Ingredient Branding of Industrial Goods

Ingredient Branding of Industrial Goods: A case study of two distinct different automotive suppliers Waldemar Pfoertsch[1] / Johannes Rid[2] / Christian Linder[3] Abstract This paper concerns ingredient branding; more specifically, ingredient branding for industrial goods. Although research in ingredient branding has been quite intensive in the area of fast moving consumer goods, considerably less research has been carried out for industrial goods. In this paper, the authors provide insight into whether successful ingredient branding can be transferred to industries where it has not been a common phenomenon: automotive suppliers.Two major companies in the automotive industry are analyzed in this paper: Autoliv, a major player in car-safety supplies and equipment like seat belts and airbags, and Bosch, producers of a large variety of car components, like diesel and gasoline injection systems, braking components (e. g. ABS and ESP), and starting motors and alternators. The findings inc lude enormous potential for B2B companies in the field of ingredient branding. Car suppliers, for instance, have rarely used the option of branding their ingredients at the finished product.The authors give a historical perspective, show e. g. that ABS braking system, invented by German supplier Bosch would have been a perfect candidate for branding to the final customer. In the purchasing decision of potential car buyers, the ingredient ABS, provided by a strong ingredient manufacturer (e. g. Bosch) could have led to a preference of buying a specific car, and in the end, added to the supplier’s reputation and revenue. 1. Leveraging the brand We now live in a world where consumers receive thousands of impressions and messages every day.Ever increasing competition makes it more difficult for a message to reach the audience and target group, with the consequence that it becomes harder for a consumer to differentiate between brands. Furthermore, as competitive advantages and inn ovations are copied at a higher speed, products and services become more alike. In this kind of environment, it is important for producers to find a position for their product or service in order to focus and clarify the attributes that make their product unique to the customer.In response to this current business environment, research and best practice show that more and more firms have come to the realization that one of their most valuable assets is the brand name associated with their products or services. (Keller,2003, Pfoertsch/Mueller, 2006). Producers understand that powerful brands are beneficial to the company: â€Å"Brands, therefore, are genuine assets and, like other forms of asset, they can appreciate considerably as a result of careful management and development. † (Blackett, in: Murphy, 1989).Kotler/Pfoetsch (2006) have proved that B2B branding offers strong competitive advantages, â€Å"by implementing a holistic brand approach companies can accelerate and i ncrease their overall success† compared to companies that do not go the path of B2B branding. Brands should be seen in a holistic manner where all activities of a company should be integrated to get the maximum advantage (Kotler/Pfoertsch, 2006). Strategic success might be achieved through leveraging the brand, because the brand is one of the most strategic and worthy assets a firm owns.Possibilities to leverage the brand include line extensions, stretching the brand vertically, brand extensions, and co-branding (Pfoertsch/Schmid, 2005). Co-branding means that two brands form an alliance in one or several areas that lead to a new product branded with both brands. Ingredient branding, on the other hand, is a brand that is solely used as a component of a branded article (Riezebos, 2003). According to Norris (1992), there are two relevant criterias that must be fulfilled for ingredient branding. First, the component can only be bought and consumed by consumers as a part of the br anded article.Second, the brand name of the component is only used for such an ingredient (and not for ‘normal’ branded articles as well). 2. Can you ingredient brand where branding is not a common phenomenon? The reason companies start to co-operate is due to technological and psychological changes of the business environment. There are two reasons why this occurs (Uggla, 2000): First, technology and new distribution patterns open up new possibilities for cooperation where brand extension and brand alliances become more interesting from a strategic point of view.Second, consumers look for risk reduction, and brand extension and brand alliances might be the right strategies to reduce consumer risk. Strategies to meet the demands of a changing world are co-branding and ingredient branding. There are some good examples of ingredient branding of durable goods on the market, such as Shimano as a component supplier of cycles, and Intel in the computer industry. Intel, for in stance, â€Å"positioned itself to be the heart and soul of personal computers.The strategy was to create a brand, and it worked – for PCs† (Karolefski, 2001). In other industries that produce industrial goods, like the car industry, ingredient branding has not been a common strategy. The primary question that guides us through this paper is: Is it possible for industrial goods industry like the automotive industry to adopt an ingredient brand when ingredient branding is not a common phenomenon? 3. Analyzing with real world data In this paper, real world data from two different companies were collected and compared.A qualitative approach was chosen, which enables us to analyze, understand and interpret the situation rather than giving standardized results. The aim was to understand the strategy of ingredient branding as a whole. Research was mainly based on collecting data through interviews with decision makers (respondent interviews), which implies that the interview s are of a strategic nature. A case study approach gives the possibility of getting deeper insight into a certain problem or situation and to ascertain how interviewees perceive their situations.The presented cases are Bosch and Autoliv, two companies representing the car SUPPLIER manufacturing industries. Since this study aims to help understand why and under what circumstances companies choose an ingredient brand strategy, the case study approach was seen as the most appropriate. The Robert Bosch GmbH, Stuttgart offers a wide range of products to the market, both as a supplier to different kinds of manufactures, as well as a producer of consumer goods. It had 2007 a turnover of â‚ ¬46,7 billion and employs over 271,000 people in about 50 countries.Today, 70% of Bosch turnover is from the car industry – it is a pioneer in the automotive supplier industry, with products that include ABS and ESP, injection systems, brakes, starter motors and alternators. Another major car s upplier, Autoliv Inc. is headquartered in Stockholm, Sweden, the result of a merger between Autoliv of Sweden, founded in 1953, and the American company Automotive Safety Production, started in 1997. Autoliv of Sweden was the inventor of seat belts, which first came onto the market in 1956, and developed the first airbag for cars in 1980.Autoliv has about 30% market share in its segment on a worldwide basis, and employs about 6,000 people, with sales in 2004 of $ 5 billion. 4. Leveraging the brand for industrial goods If a company realizes that it cannot capitalize on its own brand alone, it might choose to capitalize on another brand. This implies that company A wants to â€Å"borrow† association of a brand from company B. It follows that company B in turn must also want to have something from A, since B must also benefit from its association with A.Generally speaking, three prerequisites must be fulfilled before company A and B collaborate: 1) Both companies must have suffi cient brand equity, otherwise they would not be able to â€Å"borrow out† any associations (Keller, 2003); 2) company A and B should have a common basis of associations, meaning that A and B’s identity should have a certain degree of fit (Riezebos, 2003); and 3) that company A should be able to â€Å"offer† associations which B does not have and vice versa (Park/Jun/Shocker, 1996). (1) Sufficient brand equity The first prerequisite in terms of brand identity is that both brands have ufficiently strong and unique associations; that both of the brands (ingredient and host brand) separately have enough brand equity (Keller, 2003, p. 362). In this study, the question is whether Autoliv and Bosch each offer enough brand equity so that they could be potentially interesting partners for a host brand seeking to leverage its brand identity. The brand equity of Bosch can be rated as high. Bosch has successfully leveraged its own brand with brand extensions and line extens ions. Bosch, in its beginnings, was a producer of car parts like starting motors and alternators.Over time, Bosch began to capitalize and leverage its own brand by extending their product range, including the development and production of power tools, mobile telephones, security systems, and industrial packing machines. The other company in this case study, the car safety producer Autoliv, is a well-known brand among B2B customers. Autoliv wants to work together with the best automotive companies in the field of car safety: â€Å"The identity of Autoliv is a company that always has the technical leadership in the area of car safety equipment like airbags and seat belts.Autoliv strives to always be the first with technical development in their area. † (Mats Odman, Autoliv). (2) Common basis of associations The second prerequisite is that the companies working together should have a certain degree of similarity in their brand identity (Riezebos, 2003). According to Keller (2003 ), the logical fit (image and product) between the two brands is the most important requirement for a successful collaboration between two brands.That means a) that both companies’ brand identities (host and ingredient brand) should be in correspondence with each other, and b) that the ingredient offers complementary brand associations. Main associations connected with Bosch are: quality and innovation. Most car manufacturers have these associations as well, therefore, a common basis of associations does exist. Bosch representatives say that â€Å"products from Bosch contribute key values to the brand such as a promise from Bosch about product quality. Bosch products are also innovative in the car industry which is reflected in their slogan ‘We bring innovation’, e. . Bosch was first to introduce engine injection systems with 1600 bar pressure† (Stefan Seiberth, Bosch). On the negative side, Bosch has the problem of being a supplier to virtually every car manufacturer in the world, and these car manufacturers have widely different brand identities (e. g. the brand identity of BMW is totally different than that of Volkswagen). Autoliv can be more precise in common associations. Autoliv aims to develop projects with car manufacturers that are striving for the latest technology in car safety, most likely with car manufacturers in the premium segment.A logical fit exists here because Autoliv has the same aim of technical leadership as the car manufacturers they choose to work together with. (3) Offering complementary associations Finally, cooperation between brands will only work if the partner brand offers complementary associations, which the host brand does not have, and vice versa (Park/Jun/Shocker, 1996). The concept of brand identity system is central here (Aaker, 1996), and includes the following definition: â€Å"Brand identity is a unique set of brand associations that the brand strategist desires to create or maintain.These as sociations represent what the brand stands for† (Aaker, 1996). Brand identity consists of twelve dimensions organized around four perspectives – the brand-as-product (product scope, product attributes, quality/value, uses, users, country of origin), brand-as-organization (organizational attributes, local versus global), brand-as-person (brand personality, brand-customer relationships), and brand-as-symbol (visual imagery/metaphors and brand heritage). Though not all perspectives might be appropriate for every brand, it should help firms to consider different brand elements to be able to enrich and differentiate their brand identity.The brand identity model is structured into core and extended identity. The core identity is the timeless and central essence of the brand. Therefore, it will most likely remain constant while the brand is stretched to new markets and products. The extended identity consists of brand identity elements, which complete the core identity, such a s a slogan, sub-brands, and the brand personality (e. g. reliable, American, German engineering, friendly). [pic] Figure 1: Aaker’s model for brand identity modified with results from the case studyTo be able to identify and analyze what the case companies Bosch and Autoliv have to offer to their partners (host brands) in terms of desirable attributes, the above figure based on Aaker’s (1996) model summarizes the most important advantages of the examined cases. The reader should note that this paper is based on a study from the supplier’s perspective (partner brand). Therefore, spill-over effects which the case companies might receive from the producer side are not examined. Bosch offers associations which the partner brand possibly does not have.Attributes like ‘German engineering’, ‘reliable’ and ‘innovation’ could be easily used and benefited from by car manufacturer building middle and lower-class cars. Autoliv’s contribution to collaboration is technical leadership. One could say that Autoliv is a premium brand in their field of competence, thus offering strong associations in quality. To summarize, we can conclude that brand equity is one of the most, if not the most, valuable assets a company has. The company’s brand identity is the most important factor in creating or pushing the company’s brand equity.Company’s management should continuously try to leverage the brand’s identity. Our case companies Bosch and Autoliv prove that leveraging is fully possible in the area of industrial goods 5. Fit between brands So far, the authors have analyzed whether the examined companies and the industrial goods sector could offer enough brand equity and possibilities to leverage. In other words, up until this part of the analysis, we have looked upon whether our case companies would be interesting partners for the producers in their industries, and if the case companies ful fill the prerequisites to make co-branding successful.Now let’s look closer into the fit of brands and the field of brand association base. Image transfer What does theory say about the transferring process? Riezebos (2003) defines image transfer through the term deductive inference, which is the deduction of results/conclusions from brand images already in existence. Deductive inference is important when associations from one brand or entity is carried over to another brand/entity.For the transfer process, a source, which consumers must have certain associations with in terms of where it comes from, and a target (inductive inference, meaning that the associations load the image of the target) is needed. In summary, image transfer is a positive transfer from source to target, and similarly a positive feedback from target to source (Riezebos, 2003). For transferring associations, it is both necessary that source and target have something in common (e. g. common brand name), an d that the target evokes certain brand associations.Ingredient branding and co-branding are brand-stretching strategies based on image transfer. Critical success factors for image transfer are 1) the sources’ level of brand-added value, 2) how the products are related to each other (target and source should only to a minor degree differ from each other), 3) the target group similarity (Park, 1991), and 4) family resemblance (different packages sharing the same facings). Brand association base Simonin and Ruth (1998) stress the fit between brands (and between the products), which significantly affects the attitudes towards the alliance.Leading researchers agree that companies should integrate the brands they cooperate with within their overall brand architecture. The authors have used the brand association base described by Uggla (2003) to examine the question of fit. The result can be seen in the figure below where the association base model has been modified with the finding s from the case studies. The association base is a relevant tool for this purpose – to organize brand alliances and the brand structure from a leader brand perspective and intention.The association base describes how brands can be organized together. The model contains four different core components: leader brand associations, partner brand associations, institutional associations and the customer’s brand image. In a cooperation of brands, the advantage for the leading brand is that it adds values and positive associations to the product. The partner brand gets access to the distributions channels leading to the end-consumer market. The collaboration between the leader brand and the partner will determine an association base.The customer will evaluate the perceived equity from the association base and shape a specific brand image (Uggla, 2001). Figure 2: Modified brand association base (Uggla, 2003) Bosch, as a car part producer with German quality and innovation as th eir base of associations, could definitely contribute to the car manufacturer’s base of associations as for Mercedes-Benz: Enduring Passion. Autoliv has valuable associations for a potential host brand in terms of car safety. On the other hand, Autoliv does not build brand value, Autoliv would be a weaker partner brand according to the collaboration theory.The partner brand should help to expand the base of associations of the leader brand, and the partner brand’s core identity should lead into the direction the leader brand wants to go to, and the direction should be defined by the leader brand. The partner brand should also help to strengthen the base of associations while bringing in exclusivity and differentiation. Once more, Bosch has proven to be a valuable partner when tested against this theory. Autoliv stands weaker in this respect because the company is not actively building brand equity towards the final customer.To summarize, Uggla (2003) suggests that a le ss familiar leader brand should be connected to a strong partner brand with high brand familiarity. A lesser-known and/or unfamiliar car manufacturer (e. g. Asian car manufacturers who want to enter new markets outside Asia) using Bosch in-car equipment, for example, would be a positive example of this guideline. Functional and emotional incentives for brand collaboration A way of defining the motives for collaboration is given by Uggla (2001). He suggests a model based on a matrix, which is divided into emotional and functional benefits, to be able to understand why brands engage in co-operation.The model is based upon Aaker’s theory about the brand’s identity, but focuses on how the components of the value proposition are divided and shared among partners. The model divides the brands engaged in co-operation to a leader brand and (one or more) partner brand(s). The leader brand can choose to develop own associations or choose to capitalize on other brands’ ass ociations. The partner brand’s contribution should be to expand to the leader brand’s base of associations and add critical physical and/or emotional attributes.Two different incentives for collaboration are functional and emotional benefits (Uggla, 2001). An example for a functional alliance is Intel because Intel contributes with a product (the processor for a computer) for which they have core competence. With emotional incentives, the aim of the leader brand is to endorse reputation (Cooke, 2000), which is the aim to get a better image and/or quality association with the help of the partner brand. On the other hand, the partner brand can profit from the leader brand’s functional attributes. [pic] Figure 3: Applied incentive model from leader and partner brand perspectiveThe authors have modified this model in respect to the case analysis (see Fig. 3). As mentioned above, a brand that wants to lend associations to another brand strong must have strong incenti ves that can be either functional or emotional. For car producers, working together with Bosch could gain core competence and expand the value proposition (e. g. Bosch as a technology leader in ESP, ABS and diesel technology). This is according to the theory (Uggla, 2003), which says that collaboration based on functional incentives implies that the one brand contributes with core competence.Bosch would also profit from brand collaboration through shared costs in R&D. Bosch might expand the legitimate territory for their products if the car manufactures allow Bosch to brand their ingredients. Accentuating emotional attributes are also a possibility for Bosch: â€Å"It is our strategy to position Bosch as an innovative, international, modern company† (Stefan Seiberth, Bosch). A car producer might also want to work together with Autoliv based on functional motives because Autoliv has core competency and is a leading manufacturer of car safety equipment (intelligent seat belts, irbags, etc. ). The focus for Autoliv is choosing partners who have a commitment to actively work with the development of safety in cars. As it is the case with Bosch, Autoliv would gain from collaborations by sharing costs for R&D. Emotional incentives are also important for the company and play a certain role in choosing partners for a new project, according to Autoliv. The image of the car manufacturer is important; therefore, the company strives to share development with car manufacturers in the premium segment† (Mats Odman, Autoliv).To summarize, according to the incentive model, both Bosch and Autoliv offer sufficient incentives, both from partner brand as well as from the leader brand perspective. 6. Results: Transferring successful ingredient branding to the car industry The authors have taken into account the findings from the secondary sources of Moon (2002), Aaker (1996), and Keller (2003), all of which present a deeper analysis of ingredient branding strategies, an d have compared these findings with the information from the car suppliers Bosch and Autoliv.We first want to emphasize that successful companies invest in and put the brand first. Moreover, the most effective strategy for a company is to become a brand-driven organization (Kotler/Pfoertsch, 2006). These companies not only differentiate themselves through their technology, but also through their level of service and through all employees working effectively towards the success of the brand, and thus, the company. In addition, ingredient branding is a form of multi-stage branding (Baumgarth, 2001). Therefore, the whole value chain, from (ingredient) producer to the final customer, needs to be considered.In the case of Bosch or Autoliv, the retailer, the producer of the final good, and the final customer need to be connected. This implies that all downstream markets need to be part of the strategy. Hillyer/Tikoo proved that consumers are cognitive misers (Hillyer/Tikoo, 1995). This me ans that consumers simply trust that a well-known manufacturer would not allow itself to collaborate with a low quality supplier. This has been proven with the success of Intel. Customers simply transferred the decision making to the computer manufacturers by trusting that the manufacturers have chosen the right microprocessor supplier, Intel.In terms of transferring these findings to the car industry, Autoliv could step into the shoes of Intel. Autoliv could act as a retrieval cue (Hillyer/Tikoo, 1995) for potential car buyers, where the car buyer trusts the car manufacturer to have picked a trustworthy brand in the area of car safety. Also, for a successful ingredient branding strategy, it is crucial that the right opportunity in time be identified. If we look at the success of Intel, often regarded as one of the most successful ingredient branders, one aspect that is different between Intel and the automotive industry is the timing of the ingredient branding.The computer industry matured during an era when computer sales were strongly on the rise accompanied by a period of increasing sensitivity to the value of branding (Cook, 2003). The car industry is already mature, therefore, the timing is not optimal for an ingredient brand strategy: â€Å"It would be great to replicate [Intel’s success in the automotive industry], but it’s 80 years too late to do it† (Klaus Deller, Bosch Group, in: Cook, 2003). The authors want to stress though, that even the car industry will offer windows of opportunities, especially when supplier come up with decisive inventions and innovations.Another factor to consider is that In contrast to the situation like Intel, where producers were actively looking for co-operations, car manufacturers often want to control their brand image and are currently not actively seeking brand collaboration with supplier. This fact makes the ingredient branding strategy even more complicated to implement. A solution to this woul d be for suppliers like Autoliv and Bosch to adopt a pull strategy by creating consumer demand.The pull principle is also the basic underlying concept that is best suited for ingredient branding, meaning that the ingredient manufacturer directly addresses the final customer (Pfoertsch/Schmid, 2005). Bosch is, through its automotive advertising campaigns in 2006 and 2007, on its way to utilizing such a strategy. Building strong association could even be implemented into the car industry. The OEM’s in the car industry could effectively promote their associations, which in the case of Bosch could be ‘braking safety’ (ABS, ESP), and ‘passenger safety’ (Airbags), in the case of Autoliv.The authors conclude that it is entirely possible for auto suppliers to establish an ingredient branding strategy. Bosch and Autoliv proved to have substantial possibilities for ingredient branding. This conclusion can be drawn through congruence of findings of the empirica l research with theory. It is vital to the success of the strategy, though, that the whole organization not only strives for the same objective, but also consistently delivers the brand promise. Only with this â€Å"quality thinking† in the organization, can an ingredient succeed in the final industrial good.And – not to forget – it is time-consuming to create and establish a brand. Therefore, the overall strategy needs to be a long-term engagement in the marketing and branding investment. 7. Suggestions for future research This paper has examined the question of ingredient branding as a viable strategy for producers of industrial goods. In particular, we tested automotive suppliers Autoliv and Bosch (Norris, 1992; Keller, 2003; Riezebos, 2003). Since the scope of this paper could only cover the basics of this question, it would be interesting to go deeper into other aspects.A question for further research would be to find out how a model of the appropriateness of ingredient branding could be derived. Further research could cover even more industry segments in B2B marketing, thereby giving deeper insights into why certain industries have seen companies with successful ingredient branding, while others have not. Additionally, to discuss questions about an implementation strategy for ingredient branding needs more insight and research, including a possible guideline for companies that have decided to brand its ingredient.Examples from other industries could also be examined since the implementation process is very complex and many aspects need to be considered. Literature Aaker, D. A. , and Joachimsthaler, E. , â€Å"Brand Leadership†, The Fress Press, New York, 2000 Aaker, D. A. , and Keller, K. L. , â€Å"Consumer Evaluations of Brand Extensions†, Journal of Marketing, 54, January 1990, pp. 27-41 Aaker, D. A. , Building Strong Brands, The Free Press, New York, 1996 Baumgarth, C. , Ingredient Branding. Begriff und theoretische Begrundung, in : Esch, F. -R. : Moderne Markenfuhrung, Wiesbaden 2001, p. 17-343 Blackett, T and Boad, B: Co-branding, the Science Of Alliance, Macmillan Business, Interbrand, England, 1999 Blackett, T. , The Nature of Brands, in: Murphy, John, Brand Valuation, Hutchinson Business Books, 1989, pp. 1-11. Cook, B. , Can Bosch spark its OEM brand? , www. brandchannel. com, 2003 Cooke, S. , and Ryan, P. , â€Å"Brand Alliances: From Reputation Endorsement to Collaboration on Core Competencies†, Irish Marketing Review, Vol. 13, 2000, p. 36-41 Hillyer, C. , and Tikoo, S. , â€Å"Effect of Cobranding on Consumer Product Evaluations†, Advances in Consumer Research, Volume 22, 1995 Kapferer, J. -N. Reinventing the Brand, Kogan Page, London, 2001 Kapferer, J. -N. , â€Å"Strategic Brand Management†, Kogan Page, London, 1992 Karolefski, John, â€Å"Intel Outside†, www. brandchannel. com, 2001 Keller, K. L. , â€Å"Conceptualizing, Measuring, and Managing Customer- Based Brand Equity†, Journal of Marketing, January 1993, pp. 1-29 Keller, K. L. , Strategic Brand Management: building, measuring, and managing brand equity, Prentice-Hall International (UK) Limited, London, 1998 Keller, K. L. , Strategic Brand Management: building, measuring, and managing brand equity, Prentice-Hall International (UK) Limited, London, second edition, 2003 Kotler, P. et al. , Principles of Marketing, Prentice Hall Europe, 1996 Kotler, P. , and Pfoertsch, W. , „B2B Brand Managementâ€Å", Springer, Berlin/Heidelberg 2006 McCarthy, M. S. , and Norris, D. G. , â€Å"Improving Competitive Position Using Branded Ingredients†, Journal of Product & Brand Management, Vol. 8, Nr. 4, 1999, pp. 267-285 Moon, Y. , â€Å"Inside Intel Inside†, Harvard Business Review, October 15, 2002 Norris, Donald G. , â€Å"Ingredient Branding: A Strategy Option with Multiple Beneficiaries†, The Journal of Consumer Marketing, Vol. 9, No. 3, 1992 Park, C. W. , Jun, S.Y. , and Shocker, A. D. , â€Å"Composite Brand Alliances: An Investigation of Extension and Feedback Effects†, Journal of Marketing Research, Vol. 33, 4, 1996, pp. 453-466 Pfoertsch, W. , and Schmid, M. , „B2B-Markenmanagement: Konzepte – Methoden – Fallbeispieleâ€Å", Franz Vahlen, Munich, 2005 Pfoertsch, W. , and Mueller, J. Die Marke in der Marke Bedeutung und Macht des Ingredient Branding, Springer, Berlin/Heidelberg 2006 Riezebos, Rik, â€Å"Brand Management: A Theoretical and Practical Approach†, Pearson Education Limited, 2003 Simonin, B. L. , and Ruth, J. A. â€Å"Is the Company known by the Company it keeps? Assessing the Spillover Effects of Brand Alliances on Consumer Brand Attitudes†, Journal of Marketing Research, Vol. 35, February 1998, pp. 30-42 Uggla, H. , â€Å"The Brand Association Base: A Model for Strategically Leveraging Partner Brand Equity†, Unpublished Paper, 2003 Uggla, Henrik, †Managing the Bra nd-Association Base†, Akademitryck AB, Edsbruk, 2000 Uggla, H. , †Organisation av varumarken†, Liber Ekonomi, Malmo, 2001 Uggla, H. , †Varumarkesarkitektur – strategi, teori och kritik†, Liber Ekonomi, Malmo. 001 ———————– [1] Waldemar Pfoertsch – Professor of Business Marketing – CEIBS China Europe International Business School Shanghai – Hongfeng Road Shanghai – 201206, China – Tel: +86(21) 28905662 – [email  protected] edu and Professor of International Business – Pforzheim University – Tiefenbronnerstrasse 65 – 75175 Pforzheim, Germany [2] Johannes Rid, National Sales Manager, Pirelli Tyre Nordic AB, Gustavslundsvagen 141, P. O. Box 14147, 16714 Bromma, Stockholm, Sweden,Tel: +46. 8. 6220850, Fax: +46. 8. 7550941, johannes. [email  protected] et [3] Christian Linder – Research Assistant – Pforzheim Business S chool – Pforzheim University – Tiefenbronnerstrasse 65 – 75175 Pforzheim, Germany – Tel: +49 7231 28-6466, christian. [email  protected] de ———————– Bosch: Expand the legitimate territory Emotional incentives Functional incentives Bosch: Expand value proposition, modify brand personality Bosch: Engineering core com Autoliv: Core competence in car petence safety Partner brand perspective Leader brand perspective Bosch: Cost efficiency (R&D), Short cut to awareness and distribution. Autoliv: Cost efficiency (R&D)Institutional Associations Image Transfer Identity Transfer Customers’ image of the brand Leader Brand Associations e. g. Mercedes-Benz: Enduring Passion [pic]*fgyz}†°S? z  Ã‚ ©? iO?  ©i? i~? i? hM8([email  protected]>zhuT;CJOJ[4]QJ[5]^J[6][email  protected]>zhuT;5? 6? CJOJ[7]QJ[8]? ]? ^J[9][email  protected]>zhuT;5? CJ,OJ[10]QJ[11]^J[12]aJ,mHsH#[email  protected]>zhuT ;6? OJ[13]QJ[14]^J[15][email  protected]>zhuT;0J6? OJ[16]QJ[17]U[pic]^J[18][email  protected]>zhuT;5? CJ,OJ[19]QJ[20]^J[21]aJ,[email  protected]>zhuT;CJ OJ[22]QJ[23]? ^J[24]aJ mHsH. [email  protected]>zhuT;5? CJ OJ[25]QJ[26]? Partner Brand Associations Bosch: Innovation, quality Autoliv: Safety Association base fit

Hierarchical Analysis of Industries

Hierarchical Analysis of Industries Classes, categories, forms, brands Product hierarchy is a term which defines the way a product is relative to other products in the same industry. It guides the path and process a consumer takes to determine the products we choose and we eventually purchase. To start off we look at a basic need that our ultimate choice serves. After we identify the need and determine which industry will satisfy it we are faced with decisions. Which class of products in that industry will deliver that type of product?The different classes all serve a need that is relative to each other but may not serve the specific need. This is where we identify which category of product we are looking for. Here we will find products that serve similar functions and may be marketed to the same customer groups. To further narrow down our choices we must then select a product form that may serve a specific function. This is where we find the exact product that fills the ultimate nee d. Finally we make our end choice by choosing the brand of that product that will purchase.The actual number of levels in the hierarchy depends on how much more detailed or defined the need is. For example if someone wants soap and their only need is to clean something generic, they wouldn’t dig deeper into the types of soap they are looking for rather than looking for a specific type of cleaning agent for granite counter tops for example. To further explain and give examples of how a product falls into a product hierarchy I will look at five different industries. 1. In the first instance the consumer’s end goal is to open a checking account and the basic need is security.Industry Finance| Class| Savings| Diversified Investments| Insurance| Real Estate| Category| Bank/Credit Union and Online or in person| | | | Form| Checking, Savings, CD’s, Credit Cards, Bill Payment| | | | Brand| CHASE| | | | A consumer would first decide which area of the industry they need. The industry is divided into 4 classes: Savings, Diversified Investments, Insurance and Real Estate. Since our need falls under the first class of â€Å"Savings† it is not necessary to break down the other branches of the industry and explain all the choices they have.In order to open a checking account for example they would decide at the class level what type of institution would suit their needs. At the category level there are choices such as, should you use a credit union or a traditional commercial bank. Both serve the same general service but credit unions tend to be smaller and more community or organization oriented. They might be affiliated with a certain geographic area or group of professionals like teachers for example. They are also non-profit financial institutions owned by their members and run by a board of directors which are typically their members.They appear to offer a more personal service which is their point of marketing it. Banks could be as small as community based or as large as national organizations but they are for-profit businesses. The board of directors of a bank is chosen by the stockholders (private investors). Also will you need on-line or in-person services. There are many institutions which advertise to fill the needs of one or the other (or both) of these consumers. For example a business professional that travels often would not have the time to physically stop by a bank branch to take care of their needs.In this case, a full service on-line institution would better serve that customer. The customer who needs to sit down with a customer service representative to assist them in some way would possibly choose a bank branch for in-person service. Once that decision is made a customer would determine which specific form of the product is necessary. In this industry for example, a customer might be looking for service in checking, savings, certificate of deposits, mortgages or bill paying, etc.At this level I believe t he company uses marketing strategies to show the benefits of their brand and the attributes of their products which ultimately will help the consumer choose a specific brand or in this case institution such as CHASE BANK for example. 2. The end goal is to purchase running shoes but the basic need we are looking to fill here is to clothe ourselves. Industry Apparel| Class| Men’s wear| Women’s wear | | Children’swear| Category| Clothes/ Shoes/ Accessories| | | Form| Casual/Dress/Athletic| | | Brand| Asics| | |The general industry that running shoes are in is the Apparel industry. The class that this need falls into could be either men’s, women’s or children’s apparel. A similar need can be met in either of these classes but for a different target market. There is no substitutability at this level. In this particular instance it would be a straight forward decision based on the gender of the person who needs the product. At the next level a con sumer will have specific categories that their item will fall under. All the items at this level serve a more defined function; in this case they would be to clothe us, but just at the overall level.This is a good example of how an industry hierarchy can have many levels. Within each of the different items that fall in this category there are many choices you may have to get to fulfill the ultimate need before you even pick the specific form of the item. For example, Clothing is one type in this category but within this you may have to decide from outerwear, underwear, pants, skirts, dresses, shirts, etc. Accessories are even broader encompassing everything from hats to belts, scarves, ties, socks and so on. The category level that running shoes fall into is shoes. Once we know exactly what we want we decide on the specifics.This is the product form and where our running shoes fall. If we were looking for casual shoes, dress shoes, sandals or athletic shoes we would make that decisi on at the form level. You cannot substitute different forms at this level because they would not serve the purpose intended. You could not wear dress shoes to go jogging. Once again the detail of this level is open for discussion because there technically are more options once we select the athletic footwear since running shoes are just one type. There are endless types available based on the activity they are being used for.Finally we may choose a brand such as Asics based on brand awareness. 3. The basic need we are looking to fill here transportation but the end goal is to purchase an automobile. Industry Transportation| Class| Ground-Auto/Rail/Bus| Sea- Ship| | Air- Planes| Category| Cars/trucks/vans or motorcyclesCommuter trains/cargo/ orPassenger bus, charter bus| Cruise ships/ cargo/yachts/sailboats| Private/commercial| Form| 2 door, 4 door, sedan, hybrid, convertible| | | Brand| Honda| | | The transportation industry is broken down into 3 main classes: ground transportation which is auto, rail or bus; sea/ships or air/planes.All choices result in the movement of goods or people but depending on the purpose one might choose one over another. In this instance the end result is to purchase a car so we will just look at ground transportation. The main categories within the auto class are cars, trucks, vans and motorcycles. Since these different forms of transportation are pretty cut and dry we know that vehicle we wish to purchase will be met in the car category. The Form level is where substitutability is introduced. We now have choices of the type of vehicle we wish to purchase such as cars/trucks/vans/SUV/motorcycles, etc.Of course, we can further break down the type cars by 2 door, 4 door, sedan, hatchback, etc. There is great substitutability at this level depending on our need and taste. Finally our ultimate choice is based on brand which has strong customer loyalty in the auto industry. 4. The basic need in the publishing industry is to inform and e ducate the consumer and our purpose is to purchase a newspaper for example. Industry publishing| Class| Books| Periodicals | | CommercialPrinting services| Category| Literature/manuals/text ooks| Newspapers/magazines| Brochures/flyers/catalogs| Form| paper/digital/internet based| paper/digital/internet based| paper/digital/internet based| Brand| | Newsday| | All the items in the class category of publishing serve a need that is similar to each other which is to inform us but in a very general way. They may not meet our specific need. We have to select the category that our meets our needs. Books are acquired and saved as entertaining or reference items whereas periodicals are used to inform us.The commercial end of publishing usually has a different end user like a manufacturing company or business that is looking to advertise or get knowledge out to the consumer. At the next level the consumer will decide which of these categories best suits their needs. Here the choices involve wh ich mode type of publication would be necessary. Either books/periodicals/brochures, etc. The form which is chosen will differentiate the mode by which we will use the product. There is more product substitutability at this level because consumers may us different mediums of obtaining the same information.For example by paper print/internet/digital and finally the brand choice could be based on the loyalty of a company like a newspaper you always read and purchase. 5. The basic need is for personal care and the specific purpose in this case is to buy shampoo. Industry Personal care| Class| Cosmetics- luxury items| Personal Hygiene- essential items| | | Category| makeup/perfumes/beautification products| skin care/hair care/oral care| | Form| lipstick/body spray/hair removal/| toothbrush/toothpaste/soaps/deodorant/shampoo| | Brand| Revlon| Pantene| |We can differentiate the personal care industry by determining wants (luxury items) and needs (essential items). There is a small margin dividing these classes based on what you perceive as an essential item. In this instance shampoo is considered essential so it falls into the personal hygiene class. The items in the category class all serve a similar function but cover a wide variety of needs. To be more specific, all skin care items may be marketed to the same consumers but they may not serve a specific or desired need.To seek the actual product we are looking for we must determine which form of the product is required. Within the hair care line we can distinguish between moisturizing, body or dandruff shampoos for example. And ultimately we choose the brand based on pricing, product loyalty or other brand choice factors. Before we make a conscious decision to make a purchase, many of our decisions are made for us based on our needs. We decide which class and category of a product we choose to fill our basic need and then differentiate our choices based on what form of the product we eventually purchase.Finally w e choose a brand based on how these products are marketed to us. References: http://en. wikipedia. org/wiki/Global_Industry_Classification_Standard http://www. citeman. com/1587-product-hierarchy-and-product-line-length. html https://getsatisfaction. com http://www. msci. com/ http://www. wdfi. org/wca/consumer_credit/credit_guides/DifferencesBanksCreditUnionsSavingsInstitut http://www. ions. htm http://www. prospects. ac. uk/industries_publishing_overview. htm

Case Study: a Perky Way to Productivity Essay

1.The importance of employee benefits as a strategic component of fulfilling the goals of HRM is to produce quality workers and to keep turnovers at a minimal. Although many benefits are not legally required, it is important for companies to keep up with competition and know how to get and keep their employees. Working as a Human Resource Manager I must know what motivates and attracts quality workers, with most the paycheck is just not enough, they also require benefits or perks to stay or come with a company. Using benefits as a strategic component helps enhance the effectiveness, morale, productivity and achievement of goals. Employees tend to be more motivated to work when they feel they are attended to. When they can feel that they have benefited from the organization, they become loyal to an employer and will stay from moving to other organizations. Savings due to retention overthrown the benefit costs thus make the organization a workplace with more income. Through employee benefits, goals to fulfill goals of HRM are achieved in efficient and effective ways. I wouldn’t want to run the company as a tyrant any ways and one must make their employees happy as rewards for all their hard work to help you achieve the company goals. The company wouldn’t lose out of this if set up properly. If profit or production is not high enough then perks/rewards/benefits couldn’t be offered. The employee would have to have stipulations but both side benefits as long as work is being produced. 2.Genentech and Zappos are using employee benefits as a motivating tool by offering benefits that keep them from being distracted and to not worry. Obviously Genentech has done a great job of this by celebrating their 11th year on Fortune’s â€Å"Best Places to Work† list. This company understands it takes more than just money to motivate their workers. The desire of being accepted and appreciated is equally if not more important, and Genentech has found ways to show its’ employees this and more. Genentech keeps their workers from being distracted or keeps their employees secured so they can concentrate on producing for Genentech such as, unlimited sick leave, onsite nurses, & so many more things. An undistracted employee is most likely a safe employee and stay focused in work activities. While at Zappos they give their employees on-site child care, on-site lunches, & sending employees home with prepared dinners as rewards for longevity that their employees put in. Zappos motivates their workers to put in the hours and in return their meals are prepared for them so no worries on taking the time to figure out what to eat and getting it prepared, it’s no done all for them. Some employees won’t have to worry about rushing to pick up their kids at the sitters or if they see their kids enough, they can actually bring their kids to work and they are there with them†¦in a sense. This takes such a weight off some employees they can concentrate completely on work and producing. 3.I believe the incentive benefits such as those offered at Genentech and Zappos can be used in other organizations. They can implement the exact same benefits or change it up so it actually benefits their employee’s wants. In their organization. Most companies already know that the happier their employees are the more they produce and work for the company. Of course with every good thing there will be the share of those that try to take advantage of the benefits but in the most part in works and produces positive outcomes. However not every organization will use the same benefits package, they would have to see what‘s in their budget and what would make their employees happy. Also, I found in a few companies that benefits are not offered and they have a few loyal employees. I tried to figure this one out and it just seems the relationship is family like with owner, as a comfort level has been built. I guess in a way this would be a benefit because things can be excused from being so close. But once again it goes into a happy employee produces well and works well.

Two Old Women book review Essay Example | Topics and Well Written Essays - 500 words

Two Old Women book review - Essay Example Wallis had written the book sensitive based on the aspect of womanhood and nature that had been presented to retain survival within the members. The book is vital to predict the events that lead to the seclusion of selected societal members in an attempt to adjust to the harsh environmental challenges faced within unstable societies. Wallis’ short book had been written to predict the events that had occurred following the decision by a tribe to abandon two elderly women, following a natural calamity that threatened the development of their society. The events had been followed by the decision of the tribe to witness their reduced participation towards healthy development in the tribe. Wallis explains that these women had been linked to complaining instead of providing positive ideology to assist in eliminating the challenges. The book explains the ability of a stable societal system to make the decision to protect sensitive members within the system and encourage hard work through harsh subjections. The elderly women had been alienated despite their condition due to the burden that they would present to the new society. The decision had been made due to the harsh famine that had plagued the land. Despite the decision to abandon the women due to their condition, the result is unexpected because they apply determination and friendship to overcome the challenges. The community had made the decision to abandon the women because they had been considered a setback to the development within the new land that the tribe sought to create. The decision had been made because they had been considered weak and would not last the extreme famine witnessed. However, the twist in the story is realized when the women manage to overcome these challenges and plough through the burden that had been subjected upon them. Ch ‘idzigyaak and Sa’ managed to articulate solutions to present survival measures. Through the help of the daughter and her grandson, Ch

Computer crimes,ethics, and privacy Research Paper

Computer crimes,ethics, and privacy - Research Paper Example The advent of computers and internet in our daily life has given rise to computer crimes, illicit activity that is carried out by the help of computers, and these crimes have had a ponderous impact on the moral values of the people, especially adolescents. In this paper we will attempt to highlight some computer crimes and explain how these crimes give rise to ethical issues. Also a detailed discussion will be made on the breach of privacy through computer crimes. The paper talks about computer technology and ethical issues it poses therefore it is perfectly related to the chapter. Computer Crimes Computer crimes are formally defined as crimes that involve a computer and a network (Moore, 4). Crimes that are carried out by the help of a computer or where computer is the target also come under computer crimes. The word cyber crime is also used interchangeably for computer crime. The most common of computer crimes include identity theft, financial theft, spamming, and breach of privacy . There has been seen a surge in cyber crimes mainly due to the increasing reliance on computers and network. Almost everything is run by computers these days and therefore can be targeted by cyber criminals. Malware (short form for malicious software) is the most prevalent form of computer crime where a person controls a computer by planting some malicious code. The attacker can install or plant the code on a system and then can enjoy great access to the computer without authorization of the user (Skoudis & Zeltser, 2). Common types of Malware include Virus, Trojan, and Worm. Malwares are used to gain access to computers, sometimes just for fun. They can delete important files and can also slow down the speed of the system. Identity theft is another computer crime that can make life of a computer user miserable. The effects of this computer crime are more ponderous than Malware as it can financially hurt the individual. Identity theft involves stealing information of extremely pers onal nature in order to use it for some benefit. Mainly hackers try to gain access to bank account passwords, credit card numbers etc to steal money from the users. The crime of identity theft is extremely prevalent and many people lose their money on a daily basis as a result of it. E commerce has given users opportunity to shop online using credit cards and online merchant accounts. This has in turn increased the chances of identity theft. Other computer crimes include cyber stalking, spamming, and child pornography. Cyber stalking refers to the use of internet for stalking purposes by using personal information of a person. Cyber stalkers use internet to repeatedly harass a person and therefore it is listed as a computer crime (Pot, 1). Spamming refers to the bulk messages that are sent to users. These are unwanted messages that fill the inboxes of users. Spamming is a big business for many people and causes problems for users. Child pornography is also propagated through interne t and it is a serious offense. Children are left vulnerable because child pornography has become a business today through internet. Ethical Issues Involving Computer Crimes Computer crimes pose many ethical issues for the society. The main problem of computer crimes is that they are mostly conducted by teenagers or young people in general. This has posed many problems for the society at large. Younger generation is the

Tate Modern Museum - Poetry & Dream Wing Essay Example | Topics and Well Written Essays - 2000 words

Tate Modern Museum - Poetry & Dream Wing - Essay Example hough the impressive ground-floor galleries are dedicated to the display of contemporary works, they read as modernist museum spaces.†2 This recognition indicates that the museum itself functions more than merely a space for hanging and featuring of art, but actively participates in the art creation process. This essay specifically examines the Tate Modern’s ‘Poetry and Dream’ wing within the context of a variety of evaluative criteria. In examining the Poetry and Dream wing, one recognizes the strong significance of the museum’s curator. Curators are accountable for the feel of Tate Modern Museum and the conceptual presentation of artworks within the wing. The architects in the wing must direct all the interpretations of the constructions they plan, not the artworks housed in them. Like every museum, they require to react and adapt to the numerous kinds of forces shaping the current world. Art museums nowadays face numerous challenges. The ideology and philosophy of the art museum nowadays consists of the implications of increased  internationalization. One considers that with the multi-varied artworks implemented in the Poetry and Dream wing reflect many of these concerns. The ‘Poetry and Dream’ gallery wing displays the exhibits thematically, rather than chronologically. Contemporary art is juxtaposed with modern. Though recently it has been re-ordered, it still retains most of the patterns in accordance with the thematic display. The present arrangements provide the viewer an idea of modern art transcending the contemporary, as different movements within art forms fill the transformation. Still, one considers Barker who argues that, â€Å"by isolating objects for purposes of aesthetic contemplation, it encourages the viewer to project on to them meanings and values that have no real basis in the objects themselves.†3 Although such ‘fetishism’ as he terms it is a danger of such analysis, this research ahs worked towards drawing tangible and

Sustainable Energy Applications Discuss Solar Energy Essay

Sustainable Energy Applications Discuss Solar Energy - Essay Example growth in the field of solar energy is remarkable due to the improvement of technologies and by the support provided by the policies implemented by the government in the field of development of solar energy and its use (Timilsina, Kurdgelashvili, and Narbel). There are mainly 2 types of technologies to generate solar energy, and they are: solar thermal and solar photovoltaic (PV). The former deals with the conversion of solar radiation to heat, or also called as thermal energy, and the latter is the technique which deals with converting sunlight directly into electricity (â€Å"Chapter 10: Solar Energy† 263). The solar thermal technology is again divided into two such as solar thermal non-electric and solar thermal electric (4). Solar thermal non-electric technology is used in solar cookers, solar water heaters, solar air heaters, solar coolers, agricultural drying, etc. On the other hand, solar thermal electric technology is the method of directly using solar heat for the production of steam for generating electricity, which is otherwise known as concentrated solar power (4). Currently 2 types of PV technologies are present in the market, namely thin film technology made up of different types of semi-conductor materials such as cadmium telluride, copper indium gallium diselenide, amorphous silicon, etc., and the second technology is called crystalline silicon-based PV cells (4). The history of solar energy begins between 1860 and the First World War, when a wide range of techniques were established to generate steam by obtaining sun’s heat so as to run the irrigation pumps and engines (4). In 1954, at Bell Labs in the United States, Solar PV cells were used for generating electricity in space satell ites (Timilsina et al. 4). The energy provided by the sun can be directly collected and used to make high temperature steam, i.e. more than 1000 C, and low temperature steam, i.e. less than 1000 C (Energy Technology Fact Sheet). These methods are implemented in

Analysis Essay Example | Topics and Well Written Essays - 1000 words - 3

Analysis - Essay Example ther in the story A Good Man is Hard to Find does convey moral depravity and wavering throughout the story, which emphatically comes out as an anathema to the Misfit, who irrespective of being a criminal, does depict much moral consistency and commitment. Right from the start of the story the Grandmother comes out as an individual, who doesn’t mind manipulating and cheating her family members, irrespective of claiming a so called moral uprightness. She time and again tries to manipulate her son Bailey into going to Tennessee, just because she does not want to go on a trip to Florida. She even tries to scare away Bailey by intimidating him with the Misfit on the loose as she says â€Å"I wouldn’t take my children in any direction with a criminal like that aloose in it. I couldn’t answer to my conscience if I did (O’Connor 1).† Even when she decides to join the family on their trip, she jilts them by hiding her cat in the car, just because she knew that Bailey would not allow the cat on the trip. No doubt this very cat becomes the cause of the fateful accident that eventually ended up in a bloody tragedy. For the grandmother, morality is a ploy for manipulating and moving people, rather than being som ething that one actually practices and cherishes in one’s life. She even goes to the extent of enticing the children with the idea of the hidden silver so as to make them force Bailey to turn on the dirt road that led to the mansion she so badly wanted to visit. The grandmother regards morality to be a matter of appearances and perceptions, instead of being a way of life. It is indeed true that the grandmother in the story A Good Man is Hard to Find is a moral chameleon who dons a moral persona to cheat others and to get people influenced by the perception of morality she creates. For instance one comes to know in the story that the grandmother while going on trip is immaculately dressed in impressive fineries just so that, â€Å"In case of an accident, anyone

Unions Recruit New Allies for Obama in Battleground States Case Study

Unions Recruit New Allies for Obama in Battleground States - Case Study Example Unions Recruit New Allies for Obama in Battleground States This article by Steven Greenhouse is very insightful and it gives a general overview and perspective of the role of the trade unions in the 2012 us presidential campaigns. The article gave an account of the role the labor unions have played in this campaign to ensure that Barrack Obama is re-elected the next president of the United States. It gave the opinion of the union leaders and event organizers whom they were very enthusiastic about how the unions are growing stronger and shaping the politics of the United States. The labor unions are more concentrated on the battle ground states of Ohio and Wisconsin. Teachers mainly from Chicago which is the election center for barrack Obama are very enthusiastic about this. The union members are large in number with a figure of 67, 176 knocking at the doors of residence of Wisconsin. Sandy and Elaine were just part of that 67, 176. The unions are trying to reassert themselves after realizing that they couldn’t influence much during 2010 election that were held in some states that include Ohio. This all effort is more of a strategy to regain relevance in the elections that they influence so much especially in 2008. The unions did play a big role in the election of 2008 and eight, when they campaign for election of Barrack Obama. They have seen that the re-election of the same candidate they campaign for in 2008 is not forthcoming so they have to quickly spring into action. They have for the past two years been actively involved in these campaigns mainly in Ohio and Wisconsin.... These have helped them a great deal because they can now reach out to more people. Given that union members account for only 12% of the population of the United States their constituency have now increased tremendously. Unlike in the past where they reach out to few people per hour they can now reach out to huge number of population in just an hour. They have also good strategy whereby they have been able to bring together members from different groups to join them. The republican side is however of different view and that the unions have lost the control it had in 2008. Sara Fagen, who worked under George W. Bush said that the members no longer fully support the union and no longer swayed by the union decision to support a particular candidate because they feel the have been pressed economically by the union who drew from them to run this campaign. The union according to the republicans is funding the campaigns at the expense of the workers. They claim also that Obama have not stood up to them by not actualizing the â€Å"card check† bill that could have helped them a lot. The union members have however fought for the union members especially by seeking the reversal of the law that deprives the employees of their bargaining rights. They were then to suffer another set back after their effort to oust the governor of Wisconsin proves futile. Scott walker the republican retains the seat as the governor of Wisconsin. The union have though rise with 30 unions joining the course. There are though regular setbacks and frustration on daily basis that often face the union members. They most of the times don’t find response from 2/3 of the homes they contacted so they are left with little to do other than to left notes urging the members of

Sensory Perceptions Essay Example for Free

Sensory Perceptions Essay Three reasons for believing in the accuracy or inaccuracy of sensory information is perception, interpretation, and knowledge. Perception is our sensory experience of the world around us and involves both the recognition of environmental stimuli and actions in response to these stimuli (Bagley, 2004). Through the perceptual process, we gain information about properties and elements of the environment that are critical to our survival. Perception not only creates our experience of the world around us, and it also allows us to act within our environment. Interpretation is a communication process, designed to reveal meanings, and relationships of our cultural and natural heritage, through involvement with objects, artifacts, landscapes and sites. Interpretation is how we perceive certain situations through our own thoughts and beliefs. Knowledge is a familiarity with someone or something, which can include facts, information, descriptions, or skills acquired through experience or education. It can refer to the theoretical or practical understanding of a subject. It can be implicit (as with practical skill or expertise) or explicit (as with the theoretical understanding of a subject), and it can be more or less formal or systematic. The definitions of perception, interpretation, and knowledge are closely entwined when it comes to the accuracy or inaccuracy of sensory information because people perceive all information differently. People have different interpretation of life and how they view certain topics. What may be true to you may not be true to me. Knowledge depends on the experience level of the person involved. Sensory data is your senses, which are seeing, hearing, touching, smelling, tasting, and feeling of motion, movement, and gravity. All this information from our senses is collected in the brain, then organized and used for all of our activities. According to Kirby/Goodpaster, 2007, our senses do not operate effectively when we are sick, drowsy, or tired. The world is not always what it seems on the surface and therefore our perception becomes misconstrued. Because our brain feeds and process information about sights, sounds, textures, smells, tastes and movement in an organized way, we put meaning to our sensory experiences, therefore, we are able to respond and behave accordingly. We may not see the world as it is that’s where accuracy of sensory information is determined. False information can be provided with just alone senses but working together with the accuracy of sensory information will make the chances greater. Three reasons to believe in the accuracy of sensory information are; the ability to use our senses to provide data so that our brain can identify the truth senses help tie the brain and emotions together, and gives the mind the potential to determine what reality is. The reasons listed above are extremely important when it comes to the accuracy of sensory information because there will be consequences that would mean you’re changing the world around you. The idea of subjective reality asserts that reality and of the â€Å"truths† in the universe changes between individuals (Kirby Goodpaster, 2007). Meaning, although there may be objective truths in the universe, each person perceives these truths and experiences them differently, and because of everyone’s own unique perspective of the world, each lives in their own world existing in an altered state of objective reality (Kirby Goodpaster, 2007). Sense perception all comes down to being able to exist in a world we know it. Sensory data relies heavily on experience. So therefore, nature and nurture plays a role in a person’s behavior. A person may be born with the same behavioral patterns as their parents, but it might take a certain experience to make the behavior come forth. The different situations people experience makes a huge difference on their sensory data. They may change their perceptions based on the good experiences and bad experiences in their life. It is appropriate to separate the contributions of genetics and experience when measuring the sensory data among individuals because every individual carries different genes and is also raised differently. Nature and nurture will always be an issue, because there is no way of telling what affects a person more. We are all different and I don’t believe that we are supposed to figure out why we are the way we are.

Differences Between Linear Block And Convolutional Codes Computer Science Essay

Differences Between Linear Block And Convolutional Codes Computer Science Essay Generally the coding theory is the detailed analysis of the properties of the codes and their suitable quality for the identified application. Codes are mainly used in cryptography, error correction , data compression and now a days it is also used for the network coding.this coding generally involves with the linear block codes, convolutional codes, turbo codes respectively. LINEAR BLOCK CODES: In coding theory, the linear block code generally referred as a error correcting code for which the obtained resultant codeword is the linear combination of any two codewords. In simple words, the linear block code possesss the linearity property that is the sum of any two codewords is also a codeword. These linear block codes are divided in to the block odes and convolutional codes, eventhough turbo codes is the combination of these two types. More efficient encoding and decodig algorithms are provided by the linear codes when compared with the other codes. (http:// en.wikipedia.org/wiki/linear codes). CONVOLUTIONAL CODES The main principle involved in the convolutional code is the weighted sum of the various input message symbols is the resultant codeword symbol. This resemblance the convolution used in the LTI systems where we find the output of a syatem by knowing the impulse response and the respective input. So hence the output of a convolutional encoder can be obtained by the convolution of the input bits with the states of the convolution encoder registers.(http://en.wikipedia.org/wiki/convolutional codes). TURBO CODES In 1993, turbo codes are developed which are the class of high performance forward error correction codes and they are also the first practical codes to come nearer to the chgannel capacity for the code rate at which reliable communication is still possible while a specific identified noise level is given. Berrou glavieux and thitimajshima introduced these turbo codes in 1993 in their paper named near Shannon limit error correcting and decoding : turbo codes. Once after the introduction of these parallel turbo codes many other types are discovered which mainly includes repeat accumulate codes, serial versions. Even the conventional FEC systems are also been applied by the iterative turbo decoding methods. (http://en.wikipedia.org/wiki/turbo ) 2. CORE OF THE PAPER 1. PRINCIPLES OF THE LINEAR BLOCK CODES A block code of length n and codewors is said to be a linear(n, k) code if and only if the k dimensional subspace of the vector space is formed by all the codewords of all the n- tuples over GF(2). A linear code of length n and rank K is the linear subspace C with dimension K of the vector space where is the finite field consisting of the q elements. Such tytpe of a code with parameter q is called a q ary code. The code is said to be as binary code or ternary code if and only if q =2 or q=3 respectively. Linear block codes are briefly described by their symbol alphabets (example: binary, ternary) and with parameters (n,m, ) where n is the codeword length in symbols. m is the total number of source symbols which are used for encoding. is the codes minimum hamming distance. Linear block codes are of many types they are: Cyclic codes Repetition codes Parity codes Polynomial codes Reed Solomon codes Algebraic geometric codes Reed muller codes Perfect codes. A. GENERATOR MATRIX AND PARITY CHECK MATRIX Since the linear codes could be considered as a linear subspace C of , so any codeword C can be represented as a linear combination of a set of basis vectors such that , C= ++.= mG Where G is the generator matrix and m is the message. B. THEORITICAL CONCEPTS: As linear subspace of , the span of the minimal set of codewords can be represented by the entire code word C. These obtained codewords are collected and combined in the rows of the matrix G known as generator matrix for the code C. Theoretically, it is the standard form of is given as G=(/A), where is the kk identity matrix and A is k(n-k) matrix. A check matrix is defined as the matrix which represents the linear function H: whose kernel is C. The generating matrix G in standard form, G=(/A), with C as a code then H=(/) is a check matrix for C. C .HAMMING CODES Hamming codes are the first codes developed for the purpose of the error correction. These are widely used in digital communication systems. For any positive integer r>=2, there exists a [-r-1,3] hamming code. Example: given the following generator matrix and parity check matrix, the linear block code is [7,4,3] hamming code. G= , D. HADAMARD CODE Hadamard codes is capable of correcting many errors and is a [, r,] linear code. Hadamard code has minimum distance and therefore can correct -1 errors. Example  : The linear block code with the following generator matrix is a [8,3,4]2 Hadamard code: E..MERITS: Linear codes are the very prominent calss of the error correcting codes. It generally includes the simple description, easy procedure for encoding, nice properties, conceptually easy decoding. If C is a linear code then the minimum distance d(c) is easy to compute. Linear codes possesss simple specifications. To specify the (n,k) linear code it is sufficient to list K linearly independent codewords where as for the non linear code words generally we have to represent with all the code words. The most important linear block codes are: Hamming codes, cyclic codes, reed Solomon codes, BCH codes, LDPC codes, turbo codes respectively. F. DEMERITS: The main drawback of the hamming code is that it has the fixed hamming distance and also it is very difficult to implement coders for large block. The detection of two error bits and ability to correct the single errored bit can be obtained from the fixed hamming distance.if we choose a code which generally allows the implementor to select the desired hamming distance will be useful or beneficial. Hammer coder practical largest possible allows for codewords of nearly 31bits only. G. APPLICATIONS (1) These linear block properties are used in many applications. Trellis shaping is generated by using the syndrome coset uniqueness property of linear block codes. (2) these are also used in sensor networks for distributed sourcecoding. (3)by using these codes phase shift can be easily corrected and detected and also multiple signals can be easily sent from onechannel. (4) some other applications include mobile phone systems which are used in CDMA. (references: William E.ryan and shu lin(2009) channel codes: classical and modern, Cambridge university press.,Thomas M. corer and joy A. Thomas(1991) elements of information theory john wiley and sons). 2.PRINCIPLES OF CONVOLUTIONAL CODES Convolutional codes comes under a category of error correction codes in which an n bit symbol consists of each m bit information symbol to be encoded where coderate is m/n (n>=m) and the transformation acts as a function of the last K information symbols, here the constraint lenghht of the code is denoted by K. A. .Convolutional encoder To encode data convolutinoally, we begin with K memory reegisters holding one input bit each. Until other value specified , the 0 is the initial value af all memory registers. The encoder includes n-modulo 2 adders( it can be put effort with single Boolean XOR gate ) and n generator polynomials- each adder has one of them. The left most register is feded with the an input bit m. By using those existing values in the remaining registers and the respective generatot polynomials the n bits are the encoder outputs. By bit shifting all register values to their right and have to wait for its next input input bit. The encoder continues output until all registers have returned to the zero state if there are no remaining input bits. The below figure shows the rate 1/3 of the encoder with k value (constraint length) of 3. And also the generator polynomials are =(1,1,1), =(0,1,1) and =(1,0,1) The calculation of the output bits are as follows n1 = m1 + m0 + m-1 n2 = m0 + m-1 n3 = m1 + m-1. Img.1. Rate 1/3 non-recursive, non-systematic convolutional encoder with constraint length 3. B. RECURSIVE AND NON RECURSIVE CODES The above figure shows the encoder where as the below one shows the recursive one respectively, Rate 1/2 recursive, systematic convolutional encoder with constraint length 4. It can be easily observed that the input which is encoded is included in the output sequence also. These codes are generally called as systematic. The another type of codes are generally called as non systematic codes. Generally the systematic codes are always recursive codes where as the non systematic codes are always non recursive codes. The name convolutional encoder came for it because it carry out a convolution of the input stream with the encoders impulse responses. = Where x is an input sequence, is an output sequence from output j and which is the impulse response of the output j. The discrete lineaqr time invariant system is also called as a convolutional encoder. The own transfer function itself describes the output of an encoder. The transfer function is connected by the impulse response through z transform. + (Z)= +, (Z)=1+. The second order transfer functions are: (z)= We Define m by Where for any rational functional, we define it as Where m is the maximum polynomial degrees of the . And the constraint length is defined as . C.TRELLIS DIAGRAM A convolutional encoder is also referred as finite state machine. An encoder with n binary cells produce states. Just imagine the encoder which is shown in figure 1 has 1 in left memory cell(m0) in right one. We will refer such a stete as 10. By considering input bit the encoder at the next turn can convert either to 11 state or 01 state or 01 state. from the below figure we get rhe idea of decoding if the received sequence doesnot suit this graph then it errors can be obtained and we should select closest correct sequence. All transitions which are possible are shown as below: The red line is the path of the trellis. The lines their indicate transitions where the dotted lines are 1 input and the proper lines rae 0 input. The path here represents an actual encoded sequence. One of the path is shown in red colour as an example. The figure provides an idea about the decoding. D.FREE DISTANCE AND THE ERROR DISTANCE The minimum distance between the different encoded sequences is called as the free distance. The number of errors that can be corrected by code is given as correcting capability. It is given as correcting capability. It is given as, F. DECODING CONVOLUTIONAL CODES Decoding the convolutional codes can be done by several algorithms . thye vviterbi algorithm is universally used for relatively small values of K as it is highly parallelizable and it also provides maximum likelihood performance. By using SIMD instruction set the viterbi decoders are easy to implement the software on cpu and also in VLSI hardware. Fano algorithm is the best one among the several sequential decoding algorithms through which the longer constraint lenght codes re more practically decoded. Unlike viterbi decoding sequential decoding is not have maximum probability but there will be the slight incresase in the complexity with their constraint lengfht. Giving the chance to us the long , short constraint Length codes. In early 1970s these codes are used in the pionner program in Jupiter and Saturn but made it shorter, these viterbi decoded codes, often connecyed with large reed Solomon error correction codes which generally steeps the complete bit error rate curve and it also produces the very low residual undetected error rates. These both sequential and viterbi decoding algorithm gives the hard decisions..The codeword which is most likely formed by the bits.by using the soft output viterbi algorithm an appropriate confidence measure can be added to each bit in use with the BCJR algorithm the maximum a posterior(MAP ) Soft decisions can be obtained. G. POPULAR CONVOLUTIONAL CODES The viterbi decoded convolutiona;l codes is used for the voyagev program which has a constraint length of K=7, and also rate=1/2. The more powerful codes are produced by the longer constraint lengths but the viterbi algorithm complexity increases exponentially with respect to the constraint lengths , controlling these more powerful codes to deep space machines where the extra performance increases decoder complexity. Cassine probe, mars path finder, mars exploration rover to Saturn use of K=15 AND RATE OF 1/6, 2DB Bbetter than the simplex k=7, code at a rate of 256* in decoding complexity iss performed by this code. H. MERITS To correct the errors in noisy channels these convolutional codes are frequently used. These convolutional codes perform well on very bad conditions also. These convolutional codes are generally used often in satellite communications, mobile telephony and also in voice band modems. Convolutional codes generally gives good results in lower noise environments. Convolutional codes are also used in the voice band modems( v.,32, v.17, v.34) and also in the GSM mobile phones. I. DEMERITS Even though the convolutional encoder has the simplest procedure, decoding of it is very complex task. Convolutional codes cannot provide more protection against noise. J. APPLICATIONS Convolutional codes are used in the number of the applications which aims to achieve reliable data transfer, including radio, mobile communications, digital video communications, satellite communications. By using hard decision code, these codes are implemented in concatenation( example: reed Solomon). These are more efficient. (references: tutorial on convolutional coding and decoding, the online text book: IT, inference and leaving algorithms by david J.C.Mackay). 3. PRINCIPLES OF TURBO CODES By using the block code with convolutional code and also withthe longer constraint length and large block length it is theortically possible to approach the Shannon limit. But this approach became impractical due to the processing power required to decode. By using the recursive coders and iterative soft decoders the turbo codes overcome this drawback. The main aim of the recursive coder is to make the convolutional codes with shorter constraint lengths which appears as a large constraint length of a block codes and iterative soft decoder efficiently improves the estimation of the obtained message. The below shown figure generally gives the encoder for implementation which describes a clasiical encoder which provides the general design of the turbo codes. The 3 bits of the subblock can be sended by using this encoder implementation. The m-bit block of payload data is in the first subblock. The n/2 parity bits for a well known permutation includes in the 3rd subblock which is once aga in computed with the RSC code. The total number of bits in the code are . Interleaver is a device which generally carry outb the permutation of the payload data. This turbo code encoder includes two RSC codes (identical) , , as shown in the figure. By using the concatenation scheme these are connected to each othere which is reffered as parallel concatenation. Here M acts as a memory register. The input bits are forced to appear in different sequences by the dealy line and interleaver. The input sequence appears at both outputs after completion of first iteration [, , ] because of the encoders systematic nature. = = DECODER The serial connection of two elementary decoders is said to be a decoder. Generally decoder only operates on the lower speed( ) , thus it is planned for the encoder and is for encoder. The produces delays and also hold a soft decision. Where as produces delay respectively. The error bursts which are coming from the output are scattered by the interleaver whicvh is installed between between the two decoders. Here DI refers to demultiplexing and insertion module here it acts as a switch, it generally redirects input bits to once and to at another. It feeds both , inputs with padding bits( zeroes) in off state. While considering a memory less AWGN channel and assumption is made that at the iteration, the decoder receives a pair of random variables. =(-1)+, =2(-1)+ . Here is a bit from output of encoder and , are independent noise components consists of same produces a soft decision ie; ) = and pass it to the . generally referred as logarithm of likelihood ratio. The posterior probability (APP) of bit data is defined as which shows the probability of explaining a received bit as i. But where as produces a hard decision which is a decoded bit. Viterbi algorithm is unappropiate to calculate APP, it is not used in a BCJR algorithm is used but where as for viterbi algorithm is an appropriate one. MERITS Up to now, we know so many practical error correction methods but turbo codes and low density parity check codes come very close to approach the Shannon limit , which is the theoretical limit of maximum transfer reate of information over a noisy channel. Turbo codes increases data rate with out increasing the transmitted power, or to transmit at a certain data rate they are used to decrease the amount of the power. It generally produces the best performance results pof the throughput and latency. DEMERITS Its main disadavantage is the complexity of the relative high decoding. It also has relatively high latency, which is not suitable for some applications. It is also not verymuch useful for the satellites why because the latency is produced by the transmission distance due to the limited speed of the light. These algorithms are complex in nature. APPLICATIONS 3G and 4G mobile telephony standards uses turbo codes widely. Examples: HSPA and LTE . Used in media FLO and QUALCOMM Turbo codes are also useful in NASA missions such as mars re connaissance orbiter which is another option to RS- viterbi codes. IEEE802.16 generally uses the block turbo coding and CTC(WIMAX) a wireless metropolitan standard. Turbo codes are used in the designs of the digital communication systems and also in detection, demodulation. Turbo codes in the field of the error correcting codes represents a significant development. The cable transmission, short distance communications or data storage are the future applications of the turbo codes. (references: Berrou, claude; glavieux, alian , punva, near Shannon limit error- correcting, Berrou, claude, the ten years old turbo codes are entering in to the service, france). 4. CRITICAL COMPARISION LINEAR BLOCK CODES AND CONVOLUTIONAL CODES: Convolutional codes have a regular, natural, trellis structure which are useful in the implementation of the viterbi algorithm. Where as the linear block codes have a natural but it has minimal trellis structure. In both convolutional codes and linear block codes, the estimation of viterbi algorithm can be done by number of trellis edge symbol per encoded bit. Generally convolutional codes does not provide more protection against noise than the linear block codes. Convolutional codes offers greater simplicity of implementation over a linear block codes in many cases. Convolutional codes may not have minimal trellis representation but where as the linear block codes has the minimal trellis structure. The main differences between the linear block codes and convolutional codes is that a system which is using the block codes will transmits the k data bits and then transmits the n-k reductant bits. Where as the system which uses the convolutionla codes produces n coded bits from k data bits and the codeword need not contain unaltered k data bits. The main difference between the convolutional encoder and the block encoder is that the block code related not only to the current , but also on the previous (u) number of fixed information blocks ,, That is given as, =++.. With out the memory a linear block code is merely a convolutional code. The theory of the linear block codes seems to be degenerate of the theory of the convolutional codes, the usual approach of the convolutional codes is to note the small and fixed values of n and k and also the varying values of . TURBO CODES V/S CONVOLUTIONAL CODES: There are some differences between the behaviour of turbo codes and the convolutional codes. As we know that the performance of the convolutional codes imcreases with the increasing constraint length( code complexity). This is not for the turbo codes where the best codes of the turbo codes have the small constraint lengths . With decreasing code rate the performance of the convolutional codes doesnot improve significantly. Where as for the turbo codes even for the lower coding rates it achieves a very significant coding gain. While seeing from the implementation point of view, soft output encoders and recursive decoders are essential in turbo code schemes, where as they are not that much essential in convolutional codes excluding the concatenated configuration. Criteria Convolutional codes turbo codes Larger constraint length good bad Lower coding rate indifferent good Larger free distance good indifferent Soft output decoders indiffernt good Recursive encoders Indifferent good Both the linear block codes and convolutional codes are most frequently used type codes in the practice of enginnering for the designing of the most useful codes. TURBO VS LINEAR BLOCK CODES: The turbo codes are the hybrid model of the both the linear block codes and the convolutional codes respectively. The linear block codes used in the turbo codes instead of the convolutional codes to form a turbo product code(TPC). Two hamming codes are concatenated serially with the absence of an interleaver in between them. They can perfoem well in low SNR and can be formed by any block code. The convolutional codes used in the turbo codes usually forms a parallel concatenated convolutional code(PCCC) which have the small constraint length. They are systematic. 5. SIMULATION RESULTS The simulation results of linear block codes are as follows : The dual adaptive importance sampling (DAIS) technique evaluates the word and bit error rates of linear block codes down to extreme low values. (reference: Slin and D. Costello, error correction coding : fundamentals and applications). T,he simulation of the convolutional codes are as follows: Simulations with two recursive , equal convolutional codes with an interleaver whose length is 400 and k=50, this generally provides manufacturer interoperability, because this technique achieves the improvements which is over 3.5 dB respectively over the trellis codification modulation. (reference:Concatened trellis/reed Solomon coding in DMT systems- Kschischarg). The simulation results of the turbo codes are as follows: At a rate of R=1/2 the simulation results of the turbo codes are obtained. Here length of the data block is 400 bits( assumption) and also a MAP decoder used in the simulation. From the results it is observed that for the first few iterations yield the most significant improvements in BER for any given value of . After that the results appear to converge on to a BER for each value of . ( reference: Andersen JD and zyablov vv, interleaver design for turbo coding). 6. CONCLUSION So, hence in this research paper we have discussed the principles, applications, merits and demerits of the linear block codes, convolutional codes, turbo codes respectively. We also discussed the main differences between the block codes, convolutional codes, turbo codes and presented their respective simulation results. Personally, by doing this research i learned a lot on this coding theory and also came to know the importance of these codes in the present world. The future applications of these codes are to provide the substantial improvements in communication for the satellites. 7. REFERNCES (1) code tables: bounds on the parameters of various types of the codes. (2) q- ary code generator program. (3) error correcting codes (ECC) page (4) Wikipedia articles in corporating text from the federal standarad convolutional codes with a 1037c. (5) turbo decoding as an instance of pearls belief propogation algorithm,. (6) IEEE journal on selected areas in communication- Robert J Mackay, David J.C. (7) Turbo equalisation : principles and new results an IEEE paper on communications.

Netflix Business Strategy Analysis

Netflix Business Strategy Analysis Introduction Netflix, a multi-billion dollar subscription service company, was founded in 1997 by Reed Hastings and Marc Randolph in California, USA. It is said that Reed Hastings was charged a $40 late fine after renting the film Apollo 13 from Blockbusters and that this inspired him to set up Netflix as a DVD-by-mail service. It quickly expanded by introducing steaming media online and is now accessible in over 190 countries worldwide. In 2013 Netflix diversified into the content production industry and this foresight gave them the edge which paved the way to becoming the leader in the Streaming market, more popular than Amazon Price and Hulu. Following on from the success of its first series it is now estimated to have released in excess of 126 original series or films, more than any other network or cable channel. Currently, Netflix are believed to have approx 117 million subscribers worldwide and the company was recently estimated to be worth in excess of $100 billion(2). Market Structure Generally you can divide industries into categories according to the degree of competition that exists between the firms within that particular industry; Perfect Competition, Monopoly, Monopolistic Competition and Oligopoly. Perfect competition is where there are many firms competing within the industry and each firm has a very small market share which in turn means none of them have the power to influence the price. Monopoly is where there is just one firm in a given industry so there is no competition which allows the firm to charge what they want. Monopolistic Competition falls in the middle, there is a significant amount of competition and there is the opportunity for new firms to enter and exit the industry quite freely. Finally, Oligopoly is where only a few firms in the industry exist and it can be very difficult for new businesses to break into. This fits the market structure of Netflix Inc. The reason it falls under this market structure is because there are very few companies that provide the same service e.g. Amazon and Hulu. Although the core principle of services provided by three companies may seem the same, they differ slightly in terms of the content they provide. Netflix has moved towards original content created and produced by Netflix themselves while Hulu is aimed more at current TV Shows and films from Hollywood. Another reason why Netflix can be classified as an Oligopoly is that there is a significant barrier to enter this market; capital investment. In order to provide relevant, popular content that will attract customers to subscribe, a huge level of investment in needed to acquire the licence to stream these TV shows and movies. For example in 2011 Netflix successfully secured exclusive streaming rights to The Walking Dead and it is said to have cost the company $1.35 million per episode making the deal worth $25 million at the time (based on the episodes available at the time) [1] Product Range Although Netflix’s product range itself may appear to be very small; TV Shows and Movies, they offer a huge variety of genres and use analytics to make the best recommendations for their users. They have created over 75,000 micro-genres in an attempt to understand how people look for movies. They took the genre description, broke them down to their key words, employed people to watch content and tag every aspect of it from director/actor/genre all the way to how it ends and the personality of the main character and categorized each quanta and documented it. This allows them to offer their customers an extremely personalized recommendation service to make their entertainment experience as seamless as possible. It also allows them to attract a hugely diverse customer base because they cover almost all genres. [2] Pricing Strategy [4] In an oligopolistic market the organizations have a shared control in the price of the product/service they offer. The largest firm in the industry has the power to set the pricing standard across the market. All other firms within the market will go along with this standard e.g. when Netflix increased their prices by $1 last October, Hulu followed suit by introducing a more expensive ‘ad-free’ subscription package which was more similar to Netflix’s offerings. They did however decrease their standard package price (with adverts) in an attempt to become a stronger competitor in the market. Because of the oligopolistic nature of Netflix Inc.’s, their price elasticity can be said to be relatively inelastic. This has been proven over the years from incremental price increases and the introduction of tiered pricing for additional features. It also allows users to add concurrent streaming on multiple devices.   Netflix Inc.’s current pricing strategy was first implemented in 2011 when they introduced a standalone streaming subscription (No physical DVDs included). They have three tiers of prices. It starts with their â‚ ¬7.99/month Basic Plan which allows you stream TV shows and movies on one device at a time in standard definition. It also allows you download titles to mobile devices. The next step up is the â‚ ¬10.99 Standard plan, allowing concurrent streaming on two devices in HD (also includes option to download). Finally the â‚ ¬13.99 Premium plan lets you stream on 4 devices at the same time in HD and UltaHD included in the download option. As you can see, each tier offers more features which gives the impression of value for money. On the Basic Plan you’re paying almost â‚ ¬8 for only 1 screen whereas you are offered Ultra HD and 3 additional screens for an additional â‚ ¬6 per month, this leads the customer to choose the higher priced package as it is better value.   Market With up to 118 million subscribers globally, Netflix has a huge volume of customer globally. Of these, over 54.75 million are United States customers but as this streaming giant drives forward and increases in size and popularity, their international subscription base is growing. This was evident in April 2017 when Netflix confirmed a licensing deal made in Mainland China for original Netflix content with iQiYi which is a Chinese video streaming platform owned by Baidu [13] Profitability According to CNBC, Netflix exceeded expectations by the addition of 8.33 million subscribers globally in the fourth quarter of 2017 which brings the grand total subscribers up to 118 million. The market capitalization of Netflix is now passed the $100 Billion for the first time Monday the 22nd of January after the release of their Q4 earnings. The EPS was announced as 41 cent which was in line with expectations done by a Thomson Reuter consensus estimate and the revenue reached an impressive $3.29 Billion. These figures have changed dramatically since the Q4 report in 2016; EPS was 15cent and revenue of $2.48 Billion. Although the revenue increase is welcomed, it will be reinjected into future investments on new content for 2018. Netflix says they expect this to cause a negative free cash flow of $3-4 Billion and will continue to â€Å"raise capital in high yield market†. [12] Core Philosophy [6] Netflix have reinvented the wheel when it comes to Rules of Corporate Culture. They value people over process and believe that their workforce is made up of great people working together as a dream team. This is all to create an environment which is flexible, fun, stimulating, and creative and allows employees to work to the best of their ability. They value integrity, excellence, respect, and collaboration and base their culture around 5 core principles: Encourage independent decision-making by employeesShare information openly, broadly and deliberatelyAre extraordinarily candid with each otherKeep only our highly effective peopleAvoid rules They also have a unique policy when it comes to parental leave and holidays. They recognize that having a child is one of the most special events in an individual’s life which is why they encourage new parents to take as much time as they need to readjust to their new life as parents. Their policy us: â€Å"Take care of your baby and yourself†. This shows that Netflix truly care about the wellbeing of their employees and want their vital team players to be at their best mentally and physically throughout the full course of their career at Netflix. The same rules apply for Holiday leave. They allow employees to take whatever holiday time they feel they need to work to the best of their ability throughout the year, be it one week or four week. The decision is in the hands of the individual employee. Along with this unique attitude towards creating their employee culture, Netflix recognize that they have the ability to impact the world through their work. â€Å"IT TAKES DIVERSITY OF THOUGHT, CULTURE, BACKGROUND, AND PERSPECTIVE TO CREATE A TRULY GLOBAL INTERNET TV NETWORK†. They pride themselves on their belief that we have to work from the inside out to create a space where all employees and voices are heard and appreciated. With almost a 50:50 gender balance and an ethnically diverse work force, Netflix are helping pave the way for equality for all in the workforce. [5] Advertising/Promotional Strategy of Netflix [14] Netflix use a very clever technique to determine what their customers want to see, they monitor illegal downloading sites such as BitTorrent and ÃŽ ¼Torrent for the most popular downloads and use this information to decide which content they should be bringing to their streaming platform. This content joined with ‘Netflix Originals’ are what attract customers to their site instead of the likes of Hulu and Amazon Prime. Amazon’s CEO Reed Hastings said in an interview that they strive to â€Å"make the big titles bigger†. TV shows such as Stranger Things or 13 Reasons Why are hot topics of conversation within many friend groups and discussion boards. This pulls in the people who haven’t joined yet because they want to join the discussion. Hasting says that â€Å"All their friends are talking about the shows, which is the dominant accelerator†. Together with this, according to theconversation.com, Netflix Inc. has adopted a ‘conglomerated niche’ strategy; they produce content catering to many different target audiences, for example, action series â€Å"Daredevil, horror series â€Å"Hemlock Grove† and exclusive films starring popular actors. By doing this, Netflix is able to service different audiences simultaneously and separately [14]. While these techniques are used to initially attracted subscribers to the platform, their unique recommendation algorithm is used to keep their subscribers happy and entertained. Their algorithm also knows what image they should use when making suggestions for example if you have previously watched more comedies than romantics, when suggesting a romantic comedy they will emphasis the comedy aspect through the actors or a snapshot of a funny scene instead of the romantic side of the firm. Their theory is that on a subconscious level you will be more attracted to the imag e and more likely to select the title. Share Price Movement Week 1(11th September): Netflix begins with a share price of $181.74 according to NASDAQ which is the starting point for this analysis period. It is a slight increase from a weekly high of $179 by the previous week end. This was following a pattern of stead increases over the previous two weeks, increasing by almost 14% by the 21st of September. Week 2(18th September): Following on from week 1, week 2 saw the same pattern of slight increases and decreases in the share price but ultimately increasing overall.   Week 3(25th September) [7]: On the 25th of September there was a sharp dip in price, loosing $9.50 worth of value over the course of the weekend. This was most likely caused by the announcement that 21st Century Fox was adding more content to their own streaming service. A similar reaction among investors happen earlier in the year when Disney announced it would be removing all their content from Netflix in the lead up to the launch of their own streaming serving which would cater to their own target audience. Week 4(2nd October): After seeing another slight decrease over the course of the week due to the Century Fox announcement, Netflix made a comeback by announcing that they would increase the subscription price for customers causing a significant hike in their share price. The statement made on 5th October resulted in a share price increase of 5% ($10) in a matter of hours, and by the end of the week (Oct 6th) it has risen to $198. This was an all-time high, according to Variety. This indicated that investors momentary wobble in confident has subsided and were fulling trusting that the hike in price would not impact the amount of subscribers but would instead increase revenue, benefiting them. Week 5(9th October): Following the previous week’s announcement, Netflix’s value remained relatively flat line with the exception of a few minor increases and decreases throughout the week. This absence of change was short lived as the momentum began to build again towards the end of the week. Week 6(16th October) [8]: This week sees a record high for the stock price. Reaching $202.68 on Monday the 16th. This comes alongside the news that Netflix are planning to spend up to $8 Billion on programming in 2018. According to CNN Tech, this came at a time when tech leaders such as Apple and Amazon were using their huge availability for resources to find original content to compete with the likes of Netflix Original successes such as Orange is the New Black or Stranger Things. Each of these has brought a huge volume of customers to the site due to its exclusivity and cult following of these shows. Week 7(23rd October): This record spike in the share value was short-lived. By the 23rd of October the share price had dropped below the $200 mark again after it transpired that Netflix were expecting to raise $1.6 Billion in debt to cover the cost of the original content they had planned for 2018. This was cause for concern among the shareholders but luckily it didn’t impact too heavily on the share value which only decreased by 5% or $10. Week 9(6th November) [9]: Although Netflix had gained 64% in value over the past year, the shocks lost more than 5% this week after sexual assault allegations were made against Netflix Original Series actor Kevin Spacey. The lead actor in Netflix own House of Cards came under fire which in turn prompted the firm to decide not to continue production of their hit show as the reputation and ethics of the company may come into question if actions weren’t taken. Week 10 – 16: There is very little significant increase or decrease to report over this period. Although there was slight movement up and down, for the most part the share price remained between $184.04 and $199.18. No major announcements or significant articles were published during this time frame that would have been disruptive to the share price which is why it remained so stable for such a time period. Week 17(2nd January): The firm begin to pick up some motion upwards again after a period of relative stability in price of their stock. This could be as a result of the buzz caused by an influx of articles listing the best of what’s to come in 2018. For example â€Å"the top 20 new and returning shows to Netflix† according to TV Time Week 18(8th January) [10]: Continuing along the pattern of steadily increasing in value day by day, by January 8th, shares have reached a new high of $212.52. This pattern in causing technical analysts to predict even further increases in the share value. According to CNBC TradingAnalysis.com’s Todd Gordon says â€Å"the streaming platform’s run is hardly done†. Gordon predicts, based on the Elliott Wave theory, that Netflix shares are set for another wave up causing their value to soar even higher. This prediction is ahead of January 22nd, the date on which Netflix are set to report their Q4 earnings which have a massive impact on the share value. Final Week: The final week in this analysis period is week prior to the release of the Q4 earnings. This week traders are expecting a â€Å"big move† according to CNBS. Up to this point in 2018 alone, shares have increased by up to 9.5% going from $201 on January 2nd all the way up to $220.46 on Friday January 19th. The release comes on Monday 22nd of January and, although is not included in the requested analysis period, it would be unjust not to report the impact it had on the value of the Netflix share price. Between market close on Monday and market close on Tuesday, shares leaped a massive 10% (rounded up) which amounts to an increased value of $22.71, but this impressive jump didn’t end here. Over the next seven days the share price increased to a staggering $284.59 by market close on Monday 29th. This amounts to a surge of almost $83 and is equal to a 41.5% leap in value. The Q4 report says that Netflix added 1.98 million U.S. and 6.36 million overseas subscriber s which was much higher predicted [11]. This along with fourth-quarter revenue of $3.29 Billion is the likely cause for the surge. Investor confidence has strengthened as a result of exceeding expectations and predictions. Conclusion It is evident that Netflix are a very successful streaming platform who have a great team of people behind them to drive the company forward to do bigger and better things. They have expanded and diversified enormously since being founded in 1997. Going from a DVD by mail and online streaming platform to having 118 million users worldwide and producing their own highly successful content. It is clear that this multi-billion dollar company is a game changer in the entertainment industry. Bibliography [1] Matthew Byrd, November 2017, 15 TV Shows That Cost Netflix A Ton of Money, screenrant.com https://screenrant.com/netflix-tv-shows-most-expensive-cost/ [2] Alexis C. Madrigal, January 2014, How Netflix Reverse Engineered Hollywood, theatlantic.com http://linkis.com/www.theatlantic.com/Sa5NA [3] Blog, fusebill.com https://blog.fusebill.com/pricing-strategy-tiered-volume-pricing [4] Netflix Streaming Plans, Help Center, Netflix.com https://help.netflix.com/en/node/24926 [5] Inclusion and Diversity, Netflix Jobs, Netflix.com https://jobs.netflix.com/diversity [6] Culture, Netflix Jobs, Netflix.com https://jobs.netflix.com/culture [7] Michael Sheetz, September 2017, Netflix heads for the worst day since November after Fox spooks investors, cnbc.com https://www.cnbc.com/2017/09/25/netflix-heads-for-worst-day-since-nov-2016-after-fox-spooks-investors.html [8] Seth Fiegerman, October 2017, Netflix to spend up to $8 Billion on programming next year, cnn.com http://money.cnn.com/2017/10/16/technology/business/netflix-earnings/index.html [9] Sara Salinas, November 2017, Netflix dropped 5% this week, after rallying all year, cnbc.com https://www.cnbc.com/2017/11/10/netflix-drops-five-percent-this-week.html [10] Annie Pei, January 2018, Netflix could surge another 20 percent, says technical analyst, cnbc.com https://www.cnbc.com/2018/01/05/netflix-could-surge-another-20-percent-says-technical-analyst.html [11] Todd Spangler, January 2018, Netflix Blasts Past Q4 Subscribers-Growth expectations, shares soar to all-time high, varierty.com http://variety.com/2018/digital/news/netflix-q4-2017-earnings-stock-1202672341/ [12] Anita Balakrishanna, January 2018, Netflix jumps more than 8% after adding more subscribers than expected, cnbc.com https://www.cnbc.com/2018/01/22/netflix-earnings-q4-2017.html [13] International Expansion, Netflix, Wikipedia.com https://en.wikipedia.org/wiki/Netflix#International_expansion [14] Amanda Lotz, April 2017, The unique strategy Netflix deployed to reach over 90 million worldwide subscribers, theconversation.com http://theconversation.com/the-unique-strategy-netflix-deployed-to-reach-90-million-worldwide-subscribers-74885 [15] Netflix, wikipedia https://en.wikipedia.org/wiki/Netflix [16] John Lynch, October 2017, Netflix stock hits all-time high after price hike for US subscribers, businessinsider.com http://uk.businessinsider.com/netflix-stock-hits-all-time-high-after-price-hike-2017-10?r=US&IR=T