Hassaan Ahmed

Mothercare Pakistan: An Insight to its Retail Strategy..

2017-05-26T10:06:00.000-07:00

Contributed by: Rabiya Inayatullah

Mothercare works with various store formats to meet its customer’s needs; involving small shop-in-shop format to mid-sized high street store to the larger out-of-town or larger store in a mall. Internationally, the mothercare products are sold through its Franchise Partners’ retail stores with a small but growing online presence and a fledgling wholesale business for territories where it doesn’t have Franchise Partners. In Pakistan mothercare is operated by Gull Sons Group of Companies with Yaseen Paracha being company's CEO.

TYPE OF OWNERSHIP

mothercare in Pakistan has franchise type store format. The franchise is operated by Gull Sons Group of Companies & run by qualified management members.

RETAIL FORMAT

mothercare is a speciality retail store, a one stop shop for parents which aims to be the world’s leading mother and baby specialist in the markets in which they operate.

· Store Location:

The store is located in the Dolmen Mall: Shahrah-e-Ghalib, Marine Drive, Block 4. Clifton. Karachi. The store is on the First floor, shop no F-8. The store can be seen easily & it is convenient for the customers to locate the store as the customer’s footfall is very high on the first floor because many international outlets were there.

· Store Design:

The mothercare store is designed very creatively. The merchandise shelfing, the merchandise category segments & baby’s mannequins are designed in a way that it captures one’s site. All the elements which attracts the consumers are involve in its store design that it attracts the consumer. The elements that compliments the store design are:

RETAIL IMAGE MIX

a. EMPLOYEE TYPE & DENSITY:

mothercare’s employees are well trained & representative. They were in clean & well designed uniform with the colour combination of light purple & black. The employees are well informed about their brand, & they guide their customers in a very impressive way. In the store, there are four employees from which three are females. The Area Manager is a female & the outlet Manager is a Male.

b. FIXTURE TYPE & DENSITY:

All the fixtures in the store looks high Standard. They have used style/item presentation technique, that every merchandise is placed in its own category type. They have used beautiful wooden mixed with metal shelves, straight racks, four-way & promotional Aisles. The walls are painted with white textures & they used green colour for highlighting their ELC section. The flooring is granite in a light ash colour.

c. ODOR TYPE & DENSITY:

The store smells fresh. There is nothing that can irritate their customers. The clean & refreshing environment of the store encourages their customers to spend time in the store for examining merchandise.

d. VISUAL TYPE & DENSITY:

The store looks very creative as the merchandise is placed item/category wise, the lighting in the store is so bright that it creates a sense of excitement in the store, the use of white, light ash & green colour creates a calming environment. The store looks clean, well-managed & appealing. The window displays, mannequins & promotional aisles, promotional signage captures the customer’s attention towards the store.

e. MERCHANDISE TYPE & DENSITY:

The merchandise density is high. The merchandise is placed categorically with different SKU’s such as size, colour & fabrics. The store shows great management of merchandise within category. The apparels are placed on straight racks while the Home & Travel, ELC merchandise are placed in promotional aisles and on free-standings.

f. SOUND TYPE & DENSITY:

There is no use of soft music in the mothercare store. The whole store is quite and peace full.

DISPLAYS

The display represents the merchandise management & designing. The entire store looks classy & well-managed. The people who walks through the aisles can easily see every category of merchandise they display. People can be attracted also by the watching the stores frontal display design.

SPACE MIX

The space mix in mothercare store is 65% selling area, 20% ELC area & 15% circulation area.

Impulse merchandise: The impulse merchandise in the mothercare store are the merchandise which are placed besides the cash counter and which are baby liquid talc, soaps, baby cotton pads, baby bubble bath, water teether & kids bags.

Demand merchandise: The demand merchandise is placed in the inner side of the store but displays properly that anyone who enters the store can easily see the merchandise. The demand merchandise in mothercare store are pushchairs, feeding products, buggy & car seats.

SPECIAL MERCHANDISE: The special merchandise in mothercare store are its Early Learning Brands in which they offer different toys for children up-to 8 years. The innovative toys for every children according to their ages. The toys boosts children’s creativity & helps to have a healthy play. The toys include inflatable bowling, flying disc, trampoline & enclosure, bounce castle, etc.

Retail Space Management

The retail space is used in a very systematic way. The merchandise is placed categorically & the fixture design attracts the consumers. The stores frontal view attracts many people & increases footfall. The mannequins of baby’s apparels in the front window, the promotional signage, the ELC toys & the background also captivates shopper’s attention.

Layout & Circulation Plan

mothercare store has a Free-Form Layout as it is a speciality retail store in which they have placed all the merchandise in an asymmetric pattern which provides the customers a relaxing environment for shopping. Customers can circulate easily in the store for browsing as everything is ordered in a systematic way.

Floor Space Management

· Hot spot: The entrance of mothercare store where the new baby boy’s apparels on the left side & new baby girl’s apparels on the right side are displayed is the hot spot because it is the high traffic area in the store.

· Cold spot: The area where the traffic is medium in the store is the back side where the car seats, push chair & bedding furniture’s are placed.

· Warm spot: The warm spot is the fitting room & ELC brand segment where customers traffic flow is low.

MERCHANDISING

1 Hierarchy

Clothing & footwear:

· New baby

· Girls clothes

· Boys clothes

· Kids essentials

bHome & Travel:

· Bed time

· Bath time

· Dinner time

· Car Seats

c Toys ELC Brands:

· inflatable bowling

· flying disc

· trampoline & enclosure

· bounce castle

d Maternity Products

· Feeding bottles

· Maternity towels

· Nursing cream

· Toiletries

RETAIL MARKETING STRATEGIES

a) BRANDING:The mothercare is a well-known international brand. The brand is distinct because of its products offering. The merchandise category & the customer service of mothercare is its unique selling proposition. The brand is customer centric because of which is it able to satisfy its target customers.

b) POSITIONING: The mothercare brand has a unique positioning in the speciality retail market. The brand is in the leading position because of its innovative offerings & valuable service. Mothercare is the pioneer in offering parenting & baby’s products. They got a unique & strong position in the market as they are focused on offering style, quality & innovation in product & great service.

c) RETAIL MARKETING MIX: The retail marketing mix of mothercare includes:

· PRODUCT OFFERING:

Mothercare have a wide range of merchandise with different SKU’s. The products are designed to satisfy customers, creates style, provide high quality & building loyal relationship.

THE PRODUCT LINE INCLUDES:

Clothing & footwear:
Home & Travel
Toys ELC Brands
Maternity Products
Parenting Guides/ Expert in Store Advice

· PRICE: The mothercare products are affordable for their target customers. They have catered elite class so their price range is High & it is so expensive on some products such as on bedding furniture.

· PLACE: The store is located in the Dolmen Mall: Shahrah-e-Ghalib, Marine Drive, Block 4. Clifton. Karachi. The area is reputable & dolmen mall is the place where many customers went for shopping as the mall includes many big brands so we can see high traffic over there. The store location captivates shopper’s attention as it is on the first floor and has an excellent design.

· PROMOTION: mothercare promote their brand through print advertising in which they use many international magazines, the use digital catalogues for promoting their new offerings, through website of their own & through partner’s websites, the brand promote itself, also in UK the brand had organised many events for mothers & babies. Through sales promotion techniques such as 50% sale, discount offers & gifts they attract many consumers towards their store. Its recent sales promotional offer is “A bundle of Joy” in which they offer the customers to Shop at mothercare & get a toy of your choice, at “Half Price”.

· PEOPLE: mothercare’s employees & staff are well trained & well mannered. They have skills to handle high traffic & they have experienced to satisfy moody customers. The staff guides their customers in browsing their products. They greet the customers on the entrance of the store & also when they exit the store.

· PRESENTATION: The store’s presentation is spacious. The store looks presentable & beautiful which catches eye of many shoppers. The store in terms of display of merchandise looks beautiful, everything in the store is properly placed on the shelves & racks that are superbly designed.

ADVERTISING

mothercare advertise through online catalogs, print catalogs & magazines, banners & flyers. Internationally, it uses celebrity endorsement for promoting their brand. They use celebrity’s pictures on the banners, catalogs & magazines. The online advertisement on retail websites such as baby shop & Zubeida mother shop can also be seen.

CUSTOMER SERVICE

Mothercare is a customer centric brand. They are focused about their consumer’s needs & they strive to give best product, guidance & service to their customers. The strong relationship of the brand with its customer’s increases loyalty. Their sustainable quality & service encourages their customers to keep in touch with the brand.

FUTURE OUTLOOK

mothercare is an international brand & famous for its specialty merchandise retailing service. In Pakistan & in other Asian countries; mothercare can open stores in well-reputed areas to attract its target market. The brand is at the maturity level, so they can even increase their product line in some regions. The brands aim to leave its footprints in the globe can be achieve strategically if they provide the same standard of quality & service to their customers.

Fairy Liquid: Advertising Value Since 1950..

2017-05-25T07:18:00.000-07:00

Identifying meaningful communication channels and delivering right message remains core objective for any advertiser when planning for communication strategies. Fairy brand has remained on kitchen shelves of almost fifty percent or more of Britain’s home over half a century now. It’s important to highlight that Fairy liquid has embarked a distinctive place in consumer mind through its performance and value offerings evoking consumer loyalty. Advertisers at P&G Fairy, Strategic business unit have been able to effectively plan for its communication strategy that reflects on true value of the product attributes and features. P&G is able to set right expectations for customers through pitching or highlighting core benefits of the product and has reap dividends in return for being market leader in dish cleaning sector.

Fairy advertisers over the years are able to communicate fairy product performance based

attributes through their interactive TVC’s and social media campaigns. They are able to enforced Fairy cleaning ability through endorsements from opinion leaders such as Chef’s Ainsley Harriott, Anthony Worrell Thomson and Gary Rhodes front the brand together that helps demonstrate experience of someone professional and trustworthy in the industry. Alongside highlighting the features of their antibacterial range of fairy detergent, the various scents on offer and most significantly the all new Fairy Platinum that provides ultimate solution for the greasy dishes offering extra strong and shiner dish washing experience over the years. They are able to persuade their customers and builds strong relationship with the customers. Since customers need to be continuously engaged with product hence an active brand team of the fairy has ensured companies interact with its customers both through social media and physically. An active social media page and online campaigns ensure people are continuously pitched in with value offerings through various online competitions and activity parts that help them win discounts on their purchase. Moreover, sales promotions have remained high critically as sales boost to double when Fairy gets offered through a sales discount.

But the focus with this article remains, evaluating fairy liquid TV advertising since its early

days. They started TVC advertising back in 1950’s highlighting the product value and attributes endorsed through different celebrities of particular era. The post world war II era dynamics remained significant for companies and manufacturers around the world. Since the focus reverted towards developing products that brought convenience to user’s life. P&G introduced the Fairy Liquid following same convenience notion to housewife’s life with Liquid dish washing detergent that helped eased their dish washing chores and simultaneously cared for their skin. The advertisement from then and now truly depicts the values and practices being followed in respect to that particular era. Advertisers at Fairy liquid quickly identified key performing attribute of their product and devised an ever shining jingle that still truly depicts its brand mantra. The tag line hands that do dishes can feel soft as your face with mild green fairy liquid has ensured them a distinguished position in consumer heads. The diligent communication has helped them gain target market attention, developing interest that would ensure to enthral desirability and leading them to take action.

Nanette Newman remained one significant celebrity endorsing the brand in 1980’s, adverts usually portraying the Fairy liquid bottle to clean higher number of dishes in number in comparison to its competitors. The use of celebrities was significant in gaining the attention of the target audience. Since the product entails low interest purchasing behaviour by customers thus, it remained imperative that marketers to adopt a cut through edge strategy to win over their customers. Hence, celebrities with likeable personalities and persona have remained easy target of advertisers to enhance their brand’s image. This can be related to the concept of elaboration likelihood model.

Click for FairyConomy Advert

Fairy 2015 advert, Fairyconomy Spaceship helps us understand the changing dynamics of social and cultural values representing the modern era of gender equality and shaping up of men contributing equally to house chores as women. When compared to an old

advertisement of Fairy, back in 1960’s or likewise even in 1985’s era the fairy advertisement indigenously highlighted women’s in the role of dish cleaning and kitchen cores. While in their current Fairy advert a dad and son relationship is shown instead of mum and a daughter. Significantly a man is shown cleaning dishes while son wishes to make a Spaceship out of fairy. Predominantly, message in the advert remains same highlighting core brand value of fairy, performing an extra mileage than that of its competitors. The product is attributed to clean as much as 50% more dishes than that of their competitors but now with the new formula Fairy last 15% longer than its preceding fairy bottle. Moreover, the current advertisement alongside highlighting the brand rational value of lasting longer does acutely symbolize the new product packaging. As boy seems to relentlessly waits for new packaged bottle to finish so that he can replace his old spaceship through a new fairy packaging bottle. The key notion that triggers is the emotional connection or bond that is depicted within a family as shown in their preceding advertisements. Since mum is shown cleaning in the following frames of the advert while son still awaits. Thus, advertising team diligently puts up the add representing the modern family, where a balanced family role between men and women is highlighted. When critically appraising the commercial semantics, we can identify that a modern house with open kitchen is shown providing a look into dining and sit in area clearly demonstrate the family interaction even during house cores like dish cleaning, hence valuing time. Moreover, providing convenience and value has remained core brand essence and thus advertisers ensure that it reflects through what is portrayed in their adverts.

Finally, the concept of fairconomy helps add quantitative measures to communicated message, since the product category does not instil high interest from consumers so they need some valid and rational reasons to make a purchase decision. Thus, being economical and providing efficient cleaning solutions through a valued offering is the consumer requirement. Thus, it can be easily examined that P&G brand image and value is reflected in the advertisement of Fairy detergents. The new advertisements have inherited the same old legacy of creating point of difference among consumer’s mind that distinctively differentiate Fairy on qualities of long lasting, anti-bacterial, and being soft on skin traits.

ARGOS KEEPING UP WITH TECHNOLOGICAL CHANGE AND SOCIAL MEDIA

2017-05-23T13:03:00.000-07:00

The diligent adoption of social media and modern day digital technology cannot be better exemplified by a business than Argos, known in digital arena as the industry leaders.

Argos with 5 million stores worldwide, out of which they opened 53 new digital stores, requires them to target their customers both tangibly and virtually. Thus, they came up with an innovative manner to effectively create a harmony between their physical and online world, and improving their customers’ shopping experience both digitally and in-store. They employed the services of many digital and online marketing, sales and social media tools, strategically giving a boost to their sales and customer experience.

(Argos Future Digital Store)

For instance Brandwatch Analytics allowed Argos to know exactly how their customers were reacting on social media specifically Twitter, to the revolutionary change they brought into their digital stores, meanwhile Argos could categorize and organize this information and benefit from its use. Most recently, having implemented Scala digital signage solution technology by Pixel Inspiration in 7 UK stores, Argos is able to enhance their sales system,

deliver an all-inclusive brand experience to consumer and better manage their customer communication. The product browsers have shifted to iPads instead of printed catalogs and a 60 sec fast-paced collection service has been introduced (Scala.com, 2016). Also Argos utilized the services of Adobe Marketing Cloud including Adobe Analytics and Adobe Experience manager solutions, multiplying their marketing revenues. It not only enabled them measure their customer purchase behavior and to engage better with their customers on social media, enhancing their brand relevance, but also directed Argos to comprehend which social media channel to invest in and how to quantify their results.

(Retail Store Rankings)

Moreover Argos implemented Conversocial technology to power up its customer service performance on different social media channels like Twitter, Facebook, etc. It enables Argos to reach their consumers even before they launch any official complain, just by tracking their comments on social media about their reaction on purchase and product experience (Roberts, 2015). According to a study last year, Argos turned out to have the largest share of search for several holidays, especially Christmas, retail period, besides the brand Amazon. These organic searches provide a ripe opportunity to online retailers, and such effective strategies and their effective implementation that Argos has put together, enhance the search visibility and overall brand equity of retailers.

Argos has two separate social media accounts: to manage their advertising and promotion, and to respond to their customers, that they employ effectively as can be observed in a tweet that got viral last year, showing their social media tactics and immediate customer response. According to a research by IMGroup, Argos is rated number one in providing social customer service on Twitter and stand in second ranking for the same on Facebook, being overall second best customer service provider on social media. The same study indicated that 53% of customers today expect brands to respond to their query or complaint within or less than 1 hour. Not only Argos upped their standards by digitalising and revolutionizing their business and customer experience but also launched one of the biggest campaigns to make their customers aware of their digital transformation, comprising of TV, Cinema and outdoor advertisements and a complete renovation of Argos mobile app and website.

(Digital Catalogs)

Argos further took an innovative step by partnering up with Transport for London network and opened first ever Underground digital store, Argos Collect; which is estimated to generate 3.4 billion pounds in the coming 10 years. A route where 4.2 million travels take place on daily basis, Argos gained a hefty customer base. Digital customers today have tremendous demands for convenience, enhanced choice and speed in fulfilling orders; especially for the concept of click and collect which caters for customers to collect their orders placed online via a store or shop located nearby. Argos is considered a leader in this particular feature, and has now gone one step ahead by introducing click and reserve feature as well, letting consumers hold their ordered commodity until they can conveniently pick it up (Morris, 2014). All these efforts on their social media marketing strategy implementation and technology innovations has rendered Argos a Return on Investment of 7000% on their transformation campaign in initial 6 months.

Nike Vs Adidas: Choice of Celebrity Endorser providing competitive edge.

2017-05-22T13:21:00.001-07:00

In modern era marketing communication it’s all about hitting back to consumers with intuitive campaigns and advertisement that can revive brand image and increase brand retention in consumer head that can help generate a meaning full sales volume. Hence, marketers at Nike and Adidas meet these challenges with variety of tools and technique, celebrity endorsement is one among many used by them.

The two rival giants Nike and Adidas invest heavily on their respective marketing campaigns showcasing wide range of their brand collections and labels through various physical activities. According to Euromonitor International financing marketing activities remains core to both brands existence but doing it rightly to meet the objectives remains high on strategic note. The list of Nike highly paid celebrity endorsers are depicted in the picture.

Michael Jordan might have retired from the sport but has remained key Nikes highly paid endorser at $60 Million, but he is worth for every penny paid by the company as his Signature Shoes generates one of the highest sales volumes for Nike as illustrated in ROI section. According to therichest.com (2014) Lebron James is another key note endorser for Nike who signed him in to a seven year out from high school in 2003 with $90 million deal. James is said to earn about $20million per Annum and in return his signature shoes generates $30 Billion in sales. Lebron mains highly popular among the Kids and his signature shoes bring high volumes in the kid’s category as explained in (forbes.com, 2014).

Return on Investment from Celebrity Endorsement

It has been years to the retirement of Michael Jordan but such is his creditability and endorsing image that Nike’s Jordan Brand value accounted at $2.6 Billion with an increase of 17%. Jordan market share accounted at 58% in year 2014 from (reuters.com, 2014). While on the other hand Lebron James accounts as a most value celebrity endorser in current era playing sporting stars with annual earnings estimated at $44 million for him. His deal with Nike reaps $340 million worth sales under James signature shoes category, that have risen by 13% from the preceding years as mentioned in SportScaninfo.com (2014).

To compare with other endorses Lebron signature shoes reaps double the revenue from second best seller on the list Kevin Durant. Further Kobe Bryant ranks third on the list for sales of signatures shoes during 2014 with the highest annual increase in sales number, that rose from $50 million to $105 increasing by almost more than 50% even though Bryant had missed two seasons due to injuries from (forbes.com, 2014).

Brand Image highlighted from endorsing the football sporting events

According to BBC.com (2014) Football has a vast global reach and provides brands with opportunity to far spread their brand reach by associating themselves with the sport. This can be witnessed by evaluating Nike and Adidas market association with the sport. They invest large sums of money sponsoring teams in various football leagues enabling them cater to global audience. This allows them to increase brand awareness and sales for football goods and apparels. According to statistic from (BBC.com, 2014) news report Nike supplies shirts to about 26 clubs in comparison to Adidas of 18 only. But it’s important to highlight that major chunk of sales come from Premier League teams accounting for about sales of five millions shirts. Whereas in European the big five leagues accounted for sales of thirteen million as depict in the pictorial statistics below. Adidas being able to generate sales of £108 million in comparison to Nike £100million from the European top club deals.

According to fashionunited.co.uk (2014) Germany based retailer Adidas, according to Peter Walshe, director of Global Brandz, thrives upon one of its major weapon against rival brands that is their powerful communication and marketing strategy. He believes the ways Adidas and Nike are different from each other are far more than just the contrast in profits and brand size. Adidas' marketing campaigns are imperative contribution to the uniqueness of their brand identity, ensuring their future success. He further elaborates the significance of differentiating from rival brands, by taking steps unique and different from competitors. Adidas has made this possible by directing a specified fund towards their product segmentation strategy which focuses on their fashion and lifestyle sections. These divisions, including Adidas Originals and Adidas Neo, specially target the youth and teenagers making them the prime segment of the brand. With the launch of Fall Winter collection 2014, Adidas Neo features Selena Gomez as their brand endorser and guest-designer, hence extending the label. By the extension of Adidas Neo, Adidas has taken a solid step into the teenage market. Adidas Neo main target are the style, fashion and trend-adopting teenagers in contrast to those preferring sports-performance. Having a lower price comparatively it positions itself among the fashion brands with likes of H&M. With the whole teenage and youth segment to cater, Adidas will venture its campaigns through digital marketing media and social media, as these mediums are significant for brand support in today's' fast tech world extracted from (fashionunited.co.uk, 2014).

Application of Woodruff Customer Perceived Value model on Apple Brand

2015-02-14T06:29:00.000-08:00

Woodruff (1997) defines customer value as how customer prefers and evaluates the characteristics, attribute performances and consequences that arises from consumption providing for the achievement of a customer's goals or objectives regarding that particular situation of consumption. Woodruff relates the concept of desired customer value is conceived as a component of the whole value system of the customer. It focuses on the conceptual value dimensions, or outcome, obtained from specific performance attribute as explained by (Woodruff, 1997).

Woodruff model is based on the means-end theory and related that customers desired value is different from the received value. According to Woodruff (1997) the consumer perceive value after using the commodity. His model incorporates two dimensions known as desired value and received value. Descending the hierarchy that illustrates desired value, the apple user will initiate from desire to achieve his/her objective, for which the customer will reflect upon the consequence that may attribute to the goals. An apple user would enumerate certain objectives or goals involving the product usage and applicability that will lead up to build his experience. The consequence will take the user further to select product attributes that may include features and functions and attributes' performances. While ascending the hierarchy suggests the apple user will choose these two factors before buying. The outcome will be the sought-after consequence which will lead to the desired objective retrieved by apple user from value in experience.

On other side in Woodruff model comes the received value from the product and involves three stages as well forming a hierarchy as depicted in the picture above. The three stages are interconnected but cannot be achieved simultaneously. This deduction bring us to three levels of satisfaction, that results respectively from product attribute, performance consequence and customer's goals. Therefore we can say that Apple user can benefit from one after another form product attributes of IPhone and can attain its goals and experience satisfaction by meeting up the consequences.

Furthermore, the User can evaluate the value from deducting perceived benefits of the Iphone from its perceived cost. Which can vary from individual user to user. Perceived benefits may include convenience, quality and prestige/status. This will only be attained once a user experience it referred to as Value in experience that include all the four steps on customer value experiencing. While a user would also bear a perceived cost that includes money, time, search cost and mental fatigue in attaining of the phone. Thus customer perceived value would be attained by dividing the perceived benefits from perceived scarified/cost. Hence this way value can be determined by the users that will enable to evaluate against other competing products. Whereas, managers can benefit from it by analysing and getting insight to consumer thinking process and formulating strategies accordingly.

Keywords: Customer Perceived Value, Woodruff Model, Apple, Consumer Value

Factors determining Comparative Advantage for a country

2015-02-14T02:06:00.001-08:00

A country can attain comparative advantage in producing goods and services that enables them to export that commodity to other countries. Litertaure on international trade and policy frameworks many reasons that allow countries to trade and export goods. Most of them can be classified into (1) Technological superiority, (2) Resource endowments, (3) Demand patterns, and (4) Commercial policies by Sanides (2009).

1. Technological Superiority

Technological superiority has formed the bases to economics two prime theories. First is that of Adam Smith’s theory of absolute advantage and other that of comparative advantage by David’s Ricardo (1817). These both theories formulate their grounds on the concept of country having technological superiority over other while producing a certain commodity. The concept of absolute advantage refers to the country’s ability to produce a commodity either with a higher productivity or at a lower cost per unit production than other country by Economist (2009). But country’s absolute advantage in producing a commodity does not necessarily means to bring mutual benefit to trade. For example: a country can have absolute disadvantage in all goods and services it produces compared to another country yet it can draw advantage by means of international trade. This tends to happen because of comparative advantage in producing a certain good comparing to other countries.

2. Resource Endowments

According to Seyoum (2007) countries who don’t pose technological superiority might experience abundance availability of resources than other countries giving them comparative advantage. This happens as resource availability allows them produce commodities in bulk and lower per unit cost than competing countries. Differences in relative factor endowments also lead to a country comparative advantage illustrates Rieti (2012). As promulgated by Heckscher and Ohlin country should specialize to produce commodity for which the resources are abundantly available in the country this will lead to comparative advantage by Subasat & Turan (2003).

3. Human skills:

Among various factors of production human skills (mental and physical) both act as an important resource for a country. Chor (2010) describes countries that have relative abundant human skills tend to have comparative advantage in producing commodities that extensively requires human skills. For example: Products that may require special skills in terms of engineering, programmers, web designer and many other highly skilled labor jobs would require certain skill set of employees. Since country with abundance of these type of skilled labor would reap comparative advantage than ones who does not.

4. Economies of Scale:

The term economies of scale refer to a company or country producing certain commodity in bulk quantities that allows them to reduce per unit cost of that product described by Palley (2008). Whereas government can also intervene to help lower the production cost by means of external economies by introducing certain industry policies that provides good infrastructure and well trained employees to the sector. This may boost or create a comparative advantage for the industry experiencing such economies of scale by Sanides (2010).

5. Technological Gap (Benefits of an Early Start) and Product Cycle:

Developed economies benefit from their developed industrial infrastructure as they tend to gain early start up advantage in producing most of products that brings them comparative advantage by International trade centre (2011). This gives them chance to cater to large local and international markets and milk the high margins at start until times with low factor cost countries enter the market domain for those products as explained by Vernon’s (1966).

6. Demand Patterns: Demand Considerations

Size of the domestic market and demand patterns have clear implications on developing equilibrium terms of trade and gains from it. Moreover, it also helps bring economies of scale and product cycle hypothesis. According to Costinot (2009) relates that demand in local market steps as a milestone leading its success in international markets. As per Alessandrini et al (2007)concept producers develop new products to satisfy the home market needs initially. This gives them valuable experience and ensures to improve on their processes making product much efficiently and effectively bringing the cost effectiveness and comparative advantage respectively. Chang (2009) postulates exporting the product to countries with similar tastes/demand patterns. The theory, coupled with market imperfections and product differentiation can explain a large portion of intra-industry trade among the industrialized nations.

Keywords: Comparative Advantage, Framework for Comparative Advantage,

Measuring Revealed Comparative Advantage by Balassa Index

2015-02-13T05:18:00.000-08:00

Balance et al (1987) coined a basic theoretical framework that enabled us to determine relationship between conjectural notions of comparative advantage in relation to measuring comparative advantage practically.

EC à CA à TPC à RCA

The above equation determines that economic conditions varying across countries are main drivers for international pattern of comparative advantage. The under lining factors of these patterns consist of production and consumption variables in international trade. The relationship between first three factors Economic conditions, comparative advantage and trade production and consumption factor are core to determine motives behind international trade theories. This refers to understand economic factors that thrives comparative advantage and promote trade and evaluate the effect of trade on economy by Balance et al (1987).

Balassa Index:

In trade theory, the phenomenon of comparative advantage highly depends on the pre trade commodities‟ relative prices, but it cannot be observed in real world. Researchers or the economists may have access to future trade or the existing trade data. Thus to provide solution for calculating comparative advantage for any country or a commodity Bela Balassa (1965) proposed the concept termed as Balassa Index that calculated comparative advantage by means of differences in relative factor endowments.

The index computed by Bela Balassa worked on basis for revealing comparative advantage to the country’s most efficient, less efficient and least efficient sectors. Thus in broader concept it allows to explore competency of strong sectors of economy. To derive the comparative advantage from Balassa index post trade data is used. Hence, revealed comparative advantage is calculated by attaining the relative value of a commodity in country’s total export value divided by commodity relative value in world’s total export by Bela Balassa (1977).

Since Balassa index does not possess cardinal or ordinal property it has been discussed highly in literature because of its magnitude. Hence, it is considered as valuable tool in measuring advantage of an economy in a particular product deriving from post trade data. According to Michael Porter (2002) in some cases Balassa Index above 1 or in others Index exceeding 2 highlights country’s strong sectors.

Balassa Index is calculated according to the formula;

BRCAij = (Eij / Ej) / (Ei / E)

Where

BRCAij = Balassa Revealed Comparative Advantage index for commodity i of

Country j

Eij = Country j exports of commodity i

Ej = Country j total exports

Ei = commodity i total world exports

E = total world exports.

The equation above describes market share of country ‟j‟ in export of commodity ‟i‟ and compares its market share in the world export market. If the calculated value of BRCAij is greater than unity it means country ‟j‟ has comparative advantage in export of commodity ‟i‟. If BRCAij is less than 1, it indicates that country ‟j‟ has comparative disadvantage in export of commodity ‟i‟. Finally, if BRCAij is equal to 1, it means country ‟j‟ has neutral comparative advantage in commodity ‟i‟.

Keywords: Comparative Advantage, Revealed Comaprative Advantage, Balassa Index

Comparative Advantage Theory

2015-02-11T04:55:00.001-08:00

David Ricardo (1817) in his concept for comparative advantage theory tried to outlay the flaws of absolute advantage model and fulfill the gaps with his concept of comparative advantage theory. In his theory he discussed about countries producing commodities that they attain comparative advantage in relative to other countries. Ricardo theory is based upon opportunity cost rather than financial cost. He further stressed on comparative advantage being the way forward for a country to gain efficient goods production.

In real terms when countries specialize with concept to comparative advantage it helps increase the overall global production and leads to raise global living standards. David Ricardo critically appraised Adam Smith theory illustrating that countries should focus on producing commodities that they are better at comparing to other world countries. He was also against trade barriers and tariffs that restrict free trade in the world. He focused on advantages of comparative advantage and emphasized it to be the way forward for achieving efficient worldwide production.

Ricardo’s comparative advantage theory interprets the advantage between two countries trading wine and clothes. England and Portugal in this example, he explained that England required 100 men to produce cloth and 120 men for wine production. So, it would be in the favor of England to import wine and export cloth whereas, Portugal might utilize 80 men for wine and 90 for cloth production. Ricardo further explained that it is beneficial for Portugal to export wine in exchange for cloth with England Ricardo.

The comparative advantage as a concept in economics is among few of the rational ones. In his articles he discuss the parameters of the comparative advantage theory and identify the key point that country even with no absolute advantage in any particular sector can specialize in industry with it is least bad at it and use that commodity for trade gaining advantage.

Keywords: Comparative Advantage Theory, David Ricardo, Adam Smith

Significance of Corporate Social Responsibility

2015-02-10T06:20:00.000-08:00

There has been growing importance of Corporate Social Responsibility (CSR) phenomenon in the contemporary business and community across the world. It has been becoming a matter of great significance for business firms to rely on CSR initiatives to secure increasing support from community groups and stakeholders community leading to their business growth and success. International businesses have shown great enthusiasm towards a robust CSR performance in host and developing countries so to clinch stronger local and global community support for their business affairs.

Under CSR initiatives, business firms come up with effective targets and performance in serving their clientele, shareholders, employees, suppliers, community groups and environment. They evolve socially responsible and environmentally sustainable strategies to conduct their business affairs and proactively engage into community-based partnerships to ensure socio-economic growth and development of general public. They also engage into business relations with those parties who hold impressive CSR credentials. Their CSR-based mind-set and behaviors significantly help them to meet their financial targets with lowest possible operational costs and stronger community supports.

There has been growing trend among businesses to publish CSR reports worldwide reflecting their dedication to social good and environmental concern alongside meeting financial targets. There has been growing understanding and scrutiny by society groups over the CSR initiatives and performance of business firms in seeking public welfare. Consequently, business firms have shown more willingness and compliance to integrate greater societal and environmental facets in their CSR exposures. They have adopted international standards to give a fair and true account of their CSR targets and achievements. They largely count on community’s feedback and expectations to evolve their CSR strategies. They provide full account of their financial and societal operations for the appraisal of their performance in utilizing community financial and human resources in seeking general public welfare. They provide regular CSR reports and exposures developed under globally recognized criteria for public information and accountability. Strategic Corporate Philanthropy can be attained by meeting the marketing and other corporate objectives of businesses by investing in CSR activities. They do so by voluntarily allocating resources to social services and charitable cause as a discretionary responsibility.

Keywords: Corporate Social Responsibility, CSR, Corporate Philanthropy

Employee Empowerment for Customer Oriented Culture

2015-02-07T01:36:00.001-08:00

Employee empowerment helps delegate employees with decision making power in their respective domains. The halo effect concepts relates it to errand the responsibility of employee from that of management. However, the philosophy of the strategy is to instil leadership skill at every level of management with indistinguishable vision. The purpose of this standpoint is to enable a team culture in the organization to boost productivity by assigning responsibility.

Employee empowerment is believed to augment the morale of work force which has mark influence on productivity. It can result in multi dynamic performance and coordination. Yet, scholars have demonstrated various concerns over the strategy that articulates the possible aftermaths of the implication. Consequently, it can be concluded that employee empowerment and organizational outcomes have direct relationship that can be measured in terms of employee productivity, customer satisfaction and ultimately the success of organization.

However, the necessary components of such a culture should be amalgamated in a manner that should boost the self esteem of employee with the ethnicity of shared learning. Management attitude needs to be appropriate to submerge its reflection down the line to enhance efficacy. Hence, its important to undertand that the process of cultivating employee empowered culture in an organization is a gradual and time taking process. A patience focused approach can bring in necessary changes in the environment to nurture employee commitment and ownership.

A positive image of total customer experience is necessary for the development and maintenance of healthy customer relationship management, which cannot be accomplished until the introduction of the chain of necessary element in the organization. Therefore, it can be declared that the introduction of customer oriented culture in the organization requires the stimulation of a compact process comprised of training for leadership, communication and coordination across the board along with behavioral changes of management with improved recognition, delegation and team building. On the other hand, evident is the fact that an imbalance of behavioral modifications in organization culture or individual learning may lead to massive aftermaths.

Investigations of reputed scholars have proved the subsistence link betweem healthy employee engagement w customer satisfaction with the support of authentic analysis. Researchers have developed and explained the most convincing affect and impact theory on the same grounds. The same can be studied from the flow of after effects of motivation towards customer satisfaction until remarkable financial performance of an organization, which can be well understood.

Keywords: Employee Empowerment, Customer Oriented Culture

Significance of Consumer Behavior in Contemporary Era Marketing

2015-02-06T04:55:00.003-08:00

Marketing in contemporary era has assumed status of integral part of businesses provided the ever increasing competitiveness is the global industrial scenario. It is agreed that along with having so much importance in the modern era, marketing has also been subjected to various concerns that make this field one of the most toiling and taxing domains both in academia and corporate world. What makes the discipline rigorous is the product of modern consumer behavior spanning across the globe. state that by definition, the consumer behavior is: The study of individuals, groups, or organizations and the processes they use to select, secure, and dispose of products, services, experiences, or ideas to satisfy needs; and the impacts that these processes have on the consumer and society.

Researchers are of view that consumer behavior has been a fully-fledged discipline that counts in considerable support from the other disciplines such as psychology, sociology , social anthropology , marketing and economics. In order to understand the dynamics of buying behavior, marketers act as useful interface between the organization and consumers. Hence therefore consumer behavior is taken in perspective with multiple factors that are related to demographics and psychographics of consumer base.

Consumer behavior works for the benefit of both organization and customers since both the parties end up with their motivations tapped and aspirations fulfilled. It is evident that marketers struggle day in and day out to make a match between what consumers think of their wants and needs and what organizations are capable of putting on offer for them. This match determines the fate of a company’s repute and tells the successful brands apart from others. We can describe consumer behavior as; It attempts to understand the decision-making processes of buyers, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general. Significance of the study for consumer behavior can be explained with the fact that presently marketers see three pronged advantage as the study of consumer behavior reveals the attitudes of consumers in capacities of user, payer and buyer. All the capacities have different connotations over the buying decisions.

Consumer behavior is an esoteric area in the light of this fact that researchers have come up with multiple fields within the traditional marketing such as Customer Relationship Management and others. The focus of emerging fields is to make the most of understanding of consumer behavior studies and to obtain exactitude in the findings. At present tumultuous patterns of the markets require the companies to keep a sharp eye on consumer retention, customization of offerings and one-to-one marketing.

Keywords: Consumer Behavior, Customer Relationship Management, Consumer Decision Making.

Advertising: Exploring Consumer Emotions

2015-02-05T13:17:00.001-08:00

Advertising in itself carries huge implications of creativity and evolution. Being a crucial part of wholesome IMCs (Integrated Marketing Communications), advertising enjoys crucial position within the domain of marketing. It has always been a non-personal paid pattern of ideas and propositions that back up and support the concepts of products and services offered by organizations. The information and promotional gimmicks are communicated to the targeted audience through certain extent of use of visual, verbal, and textual media. There is always an identified sponsor behind the making of advertising messages and the use of emotions come into play in accordance with the end results in perspective.

On the part of emotional response is that the advertising’s real essence is of creating and understanding the target audience. This understanding is intended to create positive vibes for consideration of the product and service in view. As it has been established through researches and expert observations, the marketing theory has always been mostly influenced by consumers’ attitude-towards-the-advert. The attitude towards the ads helps shapes up the perception of those customers for consumption of particular item thus it is surely linked to the attitude towards ad that how buyers figure out the whole product or service. As we can illustrate that consumer buying behavior is based on the concept and idea that he/she simply decided to purchase a product or service at the spot. The major aim of advertising is to create positive attitude towards the ad and the brand until consumer purchases that product and through this positive attitude create emotional response in the mind of consumer That is why basic aim of advertising to encourage people to buy things and creates awareness.

Traditional attitude theory describes that consumer behavior is recognized for its future implications as soon as the customers choose the brand to pick it up from the shelf against financial transaction. It is usually believed that consumers buy the brands that they like and the other arguments also abound that consumers might be someone else for the product or service being purchased. For the second part, the consumers might be buying the products or services for those who prefer the particular brand so in this case the emotional connection cannot be ascertained. Further the attitude per se can be regarded as a behavioral proposition based on acquisition from the outer world so there also is somewhat strong indication towards the authenticity of affective behavioral response in consumer behavior literature. The behaviors of consumers are acquired from the environ as they all interact with different advertising messages and also with different influential circles thus ending up with considerable magnitude of external influences.

According to Schiffman (2001), the emotional response is pivotal for producing certain kind of behavior in the target customers and following are few factors that work in this regard:

• Pleasure: the state in which person feel good, happy, or joyful in a particular situation.

• Arousal: the state of feeling that is varying from person to person in different situations i.e. feeling of excitement, active, bored, or sleepy.

• Dominance: this defines individual feelings, which are in control of or free to act in a particular situation.

Consumers can be subjected to the advertising messages on daily basis so much so that there are certain ads that attract or start attracting the consumers’ attention and resultantly become preferable ads to watch. This in turn leads to the selection of those brands when consumers go shopping. The theoretical implications of marketing suggest that consumer really go to buy the brands that they prefer to watch ads of and this is something that deeply connects with the provisions of ‘actual buying behavior’ as it is mooted in formal marketing literature from around the world.

In addition the individual customers buy on the basis of impulse and they are usually influenced by the emotional make up as normal human beings have always been. There can be several attributes that can be enumerated to relate to the brand exclusively but the importance of visual and emotional appeal of ads cannot be disregarded in comparison. While advertisements’ appeal is more cogent for the audience that is subjected to the advertising messages most of the times through different media. There are several brand associations that the marketers try to come up with and the value of brand recall increases with the passage of time provided the consumers evolve positive feelings regarding the advertising messages that they frequently see on different media they consume. Emotional advertising is considered an effective tools, since consumer ultimately gives emotional response to product. Normally, a positive relationship between visual, verbal and text intensity of media and emotional response has been found.

Keywords: Advertising , Emotions, Marketing Communication , Integerated Marketing Communication, Traditional Attitude Theory

Marketing Communication Shaping Consumer Behavior

2015-02-05T08:02:00.000-08:00

Marketing communications have always been important in survival and growth of the business. The role of marketing communications in shaping and influencing the consumer behavior has been prominent for ages now. The importance of shaping consumer behavior among marketing communications has assumed much significance than ever before provided the mayhem in the markets. As marketplace has saturated with multiple brands in same categories of products and services compete and spoilt consumers for choices. Marketers have always been burdened with taxing jobs of researching markets and consumer behavior and tailor marketing communications plans and programs accordingly.

Moreover, the role of marketing communications has become more robust in the wake of advent of internet and social media communications. The multitude sources of information available to consumers has actually made the turf of marketing communications more demanding and detail oriented. The level of volatility in consumer behavior has gone from bad to worse as and this is the reason the marketing communications have gained the status of most instrumental business area in the corporate scenario. The new era of information influx requires the marketing communications anew and therefore the concepts of consumer generated marketing and customer centered brand managements are rearing heads to rule to roost. Elaborating the evolution of novel approaches in marketing communications for the consumers of late. It can be discussed that there is a kind of "always on" communication system shaping up between the most outspoken and committed of the tech-minded users. It is in connection with understanding of consumer behavior that the marketers get engaged in several activities pertaining to honing and strengthening communications of marketing.

Marketing communications merit certain level of data researched regarding the present consumer behaviors and attitudes. It is of view that IMCs (Integrated Marketing Communications) in present corporate world take in consideration a great deal of data to segment and target markets suitable for the proposition in view and the positioning is carried out in accordance with such categorization of the markets. Reaching consumers at all those moments when their decisions are most affected and influenced. This pattern of exercising influences evident by an example of consumer electronics companies that ensure not only that customers see their televisions in stores but also that those televisions display vivid high-definition pictures. It’s why Amazon.com, a decade ago, began offering targeted product recommendations to consumers already logged in and ready to buy. And it explains P&G’s decision, long ago, to produce radio and then TV programs to reach the audiences most likely to buy its products—hence, the term - soap opera. It has been a common perception that pervades within the marketers from across the globe and that is: Seek the moments and touch points that bring consumers closest to the marketing communications or advertisements to exercise maximum influence on consumers’ thought processes.

Marketing professional have worked on few of the ground breaking models that are likely to be applied to consumer decision making processes in relation to the marketing communications and the touch points. Among various models of consumer decision making process, one is based on a metaphor – funnel. The premise of this school of thought is that consumers actually make their journey from various alternatives to few and then to the selected one while deciding upon the items for purchase. It states that most of the times the consumers start thinking of alternatives that they want to buy first and then go through a mental process of omission of alternative until they reach most likely few. This is the touch point among many others that the marketers try to tap with marketing communications as consumers are to be directed at this juncture of selecting alternatives. Branding, comes to fore while the consumers are going through the funneling process in their minds casting away certain brands and considering the remaining few. But it is of concerns that the funnel concept has now taken jolts for its inadequateness as market is more proliferated than ever with most competitive offerings. The influx of information has made the matters more troubled for marketers to concentrate their efforts before well informed customers.

Shaping up the consumer behavior requires great deal of effort from the marketers’ end as the approach has not been linear anymore. The decision making process carried out by the mental faculties of consumers is far complex than previously considered decision making patterns. Therefore it can be illustrated that marketing communications take in consideration the consumer behavioral patterns and consumer decision journey is indeed the most mooted and discussed area in marketing literature. The situation gets even complicated for marketers to align and meet changing market needs.

Keywords: Marketing, Marketing Communication, Consumer behavior, Metaphor – funnel, Integrated Marketing Communication

Enhancing Employee Engagement

2014-05-07T05:11:00.000-07:00

Employee engagement is under sharp observation of organizational stakeholders due to its ultimate significance. In order to improve employee engagement different psychological conditions are used to serve personal engagements: Psychological meaningfulness, psychological safety, and psychological availability.

Psychological meaningfulness reflect the practical value of the role for individuals’ aptitude as employees feel the role matters a great deal for individual’s personal development. The Psychological meaningfulness as affected by task characteristics as well as by work interactions. Psychological safety pertains to individuals’ sense of security as they fear the roles’ characteristics influencing their personal characteristics and values. It is of view that such security concerns are relevant to interpersonal relationships, group dynamics, management patterns, and more.

Psychological availability is related to individual’s own self perceptions. Employees’ perceptions need to be in line and conducive to the roles they are required to obtain and such capacity come from all physical, cognitive and emotional domains. The few distractions influence psychological availability of employees in a negative manner such as lack of physical and emotional energy, and insecurity. Management scholars and researchers have advocated the Kahn’s framework as predecessor of employee engagement evolution. As far as meaningfulness of work is concerned, job enrichment and job fit predicted positive behavior while rewarding is sure recipe of safety for employees. The psychological availability dimension gets ample support from resources physically available to the employees.

Few current practices used in industry to promote employee engagement at workplaces include surveys and benchmarking. Different organizations have been using employee surveys and benchmarking to gauge numerous conditions available in work environment since all of the conditions might be related to engagement in any way. The results out of such initiatives are used conclude as to how engagement should go about taking the center stage in employee relations. Popularity of surveys in employee relations can be witnessed by the fact that consulting firms along with popular press have been reporting the engagement levels in organizations and those too against other organizational performance indications. The use of surveys to benchmark employee engagement levels, however, is rife with limitations.

Keywords: Employee Engagement, Organizational Performance

Motivation to Harness Positive Employee Relations

2014-05-06T01:57:00.001-07:00

Motivation in general has been the most elusive concept in human relations and relevant transactional matters. It is as crucial to employee relations in organizations as it is for the relationships maintained outside organizations but its importance is most of the times overridden in the wake of conflicting opinions of stakeholders. Employee Relations is an aspect of business that plays a crucial role in the success of overall enterprise in both the short and the long runs.

The topic in itself is protean as the domain engulfs various pressing issues that gnaw at the very stakeholders who happen to be at the helm of affairs. The issues which both motivation and employee relations deal with can be enumerated as rewards and recognition, performance management, succession planning and the likes. With respect to motivation at work, it is all about activating and directing human behaviour towards achievement of goals which ultimately are relevant to both employees’ personal and organizational goals.

Organizations initiate, develop and maintain certain processes legitimized by upper echelons in order to vitalize and make employee achieve organization’s larger goals in the long run. Motivation is more than energizing employees to achieve the tasks at hand and it is sufficed by the statement: “Motivation is concerned with how behaviour gets started, is energized, is sustained, is directed, is stopped and what kind of subjective reaction is present in the organization while all this is going on.”

Here is the subjective side of motivation to delve deeper into with employee relations in perspective. Motivation in organizations can easily be considered tantamount to a scientific discipline unearthing and establishing ways in which employees can be motivated or repelled from organizations’ desired roles and behaviors. It is a popular view that modern corporate mechanism treats competitiveness as fodder to gorge upon and is also fed with concerns of external competition. Such rigor in corporate modus operandi asks for ultimate satisfaction of talent at work. Retaining employees who matter the most is one of the foremost aspect that higher management of organizations are worried about in present years. Human Resource Management has reared its head as the most reliable business support function as the discipline is a popular management paradigm in contemporary managerial scenario.

Satisfied and motivated workforce definitely affords organizations with a hard-to-imitate competitive advantage. Human Resource Management is therefore considered part and parcel of modern strategic management. HRM predicates its operations on two basic tenets. There’s a hard version which posits that resources such as workforce should be controlled tightly enough so that their economic outcomes could be manipulated as well for the larger good of organizations. On the other hand the soft version states that there’s human side to winning commitments from employees as they need to be nurtured so as to contribute to the fullest to organizational goals. The dichotomy of focus of HRM approach is ascribed to the McGregor’s theory X and Y which is considered another milestone in the work accomplished with respect to work motivation.

Employee relations have also been an integral part of what Human Resource Management does along with the crucial indulgence of upper echelons of organizations. There has been somewhat confusion among usage of the relevant terms such as labor relations, industrial relations, employment relationship and employee relations but there are minor differences among all. Industrial relations have got employment relationships under its aegis but that industrial relations have intrinsically assumed the role of employment relationships in present scenario. The focus of this research is solely on employee relations and this discipline is considered in the realm of non-industrial employment relationships.

In a conventional stream, the subject of industrial or employee relations revolves around mere trade unionism, collective bargaining, national labour policy and labour law which are considered a part of the whole not otherwise. Employee relations strategy, pertain to the liaison between employer and employee with respect to multiple issues that emerge in day to day proceedings. The issues have potential to affect employee performance along with rendering him or her delinquent in the duties assigned. Addressing the grievances and relevant procedures are crucial to employee relations strategies in present corporate era.

There’s need for employee relations in formal organizational structure because relationship between employers and employees can be ameliorated by having support of overall strategic mission and vision. Employee relations are always dictated by views differentiated from the perspectives of employers and employees. It is of viewpoint of employers the employee relations go awry when employees exhibit non-compliance and be based performance with absenteeism as well as high turnover rate. From employees’ angle, employee relations take a wrong turn in the wake of serious issues such as discriminations, disagreements, hygiene and safety problems, conflicts on policies and terms, pay deductions and dismissal etc.

Keywords: Motivation, Employee Relation, Employee Motivation

Insight to Performance Management and Employee Engagement

2014-05-05T06:15:00.001-07:00

Performance management is considered a crucial aspect of modern business mechanism and has been instrumental to organizational effectiveness. Concept of performance management is deep rooted in an organizational culture that promotes continuous improvement in individual skills, behaviours and all business processes. Managing human capital with utmost possible accuracy has been foremost concern for organizations in the backdrop of highly competitive industrial scenario.

Unfortunately there are only about one third of employers globally who consider performance management process credible for maintaining employee well-being and satisfaction levels. The need of today’s competitive organizations is to refocus their efforts on performance management in all of its essence. The concept behind improving employee performance most of the times trace back to the modus operandi with which employees are treated and gauged against the predetermined set of organizational tenets. Due to such connections with employee behaviour and their performances, focus should be directed towards enhancing the performance via employee engagement in the long run.

Most of the times the aspect of performance management is mistaken with mere performance evaluation but in reality the former is a broad and profound phenomenon engulfing plethora of factors such as organizational policies and practices. It also traces back the performance of employees to design features which actually produce the performance. The integration of different areas hints towards a strategic approach of the discipline under aegis of human resources management.

Whereas employee engagement has gathered a great deal of limelight as far as previous years of corporate mayhem are concerned. There have been many disturbing concerns upsetting the organizational scenario. The issues include high turnover rate, increasing absenteeism and growing dissatisfaction among stakeholders, in the backdrop of which industry experts have sought the solutions beyond conventional thoughts. Employee engagement has often been hailed as a reason behind firms’ competitiveness and strength. The Plethora of academicians and industry erudite scholars has regarded employee engagement as key driver of attitudes and behaviours that enhance individuals’ performances. Thus employee engagement can be seen behind success of organizations which have been able to promote productivity, retention and financial well-being of its employees.

Keywords: Performance Management, Employee Engagement, Employee Performance

Brain Drain - Human Resource Life Cycle

2012-07-28T19:40:00.002-07:00

Brain Drain - Human Resource Life Cycle

Brain Drain predominantly a term more relevant towards flock emigration of a country’s skilled labor to a more developed region for lucrative opportunities. On micro level it can be depicted in case of companies as well. Where employers seek to pin down best possible raw heads from the market, invest on them with their scarce resource time and money to enclave a smarty head by adding value to them. But what they doom is a brain drain at end of a certain period.

This is a big dilemma businesses are faced today and has become a real challenge to answer too. The lack of policy framework on grounds of basic human resource functions such as learning & development, succession planning and rewards have destined such ritual in the industry. It has become a norm for employees switching their nest frequently in search for career growth and development. According to a survey statistics stagnant career and limited diversity leads to half of the job switch in job market.

Organizations hire a potential candidate with rigorous recruitment process. Invest a lot of money and time molding them to company’s ideology and processes but off he goes when ripen. This is a sad story on part of growing businesses that wants to grow and fix employees with their on growing need and requirement. The answer to such turnover is deep rooted in medieval practices that are yet to overcome the visionary prospect of HR from personnel management.

The significance of writing on this topic is not to highlight poor HR policies rather to envision the adverse affect of brain drain to companies, which usually gets over shadowed under criticism of disloyalty and de-motivation on employees part. It’s high time for companies now to implement proper human resources accounting mechanism in practice. To better able to evaluate value addition in employees over certain period of time, this comes from experiences and training & development of each employee in an organization.

Organizations are not able to realize the loss of a skilled labor until and unless a gap demons their efficiency and effectiveness. Organizations with high turnover can easily adjudge the cost of re-training employees on both monetary and time constraints scale. This adds to loss of productivity leading on a curse to their comparative advantage in the long run.

Thus, it envisions for more strategic decision making at the board room level. Where directors need to have a bird view to seek for a bigger picture rather encompass a narrow view to the situation. They should be able to evaluate cost of brain drain from company which can develop a big loop in whole process and adds a burden on returns to company not only restricting to employee turnover rates.

Keywords:Brain Drain, HR Policies, Motivation, High Turnover