Mutual Funds

1.      Mutual Funds
According to mutual fund is an investment where different investors pool together their money and hire a manager who will be keeping the portfolio of their investment once they have been invested as bonds, shares or securities.
There are different types of Mutual funds such as :-
Open ended mutual fund, this is where share are issued in or sold back to the fund whenever they are wanted by anyone.
Close ended mutual fund, this is when there is a limit of certain number of shares which can be issue to a particular fund and these number of shares can be sold back only when the fund terminates itself, however this type of mutual fund can sold to other investors through secondary share market.
Equity mutual fund, this is where the mutual fund company invest more than 50% of the total fund in to stock market by either buying shares or stocks. 
Bond fund, this is where the mutual fund company invest the fund in to a range of debt instrument such as municipal bond, corporate bond and convertible bonds.
Money market funds, this is where the mutual fund company invest the fund for the purpose of earning the investors interest from their investments by investing in banks or by purchasing treasury bills.
No loan mutual fund, this is where no fee or commission is charged when buying or redeeming the shares of the mutual funds.
Structured fund, this is when a company invest in a bond which has both combination of fixed income products and equity product in order to give investors the advantage of capital protection and appreciation.
Exchange traded fund, this is an investment vehicles which consist of assets or number of securities and traded in a stock exchange market like normal stocks.
S & P 500 fund, this represents the most widely cited equity benchmark in the United States of America. Investors are advised to follow certain steps when choosing mutual funds since they can invest in mutual funds for at least $100 without any trading cost. First, they should try to avoid sales charge which incurred during buying or selling of the fund since this will reduce their return on investment. Second, they should look for investment with low expense ratio since these ratios represents the annual fees charged on mutual funds and if possible they should look for investment with expense ratio with percentage less than one percent. Third, they should look for investment with low turnover since the longer the fund is held by mutual fund, the lower trading and hence low turnover. Turnover of 50% or less is advised. Next, investors should look for investment with consistency in their returns year after year. Next, investors should look for mutual fund manager who has the longevity with the fund and the company. Last but not least, investors should ask experts such as financial planners, mutual funds companies and investment advisors. Lastly, investors should review regularly the investment by setting up a regular review schedule for the purpose of checking the performance of the fund if it is consistent with the investor’s level of investment risk and investment objectives. Some of the companies/ institutions dealing with mutual funds are LIC Mutual fund, principal mutual fund, HDFC mutual fund, Birla Sun Life mutual fund, Franklin Templeton Investments, SWIP UK equity funds, AXA investment managers and Jupiter growth Funds.

Is Petroleum Tax Moratorium (Freeze) Necessary to Easy Economic Hardship?

Global economies have been showing signs of recovery from one of the longest economic recessions. However, the current resurgence in the price of oil, is by far the single biggest threat that is likely to wipe the few gains made on the economic front. High cost of oil is slowing down economic growth across the board. High unemployment, deeply entrenched toxic debts, inflation, and so forth in many developed economies, are exposing the fragile nature of the global economy. Developing nations on the other hand are being hit particularly harder, with their citizens resorting into mass action due to their inability to feed themselves.
Tanzania is amongst countries experiencing chronic energy shortage, and could join some of the economically  troubled countries should speculation continue to drive oil prices further, proportionally to the cost of food , and other basic necessities. Unrest in the Middle East, and North Africa, increasing demand for oil in the Asian continent, declining supply of oil in the global market, and now a disaster in Japan, have been the driving factors behind the sudden resurgence in the cost of oil in the commodity markets. And once Japan switches into the recovery mode, we should expect to pay more for petroleum products. This will most likely cripple the economic recovery, and further weaken the already fragile global economy
Productivity has declined significantly in many developing nations including Tanzania. The daily rise in the price of oil has regenerated into economic hardship , giving birth to the new wave of social and economic unrest amongst youth  in these developing nations; the pattern precipitated by the inability to afford food by many citizens. The cost of oil is placing a strenuous impact on transport, cost of food, freight, and the entire supply chain. Four months ago, one liter of gasoline was Tsh, 1,680, today the same liter is Tsh,1,980 an 18% increase. 1 kilogram of sugar was Tsh. 1,200, today the same kilogram is Tsh. 2,000 a whopping 67% increase. One kilogram of rice was Tsh. 900 a few months ago, today the same kilo fetches Tsh 1,400, and the list goes on.
In general, commodity prices have sky rocketed across the board in the recent months, and the increase can be attributed to many factors including the high cost of petroleum, whereby  the high cost of equipment and farming input, production, processing, and  transporting commodities must be passed on, back to the consumer in the form of high prices. To curb the rising cost of food, it is necessary for the government to think of temporary drastic measures such as extending incentives to domestic farmers in the form subsidies on farming input and equipment, as well as Interest free loans.

Subsidization of petroleum, Imposition of tax moratorium on all commodities and petroleum products, and also the adoption of STRICT commodity price regulation, that will deter greedy merchants from exploiting consumers. These temporary measures will ease the economic pain, by leaving more money in the pockets of the consumer, which will in turn maintain economic activity. This is my idea, what do you think?
Mungu Ibariki Tanzania
John Mashaka
Dar Es Salaam, Tanzania

Knowledge Management

Knowledge is an essential driver of organisational growth in a business environment.
‘Whether the objective is to develop a new product, service, or to design a new technology, the key resource required is knowledge, knowledge of markets, customers, technology available, materials and distribution, all this knowledge leads to delivery of good or services’ (Sue et al, 1998). After identifying the benefits of knowledge for an organisation and implementing knowledge in processes at different levels, knowledge creates a competitive advantage that will enhance success over competitors and organisational learning.
According to Chaffey (2007 pg.486) ‘ knowledge is the combination of data  and information to which is added expert opinion, skills, and experience, to result in a valuable asset which can be used to aid decision making’. Furthermore Pervais et al (2002) suggests that knowledge and information may be difficult to distinguish at times but knowledge and information are more valuable than raw data, the fact that knowledge begins as data and information base when intelligence is added to that information it is transformed in to knowledge. Examples of knowledge can be customer database, expertise and skills in the organisation, dealing with customer queries etc.
 As suggested by Nonaka and Takeuchi (1995) Knowledge can be classified in to two groups, which are explicit knowledge and tacit knowledge, explicit knowledge can be easily communicated in a formal language including grammatical statements, mathematical expressions, specifications, and manuals, this kind of knowledge can be transferred through individuals formally and easily. ‘Tacit knowledge is difficult to express with a formal language, it is personal knowledge that is embedded in individual experience and involves factors such as personal belief, perception and value system’. Nonaka and Takeuchi (1995, pg. viii-ix).
Knowledge in an organisation can be obtained from employee’s skills and expertise or culture and structure of the organisation that encourages knowledge sharing as well as other intangible assets that an organisation has, furthermore other organisations and customers can be a source of knowledge.
‘Knowledge management is the management of activities and processes for leveraging knowledge enhance competitiveness through better use and creation of individual and collective knowledge resources’ Chaffey, 2007 pg487). The fact that knowledge may be from employees, customers, as well as culture, and other organisations companies have to work towards creating new knowledge, store, share and use knowledge for future success.
According to Nonaka and Takeuchi (1995) success of Japanese companies was not the technology competency, customer relationship or even human resources management, Japanese companies have been successful because of skills and expertise at creating organisational knowledge. The ability of the company to create knowledge spread it through the organisation and utilise it in products, services and systems and continuous innovation helps to gain competitive advantage.

Nonaka and Takeuchi (1995) suggest that organisations central activity should be working to make new  knowledge, the authors  add that knowledge is created through the interaction between tacit and explicit, there are four modes of knowledge conversion, that is from tacit knowledge to tacit knowledge, tacit to explicit knowledge, explicit to explicit knowledge and explicit to tacit knowledge. Interacting through socialization, externalisation, internalisation and combination of tacit and explicit knowledge enables organisations to create knowledge at individuals and group levels through improving something, sharing ideas, training, etc.
Knowledge creation can be between individuals and groups through different means. Nonaka & Takeuchi (1995) provides details of knowledge creation in practice through an example of Matsushita Electrical Industrial Company limited and the development of the bread making appliance. When Matsushita was developing a bread making appliance it depended on the bakers tacit knowledge, the knowledge gap that was identified by Matsushita was helped to show how the pursuit of tacit knowledge can enable organisations create knowledge.
Chaffey (2002) suggested that at an organisational level knowledge is created through establishing expert groups or use consultants to acquire knowledge. Also knowledge needs to be stored this requires a system that will enable organising, updating and categorising knowledge. Furthermore knowledge has to be shared and most importantly it should to be utilised for the benefit of the organisation.
Companies use different things to acquire knowledge, first the benefits and values of knowledge should be understood, create an environment that encourages knowledge sharing, learn from the external environment as it may influence internal changes. To be able to manage knowledge different tools are kept in place to enhance knowledge creation, sharing, storage as well as using it. Organisational success is determined by the contribution and interaction of many factors, some are beyond influence or control while others are under control of an organisation internal environment. It is through management and utilization of these factors that knowledge management yields corporate goals (Pervais, 2002), For example in 1978  the managers of Honda were determined to convert tacit to explicit knowledge within the organisation and formed teams that were to create a product concept that the company has never done, in the car manufacturing sector though the task may seem tough but this is how tacit knowledge is made explicit and may once the task as complete the knowledge becomes the company’s asset that later results in to success. (Nonaka and takeuchi, 1995)
Technology has a great impact on knowledge management, from sharing knowledge at a normal face to face interaction. Technology has influenced people to work remote from the office. A project can be completed with teams that are geographically distributed across different countries, through video conferencing, e-mails and other forms of virtual communication. Hence companies should develop systems that enable proper storage of knowledge for effective use in offices and Tele workers. However, Easterby- smith and Lyles (2003 pg.461- 462) argue that ‘without trust, knowledge initiatives will fail regardless of how

thoroughly they are supported by technology, therefore the issue of trust should be part of knowledge sharing’.
Knowledge management can be central success of an organisation. As suggested by Pervais et al (2002) in the COST knowledge management model which comprises of customer, supplier, organisation and technology
To begin with the customer, customer satisfaction and customer retention is what organisations need in a competitive business environment. The organisation needs to know changing customer needs, and how to meet those needs. All these are done to learn from customers and to be effective and competitive in business. Organisations invest on different CRM programmes that enable data warehouse and data mining just to get customer information which will be stored as knowledge in the organisations systems in order to integrate them in their changing processes and provide that exclusive service. This shows how beneficial knowledge is and how managing it could make a successful organisation.
Having customer knowledge helps an organisation to be able to penetrate in to new market, understand how to boost sales as well as increase market share, Therefore knowledge if identified and properly managed can be a factor for success example, British airways (BA) seeks knowledge as a key to the future success in the airline industry, BA believes that managing knowledge will help innovation and creativity which will meet the customer needs. (Pervais, et al 2002)
Once the organisation has identified the benefits of knowledge, the key skills and expertise within an organisation is another key to success of the business, organisations invest in retaining the talent this will enable knowledge creation, storage, as well as the use of the knowledge for the benefit of the company. By having enough expertise in the organisation the knowledge they have may contribute in decision making which may improve efficiency and enhance profitability of the company. Example Ernst and young centre for Business Innovation and Business Intelligence is a knowledge intensive business, the professionals that the company has and the knowledge that is gained from the employees as well as customers is the key to success for the organisation. (Pervais et al, 2002).
Suppliers, having a good relationship and understanding suppliers for an organisation is necessary, organisation may obtain high quality material at a reasonable cost with efficient delivery service, from the supplier the fact that organisation may obtain all that through the quality programmes, knowledge about your suppliers in relation to your competitors is very important.
Technology as a tool is another key to organisation success that is used to manage knowledge.  Transfer of information from one person to another may enhance knowledge sharing. Intranets are often used to support knowledge access and knowledge exchange within organisations. Capturing employee knowledge may be the main facilitator of transfer of knowledge among individuals in an organisation, software’s to facilitate group discussions and skills directories are kept in place to enhance knowledge transfer through the organisation that is why organisations capitalise in the knowledge based assets.
IBM  an intellectual capital intensive company, its perspective of knowledge is business management, project management and intellectual capital management each of the knowledge has its own goals, processes and information that is then transformed to knowledge through human interaction and social process in teams and groups such as the knowledge cafĂ©, the ICM asset web and knowledge Cock pit. The frequent dialog of teams encourage sharing of tacit and explicit knowledge which is beneficial for the business.(Pervais et al 2002) This is a good example of a company that uses technology to successfully manage knowledge.
However some knowledge management programmes are failing to produce the great impact, many companies spend millions annually by investing on to knowledge programmes. Some companies have been successful while others have not .According to Pervais et al (2002) organisations that have not performed well in knowledge management have failed to close the four key gaps, technology gap, Implementation gap, the transfer gap and integration gap.
Technology gap, information technology has led companies to use intranets and internet which has enabled employees to work from different locations and time, however, despite the availability of technology companies have not been able to leverage knowledge. The issue of trust between individuals comes up, when virtual teams need to be set up when the individuals are still used to freely share knowledge to people they can interact and see  face to face. To make technology work, the work habits will have to change as well, which in turn will influence a change on the organisational culture to make technology work for an organisation. Organisations need to leverage knowledge from the user perspective that is if knowledge is shared across individuals then the technology should implement a community focus that creates forums the community will share knowledge and organise, maintain and distribute knowledge by integrating to the work flow with the support of information technology. Example Microsoft uses technology well to enhance interaction between teams.
Implementation gap, understanding  the nature of organisations knowledge and managing the knowledge is one thing being able to implement  knowledge management may be difficult, the gap between the company activities and the knowledge it has an how the two are implemented in the organisations  knowledge management strategy is a different issue all together. To be able to implement knowledge, putting things in to action, take risks and learn from mistakes, having knowledge is not enough, implementing action is what makes performance. Organisations fail to manage knowledge because of having large amounts of knowledge and action is not of the organisations interest. Example of Oil company chevron implements knowledge management through connection that is connection to explicit knowledge through intranet in a portal, connect individuals with specialised knowledge through an expertise locator, connect to communities in practice which help individuals to share knowledge and learning from others, and lastly connection of knowledge and people processes, products, and services. (Saunders, 2000) cited by Chaffey (2000 pg. 489)
The transfer gap, many companies invest a lot in creating knowledge and developing the best  practice, ignorance of the source and the recipient may be a barrier to knowledge transfer this may be a downside a organisations when knowledge creating cost millions, lack of relationship between an organisation may influence knowledge  management transfer gap. Pervais et al (2002) suggests that a reward system should change to encourage sharing transfer, leverage knowledge for the benefit of the business. Furthermore, integration gap, According to Pervais et al (2002) the failure to perform may be due to the fact that the knowledge has not been integrated properly in to the business processes
Psychology can be a barrier to organisation learning hence knowledge creation and management may be an issue. Shein 1993 cited by Dierkes et al (2001) suggest that ‘anxiety can be an obstacle to organisational learning, the psychological study of human perception have revealed many biases people search for information in ways that can confirm their initial beliefs’, Dierkes et al (2002 pg. 329). He further argues that people are ignorant about or misperceive  their own organisation, Example managers work hard to create performance quality by different training and improvement measure by they don’t know the level of their organisational performance. This is barrier to managing knowledge since the knowledge itself is not identified.
In conclusion, to have a learning organisation that identify and manage knowledge is necessary. This will enable an organisation to create a competitive advantage. It is through understanding the competencies and working on the external environment to identify, share, store and use knowledge. Efficient tools should be kept in place to allow effective sharing, storage and most of all use of knowledge. Integration of technology in sharing and transferring knowledge is important with regard to virtual organisation. However there can be technological difficulties to create virtual communities that work efficiently in knowledge management but identifying and managing knowledge effectively may be a key to success for a business which may be evidenced by improved efficiency, growth of company sales and profitability. Increase market share, Develop communication linkages between workers. Retain of expertise. Knowledge has proved to create a competitive advantage through discusses examples and has largely been a key to success for businesses.
1. Chaffey, D (2007) E-Business and E-commerce management, 3rd ed. Pearson education limited. England
2. Dierkes, M et al (2001) Handbook of organisational learning and knowledge. Oxford university press. Oxford
3. Easterby-smith, M & Lyles. A. Marjorie (2003) Handbook of Organisational learning and knowledge management. Blackwell publishing Ltd. Australia
4. Nonaka, I and Takeuchi H. (1995).  The knowledge creating company, Oxford university press. New York.
5. Pervais, A. et al (2002) Learning through knowledge management. Butterworth-Heinemann. Oxford
6. Sue, N. et al (2002) Managing knowledge work, Palgrave Macmillan. New York.

By Elizabeth Ernest

Sample Marketing Plan

Nike Inc is the world’s largest company founded by Bill Bowerman and Phil Knight in January 1964. It is manufacturing different kinds of sports wear and footwear. Nike Jordan air 09 is the new product which Nike Inc has introduced in Jan 2009. Therefore the purpose of this report is to assess the PESTEL analysis, market opportunities and threats which Nike are facing and competitor analysis. After that plan the introduction of our new product (Jordan Air 09) by providing the ACME trading corporation directors with target market and how we will apply efficiently our marketing mix for our new product.
This part of the report will look on the external environmental influences as a means of identifying the threats and opportunities that will affect marketing planning and implementation of the Air Jordan 09 within the organization.
 Social Analysis
It is important to look on social analysis because it helps the company to understand customers and things which drive them (Brassington and Pettitt, 2003). Nike inc. has been affected both positively and negatively by social factors. Keynotes (2008) suggested health consciousness to be a positive effect to Nike in UK footwear and cloth industry because most of the people starting to join health clubs or jogging in order to make themselves healthy. This will lead to increase in demand for sports wear and footwear. On the other hand Knife murders across the UK have a negative effect to Nike and hence leads to the removal of shoes called Nike air stab (stability) due to the fact that people were arguing that is encouraging crime issues.   

 Economical Analysis
This part of analysis covers conditions which affect the structure of competition such as macro and micro economics (Brassington and Pettitt, 2003). Recession affected Nike negatively; according to Keynotes this is due to the fact that most of the people do not have money to buy leisure goods or being engaged into leisure activities. Furthermore, Keynotes (2008) argued that, consumers tendency have changed, they are now consuming small percent of their income in staple items such as food and clothes. This will have an effect to Nike because when people stop consuming a lot on cloth, demand for cloth and footwear will fall which leads to fall in Nike’ sales and revenue.
      Technological Analysis
It is important to look on technological environment in order to be aware of innovation and improvements made for the benefit of the organization (Brassington and Pettitt, 2003). Improvement in technology has a positive effect to Nike because it enables the company to manufacture footwear which will provide better protection from all kind of weather, and provide better kicking, jumping and running. Moreover this innovation helped Nike to produce high quantity efficiently at low cost and time which will lead to increase in profit.
       Political and legal Analysis
It is important to look on external forces controlled by the government or external forces in order to be aware of the laws, rules or regulation improved or changed which might affect the organization strategies (Brassington and Pettitt, 2003). Political attention has moved from job losses in the well developed countries to the operational of multinational apparel companies which has been attracted many protesters against the use of cheap labour in developing countries. According to Keynotes, (2008) this is due to the fact that developed countries will be unable to compete with those multinational companies operating in developing countries due to their low production cost which will enable them to offer products with low price.
 Environmental Analysis
Global warming is one of the factors which have affected Nike. This is because of world’s response to global issues by requesting companies to reduce the amount of carbon emitted. Therefore Nike is trying its best to make sure that is producing low amount of carbon in order to meet environmental regulations made by united nation by installing new machines which produces low amount of carbon (keynotes, 2008).
In sport clothing and footwear industry Nike Inc is the market leader because of its high market share represented by its sales of $14.96 million in 2006 and its relatively high rate of market growth of 8.8 percent in 2006. (Keynotes, 2007). The closer competitor of Nike is Adidas group which had turnover of Euro 7million in 2006 and it has a plan of increasing its growth rate and market share up to 20 percent after acquisition of Reebok. After Nike and Adidas, Puma follows as another Nike competitor due to its sales of Euro 2 million in the same year 2006.  
 SWOT analysis
This part of the report looks on strengths, weaknesses, opportunities and threats of sport clothing and footwear industry. It is important to look on SWOT analysis because is the way of auditing the organization and its environment. Moreover it helps marketers to plan and focus on key issues for effective marketing of their products.
 Market opportunities
Nike Inc. in its footwear industry has many opportunities such as increase in demand for sports footwear and clothes. The demand increases due to consumer’s need of becoming fit and healthy, therefore this gives an underlying solidity to sports goods manufacturing. Moreover, Keynotes, (2008) stated Nike as a multinational sportswear company; therefore it will continue to diversify the market into branded sports equipments and hence it will increase its revenue. Another opportunity is that, fashion is among factors which provides opportunity to fast moving companies which are producing equipments for those sports which are coming into fashion.

        Market threats
According to keynotes, (2008) Globalisation is among factors which are considered to be a threat to UK sports footwear and cloth industry due to removal of some restriction on imported goods from Europe and other countries which has agreement with UK to do so. Therefore this is a threat because if competition increases price will fall, and if the company which imports its goods is from Asia or Africa where they are paying low wages compared to UK, it will destroy the UK companies market by cheap products. Another threat is that, due to recession there is possibility of price fall due to many stores competing for the same customers. Price fall may also be caused by low demand compared to supply (oversupply) because companies continue to produce regardless the fall in demand caused by recession. One more threat is that, UK manufacturers lost their ability to compete with the Far East companies due to the availability of low-cost sourcing in the Far East and in other regions.
      Market Strengths
According to keynotes (2007) sports clothing and footwear as a whole have strength of availability of low cost sourcing such as cheap labour in Far East however this is a threat to UK manufacturers. Furthermore, through participation, media coverage and fashion sport industry have high profile in modern society. Both are strengths because they will help Nike to maintain and even increase their demand and sales by being able to charge low price due to low production cost and use media to persuade prospective buyers to buy their products or attract fashion conscious buyers.
      Market Weaknesses
According to keynote (2007) most of sports clothing and footwear appears to be narrow because most of the people who wear them are youth especially boys even though sports appear to be popular. This is weakness because it narrows the market and make difficult for companies to increase their sales through establishment of other segments such as elders and female. However if they decide to include older people, they might have another weaknesses of losing youth because they will not want to look same as elders.  
Segmentation is important for an effective marketing of the product. This is because by dividing prospective buyers into groups a marketer can be able to apply its marketing mix effectively because some segments need different mix compared to others (Baker, 1996). Target market for our product which is Jordan Air 09 is divided into two main segments which are basketball players and fashion buyers for both men and women. First segment for our product is basketball players because this product has been designed to meet their needs by providing better jumping and running in their pitches. Moreover, Jordan Air 09 will also be sold to those consumers who want to buy it for fashion or those who have aspiration of looking like basketball players, and this will be our main target for this product. This second segment we will divide it into further two segments which are youth (15-25) and elders (40-60). This is because most of the companies in this athletic industry prefer to target only youth, but we want to establish a new segment which is elders because they are now conscious about health issues and they want to make their bodies fit, so by targeting them, we are expecting to have positive reaction from them due to their demand for sports cloth and footwear.
Nike Air Jordan falls under shopping goods because it represents more of a risk to consumers. There fore we have decided to manufacture it in high quality inclusive of air bubble and breathable materials which will provide better jumping, running and less ankle injuries. Moreover due to technology used our product guarantee durability because it has been produced to be used in all kind of weather. Furthermore we have decided to call our product Air Jordan 09 as the way of communicating features of it such as better jumping which is represented by word Air. Moreover we used Jordan’s name to create interest and characters to our product.
The aim of every marketer is to deliver the product to the consumer at the right time. According to Brassington and Pettitt, (2003) explain four different types of channel of distribution which are used by different organization. We have decided to use one stage channel in order to be able to deliver our product to consumer on time. Moreover, we will use one stage channel in order to control increase in price because if we use four stages channel in each stage there is commission added by the middlemen and the whole burden will fall to our consumer. Therefore we will open our Nike shops in order to have direct selling and ignore those middlemen.
It is the way of communicating with the target market. According to Brassington and Pettitt (2003) promotion mix includes advertisement which is non personal, personal selling which is face to face communication, sales promotion which aims to encourage buyers to buy the product and public relation.
             Basketball players
 In this segment we will use personal selling because we believe it will be suitable for professional basketball players. This is because it has higher impact than advertisement by being able to engage buyer’s attention (Brassington and Pettitt, 2003). Therefore, we will face them face to face and give them description of our product and its advantages such as provision of suitable running, jumping and durability due to its materials and technology used. Moreover we will ask them to wear it freely as part of advertisement to other players’ especially local ones. For local basket players we will use advertisement on sports channel such as sky sports and Setanta to persuade them to buy it. This is because Advertisement is used to compare brands in competition, inform, persuade, remind buyers and build the image of the company (Brassington and Pettitt, 2003).Furthermore we will use Michael Jordan who is a basketball legend in our advertisement in order to attract those local players.

            Fashion conscious buyers
In this segment we will use advertisement on television and sports magazine to advertise our product. We will use both sports and normal channels because our prospected buyers should not only be basketball fans, therefore we will use sports channels such sky sports and Setanta sports and normal channels such BBC to inform and persuade both basketball and non basketball fans who will buy due to either aspiration to look like Michael Jordan because we will use Michael Jordan in our advertisements or fashion. Moreover the purpose of using Jordan in our advert is to show elders that even old people can wear Jordan Air 09 because Jordan is old as they are and he is still wearing Jordan Air 09 why not them.
According to Brassington and Pettitt (2003) there are internal and external factors which are influencing price decision. Internal ones are those which are within the organization such as firm’s objectives, marketing objectives and cost. External ones are those which are outside the firm’s control such as competition, demand and price elasticity, consumers and customers, legal and regulatory and channel of distribution. We decided to look on both of them in order to have effective price for our product Air Jordan 09. The objective of the company is to increase market share by stimulating and increasing the demand for our product. Therefore we will charge a relative low luxury price on our product but not below cost (production cost plus marketing cost) in order to increase demand since the price elasticity of our product is relatively elastic, therefore the small change in price leads to relatively high change in quantity demanded. Moreover we will charge low price by ignoring long channel of distribution by opening our own Nike shops.
Based on the discussion on PESTEL, SWOT and competitor analysis and our marketing strategies Nike will have an effective introduction of this new Air Jordan 09. However the budget limit can be a threat to our plan especially in this recession era.
Baker, M. J. (1996) Marketing: An introductory text. 6th ed. London, Macmillan press ltd
Brassington, F. and Pettitt, S (2003) Principles of marketing. 3rd ed. Harlow, Pearson education limited

Product LIfe Cycle

        Product is “everything that customer receives that of value in terms of a perceived want, need or problem” (Adcock, et al, (2001) p183). This report discusses four stages of product life cycle and use Sony Plc as example to show how a company can maintain all these four stages.
         According to Chee and Harris, (1993) Product life cycle is when a product lives a life like human. Product life cycle involves four stages such as introduction, growth, maturity and decline, (Brassington and Pettitt, 2003). Moreover it helps company to know how successful its product is and where will it be in future in order to plan for improvement or maintenance.

            At Introduction stage product is new and unknown by customers. Baker, (1996) reported that sales and profit of that product is always low due to low demand for it Therefore a company should plan promotion in order to stimulate its demand. This is because most of new products are an addition to the existing ones, so consumers need clear differentiation between those products in order to make buying decision. Furthermore, marketing cost at this stage is always high which leads to high price for a product. PSP 3000 is example of a product in this stage due to its high price of £146.79 and its low sales rate increase of 0.60 million units per year (Sony financial report, 2008) .A Company may run promotion not only to stimulate demand but also to attract distributors through stimulated demand.
             Next stage is Growth stage, according to Dibb, et al (2006) sales and profit start to increase rapidly. This is because buyers have been informed and persuaded by promotion and price fall; therefore they started to repeat buying the product and hence increase the volume and product’s market share. PS3 is example for product which is in growth stage because of its high increase rate of sales by 10.7 million units up to 21.1 million units, (Sony’s financial report (2008). Moreover competition start to increase which may threaten firm’s distribution and buyers, therefore firm should be aware of it and try to either improve or modify the product. Xbox 360 is example of PS3’s competitors.
              Next stage is maturity stage, according to Dibb, et al (2006) sales and profit continues to increase till they reach their peak and then started to decrease. This is due to high competition in industry and homogeneous products. For example PS2’s sales increased up to 38 million units and then started to decline up to 23.1 million units. Moreover oversupply leads to fall in price which leads to fall in revenue. However this is not always true because sometimes firm sale more than normal units when price is low and earn high revenue.
             Last stage is decline stage. Adcock, et al (2001) reported that at this stage both sales and profit continue to fall rapidly . This may occur due to new technology or new social trend. PS1 is example of goods which are in decline stage because its sales had fallen due to new technology introduced by PS2. Moreover the focus of the firm is to cut cost and leave nature run the market. Firm may incur loss therefore it may think of either continue to sale its product or introduce new product. Furthermore, firm may increase price in order to earn profit from loyal customers
          A successful product like Sony’s products must pass through all four stages due to company effectiveness in understanding their life cycle. However it is impossible to predict the product’s life span and to measure successfulness of the product in some situation. For example how can a firm know that its product is in maturity or decline during economic crisis? It is difficult because sometimes sales may fall due to economic crisis which leads to fall in demand, but in long run during recovery customers may continue to buy it and hence increase its sales again.

Adcock, D. and Halborg, A. and Ross, C. (2001) Marketing: Principles & practice. 4th ed. Harlow, Pearson education limited
Baker, M. J. (1996) Marketing: An introductory text. 6th ed. London, Macmillan press ltd
Brassington, F. and Pettitt, S (2003) Principles of marketing. 3rd ed. Harlow, Pearson education limited
Chee, H. and Harris, R. (1993) Marketing: A global perspective. London, pitman publishing
Dibb, S. and Simkim, L. and Pride, W. M. and Ferrell, O. C (2006) marketing concepts and strategies. 5th Ed. New York, Houghton Mifflin.
Managing the product. Available at: (accessed on 12th march 09)
Sony’s financial report (2008). Available at: (accessed on 17th march 2009)

Buyer Behaviour

   Chee and Harris (1993) defined buyer behaviour as “acts of individuals in obtaining, using and disposing of economic good and services, including the decision processes that precede and determine these acts”. There are some factors which influence buyer behaviour such as psychological, sociocultural, and technological factors, and economic, political and legal factors. (Brassington and Pettitt, (2003). It is better to understand buyer behaviour in order to monitor the market. This report will discuss how sociocultural factors as a theory can influence buyer behaviour.
  Theory/model (social influences)
          According to Brassington and Pettitt (2003) social groups will help buyer to decide by differentiating between essential and non essential buying, utilising scarce resource efficiently, evaluating the benefits of the product and hence predict the possible effects of the decision. Baker, (1996) divided sociocultural influences into three parties. Firstly, culture which is the total way of life of a particular society. Secondly, social class which is when society is classified into groups based on different features such as income, occupation, social status and education. Next, reference groups which are groups of people who belong or aspire to belong in a certain group that formed formally or informally. Moreover, Brassington and Pettitt, (2003) added family which “is the group consisting of one or two parents and their children” (Hornby, (2006)).
         Social class can influence someone to buy something at a certain price due to the feeling that I am in this social class. Therefore, I should buy this at this price so as to be appreciated by a society. For example, executive director of Barclays bank can decide to buy AGA cookers which will cost him around 7500 pounds for buying and installation. This is to make others appreciate him that he is in the upper middle social class.
           Furthermore, culture can influence consumer to buy goods which are culturally accepted. For example, in Tanzania, it is a norm that a woman should wear a long skirt which hides her knees. Therefore, a Tanzanian woman may aspire to buy a mini skirt but due to the culture influence she will buy a long skirt.
           Furthermore, being a member of a group can influence consumer to buy some goods or services. For example, being a student can influence someone to buy uniform in order to look like an active student. Furthermore, a person can aspire to look like a member of a certain group; therefore he may decide to buy certain good in order to look like member of that group. For example, a citizen who is not an army soldier and aspire to look like a soldier can decide to buy a combat trouser in order to look like an army soldier.
            Moreover, being a family member can influence buying behaviour of a person. For example, a newly married husband will change from buying already cooked food and now start to eat food cooked by his wife.
 Conclusion and recommendation
      Sociocultural influences such as family, culture, reference group and social class are among factors which can influence the buying decision of consumers. Therefore, it is recommended that, a company should divide its market into segment and make sure that it understands the factors which influence the buying decision of a certain segment. For example if it is selling its product to Chinese it should understand Chinese culture, and their social classes.

Adcock, D. and Halborg, A. and Ross, C. (2001) Marketing: Principles & practice. 4th ed. Harlow, Pearson education limited
Baker, M. J. (1996) Marketing: An introductory text. 6th ed. London, Macmillan press ltd
Brassington, F. and Pettitt, S (2003) Principles of marketing. 3rd ed. Harlow, Pearson education limited
Chee, H. and Harris, R. (1993) Marketing: A global perspective. London, pitman publishing
Hornby, A. S. (2006) oxford advanced learner’s dictionary. 7th ed. New York, oxford university press.

Effective Promotion

       Advertising “is a paid for form of non-personal communication that is transmitted through mass media” (Dibb, et al (2006) p538). This report will discuss advertising media which are means used to communicate the message to targeted audience. Moreover it will give examples to show how different companies use advertising media to make their promotion effective.
        According to Adcock, et al (2001) major advertising media are television, radio, newspapers, magazines, business and professional journals, outdoor/transport and cinema. This report specializes on four media which are newspapers, magazines, radio and television. Good use of Media is important because it makes advertisement effective by making buyers pay attention to it, then get interested to it, and have a desire on the product and finally decide to buy the product.
        According to Brassington and Pettitt (2003), newspaper enable advertisers to communicate quickly and flexibly to large population. Newspaper advertisement is relatively cheaper compared to other media. There fore an advertiser who have small budget and want to communicate to large population should use newspapers. For example, home comfort care advertised scooters on Times & citizen in order to communicate quickly and cheaply to Bedford citizens. However newspapers have short life and once someone read it he will never read it again. Furthermore some of the newspaper readers are skim readers, so there is the possibility of the message being undelivered. Newspapers are not applicable to illiterates and blind people, so advertiser who their target is blind peoples should not use newspapers.
              According to Adcock, et al (2001) magazines make easier for advertisers to be selective by dividing and targeting the audience. For example men who want to lose weight will be interested in health magazines. Therefore advertisers should use different magazines in order to make their promotion effective. For example Nike sports clothing which have been advertised on the back page of the athletics weekly magazine (sport magazine) in order to attract people who are engaging themselves or like sports to buy those clothes. Moreover, magazines have longer life than newspapers. However it is more expensive than newspaper and cheaper than television.
            Chee and Harris (1993) said radio has an ability to reach new and old consumers wherever and whatever they may be doing. Radio can persuade and communicate to prospective buyers cheaply compared to television within its transmission area due to its objectives of entertaining and informing. Therefore advertisers who want to communicate with buyers within the area limit should use radio in order to make its advert effective. For example Michael Jackson show which advertised on radio Heart in order to communicate with people within Bedford and around it. However, radio is unsuitable for nation and worldwide advertisement and to children below 10 years because most of them like visual advertisements.
           Brassington and Pettitt (2003) argued that television is the most important non-personal communication channel which has a wide coverage to its audience. Through television messages can be delivered through combination of sound, colour, motion and entertainment. Advertiser used different channels and programmes to communicate their message, thus it is expected to see advert of sports equipments on sports channels such as Setanta and sky sports in order for that advert to be effective. For example lucozade sport which has been advertised on Setanta. That advert is effective because most of the people who watch Setanta either like or engage themselves in sport activities, therefore they may need lucozade sport drink. However television is expensive compared to other media and there is wastage of message in television. For example Mazda advert on BBC, that advert was targeted to over 18 but the message is being communicated to both under and over 18 which is wastage of message.
          in the light of above arguments, it can be concluded that advertising media are among factors which should be taken in to consideration when producing an advertisement in order to make that advert effective. However through advertisement it is difficult to concentrate all efforts to effective buyers like personal selling do. Furthermore advertisement sometimes is does not create unique approaches which matches the prospective buyer’s mood and need. For example Mazda advertisement on BBC to all audience regardless you have already bought one or not, or you have money to buy it or not.
Adcock, D. and Halborg, A. and Ross, C. (2001) Marketing: Principles & practice. 4th ed. Harlow, Pearson education limited
Baker, M. J. (1996) Marketing: An introductory text. 6th ed. London, Macmillan press ltd
Brassington, F. and Pettitt, S (2003) Principles of marketing. 3rd ed. Harlow, Pearson education limited
Chee, H. and Harris, R. (1993) Marketing: A global perspective. London, pitman publishing
Dibb, S. and Simkim, L. and Pride, W. M. and Ferrell, O. C (2006) marketing concepts and strategies. 5th Ed. New York, Houghton Mifflin