The Impact of Sin Tax on the Consumer’s Demand for Cigarettes Essay Example

The Impact of Sin Tax on the Consumer’s Demand for Cigarettes Paper Marlene B. Escamillan 4E1 The impact of sin tax on the consumer’s demand for cigarettes Introduction The raise in tax is one of the most valuable gauges to lessen the utilization of a good. Just the same as other taxes, a sin tax is charged to lift up proceeds for government expenditures. Different from other taxes, a sin tax is often imposed with an intention of reducing the public’s consumption of a good. On the other hand, when you articulate about taxing cigars and alcoholic beverages, consumption emerge to be unpredictable especially to the mass. The policymakers’ main concern is that an increase in cigars and alcoholic beverages taxes could have an inconsistent impact on the underprivileged (Jose Julian Escario, Jose Alberto Molina, 2004). Escario, et al. also found that the increase in the actual worth of taxation on cigarettes  has had slight effect on demand  from smokers for the reason that demand has been inelastic. But there are signs that a tipping point may have been reached. Sin taxes are also the most effective way to influence adolescent people to refrain from smoking. On the other hand, an increase in the price on cigarettes  has had slight effect on demand  from smokers since demand has been inelastic. Thus, what really is the elasticity of the demand for cigarettes to the mass? The purpose of this paper is to stimulate the impact of sin tax on the consumption of cigarettes of regular smokers. Point of view From an economic perspective, the researcher finds it more sensible to consume the standard cigarette because of the satisfaction it yields to the consumers. It is also efficient for the societal well being of the country because the tax charged will still be returned to us eventually. We will write a custom essay sample on The Impact of Sin Tax on the Consumer’s Demand for Cigarettes specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on The Impact of Sin Tax on the Consumer’s Demand for Cigarettes specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on The Impact of Sin Tax on the Consumer’s Demand for Cigarettes specifically for you FOR ONLY $16.38 $13.9/page Hire Writer In addition, based from the study, the researcher would rather utilize the standard good at a lesser demand rate rather than substituting the good in view of the fact that substituting the good would not be as satisfying from what you have been used to smoke. If the taxing of cigarettes will be put into practice, there is an option for smokers to trim down their consumption. Method 50 surveys were dispersed randomly to gather the data needed for prices, and demand for cigarettes. The survey was developed by the researcher. The prices of the usual brand, the substitute brand, and the demand for cigarettes were all answered in the form of a probit model. The price of the standard cigarette brand, and quantity demanded of the substitute cigarette brand are the explanatory variables, while demand for the standard cigarettes is the exogenous variable. Allowance was employed to determine on which income group the student belongs to. Prices were varied through its increase due to tax implemented. Meanwhile, the demand for cigarettes was gauged by the quantity consumed by the buyers. Equation 1: QDstandard = [pic] + [pic] Pstandard + [pic]QDsub + e The regression model is made known above. QDstandard stands for the quantity demanded for the standard cigarette brand; Pstandard corresponds to the price of the standard cigarette brand with tax implemented; QdSub embodies the quantity demanded of the substitute good which is inexpensive than the other good. Results Regression results of QDstandard on Pstandard, and QDsub |Dependent Variable: QDstandard | |Included observations: 50 | |Variable |Coefficient |Std. Error |t-Statistic |Prob. | |C |13. 66452 |0. 595734 |22. 93727 |0. 0000 | |Pstandard |-0. 176294 |0. 066267 |2. 660363 |0. 0145 | |QdSub |-0. 126506 |0. 043445 |-2. 911854 |0. 0086 | | | | | | | |R-squared |0. 905023 | Mean dependent var |14. 2297 | |Adjusted R-squared |0. 893151 | S. D. dependent var |0. 265487 | |S. E. of regression |0. 086782 | Akaike info criterion |-1. 919279 | |Sum squared resid |0. 180745 | Schwarz criterion |-1. 728964 | |Log likelihood |30. 86991 | F-statistic |76. 23089 | |Durbin-Watson stat |1. 193801 | Prob(F-statistic) |0. 000000 | Regressing prices of standard cigarette brand with tax implemented (Pstandard), and quantity demanded the of substitute good (QdSUB) shows all explanatory variables are statistically significant at 95% confidence level. If the price of the standard good increases by 1 unit then quantity demanded for the standard cigarette good decreases by 1. 76 The results explains that if sin tax is implemented, the demand for cigarettes in the middle class will decrease. Furthermore, if the quantity demanded of the substitute good increases by 1 unit, the quantity demanded of the standard good decreases by 1. 27. Based on the survey, middle class consumers will still buy their standard cigarette even if the price increases, while not as much as they used to when the price was lower. Never the less, low-middle class respondents would locate an alternative good if the price of their standard good will increase. When substitution takes place the tax turns into a distortion. To supplementary prove the study, the graph below gives an idea about the effects if tax is implemented. In graph 1, point U1 shows that those who give importance to the standard good more, thru the satisfaction they have for their product, have a steeper demand curve (D1). In this case, a price increase won’t distort their consumption for the standard good. Although loyal consumers’ quantity demanded will decrease, they will still pay out the same amount of money only receiving less amount of that product. In addition, point U2 demonstrates those who will be more satisfied of the substitute which is inexpensive than the standard good. Substitution effect takes place in point U2. Graph 1 Moreover, to further provide evidence for the analysis of the survey regarding consumers’ demand on standard cigarettes, D1 clearly reveals how consumers respond with tax added to the real price. Even with the increase in price, consumers will not be affected that much for the reason that of the inelasticity of its demand curve. In this situation, producers surpass the entire tax burden to the consumers. Nonetheless, D2 shows the analysis of consumers who would find a substitute good if tax is implemented. As illustrated, D2 is less steep compared with D1 which means that those consumers who have a demand curve as of D2 will be highly affected if price increases. When consumers have a demand curve as d2, they are more likely to be avoiding tax and go for the substitute good which creates distortion in the economy. Conclusion From the study conducted, results clearly show that as price of cigarette increases, the quantity demanded vary depending on the type of consumer. On one hand, if the consumer belongs to the middle class, they are more likely to consume the standard brand of cigarette regardless of the price increase but with a lesser amount of quantity. On the other hand, if the consumer is rice elastic, the consumer will more likely consume the substitute good. The demand elasticity for cigars clearly depends on the type of consumers. Source: www. econpapers. repec. org http://tutor2u. net/economics/revision-notes/as-markets-price-elasticity-of-demand. html http://www. tobaccoinabgnustralia. org. au/13-1-price-elasticity-of-demand-for-tobacco-produc Modelling the optimal fiscal policy on tobacco consumption: by Julian Escario, Jose Albe rto Molina 2004. Journal of Policy Modeling Volume 26, Issue 1, January 2004, Pages 81-93 Price U2 U1 D2 D1 Quantity

Study of Goudy Oldstyle essays

Study of Goudy Oldstyle essays This typeface is an old style type. The aspects that show this are the angle of the weight stress on rounded forms, the shape and style of the serifs, and the angle of the top serifs on the lowercase letter forms. Old style typesets are influenced by carved Roman capitals for the uppercase letter forms and fifteenth- century humanistic writing styles for the lowercase.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Goudy is a serif typeface. It has thin tapered serifs. These serifs are considered bracketed. A bracketed serif is unified to the stroke with a tapered, curved line. The bracketed serif invokes a humanistic feel in the type. It looks like a stroke made by the hand of a writer.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The typeset does not seem to follow a strict geometry. Because the upper and lowercase letter forms are derived from different sources they appear to have different geometries .While the uppercase letters look like circles and squares, the lowercase letters are more rectangular in nature but share the circular   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  The typeface has a highly contrasting, tapered stroke in the upper and lowercase letter forms. The finishing stroke in several of the letter forms ( a, i, j, r, t ) is a high contrasting, upward angled, diamond shaped stroke. The rounded forms also have a tapered finishing stroke that adds the continuity of the typeset.   To add to the humanistic quality of the type the designer omitted almost every hard angle in the uppercase letters giving areas where two strokes meet a soft corner of edge. In the lowercase letters, hard angles were omitted and softened wherever possible. The type also carries a left-angled stress.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Though this is a very well put together typeface there are several idiosyncrasies within the type.   The first is the length of the ascenders and descenders. Many typesets have ...

Electronegativity and Chemical Bonding

Electronegativity and Chemical Bonding What Is Electronegativity? Electronegativity is a measure of the attraction of an atom for the electrons in a chemical bond. The higher the electronegativity of an atom, the greater its attraction for bonding electrons. Ionization Energy Electronegativity is related to ionization energy. Electrons with low ionization energies have low electronegativities because their nuclei do not exert a strong attractive force on electrons. Elements with high ionization energies have high electronegativities due to the strong pull exerted on electrons by the nucleus. Periodic Table Trends In an element group, the electronegativity decreases as atomic number increases, as a result of increased distance between the valence electron and nucleus (greater atomic radius). An example of an electropositive (i.e., low electronegativity) element is cesium; an example of a highly electronegative element is fluorine. Moving left to right across the periodic table, electronegativity increases.Moving top to bottom down the periodic table, electronegativity decreases.

Legal and Practical Aspects of Islamic Securitisation Essay

Legal and Practical Aspects of Islamic Securitisation - Essay Example The term â€Å"Islamic finance† is a recent invention having only appeared in the middle of the 1980s. Previously, any commercial activities that complied with Islam was referred to as â€Å"interest free† or â€Å"Islamic banking†. The impetus for establishing Islamic financial systems grew out of perceptions on the part of many Muslims that they existed in an essentially hostile â€Å"non-Muslim environment.† Spurred by the increase in rich oil resources during the 1973 – 1974 after a global oil crisis, oil producing Muslim countries were encouraged to implement innovative financial tools that closely resembled those used by Western businesses. In more recent times, Islamic Banking and Finance initiatives have expanded at a rapid rate throughout Muslim countries and in non-Muslim countries with large Muslim populations. As a result, Islamic Banking and Finance is gaining currency in significant Western businesses. This is an interesting and unique development given that Islamic finance is governed by the Shariah and as such is not a universal concept. The fact is the Shariah or Islamic law governs all daily activities of Muslims. From a financial perspective, the Shariah governs not only how capital can be acquired but also how it can be discharged. While wealth may be acquired, it may only be acquired by methods that are fair to all participants.

The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act Essay

The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act - Essay Example The act implemented ways to make the process of filing for bankruptcy very long and costly in order to reduce the number of people filing for bankruptcy. People filing for bankruptcy undergo credit counselling intended to change their minds on filing for bankruptcy (Scott 2005). Later, those proceed to file for bankruptcy undergo means test to evaluate and determine their need and eligibility to file for bankruptcy. The establishment of this act has therefore worked to improve the cases filed on bankruptcy. This is because anyone who puts any file on a bankruptcy gets an opportunity to undergo credit counselling. With this counselling companies and individuals are able to have a clear analysis of their budges to avoid bankruptcy (Scott 2005). In that case, when individuals have critically well analysed and established budgets, they will be a position to have an insight of their ability to file for bankruptcy. This therefore eliminates the filing of bankruptcy by consumers without clear understanding of their ability to pay back their debts. Provision for counselling also helps people to plan on the options they have on paying their debts. These also provide a consideration of the available methods of paying back debts which can either be the priority of debts subject to the prevailing rate of interest or the consolidation of debts (Carroll 2007). After all this analysis, individuals will then be at their own free will to whether to file for the bankruptcy as they initially intended or to avoid it completely. On most cases, people who file for bankruptcy are very desperate for money. In that case, taking them through bankruptcy does not amount to any use at all. Individuals go ahead to file for bankruptcy in a financial state of dire need. After the counselling they proceed to file for the bankruptcy. This therefore is almost

What are the key considerations in branding exercise

What are the key considerations in branding exercise Brands can be defined as the promises that consumers believe in. In general, brand is an image that makes its way into consumers mind to influence how they think and buy. It is based on the promise of the products to the consumers. A brand, in essence, is related to the promise you are going to deliver to the consumers about the products and the benefits after using or purchasing the products. (Keller, 1993) A lot of people have misunderstanding towards concept of brand. They thought changing the logo and company are the complete set of brand exercise. Branding isnt a veneer that you slap on (usually in the form of a new logo) to mask or transform a product offering. Treating branding like some skin-deep solution to your businesss problems is like putting lipstick on a pig: People see through the makeup, no matter how thick the application. According to Aaker, and Keller (1990), branding has to go all the way to the core of everyone and the identity for all. Before starting doing any brand exercise, there are some mindset preparation needs to be established. First when you start building your brand, you must let the whole world to believe and confident towards your promise on your products. The product promises should be unique and represent the values of the products to be delivered to the customers. The promises you have made, should be delivered to your consumers at the same pace in term of name, logo, message and the company name. The consistency of the brand is important especially when doing publicity, advertisements or even maintaining customer relationship. After building up the brand, brand maintenance is very important. (Muniz and OGuinn, 2001). We must reinforce the brand promise. We must have self evaluation on the brand consistency with the message that we hope to deliver. If the brand does not show consistency, you tend to spoil your brand and put your brand at risk because consumer would think that you are breaking your pr omise to deliver the message to the consumers. No branding exercise is going to success if you are rushing for building up the brand. When building up a brand, we must always focus, persistence and put passion into it. Besides, branding exercise needs high investment. The higher the risk, the higher the return. The return on investment for brand exercise is huge because you will increase the involvement of market share at long run. Remember, you would not be able to see the results of branding at short time. Hence, building up branding exercise of a product or company follows the principle of Rome is not built in one day! Time, effort are the success key for building a brand. Brands create consumer trust and emotional attachments. For example, when we think of a convenient store, we will definitely think of 7-11. Why? This can be explained that the store has created the trust and emotional attachments among us. Branding exercise enhances customer loyalty and help the organization to win through even when they are having price war or having new competitors in the market. In consumer behaviour studies, brand actually a perception neurologically. For example, you are able to identify a logo because you believe how and what the logo represents. For example, Coffee Bean sells coffee. It stands for daily respiration. Remember, the brand lives in consumer minds, so branding is the process of development consumer beliefs and perception that are accurate and in alignment with what you want your brand to be. Key Considerations in Branding Exercise There is several keys consideration in branding exercise. It can be described through the diagram when taking action of brand exercise. The first key of consideration is the product definition. According to Balmer (1995) you can actually brand anything that wish to such as services, products, organisation, even people. Complete understanding of the product you would like to brand is the first consideration to be taken into account. The second consideration is the positioning of products. During positioning, we have to find out the is found in the consumers mind. Hence, the positioning should be unique, meaningful, and available spot in the marketplace. The uniqueness of the product that enables the product to stand out from the market is essential to understand your own product before taking the decision to brand the product. Next, the promise is the important element in branding exercise. In fact, the promise delivers by the product is the fundamental of the message to be delivered to the consumers. This promise shows what the product can deliver or how the product does helps the consumer. The key promises actually create the interest among consumers and credibility of the products. Most of the brand consultant would start the branding exercise by giving a fantastic name, creating a nice logo and launch the product to the market place with nice and beautiful packaging. (Keller, 2003). Persistence plays important role in branding. It is the important key consideration during branding. This is the point in the branding cycle where too many brands lose steam. After brands are launched, brand owners often get tired of their own looks and messages and begin to improvise with new looks, new messages, and even new brand personalities and promises. Just when consistency is most necessary in order to gain clarity and confidence in the marketplace, brands that lack persistence go off track. The persistence of the brand can be evaluated through perception analysis. In a consumers mind which is where brands live and thrive a brand is a set of beliefs about what a company offers, promises, and stands for. Great brands continually monitor brand per ­ceptions to see that theyre in alignment with the brand owners aspira ­tions and in synch with consumer wants and needs. Based on the results of perception analysis, brand owners begin their loop around the branding cycle again, this time adjusting their products, fine-tuning their positioning statements, strengthening their promises, updating their presentations, rewriting their brand management rules, and once again monitoring perceptions in order to guide ongoing brand realignments and revitalizations. 2. Never in my life did I think that any of my traditional dishes.. that I cured in my backyard would one day appear in store say Tescos partner Khun Kanungnit. Explain the key benefits of branding and how does branding change the way Tescos partner Khun Kanungnit operate his business? Key Benefit of Branding Most businessmen have the dilemma the statement, To Brand or Not to Brand. The consideration involved of the return on investment (ROI) worth for the value. However, the concept of branding brings more advantages to the business. First, the brands unlock profitability. Doing business in this competitive world creates problems to the new comers. All businesses are focusing on different areas and they are competing with each other. Product differentiation, provide a better service become the competitive key for all business. According to Berry (2000), consumers now are smart to do comparison on the price, quality of the products. Brands provide the platform for the product and business to venture into strategic advantage environment. Second, brands prompt consumer selection. The buying process now has changed. Traditional purchasing behaviour focus on direct selling and also face to face communication. Now, with advancement with internet and wireless connection, people can even use hand phone or ipad to purchase. The change of the buying behaviour breaks the geographic limitation. The boundless marketplace creates more challenge to the business and creates the needs of branding to the businesses. Third brands build name awareness. According to Theory Reasoned and Action (TRA) model awareness is the fundamental of purchase behaviour. Creating a brand can be enhanced through logo trademark registration. According to Ha (1998), there are nearly 99% of the words found in the English dictionary has been registered as the domain name to be used as the marketing strategy. Some of the names even are put as the trademark. Now, a lot of new business created words is not found in the dictionary to be used as their business. Those invented names have strong and diligent word so they create consumer awareness, recall, and meaning. Forth, Park, Jaworski and Maclnnis (1986) reported the brands increase the odds of business survival. When analysing product life cycle, we understand that boost up a product is essential in order to avoid the product reaches saturated stage. Brand helps to break through this barrier. With this strategy, products would continue to survive without having strike by the sinking of consumer awareness, understanding, and preference In fact, brands do not only brings advantages in financial prospective but it also creates non financial benefits such as customer loyalty, words of month marketing strategy and others. Even branding exercise needs high investment but the outcome of successful branding exercise would create unlimited benefit to the products and also organisation in the long run. Change of business operation due to branding There are several changes that were done by Tesco in Thailand in order to win the local market. The following strategies are implemented: Continue to develop market of quality Thai products so that every customer can discover, use the goods that are made for Thailand citizen. Involve in local participation Surin Limited partnership. Continue to maintain quality, cleanliness and general statements of products Continue to work hard to find useful information, and constantly getting advice from Tesco Britain to provide the best service to the consumers Provide strategic differentiation in term of service and product to the consumers. During implementing branding exercise, Tesco in Thailand continue to develop market of quality Thai products so that every customer can discover, use the goods that are made for Thailand citizen. All products that are displayed in Tesco Thailand have undergone product quality assessment. During quality assessment, health, food safety, varieties issues are taken care to ensure customer satisfaction. Besides, marketing research is conducted from time to time in order to know the needs of the consumers in term of price strategy, product range in order to satisfy the customers. The center wants to brand them as the one stop center that the customers can find everything in there. Hence, Tesco Thailand tries to fulfill the quality not only products but also the service. Tesco in Thailand involve in local participation Surin Limited partnership. When implementing branding exercise, culture issues are essential to determine the success in a local market. Internationalization is important when penetrating in new countries (Welch, 1988). Tesco Britain can be successful in their home country, but they have to based on local culture on the concept of do and dont in management so that would not offense local people. For example, certain words can be used in Britain in the advertisement. However, the same words can be offensive in local market. The cultural issue consideration can be achieved with local participation Surin Limited partnership. Tesco in Thailand brand themselves as the quality, cleanliness and general statements of products. They continue to maintain this concept the give comfortable feeling to the consumers. As in ISO 9002 of Tesco, washrooms need to be cleaned every two hours to ensure the cleanliness. (Smith and Sparks, 2004). Besides, the expired date of the products is checked by the stock keepers every month so that the product quality is maintained. Not only that, Tesco works together with local farmers to supply the fresh food, meat and meat to them. This exercise in fact becomes the branding identity for Tesco with the tagline, Fresh vegetable everyday. In order to maximize satisfaction level of customers, Khun Thanyapat always continue to work hard to find useful information, and constantly getting advice from Tesco Britain to provide the best service to the consumers. Thailand has move to knowledge society. Product information is important to ensure customers satisfaction. Leaflets are put on the entrance of the Tesco so the consumer are awared of the product range and also this increase the decision making process of consumers. Hence, this strategy improves and encourages purchase behaviour among consumers. Provide strategic differentiation in term of service and product to the consumers. Tesco Thailand brings all the products into the store. Besides, the center can be an entertainment center for children, shopping gallery for housewife. A business center for businessman and also the family gathering center also. In term of entertainment center for children, they have playground and game center for the children to have joy and fun there. Children would love to visit the place because they are place for them to do some activities. In term of housewives, they can buy groceries, fresh vegetables, meat and others to fulfill the needs of the family. The housewives do not need to travel to grocery to buy a broom and travel to wet market to buy a fish and even to dry market to buy onion. Now, Tesco Thailand gathers all the products according to the household needs. Not only there, bank services are available to help businessman to do their work while their wife are shopping. Besides, these facilities encourage shoppers to buy more because they can withdraw money anytime when they shop. 3. How does Tesco differentiate its brand from the competitors and build brand-loyalty among the consumers in Thailand? After analyzing the case study of Tesco, I have generally identified the brand strength of Tesco Thailand are: Customer Relationship management Commitment to quality Global-local adaptation Breadth of product Service offering Target market strategy. Customer Relationship Management Customer Relationship Management (CRM) is a business strategy that aims to understand, anticipate and manage the needs of an organisations current and potential customers (Reinartz, Krafft, Hoyer, 2004). It is a comprehensive approach which provides seamless integration of every area of business that touches the customer- namely marketing, sales, customer services and field support through the integration of people, process and technology It is a shift from traditional marketing as it focuses on the retention of customers in addition to the acquisition of new customers. The expression Customer Relationship Management (CRM) is becoming standard terminology, replacing what is widely perceived to be a misleadingly narrow term, relationship marketing (RM) Tesco Thailand focuses on customer relationship management. They believe that customer satisfaction is the first priority to be set by the organization. Tesco Thailand builds the customer relationship with the consumers. According to research, a lot of consumer purchases a product not because they need the products but it is due to the emotional needs. (Morris, 1998). In relationship management, Tesco wants their clients to achieve highest customer satisfaction. They differentiate themselves by providing the return product policy when they do not feel satisfy with the products. Generally, when a customer satisfies with the products or services, they would tend to repurchase or revisit the store again. Besides, Tesco Thailand understands that it is cheaper to retain the current customers rather than making promotion and advertisements to recruit new customers. Tesco Thailand always put clients as the top priority in all purchasing process. With this policy, the customers would feel more secure to purchase and shop in the shop. Besides, Tesco provides membership for the customers. The clients can accumulate points when shopping in Tesco Thailand. The points can be used to redeem vouchers or products from Tesco. Besides, the members would receive updates of promotion from time to time. These strategies promote the relationship with the customers and this lead to the customer loyalty and brand identity among customers. Not only membership, Tesco Thailand provides exclusive discount for members. Members day are conducted yearly only for members. During the members day, members are given opportunity to shop with higher discount. Each member can only bring a friend to shop on the day. This strategy improves customer relationship and made the Tesco membership to be more exclusive. (Shaffer, 1991). Commitment to Quality Product quality is customers overall evaluation of the excellence of the performance of the good or service. Kellers (1993) 7 basic dimensions of quality Performance Employee Interactions Reliability Durability Timeliness and convenience Aesthetics Brand Equity Tesco Thailand cares of the product quality. They understand price is a factor of decision making but the quality of products is the key element that sustain the customers to stay and can be converted as the customer loyalty in the future. Besides, there is a strong relationship between quality products and customer satisfaction. High customer satisfaction promotes customer loyalty in a long run. As the implementation strategy, Tesco Thailand always maintains the product quality by doing stock check to keep track on the freshness of the products. Besides, Tesco has a computerized system to evaluate the expired date for the products. This strategy maintains the quality of the products. Global-local Adaptation Global-local adaptation is used by the Tesco Thailand to win the market. Manager from Tesco Britain can be familiar with retail business but localization is important based on the culture and taboo. Products that are sold in large quantity in Britain might not be able to win the heart of the local community. As the result, Tesco Thailand takes initiative to set up a production unit (local company Surin Limited Partnership) that has no negative association with quality, premium products. With this strategy, Tesco Thailand actually undergoes internationalization and localization to achieve the support from the local community. Some products sold in Tesco Thailand are only being found in Thailand but you would never find it in the Tesco internationally. These products are specially design for the local community. Salty fish is the best example, Thailand community likes the product and they want to buy it from Tesco Thailand. However, the product might not be accepted by Britain community. The integration of local culture is taken care when providing service to the local community. Not only that, Tesco Thailand employs only local staffs. The managers and CEO are local community. With local management team, they would able to plan effectively. For example, for advertisement and promotion program, the local marketing manager would be able to know the culture in Thailand. The preference of the consumers is identified. The words choice, colours and models used in the advertisement can be localized to increase the acceptance of the local community. Hence, Global-local adaptation in term of staffs is an essential factor to be taken care off. Breadth of product Depth of product line can be defined as the variety of products that are carried by any retails shows such as cloths, electrical products, food, furniture and others. . The breadth of the product is important to ensure Tesco Thailand success in differentiating themselves and to create customer loyalty. As review in the case study, Tesco Thailand can be an entertainment center for children, shopping gallery for housewife. A business center for businessman and also the family gathering center also. In term of entertainment center for children, they have playground and game center for the children to have joy and fun there. Children would love to visit the place because they are place for them to do some activities. In term of housewives, they can buy groceries, fresh vegetables, meat and others to fulfill the needs of the family. The housewives do not need to travel to grocery to buy a broom and travel to wet market to buy a fish and even to dry market to buy onion. Now, Tesco Thailand gathers all the products according to the household needs. Not only there, bank services are available to help businessman to do their work while their wife are shopping. Besides, these facilities encourage shoppers to buy more because they can withdraw money anytime when they shop. With the breath of products, customers satisfaction level increases and this builds the customer loyalty in the long run. Service offering Tesco Thailand has undergone market and product development strategies to provide a better service to the consumer. Tesco has used the Internet to extend its market into new product markets, such as financial services, white goods and DVD rentals. While these are promoted through the store, the web provides a wider choice of products, more detailed information about products and a method of purchase. The internet can also support entry into new geographical markets. New revenue sources are available through extending the product range online as explained above, and also with new digital revenue streams such as those for music downloads and e-Diets. Tesco also supports advertising on its site of related product such as financial services. Differentiation through Target market strategy. Tesco.com has a broad market of customer types, so it is less relevant for them to use online to selectively target these with communications. However, the article explains how Tesco has used the web and e-mail to target more closely through targeting different lifecycle groups these are customers who are grouped according to their level of adoption of online service. Tesco also uses the web to target specific requirements such as Diets and Financial Services through search engine marketing. Not only this, Tesco offers some unique online promotions and lower online prices for select products such as financial services which could attract a percentage discount when purchased online. It appears not to use the service elements of the mix for positioning beyond the slogan You Shop, We Drop. But attention has been paid to improving the customer experience through usability activities and reduction of download times. Conclusion Strong brands never happen by accident. Yet only 53% of firms say they have a long term brand strategy in place. A brand strategy is simply a plan for developing a coherent brand. It provides the means for systematically creating differentiation and consumer appeal by empowering better brand decisions across the organization. An effective brand strategy influences the total operation of a business to ensure consistent brand experiences for the customer. Tesco Thailand has become a successful story of branding that can be learnt by everyone. Differentiation and innovation are important to sustain the success of the brand. Reaching the heart by creating memory and customer loyalty is the final destination for all branding exercise.

Capacity utilization Essay

?Detailed in the Indalex Ltd. case analysis, current production is stretched to the limit, creating a capacity constraint to meet future forecasted demand; hindering the firms objective of a real growth rate of ten percent annually. The issue of deciding on a capacity expansion plan, given uncertainty about near term economic projections was presented. Indalex concentrates on a competitive priority of service quality, where flexibility and quality are more of a priority than price. This is described in the case study where past and current success of Indalex is attributed to their competitive strategy being strictly based on three words: service, service, service. Indalex set out with the objective of offering a seven-day service, along with offering highly qualified assistance in designing selection for their customers. Valuing service quality, Indalex manages a close working relationship with their customers, such as responding to needs even under short notice, demonstrating how Indalex understands their factories are an integral part of their customers’ factories. I feel that maintaining reputation along with meeting the growing demand of their existing customers is crucial to the service quality strategy of Indalex. In making a decision for the capacity expansion plan, an emphasis on insuring customer satisfaction and retention is of top priority. Given the options of either increasing capacity of their extrusion process, increasing anodizing capacity, building a recycling plant to reprocess scrap aluminum, or increase capacity of both the extrusion and anodizing process; a decision had to be made on which of the options should be done first, in order for the new piece of equipment to be available by the beginning of 1979. In regards to flexibility and quality, the option to either increase capacity of the extrusion, increase capacity of anodizing, or increasing capacity of both operations together; offers machine flexibility. Having excess capacity would allow Indalex to better manage complex orders, ultimately providing an advantage towards their focused service strategy. With the option of building a recycling plant, it would enable more process flexibility and better inventory management. However, this option would generate higher inventory holding costs, creating excess inventory of over a million dollars. Along with requiring new employees with specialized skillsets, the options of adding a recycling plant won’t solve the problem of increasing demand of customer. Anodizing requires the plant to run at full capacity in order to be efficient, along with costly pollution control measures that would have to be taken. When looking into customer satisfaction and retention, customers will only be retained if Indalex increases capacity. When looking into capacity constraints, the extrusion process is the first area that I feel capacity constraints should be removed. With anodizing, the case details that much of the demand is a result from construction related work. If there were a decrease in this area, anodizing operations would be effected. Unlike the extrusion process that allows Indalex to â€Å"buy demand† by offering a low bid for high volume orders if needed, anodizing operations are much more limited in sourcing a demand. Therefore, I would chose the option of increasing capacity of the extrusion plant; which is the best option to align Indalex with their ten percent growth objective, along with offering feasibility of meeting an increase in demand, with flexibility and quality of their service. This expansion will require more employees to be hired, which will also reduce the amount of overtime that is currently required. The risk associated with increasing capacity of the extrusion plant is the idea of the U. K. ’s economy not growing as rapid as predicted, leaving the question of what Indalex would do with the new press if it couldn’t be filled naturally with demand.