Businesses can privately own, not-for-profit or state-owned. An organization or economic system where goods and services are exchanged for one another or for money. Every Business requires some form of investment and enough customers to whom. Its output can sell on a consistent basis in order to make a profit. A paid occupation, especially one that involves prolonged training and a formal qualification.
A Company (also known as an enterprise, a company, or a firm) is an organizational entity and legal entity made up of an association of people, be they natural, legal, or a mixture of both. Who share a common purpose and unite in order to focus their various talents and organize. Their collectively available skills or resources to achieve specific declared goals and are involving in the provision of goods and services to consumers. A business can also describe as an organization that provides goods and services for human needs.
Definition and Meaning of KMS (Knowledge Management Systems); A method for the improvement of business process performance. A knowledge management system is most often uses in business in applications such as information systems, business administration, computer science, public policy, and general management. Common company departments for knowledge management systems include human resources, business strategy, and information technology.
Here is the article to explain, What is KMS Knowledge Management Systems? Definition and Meaning
Every organization aims to achieve its set goals and objectives as well as secure a competitive advantage over its competitors. However, these cannot achieve or actualized if staff or workers act independently and do not share ideas. Today, prominent businesses are becoming more aware that the knowledge of their employees is one of their primary assets. Sometimes organizational decisions cannot be effectively made with information alone; there is a need for knowledge application. An effective knowledge management system can give a company the competitive edge it needs to be successful, and, for that reason, knowledge management projects should be a high priority.
Development;
Knowledge Management Systems (KMS) “developed to support and enhance the organizational knowledge processes of knowledge creation, storage, retrieval, transfer, and application (Alavi & Leidner, 2001) This means that for any organization to be competitive in today’s global world there is a need for combination or pooling together of ideas by employees to achieve teamwork; this is in support of the saying that ‘two good heads are better than one. Since organizational knowledge is one of the important assets of the organization; it needs to manage like other assets, hence the need for what is Knowledge Management Systems (KMS).
Knowledge management systems ‘collect all relevant knowledge and experience in the firm; and, make it available whenever and wherever it needs to support business processes and management decisions. Knowledge here could refer to as the understanding that a person has gained through education, experience, discovery, intuition, and insight or a combination of instincts, ideas, rules, and procedures that guide actions and decisions. It is an intangible asset that is unique and can use to achieve long-term strategic benefits or advantages. This is because knowledge has more competitive significance than physical assets in a consulting organization like ours that relies on unique competencies and methods. Also, unlike other physical assets of an organization, knowledge is not subject to the law of diminishing returns as are physical assets, but increases in value as people share it.
Understand;
Knowledge can in a form that can state, codified or written, and understandable by everyone (explicit) or in a form that cannot express easily and unconsciously applied but understood by individuals (implicit or tacit). Therefore, what knowledge management systems do is to provide collaborative capabilities; using groupware to facilitate sharing of explicit and implicit knowledge among employees. It also means to change people’s behavior to make their experience and expertise available to others. These systems involve a process that helps organizations identify, select, organize, disseminate and transfer important information; and expertise that is part of the organizational memory that typically resides within the organization in an unstructured manner. Learn more about;
The main objective of knowledge management systems is to identify knowledge; and, explicate it in a way that it can share formally, and thus re-used. It helps in transferring the intellectual assets of the firm to value processes such as innovation and knowledge acquisition. It means improving the organization’s ability to execute its core processes more efficiently by capturing intellectual assets for the tangible benefit of the organization. Knowledge Management Systems also aim at codifying knowledge (such as best practices); organizing it in repositories for later access, finding knowledge (using search engines and other schemes); and providing organized ways to find people who possess the required knowledge.
It poises towards determining what knowledge the organization has, as well as acquiring the knowledge that is lacking to provide collaborative capabilities and facilitate sharing of explicit and implicit knowledge among employees. Knowledge management systems enhance knowledge creation through learning, knowledge sharing, and communication; through collaboration as well as knowledge capture and explication, use and reuse, access, and archiving. It means transforming information and intellectual assets into enduring value for the organization; and, transforming knowledge to add value to the process and operations of the business. It also aims at leveraging knowledge strategically to business to accelerate growth; and innovation as well as using knowledge to provide a competitive advantage for the business.
Problems and Solve;
These systems also capture knowledge about how problems can solve to promote organizational learning, leading to further knowledge creation. In doing this, intellects that are in the form of tacit knowledge in individuals, groups within the organization; and other areas transfer to value processes that lead to innovation, knowledge creation, and replenishment of the organization’s core values. Knowledge management systems also capture knowledge in an external repository, identify needed knowledge and help in matching and exchanging knowledge. Some technologies that support this system are e-mail, document management, search engines, enterprise information portal, data warehouse, groupware, workflow management, and web-based training. Knowledge management systems also mean to provide collaborative capabilities, using groupware to facilitate sharing of explicit knowledge among employees; its activities or processes are supported by software such as Wincite, Grapevine, and Knowledge X.
Survival is the Mother of Innovation in Banking Sector: “Banks can provide innovative products and services to their corporate and retail customers only when creative people are in place along with the latest technology. Such people might provide innovative ideas to customers and banks. By converting their acceptable ideas into reality, banks can get an edge to compete effectively in the global village. Indian banking is also changing its shape rapidly by adopting innovative technology, products, and services.” So, what is the question going learn; Do Survival is the Mother of Innovation? Explanation.
Here is the Explanation; Do Survival is the Mother of Innovation?
Innovation is the key to success in any activity, Innovation banking is therefore not an exception. Innovation-banking is possible only when we have innovative people in banking. Moreover, innovative ideas of such people have to be heard at the right time by the right people. Only then the needed encouragement and support is given to convert such innovative ideas into reality. Customer Relationship Management in the Banking Sector.
In the past, a generation gap is considered to be with a span of at least 10 years. Whereas with the improvement in the technology followed by the integration of people and places across the world on account of revolutionary changes in information and communication. The entire world has become virtually a small global village. Since all organizations and people use technologies, we find that a new generation of techno-savvy people emerging in a very short span of 5 years in every sphere of activity infusing dynamism and creativity leading to several innovations.
Globally, usage of technology is very extensive in the financial sector of which banking sector is an integral part. Indian financial sector has made rapid strides in the late 1980s and early 1990s picking up momentum with the advent of the 21st century. Liberalization of the Indian economy has provided scope to the banking sector to reorient its focus by shifting from developmental role obligated mostly by socio-political considerations into professional financial agencies keen on preserving their bottom lines. What are Nature and Characteristics of Leadership?
The direction in which the Indian banking is moving presently indicates that the prevailing competition will lead to consolidation and convergence. Small players will either have to forge a merger to become big players or else they will be either extinguished or swallowed by larger players in the years to come. The pressure will equally be more on the existing large players to retain their lead over others. This emerging scenario warrants an innovative approach by banks to keep themselves sailing in the sea of competition.
No wonder we find a very interesting trend in the recent past in Indian banking. The trend is the major shift from routine banking functions to a very aggressive financial marketing organization. We find most of the routines banking jobs are outsourced, thanks to automation made possible by technology. Direct selling agents are actively engaged by most of the foreign and new generation private sector banks for marketing all the banking products with specified targets.
Therefore, the real core people who will be retained by these banks in the long run under their direct pay roles will only be experts at senior levels in marketing, corporate and retail banking specialists along with risk management professionals who will be required in view of the impending implementation of the Basle-II norms which attaches significant to assessment and management of risk factors in banking activity.
One can visualize the following scenario in Indian banking in the next five to seven years. State bank of India and their associate banks aiming to come under one umbrella on one side followed by mergers and acquisitions taking place between few strong nationalized banks, foreign banks and new private banks on the other side. This will leave the small players and weak banks to become extinct unless they device quick strategies to become larger and stronger.
In this context, innovation plays a very key and crucial role in the survival of the small players and also for the large players to retain their leadership amidst cutthroat competition. Out of the box, thinking is required and such thinking needs to be nurtured by the top management. ATMs of the larger banks are either fully outsourced by the individual banks or handed over to an autonomous agency by most of the banks collectively.
Small players in ATMs are also trying to be a part of this shared network with regard to clearing operations, Reserve Bank of India has already initiated the required steps to gradually dispense with the physical presentation of cheques and replace the same with electronic clearing in major cities.
Similarly, the audit and inspection of the computerized branches are now being done in many cases by transfer of data files to the supervisory and inspecting authorities. Qualitative inspection and supervision of the banks by Reserve Bank of India is made possible by the technology, leaving the routine audit work to the concerned internal audit departments of the individual banks.
With the automation of the routine work process and rapid technological developments, a host of customer-friendly banking products with flexibility is now available to one and all. Few departments of the government (e.g. customs, income tax, central excise, commercial taxes, and sales tax) have already initiated the process of EDI (Electronic Data Interface) thereby reducing the manual tasks in the preparation of documentation and enhancing the levels of automation.
This also facilitates standardization in documentation with uniformity. This will also ensure submission of such standard data in electronic form and be scanning the physical documents where required. In the long run, this enables e-commerce to gain momentum. Therefore, banks can also equally look forward to the submission of commercial documents by the trade industry through EDI in the near future.
Once this is done, the need for the business segment to personally visit the bank branches to submit the documents will be eliminated. When ATMs on one side have reduced the depends on individuals customers on the bank branches to conduct their routine banking operations, the EDI when gains momentum will reduce the dependence of corporate customers on the bank branches in a similar fashion.
These developments taking place mainly on account of automation will reduce the differentiation in the service delivery systems, as they are mostly standardized. Therefore, banks have to be innovative to maintain their brand values. Few banks have already started marketing aggressively for retail business loans by tying up with a select-reputed builder and conducting road shows in India and abroad to lure the salaried people and professionals.
This role is intermediation of the banker between the builders and salaried people and professionals can be further extended to cover other areas as well. For example, banks can connect the manufacturers of goods and services with the ultimate buyers. The process is very simple. Banks are required to have a common agency with which the entire database of all the banks should be shared.
This data should be analyzed and classified into various segments say- according to activity, age, place, income, education, etc., of the organizations and people who constitute this data. When this process is done on all India basis, a wealth of information will be available, which can be used as a marketing tool. Few relaxations in the existing banking laws are required for this purpose.
Banks can also play an active intermediary role in connecting the organizations and people at various segments, thereby facilitating the process of movement of goods and services from the manufacturers/producers to the ultimate users (of course through other intermediaries where they are not dispensable). Banks can finance the manufacturers/producers or the ultimate users while tying up them with one another thereby increasing their lending portfolio and in the process ensuring the end use of funds.
Collection of data from rural places is one area where banks can boast of possessing rich information, especially the public sector banks that have almost more than one-third of the network of branches located in rural areas. Banks can play a dynamic role in the delivery and purchase of consumer durables to the rural sector by using their rural database.
Therefore, instead of acting as financing intermediaries to some of the parties in the total chain as at present, banks can bring all the parties in the chain under their ambit. Banks can thus transform themselves into aggressive marketing intermediaries from mere financial intermediaries. This innovative approach can also be used with regard to NPAs where the products manufactured by such sick or loss-making units are of good quality but the units have become sick due to financial indiscipline or mismanagement or lack of marketing skills.
Buyers for such products can be scouted by the banks by using the above-mentioned database and in deserving cases, buyers can be given bank finance or their own merits to buy the products of sick units. A portion of the funds thus given can be again routed back into the banks for their working capital requirements.
Similarly, banks can play an active marketing role in venture capital financing with the above modus operandi, thereby taking part in not only financing the venture capital but also in marketing functions. Microfinance is yet another area where banks can play an active role. The objective of microfinance is to deliver a wide range of financial services say, deposits, advances, insurance, and other related products to people engaged in agriculture, small enterprises and poor people in order to increase their standard of living.
Finance is extended to SHGs or NGOs, which is basically institutional/group finance instead of lending to individual beneficiaries unlike in the case of other priority sector/rural lending. Moreover, there is no subsidies or interest concession and the basic concept in microfinance is to give timely finance to the needy people. Therefore, transaction costs are cheaper and profitability is better under microfinance when compared to the conventional rural lending.
In view of these factors, in the long run, microfinance is likely to replace the conventional and concessional rural lending. Ample scope is available for private and foreign banks to venture into this activity due to the above-mentioned advantages. Similarly, banks in the rural sector should actively market products like Kisan Credit Cards, Forward, Futures, and Options markets of commodities.
While Kisan Credit Cards serve as an instrument of credit, Forward, Futures and Options markets ensure a fair price to the farmers eliminating uncertainty. However, this requires an effective network that is one regulated as well as a matured financial market in rural areas for the growth and development of these products. Rural India and its economy mainly depend upon Monsoons.
Famine and Floods both occur at the same time in the different parts of the country causing damage to the crops. Therefore, rural insurance has to be an effective tool for hedging these risk factors. The government, banks, and insurance have to together evolve more proactive and vibrant measures to deal with this issue, both at the macro and micro level.
There is a vast untapped potential in this area and a lot of scope for developing new and innovative insurance linked financial products. Explain Dimensions of Price Perception. The merger of developmental financial institutions like ICICI and IDBI with their commercial banking wings lays emphasis on universal banking offering a wide range of financial products under one umbrella.
Similarly, SIDBI and NABARD are having a strategic alliance with few commercial banks to expand the reach of their products and services. Banks have come to realize that it is the survival of the fittest in the competitive environment. Therefore, when necessity is the mother of invention, survival is the mother of innovation.
Do Survival is the Mother of Innovation? Explanation.
CRM (Customer Relationship Management) essay How to help in the Banking Sector? Competition and globalization of banking services are forcing banks to productive and profitable. To retain High Net Worth individuals, banks should focus strongly on relationship management with customers. Innovative Customer Relationship Management (CRM) strategies and cutting-edge software can help, to a great extent, in achieving the desired results. To provide customized services, banks are opening Personalized Boutiques that provide all the required financial needs of a customer. Role of Price Perception in Consumer Buying Process. So, what is the problem we going to discuss; Customer Relationship Management in the Banking Sector.
Customer Relationship Management in the Banking Sector, Understanding the Relationship!
The entire service industry is now metamorphosed to become customer-specific. In this context, the management of customer relationships in the financial services industry demands special focus. Gone are the days when customers at a bank did not mind the long serpentine queues and waited patiently for their turn with a token in their hand. In today’s Internet era, no one has the leisure to wait. In this context, online banking is assuming great significance. Today, banking is more customer-centric, unlike yesterday when it was transaction-centric. As well as, Banks are increasingly focusing on the premise that customers choose the service provider who differentiates through quick and efficient service.
However, there is more to Customer Relationship Management (CRM) than just managing customers and analyzing their behaviors. Banks are well aware that their success is predominantly dependent on the CRM strategies adopted by them. Service providers have recognized that good CRM bonds customers with the organization for a longer-term, resulting in increased revenues.
Things topic 01:
With customers’ expectations becoming even more competitive, banks are coming up with a wide array of novel products and services every day. Also, the challenge is for the banks to work towards ensuring that customers prefer their products and services over that of competing brands.
The key to developing and nurturing a close relationship with customers is by appreciating their needs and preferences and catering to their requirements. Leveraging on IT, to appropriately analyze and understand the needs of existing customers better, to ensure customer satisfaction, and exploring the possibility of cross-selling products to gain a competitive advantage are the other issues drawing attention and interest.
Things topic 02:
With the opening up of the economy, several private sector banks have joined the fray and are offering a plethora of products and services – rechristening themselves as ‘Financial Boutiques’. Knowledge dissemination has been propelled by electronic and mass media campaigns. Today’s knowledgeable consumer is challenging the Indian retail banking industry to redefine itself.
Thus in this current competitive scenario, for a bank to survive competition, succeed, and make a profit, there is hardly any option but to learn from and actively respond to consumers’ needs. As well as, Banks offering retail products need to reorient their strategy from a product-centric to a customer-centric approach to attract and retain High Net Worth Individuals (HNI) and profitable customers as well.
Things topic 03:
The battle of the banks, for gaining a greater slice of the market share, is taking on a new dimension. In the current falling interest rate scenario, banks are finding it increasingly difficult to meet the high growth expectations. To bolster their top lines, banks are in pursuit of newer ways and means of achieving organic growth through strategies that enable the acquisition of new customers and retaining the loyalty of the existing customers. Also, the success of a bank’s strategy towards customer acquisition will depend on its ability to develop customer insights and translate these into effective operating models.
Things topic 04:
Ensuring a good customer experience at every customer touchpoint is the cornerstone of a successful growth strategy. A good customer experience will drive customer acquisition and promote customer retention, which translates into increased profits. This, in other words, is the hallmark of a successful CRM strategy. Emphasis on CRM arises on account of the challenges confronting retail managers managing to sustain and achieve growth and profits.
Things topic 05:
Bankers are conscious of the relative costs of acquiring new customers. As top management emphasizes “delivering results”, most bankers resort to customer grabbing, rather than customer cultivation and creation, with the result that “customer churn” is the call of the day. Incidentally, bankers are fully aware that losing the existing customer and acquiring new customers is an expensive affair. Moreover, it acts as a drain on the existing resources of the bank. Which can be better employed for growth initiatives. Therefore, the challenge for the banks is to retain and deepen the profitability of the existing customer relationships. Which is borne out by Nat West’s success.
Things topic 06:
With the shift from a transaction-centric to a relationship-centric business approach, leveraging CRM has become a sine qua non. Also, Banks are adopting CRM to converge people, processes, and products more effectively to embark on true relationship banking – with the result of accelerating the business momentum. Towards this end, experts propose various ideas and approaches to understanding the fundamental marketing motivations driving Customer Relationship Management in the Banking Sector.
Things topic 07:
To meet the challenging preferences of the customers and to stay ahead of competitors. Bankers are bound to attract customers by providing a spectrum of services. Online banking, ATM banking, and telebanking are just a few of them. As well as, Banks can enhance customer service by leveraging on technology, maintenance of efficient service delivery standards, and business process re-engineering. On their part, employees need to demonstrate certain service traits such as putting on pleasing attire. At the end of the day, bankers should display a flair for cultivating a good relationship with customers through the mechanism of better customer service.
Things topic 08:
Having understood the significance, it is prudent to plan for CRM in retail banks. To a large extent, the success of a CRM plan is dependent on the choice of the software. Towards this end, bankers should identify domain enterprise, credibility in the market, cost implementation, and relationship with the vendor as factors on which vendor selection is based. Also, the domains of software systems, multiple product databases, and tracking require a specific CRM focus. Besides understanding the requirements for CRM implementations such as the setting up of a CRM cell and conducting surveys at periodic intervals to track their effectiveness, banks need to understand how CRM assists them n customer identification, acquisition, and retention.
Things topic 09:
As a part of the planning process, frontline executives in banks should thoroughly understand. Their organizational structure, infrastructure, as well as the production environment. In this context, the management initiatives for CRM assume importance. A top-down CRM focused approach that starts with the top management, percolating, and permeating to all levels of the CRM is a necessity in the present business scenario. Initiatives, such as, introducing CRM audit by independent teams to identify the existing lacunae, and plugging. Also, the loopholes in the CRM strategy as per the recommendations of the audit report are required to adopt by the banks for reaping benefits.
Things topic 10:
It is observed that banks lose their best clients to competitors due to a variety of reasons. The rationale behind losing their best clients to other service providers such as non-brokerage houses. And, mutual fund houses need to analyze by banks. Also, Experts opine that inefficient and improper service is one major reason. The remedies suggested by them are that banks should adopt customer relationship building approaches such as responding to complaints instantaneously. Analyzing the attrition of the clients in a particular product, and rating of services across the network of branches. The creation of a suggestion box to elicit the views and suggestions of their employees. Another dimension of the relationship-building exercise is to obtain electronic feedback from customers to understand. The level of acceptance of existing products, which will facilitate the development of better products.
Things topic 11:
Banks can gain a competitive advantage from CRM by becoming low-cost players in the market, achieving operational efficiency, and maintaining customer loyalty. Also, the ability to predict the products that customers are likely to purchase over a period of time increases. The productivity of managerial executives, sales, and customer service staff. Streamlining of business processes are some of the benefits. Retail banks obtain by taking to successful management of their customer relationships.
Implementing the right CRM tools can enhance customer satisfaction leading to business growth. Also, CRM enables organizations to motivate customers to initiate revenue-generating contacts. Several CRM issues such as its effectiveness, application, and challenges draw the attention of the banking industry. Having witnessed how several global banks have benefited through CRM. The Indian retail banks need to focus on and continuously invest in customer relationship activities, banking scenario. Which is still at an embryonic stage as far as the CRM domain is considered. Needs to strive towards CRM implementation to meet the emerging demands of “universal banking”.
Customer Relationship Management in the Banking Sector.
Understanding and Learn Innovation at Indian Banking Sector. Innovation derives organization to grow, prosper & transform in sync with the changes in the environment, both internal & external. Banking is no exception to this. In fact, this sector has witnessed the radical transformation of late, based on many innovations in products, processes, services, systems, business models, technology, governance & regulation. A liberalized & globalized financial infrastructure has provided had provided an additional impetus to this gigantic effort. So, what we going to discuss; Understanding and Learn Innovation in Indian Banking Sector! Also learn, What is an Entrepreneur?
Now, Understanding and Learn Innovation in Indian Banking Sector!
The pervasive influence of information technology has revolutionaries banking. Transaction costs have crumbled & handling of astronomical brick & mortar structure has been rapidly yielding ground to click & order electronic banking with a plethora of new products. Banking has become boundary-less & virtual with a 24*7 model. Banks who strongly rely on the merits of ‘relationship was banking’ as a time-tested way of targeting & servicing clients have readily embraced Customer Relationship Management (CRM), with the sharp focus on customer centricity, facilitated by the availability of superior technology. CRM has, therefore, has become a new mantra in service management, which in both relationships based & information intensive.
Thanks to the regulatory changes & financial innovation, large banks have now become complex organizations engaged in a wide range of activities in the US & some parts of Europe. Banking is now a one-stop provider with a high degree of competition & competence. Banking has become a part of financial services. Risk Management is no longer a mere regulatory issue. Basel-2 has accorded a primacy of place to this fascinating exercise by repositioning it as the core banking. We now see the evolution of many novel deferral products like credit risk management tool that enhances liquidity & market efficiency. Securitization is yet another example in this regard, whose strategic use has been rapidly rising globally, So is outsourcing.
The retail revolution with the accent on retail loans in the form of housing loans & Consumer loans literally dominating the banking globally is yet another example of product & service innovation. Various types of credit & debit cards & indeed e-cash itself, which has the potential to redefine the role of monetary authorities, are some more illustrious examples.
Need to Push Full Throttle Ahead:
Increasing knowledge among societies is forcing the banks to adopt international best practices to remain in business. Important dimensions of change are market, customers, competition, technology & society. Banks should focus beyond technologies and geographies to accelerate growth. Indian banking sector has adopted many dynamic innovations but still, some more are needed like risk management, e-commerce etc. The new game requires new strategies with an accent on innovational transformation.
Two roads diverged in a wood, and I
Took the one less traveled by,
And that has made all the difference.
– Robert Frost
It is Customary to describe the unfolding world as of unprecedented change, of a whirlwind of ideas, of the explosive growth of since-based technology. Prospects for continued escalation of change are awesome: the world’s knowledge-based now doubles every eight years, but by 2020, the doubling time is estimated to be slashed to 76 days. A strong momentum and apparent inevitability of globalization strongly suggest an accentuation of the pace of development. Such contextual changes records. An impetus through increasing integration of the productive process, rapid technological advances, splashing of legal & institutional barriers to global trade & a smoother flow of global capital.
Michale E Porter demonstrated that in an industry, the nature of the competition is embodied in the treatment of new extent, the threat of substitute product or services, the bargaining power of suppliers/ buyers and the rivalry among existing competitors. The significance of introducing a steady stream of innovative products for banks emanates from its potential to salubriously impact all these factors.
Management theories & practice are characterized by a bewildering diversity of opinions. But the view, that the challenge to innovate is urgent & continuous, enjoys a fair measure of consensus across the development spectrum. In the present world, where all elements are critically in ferment, launching of innovative products by strong business analytic tools, optimized processes & a modern centralized IT system is central to ensuring short-term survival, achieving long-term prosperity & eventually gaining competitive advantages.
An appropriate approach to the growth matrix in an era of change, where the convergence or real & virtual worlds has become a part of our daily lives, requires a clear understanding of microeconomic framework, education & training policies, trade & competition policy & socio-economic milieu. To what extent can difference in innovation explained the observed difference in growth, profitability & financial performance of industries & even firms within the same industry? How has innovation been instrumental in influencing the Indian experience of development of banks? What lesson can be gleaned from the recent Indian experience & that of other countries? What should be the roadmap for innovation? This article attempts a brief look at some such issues of growing concerns & provides insight into the impact of the driving forces and factors, behind innovation, on Indian with particular reference to banks.
Discontinuity: The New Disequilibria:
Everything in business is always in flux & flow. Engel’s stressed, “equilibrium is inseparable from motion & all equilibrium is relative & temporary”. The quickening of change (Table 1), however, caused discontinuity & ripples of concern on the boardrooms. But it is necessary to realize, as powerfully argued by Gary Hamel, “We stand on the threshold of a new age – the age of revolution. For the first time in history, we can work backward from our imagination rather than forward from our past”.
TABLE 1: DIMENSIONS OF CHANGES
Sectors
Change
Impact on Business
Markets
Local to Global
– Investments in Identifying
& Servicing New markets
Customers
Acceptance to delight
– Listening to Consumers.
– Knowing &Understanding
their needs.
– Fulfilling Customer’s
Requirements.
Competition
– Increased Competition
– Shortage to surplus Economy
– Squeeze in margins leading
to cost cuttings.
– Consolidating &
Convergence.
Technology
Gradual change to quantum Change
– Innovational Shareholders
Transparency.
Society
Demanding Rights
– Corporate Governance
– Concern for social
Obligations.
Historically, Changes in society have always been preceded by the flow of ideas, which provide the Cutting Edge of development. In contemplating the challenges, the approaches of those enterprises. Which successfully weathered the challenges of this volatile era. Shows that innovation is not only power but also the key to sustained economic success. While the debate over innovation in the world of business has raged for long. Innovation has now rapidly emerged as a critical lament of the growth strategy.
Despite the multi-layered, any multi-dimensional aspect of ubiquitous change, most an organization still disconcertingly confine themselves to incremental improvement & innovation without trying to alter the rules of the game, bring about breakthrough innovation. What is prognostically alarming is that most companies in the given industry or market tend to follow. The same unwritten rules for conducting business with limited deviations from de facto strategies. This is reflected by the fact that though agglomeration & the location of innovative activities are closely related, important sectoral clusters like textiles (Tirupur), diamond-cutting (Surat), hosiery (Ludhiana), call centers (Gurgaon), auto-companies & automobiles (Chennai), with the notable exception of Bangalore (IT) are largely confined to incremental innovations.
Apart from this, the speed of the mistake of change quickly needs to be done to make existing strategies obsolete and continuously improving. Therefore, an important policy assessment, therefore, the impetus in the banks by radical and unbalanced innovative measures for better performance in this turbulent era.
‘The Innovation Imperative: Accelerating Growth beyond Technologies and Geographies’
Traditionally, innovation has been defined with the focus on traditional concepts of industry research & development & the commercialization of new products and/or process technologies. But the definition of innovation as “acceptance of & readiness to change across the organization, dedication to continuous improvement processes, willingness to experiment and explore novel ways, building new relationship & alliance, establishing new approaches to markets, channels, customers, pricing strategies & new & varied approaches to organization, measurement and performance measurement” is generally a acceptable.
The history of the growth of financial development, as indeed of all other development, is intertwined with the growth of innovation. Compelling & incontrovertible cross-country evidence prove that successful innovation is crucial to the competitive edge of all businesses. But innovation is particularly important for banking & finance companies. Innovation, which transcends invention, represents the point of convergence of invention & insight. Organizational ethos needs to stress innovation as a key driver of growth that surprises & delights the customer with new, differentiated & relevant benefits, this is not a cliché but defining characteristics of the modern cooperate saga.
Understanding and Learn Innovation in Indian Banking Sector!
Understanding Innovations of Customer Services in Indian Banking Sector!
Learn, Innovations of Customer Services in Indian Banking Sector: Satisfied customers are the best guarantee for the stability and growth. Customers will satisfied only when the banks provide the customized and innovative products and services at responsible cost. This article focuses on the kind of services provided by developed countries and level of innovative services provided by Indian banks. Many innovative services are currently available from Indian banks like E-Banking, ATMs, Anywhere Banking etc., but there is a wast6 scope of improvement. Globalization, the buzzword, which engulfed all the nations of the world since the beginning of the last decade of the past millennium, did not leave the banking industry untouched. The opening of the world trade has brought out several changes in the global banking map.
The continuing evolution of the banking and financial market has created opportunities both for providers and for users of financial products and this evolution has proven beneficial to the economy. However, innovations in financial products also have given rise to some new challenges for market participants and their supervisors in the areas of corporate governance and compliance. The changes that are taken place in the last decade demonstrate again the technical weakness and weak corporate governance at a few firms can dramatically change the cost of capital and impose an additional regulatory burden on even well-managed organizations.
A conventional bank may treat its customer as coldly as they cash they deposits or borrow. Many banks have conveniently used control and security as reasons for their remarkable slow and impersonal services. In recent, other service industries, not able fast food an airline, has proven that customer service can a swift and enjoyable experience for both the clients and employees without sacrificing control, costs, and profits. Some banks have finally adopted these new services Paradigms, and are now branch marking with the nonbank institution to learn about their best practice.
The growing concern about the improvement in service quality can gauges by recent news in the business standard dated June 1, 2005, where it was given that “Banks are putting their best face forward for improving service quality. While some like the Oriental Bank of Commerce has prepared a detailed dress code for their employees, others have gone a step forward and are recruiting people from the airline and hospitality industries to improve the quality of front line sales staff.”
The major brakes in the internal controls of big corporations and institutions such as share market in the past few years. And the role of bankers has led bank regulators to change their view of bankers’ relationships with their corporate clients. Technological innovation has helped in overcoming any such problems. There was a time when we used to hear that duplicate share certificates were flooding the market and a large amount of money was being embezzled. Now with demat accounts, this risk is taken off.
Let’s see the currently booming plastic card market. In India, the growth is not that phenomenal but among the emerging economies, India is picking well.
Technology is rapidly transforming the banking industry- and expanding its ability to reach the unbanked. Employers in the developed countries are turning increasingly to electronic payroll cards as a cost-effective way to reduce the burden of writing and processing checks. Consumers are using their payroll cards and other versions of the prepaid debit card- also known as stored value cards- as a substitute for cash and checking accounts. Monitoring this trend, the American Bankers Association reported last December that in 2003, for the first time, electronic payments surpassed cash and cheques as consumers preferred payment method for in store purchases- an “evolution of payment behavior,” the ABA noted, “driven by the increasing popularity of debit cards.”
In a country like America, Debit cards accounted for nearly one-third (31%) of in-store purchases in 2003, up from 21% only four years ago. Reliance on credit cards held steady during that time, at about 21%. Cash and checks, which accounted for 57% of in-store purchases in 1999, dropped to about 47% last year. In India, if we see then, people still prefer to pay by cash. The reason behind this mindset is safety for money. Still, we are far behind in terms of Internet security and E-money security.
Coming across through the performance of Banking Institutions of the west and seeing their performance in the use of innovative methods to make themselves more customer-friendly we would have no doubts about their strong banking mail-order company L.L. Bean, know for its superb order-taking and service delivery systems, as its model for change. A major result of this functional benchmarking was the establishment of a 24-hour customer service center that can not only respond to queries and complaints but also promote and sell the bank’s products and services.
The center even allows customers to open a checking account anytime or negotiate an overdraft at 2 am. The ATM was also reconfigured from mere cash dispenser to a versatile and tireless account executive. The machine can even buy and sell mutual funds. Inspired by LL Bean, Banks published a 50-page catalog to help customers appreciate and select from its more than 160 financial services.
Seafirst Bank in Seattle redefined itself from a “retail bank” to a “retailer” and has benchmarked with retailers know for world-class customer service such as fast-food restaurant chains. Insider by these models, one other bank instituted a 5-minute guarantee that says, “wait any longer than 5 minutes in line and the bank guarantees $5 to your account.” Moreover, if the customer complains of any other inconvenience, he or she gets a $5 “I’m sorry coupon”. Its branch offices have official “greeters” to greet and guide customers to the right tellers or desks, much like the Guest Relation Officers (GRO) or receptionists of 5-star hotels.
The greeter mans a kiosk at the entrance of the bank. To reinforce this service philosophy, branch managers are rated not only on sales but on service goals. Achieving or even exceeding sales targets without achieving customer satisfaction goals will not qualify a branch manager to receive the bank’s prestigious “Gold Club” award. Executives from the CEO down are encouraged and expected to visit branches regularly to monitor service and get a first-hand feel of the action. When Seafirst decides to redesign and re-layout its offices to improve services, it acquired the services of an expert from the Godfather’s Pizza chain. One result making the teller counter waist-high. It is now more open and personal than the traditional counter that is intimidating and creates a barrier between the client and the teller.
Back offices of banks are known for the snail-paced bureaucracy that hampers front line operations and ultimate customer service. By applying the concept of “mass production”, streamlining, and standardization of tasks, Citicorp aims to remove this critical bottleneck. The bank also benchmarked with Chrysler in getting its functional departments work effectively as teams.
Other banks in the west have sledded their conversation “finance and control” images, have likewise adopted innovative service strategies and practices. Many Banks have established an information center or “encyclopedia” in the waiting lounge. Here customers can browse through various bits and pieces of important service information like the average time to finish a transaction and the company’s products and services. Information about the busiest day or days in the branch is displayed so that the customers who want to avoid these periods may do so. Phone lines dedicated to customer service have been installed. Many Indian banks have also adopted some of these systems. Any customer can pick up this phone and relay his or her complaints, questions, or difficulties.
The facility is designed to represent the company’s commitment to services and also serve as the customer’s last resort in case everything else fails. Similarly, modern day banks have established phone centers to accept, process, and resolve customer complaints. They also have a customer feedback program whereby whoever the customer complaints to, say a staff employee or manager, will be responsible for giving the client feedback on the status and progress of his or her complaint. The banks have customer service centers where they have created two customer flows or lines to deliver services more effectively. One was for loans and similar products that require customized and personalized services. The other was for the standard and repetitive services like deposits and withdrawals. By creating two service environments that cater to two different types of needs, service is enhanced and speeded up.
Modern day banks have extended the concept of “Mobile Banking.” Some banks in the European and American continents have launched floating branches on boats that provide full branch bank services, to the convenience and delight of customers living in longhouses along the river banks. To further enhance service, banks have also reconfigured their Automated Teller Machines to dispense not only cash but also commodity prices and information about its products and services. The Korean Technology Banking Corporation (KTB) is setting up a Technology Financing Information Center to serve the various needs of its clients.
Most of which are setting up joint-venture overseas. The centers will contain a huge database of information analyzed from various data from internal and external sources. By accessing this database, clients will get information about specific technologies, local information, and other data relevant to the ventures they are setting up. To facilitate processing, development financial institutions like the Industrial Development Bank of India requires borrowers to submit loan application forms in electronic floppy disks.
Some banks and financial institutions have done such a remarkable job in improving and reinventing customer service that they themselves have become the benchmarks of other companies outside the banking sector. For instance, American Express, the credit card company, is the recognized benchmark to emulate when it comes to improving a company’s billing process. Amex’s billing is reportedly the fastest and most accurate in the world in any industry. Xerox, the benchmark for many quality practices, used the Amex model in enhancing its billing system.
In China, the benchmark for customer service and customer courtesy is surprisingly a bank; The Industrial and Commercial Bank. Hundreds of retail shops and department stores, many of which are known for rude service, visit the bank’s branches to learn a few lessons on satisfying and delighting customers. Before sweeping changes were made, the Industrial and Commercial Bank was also known for bad service and discourteous front line employees who even swore at clients. One radical and highly effective policy it instituted was coming about with a list of words and phrases their employees were forbidden to use when dealing with customers. For instance, the popular expression, “when will you sleep complaining?” was included on the banned list. While other banks may refuse to change or accept soiled or old currency notes, the bank will replace these without question.
Even clearinghouses have adopted the new service paradigms to support the banks’ initiatives. For instance, the Singapore clearing House Association has cut the clearing of US $ checks deposited in Singapore from two weeks to 3 days. The new system requires participating banks to open US dollar accounts with Citibank to service their respective clients.
Innovation banking in customer service is indeed a welcome and long-awaited development. Our Article focused on the kind of services provided by the banks in the developed countries but this is not to deny the fact that the banking sector in India and other developing countries has also started doing up well in terms of providing innovative and modern day banking facilities along with good customer service. We hope that other left out banks and financial institutions will follow suit soon. Satisfied customers are the best guarantee of stability and growth. As in other service sectors, bank customers deserve the very best. In the past, banks have rarely treated customers as people, preferring to treat them as account numbers, passbooks, and loan applications. Customer service, in contrast to customer processing, is a concept whose time has come for the banking industry worldwide.
How to Develop Positive Relationships with Individuals and Organizations Outside of Your Business?
It’s vital for a business to develop as many external contacts as possible. This simple approach can lead to valuable relationships and opportunities that would not otherwise have occurred. Below are some of the best ways you can develop relationships with individuals and organizations outside of your business.
Develop Your Communication Skills and Communication Channels
Before you reach out to certain individuals and organizations, it’s important to prepare properly and have the skills and knowledge required for communicating in an effective way. For instance, if you want to interact with local government representatives and agencies in a more productive way, you may need to hire a consultant or someone who has completed an online master in public administration and who has a great working relationship with the public sector.
In other situations, it may be a good idea for you or someone in your organization to enroll in an online master in public administration degree course or similar program provided by universities like Norwich University, so that you have a permanent person in your company who can deal with government entities that can help your business.
Attend Networking Events
Most people prefer to deal with other individuals and businesses they are familiar with. This means you and your business need to get public exposure. Attending networking events like Chamber of Commerce meetings, conferences, and industry seminars is an effective way to do this. The more times you are seen at these events, the more people will become familiar with you and start to trust you.
Give Your Own Presentations
Initially, when you attend networking events you may be there to listen to other people. However, eventually, you could participate more in these events by giving your own presentations in the area you have expertise in. This once again could lead to a lot of new opportunities, including business offers and referrals from those who listen to your presentations.
Join Online Communities
Today’s business owners live busy lives and it’s not always possible to attend networking events. In other cases, the people you want to interact with may not attend these types of events or they live a long distance away. This is where the internet can come to the rescue because a wide range of online business communities exists.
These communities are usually open to novice business owners, established business owners and people who have a keen interest in the same industry or niche. Interacting with other community members is extremely easy and most members of these websites are more approachable online.
Build Your Own Online Social Profile
It’s important to maintain professional online social media profiles. A huge number of people prefer to use the internet to find out about a business or the people in a business. The more informative your social media profiles are, the more impressed others will be and the more likely it is that they will want to find out more about you and your business.
Networking and building positive relationships with individuals and businesses outside your own organization is an important step if you want your business to succeed and grow. This is not as difficult as it may sound, especially if you follow the steps above.
International Advertising, generally speaking, is the promotion of goods, services, companies, and ideas, usually in more than one country performed by an identified sponsor. This article explains about Concept of International Advertising deeply discussion. Marketers see advertising as part of an overall promotional strategy. Other components of the promotional mix include publicity, public relations, personal selling, and sales promotion.
Study and Learn, the Concept of International Advertising.
Advertising is a cogent communication attempt to change or reinforce ones’ prior attitude that is predictive of future behavior. Also Learn, What is International Advertising? Meaning and Definition, the Concept of International Advertising!
It can view as a communication process that takes place in multiple cultures that differ in terms of values, communication styles, and consumption patterns. It is also a business activity involving advertisers and advertising agencies that create ads and buy media in different countries. The total of these activities constitutes a worldwide industry that is growing in importance. International advertising is also a major force that both reflects social values and propagates certain values worldwide.
Deeply Explain:
International advertising is becoming increasingly complex; more and more local and international companies are competing for consumers who are increasingly sophisticated and demanding. International advertising defines as the non-personal communication by an identified sponsor across international borders, using broadcast, print, and or interactive media.
It requires dissemination of a commercial message to target audiences in more than one country. Target audiences vary from country to country in terms of how they perceive or interpret symbols or stimuli; respond to humor or emotional appeals, as well as in levels of literacy and languages are spoken. How the advertising function is organized also varies.
International advertising can explain as the communication process that takes place in different cultures that varies in terms of values, communication styles, and consumption patterns. International advertising is also a business activity involving advertisers and advertising agencies that create ads and buy media in different countries. It is also a major force that both reflects social values and propagates certain values all over the world.
The International Communication Process:
The international communication process involves using the entire promotional mix to communicate with the final consumer. First, the appropriate message is determining the target audience by the advertiser. Next, the international sponsor (sender), usually representing by an advertising agency, encodes a message into words and images.
The message is then translating into the language of the target market and transmitting through a channel of media channels to the audience who then decodes and reacts to the message. Cultural barriers may hamper the effective transmission of the message at each stage in the process and result in miscommunication.
Art Direction:
Art direction is involving with the visual presentation- the body language of print and broadcast advertising. Some types of visual presentation are universally understood. Revlon, for example, has used a French producer to develop television commercials, English and Spanish for use in the international markets. These commercials, which are the film in Parisian settings, communicate the universal appeals and specific advantages of Revlon products.
By producing its ads In France, Revlon obtains effective television commercials at a much lower price than it would have to pay for similar –length commercials produce in the US. Pepsi Co has use four basic commercials to communicate its advertising themes. The basic setting of young people having fun at a party or on a beach has adapted to reflect the general physical environment and racial characteristics of North America, South America, Europe, Africa, and Asia. The music in these commercials has also adapted to suit regional tastes.
The international advertiser must make sure that visual executions are not inappropriately extending into markets. Benetton recently encounters a problem with its “United Colors of Benetton” campaign. The campaign appeared in 77 countries, primarily in print and on billboards. The art direction focused on striking, provocative interracial juxtapositions- a white hand a black hand handcuffed together, for example, another version of the campaign, depicting a black woman nursing a white baby, won adverting awards in France and Italy. However, because the image evoked the history of slavery in America, that particular creative execution was not in the U.S market.
Cultural Considerations:
Knowledge of cultural diversity, especially the symbolism associated with cultural traits, is essential when creating advertising. Local country managers will be able to share important information, such as when to use cautions in advertising creativity. Use of colors and man-women relationships can often be stumbling blocks. For example, white in Asia is associated with death. In Japan, intimate scenes between men and women are considered to be in bad taste; they are an outlaw in Saudi Arabia.
Advertising Communication System:
Advertising communication always involves a perception process and four of the elements shown in the model: the source, a message, a communication channel, and a receiver. Also, the receiver will sometimes become a source of information by talking to friends or associates. This type of communication is termed word-of-mouth communication, and it involves social interactions between two or more people and the important ideas of group influence and the diffusion of information.
An advertising message can have a variety of effects upon the receiver. It can
Create awareness,
Communicate information about attributes and benefits,
Develop or change an image or personality,
Associate a brand with feelings and emotions,
Forms group norms, and
Precipitate behavior.
Thus we see advertising has multiple layers to it. A lot more than what meets the consumer’s eye goes into creating a successful advertisement or an advertisement campaign. In today’s era of consumerism, the need for advertisements to break the clutter and stand out becomes imperative. Advertising has multiple media at its disposal with each having its respective strengths and limitations.
For instance, the radio still, has a reach to rural India like no other medium can. Also, it overcomes the barrier of illiteracy in a developing country like India. On the other hand mailers, pop-ups are an excellent way to remain visible to the urban techno-savvy Internet using consumers. Depending on the target audience the medium best suited should exploit to the hilt.
How to Explain the concept of International Advertising? #Pixabay
International Advertising Essay; generally speaking, is the promotion of goods, services, companies, and ideas, usually in more than one country performed by an identified sponsor. Marketers see advertising as part of an overall promotional strategy. Other components of the promotional mix include publicity, public relations, personal selling, and sales promotion.
Explaining, Essay, What is International Advertising?
Advertising is a cogent communication attempt to change or reinforce ones’ prior attitude that is predictive of future behavior. Also, learn, What do you understand about International Advertising? Meaning, Definition, and Start-UP.
It can view as a communication process that takes place in multiple cultures that differ in terms of values, communication styles, and consumption patterns. It is also a business activity involving advertisers and advertising agencies that create ads and buy media in different countries. The total of these activities constitutes a worldwide industry that is growing in importance. Globally advertising is also a major force that both reflects social values and propagates certain values worldwide.
There are two main purposes of international advertising research:
To assist business executives to make profitable foreign advertising decisions for their specific products and services, and.
To contribute to a general knowledge of foreign advertising. That is potentially useful to a variety of business executives, educators, government policymakers.
Advertising self-regulatory organizations and others were interesting in understanding the process and effects of global advertising.
Export agencies and their foreign affiliates serving international industrial (now called business-to-business) advertisers tended to translate and adapt domestic advertising materials for use abroad. Agencies serving international advertisers of consumer products tended to depend somewhat more on foreign correspondent agencies to develop localized advertising campaigns appropriate for their particular markets.
When was started International Advertising?
In the first 30 years of the 1900s, especially in the prosperous 1920s. Increasing numbers of European and US manufacturers sold branded consumers or industrial products outside their home countries. Some of them utilized ”export advertising agencies“. Most such agencies depended primarily on foreign agencies (called affiliate, associate, or correspondent agencies) either to modify domestic campaigns or to initiate entirely new campaigns, whichever was appropriate from their clients’ point of view.
Between 1930 and the mid-1950s the number of the export or globally advertising agencies declined. In 1958 in the USA six full-service advertising agencies and a handful of export/foreign advertising agencies were capable of providing international services for their US clients. These six accounted for more than 90% of all international billings of US agencies. Into the 1960s most exporters and manufacturers with foreign subsidiaries necessarily continued to utilize.
Local foreign advertising agency services available in the countries in which they did business. In the 1970s and 1980s, many consolidations and mergers led to the emergence of large foreign media buying organizations and large holding companies consisting of groups of globally advertising agencies. From the 1980s onward, advertising practices within domestic advertising agencies in Europe and the USA continued to improve.
What is International Advertising? Introduction and Meaning
What are some Challenges Faced by Global Advertising?International Marketing Essay can be a tricky business. With the increase in global trade, international companies cannot afford to make costly advertising mistakes if they want to be competitive and profitable. Understanding the language and culture of target markets in foreign countries is one of the keys to successful international or global advertising.
Here are Explaining the Types of Faced Challenges in Global Advertising Essay.
Too many companies, however, have jumped into foreign markets with embarrassing results. Out of their blunders, a whole new industry of translation services has emerged. Also Learn, What do you understand about International Advertising?the Types of Faced Challenges in Global Advertising. American companies have identified huge markets internationally for their products and services. The markets are huge in terms of population, in countries such as China and India.
The purchasing power of consumers and businesses in many countries is also significant enough for American firms to want to compete in these markets. However, international marketing is not without pitfalls, and U.S. companies have made costly mistakes by not adequately researching international markets before they commit resources there. How to Explain The Concept of International Advertising?
Global Advertising deeply discusses their types of Challenges:
The following Challenges below are;
Identifying a True Market Need.
A key to success in business is offering products and services for which customers have a compelling need. The customer has a problem that needs to solve, and the product or service provides the solution in such an effective way that its benefits are not difficult to communicate. Identifying the true needs of large numbers of people in a foreign country is not easy. Not having lived in their culture experiencing their day-to-day lives, American marketing executives can err by assuming that what people in other countries want or need exactly matches the wants and needs of American consumers.
Dilution of Brand-Name Power.
Due to the Internet, movies, and other forms of entertainment, American culture and the corporate symbols of that culture–brand names–are well known across the globe. This does not mean the American companies & rs quo; products will be popular when introduced in other countries. Being aware of a brand name isn’t the same as preferring it. It can be a long and expensive process to gain the trust of consumers who have used their own local companies’ products for years or even generations. The American companies can perceive as attempting to take over the position long held by local companies, causing resentment.
Cultural Nuance.
Consumers are influencing to purchase products by marketing messages delivered through the media, including print media such as magazines. Humor often use in commercial messages to get the consumer to pay attention. But what considers extremely funny in one culture can perceive as confusing or insulting in another. To produce effective advertising requires more than an accurate translation of the message from one language to another. It requires a deep understanding of the culture, customs, morals, and even religious views that predominate in that country. What motivates consumers to buy products varies from country to country.
Communication Style.
Business executives from different countries can encounter several barriers to effective communication besides obvious language differences. The traditional pace of business negotiations can be different. Americans sometimes want to hurry negotiations along, whereas in some other countries emphasis places on building relationships before a business deal seriously considers. Executives from other countries may place a higher value on things such as facial expression instead of just the words that are saying.
Distance and Time.
Even with technologies such as video conferencing, executives in other countries may prefer to establish relationships on a personal level. For a smaller American company, this can mean a significant investment in travel costs and having key executives out of the office for extended periods. Time zone differences can make it difficult to coordinate projects where collaboration requires. Executives on the West Coast of the U.S. are just getting to work in the morning when their European counterparts are winding down for the day.
Finding Reliable Partners.
American firms often establish relationships with distributors located in the countries whose markets they are seeking to enter. They hire sales reps based in those countries. They may engage in local marketing and public relations firms to assist them. Because the American firm might have no prior experience in that country, finding people who are trustworthy and competent can be a challenge.
The faulty Translations.
The value of understanding the language of a country cannot overestimate. Translation mistakes are at the heart of many blunders in Global advertising. Since a language is more than the sum of its words, a literal, word-by-word dictionary translation seldom works.
The following examples prove this point. Otis Engineering Company once displayed a poster at a trade show in Moscow that turned heads. Due to a poor translation of its message, the sign boasted that the firm’s equipment was great for improving a person’s sex life.
The Parker Pen Company suffered an embarrassing moment when it realized that a faulty translation of one of its ads into Spanish resulted in a promise to “help prevent unwanted pregnancies”.
Automobile:
Automobile manufacturers in the United States have made several notorious advertising mistakes that have been well-publicizing. General Motors learned a costly lesson when it introduced its Chevrolet Nova to the Puerto Rican market.
Although “nova” means “star” in Spanish, when it spokes, it sounds like “NOVA” which means it doesn’t go. Few people wanted to buy a car with that meaning. When GM changed the name to Carrie, sales picked up dramatically.
Ford:
Ford also ran into trouble with the name of one of its products. When introducing a low-cost truck called the “Fiera” into Spanish-speaking countries, Ford didn’t realize until too late that the name meant “ugly old woman” in Spanish.
Another American auto manufacturer made a mistake when it translated its Venezuelan ad for a car battery. It was no surprise when Venezuelan customers didn’t want to buy a battery that was advertising as being “highly overrated.”
Airline:
Airline companies have also experienced problems with poor translation. A word-by-word translation ruined a whole advertising campaign for Braniff Airlines. Hoping to promote its plush leather seats, Braniff ad urged passengers to “fly on leather.” However, when the slogan was translated into Spanish, it told customers to “fly naked.”
Another airline company, Eastern Airlines, made a similar mistake when it translated its motto, “We earn our wings daily” into Spanish. The poor translation suggested that its passengers often ended up dead.
Pepsi’s:
Marketing blunders have also been made by food and beverage companies. When translated into German, Pepsi’s popular slogan, “Come Alive with Pepsi” came out implying “Come Alive from the Grave.” No wonder customers in Germany didn’t rush out to buy Pepsi. Even a company with an excellent international track record like Kentucky Fried Chicken also suffered from faulty translation. A lot of sales were lost when the catchphrase “Finger Lickip good” became “eat your fingers off” in the Chinese translation.
A manufacturer of one laundry detergent made an expensive mistake in a promotional campaign in the Middle East. The advertisements showed a picture of a pile of dirty clothes on the left, a box of the company’s detergent in the middle, and clean clothes on the right. Unfortunately, the message was incorrectly interpreted because most people in the Middle East read from right to left. It seemed to them that the detergent turned clean clothes into dirty ones.
Cultural oversights can be Disastrous.
Successful international marketing doesn’t stop with good translations—other aspects of culture must research and understand if marketers are to avoid blunders. When marketers do not understand and appreciate the values, tastes, geography, climate, superstitions, the level of literacy, religion, or economic development of a culture, they fail to capture their target market.
For example, when a popular American designer tried to introduce a new perfume in the Latin American market, the product aroused little interest and the company lost a lot of money. Ads for the new fragrance highlighted its fresh camellia scent. What marketers had failed to realize was that camellias are traditionally using for funerals in many South American countries.
Deeply Discussion:
Procter and Gamble have been successful in marketing their products internationally for many years. Today, overseas markets account for over one-third of its sales. However, the company’s success in this area didn’t happen overnight. Procter and Gamble initially experienced huge losses because marketing managers did not recognize important cultural differences. For instance, when P&G first entered the Japanese market with its popular Cheer laundry detergent, most Japanese housewives weren’t interested.
The promotional campaign that emphasized Cheer as an effective “all temperature” detergent was lost on the Japanese who usually wash clothes in cold water. Although the ad had been quite successful in the United States where clothes are washing in all temperatures. It fell flat in Japan. All of this could have been avoiding if P&G marketers had done more preliminary research before launching the campaign. Once P&G changed its strategy and promised superior cleaning in cold water, sales of Cheer picked up dramatically.
Extra information:
The use of numbers can also be a source of problems for Global Marketers. Since every culture has its own set of lucky and unlucky numbers, companies need to do their homework if they want to avoid marketing blunders. A US manufacturer of golf balls learned this lesson the hard way when it packaged its product in groups of four for export to Japan. The company couldn’t figure out why the golf balls weren’t selling well until it realizes that in Japanese the word for the number four also means death. In Japan four and nine are very unlucky numbers which should avoid by marketers.
Even illustrations need to carefully examine. A culturally offensive picture can ruin an advertisement even if the written message properly translates. McDonnell Douglas Corporation made an unfortunate error in an aircraft brochure for potential customers in India. It included a picture of men wearing turbans, which was not appreciated by the Indians. A company spokesman reported, “It was politely pointed out to us that turbans were distinctly Pakistani Moslem”. The artist for the ad had used an old National Geographic magazine to copy the picture.
Preventing Blunders.
Having awakened to the special nature of international or global advertising. Companies are becoming much more conscientious in securing accurate translations. They are also becoming much more sensitive to the cultural distinctions and variables. That play such an important role in any international business venture.
Above all, the best way to guard against errors is to hire trained professional translators. Who thoroughly understand the target language and its idiomatic usage. These translators should be very familiar with the culture and people of the country and have a grasp of the technical aspects of the industry.
Extra Things:
Many Global companies are using a technique calls “back translation,” which greatly reduces the possibility of advertising blunders. The process of “back translation” requires one person to translate the message into the target language and another person to translate the new version back into the original language. The purpose is to determine whether the original material and the re-translated material are the same. In this way, companies can ensure that their intended message is conveying.
Effective translators aim to capture the overall message of an advertisement. Because a word-for-word duplication of the original rarely conveys the intended meaning and often causes misunderstandings. In designing advertisements to use in other countries. Marketers are recognizing the need to keep messages as short arid simple as possible and to avoid idioms, jargon, and slang that are difficult to translate.
Similarly, they avoid jokes, since humor does not translate well from one culture to another. What considers funny in one part of the world may not be so humorous in another? The bottom line is that consumers interpret advertising in terms of their own cultures. As the global marketplace opens up, there is no room for linguistic or cultural blunders.
Explain the Types of Faced Challenges in Global Advertising.
What is International Advertising? This article about an aspect of International Advertising in Social Life, deeply explains. Why global market need International Advertising? Global advertising or international advertising consists of collecting, processing, analyzing, and interpreting information.
The aspect of the International Advertising Essay in Social Life.
There are two main purposes of international advertising research: (1) to assist business executives to make profitable international advertising decisions for their specific products and services and (2) to contribute to the general knowledge of international advertising that is potentially useful to a variety of business executives, educators, government policymakers, advertising self-regulatory organizations and others interested in understanding the process and effects of international advertising.
Aspects of Advertising on Social Life:
When we consider International Advertising from the advertiser’s point of view, according to them the primary objective of an advertisement is that the product or services which they are offering should sell in the market. And in achieving the main objective of selling the product or services there are other profound consequences.
Advertising puts an influence that is both persuasive and pervasive. Through the selective reinforcement of certain language and values and social goals, it acts as important force attitudes that underlie behavior not only in the marketplace but also in all aspects of life.
Global Advertising:
In an international marketing concern, advertising has an important social influence in several ways: many of the international advertising is designed to promote and introduce new products from one market to another.
Often this results in the sudden change in lifestyles, behavior patterns of a society, stimulating, for example, the adoption of fast food, casual attire or hygiene, and beauty products.
International advertising encourages a desire for products from other countries; it creates expectations about “the good life”, and establishes new areas of consumption. Advertising is thus a potent force for change, while selectively reinforcing lifestyles, certain values, and role models.
Global Market:
We can see examples of brands like Levi’s, Adidas, Reebok, Nike, Marlboro, and McDonald’s. Which are familiar in almost every corner of the world. These brands have become an object of desire by the teen and young adults throughout the world. Even the scenes and images which have been shown in international advertising are either in western in origin or reflect western consumption behavior and values.
Even where it had been adapting to local scenarios and role models these shown often come from sectors of society. Such as the upwardly mobile urban middle class. Which embrace or are receptive to Western values and mores. As a consequence, a criticism frequently leveled at international advertising is that it promulgates Western values and morals; especially from the US.
Global Localization:
This is generally regarded as negative in societies with strong religious and moral values. Which is run as a counter to those of the west? For example the Islamic societies in the Middle East. When Western advertising shows sexually explicit situations or shows women in situations. Which is considering as inappropriate or immoral? It is likely to consider a subversive force undermining established cultural mores and values.
Similarly, in some countries such as France, there is strong opposition to the imposition of US culture, values, and use of English in advertising. Promotion of tobacco products by US and UK companies in countries. Where there is no legislation regulating or banning cigarette advertising has also been criticizing.
Global Communication:
At the same time, international advertising also acts as an integrating force across national boundaries. It makes the message known using universal symbols and slogans and establishes. A common mode of communication among target audiences in different parts of the world. At the same time, multicultural values are reinforcing by advertisers. Who adopt images incorporating peoples of different nations and diverse cultural backgrounds. For example, the Colors of Benetton campaign or the British Airways “Peoples of the World” campaign.
Consequently, while, on the one hand, international advertising can view as a colonizing force propagating Western values and morale throughout the world. It is also an important force that integrates societies and establishes common bonds, universal symbols, and models of communication among peoples in different parts of the world.
The aspect of International Advertising in Social Life.
