Jumping up to 1958, Joseph William Foster's grandsons began a companion company known as Reebok, based off of J.W. Foster's products and clients. In 1979, a partner in the outdoor porting goods distributorship, Paul Fireman, noticed Reebok shoes during an international trade show. Later that year, he had negotiated a deal for the North American distribution license and ended up introducing three different running shoes into the United States (2008, Reebok Company Overview).

In 1981, Reebok's grossed over $1.5 million was able to design an athletic shoe specifically for a woman (2007, Reebok Human). An extreme growth followed the three major trends Reebok had introduced into the footwear industry: the aerobic exercise movement, incorporation of women into sports, and the well-designed athletic footwear worn by adults for street and casual wear (2007, Reebok Company Overview).

Reebok gained The Rockport Company in 1985 and made this its first strategic acquisition. Rockport was a first in fusing advanced materials and technology into traditional shoes and to create walking comfort dress and casual shoes (2008, Reebok Online). Later in this decade, Reebok aggressively expanded into international markets and its products were available in over 175 countries (2008, Reebok Company Overview).

The year 1992 brought about a transition for Reebok from a company based upon fitness and exercise to a company equally involved in sports by designing footwear ad apparel for football, soccer, baseball, track, and other world-renowned sports. In the late 1990's, Reebok committed itself as a brand that aligns with the world's most talented, exciting, and revolutionary athletes. Reebok has focused on these athletes ever since (2007, Reebok Company Overview).

In the 2000's, Reebok was able to ink exclusive partnerships the National Football League (NFL) and the National Hockey League (NHL). Reebok was able to sell NHL and NFL licensed merchandise for all teams. This merchandise included on-field/ice uniforms, sideline/bench apparel, practice apparel, and NFL-brand footwear and NHL-brand skates and apparel collections (2007, Reebok Company Overview).

Reebok owns twelve separate companies throughout the world, both beginning internally through Reebok and purchased on the market. Those brands include Reebok International, Rock Port, RBK CCM Hockey, Greg Norman Apparel, Ralph Lauren Brand, The Hockey Company, Avia, Onfield Apparel, Athletic Footwear, DMX2000, 3D Ultralite, and The Ralph Lauren Apparel Line. Reebok's stock went public in 1985 and is publicly traded on the New York Stock Exchange. The share price has grown from $56.53 in 1999 to $68.65 in 2008. Reebok's stock symbol is RBK (2007, Reebok Company Overview).

In my opinion, Reebok shows more internal strengths than its weaknesses. I see the top strengths as increasing profits, a profitable multi-brand strategy, the teams connected strongly to consumer, a dedication to Reebok employees, a developing moisture technology, major divisions and subdivisions, and a strong advertising campaign. Reebok's profits have grown 39.2% throughout the second quarter, according to The New York Times. It gained $60.4 million that quarter versus the $43.4 million the previous quarter; this is a huge leap, especially with the recession weakening many companies (2008, Reebok Company Overview). Reebok has grown and expanded ever since it's beginning in the late 1800's in order to make more money on many different products. The many different brands give their customers many more options when it comes to sports apparel, especially footwear (2007, Reebok Human). Ever since the mid 1900's, Reebok has extended to female consumers and based upon this, it has launched a long range and very direct advertising campaign toward women (2007, Reebok Company Overview).

The weaknesses of Reebok, in my point of view, include too much reliance on retail stores to sell products, poor employment practices at over seas manufacturing sites, and a heavy dependency on footwear sales. Since Reebok does not sell there products directly to the consumer, they must use retail stores to distribute their merchandise. When the economy is in a recession, as it is now, those stores fail to sell as much. With this being the main process of selling their products, Reebok as a whole may suffer from the lack of sales (2008, Reebok Online). Reebok has been having problems staffing managers and keeping their managers in the international market. This comes from the inability to delegate efficiently within the management circle. Footwear sales can only take a company so far before it begins to flounder. Reebok needs to expand their market slightly more, which they are in the process of doing, in order to make greater profits (2008, Reebok Company Overview).

There are currently great opportunities for Reebok to take advantage of sometime in the future, if they haven't already begun making preparations. They have established objectives, result-oriented culture, relative advertising and marketing campaigns, NFL and NHL campaigns, and the ability to create a synergy between insider brands are all examples of the ways Reebok can expand outside of their own business and benefit from external factors (2008, Reebok Company Overview). Reebok's CEO, Paul Fireman, has created a strong business plan and has the ability to put these ideas into action. The result-oriented culture comes from awarding managers and stores when they sell a specific amount or reach a certain consumer level. Their campaigns are well expanded throughout the United States, especially advertising the NHL and NFL's merchandising apparel. The ability to combine brands in order to bring about a much bigger and better outcome for non-competing brands is one of the ways Reebok is taking advantage of its external factors (2008, Reebok Online).

There are just about as many threats to Reebok as there are opportunities. These threats, I believe, include the weak department store channels, the foreign market's suffering, the economic decline in key markets, Chinese products, and strong competition. The weakness of department stores shows through as the amount of stores willing to stock large amounts of Reebok products in their chains. This stems from the decline in markets, with less people spending as much money as they used to, the same products are not selling as it previously did. Foreign markets are also suffering at the moment, and since a large portion of Reebok's sells come from over seas, those profits also suffer (2007, Reebok Human). Competition seems to be coming out of the wood work, so to speak. The Chinese products are beginning to sky rocket again due to the cheap labor and lack of labor laws in Asia. Reebok's competing brands seem to be stepping to the plate and outdoing Reebok in sells and advertising as of late. The biggest competition right now includes Nike, New Balance, Asics, Adidas, K-Swiss, Timberland, and Saucony with Nike being the biggest competitions with 39.2% of all current athletic sells, following Adidas with 15.1%, then Reebok in third with 10.9% of sells (2008, Reebok Online).

All in all, I believe Reebok has very strong internal strengths and tend to outweigh their weaknesses. Externally, Reebok has some very strong threats, coming in the form of over seas competition. A major weakness seems to be their upper echelon of management. They appear to lack the depth needed and face a high percentage of upper management turnover. I believe this to be caused by the C.E.O.'s lack of management efficiency, in other words, some of the upper management and important employees were left unknowing of changes and out of the loop a lot. Also, it seems to me that the board of directors and the C.E.O.'s salaries were way too high. In the advertising aspect of things, Reebok seemingly changed agencies and received a reputation of being a difficult client.

Reebok should evaluate its employee situation over seas and not worry about its loss of reputation. They should also improve their top management environment and attempt to hold on to their longer lasting employees. Reebok needs to rely less on department store chains by either selling more online merchandise or opening up a full on Reebok store. Find merchandising markets that are in less of an economic decline would be n important part in helping increase profit and company well-being. By advertising more, Reebok can strengthen its brand names and help out the suffering brands. The final steps for Reebok would be to set long term goals and strategies and possibly change upper management and keep them there.

Works Cited

(2007, July 20). Reebok Company Overview. Retrieved September 17, 2008, from Hoover's

Web site: http://www.hoovers.com/reebok/free-co-factsheet.xhtml

(2008). Reebok Company Profile. Retrieved September 17, 2008, from The Boston Job Source

Web site: http://bostonjobsource.com/reebok.html

(2008). Reebok Online. Retrieved September 18, 2008, from Reebok US Web site:

http://www.reebok.com/US

(2007, January 17). Reebok Human Rights Business Practices. Retrieved September 18, 2008,

from Reebok Human Rights Web site:

http://www.reebok.com/Static/global/initiatives/rights/business.html

Just because companies strive for satisfaction, and more times than not are able to reach that approval mark by their customers, does not mean that it is an easy task. Satisfaction is usually met by companies producing the same goods and perfecting them. That is the old, traditional way of gaining the trust from patrons; the new, more modern means is quite the opposite.

Consumers want choice, after all, that's what the open market is about. However, not just because a shopper has different options of products means that he/she is willing to travel the distance to gain those different products; especially with gas prices the way they are. The new, modern customer wants choice, but from the same location as their other options. Instead of one certain type of product from each company like in the past, that person now wants competitor's products, opposite category of product (a car tire sold in the same place a goldfish is sold), and cheap, efficient products.

This new type of salesmanship is a little easier for a merchandise store, such as a Dick's Sporting Goods representing all recreational activity, Home Depot selling any and all types of home improvement products, and Wal-Mart which sells all types of products in the same location, much like a mall. These types of changes seam to be an easy transition for any consumer-selling type store. But how do restaurants and hospitality companies, such as the Hard Rock Café, make the transition to become just as flexible in order to gain a customer's satisfaction?

When making changes to any company, including product changes/additions, any type of financial issue, accounting, merchandising, and marketing, the owners and board of directors all the way down to the part time employees, need to realize that it will take time, commitment, and cooperation. These kinds of juristic changes will not occur overnight, not even over a year. The changes stated above began their transformation in the early 2000's and are still in the continuation process of change to this very day. The

Hard Rock Café began by making changes in their financial department, starting with hiring a new chief financial officer (CFO). Aside from this modification, HARD ROCK CAFE also devoted its time and efforts into altering the monetary reporting and organization of information internally. This is when they decided to make some management changes to their accounting and financing departments.

The next step was to add in a food and beverage system to find out the usage and success of each product. This system was broken down into patterns of customers purchasing merchandise daily and seasonally, one menu's monetary value versus another of similarity, an average of guest totals in each restaurant daily, and sales per item and profit margins surrounding those.

HARD ROCK CAFE then focused its accountants' duties. They went from being accountable for profit and loss statements for a particular amount of cafes to being expected to being responsible for only one financial categorization for all of the company's operations. The company also gave managers who have ties with the restaurant level and can make certain recommendations more available information by removing layers of management in the financial unit, accounting department, operations branch, merchandising department, and marketing division.

One of the most important changes that HARD ROCK CAFE must make is researching different products and finding out how they are profitable and can help the company financially. This is mainly due to the fact that the products can be attributed to a variety of different profits and consumer satisfaction. They need to know food products, which is the most expensive that customers will actually purchase as well as the cheaper food that those same customers still enjoy. This is so some food products do not go to waste versus the possibility of selling some too cheap and losing money. HARD ROCK CAFE also needs to know about merchandising products like their t-shirts, shot glasses, all the way up to their guitars. Some of these products will sell wonderfully, whereas some will be difficult to sale. The smaller items need to be researched to see how much they can sale for and the larger, more expensive items need to be researched to see how cheap they can sale them for without once again losing money (Hard Rock Corporate, 2005).

I believe that it was important that HARD ROCK CAFE made was able to make their financial changes without losing too many employees and change their overall financial goals and reporting without having to hire and train many new employees and losing too much money in the process. This was important because they had poor planning of distribution of food and products to each location. Some stores had too much, some had too little and had to make due. With their new financial reporting they will be able to buy the cheapest food at the best quality possible without losing money buying lower quality products. All in all, this change saved them the most money when it comes to planning out their distribution of products as well as buying of products to sell.

By “flattening” the financial structure in HARD ROCK CAFE, they are able to open up more communication lines up and down the chain of management. The orders of change or any type of decision that is made from management can be more easily passed along all the way down to the operational levels of management with greater efficiency. Opening up more lines to the financial department will allow management to relay messages to and from this department no matter what the command. This will allow for quicker response time and more efficiency when changing any type of process, price, or money figure. Overall, this will allow HARD ROCK CAFE to become greater balanced and overall a more profitable company with less mistakes due to lack of communication from one end of management to the financial department.

When it comes to inventory validation, HARD ROCK CAFE would most likely choose the FIFO form rather than the LIFO form of inventory. The FIFO (First-In, First, Out) form presumes that the first unit made a specific way and placed into inventory is the first sold. The advantage to the FIFO form would make the value of the inventory rise from its initial amount and would then make the replacement costs cheaper. The disadvantage to this method is that the product being sold is more represented as being the older, cheaper merchandise. This does not show the true value of the product and in turn decreases its market value to the consumer (Shaw, 2006). The LIFO (Last-In, Last-Out) form presumes that the last unit made a specific way and placed into inventory is the first sold. The older inventory is then left over until the end of the bookkeeping period (Investopedia Staff, 2008). The advantage of LIFO would be the extreme tax breaks on the inventory used with this method and more accurately represent the replacement costs. Whereas the disadvantage would be that the original merchandise would be devalued after not being used first (Shaw, 2006).

Since HARD ROCK CAFE is a restaurant as well as a merchandising store, they would most likely use a little of both types. They would use FIFO form for the food and beverage side of things (anything perishable) and then turn around and use the LIFO form for their merchandise section for those imperishable products. They should be able to utilize each type very well since they can implement them in numerous categories of customer relations.

In order to ensure the success of HARD ROCK CAFE for a long time to come, I would recommend that they stay on target. They have implemented their changes nearly ten years ago, along with this came a lot of time, money, and overall effort of the company and management. If they change anything juristically now, in any department, HARD ROCK CAFE may jeopardize any future goals as well as the last ten years of planning and changing. They will also need to continually change products (foods and merchandising) for their own good in order to keep their customers guessing and continue to satisfy those customers. After all, the customers keep the money flowing, the business booming, and the economy working.

The objective of this report is to provide an understanding of the competition mechanisms between countries which are traditionally exporters - the “Old World” producers represented by European countries - and the so called “New World” countries which today compete for the supremacy of the traditional model of wine growing and production.

World Wine Producers

The distribution of the world wine producers is clearly detailed in the map below.

The Old World producers are located in Europe. France, Italy and Spain are the main producers, followed by Portugal, Balkan states, UK and Germany. The European countries are still detaining a dominant position and they accounted for 70% of world production and consumption in 1999 (by data acquired by Euromonitor).

The New World producers are scattered around the world and are represented mainly by: Australia, Chile, United States, South Africa, New Zealand, Argentina and Canada.

World Wine Exports

The world wine export are still dominated by the Old World producers (see diagram below), with only three countries (France, Italy and Spain) which account for 60% of the world volumes exports in 2003.

Among the New World producers, the largest exports are coming from Australia, Chile and United States.

Another interesting characteristic is showed by the diagram below where the value of wine in exports market are growing at greater rate than volume.

France Productions, Exports and International Image

France accounts for 20.3% or the world wine production, with one third of domestic production exported to other European countries (UK, Belgium, Germany, The Netherlands) and outside Europe (major clients are United States, Canada, Denmark and Japan).

In the most recent years, domestic sales of wine have declined constantly. The wine consumption is becoming more occasional. This is partially due to an aggressive anti-alcohol campaign and driving restrictions set by the local government, but also facilitated by a lack of marketing strategy: the wine market is loosing touch with the youth (the average age of wine drinker is gone up from 35 to 55) and young people are getting keener to beer or alcohol pops.

Lowered domestic sales may result in a greater emphasis on exports, however the recent trend showed how French exports continue to loose market share to the New World (see diagram below).

Global Trade Atlas-Global Trade Information Source 2004

Considering France international reputation and image, it is useful to analyse its strengths and weaknesses, taking into consideration the important differences existing between standard and premium market.

Strengths:

France remain quality leader in the premium market; its international image express Sophistication, Tradition and Charm.

Weaknesses:

There are many weak points to be addressed . The puzzling classification and labeling, the unreliable quality, the rigid “appellation d'origine controlee” which dictates strict rules on methods of production (see more details on par.6.4) . Its international image is often seen as intimidating, boring and old fashioned.

Success of New World over the Old World: Key Factors

The following analysis aims to elucidate the main reasons accounting for the New World success over the Old World. We identified the following key factors:

• Taste of Wine:

  Many people like the sophistication of wine but not so much the taste; Old World provides a wine which taste need to be acquired (more acidic, dry and harsh) and the rigid appellation controlee does not allow manipulations (the only exception is the adding of sugar known aschaptilization) . The New World wine is by contrast easy to drink (less acidic, sweet and fruity), therefore appealing to a wider range of consumers.

• Labels:

  Traditionally the labels of Old World wine are very cryptic. They are in foreign language, denomination of wine is by place of origin (by naming the specific vineyard or “chateau” or the region where the wine has been produced, following the terroir concept as “unique combination of subsoil and amount of days of sun and rain during the growing season”). New World wine labels are by contrast easy to understand. They are in English, with indication of grapes variety (i.e. Chardonnay, Cabernet Savignon, Merlot), and additional information like taste description and meal suggestions. With enticing attractive labels, New World wine is just more accessible and easier to understand than European wines. Recently, some producers from the Old World has responded to the new consumer needs and starting to provide fully descriptive labels in english.

• Image and Brand:

  Old World wine hold a strong image only in the premium market The Old World needs to build a global brand and strengthen its international image for the standard market to compete with the strong image and wine brands created by the New World producers (places associated with sun, youth and fun).

• Wine Quality:

  The unreliable and too often irregular quality of Old World wine is finding difficult to compete with the very regular quality provided by the New World.

• High Fragmentation:

  The archaic structure of production which still in place in the Old World is characterised by small family vineyards or huge cooperatives
  supported by government subsidies (and traditionally more preoccupied with maintaining low price rather than achieving better quality). In both cases their culture is far from the marketing orientation needed in the modern wine market. New World production is offered by few big companies with high capital and strong marketing orientation.

• Expensive Production:

  The high fragmentation and little scale of production does make difficult for Old World producers to be very profitable: often the costs are too high, allowing no margins to spend on promotion, market research and product development. They must compete with the large scale production of New World , always very cost effective and with large margins to invest in research and promotion.

Evaluation of Different Strategies

European old world's producers are meeting on a regular basis to discuss alternative courses of action in order to fight back the ever more pressing competition exercised by new world's producers. Different strategies have been suggested in one of these discussions by the Bordeaux winemakers: we will analyse positive and negative sides of each proposed strategy.

Premium & Standard Wine Market

Strategy No.1:

“Stick to what we have always been doing and build upon our unique terrier. After all the world's wine critics, wine enthusiasts and our local customers remain discerning and are loyal to our wines”.

Evaluation:

It is important to distinct between Standard and Premium wine market.

Old World wines may have struggled to stop the advance of their New World competitors in the mass market - at least in non-producing countries such as the UK - but the premium market has largely remained dominated by French, and to a lesser extent, Spanish and Italian producers.

“In the standard market, France's obsession with tradition and maintaining the status quo will result in the bankruptcy and collapse of many producers who refuse to recognize the competitive nature of the global wine market” (M. Parker, Jr., 2004).

The approach would be successful in the Premium market where increasing demand of fine wine from such countries like Asia, South America, Central and Eastern Europe and Russia will make rise considerably top wine prices. The Premium market will see growing demand and profits. (Faced with declining margins from "standard" wines, New World producers are also shifting their marketing focus to premium products- examples are Chilean drinks group CCU, establishing a joint venture with French wine maker Château D'assault in 2001 for the production of super-premium wines in Chile and America's E&J Gallo with its recent efforts to enhance the equity of the UK's number one Californian brand, Wine Cellars, which has been re-launched under the new name Ernest & Julio Gallo Sierra Valley).

Creation of an accessible French brand

Strategy No.2:

“Adopt Australian methods of wine production and branding for international markets. We must develop an accessible French brand, learning from British Diageo with their “Le Piat d'Or” or American Australian Southcorp with “Vichon”.

Evaluation:

Branding has proved to be a fundamental factor for the success of New World producers. In order for wine producers to develop an international brand for French wine French governmentrecently agreed to double financial support for the industry to € 15m (£9m). Consumer insights are inspiring the creation of accessible French wine brands that avoids the pretensions of the Old World to appeal to real people.

In particular in the UK, one of the major key markets for France wine exports, there has been an effort with the following brands and related advertisement campaigns:

• Burgundy'slogo and “Red Dress” ads

Press campaign: newspapers, food and wine pubs

Budget: £650,000

• Vin de Pays d'Oc : “It's all happening in the Oc”

Transformation campaign: address region's lack of clear identity, used in UK

Budget: £500,000

• Rhône “Think Red. Think Côtes du Rhône.”
• French Connection has become the fastest growing French wine brand; it is now listed as the number three French wine brand, and number 12 in the top 20 list of all wine brands sold in the UK (AC Nielsen).

The Global wine company (acquisitions and mergers)

Strategy No.3:

“Follow the example provided by French LVHM and Pernod Ricard and buy into the new world wines' position and marketing expertise (LVHM own Australian Green Point and Californian Domaine Chandon; Pernod Ricard owns Australian Jacob's Creek and South African Long Mountain)

Evaluation:

This is definitely the quickest way forward for Old World producers in order to acquire the marketing knowledge and strategic strength they so urgently need.

With growing consolidation in the global alcoholic drinks market, and given the highly fragmented nature of the wine market, there is strong possibility for further merger and acquisition activity in the new wine market (as new research from Euromonitor International have confirmed). Industry consolidation is likely to make life harder for the smaller local wineries in the short term. Lack of capital is a major barrier to growth for smaller players, and this factor drive them into acquisition by larger companies.

This trend will lead eventually to a new structure of the wine production model: we are going toward the global wine company of the future.

The new global wine company will have a truly global organizational culture, will develop a series of global brands at different price to meet consumer expectations, and will create extraordinary communication systems to support an enormously complex production and marketing interface.

Appellation d'origine controlee and competitive disadvantage

Strategy No.4:

“Seek the disestablishment of appellation controlee for many of our wine-growing areas so that we can develop the global French brand we need”.

Appelation d'origine controlee is the French system of designating and controlling both the geography and the quality of wines (as well as some food products).

Near the end of the 19th Century, French vineyards (as well as most all vineyards in Europe) suffered the devastation of vine diseases and pests accidentally introduced from America. European viticulture was very nearly destroyed before measures were found to deal with these problems.

In the intervening years, the available quantity of the fine wine was reduced to a trickle and French wine was in the highest demand. Fraud and adulteration were rampant and widespread until a series laws were passed in the beginning of the 20th Century aimed at ending these deceptions. The laws specify and delimit the geography from which a particular wine (or other product) may originate and methods by which it may be made.

The regulations are administered by a powerful quasi-governmental body, Institut National des Appellations d'Origine, or INAO, founded in 1935. Every imaginable facet from producer to consumer has been considered controlled or regulated and the use of AC terms on labels of French wine requires absolute compliance.

Evaluation:

We believe that this strict system of regulations lead to a competitive disadvantage for French and other Old World producers.

Competitive disadvantage deriving from expensive production (the mandatory use of expensive oak barrels to flavour instead of the cheaper oak chips widely used by the New World producers is one of the factor and also the rigid rules regarding the appellation upon which an Old World Chardonnay must be 100% compared to 85% for New World), not allowed manipulations in order to reach a better taste, and confusing labels practice previously mentioned. Furthermore, the historic reasons which lead to its creation are not justified today, at least with regards of its most severe rules and considering the standard wine market.

The Old World should seek the disestablishment of Appellation d'origine controlee at least for the lower category wine. Since in the Premium market the Appellation characterises the product as original and distinctive we would not consider this strategy as successful as in the lower market.

Protectionism versus being marketing oriented

Suggested strategy:

“We must protect our consumers from practices that undermine our European heritage; we need to use our political clout in the EU as well as in our own parliament”.

Evaluation:

We believe protectionism is not the answer.

The new global economy and competitive system should eventually lead to the point of mutual recognition that high quality wine can be made in many different places around the globe allowing the consumers to decide which wine they like best. In today's global community we should be reveling in the diversity of wines available to consumers, and we should be doing everything we can to promote appreciation of the wines that result from different terroir, viticulture, and wine making styles rather than erecting protectionist trade barriers to the free flow of wine around the world.

World wine market: long term predictions

We would like to end this analysis considering a few interesting predictions formulated by Mr. Robert M. Parker, Jr., wine advocate and undeniably the world's most prominent wine critic (recently published in the October 2004 issue Food & Wine magazine).

“The wine Web will go mainstream”: there will be a full range of Web sites tailored to disseminate information about new wines and new producers supported by experts, consultants, specialists and advisors which will assume the role of today's wine publications.

“World bidding wars will begin for top wines”: World's greatest wines will reach a prohibitive price due to the increasing demand coming from new developing countries, i.e. Asia, South America, Central and Eastern Europe and Russia. The most limited production wines will become even more expensive and more difficult to obtain.

“France will feel a squeeze”: “France's obsession with tradition and maintaining the status quo will result in the bankruptcy and collapse of many producers who refuse to recognize the competitive nature of the global wine market”.

“Spain will be the star, Southern Italy will ascend”: Both these countries continue to make regional wines as they have for centuries, but they have adopted the New World style to some extent to increase their share of the new wine market.

Spain will rise as a leader both in wine quality and creativity, benefiting from the combination of tradition with a modern winemaking culture.

In Italy the winemaking revolution has commenced and its rewards will become evident over the next ten years.

“Value will be valued”: Due to increased competition in the market, more high-quality and low-priced wines will generally be available.

”Diversity will be the word”: Quality wines will come from unexpected places like Bulgaria, Romania, Russia, Mexico, China, Japan, Lebanon, Turkey and perhaps even India.

Conclusion

In the modern wine market the Old world producers are seeing their share of the exports market decreasing rapidly as they start to recognise the urgency to change their mentality in order to challenge new competitors with strong marketing orientation.

In the recent years, New World producers have successfully taken market share from Old World competitors through a combination of successful factors. These are aggressive marketing and effective branding, consistent product quality and reliable supplies.

The Old World future ability to counter the ongoing threat from New World producers will depend on adopting an extensive marketingapproach: size, branding, distribution channels and new mergers in order to benefit from the new global economy will all play a fundamental role in determining its success.

 

History of the Problem

When there are 25 people in your clan [Europe], each has a specific responsibility or group of tasks to perform to keep the clan alive and well.

As populations grew, from prehistoric to today, fewer few growers were needed while more doctors were needed. Thus, the idea of specialization in work became an important skill; there is a greater demand for higher levels of skills/performance.

In agricultural economies, there might be a need for 25 pickers but if there are no educated or "otherwise" trained people, one might wind up with 250 or 2,500 pickers-thus, 90% of those people will be of marginal value to any company or th farm owner, even if the farm is cooperatively owned.

At the same time farms will have an overabundance of food pickers, the villages and cities surrounding will have few doctors, accountants, mechanics, etc.

Problem

In business, one needs to know what is needed by a community [or at least desired] that is not being provided. The idea behind small business ownership is a balancing act between “finding an unfilled need and filling it” and seeing if the community might like the thing that you have but they know nothing about. This last approach can include an improvement of a technology that was thought not possible or is barely known about but thought to be inefficient or inadequate to fulfill a specific need. A specific example of this is the fuel methanol.

Meth has been available for over 30 yrs an is in fact, a component of the fuel one buys for their vehicle. However, with slight [and unfortunately, necessary] modifications to one's vehicle engine, one can run on 100% methanol at 1/100th the cost of gasoline pump gas. [It is also thought that methanol runs poorly or that it is hard to come by; both rumors are false.]

Significance of the Problem

Both the U.S. Small Business administration and other research organizations claim that eighty percent of new businesses fail within five years of startup. One of the reason for the failure is inadequate research to confirm that there is a sufficient number of customers for the new businesses.

From the time universities began stretching their research data and surveys to include small business, they began to include identifying the focus of the small business, called, in the mid 1980's, the Wow factor. This paper author, a small business faculty person, identifies the wow factor as simply an expression a new [or returning client] is likely to say when they enter a specific busin for the first or hundredth time since the customer is assured of timely service, quality products and often one or more other reasons for continuously engaging this business as a client.

When interviewed as to why a new entrepreneur started this or that business, it was uncovered that most of the new entrepreneurs just had an idea for a business and took the minimal steps necessary to open that business. Their new business in fact might have been the same as a relatives in another city or state, or just something to keep them from being bored.

Few of these budding entrepreneurs ever even thought, “what am I offering to the public that is different from anyone else offering the same thing?

When further interviewed about the entrepreneurs favorite restaurant, clothing store, auto repair service site or place to shop often, the entrepreneur often easily states one or more reasons why he or she buys from that merchant. When asked, “then why do you not make something as easily identifiable within your firm that you easily identified in the places where you are a customer?

The question way too often puzzles and perplexes the entrepreneur and makes them also wonder-and often, too late in their cycle of entrepreneurship.

I have had more students and clients tell me that they cannot afford to conduct market research. Actually, no entrepreneur can afford not to conduct market research. Research should consider what type of products the local market wants/needs; price, quantity wanted and how often to be bought. Market research will also specify whether the idea the entrepreneur has is viable.

The market researcher should also decide whether there is a need at all for the goods and services to be offered. There might be a competitor and the market research can help confirm whether there is a need for another firm to provide additional goods and services that your firm might provide.

Methodology

The author, a business consultant and college business teacher, has done primary research, and reviewed secondary literature regarding market research and did not discover anything new over the past fifty years; entrepreneurs do not wish to or know how to, take the steps needed to find out if there is a desire or need for his good or service.

Examples of survey questions:

1. Would you like to be placed on a mailing list so we may advise you about upcoming specials and services?
2. May we send a complimentary gift to you on your birthday?
3. May we send a complimentary gift to a loved one on their birthday?
4. How often do you buy flowers, whether single, in bunches, arranged, from a florist or other retailer or friend? Weekly, monthly, semi annually, annually, no special frequency.
5. How much do you spend on the average arrangement for loved ones? 5-15, 16-25, 26-50, over 51.
6. Do you like purchased flowers or arrangements to be delivered by the florist? (like to your home or office?)
7. May we keep the names and dates of loved ones birthdays, anniversaries, and special dates?
8. Do you like to pay cash, ask that we open a special account, or would you use Visa or MC?
9. What service would you especially like that we can deliver?
10. What service would you like that you don't think we can deliver that?
11. Would you be willing to tell others about us, on a regular basis?

Make sure you ask that surveys be filled out on a continuous basis. I'd even recommend that you have specially trained interviewees ask these questions at logical (within five  miles) shopping areas on a continuous basis--every 6 months! You need to continuously determine who your customers are and where they live and what they want and if you are providing what they want at the prices they are willing to pay! If your surveys are showing something other than the reality from your cash register tapes, then it is mandatory that you hire a professional market research team in a hurry to identify the discrepancy! If your market is dropping, then you need to change your product/service matrix!

Suggested Solutions

This research paper suggests that all individuals who desire to either tippy-toe or go head-long into self-employment, do at least elementary market research before hand.

What this means is that in addition to at least an Executive Summary of a formal business plan, it an only help if the candidate for self-employment checks out how many people that visits the store will take to pay the rent.

Meaning, not all visitors will buy and unless the merchant is selling exceeding unique products where one sale can make the entrepreneurs rent, many customers need to become clients of the company, and visit regularly. One of the big failures of prospective “brick and mortar” entrepreneurs and web site entrepreneurs [for places like Ebay] is that the entrepreneur

has to pay for goods, and his profit comes from the difference between the purchase price to him and the sale price he gets from the client. Many an Ebay “merchant” makes lots of sales and feels that is his/her profit. Ain't so!

It is a fact that when one sells $.50 a gallon gas, there is no need to hunt for clients. And there is no need to wonder if enough will buy from you.

It is not a fact that because 12 of one's relatives buy your art work, or love your cooking sauce, that everyone else will.

Also, market research is not a one time event. If you visit some shopping centers and see gents and ladies with clip boards and often, blue shirts, these people are conducting scientific surveys for one or more companies. Both new and successful companies need to know all the time, “am I still selling what people want, both old clients and new prospective ones? Is my customer service just adequate or am I lucky to be known for excellent service?

 

Continuous improvement techniques provide a clear focus for globalization. Globalization exemplifies the motivating factors impacting the economy each day. Because of some of the areas globalization has impacted, patrons tend to seek quality global acquisitions alone with products and services whole- heartedly. Value implies a customer's evaluation alone with punctuality and quality expected of a product given a fair market price for a product or service.

Because there is an array of management approaches the styles that is best suitable for my organization are typically autocratic in nature (2008). Management in this organization tends to bear the authority of making most of the organizations final decisions. Senior management makes the final call and is designated as the “keeper of information”. Fortunately, most Mom and Pop establishments are carried out in this fashion. This process of objectives keeps personnel in line by setting high expectations for the employees. Since the communication assessments in this form tend to trickle downward, the pace for motivation can appear to be somewhat low by nature. The directive for this course of action is such that business flow remains constant and all decisions can be readily anticipated. Hence, leaving no room for creative intentions. High levels of competencies amongst subordinates are at an all time high. During this process, leadership is highly over-rated.

The consortium of management issues can be classified as either traditional or quality focused management styles in nature. Traditional styles are non conducive to quality. Displaying such attitudes requires implementing management and labor leading to breached relationships within time; trust can be restoredthereby producing a more efficient working environment empowering people to want to succeed (Burrill, C. Ledolter, and J.1999). Traditional management typically fosters attitudes to connect people by enabling positive parallels throughout the organization.

However, the University of Phoenix has adopted a paternalistic approach to management (2008). Most decisions made by the institution require some feedback from the students. Either through their many forums and surveys or through personal contact via email or telephone calls. Decisions are explained and student issues are quickly resolved in a business fashion. This process incorporates motivated, skilled and highly competent student relationships. In the event a student has not attended college for some time, they may appear to be totally dependent on leadership during the onset of their education. Therefore, when improper decisions are made, then students may want to speak directly with those leaders in charge. Some facilitator's requests are that students can “ask them anything”.

Rapid changes in management have occurred towards the future of quality. For example, quality and commitment to customer service goes hand in hand. One reason for these changes includes the growing concepts of competition. In which case, the people come first in most situations. Resulting from these antics are more and more adults are making school their first nature of business. The world today is rapidly moving toward a competitive and growing workforce. The more in tune to change we are the lower resistant rates will be.

Currently, several pioneers have blazed a trail concerning TQM. For instance, Kaizen believes that (1) An organization should provide a product or service suitable to satisfy the customer (2) To promote higher profits it would be feasible to meander towards lower cost and less defects and (3) More empowerment of employees to accomplish organizational goals should be displayed as a clear vision for the organization (p. 469).The idea of encouraging training leads to process improvements.

Philip Crosby made a point of defining the zero defects concept. In industries such as manufacturing quality improvement is of the essence. He stated that motivation is the leading factor for errors. Employees who are highly motivated will typically exemplify lower margins of errors (p. 494). Lack of knowledge and lack of attention were the main puns in Crosby's design model.

In short, TQM has engraved its mark on society. Everyone has his own definition of quality. The more successful organizations still recognize the need to achieving sound business success. The global market place maintains that in order to be successful quality is the underlying factor. TQM concludes that change in the organization procedures are improving on a daily basis. Total quality management includes changes in areas of values, belief systems and norms (Packard, 1995). As a result, management maintains the sensitivity to stakeholder's expectations while making plans to cut cost relative to need. Careful to incorporate various styles of management, future plans are constantly being changed to incorporated more of the total quality management styles in the agenda for the future. Therefore, incorporating change and a highly motivated workforce are the end results.

 

Physical assets are used to generate activity and result in a positive or negative contribution to the owner of the asset. Intangible assets also result in a positive or negative contribution to the owner, but are different in that they do not have a physical shape or form. In fact, intangible assets help physical assets in generating activity. Intangible assets can be said to be behind the scene with respect to productive activities.

Besides real assets, the economy is supported by another group of assets called financial assets. The major component of the financial assets is cash , also called money. Financial assets help the physical assets to generate activity. Some examples of financial assets besides cash are deposits. debt investments, shares and foreign currency reserves.

Assets in any economy can thus be broadly grouped into physical, financial and intangible assets, based on their distinct characteristics.- Physical assets can be classified into fixed assets and working capital assets, based on the length of their life. Fixed assets such as land, building, machinery , and other infrastructure facilities, are utilized by the society over a long period of time when compared with working capital assets.

Movable/ circulating capital assets are produced and consumed by the society within a financial year. Examples of movable, circulating capital assets include materials, merchandise, durable goods, jewellery (gold), and similar items. Intangible assets are goodwill, patents, copyrights, and royalties.

In a macro sense, financial assets are regulated by the government of an economy. Financial assets smoothen the trade and transactions of an economy and give the society a standard measure of valuation. Money or cash is the basic financial asset created by the government of an economy. The extent of flow of this financial asset has to be regulated in an economy for the demand for and supply of funds to match.

At the macro level, financial assets also represent the current/future value of physical and intangible assets. The current/ future value of financial assets depends on the current/future return expectations from these financial instruments. All the financial assets in an economy represent a real asset either in the present context or in the context of the future. Their dependence on real assets requires the financial assets to be valued differently. The distinctive value determination of financial instruments also requires a specific market to patronize them.

The big question that is begging to be asked now is if this new campaign is working. While we may not fully know the extent of how successful it was until thirty years down the road when the supplemental ads to the campaign printed in magazines show up in antique stores all over, it is possible to take a brief look around and see what sort of buzz is already coming up in conversations.

I have both overheard, and been involved in, conversations in which the extremity of the advertising campaign is discussed. These conversations were all before VW put out their own ad in which the two characters involved discuss the plausibility and reality of the other "Safe Happens" commercials. The exact same observations make in the commercial were all major points in the conversations as well. This leads me to believe that either the marketing agency had a good idea as to what the public's reaction would be to the ad campaign or they listened after the campaign started and created another ad specifically designed to encompass the public's reaction. Either way, it shows a strong campaign which has evoked a strong feeling with the public, much as the "Think Small" campaign of over thirty years ago.

Volkswagen even goes so far as to make the ad even more edgy and memorable by letting the viewer's mind fill in the last audio bit of every ad. Every ad ends with one of the people who was in the VW when it was wrecked uttering a shocked "Holy sh..." The ad is self censoring, and the actual phrase is never said. However, it is still mentally filled in, as it is a very common phrase in the American culture.

So, is the ad effective? It's target audience is broader than the VW GTI "Fast" commercials. It's more comprehendible to then general populace than Volkswagen's brief "Unpimp My Ride" ad campaign, which incidentally seemed to make the rounds on the Internet more than on the broadcast channels. I would have to say that it is definitely one of their more effective ad campaigns in recent times. We'll just have to wait a while to see if it makes the jump from effective to classic.