Nordstrom: a Marketing Analysis Essay

Over the years Nordstrom has created individual departments that focus on the individual lifestyles of the customers. The company nor only provides its customers with a wardrobe, but also a countless line of accessories, cosmetics, and fragrance. Over the past few years, the company has added new brands to its product line to satisfy its customer needs. In order to give the best possible service to the customer, the company plans on continuing to update the product line as new customer desires evolve. The employees are extremely focused on creating an environment of customer service within the store as well. The employees are not only focused on meeting the company standards, they are also focused on reaching the standards they have set within their own department as well. Each employee is trusted by the store managers to make good decisions and represent the company well. This trust has built confidence in the employee and enables them to focus all of the energy toward the customer. The atmosphere of the store also shows evidence of the company mission. The store is easy to navigate through, specific soothing colors are well placed throughout the store, and there is always a piano that can be heard playing in the background. These three things create a soothing and comfortable atmosphere for the customer. Nordstrom’s mission of providing customer service, quality, selection and value to its customers is carried out in every aspect of the company. The company employees, store atmosphere, and product line all display extraordinary qualities of service. The Mission Statement of Nordstrom is definitely evident in its day to day operations. Situation Analysis (SWOT Analysis) Internal Strengths and Weaknesses History (Sales, Profits, Organizational Philosophies) Nordstrom was co founded 1901 by a 30 year old man named John W Nordstrom and his partner Carl Wallin. At age 16, John W of Sweden left his home and moved to Alaska where he struck gold. While in Alaska, he met a man named Carl Wallin, â€Å"who owned a shoe repair shop in downtown Seattle† (Nordstrom Employee, 2006). The two decided form a partnership and open a shoe store entitled Wallin & Nordstrom. Right form the start, the business philosophy was â€Å"based on exceptional customer service, selection, quality and value† (Nordstrom Employee, 2006). Focusing on this philosophy helped Nordstrom develop a competitive advantage in the shoe market. Due to their success, the company opened a new store in 1923. The company was soon taken over by John W’s sons. Under their management it â€Å"grew to become the largest independent shoe chain in the United States. By the 1960’s the current market had started to reach maturity and the company began to look â€Å"for new ways to spread its wings† (Nordstrom Employee, 2006). In an attempt to diversify itself, and gain greater market penetration, Nordstrom took on a new name, â€Å"Nordstrom Best†, and ventured into the clothing market. Now, upon entering a Nordstrom store, â€Å"customers were greeted with a selection of both shoes and fine apparel† (Nordstrom Employee, 2006). Now for the first time in history, Nordstrom offered a diverse product mix, something no other competitor offered. In 1971, under the third generation of management, the company decided to go public. Two years later Nordstrom reached a critical point in its business, surpassing $100 million in sales, making it the largest volume specialty store on the west coast. Profits were growing, market share was increasing, and Nordstrom’s marketing plan seemed to be working. Even though Nordstrom was experiencing tremendous success, the management was not satisfied. There was still room to grow. In order for Nordstrom to retain its competitive advantage, the company needed to revise its marketing strategy and further its market penetration. The company decided to take action. By 1975 the company penetrated into the markets of Alaska and California and by the late 80’s, the company opened up the first Nordstrom Rack in the mid 70’s. This store was a â€Å"clearance center for full-line store merchandise† (Nordstrom Employee, 2006). The higher prices in the regular store targeted the upper segment of society, while the Rack enabled Nordstrom to orient itself to a completely new crowd. Today, more than 100 years after its establishment, Nordstrom maintains the same focus of offering â€Å"the customer the best possible service, selection, quality, and value† (Nordstrom Employee, 2006). This is evident in the product line and store ambience. Nordstrom has created a unique store atmosphere designed to enhance the shopping experience of the customer. â€Å"Instead of categorizing departments by merchandise, Nordstrom† has â€Å"created fashion departments that fit individual’s lifestyles† (Nordstrom Employee, 2006). Focus on serving the market (or customer’s needs and wants) has helped Nordstrom grow from a small shoe store in Seattle â€Å"into a nationwide fashion specialty chain† (Nordstrom Employee, 2006). Nature of Firm/Current Situation Aside from Nordstrom’s customer service, one of its most influential qualities is the store atmosphere. Immediately after walking into a Nordstrom, one experiences a sense of calmness that is not experienced when walking into other department stores. At Nordstrom, â€Å"careful attention has been given to achieving an esthetically pleasing atmosphere†, a Nordstrom customer commented (Bee H, 2006). Nordstrom has put a lot of research into testing different layout scenarios within each store. Every time the layout of a department changes, a diagram is made and a record of sales is kept for that layout. From this information, Nordstrom has been able to develop the most economical and profitable layout for the customer and the organization. The Nordstrom colors are also carefully selected. Deep earthy colors present customers with a comfortable and desirable atmosphere. Deep red, brown (wooden floors), blue, purple and green are used to color the store. Every color is strategically placed throughout the store to enhance the shopping experience. Nordstrom has put a lot of research into effects that color has on the human psyche. For example red is chosen because it produces feelings of â€Å"energy, desire, and attention† (Bear , 2006). Purple is another color that is placed in distinct locations throughout the store. It brings about feelings of self assurance, dignity, high aspirations, royalty, sophistication, wealth, ambition, fame, luxury, and power. These two colors are used to promote confidence and feelings of satisfaction within the customers as they shop. During sales, employees are also given a tie to wear which almost always includes the color purple. Purple is also found near the more expensive items in the store. The color scheme is critical in creating a store atmosphere that is desirable to customers. Aside from the colors, the product layout also plays an essential role in providing a even-tempered atmosphere. Nordstrom has separated its products into different departments for men and women. This helps provide better service as each department can cater to the specific needs and wants of the customer. Within each department the clothes are either laid out on hanging racks or on tables. Organization is the primary focus when setting up the departments. Clothes are always neatly folded and clothing racks are well separated. A general rule of thumb is that if two people can not walk side by side between two fixtures, they are too close together. To produce an even cleaner look, jackets and heavier clothes are always hung on wooden hangers instead of plastic. The most famous contribution to the atmosphere of Nordstrom is the Piano. Nordstrom has created a â€Å"partnership with Levine School of Music† where it hand selects students to work for the company upon graduation. The partnership is working; â€Å"the dude playing the piano just adds to the calm shopping atmosphere† commented one man after a day a day of shopping (Bee H, 2006). To provide even more relaxation, comfortable couches are usually found somewhere around the piano for tired shoppers to sit down and for men to wait while their wives shop. Andrew Cooper, a computer design major at North Park University in Chicago said â€Å"these couches are a great place for me to relax while my wife spends all my money†. Resources of the Firm Finance: Nordstrom uses a verity of resources to help attract new customers and retain its current customer base. By far, one of its biggest resources is in the area of finance. Nordstrom recently â€Å"reported third-quarter earnings of $135. 7 million† (Portland Business Journal , 2006). These earnings jumped unexpectedly and are up from $107. 5 million earlier this year. The financial resources of Nordstrom are an essential part of the companies marketing plan. This money has given Nordstrom the ability to put on expensive training programs for employees, purchase personal book (a customer database program), send out bulk mailings to customers (such as catalogs, promotions, etc. , build new stores, and create a customer friendly in-store atmosphere. Human: Nordstrom’s employees and management are the company’s most valuable resource. An article written in the Seattle PI describes exactly why this is true. It states that, â€Å"Nordstrom salespeople make decisions as if managing their own business; they are trusted to do what is right. Everyone else in the company is ther e to help the sales staff make the sale and please the customer† (Mulady, 2001). The way the employees are treated and valued is a perfect portrayal of the company’s mission of providing the best possible customer service and value to the customer. Even though the sales person is the front man for the company (being put in positions of direct contact with the customer), the human resource and management team act as the glue that holds the company together. The president of the company, Blake Nordstrom, says that people in support positions â€Å"like myself or someone in human resources that isn’t on the floor manning a register,† needs to understand that their job is to use the â€Å"energy and the activities they’re doing (to) contribute to a better customer and employee experience† (HR Magazine, 2006). It is therefore extremely important that the workers in the HR department stay connected to the selling process in order to stay connected with the employees. It is this connection that helps the employees â€Å"take care of their customers†. It is not unusual for employees to go in on their days off to meet a customer that is in need of a new suit or pair of shoes. The manager of the men’s suit department at the Tacoma Nordstrom comes in regularly on his days off. In an interview he commented that if a customer is in need â€Å"I will find them the suit, get it altered for them so they can have it in time† (Mulady, 2001). The sales employees have a tremendous amount of trust in the tailoring shop. One employee comments: â€Å"We rely heavily on the tailoring shop; they are great† (Mulady, 2001). In one situation, a baseball player needed a special shirt for a conference that Nordstrom did not have. To solve this problem, the sales person took a few shirts up to the tailor shop and used the material to make a brand new shirt. The shirt was then delivered to the player’s hotel room that afternoon. The employees of Nordstrom are what keep the company going. The trust built between employees is critical in helping Nordstrom provide the excellent service it does. Without trust and support of all the company’s workers, Nordstrom would be just another company. Physical: Currently Nordstrom operates â€Å"156 US stores located in 26 states† (Nordstrom Staff, 2002). Of these stores, there are 99 full line retail, 49 Nordstrom Racks, 5 Faconnable boutiques, 1 free standing shoe store, and 2 clearance stores. Even with all of these stores, the company is not satisfied, and is seeking to expand its physical existence even further. Nordstrom is currently in the process of establishing a store in Kenwood, Cincinnati. When interviewed about this decision, president, Erik Nordstrom, exclaimed â€Å"there is still much more opportunity to increase our presence around the country where our customers live and shop† (Fasiq, 2006). Nordstrom has also planted stores internationally where it operates 35 Faconnable boutiques, primarily in Europe. Customers of Nordstrom can even enjoy a unique shopping experience without setting foot in the store. The company has developed a unique online and mail order catalog designed to reach those customers who are interested in its products, but may not have the time or desire to come into the physical store. These resources are extremely important to the company. The two contrasting stores (online and physical), reach two diverse crowds. The physical stores provide a tangible place that customers can relate to all across the country, while the online stores take advantage of the stores reputation. They reach customers who have heard good things about the store but do not like to shop. Policies and Objectives of firm Nordstrom has established many different policies designed to keep employees on track with its mission. The use of good judgment is the number one guiding principle for the employees of Nordstrom. The first page of the employee â€Å"Code of Business Conduct and Ethics† states â€Å"at Nordstrom, we expect you to use good judgment when it comes to taking care of our customers. But we don’t expect you to do it without help from us† (Nordstrom Management, 2006). This policy lets the sales people know that the management stands behind them at all times. Aside from the standard company policies reguarding sexual harassment, stealing, drugs or alcohol, and preventing theft; the company also has some policies that make it unique. Employees are not allowed to accept gifts from anyone with whom they do business. This policy was instilled to uphold Nordstrom’s reputation of acting fair, honest, and professional. Accepting a gift can create the inkling that the gift inappropriately influenced the business transaction. The code of Ethics also tells employees that the company expects its employees to use personal book (a database that includes customer’s information such as purchases, sizes, etc. ) on a daily basis. This policy was designed to help the company keep their â€Å"reputation for excellent follow-through and service† (Nordstrom Management, 2006). However, since this in personal information, the company states that, â€Å"Personal Book and its contents are confidential and†¦ should be used in accordance with the Confidentiality and Nondisclosure Expectation† (Nordstrom Management, 2006). When an employee ends his/her career with Nordstrom, their personal book is closed off to them and returned to Nordstrom. All of these policies help keep Nordstrom on track with its mission. Almost all of the sections in the handbook for employees end with a line about using good judgment. This shows that Nordstrom has confidence in their employees. Nordstrom truly believes that if the employees use good judgment, the customers will get the best possible service the company can offer. On the opposite end of the spectrum, Nordstrom provides many benefits to its employees. The company provides time off with pay for personal and family needs. It also provides paid time for observed holidays. Each employee is also provided with a twenty percent discount at all Nordstrom locations. Nordstrom employees also have many long term benefits available to them. These Benefits include a 401(k) and profit sharing plan, where an employee can divert 50 percent of his/her compensation on a pretax basis, and an Employee stock Purchase Plan where the employee can purchase stock at a 10 percent discount. Full medical/vision and dental coverage are also provided by the company. Basic short term and long term disability coverage, as well as basic life insurance and long term care are also included in the standard benefit package. These benefits help the employee find meaning in their work and promote a positive attitude throughout the organization. A complete list of all the benefits provided by Nordstrom can be found on page †¦ in the back of this report. External Opportunities and Threats Social Social factors play a big role in what the way the company operates. For example, in Belleview Nordstrom offers a more upscale product line such as Gucci and other upper echelon brand names. This difference in product lines is evident in the Nordstrom in Tacoma as well. The Tacoma store is located in an area surrounded by many different social classes. Because of this, the store carries a more neutral line of products such as Calvin Cline, Cole Hann, Polo, Northface, and Tommy Bahama. These brands are brands that all of the target market of Nordstrom considers being very nice. To reach the outer limits of the Tacoma population, the store also sells products ranging form Coach and Burberry (reaching the wealthier population), to the Nordstrom brand (reaching the less wealthy consumer). Nordstrom is also a company that strongly believes in diversity. On its webpage under the diversity section it says â€Å"One of the best ways we can provide excellent customer service is by working to reflect the communities we serve† (Diversity Affairs Team, 2006). The company believes that an atmosphere encouraging diversity helps the employees as well as the customer. It is â€Å"deeply committed to cultivating an environment where the contributions of every employee, customer and vendor are respected† (Diversity Affairs Team, 2006). Creating a diverse company is an important step that Nordstrom has taken to broaden its customer service. Demographics Demographic issues are a big an important issue at Nordstrom. This is shown not only in the mission of the company, but in the physical store itself. Now days a majority of women in the United States enter the workforce after college. Nordstrom has created distinct departments to reach these women. In these sections of the store, women can find suits, and other more expensive dress clothes that Nordstrom would have not carried 20 years ago. The American family has also changed dramatically in the past decade. Because of this Nordstrom has changed its focus toward the individual. Ten years ago, it would not be a common sight to see moms shopping with their children, or dad’s waiting on the couch by the escalator with their children. Now days, it is almost unheard of to see families walking around the store. Teenagers, women, and men all come alone or with their significant other. The every store use to give balloons to children, employees all over the store would stop and talk with them and a lot of the mannequins were placed together (a man with a woman, or a child). Now the mannequins are all placed individually around the store, and it is rare enough to see a kid, let alone a kid with a balloon. In order to retain market share Nordstrom has shifted its focus more toward the individual. It has downsized its youth departments and added more upscale departments. Competition Nordstrom is dealing with competition on many different levels. It is competing with higher end stores such as Saks Fifth Avenue, Neiman Marcus, and Barney’s. It is also competing with second tier stores such as Macy’s and Bloomingdale’s. Because of the diverse competition, Nordstrom constantly stays one step ahead with its unprecedented customer service. Saks Fifth Avenue: Saks Fifth Avenue can be categorized as a mini version of Nordstrom. It has similar products, but targets a smaller market and carries less variety. To make it unique, Saks â€Å"focuses on other products such as bridal† (Nordstrom comparative analysis). In comparison to Nordstrom, Saks is slightly more expensive and is well known for its â€Å"much higher brand names† (Nordstrom Comparative analysis). There is also a difference in the store layout at Saks. Unlike Nordstrom, which it is categorized by department and where popular trendy goods are on the main floor, Saks â€Å"bottom floor consists of shoes, make up and teen clothing, and the upper floors are bridal and much higher priced brands and products† (Nordstrom comparative analysis). However, the major difference between the two companies is not in the layout of the store, the products offered, or the price of the goods. The major difference is the focus of the company. The mission statement of Saks is completely different from that of Nordstrom. Saks says the focus of their company is â€Å"to be a great place to shop, a great place to work and a great place to invest† (Nordstrom comparative Analysis). Money is what seems to be the number one marketing objective of Saks. On the other hand Nordstrom focuses on the treatment of the customer. It does not have a formal mission statement but the company’s core values can be summed up by the statement â€Å"through these doors pass the most courteous people in the world†. This statement is found at the employee entrance of almost all Nordstrom stores across the country. Bloomingdales: Bloomingdales might just be one of the most famous stores in the world. Bloomingdales is known for its â€Å"Big Brown Bag† which is something that all avid shoppers like to be seen carrying around. The mission of Bloomingdales is â€Å"to seek and create†, which is a statement that is well carried out by the company (Nordstrom comparative analysis). The company has a hand picked product development team that travels to Europe looking for new fashion ideas. If they do not find what they are looking for they create it. The extreme focus on product development and diversity has made the company famous for having a tremendous product mix. However, some stores rather cluttered. The Layout seems to have no structure and Bloomingdale’s pricing ranges form being competitive with Foley’s to stores far more expensive than Nordstrom. On the other hand, Nordstrom has a focused store with individual departments and consistent prices. Its does not have as much variety in its stores, but it can special order and create any product that a customer desires. This creates more satisfaction for the customer because they can easily find what they are looking for. Bloomingdales website also reflects its store atmosphere. It is a full line of goods which overwhelms the customer. The website lacks structure and is confusing to sift through. Nordstrom’s website also reflects it’s in store characteristics. The site is user friendly and easy to navigate through. Macy’s: Macy’s seems to have a similar strategy as Bloomie’s (Bloomingdales). The company is all about selling their name, not their service, unlike Nordstrom. Macy’s also focuses on having a tremendous product width as well as depth. This focus like Bloomie’s has also led the store to look cluttered. Some customers even suggest that â€Å"Macy’s looks more like discount store every year rather than a department store† (Nordstrom comparison analysis). This is again where Nordstrom gains a competitive advantage. It offers a smaller product mix in stores to help keep the customer from getting confused and overwhelmed. Macy’s offers a larger selection of home products than Nordstrom. It has a separate department for home furnishings. This department is so large that many times it is located in its own building next to Macy’s. However, Macy’s has a good selection of home products in its retail stores as well. Again, it is the focus of Macy’s that sets them apart from Nordstrom. The specialization of household products and cheaper prices keep Macy’s competitive in the market. However, Nordstrom’s focus on the customer and the employee gives them the competitive advantage in the industry. Technological In the 1900’s the information systems of Nordstrom â€Å"lagged behind many retailers†, such as JC Penny, Federated Department Stores, Dillard’s, and Belk. (Levinson, 2005) The CFO of Nordstrom commented on the lagging information systems, saying, â€Å"our people at one time were our information system† (Levinson, 2005). During this time the company was reluctant to consider IT â€Å"for fear that it would come between the store and its customers† (Levinson, 2005). A sales slump in the year 2000 was enough to convince Nordstrom that it was behind the times. The threat of other companies gaining a heavy advantage with new technology was too much to handle. Looking at the other models around them, Nordstrom became an early adopter and began buying IT technology. â€Å"Over the past four years†, Nordstrom has spent a total of $350 million on IT products and has found â€Å"that technology has improved, not degraded, the customer service in which it takes such pride† (Levinson, 2005). Nordstrom has integrated two major systems into the company within the last five years. The systems are personal book and a new inventory system at the cash registers. These two systems have helped bring Nordstrom’s customer service to a new level. Personal Book: Personal book is new computer software designed to help companies keep track of customer information. It can track what the customer bought, their size, how much he/she spent, who sold them what, their birthday and other valuable information that sales people need to enhance sales. This is a valuable tool because the sales people can create a more â€Å"personal† relationship with the customer. One former employee quotes â€Å"the personal book was a very useful tool and instilled in me the importance of building and maintaining customer relationships† (Palma, 2006). This quote describes exactly what puts Nordstrom in a class of its own. Adding a personal touch is the difference between good and great companies. The implementation of personal book has dramatically increased sales at Nordstrom. After its introduction in 2005, Nordstrom’s first quarter sales increased â€Å"7. 7 percent to $1. 7 billion, compared with $1. 5 billion† in the first quarter of the previous year. Levinson, 2005) Total sales for the second quarter also rose 7. 8 percent. CFO of Nordstrom Michael Koppel reported that â€Å"approximately a third of all sales are a result of interactions between sales associates and customers facilitated with personal book† (Levinson, 2005). Nordstrom analysts also have reported that 68 percent of the business from the top sales people is g enerated from personal book customers. More information about personal book can be found on page †¦. Inventory System: The new inventory system has proven to be â€Å"a tremendous home run† (Levinson, 2005). The new system is based around an electronic inventory management system and an automatic replenishment function. Before this new system was installed in 2003, inventory was counted by hand. This old system was definitely â€Å"not the most accurate way to [manage inventory], and certainly wasn’t very quick†, commented Peter Nordstrom during a conference call. This created a problem for the company. The distribution departments could not tell how much inventory was needed in each store, which resulted in a lot more discounts than the company should have had. This loss of money led Nordstrom to purchase an inventory management system. The new inventory system was an electronic system which took a lot of the work load off of the Nordstrom staff. It helped the company determine the demand for each product by using historical sales and fashion trends. Now it could allocate the proper amount and type of merchandise to each store. It also kept track of in store inventory. Every time a product was rung up at the register or returned to the store, the in store inventory went up or down accordingly. This helped the distribution department immensely. They could now replenish the inventory of each store when it was actually needed. This also helped the sales dramatically increase customer service. When a customer wanted to purchase a product, a sales person could look it up on the computer to see how many were in the store, and how many were available at other locations. The results of this new system worked wonders for Nordstrom. Koppel stated that the inventory in 2003 (they year the system was integrated), went down $15 million or 1. 6 percent† (Levinson, 2005). Likewise, inventory continued to go down in 2004, decreasing by 5. 3 percent. Inventory was also turned 10 percent more in 2004. This increase showed the company there was still a lot of room to grow in their current market and that other department stores had good reason to switch to this way of inventory. Marketing Strategy Target Market In each Nordstrom store there is the potential for one consumer to encounter upwards of 30 different departments. For women’s clothing alone, there are 14 clothing options ranging from teenage apparel, to elegant ballroom attire. The multiple departments within the Nordstrom store cause the target market for a single Nordstrom store to range across a broad spectrum of potential buyers. While each of the target markets differs substantially depending on the department, the members of each of these markets do have a main connecting quality. Each customer, no matter the department in which they are shopping, is looking for a quality product that they know will be guaranteed by Nordstrom for a lifetime. Each consumer knows that while the products offered may not be the cheapest, they are quality made products that come with an implied warranty by Nordstrom. Nordstrom does not have a return policy, which will be addressed later in the paper, to ensure that consumers can return any product at anytime, for any reason. Consumers are also looking for a product that is not only well made, but that is usually contemporary in relation to current fashion trends. This makes Nordstrom’s overall target market homogeneous in respect to the demographic and psychographic segments. A person’s income and lifestyle can be the deciding factor of whether they can afford to shop at Nordstrom or not, or whether the products that Nordstrom offers are even of interest. For the sake of space, this paper will look at the target markets of three specific departments within Nordstrom that embody a large number of Nordstrom’s clientele: Brass Plum for juniors, Point of View for women, and Men’s Sportswear. Brass Plum (B. P. ) is Nordstrom’s only junior’s department, targeting young women, ages 16-22 in the middle or upper class. B. P. offers the latest fashion trends for the younger women at a price that is more reasonable than high-end boutiques and department stores. While that price is more reasonable than some places, it still is not as cheap as some other department stores, which is why the target market is the middle and upper class. Those ‘other department stores’ however, do not insure their products as well as Nordstrom’s does, nor is the quality of product comparable either. Lastly, the reason for the target of the middle and upper class is because fashion trends do not usually last for more than a season. Most people of a lower class cannot afford to buy new, trendy clothes every season to match what is popular, which is the only type of clothing that B. P. offers. Point of View has a target market of women in their twenties to early fifties. The age is not clearly defined because more specifically, Point of View has a target market of the working professional woman. While some clothes within Point of View are casual, they still uphold a classy and refined look suitable for a ‘dress down’ day at the office. Most of the selection within Point of View however, is professional attire for the working, middle to upper class woman. The clothes are priced comparable to other high-end department stores, but are backed with the quality guarantee Nordstrom provides all of its products. The one major difference between the selection in Point of View, and other high-end department stores, is that Point of View tries to offer a selection of business wear for the younger working woman that has a trendier edge. This helps to capture the twenty-something market that is usually skipped over in other department stores. It allows young women to look professional, while still looking their age. While carrying this younger professional attire, Point of View still carries the classic suits and shirts that appeal to the more conservative thirty to fifty year old professional women. The last department is the Men’s Sportswear department, which like Point of View, targets men in their twenties to early fifties. The word sportswear might evoke thoughts of soccer or football to some, but in this department sportswear are the clothes worn by the middle to upper class while they sail, golf, or simply lounge around at their beach house. This department is intended for the professional male, who in his daily life must dress in professional attire and would like that to translate into his causal wear as well. This casual wear consists of clothes that portray an image of success and prosperity without a suit and tie. The target market is middle to upper class within this department because of the intended uses of the clothes that are sold. Many of the clothes are intended for sailing and golf, leisure activities that the middle and lower class might not be able to afford. The size of the men’s sportswear department is small in relation to some of the women’s departments, but this can be attributed to men’s desire for consistency and ease when shopping. The prices within the men’s sportswear department are comparable to other high-end department stores, but once again the clothes are backed by the Nordstrom guarantee of quality. While each of the departments have a target market that separates itself from the rest of the store, it can be seen that within all of the heterogeneous factors there are three homogeneous factors that can be found. First, in all departments, the consumer is looking for a quality product that will suit their clothing needs. Second, no matter what their clothing needs, the consumer is looking for clothes that portray a specific image of their choosing, such as an established professional or a young trendsetter. Lastly, throughout all of the clothes offered at Nordstrom each consumer is expecting the Nordstrom, guarantee of quality that ensures the consumers happiness with the product – no matter the circumstances. Marketing Mix Nordstrom seeks to achieve the retention of the previously stated target markets through the use of coordinated marketing activities. These include the use of product, place, price, and promotion inside and outside of the store. These four aspects embody the marketing mix, and their objectives and roles are clearly specified through different offerings and outlets. Product The products that are offered within a single Nordstrom store compliment each other very well. On one shopping trip a family is able to buy clothes and accessories for everyone. Women are able to complete an outfit from Point of View by getting the perfect pair of shoes from the Women’s Shoes department, accessorize the outfit in fine jewelry, accessorizes and handbags, and can shop her favorite makeup line in the makeup department, all in one trip. These products are enhanced by a multitude of factors including their warranty, return policy, customer service, and the internal workings of any Nordstrom. Each transaction within Nordstrom comes with an implied warranty of the goods purchased by the consumer. If the consumer is unhappy with the product at anytime, even after the tags are removed, the product has been worn, or the receipt has been lost, the consumer is more than welcome to return the product back to the store for a full refund or exchange – no questions asked. This return policy is exemplified through the mythical story that circulates throughout Nordstrom stores and their competitor’s outlets. It has been said that a woman tried to return a set of snow tires that she claimed she bought at her nearby Nordstrom store. When the employee was unsure of what procedure to follow since Nordstrom did not sell tires, the employee contacted the store manager. The manager told the employee to take back the tires and offer a full refund of the standard price for snow tires to the woman. So while it is obvious that Nordstrom might not appreciate consumers returning goods from other stores, they are dedicated to customer service and their guarantee of quality. Nordstrom wants to carry quality items that consumers will love, and if the consumers decide they do not, they are able to return them at anytime. This allows Nordstrom to have an absent return policy to ensure that a return is bound by no limits. Aside from offering their products for free, customer satisfaction within a Nordstrom cannot be better guaranteed in any other way. By knowing that every purchase is basically guaranteed for life, a consumer’s satisfaction is not bound by any measures on behalf of Nordstrom. Along with such a liberal return policy, Nordstrom offers a range of other amenities for consumers to enjoy and enhance the value of the product to the customer. For instance, with anything that you purchase from Nordstrom you can have it altered for free. Upon trying the clothes on, a person from the alteration department will come to your fitting room and measure your clothes according to your needs. The altered clothes are usually available within a week’s time. Also, in the lingerie department, women can receive a free and accurate bra fitting. Unlike other popular lingerie stores, employees within the lingerie department must attend class and earn the right to do bra fittings. This ensures each consumer an accurate fitting. In the shoe department, if a pair of leather shoes is too tight on a consumer’s foot, the Nordstrom employee will stretch the shoes out at no cost. Also, when trying on clothes there is no limit to how many pieces of clothing a consumer is allowed to take in, and a consumer is never expected to clean out their dressing room when they are finished. Any purchase that is made can also be complimentary gift wrapped. While these factors may seem miniscule, it does help consumers reduce shopping time and have a more enjoyable shopping experience. So while the consumer might only be in and out for a white t-shirt, they know that if needed all of these amenities are available for their use, enhancing the value of the product for the consumer. Along with these externally obvious factors of product value to the consumer, there are also internal functions within Nordstrom that ensure that customer service is ideal in any situation. Quality customer service is Nordstrom’s main competitive advantage against its competitors. Nordstrom has focused itself since 1901 on the basis that superior customer service is the first and foremost important aspect of the company. While other companies have a chain of command when dealing with customer service issues, Nordstrom is void of any such rules. When hired at Nordstrom, the new employee is greeted with an employee folder that includes a welcome packet, employee expectations, rewards, benefit information and information about the specific Nordstrom store the new employee will be working. On the very front of each folder is a 5Ãâ€"7 card that states: â€Å"We’re glad to have you with our Company. Our number one goal is to provide outstanding customer service. Set both your personal and professional goals high. We have great confidence in your ability to achieve them. Nordstrom Rules: Rule #1: Use your good judgment in all situations. There will be no additional rules. Please feel free to ask your department manager, store manager, or division general manager any question at any time†. Nordstrom’s idea is to put the employees in control of every situation so that the consumer feels a sense of security at all times within the store. While specific instances might dictate manager involvement, employees are granted the right to deal with consumer situations based on their judgment. These words ring loud within any Nordstrom store because they are printed in the employee entrance and in the backrooms of most departments. Through out the hiring process Nordstrom ensures that customer service is always handled in a way that upholds their reputation. Nordstrom is able to supply a quality product based on the judgment of the consumer, while also providing a trusted and quality environment by empowering the judgment of the employees. Place/Distribution The next factor of the marketing mix is to coordinate the marketing activities for the retention of the target markets through place and distribution. Nordstrom currently has 157 stores located in twenty seven states. These include 99 full-line stores, 50 Nordstrom Rack stores, five Faconnable boutiques, one free-standing shoe store and two clearance stores. Nordstrom also operates 35 international Faconnable boutiques in Europe. Faconnable is a men’s clothing line developed by Nordstrom for the more upscale shopper to accommodate their business and leisure clothing needs. Nordstrom’s popularity is based on the west-coast, primarily because of its headquarters and flagship store in Seattle, Washington. Mainly, the Nordstrom stores are located in shopping malls which usually provide a heavily populated central area which contains a portion of their target market. Since Nordstrom is located within a mall, access is relatively easy for consumers. Even if consumers do live some distance away from the faculties, coming to the mall is more acceptable because they will not only have the option to visit Nordstrom, but will have the ability to shop at other stores as well. This justifies their traveling time, which would not happen if Nordstrom had only free-standing stores. While access to Nordstrom facilities is relatively easy on the west coast, there is room for major improvement by Nordstrom on the east coast. In New Hampshire, Maine, South Carolina, Vermont, West Virginia and Massachusetts, there is not a single Nordstrom store to date. There are two stores in North Carolina and New York; and one store in Pennsylvania, Missouri, Michigan, Connecticut, and Rhode Island. This is compared to the thirty two California stores, nine Washington stores, five Oregon stores and two Hawaii stores. However, this lack of access to facilities by consumers on the east coast will soon be partially remedied. Nordstrom plans to open twenty five new stores in the next five years. Out of these twenty five stores, it plans on opening four in Massachusetts, two in Michigan and one in Missouri. Once Nordstrom has established a stronger base on the east coast, I believe they will gain an even better reputation and have the ability to fine tune their marketing and customer service strategies. Along in place and distribution is not just the physical outlet that Nordstrom has, but also the atmosphere in each of the outlets. Since we are at the peak of the holiday season, it is a good time to look at the atmosphere within a Nordstrom store. Garland and decorative curtains decorate each entrance into the store. Holiday music played live in each store on the well known Nordstrom piano echoes through the departments on speakers. A giving tree accompanies the bottom side of each escalator, and on weekends the tops of the escalators have live carolers. Each department has holiday specials, and pictures with Santa are held every year. This atmosphere helps to evoke the holiday spirit within the consumers, and also provides them with a place to shop that is enjoyable during the busy holiday time. When it is not a holiday season, front window displays are changed bi-weekly, and in store decorations and manikins are changed multiple times each week. Also, a night cleaning crew makes sure that all the carpets, mirrors and dressing rooms are kept in pristine condition. This type of atmosphere allows the consumer to shop at ease without heaps of clothes in a mess, or stained carpets. Instead, they can go to a place where the only thing they notice is the clothes and the quality of the presentation. Promotion The next factor of the marketing mix is to coordinate the marketing activities for the retention of the target markets through promotion tactics including advertising, public relations, personal selling, and sales promotion. Nordstrom does not engage in heavy advertising. TV commercial spots are few and far between, and only usually take place on major televised events. Instead, Nordstrom does most of its advertising through print. Local newspapers usually contain a full page spread during Nordstrom’s half yearly and anniversary sales. During the holidays, Nordstrom also has featured spreads as well. These spreads are hung in the employee entrance area so that employees are aware of what consumers are looking for, if they come in and refer specifically to that advertisement. Also, Nordstrom puts out two catalogues per month that premiere a few new items within each department. They also feature gift ideas during the holidays, and include an easy way to order straight from the catalogue. Anyone that has a Nordstrom account will receive this catalogue, along with anyone that registers online Advertising: Nordstrom has also engaged in some other intense advertising campaigns in the past few years. Most of these have been directly related to online advertising. In 1999, Nordstrom started to campaign heavily to gain consumer awareness of their new website, Nordstromshoes. com. Nordstrom claims the site is the world’s biggest shoe store. It is titled ‘Make Room for Shoes’. The name was selected to entice users not only to their main website which was linked on the new shoes site, but also to educate users on the broad selection of shoes that Nordstrom offers. In 2005, Nordstrom debuted NordstromSilverscreen. com. The website combined music and pop culture with shopping. Visitors of the site were able to be a DJ and mix up songs recorded by artists specifically for the site. The visitors mixed the song, by mixing up clothes on a corresponding manikin. This allowed visitors to see new fashion trends and learn how to mix and match clothes to find their very own style. Visitors of the site could also ‘shop’ the site, by clicking on any the clothes worn in the video made exclusively for Nordstrom. Anything that the artist was wearing in the video was available for sale at Nordstom. com. Nordstromsilverscreen. om was one of the first attempts by a retailer to mix shopping and interactive media making Nordstrom an innovator in this new market. While Nordstromscilverscreen. com is no longer available to visit, the launch of this new and innovative platform says a lot of Nordstrom. This company is willing to take risks to advertise and capture a new and different consumer, and to evolve and be ahead of other department stores in the advertising industry. Aside from these new websites, Nordstrom. com is still a large, comprehensive site that allows visitors to see everything that Nordstrom has to offer. Visitors are able to search by brand, in-store department, or by age and gender. Along side every choice that the visitor views, is a selection of other clothes that are closely related to the current viewing. Also, if a consumer has provided Nordstrom with their e-mail address, Nordstrom sends out weekly e-mails that highlight new items, and special discounts. Lastly, the newest advertising campaign that Nordstrom embarked on was for the Nordstrom MOD card. The MOD card is a debit card that is set up through a consumer’s personal bank and checking account. The MOD card is specific to Nordstrom, and allows Nordstrom to track what is bought and how much consumers spend. This way, consumers can gain points like what is offered with the traditional Nordstrom’s credit card. For every dollar that is spent, the consumer earns a point; and during promotional events, they can earn twice the points for every dollar spent. Once the consumer reaches a certain level of points, they get a gift certificate in the mail redeemable at any Nordstrom. Nordstrom realized that not everyone wants to hold a credit card at Nordstrom, which led them to the idea of the MOD card. This way, consumers can buy from Nordstrom using cash, and still receive the points they deserve. Nordstrom has heavily advertised the MOD card and the rewards that a customer gains from having a Nordstrom account. Through these advertising activities, Nordstrom is better able to promote their stores in a positive and controlled manner. Public Relations: The next segment of promotion is public relations. Nordstrom is equipped with a public relations representative, who is located at Nordstrom’s headquarters in downtown Seattle, Washington. Consumers are able to find out about public relation activities on their website under investor relations, or in their annual report. On the Nordstrom website consumers are able to find out about new store openings, upcoming events, stock information, news, and press releases. Nordstrom also relies on customer word of mouth. While other competitor department stores deal with union battles, and declining sales, the quality and outstanding customer service is rarely questioned by consumers. Consumers know by personal experience and word of mouth that Nordstrom is dedicated to its customers. Nordstrom also engages in public relations activities through the promotion of some of their clothes. Most recently, Nordstrom has taken an active role in the â€Å"ONE† campaign and formed a partnership with the company Edun. Edun is selling a t-shirt with the word ‘ONE’ across the front. This promotes the idea that if the United States government allocated just one percent of its budget to health, education, and medication for underprivileged countries, the United States could save millions of lives. For every shirt sold Edun contributes ten dollars to the Apparel Lesotho Alliance to Fight Aids (ALAFA). The ONE shirts are made in Lesotho, Africa. Upon selling the ONE shirt within their stores, Nordstrom donated $100,000 to ALAFA. Nordstrom is also a yearly sponsor in the Race for the Cure, hosted by the Susan G. Komen Breast Cancer Foundation to raise money for breast cancer research and awareness. Nordstrom exclusively hosts the Beat the Bridge to Beat Diabetes marathon in Seattle, Washington. The proceeds benefit the Juvenile Diabetes Research Foundation. So far in 2006, the Beat the Bridge marathon donations have raised $855,078. 57. Through not only their exceptional reputation, but also through involvement in philanthropic activities Nordstrom is able to enhance their public relations. These positive public relation activities in turn influence consumer perception and decision making. Personal Selling: The next section of promotion is personal selling. Personal selling is defined as a purchase situation in which two people communicate in an attempt to influence each other (Lamb, et al, 2006). Personal selling is the basis of Nordstrom’s philosophy and mission statement. Personal selling emphasizes the relationship that is developed between a salesperson and a consumer. Within any department at a Nordstrom store, a consumer will be able to find numerous employees who are knowledgeable about the products they offer, and who are also eager to help them find whatever it is they are looking for. When a consumer is shopping within a department, a single salesperson will usually help them through the entire purchasing process. If what the consumer is looking for happens to be in a different department, that same salesperson will go to that other department and get whatever it s. The salesperson will find sizes, colors, and styles from other stores if what the consumer is looking for is not available at that specific store. Salespeople also can take payment on Nordstrom credit cards at their payment station, and can hold clothes for the consumer. Salespeople are endowed with the ability to manage customer service situations, so if one consumer feels comfort able with a specific salesperson, basically all of their needs can be taken care of through that salesperson. This created a very strong relationship between the salesperson and the consumer. If the consumer knows that when they go to Nordstrom they can count on someone being there that they know and trust, they will be more likely to ask more questions and try on more things. Nordstrom has made personal selling even easier through their new system of Personal Book. Personal Book allows a salesperson to enter in consumer information such as their address, phone number, birthday and recent purchases. During sale times, salespeople are asked to call at least fifty people from their personal book to the consumer know that they are excited to see them at the sale. Having this information also enables the salespeople to send out thank you cards which are supposed to be done a daily basis by a salesperson. The thank you cards are mailed out to the consumer, and add a personal finishing touch to the purchase, which also enhances the bond between the consumer and the salesperson. Personal Book also can keep track of what a consumer has bought, so when Nordstrom has a big sale, some of the consumers who have purchased the most throughout the year are invited to shop the sale prior to anyone else, and to preview what is going to be offered. Personal Book also allows for promotional materials to be sent out pertaining to certain events that occur within a department that a consumer frequently shops. All of these benefits from Personal Book enhance the personal selling aspect of promotion. Consumers are not seen as a target market within the store, but are rather seen as individuals with specific needs and wants that are catered to be the Nordstrom employees. Sales Promotion: The last component of promotion is sales promotion. Sales promotion is everything else that is not covered by personal selling, advertising, and public relations. Usually sales promotions are a quick tool that immediately increases consumer demand of a product. Nordstrom does not offer a lot of the one day sales, or door buster sales that other department stores offer. Instead, Nordstrom focuses all of their attention on their three major sales per year. These include the half yearly sales, in June and November, and their Anniversary sale in August. These attractions are not just a sale, they are an event. Special promotions, rewards and deals are offered. A kick-rally prior to the doors opening helps to hype up the employees for the coming busy weeks. Consumers line up outside of Nordstrom’s doors hours prior to opening. They enter a newly decorated store from the previous day, with new displays, merchandise and prices. Nordstrom focuses on these events for the purpose of showing the consumer that they do not just want to push inventory in and out of the store. They want to offer quality products that consumers enjoy, and reward consumers for their purchases through major discounts at these sales. Lastly, another important factor of these sales is that they have created a tradition. Women and their daughters take time off school and work to attend the first day of the sale. At the sale they go Christmas shopping, school shopping personal shopping. This is important for Nordstrom because their limited numbers of sales are not only seen as a time to get a good deal, but they have penetrated the culture and created more than just a sale. Price: The last factor of the marketing mix is to coordinate the marketing activities for the retention of the target markets through price. Nordstrom strives to provide the most quality product for the cheapest price allowable. However, Nordstrom does cater to an upper and middle class target market which does raise their prices from other lower department stores. Each department within Nordstrom, as stated earlier, has a different target market which does vary the range pf prices immensely within one store. In the St. John department catered to upper class wealthy women, a consumer can buy a suit jacket for $2,000. In Point of View, targeted toward the more middle class women who want to look professional without spending as much, a suit jacket is available for seventy dollars. Through this, it can be seen that the department a consumer goes to will determine the price they will pay. Whatever the dollar price of the purchase, Nordstrom tries to justify that price through their personal selling efforts and their product guarantee. A sale is not just a sale, as proven earlier in the personal selling section. Consumers and salespersons are able to establish a relationship which enhances the consumers purchase experience. Because the consumer knows that no matter what they buy, whether it is a pair of socks, or a mink coat, the quality of that purchase is indefinitely guaranteed by Nordstrom.

The Term Emotional Intelligence by Daniel Goleman

The origin of the term emotional intelligence is from a book by Daniel Goleman in 1995 and this book has made it one of the hottest subjects to be discussed in corporate America. This led to an article in the Harvard Business Review two years ago, and that attracted more readers than all articles published in the magazine during the last 40 years. This had such an effect on the CEO of Johnson & Johnson that he sent out the article to all 400 executives in the company. (Emotional Intelligence: What it is and why it Matters) In the book, Goleman had divided the subject as consisting of five emotional competencies and these were to identify and name the emotional states of the person and to understand its link to emotions thought and action; to manage one's emotional states and thus to control emotions or to change unwanted emotional states into ones that could tackle the situation better; to get into emotional situations which were more likely to be connected with the drive to achieve and be successful; to read, be sensitive and thus influence emotions of other people; and finally to be able to start and maintain satisfactory interpersonal relationships. In the theory of Goleman, these emotional competencies are built in a hierarchy, and one has to be able to find them out so that they can be managed. One of the important aspects is to be able to achieve drive to achieve emotional states. These abilities lead the person to the situation where he can achieve the objective of reading and influencing the emotions of other people in a positive manner. It is not that emotions do not exist and there are always feelings in our minds. This is not appreciated by organizations who value being rational, but not having emotional management. Emotional intelligence: Wikipedia, the free Encyclopedia) It is not enough to have the old fashioned cognitive intelligence to be successful at work, but it also needs the capacity in the person to stop negative emotions like anger and non-belief in one self. Instead the person should be capable of concentrating on congeniality and confidence. This is the belief of a new group of psychologists. This concept was first highlighted by Daniel Goleman in his book â€Å"Emotional Intelligence why it can matter more than IQ†. He is still continuing on his work and the new book is â€Å"Working with Emotional Intelligence†. In the book his concentration is on the use that emotional intelligence can be put at work and that is supposed to be managed more by intelligence than feelings. It has been seen that all types of people need emotional intelligence, and even the bosses who have to deal with a lot of people also need it a lot. (Does 'emotional intelligence' matter in the workplace? ) This is also not like IQ which does not change much for the person, but this factor can be learnt, and probably some types of failures help build it up. As an example, one can take the case of J. K. Rowling who is the author of Harry Potter. She has certainly learnt a lot through experience as she was first divorced and then had to live separately with her children in Edinburgh. On top of that the first book that she had written, out of the ten books now, was rejected by the publishers. (Succeeding with Emotional Intelligence) Her experience certainly gave her a lot of emotional stress bearing capacity, and permitted her to wait enough to be able to finally bring out her best. So far as we are concerned, let us now take the case of a person who has just been appointed as a trainee manager and is very hot headed. This is most often an emotional intelligence problem. Let us find out how he can be guided to be a better manager. At the outset, one has to understand that emotional intelligence is a very difficult quality for evaluation. In school we have girls who are smart, well organized and industrious. She is also caring about other students in the class, but she is not liked by her classmates and her name is left out of all invitations. She gets to hear of the lunch plans, but is not invited. This trend continues even when she is working. Boys may have a similar situation and be so smart that they are liked by all the moms and dads in the area. He may be even smart enough to merit special schools, but is not able to continue. Finally he is compelled to take up menial jobs for survival. These examples tell us clearly not to depend on our emotions, as we are taught to believe that emotions are not â€Å"life† and give us a distorted view of life. When any question of emotions come up, it is viewed as being childish and the individual is thought of being a baby. When another child runs to help the afflicted child, we call the other child as being a baby. One can say clearly that our lives are determined by our intellectual capacity in our minds, but that is often not true in real life. We pride our capacity to memorize and solve problems, spell words and calculate mathematically. These capacities are reflected in the report card and decide the grades that we get. (Emotional Intelligence Training) When an individual is not able to perform well in these measures, he is considered to be â€Å"brainless†, but that does not mean that all of them have no success in life later. This is not true for companies which today test the emotional intelligence of their employees, and many companies are already doing it. It is also true that different types of jobs require different types of emotional intelligence. A sales man requires the capacity to be able to judge the moods of the potential customers, and based on that, he has to decide when to try and sell and when to just keep quiet. On the other hand when a person is trying to become a painter or a professional tennis player, they have to gather up the capacity for a lot of self discipline and motivation. It is also seen that women have different capacities from men on certain emotional traits, and this information is based on large scale assessments of EQ. (Does 'emotional intelligence' matter in the workplace? ) It is seen that, in general women have better measures of empathy and social responsibility but a lot less on self confidence and tolerance of stress. This requires women in many organizations to learn self confidence through the use of meditation, yoga and jogging. On the other side, the men have to learn listening to other workers and the customers, and thus understand their moods and gain their trust. These are also very important qualities of being a leader, being able to work in a team and maintain good relations with other workers. (Does 'emotional intelligence' matter in the workplace? It is thus clear that the disability of our trainee manager is due to his being a â€Å"smart† boy and thus not learning enough of emotional qualities for being a successful manager. We can also see that this is not unusual among male managers. At the same time, it requires a lot of cognitive ability for any person to get admitted into a course of science. The high ability is required for just an admission into a course for any renowned school like Berkeley, but the question here is that once the admission process is over, then it becomes a question of keeping up with the other students in the course. That does not require a high IQ but requires more of a suitable social and emotional build up in the individual. This can be viewed in another way and that is a scientist probably requires an IQ of 120 or thereabouts to get a doctorate and then a job. At the same time, the individual should have the capacity to be able to get along with the colleagues and juniors, and that is probably as good as having another 10 or 15 points higher of IQ. (Emotional Intelligence: What it is and why it Matters) A somewhat similar situation exists for managers. It is not that they require a high intellectual capacity, but they have to have the capacity to get along well with others, and a manager without that capacity is likely to fail as a manager. To solve this problem in the trainee that we are talking about, an actor was put among the group of managers being trained. As a part of their training, the managers were given the task of jointly deciding on the bonus to be given to the subordinates for a particular period. The actor was the person among the group who spoke first and gave the future managers the initial ideas of solving the problem. Within the group with the problematic trainee, the actor projected a lot of cheer and enthusiasm, along with warmth about the employees. This brought about the transmission of a similar feeling to the group, including the trainee. This led good emotions among the group, and improved the cooperation, spirit of fairness and better group performance. This attitude among the managers led to a fairer distribution of money among the people and thus was of use to the organization. This activity also continued for some time, in other similar activities, and similar results were seen. In terms of emotional intelligence the required quality can be called empathy, and this has been known by the psychologists to contribute a lot to the success of individuals. (Emotional Intelligence: What it is and why it Matters) Let us look at the case of Aaron Feuerstein, and his Malden Mills Polartec factory, which was totally destroyed by fir in 1995. He personally paid the salaries of the workers for three months while the factory was rebuilt. (Succeeding with Emotional Intelligence) The importance of this quality was found out more than twenty years ago at Harvard by Rosenthal and others. They said that people who were good at identifying emotions of other people were more successful in work as also in the social aspects. This aspect was also found important among apparel sales representatives as their quality of empathy was given value by the retail sales buyers. It was reported in a survey that the buyers wanted representatives who could listen to them with patience and comprehend their difficulties and requirements. (Emotional Intelligence: What it is and why it Matters) It is important to understand that emotional competence refers to personal and social skills and those qualities lead to a better level of work. The capacity to understand the feelings of another person enables the first to develop a certain amount of influence on the second person. At the same time, people who are able to control or regulate their own emotions ultimately find it easier to develop qualities like Initiative or achievement drive. The entire concept of emotional intelligence has been developed over a long period of time. The development was through research and theoretical discussions on personality and social reactions, as well as psychology. This view was also accepted by Goleman. He has said clearly that that the abilities linked with emotional intelligence have been a part of the psychologists for a long period of time. (Emotional Intelligence: What it is and why it Matters) The manager's and the supervisors' behavior as also their treatment of their sub-ordinates ultimately determine whether they stay or they leave. They have to look after the individual needs, wants and expectations of these people every day. That in turn affects the attitudes, performances and satisfaction of the employees. It involves great stress in leading so many people and meeting their needs and expectations all the time, while at the same time performing up to the requirements of the top management. It is said that two-fifths of the departures of people from an organization are due to an effective relationship among the employees and their immediate bosses. If there is no trust between them, then the performance is naturally inferior. All employees want support and care from the supervisor and manager, who at the same time has their best interests in mind. It is with this view that team leaders and project managers are viewed as being responsible for the environment at work where different types of people come to work, to achieve success on diverse jobs in a short period. The continuation of working in the political environment of organizations can lead to a lot of difficulties for the individual – frustration, anxiety, suspicion, resentment. This lets production fall behind schedule, and ultimately people leave the organization. (Who Needs Emotional Intelligence Skills)

Exploiting the Network: Synergy, Product Placement

The media industries have a suggestive and coercive power on society, embodied within the artifacts, images, and brands we consume. As these industries diversify, so do the products and the avenues in which they are offered. Synergy allows corporations the power to maximize advertising through a variety of cross-market promotional mechanisms, proliferating their products or logos exponentially. Initially, this essay requires an explanation of the use of synergy and cross-market advertising. Subsequently, I will illustrate how television shows such as Nickelodeon’s SpongeBob SquarePants and MTV’s The Osbournes and Total Live Request (TRL), use the vast internal synergistic network of their parent company Viacom. Such programming appears to exploit its viewer-ship through commodification – product placement, branding, and celebrity endorsements. Synergy: The True Meaning of Cross-Market Advertising â€Å"We are reaching a position where the challenge for the 1990s should be to seek a greater understanding of the best ways, creatively, to exploit the potential for media synergy†(Confer, 10) The concept of synergy is not new, however evidence suggests it has only been fully realized and exploited over the last decade. Synergy is created through the integration or combination of different but complimentary business interests, each feeding off the other. Ultimately, large corporations or conglomerates are diversifying their market interests rather than specializing. This diversification benefits the company by offering a new strata of opportunities thereby complimenting its existing functionality. An example of this is a movie production company allying or buying out a major video game provider. The synergy created from such a merger allows for a film and a video game to use the same characters, story line or premise. Synergy works for two reasons. Primarily, synergy is an engine that provides cross-marketing and cross-selling opportunities, which would allow for greater sales, exceeding what would be possible from each division separately. (Hesmondhalgh, 141). Secondly, corporations also â€Å"plan and design texts, in order to encourage subsidiary spin-off texts† (Hesmondhalgh, 239). Even if these texts or preplanned products are not of great quality or a commercial success, they will still sell thus generating profit. This is because there is a pre-existing, underlying product network that has already been established through the fan base. If synergy can be classified as the â€Å"the ability to keep cash flows inside a corporate family† (Klein, 148), through its internal use of cross-market production, promotion, and sales; Sumner Redstone’s Viacom is a perfect example of synergy at work. The Viacom Empire has tapped into many markets throughout the entertainment and media industry. Viacom’s major subsidiaries include: Nickelodeon – children’s cartoon network; MTV – music network; NBC – television network; and Paramount – movie production company, which also runs numerous theme parks all over North America. Klein, 2000, comments on this phenomenon as â€Å"synergy nirvana† (160). According to Klein, ‘synergy nirvana’ is attained when a conglomerate works internally to â€Å"successfully†¦churn out related versions of the same product, like molded Play-Doh, into different shapes: toys, books, theme parks, magazines, television specials, movies, candies, CDs, CD-ROMs, superstores, comics, and mega-musicals† (161). Basically, ‘synergy nirvana’ is the proliferation of standardized products in different packaging, through a preexisting framework of cross-market advertising; which is done on a vast scale through the exploitation of many different mediums and industries in the name of profit. ‘Synergy’ is Viacom’s number one marketing tool for it allows them to link the vastness of their empire together, into a culmination, dissemination and consumption of products, images, ideals, and brands. Furthermore, ‘synergy’ in programming, such as SpongeBob SquarePants and The Osbournes, has evident implications for the viewer-ship. SpongeBob SquarePants: The Future of Product Placement â€Å"Nickelodeon has more children between the ages of two to eleven watching than the four major networks combined†¦ This is significant in the competition for the children’s advertising market, which averages about $500 million a year† (Roman, 223). SpongeBob SquarePants is a lovable, animated sea sponge that manages to find himself in undersea trouble during every episode. The â€Å"cartoon† (Mittell, 18) runs every â€Å"Saturday morning† (Mittell, 18) on Nickelodeon and is syndicated to most major television networks due to its incredible popularity among children viewers. What started out in 1999, as a comical concept for a children’s television program, has grown seemingly overnight into a ‘juggernaut’. Nickelodeon cannot only boast that it is â€Å"the number one rated program among children 2-11†, but according to Nielson ratings, â€Å"53. 7 million viewers tune into the show each month†¦including 22. 1 million kids 2-11, [and] 12. 7 million between 9-14† (Olson, blogcritics. rg). With such commercial success and an immense viewer ship, Nickelodeon’s SpongeBob SquarePants uses synergistic principals of massive product placement to have free rein and ‘seep into every pore’ of consumer culture. SpongeBob employs Viacom’s cross platform synergies to network and gain access to most children’s homes. The motivation is a given when children between the ages of 2 – 11 are not only watching between 24 – 28 hours of television a week (Roman, 74), but are â€Å"responsible for either spending or influencing the spending of $100 billion annually† (Roman, 74). This is clearly an influential and lucrative market. SpongeBob SquarePants should be the archetype for synergistic corporate product placement. With SpongeBob’s insurgence into popular culture, there have been similar synergistic trends of product placement. Support for this notion is found through looking back to 2004, days before the premier of the SpongeBob SquarePants movie in New York. Paramount, another Viacom subsidiary, launched a brand new SpongeBob SquarePants amusement park theme ride to coincide with the movie launch. Additionally, Burger King (also owned by Viacom), released a SpongeBob SquarePants value meal that comes with SpongeBob SquarePants plastic figurines from the movie – ‘collect all 42. ’ Nickelodeon, the Viacom subsidiary that operates SpongeBob must not be ignored. Nickelodeon aired a 24-hour SpongeBob SquarePants Marathon that hyped up kids for the movie and forced unsuspecting parents to shell out $12 a ticket. Furthermore, during the Marathon’s commercial breaks, SpongeBob advised the viewers to eat SpongeBob value meals, collect all 67 figurines, and go to Paramount Theme Parks to try his new ride. SpongeBob has saturated the market with his yellow sponginess, which must be overpowering to any parent; he can be found everywhere, in every nuance of daily life. Since the movie, product placements and cross-promotional marketing have skyrocketed. SpongeBob now has a line of clothing, DVD box sets, bed linens, and bowling balls with a real tenpin set. Of course a 5 year old needs a bowling ball and set of bowling pins with SpongeBob SquarePants on them – SpongeBob said so! MTV: Branding a Nation â€Å"MTV is associated with the forces of freedom and democracy around the world. When the Berlin Wall came down, there were East German guards holding MTV umbrellas† – Sumner Redstone, CEO of Viacom MTV is known for hosting different music video programs 24 hours a day, 7 days a week. In 1998, MTV was watched in â€Å"273. 5 million household worldwide† (Klein, 120), where it was reported, â€Å"85% of them watched everyday† (Klein, 120). The station offers a host television shows, including TRL and The Osbournes, that entrance its youthful audience through flashy music videos and the celebrities portrayed. MTV’s popularity, since its inception in the early 1980s, is as a self-perpetuating â€Å"fully branded media integration† (Klein, 44). Klein, 2000, writes: From the beginning, MTV has not been just a marketing machine for products it advertises around the clock; it has also been a twenty-four-hour advertisement for MTV itself†¦[where] viewers didn’t watch individual shows, they simply watched MTV†¦Advertisers didn’t want to just advertise on MTV, they wanted to co-brand with the station (44). Today, advertiser branding can be seen throughout MTV. As MTV endeavors to diversify in a changing market place, video shows like TRL are coupled with reality-based television shows intimately linked to ‘celerity’ including The Anna Nichol Smith Show or The Osbournes’. Beyond these shows lack of merit, their entire function is product branding and celebrity endorsements. Even though The Osbournes’ are a revival to the â€Å"original early 1950s format of the American sitcom† (Gillan, 55), I cannot fathom that product branding, product placement, and celebrity endorsements were as prevalent on national television in the 1950s as they are in modern programming. Within the first ten minutes of the show, the audience can blatantly see a mansion full of expensive electronics, furniture, and cars – at a closer look, the brand names facing the camera and are a part of the Viacom conglomerate in a myriad of ways. All The Osbournes offer the predominately teen audience (other than a few less brain cells) is copious amounts of product branding though celebrity endorsement. Product branding on MTV is a big issue. Much like the red carpet on Oscar night, where the predominant question on everyone’s lips is ‘who are you wearing? ’ MTV offers its audience the same intellectual stimulation, especially when all that its audience sees are ‘hella-cool’ rock stars and all the ‘bling’ they wear throughout their music videos, interviews, and award ceremonies. No wonder the Y generation is all about over consumption and bad taste. As we have entered the 21st Century, multi-media conglomerates have risen to great power in our society. They offer the consumer the media and entertainment that they desire. However through internal synergistic networks, these companies, such as Viacom, can link the lucrative children’s market or the 24-hour advertising nature of MTV, to all other aspects of their company. As consumers, we neglect what these companies are telling us to do – to consume – in order to watch our favourite programs. We refuse to witness how the realities of consumerism, and sickening nature that these corporations control the very artifacts and images that we relate to and enjoy for their own personal profit.

Sustainable Container Ports Development Case Study

Sustainable Container Ports Development - Case Study Example Certain ports may be handicapped due to obsolete machinery or being understaffed. In such cases, they find it hard to handle voluminous business, leading to backlogs. Such contingencies can damage business and lead to huge financial losses.‘The need to improve Terminal Efficiency was addressed amongst other things during the execution of the 5th EU sponsored 5th FWP project THERAPIST. Of particular interest was the contribution made in Work Package 4, the aim of developing â€Å"means† for gathering and intelligently using Data from Identified Sources. These â€Å"means† comprised of Object Oriented, Relational Database and Electronic Terminal Planning Board. Together they addressed very comprehensively, the bottleneck ‘Port’ described in the EC publication â€Å"COM99 317 en final Development of SSS in Europe†, 1999 (EC, 1999) , where shortcomings of port infrastructure and port inefficiency were commented upon and ‘port turn-a-round tim e’ was singled out as one of these inefficiencies. WP4 proposes â€Å"Means† aimed at increasing the efficiency of small to medium-sized ports by specifically increasing their commercial attractiveness to regional exporters and importers’ (Felix A Schmidt, Felix A Schmidt and Robert Young, 2005). This was a method thought to reduce the operational backlog and enhance coordination between different wings of the port.Situations like that of above and others wherein ports are too small to handle create extreme pressure on the exporter and port authorities. The government then takes up a feasibility study to modify or develop a new port/terminal to ease the pressure. China and India are two countries that have witnessed such a situation, due to their surplus volume of imports and exports. The major ports faced innumerable problems due to the high-density flow of bulk consignments, such as automobiles, heavy machinery, and food products and so on.

Reading response A Essay Example | Topics and Well Written Essays - 250 words

Reading response A - Essay Example This may be the main reason why some children and adults are finding it hard to learn a second language, or even their first language, if the education system insists on teaching language outside its context. I also find it intriguing how Savage-Rumbaugh emphasizes that if we talk to someone with the expectation that they will understand, then they will understand us, if not now, but eventually. This approach in language acquisition is applicable, not only to those who have language problems because of mental illness, but also to those who are learning the first or second language. The belief that they will learn the language because of assuming positively that they will learn is not based on optimism or faith (though those will not hurt the communication process at all), but on the insight that language is more easily learned when it comes from an empowering viewpoint. For example, for a class of Arabic students learning English as their second language, if I teach to them as if they understand, the more they can actually understand because I use an empowering teaching tone that facilitates them in learning something that I believe they can learn, using the right tools and strategies. Moreover, from Savage-Rumbaugh, I learned that I can help my students learn English better, if I teach it in connection to their local surroundings and relationships. If I make language learning, contextual, relational, and functional for them, the easier it can be for them to learn a second language. Rote learning will not work because it cannot motivate students to learn the second language deeply. One of the keys to language learning is connecting the language, not merely to the first language, but to actual uses and conditions that are present and meaningful to students. Through this approach, I can apply the joint process of language learning. Joint processing means that teachers help students make sense of language

International law Assignment Example | Topics and Well Written Essays - 1500 words - 1

International law - Assignment Example A case in point is the International Criminal Court (ICC) that, as Jones argue, has in most instances failed to deliver justice to victims of genocide, atrocities, war crimes, and serious cases of human rights violations (Jones 1). The ICC, formed in 2002, is a watchdog against the violation of human rights, because the United Nations (UN) founded it to punish crimes against humanity (Balasco 48). Because it is an international body, the court should serve the whole world without fear or biased approaches to delivering verdicts. The paper presents an argument suggesting the flaws in the judicial system at ICC that seems to derail justice to victims. Through the argument, the paper justifies whether victims get justice in the process or not. It presents recommendations on the most appropriate strategies that are viable to promote effectiveness of the ICC. In justification, the paper reflects on some of the events in the history of the court to establish whether victims of genocide, atrocities, war crimes, and serious cases of human rights violations had justice. During spring in 1994, there was genocide in Rwanda that led to the killing of nearly 10 percent of its population. The outbreak of the genocide relates to the ethnic clashes with established roots in the existence of a tension-filled political arena. At the time, there was tension following the disappearance of the Rwandese president of the Hutu community. The events that followed led to the mass killings that lasted about six months. The killings did not happen incidentally but were results of well draw plans to eliminate one community in the country. The six months led to other crimes against humanity similar to the events of 1993 in Europe in the reign of the former Yugoslavian rule (Barnett 1). The events in Rwanda prompted the UN to form a tribunal that would seek justice for the people affected by the Rwandese genocide.

E-Commerce Methods of Amazon Essay Example | Topics and Well Written Essays - 250 words - 12

E-Commerce Methods of Amazon - Essay Example Amazon is able to lower its costs because it can offer customers lower prices than competitors. Lower production costs result in savings for customers because Amazon is able to pass those on.  Despite selling products for very little profit, Amazon is able to gain traction in the market simply because of the sheer volume of orders that it processes every day. Because Amazon focused on selling its products online from the very beginning, it was able to become well-known as an online goods store.  With Internet purchases increasing year on year, Amazon is well-placed to dominate the market for years to come. New market entrants are simply unable to compete with the purchasing power that Amazon has through its vast number of customers. The disadvantage to Amazon only selling through the Internet is that if the Internet is affected in any way over the next few years, the business will feel the effects of that. This is why Amazon should consider diversifying its business model so that risk is lessened.

The Developing Person Through the Life Span Essay

The Developing Person Through the Life Span - Essay Example Joey was all the time thinking about the kindness, love and care of the husband and selfishness of the druggist. To him, morality was more than everything and he expected people to be good to each other. He was more concerned about the persons’ character and emotions toward each other which made me decide to put him in stage 3. Part 2 The adolescent was in stage 2 of identity foreclosure. What made me decide this was his reply: â€Å"My mother has always wanted me to become a doctor so I guess I am going to pursue this career. She says doctors make a lot of money and she so much wants me to get into medicine.† When a child prefers others’ choices for himself, he is in identity stage 2 (Berger). Joey did not seem to have explored all the career options nor was he very much acquainted with other career fields because he had always in his mind that he had to grow up to be a doctor as per his mother’s wishes. Joey was excited and satisfied about his career cho ice. Part 3 Joey’s parents exhibit an authoritative style of parenting. Joey replied, â€Å"Dad would say†¦look, staying out at late hours is not good†¦because Sammy (younger brother) would also do the same then. And mommy would say she was going to miss me.†

The Role of Women in Politics and Power Creation Assignment

The Role of Women in Politics and Power Creation - Assignment Example Merely naming the pejorative stereotypes attributed to Black women (e.g. mammy, the matriarch, Sapphire, whore, bull dagger), let alone cataloging the cruel, often murderous, treatment we receive, Indicates how little value has been placed upon our lives during four centuries of bondage in the Western hemisphere. We realize that the only people who care enough about us to work consistently for our liberation are us. Our politics evolve from a healthy love for ourselves, our sisters, and our community, which allows us to continue our struggle and work. This focusing upon our own oppression is embodied in the concept of identity politics. We believe that the most profound and potentially most radical politics come directly out of our own identity, as opposed to working to end somebody else's oppression. In the case of Black women, this is a particularly repugnant, dangerous, threatening, and therefore revolutionary concept because it is obvious from looking at all the political movemen ts that have preceded us that anyone is more worthy of liberation than ourselves. We reject pedestals, queenhood, and walking ten paces behind. To be recognized as human, levelly human, is enough... ( Williams, Mary, & Emerson 2008)

Supreme court US Essay Example | Topics and Well Written Essays - 2250 words

Supreme court US - Essay Example The Supreme court is: political in nature; at the same time, not constrained by politics; and finally, a signpost pointing toward the U.S.s political future. The Supreme Court by its very nature is political. For example, on the issue of abortion, Roe v. Wade was an important case, which was supported by the courts, thereby allowing for women to have abortions legally in the U.S. Now, abortion is also, by itself, a very politically charged topic. Womens rights advocates usually clash with right-to-lifers in their views concerning abortion unless the mothers life is in danger or in cases of rape or incest. â€Å"In more than three decades since its 1973 Roe v. Wade decision legalizing abortion, the Supreme Court has weighed in on the issue another two-dozen times† (â€Å"Supreme Court’s Evolving Rulings on Abortion,† 2010, p. 1). Now, what makes the Supreme Court so remarkable is that it has control over these very types of situations. It can have a lasting effect on peoples lives for years by just one decision decided upon by a small handful of people. In the case of Roe v. Wade, many people are against the Supreme Court decision because they are trying to restrict the rights of women. Many people do not want women to be independent. Roe v. Wade â€Å"†¦is the historic Supreme Court decision overturning a Texas interpretation of abortion†¦Ã¢â‚¬  (â€Å"Roe v. Wade Supreme Court Decision,† 2010, p. 1). â€Å"The Supreme Court held that the "right to privacy," assured the freedom of a person to abort†¦Ã¢â‚¬  except in certain circumstances (â€Å"Supreme Court Decisions on Abortion,† 2008, p. 1). The same thing was true of black people. For years, women and blacks were discriminated against because they were considered second-class citizens. However, blacks got some modicum of equality with Brown v. The Board of Education, when segregation in schools was

MGM600-0803B-02 Applied Managerial Decision-Making - Phase 1 Essay

MGM600-0803B-02 Applied Managerial Decision-Making - Phase 1 Discussion Board - Essay Example On the other hand, continuous data is the information that can be calculated using scale or continuum. Continuous data comprises all types of numerical and it can be subdivided to have a better understanding into units and sub units depending on the accuracy required for a measurement. Discrete data gives input whether a variable is good, bad, on or off while continuous data can be measured in time, size, length, width, cost and temperature. Money, time and temperature are continuous data. For example, when we measure a slab of equal size, slabs that do not comply with the specifications will be put aside and this would be discrete data because slabs are separated because it is not as per the specifications. Since the data is collected to measure the slabs of specific size, it is continuous data. This example involves the measure of continuous data but discrete data forms a part of it (Karthik, 2003, Continuous Data). The American Heart Association encourages the reduction of fat in food available in restaurants, bakers and in packaged form. The association basically promotes safe food and oil consumption and has set up the 1-800 numbers for consumers to clear their doubts about food safety thereby promoting healthy eating habits (American Heart Association Calls on the U.S., 2007). Some of the commonly asked question is advice on changing the snack eating habits of obese children. This question received at 1-800 was put up at SUNY Upstate Medical University Health Connections who suggested the child should be taken to the primary care provider since the child may have basic health problems which should be checked. If it is a case of general condition, parents are referred to avail information from Mayo Clinic through the online Health library of CNN. This is a discrete date because obesity of the child cannot be measured but can be called as obese (Are Evening Snacks OK?

Ethan from - Realism Essay Example for Free

Ethan from Realism Essay The rise of Realism in 1855 was the time when farming began to industrialize, communication expanded through railroads, and Nationalism was yet again revived. On top of all these important transformations that have marked this period of time was the significance for literature with a new audience, new settings, and new characters. The novel, Ethan Frome, by Edith Wharton, is a magnificent example of literature from the Realistic period. First, Realism is a definite movement away from the Romantic period. Romantics wrote regarding the unique and the unusual, whereas in Realism, literature was written about the average and ordinary. The town where the novel takes place is Starkfield, an average farming community. There is not much in the town that is of interest or anything extravagant to be known for. In addition, literature from Romanticism focused on hopes, while Realistic literature illustrated skepticism and doubt. The narrator describes the scene where Zeena declares to Ethan that her sickness is getting serious, saying, She continued to gaze at him through the twilight with a mien of wan authority, as of one consciously singled out for a great fate. Ive got complications, she said (108 Wharton). Hope for Zeenas health is nonexistent, and she, being a hypochondriac, confirms the fact that she feels doubtful about life. The Romantics wrote about the unusual and hopeful, which are characteristics that are not strongly represented in Realistic literature. The second aspect of Realism is the idea of Regionalism. One indication of Regionalism in literature is the characters dialect. An excellent depiction of dialect is where Harmon Gow says, Wust kind, . . . Moren enough to kill most men (6). His regional accent is shown by the spelling and punctuation, allowing the reader to have an idea of how Harmon would have said it. Another aspect of Regionalism is the customs and the way of life of the characters. One way of life that the characters are accustomed to is the normality of marriage between cousins. As this practice is not enthusiastically accepted everywhere, it brings the Regionalistic aspect to the novel. Regionalism, which includes the characteristics of dialect and customs, is a critical component of Realism. Third, Realistic literature uses the concept of Naturalism. In Ethan Frome, the bleak winter setting is a primary clue that nature plays a key role in the story. Nature is displayed as a powerful and malevolent force that is indifferent to humankind. In the novel, the narrator once stated, But when winter shut down on Starkfield, and the village lay under a sheet of snow perpetually renewed from the pale skies, I began to see what life thereor rather its negationmust have been . . . (7). This statement depicts the winter seasons in Starkfield as gloomy and undesirable weather. Aside from the setting, the basic animal nature of humans also draws out the Naturalistic traits in Realism. The narrator tells what was going through Ethans mind following the smash-up, . . . and far off, up the hill, he heard the sorrel whinny, and thought: `I ought to be getting him his feed. . . (172). At such an intense moment, Ethans animal nature brings him to think about tending to his hungry horse instead of caring about his and Matties teetering lives. These examples signify the sense of nature and its forces used in the literature of Realists. Edith Whartons novel, Ethan Frome, is a wonderful example of Realistic literature. Its style shows signs of a distinct shift away from Romanticism and illustrates the aspects of Regionalism and Naturalism, two major components of Realism. Authors of the Realistic period depicted life as typical, everyday people lived and knew it to be, using these important points. The ordinary characters that dealt with common problems and situations in the literature brought a new group of readers, establishing a unique new era that has changed the way people perceive life forever.

History Of Philippine Monetary System

History Of Philippine Monetary System Most people dont spend much time wondering what money is, their major concern is how much they have, and how to get more. Usually, the question of what money IS arises only when money ceases to function properly. In economics (properly understood), the answer to the question what is money? consists of three words: Thats all. Yet the conception of a medium of exchange ranks below only language (with its corollaries speech and the written word) as the greatest intellectual discovery in history. Without language, the exchange of anything but the most rudimentary ideas is impossible. Without money, the production and exchange of anything but the most rudimentary goods and services is impossible. It is not difficult or time consuming, or inefficient, it is IMPOSSIBLE! Animals dont exchange (or trade) amongst one another. They are self-sufficient, or they take from each other, or they exercise the prerogative of superior strength and/or cunning. There are some human beings who get along in a very similar fashion, but the overwhelming majority recognises the benefits of voluntary exchange. Strictly speaking, the use of the word voluntary in this context is redundant. The phrase your money or your life is not the precursor to an exchange, whether the person uttering it brandishes a gun or a government identity card. The first rule of any voluntary exchange is simplicity itself. If two people are willing to exchange, each must view the results of the exchange as being beneficial. If either of them is not of that view, the exchange will not take place. Direct exchange, or barter, is exactly that my good or service for your good or service. The problem is that I might want what you have to offer, but you might not want what I offer in exchange. With no medium of exchange, there is no deal. Indirect exchange takes place when one party has a medium that is always acceptable, not for what it is, but for what can be done with it. If you offer me money, I will accept it, because I know that I can exchange it for what I want, whenever I want it. Indirect exchange involves the use of MONEY the medium of exchange. Money is the universal key, it fits all locks. And the world it has unlocked is the world we live in today. Money has made the division of labor possible. It has made specialization possible. It has made the accumulation of wealth over periods which exceed a human lifetime possible. Perhaps most important of all, it has hugely advanced the potential for amicable interaction between people. To survive as such, and to prosper, a rational animal must exchange. He or she has language, to exchange ideas, and money, to exchange the fruits of ideas. From that foundation, everything else we see around us has been built. That covers the concept or idea of money. But an idea, as such, does not exist as a physical entity. Money must be a physical entity. Neither the electronic money of today nor the notes and coin which circulate as cash has any official or legal connection with Gold and Silver. But they once did, and most people think that they still do. As long as that situation persists, the modern monetary system will function. Now, how does one go about choosing what is to be used as money? Simple, one looks for the most tradable good, the good which is in highest demand, the good that has begun to be accepted, not as an end in it, but as a means to an end. Money is the good that people do not want to consume, but want to use to make further exchanges easier. Human beings have lived together for more than two million years. Money in its modern form coin of fixed weight and denomination came into use less than three thousand years ago. It took a long time to discover the physical good which best serves the purpose of a medium of exchange. (http://www.the-privateer.com/gold-b.html) Functions Money as a Unit of Value The first function of money is to be a unit of value or a unit of account. The monetary unit is the unit in terms of which the value of all goods and services is measured and expressed. The value of each good or service is expressed as a price, which is the number of monetary units for which the good or service can be exchanged. If the price of a pen is Rs. 10 then a pen can be had in exchange for ten monetary units (where the monetary unit in this case is the rupee). Measuring values in monetary units helps in measuring the exchange values of commodities. If a pen is worth Rs. 10 and a notebook is worth Rs.20 then a notebook is worth two pens. Further, accounting is simplified, as all items will be recorded in terms of monetary units that can be added and subtracted. Money is a useful measuring rod of value only if the value of money itself remains constant. This is similar to saying that a scale is a useful measure of length only if the length of the scale itself is constant. The value of money is linked to its purchasing power. Purchasing power is the inverse of the average or general level of prices as measured by the consumer price index etc. As the general price level increases, a unit of money can purchase a lesser amount of goods and services so the value or purchasing power of money declines. So, m oney will be a useful unit of value only as long as its own value or purchasing power remains constant. (http://hubpages.com/hub/Functions-of-Money) Money as a Medium of Exchange Money also acts as a medium of exchange or as a medium of payments. This function of money is served by anything that is generally accepted by people in exchange for goods and services. Anything has been quite a variety of things across places and times. Some of the things that have served as money are clay, cowry shells, tortoise shells, cattle, pigs, horses, sheep, tea, tobacco, wool, salt, wine, boats, iron, copper, brass, silver, gold, bronze, nickel, paper, leather, playing cards, debts of individuals, debts of banks, debts of governments, etc. Money will then reduce the time and energy spent in barter. The person who owned a cow can now simply sell it to the person who offers the most money for it and then buy the bullock cart from another person who offers him the best bargain. Ultimately, all trade may be considered barter one good or service is traded for another good or service -either directly, or indirectly with money acting as the intermediary. However, by acting as an intermediary, money increases the ease of trade. Money is also called a bearer of options or generalized purchasing power. This indicates the freedom of choice that the use of money offers. The owner of the cow need not procure goods and services from those to whom he sold his cow. He can use the money to buy the things he wants most, from those who offer him the best bargain (not necessarily those who bought his cow), at the time he considers most advantageous (not necessarily immediately). Again, this function can only be performed properly if the value of money remains constant. (http://hubpages.com/hub/Functions-of-Money) Money as a Standard of Deferred Payments If money performs the previous two functions then it may also perform the function of being the unit in terms of which deferred or future payments are stated. Examples of situations where future payments are to be made are pensions, principal and interest on debt, salaries etc. As long as money maintains a constant value through time, it will overcome the problems associated with making future payments with specific commodities. (http://hubpages.com/hub/Functions-of-Money) Money as a Store of Value If money becomes a unit of value and a means of payment then it may also perform the function of serving as a store of value. The holders of money are holders of generalized purchasing power that can be spent through time. They know that it will be accepted at any time for any good or service and is thus a store of value. This function will be performed well as long as money retains a constant purchasing power. (http://hubpages.com/hub/Functions-of-Money) It may be noted that any asset other than money may also perform the function of store of value, for example, bonds, land, houses, etc. These assets have the advantage that, unlike money, they yield income and may appreciate in value over time. However, they are subject to the following: (1) They may involve storage costs, (2) They may not be liquid in the sense that they could not be quickly converted into money without loss of value, and (3) They may depreciate in value. A person may choose to store value in any form depending on considerations of income, safety and liquidity. (http://hubpages.com/hub/Functions-of-Money) Kinds Commodity Money Commodity money refers to money whose value comes from a commodity out of which it is made. Examples of commodities that have been used as money include gold, silver, copper, salt, large stones, decorated belts, shells, and cigarettes. Commodity money is to be distinguished from representative money which is a certificate or token which can be exchanged for the underlying commodity. A key feature of commodity money is that the value is directly perceived by the users of this money, who recognize the utility or beauty of the tokens as they would recognize the goods themselves. That is, the effect of holding a token for a barrel of oil must be the same economically as actually having the barrel at hand. This thinking guides the modern commodity markets, although they use a sophisticated range of financial instruments that are more than one-to-one representations of units of a given type of commodity. In situations where the commodity is metal, typically gold or silver, a government mint will often coin money by placing a mark on the metal that serves as a guarantee of the weight and purity of the metal. In doing so, the government will often impose a fee which is known as seigniorage. The role of a mint and of coin is different between commodity money and fiat money. In situations where there is commodity money, the coin retains its value if it is melted and physically altered, while in fiat money it does not. Commodity money often comes into being in situations where other forms of money are not available or not trusted. Various commodities were used in pre-Revolutionary America including wampum, maize, iron nails, beaver pelts, and tobacco. In post-war Germany, cigarettes became used as a form of commodity money in some areas. Cigarettes are still used as a form of commodity money in prison cell. Although commodity money is more convenient than barter, it can also be inconvenient to use as a medium of exchange or a standard of deferred payment due to the transport and storage concerns. Accordingly, notes began to circulate that a government or other trusted entity (e.g. the Knights Templar in Europe in the 13th century) would guarantee as representing a certain stored value on account. This creates a form of money known as representative money the beginning of a long slow shift to credit money. Historically gold was by far the most widely recognized commodity out of which to make money: gold was compact, easy to work into more beautiful jewelry, had decorative and functional utility as a finely strung wire or thin foil leaf, and most importantly, could always be traded for other metals to make weapons with. A state could be described as a political enterprise with sufficient land, gold and reputation for protecting both, e.g. the Fort Knox gold repository long maintained by the United States, could reliably issue certificates to substitute for the gold and be trusted to actually have it. Between 1933 and 1970, one U.S. dollar was technically worth exactly 1/35 of a troy ounce (889 mg) of gold. However, actual trade in gold as a precious metal within the United States was banned presumably to prevent anyone from actually going up to Fort Knox and asking for their gold. This was a fairly typical transition from commodity to representative to fiat money, with people trading i n other goods being forced to trade in gold, then to receive paper money that purported to be as good as gold, and then ultimately see this currency float on commodity markets. However, commodity money remained active in the background in some form or another, and seems to have been revived thanks to global capitalism, wherein a currency is widely traded as a commodity. One way to view such trade is that currency of resource-rich nations tends to be tied to the price of those particular commodity items until it becomes a developed nation. Thus, one could see the nominally fiat money of say Cuba as being tied to the commodity sugar globally, rather than to the military power of Cuba that holds within its own borders. Also, commodity supplies and protections of supplies by states military fiat remain critical to trade, and there are active commodity market speculations on the stability of certain states, e.g. speculation on the survival of the regime of Saddam Hussein in Iraq has from time to time driven the price of oil. Some argue that this is not so much a commodity market but more of an assassination market speculating on the survival (or not) of Saddam himself. Finally, commodity money is undergoing a more direct revival thanks to theorists of green economics, natural capitalism and global resource banking, some of whom suggest a form of money based on ecological yield. They argue that the outputs of natural capital are the only genuine commodities air, water, and calories of renewable energy we consume being mostly interchangeable when they are free of pollution or disease. However, such goods cannot be held directly, and so it is common to suggest that representative money be issued based on enhancing and extending natures services, giving one the right to receive the yield as a benefit. They argue that reframing political economy to consider the flow of these basic commodities first and foremost, avoiding use of military fiat except to protect natural capital itself, and basing credit-worthiness more strictly on commitment to preserving biodiversity rather than repayment of debt, as in the current global credit money regime anchored by the Bank for International Settlements, would provide measurable benefits to human well-being worldwide. Some seek to replace the B.I.S. with a Global Resource Bank to manage global resources outside national jurisdiction for global benefit. Others would replace the gold standard with a biodiversity standard. It remains to be seen if such schemes have any merit other than as political ways to draw attention to the way capitalism itself interacts with life. Critics of this type of proposal often note that, as with other transitions from commodity to representative money, inadequate substitutes will be made on a just trust me basis as per Greshams Law which states that bad money drives out good. Other proposals, such as time-based money, rely on the availability of human labor as a commodity, especially within a community, which is presumably harder to guarantee access to, but also harder to steal. Still others deny the utility of co modifying labor as such, and suggest making free time the standard, since physical capital used for leisure, sport, art, theatre, and other forms of play is co modifiable and possible to control. (http://www.wordiq.com/definition/Commodity_money) Credit Money Credit money refers to money that constitutes future claims of a valuable item against an entity. The holder of credit money can use it to purchase goods and services; when the holder wants to, he or she can redeem it to get the item by which it is backed. Credit money is made of a material that has low intrinsic value compared to the value it represents when exchanged. Some types of credit money include IOUs, bonds and money market accounts. Some people also consider paper money and coins to be credit money because they have no intrinsic value and can be exchanged for valuable commodity. To illustrate how this concept came about, consider English goldsmiths, who centuries ago used to keep deposits of precious metals. They issued paper notes to those who deposited gold or silver for future redemption. These goldsmiths realized that they did not need to completely back their notes with precious metals because only a small fraction of holders come back to convert their notes. The goldsmiths then issued non-backed notes as loans to people who needed funds and received profits from interest payments. These notes constituted the early form of credit money. When a government issues banknotes, it decides on a valuable commodity on which to fix them, gold or silver, for example. It then fixes a stable value on the banknotes and sets them as a medium of exchange. The government can choose to maintain enough valuable commodities to let everyone with banknotes redeem it. The government can also choose to keep just enough valuable commodities to satisfy the small fraction of people who actually want to make the redemption. In this sense, banknotes are credit money because people can use them to redeem gold or silver. In modern monetary systems, however, the central bank often issues money that is not backed by valuable commodity. The size of the money supply in these systems does not depend on the availability of valuable commodity or the obligation of the central bank to repay credit money with valuable commodity. This kind of money is known as fiat money and is the most ubiquitous form of money in most modern monetary systems. Credit money can also refer to any claim on valuable commodity that is used as a medium of exchange instead of banknotes. Checks, IOUs and bonds that can be redeemed for banknotes are examples of this. Sometimes credit money has a maturity date, as in the case of checks where the bank pays the check recipient a certain amount of banknotes at maturity. Fiat Money Fiat money is the opposite of honest money. Fiat money is money that is declared to have value even if it does not. Honest money has value regardless of what people say. Gold and silver are often referred to as honest money and since they have been dug out of the ground at considerable expense, they do have value regardless. People will pay variable sums for them. Fiat money is also known as paper money, or electronic money. Since there is nothing behind paper money but the obligation of a state to redeem it in more paper or electronic money, fiat moneys ultimate worth is questionable at best. In fact, there is a history of states walking away from the face value of the fiat money that has been printed (created). But if one has it in ones possession, it is impossible to walk away from the value of gold and silver and contrary to fiat money, they have an inherent quality. Mainly an outgrowth of central banking, in the modern age, fiat money probably would not be attractive without state support. Thats because fiat money, unlike fractional reserve money, has no inherent value. Fractional reserve banking, in fact, is a private market phenomenon in which private banks provide paper notes the face value of which adds up to more than the reserves held by the bank. There is a history of successful fractional reserve banking efforts within the private marketplace; however fiat money ALWAYS collapses, as it is impossible to issue a substance of value year after year and generation after generation that HAS no value. In the United States, the worlds largest and most dominant economy, the greenback became a fiat currency when President Richard Nixon broke the final link between gold and the dollar in 1971. He did this because the French were apparently threatening to redeem their dollars in gold and either the US central bank and/or Treasury did not have enough gold to In any event, Nixon severed the dollars relationship to gold and ever since then the world has embarked on a bold experiment in which the global, anchor currency has no specific relationship to an underlying asset. Predictably, this has meant that the United States has continually created more and more fiat dollars, thus inflating the overall stock of dollars and making them worth less and less. China, one of the worlds most ancient civilizations, is said to have had no less than eight separate interregnums of fiat currency each collapsing and then being replaced by another. In the 1800s, fiat money was even banned by the Chinese. Today, however, the Chinese government is once again a user of fiat money along with the rest of the world. Fiat money has never been as prevalent perhaps as in the modern age. But that doesnt make it any healthier or less prone to failure. Those who ignore history are doomed to repeat it. (http://www.thedailybell.com/803/Fiat-Money.html) Legal Tender Money Legal tender is any form of payment that must be accepted for a debt, according to the laws of the area. Generally, the term refers to government-issued cash money such as bills and coins, as opposed to credit lines, checks, or cards. The laws surrounding legal tender have proved vital in the formation of the fiscal policy of many nations. (http://www.wisegeek.com/what-is-legal-tender.htm) The term legal tender means currency that is legally permitted to be used to obtain goods or services in a particular country. Immediately recognized as legal tender for purchases and to settle outstanding debts, currency remains the single most common of all liquid assets that are used on a consistent basis by retail customers. (http://www.wisegeek.com/topics/legal-tender.htm) II. Development of Philippine Money Pre-Hispanic Era Archaeological evidence indicates that small seafaring communities existed throughout the Philippine Archipelago for at least 2000 years, prior to the arrival of the Spaniards. The chief means of trading was barter. Records show that Chinese merchants came to the Philippines to trade porcelain, silk and metalwork in exchange for gold, pearls, beeswax and medicinal plants, which the Philippines is naturally rich in. Excavations also unearthed gold ingots, known as piloncitos, the first recognized form of coinage in the country. Barter rings in different sizes, gold ornaments and beads were the other objects used as medium of exchange during the period. (http://www.bsp.gov.ph/about/history/story2.asp) Spanish Era The Galleon Trade, which started during the colonization of the Philippines in 1565 and lasted for 250 years, was responsible for transforming Manila into a trade center for oriental goods. These were brought across the Pacific, in exchange for odd-shaped silver coins called cobs or macuquinas. Other coins that followed were the dos mundos or pillar dollars in silver, the counterstamped coins and the portrait series, also in silver. In the 18th century, the Royalty of Spain authorized the production of copper coins by the Ayuntamiento or Municipality of Manila in response to the acute shortage of fractional coins. These were called barrillas which first appeared in 1728.In 1852, the first banknotes called pesos fuertes were issued, and in 1861,the Casa de Moneda de Manila minted the first gold coins with the word Filipinas inscribed, which were called Isabelinas and Alfonsinos. (http://www.bsp.gov.ph/about/history/story3.asp) Revolutionary Period On August 23, 1896, the Cry of Balintawak, headed by Andres Bonifacio signaled the start of the Philippine Revolution. After General Emilio Aguinaldos proclamation as President of the First Philippine Republic, Two types of 2-centavo copper coins were struck in the army arsenal of Malolos. Because their mintage was so few, they are considered extremely rare collection. Paper notes were also issued, but the circulation was limited because the government was short-lived. (http://www.bsp.gov.ph/about/history/story4.asp) American Regime When the Americans took over the Philippines in 1901, the US Congress passed the Philippine Coinage Act, which authorized the mintage of silver coins from 1903 to 1912. Subsequently, Silver Certificates were issued until 1918. These were replaced with Treasury Certificates from 1918 to 1935. The American Government deemed it more economical and convenient to mint silver coins in the Philippines, hence, the re-opening of the Manila Mint in 1920, which produced coins until the Commonwealth Period. This also became the first seat of the Central Bank in 1949. (http://www.bsp.gov.ph/about/history/story5.asp) World War II During the Japanese Occupation from 1941 to 1944, two kinds of notes circulated the Japanese Invasion Money issued by the Japanese Government, and the Guerrilla Notes or Resistance Currencies issued by Filipino guerrillas. (http://www.bsp.gov.ph/about/history/story6.asp) Republic Period Republic Act No.265 created the Central Bank of the Philippines (CBP) on January 3, 1949, which was vested the power of administering the banking credit system of the country. Initially, the CBP issued the Victory Notes with the overprint Central Bank of the Philippines in 1949. The first official banknotes issued by the Central Bank were the English series in 1951, followed by the Pilipino series in 1967, the Ang Bagong Lipunan series in 1973 and the New Design series in 1985. Central Bank coins of the English series were also issued in 1959, followed by the Pilipino series in 1967, and the Ang Bagong Lipunan series in 1975. The Flora and Fauna series were introduced in 1983, and subsequently, the improved version in 1992, until the demonetization of all the series in 1998. (http://www.bsp.gov.ph/about/history/story7.asp)