The market and marketing

What is marketing?

A market is where buyers and sellers come together and exchange their products for money. It can be in the streets, on the internet, in shops around the world, etc… Customers and sellers exchange both goods and services for money.

Product-orientated and market-orientated businesses

A product orientated business focuses on the quality and price of the product before finding a market for it to sell in. These type of businesses usually produce basic needs. New technology could be developed this way, and customer wantsare created by advertising. 



Other big companies cannot afford to produce a product that will not sell, so they have to do market research first to find consumer wants before developing a product. They are called market-orientated businesses. They will need to set up a marketing budget for this, which is a financial plan for marketing of a product, which contains the amount of money the Marketing department may spend on marketing.

What is marketing

Marketing is the management process which identifies consumer wants, predict future wants, create wants and find ways to use these wants to the fullest (most profitably). In other words, businesses try to satisfy wants in the most profitable way possible. Marketing covers a wide range of activities such as: advertising, packaging, promotion, etc…

The Marketing department

Most businesses will have a Marketing department, which will have a Marketing Director. He will be in charge of things such as R&D, distribution and pricing. Here is an organisational chart showing what departments the marketing director controls: 

• Sales department: Responsible for sale and distribution of products for each region. There may also be an export department.
• Research and Development department: Responsible for finding out consumer wants and developing new products. They also need to find ways to improve an existing product.
• Promotion department: In charge of advertising and promotion. It will need a marketing budget which limits the amount of money it can spend.
• Distribution department: It transports products to their markets.

The objectives of marketing

A successful Marketing department should be able to achieve these objectives for the business:

• To increase sales revenue and profitability.
• To increase market share (percentage of sales a product has in a market).
• To maintain or improve image of a product or company.
• To target a new market or market segment.
• To develop new products or improve existing ones.

SWOT analysis

This is a method to evaluate the statistics of a product of business. It assess these things:

• Strengths (internal)
• Weaknesses (internal)
• Opportunities (external)
• Threats (external)

Strengths and weaknesses of a product are its internal factors, while opportunities and threats are external factors.

Market segments

Market segments are parts of a market which contains people which have similar preferences for their products. The Marketing department should know which segment their product fits the most, so that they can advertise and sell their products to it.

There are two ways to segment markets. By the type of product or the attributes of the customers buying it. Here are two types of markets which are segmented based on the product:

• Mass market: Where there is a large number of sales of a product. (e.g. Pepsi can be bought anywhere)
• Niche market: A small market for specialised products. (e.g. Ferrari cars)

Here is how a market can be segmented regarding people buying the product:

• Income
• Age
• Region
• Gender
• Use of product
• Lifestyle

It is very important to target the right market segment since it can increase
sales by a lot. If a business can analyse all of these market segments, they may find a market segment whose needs are not being met. This is when the business finds a gap in the market, and it could produce goods to take advantage of this gap and again increase
sales.

The marketing mix

The marketing mix is a term that describes how products are marketed. You must remember that before marketing can be achieved, market research is needed. The rest is summarized into the four P's. Let's look at them briefly first, since they will be covered in other chapters:

• Product: Design and quality, competitiveness, packaging, etc… 
• Price: There are different pricing strategies. Businesses need to use them so that they increase sales. 
• Promotion: Advertising and promotion. Discounts, TV adverts, sales, packaging,
  etc… 
• Place: The location of the point of sale (the shop). Channels of distribution. Type of shop (wholesaler or retailer?)

A successful product require effective use of the four P's. However, businesses must be careful to not let each of these factors counteract each other (e.g. expensive but low quality goods), else the product will fail. 

Ishikawa Diagram / Fishbone Chart

These diagrams are named after Kaoru Ishikawa, a Japanese professor and influential quality management expert. They were first started to be used in the 1940s, and are considered to be one of the seven important tools in quality management. They are alternatively referred to as Ishikawa diagrams, fishbone charts, cause and effect charts, or root cause diagrams. They are most frequently used in product design and manufacturing, analyzing defects or deviations and trying to identify the root causes.

The problem is stated in a box to the right of the diagram, and each major branch is devoted to some of the key issues that could have caused the problem. Major issues are generally grouped by people, materials, machinery, processes, measurements and external factors. But there is a whole art to grouping these major branches, and people have come up with standard groupings such as the 8 Ms, the 8 Ps, or the 4 Ss.

The 8 Ms (used in manufacturing)

• Machine (technology)
• Method (process)
• Material (Includes Raw Material, Consumables and Information.)
• Man Power (physical work)/Mind Power (brain work): Kaizens, Suggestions
• Measurement (Inspection)
• Milieu/Mother Nature (Environment)
• Management/Money Power
• Maintenance

The 8 Ps (used in service industry)

• Product=Service
• Price
• Place
• Promotion/Entertainment
• People(key person)
• Process
• Physical Evidence
• Productivity & Quality

The 4 Ss (used in service industry)

• Surroundings
• Suppliers
• Systems
• Skills

There is a great Wikipedia article on Ishikawa Diagrams (link), which provides a lot of context, questions to ask in each branch, and additional resources and links.

Employee and employer associations

In smaller businesses, if employees have any problems they can talk directly to their employer. However, in larger businesses that employs many people, it becomes extremely hard to do so. It is also hard for the Human Resources department to make decisions when they have about 500 employees (e.g. who will get a pay rise?). It becomes much easier if decisions are negotiated with a trade union, and employee association that represents them. This saves the management a lot of time because they do not have to see individual employees to discuss problems.



Employees might not be treated fairly at work. They may be overworked and underpaid. Trade unions has the role of bargaining with the HR department for better working conditions, conditions of employment and better pay.

Trade Unions

Employees with similar interests (higher pay) form a trade union. Trade unions are a form of pressure group with has the ability to influence business activity. There are four main types of trade unions:

• Craft union: For workers skilled at a particular job.
• General union: For unskilled and semi-skilled workers from different industries.
• Industrial union: For all types of workers in an industry.
• White-collar union: For non-manual or office workers.

Why do workers join a trade union?

Unions have a shop steward, who is an unpaid representative of the union. When someone is new to a job they may ask if they may want to join. If the person joins, they will have to pay an annual subscription. This money will be use for employing union officials who will represent the views of the employees. 

Advantages of a union

• Strength in numbers.
• Improved conditions of employment.
• Improved working conditions.
• Improved sickness benefits, pensions, and retrenchment benefits.
• Improved job satisfaction and encourage training.
• Advice/Financial
  support if a worker is dismissed unfairly/made redundant or is asked to do something not part of their job.
• Improved fringe benefits.
• Employment where there is a closed shop, which is when all employees in a business must belong to the same union.

Trade unions need to:

• Put forward their views in the media to influence government decisions on pay, employment, etc…
  
• Improve communications between workers and managers.
  

Closed shop

A closed
shop is when all employees must join one union in order to be employed. It is because its members feel that the union is doing nothing when non-members receive the same pay rises as them. They think it is unfair. Trade unions also gain greater strength if all the employees are members of the union. However, many people think that it is unfair since they are forced to join – they should be able to make their own decisions.

Single union agreement

Some companies have a single union agreement, when a business only agrees to deal with a single union. Any employees who want to join a union can join this union. It is becoming more popular nowadays because many employees are becoming multi-skilled, and do not know which union to join.

Advantages to the employee:

• Discussions are clearer if there is only one union to deal with.
  
• The union has greater power.
  
• No disagreements between different unions.
  
• A better working relationship should develop between the union and the management.
  
• Disputes are solved more quickly.
  

Advantages to the employer:

• Discussions are clearer.
• A better working relationship should develop, meaning that there would be less industrial disputes, benefiting both employees and employers.
• Disputes are solved more quickly.
• It is easier to agree to changes.

The structure of a trade union

The structure of different unions vary, but most elect a President or General Secretary to work full-time for and get paid by the union. They work at the union's headquarters. If the union is large, there will be union officials to take cared of members in different branches. Each branch represents its members in one work site, one factory, or one employer. Each branch has a representative. Unions are usually democratic and their union officers are voted up by the members.

Employer associations

Employers join what are called employer associations/employer federations/trade associations. Like trade unions, employer associations are made up of businesses and employers and who all pay annual fees for their benefits.

Advantages of joining an employer association:

• They negotiate with trade unions on behalf of their members.
  
• They give advice on employment laws, health and safety, taxation laws etc…
  
• Strength in numbers, they want to influence government decisions.
  
• They can share ideas and research facilities.
  
• They can organise bulk buying for members and get discounts.
  

Employer associations and the government.

Employer associations represent similar wants of businesses, and will try to influence the governments to give better conditions for businesses to prosper:

• They want the government to control things such as inflation, law and order, health and safety, and education for the workforce.
• Lower taxes.
• More freedom for businesses.
• Fair competition.
• Good transport infrastructure.
• Access to overseas markets.
• Reliable source of power.

Collective bargaining

This is when representatives of different interest groups negotiate and a collective agreement is made. The bargaining can be with businesses or with the government. Collective bargaining in businesses usually means that the representatives of one or more trade unions negotiate with one or more employers or employer associations to come up with a mutually acceptable agreement on conditions of employment.

Why trade unions want wage increases:

• Inflation.
• It is difficult to recruit qualified workers (so pay them more!).
• Pay differentials need to be maintained (everybody's wages should rise when the minimum wage rises).
• Changes in the workplace, e.g. new machinery.
• If there are increased productivity, wages should increase too. There are productivity agreements, when managers and trade unions agree to raise prices for increased productivity.

Often agreements take place and the "middle path" is taken. However, this does not always happen and if the workers and unsatisfied with the agreements, they will use industrial action.

Industrial action

There are various forms of industrial action that try to influence the decisions of employers. Here are some of their most comment forms.

Strikes

Strikes are when workers stop working and leave the workplace to protest against things.

• Token strike: Stoppage for an hour, a few hours or half a day to show strong feelings.
• Selective strike: Only a few workers go on strike. They are chosen by the union to cause as much disruption as possible.
• All out strike: All union members stop working and wait until a dispute has been settled.

Unions have to pay their members out of strike
funds as long as the strike has been approved by the union. All members vote to see if the strike is favourable or not.

Picketing

This is when workers stand outside the factory holding signs to protest and stopany people
going in and out as well as goods. This can halt the production process. The strikers gain publicity and gives the firm a bad image. This puts pressure on the firm to settle the dispute.

Work to rule

This is when workers stick rigidly to every rule and regulation in the business so that it slows
down the production process. They still get paid since they are technically doing nothing wrong, but this still causes a lot of disruption in the workplace.

Go slow

All workers deliberately do things very slowly.

Non-cooperative

Workers refuse to work with any new rules or follow any new practices they do not approve of.

Overtime ban

Workers refuse to do any overtime. This might damage the business if they need to complete some orders quickly. 

Possible harmful consequences of industrial action:

• For employers:
  • Loss of output.
    
  • Loss of profit.
    
  • Loss of customers.
    
  • Poor reputation.
    
  • Bad image.
    
• For employees:
  • Loss of wages.
    
  • They might lose their jobs if the company suffers low profits.
    
• For customers:
  • They need to find another supplier which might cost more (production is stopped)
    
  • Shortage of products.
    
  • Deliveries not made.
    
  • For other businesses:
    
    • May lose income.
      
    • May not have materials to produce goods.
      
• For the economy:
  • Workers have less money to spend.
    
  • Less tax revenue.
    
  • Country gain bad reputation for late deliveries.
    
  • Workers may be made redundant.
    
  • Exports may be lost and imports increased.
    

Employer's powers

However, employers can do something about the situation. Usually, they will sign a no-strike agreement with the union which also involves pay rises. The pay rises are determined by an arbitrator, an independent person who represents both sides and decides on the best decisions possible. Again, he will most likely choose the "middle path".
Nevertheless, if strikes do happen, here are some things employers can do:

• Dismiss all workers: This leave the company in a very terrible position since they can't produce goods or deliver goods.
• Lock-out the workers: Stop workers from coming to work or get paid. Used to counter work to rule and go slow strategies.
• Institute a pay freeze: Used if employees are refusing to follow new rules, practices or operate new machinery.

Worker participation:

The management needs to let everyone feel that they are part of the business. This means that managers will let workers participate in business decisions. There are several ways of doing this:

• Worker directors: Some workers become directors, but they are not allowed to attend all board meetings.
• Works councils: These are where representatives of employees get together and discuss matters that affect employees with managers. Works councils are called European committees in Europe, and are becoming more common there. Multinationals with more than 1000 workers or 100 workers per branch will have to create a works council and will have to always consult it when making decisions affecting employees.
• Quality circles: This is often used in Japanese companies, where workers regularly debate on how to improve quality and efficiency.
  
• Using a democratic style of leadership: Workers are delegated tasks and are consulted in business decisions.
  

Advantages of worker participation

• It increases the flow of information and improve relationshipsbetween the employer and the employee.
• It increases motivation.
• It increases job satisfaction.
• It benefits the company since it can use knowledge from experiencedworkers.

Disadvantages of worker participation

• It is time consuming.
• Workers may lack necessary technical knowledge.
• If representation is done via trade unions, non union members won't be affected.
• There could be conflict of interests.

4Q Methodology (Measure, Analyze, Improve, Control)

The “Measure – Analyze – Improve – Control” framework, sometimes also referred to as the 4Q (for 4 quadrants) methodology, is based on a classic six sigma methodology of problem solving. Some firms refer to the fourth quadrant as “Sustain,” but Control is used most often in six sigma literature. Also, other applications of the methodology use five phases, adding a “Define” phase at the beginning. So you may also find literature on the Internet under the acronym DMAIC (Define, Measure, Analyze, Improve, Control).

Sticking to the four most important quadrants:

Measure: The purpose of this step is to define the scope and the problem, and to learn about the current state, and capture the base line data. This includes, among other things: Creating a statement of the opportunity, understanding what the Customer wants. Identifying team members and time frames. Investigating the current situation in detail: Who, What, When, Where. Developing a detailed process map of the situation. And plotting baseline data over time to look for special causes. Outputs from this phase will typically include data that shows the problem’s location, baseline data, and a better understanding of the current process.

Analyze: The second step is focused on to identify the root cause(s) of the problem, and to find/prioritize/verify the greatest opportunity for improvement. This will include: Generating many potential causes or opportunities. Organizing and evaluating causes for greatest impact. Collecting data to verify the selected root cause or opportunity with greatest potential. And identifying the relationship between the selected cause and the process outcomes. Outputs from this phase will typically include identified root causes or improvements that have been tested and confirmed.

Improve: The purpose of the third step is to develop, pilot, and implement the solutions that address the root causes. This includes: Generating many potential solutions or improvements. Evaluating and selecting the best solution. Running a pilot if necessary. Implementing the best solution quickly. And measuring results and comparing them to the baseline to verify expected results were obtained. Output from this phase will typically include completed actions that eliminate or reduce the root cause of problems or implement improvements to the process.

Control: The purpose of the last step is to maintain the gains you have achieved with the project and make sure the process stays “in control.” This includes: Documenting changed work methods or processes. Training employees on the new methods. Summarizing results and communicating learnings to the organization. Identifying next steps for this process. Output from this last phase will generally include documentation of the new process or method being followed, communication of the results, and further recommendations of the team.

The chart above lists a number of specific statistical tools, six sigma concepts, frameworks and methodologies that can be applied in the various phases. And the chart below shows an example on how some of the key findings could be summarized on one page for a specific problem that needs to be solved.  

15.3. Антикризисное регулирование экономики

В современной экономической литературе сконцентрировано внимание на исследование антициклического регулирования национального хозяйства [1, с. 354]. При этом отмечаются инструменты, посредством которых можно осуществлять антицикличные мероприятия. Здесь нужно уточнить предмет исследования. Нам нужно бороться не с цикличностью, конъюнктурными колебаниями или динамичными волнами в целом, а её составной частью — экономическим кризисом, который и представляется «болезненным состоянием» экономики и общества. Задачей государства и общества является своевременное определение причин возникновения такого негативного положения в экономике, и применение превентивных меры против возникновения и функционирования экономического кризиса, обращая внимание на внешние и внутренние факторы, обусловливающие его развитие. Поэтому исследования должны быть направлены на предотвращение, или снижение негативных влияний и сокращение стадии экономического кризиса до минимума по сравнению с другой противоположной тенденцией — экономическим ростам.

Современный уровень развития экономики в высокоразвитых странах позволяет и сокращает стадию экономического кризиса до 8–10 месяцев [2, c. 593]. Это менее болезненно влияет на общественное хозяйствование и государство, чем сокрушительный характер, который был свойственен раннему этапу проявления экономического кризиса, что сопровождалось длительностью во временном отрезке, измеряемые годами.

Ученые Запада в основном остановились на двух направлениях регулирования антикризисного развития экономики: неокейнсианском и неоконсервативном. Данные теоретические направления развились на основе классической школы[1, с. 354].

Неокейнсианское направление ориентируется на избежание экономического кризиса или его смягчения на основе регулирования совокупного спроса, тогда как неоконсервативному — свойственно использование экономических инструментов воздействия на совокупное предложение. Исходя из данных подходов, российские ученые систематизировали их и представили в виде таблицы[1, с. 354], которая нами была усовершенствована и добавлено авторское направление, что можно проиллюстрировать в следующей модернизированной форме (см. табл. 16).

Как видно из таблицы 17, неокейнсианство ориентировано на подход регулирования экономического кризиса посредством воздействия на совокупный спрос. Это достигается посредством налогово-бюджетных и кредитно-денежных механизмов на уровне национальной экономики, где поощряется воздействие государства. Здесь нужно отметить, что данный подход в 70–80 годы не сработал, а усугубил кризисное экономическое положение[3, с. 129]. Однако неоконсерватизм, в противоположность неокейнсианству, делает ставку на воздействие через совокупное предложение на экономический кризис, где осуществляются мероприятия по стимулированию субъектов хозяйствования на уровне микроэкономики. При этом ограничивается роль государства, увеличивая воздействие финансовых рычагов. По данному направлению также имеются критические взгляды, которые подчеркивают о несостоятельности полноценного воздействия на снятия экономического кризиса[3, с. 129].

Таблица 17

Подходы к антикризисному регулированию общественного хозяйствования

Признаки	Неокейнсианство	Неоконсерватизм	Авторское направление
Ориентация	на совокупный спрос	на совокупное предложение	на взаимодействие совокупного спроса и предложения на основе учета их объективно предельных величин
Цели	регулирование хозяйства на уровне национальной экономики	стимулирование субъектов хозяйствования на уровне микроэкономики	регулирование хозяйства на уровне мезо- и макроэкономики на основе объективно предельных величин и механизма действия экономических законов, а также стимулирование субъектов хозяйствования
Приоритеты регулирования	а) налогово-бюджетная политика б) кредитно-денежная политика	а) кредитно-денежная политика б) налогово-бюджетная политика	сочетание налогово-бюджетной и кредитно-денежной политики
Оценка роли государства	поощрение	ограничение	оптимизация взаимодействия государства и рынка на основе объективно предельных величин

 Мировая практика общественного хозяйствования выработала следующие антикризисные мероприятия, которые отмечены в экономической литературе[1, с. 355–362]. Эти мероприятия сгруппированы в таблице 18.

Конечно, недостатки вышеназванных подходов предотвращения и обуздания экономического кризиса явно прослеживаются, поскольку эти воздействия направлены на совокупный спрос, или совокупное предложение в одностороннем порядке. Но совокупный спрос и совокупное предложение представляют органически взаимосвязанную целостность, и воздействие на одну из них требует коррекцию соответственно другой части в тех пропорциях, которые необходимы для данных составляющих.

Регулирование антикризисных процессов должно осуществляться на основе знания механизма действия экономических законов, объективно предельных величин соотношения совокупного спроса и совокупного предложения, оптимизации взаимодействия государства и рынка посредством учета объективных условий расширенного воспроизводства, соблюдения пропорций между подразделениями, секторами, отраслями общественного производства. А также нужно использовать объективно предельное соотношение основного капитала, промежуточного продукта и человеческого капитала, и сочетание финансовых инструментов в обеспечении вышеприведенных условий. Экономико-математические модели и методы по определению объективно предельных величин и условий расширенного воспроизводства общественного хозяйствования в современных условиях ранее в данной работе были рассмотрены, что можно использовать вполне на практике не только на уровне субъекта хозяйствования, национальной экономики, но на международном и мировом масштабе[4, с. 117–365].

Таблица 18

Антикризисные мероприятия в цикличном развитии экономики

Стадии цикла	Экономический кризис	Экономический рост
Характер антикризисной меры	Стимулирование деловой активности	Сдерживание
Экономические меры	Налогово-бюджетные(фискальные) мероприятия
	Снижение налоговых ставок. Рост государственных расходов. Налоговые льготы на новые инвестиции. Ускорение амортизации.	Повышение налогов. Снижение государственных расходов. Введение ограничения в ускорение амортизации. Сокращение инвестиций.
	Кредитно-денежная мероприятия
	Понижение ставки рефинансирования и уровня резервных требований. Покупка ценных бумаг.	Повышение ставок рефинансирования и уровня резервных требований. Продажа ценных бумаг.

Глобализация в мировом масштабе развития экономики обусловливает особенности проявления цикличности в синхронизации их стадий в различных странах и регионах. Основой такого явления служат концентрация и централизация капитала на международном уровне. При существующих социально-экономических «болезнях» в одних странах, в условиях высокой плотности их взаимосвязи с другими, происходят «заражения», что охватывает «эпидемией» многих, имеющих уязвимые сферы экономики.

Таким образом, антикризисное регулирование — необходимая мера, которая должна исходить от государства, где должны учитывать объективные требования рынка, экономических законов. При этом, вырабатывая посредством их объективных требований учет оптимальных мер для противодействия негативным экономическим колебаниям и тенденциям развития общественного хозяйствования.

Понятия и термины

Антикризисное регулирование; антициклическое регулирование; синхронизация стадий цикла; неокейнсианский подход антикризисного регулирования; неоконсервативный подход антикризисного регулирования.

Рассматриваемые вопросы

1.  Сущность антикризисного регулирования.

2.  Основные направления антикризисного регулирования.

3.  Экономические меры и инструменты антикризисного регулирования.

Литература

1.  Курс экономической теории/Учебник/Под ред. Чепурина М.Н., Киселевой Е.А. – Киров, 1998.

2.  Самуэльсон П., Нордхаус У. Экономика/15-е изд. - М., 1997.

3.  Сорос Дж. Кризис мирового капитализма. Открытое общество в опасности/Пер. с. англ. - М., 1999.

4.  Айнабек К.С. Теория социально-рыночной экономики/Уч. пос. - Караганда, 2006.