Reduction of Pressure Ulcers

Reduction of Pressure Ulcers by Risk Assessment and Prevention in Hospital Setting

 

Introduction

            Pressure ulcers continue to be a distressing medical problem. Not only do patients experience pain and discomfort but intensive wound care also incurs considerable costs to both patients and hospitals. Therefore both health care professionals and patients should consider the prevention of pressure ulcers of extreme importance. Hospital nursing teams are especially concerned with the prevention of pressure ulcers that develop during hospitalization, i.e. the nosocomial pressure ulcers.

            The aim of this project is to improve pressure ulcer risk assessment and prevention through the implementation of guideline recommendations, many of which related to accurate and timely documentation of risk, adequate care planning and the provision and review of appropriate equipment. To achieve this, clinical audit will be used. The clinical areas audited provided care to patients identified anecdotally at higher risk of pressure ulcer development due to their physical condition. A quantitative form of research is applied in this project.

 

Background of the medical condition

Pressure ulcer is most commonly known as bedsore. Other names for it include pressure sore, decubitus ulcer and tropic ulcer. It is an ischemic necrosis and ulceration of tissues overlying a bony prominence which has been subjected to prolonged pressure against an external object like a bed, wheelchair, cast or splint for example (Beckley & Silage, 2003). The condition results to impaired skin integrity related to unrelieved, prolonged pressure (Potter & Perry, 2004).

Such a condition is seen most frequently in patients who have diminished or absent sensation, or are debilitated, emaciated, paralyzed, or otherwise long bedridden. Any patient experiencing decreased mobility, decreased sensory perception, fecal or urinary incontinence and/or poor nutrition can therefore be at risk for pressure ulcer development. Tissues over the sacrum, Ischia, greater trochanters, external malleoli, and heels are especially susceptible but other sites may be involved, depending on the patient’s position. Pressure ulcers can affect not only superficial tissues, but also muscle and bone.

            Both intrinsic and extrinsic factors precipitate pressure ulcers. Intrinsic factors include loss of pain and pressure sensations that ordinarily prompt the patient to shift position and relieve the pressure, and the thinness of fat and muscle padding between bony weight-bearing prominences and the skin. Disuse atrophy, malnutrition, anemia, and infection play contributory roles. The most important of the extrinsic factors is pressure. Its force and duration directly determine the extent of the ulcer. Pressure severe enough to impair local circulation can occur within hours of an immobilized patient, causing local tissue anoxia that progresses, if unrelieved, to necrosis of the skin and subcutaneous tissues.

            The best treatment for pressure ulcers is prevention. Pressure on sensitive areas must be relieved. Unless a full-flotation bed such as a water bed is used, providing even distribution of the patient’s weight. If the patient is using braces or plaster casts, a protective padding at bony prominences should be used under braces or plaster casts, and a window in the cast should be cut over potential pressure sites.

            Skin inspection is also important. Pressure points should be checked for erythematic or trauma at least once/day in an adequate light. Able patients, mobile or immobile, and their families must be taught a routine of daily visual inspection and palpation of sites for potential ulcer formation. Exquisite skin care for neurologically damaged parts is necessary to prevent maceration and secondary infection. Maintaining cleanliness and dryness helps to prevent maceration.

            The prevention of pressure ulcers is a priority in caring for patients and is not limited to patients with restrictions in mobility. Impaired skin integrity may not be a problem in healthy, immobilized individuals but is a serious and potentially devastating problem in ill or debilitated patients. Prompt identification of the high-risk patients and their risk factors aids in prevention of pressure ulcers.

A well-balanced diet, high in protein, is important in the treatment of pressure ulcers. Blood transfusions may be needed for anemia. Threatened pressure sores require energetic use of all the above mentioned prophylactic measures to prevent tissue necrosis. The area should be kept exposed, free from pressure, and dry.

            The major problem in treating pressure ulcer is that the ulcer is like an iceberg, a small visible surface with an extensive unknown base, and there is no good method of determining the extent of tissue damage.

            More advanced ulcers require surgical treatment. Surgical debridement and closure is required for fat and muscle involvement. Affected bone tissue requires surgical removal; disarticulation of joint may be needed. Necrotic tissue can promote pathogen growth and delay healing, so it should be removed. An exception may be scharr or necrotic tissue on a heel ulcer because an open heel wound can easily become infected and lead to osteomyelitis. Several debridement methods are available; the choice depends on the amount of necrotic tissue, absence or presence of infection, patient preferences, and economic considerations (Baranoski, 2006).

 

Evidence-based pressure ulcer prevention and treatment

            Evidence-based practice, which is often referred to as evidence-based nursing or evidence-based medicine, is the conscientious, explicit, and judicious use of current best evidence in making decisions about the care of individual patients. (1) It involves integrating the individual clinical expertise of the physician or nurse with the best available external clinical evidence from systematic research and individual patient preferences. (2) Research shows that patients' outcomes are at least 28% better when clinical care is based on evidence rather than tradition or common sense (Bryan-Brown, 2006). The following paragraphs would discuss health care practices and interventions on pressure ulcers which are evidence-based and are widely used in health care settings today.

A major aspect of nursing care is the maintenance of skin integrity. Consistent, planned skin care interventions are critical to ensuring high quality of care ( 2004). Nurses constantly observe their patient’s skin for breaks or impaired skin integrity. Impaired skin integrity occurs from prolonged pressure, irritation of the skin, or immobility, leading to the development of pressure ulcers. Nursing care interventions aimed at the prevention, assessment and treatment of pressure ulcers should be based on research (Potter & Perry, 2004) or evidence-based practice.

            There are several instruments for assessing patients who are at high risk for developing a pressure ulcer. Patients with little risk for pressure ulcer development are spared the unnecessary and sometimes costly preventive treatments and the related risk of complications.

            Prevention and treatment of pressure ulcers are major nursing priorities. The incidence of pressure ulcers in a facility or agency is an important indicator of quality of care. There is evidence that a program of prevention guided by risk assessment can simultaneously reduce the institutional incidence of pressure ulcers by as much as 60% and bring down the costs of prevention at the same time (Potter & Perry, 2004).

            Evidence-based practice shows that lack of documentation of patients at risk demonstrates the need for hospitals to increase prediction and prevention strategies. Use of a risk scale can provide triggers to plan care to decrease risk factors.

            As a predictive measure, individuals should be assessed for risk of pressure ulcer development upon admission to acute care and rehabilitation hospitals, nursing homes, home care programs, and other health care facilities (2004). Pressure ulcer risk assessment should be done systematically.

            Evidence-based practice also shows that extended stays of over 7 days increase the risk of pressure ulcer development (Lyder, et al, 2001). Nurses must therefore remain vigilant in the prevention of pressure ulcers in patients with longer hospital stays.

            Evidence-based practice shows that the use of care practices such as daily skin assessment, use of pressure-relief surfaces and objective risk assessment measures, such as the Braden scale, identified at risk patients and reduce evidence of pressure ulcers (Lyder, et al, 2001). The Braden scale was developed based on risk factors in a nursing home population. It is highly reliable when used to identify patients at greatest risk for pressure ulcers. It is also the most commonly used assessment scale for pressure ulcer (Potter & Perry, 2004).

            Evidence-based practice also shows that the use of nutritional consultation was associated with decreased incidence of pressure ulcers, suggesting a nutritional consultation may sensitize the staff that the older adult is at risk for pressure ulcer development (Lyder, et al, 2001).

            Nursing interventions for reducing and treating pressure ulcers are evaluated by determining the patient’s response to nursing therapies and by determining whether each goal was achieved. To evaluate outcomes and responses to patient care, the nurse measures the effectiveness of interventions. The optimal outcomes are to prevent injury to the skin and tissues, reduce injury to the skin and underlying tissues, and restore skin integrity (Potter & Perry, 2004). The care of a patient with a pressure ulcer requires a multidisciplinary team approach.

            There is a strong relationship between nutritional status and pressure ulcer development, yet nutrition is an area often overlooked by clinicians in pressure ulcer care. Nutrition, including adequate hydration, plays an important role in pressure ulcer prevention and healing, and is critical in maintaining tissue integrity. Patients defined as malnourished at hospital admission are twice as likely to develop pressure ulcers as well-nourished patients. Therefore, nurses and dietitians should work together to assess the patient's nutritional and hydration status and ensure that these factors are addressed in the patient's care plan (Voss, 2000).

            Pressure ulcers, regardless of their origin, represent negative outcomes for patients. These negative outcomes may include pain, additional treatments and surgery, longer hospital stays, disfigurement or scarring, increased morbidity; and increased costs. Although all negative outcomes are of concern, a hospital-acquired pressure ulcer can result in increased cost of treatment, patient dissatisfaction with care, and a potential litigious situation (Schultz, 2005).

 

The project plan

 

Objectives

            The aim of this research is to improve pressure ulcer risk assessment and prevention to reflect the guideline recommendations. The objectives are:

• Develop a dissemination and implementation strategy to accompany the guideline;
• Audit care in pressure ulcer risk assessment and prevention, using criteria based on the guideline; and
• Make recommendations for practice and future research based on the findings of the study.

 

Defining quality

In keeping with the classical audit cycle this project seeks to identify current best practice in prescribing, survey the actual practice, and then institute measures to improve prescribing up to the identified standards. The audit tool was used to collect data on length of stay, mattresses and repositioning provided to patients in each of the following hospital wards: medical, orthopedic or older patients ward, groups considered to have a higher risk of pressure ulcer development, recovery room for the postoperative stay until first ambulation. This audit tool included demographic data as well as data on the modified Norton scale for evaluation of a patient's risk of developing a pressure ulcer. A score of 16 or less indicates increased risk for developing a pressure ulcer.

The audit tool will also include data on accompanying medical conditions, i.e. continence, diabetes, heart insufficiency and peripheral vascular diseases. Continence means that a patient has full control on urine and feces. Inserting a Foley catheter into the bladder can bypass the problem of urine incontinence. In case of urine incontinence, continued contact between skin and urine weakens the cell wall and may alter the skin pH, making it more susceptible to breakdown ( 2004).

 

Recruitment of pilot sites and link nurses

As the project had a short timeframe, a decision was taken with the advisory panel that four to six sites would provide sufficient patient numbers to allow improvement in practice to be detected between the audits. Sites were included if they provided tare to medical, orthopedic or older patients, groups considered to have a higher risk of pressure ulcer development. As this was an audit project, ethics committee approval will not be required, however, confirmation of this will be sought and obtained from all hospital sites involved in the project.

            The audit criterion is that a practitioner with 'appropriate and adequate training' should undertake the initial risk assessment and document findings. For audit purposes, the grade of the nurse or health care professional will be recorded.

 

Dissemination and implementation strategy

The dissemination and implementation strategy was informed by evidence and reflected the advice of site link nurses and staff from the clinical areas on possible barriers to change. This ensured the strategy reflected best evidence to bring about change, and encouraged local ownership of the guideline. Dissemination comprised the identification of a nurse from each clinical area who could support clinical staff involved in the project and assist with the audits; circulating copies of the project proposal, quarterly newsletters and summaries of the guideline recommendations to all relevant staff.

 

Implementation

Implementation focused on the development of an evidence-based resource pack by the project team and provision of education sessions by the project manager. A resource pack was given to each senior member of staff in the clinical area to be audited, the site link nurses and directors of nursing, and included an implementation guide and copies of the audit tools.

            The project manager shall lead education sessions at each site, with the assistance of the site link nurse, following audit 1. The sessions were to be attended by nursing staff from the clinical areas to be audited, senior nurses and/or ward managers. The sessions focused on a description of evidence-based practice and clinical guideline development; the development and recommendations of the RUN guideline; an outline of the project; site specific feedback and recommendations for practice from audit 1.

            To ensure standardization of pressure ulcer grading for the audit, the PUPA tool was used by the project team (Stephens, 2003). Reduction in pressure ulcer prevalence is not a study outcome due to the time constraints and need to take account of potential contributory factors. Nevertheless, it is considered important to assess prevalence to enable audit findings to be more generalisability. Each site will be asked to identify clinical areas that met inclusion criteria and arrange dates for the project manager to undertake audit 1. Audit 2 will commence at each site five to six months later.

           

Development of Audit Tools

            Two audit tools will be developed; one for the patient and one for the clinical area. The tools are developed using recommendations for audit criteria proposed by Baker and Fraser (1995), which included the following:

• Criteria should be based on evidence where possible.
• Criteria should be prioritized according to the strength of the evidence and effect on patient outcome.
• Criteria should be measurable and appropriate to the clinical setting.

 

Audit criteria will then be derived from the guideline. This will be followed with a consultation with the advisory panel where and agreement will take place on what the audit would comprise.

 

Measuring and comparing

            On the first audit and data analysis, to be included are all patients admitted to the hospital with no skin breakdown during a six-month period, but are at risk for pressure ulcer development. The nurse will collect the data, using the audit tool. The information sources are patients' records, interviews with patients and/or patients' families, and nurses.

This is quantitative form of research wherein patient age range and mean will be computed both in the first and second audit. Pressure ulcer risk was elicited using clinical assessment and a tool to obtain a risk assessment score. Risk assessment scores for each patient were verified by the auditors (Stephens, 2003).

            Data from audit 2 will then be compared with audit 1. Data will be coded and entered onto an Excel spreadsheet, and results collated in an anonyms form using simple descriptive statistics to enable comparative analysis to be undertaken. Each site will then receive feedback comparing results from both audits by clinical area in an anonyms form.

 

Taking action to improve

            An intervention program will be prepared and implemented based on the results of the project. The program will be prepared as an addition to the basic health care practice that is common for bedridden patients and other patients at risk for pressure ulcer development.

 

Conclusion

Patient safety should be the number one concern during hospital stay and also before, during and after each hospital procedure performed. A detailed knowledge of the epidemiology, based on adequate surveillance methodologies, is necessary to understand the Pathophsiology and the rationale of preventive strategies that have been demonstrated to be effective in preventing and treating pressure ulcers. The principles of general preventive measures such as the implementation of standard and isolation precautions, following guidelines, and the control of antibiotic use should be reviewed. Some patients are more at risk for pressure ulcer development than others, and this should be taken into account by health care professionals.

The necessity to audit is seen in the high prevalence of pressure ulcer development in hospital stays despite established clinical guidelines. There is a need to improve pressure ulcer risk assessment and prevention through the implementation of guideline recommendations, many of which related to accurate and timely documentation of risk, adequate care planning and the provision and review of appropriate equipment involved. The success of the health care professional who practices pressure ulcer prevention and control techniques is measured by determining whether the goals for reducing or preventing infection are achieved. A comparison of the patients’ response with expected outcomes determines the success of the health care interventions.

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Research Proposal On Ethiopia’s Accession WTO: Potential Challenges And Opportunities

Ethiopia’s Accession WTO: Potential Challenges and Opportunities

 

Introduction

There are significant economic challenges remains in every country, which is very far from their goals in fostering the more competitive and continuous growth in economy, deregulation and reduction of corruption. There is a less involvement of government in assessing the ongoing efforts to increases the political stability. And joining in the aspiration of the WTO in terms of accession named different requirements and outcomes. 

Background and Statement of the Problem

From the experience of the other countries in accession, there are potential helpful role of WTO or the World Trade Organization in developing a domestic concern about the reform. However, it remains vulnerable because it is plagued by the present potential challenges and opportunities (IMF, 2004). In Ethiopia, the WTO accession plays a critical role in market accessibility, investment, government revenue, and poverty. Thus, the country is welcoming other option to avoid such drastic situation and expecting to pose a strong foundation on their economy.

Objectives of the Study

The main objective of the study is to find ways to open the other windows of improvement in Ethiopia in the presence of the WTO. And to make it possible, the study also aims to recognize the potential challenges that the WTO might and the opportunities it can deliver to Ethiopia.

Significance and Delimitation of the Study

The study view itself as a medium to project any potential strategy in which the Ethiopia or other country can use as a guide in terms there are certain problems plagued their economic structure. However, the study is also limited in delivering the ideas about the WTO accession on Ethiopia. In all countries in the world, it is very crucial to invigorate the other opportunities all at the same time. The reforms in labor markets, legal or regulatory bodies, and institutional framework is difficult to assess in encourage foreign investment and enhancing the role of the private sector.

Research Design and Methodology

The Ethiopia and its economic sector must measure the different estimation before and after the WTO accession. The researchers will compare the different impacts happened in financial sector of the country. The focus is allotted in financing because most of the impacts of the WTO are reflected in terms of monetary reserves, credit policy, financial sources, investments and revenues, and banking system. In addition, the financial policy of the country is the considered as the main driver of the economy and being part of the country’s performance more specifically, in global markets.

Research Method and Sampling

The researchers may go directly to the country’s governmental department to determine which department or sector is more likely engaged in the use of the financial sources. Through that, the recent reports can be acquired, collected and being subject for analysis. Also, through the collected data, the growth and loss of the GDP and GNP can be determined only if the researchers will go beyond the comparison of the WTO accession.

Discussion and Analysis

It is important in every country to lessen the poverty rate in their country. The poverty is the main hindrance or challenge of the developing countries in embracing the globalization. Therefore, it is believed that Ethiopia should welcome the improvement or the opportunity to improve the investment environment through the recognition of stronger banking systems (IMF, 2004).

There is a more significant impact in the export and import process of Ethiopia upon the accession of the WTO. Although the WTO increases the competition in domestic market, still the outcome will be different. The idea for better market of exportation is a “no” because the country is a duty-and-quota-free access, and a “yes” because there is a unilateral preferences (Bienen, 2009). In the long-run, the WTO will affect the market access and can enhance the predictability of the market in which enables them to plan ahead.

Moreover, the benefits that WTO might bring to Ethiopia is to develop the trading as mush as improving to be competitive in the global market. Therefore, it encourages more flows on foreign direct investment and makes the assurance that the manufacturers and producers can be more competitive in the area of international marketing. On the other hand, there are also challenges of WTO accession. The main challenge that the Ethiopia faces is the lack of competitive advantage, scale of economy, cutting edge technology, marketing efficiency, and efficiency in production and distribution system (Teshome, 2007).

Conclusion

From the above research, it clearly summarizes that Ethiopia must recognize the importance of the benefits that the WTO accession might bring and not the cost it incurred. The costs are not always on the side of the financial system but also in managing the procedures and opportunities offered by the WTO to meet the demands.

References:

Bienen, D., 2009. Preparedness of the Ethiopian Private Sector to Benefit from WTO Accession. [Online] Available at: http://74.6.146.127/search/cache?ei=UTF-8&p=ethiopia+accession+wto%3Apotential+challenges+and+opportunities.ppt. [Accessed 06 Jan 2010].

IMF, 2004. Chapter 1: Economic Prospects and Policy Issues, International Monetary Fund. World Economic Outlook. [Online] Available at: www.questia.com. [Accessed 06 Jan 2010]. 

Teshome, A., 2007. The Compatibility of Trade Policy with Domestic Policy Interventions in Ethiopia. [Online] Available at: http://www.fao.org/es/ESC/common/ecg/494/en/FINAL_TESHOME_Trade_Policy_Paper___Ethiopia.pdf. [Accessed 06 Jan 2010].

 

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STATE OF THE ART TERMINATION: A CASE OPINION

STATE OF THE ART TERMINATION: A CASE OPINION

 

 

 

 

            The sample case narrates the experience of Bill , a computer support staff at a company who was terminated in a manner that offended and humiliated him. Bill already had prior ideas that he would be terminated because he knew that the company was undergoing a merger and his job was already duplicated in the process. He understood the company’s reason for terminating him and other colleagues. However, he was shocked at the manner that the company used to inform them about their termination. They were invited to a meeting at a nearby hotel and were informed that they would still get some benefits from the company such as full salary of six months and career counseling. Bill was humiliated when they were not allowed to return to their desks to clear their personal belongings and were directed to prepaid taxis to take them home.

Did the company strike the right balance between compassion for the terminated employees and the need to protect against possible harm?

 

            The company was basically compassionate to the terminated employees. The employees were provided with the appropriate benefits and severance pay necessary for termination. The  (2006) cites that an individual’s employment is severed if and when his/her employer dismisses or ceases to employ him/her for any cause, even if it is a result of insolvency or bankruptcy. This condition necessitates a severance pay which is a form of compensation provided to a qualified employee with severed employment. It is in recognition of a person’s years of service in the company. Severance pay is computed by multiplying the employee’s “regular wages for a regular work week” by the sum of the number of completed years of employment and the number of completed months of employment divided by twelve months for a year not completed.” In the case, the employments of the employees were severed due to redundancy of jobs caused by a merger. The terminated employees were provided with full payment equivalent to six months salary and unused accrued vacation leave. The termination meeting was also done in a confidential venue so as to protect the dignity of the employees. According to (2005) managing the risks of termination requires employers to be as sensitive as reasonably possible by terminating employees in an appropriate environment away from other employees and third parties. Bill and his colleagues were invited to a meeting at a hotel one block away wherein they were informed of their termination. The venue was appropriate since it was not within the premises of the corporate office where other employees might interrupt or cause humiliation to the terminated employees. However, the company failed to strike a balance between compassion and the need to protect itself from possible harm. Despite the fact that the consultant called the employees into a meeting to discuss the termination, the meeting had some missing components. The (2006) states that the manager or whoever is tasked to facilitate the termination meeting must be straightforward and clear to the employees and should advise them of the company’s decision to sever their employment, when the termination will take effect, and the reasons for termination. The manager is required to answer employee questions and allow any reactions without arguing with the employee. Also, for those terminated employees who have access to confidential material such as computer files, financial records, and corporate documentations, the manager must explain the need to deny the employees access to these information. The manager must make the terminated employees fully understand that the denial of access is not a manifestation of lack of trust but a measure to protect corporate security          ().  were not given ample explanation on the reason of the termination and why the company did not permit them to go back to the office. The fact that most of the terminated employees are computer support staff who are skilled in accessing corporate information through the database should have been considered by the consultant. The consultant’s failure to address the employees’ need for thorough understanding of the method of their termination caused them humiliation and a perception that the company did not trust them even after their years of service.

Was the humiliating treatment necessary for business reasons?

 

            The treatment per se is necessary for business reasons but the humiliation that  and his colleagues developed out of it is unnecessary. The company had the right to protect itself from possible danger that the terminated employees can cause especially since the terminated employees are computer experts who can manipulate any corporate data if still allowed continuous access to the corporate database. (2007) claims that corporate information theft is a crucial security concern for most companies today which leads to loss of customers, leak of confidential corporate details to competitors and even bankruptcy. The need to protect the company from both inside and out is crucial. Companies must set policies that employees have limited access to vital information while the data access rights of terminated employees must be revoked immediately. The company authorities in the case should have instructed the consultant to explain this matter to the terminated employees rather than hastily telling them that they would not be returning to the office and should not contact anyone in the company. The approach was offensive when it could have been explained effectively.

Do the employees have any rights with regard to the manner in which they are terminated?

 

            Most employment relationships adopt an “at-will doctrine” wherein both the employee and employer regard the employment relationship as indefinite and voluntary. This means that the employee can resign from the job anytime and for whatever reason he may have while incurring no consequences in the process. In turn, the employer can terminate an employee for whatever reason that is not based on discriminatory notions (2007). The employer in the case is an at-will employer as it was able to cease the employment of some of its staff without a concrete explanation for doing so. However, (2007) argues that terminated employees can claim that their at-will employers defamed them by treating them in a manner that causes emotional distress or humiliation. Bill was upset and humiliated by the manner that the consultant delivered their termination. He did not understand why the company did not permit them to go back to their desks and arrange their things or even say goodbye to their friends. The  (2006) cites that in cases where the terminated employees have access to critical corporate information, a manager or supervisor can be assigned to guide the employee in clearing his belongings until he leaves the company premises so as to ensure that he did not change anything on his computer that can sabotage the company (). Bill can consult an employee’s rights lawyer for advice on the matter to settle his emotional distress from the entire experience (2007).

Correspondingly, do employees owe terminated employees any kind of treatment?

 

            The remaining employees in a company basically have no obligation to provide favorable or unfavorable treatment to terminated employees. Termination is a fundamental element of employment and most employees are aware that the employer can terminate anyone for economic and performance reasons. However, the loss of a colleague due to termination can have devastating impacts on the remaining employees. Feelings of confusion, divided loyalties, fear of the same thing possibly happening to them, and even guilt for still being part of the company can exist. Thus, even if most companies do not tolerate the remaining employees to interact with terminated employees and talk about the issue, these employees are still allowed to comfort, assist the terminated personnel in arranging their personal belongings, or stay with them until they leave the premises especially if they are a friend, an immediate supervisor or subordinate (2006). The remaining employees are not obliged to provide any kind of reaction or treatment to the terminated employees but the fact that someone has to go can impact employee morale and the spirit of teamwork.

 

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Annotated Bibliography

Consumerism, Consumer Behavior and Identity: the Extent in Policy Decision-Making

 

 

Annotated Bibliography

 

Villegas, Bernardo M. (2005) Christmastime and Consumerism. Manila Bulletin. December 9. p. NA.

 

This brief news article is about the spending and consumer behavior of Filipino people during the whole year of 2005. The economic situation of the people affects their consumer identity and behaviors. Furthermore, the news also presents the cultural practices, backgrounds and attributes of the said setting. Specifically, Christmastime is the main event observed because this is the season when all people are engage in a rapid exchange of economic activities.

 

Barnhill, David Landis. (2004) Good Work: An Engaged Buddhist Response to the Dilemmas of Consumerism. Buddhist-Christian Studies, vol. 24, pp. 55+.

 

Barn's article relates to the cultural, social, political, religious, and psychological application of consumerism. In particular, he presented the principles of engaged Buddhism in relation to consumerism. Further, he is proposed several ideas to resist consumerism knowing the fact that it is an “ingrained part of our culture” and “paradoxically difficult to avoid and easy to ignore.”

 

Harris, Daniel. (2000) Cute, Quaint, Hungry, and Romantic: The Aesthetics of Consumerism. New York: Basic Books.

 

The author Daniel Harris presented the concepts of aesthetics in consumerism. It is an evaluation of the attitudes of consumerism among people – teens, household wives, and many others. He aims to identify “how the aesthetics of

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PRIVITY OF CONTRACT IS OUT OF DATE IN THE MODERN WORLD

I.              Introduction

The principles related to the privity of contract have been under considerable scrutiny in the past years. Essentially, the doctrines related to privity concerns the issues relating to third parties. Specifically, it claims that an individual cannot have any rights or put into effect any right found on a contract which he/she is not considered a party. In the same manner an individual who is not considered a party to a contract will not be liable to any concerns relating to it. In looking at the accepted definition of the privity doctrine, there seem some discrepancies that need to be addressed. The following discussions will attempt to establish a set of arguments in opposition to the implementation of the doctrine.    

II.            Arguments against the Privity Doctrine Being out of Date

There are several major arguments that need to be addressed in the doctrine of privity. These include the importance of the privity doctrine in determining who would enforce the contract; protection of the integrity of a contract being a private transaction; and possible injustices held in relation to the capabilities of the third party. These four are to be expounded in the subsequent parts. Certain laws applicable will be taken into consideration such that the arguments will be supported.

 

A.   Third Party and Consideration

In contract law, it is an established tenet that consideration should be present in any legal relationship. This being said, one could therefore deduce that a third party cannot take any benefit whatsoever in the contract, given that he has not given any consideration on it. On its plane, it is just logical that a third party given a better legal position in the context of contracts as compared to the promisor and the promisee is essentially unreasonable given that the two latter parties has provided consideration in the agreement.

Nevertheless, in certain jurisdictions the third party could acquire rights in the contract provided that they are covered by law. Specifically in Australia, s55 of the Property Law Act 1974 (Queensland), s56 Law of Property Act 2000 (Northern Territory), s11(2-3) of the Property Law Act 1969 (Western Australia), provides the third party the capability to enforce the contract if they were named in the contract itself. This means for Third Parties to have any right in implementing the terms of the contract, then they have to be actually named. Thus, the doctrine of privity is not out of date. It only appears to be because it is often misconstrued as the consideration rule. There is a difference. The doctrine of privity is still a superior in determining the people who should implement the contract, as seen in the legislation above those named should be the ones having the right to do so. On the other hand, the rule of consideration the actual promises that should be enforced. This means as the lack of consideration is a valid argument against the privity doctrine provided that they are two separate principles. The presence of the Acts such as those above provides a venue in where the privity doctrine could be contested.   

   

B.   Contracts as Private Transactions

Essentially, contracts are indeed a private and personal transaction between the parties involved. The presence of consent (offer and acceptance) is essential in determining the actual existence of a legal relationship bound by contract. Thus, in the context of the third party, it is perceptible that he/she should not have any rights on the contract.

However, in analysing the creation of consent in contractual relationships, it is done not so much as to preclude others from acquiring benefit from the terms held in it. The existence of us is to establish protective legal armour for the autonomy of the contracting individuals. It seeks to protect the intention of the contracting parties in enforcing an agreement. Thus, in instances where, as stated above, third parties are given the ability to benefit in the contract, then it still does protect the autonomy of the parties involved, and consequently maintains the transaction still as a personal one. Nevertheless, as stated in the case of Trident General Insurance Co Ltd. v McNiece Bros Proprietary Ltd. [1988] 165 CLR 107 at 123, 117-118, there should be established that it is the intention of the parties involved to provide the third party power of enforcing the terms indicated in the contract. This claimed under the credence of s55(6) of the Property Law Act 1974 (Queensland) and s55(6) of the Law of Property Act 2000(Northern Territory). It means that there should be an expressed intention among the parties involved. In Western Australia on the other hand, an implied intent to enforce the third party is sufficient. (Western Farmers v Southern Meat [1981] WAR 241)

 

C.   Capability of Third Party to Sue

There is the longwinded argument against the privity doctrine that it favours the third party because the third party could take legal actions against the promisor but the promisor is not authorised to take legal action against the third party. In looking at this scenario, the doctrine of privity appears to present a situation where a degree of protection is given to those not part of the contract from any unjust legal actions. In the case of third party, the problem lies in the capability of the promisor to take reciprocal actions, thus appears to have placed his/her interests in the line. Thus, as the intention of the creation of the contract, interests of the parties involved should constantly be protected. In this context, the inability of the promisor to sue the third party does not compromise his/her interests; in the first place he/she could still protect it by taking legal actions against the promisee.   

 

III.           Conclusion

The discussions above has provided arguments against the claim that the doctrine of privity being out of date. The issues presented above indicate that the doctrine continues to protect the parties involved. In the same way, the doctrine has evolved such that laws and legislations have been ratified to meet the flexibility required by the courts. The doctrine of privity does not go out of date. It continues to develop and improve. With the enactment of such laws as Property Law Act 1974 (Queensland) and Law of Property Act 2000 (Northern Territory), then issues relating to privity will continue to grow.   

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Nokia Corp. Marketing Plan

Executive Summary

 

This marketing plan is about the launching of a new mobile product Nokia E71 by Nokia Corp. by the end of 2008. Most people need a diverse and high technology mobile phone. So, Nokia is aim at this point and its mark that Nokia’s develop this mobile phone in a new market niche.

 

Nokia E71 represents the most advanced diverse mobile phone with the latest digital applications. It reflects the radical changes in mobile phone technology moving from the analogue service to the digital era.

 

This plan will provide the information about Nokia E71 mobile phone function and it’s marketing strategy.  Also, it wills analysis the environment’s strength and weaknesses for the diverse phone.

 

Other ambitions for this marketing plan include:

 

v  Analysis of SWOT, strengths, weaknesses, opportunities, and threats

v  The local market force, target markets, and promotional opportunities.

v  Analysis the Macro-environmental of Political, Economics, Society and Technology.

v  Marketing mix for product, place, price and promotion.

v  Product life cycle and competitive

v  E71 – 2 years product finance forecast

 

The successful launch of Nokia E71 illustrates that product innovation is the key to success into the market.
 

1. Introduction

Most people have one or more than one mobile phone in 21st century. In Hong Kong, over 90% peoples (around 6 million peoples), they have mobile phones and they used to change their mobile phone frequently. They seek the mobile phone that has more functions (camera, internet, etc) and the good outlook design. Thus, Nokia has promoted the new diverse mobile phone E71 (include camera, internet and 3G among others) to fit for customers’ need and desire. E71 has the same functions that Blackberry also has, but the price is cheaper than Blackberry. This thesis is written in a good marketing plan and strategies for E71 mobile phone to enter to the market.

 

2. Company Background

Nokia Corporation (Nokia) is an international communications company and player in mobile industry, focused on the key growth areas of wire line and wireless telecommunications. Nokia is at the forefront of mobile technology and has over a century and a half of innovation with roots beginning as early as 1865. The Company makes a range of mobile devices with services and software that enable people to experience music, navigation, video, television, imaging, games, business mobility and more. Nokia is now the world's largest manufacturer with a global device market share and world leader of mobile telephones and communications.

 

Nokia also provides equipment, solutions and services for communications networks through Nokia Siemens Networks. Nokia produces mobile phones for every major market segment and protocol, including GSM, CDMA, and W-CDMA (UMTS). The corporation also produces telecommunications network equipment for applications such as mobile and fixed-line voice telephony, ISDN, s, voice over IP, and wireless LAN. Nokia had four business groups: Mobile Phones, Multimedia, Enterprise Solutions and Networks, broadband access and serviced by two horizontal groups: Customer and Market Operations and Technology Platforms, in addition to various Corporate Functions.

 

2.1 Objectives

Nokia sets an objective aggressively to sell the diverse mobile phone E71 to achieve in two years in the market.

• Nokia are aiming for a 5 percent market share in Asia Pacific region;

• E71 style phone market through unit sales of HKD 3 million in two years;

• Achieve a 15 percent share based on sales.

An important objective will be extended on the Nokia brand name and link to the established meaningful positioning. Nokia has invested heavily on the diverse mobile phone and it plan to capitalize on the brand when marketing the diverse mobile and it will extend on Nokia’s image of innovation, quality, market share and value. In additions, it will measure the awareness and response in order to make adjustments to our marketing campaigns as necessary.

 

2.2 Mission

Nokia’s mission is to provide consumers with innovative digital convergence products that possess exceptional technology, quality, features, performance and value. It connects people to each other and the information that matters to them with easy-to-use, and modern products like mobile phones, devices and solutions for imaging, games, media and businesses. It’s simple mission: to “connect people” in every-time, everywhere, everyplace and every day. 

 

2.3 Product Life Cycle

Each mobile phone has a product life cycle. Almost the phone life is 1 year.  But E71 has more functions and professional style, Nokia extend the life cycle is around 2 years.

 

In the introduction stage (1-3 months), the consumer, the market has not any information for E71; feature and function. So, Nokia require a lot of advertising and promotion to introduce the consumer and the new market.  In this stage, the outcome cost is larger than income.  The majority cost is included development cost, consultant fee, advertising fee and promotion fee.  The company also expects advertising and promotional costs to be as high as in the introduction stage as more companies will enter the market and competition for market share will also increase.  Advertising is a proven way of promoting technological advances within a market so higher advertising costs can be expected as the technologies available get better and more advanced. 

 

The growth stage (4-12 months), Nokia start to make a profit, based on good market research and a strong sense of branding and a successful marketing scheme. Nokia also has high promotions cost involved in this stage.  In the growth stage profit isn't the only thing that will start to develop, as in the market it is obvious that more difference mobile phone will be developed and that will drive prices higher, this is a good time to make a profits because consumers have accepted the product, as a necessity they will be more willing to pay higher prices for new phones that emerge in the market.

 

When a product enters the maturity stage (13-18 months), advertising and promotional prices should decrease, as consumers are more aware of the product and will research new additions to the market instead of being told what is new.  At this point in the product life cycle, Nokia should be clear as they will have the most money to develop and promote E71 phones while the other, less popular producers of phones will be struggling to survive and will drop out of the market either here or they will seriously struggle in the next stage, decline.

 

The final stage, decline stage (over 18 months), E71 mobile phones have entered, and Nokia will try to re-launch E71 to the existing market or entering new markets (outside of Hong Kong).  At this point mobile phone sales will be decreasing and promotion and advertising costs will start to rise again as companies fight for the remaining market share and struggle to make a profit.  This will back into to growth stage.

 

Sales and Profit ($)

 

 

 

 

 

 

　

　

　

　

　

 

 

 

　

　

　

　

Sales

 

 

　

　

　

　

　

 

 

　

　

　

　

　

 

 

　

　

　

　

　

 

 

　

　

　

Profits

　

 

 

　

　

　

　

　

 

0

　

　

　

　

　

Time

 

　

　

　

　

　

 

 

　

　

　

　

　

 

 

Product

Introduction

Growth

Maturity

Decline

 

 

Development

　

　

　

　

 

 

Stage

　

　

　

　

 

Losses / investments ($)

 

 

 

 

 

3. Environment

The environmental factors are comprised of several differing influences and trends that are considered to be the layers around an organisation. The primary environment of any organisation is its macro-environment or where the organisation belongs in the industry. The PEST analysis is the most comprehensive method of assessing the environment of any organisation. PEST includes the political, economic, social and technological, and provides the organisation with a framework of variety of forces that could affect their operation. The results of this analysis could effectively lead to transforming such forces into strategies that are beneficial for the organisation.

 

Environment can affect the company marketing strategy from development. There are two factors of internal (micro environmental) and external (macro environmental). The company can directly control the internal environmental, but the external environmental is un-control. The company needs to follow the external environmental

 

3.1 PEST analysis

Nokia is a global brand, which is required to focus on macro environmental factors.  Macro environmental factors comprise Political, Economics, Society and Technology, PEST analysis. When Nokia provides a new product in the market, it also needs to know what is happening in the other countries at the moment. So, Nokia has to adjust its strategic plan in order to develop international market, as there are different culture and different external factors between different countries.

 

3.1.1 Political factor

It is important of a company to acquire resources from government, such as economic policy, and science and technology policy. Hong Kong is a free trade zone, to operate efficiently, a modern knowledge and technology based economy that is highly specialized internationalized and undergoing rapid structural change requires active support from the public sector. The success of Nokia has followed the Hong Kong policies which assist Nokia to advance its products. 

 

3.1.2 Environmental and Social factor

Many companies may view profit as more important than ethical practice and this can lead them to making illegal decisions and this has been a big contribution to many companies going out of business or losing their entire market share to eco-friendly companies.

 

Nokia have managed to be quite environmentally friendly and have not done anything that the consuming public have taken huge offence to, they have been very careful about this and this is one of the reasons, they are such a popular brand of mobile phones.

 

3.1.3 Technological factor

In the communications market this is probably the most important external factor in affecting a Nokia development of their marketing strategy as they must always keep up to date with every change within the market. It has to keep up to date with all the newest technological advances if they are going to capture the biggest market share and successful, hold on to their market share as hopefully gain more and stay ahead of their competitors.

 

3.2 SWOT analysis

Strategic capability concerns the adequacy and suitability of resources and competences as the requirements of survival and growth. To wit, competitive advantage could be only achieved one the organisation learned to develop strategic capabilities that are appreciated by its customers in a manner that competitors are finding difficulties to imitate. The most basic process of acquiring knowledge on organisation’s strategic capabilities is through a comprehensive review of the strengths, weaknesses, opportunities and threats (SWOT).These are tangible and intangible elements inherent to the organisation that enables the continuous improvement or the ability to continually develop strategic capabilities.

 

SWOT analysis is also another way of deciding on a successful marketing scheme, it must look at Strength, Weakness, Opportunity and Threat. The SWOT analysis provides information that is helpful in matching Nokia’s resources and a capability to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection.

 

3.2.1 Strengths (Internal factor)

Nokia is a big brand in the World; their product can make a confidence to customer buy. Nokia have strong strengths than other company.

Ø   Most popular mobile communications company

Ø   Excellent marketing and promotion

Ø   Solid manufacturing

Ø   Best Research and Development facilities

Ø   Potential customer

Ø   High quality product and function

Ø   Variety of products to keep them in the game

 

3.2.2 Weakness (Internal factor)

This is basically looking at where the product is failing or mot doing as well as it should in the market. Nokia problems are that:

Ø   Currently aiming their products as a saturated market segment.

Ø   Products lack user centered design

Ø   Products lack the slick and fashionable appeal

Ø   Products lack the touch screen function

 

3.2.3 Opportunities (External factor)

This is the area in which Nokia can make more profit or gain more market share.

Ø   Improve the technology that they are using to make their phones and use in their products. The camera phones and advanced picture messaging would attract new consumer to purchase phone under the Nokia brand name.

Ø   Using innovation to re-invent their products, change and develop within the market to offer something none of the competitors have. Also the fact that phone call charges are being forced to fall should prove to be an opportunity for Nokia to sell to the people, who previously may have not purchased a phone because of higher call charges.

 

3.2.4 Threats (External factor)

This is looking mainly at the competitions that are taking away Nokia’s current market share.

Ø   Asian OEMs (Original equipment manufacturer) who are entering the market very aggressively (For example, TCL)

Ø   ODMs (Original design manufacturer) enabling carriers to leverage their customer power bypassing the handset vendor. Operators want to lessen their dependency on handset vendors and the dominance of Nokia. HTC, Orange, O2 and many other operators globally are selling their own brand of phones.

 

3.3 Porter’s Five Force Analysis

Another method to evaluate the environment of the organisation is through the five forces framework. This framework, which was developed by Michael Porter, put emphasis on sources of competition internal and external to the organisation by means of barriers to entry, suppliers’ and buyers’ power, threats of substitute and extent of competitive rivalry. The dynamicity of the two techniques of environment evaluation conforms to understanding the competitiveness of the organisation and the critical success factors that could be derived from these environment evaluations. 

 

In the Porter’s generic strategies, there are three strategies; Differentiation, cost leadership and focus.  For the mobile phone of E71, Nokia is use cost leadership model for the marketing strategies.

 

As per the above marketing mix – product and price strategies, its present that the model cost is less than any other competitive organization and provide more function.  These two points is attracting the consumer need and wants.  The product is often a basic no-frills product that is produced at a relatively low cost and made available to a very large customer base and gain market share. 

 

Maintaining this strategy requires a continuous search for cost reductions in all aspects of the business. The associated distribution strategy is to obtain the most extensive distribution possible. Promotional strategy often involves trying to make a virtue out of low cost product features.  Nokia is provide the low price, will remain the profitable for the longer period of time.  The cost leadership strategy usually targets a broad market.

 

Also, Nokia has efficient distribution channel, skill in the design product and high level of expertise in manufacturing process engineering, this internal strategy can success the cost leadership.

Porter argued that:

“Competitive advantage is a function of either providing comparable buyer value more efficiently than competitors (low cost), or performing activities at comparable cost but in unique ways that create more buyer value than competitors and, hence, command a premium price (differentiation).”

 

Porter is identified that two types of competitive advantage. Cost advantage and differentiation advantage.  A competitive advantage exists when the firm is able to deliver the same benefits as competitors but at a lower cost (This is cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage).  Thus, a competitive advantage enables the firm to create superior value for its customers and superior profits for itself.

 

In the mobile phone market, there are more competitive, they will develop the products every time.  So Nokia need to increase their product function at the same moment and also need to use the high-tech technology but the cost is low to the market.  Then, it can increase the product advancement, increase the company market share and increase the customer use Nokia confidence advantage enables the firm to create superior value for its customers and superior profits for itself. on advantage; this is a benefit for the consumer and company (two wins method).

 

4. Market Definition and Segmentation

4.1 Market Segmentation

 

Target Segment

Consumer Need

Corresponding Feature / Benefit

Professionals

 

 

 

 

>> 

Stay in touch while on the go

>> 

E-mail, instant messaging, and phone

>> 

Record information while on the go

>> 

Applications from Excel, Words for notes and record keeping

 

 

 

 

Students

 

 

 

 

>> 

Perform many functions without carrying multiple gadgets

>> 

Phone, video, TV Shows, Internet, PDA, MP3

>> 

Style and individuality

>> 

Nokia branding as fashion statement

 

 

 

 

Corporate Users

 

 

 

 

>> 

Input and access critical data on the go

>> 

Applications from Excel, Words for notes and record keeping

>> 

Get information and data to customers quickly

>> 

Compatible with widely available software

 

 

 

 

Entrepreneurs

 

 

 

 

>> 

Organize contracts, access contracts, and schedules details

>> 

Wireless access to calendar and address book to easily check appointments and contacts

 

 

 

 

  

4.2 Target Market

 

Nokia targets consumers who need to store information and communicate as well as people who want entertainment on the go. The company target segments that consist of professionals, students, corporate users, entrepreneurs, and health care workers. Based on the marketing research, between the age of 20-50 market segment as they will have lots of disposable income and shows that most people aged over 50 do not currently own a mobile device and could be persuaded to buy one by certain promotions and a good advertising campaign, also the drop in call prices should attract a lot of people who may have previously been hesitant due the high costs.

One of our primary customer targets is the middle-upper income professional that need one portable device to coordinate their busy schedules and communicate with colleagues, friends and family. Our secondary consumer targets are high school, college and graduate students who need one portable multifunction device. Mainly the mobile phone market will be replacing their cell phone with Nokia E71 diverse mobile phone. 

4.3 Marketing Positioning

 

4.3.1 Products

 

“A new product can be defined as a particular good or service that is perceived by some customers as new. It may ultimately have been around for a while, but the customer has just recently come across it” (Kotler, 2006).

 

Nokia has catered to the different customer’s need and want. They have design a different model to market for the customer choice. Few people want Internet, camera, video, games, online TV and information, and PDA features in one device because of the high price. The smart phone market is still relatively small being compared with general phone market. The market will rapidly increase in coming years due to lower prices and greater power. It’s depending on the customer need and the budget.

 

Nokia knows that most of the people want to buy a high functional mobile but they are no budget to buy it. Then, Nokia design a professional mobile phone E71 to cater to the market needs, the suitable size is fit to use and it is a high-technology phones. The price is lower than HK,600, its fit the consumer target.

 

The Key features of Nokia E71 as below:

Optimized mobile email and messaging experience with full QWERTY keyboard and pocket-size for one handed typing.

3G function

Nokia PC Internet access

Intelligent input with auto-completion, auto correction and learning capability ensuring fast and error-free typing

Built-in A-GPS and Nokia Maps

Music player, Media player, Visual Radio

Built-in mobile VPN for convenient intranet access

Microsoft program (Excel, Words)

Dictionary (English convert to Chinese and Chinese convert to English) and readout the word

Keyboard input function

 

4.3.2 Price

“The meaning of price depends on the viewpoint of the buyer and seller, each party to the exchange brings different needs and objectives that help describe a fair price, without both parties agreeing no sale takes place” (Strauss 1999). “The price a product is sold for consists of three elements which include production costs, coordination costs and profit margin” (Wigand and Benjamin).

 

The phones that Nokia produce are usually sold at high prices (new phones can be expected to enter the market at around HK,000, if they carry the latest technology) except this new E71 mobile phone, they sell around HK,600 in the introductory period. The price of the new phones usually decreases after an introductory period, which is usually around 6 months long.  

 

Nokia's current pricing strategy is based on 2 main theories:

 

1.                  Penetration pricing-although this strategy is usually for companies that are trying to gain instant market share in a new market, companies who are already well known in the market still do it with new products that carry new technologies so they can take more market share from their competitors.

 

2.                  Competitor based pricing- this is used when there is a lot of competition in the market and a company is looking to take another companies market share by offering the same or similar products for a lower price, this happens a lot in the communications market and this strategy is used by every mobile phone producing company that is still in business.

 

Nokia's pricing strategy has proven very effective, this is down to the fact that they first sell their products for high prices and have very limited sales but make big profits on each sale, they then lower the price of their product and have lots more sales but they make less profit, but they still make a large profit due to the amount of sales, the other reason that they are so successful is that they offer high quality products and they sell them for the same price and sometimes even lower prices than the competition and have now built up the highest market share, they currently have 42% of the mobile phone market share and are the biggest selling mobile phone company in the world.

 

Compared with our company, they also have provided the similar function mobile in the market. But the price is more expensive than Nokia.

 

Brand / Model

 Price (HK$)

 Compare with E71 (expensive)

Expensive %

Nokia E71

         3,580

                           -  

 

LG Renoir

          4,380

                     800

22.35%

Blackberry® 8707g(3G)

             4,580

                     1,000

27.93%

HTC Touch diamond

             4,680

                    1,100

30.73%

I-Phone (8GB)

             5,400

                      1,820

50.84%

Sony Ericsson X1

             5,980

                      2,400

67.04%

I-Phone (16GB)

             6,200

                      2,620

73.18%

Samsung innov8 i8510H

             6,380

                      2,800

78.21%

 

4.3.3 Place/ Distribution

 

‘Distribution channel is a group of interdependent firms that work together to transfer product and information from the supplier to the consumer’(Strauss 1999).

 

Nokia phones are generally sold at all established mobile phone dealerships, although they are also sold at other retailers such as Broadway, Fortress, Best (the larger electric equipment retailer shop) and other electrical suppliers (the small business shop). For the larger retailer shop, they have over 70 retails shop distributed in Hong Kong Island, Kowloon and New Territories.

 

Also, the company will sell the products into Nokia specialty shop. It has 5 specialty shops; all is distributed in Hong Kong Island and Kowloon popular shopping location.  It can provide the professional advice to the consumer and convenient to buy it.

 

In the introductory period (for the first two weeks), the products are sold in the Nokia specialty shop only, so the phones can remain limited edition, as this will encourage younger and professional consumers to buy them. After the first two introductory weeks, all the products are sold in the dealerships shop. 

 

Channel 1

Manufacturer

 

 

 

 

 

 

 

Consumer

Directly sell to consumer in website - "Online shopping"

 

 

 

 

 

 

 

 

 

 

 

Channel 2

Manufacturer

 

 

 

 

 

Retailer

 

 

 

Consumer

Manufacturer sell to Nokia specialty shop, then sell to consumer.

 

 

 

 

 

 

 

 

 

 

Channel 3

Manufacturer

 

 

 

Wholesaler

 

 

 

Retailer

 

 

 

Consumer

Manufacturer sell to Wholesales, then wholesales sell to electric equipment

 

retailer shop, after that sell to consumer.

 

 

 

 

 

4.3.4 Promotion

“Marketing communications or promotion is a strategic business process used to plan, develop, execute and evaluate coordinated, measurable, persuasive brand communication programs with consumers, customers, prospects employees and other relevant external and internal audiences” (Belch and Belch, 2007). Marketing communications consists of all the basic elements in the promotional mix. These include Advertising, Direct marketing, Interactive/Internet marketing, sales promotion, publicity/public relations and Personal Selling (Belch and Belch, 2007). When a business develops a promotional plan, it is not uncommon for them to use some, if not all of these elements.

 

Nokia tends to promote the new technologies and mobile devices they create using one big advertising campaign that focuses on a singular technology instead of each individual handset so they can appeal to a lot of different markets with one campaign.

 

Nokia would be aiming their new line of mobile phones at completely new markets; there would be high promotion costs involved as there is at the introduction stage of any product life cycle. 

 

Nokia will integrate the message of revolutionary communications and audio/visual experience together in all of the media advertisements. Prominently featured to differentiate our product against others is same as PDA functionality. The best places to put print advertisements would be in supermarkets near the tills so people in the queue can read them and hopefully become interested in buying a Nokia brand mobile phone.  Also print adverts should be placed in popular magazines and newspapers where the target market will see them. The advertisements need to be original but tasteful at the same time. Thereafter, advertising will be appearing on a regular basis to maintain general public awareness and communicate various differentiation messages to several targeted groups. To attract, retain and motivate channel partners to push the product, it will send personnel to inform the consumer.

 

Research about media consumption patterns of the targeted audience will help the advertising agency choose appropriate media and timing to reach prospects before and during product introduction. As per the research report, Nokia mainly have five channels for promotion; advertising in magazines, TV, electric retails shop, leaflet and street poster.

 

 

5. Financial Summary

5.1 Financial forecast table by product life cycle  

Forecast income and outcome for the mobile phone E71

 

 

In HKD

 

 

 

 

 

The selling price is HK,600

 

3600

 

 

 

 

 

 

 

 

Stage

Month

Estimate Sales

Qty

Advertising

Other expenses

Introduction

1

        360,000.00

100

      300,000.00

            100,000.00

2

        396,000.00

110

      400,000.00

            150,000.00

3

        432,000.00

120

      500,000.00

            120,000.00

Growth

4

          702,000.00

195

       200,000.00

              100,000.00

5

          900,000.00

250

       350,000.00

              110,000.00

6

          720,000.00

200

       220,000.00

              130,000.00

7

          756,000.00

210

       240,000.00

              135,000.00

8

          720,000.00

200

       190,000.00

              140,000.00

9

          648,000.00

180

       170,000.00

               85,000.00

10

          684,000.00

190

       180,000.00

               99,000.00

11

          666,000.00

185

       160,000.00

              110,000.00

12

          792,000.00

220

       175,000.00

              105,000.00

Maturity

13

          630,000.00

175

       200,000.00

              70,000.00

14

          540,000.00

150

       150,000.00

              63,000.00

15

          594,000.00

165

       120,000.00

              57,000.00

16

          612,000.00

170

       130,000.00

              43,000.00

17

          558,000.00

155

        90,000.00

              31,000.00

18

          504,000.00

140

        76,000.00

              20,800.00

Decline

19

          468,000.00

130

        50,000.00

              10,000.00

20

          360,000.00

100

        30,000.00

               8,000.00

21

          324,000.00

90

        20,000.00

               7,000.00

22

          378,000.00

105

        22,000.00

               7,500.00

23

          288,000.00

80

        15,000.00

               6,000.00

24

          108,000.00

30

        12,000.00

               2,000.00

 

 

 

 

 

 

 

Total

      13,140,000.00

3650

     4,000,000.00

           1,709,300.00

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

      13,140,000.00

 

 

 

Less: expenses

 

 

 

 

 

Development cost

3,500,000.00

 

 

 

 

Advertising costs

4,000,000.00

 

 

 

 

Other expenses

1,709,300.00

        9,209,300.00

 

 

 

 

 

 

 

 

 

Estimate 2 years Net profit

 

        3,930,700.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Refer to the above forecast table, just only have introduction stage sales can’t cover the expenses cost. And, Nokia is the world's largest manufacturer and most popular in the mobile phone market. It has an existing consumer to buy Nokia’s new product.

 

6. Conclusion and Recommendations

 

Base on the above marketing analysis, Nokia has a leader position in the mobile phone market. Most of 40% people will use Nokia’s brand mobile phone. During to the last five year, it’s continuous to innovate the mobile phone to the market. Nokia knows that essence of the future mobile phone is all about speed, high functional and capacity and has successfully implement of the new technology. And then, Nokia has its sights set on creating niche markets in the steadily growing mobile multimedia arena. The company has managed gearing up to roll out a range of multimedia and diverse handsets including Nokia E71.

 

Nokia E71 has invested in the end of year 2008 and it plan to capitalize on the brand when marketing the diverse mobile and it will extend on Nokia’s image of innovation, quality, market share and value. It’s can follow and match to Nokia’s marketing objective and company’s mission. Moreover, Nokia E71 can reflect a strong market orientation because it has more high technology functions merge together into one mobile phone. Also the price is very important thing to consumer’s concern. It can match to the consumer needs and wants. Finally, Nokia E71 also reflects the fact that product innovation is the key to Nokia’s success. The success of Nokia in the market to date is also the result of appropriate organizational change.

 

One appropriate recommendation is setting measuring success criteria. The measures of criteria for the four areas are determined below.

 

i) in terms of expected sales

The paper will make use of a financial equity scoreboard shown as below. The criteria will be two-fold – asset and monetary. Under asset, the scoreboard will measure intangible, conditional and beneficial performance. The monetary aspect will center on stock price performance (optional); return on investment including costs of setting-up of website, online collaborations and convergence with computer superstores; return on sales and cash flow. 

 

From (date)

Estimate- Decision A

Estimate- Decision B

To (date)

ASSETS

1 Intangible

2 Conditional

3 Beneficial

 

 

 

 

MONETARY

1 Stock Price Performance

2 Return on Investment (ROI)

3 Return on Sales

4 Cash Flow (ROI)

 

 

 

 

 

ii) criteria to control performance

The criteria to be included in measuring control performance will be shown below. It will demonstrate the brand strength indicators and how poor or well does the product, Nokia E17, performs in the market.

BRAND STRENGHT INDICATORS

YES/NO

REMARKS

Value-added Attributes

- non-duplication

- distribution

- promotion

- pricing

- customer service

- access

 

 

Brand Knowledge

- levels of familiarity

- image awareness

- customer recalls

 

 

Brand Preference

- individual motivation

- ability to purchase

- attitudes and behaviors toward consumption

-levels of attachment

 

 

 

iii) increase number of consumers

The document will also predetermine the use of a sales-based measurement in order to distinguish the increase in number of customers. As shown in Fig. 2, the schedule will include criteria of baseline sales, promotional sale and incremental sale via e-markets.

 

iv) entry to the targeted market

The paper will focus on the effectiveness of entry strategies both general and promotional. The general strategy is to be measure afterwards is on the efficiency of the factory to directly collaborate with foreign wholesalers, retailers and distributors and to internationally-acclaimed Internet providers. The promotional strategies in penetrating new markets will be center on the effectiveness of active promotional tactics specified.  

 

Another recommendation centers controlling and reviewing. To take the maximum advantage of our marketing plan, the progress of the plan will be carefully monitored. The measurement of progress will center on establishing targets and standards, and whenever necessary, corrective actions will be implanted. Deliverables will be closely watched so as the activities generally outlined above could be followed without interruptions. The plan will be reviewed on a monthly basis with the quantifiable aspects of the plan: sales, market share, expense and financial.

 

7. References / Appendices

 

Ø  The design dimension: product strategy and the challenge of global marketing

Lorenz, Christopher, 1946 / Oxford, UK; New York, NY USA: Blackwell, 1986.

 

Ø    New product development

Lincolnwood, IL, USA: NTC Business Videos, c1989

 

Ø    Total relationship marketing: marketing strategy moving from the 4Ps--product, price, promotion, place of a new marketing paradigm

Gummesson, Evert, 1936 / Amsterdam: Butterworth-Heinemann, 2002.

 

Ø  Creative product development: a marketing approach to new product

Andrews, Bryan / London; New York: Longman, 1975

 

Ø    Principles of Marketing (edition 2, 2003)

Kotler / Adan / Brown / Armstrong (Prentice Hall)

 

Ø    Consumer behaviour

Peter M. Chisnall, London; New York: McGraw-Hill, c1995.

 

Ø    Consumer behaviour and marketing strategy

J. Paul Peter, Jerry C. Olson, Homewood. IL: Irwin, c1993

 

Ø    http://www.wilsonweb.com

Ø    http://www.marketingprofs.com

Ø    http://www.nokia.com

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