There are four ways to invest in gold.

1. Gold Mining Companies
2. Gold Exchange Traded Funds (ETF)
3. Local Gold Bullion
4. Online Gold Bullion

Gold Mining Companies

Purchasing the gold mine company stock is an excellent way to get in the gold game without being fully exposed to the ups/downs of the gold market. If you invest in a good mining company it will have growth potential (especially if gold is going up) and the ability to sustain itself through down periods. Gold mine stock, however, is still susceptible to speculators and short investors. Make sure you understand the company's balance sheet and long-term financial outlook before investing in it. At a minimum make sure you understand the company's balance sheet and long-term value.

Gold Exchange Traded Funds (ETF)

I recently stumbled across ETFs when I was trying to find a method to invest in commodities and specifically buy minerals directly. ETFs are an excellent way to directly purchase a commodity without dealing with special investment firms. Essentially an ETF is a mutual fund that you can trade like a stock through a regular investment firm. The price of the ETF share is directly proportional to the price of gold at that time. In fact, most gold ETF funds normally own gold that directly relates to the price of their shares. The benefit with investing in an ETF is that you own gold without having to worry about safely storing it. A negative with ETFs is that they are taxed by the IRS as collectibles, not like stocks and mutual funds and thus, ETFs do not benefit from long-term capital gains. After 1 year with a stock or mutual fund the long-term capital gain kicks in and the maximum tax rate is 15%, whereas with an ETF it continues to be 28%.

Local Gold Bullion

If you'd like to own gold directly there are numerous options. You can purchase gold bullion (e.g., coins, bars and other items) or purchase gold jewelry. The latter is particularly beneficial because you can own gold while still being able to use it. Personally I took the route of investing in gold coins. I found it quite fun to buy a “piece of history” and have a long-term investment at the same time. There are two big negatives with holding gold directly. First, you require a safe place to store your gold and keep it away from the criminal element, and secondly it can be somewhat difficult (and expensive) to buy and sell gold directly. You can purchase gold coins from online auction sites (e.g., Ebay), and gold bars from brokerage sites such as http://kitco.com. The greatest advantage with having real gold on hand is that you can have immediate access to it. For the paranoid, gold is a safe bet if society goes to hell in a hand basket. Some folks have dollar bills stuffed under their beds and some have gold coins. Given how the dollar has been plummeting lately I greatly prefer the latter.

Online Gold Bullion

If you want to own gold directly but don't have a safe place to store it or don't want to be charged expensive fees then an online bullion brokerage may be best for you. The concept with the online bullion traders is that they store bullion at their secure vaults. When you purchase gold it is not shipped to you, but rather stored in their vault. You can purchase more gold or sell it at anytime and they will immediately give you the $ for the current rate of gold being traded at that time. A small transaction fee will be applied (normally in 10s of dollars). The process is very fast and secure. There are quite a few online gold brokerages out there but most seem to specialize in the acquisition of gold bars/coins. One online brokerage I particularly like is bullion vault. This website allows you to buy gold directly and have it stored in one of their three vaults: New York, London or Zurich. The website is very secure, intuitive and easy to learn. One of the coolest features of Bullion Vault is that you will receive a free ounce of gold when you signup.

I hope this article has helped educate you on the different gold investment options. If you have any questions please let me know, I'd be happy to help out.

This is what consumers commonly pay that generally cover all the expenses of the wholesalers, retailers, and manufacturers. When you pay retail, you are paying 100% or more for a product that you are trying to resell in the future. You also may be paying an inflated price due to intangible factors like location, good press, or poor research. If you are a serious investor, you don't ever pay retail!

Wholesale Price –

What middleman vendors and marketers usually pay. These agents can still charge a price profitable for them, yet low enough to appeal to retail sellers. Wholesale purchasers usually purchase in bulk in order to get a lower cost. In most cases, investing in a product at a wholesale price means that there is still a desire in the market for the product, and it can still generate a good profit margin for you.

Fire Sale –

This typically is the manufacturers base price that includes all costs of producing product/service. Investors view this price as a turnaround opportunity and negotiate the lowest price possible and can sometimes get below base price because of poor market conditions or devalued inventory. On the surface, fire sale prices can be attractive because they seem like a bargain. However, investors should be wary of fire sales because there may be unknown or unseen expenses associated with the purchase that will not make it a bargain.

The key to knowing the difference between any of these price variables is making sure you do enough due diligence to be able to make an intelligent decision the next time you are ready to take advantage of a "good deal". Due diligence means comparing apples with apples - matching similiar products in the same industry (stocks) or neighborhood (real estate) and making comparisons based on price.

One of the first things I learned that although this is a basic wrapper, the end flaps do not match any of the candy bars on the shelves in today's market. Therefore, I removed them. I was looking to design the package into something attractive that people would buy when they went to the candy shelves. I also wanted it to look original.

It took sometime to create this little masterpiece. Soon I had a finished product that I could show as a mockup.

This product would compete with all the candy bars on the market. It would be your standard candy bar aisle competing against Hershey's, Whatchanmacallit, Nestle Crunch, and the like. The customer you are looking to attract is more than likely ages 7 to 21. Although people of all ages eat chocolate, and you may use ads in a variety of different places, the younger the person the more sugar they are bound to eat.

This would be the ad for the chocolate bar to capture an audience.

Marketing, from the economic point of view is defined as the exchange function by maintaining supply and demand in equilibrium. It aims at creating the welfare and standard of living to the society as the object of marketing. It can be said to be “the performance of business activities that direct the flow of goods and services from the producer to the consumer or uses. However, one can explain that it makes marketing production-orientation rather than censure - oriented.

Object of Marketing

According to the saying of great economists, Barker and Anshan, “the end of all the marketing activities is the satisfaction of human wants”. With the satisfaction of human wants, profits are obtained from the business and at the same time the reward is available leverage for marketing.

1. Intelligent and capable application of modern marketing policies suitable to the vibrant growth of globalization
2. To expand and develop the marketing field
3. To adopt, develop and implement guiding polices to meet good results
4. Pertaining to marketing, problem should be studied closely to arrive at the best solutions
5. To find sources for further information regarding market problems
6. To identify defects and accumulate its effects in the existence of marketing function

In the modern society, marketing draws the greatest attention of the public to purchase anything anytime anywhere else at negotiable rates. Because it is the competitive world where any commodity can be bargained. Marketing has a link between the consumer and the producer. Marketing processes new items to retail shops from where from a poor hand can buy. It takes a vital role to stimulate and tempt the consumers to purchase any material. Marketing increases a nation's income. By and large, it changes the living standard of people. It creates employment opportunities even in the Age of Internet. Continuous marketing invites a large number of commercial and innovative activities and in consequence the job opportunities are provided to the people.

No doubt, marketing creates modern producers. It removes the imbalance of supply by transferring the surplus to deficit areas through better transport facilities. It maintains economic stability and boosts rapid development in under developed or developing countries.

One can be sure of the fact that market includes all activities in the creation utilities, form, place time and possession, as far as the individual firm/industries/company/organization, marketing and innovations are the two basic functions of all business. In the eve of Globalization, change is the essence of life. Changing a business suitable to the taste of customer's new product and innovative methods is more important than running a business more efficiently. In order to carry out marketing through business, are should adopt the changing styles, fashions and preferences. The function of marketing is a boon to business. It invites and creates customers.

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.

 

These theoretical explanations are fundamentally based on the way they perceive how the market system works and the nature of its equilibrium at full employment level is the norm or exception given the role of government is minimal. As well, the theories differ in their explanation of the causes and effects they attribute to the business cycle. In addition, the theories differ whether the business cycle is an inevitable outcome of the market economy or it is caused by economic shocks and its temporary nature and the ability of the market system to come in to equilibrium at full employment level given that the government do not distort the market system by inappropriate excessive intervention in to economic affairs.

The Monetarist and Neoclassical Theories of Business Cycle.

 

In the monetarist theory of business cycle the basic cause of the business cycle is because of excessive or restrictive money supply by the financial authorities and is caused by economic shocks, which are caused not by economic system failure but by external factors and excessive political and social policies of the government. That is, the business cycle is not caused by inadequate aggregate demand but by money supply in the economy and excessive government intervention or in appropriate polices to manage the economy.

In essence monetarist theory explain business cycle by in appropriate monetary policy and other external factors and economic shocks and it is temporary and the rational behavior of the market will automatically move the economy towards full employment and if government intervenes it will cause excessive inflation and will make the full employment unachievable. In addition, in their view it is also caused by rigid labor market practices and inflexible wage fixing systems and Union power in the labor market and imperfection and anti- competitive practices in the goods market. In summary, according to monetarist the business cycle is not inherent weakness of the market economy but is caused by monetary factors and excessive government intervention in the economy or inappropriate economic and social polices of the government and rigidity in the labor market and the role unions play in the labor market as well as imperfections in the goods market by anti-competitive practices and over regulation of business activity by government.

In their view, in all circumstances fiscal policy to boost aggregate demand by government expenditure or by tax credits will not work because it will affect prices not output and increases the rate of inflation at least in the medium term even temporarily it increases out put for a short time. The solution to business cycle is to have adequate money supply and control money supply by interest rates or some control of money supply by prudent supervision of the financial system and undertake microeconomic reform so that the market is close to a more competitive market system and make the system to become flexible to adept to changes in the market or adept to economic shocks faster as possible and to reduce government intervention to a minimum.

Keynesian and Neo Keynesian Theories of Business Cycle

In Keynesian theories of business cycle the business cycle is caused by inadequate aggregate demand because of lack of investment by the private sector and lack aggregate consumption within the economy as well as in an open economy by exports as imports.

In their view the aggregate demand function is the cause and money supply is an effect.

As well, the economy can come into equilibrium less than full employment because of wage stickiness that is wages do not adjust faster down wards compared to increases even without union power in the labor market. In addition, imperfection in competition in the market is reality and government regulation is necessary in the goods market to control monopoly and oligopoly practices. In addition, market failure is caused where the private cost and social cost diverge and in this respect government intervention is necessary. In Keynesian view, in a economic sense there is legitimate grounds governments must intervene in a market economy at least in the circumstances of deep recessions where if no government intervention the market mechanism will take a longer time to move towards full employment and if not resolved in a short to medium term it will cause social and political instability and may be threat to a market system because of high level of unemployment in a deep recession. In Keynesian and Neo Keynesian theory of business cycle if market is allowed to work in itself without any government intervention in the economy it will grow and the market is dynamic and adaptable however it can come in to equilibrium less than full employment frequently and may also can cause deep recessions, which may take a longer time to be resolved by market mechanism alone. In their view, the business cycle can be stabilized by appropriate fiscal and monetary policy and they are effective to reduce business boom and busts and reduce the possibility of unacceptable levels of unemployment.

If monetary policy is used alone according to Keynesian theory it will take time to work in the economy and it may not be effective to solve deep recessions and fiscal policy is important tool to reduce boom and busts to stabilize the economy.

Marxist Theory of Business cycle

In the perspective of Marxist theory of Business cycle the boom and bust cycle is inherent weakness of the market system. It is caused by its own mode of production and

private ownership and profit motive. No policy whether monetary or fiscal policy will correct this inherent economic weakness of the capitalist system or the market. In their view, the market in the modern capitalist economies do not work because of the concentration of wealth and the law of accumulation in capitalist system do not allow to have adequate aggregate demand because it causes unequal distribution of income and purchasing power and produces overproduction and deflationary tendencies. They also point to the fact the labor theory is a regulator of the system and there fore if capital is used and labor is saved then the rate of profit will come down because the profit come from surplus labor and there fore investment levels even though they can mitigate this over a period of time however not indefinitely as this process will cause boom and busts which are more frequent and deeper and if markets are not overthrown by labor then it will continue the boom and bust indefinitely. That is monetary and fiscal policy is ineffective in solving the boom and busts of market economy because it is inherent to the capitalist system weaknesses.

Effectiveness of Business Cycle Theories in Context of Empirical Evidence

In all market economies boom and bust is a reality. However the boom and bust differ in its frequency and the level of boom and bust. In addition, all countries have not used one policy measure alone to stabilize the economy and the effectiveness of policies to stabilize the economy is not always effective. This may be due to in appropriate policy mix and the time lags they take to work in the economy and the economic condition changes and it may stabilize but destabilize further the economy. This shows that fiscal or monetary policy alone will not work in all market economies and different mix of policies work in different conditions in terms of their specific market conditions in terms of the characteristics of the labor market industrial structure and level of competition and degree of market failure in their own economic systems.

However, it is also evident from the recent experience of the market economies boom and bust cannot be completely eliminated by the functions of the market and governments have successfully used fiscal policy with monetary policy and other microeconomic reform to some extent indicate fiscal policy at least to solve deep recessions is an effective tool and monetary policy in itself have been proven not effective in these circumstances. However, there is evident from the experience of Germany particularly the fiscal deficit may produce inflation and fiscal policy as predicted by monetary policy if used not prudently may increase boom and bust cycles and also can produce stagflation. In addition, in the current global economy economic shocks can affect many economies in a shorter period of time and markets may not be able to correct all shocks in it self and some regulation is inevitable to have economic stability. In this context government in varying degrees must playa role to control or manage business cycle to acceptable levels of economic activity. In addition, in reality most market economies are mixed economies and government playa role in economic activity even though market plays a dominant role. It may due to historical, cultural and social factors.

However, it is also possible government intervene in the economy to reduce market failure and also where the private sector is impossible to provide public goods where the risks are higher and government can only provide such goods and services.

Even in the current economic climate of market based policies in Western Europe Social security is not totally abandoned because in a market economy conflict in distribution is inevitable and political stability is necessary to protect vulnerable groups with the society to reduce the negative impacts of the working s of the market systems. In addition, public education, public health and environmental protection are a norm to varying degrees in most of the western countries even in the 21st century.

This indicates, at least in some economic activities government has a role because private sector cannot provide it because of the nature of product or service as well as to the restriction in resource capacity and duplication, which is not economically efficient compared to the government at least in some circumstances.

It cannot be denied government intervenes in the economy due to political and social reasons or it is historical and cultural. However, it is also true that government has to intervene on economic grounds to correct market failure or to reduce unemployment due to deep recessions where the market alone will not be able to solve it at least very quickly and the uneven distribution of income it produces because of its workings which may produce political instability.

In summary no theory of business cycle is completely explain the complex issue of business cycle. However, the theories together at least to some extent explain the dynamics of business cycle. It is certain business cycle cannot be avoided because the empirical evidence shows that it is inevitable in a market economy. If one theory is used to formulate policies to manage business cycle then it is evident from the experience of most Western Europe that it will lead to increase the instability than control the instability or boom and bust. Ideologically driven explanation will lead to disaster than a solution. It is certain that market will not always even without intervention will produce full employment all the time as evidenced by the history of US economy, which has the most minimal government intervention in a market economy. That is, based on evidence. Mix of monetarist and Keynesian theories and some insights from even the Marxist perspective is essential to understand the issue of business cycle to formulate effective polices to manage business cycle on the basis of empirical evidence as discussed above.

But before proceeding to each of these successive stages, management has to decide whether to proceed on the process, seek more information or abandon the new product development process.

1. Idea Generation: New products stem from various sources. The most important sources are customers, employees, distributors, competitors, research and development, and outside consultants (Lamb et al 1992).
   • Customers: The marketing concept suggests that customers are the spring board for developing new products. An organization may learn of promising products and programmes developed outside the company from either the customers themselves or the company's field representatives. Some companies also encourage customer input. For instance, many customer packaged goods provide numbers for customers to call with problems, complaints and/or possible suggestions.
   • Employees: Marketing personnel often create new product ideas because they analyze and are involved in market places. This applies to advertising and marketing research personnel as well as sales persons. Firms should encourage there employees to submit new product ideas and reward them if their ideas are productive and finally adopted.
   • Distributors: A well trained sales force will routinely question distributors about needs that are inadequately met because they are closer to end users. Distributors are often more aware of customer's needs than are manufacturers.
   • Competitors: No firm relies solely on internally generated new product ideas. A significant component of any organization's marketing intelligence system should be monitoring the performance of competitor's products. One purpose of competitive monitoring is to determine which, if any, of the competitors' products should be copied. Competitive monitoring may even include tracking products manufactured and sold in foreign countries.
   • Research and Development: Research and Development is carried out in four distinct ways from the basic research in scientific research aimed at discovering new technologies, applied research that takes these new technologies and attempts to find useful applications for them, product development goes one step further by converting these applications to marketable products and finally product modification makes changes in products and/or functional product improvement. Many new product breakthroughs come from R&D activities. For example Kodak developed the lithium battery in one of its R&D labs. R&D scientists at Bell laboratories discovered the transistor, the laser, the solar cell and the first communications satellite.
   • Consultants: Consultants are available to examine a business and recommend product ideas. Traditionally, consultants adopt a strategic posture, assessing company product needs as well as market opportunities. They determine if a company has a balance portfolio of products, and if not, what new product ideas are needed to offset the imbalance of the company's present product mix.
2. Idea Screening: After these new ideas are generated and passed through the first filter in the product development process, the next stage, called screening, eliminate new product ideas that are inconsistent with the organizations new product strategy or are obviously in appropriate for some other reason. The new product committee, the new product department, or some other formally appointed group performs screening review. Most new product ideas generated are rejected at the screening stage. Rejecting good ideas lead to lost of opportunity. Accepting poor ideas leads to increasing cost, because the cost associated with the later stages with the development process are much higher than those in idea stages. The longer it takes to scrap the poor idea, the more costly it is to the firm.
3. BUSSINESS ANALYSIS: new product ideas that survives the initial screening process progresses to the business analysis stage, were preliminary demands, cost, sales and profitability estimate are made. This is the first time the estimate cost and revenues are made and compared, depending on the nature of the product and the company. This process may be simple or complex. The newness of the product, the size of the market, and the nature of competition all affect the accuracy of revenue projections. In an established market like soft drinks for example, industries estimate of total, markets size are available, the challenge is to forecast market share for a new entry.
4. Product Development: In the early stage of development, the research and development (R&D) or engineering department may develop a prototype of the product. During this stage, firms should begging sketching out a marketing strategy. They should decide the packaging, branding, labeling and so forth. In addition. Firms should map out their preliminary promotion, price and distribution strategies. In the development stage, the technical feasibility of manufacturing the product at an acceptable cost is thoroughly examined. This stage can last a long time and thus be very expensive. For example, a toothpaste company was in the development stage of their new product for ten years. It took eighteen years to develop minute's prize, fifteen years to develop the Polaroid color pack camera, fifteen years to develop Xerox copy machine and fifty-five to develop the television (lee Adler, 1966).
5. Test Marketing: Test marketing involves the limited introduction of new product in selected markets. The purpose of test marketing is to try out the product and the rest of the proposed marketing strategy in the market place and to correct any defects in the strategy prior to large scale introduction. Many companies use test marketing to minimize the risk of major product failure. Test markets are usually cities that marketing management believes will be representatives of the overall national consumer reaction to the product cost. Due to high cost of test marketing, usually, only two or three test cities are chosen. Testing time may vary from two months to two years, depending on the company's lead over competition, the repurchase rate of the product, and the desire for secrecy. The goal of test marketing is to gather information on the sales of the product. It's repurchase rate, the characteristics of consumers, where the product is bought, competitive reactions, and the strength and weaknesses of distribution, promotion and price.
6. Commercialization: This is the final stage in the new product development process. Whether the company runs test market or not, at some point it either drops the product or goes into full scale introduction. The commercialization step involves developing, manufacturing and distribution systems to deliver the product to all intended markets. Pricing policies are set, and promotional messages are sent to all market .any changes of fund necessary in the test market are made, and the product's complete marketing strategy is implemented. Commercialization is to an extent extremely expensive .the company commits capital expenditures to manufacturing and distribution systems and begins advertising and promoting the product on a massive scale. In many cases, the cost of carrying inventory at all retail locations and at distribution points will into reasonably huge amount of money.

The process of developing a new product might not be very attractive to young entrepreneur and he would just have to select the product/service to handle from amongst existing products and services and try to find new markets or customers for himself. He of course has to work within the law by obtaining permission of the owner of the product (patented or registered) or by producing his own or selling for other producers.

Your Need

It must be sounding strange that I am asking you to consider your need before buying insurance. Isn't that obvious? I'm afraid it's not. Most people buy insurance because of reasons other than their need:

1. Because a friend bought the policy,
2. Because it is good investment,
3. Because the agent said it is the best policy for me, etc.

You should buy insurance only because you need it, and the type of insurance you buy should depend on your specific need. You shouldn't think it is a good policy for you just because Miss Z bought that policy or because your agent thinks it's the best one for you. Only you know your needs best, and you can find out what policy to take by carefully considering your need. The agent, of course, knows his own needs best .

History of the Company

What do we buy insurance for? So our nominees can be compensated for the loss, right? But rarely do we consider the claims settlement history of the insurance company, which is so crucial to protecting our interests. And this information is easily available. In most countries, the government's insurance regulatory body releases data pertaining to claims settlement history of each insurance company, which is available on the net. Even if there is not a huge difference, why not go for the company that settles the maximum claims?

Most importantly, beware of companies that offer maximum benefits for the lowest prices. Those are the ones who will go to a court rather than settle your claim.

Policy Document

Would you sign a legal agreement with me entailing significant financial obligations without even reading the agreement? And if you read and find it difficult to understand some terms, would you ask my secretary the meaning of those terms? Well, that is exactly what most of us do in case of an insurance policy. The policy document is a legal agreement, and the agent is a commissioned employee of the company.

So not only you should make it a point to read the entire policy document, but also never rely on the agent's explanation of terms that you do not understand. You can understand the jargon by referring to a good insurance dictionary. If you are still confused about certain terms, ask the agent to explain it in writing and get it signed by him.

To explain why it so important to read and understand all terms and conditions, I will cite an example. A person who worked in an MNC in a big city had bought a term policy coverage of 50,000. The policy offered an additional benefit for accidental death, which entitled the beneficiary to double that amount if the insured died in an accident. All was good till that person actually met with an accident and died when he was on a vacation in a remote corner of the country. His wife's claim was turned down under the plea that the insured was not in his “natural habitat” when the accident occurred. In fact, this term was there in the policy document, which the poor man had never cared about.

Obvious and Not So Obvious Charges

If you have ever bought an insurance policy, I need not explain this point to you. Almost all insurance policies have charges beyond what is obvious. For an insurance-cum-investment policy, there might be charges under several heads: mortality charges, administration charges, fund management charges, miscellaneous charges, etc.

In many cases, these charges are deceptively low. For example, in one market-linked policy a friend had bought, the administration charge was mentioned as 15 per cover per month. He thought that was negligible, considering he was getting covered for 100,000. Later he came to know that “per cover” meant per 1,000, which meant the administration charges were too high.

Insurance companies keep inventing new ways to fleece the customer. Make sure you understand how much it costs you to be insured. In most cases, you lose when you combine insurance with investment. Contrary to what they claim, most companies sell market-linked policies that will make you poorer and make themselves richer.

Late Payment and Surrender Terms

Harsh! Yes, that's what late payment and surrender terms are for most policies. If you are buying insurance, you should be pretty sure that you would not default on premium payment and you aren't going to surrender the policy before its maturity.

Late payment is a dangerous thing because your insurance cover is in void starting the last date of your premium payment till the company receives and acknowledges your payment. In certain policies, when you default, your insurance cover remains suspended for a month even after the company has received your payment. Besides, the penalty for late payment is usually very high. For some market-linked policies, your agent may claim that you don't have to pay any penalties for late payment, but make sure you know the truth. In such cases, usually the company deducts some money from the investment part of the premium you have paid before.

Once bought, you should keep a policy till it matures, unless you badly need the money. Surrender is really very costly in most cases. If you surrender a 20-year insurance-cum-investment policy after 5 years, you may realize only 30% of the money you had paid over the period. Yes, that is a loss of 70%, and I am on the optimistic side.

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I have personally just been let down by my buyer who put in an offer on one of my properties over 2 months ago. It was a sale that should have been all tied up within 6 weeks due to the buyer being a first timer and the house being empty. I accepted the offer at the beginning of February and here we are 2 months on and the buyer has struggled to get a mortgage and has been let down by more than 1 lender. The position this now puts me in is a bad one because now my property is worth less and than it was at the end of January 08 and it has cost me solicitors fees plus 2 monthly mortgage payments. Where is the security for Sellers? There is none!

In Scotland they have a Bidding system and the buyer is locked in early and deposits change hands at an early stage but here in England the sale has to go weeks down the line with nothing firm or contractually binding until Exchange of Contracts when the deposit monies transfer across. I think it's about time out whole house purchasing system in England is reviewed to protect the seller more and also the buyer.

The buyer's in this country are also put in the position where the seller could leave the house on the market and decide to take a higher offer after they might have already accepted one from another buyer. This gets buyers into bidding wars and in some cases people end up paying more than a house is worth.

Isn't it about time we fought to get our property market back on track? To allow Sellers to feel more security when they receive and accept an offer? And, to give buyers the opportunity to buy a house at its true value? In today's market we are desperate for some change for the better and a review of the buying and selling process is well overdue.