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GLOBAL BRANDING: KEY REASONS FOR MARKETING IN A GLOBAL BRAND NAME

Table of Contents   I.      Introduction.. 3 II.     Marketing Under a Global Brand Name.. 4 A.    Creation of Demand on Other Countries. 5 B.    Strategic Appeal. 6 III.        Brand Management in the Global Setting.. 7 A.    Value Creation in Branding.. 8 B.    Using Brand Equity. 9 C.    Consumer-Centered Brand Management. 10 IV.       Issues to Consider.. 11 A.    Buying Behavior of the Consumers. 11 B.    Possibility of Replacing of Global Brand Names. 12 V.    Conclusion.. 13 VI.       References.. 14   I.        Introduction In this day and age, consumers automatically relate a product to the name of a particular brand. More specifically, the reputation of the said brand tends to trigger signals of whether a product is cost-effective, superior in quality, or even equate to a particular social status. Numerous studies have maintained that brands have become powerful tools in modern marketing. It has become one of the major factors that consumers consider in their purchasing decisions. Any commercial organization knows this as a fact. That is why they are inclined to place their attention to brands and the demands of the consumers. It has become an indispensable component of the marketing operations of the modern organization. For existing multinational companies, having a global brand name has been immensely helpful in expanding their operations the world over. Presenting their products and services as the top alternative in the market nowadays is not enough to ensure the success. In this era where the consumer is sovereign, every company needs to build a brand that will be universally recognizable in any market. Companies seek to establish a global brand with the ends of acquiring a bigger market share and a better position in the market. Though it is a common belief that having a global brand name equate to success in terms of business, there are still existing issues that comes with it. This paper will be considering the minutiae of establishing a global brand name. Similarly, the key reasons why this is being considered by most, if not all, companies will be taken into account along with the other alternatives that these companies have in marketing a global product.        II.      Marketing Under a Global Brand Name The term “global brand” is often interchanged with the term “global product.” However, there are studies that pointed out that the two are completely different terms. Basically, a global product connotes merchandise sold all over the world that share standardized attributes. (Steenkamp, Batra, and Alden 2003, 53) This means that these products tend to have a uniform set of characteristics and normally take on common brand names. On the other hand, a global brand tends to characterize the identity and image attached to a specific product. More importantly, it is the blend of both tangible and intangible attributes that constitute a global brand.  Recent studies of global branding indicate that the said concept is subject to the perspective of the individual consumer. (Holt, Quelch, and Taylor 2004, 69) More specifically, the more recent views of international branding strategies tend to reflect the demands of the consumers. As Holt, Quelch and Taylor (2004, 70) puts it, these global brands are subjected to the global culture. In its simplest terms, global culture pertains to a set of consumer tastes and values. These tastes and values do not necessarily share the same standards and often show conflict with one another. Thus, global brands have to take on a certain level of flexibility in their operations.     In its face value, this seems quite a daunting task for any company. However, this does not stop them from seeking to establish a global brand name and engage in global branding strategies. Why? The reason is that despite these complex concerns of the consumers, these brands have become embedded in their consciousness. (Holt, Quelch, and Taylor 2004, 70) The bottom-line is that, despite their best efforts, consumers cannot ignore global brands. The following parts will discuss the other advantages that companies enjoy in operating a global brand.    A.    Creation of Demand on Other Countries One of the advantages of having a global brand is the possibility of demand spillovers. This means that the marketing efforts held in a particular country could essentially spread out to markets of other countries. Basically, the image of the global brands encapsulates this advantage. (Kim and Chung 1997, 361) The concept of brand popularity and the country of origin often establish this type of demand spillover. Holt, Quelch, and Taylor (2004, 71) share this intimation of demand of global brands. Mainly, they call this dimension of global brands as the “global myth.” Simply put, demand of global brands tends to provide the consumers a feeling of having a “global identity” or having a feeling of being a “citizen of the world.” Studies on the effect of brand popularity on the company maintained that it has major implications on its market share. In the study of Kim and Chung (1997, 361) they pointed out that the company acquires benefits from brand popularity. One benefit is that having brand popularity provides the consumers more confidence in their purchasing decisions with particular reference to giving the implied assurance that a popular brand is better than the alternative. Another benefit of brand popularity is the association of value to the product. (Kim and Chung 1997, 361) Holt, Quelch, and Taylor (2004, 71) coined this dimension of global brands as “quality signals.” Thus, issues of price of the product with a global brand are often regarded as “reasonable” because of its perceived high quality among consumers.   B.    Strategic Appeal Another perceived reason why organizations seek to establish a global brand is because of its strategic appeal. Steenkamp, Batra, and Alden (2003, 53) indicated in their study that global brands tend to have more opportunities than their counterparts in the local markets. This is supported by the earlier studies on the markets in the US, Japan, and EU. Brouthers, Werner, and Matulich (2000, 39) noted that global brands offers companies an efficient way of exhausting its resources. More specifically, maintaining global brands tend to offer the possibility of lower costs and having the highest quality product. Aside from the earlier fact pointed out on the demand spillover, a consequent outcome of that phenomenon would be the demand for standardized products. (Brouthers, Werner, and Matulich 2000, 39) This means that modifications to meet the local demands are significantly lessened as the demand reflects greater value with the unaltered global brands. In this regard, time and resources in the modification processes is taken away which equates to cost reductions and further profit for the company. On the whole, the creation of global brands creates a much greater economies of scale and scope for companies. (p 43)     III.    Brand Management in the Global Setting Recent marketing initiatives in the global setting have acknowledged the importance of bands in dealing with the dynamic business environment. Recent studies maintained that it is important for companies to treat their brand management initiatives as they treat their strategic management processes. (Chan-Olmstead and Kim 2001, 75) This means that the battle of brands in both their local and domestic counterparts have intensified throughout the years. This increase in the demands on the part of the organizations has given them the responsibility of making their brand management more systematic, scientific and a continuous process. The study of Chan-Olmstead and Kim (2001, 75) basically maintained that companies should bake sure that their brand will be remembered constantly. Be it through logos or taste, the consumer has to readily recognize the brand right away.  This is where brand management comes in to the picture.    There are studies that maintain initially what their brand intends to represent. In doing so, the company is able to find a way to position its brand with reference to the other players in the market. (Chan-Olmstead and Kim 2001, 75) This is seen in the case of global brands like Nike and Coca-Cola. In the case of Nike, they have decided to package themselves as a brand associated with winning. On the other hand, the Coca-Cola brand tends to place value on their universal taste. (Andrews Chompusri, and Baldwin-Obe 2003, 198) A case study of Procter & Gamble maintained that a use of a brand portfolio would be able to help a company in managing its brand in the global setting. (Madapati 2003) With such a tool at their disposal, P&G is able to make sound decisions with regards to their brand management initiatives. In doing so, P&G are able to position their products properly with reference to the other players like Unilever, Kimberly-Clark and Colgate-Palmolive. Studies pertaining to branding strategies and theories point out two important components organizations should consider in their brand management initiatives. These are brand equity and brand value. A.    Value Creation in Branding Brand value is the perceived worth of the consumers on the brand. The most notable form of value creation in brands is through advertising. (Steenkamp, Batra, and Alden 2003, 53) There are three known approaches in the creation of value in brands: decoration, gluing, and mascot approach. The decoration approach basically shows a branding strategy displaying differentiation by connecting the brand to completely different cues presented by the other players in the market. (Todreas 1999, 51) The gluing strategy of value creation associates their product to certain emotional cues of the consumer. These are seen in advertisements that attempt to stir the emotion of the possible buyers. (Cook 1992, 10) The mascot approach on the other hand indicates the use of a human-like entity that is believed to be able to establish a connection to the potential buyers. The use of charismatic non-human characters (Pillsbury Dough Boy) tends to reflect this type of value creation approach in branding.  (Alleyne 2004, 188) Basically, these approaches of value creation tend to be influential for the buying decisions of the consumers. In the same regard, the use of brands could also be a way towards building this value to the company. B.    Using Brand Equity The term brand equity denotes the net revenue of the brand which it is expected to amass eventually. There have been instances that local brands have changed its name to build up its brand equity. In the Netherlands, the potato chip brand, Smiths, has acquired the brand name of Lay’s despite being one of the top brands in the market. (Steenkamp, Batra, and Alden 2003, 53) They pointed out that the shift of brand names is an attempt to capture “affinity” with the global brands and establish more value in their products. This is also seen in the case of Vodafone which operated local brands with different names. Steenkamp, Batra, and Alden (2003, 53) mentioned that these local brands are now employing the brand name Vodafone to establish brand stature and brand validity at par with the other global and local brands operating in the same market. In the international retail industry, P&G started to eliminate the redundant brands in the local markets and started acquiring brands with an existing consumer base. This is seen in their recent acquisition of Gillette which resulted to the expansion of the scope of their market. (Madapati 2003) In essence, the development of brand equity tends to cling on the intangible aspects of the brand. Factors like the consumer awareness and differentiation of established by these brands contribute to the overall equity of the company’s particular brand.     C.    Consumer-Centered Brand Management Looking at the discussions above, it is implied that branding is in the business of giving consumers what they want. Instances of local brands acquiring the brand name of the global brand seem to be the trend so as to ensure greater brand equity and brand value. However, Coca-cola took on a different path. In its acquisition of Parle, a beverage company in India, Coca-Cola kept the local brand name, Thums Up, in operation. (O’Shaughnessy and O’Shaughnessy 2003, 185) In looking at this scenario, Coca-Cola appears to center its attention to the consumers in the market. Before the acquisition, Parle was the leading distributor of carbonated drinks, even surpassing the monoliths Pepsi and Coke. Their product, Thums Up, has become a part of the Indian society. Advertisements of the product emulated the Coca-cola formula of “can’t beat the feeling” campaigns. (Bhattacharyya 1998, 250) Though the soft drink consumption is somewhat considered a luxury in India, these advertisements created value for Thums up and prompted the market to take the product as their constant companion in meals and other past times. Thus, instead of the convention of homogenizing the products after acquisition, the decision to keep the Thums Up brand essentially ended up as a great marketing stride for the overtops of Coca-cola in the Indian market.   IV.   Issues to Consider Based on the claims above regarding the dynamic nature of the market, it appears that there are certain issues that companies have to take on in their global brand management initiatives. The following discussions will be covering these issues and how existing companies dealt with it. A.    Buying Behavior of the Consumers A key element in for every profit-seeking organization is the recognition of the behavior of the consuming public. Consumer behavior is essentially a product of the culture of a particular market. (Haugtvedt, Petty, and Cacioppo 1992, 239) The seminal study of Hofstede (1980, in Katz, Zarzeski, and Hall 2000, 119) points the importance of culture for multinational organisation. In his theory, Hofstede intimated that societies could have either “individualism-collectivism, masculinity-femininity, high-low power distance, and high-low uncertainty avoidance.” (p. 120) The theory basically reinforces the claim that consumers tend to base their buying decisions on the existing social conventions. This theory also claims that for every state, there is a distinct buying behavior which could also entail distinctive branding strategies and marketing initiatives. Recent studies like that of Katz, Zarzeski, and Hall (2000, 119), points out that the national culture contributes to the future performance of an organisation. Other distinctive features of the state like language tend to trigger changes in the packaging of the brand and changing characters that the buying public could understand. This basically manifest that every market has a distinctive way of reacting to certain products or services. The best way to provide some sort of positive reaction is to make the company relate to the consumers. Some companies went as far as changing the menu like that made by Pizza Hut in Hong Kong. (Lan and Khan 1995) B.    Possibility of Replacing of Global Brand Names As indicated in the previous discussions, the awareness of the market should be among the top priorities of the operations of global brands. In terms of using the global brand name or using a local one, the Coca-cola model in India should be very helpful. Good companies like Coca-Cola should realize when and how to use their brand names. For instance, the European operations of Budweiser tend to emphasize the name of their global brand as the “King of Beers.” (Weidenbaum 2007, 62) Prominence on the symbols and letterings are also ensured because there is a similar alcoholic brand that has a slight similarity to the global brand. The said brand is called Budvar. This prompted the Budweiser brand to refrain using the “Bud” label in their beers in their European distribution. In the same regard, they reinforced their brand management initiatives by their “this Bud is right for you” campaign. In the area of mobile phones, the situation of Nokia takes a whole different approach. Being the leading provider of mobile technologies, Nokia is able to acquire local brands and manufacturers all over the world. In this scenario, they tend to change the name of the acquired companies and place their global brand names in all the products that they sell. (Ricart, Enright, Ghemawat, Hart, Khanna 2004, 175) This makes perfect sense given that Nokia’s brand name has been equated with innovation and top of the line products since the mobile phone surge in the later part of the 90s. Another global brand name is Electrolux. It was the company who are among the early ones who built value on their brand through door-to-door sales. (Church and Godley 2003, 86) Thus the name is often associated with top house appliance sold all over the world. (Todreas 1999, 173) However, the company holds other brand names aside from Electrolux as they have acquired numerous local companies (like Zanussi) in their years of operation. (Kay 1995, 162) In the same regard, they have decided to keep the names of the local brands to show diversity in their products. V.     Conclusion The concept of globalization has been the most influential and possibly of furthermost significance in the realm of business and commerce. With the apparent elimination of geographical boundaries, the market has given organizations the opportunity to trade regardless of the size of their company. The emergence of globalization has triggered inclinations towards global products and establishing global brand names. It is this phenomenon that maintained the need for standardization of their products and indispensable condition of brand management strategies. Building up a global brand name is as complex as sustaining the potential of the products in the global scale. As indicated in the discussions above, issues on competitiveness, close consideration in changing of local brand names and the recognition of the consumer behavior in the market could spell the difference between the success and failure of the company in their ventures. Recognition of the demands of the market allows them to make informed decisions and take actions that would essentially place them in a favorable business situation. Elements like consumer behavior, personality, product characteristics and even the culture of the market tend to dictate the direction on which a global product’s life cycle. In the end, the awareness of the company of these elements along with the intangibles of the brand (vitality and stature) will ensure an impressive performance of a global product in the respective markets that it operates. Essentially, as manifested in companies cited above, a fit between the right marketing strategies, brand management, and knowledge of the respective market not only ensures the success of the company but also guarantee its sustainability for years to come.    VI.   References Alleyne, S. (2004) “The Magic Touch: Carol H. Williams Advertising Conjures Up Winning Campaigns and Huge Billings Using an Enchanting Mix of Business Savvy, Creative Talent, and Unbridled Passion.” Black Enterprise. 34(11), 188. Andrews, T., Chomusri, N., Baldwin-Obe, B. (2003) “The Changing Face of Multinationals in Southeast Asia.” New York: Routledge. Bhattacharyya, G. (1998) Tales of Dark-Skinned Women: Race, Gender and Global Culture. London: UCL Press. Brouthers, L., Werner, S., Matulich, E. (2000) “The Influence of Triad Nations’ Environments on Price-Quality Product Strategies and MNC Performance.” Journal of International Business Studies. 31(1), 39. Chan-Olmsted, S., and Kim, Y. (2001)”Perceptions of Branding among Television Station Managers: An Exploratory Analysis.” Journal of Broadcasting & Electronic Media. 45(1), 75. Church, R., and Godley, A. (2003) The Emergence of Modern Marketing. London: F. Cass. Cook, G. (1992) The Discourse of Advertising.New York: Routledge Haugtvedt, C., Petty, R., and Cacioppo, J. (1992) “Need for Cognition and Advertising: Understanding the Role of Personality Variables in Consumer Behavior.” Journal of Consumer Psychology. 1(3), 239. Hofstede, G. (1980). Culture’s consequences: International differences in work-related values. in “Katz, J., Zarzeski, M., and Hall, J. (2000) “The Impact of Strategy, Industry and Culture on Forecasting the Performance of Global Competitors: A Strategic Perspective.” Journal of Business Strategies. 17(2), 119.” Holt, D., Quelch, J., and Taylor, E. (2004) “How global brands compete.”  Harvard Business Review. Available at: www.sba.pdx.edu/faculty/ahutinel/Read/25.pdf [Accessed 07 March, 2008] Katz, J., Zarzeski, M., and Hall, J. (2000) “The Impact of Strategy, Industry and Culture on Forecasting the Performance of Global Competitors: A Strategic Perspective.” Journal of Business Strategies. 17(2), 119. Kay, J. (1995) Foundations of Corporate Success: How Business Strategies Add Value. Oxford: Oxford University Press.  Kim, C., Chung, J., (1997) “Brand Popularity, Country Image and Market Share: An Empirical Study.” Journal of International Business Studies. 28(2), 361. Lan, L. and Khan, M. (1995) “Hong Kong’s fast-food industry: an overview.” Cornell Hotel & Restaurant Administration Quarterly. June 1. O’Shaughnessy, N.,  O’Shaughnessy J. (2003) The Marketing Power of Emotion. New York: Oxford University Press. Ricart, E., Enright, M., Ghemawat, P., Hart, S. (2004) “New Frontiers in International Strategy.” Journal of International Business Studies. 35(3), 175. Steenkamp, J., Batra, R., and Alden, D. (2003) “How Perceived Brand Globalness Creates Brand Value.” Journal of International Business Studies. 34(1), 53. Todreas, T. (1999) Value Creation and Branding in Television’s Digital Age. Westport, Connecticut: Quorum Books.  Weidenbaum, M. (2007) “An American Look at the Czech Republic.” USA Today. 136(2748), 62. Credit:ivythesis.typepad.com

GLOBAL BRANDING: KEY REASONS FOR MARKETING IN A GLOBAL BRAND NAME

Table of Contents I. Introduction .. 3 II. Marketing Under a Global Brand Name .. 4 A. Creation of Demand on Ot...

Mobile Industry Strategic Analysis and Choice

Strategic Analysis and Choice Introduction             The mobile Industry has been evolving now and then, from the “brick-size” phone to the size of a credit card, what comes next? In the advent of high-end technology, mobile phones become a necessity at the same time a leisure gadget that most teenagers enjoy. What has these phones got into? Well, they not only serve as communication purposes but it has become an icon, a fashion statement due to its complicated high-end features yet the simplicity of its function captures the heart of its consumers. In the words of Robin Richmond (n.d.), “the mobile phone industry is certain to continue evolving, with some research suggesting that one day phones will take the place of credit cards and the remote control.” We are given the capacity to personalize our mobile phones in every aspect or features. Much more, with the growing innovation of mobile phones it has likely influenced the desires of every consumer; good news for mobile industries that they would be able to advance to next level. The current fads that the consumer has well appreciated are unlimited video clips, video phone calling, camera, photo message, downloadable ring tones, wallpapers and screen saver and most of all, the mp3 player, if this is now? What comes next? That is what we call the never-ending strategy.             An example of a mobile industry is the Orange Mobile Company. It was launched last April 1994, Orange was the fourth entrant into an already crowded UK mobile phone market, with an ambitious aim: to become the mobile provider of choice by making communications an intuitive and easily accessible part of daily life. Orange enlisted the influential brand consultancy Wolff Olins for help in producing a brand identity, name and visual style that would create high awareness … and attract customers. The products and services they offer are: mobile phones where in they work closely with major manufacturers such as Motorola, Nokia and Samsung; the internet where one can go livebox and livemusic. Colour was used simply and confidently, complemented by simple language, short sentences and an easy to read typeface. Words spelt out the customer benefit rather than the technical specification of a product. By the time Orange was sold to Mannesmann AG in 1999 Orange had launched in Switzerland and Belgium and had licensed its brand to companies in Hong Kong, Australia, Israel and India (www.orange.com). In particular, this paper will be concentrating on Orange Mobile Company; one of the leading mobile industries in UK, with regards to its strategic marketing analysis. This paper will be discussing the importance of understanding competitors and how this understanding may facilitate successful planning of marketing activities and analyze these activities to conceptualize a profitable plan. The purpose of this paper is to give the researcher wide knowledge over strategic analysis and apply this knowledge in assessing the strategic analysis of Orange Mobile Company in particular context with its strategic business units , (France Telecom rebranded Wanadoo, and Equant ) and in the maintenance of the brand value in competition with other mobile industries (Cellnet and Vodafone). An in-depth analysis of product portfolio strategy with the use of its method, the Boston Consulting Group Box (BCG Box) is required as to facilitate the researcher in its aims for the paper. Strategy             Strategy as defined by Johnson and Scholes (Exploring Corporate Strategy) as the direction and scope of an organization over the long-term; which achieves advantage for the organization through of configuration of resources within a challenging environment to meet the needs of the market and fulfill the needs of stakeholder expectations. Strategies exist in any areas of an organization from a group of businesses to the individuals working with it. The different levels of a business where in strategy became one of their cornerstones. We have the corporate strategy, business unit strategy and operational strategy. Corporate strategy is concerned with the overall purpose and scope of the business to meet stakeholder’s expectation. When we say, market scope it classifies as to which market a business should compete in and what kind of activities to be involved in the business incorporating the values and expectations of those who have power in and around the business. This level often stated their strategic decision-making through their mission statement. The said mission statement would guide them as to what they should do for the betterment of the business for the years to come. Business unit strategy is concerned on how the business competes successfully in the market. This refers as to what products that shall meet the demands of the customers, necessary skills that are required in gaining advantage over the competitors to further exploit and/or create opportunities. The firm’s operational strategy concerns mainly of the assets, finances, technical competence and the people. Job performance is influenced by the employee’s knowledge, attitude and skills in handling their day-to-day activities and issues. This is by upholding work ethics within the organization and during business affairs. Strategic Management             Strategic Management is showing strategic timing in selling a stock. The diagram shown below clearly pinpoints the corporate, business unit and the operational strategies in the simplified five tasks. Figure 1: Five Task of Strategic Management Source: Irwin 1995 In order for the said tasks to be realized there must be a thorough coordination with other departments so that strategic decisions answer the mission statement of the organization. It is an on-going process that challenges the organization to convert their mission statement into organizational objectives that pushes the firm to be inventive intentional and focused. In this way they could keep track of the company’s performance thus, error would be prevented and they would be able to dispose parts of their business that cannot generate adequate returns or that does not generate with their business strategy. Strategic Analysis In thorough strategic management process, it has three main components shown in the figure below: Figure 2: Strategic Management Process Source: www.tutor2u.net Strategic analysis by the term itself means it is by using strategic tools in order to methodically assess and analyze the firm’s strength in order to propel company’s ambition to its zenith considering their position or their standing in the competitive market and the influencing environment that might alter or improve their status. The strategic choice would involve the stakeholder’s expectation as their basis in making strategic choices and these choices are screened very well in order to implement these options. Strategic implementation is the crucial and most difficult of the three since; it has to be implemented into an action, and that the organization would act as a whole. Business Portfolio             The Business Portfolio is the collection of business and products that make up the company. The best business portfolio is one that fits the company’s strengths and helps exploit the most attractive opportunities. The company must (1) analyze its current business portfolio and decide which business should receive more or less investment, and (2) develop growth strategies for adding new products and businesses to the portfolio, whilst at the same time deciding when products and businesses should no longer be retained. Methods of Portfolio Planning             The two best-known portfolio planning methods are from the Boston Consulting Group and by General Electricity/Shell. In each method, the first method is to identify various Strategic Business Units (“SBU’s”) in a company portfolio. An SBU is a unit of the company that has a separate mission and objectives and objectives and that can be planned independently from the other businesses. An SBU can be a company division, a product line or individual brands – it all depends on how the company is organized. The Boston Consulting Group Box (“BCG Box”)             It is a means of analysing and categorizing the performance of business units in large diversified firms by reference to market share and growth rates. Four main categories are displayed in a two-dimensional matrix, which seeks to identify those business units that generate cash and those that use it, and then to relate the position of the business units to the formulation of an overall business strategy (A Dictionary of Business; 2002). Resources are allocated to business units according to where they are situated on the grid as follows: Figure 3: The Boston Consulting Group Box Source: www.tutor2u.net Using the BCG Box, a company classifies all its SBU’s according to two dimensions: on the horizontal axis: relative market share – this serves as a measure of SBU in the strength market; on the vertical axis: market growth share rate – this provides a measure of market attractiveness. By dividing the matrix into four areas, four types of SBU can be distinguished: ·  Stars – a business unit that has a large market share in a fast growing industry. Stars may generate cash, but because the market is growing rapidly they require investment to maintain their lead. If successful, they become cash cows (www.quickmba.com).             In relation, Orange mobile company has made strategic partnerships and alliances with some of the world’s leading suppliers and operators. They established the FreeMove alliance in 2003.  In 2006 they were joined by leading Nordic operator, Telia Sonera. This alliance ensures that customers have access to the same familiar services, like voicemail or customer service, abroad as well as at home. You can now even see who is calling when you roam on member networks. The services they offered are classifies into two: business and individual services. In the business sector – roaming services for international businesses, each with a consistent call rate for calls made and received when users are roaming abroad, and for international calls made from their home countries; also offered, data services including both GPRS and BlackBerry™. In this sector, they have an International customer service with International Business Care group, a multi-lingual team dedicated to providing great service to multi-national organizations. In the individual sector, they have the FreeMove answer, wherein they just have to dial their usual short codes to access voicemail and see whose calling; there is no need to re-programme the saved numbers for them to work internationally (www.freemovealliance.com). Aside from it, they join with Cingular Wireless combining okay strengths of coverage, network performance and business support services. These functionalities are the STARS of the Orange mobile company; the joint services offered will attract future customers as well as prospect businesses who would like to venture business with them. Thus, an increase demand of services also increases their sales. ·  Cash Cow – a business unit that has a large market share in a mature, slow growing industry. Cash cows require little investment and generate cash that can be used to invest in other business units (www.quickmba.com). France telecom acquired the Orange brand last August 2000 in effort to acquire the power of the Orange brand. Most of France Telecom’s mobile businesses were rebranded to Orange. France Telecom’s ambition is to be the first integrated telecoms operator in Europe and leader for convergence, delivering a ‘New Experience of Telecoms’ for its customers. This includes the rebranding of Equant and Wanadoo on 1 June 2006 – forming part of an international strategy to use the Orange brand commercially for mobile, fixed-line, broadband, multi-play and business offerings. This means a simple, single-company experience for customers as well as an exciting new generation of enhanced communications and converged services. The rebranding of the said business added brand value to the Orange brand. Knowing this, those individuals who use the previous brand now use the power name of Orange. This is an example of Cash cow since, the Equant and Wanadoo are already legitimate brands that are already recognized by the mobile market. The effect of rebranding escalated the number of prospect customers thus, Orange Company can generate fund from this to support other businesses that is still fresh in the competitive mobile market or other projects that has promoted the brand value of Orange. For an instance, the collaboration of Orange with PalmSource in the Palm Powered Mobile World Program, the joint forces of the two will bring a cutting – edge Palm Powered smartphones to the market. ·                     Question Marks (or Problem Children) are businesses or products with low market share but which operate in higher growth market share at the expense of more powerful competitors. Management have to think about “question marks” – which one should they invest in? Which ones should they allow to fail or shrink? In this category, these are the probable business units that might not continue to share in the market that will lead to product failure due to poor promotion and advertisement and the price is just costly that people wouldn’t spend a cent; or it might become the Stars and in the long run the Cash cows. The business units I’m referring are of those newly integrated services and products since; it is new there will always be questions that will arise and strategic planning must continue on and on in order, to finalize what particular procedure should be implemented. In addition, it is necessary that management of the marketing function be built upon purposively defined and analytically based marketing strategies. The strategic marketing planning, according to Allen (2006), involves basically three stages: (1) segmenting the market; (2) profiling the market segments; and (3) developing the market segment marketing strategy. Pease refer to Figure 4 for the outline. Considering that globally, it is a competitive market, it is a must that strategic planning must be done before making unnecessary unfit choices. After such strategic choices, strategic analysis is done to further enhance the chance of making it big.                         Figure 4: Strategic Marketing Planning Source: Allen 2006     In strategic analysis, the company must also learn to comprehend the competitors of a business in a given industry and developing methods as to distinguish it from them is a very relevant and critical aspect which influences the development of the competitive strategy of the firm. In addition, it is also an important aspect of the strategic planning process as it (1) facilitates the management to understand their competitive advantage or disadvantages associated to their competitors; (2) creates understanding of the competitors past, present, and future strategies; (3) offer an informed basis to develop strategies to gain and maintain competitive advantage in the future; and (4) to facilitate the firm in forecasting the returns that may be made from future investments (Tutor2u Limited 2005).             Proctor (2000) notes that understanding competitors is the core to making marketing plans and strategy. A firm has to compare its products, prices, channels of distribution and promotional methods with those of its competitors on a regular basis to make sure that it is not at a disadvantage. The process of the competitor analysis basically constitutes three steps. The first step is to identify the firm’s competitors. As for Orange Mobile Company, it has several competitors such as Vodafone and Cellnet. The second step of the competitor analysis is the assessment of its competitors. This may be done through benchmarking as the firms will first have to determine the objectives of its competitors as well as their objectives, then later on assessing the strengths and weaknesses of its competitors. Lloyd, Elmuti and Kathawala (1997) notes that benchmarking sustains organizational growth as well as facilitates world-class competitive status.             Finally, the third step in the competitor analysis is the selection of competitors to avoid or to attack. After the assessment of the firm’s competitors, the firm will have to formulate the specific strategies that will give them the competitive advantage against its competitors.             It must be noted that during the process of competitor analysis and the implementations of its strategies, the firm will have to assess which of the competitors’ strategies that they will have to follow or not. The second stage which allows the company to compare their operations with others will necessitate some degree of change within the organization. Thus it should be very well noted that the company only as to follow the strategies that will apply to their business as every business is unique in their own nature. These strategies will have to be in lined with the company’s philosophies as well. ·                     Dogs are the combination of low growth rate and market share is typical of these businesses and products, which operate in mature markets. Firms frequently face strategic decision regarding whether to continue to support dogs or to implement a divestment strategy. Barriers to exit (factors that make it difficult for a company to leave a make a market that is no longer profitable or that has ceased to provide an acceptable return on capital) would also need to be considered (A Dictionary of Business, 2002). Using the BCG Box to determine the strategy is a way of maximizing the long-run interests of every group. Another is that by balancing properly the interests of major stakeholders, the long-range interests of all will be maximized. However, conventional strategic thinking suggests there are four possible strategies for each SBU: (1) build share: here the company can invest to increase market share like turning the Question mark into a Star (2) hold: the company invest just enough to keep the SBU in its present position (3) harvest: the company reduces the amount of investment in order to maximize the short term cash flows and profits from the SBU. This could be shown by turning the Stars into Cash cows (4) divest: the company can divest the SBU by phasing it out or selling it – on order to use resources elsewhere by investing into more promising Question marks. Conclusion: The mobile industry has already extended throughout the world. Firms that operate within the mobile industry are categorized as a market structure that is highly competitive. Orange Mobile Company and its strategic marketing planning has been the focus of this research is that the Orange mobile Company as a market leader in the mobile industry. The Strategic Management is the process of specifying an organization’s objectives, developing policies and plans to achieve these objectives, and allocating resources so as to implement the plans. There is a need to have a strategy that is concerned with the most important decisions made in an enterprise. The central thrust of these decisions is the future of the organization. In here, strategic planning must be done to “create” more desirable future results by (a) influencing the outside world or (b) adapting current programs and actions so as to have more favorable outcomes in the external environment. This paper has strongly recognized the importance of understanding competitors in strategic marketing planning for the benefits that it gives to the successful planning of marketing activities. These benefits and advantages include the following. First, understanding competitors will facilitate the firm’s management to understand their competitive advantage and disadvantages in relation to their competitors. Second, understanding competitors will also generate understanding of the past, present and future strategies of the firm. Third, it offers the firm an informed basis to develop strategies in order to gain or maintain competitive advantage against their competitors in the future. Lastly, understanding competitors will also facilitate the firm in forecasting or predicting the financial returns that they made from future investments. To further influence the strategic analysis of the Orange mobile Company, we use the BCG – share matrix. The experience curve represents a volume-cost relationship. It is argued that, as the cumulative historical volume of output increases, unit costs will fall at a geometric rate. This relationship is said to result from specialization, standardization, learning, and scale effects. The firm with the largest cumulative output will have lower costs, suggesting a strategy of early and price policies to develop volume. Reference: Allen, C (2006), What is Strategic Marketing Planning, Retrieved June 2, 2006, from http://www.allen.com/cgi-bin/gt/tpl.h,content=125 Boston Matrix. 2002. A Dictionary of Business. Retrieved June 2, 2006, from http://www.highbeam.com/library/doc3.asp?docid=1O18:Bostonmatrix   Barriers to Exit. 2002. A Dictionary of Business. Retrieved June 2, 2006, from http://www.highbeam.com/library/doc3.asp?docid=1O18:barrierstoexit   FreeMove. (2004-2006). FreeMove. Retrieved June 2, 2006, from http://www.freemovealliance.com/English/default.html   Irwin, R. D. (1995). The Strategic Management Process: An Introduction (Strategic Management: Self-Study Modules.) Retrieved June 1, 2006 from http://www.csuchico.edu/mgmt/strategy/module1/sld001.htm   Johnson, G., & Scholes, K. (2001).Strategy. In Exploring Corporate Strategy (Business Strategy.) Retrieved June 1, 2006 from http://www.tutor2u.net/business/strategy/what_is_strategy.htm   Richmond, R. (n.d.). Growing Trends of the Mobile Phone Industry. Retrieved June 2, 2006 from http://www.apna-hyderabad.com/mobiles/mobile-phone-industry.asp//www.apna-hyderabad.com.   Lloyd, S, Elmuti, D and Kathawala, Y (1997, July/August), The Benchmarking Process: Assessing its Value and Limitations, Industrial Management, Vol. 39, No. 4, pp. 12-176. Orange. (2004-2006). Orange. Retrieved June 2, 2006, from http://www.orange.com/English/default.asp   PR Newswire. (2004). Highbeam Reference. Retrieved June 2, 2006, from http://www.highbeam.com/library/doc3.asp?DOCID=1G1:131536411&num=13&ctrlInfo=Round20%3AProd%3ASR%3AResult&ao=&FreePremium=BOTH     Proctor, T (2000), Strategic Marketing: An Introduction, Routledge, London. Tutor2u Limited (2005), Strategies – Competitor Analysis, Retrieved June 2, 2006, from http://www.tutor2u.net/business/strategy/competitor_analysis.htm Credit:ivythesis.typepad.com

Mobile Industry Strategic Analysis and Choice

Strategic Analysis and Choice Introduction The mobile Industry has been evolving now and then, from the “brick-size” ...

MANAGERIAL ACCOUNTING ESSAY INSTRUCTIONS

THIS IS AN  M B A MANAGERIAL ACCOUNTING COURSEWORK I GIVE BELOW THE QUESTION AND THE TWO COMPANIES I WANT TO COMPARE. THE OBJECTIVE OF FINANCIAL STATEMENTS IS TO PROVIDE INFORMATION ABOUT THE REPORTING ENTITIES FINANCIAL PERFORMANCE AND FINANCIAL POSITION THAT IS USEFUL TO A WIDE RANGE OF USERS, FOR ASSESSING THE STEWARDSHIP OF MANAGEMENT AND FOR MAKING ECONOMIC DECISIONS. CRTICALLY ANALYSIS THIS STATEMENT WHERE APPROPRIATE WITH EXAMPLES HOW FAR THE PUBLISHED FINANCIAL STATEMENTS MEET THE INFORMATION NEEDS OF PRESENT AND POTENTIAL INVESTORS WITH SPECIFIC REFERENCE TO IAS 1(PRESENTING FINANCIAL INFORMATION) IAS 8(CCCOUNTING POLICES CHANGES IN ACCOUNTING ESTIMATES AND ERRORS) AND OTHER RELEVANT ACCOUNTING STANDARDS. YOU MAY WISH TO SELECT TWO LISTED COMPANIES AND COMPARE THE INFORMATION PUBLISHED TO THE LEVEL OF COMPLIANCE WITH THE INTERNATIONAL ACCOUNTING STANDARDS AND THE EXTENT TO WHICH THE NEEDS OF THE USERS ARE ADDRESSED. IN MICROSOFT PROFESSIONAL REPORT FORMAT FONT SIZE 12 LINE SPACING 1.5 THE TWO COMPANIES ARE VODAFONE MOBILE AND ORANGE MOBILE FINANCIAL STATEMENT SHOULD BE 2005 OR 2006 (WICH HAS PUBLISHED AFTER 01/01/2005 (OBJECTIVE IS TO COVER HAS 1 AND HAS 8) ALLSO HAS TO SPEEK ABOUT GROUPS. Credit:ivythesis.typepad.com

MANAGERIAL ACCOUNTING ESSAY INSTRUCTIONS

THIS IS AN M B A MANAGERIAL ACCOUNTING COURSEWORK I GIVE BELOW THE QUESTION AND THE TWO COMPANIES I WANT TO COMPARE. THE OBJECTIVE OF FI...

MOBILEPHONES INDUSTRY

CHAPTER 1 Introduction   “The Filipinos love to talk and to interact, thus the penchant for gossip, telebabad (the habit of engaging in long, often senseless conversations over the telephone) and, this time, text messaging.  The Filipinos are heavy users, not due to big businesses, but because it is one form of entertainment. Filipinos love talking.  Filipinos love interacting so much he is using text messaging as a medium” (, 2000).   It would be an understatement to say that text messaging, or texting, has revolutionized communication in the Philippines.  It has successfully entrenched itself into the unique Filipino lifestyle, becoming an indispensable part of every Filipino’s life.  Arguably, the most stellar contribution the cellphone has had in contemporary Filipino life is when it played a crucial role in galvanizing support for the EDSA 2, heralding its importance in today’s Philippine society.  (2001) It used to be that the cellphone was a status symbol; however, the rapid advances in telecommunications technology has enabled virtually anyone access to this technology due to the affordable price of the phones as well as the services it offers.  Interestingly, it is not the calls which are bringing in the sales, rather, it is the text messaging function which has been raking in all the income.  And it sure does make economic sense.  Figure this out, calls on landline phones cost about P5.00 for three minutes, while calls made to cell phones cost P9 per minute.  However, text messages, about 160 characters long, cost only a peso per message (2001).  To better appreciate its popularity, in 1998 alone, more than eighteen million text messages were transmitted in the country daily.  (, 2001) The youth have been quick to catch up with this technology.  It has, unofficially, become the status symbol of Filipino youth, who are now far more knowledgeable about a cellphone’s latest features than their parents.  Moreover, it has definitely created a unique venue among young Filipinos, where they could express themselves, starting out with the unique text lingo, and by the countless jokes, pieces of advice and graphics that could be sent through it.  Young Filipinos have used this technology to look out for dates; get to know potential beaus; meet new people, outside their current circle of friends; and essentially, become the glue that has bonded the barkada (close friends) together during happy days like gimik (fun-filled night-time activities) as well as during those sad days (breaking-up with the boyfriend).  Although no statistics are available as to how many De La Salle University (DLSU) students have a cellphone, it would not surprise the researchers if the incidence of ownership is almost 100%.  With a student population known for being in the forefront of whatever is hip or cool in today’s society, it would be interesting to know what the cellphone has done in changing, molding and improving the lifestyle of a typical La Salle student.  Although, not quite the image of a typical young Filipino (due to the predominantly upper middle class population in the university), the researchers would like to paint an interesting, accurate, even, earnest picture of what this landmark technology has done in shaping today’s Filipino youth culture, using DLSU as a barometer. In general, the study will point out the lifestyle changes brought about by cellphone usage, which have happened to DLSU students. This study will primarily focus on the advantages and disadvantages of cellular phone usage.  The Filipino youth has adapted nicely to cellular phone technology.  But are we really seeing the whole picture?  With this study, the researchers hope to provide a more in-depth look. Review of Related Literature Text messaging is a fairly recent phenomenon considering that cellular phones have been around for more than a decade.  However, it is such a hit that it has revolutionized how Filipinos communicate and it has certainly made a dent on the social lives of today’s intrepid Filipino youth.  The following topics on cellular phone usage will be discussed: its transition from status symbol to mass product, the importance of brand recall, the quality of the carrier service, facts about text messaging, prospective legislation on text messaging, the social aspect and financial cost involved in owning a cellphone, facts about text lingo and the coping mechanisms adopted by the students who own cellphones.  From mere status symbol to mass product In the late 80’s, people who were seen with a cell phone in hand were unmistakably from the higher bracket of society.  Today, however, cell phones are no longer used to merely show status symbol.  Anybody can actually own cellular phones since some units are sold at an affordable price.  The emergence of cost efficient subscription plans and pre-paid accounts have also widened the market base (, 1998).  There are several considerations before one chooses a phone. Among the first things people look at is the phone’s features.  People take into consideration features such as caller identification, text identification, voice tag, calendar, automatic redialing, voice mail and call screening, among others.  Comparing the features of the cellular phones today to the ones before, it is evident that the modern models are more useful and more user-friendly.   Cellular phones are more useful now as one can make notes and organize schedules.  It also provides for personalized and related information needed for business or household on a daily or weekly basis.  Cellular phones are user-friendly as it allows for multi-tasking, like reading or sending text messages and calling with the use of head sets without even touching the phone as it will dial a number by just merely mentioning the name of the person you want to call through a voice tag.  Another thing people look at is the unit’s design.  Size and weight are important factors. During the late 80’s and early 90’s, phones were bulky and heavy, making it difficult to bring along.  Now, the smaller the cellular phone, the better it is, because people want something they can easily carry around.  People want a unit that looks good so that they too would look good.  To others, that is the reason people actually buy accessories for their cellular phones.  So many shops can be seen selling cellular casing and housings, keypads, and backlights, as well as providing ringing tones, operator logos, and picture messages as a way for the cellular owner to personalize his unit.  People want their phones to become a part of them, thus they spend so much so that part of their character is transferred to the phone.  Brand Recall Another strong selling point is the unit’s brand name.  “Buyers tend to choose also on the basis of name recall,” (, 1999).  A brand name has to be built on a good and consistent reputation. Ever since the start of GSM in the Philippines, Nokia, one of the leading cellphone brands, has been consistently included in the print and commercial ads of Globe.  Globe Telecoms is one of the leading telecommunications provider in the country.  This is so because Nokia was one of the first innovators and cellular phone manufacturers that utilized SMS (short messaging service) in Europe through the digital GSM communications system.  In 1991, the world’s first genuine GSM call was made using Radiolinja network (the first GSM operator in the world).  Nokia became the first manufacturer to have a large-scale production-ready GSM phone with the Nokia 1011 series ().  In 1993, Nokia was the world’s first SMSC (Short Message Service Center) taken into commercial use in Europolitan’s Nokia network paving the way for the cellular company to be the first manufacturer to launch a series of handportable phones for all digital standards (GSM, TDMA, PCN, Japan Digital). The Nokia 2100 was the world’s smallest and lightest family of digital products ().  In 1995, Globe Telecoms released a distinct commercial of which the ad featured a mute couple communicating through text messaging using Nokia 2110 units.  Nokia for one has captured 87% of the cellular phone market in the Philippines alone virtually overtaking Motorola when there came a shift in the service format from analog to digital (, 1999). Carrier Service Another basis for choice is the carrier’s service.  Coverage, cost, capability, and capacity are just four issues to consider in telecommunications, (, 2000). Coverage pertains to the number of cell sites covering the entire archipelago.  Cost is how affordable the service is.  Capability is to how these service providers render 24-hour available service to their subscribers.  Lastly, capacity is how much load of calls and messages and other service related features that their system can handle. “In the end though, people will choose the phone, which makes them happy.  Meaning, if the phone has features that the person really needs, if it has low maintenance and if it “looks like it’s owner” chances are the person has found the right phone for himself.  In addition, choosing a certain kind of cellular phone boils down to fulfilling one’s communication needs” (, 1996).   Text Messaging SMS is a cellular phones’ service ability to send and receive text messages via digital mobile phones.  It’s short because each message is only up to 160 characters in length for the Latin alphabet, and 70 characters for non-Latin alphabets such as Arabic and Chinese Sending text messages does not require making a phone call.  People merely type in a message and the recipient’s phone number, hit the phone’s send key and off it goes to the operator’s message canter, which forwards it to the recipient.  Because messages are exchanged over the frequency the network uses to identify phones rather than the frequency used for making phone calls, messages can be sent and received the instant the phone is turned on and can even be received when a call is on progress”.  This assures that all messages are readily sent and can be readily received within the day. Text messaging has also come in handy for students and the working class since last minute reminders and assignments could easily be relayed via text.  Information such as dates and venues of meetings, parties and the like could also spread easily via text. Despite this, there are still other people who use text messaging as a source of fun and amusement.  They would text people just to annoy and harass them.  Still, others would even engage in economic sabotage, like spreading text messages about bank holidays of certain banks. .  The success of SMS has been attributed to cheaper pricing than voice calls.  In particular, the Filipino youth, enjoy texting back and forth.  It is relatively simpler and maybe even more economical than making a voice call.   It is currently the most widely used mobile data application for person-to-person messaging.  Most Filipinos have taken advantage of this fact and have adapted this technology for enhancing information access and communications. (, 2001) There are already other innovations that have evolved from text messaging technology.  ., headed by , has devised a software that allows mobile phone users access on the net. They developed a software using Wireless Application Protocol (WAP) which gives mobile phone users cut-down versions of some web sites.  This technology will enable people to buy movie tickets over the phone or to make reservations at restaurants. The History And Future Of Texting             According to the , the first text message was supposed to have been sent in December 1992 from a PC (personal computer) to a mobile phone on the Vodafone GSM network in the United Kingdom.  Since then, its popularity has grown worldwide.              Two networks, Globe Telecom and Smart Communications, currently dominate the Philippine cellular phone market.  According to an article in the Philippine Daily Inquirer dated July 10, 2000, the Philippines claims to be the world’s text messaging capital, with reportedly more than 32 million text messages passing through the networks of Globe Telecom and Smart Communications each day.  However, if the figures cited at the Mobile Lifestreams site at  for the European SMS volume are correct, Germany would outtext the Philippines.  While the figure for the Philippine market, would give you 960 million a month, compare this to the supposedly 1 billion text messages the Germans sent in May 2000, when the total SMS volume for that month in the European market was 4 billion.  Still, the site cautions that these figures should not be taken as gospel truth, since they are approximate and based on input from the industry players themselves, just as in the case with the Philippines.              Another telecommunications company in the country, Nextel capitalizes on its high-speed data networks such as General Packet Radio Service (GPRS).  This form of communication is also coursed through a secure high frequency one-way radio wave.              The GSM association has predicted that SMS as we know it today would still be used until at least 2005, and that WAP would be one of its drivers.  One of the main applications for SMS would be an alert service to let you know of incoming email messages.  When roaming, messages could be delivered via SMS since the store-and-forward nature works well with different time zones.    The Internet, however, is now also changing the text experience just as it is reinventing practically everything anyone does throughout the globe.  A person can already do practically everything on the Web, including sending SMS.  Sites like Unimobile at and Quiosat  allows Internet surfers to send SMS for free over the Web.  In the case of Quios, a Q-Messenger application at the site allows a customer ten (10) free text messages a day which can be sent to someone’s mobile phone.  ( 2000) Meanwhile, Unimobile offers an unlimited number of text messages, plus a whole gamut of mobile devices apart from cellular phones, including pagers, personal digital assistants such as the Palm VII.  All these portable digital gadgets are capable of receiving text messages.  A user can download the Unimobile application for free from the site so that it resides on his PC and he can configure his mobile device so that it can receive text messages and electronic reminders even when he’s offline.  Unimobile is now also offering a beta WAP (wireless application protocol) – based version.  These kinds of services allows for text messaging from the internet to cellular phones.  Locally, Globe’s site at  offers an SMS center, which allows an Internet surfer to send SMS to any Globe handyphone subscriber, (,2000).   Why Text Messaging Is Popular In The Philippines The article, “Why Filipinos Love Text Messaging”, says that the main purpose of text messaging is to cut down on call costs and to make the phone double as a pager.  Today’s cellphones have the pager’s capacity of handling text messages sans the operator.  The convenience of a GSM phone is illustrated in this example, “You’re driving down Makati to meet a friend for coffee in Starbucks 6750 and you’re stuck in EDSA traffic.  To spare you some agony, you send your friend a message: WIL B L8 4 ABT 15 MINS”.    Filipinos also want and love to be in touch.  A perfect piece of evidence is the message that the Filipinos transmit usually ends with a question mark and not a period.  An example from this article is – ‘Hi Jed! Musta na? Gud a.m.! -J’ of course Jed would be forced to text back.  Other examples given include the ability to “talk”  in a noisy bar or dance club. Texting also allows greater freedom of expression seen through the messages that’s why Filipinos send many jokes, quotes and sayings via the phone.  (/). Of course, there is also a negative side to text messaging.  Schools in all levels have been one of the first institutions to act on text messaging.  Due to complaints from teachers that students were sending and reading text messages during lecture hours, the Department of Education Culture and Sports (DECS) had to take action, such as temporary confiscation, so as to instill discipline among the students, ( 1998).  Since misdeeds even include sending each other the answers while taking a test, the DECS eventually banned the use of mobile phones in grade schools to stop kids from cheating.   Usage in high schools and universities has also been highly regulated.  Another downside to text messaging, or cellular phone usage in general, is the personal loss of privacy.  It is normally compromised to a certain point since a person is easily reachable, although the user can always turn his unit down or ignore a call.  Finally, there have been some findings that drivers get prone to accidents more by “texting” while driving.  The Traffic Management Group report showed that from 1998 to 2000, road accidents caused by motorists using cellular phones while driving had increased. From three reported accidents in 1998, it climbed to 14 in 1999 and to 40 in 2000.  (, 2001) With the popularity of pre-paid text messaging, some people abuse their anonymity because pre-paid users don’t have any records of their name nor billing address.  People have been known to receive lewd messages and threats by text. April fool’s day jokes are not that funny anymore when sent through text because some people tend to believe in it.  One said the Pope has died then another message started spreading that President Estrada also died asking for prayers and it turned out to be untrue. Prospective Legislation On Text Messaging In an article by  of The Philippine Daily Inquirer entitled “Txtrs: B-ware: Gov’t Out To Get You”, then President Estrada ordered government officials to study “legal measures” to control, if not stop, “destabilizing” text messages such as those that attacked the banking sector; (e.g. rumors from text messaging spread around that a certain bank is getting bankrupt). With the increasing popularity of cellular phones, different types of messages can been sent. Some messages can be vulgar and unethical.  This could be compared to the pornography present in the net. According to then Transportation Secretary ., it is not only impractical to monitor text messaging, because of the volume of messages sent, but also unconstitutional to trace the origin of malicious text messages.  He said that, “Monitoring and maintaining records of messages may also infringe into the right of individuals to private communication”. To minimize such abuse, the government, in cooperation with the two major cellular companies, Smart Communications Inc. and Globe Telecom, will implement three measures to “minimize effects of malicious messages” on SMS.  These are massive information drive on responsible texting, the establishment of call centers where customers can verify the veracity of text messages and a creation of a memorandum of agreement among National Telecommunications Commission (NTC), the cell phone companies and KBP members to “immediately broadcast the truth behind any malicious text messages sent through the SMS”.  But some critics say it is impossible, technically and financially, to trace the source of destabilizing text messages (, 1999).  Government has recognized the power of this communication tool, and that is why they are tasking NTC to set up limitations. The Social Aspect of Owning A Cellphone Some people find fulfillment in the things they do or have done.  Others find this in the person they have become.  Still, others find their mode of fulfillment in the things they own.  For some people, owning a cellular phone would somehow give them a sense of pride.  For example, a person may think that he would have to work hard in order to reward himself with a cell phone.  Thus, he becomes motivated to work and do his best.  This motivation can either be intrinsic or extrinsic motivation.  In intrinsic motivation, it is the internal stimulus that pushes one to act.  The person works not for medals or anything tangible, but for the personal satisfaction for accomplishing their work and attaining their goals.  Extrinsic motivations, on the other hand, are those based on incentives, those that come from the external environment.  They can either be praise or other forms of rewards. Some people would make use of the cellular phone as a means of reinforcement and extrinsic motivation, (, 1999). Owning a cellular phone would also somehow give a person a boost with regards to his self-esteem.  Imagine being among a crowd who all use cellular phones and you do not own one.  The person would somehow feel out of place. It becomes an issue of being “in” with the crowd.  It is a given that people get their feeling of equal status relationships from their friends or peers.  People also get a sense of protection when they deal with other people, as best exemplified by the tribal groups.  Social control also comes about when dealing with social relationships.  This focuses mainly on a group’s approval or disapproval of a certain act.  People will tend to act in accordance to the group so that he would look good to the other members. “Issues such as acceptance, popularity and group solidarity are paramount” ( 1994).  Recreation is also a function of social groups.  This is in order to get away from the drudgery of work or life.  When people interact with others, they learn new things.  It is also through their social interaction that people learn to follow certain fads.  Influences of the society and culture as a whole are hard to avoid.  This can be seen through the way people follow the latest clothes that people wear, the music they listen to and now, to the type of cellular phones they own. Through the use of cellular phones, one can actually make up one’s own identity.  This happens mostly when people look for textmates.  One can hide within the world one has created.  This behavior can be exemplified by this example.  Groups of friends are sitting in a bar but are busy tapping away on their keypads.  Instead of it being a time of catching up on lost time or bonding, they become absorbed in their own world of texting.  They hang out with their friends physically but are mentally not there.  As a result, it appears to be a total disregard for the other person’s presence, and somehow implies disrespect for the other person.  This behavior can be damaging to the formation of lasting friendships and it defeats the purpose of   bonding whenever friends get together. The Financial Cost Owning a cell phone can actually be a burden to the pocket since people have this desire for personalizing their phones.   Add to this, the cost of prepaid cards.  The minimum value for a prepaid card costs varies from not less than three hundred pesos (P300.00) to one thousand pesos (P1,000.00).   Subscription plans are also costly as it has minimum monthly payment of six hundred pesos (P600) for an advantage plan and minimum of two thousand five hundred pesos (P2,500) monthly for executive plan.  Repair and maintenance of the phones can also be costly.  Text Lingo According to , “language is a vocal symbolism of speech with its related bodily gestures and mechanical signals which give precision and finesse to communication” (, 1998).  It is used primarily for communication.  Communication does not always have to take place in a face-to-face manner. People can make use of other means for communication such as telephones and radio.     Cellular phones are used not only for calls but also for sending text messages as well.  Thus, the cellular phones have become mechanical aids to writing.  With the popularity of text messaging nowadays, writing has also taken a new form.  It would be too much of a hassle if people were to type whole words on the cell phone since the cellular phones have only a limited character space.  In order to save space and to be able to type more on the cell phone, a new form of vocabulary is being used by the texters.  Texters make use of shortened forms such as “C U L8R” for “See you later” and “HW R U?” for “How are you?”  Sometimes, this form of vocabulary is carried on to the actual writing process unconsciously. (, 1999).  The development of this text lingo has slowly become entrenched among cellphone users with the youth primarily driving its innovative and creative nature. Coping Mechanisms             Understandably, adjustments will be needed by the users of cellular phone to be able to cope with the stress.  Coping mechanisms allow the individual to deal with the stress.  Coping is either categorized as defensive and direct. (, 1979)  Defensive coping involves either mental or physical escape from the situations, while direct coping involves an analysis of what the problem is, how it came to such, and how one can respond to it.  It also includes plan of adjustment of the person, and a list of new approaches in life that they may use in adjusting. (, 1986)  It is clear that without the coping mechanisms for an individual to hold on, life would be intolerable.  Relating it to this study, cellular phone usage has impeded on the privacy of the user to a point that one has to either ignore the call or just turn off his unit. Synthesis             The review of related literature illustrated the impact of cellular phone usage in the Philippines.  It began by discussing the transition of the cellular phone from a mere status symbol to an important personal gadget.  It discussed the technology behind text messaging and the importance of the carrier services.   With the widespread use of this technology, the review enumerated the main reasons why text messaging is highly popular here in the Philippines.  The cheap cost of text messaging has enabled many Filipinos  all over the country to make it their favored medium of communication.  A brief history of texting as well as its future were also discussed.  The prospective legislation regarding malicious text messaging was also discussed.              Three aspects of the respondents’ personal lives were examined; namely, financial, psychosocial and academic.  For each of these aspects, coping mechanisms were identified.  Finally, a short discussion on these coping mechanisms was made to relate it to cellular phone usage.    Statement of the Problem Undeniably, cellular phone usage has impacted on the lives of young Filipinos.  This study wants to know what lifestyle changes have occurred to a sample of today’s Filipino youth, namely, the students of DLSU.  Specifically, the study aims to answer the following: 1.      From a social dimension and on a personal level, what have been the advantages of cellphone usage? 2.      From a social dimension and on a personal level, what have been the disadvantages of cellphone usage? 3.      How have these advantages and disadvantages affect the academic aspect of the respondents’ lives? 4.      How have these advantages and disadvantages affect the financial aspect of the respondents’ lives? 5.      How have these advantages and disadvantages affect the psychosocial aspect of the respondents’ lives? 6.      Based on the financial, academic and psychosocial aspects, how have the respondents coped with the adjustments in their daily cellular phone usage? Definition of Terms             For a better appreciation of the study, the following are the operational definition of the pertinent terms mentioned.             Cellular Mobile/Phone is a mobile communications device that uses a combination of radio transmission and conventional telephone switching to permit telephone communication to and from mobile users within a specified area. This also refers to the gadget used by the respondents in sending and receiving text messages.              Early adulthood refers to the period that begins around the end of adolescence, somewhere between the age 18 and early 20’s.  This is a period characterized by relative independence, financial and otherwise, from parents and the acceptance of responsibility for ones actions.  Operationally, this is the stage where some of the study’s respondents qualifies. GSM, which stands for Global System for Mobile Communication, is a format for a digital cellular phone that provides service to send and receive text messages.  Also, this kind of format restricts cloning as cellular phone service is accessed through a SIM card.  This is the format used by the study’s respondents for their cellular phone service. Prepaid Account refers to a type of subscription where there are no billing statements as subscription is maintained through the purchase of prepaid call cards.   Prepaid Call Card refers to a card of fixed value which, when used together with a Prepaid SIM card, allows a person to make cellular mobile telephone calls and send text messages. When used, the amount indicated is loaded into the user’s prepaid account. TY refers to the type of payment for subscription wherein a specified amount of credit is ready for use by loading it to a pre-paid account by which some of the study’s respondents avail of. SMS, which stands for Short Messaging Service, is a cellular phones’ service ability to send and receive text messages via   digital mobile phones provided by GSM service companies.  It refers to the type of messaging feature that the study’s respondents’ use for their cellular phones. Subscriber Identity Module Card (SIM Card) determines the phone number and allows one to store data (phone numbers, messages, etc.) wherein the user restricts cloning of the cellular phone accounts due to its exclusive handling.  The SIM card is where subscription is centralized, and is first registered in the service providers’ database for further activation.  SIM cards are classified into pre-paid and line accounts.  Telecommunication refers to long-distance communication. At present, such communication is carried out with the aid of electronic equipment such as the radio, telegraph, telephone, television and computers with internet subscription. Operationally, it refers to the technology in which communication is done by the use of mobile cellular phones.  Text Messaging refers to cellular phone messaging which is capable of 160 characters per message in length for the Latin alphabet, and seventy (70) characters for non-Latin alphabets such as Arabic and Chinese.  Operationally, it is the exchange of messages between two or more GSM cellular phones wherein message is entered through the use of a cellular phone’s keypad.  Primarily, this is the subject of the study. Significance of the Study             This study will be a barometer on how college students have managed to cope with a technological innovation like the cellphone.  Specifically, it will describe the psychosocial, financial and academic aspects of text messaging on the lives of college students studying in De La Salle University.  This study will provide a sketch of how college students cope and how they have used this technology in making their lives become better.   Hopefully, this will provide parents, school administrators, peers and other researchers an insight into the behavior of college students with regard to the life changes that happened to them due to a technological innovation.             This study will also provide another dimension to many studies being currently done on the text-messaging phenomenon in the Philippines.  Specifically, the information that will be provided in this study can be part of a more holistic study on the problems and concerns today’s Filipino youth which would surely interest Filipino psychologists and child care development specialists.    Due to the broad effects cellular phone use has on today’s youth, this study can even be a springboard to related studies focusing specifically on the other aspects related to cellphone usage, like family relations and family conflicts arising from it.  This study will also help cellular phone companies get a better understanding of the importance of a cellular phone to today’s young Filipino.  The cellular phone companies think-tank can use the information in this study to better understand what features of the cellular phone appeal to young people and how better to address their needs without pegging a steep price that may alienate the youth market.  With cellular phone technology rapidly changing, this study can help the marketing departments of these companies prepare their campaigns in such a way that the new features of their newer models appeal to the Filipino youth market. Finally, this study can help today’s Filipino youth take a closer look at themselves, and be a point of reflection, on their individual personal lives, deliberating whether the technology has become a hindrance or an asset to their lives.                 Scope and Limitations This study focused primarily on how cellular phone usage has impacted on the lifestyle of a DLSU student.  Specific attention was given to the advantages and the disadvantages of cellular phone usage to their individual personal lives.  Focus was also given to the analysis of the advantages and disadvantages of cellular phone usage in the respondents’ daily lives.  Only three aspects was used; namely, financial, academic and psychosocial. Based on these three aspects, the study  analyze the coping mechanisms the respondents had to undergo with regard to their daily cellular phone usage. The respondents of the study were limited to currently enrolled DLSU-Taft students.  The study focused only on cellular phone use, specifically on its text messaging function, and not on other interrelated technology like the WAP and the Internet.  The study also gave an overview on the history and future of text messaging as well as a brief discussion on the popular carrier services and how they developed their brand names. Credit:ivythesis.typepad.com

MOBILEPHONES INDUSTRY

CHAPTER 1 Introduction “The Filipinos love to talk and to interact, thus the penchant for gossip, telebabad (the habit of engaging in...