Experience Economy - Essay Example

EXPERIENCE ECONOMY Lets look how experience economy helps in the industrial growth. International trade is a way to achieve a higher standard of living and improving the per capita income and GDP growth for all trading nations. The post war (WWI and WWII) era has seen a rapid expansion of trade in the trading sections among all the trading nations. One of the important issues is the controlling of rapid growth in trade deficit. Trade involves exchange of goods or services for cash or on credit. There are several other activities, which facilitate trade, and these along with trades are known as commercial activities. Commerce includes all those activities, which are connected with trade and auxiliaries to trade such as transport, warehousing, insurance and banking and finance. Trade involves buying and selling of goods and its purpose is to bridge the gap between persons, i.e. the producers and the consumers can concentrate on their own occupations and at the same time buy goods to satisfy their consumption needs. The farmers can both enjoy each other's products with the help of traders. For example there are different types of cotton; jute, hides and skins are supplies to the producers of cotton textiles, gunny bags and shoes respectively. At the same time manufactured goods, which have been produced with the raw materials, are supplied to the consumers. Producers buy raw materials, machinery and equipment as well as stores and spare parts for machinery fro trading agencies and consumers buy practically all articles required for their daily use from traders. Goods are produced on a large scale in anticipation of demand. The markets for products are now spread over the length and breadth of the country and even extended to countries across the international borders. Hence direct sale of goods by the producers to the consumers is not possible. Without the help of traders and merchants engaged in trade it would be impossible for the system of large-scale production to continue. The trader involved in the actual operation of purchasing goods from producers and selling them to consumers. Traders and consumers are interdependent. Importance of trade Trade is of great significance for production as well as consumption of goods. It is through trade that goods produced at particular places are equitably distributed among users. With the help of trade goods are made available to consumers at the time of their need. It removes the hindrance of persons by bringing together producers and consumers who are widely scattered. Advantages of trade Advantages of trade are outlined below: It enables the producers to concentrate on their production activities; otherwise they would have to go in search of consumers for goods they produce. Trade makes goods available to consumers who can concentrate on their own occupations It results in specialization and large-scale production as the markets are now spread over wide territories. Sale of goods from one country and purchase of goods form other countries. It provides avenues of employment to various persons. It increases the standard of living of people as they can avail of goods of various kinds produces by different producers. Distinction between Home trade and foreign trade a. Home trade is concerned with trade between people of the same country while foreign trade is concerned with trade between people of two different countries. b. In home trade the buyer has to pay for the goods in home currency while in foreign trade buyer ha to make payment in foreign currency. c. Payment in home trade is simpler and less time consuming while in foreign trade, payment is not a simple process and hence is more time consuming. d. Home trade is not subject to restrictions, which exist in case of foreign trade such as tariffs, quotas, etc. e. Transport costs are relatively much less in home trade than in foreign trade. Development in different sectors like Information Technology, Steel industry, etc., has resulted a sharp rise in the usage of harmful substances. Problem of over consumption becomes irrelevant when super- (eco) efficiencies are achieved under a production sphere. Though some mathematical projections may address future consumption scenarios but they are just predictions and may vary with the real scenario. Consumption is bound to increase and conservation and efficiency may not be enough to handle the situation. It has been found that mathematical projections always vary with the real scenarios and therefore production efficiencies should also be increased to delay the complete resource depletion. Not only due to steady increase in population but also due to over consumption the demand for food products may increase sharply and might slowly replenish. According to consumer modernisation the solution to this sort of crisis can be found in more production, more modernity and more industrialisation. Rather than more production consumer modernization purports on different industrialisation and production. This is termed as more -as-different approach. In digital market the production more that result in the increase in economy and thus maintaining overall consumption low and sustainable. Thus we could say that consumption is dematerialised. Though the present world is turning towards e shopping still some of us like to prefer the old ways of purchasing things like jewellery, cars, etc. Some economic theories of had greater impact in correcting the production in ecological modernisation by working out on production-consumption cycles. Using the process of co-structuring a producer and consumer can exchange information that might help in increasing the production-consumption efficiency. The production remains out of problems as long as consumption is free of problems. The first is concerned with increasing industrialisation and consumption of the products. It also deals with the environmental problems such as pollution and waste generation caused by the industrialisation. Due to increasing industrialisation the environmental problems are also increasing, it is affecting the climate, bio-diversity and the ecosystem of the planet. Therefore there is an immediate need of modernisation for sustainable development. If it's not achieved then it might have adverse effects on shareholders values because firms neglecting the rules may be closed or fined severely. One of the important problems of every government is to control population burst. Increase in population means increase in unemployment and inequity. Social development and wealth creation on a larger scale is the need of the hour to achieve sustainable development. Large population means more requirements needed that means there will be more consumption. Thus firms can increase their productivity rate and can tap previously un-served markets. Thus having a positive effect on the creation of shareholder values. One of the important areas of development in consumer marketing section is attracting children. According to marketing and advertising rules and guidelines, children always impress upon their parents to buy something for themselves. The marketing agencies to attract the children, they make publicity of their product through media. The products may be of toys, cartoons and games etc.; the producers and marketers display their produce in supermarkets and departmental stores for sale. Children, according to latest estimate the rate of sales have increased in three fold since 1990 shooting up to $30 billion annually. In the society, the marketers are expected to put up good brand name products for sale. The purchaser desires to have or own a good brand name product and material with good quality at reasonable and cheaper rate. If the marketers were able to meet this demand of people of the society, definitely there would be a souring business for their product. The advertisers and marketers say that they would be able supply anything to kids what they want. It may be right to say that marketers and advertisers are in a position to meet the desires of children up to some level. In a passage of time, the culture of children has absolutely become indistinguishable from the consumer culture during the last century. The children want to have a brand name shoe, skirt etc., the parents are put in such a dilemma either to meet the demands of children to purchase or risking the children to be seen out-casting on the play ground. The marketing of consumer items and children's relationship is reciprocal. Childhood is a creative, innovative and generative. In the society the children consumers are more than adult consumers. The kid's consumer's culture fuses it with a most distant system in the market. In a passage of time we have become the conspirators of reproduction generation by generation. The children have become adults by passage of item and bonded with memories of commercial culture of youth. At present, the marketing strategy for selling children product is to lure the children for branded products such as food items; play in branded spaces and exposing them to TV channel. The marketers and advertising agencies work and trade on psychology of our children for marketing their product. Marketers spend and invest lots of money in developing strategies of different methods to attract children towards their produce and capitalize the opportunities to make or amass money. The marketers conduct research to defend, develop counter measures to meet the market competition. The ability of the youth to remove and neutralize the technique of advertising is snubbed by the other agency so as to increase the sale of their product. In the market, the Internets are counteracted by the here of e-commerce web sites. Mergers generally take place to improve profits, expand customer base or to sell off the company in order not to incur future loss. Most of the mergers or acquisitions happen to expand the company and to cross the geographical boundaries. A company interested to acquire another company has to look into every aspect of the functioning of the company. A company will have many departments and audit should be done on every departments accounts and then valuate the viability of merger of acquisition. After audit if it is found that functioning of all the departments are healthy and profitable then a memorandum is made between the companies. Mergers can take place only when there are healthy relations between both the companies. Mergers also depend on the percentage of shares acquired of the firm. If the company to be acquired has good standing in the market, high share value and high points in the share market then we can say that a company is worth to be acquired or suitable for acquisition. Merger or acquisition sure has its impact on the employees and shareholders who are the unforeseen assets of the company. It is well known that any merger will have its pro's and con's. Some mergers happen for profit and some not to incur losses. Employees may or may not be benefited by the merger. The new mangemen6t may not provide all the facilities unlike the earlier owner. The new company will definitely try to curb miscellaneous expenses and cut management costs. In order to cut costs they may reduce number of employees working per department. After merger employees may be asked to change their shift timings, move from one department to another etc. employees need to co-operate with the new management. Branding Ford Motor company one of the oldest car manufacturing companies, if intending to acquire an ancillary unit or a vendor's factory, any company will be more than glad because of the whooping amounts on the deal and the demand for the brand name. Ford has the best facilities to offer to its employees. Its infrastructure, its faculties, quality of management, vendor's relations financial and cordial relations will be at par compared to other companies. Employee's satisfaction is the primary aspect of the management. For example, if Ford has acquired a company and is not providing proper facilities to the employees ands is keen on attrition then the employees must form an association and should fight for the rightful emoluments from the company. Mergers may also have its negative effects on the employees and marketing strategies then the relation between the management should be positive enough so that there is no misunderstanding between the employer and the employee. After acquisition the new company will have their own planning strategies that might be entirely different and the employees need to co-operate and understand with new working policies and targets of the new company. Acquisition by Ford may be good for employees since it provides world-class work environment and possibilities to grow personally and professionally. Public Relation department for a company has become an essential department next to HR. PR's are the face of the company since they have direct contact to the outer world and work as a medium within the company and the society as a whole. Hence mergers and acquisitions may be a bright prospect for the consumers, shareholders and partners. Let's look at the BMW as another example as why consumers give importance to the branded names. Bevarian Motor work (BMW) as the abbreviation stand that is German company based in Munich. Bevarian motor works is an English translation from German language. It is Ayerische Motoren Werke, which we now call as BMW. BMW is the leading auto exporter of automobiles. The company Standard in 1913 by a Beverian Karl Rapp started an air craft engine shop is Munich. After four years Rapp designed the company led by Franz-Josef Popp changed its name to Buyerische Motoren works. The company has to take a major set back when the 1919 treaty of Versailles took a decision prohibiting German companies producing aircraft engines and aircraft. Due to the company started manufacturing motorcycles. One of its models R32 is also known for its speed during 1930's. Though not allowed to produce aircraft the BMW Company entered automobile business by taking over Eisenach vehicle factory. Later it went on developing large touring cars and sports cars one of the model 328 sports car that was highly successful. The ending of World War II also witnessed the dismantling the company by the Allied forces. Though the company was dismantled it recouped and started making automobiles, and again came to the marked in 1950's it rose to success after it begun manufacturing sports and turning cars. It was giving a tough competition to Mercedes Benz in luxury segment. The other two competitors like Toyota and Nissan gave tough competition and sales started steeply falling. Collapse of Berlin wall led B.M.W to outsold Mercedes Benz in Europe for the first time. An establishment in any country whether an industry or a Car manufacturing unit or for that matter any other plant shall give innumerable benefits that may be enjoyed by the countrymen as well as by the Government. There may be employment potentiality for the skilled and unskilled people which being the direct employment. People's standard of living and the lifestyle would grow above for the pleasant environment and the economical growth. The government would also derive financial and economical benefits out of the revenue they get by the way of taxes. Indirectly as a result the subsidiary industries will boom and the production units also would start producing more number of product items. Research To be successful in any marketing business proper research has to be done before writing a business or marketing plan. A qualitative and quantitative research is must in developing an Information system. Qualitative research is more of collecting data, conducting interviews, using documents and to understand and explain social phenomenon. Quantitative research involves is of development of natural sciences to study natural phenomenon. Survey methods, formal methods, econometrics, etc., are some of the examples of quantitative research. It's the research and analysis done by the scientists and programmers in software engineering yielded fruitful results in the development of different programming languages, which became more and more user friendly. The main purpose of these programming languages was to develop applications that could be used in everyday life. The research involves finding potential problems in the present applications used and resolving them by updating them or using new applications. The researchers found the flexibility of a language enables it to be used by more clients. Another important factor probably the most important one is the cost. If the final product is expensive there will be only few takers for it. Therefore research has been done to use cost effective applications. Another important feature developed by the researchers was reverse engineering. In reverse engineering the work is done from final stage to the initial stage. The main purpose of reverse engineering is to extract the code from the final product, working on the final product to the scratch. By using reverse engineering technique one can extract their competitors application and introduce own application in the market accordingly. Qualitative research methods are more often used as it involves observation of data that helps in finding solutions to the problems. Qualitative research has been categorised into three categories named as positivist, interpretive and critical. Positivist research methods involves attempt to test theory that to understand the predictive element of the phenomena. It involves formal propositions, hypothesis testing, measuring of quantifiable variables, etc. In this type of research it is assumed that the objectives are given in reality and can be measured by their properties. Interpretive research method involves sharing of information and social constructions such as language. Interpretive method is used to understand the meaning of the given information that was assigned to the researchers. Critical research as the name implies concentrates more on the critical view of the subject. It highlights the critical viewpoint of the situation that has to be analysed. FEASIBILITY STUDY Feasibility study is an important phase in the development process. It enables the developer to have an assessment of the product being developed. It refers to the feasibility study of the product in terms of outcomes of the product, operational use and technical support required for implementing it. Feasibility study should be performed on the basis of various criteria and parameters. The various feasibility studies are: Economic Feasibility Operational Feasibility Technical Feasibility Economic Feasibility: It refers to the benefits or outcomes. We are deriving from the product as compared to the total cost we are spending for developing the product. If the benefits are more or less the same as the older system, then it is not feasible to develop the product. The development of the new product should greatly enhance the accuracy of the system and cuts short the delay in the processing of the product. The errors can be greatly reduced and at the same time providing great level of security. Hence, we do not need any additional equipment except memory of required capacity. Operational Feasibility: It refers to the feasibility of the product to be operational. Some products may work very well at design and implementation but may fall in the real time environment. It includes the study of additional human resources required and their technical expertise. Technical Feasibility: It refers to whether the product that is available in the market fully supports the present trend. It studies the pros and cons of using particular product for the development and it's feasibility. It also studies the additional training need to be given to the people to make the product work. Planning In any marketing sector marketing plan is considered to be very important and a thoughtful business plan cannot be overemphasizes because much hinges on it: financial support, management of the available resources like operation and finances, credit from suppliers, promotion and marketing and last but not the least company's goals and achievements. Implementation Plan: The main plan for the system developed is to upgrading and existing system to proposed system. There are mainly 4 methods of upgrading the existing system to the proposed Parallel Run System Direct Cut-Over Method Pilot System Phase-in Method Parallel Run System: It is most secure method of converting from an existing to anew system. In this approach, both the systems are run in parallel for a specific period of time. During the period of if any serious problems were identified while using the new system, the new system is dropped and the older system is taken at the start point again. Direct Cutover Method: In this approach, the existing system is converted to the new system abruptly, some times over a weekend or even overnight. The old system is used until a planed conversion day. There exist no parallel activities. Pilot Method: In this approach, a working version of the system is implemented in one art of the organization such as a single work area or department. When the system is deemed complete it is installed through out the organisation either all at once (direct cut-over) or gradually (phase-in). Phase-in Method: In this method, a part of the system is first implemented and over time, other remaining parts are implemented. Thus the above factors help in the growth of a firm. References Steven Miles. Consumerism-as a way of life. London: Sage Publications Ltd. 1998. Naomi Kleini. NO LOGO. New York: Picador. 2001. BMW. About BMW. Retrieved September 4 2006 < http://www.bmw.co.uk/bmwuk/about/homepage/0,5098,___,00.html>. 2005. Craig Elwell. RL30226: Trade, Trade Barriers, and Trade Deficits: Implications for U.S. Economic Welfare. >. 2001. Bob Jennings. Merger mill: Ford and GM battle for Daewoo. Retrieved September 4 2006 . 2000. Read More