The Palm Oil Industry In Malaysia Economics Essay

The Palm Oil Industry In Malaysia Economics Essay INTRODUCTION Summary of Research Palm oil also known as Elaeis guineensis. Palm oil is derived from the pulp, and it can be found from African palm. There are so many uses of palm oil, such as edible oil, soaps, candles, cosmetic and chocolates. The colour of palm oil usually red colored, it is because of content of palm oil. The red coloured content with two types of carotene, there are à Ã‚ °-carotene and ÃŽÂ ²-carotene. a-carotene contents with 30mg per 100 g, and ÃŽÂ ²-carotene contents with 30mg together with Vitamin E. Usually ÃŽÂ ²-carotene already removed and become a pale oil. Three content of pale oil, saturated vegetable fats, mono-saturated and the last one is polyunsaturated. Besides that, other than red colored of palm oil, there are yellowish-white colors and also known as palm kernel oil. It can be use to make a margarine and cosmetics. 1.1.2 Palm Oil History Palm oil has been found in West African countries. This palm oil is good to make cooking oil. The uses of palm oil that been introduced by West African and has attracted the European merchants to make an international trade between this two country in order to purchased palm oil. Ashanti Empire or Ashanti Confederacy plants a large amount of oil palm trees, while the King of Kingdom of Dahomey forbid whoever person from cutting the palm oil trees. This uses of palm oil have been attracted the Britains Industrial. And the value of palm oil increased because of the demand from British Traders. Besides that, palm oil also can make soap, for example, Sunlight Soap and the Palmolive brand. A country such as Ghana and Nigeria becomes a primary export from West African but in year 1880 this export of palm oil was overtaken by cocoa. 1.1.3 Research of palm oil in Malaysia. Research and development (RD) began to expand the oil palm breeding in 1960s. This activities implemented after the establishing the Malaysias Department of Agriculture. The government also provided a college to train society how to plant palm oil. For example, the government established Kolej Serdang and now become Universiti Pertanian Malaysia (UPM). This university encouraged the graduates student to conduct research related to the palm oil. Malaysia. In year 1979, government established Palm Oil Research Institute of Malaysia (PORIM). This institute support from UPM and B.C Sekhar as a founder and chairperson also support Porim to be a coordinated institution. Porim also giving the opportunities to society especially the scientist to do RD related to the uses of palm oil. In year 2000, Porim changed to Malaysian Palm Oil Board (MPOB). Nowadays MPOB become well known at the international country. 1.1.4 Bright future of palm oil in Malaysia Few years ago, the income from palm oil production has become the big contribution to Malaysias Economy. Because of the income gain from palm oil, many palm oil companies can give the employee bonuses every year. Besides that, oil palm shareholders also get the benefit of selling the palm oil. Industry of palm oil said that, the price of palm oil will maintain every year depends on the economic condition. Because of production of palm oil has contributed to Malaysias economy, the changes of palm oil prices in Malaysia always published in newspapers. It is good for rural area, because rural areas are the biggest hectares in palm oil plantation. As we know, price of palm oil influenced by the production of palm oil, import and export, and then global economic condition. If the global economic become more slowdown, it will the major fact that the importer will less confident to the production of the palm oil in our country. If the prices of palm oil decrease, we can replant back the palm and reducing supply. This can help the prices of palm oil increase back. Besides that, nowadays, many new developments in technologies also can increases the production of palm oil. 1.2 Problem Statement Price of palm oil always fluctuated depends 4 factors. The 4 factors are production of palm oil, export of palm oil, consumption of palm oil, and land area in plantation of palm oil. The problem of this research is difficult to seek the data in internet. To find this data, we must find it at statistic department besides of UMS. 1.3 Research objective This research has an objective that to find a factor that influence the price of palm oil in Malaysian palm oil market. After find the factor, we must find the relationship between this four factors to the prices of palm oil. to find this relationship, we must test it one by one using econometric. 1.4 Significance of the research Researcher This research suitable for the researchers who wants to gain knowledge and information about palm oil in Malaysia. All this information gather from internet, journal, and by result from E-Views. So all society especially researcher will gain knowledge on the study about determinant of the price of palm oil in Malaysia. Palm Oil Industry The palm oil companies also can get benefit from this research by knowing the factor that will influence the price of palm oil respectively. If palm oil companies already knew what the factor can influence the price of palm oil, the palm oil companies increased the export of palm oil and our country also can get higher income because of the production of palm oil. Labor Study Labor can know what are the big factor that can influence the price of palm oil, and then can their can increase performance in terms of work quality and many more. 1.5 Scope and Limitation of the study The scope of this study is around Malaysia and the data collected on production of palm oil, export of palm oil, consumption of palm oil, and plantation of palm oil in land area (hectares). This data from year 1980 to 2009, involved 29 years. The data for 2010 also hard to find because year 2010 is not finished yet. So the data for 2010 is not stated yet. CHAPTER TWO LITERATURE REVIEW The previous study has been made to understand the impact of palm oil based-biodiesel demand on palm oil prices (Ramli; Roslan and Ayatollah, K 2007). Nowadays biodiesel has become an important fuel to our society. It is because of the growing concern for the environment. Demand for the biodiesel has become higher, and that effect to the amount of palm oil that we can get in the market that putting its prices increased sharply since July 2006. That days, the prices of palm oil influenced by the stock, supply, production. From July 2006 onwards, biofuel become a serious fuel of his renewable production. Biodiesel mainly from palm has increased the demand and altered the economics of palm oil. This study using the autoregressive integrated moving average (ARIMA). This method has been proven to forecast from July 2006 to end 2007 to forecast the prices of palm oil. Supporting to this journal, the prices of petroleum and vegetable oil down to be moving slowly together. (Anna Awad, Fatimah, 2009). This previous studies have been made to find the long term relationship the prices of crude oil and vegetable oil. They were using the Engle-Granger two-stage to do the method. This study use data over the period from January 1983 to March 2008. The two products show the result of the strong evidence of a long relationship. Began in the 1970s until 21 century, the price for all commodities increased between January 2000 and March 2008. The increased of the prices caused by the increased petroleum price more than 300%, while food prices increased 107% during the same period and vegetables oil increased of 192%. Besides that,(Mohd Nasir, 2003) said that Malaysia is the largest producer and Indonesia is the second largest producer. This two country is the exporter where they contribute 89.6% of palm oil trade in the world and 83.5 % of production. They also export crude palm oil (CPO) and other than that processed palm oil (PPO). The Malaysia exporting quantities of CPO increased from 0.4 million tones to 1.3 million tones in 2000 and 2001, followed by exports of Indonesian CPO increased from 1.8 to 2.0 million tones. Both countries also contributed PPO which is the larger share of palm products. CPO and PPO in Malaysian were lower than Indonesia in 2001 and 2002. Both countries products imposed by the tariffs with the objectives initially raising revenue. For example, in Malaysia is to encouraging down stream while for Indonesia it reflected to consumer down. Both countries have been imposed taxes on export, and there is a difference way the exports duty payable. (Ahmad Borhan and Mohd Arif, 2009) said that the prices of palm oil and it comprises crude palm oil and processed palm oil is a strong indicator of the level of palm oil stock. The stock of palm oil has been hovered around 1 million tones. With this amount, the volume has become the psychological which prices tend to be increased and decreased. The end of stock fully depends on the export of palm oil and its production. While local usage and import play smaller roles. The Malaysian palm oil industry has estimated that 1.8 million tones could become the new level of palm oil stock. But it all depends on change in the demand and supply factors. (James, 2008) said that the prices of crude palm oil (CPO) has a strong relationship with stock according to the conventional economics. The economics of oils and fats had changed in the last two years, that cause both prices and rising in tandem according to traditional economic theory. Because of created the new role played by biodiesel, the strong signs of a linkages also created. The palm oil prices should take into one account of two factors, the petroleum price and the amount of oil stocks. The price band can determines by prices of petroleum. While the stocks can show high or low palm oil prices. Malaysias economic development has indeed been impressive by the contribution of the palm oil industry. (Sabri, Salmiah,Faizah and Nik Abdullah, 2008). It also changing the market trends and rapid development and has continued to pose challenge. The development of oil and fats industry are provides and has undergone in terms of world balance. In the previous journal, (Mohd Basri, Mohd Arif, and Jamil, 2008) long time ago, the prices of palm oil have been increased, especially to the supply and demand of fats and oil. But since mid 2006, spikes have become more sustained. Besides that, spikes also been attributed to the supply and demand of edible oils and fats and also to the increasing demand for the fuel. Because of the increased of palm oil, the demand curve shifted to the right. The prices of oils have been increased slightly. (Ayat K Faizah, Ramli Abdullah and Nurul Hufaidah, 2007) study on how to examines volatility spill over. The study focus on between the domestic prices of palm oil and what major factor to the prices volatility. From the research, palm oil has moderate price volatility. And effort should be made to sustained the price of crude palm oil (CPO) to minimize volatility in other prices caused of the prices of (CPO) become a price leader among the other palm oil products. There was a model to develop to forecast prices of palm oil products in domestic. (Ramli and Mohd Alias, 2006). Malaysia also known the worlds biggest exporter of the palm oil and associated with palm oil. Because of the largest exporter the world, it become important for the country to lead the commoditys production and its price and can be used to determine the country revenue or in process of decision making. The objective of this paper is to analyses them econometrically and to forecast. The paper forecast that in the future, the production of palm oil can increased. By 2020, the production of palm oil can reach 22 million tones. Prices of palm oil also can fluctuate but in the future, its amount of prices increasing gradually. (Basri; Mohd Fauzi; Mohd Noor Mamat and Rosli, 2007) analyses the impact of lifting the export tax on Malaysian crude palm oil. Firstly, the equation is developed, especially on processed palm oil (PPO) and crude palm oil (CPO). The study comes out with the conceptual model of the Malaysian palm oil market model, such as the palm oil supply, oil palm area, imports and exports of palm oil products, domestic consumption, domestic price relationship and stocks According to (Ahmad Borhan, Faizah, Mohd Arif, Norhanani, 2006), said that oilmeals, such as Soyabean meal (SBM) especially an animal feed competes with Malaysian palm kernel expeller (PKE). The competition exists among this two company because of the competitive price. The increasing production also will affect the condition of Malaysian PKE. Future development of the Malaysian PKE depends to world livestock market. (Ahmad Borhan, Mohd Noor, Mohd Arif, Norhanani, 2007) said that, the commodity trade will effected by the local demand and also become the risk to the physical commodity. The forecasting method need to apply to forecast the price of palm oil in the future. Hedging can be improved by using the expected trends. The behavior of crude palm oil (CPO) can be determined by doing this work. This work also compared the forecasting CPO in Malaysia. It was introduced in 1980 and become the price discovery for hedging in pegged the prices. Good based can be determine by processing of price discovery especially on its demand and supply. Through arbitrage, the future price of palm oil is realized in terms of aggregate level. (Fatimah, etal, 1994) using Box Jenkins technique, forecasting method, can predict the palm oil futures prices whether to perform better or not. According to (Faizah, Ayat K, Mohd Nasir, 2006) fluctuate export markets and prices due to the current economic. Because of this, government giving full attention the price of export demand. The good demanded will be present by the price elasticity of demanded. Besides that, the demand for exports can predict by looking for export demand elasticity. Malaysian becomes largest share in the export and this export elasticity is important to estimates in order to maintain the production of palm oil. Only the changes of the prices of palm oil will have a big effect to the export of palm oil. Recently, the edible oils and fats has become substitutability products. Malaysian palm oil can be influence by the number of factor, and its the most important to structure the international market. Palm oil prices will compete with other, for example edible oils and make the palm oil prices significant. It was said by (A B, Ma, Chow, H Hamdan, Choo, 2006) every country depends on the energy and this energy becomes a key factor to country to develop in the future. Oil palm industry has been build factory to generate steam and from electricity. In our country, there were 395 factories that processing 84 million tones fruit in year 2005. (Yusof, Mohd Arif, 2005) found that, palm oil such as an export oriented commodity is not easy to predict in the future. It involves investigating the past performance of the palm oil. They make an overview about the palm oil industry, about the background, recently and in the future development. Long time ago, production of palm oil is lowest among the soyabean oil and animal oils. But, recently the production of palm oil is the number two in our country and the production exceed 29 million tones follow by soyabean oil and animal oils. It is expected that palm oil production can reach 37.15 million tonnes in 2020. This production of palm oil will contribute to world oils. Malaysia become the largest producer in the world and try to maintain the position in producing 42% tonnes to the world demand of palm oil. Conceptual Framework Independent variable Dependent var. Factor/supporting Price of palm oil Relationship Production (supply) Export Consumption Land area (Hectares) Independent variable There are 4 factors that influence the price of palm oil. There are production (supply), export, consumption and land area in hectares. This independent variable also can support the price of palm oil. Production can influences the prices of palm oil by the supply in the market, the more supply in the market, the more it can influences the prices of palm oil. It means that, if the supply exceeds the demand of the market, many unit of production are waste because of the demand not equal to the unit of production in the market. So to increase the demand in the market, firm can reduces prices of the production in order to attract the demand of the market. Low prices of the production can increased the demand of the production in the market. Export also can influences the prices of palm oil in the market by having a export more than import in the market can make a country deficit in terms of profit. Same like production, but export trade in other country and make an international business in order to gain profit. If have much demand in palm oil from other country, it means that, we should export more to achieved the demand from other country. From this situation, our country can take advantages to increase the prices of palm oil respectively. Consumption also can influences the prices of palm oil. It depends on how the consumer fully utilized the use of palm oil. If the consumer already knew the use of the palm oil, easy to them to know how important the palm oil in our society. Because of that, the consumer will ask for the palm oil and directly increased the demand for palm oil. Other than that, land area of plantation also can influences the prices of palm oil. If we plant more trees of palm oil in land, we are producing more palm oil in the market. If the supply of the palm oil in the market exceed than demand, than many surplus to that product. So to overcome this problem, firm must reduced the prices of palm oil to attract consumer to buy the palm oil. But it is good to the firm if the demand more than supply, then the firm can increased the price of palm oil in order to gain profit. Dependent variable The price of palm oil is depending to this four factor, this four factor can influences the prices of palm oil whether wants to increased or decreased. CHAPTER THREE DATA AND METHODOLOGY LEAST SQUARE METHOD (SINGLE REGRESSION) and (MULTIPLE REGRESSION) The framework developed in this study is drawn both from econometric method (which is based on the economic theory) and the system dynamics approach. This section discusses the econometric model using least square method. Its to correlate and examine the relationships among dependent variable and independent variable. It is a economic theory form with statistical methods. Factor determinants of prices of palm oil in Ringgit Malaysia (RM). consists of 4 factor that influence the price of palm oil, there are production (supply), export in tones, consumption of palm oil and land area of plantation of palm oil in hectares. The first step is finding time series data from 1980 to 2009, which influence the price of palm oil to make a research and then describe it according to the econometric model. To regress the econometric model we must use the data which influence the prices of palm oil. So this 4 factor is the important data to make a research. After regress, we can identify relationship between dependent and independent variables. These 4 factor also known as independent variable and price of palm oil also known as dependent variable which price of palm oil depend on this 4 independent variable whether to increase or decrease. The prices of palm always fluctuate depend on this 4 independent variable. To test this independent variable had a relationship between prices or not, the econometric model by using least square method use to test one by one of this independent variable whether this independent variable has a relationship between dependent variable. But before regress, we must test the variable using unit root test to make sure the probability below 0.05. This is because, we must make all variable significant before regress the data and know what difference we should use before regress data. After that, we log the data to make all data less problem in autocorrelation and less problem in multicollinearity. After test this econometric model, we look to the T-statistics, R-squared, Durbin-Watson stat. if t- stat are less than 2, this means that there is no relationship between independent variable and dependent variable and also known as is not significant. If more than 2, there is a relationship between independent variable and dependent variable. After test one by one, we should regress all dependent variable using multiple regress because of explanatory variable is more than one to check whether all independent variable significant or not. 3.1.1 Collecting of Data Primary Data Using the previous journal and summarize that journal to give the information about this research. CHAPTER 4 4.1 RESULT AND FINDINGS Unit root test Unit root test of price of palm oil using first difference to make the data stationary. Null Hypothesis: D(PRICE) has a unit root Exogenous: Constant Lag Length: 4 (Automatic based on AIC, maxlag=7) t-Statistic   Ã‚  Prob.* Augmented Dickey-Fuller test statistic -2.998437   0.0493 Test critical values: 1% level -3.737853 5% level -2.991878 10% level -2.635542 Graph of Price Explanation. As we can see graph above, the price of palm oil is fluctuated, but recently, the prices of palm oil increased and then drop back. Unit root test of production using first difference to make the data stationary Null Hypothesis: D(PDC) has a unit root Exogenous: Constant Lag Length: 0 (Automatic based on AIC, maxlag=5) t-Statistic   Ã‚  Prob.* Augmented Dickey-Fuller test statistic -3.998301   0.0047 Test critical values: 1% level -3.689194 5% level -2.971853 10% level -2.625121 Graph of Production Explanation. The production of palm oil in our country decreased every year because of other competition from Indonesia. Our country compete with Indonesia in terms of production because last time Indonesia is a second largest producer in the world and recently, Indonesia already becomes the world largest producer in the world follow by Malaysia. So our country production of palm oil decreased because of world demand has two choices to import the palm oil. Unit root test of land using first difference to make the data stationary Null Hypothesis: D(LAND) has a unit root Exogenous: Constant Lag Length: 0 (Automatic based on AIC, maxlag=7) t-Statistic   Ã‚  Prob.* Augmented Dickey-Fuller test statistic -4.664706   0.0009 Test critical values: 1% level -3.689194 5% level -2.971853 10% level -2.625121 Graph of Land Explanation. The hectares of land in our country also increased year by year because of people already know that plant palm oil can make bulk of profit to them. Besides that, the planters increased the hectares of plantation because government enhances them to plant the palm oil by giving them awareness and so on. Unit root test of export using first difference to make the data stationary Null Hypothesis: D(EXP01) has a unit root Exogenous: Constant Lag Length: 0 (Automatic based on AIC, maxlag=3) t-Statistic   Ã‚  Prob.* Augmented Dickey-Fuller test statistic -3.609207   0.0121 Test critical values: 1% level -3.689194 5% level -2.971853 10% level -2.625121 Graph of Export Explanation. Our export in our country also decreased year by year, it is related to our production in our country. This is because of Indonesia also export the palm oil in the world. So the world demand has two choices whether wants to import from Indonesia or our country. Unit root test of consumption using first difference to make the data stationary Null Hypothesis: D(CNSPTN) has a unit root Exogenous: Constant Lag Length: 0 (Automatic based on AIC, maxlag=7) t-Statistic   Ã‚  Prob.* Augmented Dickey-Fuller test statistic -4.569870   0.0011 Test critical values: 1% level -3.689194 5% level -2.971853 10% level -2.625121 Graph of Consumption Explanation. Our consumption in our country also decreased in our country. Single regression Least square method-POPt=+bX Between dependent variable and independent variable Variable C Std-error T-stat R-Squared DW-stat Prob D1LNPROD 0.329321 0.177300 1.85 0.113301 1.751273 0.0742 D1LNEXP 0.855506 0.254039 3.36 0.295760 1.816493 0.0023 D1LNCONS 0.171866 0.270477 0.63 0.021939 1.704933 0.5332 D1LNLAREA 0.097365 0.389766 0.24 0.678609 0.571303 0.8046 TABLE ONE Analysis of data: Used e-view to regress and estimation using Ordinary least square based on dependent variable and independent variables from the data collected. Before regress the data, must do the unit root test to make sure the data stationary or not, after that log the data to reduce the problem of autocorrelation and multicollinearity. Then use first difference method because it is already mention in unit root test to check using first difference method. List of Equation PPOt=price of palm oil in the market PROD=production of palm oil(supply) EXP=export of palm oil to the world demand (tones) CONS=consumption of palm oil in this market L.AREA=landarea of palm oil plantation in Malaysia (hectares) Result of regression between POPt and PROD Dependent variable: POPt and Independent variable: PROD POPt=0.054234+0.329321t The coefficient above shows that the relationship between price and production of palm oil is positive relationship. It means that, 1 unit increased of production of palm will lead to increase price of palm oil by 0.329321. t-statistic=1.85 Reject Ho, because there is no significant relationship between price and production because t-statistic shows that it is significant and below 2. So production cannot influence the price of palm oil respectively. R-Squared =0.113301 Explanation. There are 11.33% of the changes in the dependent variables. Only independent variable can explain the dependent variable. 88.67% cannot be explained by the regression analysis due to some omission of independent variables. In other words, this R-squared show the weak relationship between dependent variable (price) and independent variable (production). Its mean that, when independent variable change 1%, dependent variable will change by 11.33%. So, we can concluded that independent variable and dependent variable has a weak relationship because of the R-Squared is low. Std-error=0.177300 Explanation. The smaller the value of SEE, the closer the data points/actual points to the regression line. DW-statistics=1.751273 Explanation. There is a less problem in auto-correlation because DW shows value almost than value 2. If the value of DW shows above 2, means that there is no problem in autocorrelation Probability=0.0742 Explanation. The variable is significant at 0.05 (5%) significant level or 95% confidence level. If the probability is less than 0.05, it means that 95% confidence interval accepted and there is a relationship between dependent variable and independent variable. The independent variable for the production is 0.0742. This production of palm oil (supply) cannot influence the price of palm oil. Its because if the production is too many in the market, the price of palm oil will not effect because society only concern for the basic needs such as shelter, food and society not concern for the production of palm oil. Same like if the production of palm oil is low, it will not influence the price of palm oil because society not really wants the uses of palm oil. Result of regression between POPt and EXP Dependent variable: POPt and Independent variable: EXP POPt=0.063604+0.855506t The coefficient above show the positive relationship between price and export. It means that, 1 unit increased export of palm oil will lead to increase price of palm oil by 0.855506 t-statistic=3.36 Also accept Ho, because there also a relationship between price and export because t-statistic shows that it is significant and above 2. So export also can influence the price of palm oil respectively. R-Squared=0.295790 Explanation. There are 29.57% of the changes in the dependent variables. Only the independent variable can explained the dependent variable. 70.43% cannot be explained by the regression analysis due to some omission of independent variables. R-squared show the weak relationship between dependent variable (price) and independent variable (export). It can be explained when independent variable change 1%, dependent variable also will change by 29.57%. we can concluded that independent variable and dependent variable has a weak relationship because of the value of R-squared is low. Std-error=0.254039 Explanation. The smaller the value of SEE, the closer the data points/actual points to the regression line. DW-statistics=1.816493 Explanation. There is a little bit problems in auto correlation because DW shows value almost 2. Probability=0.0023 Explanation. The variable is significant at 0.05 (5%) significant level or 95% confidence level. If the probability less than 0.05, it means that 95% confidence interval accepted and there is a relationship among dependent variable and independent variable. The independent variable for the export is 0.0023 and this export of palm oil (supply) can influence the price of palm oil. The price of palm oil will influence if the export more than demand from other country. This kind of scenario happened because its good to decrease price of palm oil to the trading country, so that the trading country can buy with cheapest price. But if the export less than demand from other country, it will influence the price of palm oil, because our country can sell with high price in order to get more profit from other country. It happen when the shortage of the production and demand will keep increasing every year and the export are limited. Result of regression between POPt and CONS Dependent variable: POPt and I

Brand Awareness Essay

Extent to which a brand is recognized by potential customers, and is correctly associated with a particular product Expressed usually as a percentage of target market, brand awareness is the primary goal of advertising in the early months or years of a product’s introduction.( Noel. K, Francoise. R. 1995), Brand awareness, In general, means the extent to which a brand associated with a particular product is documented by potential and existing customers either positively or negatively. Creation of brand awareness is the primary goal of advertising at the beginning of any product’s life cycle in target markets. In fact, brand awareness has influence on buying behavior of a buyer. (Noel. K, Francoise. R. 1995), Brand awareness can be measured by showing a consumer the brand and asking whether or not they knew of it beforehand. However, in common market research practice a variety of recognition and recall measures of brand awareness are employed all of which test the brand name’s association to a product category cue, this came about because most market research in the 20th Century was conducted by post or telephone, actually showing the brand to consumers usually required more expensive face-to-face interviews (until web-based interviews became possible). (Noel. K, Francoise. R. 1995), this has led many textbooks to conceptualize brand awareness simply as its measures, that is, knowledge that the brand is a member of a particular product category, e.g. soft-drinks. Examples of such measures include: Brand recognition – Either the brand name or both the brand name and category name are presented to respondents. Brand recall – the product category name is given to respondents who are asked to recall as many brands as possible that are members of the category. ï‚ §Top of mind awareness – as above, but only the first brand recalled is recorded (also known as spontaneous brand recall). There has been discussion in industry and practice about the meaning and value of various brand awareness metrics. Recently, an empirical study appeared to put this debate to rest by suggesting that all awareness metrics were systematically related, simply reflecting their difficulty, in the same way that certain questions are more difficult in academic exams (Robert W. P. 1971), Brand recall Brand Recall is the extent to which a brand name is recalled as a member of a brand, product or service class, as distinct from brand recognition. Common market research usage is that pure brand recall requires â€Å"unaided recall†. For example a respondent may be asked to recall the names of any cars he may know, or any whisky brands he may know. Some researchers divide recall into both â€Å"unaided† and â€Å"aided† recall. â€Å"Aided recall† measures the extent to which a brand name is remembered when the actual brand name is prompted. An example of such a question is â€Å"Do you know of the â€Å"Honda† brand?† In terms of brand exposure, companies want to look for high levels of unaided recall in relation to their competitors. The first recalled brand name (often called â€Å"top of mind†) has a distinct competitive advantage in brand space, as it has the first chance of evaluation for purchase. (Jonathan, 1982) Brand Recognition Brand Recognition is the extent to which a brand is recognized for stated brand attributes or communications In some cases brand recognition is defined as aided recall – and as a subset of brand recall. In the case, brand recognition is the extent to which a brand name is recognized when prompted with the actual name. A broader view of brand recognition is the extent to which a brand is recognized within a product class for certain attributes. Logo and tagline testing can be seen as a form of brand recognition testing. For example, if a product name can be associated with a certain tagline, logo or attribute (safety and Volvo; â€Å"Just do it† – Nike) a certain level of brand recognition is present. (Jonathan, 1982) What Does Brand Awareness Mean? The likelihood that consumers recognize the existence and availability of a company’s product or service Creating brand awareness is one of the key steps in promoting a product. Investopedia explains Brand Awareness Brand awareness is an important way of promoting commodity-related products. This is because for these products, there are very few factors that differentiate one product from its competitors. Therefore, the product that maintains the highest brand awareness compared to its competitors will usually get the most sales. For example, in the soft drink industry, very little separates a generic soda from a brand-name soda, in terms of taste. However, consumers are very aware of the brands Pepsi and Coca Cola, in terms of their images and names. This higher rate of brand awareness equates to higher sales and also serves as an economic moat that prevents competitors from gaining more market share. Definition: A gauge of marketing effectiveness measured by the ability of a customer to recognize and/or recall a name, image or other mark associated with a particular brand. Examples: In today’s most competitive atmosphere, it is critical for retailers to maintain and build on their brand awareness, as well as reinforce the value proposition of their market. (Barnard. N, 1997) 7 Ways to Build Brand Awareness To some, branding might not feel like a tangible aspect of running a business. It can’t be seen like a product on the shelf, or counted like a cash drawer at the end of the night. But, branding is the reason people pay three times more for a product at one store over another. (Houston 1992), Good branding is the product of a clear vision, and nobody knows more about vision than small business owners. But, with limited resources, creating a brand identity can be tricky. Fortunately, building brand awareness on the Internet doesn’t need to take a lot of money or resources. Here are seven strategies to build your business brand: Define the vision. Before moving ahead with the web site, create a brand positioning statement. â€Å"This isn’t just, ‘What kind of web site do we want to be?’ This is ‘Who are we?’† says Harley Manning, vice president at Forrester Research in Cambridge, Mass., a technology and market research firm that advises on the effects technology has on consumers and businesses. Good brand statements typically include the company’s mission, vision and values. â€Å"It’s succinct. It’s typically something that will fit on a page easily,† he says. Build a brand worth believing in. â€Å"Do you so believe in what you’re creating that you would trademark it?† says Andrea Fitch, (president and CEO of Red Carpet Creations, Inc., and national president of the Society for Marketing Professional Services, both based out of Alexandria), Va. Really consider what kind of brand could represent the business through the next d ecade. â€Å"Don’t have a logo that in five years you’re going to be tired of and discard for another,† she says. Remember, the web site is the brand. â€Å"A web site is not just a communication medium,† Manning says. â€Å"It is actually a channel that must deliver on the promise.† Essentially, a web site should embody the promise that it makes to customers. If, for instance, a business claims to be innovative, the web site should look fresh and modern. Create a cohesive experience between all mediums. Before she launched her company’s new web site, Fitch made sure it would be an event that her potential clients would never forget. Red Carpet Creations mailed 4,000 silver tubes containing scrolls that looked like rolled-up carpet. Inside the scrolls was an announcement about the web site’s launch. Once online, the web site was an extension of the invitations because it followed through on the themes of red carpet imagery and references to visitors being treated like a VIP. Customers should easily be able to recognize the company’s brand, whether it is print, online or some other form of media, Manning says. Don’t sacrifice creativity. Once the brand’s guidelines are established, creative choices must bring those attributes to life, Manning says. Don’t let the company’s brand become so dominating that there is no room for new thoughts and ideas. Brand should be the jumping-off point for interesting ideas, not the place where every new idea dead-ends. Fitch stresses that a sense of fun and whimsy will only enhance the likelihood that people will take an interest in the web site. Don’t communicate brand at the expense of delivering. While a web site can be a significant tool for building brand awareness, clarity and functionality are paramount. â€Å"Just be careful not to let the communication about your brand get in the way of delivering your message,† Manning says. People should be able to understand how to navigate the site without knowing a thing about the company’s catch phrases. â€Å"You can’t frustrate and annoy people into liking your brand (Houston, 1992), Listen to the customers: They determine a brand’s true value. Pay attention to customer feedback about the site because, ultimately, it’s the customers’ opinion that counts. When it comes to building a brand, a company can incorporate everything from signature colors to catch phrases, but at the end of the day, it’s the consumer who decides what a brand is really worth. â€Å"It’s not what you say [about] yourself, it’s what others say of you, How do consumers make decisions? This question is at the core of much of marketing examination over the past 60 or 70 years. As marketers manipulate the various principles of marketing, so do the consumers they seek to reach-choosing which products and services to buy, and which not to buy, choosing which brands to use, and which brands to ignore. The focus of this paper is to examine the major decision-making mo dels, strategies, and theories that underlie the decision processes used by consumers and to provide some clarity for marketing executives attempting to find the right mix of variables for their products and services. Three Decision-Making Models Early economists, led by Nicholas Bernoulli, John von Neumann, and Oskar Morgenstern, puzzled over this question. Beginning about 300 years ago, Bernoulli developed the first formal explanation of consumer decision making. It was later extended by von Neumann and Morgenstern and called the Utility Theory. This theory proposed that consumers make decisions based on the expected outcomes of their decisions. In this model consumers were viewed as rational actors who were able to estimate the probabilistic outcomes of uncertain decisions and select the outcome which maximized their well-being. However, as one might expect, consumers are typically not completely rational, or consistent, or even aware of the various elements that enter into their decision making. In addition, though consumers are good at estimating relative frequencies of events, they typically have difficulty translating these frequencies into probabilities. This Utility model, even though it had been viewed as the domina nt decision-making paradigm, had serious shortcomings that could not be explained by the model. (Herbert S, 1950) proposed an alternative, simpler model. This model was called Satisficing, in which consumers got approximately where they wanted to go and then stopped the decision-making process. An example of this would be in the search for a new apartment. Under the Utility theory, consumers would evaluate every apartment in a market, form a linear equation based on all the pertinent variables, and then select the apartment that had the highest overall utility score. With Satisficing, however, consumers might just evaluate apartments within a certain distance to their desired location, stopping when they found one that was â€Å"good enough.† This theory, though robust enough to encompass many of the shortcomings of Utility Theory, still left significant room for improvement in the area of prediction. After all, if a marketing executive can’t predict consumer behavior, then what use is a decision-making paradigm? Simon and others have extended this area in the investigation of the field of bounded rationality. Following Simon, additional efforts were made to develop better understandings of consumer decision making, extending beyond the mathematical optimization of Utility Theory and the somewhat unsatisfying Satisficing Theory. In the late 1970s, two leading psychologists, Daniel. K and Amos. T, developed Prospect Theory, which expanded upon both Utility Theory and Satisficing Theory to develop a new theory that encompassed the best aspects of each, while solving many of the problems that each presented. Two major elements that were added by Kahneman and Tversky were the concepts of value (replacing the utility found in Utility Theory) and endowment, in which an item is more precious if one owns it than if someone else, owns it. Value provided a reference point and evaluated both gains and losses from that reference point. Additionally, gains and losses have a marginally decreasing increase from the reference point. For example, there is a much greater value for the first incremental gain from the reference point than for subsequent gains.

Has the development of Human Resource Management practices replaced the need for trade unions Essay

According to Phelan (2007, pp. 45-47), trade unions were the most powerful organizations after the industrial revolution. During the 19th and 20th century, management was largely mechanistic and the position of workers was not felt unless the force of the numbers was employed. As a result, the membership to the trade unions increased steadily to 1979 after which a sharp decline is evident. During the 20th century, Donna, Stephen and Roderick (2007, p. 832) report that over one third of all employees belonged to trade unions by 1979 before declining sharply o 13. % by year 2000. In their view, Gurpreet (2007, p. 85) and Hearnshaw (2007, p. 76) argue that the trade unions decline is an indication of the critical period that change must be embraced to create greater value of the production systems. According to Tove, Hammer and Bayazit (2009, pp. 405-406), the unions lacked the needed sensitivity to their members and held their views towards salaries and job security only. Under this model, unions failed to recognize the fact that if employees were guaranteed what the unions provided, they would lack their value. From their view point, Coca-Stefaniak, Hallsworth and Bainbridge (2005, pp. 361-363) argue that trade unions’ mandates lacked clear definition and therefore kept overlapping between political delineations to employees protection. Consequently, many leaders used them to settle political scores and stepping stones to power. Indeed, Marlow (2006, p. 54) points an accusing finger to this vagueness in executing their mandates that employees sought to distance themselves. A major question that arises at this point is what is indeed the future of the unions? Though many analysts appear to avoid answering the question directly, Pencavel (2003, p. 21) and Blanden and Machin (2003, pp. 121-122) suggest that the unions will indeed not fully die, but resilience of their roles will be evident when major problems occur. Comparison of human resources managements and trade unions Comparison of trade human resources and trade unions brings out the picture of two negating forces but geared towards achieving the same objectives. To begin with, trade unions were run politically and therefore involved a very wide spectrum of employees they dealt with. As a result, Gill (2009, pp. 41-42) explains it was very hard to address the demands of the different members with ease. On the other hand, human resources management is a discipline defined by clear cut professional outline that have key objectives. Redman and Wilkinson (2009, p. 121) explain that apart from this clear objectivity, human resources managers have a narrower spectrum, for instance, one company or institution, which makes it easier to address concerns of their subjects. The approach and consideration of trade unions as Marchington and Wilkinson (2005, p. 114) pointed out in their study, was based on a competitive model that was viewed as a major achievement for specific leaders. As a result, other options were locked out; a consideration that created controversy with economists and political elites. Marchington and Wilkinson (2005, p. 117) further point out that human resources managers consider conflicts to be critical aspects that must be addressed carefully in defining a better relationship and ultimately greater productivity. Though Jose and Fernando (2002, pp. 181-182), use of the term ‘militant’ when referring to trade unions has received sharp criticism, it is perhaps the correct term. Trade unions main method of addressing conflicts was use of strikes and demonstrations. As a result, they resulted to great losses to particular institutions, companies and even nations. Human resources managers however, balance between critical human qualifications, existing infrastructure and overall returns as dictated by the demand and supply of resulting products. Gill (2009, pp. 41-42) therefore concurs with Marlow (2006, p. 78) that everybody has his own niche and stands a better chance of advancing with ease. Modern roles of human resources a) Staffing and selection The roles of human resources have over the years changed with the rising demand to view employees as a responsive system as opposed to a rigid consideration Farber and Western (2002, pp. 398-399) explains that this role therefore creates a harmonic platform that proactively addresses key problems that necessitated the need for trade unions. Staffing and selection is done on the basis of merits; a consideration that give employees great security both locally and internationally. By conducting effective selection, the employees do not feel threatened, but are given a chance to improve on their skills which the organization they work for strongly struggles to retain while others remain opportunistic to outsource (Blanden and Machin, 2003, pp. 126-127). Unions are therefore rendered less essential as job security is indeed very high and payments highly sustainable. ) Rewarding compensation and motivation management To concur with Gill (2009, p. 90) conclusion, poor rewarding systems formed the basis of unions in the mid-twentieth century. At this time most production were privately owned, but most importantly, they lacked effective competition to trigger better compensation and motivation of their workers. Human resources managements’ greatest roles are indeed to assess performance, initiate the needed improvement ef forts and most importantly reward the best performers. In his theory of human needs, Robert Maslow argued that when employees are guaranteed the needed capacity for progression towards self actualization, other systems are easily foregone (Gill, 2009, p. 48). Unlike the trade unions that provided only raising the salaries, human resources create a roadmap for sustainability; a factor that Brewster (2004, p. 371) indicate directly disrupts their consideration for unionization. c) Employee’s development and modelling When refereeing to the current replacement of trade unions roles with human resources management, one cannot fail to focus on the modelling and development roles. Though trade unions train their members on different aspects of their relationship with their seniors and the employers, greater credit as Jose and Fernando (2002, p. 189), suggests, is given to human resources managements. As indicated earlier, trade unions lack the necessary specificity on their members who are highly diverse. Due to their smaller nature of operation, human resources have proved to be more effective in that employees are continuously modelled with close supervision with an aim of improving their place in an organization. Jose and Fernando (2002, pp. 188-190) add that modelling sets a clear role model and a definite roadmap to follow in addressing their concerns and issues. d) Negotiating and change management Unlike during the period of the trade unions, negotiations have taken a central position for all the employees. Brewster (2004, p. 368) explains that human resources management eliminates key bureaucracies and therefore brings the employees closer to the top leadership. Furthermore, human resources management facilitates teamwork to encourage involvement of all the workers in negotiating their views in an organization. To infer greater need for negotiations, Coca-Stefaniak et al (2005, pp. 366-367) argue that internal and external change agents often propose changes towards improving the welfare of the employees and ultimate productivity of the company. As a result, the need for trade unions to create either a rise in payments or even improved working conditions does not arise. Counterarguments In his view, Phelan (2007, pp. 4-75) suggests that trade unions roles will remain critical despite the current decline. He further points out that though many workers have shifted from the trade unions; their need will always be rekindled during the periods of major crisis. During the 2007-2008 financial crises, many workers turned to trade unions for protection of their jobs. Pencavel (2003, p. 25) cites the political interference in reducing the relevance o f the unions. As a result, strength of trade unions will always recur when new political elites with favouring views rise to power. However, the two counterarguments fail to acknowledge the great advancements in technology that facilitate easier detection of workplace problems, faster communication and precise assessment that assists in making the correct decisions to avoid major issues (Hearnshaw, 2007, p. 69). Conclusion and recommendations From the above discussion, this paper supports the thesis statement, ‘the critical roles played by human resources managements that greatly satisfies the customers, improves their earnings, secures their employment, and maintains the correct organization cultures have increasingly replaced the need for trade unions. Trade unions came out as strong movements that were very vibrant during the 20th century when clear professionalism lacked in running businesses and organizations. Human resources management came in with great specialization that is highly proactive and employees driven; a consideration that surpassed the major roles of the unions. However, counterarguments presented in the discussion are true and their roles will often recur during periods of major crisis in organizations.

Children s Effect On Children - 1183 Words

When children are waking up in the middle of the night, it can be detrimental on parents. According to Roberts et al, in western societies, infants who cry persistently or wake at night are common concerns for parents and can lead a parent to smother, hit, or shake an infant, sometimes resulting in infant brain damage or death. Children wake up for many different reasons. For example: hunger (breast-feeding), colic, diaper change, physical illness, sleep temper tantrums or parent’s attention. â€Å"At least 20% to 30% of all children 1 to 4 years of age have frequent night awakenings, bedtime struggles, or both† (Rickert Johnson, 1988). Parents are distressed and there tolerance level is decreasing. Sleep problems are the most common complaint from parents and can become overwhelmed with their child’s crying (citation). Children waking up have a huge influence and effects on parent reactions to crying. Self-esteem issues can cause parents to feel hopeless; pare nts can have self-esteem issues because they can feel like a horrible parent and not worthy enough to solving their child’s crying. It’s important to understand why children wake up and how parents will respond. There are many different findings focusing on parents responses to mid-night awakenings, there are three types of response; systematic, ignoring, and scheduled awakenings. Systematic awakenings involve children waking up on their own and scheduled awakening involves parent waking the children up at certainShow MoreRelatedThe Effects Of Spanking On Children s Children880 Words   |  4 PagesGrowing up most children had experienced being spanked.Being spanked is not fun and hurts very bad. Sometimes children get spanked for something they did wrong or simply because they lied.Spanking is a form of child abuse and can hurt a child s feelings. Spanking of children can cause a disattchament between parents and child. 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