Wednesday, 15 May 2013

A Literature Review Paper: The role of religious coping and superego anxiety on recovery from substance abuse and depression.

The role of religious coping and superego anxiety on recovery from substance abuse and depression.

 

Coping literature has shown that individuals are not merely passive victims of their circumstances. They are also active participants in their own affairs (Lazarus and Folkman, 1984; Pargament, 1997a).  The same literature has also shown that coping is a process that changes with time (Lazarus and Folkman, 1984; Pargament, 1997a).  Lazarus & Folkman (1984) and Marler & Thoresen (2002) suggested that in most circumstances individuals employ personal, social and situational factors in coping with stress. Pargament (1997a) and Koenig (1998) found that in stressful situations many people employ religion. They stated that for a religious person, religion contributes to both their self-definition and their coping strategies.  Since some who profess spirituality (belief in God) or religiousness (the exercise of spirituality in an organized manner) do not actually practice their religion, the present study will focus on the actual use of spirituality or religion in times of stress (religious coping) rather than the mere profession of spirituality (belief in God) or religiousness (the exercise of spirituality in an organized manner). In this sense, the term religious coping bridges some of the implicit differences between spirituality (belief in God) and religiousness (the exercise of spirituality in an organized manner).

 

Conditions under which religious coping can be adopted.

The adoption of religious coping depends on many factors that can be summarized into personal, social, and situational factors (Lazarus & Folkman 1984; Folkman et al. 1986; Bush et al., 1999; Pargament, 2000; Pargament, 2001; Harrison et al. 2001).

First, the adoption of religious coping depends on the extent religion is incorporated into subject=s self-definition (Pargament, 2001).  For some subjects, religion is intrinsically part of their lives, for some it is not, and for some it is a direct opposite of their belief and/or life.  For some deeply religious people, religion is so ingrained in their subconscious that McIntosh (1995) speaks of religious schemas that influence how they receive and process information.  

Secondly, the adoption of religious coping also depends on how a particular situation is appraised (Lazarus & Folkman, 1984; Folkman et al. 1986; Bush et al., 1999).  For example, if a situation is appraised as life threatening or falling outside the realm of human control, religiously minded individuals are more likely to adopt religious coping than when the situation is judged otherwise. Even when the situation is deemed life threatening, Lazarus and Folkman (1984) warn that individuals do not automatically adopt religious coping.

Harrison et al. (2001, p. 90) tried to pinpoint situations under which religious coping is likely to be adopted.  They found that religious coping is often adopted when faced with negative events or situations.  In these situations, religious minded individuals use God to give meaning and purpose to negative events that happen in their lives. For example, a religiously minded individual may interpret a misfortune as an opportunity for spiritual growth (Pargament et al. 2000).

Pargament’s (2000, p. 520) study went a little further in noting that religious coping influences the appraisal of a supposedly stressful situation from harmful to benevolent, depending on whether the religious coping style adopted is either positive (empowering) or negative (demoralizing).  For example, if a situation is appraised negatively as a punishment from God or a lesson from a punishing God the reaction will be different from when the situation is appraised positively as a temptation, or a test of commitment to God.  However, the study did not address why a religiously minded individual will adopt for example, a negative religious coping style instead of a positive religious coping style in a particular situation.  In addition, the study is unclear whether the accompanying relief from religious coping was temporary or permanent.    

Religious coping and spiritual coping

             Initially, there was no distinction between religion and spirituality (Pargament, 1999).  Spilka and McIntosh (1996) held that the twosome were used interchangeably.  Recently, the concept religion has attracted diverse meanings (Pargament, Balzar, Van Haitsma, & Raymark, 1995; Zinnbauer, 1997; Pargament, 1999); the literature suggests that religion is increasingly defined in organizational terms while spirituality is defined in more personal and experiential terms (Zinnbauer, 1997; Pargament, 1997; Pargament, 1999; Shahabi et al.; 2002). 

            Miller and Thoresen’s (2003) study stated that the multidimensionality of spirituality makes it easy for the concept to elude clear-cut definitions. They concluded it is easier to know what spirituality is not than what it is because people differ from each other when they are speaking of spirituality.

This development according to Sheldrake 1992 and Wulff 1997 has forced researchers to distinguish between spirituality (belief in God) and religion (the replication of that belief in organized way).

            Spirituality has been defined in the context of a search for spiritual value (Pargament, 1999); or functional in nature as in the search for universal truth (Scott, 1997, p. 108), or as a conscious or unconscious belief that relates the individual to the world and gives meaning and definition to existence (Scott, 1997, p. 115) or as the opposite of materiality (Thoresen & Harris, 2002).  In all, spirituality (belief in God) is dissociated from institution. 

            The new trend is attributed in part to the influx of eastern religions e.g., sects of Buddhism, which McLoughlin (1978) traced to the religious revitalization movements inherent in history. Other researchers such as Finke (1990); Finke & Stark (1986, 1992); Iannaccone (1991), Marler & Hadaway (2002) trace it to the 20th century free market approach to religion. This trend has thrown into question the once accepted definition of religion because of the need to incorporate different sects and practices. The situation has led to not only a more narrow definition of religion but also the delineation of the concept of spirituality in order to accommodate the different sects and practices.

The rise of secularism in the later part of the last century and the growing perception of institutional religion as a hindrance to personal religious growth and development is another reason for the development (Zinnbauer et al. 1997; Turner et al. 1995).  This trend, as well as the influx of eastern religions came also the inherent feeling among researchers and the public that something is lacking in the way religion is define or understood (Pargament, 1999b). 

            Furthermore, Pargament (1999b) and Bibby (1987) held that the prevalent trend toward individuation and autonomy created a disdain for institution and the need to deinstitutionalize.  The disdain toward institutions such as big governments and big companies was extended to religious institutions.  The sociologist Roof (1993) found that baby boomers in the United States mistrust institutions of all kinds.  Their tendency to pursue individualized beliefs and practice makes them more likely to commit to a spiritual quest than an institutionalized religion (Roof, 2000; Marler & Hadaway, 2002). Roof (2000) also found that spirituality was defined in personal and experiential terms, while religiousness included beliefs, practices and institution.

            The findings of Roof (1993) and Bibby (1987) were replicated by Woods and Ironson (1999).  In addition, Woods & Ironson (1999) found that those who reported spirituality (belief in God) were more likely to see God as more loving, nonjudgmental and forgiving, whereas those who reported religiousness (organized expression of that belief) saw God more as a judgmental creator.

            This development, according to Pargament (1999, p. 5), is novel because historically, religion has not been viewed in a purely institutional sense nor was it only about God.  Evidently, it is no longer surprising to hear people say I am not a religious person, but I am spiritual (Pargament, 1999, p. 4).  The concepts religion and spirituality began to mean different thing to different people.

If the popular parlance is to say, I am not religious, but I am spiritual, to what extent therefore does the academic understanding of the term religious coping reflect the public notion of the term?  This is necessary in order to abridge the gap between the academic construct of the terms religion and spirituality with the understanding of the concept by the participants in the study.

Marler and Hadaway’s (2002) review found that the two concepts are mutually overlapping when they took the definition of the concepts to the streets. They asked regular people what might be the definition of religion and of spirituality. An older baby boomer from New England saw spirituality as “how you look at life and religion as the clothing for it. An ex-conservative Protestant now married to a Muslim in Georgia saw religiousness as being active in the church and all that, while being spiritual was more of inner feelings and self. Among many respondents, religion was organized spirituality, the practice of spirituality, or that part of spiritual experience that is institutionalized. Marler and Hadaway (2002, 295) concluded that for most people spirituality is about a connection between the individual and some larger power, while religion is the organized expression of that connection.  

Zinnbauer et al. (1999) reviewed the literature on religion and spirituality.  They concluded that the two concepts are conceptually overlapping.  The same finding was also replicated by Hill et al. (2000) and Marler & Hadaway (2002). Both Zinnbauer et al. (1999) and Hill et al. (2000) warn against ignoring the reality that spirituality and religion are inherently intertwined and that those who polarize the concepts oversimplify them.

In a broad based sample, Zinnbauer et al. (1997, 562) found that ninety-three percent (93%) of the respondents consider themselves spiritual; seventy-eight percent (78%) identify themselves as religious. However, they recognized that different religious and cultural groups assign different meanings to the term religiousness and spirituality.  They advocated operationalizing the definition of religiousness and spirituality in a way that reflects the variety of perspectives in the sample. They also found that seventy-four percent (74%) of their sample saw religion in the same way as spirituality and did not see the need to choose between them.  Although almost every one in the study believed they were spiritual, the correlation in the participants definition of spirituality was essentially zero.  There was even less correlation in the manner mental health professionals in the study rated themselves as spiritual or religious.  The study also found that more than any group, the mental health workers rate themselves spiritual more often than religious.  The study points to a potential bias in psychotherapy (Kelly, 1990; Schwen & Schau, 1990) where religious solutions may be considered maladaptive or the therapist may implicitly impose his or her spiritual or secular worldview on a religiously minded client.

Marler and Hadaway (2002) review suggested that the large discrepancy between the number of those who rated themselves spiritual rather than religious in most studies on spirituality and religion depends on how the question was framed. They stated that both Roof (1993) and 1999 Gallup poll from which many of the studies were based assumed that being religious and being spiritual were mutually exclusive and did not give the respondents the choice to be both spiritual and religious. They asserted that in the Zinnbauer et al. (1997) study in which the choice was given, seventy-four (74%) of the subjects rated themselves both spiritual and religious as opposed to nineteen percent (19%) that rated themselves spiritual or the four percent (4%) that rated themselves religious. In the Marler and Hadaway (1993) study where the same choice was available to the participants, sixty-four percent (64.2%) rated themselves both spiritual and religious as opposed to nineteen percent (18.5%) and the nine percent (8.9%) that are reportedly either spiritual or religious alone.

The present study will therefore adopt Pargament’s (1999, p. 15) broadband definition of religion which includes not just institutions but all sacredness including spirituality. Religion is defined as a “search for significance in ways related to the sacred (Pargament, 1999, p. 11). By significance, he meant, whatever people value in their lives be it psychological, social, physical or spiritual; be it good or bad (Pargament, 1999, p.11). Pargament (1999, p. 12) divided the search into a pathway and a destination. He posited that pathways might not necessarily lead to sacred destinations because people involve themselves in religion for many reasons that may not be spiritual. What was required of each search, according to Pargament (1999, p.12) was a sacred pathway. He likened sacred pathways with religious attendance, rituals, coping, etc. Hence, the search for the sacred qualifies as religious no matter the destination. In this vein, religion is considered a broader concept than the bad, narrow and institutionally definition that is an oversimplification of an otherwise complex construct. 

 

Psychoanalysis and religion

 Religious coping (the use of spirituality or religion to cope in times of stress) has received both positive and negative evaluation from the fathers of psychoanalysis over the course of the history of psychoanalysis.

In three papers, Freud (1907; 1928; 1939) discussed religious coping and its impact on the society. His view on the origin and use of religious coping is more negative than positive. First, Freud (1928) held that religious belief is the product of primitive mans (sic) frustrations in confronting forces beyond his (sic) control (instinctual and external).  In mans (sic) attempt to guide against unbearable forces and the subsequent anxiety from failure to deal with these forces, he (sic) projects his wishful fantasy of an omnipotent father onto the concept of God to guide and protect him from danger (Freud, 1939).  By using religion as a means of coping with feelings of helplessness, man (sic) fulfills his unconscious wish for an omnipotent father by actually living and acting as if there is an omnipotent father or God to guide and protect him (sic) in times of danger.  Therefore, religious coping, according to Freud fosters regression to childhood dependency.  Freud (1928) stated that the strength of mans fantasy of an omnipotent father is contingent upon the strength of his dependency issues; the use of religious coping has provided the avenue for mans (sic) fantasy to be sustained and maintained.  With the dawn of civilization, man (sic), according to Freud, attained the age of reason; subsequently religion outlived its usefulness.  Freud argues that it is incumbent that the wish for an omnipotent father is replaced because continual reliance on this fantasy fosters childhood neurosis by enabling illusory infantile wishes to be sustained and maintained.  Freud (1928, p. 49) writes: men cannot remain children for ever; they must in the end go out into hostile life.  We may call this education to reality.@

In Obsessive acts and religious practices, Freud (1907) held that religious rituals are analogous to symptomatic efforts to cope with unconscious guilt from the oedipal complex.  The emphasis on guilt and punishment prevalent in religious rituals, according to Freud, aim at assuaging unconscious guilt from the oedipal complex.  Freud (1907) held that through religious rites and rituals, the communitys unconscious guilt as well as the efforts to assuage guilt is reinforced and maintained; community neurosis is thereby sustained and maintained.  This, according to Freud, (1928) hinders ego development by consistently fostering regression and obsessional neurosis. 

Freud did not advocate immediate eradication of religious coping because that would create by his admission a dangerous void.  For the unsophisticated, Freud allowed religious coping as their only means of sustaining civility in the state.  Freud (1928/1913) saw in psychoanalysis a vehicle through which preparation for the replacement of religion can be achieved.  Despite his idea that religion helps to maintain stability in the state for the unsophisticated, he was never in doubt that societies and individuals will be better, if individuals rely on science rather than religion in dealing with their problems.  If religious coping fosters childhood and societal obsessional neuroses and needs to be replaced by science, there is no gainsaying that Freuds view of religious coping is at most not favorable.

In A Common Faith, John Dewey (1934, p. 46) distinguished between what he called religion and religious experience.  Like Freud, he held that religious coping is a hindrance to mans attainment of his potentialities.  Through religious coping, man (sic) continues to sustain the idea of Gods intervention in human affairs thereby relying on some external power to fulfill his responsibilities.

 Flugel (1945) held that religious coping is a defense against anxiety from noxious impulses that are difficult to confront. He stated that the concept of God or an omnipotent father is a projection of a weak ego in defense of the anxiety from having to deal with the conflict between the demands of the id (basic drives) and superego (conscience).  Flugel (1945) explained it by saying that the developing ego lacked libidinal energy to confront the conflicts between the instincts and the demands of conscience.  In defense, the developing ego projects a disguised superego that now appears as an outside observer, otherwise known as an omnipotent and independent person i.e. God, as a defense against the anxiety of mediating between the conflicts of the id and the superego. In this sense, religious coping provides an opportunity for man to hide from his responsibilities by relying on external factor or God instead of facing realities.

Karl Marx regarded religion as the opium of the masses.  He advocated eradication of religious coping because of his belief that religious coping hinder the working class from seeking their due rights. For Marx, religious coping represent both an expression of symptoms as well as a resistance to real expression of symptoms. It is an unconscious effort to maintain substitutive fantasy of an omnipotent God and some reward that comes with a fulfillment of an action either here or hereafter. In religious coping, this fantasy is not only maintained but lived out in religious rites and rituals such that prayers and religious rites become magical means of realizing these fantasies (Argyle, 1959).

Unlike Freud, Jung traced religious coping to the human psyche.  In Psychology and religion, Jung (1938) stated that religious coping is a psychological phenomenon that is ingrained in the collective unconscious. Like Freud, Jung held that religious coping is symptomatic of unconscious conflicts but unlike Freud, Jung believed that religious coping is also therapeutic, in the sense that through religious coping unconscious conflicts are not just played out but also sublimated. In this vein, religious coping facilitates ego development through the process of identification and misidentification.              

 In Psychoanalysis and religion, Fromm (1950) stated that the relationship between psychoanalysis and religion is too complex to be forced into either one or two categories.

In 1983, Bergen reviewed the literature on the relationship between religious coping and mental health. He found that the literature was inconclusive. Forty-seven percent (47%) of the studies reported positive relationship between religion and mental health, twenty-three percent (23%) reported negative correlation between religion and mental health while thirty percent (30%) reported no relationship between the two.

In another review by Gartner, Larson, and Allen (1991), the emphasis was on how mental health was defined.  They found that when the definition of mental health was based on what they called Ahard variables@ or behavioral events that can be reliably observed and measured, a positive correlation was found between religion and mental health. However, when the emphasis was on what they called Asoft variable@ that is, paper and pencil personality tests which attempts to measure theoretical constructs,@ religion was found to correlate negatively with mental health.

In their review of the literature eighteen years later, Harrison et al. (2001) found that religious coping is linked to a variety of psychological and health indicators. They also found a great deal of variations in the size and strength of the relationship between religious coping and mental health. The study found that religious coping was common among many groups; people were more likely to adopt religious coping when faced with hopelessness and helplessness. Religious coping was prominent in situations such as terminal illnesses (Mickley et al., 1998), bereavement (Thompson & Vardaman, 1997), depression (Bickel et al., 1998), chronic pain (Bush et al., 1999), and serious life stressors (Park, Cohen, and Herb, 1990).  In all, religion was found to correlate with mental health when the emphasis is on positive religious coping (Pargament, 2001) and positive appraisal (Lazarus and Folkman, 1984). 

Although there is significant empirical evidence supporting a positive correlation between religious coping and mental health, there is a dearth of literature on how religious coping may interact with substance abuse and superego anxiety in depressed substance abusers. Depressed substance abusers share a sense of helplessness and hopelessness reminiscent of those who use religious coping to deal with life threatening situations but whether this helplessness and hopelessness rises to the level experienced by bereaved or terminally ill patients is not clear.

In some studies, a negative correlation was found between  religiousness and substance abuse disorders (Gartner, Larson, & Allen, 1991; Gorsuch, 1995; Kendler, Gardner, & Prescott, 1997; Miller, 1998), in the sense that substance abusers were less likely to go to church, temple or synagogue; in another study, it was found to depend on the type of substance used (Uchendu, 2002).

The relationship between substance use and depression is well documented in addiction literature. In Civilization and its discontents, Freud (1930) saw addiction as a flight from unpleasures by escaping to a fantasized world. Like Freud, most psychodynamic theories adopted the notion that substance abuse is a medication for underlying psychological problems. The exact nature of this underlying problem has not been resolved. It has been described as depression (Rabo, 1933), euphoria of drunkenness (Fenichel, 1945), Character problems (Wieder & Kaplan, 1969), childhood trauma (Raskin, 1970), painful affect from ego deficits (Khantzian, 1985), defect in the self (Kohut, 1977), vulnerability or deficiency in self-regulation and efforts to overcome them (Golden, 1990). In all, substance abuse is considered a mask to an underlying psychological problem. The choice of depressed substance abusers for the present study is based on the idea that substance abuse is a mask for an underlying depression. In the present study, the degree of substance abuse will be predicated on the severity of depression, while the severity of depression will be contingent on the measure of superego anxiety.

 

Purpose of Study

This study aims at contributing to the literature by pointing out that the various outcomes often associated with religion depends on the type of religious coping adopted positive or negative. It hypothesizes that the negative outcome often associated with religion and mental health is based on the erroneous identification of religion with negative religious coping.  The present study also hypothesizes that the adoption of negative religious coping is associated with harsh superego or strong parental disavowal.

            Building on the negative correlation between church attendance and substance use (Chang et al. 2001; Koenig, 2001), and the correlation between positive religious coping and mental health, the study aims at a psychotherapy technique that incorporate positive religious coping for clients with substance abuse and depression.  In addition, the study has implication for both religiously and non-religiously minded clients who may be using negative religious coping style in attempts to cope with stressful situations like substance abuse and depression. The whole idea is summarized in these hypotheses.

 

Hypothesis:

I. Subjects who score high in positive religious coping  will also report a high length of recovery from substance abuse.

II. Subjects who score high in positive religious coping will also report a high length of recovery from depression.

III. Subjects who score high in negative religious coping will report a lower length of recovery from substance abuse.

IV. Subjects who score high in negative religious coping will also report a lower length of recovery from depression.

V. Subjects who score high in superego anxiety measure will also report negative religious coping because of introjected parental disavowal or harsh superego anxiety.

VI. Subjects who score high in superego anxiety measure will also report a lower length of recovery from substance abuse.

VII. Subjects who score high in superego anxiety measure will report a lower length of recovery from depression.

VIII. Subjects who score low in superego anxiety measure will also score high in positive religious coping.

IX. Subjects who score low in superego anxiety measure will report a higher length of recovery from substance abuse.

X. Subjects who score low in superego anxiety measure will report a higher length of recovery from depression.

 

Method

Subjects:

The subjects (50) will be drawn from outpatient substance abuse treatment centers and AA groups in Nassau and Suffolk counties in Long Island as well as in Brooklyn, Bronx and Queens' boroughs of New York.  A majority of the participants will be drawn from the outpatient substance abuse program in Creedmoor psychiatric center in Queens' village.  Participants will be made up of depressed substance abusers.  The criteria for inclusion will include:

(a)          Subject must be an adult (at least 18 years of age by the time of the interview).

(b)          Subjects must have at least a year history of substance abuse and depression.

(c)          Subjects must have a clinical diagnosis of substance abuse and depression.

(d)          Subjects with psychosis e.g. schizophrenia, are ruled out.

 

Procedure:

This is a correlational study. The measures will consist of a demographic form that will include among other things subjects family history, history of depression, history of substance abuse, days of abstinence, and length of recovery from substance abuse and depression. Subjects psychiatric history is tailored to rule out subjects that do not meet the criteria of inclusion. Three scales will be used, the Beck depression inventory (BDI-II), Pargament et al. (2000) religious coping scale (Rcope), Early memory test, and the Thematic Apperception Test (TAT). 

 

Religious Coping Scale

Pargament et al. (2000) religious coping scale (Rcope) consists of 21 subscales of 5-items to which participants respond on a 4-point scale ranging from O representing not at all to 3, which represents a great deal.  The scale was normed with a college and a hospital sample.  Reliability estimates of the subscales were generally high (alpha = .80 or greater) with the exception of two scales none of which were adopted for the present study.  The four subscales selected for the present study are not only among the most reliable but also among the most commonly used subscales. The four subscales include, seeking control through a partnership with God in problem solving (collaborative religious coping subscale - alpha = .89). Redefining stressor as benevolent and potentially beneficial (benevolent religious reappraisal subscale - alpha = .91). Dissatisfaction with Gods relationship with the individual in the stressful situation (spiritual discontent - alpha =.88), and passively waiting for God to control the situation (passive religious deferral - alpha = .83). The four subscales were selected to satisfy two positive and two negative sides of Rcope. The variations in internal consistency between positive and negative subscales were underscored by Pargament et al. (2000).

Beck Depressive Inventory II (BDI-II).

            The BDI-II is a self-report analysis of occurrence and severity of depressive symptoms.  BDI-II reliability studies indicate a coefficient alpha of .92 for an outpatient population.  This is an improvement because BDI-I had a coefficient alpha = .86.  Unlike BDI-I, BDI-II is positively correlated with the Hamilton Psychiatric Rating Scale for Depression (r.71, n = 87; Beck et al. 1996).  It is also consistent with DSM-IV criteria for depression (Smith & Erford, 1998).  Like most measures, it is not an actual diagnosis of depression (Sundberg, 1987) because that will require in addition, a clinical judgment.  BDI-II contains 21 items on a scale of 0-3 rated according to severity.  It was written at the 5th grade reading level (Conoley, 1987).  Since BDI-II is a new diagnostic tool, much is not known, except that five percent of the standardization samples were minorities. It is also said to be an updated version of BDI-IA, which was found to apply across racial/cultural categories (Ames, Gatewood-Colwell, & Kaczmarek, 1989).

            However, differences were found in frequency and severity in the expression of depressive symptoms between men and women in the standardization sample (Beck, Brown, & Steer, 1989).

 

Thematic Apperception Test (TAT):

Josephs (2003) superego anxiety measure will be used to score five depression and substance abuse eliciting TAT cards (1, 2, 3BM, 3GF, 13MF) to determine subjects level of superego anxiety. Participants will be required to make up a story with this directive: Use the picture to make up a story as you please.  Describe first, what is happening in the picture right now. Secondly, write briefly, what led to it and thirdly, what happened after it.  Describe what the character(s) in the picture is (a) feeling and, (b) Thinking. 

            The cards were selected because they were associated with depressive symptoms (Coche & Sillitti, 1983).  In addition, Coche and Sillitti (1983) reported that the presence of depressive themes on the TAT was correlated with measures of depression on MMPI and Beck Depression Inventory, one of the scales in the study.

 

Picture # 1:

This is a picture of a boy sitting at a table looking at a violin placed on the table in front of him.

            The picture elicits how subjects deal with impulse versus control, personal demands and external controlling agent, and general attitude toward authority (Groth-Marnat, 1999).

 

Picture # 2:

This is a picture of a country scene with a woman holding a book in the foreground. In the background, a man is working a field while a woman watches.

            This picture elicits issues of autonomy from the family versus status quo. It also deals with how individuals cope with challenges of people living together, competition among siblings etc (Groth-Marnat, 1999).

Picture # 3:

A boy is huddled next to a couch.  On the floor next to him is an ambiguous object that could be a set of keys or a revolver.

            This picture centers on an individual who has been emotionally involved with another person or who is feeling guilty over some past behavior he has committed. Drug addicts often perceive the person in the picture as an addict (Groth-Marnat, 1999).

 

Picture # 4:

A woman is standing next to an open door with one hand grabbing the side of the door and other holding her downcast face.

This picture elicits stories on interpersonal loss and contemplated harm because of guilt over past behavior (Groth-Marnat, 1999).

 

Picture # 5:

A young man is standing in the foreground with his head in his arms.  In the background is a half-naked woman lying in a bed.

            This picture elicits stories on sexual conflicts.  It also focuses on guilt induced by illicit sexual activity (Groth-Marnat, 1999).

 

Joseph Superego Anxiety Measure

Josephs (2003) superego anxiety measure was designed to measure three ways of expressing critical attitudes from narrative material.  This measure consists of three subscales.  The subscale I measures self-criticism.  The subscale II, measures perceived criticism of others, and the subscale III measures criticism of others, condition, situation or environment.

The narratives from the early memory and TAT stories will be scored by reading and scoring each sentence for the presence or absence of subscale I, II and III.  Sentences receive one score. Since it is a measure of explicitly stated attitudes, sentences are scored only when critical attitude are reflected in them.  A sentence may be scored for the presence of any of the three types of criticism at the same time. Critical attitudes are not scored in sentences unless explicitly stated.  With no training, Josephs superego anxiety scale was found to enjoy a moderate level of interrater reliability (r= .4 to .6).  By the third time of scoring patient narratives, interrater reliability was found to be over .7. Three doctoral students trained in Josephs (2003) superego anxiety scale will rate the stories independently. 

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NOTES ON HOW TO ANSWER PROBLEM QUESTIONS IN LAW

Notes On How To Answer Problem Questions In Law

 

1.    Identify the relevant facts eg by highlighting, underlining etc But Do NOT Rewrite Them In The Answer - This Wastes Precious Exam Time And Words!

 

2.    Identify the legal issue eg is the scenario about offer and acceptance? Consideration? Intention to form legal relations? (Do write this in the answer).

 

3.    If possible try to avoid giving a legal definition and the relevant rules for the issue.  More marks can be obtained if you relate the definition and rules to the identified facts.

 

4.    State where you get your authority from when you give a definition or rule.  Since almost all authority for definitions and rules in Contract and torts law comes from legal cases which have been decided on by the courts, you must CITE THE CASES, eg the definition of an invitation to treat comes from the case Pharmaceutical Society of Great Britain v Boots Cash Chemists [1952] 2 QB 795.  In the exam you do not need to cite all the relevant details such as the Journal name, page number etc - simply refer to the Boots Cash Chemist case or the Smokeball case, etc.

Citations In Law

There are some conventions specifically relevant to legal writing. For example, law journals generally require referencing by way of footnotes, with specific rules regarding form.

However, for this course referencing should be consistent with the Harvard System, with references cited in the body of the text.

Citing Cases

As indicated above, cases should be cited within the text in the form illustrated by the following examples: FCT v Clarke (1927) 40 CLR 246; Coles Myer Finance Ltd v FCT 93 ATC 4214. All case names are to be put in italics or underlined. Where a reference is made to, or a quotation is taken from, a particular page of a case (say, page 249 of the Clarke case) that page should be cited thus: FCT v Clarke (1927) 40 CLR 246 at 249.

Quotations From Statutes

If the entire section of a statute is to be quoted, it must be identified by section number and then the quotation indented in the usual way. Where only a phrase is being quoted, this should be included within the text of the paper together with the title of the statute and number of the section. After the short title of the Act which is written in italics or underlined, give the year of enactment followed by an abbreviation of the appropriate jurisdiction in brackets. For example: Income Tax Assessment Act 1936 (Cth); Pay-roll Tax Act 1971 (SA).

 

 

 

 

 

 

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PESTLE Analysis of the Luxury Goods Industry

GENERAL OBJECTIVES

As a person with knowledge of the luxury goods industry, the author has always brought up to his superiors the viability of strategy formation regarding the analysis of this industry and at times fail to understand the reasons or logic behind certain strategic implementations imposed on it.

By delving into this project paper, the author intends to have better insights into how the strategic analysis of the luxury goods industry is thought up, formulated and then imparted down. The author hopes to have an in-depth understanding as to how the strategic analysis of the luxury goods industry enables companies and organizations in this business to compete effectively and profitably in this era of internationalization where competition is extremely intense.

In order to reinforce the learning objectives, two key focal issues were focused upon i.e. innovation and diversity. Innovation was discussed with regard to the strategic analysis of the luxury goods industry where it was renowned for its developmental capabilities to constantly innovate. Diversity came under strategic thinking and formation as the author considered the diverse culture, political climate, economic surroundings, social environment, technological settings, government policies and legal systems in order to better understand the issues being discussed.  

EXECUTIVE BRIEF

This paper utilized the luxury goods industry as the model industry to review its present impacts and opportunities and how it dealt with critical situations. From the analysis, key trends in the luxury goods industry were then identified, how it worked and its effectiveness in dealing with critical situations was ascertained. The paper then moved on to assess the luxury goods industry with regard to its suitability to critical situations, during which the internal capabilities of the industry in relation to the strategy being followed was determined also. An overall analysis of the performance and effectiveness of the luxury goods industry was also conducted to assess and compare the strengths and capabilities of the industry with those of others. Gaps in the luxury goods industry and environment were then identified.

Finally, several choices of strategies to improve the status of the luxury goods industry as effective means in critical situations were recommended and evaluated in terms of appropriateness to the issues reviewed, feasibility in carrying out the options and acceptability within the key stakeholders and decision makers. Several key implementation issues related to managing strategic change were also addressed as well. 

PART A: LUXURY GOODS INDUSTRY

Detailed Analysis of the Macro-Environment (PESTLE Analysis)

 

Political Trends

 

            The luxury goods industry has experienced electoral and political transitions and crises in the last 12 months.  There have been at least four political trends that have emanated from these political events. These are: (a) the cry for democracy and reforms; (b) increased popular and local-level assertiveness; (c) greater public accountability; (d) re-definition of the concepts of power and politics. Also, the forms of political economies have slowly shifted from a bipolar (big government-big business) to a tri-polar structure (authorities - private sector – civil society).

 

            The implementation of the Free Trade Area, which laid out a comprehensive program of regional tariff reduction, will be continuously implemented in phases through the year 2008. Over the course of the next several years, the programs in tariff reductions were made broader. Efforts to eliminate non-tariff barriers and develop common product certification standards were initiated. In addition, ASEAN also was able to formulate framework agreements for the intra-regional liberalization of trade in services. Industrial complementation schemes meant to encourage intra-regional investment were also approved (Amsden, 2001). 

 

Economic Trends

Despite the adverse economic trends in the first half of the year, the luxury goods industry as a whole experienced relatively robust economic growth. It is estimated that the ASEAN countries, taken together, posted a better-than-expected GDP growth of 4.5% last year, slightly higher than the 4.1% growth that they achieved in 2002. Last year, Vietnam was the fastest growing ASEAN country, with an estimated GDP growth of 7.3%, followed closely by Thailand with a GDP growth of 6.7%. In other countries, GDP growth ranged from about 1% to 5%.

Many countries have also seen the risk-weighted capital adequacy ratios of their banking systems improve due to government-sponsored bank recapitalization programs, continued progress in financial restructuring, and improvements in financial risk management. The capital adequacy ratio of commercial banks in these countries is now far higher than the 8% Basle norm. It ranges from about 14% in Malaysia and Thailand to about 20% in Indonesia, with the Philippine commercial banks reporting an average capital adequacy ratio of about 18% (Arora et al. 2001).

Social / Cultural Trends

There have also been social and cultural trends that have been evident over the last 12 months in the luxury goods industry. These include: (a) the irreversible rise of civil society among ASEAN countries; (b) the rise of civil society blends perfectly with a tri-polar structure of political economy; (c) the increase in the roles of intellectuals; and (d) the beginning of a period of introspection.

Technological Trends

It is a common knowledge that the luxury goods industry is still a relatively new industry and is still in its early stages of development. However, it has shown signs of rapid growth and it is being estimated that there will be more than a million mobile devices that will be shipped within the year. And it is further being expected that within the next years the tremendous growth and technological advancements will continue in the mobile world. Mobile commerce and multimedia terminals are just some of the technological advancements already being expected. Therefore, the continued growth and development will also make it imperative for localization to occur in the luxury goods industry in the years to come (Dunning, 1993).

Legal Trends

Intellectual property (IP) and IP Rights (IPR) creation, commercialization, and protection have been a significant source of comparative advantage of enterprises and economies and a major driver of their competitive strategies. Indeed, countries all over the world are fully aware of the pressing need for a long-term policy commitment to collectively transform the luxury goods industry into one which is largely based on knowledge, driven by innovation and sustained by life-long learning (Cyhn, 2002).

Countries all over the world have pledged to work together to help accelerate the pace and scope of IP asset creation, commercialization and protection; to improve the regional framework of policies and institutions relating to IP and IPRs, including the development and harmonization of enabling IPR registration systems; to promote IP cooperation and dialogues within the region as well with the region’s Dialogue Partners and organizations; to strengthen IP-related human and institutional capabilities, including fostering greater public awareness of issues and implications, relating to IP and IPRs.

Detailed Analysis of the Industry Environment

The assessment of the industry attractiveness is performed using the Porter’s Five Forces Model.

 

A. Threat of New Entrants

New entrants in the luxury goods industry will have to deal with high costs of entry for their latest technologies. Most major competitors in this industry have yet to establish strong distribution channels. This will severely hamper their plans to retaliate with their technological developments as without distribution channels, their products would never be seriously considered in the market by customers. These companies must worry though about certain government laws in some countries that might weaken their competitive position (Baumol, 2002).

B. Bargaining Power of Suppliers

Suppliers of luxury goods have relatively lower bargaining power because their products have yet to establish consistency in the market. This is in contrary to ordinary brands where these products have been able to secure the confidence of its customers worldwide.

C. Bargaining Power of Buyers

A majority of consumers in the luxury goods industry are professionals who rely on mobile and expensive gadgets and expect seamless services every time they use them. For instance, a customer phones in a service request from the New York airport while boarding a plane bound to Paris the same day. The technical people in New York will immediately work on the service ticket of the client. And when that client arrives in Paris, he / she would be able to call the New York service center and pick up exactly where he / she left off (Bartlett et al. 1999).The bargaining power of buyers in the luxury goods industry is relatively high because there are only few, large players in the industry.

D. Threat of Substitutes

There are very little threats that could emerge from possible substitutes.  This is because product-for-product substitution could not possibly happen especially with luxury goods. Other products cannot simply replace the ingenuity of the established luxury products in the market. Also, the millions of users of these luxury products surely would find it too uncomfortable using other products other than their luxury products (Christensen, 1997).

What are strategic implications for the forces analysis?

The luxury goods industry requires raw materials to produce their goods which lead to buyer-supplier relationships within the industry. The luxury goods industry requires to the productive manufacturers which can supply them with the raw materials that they need. Because the supply is not that abundant, then suppliers in the luxury goods industry are powerful. Another factor which has contributed to this is that the limited sources of raw materials are already controlled by the major players in the market, which makes the power of suppliers high in the luxury goods industry.

There are two major reasons why the power of buyers in the luxury goods industry is low. The first reason is that luxury goods are one of the most expensive things in the world. On the other hand, the second reason is that there are only a few major players in the global market who controls the major supplies of luxury goods in the whole world. Thus, buyers are forced to follow the prices dictated by the companies along with other rules in the market such as availability of the luxury goods to be offered to them. 

The possibility of new companies entering the industry influences the pace of the competition. Thus, the key is to evaluate the methods of entry and exit for a new player to the industry. Although any company should be able to enter and exit the sector, each industry presents different levels of difficulty influenced by economics. These unique characteristics of the each industry are referred to as barriers to entry which may come from different aspects of the business ranging from supplies to technology. They seek to reduce the rate of entry of new entrants which leads to maintenance of a level of profits for the existing players.

These are the luxury products which are available from other industries which can meet an identical or similar need for the consumers. They are unique because they are perceived as the best possible gifts for very special occasions such as engagements, weddings and anniversaries.

OPTIMISTIC AND PESSIMISTIC SCENARIOS

Deriving from the analysis between the luxury goods industry, operations management and capabilities of the industry involved, many positive and negative scenarios would become imperative. It is therefore essential to evaluate these scenarios as to whether they are appropriate to the issues addressed, whether they are feasible enough to be implemented and their acceptability to key stakeholders.

A. Optimistic Scenarios

Since there are potentials of merging and acquisitions that could happen among the companies within this industry, there is definitely a need to reconcile both the inside-out and outside-in capabilities. While most luxury goods companies’ operations management involves focusing on their core competencies with market position following their resource base, they will be put into a disadvantageous position should they choose to neglect both the macro as well as the luxury goods industry environment. Therefore, in ten years, it is expected that operations management changes, as well as changes in political, economic, legal and even demographic trends within the industry will occur in order to develop the outside-in capabilities of the luxury goods companies, such as market sensing, customer linking, channel bonding and technology monitoring.

The advantages enjoyed by the luxury goods companies may come in the form of increased revenues. Knowing what the market demands and the latest trends could help these companies fully exploit their research and development capabilities to come out with luxury products which are not only cost-effective but also high in quality within the next ten years. The strategic option can even be used as marketing tool where the focus is on staying close to their customers and listening to their feedbacks. On the flip side of the coin, there will be huge mobilization of resources involved, and the associated risks bestowed on the companies.

Nevertheless, the mentioned optimistic scenario seems the most evident to happen in the wake of globalization, since there is a sudden shift towards a more integrated and independent world economy. The key stakeholders too should not have any objections so long as the industry’s core business is not threatened. By virtue of the industry’s centralized control of its business, it is being expected that major barriers should not exist in carrying out such an option except additional time may be required given the scope and span of operations.

Understanding the strategic importance of operations management is something the luxury goods companies has to be familiar with. These companies normally practice a centralized and globally scaled configuration of operations and capabilities. This allows information dissemination to be retained.

B. Pessimistic Scenarios

A tie-up or merger with various luxury goods companies offers tremendous benefits in terms of access to their operations management policies, infrastructure and even its resources. However, this scenario might become difficult to achieve within the next ten years, since every company might be in danger of losing sight of its core competencies while pursuing these tie-ups. This will result in jeopardizing the image of these companies.

Meanwhile, the collaboration of luxury goods companies with its major competitors can be seen as a brilliant move at first.  However, upon close examination, this move could pave the way for luxury goods companies to experience a decline in its operations management. The bottom line is both sides wouldn’t be able significantly gain in such an alliance because of copying of ideas and information leakage. For instance, a company’s strengths in luxury product development combined with the operations management capabilities of their competitors can transform them suddenly into an unbeatable force to reckon with. One possible setback, however, is the differences in the cultures of the companies involved. Another possible setback could be whether any of the company’s competitors has the need to form alliances.

CONCLUSION

The results of the analysis carried out on the luxury goods industry indicated very significant effects, even amidst the threats of unrest. Therefore, we could conclude that the luxury goods industry could still be expected to improve faster than an average of ten years.

The review of the industry’s capabilities and resources revealed very little inconsistencies regarding its strategies. This is coherent with its traditional inside-out approach. However, the need to reconcile both the inside-out and outside-in approaches becomes imperative now for the luxury goods industry.

The analysis among the environment as well as the operations management and capabilities of the luxury goods companies revealed certain gaps, most of which are biased towards the environment. However, these gaps paved the way towards determining a number of recommended strategic options to secure the competitiveness of the industry.

Also, luxury goods companies have to find a balance between adherence to internal forces within the management and to the changing forces of the environment in order to implement such strategic options. 

PART B

INTRODUCTION

The luxury goods industry over the years has developed an efficient and effective process of implementing the policies and tasks necessary to satisfy its consumers and management of companies and organizations. There has been a recent focus on the careful management of the processes involved in the production and distribution of luxury products and services within the industry.

More often than not, small luxury goods companies don't really have the capabilities to implement operations management. Instead, these companies engage in activities that various schools of management typically associate with operations management. These activities include the manufacturing of products, product development, production and distribution.

However, operations management deals with all operations done within companies and organizations. Activities such as the management of purchases, the control of inventories, logistics and evaluations are often related with operations management. A great deal of emphasis lies on the efficiency and effectiveness of processes. Therefore, operations management includes the analysis and management of internal processes.

Gucci will be the model business entity that will be used in this research based on their history in the luxury goods industry

Measuring Gucci’s Performance

a. Financial Analysis

In the fiscal year of 2003, Gucci was able to experience a significant progress in several key metrics. The inventory was reduced from $55 million to $23 million and inventory turns rose from 12 to 26. The cost of revenues, excluding the benefit from previous special charges and the applicable portion of the amortization of intangible assets, decreased from 72.3% of revenues to 67.8% of revenues. The combination of sales and marketing, research and development, and general and administrative expenses was reduced from $ 435 million to $339 million, while at the same time improving on the pace of innovation. Gucci’s total revenue has approximately grown from $1 million in fiscal year 1995 to $ 871. 9 million in fiscal year 2003.

b. Marketing

The retailers in Europe represent Gucci’s largest sales and marketing channel which encompass national and regional office supply stores and mass merchants. Distributors represent Gucci’s second largest European channel and generally sell to both traditional and Internet resellers and retailers. In Europe and the US, Gucci’s market share is still relatively high. Gucci has more than 100 international distributors located worldwide.

            The company also uses online stores as a venue to sell its products. This is accomplished through the use of e-marketing campaigns and product bundles. The company is able to build awareness of its products and brands through mass media advertising, public relations efforts and branded Internet properties. The company also makes it a point to receive feedback from its customers through market research. The company then uses these feedbacks to refine its product development efforts and marketing strategies (Kotler et al. 1999).

c. Operations

Gucci out-sources all of the fashion designs of its products to third party manufacturers. This outsourcing extends from prototyping to volume manufacturing and includes activities such as material procurement, quality control and delivery to distribution centres. The company is assured that there is an adequate supply of components to manufacture its products. The majority of the company’s products are assembled in Italy and the US. Distribution centres are operated on an outsourced basis in Europe and the US.

d. Human Resources

Gucci knows that its future depends on the company’s ability to attract new personnel and retain existing personnel in key areas including engineering and sales. None of the company’s employees is subject to a collective bargaining agreement. The company considers its relationship to its employees to be good.

Gucci Company SWOT Analysis

Strengths:

  • Gucci has products that boast of a very powerful retail. This includes a reputation for value of money, convenience and a wide variety of products
  • Gucci has grown significantly over the years, and has experienced global expansion.
  • Gucci’s main competence lies on the use of information technology (IT) to fully support its international logistics system. Therefore, Gucci can see how their individual products perform within the United States, or even at stores at a glance. IT also supports Gucci’s efficient procurement.
  • Gucci is able to deliver good customer care, as the limited amount of work would mean plenty of time to devote to customers.
  • Gucci’s lead consultants have established a strong reputation within the market.
  • Gucci can afford to change direction quickly if its management finds that the company’s marketing strategy is not effective.
  • Gucci has little deficits and overheads. Therefore the company can offer good value to customers on a consistent basis.

Weaknesses:

  • Gucci is one of the world's largest companies in luxury goods but has a weak control of its empire, despite its IT advantages. This could lead to a decrease in productivity in some areas where they have the least control of.
  • Since Gucci sell products across many sectors, the company may lack the flexibility that some of its more focused competitors possess.
  • Gucci operates globally, but its presence is located in only relatively few countries worldwide.
  • Some of the company’s weaker branches lack market presence or reputation
  • Some of the company’s personnel still lack the essential skills base in many areas.
  • The company is still vulnerable to the temporary losses of its vital staff (e.g. being sick, leaving).
  • The company’s cash flow is unreliable especially in the early stages of a new product development.

Opportunities:

  • Taking over, merging, or forming strategic alliances with other luxury goods companies while focusing on strong markets like Europe or the Greater China Region.
  • The branches of Gucci operate only on trade in a relatively small number of countries all over the world. Thus, this would open the opportunities for future businesses in expanding various consumer markets, such as those in China and India.
  • The opening of new locations and branches offer Gucci the opportunities to exploit market development. This could lead to the diversification of the company’s branches from large super centers to local-based sites.
  • Opportunities exist for Gucci to continue with its current strategy of establishing large branches worldwide.
  • Gucci is continuously expanding, with plenty of future opportunities to exploit for success.
  • The local councils of Gucci are in the process of encouraging local businesses with work whenever possible.
  • The competitors of Gucci may be slow to adapt to new luxury goods especially the ones that Gucci releases.

Threats:

  • Being number one means that Gucci is the target of competition, the company to beat, both locally and globally.
  • Being a global retailer means that Gucci might be exposed to political problems in the countries where the company has operations.
  • The production costs of most consumer products have the tendency to fall because of lower manufacturing costs. Manufacturing costs fall because of outsourcing to low-cost regions around the globe. This phenomenon could lead to competition in prices, which in turn would result in the deflation of prices in various ranges. Intense price competition must definitely be considered a threat.
  • The latest developments in information technology which could possibly change the markets might challenge the company’s ability to adapt to these changes
  • A slight shift in focus of a large competitor might wipe out any market position that Gucci has achieved over the years. This could force the company to specialize in rapid response but good value services to local businesses. This would put so much pressure on the company’s consultancy staff to keep informed with the latest changes in technology where possible.

MARKETING MIX ANALYSIS

A. Product

Gucci’s dedication to quality for almost three generations now has led to the satisfaction of millions and millions of its customers worldwide. Gucci was created by a group of people who pursued the best quality and craftsmanship in terms of luxury goods designing and production. The various Gucci products that its customers patronize today are still being manufactured using nothing but the original and unparalleled raw materials discovered three generations ago by the Gucci family. Gucci’s durability and bright colors are obtained by using only the purest raw materials.

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The raw materials used in the production of Gucci luxury products are able to meet the high quality standards and specifications. The packaging materials where Gucci products are sold are also being subjected to strict quality standards.

In line to Gucci's policies in product safety, appropriate measures are taken in the production process of Gucci and all of its brands to prevent the possible contamination of the products. Gucci manufacturing plants implement the principles of the HACCP (Hazard Analysis and Critical Control Points) system as a testament to their dedication to quality.

B. Promotion

Gucci has been able to maintain its reputation as one of the world's leading luxury goods companies for more than 130 years now. It is able to face the challenges in many of its markets directly. This is made possible by the effective promotional and positional strategies aimed to deliver not only profit growth, but also on building down the foundation of Gucci’s brands and business.

The promotional campaigns and strategies of Gucci are focused mainly on driving the growth of its brands and improving the company’s financial performance. These campaigns have also helped secure significant acquisitions and partnerships. And more importantly, these campaigns have led to the release of the potentials of the company’s employees, thus building a quality performance- based culture.

The promotional strategies of Gucci’s local products are practically reinforced by the local employees themselves. These moves certainly allow the company to improve even more without the costs of introducing new technologies. These efforts have resulted in increased financial gains for the company and have allowed the establishment of distribution networks for both the local and international Gucci products.

C. Place

Gucci has grown and expanded virtually around the entire globe. This was made possible by their strong efforts to acquire smaller luxury goods companies and firms from other countries. Over the years and decades, Gucci has slowly but surely established an empire, with strong segment markets established in Asia and the Middle East, the Western Hemisphere, the Europe and most recently the Asia Pacific.

In Europe for instance, Heineken was able to achieve a broad market leadership through various acquisition deals over the years. The company also exerts efforts to communicate with their customers in every local culture about Gucci products and their impressions. And this is no easy thing because Europeans have different tastes in fashion and technologies. Therefore, Gucci products might not really have an appeal to them. This critical information gathered by Gucci paves the way for them to make the right decision regarding the appropriate strategies to pursue.

What are value chain implications for the corporation?

Gucci’s functions are based on a simple concept: that they could best understand consumer needs and efficiently provide the most effective luxury goods and products to meet those needs by selling directly to customers. This direct business model eliminates retailers, who adds unnecessary time and cost, and also allows the companies to build every system to order, offering customers powerful, richly designed luxury products at competitive prices. Gucci introduced the latest relevant technology much more quickly than companies with slow-moving, indirect distribution channels, turning over inventory an average of every four days.

The traditional value chain in the luxury goods industry is characterized as “build-to-stock.” Gucci design and build their products with preconfigured options based on market forecasts. Products are first stored in company warehouses and later dispatched to resellers, retailers, and other intermediaries who typically added a 20–30 percent markup before selling to their customers.

Gucci commands the upstream part of the value chain, while giving the downstream part to middlemen (resellers, retailers and other intermediaries). Retailers justify their profit margins by reasons that they also give free several benefits to customers: easily accessed locations selection across multiple brands, opportunity to see and test products before purchasing, and knowledgeable salespeople who could educate customers about their choices.

CONCLUSIONS AND RECOMMENDATIONS

Gucci has been able to remain one of the world's leading luxury goods companies for more than a century now primarily because of the execution of the company’s branding and positioning strategies to perfection. Add to the mix the company’s dedication to high quality of service and the formula for success is at hand.

However, I am not totally convinced that the branding and positioning strategies Gucci implements currently would be as effective as before. For one, consolidation and globalization are taking place across most industries, and the luxury goods industry is not excluded. Gucci, as a leader in their industry, has implemented various strategies to fully adapt to the need to go global.

 I suggest that Gucci should implement a more sober approach to maintain consumer loyalty with their local brands. There is nothing wrong with building new loyalties with the other global consumers. But there are instances where the local market is often neglected. As a result, local consumers will tend to develop a bad impression about the company and its products. While it is good to acquire new firms, it is even better to keep and maintain the older and more established markets. This way, the empire of Gucci will remain unscathed amidst the advent of consolidation and globalization.

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