this is true then, the rationale behind mergers and takeovers may be questioned. If companies are acquired at their correct equity position then purchases are breaking even. If they have to make significant gains on the acquisition, then they have to rely on synergy in economics of scale to provide the saving.

If the acquirer (or the redactor) pays the current equity value plus a premium, then this may be a negative NP decision unless the market is not fully efficient and therefore prices are not fair. If markets are efficient then they reflect all known information in existing stock prices and investors therefore know that if they purchase a security at the current market price they are receiving a fair return and risk combination. This means that under or overvalued stocks do not exist. Companies should not offer substantial discounts on the security issues because investors would not need extra incentives to purchase, the securities.

According to Susan Guests, lead author of the study, “Application servers are being used to create APS that run on mobile devices and that tie together the Internet of things. Infrastructure for the Internet and for smart mobile devices creates demand for more sophisticated web development and web applications. Everything is going bile. This evolution is driven by mobile smart phones and tablets that provide universal connectivity. Application servers represent a significant aspect of Internet market evolution. IBM is moving toward domination of the application server market, going from 55% share in 2011 to 60% share in 2012, buttressed in part by its dominance in supporting development of mobile APS. This achievement of 60% share of the application server market provides IBM with a defaced standard status in the market. To Download Full Report with TOCK: http://www. Nonrepresentational. Is/sample/ sample/207996 Mission critical application servers are needed in the enterprise to support scalability, reliability, and security.

More light weight open source application servers have a place in the market for web presence software, but for a solution that involves transactions intensively and has the downside of losing significant revenue if the site is down the mission critical servers are needed. IBM Webster application server is a proven, high-performance transaction engine that can help build, run, integrate, and manage dynamic web applications. The IBM Webster application server Liberty profile option and development tool options extend the mission critical aspects of the system.

Intelligent management capabilities minimize end-user outages and maximize operations monitoring and control of the Application Server Market Shares, Strategies, And Forecasts, Worldwide, 2014 To 2020 By Illuminations IBM Webster application server features robust capabilities. Key features relate to configuration. IBM ability to support development of mobile APS is unparalleled in the industry. The app server is able to provide the flexibility added to create tags and URL that support search engines. Search engine optimization is a key strength of the IBM Webster application server.

Companies with a web presence need to be seen across all devices that a user may have in use on any given day. Webster permits users to choose the application server configuration that best fits a current business strategy. To Read Complete Report with TOCK: http://www. Nonrepresentational. Biz/analysis/ 207996 IBM Webster application server is far and away the best product on the market for growing solutions as needs evolve. As market conditions change, applications need to be changed and adjusted rapidly.

The modular construction and the solid front end and back end integration of the IBM Webster application server give IBM significant advantage in the market. The JEEZ application server software market is defined by the ability to build mission critical web sites that support a globally integrated enterprise. Strong growth is anticipated as tablets, smart phones, and mobile devices replace PC’s. Mobile devices proliferate with 6. 9 billion smart phones anticipated to be installed in 2019. There are now 6. Billion cell phone registered, paying users.

Portable, mobile systems will expand the Internet at a pace not yet achieved. It is anticipated that the APS market will expand from $24 billion in 2013 to $35 trillion by 2019. This expansion of mobile computing at the device level is nothing compared to what is happening at the machine to machine (m to m) communications, with sensors being located everywhere, and monitoring of those sensors proliferating.

In this task I will be producing a report where I will be writing how food retailing is influenced by the consumer market and how food retailers have adapted to meet such developments.

Food retailing operations

These are the different stores which are used to sell the products that they have to offer, they include different outlets that sell a vast range of products.

Superstore

A superstore is a large supermarket but they are normally not located in the town areas, also can be defined as a large retailer store where they have diverse merchandise, such as groceries, electrical product, and even clothing or even they sell a wide variety of products in a selected product, such as clothing, computing and even sporting goods. Business’ like this include Morrison’s, Tesco and even store likes wait rose, that specialize in selling variety of products.

Super stores in the UK include Tesco Extra and Asda where their target audience is more than half then the country, so supermarkets are influenced by the consumer market where they listen to the ideas and thoughts and see what products they would like on the shelf, for instance if the customers want low fat products the business will provide low fat products, superstores currently provide almost every type of food product that is out there from food products for a healthy meal such as vegetables, low fat yogurt, low fat food in general to products such as meats, tuna, peanut butter for people who just like them products and even different vast foods for worldwide food for the different ethnicity groups in the UK such as eastern Europe, far east and middle eastern Asia and even African food, supermarkets are not really influenced by the consumer market because of the various different products that they have to offer because they do not just have one target audience but lots of different audience because if one audience does like a product they sell the business knows a different audience will like that product.

Limited range

This is the limited range products where they sell limited range products these can include independent stores that sell limited products but customers still buy them, limited ranges stores generally sell products that are in trend where as a larger supermarket sell a larger variety of products. So at a limited range store that they know customers are going to buy.

Discount food store

They can simply be called department stores, these types of stores simply sell store cheaper than the average retail store, the most common stores in the UK include stores like home bargain where they sell big brand food products for cheaper product, whereas store like Aldi, Lidl and farm food sell like branded products where they have the same supplier and manufacturer of the original brand but just sell the like branded product for cheaper products. These type of stores are not really affected by the consumer market where it is similar to how the consumer market affects the super store, this is because they sell a large variety types of product where they sell healthy products for who those want it and other type of products such as ready meals, and fresh fruit at veg like the superstores but are cheaper prices.

Petrol station

The UK petrol station sell petrol which is not edible, but the location where you pay for fuel there are other products that are available to purchase, most commonly snacks but in recent years they have started to sell lots of different products like a variety of different snacks, drinks, fruit and veg, sandwiches, petrol station like the ones that are run by supermarkets like Morrison and Tesco, where they sell in store products in the petrol station, this is because a lot of customers may just come to the supermarket locations to use their petrol station but they may be attracted to the other products that they have to offer in the petrol stations. The bigger petrol station in like the service stations on the motor ways include lot of different businesses such as having mini supermarkets like Morrison’s and Tesco and even fast food store such as . The larger petrol station offers a larger variety of food products for their customers whereas the small petrol stations offer products that are for on the go such as snacks.

Top up/home essential store

Top up stores are stores that allow the customer to come to the store and top up their mobile phones, which makes stores like Tesco become more convenient for customers and also allow them to do their normal shopping alongside topping up their phones, a lot of businesses have introduced the top up feature because it allows them to have that additional feature to retain customers. Home essential store are stores that sell products for the home like furniture, food, accessories, decoration these stores include Tesco, when you link a top up sore and a home essential store you have a convenient business for customers to do all their shopping in one spot.

City stores

These are simply stores that are located in the city, these stores are purposely located in city Centre because they are in the busiest part in the city, where not only people use the city Centre to get to and from work but also to do their shopping, so Tesco, Morrison’s and Asda stores in the city Centre make it easier for people to shop. These stores have become more of a trend because people come back from work and school get snacks for themselves from a familiar store. Mail order- when the mail service was first invented it was used to send mail from one monarch to another or one leader to another, where they will sell an informative letter to one person to another, but in recent years they have become a famous method to get their product they ordered online to get it sent to their homes, like the click and collect and service can be used to send a large variety of products to send to the consumers home. Delivering to homes have now become a trend because it is not that much time consuming and also mail order can be accessed from anywhere.

Farmer’s market

Sell fresh and organic products has also become a trend in society where people want fresh and organic products and also on television programs chefs like Jamie Oliver promote using organic and fresh products, so famers in the Yorkshire have their own businesses set up where they sell their products directly to their customers, instead of selling the products to a third party business and then getting sold to the customers, farmer market sell directly from their farms or they have stalls set up set up in towns and in a market on weekends and week days.

Radical

In the online dictionary radical refers to changes that have immediately occurred like a mutation or even changes in trends in society, in recent years relating it to business radical change has occurred in on online shopping where it has become a lot more acceptable, where many business including Tesco has released a click and collect service so that they can meet these changes to “stay on top of their game”.

Other radical changes include changes that have occurred when there is a change that has occurred in products that are acceptable for instance product that are like food for instance Twinkies are now acceptable to eat a breakfast, lunch, dinner, tea and supper so demand has increased in these specific products so business needs to meet these demands.

Continuing changes

This refers to trends that are continuously changing for instance instead of having Twinkies for break best it is now acceptable just to have chocolate Twinkies instead so this is referred as a continues change.

A continuing change refers to a trend that is customers want value for money, because of the tight budgets that they have so they wish to save money wish is now sociable acceptable, businesses do this so that their shopping experience is more pleasant online or in store.

Customer expectations and demands

Something that customers expect is something that they have standards for instance in store they expect to have clean environment to work in, whereas in demands this is something that the customers want for instance there is an increase demands in Twinkies so a business like Tesco will need to meet these demands if they want to run successfully.

Changing social and working patterns

Changes in social and environment include changes like working patterns that have occurred for instance more people are concerned about their health’s where they want to live healthier life style, Tesco can find information about what information they need through the club card system, where they pick up new trend that are occurring in society.

Affluence

Affluence has simply got to do with money and the income that the house holds achieves on a yearly basis, it has got to do with what budget families have available to spend on food for instance, some people have the budget to buy the expensive products whereas the other families don’t so businesses like Tesco has overcome this problem by placing a variation of different products on sale for instance, they have different brands and types of the same products.

Increase mobility

This refers to the increase use of transportation where less people are walking but are actually using cars and other means of transportation, for the business point of view it is an excellent trend because they can build a store like Tesco supermarket in city center because they know people form the suburbs will travel to the Centre to do their weekly shopping.

Environmental issues

Environmental issues refers to the damage the business makes on the surround internal and external environment, many business pump so much CO2 that is damaging the earth in many ways and the land that businesses destroy to create factories and additional stores also affects the earth, but this is only happening because the business is listening and meeting the customers demand, but a business that damages the earth can also create a negative image for the business.

Technology

Tesco has improved their business because of the vast change in technology, now percentage of the business run on electrical products, like the self-checkout till to the phones they have on display, they also have made many other improvements for instance creating their website and click and collect service with the technology that they have available.

Task 4- a customer service handbook

In the food retailing industry it is important to have different customer services in order to keep customers satisfied, the different areas are important to consider because it keeps the business running smoothly without having any loss of customers and having customer service allows the business to achieve the 7p’s which allows the business to retain customers. The different areas that have been identified are classed as the key areas for good customer service in the food industry these area include

Checkout queue and staffing

The checkout are the tills that customers go to checkout their food and other products, no matter what the business is there is always going to be a queue unless they have multiple checkout tills like business like Morrison’s and Tesco have around ten or even more tills and in Tesco promises that there queue will never be longer than two people, in order for them to achieve this they have multiple tills and good staffing, the importance of having good staffing is so that they can operate the tills immediately and checkout products as fast but smoothly as possible but in businesses like KFC and McDonalds they have consist request on fast food orders so they will require good staffing where they are able take orders and serve the products accordingly, so having short queues and good staff keeps the customers satisfied.

Quality of service

The quality of service is important because if customers are not satisfied with how their food was made or served it reduces the chances of the customer to return to that store, the quality of service in many food industries need to be at an exceptional level such as fast food stores like KFC and McDonalds, where if the service is not exceptional it may lead to a loss of customers and potential customers because of the reviews the customers give on the internet or to friend and family, the importance of quality of service is so that they can retain customer because service fall under the 7p’s which include people, process and physical evidence.

People

This is the 6th P of the marketing mix where it is used for the service industry, but they can also be used for the food products as well, this is because employees that come into contact with customers will create a lasting impression and for business like Tesco or even fast food stores like KFC they would hope it is a positive impression that the employees make this is because it has a thoughtful effect on the business, this also allows to build the business’ reputation where it meets their aim of having satisfied customers so the business does this by having excellent customer service. Tesco has a customer service team where their role is to keep customers satisfied by face-to-face communication by listening to what complaint/compliments they have, even the employees at Tesco have appropriate training so that they can approach customers kindly and assist them with whatever they need help with.

Process

This is related to service delivery, complaints and response time.

Service delivery is where Tesco tries to get its services as quickly delivered to the customer, for instance a service at Tesco can include information on what type of food products will arrive to the store or which products they will have available, so the customers are not really kept waiting that long because the employee looks on to the system and whatever dates that are on the database they inform the customers with or inform them with current food products and great alternatives, the average time in any business including Tesco to provide a selected service to a customer is 122 seconds, so in Tesco customers do not wait that long and also in one of the values of Tesco is to “treat other how they will be like to be treated.

So nobody likes being kept waited so the initial aim when a customer ask for a service is to respond as fast as possible but also the delivery of the service such as how they provide that service, if it is verbal information the customer is looking for the service delivery would be how helpful the information was, and the tone of the employee which falls under the behavior of those who deliver the service, if the employee delivering the service in Tesco is using a disrespectful tone they may leave a negative image of the business to that customer, but in Tesco they have trained employees to deal with situation like this where it has a positive outcome for both the employee and the customer.

This also has to do with how Tesco responds to a complaints, in store the customers can inform the customer service team with whatever is upsetting them and if that factor is controllable by the business they can respond to have satisfied customers, whereas the customer can also use the online services where they can send complaint directly to the manager so (s)he knows what made their shopping trip unpleasant and if that factor is also controllable the manager will try to respond to that as the best of their ability. Customer expectations- customers have expectation on what they expect the business to have and the business needs to meet these expectations, this is important because if they do not meet these expectations they may lose potential customers which is bad. This includes their choice of food and quality of the food product such as it is important to meet the quality standard of how the food in a fast food shop should be presented, such as not being burnt, the cheese is on the Centre of the burger not dripping of on one side, and how much salad and sauce should be added etc.

Even the price sold to be considered when meeting customers expectation because the customers would want a realistic price range for whatever product they are purchasing plus the rang of product that are available like customers expect stores like Tesco to sell known and own branded products so that they have a variety of product. Adding value to customer experience- this includes recipe cards, free magazines, in store support for elderly/disabled, sampling and even loyalty cards, it is important to have in store support for the elderly and disabled because not only does it give a good reputation for the business but it also allows the business to have a larger customer base which what every business wants.

A lot of businesses have the wheel chair entrance for those people who require a wheel chair in most of the business and businesses like supermarket like Tesco and Morrison’s have wide aisle so that there is an easy access for people in wheel chairs to get around the store, the store does also have support for the elderly where the businesses have trained staff to take in consideration of all customers including the elderly who may find it difficult to do their shopping this is why businesses train their staff to help the elderly. A lot of businesses also have loyalty cards such as Tesco have their club card where customers are rewarded for every shopping trip that they make, which allows them to build up points to spend on in store products, this is a good method to retain customers.

Stock control and product ranging- stock control is the regulation of the stock in trade of a company so that all the merchandise are available without delay but without tying up unnecessarily large sums of money, so the stock is just products that are stored for a business for production or sales, it is important for businesses to control the stock that they have because it will allow them to know if they can meet demand and it will also allow them to know when to buy new stock when the current stock is almost finish, but a lot of business sell a lot of fresh product that will go bad after a couple of days so the importance of a business to regulate its stores is so that they do not end up wasting any product such as stacking up their stock and it gets left in the warehouse where it runs out of date before they are able to use it.

Product range is different variation of the same product this is commonly done with supermarket where they have lots of different version of the same product such as different types and brand of bread that they sell this allow the business to target different segments of the market.

Ordering service

The ordering service is where the business must guarantee that there customer’s get the products they ordered alongside the county they are in and also then receive the products in the correct time.

The ordering service is an additional method that business like Asda uses so that they can use it as a retaining method, the ordering service can be accessed by the stores website or even in store if the products are too big. Ordering service is an additional feature that allows customers to have an easier shopping visit where they can do their shopping at home.

Right product at the right time

This is that the business has a specific product at the correct time, for instance selling the correct specialized items at the correct seasonal time, this also includes any celebration, festivals and events, so sell products relating to them events so that they attract customers with these products, this can include Christmas decorations, birthday cakes, Easter eggs, deck chairs for summer etc.

A lot of the big business like Tesco and Asda use this method to sell their products, this can also be used as a method to retain customer and also meet customers’ needs and expectations. Technology and data use to tailor product range to customer profiles – customer relationship management system is a technique used by a specific business to retain customers, the system is where they look at the customers shopping history pattern, where they look at the specific products that customers buy and even the type of products they buy so they know what promotional scheme they can send to the customer, it can be used as a profile prospecting where they can understand the segments needs so they can provide with products that are suitable needs.

The system creates a data base of the customer so when the business needs to send promotional schemes they know what desired promotion the customers are looking for. CRMS is a method used by many businesses including Tesco where they use different schemes to not attract new customers but to retain existing customers; Tesco uses the club card system where they get points for each shopping visit they have, with enough points that they have built up both the business and customer have a mutual benefits, the customers get discounts on selected products and even vouchers that they can use in store and even usable by outside business such as a 2. 50 worth of club card may be worth 10 of pizza at pizza express.

The benefit for the business is where they get information (data) that they are looking for, this is a benefits for the business because they get inside information such as customer shopping history so they can pick out a pattern and look at what type of product they buy the most so they can give out promotional schemes or know what type of products that customers want to buy, also market research is time consuming and cost money plus with this method you can get data instantly. The function of customer relationship management system is where they get to have direct communication with their customers so that they can get information of their customers, the information they get may seem pointless such as where they live, who else in their family visits their store, how many children they have etc. but it allows to build up an image of the customer, this allows the business to send information such as promotional schemes to them customers that are relevant to them.

The business can send and retrieve information from their customers from direct information from phone call, mail such as discount voucher to see which one the customer use, and even from their club card because a lot of the retention schemes are built around the club card because they can get a lot of information from it such as where they live and the last time they bought a certain product. So Tesco use this to the best of their abilities because they do have their club card which makes Tesco stand out from other business but they also have the club card points where at the end of the month they can either spend their pints on in store products or they can save them up for something big.

Customer relationship management system can be used in the reviewing and planning of marketing activities, in Tesco they use the club card system a lot to see what products commonly buy and see what product they buy every other week so they can identify the reason before this, such as that products may be too expensive to buy on a daily basis, by identifying the situation such as the product being expensive they can identify what the customers want, they also look at what promotional schemes that customers respond to so they can plan anew marketing activity, for instance if customers do not respond to the 1/3 of product voucher the business may need to send of certain products and see if the customers will respond to the voucher, with the information they retrieve they can identify what promotional schemes customers are looking for. Tesco can also use information from customers to firstly review what customers shopping visit has changed to such as where customers have down branded because they do not have the budget to buy expensive products, so Tesco will create a future plan to lower a lot of necessary products that are relevant to the customers. But this has a lot to do with if the country is in a recession or there is an economy boost.

Also the benefits of having inside information is that they can share intelligent such as if the Tesco has identified the customer buys their contacts from this business but do not buy their contact fluid they can them inform that department that specialize in selling contacts to contact that customer sending promotional schemes on contact fluids because in the future they may buy it. Conclusion- the importance of relationship marketing is that it allows inside information of what product and promotional schemes that customers want to see, because if the business is losing customers to competitors they can research why and use that information to their benefits, the potential benefits of successful information retrieved is that they will get a loyal customer out of it but if quality is poorly perceived they may end up annoying customers with updates like vouchers they do not want which can lead to a bad review and also other customers may not want to go to their store.

Task 5 – newsletter

In this task I will be outlining the importance of how seasonal changes affect specialist diets; more specifically I will be looking at how festival and celebration are affected by specialist diets like religious groups and health issues. The following information just provides an inside on why it is important for the food industry to take in consideration the specialist diet of the different customers. The festival and celebrations that I will be looking at is birthdays because everybody celebrate birthdays once a year, and birthdays are celebrated in multiple cultures in their own way but they all have one thing in common everybody eats a lot of food on their birthday, but birthday are not celebrated for living people but for many religions celebrate birthdays for their founders, like Buddha’s birthday and Christmas.

In the Jewish culture when a boy hits 13 they have a bar mitzvah to represent their transition to become obligated to the commandments, birthday are not really celebrated in Jewish culture but are actually seen as a day of gathering for family and friend make a positive resolution for the individual for that year, but with the Jewish community adapting to modern celebration there has been an acceptance for having a celebration on an individual’s birthday, the most common birthday tradition is to get a cake for the individual on their birthday, this may seem like a really simple task but in the Jewish community they can only eat kosher food, so the ingredients required for the cake must be kosher, fit to use which fall under the halakha(the Jewish law), some may assume that this only include the way an animal is slaughtered but it also the animal products that can be used, this all falls under the law of kashrut (Jewish dietary law), kosher rulings effect on what ingredients can be used which can include eggs, where if there is blood in the yolk it’s not permitted to be used or if the embryo the black little dot is visible it must be removed before use, but in modern times they have introduced the battery egg where it cannot produce a possible embryo so the egg is classed as kosher.

The majority of the food industry in the UK and possibly the rest of the world may and probably do use non-kosher egg and do not see the problem of this, but what they do not see is that they are excluding a potential targeted audience which can increase the customer base of the business, if the different businesses look at the statistics they will find out what they are missing, currently the three fasting growing religions in the world is Christianity, Islam and Judaism, and currently in the UK

57% of the people are Jewish but what businesses do not understand is that 80% of sales come from loyal customer and repeat customers spend 33% more than new customer, even though the Jewish population seems small if they can target this segment of the market the businesses can increase sale figures, and have a dependent income source. The startup cost may seem large, but it will be worth the risk because if the business does target a potential audience they will not need to worry about anything else, for instance a new bakery can run a strictly kosher business in Jewish community if they can attract the potential customers they have nothing else to worry about because there is a 107% chance of getting referrals from a happy customer then an upset one, so if the business does have a great start they have nothing else to worry about. Also an advantage is that non-Jews could also eat the food too, because it still tastes the same.

The effects of a business selling kosher food is not only that they increase sale and have a slightly larger customer base but they can also get a better reputation with their customers, if the business starts to sell kosher products the business can be seen as a diverse business where they try to helpful to all of their potential customers, business like Tesco will also get a positive reputation because one of their values is to “treat other like how they want to be treated” ad they have said “not on tries harder for their customers then we do”, if Tesco do try to target this segment of the market they will have the opportunity to be seen as a business that goes above and beyond for their customers. Conclusion- the food industry sells different kinds of food, some are nice some are not, other foods comes in packaging where other don’t because they are fresh food that are sold freshly, the food industry is the largest industry in the world where it is the only industry that has a target audience of the entire local and foreign consumers, but there is many businesses in this industry which has increased competition in the market, where business try to attract and retain customers in order to stay on top of the game.

In recent years relating it to businesses, radical changes have occurred on online shopping where it has become a lot more acceptable, where many business including Tesco has released a click and collect service so that they can meet these changes to “stay on top of their game”. Radical changes have affected Tesco because they have adapted to meet developments by installing self-scan checkouts to reduce queues in stores, this new type of technology that supermarkets have invested in to keep their customers happy, by reducing the time standing in queues.

Tesco plc. also has a website for customers to order their shopping and either have it delivered to their home or can pick it up from the store. This indicates that Tesco are arranging services to work around their customers as they are their main audience and target people/customers. Tesco have benefited from their online services because customers are happy that Tesco are working around their times by providing time slots where they can fit their customers preferred time of pick up or delivery.

In 2012 Tesco were close to 50% of internet food sales. This has improved their reputation and brought more customers and increased sales in recent years. Another radical change is Tesco have a ‘’Scan-As-You-Shop’’ Technology. Tesco has said it will add another 100 stores by the end of 2014 also it is also exploring the use of mobile phones to scan and pay for shopping. This makes the customers happy and encourages Tesco’s customers to praise their business and encourage them to return. How Continuing changes in the consumer market impacted Tesco

Continuing changes are about the changes that are continually happening this can be influenced by fashions, trends and awareness. A continuing change refers to a trend that is customers want value for money, because of the tight budgets that they have so they wish to save money wish is now sociable acceptable, businesses do this so that their shopping experience is more pleasant online or in store. For many years Tesco have worked hard to reduce emissions in the fight against climate change.

‘We are committed to meeting our 2020 targets to reduce carbon emissions in our direct operations, in the products we sell and to help our customers to do the same’’. They started measuring their carbon footprint back in 2006 and they found that the vast majority of their direct emissions come from electricity usage, distribution fuels and refrigerant gases. Tesco have a plan called ‘F Plan’ this is their strategy for reducing emissions. 2014 they have made a 7. 8% reduction and their plan for 2020 is a reduction target of 25%.

In Thailand, Tesco are opening a new distribution centre so they can transport products to their customers more efficiently. They have a new Khon Kaen regional distribution centre this will allow them to reduce the distance driven by their trucks by 400,000 kilometres each week. How Customer expectations and demand in the consumer market impacted Tesco Consumer expectation generally refers to the needs and wants. Consumers may also have high expectations for new products that have been given a lot of exposure.

Consumers can be broken down into three groups: those who are expected to buy, those who are not expected to buy, and those who are undecided about making a purchase. What customers think and feel about a company and/or its products is a key aspect of business success also. Customer expectations and demand must be met if a business will want their customers to return and purchase from their business again. They must guarantee their demands and expectations are met in order to gain customer loyalty and enhance relationship with their consumers.

Tesco has reduced the prices of more than 3,000 products that customers need to buy every day – such as milk, bread, fruit and vegetables. Customers are turning away from expensive brands to more affordable own label ranges. Tesco brand products are the most popular in the country and are now even better quality. Over the past 18 months Tesco has improved over 1000 products, with many more to come. Tesco will focus most of the investment in the Big Price Drop on reducing prices on over 1000 Tesco brand products

With Aldi and Lidl gaining more shoppers, – Tesco’s had no option but to lower prices if they didn’t they would of lost half their customers that will start shop at Aldi and Lidl Tesco had recorded the first lost in 2 decades in 2012, their superstores, costs, store environment have additionally been examined, a survey done which shows that Tesco were the most awful market in the UK, because there customers were not feeling that they are getting items for the right price, an article Found Tesco customers felt that the store environment was not inviting. what has been expressed by the daily papers Tesco PLC have used over ?

1 billion pound in making the store additionally inviting and preparing more staff so customers don’t need to look for workers. The way Tesco PLC urges customers to focus on the business is through trust, yet because of the horse meat scandal it prompt the purchasers not having enough confidence in the business which prompt the business not making enough income in that quarter of 2013. The impact of customer expectation and demand has proven to be good for Tesco because they have worked on the idea of responding to the customers demand and reaching the expectations they have for the company.

This is good because it has pushed Tesco in terms of investing in refurbishment for customers redesigning their store environment they require as well as providing them a better shopping environment. Through this Tesco have shown that they can respond to customer demands and that they keep in mind the expectation people have from them. This means that Tesco have benefited from customer expectation and demands as they have been able to build loyalty with their customers which every business aims to do.

How changing social and working patterns in the consumer market impacted Tesco Changes in social and environment include changes like working patterns that have occurred for instance more people are concerned about their health where they want to live healthier life style, Supermarkets for example Tesco’s can find information about what information they need through the club card system, where they pick up new trend that are occurring in society and there is now a variety of different food ranges depending on how different people live their lives.

Also some stores now remain open for 24 hours to work around every working people’s hours. Tesco are obtaining information about their customers from their club card service will help them to better, this is because they can find out more about their customers and meet their needs to improve their performance. Tesco will monitor the shopping habits of customers who want to slim and advise them on how to eat more healthily. The system will work by using Club card data to check whether shoppers are loading up on doughnuts, chocolate and pizzas.

The supermarket giant said it wanted to play its part in battling the growing obesity epidemic. Tesco has already met one of its targets by reducing the number of calories sold in its own-brand soft drinks last year by one billion. Tesco has increased the number of non-food items offered for sale. The type of goods and services demanded by consumers is mostly influenced by their beliefs and attitudes which, in turn, are influenced by social conditioning.

Because customers are becoming more aware of health issues, due to which their approach towards foods is changing constantly, Tesco is adapting to these changes by accommodating the demand for organic products. Working patterns have impacted on Tesco as they open some of their small, convenient stores 24 hours as well as their petrol stations. This is to fit everyone’s type of life. This is because some people work days or night and do their shopping through the day.

This indicates work patterns have impacted Tesco as they have make changes to their product line as well as trading hours for some stores. This indicates that the change has proven to be a good impact on Tesco; because by Tesco introducing a new healthy product line they have attracted those with a healthy lifestyle and those customers now come to shop at Tesco regularly because they find all their products they require there with the number of calories that are within the product.

Tesco having new convenient store hours has shown that they can adapt to changing working patterns and that they are adapting for their customers convenience as they are the ones who make the business successful. This shows that Tesco are ready to employ employees who are ready to work all night to provide the same service for their customers for 24 hours. Through this Tesco sales and customer foot fall has increased rapidly as they have met the majority of peoples convenience. How affluence in the consumer market impacted Tesco Affluence is how much money a person earns in a household.

This is central to the food industry because the higher the persons income they higher quality they will purchase and vice versa. People can have high levels of affluence and low levels of affluence for example people have high affluence on new ranges like Tesco finest. Depending on the income people get in their household, can influence the food industry in terms of them providing their customers with products that they are able to afford for those who have a low income. However people who have high affluence are people who have a high income of money within the household.

In 2012 Tesco has begun talks with suppliers aimed at launching price promotions in less well-off areas where it faces competition from the likes of Aldi and Lidl. “It has a list of 100 stores where it is going to launch special deals at discount prices,” said one Tesco food supplier involved in the talks. Tesco’s has value range products means that they have met customer expectation and have adapted to the changes in the economy. This is because their sales have decreased slightly in spite of this due to what’s going on in the economy.

This is because they are providing ranges of food that match everyone’s household/lifestyles income, which means that they do not make their customers feel intimated with those who have less money to buy the end products when they can’t buy them. This development has helped Tesco meet all their customers’ requirements in terms of finance and has helped them increase the number of customer s they have through the door every day. If they hadn’t introduced the food ranges then their sales may have fallen even further. How increases mobility in the consumer market impacted Tesco

Increased mobility is about the increase in moving around. This has impacted on Tesco because as there a rise of customers visiting the stores many are travelling around from quite far. This indicates that Tesco have been impacted on that when buying a new piece of land for their store ensuring that their parking space is very big because people have difficulty parking when the car park is full. Many people are also using different types of transport such as buses and trams. Therefore Tesco aims to build their new stores where there is a bus stop which is just outside for their customers which is same for trams in some cities.

This is beneficial for Tesco as many customers due to the variety of transports to the stores. This indicates it’s good for Tesco because it attracts more and more customers which increase their sales and so making changes to adapt to the development in this case can be good or bad for them. Also due to the increase in mobility there has been an increase in out of town stores and Tesco introduced the click and collect service. This means at the same time there has been an increase in local stores due to the population density and convenience stores.

 BIOMAb was an anticancer drug that was undergoing research by Biocon owned by Dr Kiran Mazumdar-Shaw in 2006. However, Mazumdar-Shaw was impressed with the degree of successfulness showed by the drug that she found that a decision had to be made immediately. The Drug Controller General of India – DCGI (similar to the FDA) was likely to give a go-ahead for the drug. The drug had completed Phase 2 trials, but if the DCGI gave its approval then phase 3 trials would likely to get affected. Hence, experts from the company felt that even if the drug got its nod, phase 3 trials to determine safety and efficacy should continue.

This was to gather strong evidence for the drug. Besides, the company had not prepared a marketing strategy for the drug (the pricing, sales, marketing personnel, channels, etc) was not yet decided. Biocon was initially an enzyme manufacturing company, initiated in 1978, but slowly moved into other areas. It entered biopharmaceuticals in 1996. This was because the global enzyme market was about $ 2 billion and even a 10 to 15% share of the market would not be sufficient for the company to take on growth. The global biopharmaceutical market is more than $10 billion and is likely to grow to $80 billion by 2016.

The company had two problems when moving from one field to another: It had to move from technology required for enzyme manufacturing to proteins. The pharmaceutical market is highly regulated, and hence the company decided to launch generic versions of the drug to help understand the market. Biocon got approval to sell Levostatin in 2001 and sold the same through GenPharm. Within a few years, Biocon got a 15 to 20 % share of the statin market in the US. When Biocon wanted to enter the insulin market, it felt it had a few advantages over the others.

Indians represented 1/5th of the world diabetic population and Biocon had fermentation capabilities such that it could manufacture huge amounts of the insulin. It was successful at these endeavors and soon took on proprietary drugs especially oral insulin. It crossed the $1 billion mark in 2004. Identification of major problems & Opportunities BIOMAb is an anticancer drug used to treat head and neck cancers. The company had accidentally taken up the drug in 2002, when Mazumdar-Shaw decided to visit CIMAB during her spare time. This organization had been working with several anticancer drugs.

It had developed monoclonal antibodies (Mabs) that could attack the cancer cells, block specific cell receptors and prevent further growth of the tumor. CIMAB had conducted extensive research on BIOMAb through phase 1 trials, and Mazumdar-Shaw realized that there was a tremendous opportunity. The company had an opportunity to take the drug further through research, market the drug, and further launch it. However, there were also several problems associated with the same. This was concerning a new technology for mammalian cells and a company making fermentation enzymes; it was really a grey area.

The company had no idea of the financial investments or the technology involved. Biocon had no experience in selling or marketing a proprietary anticancer drug. Besides, it did not have any idea of the patients, physicians, specialists, etc. Approval was required through the regulatory bodies and clinical trials were not extensively conducted in India. Experts estimated that more than $ 25 million were required through investments, which included 25% for costing, 15% R&D, 25% marketing, and the remaining as profits.

In 2005, the Indian government agreed to implement the TRIPS agreement, which saw major changes in the Indian patent laws. Many companies were not happy with the Indian patent laws, as their IP rights were not adequately protected. Biocon idea was to help a research institute take their products through various phases of clinical trials. It wanted to help the company commercialize their drugs and market the drug in various parts of the world including India. This was a unique model that demonstrated great opportunities worldwide.

Biocon was able to obtain a license from CancerVax in 2004 to market three cancer drugs developed by CIMAB in various parts of the world. It saw tremendous scope for BIOMAb in India, and decided to conduct trials for head and neck cancers, as the prevalence was high. At the time when BIOMAb was launched into India, about 95% of the cancer patients had to buy their own healthcare and only a small percentage actually could afford BIOMAb. However, a positive side was that the Indian economy was growing at 9% per year & the Indian population at 1.

4%, and hence more and more people could slowly afford the drug. About 10% of the cancer patients were actually the customers to receive the drug. Biocon was also receiving tremendous competition from Erbitux, which was originally an anticancer drug meant for colorectal cancers, but considering its huge potential, Merck decided to test it out for head and neck cancers. Merck had got the approval for using the drug in head and neck cancers from the DGCI in 2006. BIOMAb did had not have phase-3 data (unlike Erbitux).

However, BIOMAb had shown a 100% success rate and there were lesser side-effects such as skin rash associated with BIOMAb. The alternative marketing courses of action The alternative course of action selected by Biocon was interesting and noteworthy. Biocon strategy seemed to be very strong – to help research organization to go ahead with trials, ensure commercialization of the products, along with sharing of the IPR. As the drug went from phase 1 to phase 3, the number of subjects were increased.

Phase 4 trials included researching the drug after it was marketed to obtain data about the side-effects, efficacy and long-term use. Since, it was a new molecule, several experts in the field of cancer were skeptical about giving the drug to patients. However, Biocon tied up with premier cancer institutes in India such as Kidwai Institute of Oncology and used the drug for phase 2 trials. Clinigene aided in researching the drug. The drug was combined with other treatment modalities and it was found that when administered with radiotherapy-chemotherapy combination it could 100% get rid of the cancer.

However, BIOMAb had to compete with Erbitux which was internationally reputed. Biocon also considered whether BIOMAb could be utilized for treating colorectal cancers and hence directly compete with Erbitux. If BIOMAb was launched after phase-2 trials, then Erbitux may have been preferred as it had completed phase 3 trials. There was also the idea of launching BIOMAb with other generic drugs simultaneously which could help the users to use the generic version and get accomplished with the drug.

The company had problems deciding to price the drug. If it was set below the price of Erbitux, then it would lose its credibility and in case it was higher, it would not be affordable for the Indian public. Hence, it chose a two-tier pricing system for India so that certain people from the lower socioeconomic groups could even afford the drug and use it. There were two supply chains for BIOMAb, one through the traditional manufacturer-wholesaler-pharmacy and the other a doctor/hospital-pharmacy relationship.

Biocon provided much more services than merely drug supply to the patient, considering the fact that cancer was a fatal disorder and the patient and family needed support (such as web site information, consumer helpline, direct consumer advertising, education and awareness through sales representatives, etc). The medical representatives were spending a time educating the patients and their families about the drug. The company used its resources for various useful purposes.

References

1. Gupta, S. and Narayan Das (2008). “Biocon: Launching a New Cancer Drug in India. ” Harvard Business School.