The Launch of a New Product Under Consideration

1. Solved: The launch of a new product is under consideration. Its unit variable costs will be £30 and it is estimated that incremental fixed costs of £250,000 will be incurred if production is commenced. Forecast sales are 50,000 units. At what level of price for the new product will the organisation break even? If the actual planned selling price is £48 per unit, what will be the organisation’s margin of safety? 2. The following information is about two organisations, A and B. Organisation A Organisation B £ £ Fixed costs 60,000 12,000 Variable costs per unit 0.20 0.50 Unit selling price 0.60 0.60 Expected sales levels (units) 160,000 160,000 Which firm has higher operating gearing? What is the expected net income of both firms? What would expected net income be for both firms if sales were a) 140,000 units and b) 180,000 units? Which firm is facing more risk in terms of its current sales predictions?

Launch of a new product

2. Solved: The following information is about two organisations, A and B.

  Organisation A Organisation B
  £ £
Fixed costs 60,000 12,000
 Variable costs per unit 0.2 0.5
Unit selling price 0.6 0.6
Expected sales levels (units) 160,000  160,000
  • Which firm has higher operating gearing? What is the expected net income of both firms?
  • What would expected net income be for both firms if sales were (a) 140,000 units and (b) 180,000 units?
  • Which firm is facing more risk in terms of its current sales predictions?
    Be sure to demonstrate your numerical workings.

Launch of a new product …

Solutions

1 (a)  At what level of price for the new product will the organisation break even?
Variable cost per unit = £30
Fixed costs = £250,000
b (in terms of price) = ?
Total sales revenue = fixed costs + total variable costs
50,000 units x b = £250,000 + (£30 x 50,000)
b = (250,000+ 1,500,000)/50,000
Break-even price =                          Read more …..

b) If the actual planned selling price is £48 per unit, what will be the organisation  Read more ….

2 a) Which firm has higher operating gearing?
An activity with relatively high fixed costs compared with its variable costs has a high operating gearing (Atrill and McLaney 2006, p. 229). According to Cima Global (2006), one way of determining operational gearing is by evaluating the contribution-to-sales ratio (C/S ratio). A low C/S ratio indicates that a business has low proportion of fixed costs and vice versa (Cima Global, 2006).

The contribution per unit for organisation A is £0.4 (0.6-0.2) while that for organisation B is £0.1 (0.6-0.5).
Contribution‑to‑sales ratio = (Contribution per unit / Sales price per unit) as a percentage
Contribution-to-sale ratio for:

Organisation A = (0.4/0.6) x 100= 67%
Organisation B = (0.1/0.6) x 100= 17%
 Read more … 

b) What is the expected net income of both firms?  Read more ….

What Is Wrong With Having a Nanny? – Philosophy

What is Wrong With Having a Nanny?

What Is Wrong With Having a NannyThere are countless chores that fall within the domain of housework; washing dishes, sweeping, vacuuming, cooking, food shopping, and caring for children and countless others (Peacock, 2012). Housework is commonly assumed to be women’s work (Townsend, 2016). Every year, an average housewife spends between one and four thousand hours performing housework (Davis, 1981; Peacock, 2012). This amount of time does not include constant and unquantifiable attention that mothers have to give dedicate to their children. In spite of the huge amount of time and effort spent in it, housework is rarely appreciated (Davis 1981). In this regard, Ehrenreich and English (1975) note that housework is never noticed until it is not done. For example, people do not notice the scrubbed and polished floor but will quickly notice the unmade bed (Ehrenreich and English, 1975). From a philosophical perspective, this paper attempts to answer the question, what, if anything, is wrong with having a nanny – nanny philosophy | philosophy?

Nannies are charged with the responsibility of taking care of children in their home; work that squarely falls under the umbrella of housework. As noted by Ghaeus (2013), among other duties, nannies meet children’s security, affection, social and other needs and guide them in different situations. For many people, taking care of children at home is mindless work; work that they would rather leave to others if money allows (Townsend, 2016). Unlike the carpenter, electrician, or plumber who earn their respect because of the intelligent skill they apply in their labour, housework seems to demand no particular skill. There continues to be raging debate among philosophers, feminists, economists and other experts regarding housework, its importance and whether it should be done in the first place. Drawing on different perspectives, this paper seeks to answer the question, what, if anything, is wrong with having a nanny?  The paper also discusses the  nature of what nannies do (domestic work), and different perspectives on domestic/nanny work (including Marxist and feminist perspectives)  -nanny philosophy.  Read more

 

Online Sales Bans By Product Manufacturers

If a manufacturer of a product requires that its distributors do not make online sales, then that must harm competition and so such “online sales bans” should be strongly presumed to be anti-competitive. Do you agree? Online Sales Bans By Product Manufacturers on Distributors – online sales bans anticompetitive.

Should Online Sales Bans Imposed By Product Manufacturers On Distributors Be Strongly Presumed to Be Anti-Competitive?

Introduction

Firms may engage in vertical agreements with other firms or parties as a way of achieving goals they may not otherwise realise acting on their own. When they make such agreements with other companies or parties, firms may impose vertical restrictions. Such restrictions may come in the form of selecting distributors, limiting online sales among other conditions. An Online sales ban come into effect when a company requires its distributors not to make online sales. With anti-competitive practices generally prohibited in the European Union and indeed in many other jurisdictions, the question of the legality of online sales bans is one that lingers in the
minds of many business owners and distributors. If, for example, a manufacturer of a product requires that its distributors do not make online sales, then that must harm competition. Should such “online sales bans” be strongly presumed to be anticompetitive? This paper attempts to answer this question and argues that absolute online sales bans by manufacturing companies are strongly presumed to be anticompetitive.

online sales bans by product manufacturers

Anti-competition Laws and Vertical Restraints

Many countries have in place laws aimed at protecting consumers and businesses from unfair practices and practices that inhibit or thwart competition. In the UK in particular, Chapter I of the Competition Act 1998 expressly prohibits any agreement or concerted practice that restricts, prevents, or distorts competition unless such action enjoys exemption from the prohibition. In the same spirit, Article 101 of the Treaty on the Functioning of the European Union (TFEU) forbids concerted practices, agreements and decisions by undertakings or group of undertakings acting together that aim to restrict, prevent, or distort competition within the common market or that may affect trade between European Union (EU) member countries.  Read more

Decolonisation and International Power Relations

Did Decolonisation Transform Power Relations in the International Economy? If not, why not?

Decolonisation has been defined by Tuhiwai (2010, p. 3) as “the long-term process involving the bureaucratic, cultural, linguistic, and psychological divesting of colonial power”. According to Klose (2014), decolonisation is a process that involves the dissolution of colonial rule together with its economic, political, social, and cultural dimensions. Although different scholars have defined decolonization in different ways, there is wide agreement that decolonization is linked to the transfer of legal and institutional control over territories and dependencies from colonial powers to indigenously based, formally sovereign, nation states (Duara, 2004). Decolonisation, in Duara’s (2004) view, was not only a process but also a movement for political solidarity and moral justice against imperialism. There is a lot of agreement among scholars that decolonization had a significant impact on the global sphere (Collins, 2016; Office of the Historian, 2018). This notion is especially supported by the fact that within thirty years of the signing of the Charter of the United Nations in 1945, the European colonial empires in Africa and Asia completely disappeared, and in their stead stood new independent states (Klose 2014). For many territories under colonial rule, the thought of becoming independent states through the process of decolonization promised hope, freedom and prosperity. Decolonisation also promised positive changes in power relations between the newly formed independent states and imperial powers. This paper seeks to answer the question: Did decolonisation transform power relations in the international economy? If not, why not?This paper argues, based on dependency, New International Economic Order, and structuralism, that in spite of these promises, decolonisation did not truly transform power relations in the international economy.

Power in International Politics and Economy

The concept of “power” is perhaps the most fundamental in political science, international relations and political theory. Although there is general consensus regarding its importance, the definition of “power” remains a subject of great disagreement and debate. Indeed according to Barnett and Duvall (2005), scholars remain divided on how to define, conceive, study, and measure power, rendering the concept quite elusive. According to Barnett and Duvall (2005), power relates to the production of effects, in and through social relations, which determine the ability of actors to define or decide their circumstances and fate. Read more

Did Decolonisation Transform Power Relations in the International Economy?

PESTLE Analysis for Air Pollution Eating Bikes

PESTLE Analysis for Air Pollution Eating Bikes in Poland

Introduction
As part of its growth strategy, ABC Bicycle Company, a company based in London, seeks to enter the Polish market with its pollution eating bicycles. In order to establish the suitability of the Poland market with this product, the company needs to evaluate the external business environment of this market. The external environment of the country was evaluated by conducting a PESTLE analysis. This report presents the results of the PESTLE analysis and recommendations for ABC Bicycle Company
regarding the market – PESTLE Analysis for Air Pollution Eating Bikes in Poland. The report is limited to the Political, Economic, Social and Environmental factors and does not include the Technological and Legal factors.

Search Results Web results PESTLE Analysis for Air Pollution Eating Bikes in Poland

Political Factors

Poland has a stable government and a stable political environment and is governed by the rule of law (Radio Poland, 2018). Recently, there has been growing concern that the country is experiencing declines in democratic freedoms. However, the country has a functioning judiciary and strong institutions. Corporate tax in Poland is 19% although start-ups (businesses in their first year of paying corporate tax) and small businesses (those that did not achieve a turnover more 1.2 million euros in the previous year) are taxed at the rate of 15% (Price Waterhouse Coopers 2018). The lower tax paid by start-ups and small businesses serves to promote entrepreneurship as well as increase chances of business survival and success. The Polish government has no special policies governing cycling or the bicycle industry although it appreciates the riding culture in the country and is taking measures to improve cycling infrastructures in some cities and towns (Rigitano, 2015).

Economic Factors

Bicycle Sales

According to Mayne et al. (2016) Romania, France, Sweden, Germany and Poland have been experiencing a rise in bicycle sales since 2012. Of these countries, Poland experienced the highest (20%) increase in bicycle sales between 2012 and 2015 as can be seen from figure 1 (Mayne et al., 2016). In 2010, Poland’s bike sales stood at 750,000, sales exceeding the country’s manufacturing capacity (Utkin, 2016). Read more …

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PESTLE Analysis for Parcel Delivery Using Drones

PESTLE Analysis for Parcel Delivery Using Drones in the UK Market

1.0 Introduction
SFS Express is a Chinese company that provides logistics and parcel delivery
services. Having witnessed a lot of success in the Chinese market with its parcel delivery services that relies on drones to make last mile deliveries, the company intends to expand by venturing into the UK market. Being a foreign market, SFS Express needs to understand the external business environment of the UK and its suitability for parcel delivery and courier services using drones. This report presents a PESTLE analysis of the courier and parcel delivery service market as applies to the UK.

2.0 Political
A stable political environment is important for business and provides a conducive environment for economic activities. The United Kingdom is a peaceful country with a stable political environment. The country’s postal and courier industry is liberalized so that any interested person can easily enter the industry (Brown and Conway 2017). The industry is widely unregulated, a factor that has led to the poor services by some industry players (Tims 2014). Operators may, for example, provide postal and courier
services without a license or without prior authorization from Ofcom, the industry regulator (Brown and Conway 2017). Although the industry generally remains widely unregulated, shipping products to and from international destinations outside the European Union requires custom clearance and is highly regulated (Parcel Hero
2015). Several legal hurdles make international shipping both expensive and difficult, which has rendered international shipping unattractive for relatively small firms (UK Government 2017). While the liberation and limited regulation of the parcels industry makes it easy for businesses to venture into the industry, it also gives room for the entry of many players in the industry, which potentially makes the industry highly competitive.

The courier and parcel delivery market in the UK is taxed the same way as other industries. While corporate tax has been set at 19% since 2017, this rate is set to be reduced to 18% as from April, 2020 (with a possible further reduction to 17%) (HM Revenue and Customs 2018). Continue …

Alternative link …. 

PESTLE Analysis for Parcel Delivery Using Drones

Accounting Profession and Accounting Information

International Accounting Profession and Accounting Information

IntroductionInternational Accounting Profession and Accounting Information

This paper seeks to answer a number of questions: First it discusses whether the international accounting profession has lost its way and is no longer serving the needs of different users of accounting information in a manner which is appropriate and meaningful for the global business environment of today. Secondly, it seeks to identify the different user groups who require accounting information and how this information is provided for them. Finally, the paper discusses the status of accounting profession internationally and more specifically in the U.S. and the profession has been impacted by financial scandals in the recent past and the measures that have been taken in to offset the impacts of these scandals. The paper also discusses whether or not these measures have been successful – Accounting Profession and Accounting Information.

International Accounting Profession and User’s Needs

Accountancy involves recording, classifying and reporting on business transactions for a business (Bragg, 2018). It also involves measuring, processing and communicating financial information about business organisations. It is important that when reporting or communicating
accounting information, users of such information understand the information and can use it to make decisions. Members of the accounting profession should, therefore, ensure that accounting information is clear, understandable, and useful in decision making for users of the information.
The professional accounting profession has been proactive in ensuring that it caters to the diverse needs of users of accounting information in a manner that is meaningful to today’s business environment (University of Pretoria, 2016). This is partly evidenced by the fact that the profession has constantly adapted itself to the needs of different users of accounting information.

In response to these varying needs, different types and branches of accounting have been developed. Some of the types of accounting that have been developed in this regard include social responsibility accounting, management accounting, tax accounting, forensic accounting, financial accounting, governmental accounting and cost accounting (Siddiqui, 2011; Accounting Verse, 2018). Two main branches of accounting have also been established to cater to the needs of internal and external users of accounting information; management accounting and financial accounting. Internal users have direct and unconstrained access to accounting information of an organisation (Siddiqui 2011; Kimmel et al., 2010). External users, on their part, have limited and indirect access to this information and gain this information mostly through press reports and financial reports. Also worth noting is that cash flow statements were introduced in response to the need by some users of accounting information for information on organisations’ liquidity and sustainability (over and above their profitability information) (Simon Fraser University, n.d.). These adaptations and changes truly confirm that the international accounting profession seeks to provide accounting information to users in a way that is meaningful to today’s business
environment.

Accounting Information and Different User Groups

Different users need accounting information belonging to an organisation of interest to them for different purposes. Key users or user groups of accounting information include managers, employees, owners, shareholders, lenders, suppliers, customers, investors, regulatory authorities, community representatives, government, investment analysts, and competitors (Siddiqui 2011; Kimmel et al., 2010). The different user groups may be broadly classified into two groups; internal users and external users. While internal users such as owners, managers and employees have direct and unlimited access to the accounting information that belongs to an organisation, external users such as suppliers, investors, creditors and government have limited and indirect access to this information (Finkler and Ward, 1999). Internal users have access to accounting information that belong to a business through documents such as receipts, invoices, cash books, budgets, and ledgers. External users who are mostly interested with summaries of the organisation’s finances (as opposed to the minute details), often access information that covers an accounting cycle through four main documents or reports; the statement of financial position (balance sheet), income statement, statement of retained earnings, and cash flow statement (statement of cash flows) (Finkler and Ward, 1999).

Each of the four reports has a specific purpose. The income statement informs external users about the amount of money the organisation lost or made during a given duration. As noted by Kimmel et al. (2010), the balance sheet shows the exact accounts that the organisation has and how much every one of these accounts has. The cash flow statement provides details about what brought revenues to the business and how much of these revenues have been spent (Kimmel et al., 2010). On its part, the statement of retained earnings gives details on how part or whole of the net income presented on the income statement was invested back into the business.

Status of the Accounting Profession and Financial Scandals

Financial scandals have become common in many countries. Such scandals may result from the actions or inaction of different players including managers, employees, accounting professionals, or suppliers. Although there are countless cases of financial scandals that have been reported by media, some of the most notable are those involving Enron, Wells Fargo,
Cendant, and WorldCom (Michaels, 2018). The Enron case has particularly been important to the accounting profession as it has contributed to the adoption of changes in laws and accounting standards across the world. Investigations into the scandal revealed that the company’s executives overstated the company’s earnings, a factor that contributed to a failed merger. Several of these executives were found guilty of multiple crimes such as insider trading and money laundering (Michaels 2018).

Financial scandals have instigated changes to laws regulating accounting and the reporting of accounting information and accounting standards. In 2002, as an example, the Sarbanes-Oxley Act (SOX) was enacted in the US in response to the financial scandals that rocked Enron and WorldCom (Warren et al., 2012). As noted by Warren et al. (2012), this law was enacted as a measure to prevent the occurrence of similar scandals by regulating and standardising issues such as disclosure, corporate responsibility and independence. At the same time, education institutions have responded to financial scandals by teaching ethics and ethical principles as part of their accounting courses as noted by Titard, et al. (2004). The Sarbanes-Oxley Act has been criticised by some experts for being a “feel-good” legislation that was aimed at pacifying investors and members of the public while having little impact on the prevention of frauds and financial scandals (Coene 2018). The legislation has also been criticised for overburdening companies with paperwork and hefty implementation costs (in some cases running into hundreds of millions of dollars per year) as noted by Coene (2018). The act has especially been criticised for failing to prevent the 2008/2009 financial crisis that hit U.S. and several other countries (Verschoor, 2018). In spite of these criticisms, some experts note that the Act has helped strengthen corporate governance by increasing the accountability and responsibility of CFOs and CEOs in relation to financial disclosures and related controls and by increasing the engagement and professionalism on the part of corporate audit committees (Verschoor, 2018).

Although members of the accounting information have in some cases engaged in fraud, unethical activities, and financial scandals, members of the profession have also played an important role in detecting and preventing them in other cases. Without the input of professional accountants, many financial scandals would go undetected or would not be prevented. Furthermore, without their input, accounting standards would not keep improving. In general, organisations and countries in which adherence to accounting standards and laws is poor, several loopholes for
financial scandals exist and therefore cases of such scandals tend to be high, the converse being true. Basically, this shows that the status of the accounting profession has a bearing on financial scandals and frauds, especially at the organisational level.

Pestle Analysis Example Parcel Delivery Drones

References
Accounting Verse (2018). Types of Accounting. [online]. Available at:
https://www.accountingverse.com/accounting-basics/types-of-accounting.html

Bragg S. (2018). What is accountancy?. [online]. Available at:
https://www.accountingtools.com/articles/what-is-accountancy.html

Coene T. (2018). Has Sarbanes-Oxley Really Done Anything to Curb Fraud?. [online]. Available at: https://www.allbusiness.com/has-sarbanes-oxley-really-done-anything-to-curbfraud-2-5220240-1.html

Finkler, S. and Ward D. (1999). Essentials of Cost Accounting for Health Care Organizations. London: Jones & Bartlett Learning.

Kimmel, P., Weygandt, J. & Kieso D. (2010). Financial Accounting: Tools for Business Decision Making. London: John Wiley & Sons.

Michaels. M. (2018). The most memorable and expensive financial fraud cases of all time. Business Insider 24 April. [online]. Available at: http://www.pulselive.co.ke/bi/finance/themost-memorable-and-expensive-financial-fraud-cases-of-all-time-id8297568.html

Siddiqui, A. (2011). Comprehensive Accountancy XI. New Delhi: Laxmi Publications.

Simon Fraser University (n.d.) History of the Cash Flow Statement. [online]. Available at: http://www.sfu.ca/~poitras/cash-flow-stmt-history.pdf

Titard, P., Braun R. & Meyer, M. (2004). Accounting Education: Response to Corporate Scandals: Helping the profession find opportunity in crisis. [online]. Available at: https://www.journalofaccountancy.com/issues/2004/nov/accountingeducationresponsetocorporatescandals.html

University of Pretoria (2016). Chapter 5 Accounting in a changing environment. [online]. Available at: https://repository.up.ac.za/bitstream/handle/2263/28951/05chapter5.pdf

Verschoor C. (2018). Has SOX Been Successful?. [online]. Available at:
https://www.accountingweb.com/practice/practice-excellence/has-sox-been-successful

Warren, C., Reeve, J. & Duchac J. (2012). Accounting. New York: Cengage Learning.

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Nursing Care Patients with Acute Changes

Nursing Care of Patients with Acute Changes

Introduction

In this paper acute illness and how it can be treated and managed is discussed. So as to demonstrate a broader understanding of the patho-physiological changes that can potentially take place during acute illness, a case study of a patient will be used (see appendix). The paper discusses homeostasis, the patho-physiological changes in acute illness and the National Early Warning Score and Sepsis Screening tool. It also discusses the structured approach to assessing and managing acutely ill patients, before focusing on patient screening, assessment, and management of acute illness. In addition, it discusses the role of the nurse in the management of patients with cardiac arrest, ethical issues surrounding resuscitation, and human factors in resuscitation. The paper also discusses the importance of communication in the management of patients and before concluding – (nursing care acute changes).

Homeostasis

Korotkov (2013, p. 53) defines homeostasis as “the property of an open system, in living organisms, to regulate its internal environment as to maintain a stable condition, by means of multiple dynamic equilibrium adjustments controlled by interrelated regulation mechanisms”. As noted by Clark and Ketchell (2011) in this case, the body regulates parameters or variables within a specific range of values. Homeostasis, represents the processes for the maintenance of conditions under which cells, and, therefore, the body can function effectively. Homeostasis typically involves a negative feedback loop that counteracts the changes in a variable from the set point or norm (Starr and McMillan 2013)…. Continue Reading

Contents:

Introduction
Homeostasis
Patho-physiological Changes in Acute Illness
National Early Warning Score and Sepsis Screening Tool
Structured Approach to Assessing and Managing Acutely Ill Patients
Airway, Breathing, Circulation, Disability, Exposure (ABCDE) Approach
– Assessing and Managing the Airway
– Assessing and Managing Breathing
– Assessing and Managing Circulation
– Assessing and Managing Disability
– Assessing and Managing Exposure
The Nurse’s Role in Further Management
Nurse’s Role in the Co-Ordination and Managing Cardiac Arrest Patients
Ethical Aspects of Resuscitation
Human Factors in Resuscitation
The Importance of Communication
Conclusion
Appendix: Case study of James, a 22 year old male who has been admitted to coronary care unit (CCU).

(nursing care acute changes)

Nursing Care Acute Illness

Market Segmentation Targeting Positioning Examples

The following article attempts to provide an answer to this prompt: 

“…positioning and segmentation are distinct parts of the strategy process and provide us with some extremely powerful tools; but ultimately they are linked by the central issue of focusing on satisfying customer’s needs in ways that are superior to competitors(Hooley et al, 2017 p159)

By reference to academic literature evaluate, and critique, the concepts of
Segmentation, Targeting & Positioning (STP) including a consideration of
implementation issues. With supporting evidence, use appropriate examples from different industries (plural) to exemplify how different organisations (plural) have applied STP, to demonstrate your learning and application of this topic. Indicate how any company could apply the concepts around STP, making generic recommendations for best practice.

Market Segmentation, Targeting & Positioning (STP) with Company Examples

Introduction

Market Segmentation Targeting Positioning ExamplesEver increasing competition and greater demands by customers have rendered mass marketing virtually ineffective in several product categories (Harvard Business Review, 2006). As a consequence of the increasing competition and the rise of ever more demanding customers, producers are constantly seeking ways to differentiate their products and meet the specific needs of smaller customer groups. Today, it is a fact that coming up with a great product alone is not enough to achieve market success. Against this backdrop, companies need to apply strategic marketing. One of the strategic marketing tools that firms can use to their advantage towards achieving success in the market is segmentation, targeting and positioning (STP). Worth noting is that STP is as much a tool as it is a strategic approach and model used in marketing. STP is part of the process involved in coming up with a marketing strategy and summarises the market segmentation process. Hooley et al. (2012, p. 183) note that although positioning and segmentation are distinct parts of the [marketing] strategy, they are centrally linked by their focus on satisfying customers’ needs in a better way than competitors do. This paper discusses segmentation, targeting and positioning and illustrates the application of STP using different industry and company examples (with greater focus on car manufacturer, Volkswagen). The paper concludes with recommendations for companies with respect to the application of STP – market segmentation targeting and positioning examples.

Related article: Segmentation Targeting and Positioning Volkswagen

Market Segmentation

Market segmentation, according to William Stanton, is the process of dividing the heterogeneous market for a product into several sub-markets or segments, each of which tends to display homogeneity in all important aspects (Rudani, 2010; Tabavar n.d., p. 63). …  As noted above, segmentation is aimed at enabling the firm give proper attention to the needs of specific customers that collectively form a segment, thereby maximising consumer satisfaction and profits for the business (Bihani, 2004). A company’s market can be partitioned or divided based on different bases. Some of the bases commonly applied towards the segmentation of a market include demographic, behavioural, geographic, and psychographic characteristics (Anand, 2016). … A company such as cosmetics manufacturer L’Oréal applies demographic and psychographic segmentation in marketing its products. With regard to demographic segmentation, L’Oréal produces certain brands specifically for …. With respect to psychographic segmentation, L’Oréal produces different products that are targeted at different markets depending on …; there are products for general consumers and there are those for … consumers such as …. Continue reading  .

Other subtopics included in the article: Targeting, Segmentation, Application of STP by Volkswagen (VW), Recommendations for Companies. 

Related article: Segmentation Targeting and Positioning Volkswagen

Segmentation Targeting and Positioning Volkswagen

segmentation targeting and positioning strategy exampleThis article presents a segmentation targeting and positioning strategy example.  It also presents a segmenting targeting positioning example. It discusses market segmentation of cars and stp model marketing example, and is related to market segmentation for car industry, automotive market segments, automotive market segmentation, and marketing stp. It attempts to answer the question how do car companies segment their market? Article preview: 

Segmentation, Targeting and Positioning by Volkswagen

Introduction

Many successful companies across the world apply segmentation, targeting and positioning (STP) as part of their marketing strategies. Volkswagen (VW), a company that makes cars is one of the successful companies that apply STP. Established in 1937, the company manufactures several car brands including Audi, Seat, Lamborghini, Skoda, Porshe, Scania, Man, Bentley, Bugatti, and Volkswagen (Volkswgen, 2018a; Bhasin, 2017; Volkswagen, 2018b). While its headquarter is in Wolfburg, Germany, the company has several branches and plants spread out in different parts of the world. This enables it to meet the needs of its global clientele, with the help of a robust distribution network. This paper briefly discusses segmentation and targeting before focusing on how Volkswagen has segmented its market, its target markets (segments), and how the brand is positioned.

Related Article: Market Segmentation, Targeting & Positioning (STP) with Company Examples

Segmentation and Targeting

Market segmentation, according to William Stanton, is the process of dividing the heterogeneous market for a product into several sub-markets or segments, each of which tends to display homogeneity in all important aspects (Rudani, 2010; Tabavar n.d., p. 63).  Philip Kotler, on the other hand, defines segmentation as the process of dividing a market into discrete groups of buyers based on factors such as needs or characteristics, behaviour, marketing mixes, or who might require different products (Rudani, 2010). A company’s market can be partitioned or divided based on different factors. Some of the bases commonly applied in segmenting a market are demographic characteristics (such as age, gender, religion, income levels, family size), behavioural characteristics (such as brand loyalty status, usage rates/consumption levels, benefits sought by the buyer, response to a product, and occupation), geographic characteristics (such as geographic location, cultural preferences, language, population type and density (urban, rural, exurban, suburban), time zone, and climate/season, and psychographic characteristics (such as values, beliefs, interests, attitudes, lifestyles, personality traits, social status). 

Targeting, according to Bihani (2004), is the process of evaluating how attractive market segments are and choosing the segment(s) to enter. It involves making choices taking into consideration available and necessary resources. Firms have a number of options with regard to the targeting strategy to apply. The main targeting strategies that companies can apply are mass marketing, niche marketing, segmented marketing, and micromarketing (Strydom, 2005; Kotler et al., 2015).

Segmentation and Targeting by Volkswagen

Volkswagen applies segmented marketing and has its market partitioned based on a mix of psychographic, demographic, geographic, and behavioural factors to meet the specific needs of different groups of customers. The following section discusses Volkswagen’s market segmentation based on these factors/bases.

Psychographic segmentation involves partitioning a market based on customers’ values, beliefs, interests, attitudes, lifestyles, personality traits, social status, or other psychographic factors. Volkswagen has partitioned its market based on customers’ interests and lifestyles. In this regard, some of the segments the company targets include consumers who simply need mobility, enthusiasts and consumers who need comfort. 

The compact or small cars that VW manufactures such as the beetle, polo, and golf are aimed at catering to the needs of consumers who simply need mobility or who simply wish to enjoy the utility value of a car … The cars targeted at these consumers are simple in design, …, and are cheaper to buy and maintain. …

Positioning of Volkswagen/ Volkswagen Brand Positioning

Market positioning, according to Wilkinson (2013), is the process of establishing the identity or image of a product or brand so that it is perceived in a certain way by consumers.With regard to positioning, Volkswagen takes pride in being a leader in … and to this extent uses the
tagline “….”. … Volkswagen mostly positions itself as … that produces … vehicles which attrac
t … compared to most car brands with more or less similar specifications. Whichever place the Volkswagen car is marketed, it is positioned as a vehicle that promises … 

Conclusion

Volkswagen segments its market based on a mix of psychographic, … factors to meet the specific needs of different groups of customers. With respect to psychographic segmentation, the company has segmented its market based on customers’ interests, … and lifestyles. …. The company applies … given that it has segmented its market based on how consumers intend to use vehicles. There are consumers who need vehicles for … use while others need them for …. use. Going by …., Volkswagen positions itself as a …. brand that produces … efficient vehicles.   Read the entire paper …

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Related article: Market Segmentation, Targeting & Positioning (STP) with Company Examples

Outline
Introduction
Segmentation and Targeting
 – Segmentation and Targeting by Volkswagen
       – Psychographic Segmentation
       – Demographic Segmentation
       – Geographic Segmentation
       – Behavioural Segmentation
– Positioning of Volkswagen
– Conclusion
– References

Segmentation, Targeting and Positioning by Volkswagen

 

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