Tag: Market

What is the Difference Between Money and Capital Market?

Money and Capital Market Difference; What the differences between things are you first need to understand what each of the items is. In this case, before you can understand the difference between the money market and the capital market, you are going to need to understand. What money market is and what capital markets are. Once you understand the two items are it will be easier to see what the difference or differences are between the two markets. Also learn, What is the Difference Between an Intrapreneur and Entrepreneur? the Difference Between Money and Capital Market!

Learn and Understand, the Difference Between Money and Capital Market!

The following Difference below is:

What is the Money Market?

The money market is the global financial market for short-term borrowing and lending and provides short-term liquid funding for the global financial system. The average amount of time that companies borrow money in a money market is about thirteen months or lower. Some of the more common types of things used in the money market are certificates of deposits, bankers’ acceptances, repurchase agreements, and commercial paper to name a few.

What the money market consists of are banks. That borrow and lend to each other, but other types of finance companies are involving in the money market. What usually happens is the finance companies fund themselves by issuing large amounts of asset-backed commercial paper. That is securing by the promise of eligible assets into an asset-backed commercial paper conduit. Your most common examples of these are auto loans, mortgage loans, and credit card receivables.

What is Capital Market?

The capital market is a type of financial market. It includes the stocks and bonds market as well. But in general, the capital market is the market for securities. Where either companies or the government can raise long-term funds. One way that the companies or the government raise these long-term funds is through issuing bonds.

Which is where a person buys the bond for a set price and allows the government or company to borrow. Their money for a certain time but they are promising a higher return for allowing them to borrow the money. The higher return is paying through the interest that accrues on the money that the government or company borrows. The Difference between Revaluation and Realization Account!

Another way that the companies or government can raise money in the capital market is through the stock market. Most of the time you don’t see the government as a part of the stock market. But it can happen so we need to include them. But how the stock market works is that the companies decide to sell shares of their stock. Which is ownership in the company, to ordinary people and other companies, as a way to raise money. The people who buy the stock are usually given dividends each year if the company agrees to pay out dividends. So, that is another possible return on their investment.

The capital market consists of two markets. The first market is the primary market and it is where new issues are distributing to investors and the secondary market where existing securities are trading. Both of these markets are regulating so that fraud does not occur and in India, the Securities and Exchange Board of India (SEBI) is in charge of regulating the capital market.

The Difference Between Money and Capital Market!

The difference between the money market and capital market is that money markets are more of a short-term borrowing or lending market. Where banks borrow and lend between each other. As well as, finance companies and everything that is borrowing, is usually paying back within thirteen months. Whereas capital markets are for long-term investments, companies are selling stocks and bonds to borrow money from.

Their investors to improve their company or to purchase assets. Another difference between the two markets is what is being used to do the borrowing or lending. In the money markets, the most common things used are commercial paper and certificates of deposits. Whereas with the capital markets the most common thing used is stocks and bonds.

The money market is distinguishing from the capital market based on the maturity period, credit instruments, and the institutions, the Difference Between Money and Capital Market:

Basic Role:

The basic role of the money market is that of liquidity adjustment. The basic role of the capital market is that of putting capital to work, preferably to long-term, secure, and productive employment. Learn about the Difference Between Management and Leadership!

Maturity Period:

The money market deals with the lending and borrowing of short-term finance. While the capital market deals in the lending and borrowing of long-term finance.

Credit Instruments:

The main credit instruments of the money market are called money, collateral loans, acceptances, bills of exchange. On the other hand, the main instruments used in the capital market are stocks, shares, debentures, bonds, securities of the government.

Nature of Credit Instruments:

The credit instruments dealt with in the capital market are more heterogeneous than those in the money market. Some homogeneity of credit instruments is needed for the operation of financial markets. Too much diversity creates problems for investors.

Institutions:

Important institutions operating in the money market are central banks, commercial banks, acceptance houses, non-bank financial institutions, bill brokers, etc. Important institutions of the capital market are stock exchanges, commercial banks, and non-bank institutions. Such as insurance companies, mortgage banks, building societies, etc.

Purpose of Loan:

The money market meets the short-term credit needs of the business; it provides working capital to the industrialists. The capital market, on the other hand, caters to the long-term credit needs of the industrialists and provides fixed capital to buy land, machinery, etc.

Risk:

The degree of risk is small in the money market. The risk is much greater in the capital market. The maturity of one year or less gives little time for a default to occur, so the risk is minimizing. Risk varies both in degree and nature throughout the capital market.

Relation with Central Bank:

The money market is closely and directly linked with the central bank of the country. The capital market feels the central bank’s influence, but mainly indirectly and through the money market.

Market Regulation:

In the money market, commercial banks are closely regulating. In the capital market, the institutions are not much regulated.

What is the Difference Between Money and Capital Market?

April 10, 2018
Dimensions of Market-Based Management

Five Dimensions of Market-Based Management

A business’s culture is the basis of victory, and a strong, flourishing workplace is a requirement to being able to explain problems using the five dimensions of Market-Based Management. By screening businesses throughout five special dimensions, problems are more simply detected and solved. They are: Vision – determining how and where the business can produce the most long-term worth. The development of a successful vision needs recognizing how a business can make better value for client and most fully benefit by it. The procedure begins with a practical evaluation of the business’s core potential (new, improved or existing) and a preliminary determination of the chances for which these competences can create the most worth. This preliminary determination must be established through the improvement of a point of view concerning what is going to occur in the industries where the business consider these chances exist. Why You Should Be Balancing Your Books on Every Single Month?

To be a truly successful business, one that stands and excels the test of time, virtue as well as talent must be highlighted. Virtue and talents help to ensure that individuals are with the correct skills, values, and capabilities are employed, retained, and developed. Businesses applying market-based management reward workers according to their virtue and their inputs. Businesses struggle to find the individuals who can produce the most value through a variety of experience, perspectives, knowledge and abilities. Diversity within a business is also significant to assist to improve understanding and relating to its clients and communities in this diverse world. The skill to create genuine value depends on an ethical, entrepreneurial culture in which the workers are passionate about finding. Although workers are chosen and kept on the basis of their beliefs and values, they must also have the required talent to produce outcomes. Virtue without the needed talent does not generate worth. But talent not including virtue is dangerous and can put the business and other workers at risk. Workers with inadequate virtue have done far more harm to businesses than those with inadequate talent.

Market economies are flourishing, in large part, because they are better at creating helpful knowledge. Knowledge processes are market economies that make it mainly because they are well-equipped to produce useful knowledge. Acquiring, creating, sharing, and applying appropriate knowledge, and tracking and measuring profitability. The main methods of this knowledge creation are market signs from trade to prices, loss and profit to and free speech. Businesses are most wealthy when knowledge is abundant, available, important, cheap and growing. Such situations are most fully brought about by trade. Knowledge increases success by indicating and guiding resources to most valued uses. Besides allowing producers to build goods that create better value for customers, new knowledge also assist producers do so with smaller amount resources. The detection and application of knowledge directs to the enhanced use, consumption and of resources. Within a business, knowledge is necessary for creating better value for its clients and the business. A knowledge procedure is the way by which businesses develop, replace, apply and share knowledge to create value. To be successful in an uncertain future, a business must draw on the dispersed knowledge among its workers. It must also give them confidence to find out new means to create value. Workers must innovate, not just in technology, but in all features and at all levels of the company.

Decision rights are ensuring the correct individuals are in the right roles with the exact power to make decisions and holding them responsible. Decision rights should reproduce a worker’s established relative advantages. A worker has a relative advantage among a group of workers when he/she can carry out an activity more efficiently at a lesser opportunity cost than others. Decision rights constitute a worker’s liberty to act separately in carrying out the tasks of a given role. They normally take the form of limits for diverse types of capital expenditures, operating expenses and contractual commitments. The right to make some decisions, but not others, is supported on the degree to which a worker has established the skill to achieve outcomes in diverse areas. Decisions should be taken by workers with the best knowledge, taking comparative advantage into consideration.

Finally, incentives: gratifying people according to the value they generate for the business. These dimensions each offer a lens through which to be aware of and solve multifaceted obstacles that businesses face. For example, Koch industry used incentives to try to align the interests of every worker with the interests of the business. This means striving to pay workers a part of the value created. Profit is a influential incentive that motivates entrepreneurs to be aware and take risks to foresee and satisfy client demands. Finding less costly ways to make existing goods and developing new and improved ones is not only gainful for the discovering entrepreneur, it is advantageous for business.

However, there is sixth dimension which is brute physical force. The brute physical force dimension follows this basic pattern, first at the individual level; it is helpful to pump iron daily. At the organizational level, it is beneficial to strive to have employees whose standard shirt-collar size is in the low 20s, at least; and finally, at the societal level, wealth is usually increased.

In order to completely capture the influence of market-based management, a business must not only keep away from fruitless tendencies, but frequently strive to develop its capability to internalize and apply appropriate mental models. This needs the most complex and painful of all changes. Achieving such a change entails a prolonged and focused effort to build up new habits of idea based on these mental models. Achievement in relating new mental models comes only after frequent practice.

I had an MBM mentor that I would bring questions and issues to about once a month. EVERY time, he would analyze the problem and give advice in the same format. He’d write down “V, VT, KP, DR, I” on a piece of paper, and proceed to ask dimension-related questions about the problem at hand.

Another mentor would call this “using the five flashlights of MBM” to shine light on murky situations.

It was always surprising to see how quickly this simple practice brought issues into focus, or highlighted holes in my thinking. Of course, it was then up to his experienced advice and my flawed decisions to figure out what to do next, but this was often helpful. How Do You Know Your Company Wants Help From The Outside?

For example, the questions would go something like:

Vision: what’s the purpose of the project? How does it uniquely create value? Are there multiple people involved–do they have a shared understanding of the purpose? Are there ways to experiment small vs. a full roll out? What creates value for the customer? Why should WE be the ones to do this project? Does it fit with the vision of the organization?

Virtue & Talents: Who is involved–why? What capabilities are needed for this project (then) does the team have those? How do the Guiding Principles come to play here? Is there a culture of openness to change/respect/etc.? What compliance issues are most important here?

Knowledge Processes: What are your major outcomes, and how will you measure them? What information is critical; who needs to know it? What are the communication styles of key team members? Is there a culture of challenge? Is useful information being institutionalized?

Decision Rights: Who “owns” (i.e. is responsible for the outcomes of) this project? What are the key drivers of the project, and who is responsible for them? How do you hold one another accountable? Whose buy in do you need to get resources or “the go ahead” (in your department or others)? Is the “ownership” of each portion of the project clearly communicated and understood? How does this fit into your RR&Es?

Incentives: What’s your motivation here? What motivates others working on the project with you? If you have involved others, do they feel like they have a stake in success/failure, or are they a cog in your machine? Map out the incentives of yourself, your team, others involved, your customer, etc.–any conflicts or opportunities there?

Though the next unexplored cave will never be the same as the last one you spelunked (not a word), you can consistently use these five flashlights to help find your way in any setting. How To Make Your Small Business Stand Out? Many Ways You Can Try IT!

November 17, 2017
What is Market-Based Management?
Introduction of Market-Based Management!

Market-Based Management is found on the principles that cause societies to become wealthy instead of mired in poverty. It sees the business as a small society with exceptional features requiring variation of the education drawn from society at large. Through this variation an organization could build MBM structure and ever-evolving mental models. New Roles of Human Resource Management in Business Development.

Market-Based Management is a holistic approach to organization that incorporates theory and practice and organizes businesses to deal effectively with the challenges of change and growth. It also draws on the training learned from the failures and successes of individuals to attain prosperity, peace and organisational progress. Thus, it involves the study of the history of economies, politics, societies, cultures, governments, businesses, conflicts, science, non-profits and technology.

Market-Based Management is the exceptional management tactic developed and executed by Koch Industries, Inc. It is a company philosophy that is embedded in the science of human action and functional through five dimensions: Vision, Knowledge Processes, Virtues and Talents, Decision Rights and Incentives. Koch Industries’ MBM Guiding Principles articulate the rules of just conduct and describe the main values which direct the day by day business activities.

Market-Based Management is an approach of philosophy which centers on using the tacit knowledge of workers to the benefit of the business. It is stand on creating a situation where workers can feel secure to speak their opinions and question decision making, because the values and the culture permit it. Market-Based Management was based on the fact that capital, ideas and talent are permissible to flow freely and is situated where it is most likely to produce wealth and innovation. This is unusual from the traditional company model where decision-making, knowledge and resources are controlled centrally by a top management team. Roles of HR Management in Organizations on Difficult Times, All gathered knowledge from the external settings is shared inside the business and utilized by workers involved in developing new services and products. Businesses need to decentralize decision-making to areas where the knowledge is situated rather than trying to move knowledge up the business for top managements to make decisions with insufficient knowledge. Freedom of speech and action are important elements of a market economy, just as workers require experiencing the liberty to question and communicating improvements in their work environment.

The basis for the philosophy

Market Based Management was developed based on these beliefs:
- Long-term business success comes only from creating real long-term value for customers and society, not the illusion of value.
- The world is experiencing an unprecedented (and accelerating) rate of change.
- To create value amid this change requires a well-founded understanding of what people value and how the world works.
- Throughout history, the framework that leads to the greatest value creation is one based on economic freedom, individual responsibility and the rule of law.
- A market system based on private property and economic freedom has proven to be the most effective and efficient system for creating prosperity and social progress.
The five pillars of MBM

Koch’s Market Based Management framework includes five dimensions:
- Vision: Koch companies constantly seek opportunities, in any industry, for which their capabilities will create superior value.
- Virtue and talents: Integrity, humility, teamwork, intellectual honesty and the desire to create real value are necessary values for a free society to function properly. Talented people who embody these virtues are an important driver in an organization’s success.
- Knowledge processes: A key driver of prosperity is understanding what people value and how to satisfy those values. Thus, Koch companies strive to create a culture and the measures necessary to build the relevant knowledge.
- Decision rights: Creating superior value requires that decisions be made by those who have demonstrated the ability to get results. Therefore, authorities are set more by comparative advantage than by hierarchy.
- Incentives: Koch companies try to reward their people like entrepreneurs, paying them a portion of the long-term value they create.
Further information on MBM

Part of the transition planning now underway is the development of a curriculum for teaching Market Based Management to employees. How To Make Your Small Business Stand Out? Many Ways You Can Try IT!
November 16, 2017
Innovations of Customer Services 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.

August 28, 2017
How to Explain the concept of International Advertising?
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
July 31, 2017