The Success and Failures of Willy Loman

 The word “success” evokes many interpretations.  While the common dictionary definition defines it merely as achieving a desirable outcome, the true meaning of the word extends far beyond that.  In Arthur Miller’s tragic play Death of a Salesman, success carries a much more elaborate definition as Willy Loman, the story’s protagonist, undergoes a tragic fall caused by his perceptions and delusions surrounding the definition of “success”.  Through Loman’s descent, Miller redesigns and embellishes both the meaning and the value of the word by adding a level of complexity beyond merely what is stated in the dictionary. The definition of success, as it pertains to the play, changes with the perspective, the situation, and the desires of those to which it applies.  Willy Loman, throughout the story, has a flawed concept of success and through his failures to succeed as a father, a husband, and a salesman, the true meaning of success is ultimately unveiled.

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For Willy Loman, success is measured against the accomplishments of others.  While, at first glance, this ideology may not seem unusual, since Willy’s desire to achieve what his idols have already achieved seems more or less human.  However, Willy’s unrealistic, and sometimes contradictory, perception of success ultimately results in his untimely.   As noted by literary critic Merritt Moseley, Willy asserts, on multiple occasions throughout the play, that he wants to “[be] recognized as a success and [be] admired, like legendary salesman, Dave Singleman,” a character who Willy never actually knew in person, but nonetheless idolized based on the impressive number of people that attended his funeral (Moseley 2).  Willy shaped his interpretation of success around replicating the influence and popularity of Singleman through his own career as a salesman.  In addition to this goal of achieving the greatness of Singleman, Willy also desires to follow in the footsteps of his mysterious older brother, Ben.  To Willy, Ben represents Willy’s potential to obtain the massive amounts of wealth and power that Ben has managed to acquire.  Idolizing both very different figures, Willy uses the schemas set by both to sculpt a definition of success that is fundamentally flawed.  Individually, the qualities of each idol are positive in nature.  However, in this instance, two positives do not automatically equal another positive.  Aside from the fact that the qualities that Willy chooses to idolize are not aligned with his personally at all, the futility of Willy’s approach to success is due to his inability to see the flaws of each role model.  He only ever choses to consider the positive images portrayed by each idol, falsely assuming that they got to be in a position of admiration simply by practicing the qualities that they projected onto Willy.  Willy truly believes that he can succeed both financially and socially purely by being a likable salesman.  This conclusion, however, proves to be simply unrealistic for his character, and eventually contributes to his downfall.

Another major factor in Willy’s denotation of success is the false assumption that success must be quantifiable, and can only be measured based on accumulated wealth and financial status.  However, this assumption is not the case in the larger reality of Miller’s play.  In the context of Willy Loman, most of his aspirations cannot be quantified through money.  For example, although Willy values positive social connections and human relationships very highly, he has no quantifiable way of measuring his success in this field other than the number of people attending his funeral.  Because Willy has no way to measure his progress socially, he incorrectly interprets his own wealth to be an indicator for his own likeability, ultimately causing him to fail socially.  Consequently, Willy’s failure to be well-liked among both businessmen and his own family members causes him to also fall short as an effective salesman (Jameson 247-251).  Without the ability to maintain his job, Willy cannot sustain himself or his family financially causing him to find himself trapping a vicious cycle based on the delusion that money determines stature.  As the play progresses, Willy’s definition of success, along with his mental state, deteriorate and become more and more detached from reality until he eventually commits suicide with the hope that the insurance money that his family receives from his death earns him some kind of admiration.  Willy states to an imaginary Ben:

I can see [the insurance money] like a diamond shining in the dark, hard and rough, that I can pick up and touch in my hand… [my family] thinks I am nothing, see, and so [they] spite me.  But the Funeral – Ben, [my] funeral will be massive! They’ll come from Maine, Massachusetts, Vermont, New Hampshire… Rhode Island, New York, New Jersey – I am known, Ben, and [they’ll] see it with [their] own eyes once and for all. [They’ll] see what I am. (Miller 1622)

Unfortunately, only five people actually attend Willy’s funeral, tragically demonstrating the futility in Willy’s quantifying success with monetary possession.  Ironically, Miller utilizes the minute number of people at Willy’s funeral to teach the lesson that achievement cannot truly be assessed as it exists differently across all types of mediums.

Through Arthur Miller’s play, Death of a Salesman, success embraces a broader definition.  Learning from the failures and shortcomings of Willy Loman, the definition of success extends beyond simply a desirable outcome or a favorable result, to rather accomplishing a specific, preconceived standard through one’s own efforts.  In addition, Miller illustrates that a successful existence cannot be quantified because the mediums for which success can occur extend beyond any single value of measurement.  Willy’s failures come from him setting unrealistic standards for himself, and hopelessly trying to weigh his success with money.  Provided the consequences of Willy’s actions, Miller teaches a very valuable lesson about the true nature of success, and the realistic way to go about achieving it.

Works Cited

Jacobson, Irving. “Family Dreams in Death of a Salesman.” American Literature, vol. 47, no. 2, 1975, pp. 247–258. JSTOR, www.jstor.org/stable/2925484.

Miller, Arthur. Death of a Salesman. Perrine’s Literature Structure, Sound, and Sense, Eighth Edition, 8th ed., Earl McPeek, 2001, pp. 1545-1631.

Moseley, Merritt. “The American Dream in Arthur Miller’s Death of a Salesman.” Bloom’s Literary Themes: The American Dream, Chelsea House, 2009. History Research Center, online.infobase.com/Auth/Index?aid=&itemid=&articleId=2742. Accessed 2 May 2019.

 

Unsupervised Learning for Predicting Machine Failures for Aircraft Engine

Review of Unsupervised Learning for Predicting Machine Failures for Aircraft Engine Run-to Failure Simulation

Abstract— This research paper shows how damaged machines can be fixed inside the aircraft gas turbine motors. Keeping that in mind, reaction surfaces of all sensors are produced by means of a thermo-dynamical re-enactment model for the motor as a component of varieties of stream and proficiency of the modules of intrigue. An exponential rate of progress for stream and effective loss was imposed for each data set, beginning at a randomly chosen initial deterioration set point. The rate of change of the stream and efficiency indicates unspecified fault to damage and worse the effect. The rates of progress of the flaws were obliged to an upper threshold, were generally picked randomly. Damage propagation was permitted to proceed until failure. A health index was characterized as the base until it reaches zero. Output of the model was the time series (cycles) of detected estimations normally accessible from airplane gas turbine engines. The following research analysis has been done with numerous available open source technologies.

Keywords — Damage modelling, Classification, Linear Regression, Performance Evaluation, Data Modelling, Unsupervised Learning.

INTRODUCTION

Would one be able to anticipate when an engine or device breaks down? This appears to be an engineering question. Be that as it may, these days it is likewise a Data Science question. More solidly, it is a critical inquiry wherever engines and devices utilize information to direct upkeep, for example, air ship engines (1), windmill engines (2), and rotatory machineries (3). With respect to human wellbeing and logistic planning, it’s anything but not a smart thought to simply hold up until the point that an engine breaks down. It is fundamental effective to design support to maintain a maintenance to avoid costly breakdowns.

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Proactive planning is empowered by various sensor advances that gives powerful information about the condition of machines and devices. Sensors incorporates data, for example, temperature, fan and core speed, static weight and so on. Would we be able to utilize this information to anticipate inside specific edges to what extent an air ship motor will work without failures? Also, assuming if this is the case, how to do it? This is the question about the concept of remaining useful life (RUL) which is yet to be answered. It means to appraise the rest of the time a thing, part, or framework can work as per its expected reason before justifying substitution. The present research demonstrates to utilize profound learning in R using PCA (Htelling’s T-square method, Gaussian mixture model and One-class SVM) to foresee the RUL with unsupervised learning. It is intended to give a precedent contextual investigation, not a comprehensive and extreme arrangement. There is a lack of real data to answer this inquiry. Be that as it may, data simulations have been made and given a special asset. One such an entrancing reproduction is given by the C-MAPSS information [1]. It gives prepare information that show sensor-based time-arrangement until the timepoint the motor separates. Conversely, the test data comprise of sensor-based time-series a “random” time before the endpoint. The key point is to assess the RUL of the test set, that is, how much time is left after the last recorded time-point.

I.     Literature Review

II.   Data Analysis

A.      Data Description and Preparation

The raw data was collected from NASA free data sets, named as “Damage Propagation Modelling for Aircraft Engine Run-to-Failure Simulation,” International Conference on Prognostics and Health Management, (2008)., which contains 4 machines training dataset with 4 test data set as well, and their respective (RUL) data set.

The data set incorporates time series for every engine. All enginess are of a similar sort, however every engine begins with various degrees of starting wear and varieties in the manufacturing processes, which is not known to the user. There are three optional settings that can be utilized to change the execution of each machine. Every engine has 21 sensors gathering distinctive estimations identified with the engine state at runtime. Gathered data is debased with sensor noise.

After some time, every engine builds up a fault, which can be seen through sensor readings. The time series closes some time before the failure. Data incorporates unit( engine) number, time stamps, three settings, and readings for 21 sensors.

Table. C-MAPSS contributions to simulate different degradation situations in any of the five rotating engines of the simulated engine.

Name

Symbol

UnitNumber

Unit number of the machines

Time

Recording Data time

Setting1

Setting of Engine 1

Setting2

Setting of Engine 2

Setting3

Setting of Engine 3

Sensor1

Sensor 1 Data w/r to Time

Sensor2

Sensor 2 Data w/r to Time

Sensor3

Sensor 3 Data w/r to Time

Sensor4

Sensor 4 Data w/r to Time

Sensor5

Sensor 5 Data w/r to Time

Sensor6

Sensor 6 Data w/r to Time

Sensor7

Sensor 7 Data w/r to Time

Sensor8

Sensor 8 Data w/r to Time

Up to Sensors 21…

Sensors Data w/r to Time

B.      What to Predict?

In other way, which variable is our target. Since the engine is degrading after each operational, we need to predict how many cycles is left before the engine breaks down. This brings us to Remaining Useful Life or RUL. This can help us measure how many life cycles are remaining before it breaks down.

1.)     So, what is RUL?

The Remaining Useful Life (RUL) is a term that helps us to know the number of residual years that a thing, segment, or framework is assessed to have the capacity to work as per its planned reason before justifying substitution. The remaining useful life is assessed dependent on perceptions, or normal appraisals of comparable things, segments, or frameworks, or a mix thereof. For instance, the remaining useful life of a rooftop with a PVC film that was introduced around seven years prior and was ineffectively kept up may be roughly ten years. The Remaining Useful Life of building segments and frameworks is noted in a Property Condition Assessment and is utilized to help ascertain expected short-and long-term capital costs required to keep up a property.

2.)     Technical issues with the Data

The training data does not have RUL variable.

The only provided RUL is in the last cycle of each engine.

In other words, training data is not labelled but test data is partially.

3.)     Solutions to the issues:

Assuming that the last cycle of each machine is failure.

Which means, at the last cycle of each machines RUL equals zero.

So, in each cycle, RUL decreases until it comes to 0.

C.     Experimental Setting

1)     Environment

There were many tools used as to depict outcomes with different tools, and all of them are open sourced for this research paper.

2)     Model Selection Process

  At first, when modelled and graphed according to the senor readings, the reading was frequent as:

Since, a lot of sensor data were co-related to each other, and a lot of sensor measurements were constant. The models (s2, s8, s9) was selected for the final model.

3)     Modelling Approach

a.)     Data Pre-processing (Training set):  The following process is applied for Data Pre-Processing:

       Setting variables name

       Extracting sensors effectively

       Labelling conditions into 4 categories based on RUL.

b.)     Data Pre-Processing (Test set):

The relationship between each category are as follows:

          0~50 cycles: urgent

51~125 cycles: short

126~200 cycles: medium

201~: long

4)     Visualizing Data

 

1.)     Dimensional reduction by PCA

By applying Principal Component Analysis (PCA) to make the data in standard form for training the data set. We can see by creating plot for the first 2, we can confirm that first “long” class data forms clusters, and value of first increases as per the number of cycles.

Htelling’s T-square method:

Among numerous statistical oddity location strategies, Hotelling’s T-square strategy, a multivariate factual examination procedure, has been a standout amongst the most ordinary technique. This technique has a crucial suspicion that the data pursue a unimodal distribution. In light of this supposition, the strategy computes squared Mahalanobis distance for every datum in multi-dimensional space, and judges x percent anomalies in dataset as an oddity.

Training Data Model:

Testing Data Model:

Same goes for the GMM Model:

Despite the fact that Hotelling’s T-square strategy is material for some multi-dimensional data sets, this technique has a major suspicion that the data pursue a unimodal conveyance. Thus, when the data pursues multimodal appropriation, other PdM strategies ought to be connected. Gaussian blend demonstrate is a probabilistic model that expect every one of the information focuses are produced from a blend of a different Gaussian dissemination. Therefore, by evaluating mean and difference esteems for each Gaussian circulation from watched information, x percent anomalies can be distinguished. To figure the greatest probability estimation of Gaussian blend display, Desire Augmentation (EM) calculation is regularly utilized.

Training Data Model

Testing Data Model

Same for the One-Class SVM

The past strategies, Hotelling’s T-square strategy and Gaussian blend demonstrate, utilize Gaussian dissemination based parametric model. Nonetheless, in handy circumstance, in some cases data dissemination does not have express groups or, in more serious case, can’t be gotten a handle on for some reasons, for example, extensive number of measurements. In such a case, non-parametric model can be pertinent. In this demo, I might want to demonstrate how one class SVM, one of run of the mill non-parametric order strategy, can recognize a x percent exception from a given data collection.

Training Data Model

Testing Data Model:

 Conclusion

The primary target of predictive maintenance is to predict when hardware failure can happen. At that point keep that failure by taking significant actions. Predictive Maintenance System (PMS) screens future failures and will plan support ahead of time.

This can help us in:

Reducing maintenance frequently.

Cost saving

Reducing machine failures

Predictive maintenance using different regression and classification algorithms. These techniques require large amount of training data that includes failure readings. Since failures does not happen frequently, data collections can take quite a long time. This still remains a significant issue in predictive maintenance. This type of data needs to dealt in different scenario. In other words, making it a classification problem rather than regression.

III. References

  A. Saxena, K. Goebel, D. Simon and N. Eklund, “Damage Propagation Modelling for Aircraft Engine Run-to-Failure Simulation,” International Conference on Prognostics and Health Management, (2008).

Turbofan Engine Degradation Simulation Data Set

Mathworks (2018). Examples of Data Analytics for Predictive Maintenance

Roshan Alwis., Srinath Perera, Srini Penchikala (2015)..Machine Learning Techniques for Predictive Maintenance

Ruthger Righart (2018). Sensor Time Series of Aircraft Engines

Hank Roark (2016). Machine Learning for Sensored Internet of Things

R4DS Online Learning Community (2018). Explorartory Data Analysis of NASA Turbo Engine Degradation Data

Research Gate (2014). Predictive Maintenance Data Sets

University of South Florida Scholar Commons (2015). Essemble Learning Method on Machine Maintenance Data

Ye Xing (2017). Aircraft Predictive Maintenance Project

Science Direct R.B. Jolly, S.O.T. Ogaji (2016). Gas Turbine diagnostics using artificial neural-networks for a high bypass ratio military turbo engine

Failures of Transactional Marketing: An Analysis

A. R. Lacey (1996), in Dictionary of Philosophy explains paradigm as “a shared assumption or an accepted theory which governs the outlook of an epoch and its approach to scientific problems … [giving]… standard forms of solutions to problems”. Within the physical and social sciences, it is common for one paradigm, a dominant paradigm to be prevalent. Currently, the dominant marketing paradigm, the accepted model of how marketing works and should be integrated with the rest of the world, is what has come to be called Transactional Marketing (TM) (Gronroos, 1996; Aijo, 1996; Gummesson, 1987; Berry, 1983; Jackson, 1985; Payne, 1995).

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This research is principally concerned with what has been called Relationship Marketing (RM), a term alluded to by Thomas (1976), but first explicitly used by Berry (1983: see Kotler, 1992; Gronroos, 1990, 1991; Hunt and Morgan, 1994; Berry, 1995; Sheth and Parvatiyar, 1995; Turnbull and Wilson, 1989). The foundations of Relationship Marketing are inextricably mixed with the development and practice of Transactional Marketing. The underpinning theories and conceptualisations of RM often only exist in relation, or opposition to the theory and practice of Transactional Marketing. It is therefore necessary to understand Transactional Marketing before RM can be fully comprehended.
The American Marketing Association has defined (transactional) marketing as “the process of planning and executing conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational objectives.” (AMA Board, 1985). The marketing concept is a very simple but powerful idea. The best way for a company to meet its objectives, profit making or otherwise, is by satisfying customers-“the achievement of corporate goals through meeting and exceeding customer needs better than the competition” (Jobber, 2001). This is best done by all members of the firm seeking to serve the needs of the customer, even at the expense of producer inconvenience. If this concept is adopted by the organisation, it leads to what is called a marketing orientation. The analysis and subsequent review of transactional marketing will be in two parts, an appraisal of its theoretical origins, development and weaknesses and an examination of the standard ways in which firms implement it. The next section will critique the Transactional Marketing Paradigm on two main fronts. These being firstly, criticisms based on theoretical weaknesses or omissions, and secondly, criticisms about the way in which theory and models have been misunderstood or ignored by firms. Both of these categories however, emerge out of the unique economic and social environment within which the transactional marketing paradigm developed (Webster, 1992; Aijo, 1996).
1.1. THE BIRTH OF MARKETING THEORY
The origins of Transactional Marketing are in microeconomics, North America and the 1950’s. Prior to WWII, economists developed price theory to embrace what they called oligopolistic competition (Chamberlain, 1933; Sheth, Gardner and Garrett, 1988; Waterschoot and Van Den Bulte, 1992). This theoretical development led early marketing theoreticians (McGarry, 1950; McKitterick, 1957; Alderson, 1957: see Gronroos, 1994, 1996) to create ‘lists’ of marketing variables deduced from econometric, profit optimising equations- the so called functionalist school of marketing (McGarry, 1950). In turn, this inspired Borden (1954) to introduce the concept of the marketing mix, a list of 12 variables (product, price, branding, distribution, personal selling, advertising, promotions, packaging, display, servicing, physical handling, fact finding and analysis which “the marketer would have to consider in any given situation…. [And] would blend the various ingredients or variables of the mix into an integrated marketing program.” (Gronroos, 1994b:350).
In a seminal work, McCarthy (1960) presented the marketing mix management approach, reconstructing Borden’s original 12 variables into the now familiar ‘4P’ model (Price, Product, Promotion and Placement). The theoretical foundations of this model have been severely questioned (Waterschoot and Van Den Bulte, 1992; Gummesson, 1987; Sheth et al, 1988; Webster, 1992; Duncan and Moriarty, 1998). Principally, these questions stem from the fact that the original microeconomic variables, derived through empirical induction had solid theoretical foundations, whilst Borden’s list had only second-order links to these foundations and, crucially, was not intended as an exhaustive definition or method of implementation but merely as a set of guidelines within a fully integrated marketing program. Real world developments and its inherent simplicity ensured the rise and rise of the 4P model and its attendant Marketing Mix Management theory. 1950’s North America -a huge domestic market of apparently homogenous and insatiable customers -led to rapid increases in the demand for standardised consumer goods and the crowning of the United States as the dominant marketing culture. In time it became the basis of ‘modem’ transactional marketing (Takala and Uusitalo, 1996; Kotler, 1992; Aijo, 1996).The simplicity and communicability of the marketing mix paradigm, in combination with its apparent success, combined to turn marketing into “a highly effective impact machine” (Gr6nroos, 1996c: 16). Transactional Marketing rapidly became the overwhelmingly dominant marketing paradigm (Dixon and Blois, 1983, Kent, 1986).
1.2. MARKETING IN CONTEMPORARY ORGANISATIONS
Given the great number of organisations which pay at least lip-service to the importance of marketing, a diversity of methods of implementing transactional marketing is inevitable (Brodie et al, 1997). The most typical structure, and one commonly found within the context of end-user orientated firms (Christy et al, 1996) is to have within the organisation a sub-unit, separate from the rest of the firm, with responsibility for ‘marketing’ – market analysis, advertising, sales promotion, pricing and distribution (Buttle, 1996; Deshpande and Webster,
1989; Gurnmesson, 1994). The principal focus of this research is on the ‘relationship’ between such firms, and their customers.
“In everyday marketing vocabulary….marketing department, an organisational unit, is used as a synonym for marketing function” (Gronroos, 1994). The implication is clear, Transactional Marketing theory suggests that marketing can be treated as a separate, discrete function, rather than as an integrated one (Berry and Parasuraman,1995; Waterschoot and Van Den Bulte, 1992; Palmer, 1994; Payne, 1995; Thomas, 1996). The existence of these ‘marketing departments’ echoes much about the functionalist, scientific [econometric] origins of transactional marketing. The philosophy of implementation prevalent within western business is that “specialists should themselves take care of a task for specialists” (Gronroos, 1996). In many businesses, the marketing department is seen as having total responsibility for “…various marketing tasks, such as market analysis, market planning, advertising, sales promotion, pricing, distribution and product packaging” (Gronroos, 1994). This begs the question that if the marketing department takes care of these entire fundamental issues, what exactly is the rest of the business for?
One of the primary and most traditional Justifications of adopting a marketing orientation rather than a sales or production orientation is that marketing integrates the other functions of the business (Bennett, 1996; Jackson, 1985) into a more coherent whole, built around the needs and wants of the customer. The outcome of creating a ‘marketing department’ is to bring about a situation where, within an organisation, “marketing department… is used as a synonym for marketing function, which is the process of taking care of the fulfilment of customer needs and desires. As a consequence, the rest of the organisation is alienated from marketing, and the marketers are isolated from design, production, deliveries, technical service, complaints handling, and other activities of the firm ” (Gronroos, 1994). Marketing is being treated as a specialist management function, rather than a general management issue (Gronroos, 1996).
Within such organisations, there is a clear-cut distinction [inferred from marketing mix management theory] between those who ‘are’ involved with marketing, and those who ‘aren’t’. This process has been called the “Ghettoisation” of marketing (Gummesson, 1987).
It has been strongly argued (Gummesson, 1987,1990,1994; Duncan and Moriarty, 1998; Aijo, 1996; Christy et al, 1996; Heide and John, 1995) that the distinction between the marketer and non-marketer is an artificial one. Opportunities for marketing activity are not limited to those ‘inside’ the marketing department. “What do the following people have in common: a telephone operator connecting a customer with a salesperson; an installation team from the supplier spending two weeks on the buyer’s premises installing and testing new equipment: a management consultant presenting a progress report in an assignment?” (Gummesson, 1991). The answer is of course, that these are all people outside the marketing department, [therefore by definition “not responsible” for marketing] where, nevertheless, “their attitudes and way of doing their job have an impact on the customer’s perception of the firm” (Gronroos, 1996).These “non-marketers”, with their influence on the firm’s ability to market itself efficiently and effectively have been called ‘part-time marketers’ (Gummesson, 1987).
1.3. SUMMATION OF THE PROBLEMS INHERENT TO THE ‘MARKETING MIX’
The origins of marketing mix management theory, and the transactional marketing paradigm it gave rise to be in the USA, the nineteen-fifties and microeconomics. The theoretical foundations of this paradigm are questionable in terms of its ‘translation’ from econometric modelling and its pedagogical simplification. At best, the 4P model was suitable for the unique marketing environment created by the post WWH American autarchy. The theoretical weaknesses of the transactional marketing paradigm have been highlighted by radical changes in the business environment, such as the globalisation of competition and the increasing sophistication of consumers and products. These weaknesses are especially apparent in contexts that are significantly different from that of its origins -most noticeably services marketing and European markets. The academic response has been to avoid the problem by papering over the theoretical cracks. Within firms, the creation and stagnation of marketing departments has ‘ghettoised’, neutered and isolated marketing from the consumer and even the rest of the firm. As a result of this, transactional marketing treats the consumer as passive and fails to fully recognise the marketing importance of interaction between front-line staff and customers.
Transactional Marketing fails its own definition. It is a production orientated definition of marketing, not a customer orientated one.
THE ORIGINS OF RELATIONSHIP MARKETING
THE ‘OTHER’ MARKETING THEORIES
The origins of Relationship Marketing are in Europe, the nineteen-eighties, and dissatisfaction with the Transactional Marketing paradigm. It was noted earlier that transactional marketing theory was principally developed from its origins in end-user, consumer markets. Relationship Marketing draws on a broader theoretical base (within a marketing context), with concomitant development within the services and business to business (B2B) marketing literatures. The term ‘Relationship Marketing’, alluded to by Thomas (1976) was first explicitly used by Berry (Berry and Parasuraman, 1991; Berry, 1995; Gummesson, 1987; Gronroos, 1996; Payne and Richard, 1993; Robicheaux and Coleman, 1994; Payne and Frow, 1997). It has also been called “customer-focused management” (Gummesson, 1994), or “relationship management” (Payne, 1996). Berry (1983) used the term within the context of criticising services marketing literature, arguing that “researchers and businessmen have concentrated far more on how to attract consumers to products and services than on how to retain those customers”. He advocated a switch from a transactionary approach, where marketing effort was focussed on customer attraction, to a relational approach, where the attraction of new customers should be viewed only “as an intermediate step in the marketing process” (Berry, 1995), and the primary objective was retaining customers.
Berry (1983) defined Relationship Marketing as “attracting, maintaining and -in multi-service organisations -enhancing customer relationships”. Simultaneously, Hammarkvist, Hakansson and Mattson (1982), working within the arena of business-to-business marketing (Gronroos, 1996), advanced similar definition (Andersson and Soderland, 1988; Anderson, Hakansson and Johanson, 1994) “all activities by the firm to build, maintain and develop customer relations. ” (Hammarkvist et al, 1982: cited Gurnmesson,1987). That relationships should be managed and built has become a cornerstone of both the Nordic and the Industrial Marketing and Purchasing (IMP) School of marketing (Mattsson, 1997; Gronroos, 1996c). This parallel development within separate areas of research is far from coincidental (Takala and Uusitalo, 1996). As with the Transactional Marketing literature, each of these streams of research emanates from within a specific business environment (Aijo, 1996).
SERVICES MARKETING
It was argued earlier that the Transactional Marketing Paradigm habits origins within a unique and highly specific business environment, that of the North American consumer goods markets of the 1950’s. It was further suggested that these origins limited the value of TM as a universal theory of marketing, and that primarily within the context of end-user orientated literature, development consisted of re-jigging a redundant theoretical format.
The deviation from this specific business environment was greatest within the domains of service marketing and business to business marketing (Mattsson, 1997), albeit in very different ways. The theory and practice of transactional marketing assumes that consumers are available in great numbers and behave passively. Within industrial and service markets, the interactive Participation of the customer is required to successfully complete the exchange (Gummesson, 1987), within business, customer-firms are often limited in numbers. An ancillary implication of treating the customer as passive, someone “to whom things are done” (Dixon and Blois, 1983) is to instil within the business the philosophy of competing with customers, rather than interactive co-operation.
Transactional Marketing Theory maintains the assumption of its microeconomic origins in that the marketing mix is a tool used to help a company ‘optimise’ [maximise] its profit function (Waterschoot and Van den Bulte, 1992; Gronroos, 1991). It is because of this that firms consider marketing objectives met at the point of customer attraction -i.e. moment of exchange. When marketing a service, it is argued that the objectives should not only be to only to attract, but to then keep and maintain the customer-to develop a long-term relationship with them (Bitner et al, 1994; Cravens and Piercy, 1994; Gronroos, 1991; Gummesson, 1987b). When selling a physical product, the costs of production are offset by the revenue of the purchase. With a service, the majority of costs are often incurred whilst ‘setting-up’ the service (Berry and Parasuraman, 1991; Booms and Bitner, 1981), for example; accountancy and banking. The implication of this is that longer-term strategy, in conjunction with placing significant emphasis on customer retention will yield dividends (Berry, 1995; Payne and Richard, 1993; Parasuraman et al, 1991; Gronroos, 1990), and indeed, empirical evidence to support this has been found. “Reichheld and Sasser (1990) have demonstrated across a variety of service industries that profits climb steeply when a company successfully lowers its customer defection rate…the researchers found that the firms could improve profits from 25 percent to 85 percent by reducing customer defections by just 5 percent. Not only do loyal customers generate more revenue for more years, the costs to maintain existing customers frequently are lower than the costs to acquire new customers” (Berry, 1995). Other studies have provided further evidence of the benefits of a long-term, customer retention strategy within competitive consumer-service markets, Storbacka (1997), Gwin (1988) and Perrienet al (1993) in banking, Crosby and Stephens (1987) in insurance. ‘Moments of Truth’ and the Crucial Role of the Part-Time Marketer. Firms producing end-user products often sell through an intermediate, retailing company. As such, opportunities for marketing are indirect via mass-media ‘and market research (Henry, 1994). The interaction required within service and business-to-business marketing enforces a more direct approach (Gronroos, 1994). The image and reputation of the firm cannot solely be constructed through promotion. Interaction between a consumer and the firm’s “part-time marketers” (Gummesson, 1987) will result in that consumer have a positive or negative perception of the company (Price et al, 1995; Cravens and Piercy, 1994) a process that Gronroos (1982) calls perceived service quality.
Given the intangibility of service ‘products’, this perceived service quality is of the utmost importance, the consumer has little else by which to judge the firm outside of his direct interaction with it (Ferguson,1996; Bitner et al, 1994). The marketing effort of the part-time marketers therefore forms the bulk of the firms marketing impact (Gronroos, 1996), “often they are the only marketers around” (Normann, 1983). “Research shows that the customer will judge the quality of the service and form an attitude to the provider both from the experience of the production1delivery process and of the future benefits of the service” (Lehtinen, 1985).
In a situation where the majority of marketing activity does not come from the full-time marketers within the marketing department, it makes little sense to plan the activities of this department separately. It was argued earlier that if such a department is considered by the rest of the firm to be taking care of the marketing function’, it will become increasingly difficult to create an interest in marketing amongst unwitting part-time marketers (Gronroos, 1982; Christy et al, 1996). A marketing orientation is only achieved when all members of an organisation has asked them “how do I contribute to excellence in customer relations and to revenue” (Gummesson,1991: 60).
An auxiliary concept to that of the “part-time marketer” is that of ‘points-if-marketing” (Normann, 1983), more poetically called “…moments of truth. These are natural opportunities emerging in the production and delivery process; for example, the interaction between a doctor and a patient ” (Gummesson, 1991). For these occasions to be positively resolved, marketing must be designed-into the process, rather than “tacked-on”.
RELATIONSHIP MARKETING DEFINITIONS FROM ‘SERVICE’ LITERATURE
Since Berry (1983), other authors have presented alternative definitions of Relationship Marketing within the services marketing literature. “RM concerns attracting, developing, and retaining customer relations ” (Berry and Parasuraman, 1991). “establishing a relationship involves giving promises, maintaining a relationship is based on fulfilment of promises; and, finally, enhancing a relationship means that a new set of promises is given with the fulfilment of earlier promises as a prerequisite. ” (Gummesson, 1991). The core of these ideas from services marketing is the interpersonal interaction between buyer and seller interaction. The organisation should be structured and managed so that promises worth making can be kept. Clearly, a relationship between two parties is something that grows in strength through repeated exchanges over a period of time, it is not instantaneously generated.
BUSINESS TO BUSINESS AND NETWORK MARKETING
Such ‘moments of truth’ also exist within a business-to-business context. If the interaction between producer and consumer is crucial in services marketing it is doubly so within B2B marketing -principally because of the relatively low number of customers/suppliers (Andersson et al, 1994; Blois, 1997; Dabholkar et al, 1994). These dyads do not exist in isolation. Within the business marketing literature it has become clear that the theoretical foundations of contemporary work are not shared with the “Kotlerian ” (Andersson and Soderland, 1988) marketing mix theory, which has microeconomic ancestry. Instead, ‘network-theory’, which attempts to model the process of resource exchange in markets where both buyer and seller are firms or other organisations has its origins in empirical work conducted over the last 20 years, principally in Northern Europe (Mattsson, 1997). The results of these studies, when assessed as a body of work, highlight several commonalities in the exchange behaviour between firms that contradict business philosophy derived from the transactional marketing paradigm (Elg and Johansson, 1996). B2B partners are characterised as active and mutually dependent, with the buyer and seller both able to initiate an exchange. Interaction between the organisations was not the sole purview of a marketing department but instead between the equivalent departments in each firm -‘inter functionally’.
In practice, it was recognised that the marketing emphasis had switched from optimising the marketing mix to the management of the firm’s relationships (Andersson and Soderland, 1988). Network theory suggests that markets are heterogeneous, rather than homogenous (Matthyssens and Van Den Bulte, 1994). The marketing objectives of the firm became to establish, develop and decide when to terminate its relationships with the customers and suppliers in its network (Hammarkvist et al, 1982).
This divergence from the transactional marketing paradigm was driven by factors in the business environment (Blois, 1997; Andersson and Soderland, 1988). Many of the economic and social characteristics of Scandinavian countries [where much of the empirical work was conducted] helped to highlight the differences between consumer markets and business to business markets (Andersson and Soderland, 1988). These economies have been traditionally noted for high levels of concentration in industry, a considerable amount of interaction between firms, the state and labour unions, and the national dependence on the export of highly complex products (Porter, 1985). In general terms, business-to-business markets are characterised by a limited number of potential customer-firms, encouraging businesses to maintain relations with their partners over-time (Anderson and Narks, 1984, 1990), rather than the start-stop philosophy of transactional marketing. The increased level of interaction between the partners and the individualistic requirements of each customer obviate the need for a standardised marketing program (Dabholkar et al, 1994). Relationships must be tailored, not off the peg (Harland, 1996).
The management of relationships is a complex issue, Hakansson and Johanson (1992) acetones relationship management problems as either limitation or handling problems. Limitation problems concern the firm’s management of its ‘portfolio’ of relationships -its collection of dyadic interactions. These problems concuern which, if any, of the firm’s relationships should be emphasised (Andersson and Soderlund, 1988). To misquote Clausewitz, he who emphasises everything, emphasises nothing’. Handling problems concern the manner in which relationships are established, and once established, how they are maintained, developed and judged appropriate for termination.
Within a network, what are the relational objectives of an organisation? Transactional Marketing advocates a competitive stance, the results of any interaction between a buyer and seller must result in one ‘winning’ -and one ‘losing’ (Doyle and Engermann, 1992; Donaldson, 1996). Network theory espouses co-operation to produce a win-win situation (Deshpande and Webster, 1989). Despite this, network theorists consider that firms must work to deepen chosen relationships, to achieve some level of power -also called ‘bonds’ over their partners whilst striving to remain free of such bonds themselves (Andersson and Soderlund, 1988). Relationships can create bonds of several types, planning, knowledge, legal and social (Berry, 1985).The end of the relationship will incur switching costs, not necessarily purely financial. The original quote being ‘He whose fends everything, defends nothing’
BUSINESS-TO-BUSINESS RELATIONSHIP MARKETING DEFINITIONS
Since Hammarkvist et al (1982) defined “relationship marketing” within the context of business network marketing, others have proposed alternatives. “RM is an emergent disciplinary framework for creating, developing and sustaining exchanges of value between the parties involved, whereby exchange relationships evolve to provide continuous and stable links in the supply chain ” (Ballantyne, 1994) ….. Is not directly aimed at immediate transactions but is based on building, supporting and extending customer relationships” (Matthyssens and Van denBulte, 1994). “RM is the process of co-operating with customers to improve marketing productivity through efficiency and effectiveness” (Parvatlyar, 1996). At the heart of these ideas is the concept of a partnership where both parties require co-operative behaviour from the other in order for the relationship to be mutually beneficial -neither has many other alternatives, to buy from or supply to. The focus is not at the level of one-on-one interaction of services marketing, but is instead much wider -it is necessary for large groups on both sides to contribute.
THE RELATIONAL CONSTRUCTS OF ‘COMMITMENT’ AND ‘TRUST’
Until quite recently, little attempt had been made to provide network theory with the conceptualisations necessary to understand the processes of relationship maintenance and development. Whilst an initial model was presented by Dwyer, Schurr and Oh (1987), the first serious attempt test a model in a structured manner was in a seminal paper by Morgan and Hunt (1994), (see Kalatatis and Miller, 1996; Hunt, 1997; Gronroos, 1996a; Gummesson, 1997).
“Relationship Marketing refers to all marketing activities directed towards establishing, developing and maintaining successful relational exchanges.” Morgan and Hunt (1994)
They further argue that Relationship Marketing requires the successful management of relationships with the firm’s partners. Such management requires the establishment, maintenance and development of relationships, in which understanding of concepts like ‘commitment’ and ‘trust’ are keys. Morgan and Hunt have suggested that commitment and trust are amongst the key mediating variables that distinguish productive, effective relational exchanges from those that are inefficient and ineffective (Morgan and Hunt, 1994). Furthermore, commitment and trust between partners in a network leads directly to “co-operative behaviours” in three ways. Firstly, they predispose the partners towards actively preserving relational ‘investments’. Secondly they help to prevent partners from adopting short-term, opportunistic behaviours. Thirdly, they help to support the view of high-risk actions as being prudent in the longer term (Hunt, 1997). Morgan and Hunt construct what they call a KMV (Key Mediating Variable) model to show the central importance of commitment and trust in marketing relationships.
THE BEGINNINGS OF A RELATIONAL PARADIGM?
The increasing awareness of the limitations of the Transactional Marketing Paradigm, in conjunction with the development of ‘Services’ marketing and ‘Network’ marketing has led to calls for a substantial change in the marketing philosophy, practice and ethos (Daskou, 1997; Clarkson et al, 1997; Palmer, 1994). ” in the author’s view, the present marketing concept, as it appears in research, textbooks and seminars is unrealistic and needs to be replaced ” (Gummesson, 199 1). “The need for a paradigm shift in Marketing, based on a Relationship Theory is being advocated more and more strongly “( Gronroos, 1990).
This change is not skin-deep, it will not be quick, and it will not be painless. “RM suggests different focus and different underpinning values for marketing that, in my view; justify calling RM a new paradigm and the beginning of a new marketing theory.” (Gummesson, 1994). “It requires a totally new approach to some of the fundamental thoughts in marketing…the transition from a transaction-orientated marketing mix-based practice of marketing to a relationship-oriented one is not an uncomplicated process. The old paradigm has deep roots in the minds of marketers as well as non-marketers in a company. “(Gronroos, 1996).
What then, is the association between Transactional and Relational marketing? Any meaningful answer to this critical question requires a definition of ‘Relationship marketing’. The first definition of RM offered as a general rather than a business/services/consumer marketing specific definition is to be found in Gronroos (1991). “Marketing is to establish, maintain and enhance, and where necessary end relationships with customers and other parties at a profit so that the objectives of the parties involved are met. This is done by a mutual exchange and fulfilment of promises. “
As Aijo (1996) notes from the work of Sheth et al (1988), “Throughout its history…marketing has been generally dominated at any one time by one prevailing perspective”. The implication of this is firstly, that the transactional paradigm will be completely replaced by the relational paradigm, and that secondly, the association between the alternative paradigms is competitive, rather than complementary. For some brief time, this view received wide support, no doubt influenced by the weaknesses of the transactional paradigm and incredible growth of relational literature (Berry, 1990; Gronroos, 1989; Dixon and Blois, 1989; Gurnmesson, 1991). Quickly, this simplistic view of the (non) association between transactional and relational was superseded by more sophisticated thoughts (Brodie et al, 1997;Aijo, 1996). Gronroos (1991) considered that the true decision facing firings was not Transactional Marketing or Relationship Marketing, but rather where on a “marketing strategy continuum ” the company should place itself In some cases, a firm could be justified in maintaining a purely transactional approach. “For some types of products and in some situations or for some types of customers a one-deal-at-a-time approach may be good strategy” (Gronroos, 1991). This idea has great appeal, especially when it is considered that some sections of the wider marketing literature have discussed for years the interaction between the customer and aspects (we might say avatars) of the impression/relationship the firm has made in the mind of the customer-obvious examples of this would be store location strategies and especially branding. Indeed, the argument could be made that if the objective of the research project is to examine customer perspectives on their relationships with firms, an assessment of branding would be a key part of the literature review and would feed into the design of the research questions and fieldwork. A subtle but important distinction needs to be made between the ‘relationship’ a customer has with a firm and the perspectives that customer has on ‘relationship marketing’ as applied to them by the company. This research project is centred on the latter, not the former.
This Transactional Marketing-Relationship Marketing continuum forms the basis of a simple model that developed by Gronroos. In this model he attempts to place various categories of goods/services at the appropriate place
 

Contingency Planning Failures at KFC

Introduction
Kentucky Fried Chicken (KFC) is a big chain chicken restaurant providing fast service fried chicken foods with its headquarter located in Louisville, Kentucky. In December 2018, it was already located in 136 countries in 22,621 locations internationally. KFC competes against major global food chains such as McDonald’s Corporation. Apart from McDonald’s Corporation, KFC owner Sanders outcompetes other food chains by its commitment to significant consumers’ needs such as recipe perfection, cooking speed, quality service, and availability, pricing, optimum food temperature, and safety. Kentucky Fried Chicken value chain starts with suppliers and the raw materials they offer such as chicken, mashed potatoes, buns, seasoning, and packaging. It involves intermediate processing for cooking, taking orders and finally assembling the products for order delivery and hoping that the consumers will be pleased. As aforementioned, Quality of service (QoS), food quality and pricing are some of the determinants of consumer satisfaction (Cuong et al., 2019). However, there have been some arising issues in the company operation management in the past few years that led to the company’s failure even though it is up and running.
Problem Statement
 The main issue was that the restaurant founder Sanders Harland David failed to administer the supply chain management as well as lacking a contingency plan. In February 2018, the company closed three quarters and above of its locations because there was a delay in raw materials delivery from DHL International GmbH. This led to a shortage of chicken supply and loss of customers as the company only had one warehouse. This questions KFC if it has a well-established supply chain with a contingency plan that can keep the company going in case of incidents.
As-Is Condition
Supply chain Management Process in KFC

Strategic Planning
Supply Planning
Procurement
Demand Planning
 
Order Fulfillment
Manufacturing
Transportation
Warehousing
 
Figure 1.1: Supply chain Management Process in KFC
Strategic Planning. Involve the plan made on how the supply chain will operate, evaluate and optimize business operations and established strategic relationships with the supplier. KFC at the moment of supply shortage was having a poor strategic plan.
Demand planning process. KFC could not predict the future using the judgmental and historical data that could predict varying outcomes as DHL claimed that it was not entirely their fault. KFC failed because its demanding customers require a contingency plan for business continuity.
Supply process. KFC didn’t ensure stock safety and its distribution by DHL Company is not properly capable of supplying all the KFC restaurants. Although the working ones’ procurement process is till fine because KFC did cut on some restaurants to allow other to have sustainable purchasing to receive required good and the final product sales are still made for orders requested in the order fulfillment process. The manufacturing process is as well as doing well with limited supplies as the goods obtained are still processed with good quality in a few chicken cooking restaurant.
Warehousing. Inbound KFC processing is not well established as it is dependent on only one warehouse that does supply all the KFC restaurants in the USA and other states copy on the same.
Transportation process.  KFC doesn’t have a better transportation method as it depends on only one transportation method by DHL Company.
KFC’s Competitive Situation
When it comes to competitors, product quality matters. The product quality is one of the things that make consumers buy and get satisfied. The operational management problems had led to customer dissatisfaction in the year ended December 2018. The data displayed will be focusing on 2019 customer experience as the evaluations are commonly done for the whole year to see the bigger picture. This will be shown in figure 1.2.

Figure 1.2: American customer satisfaction index scores of Kentucky Fried Chicken restaurants in the United States from 2000 to 2019. Retrieved from https://www.statista.com/statistics/216698/kentucky-fried-chicken–customer-satisfaction-in-the-us/
Between 2017 and 2018, there was a decline in customer satisfaction due to company chicken supply shortages. The customer can be satisfied only if their needs are met. According to Nasir et al., (2014), quality of service and product quality is viewed as a positive impact on customer service. The service and products provided by KFC in 2018 were poor.

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To gain a competitive advantage, the company needs to reduce costs and enhance products. Currently, the company cannot do this because it does not have enough financials to support initiatives that’s why most of its locations are closed. KFC’s one major weakness is the struggle to catch up to satisfy all its customers but they can’t hence customer dissatisfaction as supported by figure 1.2 where satisfaction in 2019 didn’t reach the maximum (81). All this has given the competitors opportunities to sell the same quality products to customers of KFC’s chicken especially in the locations where KFC kitchens are shut. Besides, competitors gain customer loyalty as customers get what they require. This results in customers doubting KFC with its inconveniencies as of now. They don’t think KFC will possibly be able to provide better quality products that can be available whenever needed. Therefore, KFC is now marketing its products again to gauge the customers’ attention.
Analysis of Inefficiencies causes, effects and gaps
Poor contingency plan
Typically, the company lacks a contingency plan. Having future plans is closely related to examining suppliers properly. Like any enterprise, KFC has its standard operations such as previously mentioned practice not to use frozen chicken but fresh ones. Therefore chicken preparation done at KFC is a closely controlled process with fixed scheduled time. These chicken must be kept under a particular temperature as legislation indicates.  The KFC chaos has been released several times that DHL Company has only a single warehouse Centre in Rugby. When the warehouse failed, the preparation process also failed and KFC remained stranded with chicken that was starting to rot fast. This showed poor contingency plans and poor communication leading to company loss.
Distributive inefficiencies
There was a huge distribution problem facing KFC that saw up to two-thirds of its UK branches shut down, the main evidence of this was the eyesore presence of heavy clad security personnel manning the new depot supposed to house the missing chicken. KFC maintained that its distribution crisis was a result of switching its previous longstanding distributor Bidvest to DHL as we quote KFC’s tweet on the matter “we’ve got the chicken, we’ve got the restaurants, but we’ve just had issues getting them together” KFC woes have taken a funny approach around the country, nevertheless, it has clearly shown the grave consequences for a business of a supply-chain hiccup. This hitch and the “great chicken run of 2018” will without a doubt echo with Irish and UK companies considering now that Britain is in the process of Brexit, this would imply longer border checks and more delays incurred at customs, as Rod McKenzie a director at Road Haulage Association says “most folks in this country fail to understand the mechanics of supply chain until something goes haywire” KFC indicated in the report that at in 2018, the supply chain had strong sales growth which declined in 2019 by 6.8%. After-tax, the company faced profit decline by 27.8% from €171.9m to €129.9m. The turnover fell from €445.7 to €207.3 within 2017 and 2018 by 73%.
Economic inefficiencies
Economic inefficiency is when all raw materials and determinants of production in an economy are allocated or distributed to their suitable valuable utility and with no waste products (Asche, 2009). KFC does distribute its raw materials and produces better products under the illusion that there is no wastage of time in the reliability on one delivery (DHL Company) and no risks incurred by doing so. This kind of company forecast or assumption has led to the company losing many of its consumers, closing of many locations, reduced sales and profit reduction. Table 1.1 shows the yearly performance comparison of KFC.
Table 1.1. Annual performance comparison of KFC.

Productive inefficiencies
According to KFC, despite a lot of chicken being cleared at the depot, their restaurants will experience disruptions that may go over the weekend due to the distribution challenges facing DHL KFC takes the supply of its chicken very seriously, they say they only use chicken meat from Irish and British farm and these chicken ought to be fresh not frozen a fete that differs majorly with some of its competitors. For productive efficiencies, the company uses a lot of calories to preserve its meals. This has led to basic effects like obesity although they have promised to reduce this by 20% by 2025. According to Xue (2016), their past cross-sectional research amongst in Beijing 21,198 children indicated a positive relationship between FFC (Fast Food Companies such as KFC) and obesity or over-weight. Showing that the results of their production affect consumers negatively.
Warehousing inefficiencies
The company claims to have chicken which is not injected by steroids and hormones. They also indicated that in the United States, FDA regulations ban the inclusion of the hormone in poultry. The KFC original chicken recipe is on bone purchased from Irish and British farms and freshly delivered to their restaurants. As the company prefers fresh chicken or the ones that are not kept for so long, the company only had one warehouse in the United States where the chicken is stored temporarily before being distributed to restaurants. The company had faced over-dependent in a single warehouse consequence such as chicken food shortage leading to loss of consumers. Customers lost interest because the company was not able to provide goods at the required time. Even now the company still stands by fresh delivery and reliability on one warehouse located near Rugby, United States.
To-Be Condition – Proposed Improvement/Solution
Inbound logistics
The company should realize that it is important to scrutinize the supply plans before even proceeding to give tender one. The significance of doing this is to develop a proper relationship with the supplier. Their support is essential in transportation and storage of chicken helps eradicate product development challenges such as raw materials shortage. With the ingredients ready, there is an increase in ready food supply leading to an increased profit margin.
Product design process analysis. It is important to monitor the production process of raw materials as they produce end products ready for market launch. Product development and better strategy can lead to product improvement and maximizing efficiency with surety for KFC competitive advantage. The product enhancement attracts more consumers leading to steady company economic growth and profit margin increase.
Outbound logistics
This is the delivery of end products to consumers. At KFC, the consumers can order the products and get them delivered but most of them prefer buying from closer restaurants or intermediaries shops. It also includes order processing that reduces time wasted on queue for a particular food to be made for a certain individual. KFC cooking takes around 30 minutes, so ordering before time could be an appropriate idea. Better outbound delivery such as trucks should be able to keep the products warm in the delivery process to please the consumers.
Sales and marketing.
At this point, KFC is doing marketing to make its products sell but without a proper highlight of product delivery benefits such as product affordability, distinctive features, and the product of high quality, the marketing process won’t matter. So KFC should invest in marketing and sales procedures to ensure maximum reach to the target audience. The promotions and advertising help KFC regain its market share through a funnel approach. The strategy can allow the company to do pull or push nature depending on KFC’s brand image, changing competitors and objectives. These can lead to equity of brands and assist KFC to outcompete its competitors.
Services. Services offered by KFC include food delivery. Post-sale and pre-sale can assist the company to gain customer loyalty. The post-sale services are considered significant in the promotional and marketing process. Negative e-WOM power as a result of poor service support cannot be underestimated in the recent technological improvements. The online media should be regulated to protect KFC brand image and reputation and to spread the positive side of KFC such as fast food delivery and service quality.
Firm management.
The slogan ‘change start by me’ perhaps expound on everything. When a company needs positive change, it should start by considering its strategies, planning, legal matters, accounting, and quality management as a single running process. If one fails, so does the others. KFC extensively relied on a single supplier which failed them. So they should ensure effective infrastructure management that maximizes the value chain leading to overhead cost control to make KFC stand in market competition.
Human resource management.
 Human resource manager deals with recruitments of employees, managing their performance, training as well as rewarding them. The managers can ensure that the employees are under control and well-motivated to achieve company goals. Better rewarding lead to employee better production (Samnani, 2014). Therefore, KFC can minimize competitive pressure associated with motivation, skills, and commitment of the workforce. The company also analyzes hiring and training costs and can obtain cost reduction goals. KFC should believe that each employee is significant to manage all the problems that may occur such as supplier inconveniencies.
Technology development.
 Current technological trends are immersed in company processes to make the processes easy to deal with. About all activities in the value chain rely on technology starting with communications, marketing, order fulfillment, billings, and others. KFC should integrate its processes such as human resources, distribution, and production with effective technology. If the company had a proper technology system that analyzes all risks that may lead to company failure, then KFC would not be facing a crisis. KFC’s deep communication with suppliers would help know what suppliers can handle and what they can’t. This could assist in having other supplier alternatives with a better strategic distribution process. This can make the company obtain its goods quickly, produce quality products and selling them efficiently both online and offline. Technology can also be used to analyze by KFC overall performance to know the company’s financial position and predict the future outcomes given certain variables. So better technology selection can help increase customer satisfaction, expand market share and gain competitive advantage.
Procurement.
KFC purchasing of inputs varies from raw materials, surplus, machinery, equipment, and others essential for making the end products. Understanding the significance of the value chain can help KFC notice sectors where they can achieve cost efficiency and add value. For instance, as KFC had failed in raw material supply through DHL Company, they can perhaps develop a new method where the company purchases its delivery trucks that are widely spread and renting warehouses that may help keep their products from spoiling in case of an incident.
Conclusion
Most companies face several challenges to achieve their goals and objectives. KFC Company has been experiencing some of those challenges such as lack of contingency plan, limited resources especially in the inbound logistics sector, excessive reliability on a single supplier, poor communication and relationship with suppliers. This specific scenario has not occurred in other companies since most of them either employ many suppliers, own several warehouses or both. If KFC could have just thought of designing effective supply chain management then most of their closed stores that are more than three quarters would still be functioning. The poor supply chain management has already led customer loss, loss of market share, reduced sales, reduced profit margins, unemployment of employees and competitors outcompeting them. The customers have also been unpleased due to abrupt quality of service change. 
It can be illustrated that for the company to recover from those arising issues, it needs to work on the relationship and communication with the supplier, have a proper supply chain plan that can oversee all the risks, opportunities, weaknesses and strengths of Kentucky Fried Chicken Company using Porter’s Competitive Force’s Model. Better technology selection can also help conduct enterprise customer relations to avoid losing more clients in the future. Technology message delivery can change how consumers view the company (company reputation). To increase the range of customer reach, KFC needs to do marketing on social media platforms. In the case of negative comments or replies on social marketing platforms, the company can handle them cautiously by listening to customer demand and providing better solutions. The solutions can be social or product-related (provision of quality products). The entire solutions can lead to profit increase and customer satisfaction.
References

Asche, F., Roll, K.H., & Tveteras, R., (2009). Economic inefficiency and environmental impact: An application to aquaculture production. Journal of Environmental Economics and Management, 58(1), Doi: https://doi.org/10.1016/j.jeem.2008.10.003
Cuong Nguyen, C., Nguyen, D., & Do, T. (2019). The Determinants of Customer Satisfaction in Fast Food Industry: The Case Study of KFC Viet Nam. Humanities and Social Science Research, 2(2), 1-2, Doi: https://doi.org/10.30560/hssr.v2n2p1
Nasir, A., Ahmed, M.A., Nazir, I., Zafar, H., & Zahid, Z. (2014). Impact of Different Determinants on Customer’s Satisfaction Level (A case of Fast Food Restaurant). International Journal of Business and Management Invention ISSN (Online): 2319 – 8028, ISSN (Print): 2319 – 801X, 3(9)
Samnani, A.K., and Singh, P., (2014). Performance-enhancing compensation practices and employee productivity: The role of workplace bullying. Human Resource Management Review, 24(1) 5-16, DOI: https://doi.org/10.1016/j.hrmr.2013.08.013
Xue, H., Wu, Y., Wang, X., and Wang, Y., (2016). Time Trends in Fast Food Consumption and Its Association with Obesity among Children in China. PLoS ONE 11(3): e0151141, DOI:10.1371/journal.pone.0151141

 

Market Entry B2C Failures

Market Entry B2C Failures

Firms enter into the international market as part of their expansion strategies. Several factors are taken into account prior to the entry. Setting an entry market strategy and understanding the competition are some of the key areas for consideration. There are firms achieved greater success in the foreign market but some of the expansion strategies failed miserably. This paper will explain entry market failures of firms. The firm which failed doing business in the Canadian market is Target (Wahba, 2015). The Canadian firm that failed in the international market is BlackBerry (Reguly, 2018).

Target

Target is a US based department store retailer and one of the biggest retail giant in the USA. The company has 1850 stores all across the US. The company has more than 350,000 sales force all around the globe. The global offices located in Hong Kong, China, and India (corporate fact sheet, 2019).When Target decided to enter into the Canadian market first thing they did was started acquiring existing properties that way they can save the time for set up new buildings and amenities. In the year 2011 Target decided to take over the stores of Zellers on lease conditions. Leasing on Zellers stores was one of the greatest mistake done by Target Canada because most of the Zellers stores are not in the right location for people to shop. Target opened its stores all across Canada within a short span of time. Opening 100 plus stores negatively affect the inventory management of the company. Most of the Target Canada outlet was running out of inventory, that also made a negative impression about the company in the mind of consumers (Wahba, Why Target failed in Canada, 2015).

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Target set the price of their products based on the competitive environment. They want to create an image of the lowest priced player in the market. Once after Target started its operation in the Canadian market they had to face though competition from Wal-mart. Wal-mart started giving more offers and price -offs to the customers that also adversely affect the sales figures of Target (Strauss & Krashinsky, 2018). Target always trying to communicate with customers through social media platforms such as Facebook, Instagram, Linkedin, and Twitter. They usually share the latest news and offers through this platform.

PESTLE Analysis of Target

When Target came to Canada the political stability of the country is also taken into account. Canada is politically stable and supports investments from foreign players for their economic development. Target decided to wind up its Canadian operations at the end of 2015 after meeting $5.4 billion loss, around 17000 employees lost their jobs. The company care their employees and customers and try to give positive shopping experience to the customers. As part of their social commitment Target gives a percentage of profits back to the community for the community development. Target is a company which uses social media platform effectively to keep in touch with their customers  (Frue, 2019). Target had to follow all the legal procedures while doing its business in Canada, including “Environment laws, Labour laws, Privacy and security laws, and Employment laws” (Frue, 2019). Target try to reduce the waste as part of their Eco-friendly programme (Frue, 2019).

BlackBerry

BlackBerry, a Canadian, based smartphone manufacturing company, The company had a good brand image and reputation in the market when it first launched. Currently, the company lost its market share and facing tough competition from rival companies. There are numerous reasons why this Canadian mobile manufacturer lost their market share. Some of the important once are;

1.Failed to address market change and customer expectations

One of the noticeable features of BlackBerry phones was Qwerty keypads. It was very successful in the market when its first launched because of the easiness of sending messages and emails, but after that iPhone came into a place people started to use the touchscreen phones more often than plastic keypad ones. The company failed to identify the market shift and they still focus on the same old plastic keypad phones, this negatively affect the business of BlackBerry.The company later introduced its new model BlackBeryy 10 which support full touch screen and stylish design but it cannot bring back the market share BlackBerry had before in the market (Worth, 2016).

2.Unattractive designs

This is another reason why BlackBerry lost its market share in the international market. When iPhone introduced in the market its got much appreciation for stylish design and user-friendly features but BlackBerry followed the same old pattern and some of the models are really heavy and not user-friendly this is also set the company back in the race (Worth, 2016).

3.Competition

Competition from Apple is one of the reasons why BlackBerry lost its upper hand in the market. The customers easily get used to the touch screen technology and BlackBerry failed to understand the competition from Apple  (Worth, 2016).

The company facing pressure from certain countries especially India, Saudi Arabia regarding the encrypted service facility in the mobile device. These countries are putting pressure on Blackberry to provide some of the information generated through their devices (Hlliday & Wearden, 2010).BlackBerry enter into a partnership with Tata for making highly secure mobile devices for the Indian market. This collaboration aimed at manufacturing highly secure communication devices under government requirement and conditions (BlackBerry, Tata enter into pact, 2016).

Conclusion

Target and BlckBerry are examples of market entry failures. Both the firms failed to address the needs of the consumers and market conditions. These two firms are facing tough competition from their competitors and both firms are not moving as per the market demands. Target faced a shortage of inventory after they opened 100 plus stores and it clearly shows incapability of management and operations. Blackberry it was reluctant to change according to the market requirements.

References

BlackBerry, Tata enter into pact. (2016, October 06). Retrieved from The Hindu: https://www.thehindu.com/business/Industry/blackberry-tata-enter-into-pact/article7731059.ece#!

corporate fact sheet. (2019). Retrieved from Target: https://corporate.target.com/press/corporate

Frue, K. (2019, Januvary 23). PESTELE Analysis of Target. Retrieved from Pestele Analysis: https://pestleanalysis.com/

Hlliday, j., & Wearden, G. (2010, Auguest 12). India sets deadline for BlackBerry compliance. Retrieved from The Guardian: https://www.theguardian.com/technology/2010/aug/12/blackberry-email-messaging-india

Reguly, E. (2018, May 11). The decline and fall of Canada’s global corporate superstars. Retrieved from The Globe and Mail: https://www.theglobeandmail.com/report-on-business/the-decline-and-fall-of-canadas-global-corporate-superstars/article13822902/

Strauss, M., & Krashinsky, S. (2018, May 11). The Target invasion: How pricing will be key to Canadian success. Retrieved from The Globe and Mail: https://www.theglobeandmail.com/globe-investor/the-target-invasion-how-pricing-will-be-key-to-canadian-success/article7550145/

Wahba, P. (2015, Januvary 15). Why Target failed in Canada. Retrieved from Fortune: http://fortune.com/2015/01/15/target-canada-fail/

Wahba, P. (2015, Januvary 15). Why Target failed in Canada. Retrieved from Fortune: http://fortune.com/2015/01/15/target-canada-fail/

Worth, D. (2016, October 07). 6 reasons BlackBerry crumbled in the smart phone market. Retrieved from the INQUIRER: https://www.theinquirer.net/inquirer/feature/2473044/6-reasons-blackberry-crumbled-in-the-smartphone-market

The Comprehensive Analysis of Banking Failures

Introduction

The premise of a bank failure is the existence of a banking crisis. “Banking crises can be caused by inadequate governmental oversight, bank runs, positive feedback loops in the market and contagion” (Lumen, 2015).Essentially, banks are over-involved (or lending to businesses) in high-risk industries (such as real estate, stocks), which leads to a serious imbalance in assets and liabilities. So, generally speaking, when banks are unable to pay their debts and deposits to depositors and other creditors, the bank has closed down. 

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When a bank failed, it would tend to have a negative impact on the masses and society. Hence, there is no doubt that governments will have some important factors to consider when dealing with a failing bank. Based on one example of reading about Overend and Gurney Bank, the key factors considered by the governments are public confidence, conductivity of financial risks and negative externality when dealing with a failing bank.

The following content will be mainly revolved around the main factors needed to consider by government and how creditors are effectively and properly repaid on the basis of priority under the situation of bank failure, as well as how European financial stability policies has evolved to adapt to the solutions for tackling the failing bank.

Main body

Main factors considered by government

In the case of Britain’s Overend and Gurney Bank, its core business is to buy and sell bills of exchange at discounted prices. It has been the world’s largest discount store for 40 years. After Samuel Gurney retired, the bank expanded investment portfolio, mainly invested heavily in rail and other long-term investments rather than holding short-term cash reserves as was necessary for their role. It found itself in debt at about 4 million pounds and its current assets were only 1 million pounds. In order to restore its liquidity, the company was registered as a incorporated company in July 1865 and sold its 15 pounds stock at a premium of 9 pounds, taking advantage of the active market from 1864 to 1866. This period, however, was followed by a rapid collapse in stock and bond prices, accompanied by a contraction of commercial credit. Also, railway stocks were particularly affected. Overend and Gurney Bank’s monetary difficulties increased, and it asked the Bank of England for assistance, but it was rejected. The bank suspended payment on 10th of May 1866. The next day, London, Liverpool, Manchester, Norwich, Derby and Bristol were filled with panic. A large crowd of people took out deposits around the headquarters office of Overend Gurney at 65 Lombard Street. Finally, Overend and Gurney Bank went bankrupt. Influenced by Overend and Gurney Bank, more than 200 companies, including other banks, have closed down.

As can be seen from the above example, first of all, Overend Bank’s financial risk increased as its assets were not offset the debt. Once financial risks are accumulated to a certain amount and are made public, financial risks are highly conductive. Under the principle of free deposit and withdrawal, once the liquidity risk of a commercial bank is made public, the depositor will withdraw the deposit from the bank. When the amount of advance withdrawal increases, or a run is formed, the bank will have liquidity crisis. However, when the liquidity crisis causes a failing bank, it may trigger a crisis of depositors’ confidence in the banking system. Hence, huge financial risks will be conducted to other banks in the banking system, causing banks that are already operating normally to be involved in the risk of bankruptcy, forming a systemic crisis in the financial industry. Therefore, when dealing with bank failures, the government needs to consider the conductive effects of financial risks.

Secondly, the direct reason why the crowds around Overend Gurney’s headquarters office form a run and indirectly affect the normal operation of other banks is because people’s expectations for the UK economy are bleak so that they lack confidence for the financial industries. Thus, when dealing with bank failures, public confidence in the UK economy is also a major factor for the government to consider.

Thirdly, overend failures tend to cause strong negative externalities. “A Negative externality is an undesirable impact on an unrelated third party because the production or consumption of a good or a service. In other words, it’s an unforeseen negative consequence from some market activity” (My Accounting Course, 2018). Obviously, the bankruptcy of large-scale banks will cause unbearable losses to all depositors in the above example. What is more, deposit insurance institutions will not be able to provide sufficient liquidation funds. Finally, the entire society will not be able to eliminate the negative impact of its bankruptcy. Hence, the negative externality is still an important factor that the government needs to consider when dealing with bankruptcy.

Repaying creditors based on priority

Compared with general enterprises, commercial banks are in a special position and play a special role in the social economy. Their bankruptcy involves a wide range of stakeholders, especially a large number of stakeholders. Once a commercial bank goes bankrupt, its depositors, other creditors, shareholders or investors, employees and so on will face greater losses. More seriously, the conductivity of the commercial bank crisis causes that the bankruptcy of a commercial bank likely cause a chain reaction and spread to other banks. Correspondingly, the negative externalities caused by the bankruptcy of commercial banks are strengthened along with the spread of the crisis, which will affect the interests of more depositors, creditors, shareholders and employees. Consequently, when banks are liquidating, it is also an important issue about how various types of creditors get repaid.

Generally speaking, in terms of banks, creditors are divided into 5 categories, namely insured depositors, uninsured depositors, preferential creditors, general creditors and shareholders.

According to European deposit insurance scheme, if the deposit is below 10,000 Euro, the bank will protect the principal from loss. In other words, when the bank is liquidating, it must pay off to the creditor. This is the so-called insured depositor. On the contrary, if it exceeds 10,000 euros, the uninsured depositor may suffer certain losses when the bank is put into liquidation. Meanwhile, Preferential creditors generally refer to employees as they spend times and skills on the post. Also, general creditor is generally an unsecured lender, such as the owner of a bond.

In terms of the important issue of how various types of creditors are repaid, there is a good way: “An official ‘hierarchy’ laid down by the Insolvency Act, 1986, determines which group of creditors is paid first during an insolvent liquidation” (Begbies traynor, 2018). So, the issue of how creditors are repaid should be based on priority.

In accordance with the provisions of the law, after the insured depositor is paid, the preferential creditor is paid, followed by the uninsured depositors, then the general creditor and finally the shareholder. So, it is very clear that the liquidator makes liquidation in accordance with the priority right in liquidation.

How European financial stability policy has evolved

Since the beginning of 2016, the negative news of the European banking industry has continued. The problems of the high non-performing loans, the difficult to improve earnings, the excessive risk exposure of derivatives, the poor ability to handle bad debts and the drag on government debt have deeply dragged down the major banks in Europe such as Italian banks and Deutsche Bank. Once these problems cannot be effectively addressed, banking crises will erupt. European banks have closed down, which will have far-reaching effects and may even trigger the breakup of the European Union.

Therefore, in terms of European financial stability policy, it is very important for regulators to formulate the “bank resolution” policy.

“A bank resolution occurs when authorities determine that a failing bank cannot go through normal insolvency proceedings without harming public interest and causing financial instability” (European commission, 2014a). After the recent financial crisis, the European Union had taken a series of measures to formulate the “bank resolution” policy to coordinate and improve the tools of for dealing with the banking crisis in its member states.

“The bank recovery and resolution directive (BRRD) was adopted in spring 2014 to provide authorities with comprehensive and effective arrangements to deal with failing banks at national level” (European commission, 2014b).

To begin with, the policy measure available to the regulator is a “bail-in” mechanism. The bank recovery and resolution directive (BRRD), which has been in force since 2015, specifies that the government cannot use taxpayer funds to bail out banks before shareholders and creditors of banks bear losses, so banks may need to bail in first.

“The EU’s bank resolution rules ensure that the banks’ shareholders and creditors pay their share of the costs through a “bail-in” mechanism. If that is still not sufficient, the national resolution funds set up under the BRRD can provide the resources needed to ensure that a bank can continue operating while it is being restructured” (European commission, 2014c).

However, if banks save themselves, many retail private investors will suffer losses. For example, Financial Stability Report of 2016 in the central bank of Italy showed that retail private investors contributed nearly 70% of the funds of banking sector; residents held bank debts amounting to 920 billion euros, accounting for about 23% of the total assets of the residential sector, of which about 420 billion were at risk of loss. Once the bank risk breaks out, bank bail-in will lead to heavy losses in the residential sector, which is no different from the ordinary taxpayer’s loss.

Therefore, after that, the special provision in the BRRD regulations were initiated, which is the temporary assistance of the government. Although EU regulations do not allow direct government assistance, if the situation becomes serious, the government will reach a compromise with the EU, categorizing the outbreak of banking risks or the impact of Brexit as “force majeure”. In this way, it is possible to implement a policy of temporary assistance from the government to protect the interests of the bank’s retail investors. The Italian government has acted like this.

Nevertheless, given the potential collapse of the EU financial system by defaults of “big but not down” banks such as Deutsche Bank or Seattle Bank, Germany and the European Central Bank will not dare to risk getting these banks into bankruptcy protection. The EU has now approved the Italian government to bail out the banking industry. Since it has already begun, it will certainly not be a one-time bailout. Just as the EU’s aid to Greece was the same, in order to prevent Greece’s collapse and withdrawal from the EU, EU policy was kidnapped, and the scale of aid was expanding. The rescue of Italian banks may be like a bottomless pit, causing the EU to fall into debt again.

Therefore, the policy of the final solution is the unification of fiscal policy and monetary policy. Due to the particularity of the EU system, the implementation of its fiscal policy is very difficult. If fiscal policy and monetary policy can be combined, it is possible to exert the maximum effect of the government. Using the “helicopter drop” (“deficit monetization“), the government can directly bail out banks in distress without worrying about the debt burden.

Conclusion

The implementation of the European financial stability policy is necessary because of the negative effects of bank failures. In other words, the impact of bank failures is the main factor considered by the government, i.e. the public confidence, conductivity of financial risks and negative externality. Also, it is also an important issue about how creditors to get repaid when banks are liquidating, which is derived from these three factors. Obviously, Creditors get repaid based on priority.

Thus, the EU provides a framework for regulators to manage bank failures effectively. According to the bank recovery and resolution directive (BRRD), based on the certain problem of policies, the European financial stability policy extends from the policy of the bail-in mechanism to the policy of government assistance, and finally proposes policy measures that unify the fiscal and monetary policies.

References