Retail

Mental Model: As mentioned by John Bradley Jackson, “internal selling can be the hardest sale”. A salesperson might feel that convincing the customers and winning the deal is the end to it, but that is not true. Convincing the people within the organization and specially the higher management is a tougher job to do. There is resistance and inflexibility to change. The internal sales cycle is almost similar to the process of selling to the end customers. A salesperson has to understand the process, his role in it and then communicate everything to everyone (From John Bradley Jackson).

After studying the course “Internal Selling”, I have understood the importance of selling within the organization. Like a ray of white light consists of all the colors, behind any decision in a company, there are different persons involved. These people have different ideologies, mental models, constraints and resistances. To be a successful internal seller, one has to accept this fact and be adaptable to apply different approaches to convince these people with the help of three types of selling skills: strategic, tactical and self-management. Thus he will be able to network and effectively implement any idea or plan internally.

Executive Summary: This report talks about the Super-Ware case and tries to analyze how different internal selling concepts can be used in such a scenario in real life. There are two challenges here. The first one is to win over the customer Australian Home and the second one is to convince the people within the organization to agree to the demands of Australian Home. SPIN selling techniques can be used to convince Australian Home. For the second part, six stage internal sell process is explained. For each of the stages, relevant theories and concepts have been used.

The final goal is to convince both the companies to strike a deal so that a long term good business relationship can be started. Putting Theory into Practice: I will consider the “Super Ware” case and try to analyze it in the lights of the theories learnt in the course “Internal Selling”. First, I will describe the situation in brief. Then the two parts will be discussed separately. The first part, convincing the customer, Australian Home will have discussion on how SPIN selling technique can be used here. The second part, convincing the company people, will be dealt with the six stage internal sell process.

Situational Analysis: Super-Ware is a cookware company. It designs products to simplify people’s lives. For more than 100 years, they are helping people to save money and time by keeping their food fresh for longer. Super-Ware offers a wide range of products for storing food, food preparation, cookware, storage and serving items. They have designed a new technology cookware. This is called Snap-Shut which has the patented Easy-Find technology. The first challenge of the sales representative is to win the deal from the most shopped general merchandise retailer of Australia, Australian Home.

Then the second challenge is to convince the departments within the organization to agree to the needs of Australian Home. 1. Convincing the End Customer: Australian Home 1. 1 SPIN selling technique: First, I will try to apply the SPIN selling technique as proposed by Rackham, 1987 to be able to win over the customer, Australian Home. •Situation: Australian Home is one of the biggest retailers of Australia. It is part of Australian Home Corporation, Limited which operates in retail, financial services and petroleum. More than 25,000 Australians work across the company.

It has 254 stores in a wide range of communities nationwide. Australian Home stores offer a unique mix of products and services through the leadership of three specialty stores under one roof- Automotive, Sports and Leisure and Home Products. The product in question, Snap-Shut is currently not listed in Australian Home but other products of Super-Ware are sold in Australian Home as well as other competitive products like Lite-Box and Snap-Tight. Snap-Shut is sold in three retailer stores in Australia currently: All-Mart, Wellworths and Dollarland.

The objective of the salesperson is to secure full listing of the Snap-Shut product line before the key summer picnic season. It is known that the future relationship with Australian Home is dependent on successfully getting this deal. •Problem: Consumers cannot find the lids of their containers and the Easy-Find technology of Super-Ware solves this problem. But there are some issues. Super-Ware does not accept returns of products and there is no guarantee that the products will sell as it is a new innovative range of cookware. The shipping policy of Super-Ware is FOB (freight on board) to the retailer.

This means Super-Ware’s responsibility ends once the products are on board and the retailer has to bear the responsibility from then onwards. To add to these, Australian Home wants the products to be delivered in boxes of 20 instead of the Super-Ware convention of 10. They also want the boxes to have red transparent lids and not blue. Moreover, they demand to sell below the MSRP (manufacturer’s suggested retail price) by at least 2 cents for each if the items. They do not want the FOB policy for shipping and want the products to be delivered directly to their Melbourne depot. Implication: Over 70% of consumers are routinely unable to find the lid that matches their containers and another 52% loose the lid completely. The Snap-Shut products solve two problems, leakage and easy organization. They have unique locking tabs for secure storage and the lid snap to the base so that it cannot get lost. The lids are transparent which means whatever is stored within the boxes can be seen easily. It will help the customers to find what they want in a time efficient manner. This Easy-Find technology is patented by Super-Ware. So these boxes will attract more customers than competitors.

This will mean more business for Australian Home. The competitors of Australian Home: All-Mart, Wellworths and Dollarland currently sell Snap-Shut products. So not listing this range will result in competitive disadvantage for Australian Home. Moreover, after the Christmas season, customers will have many leftover foods and Summer being a picnic season, they will need more food storage boxes. These customers will be more than happy to buy the unique Snap-Shut products. These are some of the main reasons why Australian Home should store this new product range. Need-Payoff: Australian Home is convinced about the innovative Snap-Shut products. But they have raised some demands to be fulfilled before placing the order. Getting this deal is very important for Super-Ware. This will ensure start of a good professional relationship with Australian Home which can be turned into a long term one. Australian Home is the biggest player in Australia and having a good relation with them will help Super-Ware to gain more profits. If the demands of Australian Home are fulfilled and they are given guarantee of sales, they will order the products.

This will mean gaining their trust and future orders. To make it a success, the sales representative has to use his selling skills to convince the people within different departments in the organization to accept the demands of Australian Home. 2. Convincing the Internal People of the Company: Super-Ware I will use the six-stage Internal Sell Process as proposed by Friesen, M. E. , 1998 to describe how the people within the organization, Super-Ware can be convinced to agree to the demands of Australian Home so that the deal comes to a successful end.

The sales representative has to use the three selling skills of Strategic, Tactical and Self-management to do this task. 2. 1 Identify the Problem: There are four demands of Australian Home which is related to four departments. •The Marketing/Brand team has to be convinced that supplying red lids will be beneficial and cost effective •The Production team has to be convinced that changing the pack box quantities from 12 to 20 is viable •The Sales, Finance and Marketing teams are to be convinced that selling 2 cents below the MSRP will benefit the company •The Supply Chain team should agree to ship the products to the Melbourne depot 2. Generate Ideas: People are different. They have different mental models. These models influence how they observe and understand the world and finally how they take actions and behave. They have different constraints and resistances. To convince these people, one has to accept that they are different and try to think in the same way as they do. Different approaches are needed to accomplish this. One has to be ready to apply them and be effective at gathering information to successfully apply them (Spiro, & Weitz, 1990). This is called Adaptive Selling.

As explained by John Bradley Jackson, “Internal selling can be the hardest sell”, one need to explain the unique attributes of the new customer agreement and don’t expect people to seek out the details about the new agreement. The people within the organization should be specifically communicated about the importance of the deal. They should be involved to generate ideas about how to meet the demands. The four departments can be given the following four reasoning: •Marketing: As Christmas is coming and red is a popular colour in Australia, changing the lid colour from blue to red might become more beneficial for the company.

The department people might argue that changing the colour of the lid will confuse the end customers. The end customers can easily identify the colour blue with the Super-Ware brand name. This is part of their brand recall. And doing something which may affect the brand loyalty is a very risky decision. But the counter argument here can be that Australian Home and Super-Ware will engage in cooperative advertising which will feature both the companies. This adds will carry the message that Super-Ware has brought new Christmas special red lids exclusively for the Australian Home customers.

This will help to increase the brand loyalty rather than affecting it. Another argument from the department can be that there is no guarantee that customers will like these red colour lids and buy them. The reasoning here can be that Australian Home, being the biggest retailer has more knowledge about the customer preferences and they have the confidence that the red lids will attract more and more customers during this festive season. •Production: Australian Home wants the products to be delivered in pack of 20. The Production department will say that doing this will mean different packaging process for Australian Home.

Currently, the products are delivered in cases of 12 for all the other customers. Changing the packaging process only for one customer will result in more cost. Super-Ware might outsource the entire packaging process but that will mean losing the control over it. And if Super-Ware decides to standardize the process and package all products in cases of 20 for all customers, then the other customers might disagree to it. The sales representative can try to address these concerns by saying that packing in cases of 20 instead of 12 will save packaging material and thus save cost.

The other customers can be convinced to accept delivery in packs of 20 with the reasoning that this is an environment friendly manner of business. •Finance: The Finance and Sales teams are to be convinced that selling below the MSRP will be beneficial in long term. They might say that if Australian Home is sold at 2 cents below the MSRP, then the other customers will also demand the same. But the counter argument here can be that, Australian Home is one of the biggest retailer and they have the biggest customer base. Profit = quantity * price.

The reduction in price will result in more quantity being sold and thus more profit. If the other customers also demand same reduction in price, then Super-Ware can say that Australian Home gives the guarantee of more quantity, if they are also ready to buy more products and confident to sell them then they can also be given this privilege. Thus in long term, this will mean more Super-Ware products being sold and more profit for the company. •Supply Chain: Currently Super-Ware has the FOB shipping policy. The products are shipped from China and it is the responsibility of the buyer once the products are on board.

Australian Home is worried about this responsibility, they are not worried about the money i. e. they are ready to pay the shipping prices but do not want the hassle of customs and other responsibilities. The Supply Chain department may say that changing the policy will mean new agreements and more legal costs and moreover the other customers will also start demanding the same. But they can be convinced saying that Australian Home is a major key account and they mean more business for the company. And they are not concerned about the money. Super-Ware only has to arrange for the responsibilities.

All they have to do is to contact some outsourced expert shipping company for this. The expenses will be paid by Australian Home. If the other customers demand this, then they can be asked to enter into a long term business contract to avail this service. 2. 3 Network the Ideas: After talking to different departments, convincing them and asking them for suggestions, the ideas have to be communicated to all within the company to gain support from top management and others within the organization. The sales representative has to use his networking skills in this stage.

He has to understand that people have different ego states from which they can communicate. This is the transactional analysis proposed by E. Berne, 1986. There are three ego states: •Parent •Adult •Child And there are three types of transactions possible within people: •Reciprocal/Complementary •Crossed •Duplex/Covert While communicating with someone, one should try to analyse the ego state of that person and try to guess the type of transaction he is trying to do. Accordingly, the sales representative should behave with that person to perform a successful friendly communication.

Everyone in the organization should be convinced about the importance of the deal with Australian Home and the new ideas thought of to meet the demands of them. The sales representative can use his different powers, coercive, utility and honour, to influence and convince people. Influence is termed as the highest level of all human skills. The sales representative has to identify the most influential persons within the company or the opinion leaders. If these people are convinced, then they can motivate others to agree to the changes required to meet the demands of Australian Home.

The other people who should be targeted first are the people with knowledge, people who have good connections in the company and also who are trustworthy. These people might help to get support and cooperation from others. People do not like changes. They are resistant to changes. And the worst part is, if one process succeeds then people become more resistant to change it. Meeting the demands of Australian Home requires some serious changes in the company policy. So the sales representative has to be very careful to make sure everyone is convinced that these changes are good for the company in the long term.

Everyone should be involved in this process. People feel more obliged to agree to changes if they are engaged in and part of the process. The sales representative should keep in mind that there is the ladder of inference as proposed by Peter Senge. These are the stages that one goes through while inferring something. One decides what information to select from the pool of available information, and then he describes this information to himself and makes the interpretation. After that he evaluates it based on his views and opinions. Then finally he theorises it and concludes.

This is the complex procedure behind any inference. People do these steps in mind without knowing that he is doing these. So, it is important to know that everyone has their own different ladder of inference. To convince someone and sell some idea to him, the seller has to act in a friendly way so that the person infers the exact thing that the seller wants him to infer. The ideas generated by talking to the four departments should be networked within the company with these theories kept in mind to ensure effective communication and generating support. The sales epresentative has to use his powers and influence skills to successfully convince everyone in the company. He should use his four types of influence styles depending on the situation: •Involving: He should use this style with people who are friends and trustworthy. It should be used to build collaborations based on the same goals. They can form a team together and work towards motivating and convincing others in the company. •Inquiring: He should use this style of influence with people who have some other needs. He should talk to people and try to identify their objectives and goals.

Then he can try to convince them about his ideas and in turn he will help them to get success on their respective issues. •Leading: He should use this influence style to let everyone know the importance of this deal and the importance of Australian Home as a major long term key account customer. If the employees within the company are convinced about the importance of the issue then they will shed their resistance and come forward to make the deal a success. •Proposing: This style of influencing involves proposing various options and solutions with rationalizations.

It is a structured style. This style might be used with people within the four departments. The sales representative should try to get these people involved in the whole matter. He should ask for their suggestions and they should work together towards a win-win solution for both the companies. 2. 4 Close the Deal: This is the hardest of all the stages. Getting the commitment from the top management can be as hard as possible. They can be convinced still not committed. The sales representative might have to use different closing techniques depending on the situation and the persons involved.

While closing, the sales representative can use the concept of co-opetition, Brandenburger and barry, 1996. It is not necessary that one party has to be defeated for the win of the other party. It can be a win-win situation for both Australian Home and Super-Ware. The top management has to be convinced that. The solutions should be made in such a way so that they benefit both the companies. 2. 5 Implementation: This is the stage once commitment is gained from the top management. The ideas should be implemented. The sales representative should personally ensure that all the four departments can successfully implement all the olutions. He should be involved in the entire implementation process. He should also ask the Australian Home representatives for their feedbacks. He is the middle man between the two companies. He has the responsibility of maintaining the interests of both the companies and keeping both of them happy and thus helping to grow the inter-organizational relation. In this stage also he has to use his people skills to ensure that everything is going smooth. 2. 6 Sell the Results: This is the final stage of this six stage internal sell process.

The results of the deal, the final success story should be communicated to everyone. The sales figure of Australian Home, the growth in revenue and other financial figures should be communicated to everyone. He should also not forget to thank everyone and mention their contributions everywhere. This can be explained with the help of the Double Loop Learning concept as proposed by Argyris, 1976. Single loop learning is only problem solving and is a one way approach. This helps only in improving the system as it exists. But double loop learning is more than just solving the problems.

This involves questioning the underlying assumptions and beliefs behind the techniques in which we do something, goals and values. The final outcome is the result that we get. We should analyse this result and try to learn from it. This learning can help in building the underlying assumptions which explains why we do something. This will also help in the techniques, goals, values and strategies which explain what we do. The outcome of building a successful business relation with Australian Home should be considered as a learning experience for the company Super-Ware.

The results should be communicated to one and all within the company. This will help in internal sell process in future for other decisions in other situations. References: •John Bradley Jackson, “Internal Selling Can Be The Hardest Sale” •Rackham, 1987, SPIN Selling Technique •Spiro, & Weitz, 1990, Adaptive Selling •Jennifer McFarland, 2001, “The Inside Sales Job” •Friesen, M. E. , 1998, “The Internal Sell Process” •E. Berne, 1986, Transactional Analysis •Peter Senge, Ladder of Inference •Brandenburger and Barry, 1996, Co-opetition •Argyris, 1976, Double Loop Learning

Later there was limited choice for mostly products and companies didn’t have to put much efforts to sale their product. But today’s scenario is totally different. Consumers have choice because of availability of varieties and options. We can say today’s consumer is the king of market. So it is important to know his buying behavior and try to fulfill his demand. Company’s aim should be customer delight not costumer satisfaction. The purpose of this dissertation project is to know the marketing strategies which HOC Manifestoes Ltd. Sees to become the market leader in the field of Personal Computers and Different marketing strategies adopted by HOC to compete with others. HOC Manifestoes how much is fulfilling the customer needs and try to sale the maximum of personal computer This dissertation report making was really good learning period for me. I got opportunity to know the theoretical knowledge related to marketing strategies. This dissertation report is part of course of PAGE program, which is set by CACTI, and it is necessary for every student to under go for dissertation project.

This project report is also made for submission to Institute of Management Education, Sahib’s. Sustains including in this report are research methodology, analysis of activities, conclusion and bearing from this project Bibliography is also given in last to know from where information has been taken to complete this project. I hope this project will serve the purpose. IT HARDWARE INDUSTRY: AN INTRODUCTION The Indian IT industry is, undoubtedly, a shining Jewel in the country crown. The achievements of our IT companies have earned us the respect of the most developed nations of the world.

The skills, ingenuity, dedication and drive of our young IT professionals is acknowledged worldwide. Today, there will hardly be a company of any stature anywhere in the globe where Indian IT professionals are not making a stellar contribution. However, most of the growth in IT has been in the software services and support segment. I do believe that if we are going to continue our thrust and growth in the IT industry, it is imperative that we develop a robust hardware industry and emerge as an important destination for high end product development.

While software development has been the more visible face of our IT industry, we cannot deny the fact that ultimately it is ‘hardware’ that runs the ‘software’. While ‘hardware’ is of no use without software, the converse is also equally true. The development of a vibrant ‘hardware’ industry in India has been lagging behind on account of various factors. The underlying fact is simple. Unless companies are able to manufacture products that can compete with the world’s best in quality and unless they manufacture in volumes that make them cost efficient and globally competitive, they will not survive.

A major bottleneck in the development of the ‘hardware’ industry has been the lack of a strong local component industry. It is my humble suggestion that the government, both at national and state levels do everything in their power to promote such industries so that by the end of this decade, we can have a strong and world-class component industry. Sure, we have a long way to go to catch up with Taiwan or China or even Malaysia, but I believe with the right encouragement we can develop a strong ‘hardware’ industry. I must make a point here about the viability of ‘hardware’ as an industry in India.

It is a myth that the ‘hardware’ business is not profitable. This point of view has been largely perpetrated on account of the large number of players who made half hearted or weak attempts to enter this business. To be a success in the hardware business requires both vision and grit. I often give the example of my own company D-Link (India) which, starting out as a small manufacturer of modems has grown to become a RSI. Billion company with a product range that extends from modems to routers. But success has not come easy.

We have made massive investments in both plant and people and have spared no effort in getting the best of equipment and talent. More importantly, we have set up a strong R&D backbone to support our manufacturing. Which brings me to the next point: the importance of R&D? Technology in the IT space changes very rapidly. Technological obsolescence is not just a ‘click’- it has thrown strong companies out of business. In this scenario, the importance of R&D can hardly be overemphasized. It is vital that those who venture onto ‘hardware’ industry are seized of this fact.

Only through strong R&D can manufacturers ensure continuous product improvements and keep their offerings truly ‘state-of-the-art’. Over a period of time, with a strong R&D base, Indian companies can look forward to developing innovative products and own Intellectual Property Rights (par’s) on such products. I dream of the day, and I believe it’s not too far away, when technology for products developed by Indian companies would be licensed to global manufacturers as well as innovative products manufactured by Indian companies would be available worldwide.

The state of our hardware industry and R&D infrastructure is quite the same as that of the software industry a couple of decades ago. Visionaries like Unmannerly and Skim Preemie have shown that we have the potential to achieve global stature in a business. Extending our sights a little further, we have seen how a Armband or Dry. Redder have got recognition for Indian R&D in the Pharmacy industry. There is no reason, therefore, why we can’t develop a strong R base in the IT industry as well.

The development of a strong hardware industry base would also go a long way in increasing the IT penetration in our country, which is still very low. I do believe that we have all the elements to become a significant player in both IT hardware as well as R. As IT penetration increases, as organizations across the country network, as we build more robust IT backbones in various spheres of our activity, we will need more and more hardware. Rather than be totally dependent on imports, we need to have a thriving component and hardware industry backed by strong R.

Along with our strength in software services, it will provide another cornerstone towards India truly becoming a global IT superpower. India a Global IT Super Power The Indian computer hardware industry has growing at a rate of over 30 per cent annually for the past few years and this pace is expected to be maintained until 2005. As the first table above shows, domestic manufacture has been increasing, but so also have imports. The locally manufactured computers cater to low-end applications while the imported computers continue to facilitate CAD, CAM, CASE, multi-media, and other high-end applications.

Indian computer hardware and peripherals industry segments are dominated by U. S. Joint ventures and suppliers. IBM in collaboration with Tats, Hewlett Packard in association with HOC Limited, Digital Equipment Corporation with Hindsight Group, Silicon Graphics with Tats, Oust to mention four major Joint ventures) manufacture computer hardware for the domestic and export markets. Compact, Silicon Graphics, and Dell have opened offices to sell their computers in India. Sun Microsystems and Apple distribute their products through Wiper Information Technology Limited.

Most business firms in India have not computerized. Many of those who have, still use outdated products such as dot-matrix printers instead of laser and ink-Jet printers. As more and more international companies set up office in India, the demand for hardware will increase. The growing awareness of the case to shed fat in the public sector will call for more automated operations; this too will generate demand for computers. The prospects for both exports to, and investment in, this sector are excellent.

IT hardware manufacturing in India is a classic case of the chicken and egg syndrome. Should we wait for the market to grow to high volumes that Justify creating a manufacturing base in India, or should we Just kick-start manufacturing so that prices then come down and thereby create volumes? The debate has raged on long enough and no consensus seems to be emerging. Rather, things took a turn for the worse with recent years witnessing a perceptible decline in manufacturing activity.

Therefore, when a recent MATT study, conducted Jointly with Big Five firm Ernst & Young, concluded that the Indian hardware industry had the potential to reach a size of $62 billion by 2010, it not only raised many an eyebrow, but derisive laughter from skeptics. Sample some salient conclusions of the study which paint a rosy future for India Hardware Inc: By 2010, the Indian hardware industry has the potential to grow to twelve times its existing market size, with the domestic market counting for $37 billion and exports accounting for another $37 billion.

The study has identified major export opportunities in the areas of innovative new devices, contract manufacturing and design services. The study says that component exports offers an opportunity worth $5 billion, while that of design and related services in embedded systems and wireless telecommunication services can bring in another $7 billion by 2010. Further, ambitious projections have been made in the area of contract manufacturing, which represents a $11 billion opportunity if India succeeds in capturing a share of only 2. Percent of the global pie by 2010. Though the rosy projections look good on paper, is this growth really possible?

Skeptics deride the study as an attempt by the hardware industry to copy its software counterpart, which has been tom-timing Mascot and Muckiness’s projection of $87 billion in software revenues by 2008. MATT officials are however quite upbeat. Says Avian Deckhands, president of MATT, “There are four key steps which we need to take to make India a manufacturing-friendly country. Firstly, market India as a hardware destination and build a brand akin to software. Making India manufacturing-friendly through improvements in infrastructure and logistics should follow this.

We should also emphasis on design and innovation through the development of Indian solutions for Indian needs. All these initiatives need to be backed up by the government with adequate funds. ” The bright side For a country whose economy is so heavily dependent on agriculture, a vibrant hardware industry has the potential to generate three million Jobs, especially for Indians who come from economically underprivileged sections, who aren’t very highly educated. So, in the words of Deckhands, the hardware industry can be some sort of a panacea for Indian’s unemployment problem.

Also, with the size of the contract manufacturing industry expected to be over $500 billion by the year 2010, Indian firms could grab a significant chunk of the pie in a manner pretty similar to Indian’s emergence as a key player in the global BOP stakes. And, with a potentially huge market in embedded systems emerging, Indian firms with the right mix of hardware and software can be big players here. For the record, of all the high-end processors produced in the world, only 6 percent are used in PC’s and the remaining 94 percent are used in entertainment electronics, non-PC devices, communication products and embedded electronics.

The hardware revolution is also essential for the continued high growth of the software industry. As Vine Meta, director of MATT, puts it: “India can lose out on the software advantage it has already built up, and the future potential, if it does not concentrate on the hardware front. For example, the estimated domestic hardware requirement by 2008 to meet the software target of $87 billion is $160 million. ” And now the problems But before India Inc. Can go into ballistic mode on the hardware front, there are lots of serious issues that need to be addressed.

Issues like lack of local availability of input raw material, ever changing government policies, inconsistent sales tax structures in different states, high interest rates, customs duties on capital goods, poor infrastructure, inordinately long and variable transit times all add to uncertainty, delays and increased costs. Something that hardware manufacturers dread. Explains Mango Church, country manager-manufacturing, IBM India, “Everyone in India cribs about duty, but even China has a similar duty structure.

The main reason why companies prefer to locate their manufacturing operations in China is because customs processing in China is much faster. Here, even after a manufacturer’s raw material arrives at a port it might take another month or so before the goods reach his factory. In the fast changing world of technology, that’s virtually suicidal for companies into hardware manufacturing. Besides, labor laws in China are also very flexible. In India, laments Raja Sara, chairman and managing director of Zenith Computers, there are a lot of restrictions for the hardware industry. The software industry has grown in leaps and bounds simply because there have been no restrictions. On the other hand, even if I do manufacture in an SEE in India, I Anton sell my products in the domestic market. The government says everything should be exported. But it should realism that the industry will always flock to an area where there are least restrictions. ” The government can also take a cue from the fact that if the industry is allowed to grow to three times the size it currently is today, it can earn more tax from its revenues.

The manufacturing industry in India also suffers from a lack of proper environmental standards. With environmental concerns mainly ignored or casually overlooked by Indian corporate, Macs desist from setting p manufacturing bases here since there is no compliance with ISO 14000 standards, which deal with environmental issues. On the design front too, there are lots of opportunities left to be explored. Design exports are a $7 billion opportunity in areas like embedded systems and wireless telecommunications.

While Indian firms do some work on hardware design exports, many unfortunately show this as software exports to avoid tax. Fact is, some experts say a robust design sector could play a huge role in bringing down PC prices too a significant reason why PC penetration remains low in India. For example, on a CPU that costs $150, the material cost is not even $4. Adds Deckhands, “If we can get a design, like say a PI, made either by ourselves or if we can get the government to buy out a design and start manufacturing here, this would bring costs down substantially in PC’s. The silver lining The Indian hardware industry could learn a thing or two from the Taiwanese hardware industry, where companies started off as component assemblers some years ago. Today, the same firms are world leaders, and in fact outsource their manufacturing designs to other countries. A majority of Taiwanese firms are now original manufacturers of chippies. Another instance that could inspire companies to set up local manufacturing bases is the example of D-Link. D-Link is one of the very few hardware companies in India that does local manufacturing.

Recently, the company tied up with Taiwan-based Gigabyte Technology to manufacture and market motherboards locally. D-Link will manufacture approximately 30,000 motherboards per month. Besides giving D-link a key advantage in terms of technology, it also means utilization of D-Links manufacturing facilities. The cost savings per motherboard when manufactured here works out to be approximately $5. Hence, if illume are huge, it does makes sense to outsource contract manufacturing to India.

And for skeptics who doubt the quality of Indian products, Ram Augural, managing director, Wiper peripherals has a ready answer, “Doubting Thomas who keep on questioning the quality of Indian products should know that Legend computers, the largest maker of PC’s in China, buys network interface cards from India. ” Going forward, if the government and the hardware industry proactively decide to work together and solve issues rather than have one hand clamoring for duty concessions, and the other avoiding issues, the Indian hardware industry could finitely go the software way-as MATT and Ernst & Young have said.

The only question to ask is whether the government and the industry are up to it. Around the world, enterprise IT spend has been on the decline. The economic downturn coupled with inconsiderate or unplanned spending on IT in the last decade, has contributed to all this. So what is the scenario in India? As per last year’s survey (IS 2002-?June issue of Network Magazine), Close had committed to spend an average of RSI 554 Lack on IT-related investments. This spending was more or less equal to what they had spent in the previous year (2001-2002). So, did Indian enterprises spend that amount?

As per this year’s survey, the average amount spent on IT was only RSI 468 Lack. This implies there has indeed been a decline in IT spending. Close did not fully utilize the amount they had budgeted for IT related projects. The largest spenders in 2002-03 were BIFFS, Telecoms/ IT/TIES, and Gobo. /US. The average amounts spent were RSI 1109 Lakes, RSI. 954 Lack, and RSI 649 Lack respectively. All other industry verticals show modest spends. Technology is a key component for BIFFS and Telecoms/let/lets verticals. This explains why spending on IT is high in these sectors.

Also, nationalized banks have been spending substantial amounts on computerizing. Us have traditionally been big spenders, given the need to link distant locations. And with various state governments and quasi-government institutions pushing initiatives like e-governance, technology has been of high-priority here too. So, which were the technology verticals that received a maximum chunk of the shrunken IT budget? 68 percent Close said they invested in Bandwidth/connectivity last year. 64 percent in Enterprise hardware procurement, and 48 percent in Enterprise packaged software.

Security comes fourth with 47 percent having invested in this area. More or less ? We were keen to find out the number of Close who had spent more than the amount budgeted. Nearly 60 percent said they had spent the exact amount budgeted for IT in 2002-03. 20 percent said they had spent less, while only 1 5 percent claimed to have spent more than the amount budgeted. A majority of those who had spent less than the amount budgeted are from large-sized companies (turnover exceeding RSI. 500 scores). Nearly 22 percent large-sized companies spend less on IT.

The reason Enid this is obvious: Most of the large-sized companies already have sizable investments in IT when it comes to automating back-end and front-end processes. In this particular case, the reasoning was to build a buffer within the IT budget, to provision for any last minute or unforeseen procurement/maintenance costs that may arise. Even in the case of leading IT spenders like BIFFS, Telecoms/ IT/TIES, Gobo. / Us, more than one-fifth of companies have spent less than the amount budgeted, indicating a slowdown in IT spending.

On the rise again The IT spend in 2003-04 is on the rise again, albeit slowly. This year companies plan to spend on an average RSI 493 Lack, indicating a 5 percent increase in IT spending. The major spenders are again the BIFFS, Telecoms/ IT/TIES, and Gobo. / US verticals. The BIFFS vertical is registering significant spends; their average budget has climbed from RSI 1109 Lack in 2003-04, to RSI 1310 Lack in 2004-05. In Telecoms/let/lets and Gobo. / US, both major spenders last year, the allotted budget is same when compared with last year.

In almost all other verticals, companies are registering a small increase in the budget allotted for IT. In terms of turnover, IT spending in medium-sized impasse is expected to grow by 20 percent, while in large organizations the IT budget may actually shrink by 11 percent. What technology? This brings us to our next question: Which technologies are companies investing in? The top areas of IT spend, in terms of technologies, are: Bandwidth/connectivity (57 percent plan to invest), Enterprise hardware (55 percent), Storage (46 percent), and Security (46 percent).

Both Storage and Security are clearly gaining prominence in the BIFFS sector where information security and availability is critical. The Indian IT and Electronics market in 2003-04 was worth SIS$ 20. 3 billion of which SIS$ 12. 7 billion consisted of software. Electronics and IT hardware production stood at SIS$ 7. 93 billion. Some 3,500 units are engaged in electronics production manufacturing goods as diverse as TV tubes, test and measuring instruments, medical electronics equipment, analytical and special application instruments, process control equipment, power electronics equipment, office equipment, components etc.

Market researcher DC estimates that the market-value estimate over next 3 years for hardware products is RSI. 75,OHO scores. The Indian electronics and hardware industry as been lagging behind the impressive performance of the software sector. Most of the hardware requirements of the burgeoning software and telecoms sectors are met by imports which are about 25%. The Ministry of Information Technology, Gobo. Of India has estimated that the total requirement of hardware and components by 2008 would be in range of SIS$ 160 billion and the investment required in the manufacturing facilities would be US$ 16 billion.

MASCOT, the leading IT industry body estimates that to achieve a software export target of SIS$ 87 billion in 2008, the hardware requirement would be US$ 50 billion. By far the most comprehensive study was carried out by Ernst & Young in association with MATT, the hardware industry body in 2002. It estimates that given the right incentives, Indian’s electronic hardware industry has the potential to reach SIS$ 62 billion by 2010, twelve times its existing size with the domestic market accounting for SIS$ 37 billion and exports of SIS$ 25 billion.

The major export opportunities would be in the area of innovative new products, contract manufacturing and design services. This shows that there are large opportunities for Indian companies to increase their strength and grave these opportunities for future growth. HOC Manifestoes Ltd is one of those companies which are working to increase their network and making innovative new products. HOC Manifestoes Ltd. Is currently engaged in selling manufactured hardware (like PC’s, servers, monitors and peripherals) and traded hardware (like notebooks, peripherals) to institutional clients as well as retail channel partners.

Besides, it offers hardware support services to existing clients through annual maintenance contracts, net work consulting and facilities management. In 2003-04, He’s total hardware turnover was RSI. 12. 97 billion, higher by around 24% veer the corresponding fugue for 2002-03. Of this, manufactured hardware constituted 60%, traded hardware 32% and hardware support services 9%. The company’s reported operating margins in 2003-04 (including six months of OH, telecommunication and software businesses) increased to 6. 7% from 5. 9% in 2001-02, primarily because of better margins in hardware.

While average material costs declined in 2003-04, the company was able to retain a part of the margins in its product realizations. Better margins in hardware resulted in the return on capital employed (RACE) from hardware increasing from 1 1. 9% in 2002-03 to 25. % in 2003-04. In the domestic home PC organized sector, HOC Manifestoes is the market leader. Other players include Zenith Computers, MM, Sun Microsystems, Wiper, Hewlett Packard. Assembled personal computers have a large presence in the domestic home PC market, accounting for a chunk of the total sales.

The overall market for desktop personal computers registered a 28. 2 percent growth during calendar year 2004 as compared to the previous year. What is significant is that branded PC’s continue to make impressive gains against the gray market. According to DC, the share of branded PC’s grew from 36. Percent in 2004 to 49. 2 percent in 2005, registering an impressive growth rate of 74. 3 percent. Interestingly, the gray market remained flat, registering a growth of 2. 2 percent, while the total desktop PC market registered a growth of 28. 2 percent.

According to DC, the recent re-surfacing of finance-based purchase options had an accelerating effect on the consumer desktop market, which is already witnessing a consistent drop in end-user prices for both the branded and unbranded PC segments. Among the vendors, HOC Manifestoes emerged as the market leader with a share of 13. 7 percent. The company registered a 91. Percent growth during 2004 as compared to the previous year. HP followed HOC with a market share of 1 1. 9 percent. HP too grew at a blistering pace registering a growth rate of 73. 03 percent.

IBM is in the third place with a market share of 6. 2 percent. DC is not the only research firm confirming the signs of robust growth. Gardner, in a recent report, states that the Indian desktop market grew by 31. 5 percent in 2005. Says Viand Nair, Analyst, Computing Systems, Gardner India, “Peaking business confidence based on strong economic growth catcalled PC purchases in both consumer and corporate segments throughout 2005. ” While every research firm has given different figures, one thing is common-the PC market is booming at double-digit growth rates.

MATT (Manufacturers Association of Information Technology) estimates that the desktop PC market grossed 17. 1 lakes units in the first half of fiscal 2004-05, registering a growth of 37 percent over the same period of the previous fiscal. With the Indian economy booming, MATT estimates that PC sales will touch the 40 lakes mark in fiscal 2004-05. The buoyancy in PC sales can be attributed to increased consumption by traditional industry verticals such as telecoms, banking, financial services and insurance, BOP, manufacturing and government.

Consumption also increased in non-traditional sectors such as education, retail outlets and self-employed professionals. In future, He’s hardware sales to the institutional segment are likely to remain stable, with sustained hardware spending by all the verticals, especially the banking and financial services sector. Besides, in retail hardware sales, a continued reduction of price points, facilitated in part by the recent reduction in excise duties on PC’s,

This Report was commissioned on the request of the Board in relation to ACACIAS press release: ’12-MURMUR ACACIAS areas of focus for 30 June 2012 financial report’. A review of the relevant disclosures made In Super Retail Group Lad’s 2012 Annual Report is assessed against relevant polices that relate to element 8, estimates and accounting policy Judgments under ACACIAS press release.

Executive Summary release: ’12-MURMUR SAIS’S areas of focus for 30 June 2012 financial report’. A review of the relevant disclosures made in Super Retail Group Lad’s 2012 Annual Report is assessed against relevant policies that relate to element 8, estimates and accounting policy Judgments under Sais’s press release. The outline of SAAB standards 108 Presentation of Financial Position, CASABAS Impairment of Assets, SAAB’S 38 Intangible Assets and SAAB’S 37 Provisions, Contingent Liableness and Contingent Assets are disclosed.

Super Retail Group (SIR) Lad’s accounting practice is determined in regards to the standards examined. From this analysis, differences can be determined in the ways SIR applies the relevant standards and the requirements of the standards in relation to estimates and Judgments. From this analysis, it is determined that SIR has failed to disclose any Judgments and certain estimates and assumptions that may affect significant amounts seen In the financial statement and the entities positions. Recommendations of refining the presentation of the disclosures and the ways in which it should be structured are outlined.

ASIA has identified the need for disclosures within this area for users to assess the reported financial position, as entities did not make material disclosures of sources of estimation uncertainty and significant Judgment in applying accounting policies. An analysis of the relevant counting standard, ISOBAR in particular paragraph 17-124, Disclosure of Accounting Policies and paragraph 125-133, Sources of Estimation Uncertainty, CASABAS Impairment of Assets, CASABAS Intangible Assets and CASABAS Provisions, understand Grog’s current accounting practices reflected in the 2012 Annual Report.

A further discussion into the differences between the accounting standards used and its requirements and the application of them are examined. Through this, recommendations are then outlined into refining the gap between Grog’s current accounting practices and the requirements of the standards. Relevant Accounting Standard The relevant accounting standard related to disclosures of sources of estimation uncertainty and Judgments can be found within ISOBAR Presentation of Financial Statements.

Other key standards that are relevant to Grog’s disclosure of assumptions, estimates and Judgments are SAAB’S 36 Impairment of Assets, SAAB’S 38 Intangible Assets and CASABAS Provisions, Contingent Liabilities and Contingent Assets. 2. 1 ISOBAR This standard outlines the presentation of financial statements for general purpose financial statements, in order to ensure that there is comparability between the entities reporting periods as well as between other industries reports. The standard discusses the minimum requirement for reporting content and guidelines for the structure in which it is to be set at.

Paragraph 117-124 distinguishes the disclosure of accounting policies in relation to Judgment. Management’s Judgment made in applying accounting policies that may have effected significant amounts found in financial statements and the financial position. Seen in paragraph 125-133 ‘Sources Of Estimation Uncertainty, it is vital that entities disclose the key assumptions made grading future prospects and other uncertain estimates that are used in identifying carrying amounts of assets and liabilities.

Along side this, the nature and carrying amount must be disclosed at the reporting date. 2. 2 SAAB’S 36 Under SAAB’S 36 it is essential for assets to be tested for impairment when the carrying amount exceeds its recoverable amount. In undertaking these annual proceedings, a number of related Judgment and estimated assumptions need to be encountered. There is a need for Judgment when determining cash-generating assets (Para’s. 68). Paragraph 30-57 outlines the associated requirements for calculating value-in-use.

Paragraph 30. A specifically identifies the need for an estimate of future cash flows that the entity expects to generate from the asset. These cash flow projections are outlined in paragraph 33. A, where it is based on reasonable and supportable assumptions made by management’s estimates, re- stated further in paragraph 34, where this assumption is based on the difference between past cash flow predictions and actual cash flow amounts. These projections need to be consistent with previous projections.

Paragraph 38 continues to detail the significance for management to use the appropriate assumption that would best fleet management’s estimates of economic conditions that will continue throughout the assets useful life. When calculating the value-in-use, there is a need to determine a discount rate and under paragraph 55 the rate is a pre-tax rate. Paragraph 126-137 states that entities should be encouraged to disclose the assumptions and various estimates taken in order to determine the CHUG recoverable amount during the period.

Paragraph 134 requires that a disclosure of the group’s key assumptions, description of managements approach to identifying these assumptions, the period future cash flow as well as the discount rate applied. . 3 SAAB’S 38 SAAB’S 38 details the accounting procedures applied for intangible assets that are not specified otherwise in other standards. This standard deals with a number of assumptions and estimates that are required when applying it.

Paragraph 22 examines the need for entities to assess the prospect of anticipated future economic benefits using reasonable and supportive assumptions that will exist over the useful life of the asset. Paragraphs 33-41 identify the requirements regarding acquisitions as part of a business combination, these intangible assets must be recognized separately from goodwill. Paragraph 41 examines the principle of entities being allowed to use techniques that have been developed for estimating fair values. The standard requires certain disclosures outlined in paragraphs 118-128.

These disclosures provided basis for understand of assumptions and estimates involved in determining: Finite or indefinite useful lives, amortization rates and the reasons for identifying an intangible asset having indefinite useful life Amortization methods used for definite lives The gross carrying amount for any accumulated amortization Reconciliation of the carrying amount at start and end of period Information grading any restrictions on the face of intangible assets or any assured as security for liabilities 2. CASABAS SAAB 137 outlines the accounting procedures for provisions, contingent liabilities and contingent assets. Under paragraph 36 the best estimate required to settle the present obligation at the end of the financial period is the amount recognized as a provision. This estimate discussed in paragraph 38 is determined by the Judgment of management and takes into account risk and uncertainties, the discounting of present value (discounting at a pre-tax rate) and future events that may affect present obligations.

Further Judgment needed by management is necessary when dealing with risks and uncertainties in order to avoid overstating or understating accounting elements. When disclosing the application of this standard paragraph 84-92, in relation to Judgments and assumptions, an entity shall detail the major assumptions made relating to future events further addressed in paragraph 48 that is the description of future events that may affect the amount of the provisions likeliness to occur. In summary an entity shall disclose the reconciliation of the movements of each class of provision and detailed information regarding the nature f the obligation.

Under note 3 found in SIR Ltd 2012 Annual Report, three significant factors have been disclosed that may result in an alteration of future material adjustments due to estimates and assumptions (Refer to Appendix 1): I. Estimated impairment of goodwill I’. Estimated value of intangible assets relating to acquisitions iii. Estimated make good provisions The associated SAAB standard, previously discussed are SAAB’S 36 Impairment of Assets in relation to point I, SAAB’S 38 Intangible Assets corresponding to ii, and iii, is the reflection of CASABAS Provisions, Contingent Liabilities and Contingent Assets.

Specific paragraphs have been discussed earlier in order to understand the Grog’s accounting practices. 3. 1 Critical Accounting Estimates and Assumptions SIR Ltd applies SAAB’S 36, CASABAS and SAAB’S 38 regarding estimates and Judgment disclosures under ISOBAR paragraph 125-133 as discussed previously. Estimated impairment of goodwill deals with the application of SAAB’S 36 disclosed under note 1. 0. In applying SAAB’S 36. 68, SIR has classified the recoverable amounts for CHUG, which are determined based on the calculated value-in-use.

The assumptions require the application of paragraph 134, outlining the assumptions under note 14. (Refer to Appendix 2). The growth rate and discount rate for each subsidiary and the period of which these assumptions are based on, that is a five-year period approved by the Board has been outlined. The assumptions disclosed regarding value-in-use is that budgeted gross margins are determined by past and expected future performance. There is consistency between the use of weighted average growth rates and forecasts included in industry reports.

Disclosures of management’s explanation as to why certain subsidiaries were not calculated using value-in-use is present. SIR Ltd has identified the intangible assets that undertook assumptions and estimates as brand names and supplier agreements, as well as put options. The use of paragraph 41 has been performed by SIR Ltd in valuing brand names using the relief from royalty method and multi-period excess earnings method in valuing supplier agreements. In determining these calculations, assumptions are made by management.

The value of put options has undertaken estimations. These three intangible assets were acquired as a business combination. SIR disclosures of the assumptions and estimates reflecting the application of SAAB’S 38. 18-128 are found under note 1 . Q. Iv-v (Refer to Appendix 3). Brand names are determined as indefinite, supplier agreements have a useful life of 20 years, and amortization is calculated in regards to the timing of projected cash flows over the estimated useful life. Reasons for specific brand names being classified as indefinite is outlined under note 14. . The key factors that management has taken in depicting brands useful life is also estimates in accounting for provisions for make good on the removal of leasehold improvements or return leasehold premises to the original state. The make good provision is recognized when SIR has a present obligation from the occurrence of past events. Leasehold improvement costs are capitalist and amortized over the useful life or the shorter of the period of the lease disclosed in note 18. C (Refer to Appendix 5). Note 1 . States that the amounts for provisions have been reliably estimated, and are not recognized for future operating losses (Refer to Appendix 6). Further disclosed under note 1 . Z, is Grog’s application of make good costs. They are recognized as a provision at the beginning of the agreement and these estimated true payments are discounted using appropriate market yield at reporting date. (Refer to Appendix 7). 3. 3 Significant Judgment Significant Judgment is essential for SIR to disclose when applying the listed standards. There have been no Judgments disclosed under note 3.

Accounting Standard Requirements The one significant gap found between ISOBAR and the current practices of SIR Ltd is the failure of disclosing significant Judgment. ISOBAR . 122 details an entity should disclose a summary of the significant accounting policies of management Judgment’s (apart from those of estimations) dad in applying the entity’s accounting policies, which has affected significant amounts recognized in financial statements. SIR Ltd has failed to disclose a summary of Judgments made that may affect significant amounts on financial statements.

However SIR has disclosed estimates and assumptions however certain areas are not successfully outlined. Assumptions are clearly outlined in the notes, however a detailed description and reasoning of managements approach to identifying these is not present. Management estimates relating to put options have not been clearly stated within the notes. The assumptions regarding the valuation ethos of brand names and supplier agreements have not been outlined (royalty method and multi-period excess earnings). ISOBAR . 125 has not been effectively applied in Grog’s disclosure of assumptions.

There is no information regarding the assumptions of future events. Assumptions and estimates overall have been disclosed, however briefly without detail, as required by ASIA. In order for SIR Ltd to comply with the standard of disclosures of estimates and judgments by which ASIA requires, certain adjustments for future disclosures are needed. The need for ease of locating information requires the implementation of fined structure essential. Under note 3, Critical accounting estimates and judgments, a clear distinction between estimates and Judgments is integral.

A distinct need can be seen within note 3. A. I to ‘refer to note 14 for details’; and should be outlined in ii and iii. It is difficult to locate the relevant information regarding estimates value of intangible assets relating to acquisitions and estimated value of makes good provisions, however assumptions are still outlined throughout the notes despite a lack of clarity regarding referral to note 3. Any related estimates and judgments made by management need to be discussed under note 3, regarding the nature of the element relating to estimates or Judgment.

The differences mentioned previously need to be refined; assumptions relating to the future events, estimates relating to put options and methods used to value brand names and supplier agreements need to be outlined. It is important for SIR to disclose all related information that may assist users in making economic decisions. Therefore it is essential for SIR to outline all assumptions, estimates and Judgments made that affect significant amounts within the financial statement and financial position.

Exploring the CEO-fashion trend: How are youths’ perceptions contributing to its popularity? Introduction Ensuring garments are produced in an environmentally friendly manner in regards to its materials, consumer benefits and the condition in which employees are working is the essence of what CEO-fashion is all about (Hudson, 2012). According to Hudson (2012), 2011 was the leading year fashion industries realized a prosperous opportunity and need for venturing into the businesses of CEO-friendly clothing.

CEO- fashion has increased in popularity as a global trend and Anne Salvatore Epstein was he one that discovered this concept in 2009, when she was pregnant. The reason for Epstein to embrace this concept was because of her desire to enhance the organic value in life for her new born. In order to create an organic fashion trend, Epstein first collaboration partnership was with Marc Jacobs (Smith, 2006). Generation Y, the main target market for sustainable fashion, enjoys the quick trends presented by fast fashion retailers (Martin ; Bush, 2000, as cited in Hill, 2011).

However, the value of being socially responsible and taking into consideration sustainability issues is mongo their concerns as well (Yang, 2003). According to a study by a market research company, Marital, 47% of the participants from generation Y found that they are attracted to environmentally friendly services, products or brands and are often more agreeable to pay extra when purchasing. The explanations behind the enthusiasm of the vast majority were due to reasons such as “care about the environment”, “it’s the right thing to do” or “so that people know I’m environmentally aware” (Barcelona, 2007). A significant figure of 47% of Generation Y is willing to shop at a retailer more often if they were environmentally friendly’, was the outcome of the study, hence describing their attitudes towards retailers that positioned themselves as environmentally aware (Barcelona, 2007). A result from another study also showed that a company’s social and environmental commitments are factors to be considered by of Generation Y interviewed and 83% find a company more treatable if it practices the societal marketing concept (Kim, Change, Lee ; Huh, 2011).

The improved public education that generation Y received in their early childhood consequently resulted in their heightened awareness and concern of becoming more environmentally conscious than previous generations (Meddlesome ; Polygons, 1995, as cited in Kim, Change, Lee ; Huh, 2011). Throughout their lives, Gene Y has faced detrimental issues regarding global climate change and ozone depletion. As a result, increased awareness through sound environmental education is an important element when teaching hence emphasizing the importance of protecting the environment.

Additionally, younger consumers are more likely to be fashion leaders (Goldsmith ; Clark, 2009, as cited in Hill, 2011), therefore understanding generation Yes perception towards CEO-fashion may lead to a better understanding of owe they are contributing to its growing popularity (Morgan ; Bristle, 2009). Research Justification Despite the prominently growing trend of CEO-fashion and its popularity in the fashion industry, identification of factors influencing consumers’ evaluations and perceptions of sustainable product requires further research.

Lack of available options is one of the major barriers to CEO-fashion (Hillier Connell, 2010). Moreover, there is limited research directed towards consumers’ views of fashion sustainability (Morgan ; Bristle, 2009). Thus highlighting the need to acquire further insight into generation Yes perceptions of fashion and sustainability. Fashion retailers are seen to have a unique position of being closer to consumers, as their business model and supply chain is driven by consumer demand (Bristle, Squid ; Frito, 2003).

Therefore consumer’s opinions concerning sustainability are essential to how retailers conduct business in addition to the fact that they are able to respond quicker to the demand for sustainable products more appropriately. Owner and founder of Coming NYC and a fashion retailer that excelled in CEO-fashion, Anne Bernstein, has proudly dedicated to educating the public about the advantages of CEO-friendly fashion (Pietistic, 2009). According to Bernstein, there are three key factors that CEO-fashion designers take into consideration when creating pieces of fashion that is considered “sustainable”.

They are the health of the planet, health of garments makers, and the quality of products in terms of sustainability essentially serving the purpose of long-term usage (Pietistic, 2009). Bridges & Wilhelm (2008) found a low level of knowledge of sustainability matched with a high level of interest in the concept among Generation Y. Hence, this research seeks to consider Generation Yes perceptions towards the sustainable line of fashion garments and how these perceptions will contribute to the expanding popularity of CEO-fashion.

Taking the above mentioned into consideration, this study will aim at providing fashion designers and retailers the insight needed into factors Generation Y consumers consider in relation to the concept of CEO-fashion. Understanding this could better equip retailers when creating marketing campaigns when targeting consumers as it is based on their level of knowledge and understanding. Objective of Research This research paper intends to determine the factors that affect the Generation Y consumer’s perceptions towards the concept of CEO-fashion, and how these factors result in the mounting popularity of CEO-fashion.

Therefore, the objectives of this study are to: 1 . Identify the stimulus affecting perceptions towards CEO-fashion among Generation Y. 2. Examine the relationship between Generation Y consumers’ perceptions on CEO-fashion concept and the popularity of the concept in regards to the five variables that will be analyzed. Literature Review Price and the purchase intention of CEO-apparel Consumer’s price sensitivity has attracted the attention of various researchers throughout the 21st century.

The reason being is studies have shown that price is the cost that shoppers are able to best determine thus making it among the most important criteria when deciding to purchase (Dickson ; Hustled, 2009). To further elaborate, in a recent study of shopper’s selection, price was consistently indicated as a major influencing factor (Sensei & Todd, 2003). This coincides with the findings of how retailers too, find price to be an important factor for shoppers thus emphasizing its relevance (Sensei & Todd, 2003).

Studies have shown that the perception of higher prices may prove to be a barrier to purchasing environmentally friendly apparel and they may be unwilling to pay increased prices for sustainable apparel (Connell, 2010). However the way in which retailers are able to overcome this issue is by producing apparel on a global scale thus increasing sourcing options that allows manufacturers to compete on lower prices (Gamma, 2011). Another solution is sustainable fashion is encouraged to develop current styles and provide increased information to customers through labeling to inform them (Height, 2009).

Levis have incorporated this concept into their trendy clothing proving how it can gain customers through style and ethics (Mesa , 22)). The concept is still emerging into the retail business hence showing its potential to grow. Furthermore, it was stated in green marketing literature that consumers that are environmentally conscious are willing to purchase green products that may cost more than the average (Halyard, Ogle & Dunbar, 2006). HI : Price positively affects the purchase intention of CEO-apparel. Perceived quality and the purchase intention of CEO-apparel

When considering a product, consumers take into account their perceived quality of the products characteristics meaning its overall components that are physical and non-physical (Hill & Lee, 2012). Elements such as reliability, durability and performance are factors that lead to consumer satisfaction or dissatisfaction in accordance with their expectation (Sheen, Wang, Lo & Chum, 2012). As CEO- apparel is still a young concept in the business, consumers may be reluctant in purchasing such goods although they are environmentally conscious.

Another barrier that may be faced is the belief among consumers that apparel made of recycled eternal is of reduced quality. The large apparel industry leaves a large carbon footprint in the environment as it is ever changing and growing resulting in increased wastage (Chain & Wong, Wong). Through all stages of its product life cycle: from fiber growth, manufacturing, dyeing, transportation to end users each step leaves a harmful impact (Hill & Lee, 2012). Consequently, designers are taking initiative by engaging in CEO fashion by producing their clothes in a way that best suits the environment (Hill, 2012).

Utilizing 100% organic fibers, bamboo and hemp are among the biodegradable materials used in the production process. The sturdy fibers of the plants increase the durability of the products promising that the garments made are of strong quality. In addition, for those that are hesitant as it is a new concept, reputable designers such as Guess Scares have altered methods of production to create more CEO-friendly garments (Volitional, 2009). Customers need not make trade-offs in terms of attributes that create quality when selecting CEO- apparel products to purchase due to qualities like 100% organic cotton (Sheen, Wang, Lo & Chum, 2012).

By remaining stylish, entities have been able to promote Rene fashion without compromising their cool factor, thus enhancing their brand image to a larger pool of customers besides guaranteeing quality. H2O: Perceived quality positively affects the purchase intention of CEO-apparel. Openness to innovation and the purchase intention of CEO-apparel One of the main influences in determining the purchase of CEO-garments depends on an individual’s personality and their openness to experience.

Each person has a unique self-image they try to portray and remain consistent with in accordance to the type of good or service consumed (Sibilate ; Undervaluation, 2012). A significant indicator of the type of consumers that may be attracted towards this concept are those that indulge in innovative ideas (Cornell ; Heartfelt, 2012). As stated by Coworker , 2011, the CEO-apparel concept is fairly new and is gradually gaining awareness among consumers and businesses thus the need for consumers to be open to new ideas is vital in order for them to accept this idea (Coworker, 2011).

Getting a further understanding of the degree to which consumers inhibit a desire to experience unique ideas allows marketers and CEO retailers the opportunity to take advantage increasing the amount of potential customers. However, research has shown that the level of generation Yes knowledge regarding this matter is low, yet it also indicates that they put great emphasize on their concern of this issue (Sensei ; Todd, 2003). Their willingness to educate themselves will essentially result in an increased desire to indulge in CEO-friendly goods (Ma, Littered ; NIMH, 2012).

Targeting generation Y in an effort to gain increased supporters of CEO-garments is key to its success (Connell, 2010). However, capturing those individuals that are more ailing to engage in such products enables this concept to gain popularity more rapidly. HE: Consumer innovativeness positively affects the purchase intention of CEO- apparel. The socio-cultural impact and the purchase intention of CEO-apparel When discussing the environment as a whole, several factors can be taken into consideration in accordance to an individual’s life.

CEO-fashion is currently considered to be a niche market hence appropriately targeting those consumers that are environmentally concerned with products that are designed to fit their lifestyles (Bruno, Mindedness, Reid & Yanks, 2008). Moreover, generation Y consumers that enjoy shopping generally have specific lifestyles, motivations and opinions in relation to shopping (Serbia-Sanchez, Vagary & Hot, 2011). Their motivations to purchase certain goods tend to reflect their social and recreational identities (Serbia-Sanchez, Vagary & Hot, 2011).

Hence by purchasing specific goods such as CEO-apparel allows them to communicate to their peers that they are able to incorporate their values and beliefs of being socially aware through the clothes they purchase. Moreover, segmenting research has shown that lifestyle profiles of customers are a more beneficial meaner to differentiate green consumers than demographics thus highlighting the importance of understanding their daily lives (Hill, 2012). In addition, as generation Y makes up a large segment of the retailer business, their interest in fashion and shopping is dominant.

They are more prone to seeking new knowledge regarding clothing products which can lead to greater curiosity concerning CEO-garments (Sheen, Wang, Lo & Chum, 2012). They find a sense of self-fulfillment when purchasing CEO-made goods as it promotes an CEO- lifestyle (Macaroon, 2009). Research has shown that by combining an CEO-friendly production process with fashion-orientated behaviors may identify the degree to which consumers are more willing to purchase CEO-apparel (Cornell, Hester & Richard, 2011).

For those that want to express their values in regards to being CEO- friendly but also want to be stylish, top designers such as Archie Rich, was able to feature a “stunning pink and yellow skirt” made entirely from corn fiber. This shows the potential of such raw materials hence allowing them to further advance consumers beliefs and perceptions regarding this industry (Larry, 2012). Moreover, designer he stated how people often perceive the fashion world as superficial. Therefore this could be a stepping stone that proves to the world that by utilizing such resources in their clothing shows their willingness to help (Larry, 2012).

Businesses are able to undergo certain actions in their business that allows consumers to form certain perceptions about this issue. This results in the target market discovering certain attitudes, beliefs and values they own that translates into their daily lives. HE: The socio-cultural positively affects the purchase intention of CEO-apparel. Corporate persona and initiatives and the purchase intention of CEO-apparel Throughout the last decade, corporate social responsibility (CARS) has gained incredible momentum across diverse businesses globally as it is being considered as a main objective for firms.

This is done in an attempt to emphasize their commitment to environmental, social and economic goals that go beyond their commercial activities Cones, Comfort & Hillier, 2006). Studies have shown that the generation Y consumer does appreciate activities retailers practice and prefer to purchase from companies that are making a difference in society (Hill & Lee, 2012). As the participation in CARS and sustainability initiatives gains popularity in the market, companies also gain a competitive advantage (Career & Valor, 2012).

Companies such as Wall-Mart are confident enough to report the environmental footprint on products it sells to prove to consumers that they are causing lesser damage annually (Hill, 2012). Furthermore, various designers such as Stella McCarty, Gap, Levis and Guess Scares have recently debuted sustainable clothing lines highlighting short-term sustainable acts (Hill, 2012). Barneys NY, a famous U. S. Retail outlet, invested in a green luxury’ campaign whereby studies found that it was well received by consumers that expressed interest in the “green themed window displays” (Hill, 2012).

This shows various ways in which companies show their consumers how they are involved as well as how consumers are positively responding. It represents a relatively smaller portion of the marketplace however each step taken to help the sustainable fashion market place grow is effective (Chain ; Wong, Wong). Practicing CARS is an option and not an obligation for entities therefore it verifies that those that practice do care about their consumers and the environment therefore allowing them to improve their value to consumers, enhance their reputation and own a competitive advantage.

Finally, another study showed that numerous participants mentioned the proactive measures taken by companies and how it makes a more positive impact thus practicing initiatives has a direct affect towards their purchase intentions of CEO-apparel goods (Regional, 2010), HE: Corporate persona and initiatives positively affects the purchase intention of CEO-apparel. Methodology Three hundred female university students are to participate in this research by completing a self-administered questionnaire.

University students are targeted for the sample because they share similar characteristics with fashion leaders and are exposed to a variety of fashion information (Workman ; Kid, 2000). The sample for this study contained only female consumers due to previous research noting that there is a high propensity of female consumers towards fashion (Morgan ; Bristle, 2009). Additionally, research on environmentally conscious consumers has found females being more apt in supporting environmental issues (Mariner, Barnett, Balder, Nubian ; Osama, 1997, as cited in Nodding, 2003).

Therefore, in order to eliminate potential sampling biases due to gender, this study utilized data only from female respondents. To guarantee reliability and validity, the large amount of samples used will better reflect reliable results. Data is collected in the Klan Valley area as this area consists of most universities as well as being convenient for the researchers, thus making it a strategic location to gather a large amount of data (Miller ; ROR, 2004). To achieve the objective of this research, non-probability sampling method was adopted, as the focus of the research is only on Generation Y assign consumers.

The questions used to measure the variables were adopted from a wide range of relevant past research with the following components: 1. Price (Darker ; Freedman, 1992, as cited in Madman ; Sure, 2001; Vaudevillian ; Gradual, 2008). 2. Perceived Quality (Estimate, 1988, as cited in Joy ; Cigarillos, 2007; Sarasota, 2012). 3. Openness to innovation (Hill, 2012) 4. Socio-cultural (Bruno, Mindedness, Reid ; Yanks, 2008). 5. Corporate person and initiatives (citation) Participants were asked to rate, on a seven point Liker scale.

In terms of rating scale, seven point Liker scale will be used to identify categories in the questionnaire where 1= strongly agree, 4= neither agree nor disagree, and 7= strongly disagree. According to Sigmund, Ward, Lowe, WinZip ; Bin (2007), the Liker scale is also known as a popular method to measure attitude because it is easy to administer. Data processing and analysis SPAS 18. 0 will be used for data analyses. Reliability will be estimated by using Cockroach’s coefficient alpha for all multi-item scales.

Others statistical analyses are such as descriptive statistics, inferential statistics, factors statistics and associative analysis. Functions of these statistics are to reduce the sturdy sum of data matrix collected from the large array of respondents (Burns & Bush, 2006). Tasks such as describing measurable characteristics for entities such as median, range, standard deviation, etc could be performed using descriptive statistics (Wally’s, 1978). According to Stephen ; Horny (1995), inferential statistic is using a one-sample test to obtain data for standard error analysis and hypothesis testing to determine population parameters.

While associative analysis will determine whether the proposed variable in the report are interrelated in a logical way (Pappy ; Sequester, 2006); factor analysis will be used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved variables (Rumen, 1970). Limitation of the research Few limitations in the research are barriers that might limit the findings of the research but overcoming these weaknesses of the study would be the direction of future research.

Firstly, the research only focuses on the perceptions of the Generation Y consumer, thus not being a proper representation of the entire population of CEO-fashion consumers although this target consists of consumers that could be most interested in CEO-apparel. Studying other generational groups of consumers would further build the knowledge of consumers’ perceptions toward the CEO-fashion concept (Hill, 2011). Furthermore, the research only analyses university students within the Klan Valley area thus it may not be most applicable in terms of different cultural contexts.

To elaborate, consumers react differently to prices across countries 00 & Cigarillos, 2007). Compared to individualistic culture, any changes in price in a collectivist culture tend to have greater corresponding perceived laity differences. Hence, a larger sample covering other distinctive areas would be suggested to provide more accurate results (Cooper, 2005). Additionally, this study is limited in that it only covers variables such as price, perceived quality, openness to innovation, corporate person and initiatives and socio-cultural impact that influences consumers’ perceptions toward the CEO-fashion concept.

The inclusion of other related features such as personality and family could also influence the consumers’ perceptions toward CEO-fashion concept. According to Fernery, Park & Brandon 2005), these factors play a unique role in the perception towards fashion retailers and are especially salient in apparel purchases. Thus, further study into other influences on consumers’ perception is needed. Lastly, this research is limited as it focuses only on female respondents. Therefore, this may lead to gender bias in the results.

We will soon enter a phase of strong competition in fixed services and we expect similar benefits to flow as result,” said Mohammad AY Change, Director General of the TRAP. Matthew Reed, an analyst at Informal Telecoms and Media, welcomed the decision. “It means that we finally have competition in the fixed broadband market in the I-JAW for the first time,” he said.

But he believes that prices are unlikely to fall for consumers in the short term. “l think they will avoid a price war. They will probably try to compete on packages, higher internet speeds at the same price,” he said. “As a consumer, overall you should have more competition, which means there will be better opportunities available. ” Meanwhile, the leaders of both distillates and du welcomed the move. “Distillates has always believed that competition is a win-win situation for all as it energies operators to excel and stimulates telecommunications advancement in the country…

We are fully prepared for a more competitive landscape in the AJAX,” Eased AY Hamlin, CEO of distillates, said. Ottoman Sultan, CEO of du, added: “We are equally pleased about the opportunity to provide consumers and businesses across the AAU a choice in their selection of a fixed line services provider. ” – Gulf News y Facts Mission Statement: Our guiding mission is to deliver superior quality products and services for our customers and communities through leadership, innovation and partnerships.

Our Vision: Our vision is to be the quality leader in everything we do. History: The TLD Group Corp… Is the licensing company for Tim Horton franchises presently operating in Canada and the United States. The Tim Horton chain of restaurants began in 1964. Ron Joyce was originally the franchisee of Store #1, located in Hamilton, Ontario, Canada. By 1967, he and Tim Horton became full partners in the many and after Time’s tragic death in a car accident in February of 1974, Ron Joyce became the sole owner.

Distribution: Five warehouse distribution centers, located in Gullah, Ontario; Calgary, Alberta; Debit (Tour), Nova Scotia; Kingston, Ontario; and Lauderdale (Langley), British Columbia presently service the Tim Horton stores across Canada and the U. S. A fleet of decorated trucks deliver food and supplies from our distribution centers to the stores.

The purpose of this report is to analyze and improve the business performance of Vodafone Australia and assess its future viability based on the company’s current operating situation. At present, the firm is engaged in a turnaround strategy to rectify its poor performance, as evidenced by its stagnant market share and revenues as well as its large debt. As such, it has divested many of its retail stores, reduced capital expenditure, decreased operating expenditure and cut its workforce.

Through the evaluation of market factors, it has been determined that the likelihood of profit generation from the firm’s current strategies is low given the industry’s intensive competitiveness and its maturing lifecycle stage as well as the competitive strength of telecommunications leaders Telstra and Optus. Thus, a two-pronged strategy has been devised to combat these forces, which are based on Vodafone’s competitive strength to meet market needs. The first part of the strategy will pursue growth through market development while simultaneously utilizing Vodafone’s competitive advantage as an expert in wireless technology.

It involves bringing wireless solutions to the small to medium business niche, a market that has been overlooked by industry leaders. The second part of the strategy is to build brand loyalty amongst existing consumers with the aim of increasing revenues. Vodafone Australia has recently been plagued with negative headlines like “Vodafone in Dire Straits” and “Vodafone Still Takes on Opposition despite Job Cuts”. This is in the midst of its poor financial performance over the past couple of years as it struggles to compete against Telstra and Optus, the two industry leaders.

The company’s substantial debt1, its revenue decline in 2001 and its stagnant market share2 has led to its pursuit of a turnaround strategy with the 30% reduction in staff3, the 25% decrease in operating costs4 and the divestment of its mobile phone retail outlets5. Thus, this report seeks to analyze and improve Vodafone’s business performance and assess its future viability through analyzing its current internal and external environments. Here, the nature of Vodafone is probed in terms of its strengths, weakness and objectives.

These internal factors are then weighted against the firm’s opportunities and threats, evaluating the suitability of the firm and its objectives to its external environment. In addition, the possible causes for its performance decline and the major issues facing the company are identified. In this instance, the issues of intense industry rivalry, market saturation and Vodafone’s core competency in providing purely wireless solutions are given significant consideration in the devising of a two pronged strategy designed to enhance Vodafone’s short term and long term situation in light of these market factors.

The information upon which this recommended strategy is based has been derived from secondary data research from the company’s website, advertisements, newspaper, Internet and magazine articles. One of the limitations encountered during the formation of this report has been Vodafones’ company policy to keep all firm related information confidential other than what is already presented on their website. Vodafone Australia’s vision is based around understanding and providing the multiple benefits of mobile communications to consumers, such as the freedom and flexibility to communicate and access information anywhere at anytime.

In addition, Vodafone aims to lead the industry through innovative technology and service development and as such, its main objective is to increase its market share within the mobile and data services sectors of the telecommunications industry. The company is the third largest telecommunications carrier in Australia6, with its business predominantly in mobile retail and services with some dealings in data services. It is a subsidiary of the UK based parent firm, Vodafone Group Plc, and has had a presence within Australia since 1992 with a network investment worth over $2.

7 billion7. Headed by managing director, Grahame Maher, Vodafone Australia once boasted 12 000 retail points of sale8. Vodafone Australia’s strengths include its ability to provide innovative products and its expertise in wireless technology, both of which are considered competitive advantages in such a dynamic industry9. In addition, it effectively uses widespread advertising to target different markets 10 and is the largest carrier in the world11 with operations in over 28 countries, meaning that is also possesses experience and skills in international settings (see appendix 6).

These organizational strengths allow the company to exploit potential business opportunities such as an expansion of wireless communications on a global scale (see appendix 6). Here, wireless office solutions provide mobile voice/data services to business customers who possess great revenue potential in the wake of increasing globalization so that even small and medium firms require more sophisticated communications systems to operate in international markets. Other opportunities include the emergence of new technologies, in particular the 3G networks, to provide new mobile telecommunications products and services.

However in spite of these opportunities, Vodafone is facing financial distress due to its company flaws and threats (see appendix 6). The major weakness of Vodafone is its poor financial position. This can be attributed to its flat revenues 12, low rates of new customer generation (in the March quarter 2002 only 24,000 new customers signed up compared to a budgeted 350,000 customers)13 and falling market share from 20% to 17% in the last 2 years14. Furthermore, attention has been given to its poor customer service15.

These factors make way for external threats to penetrate company operations. These include Mobile Number Portability (MNP) which lowers switching costs between carriers and as such decreases customer loyalty16 and the rivalry of existing competitors. The latter could counteract Vodafone’s strength of providing continuous innovations, as competitors may also follow this strategy to make the benefits of introducing new products short lived17. Another threat comes from consumers becoming increasingly more price sensitive, as they are not willing to pay for the benefits of new technology18.

Abstract

Co-branding is pairing of two products in marketing context such that a new product, revised price, different distribution channel or promotional deal comes into existence. The two main types of co-branding; corporate co-branding and retail co-branding are for a global organization; British Petroleum is discussed in the following document. A corporate co-branding partnership is formed with Siemens Power Generation and retail co-branding partnership is formed with Starbucks.

Co-branding can be defined as pairing of two products in marketing context such that a new product, revised price, different distribution channel or promotional deal comes into existence. Specifically it is used when two brands come together to form a new product which signals to consumers that the partnership is strategic and a long term commitment on part of businesses (Leuthesser, Kohli, Suri, 2002). Corporate Co-branding and Retail Co-branding (distribution channel related) from view point of British Petroleum are discussed below.

British petroleum

British Petroleum is a global organization operating in more than 100 countries with revenues of more then $200 billion. Its products and services, generally, are based on oil exploration, production, marketing and developing alternate energy sources. Some of its brands include BP, BP Solar North America, ampm, ARAL, ARCO, Wild Bean Café. Recently, British Petroleum has re-defined its BP initial to demonstrate its global nature to Beyond Petroleum. This re-positioning also takes into account all non-petroleum oriented brands of BP such as BP Solar North America, ampm and Wild Bean Café (BP Global, 2007).

The brand of BP that is chosen for corporate co-branding is BP Solar North America, this service is for household consumers and provides them with an in-house system of solar energy power production providing them with sustainable, environment friendly and cost effective energy alternative (BP Solar North America, 2007).

Corporate co-branding

BP Solar North America & Siemens US Power Generation

Green Solutions is an innovative product as a result of corporate co-branding of BP Solar North America and Siemens US Power Generation (Siemens Power Generation, 2007). The concept behind this innovative power solution is that it delivers power to consumers produced through solar and wind sources. A combination of these two cost-efficient and innovative energy resources will enable both organizations to deliver dynamic solution.

Partner’s brand values

• Over the years, Siemens objective has been to come up with newer and cutting edge technologies.
• Main priority of Siemens is sustaining success and providing value to its consumers, shareholders and employees.
• Siemens has identified innovation as its core competence with more then $6.15 billion invested in research and development in 2006 (Siemens, 2007).
• It has worked toward diversifying its portfolio which includes products and services related to automation and control, information and communications, lighting, medical, power, transportation and water technologies.

Target audience’s demographics/psychographics

Target audiences demographics incase of Green Solutions are North American households and industries from higher income bracket. This classification easily covers target audience of BP Solar NA which is targeted towards households and higher income bracket of consumers. Consumers of Siemens Power Generation are also targeted through this segmentation that is industries with resources and drive to switch to a newer power supply method.

Psychographics of target audience are also very important as far as this co-branded product is considered. The target audience will be innovators who prefer trying unique and newer products. Also, the consumers will be socially aware of the need of product and are concerned for the environment and conserving natural resources.

Benefits to customer from partnership

The existing consumers of BP Solar will able to use another form of cost effective and environmental friendly power generation option. Green Solutions offer them an alternate on days when there is no sunlight.

Industrial customers of Siemens will be able to use and explore the solar energy for their electricity needs which has efficiently used in space and technological projects globally.

A combination of solar and wind power for generating electricity will enable bring cost of electricity consumption to even lower levels then its existing cost. Providing consumers higher value and benefits for the cost incurred.

Advantages

BP Solar North America will be able to increase its reach to existing consumers because Siemens is a partner that can contributes significantly to co-brand’s bundle benefit.

Siemens power generation is not only provider of home solutions but also provides environmental friendly solutions for industrial use. BP Solar North America can capitalize on their strength and move towards providing combined solutions with Siemens to industry instead of only solar based home solutions.

BP and Siemens both have strong images and perception in market. While BP is renowned for its expertise in fuel quality, Siemens is a renowned expert of electrical and mechanical aspect of technology. A combination of two brands will result in a stronger more forceful brand.

Disadvantages

The only drawback that could arise as a result of co-branding of BP Solar North America and Siemens Power Generation is that the product is completely new and innovative; it might not be very well received immediately in market. However, this is where strong brand images of BP and Siemens come in. Through active environmental marketing the product should be able to receive all due attention. Another important factor is that it is the energy solution of tomorrow and consumers would require time and understanding to completely understand its effectiveness in world of today.

Retail co-branding

British petroleum & starbucks

BP and Starbucks offer a retail promotional scheme; Starbucks @ BP. Starbucks will establish kiosks in BP ampm stores. Any consumers purchasing a Starbucks beverage from BP outlet and purchases any other BP product in the same visit will get 5% of the total transaction.

Partner’s brand values:

• Delivering high quality coffee products through company’s retail stores.
• Operating more then 10,000 outlets all over the world (Starbucks Fact Sheet, 2006).
• Creating value for Starbucks through satisfying customers and employees.
• Understanding that profitability is essential to success.

Target audience demographics/psychogaphics

BP consumers who are purchasing any petroleum product from its outlets are on wheel. This makes anyone owning a car a target consumer. However, keeping in mind premium services that BP offers its consumers we can say that it is intending to target consumers aged 16 and above who belong to a middle to higher level of income. Demographics of Starbucks target audience, young working people, students or people on move who want a quick fill of coffee, is quite similar to those of BP.

Since both brands are associated with high quality as well as affordable pricing and exceptional service, we understand that these values have been associated with both products keeping their target consumers psychology in view.

Customer benefits from partnership

Customer who are on go normally get a fill of fuel for themselves (in form of coffee) and for their cars. Starbucks @ BP is inviting them to combine both their morning rituals into one and get a discount on their convenience as well.

In addition to earning a retail discount on Starbucks kiosks at BP customers are also doing time management while they refuel themselves and their cars at the same time for the day ahead.

Advantages

BP retail outlets will be able to increase its product offering by including Starbucks.
The co-branding will enable to BP to attract consumers who are regulars at Starbucks but use another service for their car fuel requirements, thus helping BP in increasing its market share and volume of sales.
The branding strategy of Starbucks and BP are similar yet unique as per their product offering and equally strong in their respective markets, therefore, there is no chance of one brand eclipsing another.
Starbucks is also benefiting from the co-branding by attracting existing BP consumers who usually go to another coffee house.
The kiosk establishment is line with current of expansion, it will help maintain it its presence where operating a complete retail outlet for a coffee shop is not viable, such as a national highway.

Disadvantages

The only disadvantage perceived of this branding partnership is that consumers might understand Starbucks kiosks to be in place of ampm convenience store. In fact, the kiosks are an addition to the products already offered at ampm and Wild Bean Café.

References

1. Leuthesser, Kohli, Suri 2002, ‘2 + 2 = 5? A framework for using co-branding to leverage a brand’. Retrieved February 6, 2007, from: http://www.brandchannel.com/images/papers/cobranding.pdf
2. BP Global – About BP 2007. Retrieved February 6, 2007, from: http://www.bp.com/marketingsection.do?categoryId=2&contentId=7013628
3. BP Solar North America 2007. Retrieved February 6, 2007, from: http://www.bp.com/sectiongenericarticle.do?categoryId=3050480&contentId=3060150
4. Siemens USA 2007, Retrieved February 6, 2007 from: http://www.usa.siemens.com/index.jsp?sdc_p=c194dfi1431748lmno1002155ps6t4uz1&sdc_sid=3554653738
5. Siemens Power Generation: Wind Power 2007, Retrieved February 6, 2007 from: http://www.powergeneration.siemens.com/en/windpower/index.cfm
6. Starbucks Company Fact Sheet 2006, Retrieved February 6, 2007 from: http://www.starbucks.com/aboutus/Company_Factsheet.pdf