PUBLIC RELATIONS DEFINED

Posted: July 12, 2013 in Marketing

Public relations is basically an art or a science of making strong relationships between an organization and its interest groups. Public relations help organizations to create strong relationships with customers. In this essay I will seek to critically examine a number of definitions to explain what is public relations and its strengths and weaknesses, how those definitions helps public relations practitioners on their day-today activities and also the relationship between those definitions and ethical practices. Finally it will conclude the most effective and efficient definition of public relations.
Various writers define Public relations in various ways. According to Haywood (1991, p.4) public relations is “the management of corporate reputation”. This is a simple definition and it is very easy to understand. This definition expresses the main goal of public relations. That is public relations enhance the company’s reputation. According to this definition we can explain the role of the Public relations practitioner as the company’s reputation protector. Their duty is to prepare positive stories about the company or its product and build good relationships with media. The main weakness of this definition is that it does not reflect the importance of public relations. That is it does not talk about the public or the customers who buy the product and the media that is responsible for selling the product.
The definitions of public relations are “often evolving alongside public relations’ changing roles and technological advances.” (PRSA, 2010) there is no specific definition for public relations because it changes with the time. According to the current environment the definitions of public relations “incorporate the concepts of engagement and relationship building.” (PRSA, 2010) According to PRSA (2010) it is defined as “Public relations help an organization and its publics
adapt mutually to each other”. This is a simple definition with a big meaning. Adapt mutually to each other means that the people are getting more familiarize, loyal or confidence with the company or its products.
Another definition for Public relations is that “The Public relations is a management function which evaluates public attitudes, identifies the policies and procedures of an individual or an organization with public interest, and plans and executes a program of action to earn public understanding and acceptance.” (Seitel, p. 10) It defines PR as a management function. Management should be able to bring up with something that makes public and media more appealing and interested. That will make the company or the product more attractive from their competitors or substitutes.
Moreover Public relations have also defined as a “distinctive management function which helps establish and maintain mutual lines of communications, understanding, acceptance, and cooperation between an organization and its publics; involves the management of problems or issues; helps management to keep informed on and responsive to public opinion; defines and emphasizes the responsibility of management to serve the public interest; helps management keep abreast of and effectively utilize change, serving as an early warning system to help anticipate trends; and uses research and sound and ethical communication techniques as its principal tools.” (Seitel, p. 9) It explains each and every aspect of public relations. It includes all the main points pop up with all the above definitions. According to this definition public relations is a separate management function.
Public Relations institute of Australia (2010) defines it as “deliberate, planned and sustained effort to establish and maintain mutual understanding between an organization (or individual) and its (or their) publics. It’s the key to effective communication in all sectors of business, government, academic and not-for-profit.” Unlike other definitions this definition shows that this is a deliberate or done after careful consideration and a proper planning is very important to attract most public. Also this explains the main goal of Public relations in a simple way. Maintain mutual understanding is promotion of a feeling of goodwill towards company. I believe that this is the most appropriate definition for Public relations since it explain the main goal of public relations and the parties involve with in a simple and straightforward manner.
According to the above definitions it is apparent that the main objective of the public relations practitioners would be enhances the public feelings towards their organization. To make stories or write articles needs certain skills like high level of communication skill in both written and verbal. They also need to have heaps of contacts or a network. Apart from that they should have good knowledge about how the media and advertising work. Ethics is also very important to an organization since bad ethnics spoil the image of the company. Most importantly if the company goes wrong or have done something bad the Public Relations practitioners should effectively answer the criticism and turn it around in order to protect the company’s reputation. (Thomas, 1987)
In conclusion, there are number of different definitions for public relations. I believe that the ideal definition to public relations is “deliberate, planned and sustained effort to establish and maintain mutual understanding between an organization (or individual) and its (or their) publics. It’s the key to effective communication in all sectors of business, government, academic and not-for-profit.” It is very simple straightforward and describes the main goal of public relations. According to all the definitions the public relations practitioner’s main goal is to protect and increase the company’s reputation. To do that, they need variety of skills mainly high level of communication skills. There is a positive relationship between professional definition of public relations and ethical practice. Because ethics apply how an organization interact with public. Good ethics will increase the reputation while bad ethics will spoil the image of the company. If something happen to the image of the company it is public relations practitioners’ duty to reestablish its good name. .

Reference List

Haywood, R., 1991, All About Public Relations, 2nd edn, McGraw-Hill Publishing Company, England.

Public Relations Institute of Australia (PRIA), 2010, About Public Relations, Viewed 7 April 2010, < http://www.pria.com.au/aboutus/cid/2/parent/0/t/aboutus/l/layout&gt;

Public Relations Society of America (PRSA), 2010, PRSA’s Widely Accepted Definition, viewed 5 April 2010, <http://www.prsa.org/AboutPRSA/PublicRelationsDefined/&gt;.

Seitel, F.P, 2001, 8th edn, The Practice of Public Relations, Prentice Hall, Inc.

Thomas, H.B., 1987, ‘Applying ethical theory to public relations’, Journal of Business Ethics, vol.6, issue.3, p.6-7.

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LEADERSHIP

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The importance of understanding the models and techniques of leaderships are increasing due to the increase of complexity, diversity and rapid changes in today’s organizations. Winston & Patterson (2006) presented a integrated definition for leadership as “A leader is one or more people who selects, equips, trains, and influences one or more follower(s) who have diverse gifts, abilities, and skills and focuses the follower(s) to the organization’s mission and objectives causing the follower(s) to willingly and enthusiastically expend spiritual, emotional, and physical energy in a concerted coordinated effort to achieve the organizational mission and objectives.” (Winston & Patterson, 2006) This emphasises the importance of leaders for organizations to achieve its goals and objectives. So it is important to understand, the different models of leadership styles since the leadership style which suits for one organization might not suitable for another organization. Many people in the past have tried to come up with theories and techniques to understand the styles of leadership. Those leadership styles or models have changed from time to time and currently we called emergent models for those models, which became more widespread and accepted within the last ten years time period. The purpose of this essay is to identify the differences between traditional leadership and contemporary leadership. For a clear understanding first it will review the literature of traditional leadership models. Secondly, it will explain the contemporary leadership models. Finally, it will analyse the contribution of emergent models of leadership and justify how those emergent models of leadership have enhanced the contemporary leader in a world of rapidly changing technology.

Examples for traditional leadership models mainly include trait model of leadership and behavioural model of leadership. The main feature of a traditional leadership model is, which “stresses on supervisory control over employees.” (Schnake, Dumler, & Cochran, 1993) The trait leadership models were determined by many theories such as “great man” theory where it tried to understand personal characteristics of great leaders who lived in the past. Those personal characteristics include the “innate qualities and characteristics possessed by great social, political and military leaders such as Ghandi, Lincoln and Bonaparte.” (Northhouse, 2010, p. 15) The fundamental principle of trait theory is that, a good leader was born as a leader and not made to be a leader. These leadership traits mainly comprise with individual’s physical characteristics, intellectual qualities and personality features. (Slack & Parent, 2006, p. 293) Similarly, Behavioural leadership model emphasise the behaviours of the leaders or according to differences in the level of the authority given to their followers or subordinates. Behavioural leadership have three styles called autocratic, democratic and laissez-faire. Autocratic style of leaders keeps all decision making and all other authorities to themselves and followers just do only what they were asked to do while democratic style of leaders encourage group participation and majority rule. Laissez-faire style of leaders give maximum level of authority to their followers and less involved in their works. It is argued that the most effective behavioural style is democratic. The ‘Leader behaviour description questionnaire’ (LBDQ) was introduced by Ohio State University to assess how a leader’s behaviour influenced on follower’s performance. (Manning & Curtis, 2003) Moreover, Situational leadership model is another traditional leadership approach. In situational model “the style of leadership will be matched to the level of readiness of the followers.” (Slocum & Hellriegel, 2007) Here, the readiness is the “follower’s ability to set high but attainable task related goals and a willingness to accept responsibility for reaching them.” (Slocum & Hellriegel, 2007) The readiness depends on the task, which means the readiness of same group of people would vary depending on the level of training they received, their previous experiences and their commitment to the organization. (Slocum & Hellriegel, 2007)

On the other hand, the contemporary leadership models argue that the “effective leaders are those who have the cognitive and behavioural capacity to recognize and react to paradox, contradiction, and complexity in their environments.” (Denison, Hooijberg, & Quinn, 1995) Most common contemporary leadership models include charismatic, transformational and transactional leadership. “Transactional leadership style is based on an exchange of service for various kinds of rewards that the leader controls, at least in part.” (Leithwood, 1992) Transactional leaders should be able to identify the rewards that would motivate their followers in orders to achieve their goals. In contrast, transformational leadership is defined as “the collective action that transforming leadership generate empowers those who participate in the process.” (Leithwood, 1992) Transformational leaders are capable to bring up with a significant change. That is “it facilitates the redefinition of a people’s mission and vision, a renewal of their commitments, and the restructuring of their systems for goal accomplishment.” (Leithwood, 1992) Charismatic leaders have supernatural powers over their followers. House & Baetz (cited in (Conger & Kanungo, 1987) ) defined charismatic leaders as the leaders who “by the force of their personal abilities are capable of having profound and extraordinary effects on followers”. The followers of charismatic leaders are loyal and trust the charismatic leader’s values, behaviours and vision. (Borkowski, 2005) Charismatic leaders use their own personal power instead of position power to influence followers in order to achieve their goals.

The emergent models of leadership turned up with the rapid increase of complexity, technological advancements and increasing demand for leaderful organizations and flexible firms. The main difference between traditional models and modern leadership models would be all traditional models of leadership emphasise characteristics or behaviours of only one leader within a particular group where as emergent models provide a space to have more than one leader at the same time. According to emergent models a leader at one instance can be a follower in another instance. Traditional models do not tell the kind of skills that the leaders should have. But emergent models more focus on the special skills or talents that the leaders must have to practice to face challenging situations.  For example Innovative thinking improve the decision making process of leaders by exposing better alternative options for current methods, techniques and solutions. Emergent leadership approach argues the importance of ‘systems thinking’ for more complex organizations, especially for flexible firms. ‘Systems thinking’ is defined as “an ability to think or analyse information and situations that leads to or causes effective or superior performance”. (Palaima & Skaržauskienė, 2010) “To engage in systems thinking means to start treating problems in an organization as problems of a system and to start looking for system-integrated solutions.” (Palaima & Skaržauskienė, 2010) It helps to improve contemporary leader in many ways. The holistic approach of systems thinking enables to enhance the working system by innovative thinking. And it enables leaders to make more effective decisions by considering the organization as an open system or considering the environmental influences to organization and organizational influences to the environment. Also helps to understand the systematic forces for effective change management. (Palaima & Skaržauskienė, 2010) Moreover, in the recent past the research investigators found that the emotional intelligence is very important for effective leadership rather than use of traditional leadership styles. “Emotional Intelligence involves the ability to monitor one’s own and others’ feelings and emotions, to discriminate among them, and to use this information to guide ones’ thinking and actions.” (Emmerling, Shanwal, & Mandal, 2008) Transformational leaders can easily make the difference by taking decisions according to follower’s emotions. “Inspirational, motivation and individualized consideration components of transformational leadership correlated with the ability to monitor emotions and the ability to manage emotions.” (Rosete & Ciarrochi, 2005) So it is important to improve emotional intelligence for an effective leadership. “Findings suggest that executives higher on EI are more likely to achieve business outcomes and be considered as effective leaders by their subordinates and direct manager.” (Rosete & Ciarrochi, 2005) Also transactional leaders can use their emotional intelligence to understand emotions of followers and give rewards according to their emotions. Furthermore, boundary spanning is also help to improve the effectiveness of contemporary leaders. “Boundaries are an unavoidable aspect of organizational life.” (Christopher & Jeffrey, 2008) Organizations have boundaries for its functions or even boundaries can be created from its culture. But the effect of globalization, technological advancements, demographic changes and shifts of social structures enables people to work together without a limit, which creates “the need for leaders to bridge social identity boundaries among groups of people with very different histories, perspectives, values, and cultures.” (Christopher & Jeffrey, 2008) This might helps transactional leaders to make a significant different within the organization easily. Also boundary spanning helps to spread the organizational experiences into local communities. “If people of different identity groups are provided with opportunities for positive cross-boundary contact in the workplace, then these experiences can spill over into local communities.” (Christopher & Jeffrey, 2008) Charismatic leaders might find this as an advantage to become a powerful leader not only to the company but also to outside communities. In addition, another very important and interesting approach of leadership is leaderful organisation. This concept introduced with the increased demand of organisations which have flattened structures where it is important to have self-managed teams. It directly challenges the traditional leadership model of being one leader for a group of people. Leaderful organization emphasise the “need to establish communities where everyone shares the experience of serving as a leader, not serially, but concurrently and collectively.” (Raelin, 2003, p. 5) Unlike in traditional theories, here, the leadership is concurrent. That is there are number of people acting as leaders on any one occasion. Moreover, it says that everyone is serving as a leader collectively. We know according to traditional models all the decisions were taken by one leader and he gives the authority or empower his followers to go beyond and do certain things if necessary. But according to leaderful organization, all the people have same type of authority or they were empowered equally to take necessary decisions to achieve their common objectives or goals. As a final point it is very important to mention the importance of expansive leadership. “Expansive leaders are people who are avid continuous learners.” (Diamante & London, 2002) Expansive leaders are always expanding their knowledge internally and externally. “Expansive leaders dive into the technology, thrive on their own development, and use their understanding of operations and linkages (connectivity) to push the organization in new directions.” (Diamante & London, 2002) Expansive leadership is vital to create expansive organisational cultures and expansive cultures promote learning organisations. The approach of learning organization is essential for every modern organisation since those organisations are always facing into rapid technological advancements.

In conclusion, traditional leadership models which include trait model, behavioural model and situational model of leadership explain the personal and behavioural characteristics of a leader and the leader always have the control over followers. Charismatic, transformational and transactional leadership models are the main contemporary models of leadership and those models argues that the effective leaders are the people who can manage followers and take effective decisions in complex, challenging and changing situations. Emerging models improve the effectiveness of contemporary leaders by enhancing their skills. It have been identified that systems thinking, boundary spanning, emotional intelligent, leaderful organisation and expansive leadership approaches helps contemporary leaders to make effective decisions to admit the globalization, rapid changes in technology and organisational structural changes such as flexible firms and virtual organizations. Unlike traditional models, emergent models promote concurrent and collective leadership which helps transformational leaders to be more innovative and bring the significant change easily. Transactional leaders can use approaches like emotional intelligence to be more effective by understanding the emotions of followers to improve their effectiveness. Emergent approaches such as boundary spanning helps charismatic leaders to extend their leadership into outside communities.

Reference List
  1. Borkowski, N. (2005). Organizational behavior in health care. USA: Jones and Bartlett Publishers, Inc.
  2. Christopher, E., & Jeffrey, Y. (2008). Bridging boundaries: Meeting the challenge of workplace diversity. Leadership in Action , 28 (1), pp.3-6.
  3. Conger, J. A., & Kanungo, R. N. (1987). Toward a Behavioral Theory of Charismatic Leadership in Organizational Settings. Academy ot Management Review , 12 (4), pp.637-647.
  4. CONGER, J. A., & KANUNGO, R. N. (1987). Toward a Behavioral Theory of Charismatic Leadership in Organizational Settings. Academy ot Management Review , 12 (4), pp.637-647.
  5. Denison, D. R., Hooijberg, R., & Quinn, R. E. (1995). Paradox and Performance: Toward a Theory of Behavioral Complexity in Managerial Leadership. ORGANIZATION SCIENCE , 6 (5), pp.524-540.
  6. Diamante, T., & London, M. (2002). Expansive leadership in the age of digital technology. Journal of Management Development , 21 (6), pp.404-416.
  7. Emmerling, R. J., Shanwal, V. K., & Mandal, M. K. (2008). Emotional intelligence: theoretical and cultural perspectives. UK: Nova Science Publishers, Inc.
  8. Leithwood, K. A. (1992). The move toward transformational leadership. Educational Leadership , 49 (5), pp.8-12.
  9. Manning, G., & Curtis, K. (2003). The Art of Leadership. New York: McGraw-Hill Companies, Inc.
  10. Northhouse, P. G. (2010). Leadership; Theory and practice (5 ed.). USA: Sage Publications, Inc.
  11. Palaima, T., & Skaržauskienė, A. (2010). Systems thinking as a platform for leadership performance in a complex world. Baltic Journal of Management , 5 (3), pp.330-355.
  12. Raelin, J. A. (2003). Creating leaderful organizations: how to bring out leadership in everyone. San Francisco: Berrett-Koehler Publishers, Inc.
  13. Rosete, D., & Ciarrochi, J. (2005). Emotional intelligence and its relationship to workplace performance outcomes of leadership effectiveness. Leadership & Organization Development Journal , 26 (5), pp.388-399.
  14. Schnake, M., Dumler, M. P., & Cochran, D. S. (1993). The Relationship between “Traditional” Leadership, “Super” Leadership, and Organizational Citizenship Behavior. Group & Organization Management , 18 (3), pp.352-365.
  15. Slack, T., & Parent, M. M. (2006). Understanding sport organizations: the application of organization theory. USA: Human Kinetics.
  16. Slocum, J. W., & Hellriegel, D. (2007). Organizational behavior (11 ed.). USA: Thomson South-Western.
  17. Winston, B. E., & Patterson, K. (2006). An Integrative Definition of Leadership. International Journal of Leadership Studies , 1 (2), pp.6-66.

AUDIT EXPECTATION GAP

by me

The collapses of corporate giants such as Enron, HIH or One.Tel, even though after they were having a favourable audit opinion on their financial reports indicate that there is incompleteness in the process of Auditing. The purpose of this research essay is to discuss ‘audit expectation gap’ and explain the role of external auditors in the HIH and One.Tel collapses and how the actions of those auditors affect adversely to the stakeholder perceptions. Finally, this essay will suggest number of recommendations required to minimize or close the audit expectation gap.

First, let’s look at the definition of Audit Expectation Gap. Lee, Ali & Bien (2009) defined AEG as “difference between what the public expects from an audit and what the audit profession accepts the audit objective to be.” For example every audit is subject to an audit risk. Part of this audit risk cannot eliminate even though we perform the audit with the lowest level of materiality. So “accounting profession argues that one cause of the expectation gap is the public’s failure to appreciate the nature and limitations of an audit.” (Frank, Lowe & Smith 2001) These limitations are unavoidable. Furthermore, Lee, Ali & Bien (2009) mentioned that the AEG is “critical to the auditing profession because the greater the unfulfilled expectations from the public, the lower is the credibility, earnings potential and prestige associated with the work of auditors” (Lee, Ali & Bien 2009). Another unavoidable limitation is related to the fraud detection.  “An auditor is not bound to be a detective, or, as was said, to approach his work with suspicion or with a foregone conclusion that there is something wrong. He is a watchdog, but not a bloodhound” (Vanasco 1994). On the other hand part of this AEG can be preventable. Those are the issues arise in related to the professional independence and the auditor’s competency and care of duty and diligent. To get a thorough understanding of this concept of Audit Expectation Gap let’s look at the role of auditors in HIH and One.Tel collapses.

Apparently, the cause for the HIH collapse was an issue of professional independence. “Investors who place value on auditor independence believe that independence in fact is present and also they believe independence has a desirable effect upon the quality of audits” (Nieschwietz & Woolley 2009). “Auditor independence and the appearance of independence are fundamental to an effective audit” (Lipton 2003). Arthur Anderson, the auditor for HIH had many threats to their independency. “the HIH board had three former Andersens partners, one Andersen partner was the chair of the board and continued receiving fees under a consultancy agreement, a partner was removed from the audit team after meeting with non-executive directors in the absence of management and Andersens derived significant fees from non-audit work which gave rise to a conflict of interest with their audit obligations” (Lipton 2003). Since Arthur Anderson is earning big bucks form their consultancy firm by giving consultations to HIH, they haven’t perform their audit in the interest of stakeholders. They have just pleased the management of HIH. So it is important to note that professional independency is key issue as far as the AEG is concerned. Furthermore, Collapse of One.Tel unveils another problem relates to audit opinions.

One.Tel management haven’t prepared their financial reports accurately. For example “Mr Hodgson’s second day in the witness box produced more startling evidence of One.Tel’s accounting practices, which allowed the company to turn a $7 million loss into a $25 million profit in 1999 and to conceal expenses of at least $173 million up to April 2000” (Barry 2002). To cover-up themselves the chairman of One.Tel John Greaves claims “If what we were doing was unacceptable, the auditors wouldn’t sign the accounts” (Barry 2002, p.159). The company management have asked public to believe the auditor. On the other hand BDO was paid a huge sum of money to perform the audit. “Until last November (2000), One.Tel’s accounts were audited by BDO, which was paid a total of $491,000 until November of last year. It was BBO which last September gave the company a health check and claimed it was fine” (Roy 2001). So even after spending that much of money if shareholders would not be able to get reliable information about the company means they just have wasted their money. “After the collapse shareholders are once again left wondering what they can expect for the thousands of dollars they pay auditing firms to keep an independent eye on a company’s bottom line” (Roy 2001). The stakeholders might have disappointed about the work done by auditors. The ICAA’s committee mentioned that BDO had “failed to observe a proper standard of professional care, skill or competence in the course of carrying out their professional duties” (Barry 2002, p.160). It also concluded that “BDO’s audit report was in breach of the corporations Law, Australian accounting standards and Australian auditing standards” (Barry 2002, p.160). Then it was appointed Ernst and Young as their external auditor.  “Ernst and Young, informed the Board that its investigations revealed that the financial position of the company was not as reported to the Board on May17, and that a capital raising of $132 million would be insufficient to keep the company solvent”(ferret 2001). “Mr Packer and Lachlan Murdoch issued a statement saying they had been profoundly misled about the telco’s financial state.”(smh.com.au 2009) Ernst and young is more competent than BDO, but again it created the treat to auditors’ independence. James packer had a strong relationship with the Ernst & Young. “Ernst & Young chairman Brian Long, told the NSW Supreme Court yesterday of his and his firm’s lengthy association with media owners Kerry and James Packer and Packer-controlled companies”(Lampe 2005).

In conclusion, to completely close this AEG we have to find solutions for both avoidable and unavoidable issues causing for AEG. To close or minimize the gap arise with unavoidable limitations it can be recommended to make investors aware of it. The auditors can include a clause which explains those limitations such as auditors cannot guarantee that the company haven’t involved with any fraud since auditors are not fraud detectives. Government and other accounting professional bodies can also use media to educate public about this problem. Secondly, it is very important to take serious actions to overcome the preventable problems such as threats to auditors’ professional independency and auditors’ lack of competency to perform the audit since these issues might reduce the public trust and confidence over the audit opinions. Some people have already came-up with suggestions to overcome these problems. Financial reporter, Edmond Roy (2001) suggests that “system of rotating individual audit partners within a firm so that no one partner looks after a particular client’s audit for more than a short period of time” But if the assurance firm as a whole is getting a benefit by performing a particular audit this suggestion might not help much. He also suggested that the “audit work shared between the various big firms and auditors being appointed by an independent committee, or by the Australian Securities and Investments Commission” (Roy 2001) I believe that the latter suggestion is more effective. By doing it, the company managers find it difficult to create a strong relationship with audit companies. But again sharing audit work between several companies creates conflicts among those auditing companies Such as setting the materiality levels, evaluating internal control systems, identify the audit risks, determining sampling techniques…etc. Also, this suggestion not only increase the complexity of the work of ASIC and increase the government spending but also it increases cost of the audit and none of the shareholders would ever like to spend that much of huge money for auditing. So even though those suggestions work well in closing AEG I believe that those are practically impossible. The best option that we can have is amend regulations to increase the disclosure requirements. Make all the connections and relationships whether it is direct or indirect to be disclosed in the financial reports. And imply server penalties especially for assurance auditor and audit partner who have not disclose it. On top of that it is very important to carry out random investigations by ASIC to check whether the auditor is performing its work competently and see whether there are any kind of undisclosed connections between auditor and the client. ASIC can ask ICAA or CPA to perform such random investigations.

REFERENCE LIST

 

MARKETING

by me.

According to the current environment the marketing world has become more complex and highly developed due to the increasing number of competitors and alternative products for an organization (Levine & Benjamin, 2010). Due to this complexity every organization spends more and more money on advertising and promotions of their product/s. As a result consumers’ exposed into hundreds of thousands of advertisements every day. “Will those consumers get what is saying in each and every advertisement?” The definite answer would be “no, they won’t”. People absorb only the advertisements which are relevant to them. That is called “selective Perception”.  For example, consumers who are looking at a car advertisement are more likely to be the consumers who are willing to buy a car in the near future and the consumers who are recently bought a new car will never get anything from a car advertisement.  Moreover, even the organization produced a highly attractive advertisement the consumer might remember only the attractive part (for example the funny part of a funny advertisement) of that advertisement and forget the brand or the product. Organizations have to identify the group of consumers who are willing to buy or who can be persuaded to buy a particular product in order to make their marketing campaigns to be efficient and effective.  Customers are different from each other (Cahill, 1997). In terms of their needs, wants, values, attitudes, perceptions, education level, social background etc. Marketers choose the relevant marketing mix (product, place, price, promotion) and adjust the content for their marketing campaigns according to the perception of the target market about the nature of that offer (Simkin, 1998). Therefore, profiling the target market and determining the characteristics of consumer’s buying decision are vital for deciding appropriate strategies used in their marketing plan. The purpose of this critical essay is to profile the target markets and identify the consumer behavior of two car manufacturing companies BMW and KIA, where those two companies have to market their product for two distinct types of consumers’ based on the quality and the price of their product.

The consumers of both BMW and KIA can be segmented using the characteristics which were common for a group of people. Green and Stager (Cited in Musyoka et.al, 2007) defined market segmentation as “the process by which a market is divided into segments based on the homogeneity of responses of customers to marketing-mix strategies”. The primary objectives of segmentation includes it is easier to locate and address the small group of consumers or potential buyers who have common characteristics rather than considering the whole population around the country (Musyoka et.al, 2007). After the segmentation it will identify the most potential segment or segments out of all the segments and focus the marketing plan only on those selected segment or segments. Those selected segments are called target markets. Cahill (1997) defines target market as “the most basic, simply the market or submarket (such as a segment) at which the firm aims its marketing message(s)”. Target markets of those car manufacturing companies can be profiled using demographic, psychological, and behavioral factors. After identifying the target market it will position the product using the characteristics of target market and carries out the marketing campaign by promoting the position of the product.

The demographic factors for BMW and KIA include consumers’ age, income, and occupation and it helps to identify what kind of consumers are more likely to buy a BMW or KIA. Since BMW cars are very expensive they would definitely consider the age of the customers. For example, buying a Beemer can be an expensive purchase, so they would target ‘baby boomers’ since most of them might have good savings to afford for a highly expensive car. In contrast the KIA’s target market might consists of bachelors who just started their careers and the low income earners in other word they are targeting price sensitive consumers and the consumers who are trying to save more money than spend their money. For example in most of the KIA ads they put the price of their cars but in BMW ads they are unlikely to put the price of their cars. That is because BMW is targeting less or no price sensitive consumers. Also the phrases which express extra ordinary features such as “soccer momma”, “Heavyweight Power” and “Racecars shouldn’t be confined to racetracks” attract young people. In contrast KIA just put the basic features that are expecting young people to buy such as air conditioning and CD players to attract them. The income and occupation factors are very important to profile the target market for BMW. For example Melbourne agent for the BMW is more likely to have a big showroom in Toorak and/or surrounding suburbs since it is considered as the highest income suburb in Victoria (Wikipedia, 2010) and it will target higher income earners mainly the entrepreneurs and the people who do white collar jobs like finance managers, executive officers or company directors while the dealer of KIA would consider to open more car sales in the suburbs like Dandenong where the most of the lower income or the people who do blue collar jobs resides.

The psychographics factors helps to identify why a consumer choose a BMW instead of KIA or vice versa. That would include socioeconomic standing, personality characteristics and lifestyles. BMW would focus on upper and upper middle class peoples since they are the people who can afford for such an expensive car while KIA mainly target middle or average class people. Also the person who goes for BMW actually might not have any interest on buying it. May be he just want to show off his spending power or he might think it as a necessary for his prestige. Motivation is the key factor for this. We can explain this using Maslow’s hierarchy of needs theory. People are trying to satisfy their physiological, safety, social, esteem and self-actualization needs respectively. For example People who have satisfied up to their social needs motivated to satisfy their esteem needs. For that they need recognition, status and prestige. Most people think that a car is a status symbol. So those people were motivated to buy an expensive car like Beemer while the people who are still satisfying their safety needs or social needs were not motivated to buy such a car since they have many other things to buy to be fully satisfied within current stage. So they are happy to buy a KIA. Grouping the people according to their personality types is another very important factor for profiling a target market. For example car manufactures can offer test drives for the people who are more sensible than the people who are intuitive. Another example is the dealers need to give more detailed information about the car to the people who are more introverted than for the people who are more extroverted. Lifestyle factor is also very important to profile target markets. For instance BMW cars mainly target for the people who are seeking luxurious lives, for the people who are not just buying a car for transportation needs. According to the value segments introduced by Levine & Benjamin (2010) the most suitable segment to market BMWs are ‘visible achievement’ and ‘Conventional family’ groups. They are the people who always care about the rich look, quality, extraordinary features and value for money rather than the price of the car (Levine & Benjamin, 2010). So the advertisements of BMW should convince the quality of their cars and its extraordinary features (BMWad1, 2010) and most importantly safety (BMWad2, 2010) of their cars to get the attention of conventional families (BMWad2, 2010). On the other hand KIA’s target market is ordinary people and ordinary families. They need a car just as a means of transportation. They are just looking for a fancy looking car with some basic options or features such as good music players. That’s why KIA uses ordinary families and peoples who are singing inside their cars with noisy music on their CD players in their advertisements (KIAad1, 2010). According to another theory called VALs typology, consumer behaviors are influenced by eight different set of psychological traits. Those eight types are innovators, thinkers, believers, achievers, strivers, experiencers, makers and survivors. BMW would target ‘innovators’ and ‘thinker’ since they have lots of resources and use innovative advertisements to attract them. KIA might target ‘strivers’ since they consider about their financial ability before purchase a product and advertise by presenting the price to attract them. Also they are likely to target ‘experiencers’. Since experiencers like good looking cool stuffs KIA use cute animations and fancy music to attract them (Strategic Business Insights, 2010).

The behavioral segmentation factors show the relationship of the people’s behavior and the product. This includes attitudes, benefits and loyalty. Attitude segmentation involves the dividing of consumers using their attitude towards the product. Consumers might be “enthusiastic, positive, indifferent, negative or hostile towards a product” (Adam & Armstrong, 2009, p.238). For example there may be people who had a bad experience with KIA cars in the past. So they might have hostile attitude towards the KIA cars. Consumers of BMW cars can customize their own cars before purchasing it. So they can add or remove color, design, options and features of their wish. This enables to reduce the post purchase negative feelings towards the product since they can remove all the things that they don’t like and include everything they like. So the people who had had a BMW in the past are more likely to have a positive attitude toward the brand in the present. “An attitude describes a person’s relatively consistent evaluations, feelings and tendencies towards and object or an idea.” (Adam & Armstrong, 2009, p.168) Tri-component attitude model suggest three components of an attitude namely cognitive, affective and conative. Cognitive is the thoughts or beliefs about the product, affective is feeling about the product and conative is the action or the purchase of the product. For example generally people believe BMW cars are high quality luxury cars where KIA cars are less quality cheap cars. So the people who need a quality product might believe that BMWs are perfect for them to buy while price sensitive buyers believe KIA is a good car to buy. “Benefit segmentation is a technique to differentiate and group customers on the basis of the benefits they desire or seek.” (Koh et.al., 2010). Lewis (Cited in Koh et.al. 2010) found that benefits can be sensory, rational or emotional. It can be evaluate by looking whether there is a desirable change in condition of the group, maintain a desirable condition or realization of such a condition of the group. For example BMW would identify the benefits of buying its car as luxurious feeling and safe drive while the benefits for KIA customers might be just saves their time and ease of transportation. Customer loyalty is a prominent factor for any successful business. They are less price-sensitive.Theyalways stay with the brand or increase the number of purchases and also they persuade people around them to purchase a particular brand (Rowley & Dawes, 2000).

Stanton et. al. (1994) defined product positioning as the “image that the product projects in relation to competitive products as well as to other products marketed by the same company.” For example BMW series 1 would position it as compact, fuel efficient, agile and versatile car which will target for singles or bachelors or even old peoples since they are easy to park and handle while series 6 or series M would position as sport cars and target the people who think them as sport loving cool peoples. KIA would position its Soul model as small fuel efficient cute car and Carnival as a family car.

In conclusion, generally people cannot remember each and every advertisement they see. So it is important to identify the consumers and potential consumers of a particular product in order to carry out an effective and efficient marketing campaign. The method of choosing the potential consumers starts with segmentation. Segmentation is dividing the population using a common characteristic among group of people which might be demographic, psychological or behavioral. Then choose the most appropriate segment or segments out of all the segments and those segments will then be called target markets. Also it is important to identify the characteristics which influence the consumer’s buying decision. The theories like Maslow’s hierarchy of needs, Tri-component attitude model and VALs typology are some of the important concepts which used to identify such characteristics which influence consumers buying decisions. After profiling the target market the next step is to position the product based on the target markets. If the company has variety of products they can position each and every product based on its main features or characteristics. Or even a company which makes only one product can position that individual product for different target markets using different benefits or features of that product.

REFERENCE LIST
BIBLIOGRAPHY
  • BMW  2010, The international BMW website, viewed 1 September 2010, <http://www.bmw.com/com/en/index.html>
  • Gosnay, R. and Richardson N., 2008, Develop your Marketing Skills, Replika Press Pvt Ltd, India.
  • KIA, 2010, KIA Motors, viewed 1 September 2010<http://www.kia.com.au/>
  • Rix, P., 2007, Marketing a Practical Approach, 6thedn, McGraw-Hill Australia Pty Ltd, NSW.
  • Rose, P., 1991, Basic Marketing, 3rdedn, The Dunmore Press Ltd, New Zealand.

HANNA

Watch this amazing movie using following link.

http://www.putlocker.com/file/C8A8866FB552B6D3

Storyline

Hanna (Ronan) is a teenage girl. Uniquely, she has the strength, the stamina, and the smarts of a soldier; these come from being raised by her father (Bana), an ex-CIA man, in the wilds of Finland. Living a life unlike any other teenager, her upbringing and training have been one and the same, all geared to making her the perfect assassin. The turning point in her adolescence is a sharp one; sent into the world by her father on a mission, Hanna journeys stealthily across Europe while eluding agents dispatched after her by a ruthless intelligence operative with secrets of her own (Ms. Blanchett). As she nears her ultimate target, Hanna faces startling revelations about her existence and unexpected questions about her humanity.

Director: Joe Wright

Stars: Saoirse Ronan, Cate Blanchett and Eric Bana

Released: April 07, 2011
Runtime: 111 mins
Genres: Action Adventure Drama Mystery Thriller

Movie details were taken from IMDB, <http://www.imdb.com/title/tt0993842/>

EXAM HELP

 
Things that I referred to get more than 7 marks for each components in IELTS test. 

Go to youtube instead of watching this video in here. Then you can see lots of other useful videos which may be very helpful for you.

Sample questions and answers for writing and speaking components of the test.

http://www.goodluckielts.com/

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