The East Asian Financial Crisis and Regulation - Free Essay Example

Sample details Pages: 7 Words: 2186 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? The East Asian Financial Crisis: Deregulation or More Regulation? The East Asian countries were presented as an example for other developing countries (their progress was called the east Asian miracle by World Bank) until the East Asia financial crisis. Some blamed the government for the crisis saying, state intervention was the root of the problem. Some held the financial liberalisation process responsible, Even today, many scholars and experts hold different opinions on the roots of this crisis and the solution to it. Don’t waste time! Our writers will create an original "The East Asian Financial Crisis and Regulation" essay for you Create order There were many opinions on the crisis and critics of how to handle the crisis from left and right side of the scholars. While some critics said that the pegged exchange rates, exchange rates controls, guaranteed governmental bailouts for banks, the lack of prudential regulation and management of the financial system was the root of the crisis. Other critics said that financial liberalization was the real cause of the problem as it enabled to move massive funds from country to country to earn the maximum profits from speculating or investing in currencies and shares and get higher returns for providing loans. Those who blamed the government for the crisis summarised some of the main causes of this crisis as follows: High debt/equity ratios; so much higher than in western countries. Overvalued currencies; they pegged their currencies to the U.S dollar. Lack of competition in the market. Government directed loans. High current account deficits. Those who are in this group suggested that the above were the main causes of the crisis, but before we accept this explanation, we should first have a look at East Asian countries economic systems. East Asian countries had some kind of Keynesian economic model. This allowed close and co-operative relationships between government, firms and financial institutions. Corporate debt/equity ratios in East Asia countries were higher than in western systems, because savings were higher (Gross domestic savings to GDP ratios in Asia were one third of GDP or more compared to 15-20 percent in western systems). Households who hold the majority of savings have those savings mostly in bank deposits, as it is less risky than shares. Banks have to lend and firms are the only major net borrowers in the market. Firms did have high debt/equity ratios, because firms, which aim to compete with major world industries, needed large sums of money. Equity and retained earnings were not enough to meet their requirements, therefore, this system allowed high debt/equity ratios and the governments were playing an important role allocating funds efficiently. Yet, this model made the Financial system vulnerable to shocks, but as long as there was government protection the system worked well. Was the financial liberalization the cause of the problem which generated huge amounts of capital inflow into these countries or were the capital inflows the evidence of the problems these countries economies were suffering? Why did they have financial crisis? Why did the attack on their currency cause a financial crisis? It did not have to. They experienced this crisis because their financial institutions and firms were suffering currency mismatch. An increase in the exchange rate (depreciation) makes them default as their balance sheet deteriorates and cause a financial crisis. Before the crisis occurred International banks and money traders thought that Asian currencies were overvalued. They started attacking those currencies. Asian countries tried to withstand against this attack, as they knew devaluation would impair those firms, which had borrowed vast sums of money in foreign currencies. Speculators won along with institutional investors, first in Thailand, selling Thai baht forward, making instant profits. The Asian governments tried to resist, but even central banks ran out of dollars and they allowed their currencies to devalue, stock market plummeted and now many companies would be in trouble. Lets deepen our analysis, what made these exemplar countries experience this crisis. They had this financial structure for a long time and had experienced high growth performance until the crisis. When they embarked on financial deregulation, they removed or lessened controls on firms foreign borrowing and investments and failed to oversee the banking system. Domestic borrowers started borrowing from abroad, as it was cheaper than home .For example; this caused unsustainable real estate boom in Thailand. Foreign debt escalated, most of it private and short term. This short-term capital flow plus the rise in US dollar against other currencies (interest rates increased in USA) contributed to overvalued currencies as exchange rates of local currencies had been fixed against the US dollar. So one can say financial liberalisation caused this crisis. In fact, theory says that such liberalisation (deregulations) in the financial market, especially lifting restrictions on inflows and outflows of funds, would bring in foreign funds that accelerate a countrys growth by reducing the cost of capital and allocate the financial resources in a most efficient way to get the highest returns .On the contrary what we saw in Mexico, hot money flows lend themselves easier to financing consumption rather than growth. Short-term investments rarely contribute to actual production .In East Asia a big part of short-term capital was directed into speculative investments, which pushed up property and share prices. When the crisis started by attacking those countries currencies all creditors immediately tried to collect on debts, which lead to a chain reaction of general bank and financial insolvency. These countries government could not take action to stop it as they abandoned their means of controlling their financial system by deregulation. One should think about why China was not nearly as badly hit as its neighbours, because it was able to cut, not raise, interest rates in the crisis despite maintaining a pegged exchange controls. India was relatively insulated from the East Asia crisis as well. East Asia countries had high level growth rates, were running budget surpluses, and built up high quality manufacturing industries, savings were high. Income had soared, health improved and poverty plummeted dramatically. Some had not suffered a single year of recession in 30 years. All those had been done by governments guidance prior to the so-called E. Asia crisis, which coincided with deregulation of the financial system. Countries like Argentina, Uruguay, Brazil, and Turkey, all suffered financial crisis after deregulations of financial markets. A study done by Demirguc-Kunt and Detragiache (1998) shows that financial liberalisation made crisis more likely and increase financial fragility. East Asian countries were unprepared when they removed many restrictions on their financial system and liberalized it. While they liberalized their financial system they lacked doing the necessary regulation and creation of new watchdog bodies which could supervise and oversee the banks and other financial institutions operations. There were not strong, prudential bodies that could eliminate or reduce the asymmetric information problems of adverse selection and moral hazard. Weak regulations and monitoring systems allowed the banks and other financial institutions to exploit the opportunities created by financial liberalization. Banks are blamed for lending unsafe loans and it was widely believed that banks would be bailed out if they became insolvent. Furthermore, many accused western banks and financial institutions of lending excessively to those countries. What about the idea of financial liberalization, deregulating the financial system? How correct is it to treat financial markets like goods markets? To suggest Laissez faire type of policy in financial markets and applying demand supply diagrams which we use in goods markets to analyse financial markets? Finance is interested in the exchange of money today for the promise of repayment tomorrow. The existence of uncertainty, lack of complete future markets, and the risk of bankruptcy make finance different. Information asymmetries will always exist; there will never be a state of perfect information, besides, investment decisions will not necessarily be improved by better information and transparency. If it would, Sweden, Finland, Norway would not have had financial crisis. They are not enough to underpin robust financial systems. We need the state as a regulatory authority to complement the markets. Noam Chomsky (1999) argues that 30 years ago about 90% of foreign exchange transactions were related to real economy (trade and long term investment); today over 90% of a vastly greater sum consists of short-term flows, about 80% less than a week duration. These short-term flows speculate against currencies or exchange rate fluctuations. According to data from The Bank of International Settlements, a total of 184 billion US dollars entered Asian developing countries as net private capital flows in 1994-1996. In 1996, 94 billion US dollars came in and even as late as the first half of 1997, 70 billion US dollars poured in. With the financial crisis starting in June, a total of 102 billion US dollars flew out in the second half of 1997. This shows how volatile capital flows can be and makes the probability of crisis likely. I think this can be the response to those who suggest that financial liberalisation will allocate the funds more efficiently and investment thus become more efficient. Neoclassical economic school that is behind financial liberalisation (they want deregulations in all markets) wants the state out of the economy completely. Deregulating markets will prevent governments from pursuing any economic and social policy. From economic theory we know externalities, we know when something is good for an individual, it does not follow that is good for society as a whole. This is where the government comes into action, which tries to maximize common good for the nation. A project might not be profitable for an individual, but it may bring benefit to the whole society or vice versa. To understand this crisis and prevent it from happening again one should understand how these countries achieved significant growth rates before the crisis. East Asian countries did not have free markets or western type civil liberties they did have strong, authoritarian governments who made long run economic decision in the sacrifice of short term individual interest. When they liberalized their financial market Individuals, firms and banks did not make their business decision on the basis of long run interests of the common good but on the basis of short term interests of themselves. Adverse selection and the moral hazards problems which caused the Asian financial crisis can be reduced by establishing regulatory institutions and monitoring systems, but will never be removed completely. I believe that the East Asian financial crisis was brought about by many factors. These included; bad economic decision, ongoing decline in economic performance of these countries before crisis, lack of transparency in the system, undemocratic, corrupted governments combined with the adverse selection and moral hazards problems in the banking industry and financial liberalization triggered the crisis. If there were robust, prudent financial institutions, strong, effective regulatory and monitoring bodies with little and no corruption limit and control harmful effects of financial liberalization of markets. What East Asian crisis and other financial crisis provide evidence that the first part of financial liberalization should be to create regulatory and monitoring bodies that holds the financial instability under control created by financial liberalization. There should be some transition period that this type of regulatory framework can be created. Therefore, developing countries who want to liberalize their financial system must follow a gradual path and be cautious. The ironic part of this story is that trying to liberalize the markets by deregulating shows us we still need regulations, rules and monitoring systems. REFERENCES Bong-Chan Kho, Ren M. Stulz, (1999). Banks, the IMF, and The Asian Crisis.NBER Working Paper. Demirguc-Kunt,Asli and Enrica Detragiache, (1998) Financial liberalisation and Financial fragility, World Banks Development Research Group and the International Monetary Funds Research Department. Frederic S. Mishkin, 1999 Lessons from the Asian Crisis NBER Working Paper. Giancarlo Corsetti, Paolo Pesenti, Nouriel Roubini, 1998 Paper Tigers? A model of the Asian Crisis,NBER Working Paper. Joseph Stiglitz, 1998, More Instruments and Broader Goals: Moving Toward the Post-Washington Consensus The 1998 Wider Annual Lecture Joseph Stiglitz The role of the Financial System in Development Presentation of the Fourth Annual Bank Conference on Development in Latin America and the Caribbean (LAC ABCDE) Joseph Stiglitz, February 4, 1998. Bad Private Sector Decisions Wall Street Journal, Joseph Stiglitz, 2000, What I learned at the World Economic Crisis The Insider Joseph Stiglitz, 2003. The Roaring Nineties, Penguin Books. Lot S.Felizco, Feb. 2001, Asian Exchange. Understanding Short-Term Capital Flows and the Imperative of Regulation. Martin Khor, Third World Network, The danger of financial liberalisation Martin Khor , Third World Network, The Economic Crisis in East Asia: Causes, Effects, Lessons . Noam Chomsky ,1999From Bretton Woods to the MAI Le Monde Diplomatique, P.Krugman (1998) What happened to Asia, and Analytical Afterthoughts on the Asian Crisis; at https://www.pkarchive.org Robert Wade and Frank Veneroso,1998, The Asian Crisis: The High Debt Model Versus the Wall Street-Treasury-IMF Complex, New Left Review. Sule Ozler, The Asian Financial Crisis Causes, Contagion and Consequences Koc University and University of California, Los Angeles The Asian Financial Crisis Causes, Contagion and Consequences Edited by Pierre-Richard Agenor, Marcus Miller, David Vines and Axel Weber

Roles Of Leadership And Management - 1466 Words

In every organization, individuals are faced with the task of fitting into a role, and functioning in the role that they possess. This role can be seen in the simple organization of the family, and in more complicated organizations, such as national government. One pivotal role in any organization is that of the leader who provides a framework and advises those under his direction. A manager not only leads those under his direction, but is also efficiently utilizes the available resources and time. Leadership and management are critical in the healthcare setting, and more specifically in nursing. According to Ellis and Abbot (2013) â€Å"the role of the leaders is to inspire, facilitate and direct rather than to dictate the way in which†¦show more content†¦Strict authority is often needed when working with employees who need a large amount of direction and who do not have the educational background or initiative to act on their own. According to Frandsen (2015)  "This style works best in a true emergency, when split-second decision-making is needed; however, if employed as the leader’s primary style, it is demoralizing and can result in increased turnover, as staff feel undervalued.† The person in the leadership role makes the decision with little to no regard for the ideas of subordinates. This type of leadership may be viewed as dictatorial. While some people may follow the dictates of the leader without question, others will find this to be an intolerable work environment. Nurses are educated to be self-reliant, critical thinkers. Those who possess these skills would feel suppressed in an environment where their ideas that could improve the work environment or patient care were of little to no importance. Also, this leadership style does little to acknowledge the efforts and accomplishments of those working. Without positive feedback, self-confidence and motivation may be compromised. According to Giltinane (2013) â €Å"followers of an autocratic leader can rely heavily on their team leader and may underperform in the leader’s absence.† Without someone directing actions, those under the supervision of an authoritative leader no longer have the capacity to self-motivate and

Reasons Forms Of Expansion Foreign Markets -Myassignmenthelp.Com

Question: Discuss About The Reasons Forms Of Expansion Foreign Markets? Answer: Introduction XYZ Corporations is a finance firm that is based out of Australia and operates from four different domestic locations. The organization serves domestic and international customers and is under the expansion phase. There are over 250 employees engaged with the organization distributed across four different business units. There are communication issues that have been observed in the company and the report analyses the same. Data Collection Method In order to understand the communication issues, it is necessary to gather data sets describing the major conflict areas, primary gaps, current scenario, expected scenario, and likewise. There are various methods that may be used for the purpose of data collection, such as online surveys, questionnaires, personal interviews, group discussions and so on. The method which is apt for this scenario is online surveys. It is the method in which the employees of XYZ Corporations can fill out a questionnaire shared over the network. The identity of the employees may be kept anonymous or may be revealed as per their comfort. The idea behind the selection of this method is due to the geographically spread business units and large number of employees. The conduction of other measures will be time-taking and higher on cost as well. However, there are pros and cons associated with online surveys as the method of data collection. Set of Advantages The method will be cost-effective in nature as there will be no cost spent on the infrastructure and resourcing. The survey will be shared over the network and the employees will be asked to give their response. The employees will be free to give their honest opinion as they may choose to keep their identity anonymous (Harlow, 2010). The survey will reach to all the employees located at diverse business locations. The management will find it easy to analyse the response and draw conclusions as the grouping of the data sets will be easier with the aid of automation of data handling and analysis. Set of Disadvantages The detailed description of the issues and problems may be difficult to gather as compared to measures like personal interviews. The employees will be required to be reminded multiple times to have a good response rate (Nulty, 2008). There may be fraud responses filled in by the employees which may be difficult to track. Report The primary aim of a business organization is to ensure that the customer expectations and met and the customers are served with best quality services and products to have increased profits and revenues. So is the case with XYZ Corporations as well. In order to achieve these goals, the team collaboration and team playing of the human resources is of utmost importance. In the four different geographical locations of the company, there are over 250 employees that are engaged with the company that belong to different age groups, cultural backgrounds, communities, and gender. Also, the skills, knowledge, and experience of these employees vary. Recommendations Some of the recommendations for the diverse set of employees to achieve their respective project goals along with the organizational goals are as listed below. There shall be an ethical and professional code of conduct that must be set-up and complied by all the resources (Acs, 2014). There must be bi-monthly trainings provided to the employees on the development of professional and soft skills. A strategic alignment shall be formed between the project goals and organizational goals. There must be regular inter-department and intra-department sessions, activities and discussions organized by the company. Every team must publish a weekly portfolio on any of their project-related topic on the company portal. Summary There are 43% females and 57% of the male employees that work in the organization. Out of these employees, 65% are below 35 years of age and 10% are above 50 years of age. The organizational structure includes senior-level management at the top spot in the hierarchy followed by middle level managers, lower-level managers and operational staff in the same order. The top-level management comprises of 12% of the overall employees. 60% of the staff is at the operational level. There must be group discussions and activities organized by the company to minimize the cultural, and knowledge gaps. Please let us know if you have any concerns over the information that is shared and we will be more than happy to assist you. Message to Employees To: All Employees of XYZ Corporations From: John Hanks, CEO, XYZ Corporations Date: January, 18, 2018 Subject: Strategy for Business Expansion Our company has decided to expand at the global level due to the enhanced competitive rivalry and new entrants in the market. The financial sector in Australia has witnessed a drop by 12% in the overall market shares in 2017. The numbers are expected to drop further and we are therefore, required to take necessary steps to emerge out as winners in the tough times. Our customer base has been marginally implicated due to the changing nature of the market and we tend to maintain and enhance our customer base by revising our business schemes and policies. We will be relocating some of our employees so that they may contribute better towards the process of business expansion that will be initiation next month. Also, we will be developing a fresh web portal for interacting with our customers. There will be a new social media development department that will be set up for maintaining customer relationships and some of the employees will be shifted to the department as per their skills and our requirement (Twarowska, 2013). There are financial start-ups along with small and media scale enterprises that have captured over 45% of the total market and we need to establish the services to have a distinguished place among our competitors and peers. The transformations in the organizational strategy may introduce some changes in the business operations, techniques, and methods. It is expected that the XYZ Corporations family of employees will work together as a team to be able to establish an excellent brand image (Amoako, 2016). We are also open to suggestions and recommendations from our employees that may assist us in the process of business expansion. Let us all pledge to work together towards a smooth expansion and transition. Proposal to CEO XYZ Corporations is a financial firm that is suffering from the communication issues among the employees due to their diverse backgrounds and geographical locations. These issues may impact the organizational growth in its process of business expansion. The proposal is written to the CEO of the company to recommend the tools and techniques that may be used for the resolution of the issues. The purpose of the proposal is to provide the CEO and senior management of XYZ Corporations with the recommendations on the resolution of the problems of business issues and problems. The company is witnessing major communication gaps that may have an impact on its process of growth and business expansion. Proposed Course of Action The communication issues in the organization shall be resolved with the aid of technology. There shall be an internal chat server that must be set-up for the organization and every business unit shall be equipped with tele-conferencing tools and equipment. There shall also be Big Data and data analytics tools that must be used to analyse and understand the communication problems among the employees. These tools will allow the organization to understand the common patterns and trends associated in the communication channels (Llorente Cuenca, 2016). Further Materials/Tools to be used These tools will also be of a great aid in the business expansion process as the market status, customer expectations and demands will be easier to understand. A real-time picture of the data will be available with the management that will assist in the formation of business strategy and decision-making processes. Schedule and Costs The implementation of these tools shall be done in a total duration of six months. The budget for the required changes shall be $45,000. These shall include the cost of infrastructure, cost of operations, tools cost, resource costs, and implementation costs. Conclusion XYZ Corporations must carry out extensive planning and analysis before making the changes that are highlighted above. The current and expected scenarios shall be clear in the minds of all the resources to ensure that the transition is smooth and successful. References Acs. (2014). ACS Code of Professional Conduct Professional Standards Board Australian Computer Society. Acs.org.au. Retrieved 18 January 2018, from https://www.acs.org.au/content/dam/acs/rules-and-regulations/Code-of-Professional-Conduct_v2.1.pdf Amoako, S. (2016). The Development, Growth and Expansion of Locally-Owned Businesses in Africa. Theseus.fi. Retrieved 18 January 2018, from https://www.theseus.fi/bitstream/handle/10024/105610/Amoako_Shirley.pdf?sequence=1 Harlow, A. (2010). Online Surveys - Possibilities, Pitfalls and Practicalities: The Experience of the Tela Evaluation. Researchcommons.waikato.ac.nz. Retrieved 18 January 2018, from https://researchcommons.waikato.ac.nz/bitstream/handle/10289/6163/Harlow%20online.pdf Llorente, Cuenca. (2016). The use of Big Data in corporate communications strategies. Desarrollando-ideas.com. Retrieved 18 January 2018, from https://www.desarrollando-ideas.com/wp-content/uploads/sites/5/2016/10/161102_DI_Article_Big_Data_ENG.pdf Nulty, D. (2008). The adequacy of response rates to online and paper surveys: what can be done?. Retrieved 18 January 2018, from https://www.uaf.edu/files/uafgov/fsadmin-nulty5-19-10.pdf Twarowska, K. (2013). International Business Strategy: Reasons and Forms of Expansion into Foreign Markets. Toknowpress.net. Retrieved 18 January 2018, from https://www.toknowpress.net/ISBN/978-961-6914-02-4/papers/ML13-349.pdf

Term Paper by Jasim Essay Example

Term Paper by Jasim Essay Culture is an extremely broad and encompassing term. It includes what we have learned, our history, values, morals, customs, art, and habit. Marketing takes place within a given culture. Marketers should know that experience, history, values, morals, customs, art, habit, etc. vary within a given culture requiring different marketing programs. Not everyone in the same country or society shares the same behavioral pattern of the dominant or main culture. It clearly indicates that there are subcultures, such as those of northerners, southerners, city-dwellers, the poor, teen agers, elderly, religious groups and so on. The identification of a subculture may provide a firm with a segment of a market that it can develop. For example, products have been developed in great quantity for the teenage subculture, and advertising has been directed to these consumers. Each subculture, like a larger culture, has distinctive values, beliefs, and attitudes that the marketer must understand if he is effectively to exploit them. It is not always easy to identify differences among subcultures. It is easy to develop mistaken stereotyped notions about subcultures due to the lack of proper knowledge on subcultures. Marketers are interested in identifying any subculture as a potential market for their products. 1. Origin of the Report Dr. Md. Ashraful Islam Chowdhury, Professor, of Dhaka University, authorized this report in oral, as part of the course curriculum of Consumer Behavior (M-602). We will write a custom essay sample on Term Paper by Jasim specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Term Paper by Jasim specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Term Paper by Jasim specifically for you FOR ONLY $16.38 $13.9/page Hire Writer This is an individual assignment, which was assigned after a series of class lectures and presentations by the professor. 1. 2 Problem and purpose 1. 2. 1Problem StatementTo analyze the existing subculture in Bangladesh and take appropriate marketing strategy to reach them. 1. 2. 2Objectives of the study †¢ Understand the subculture context of Bangladesh †¢ Identify different types of subcultures †¢ Know how different subcultures affect buying behavior †¢ Explain Bangladeshi subculture for marketing decision making. 1. 3 A Preview of the Presentation To give an overview the report begins with a definition and explain what subculture is, then what are the subcultural groups prevailing in Bangladesh their characteristics , consumption pattern and the effective way to reach this subcultural group through marketing strategy. 2. 0 DEFINING SUBCULTURE Subculture is a part of the culture containing the important features of the main culture. In sociology, anthropology and cultural studies, a subculture is a group of people with a culture (whether distinct or hidden) which differentiates them from the larger culture to which they belong. If a particular subculture is characterized by a systematic opposition to the dominant culture, it may be described as a counterculture. As early as 1950, David Riesman distinguished between a majorities, which passively accepted commercially provided styles and meanings, and a subculture which actively sought a minority style. And interpreted it in accordance with subversive values. In his 1979 book Subculture the Meaning of Style, Dick Hebdige argued that a subculture is subversion to normalcy. Hebdige argued that subcultures bring together like-minded individuals who feel neglected by societal standards and allow them to develop a sense of identity. According to the definition of science dictionary A group within a society that has its own shared set of customs, attitudes, and values, often accompanied by jargon or slang. A subculture can be organized around a common activity, occupation, age, status, ethnic background, race, religion, or any other unifying social condition, but the term is often used to describe deviant groups, such as thieves and drug users. As there can be broad differences between the cultures of various societies, there can also be differences within the same culture. Every culture, therefore, contains subcultures, defined as groups that share the values and artifacts of the larger society, but also have distinctive practices, preferences, and beliefs. Businessmen living in the old part of Dhaka, cinema artists, and people living in the urban slums are all examples of subcultures. Islam is the dominant religion in the culture of Bangladesh; sunni, shiaa and Baahaai, for example, may be viewed as subcultures within the larger Muslim culture here in Bangladesh. Figure: Showing Subculture’s Relation with the Main Culture Main Cultural Behavior |Northern subculture | |Urban subculture | | | | | | |Religious subculture | | Berkman and Gilson have defined subculture for marketing purposes as any cultural patterning that preserving important features of the dominant society but provides values and life styles of its own. The cultural profile of a society or nation is a composite of two elements: 1) the unique beliefs, values, and customs subscribed to by members of specific subcultures and 2) the central or core cultural themes that are shared by most of the population, regardless of specific subcultural membership. 3. MAJOR SUB-CULTURAL CATEGORIES IN BANGLADESH 3. 1 Ethnic sub-culture The ethnic subculture is based on the nationality of one’s ancestors who have migrated to a new country. It (nationality) may form a basis for a subculture when the members of that nationality group identify with it and base at least some of their behaviors on the norms of the national group. Ethnic subculture is usually found in affluent countries where people might from other parts of the wor1d with the hope of a better life and live-li-hood. . 1. 1 Character i. It is based on the original nationality ii. Migrated from one country to another or one locality to another. iii. Though the citizens of a particular country see themselves as citizens of that country, but they frequently retain a sense of pride and identification in the tradition and language of their ancestors. iv. Pattered network of groups and organization v. Ethnic subculture provides a psychological source of group identification. 3. 1. 2 Consu mption pattern When ethnic subculture comes to consumer behavior, this ancestral pride is manifested most strongly in the consumption of ethnic foods, in travel to homeland and in the purchase of numerous cultural artifacts. Ethnic clothing, art, music and foreign language newspaper are the commodities which are preferred by the ethnic subcultural people. One’s interest in ethnic goods and services expands rapidly, as one tends to better understand and associates with his ethnic origin. 3. 1. 3 Marketing program To reach this ethnic subcultural people a marketer should understand the consumption pattern of that subculture. In Bangladesh there are foreigner ( people comes from Europe, Australia, USA) who come for their job purpose, but staying in Bangladesh for a long tine, may form a ethnic subculture and prefer fast food, long skirt, trouser, jogging shoe, golf course etc. So marketer should understand the need of this ethnic subcultural people and meet their unsatisfied need. Beharies are the greatest example of ethnic subculture. They use to speak in Urdu. Prefer food like kabab and parata. So to reach them marketer can take niche marketing strategy. 2. Working ladies sub-cultural Through the process of development, the number of working ladies is increasing day by day. The consumption pattern of these ladies varies as they have to maintain their work place as well as a family life. 3. 2. 1 Character i. They have a very short time to prepare food. ii. They have to do their household activity as well as maintain a working life. iii. Sometime they have to stay away their family 3. 2. 3 Consumption pattern This subcultural group used to consume ready food and less time consuming equipment to wash and prepare food like washing machine, micro-wave oven. 4. Marketing program to reach Marketer should take strategy like ready food as 3munites nodules, packet spice and ingredients, washing machine and home cleaner. Ladies hostel for those women who have to stay outside the home. 3. 3 Religious An individual’s religious affiliation influences to great extent his consumption pattern. Those who belong to a particular religion may buy/not buy and use/not use certain goods and services. 3. 3. 1 Character Members of a particular religion constitute what we call religious subculture. Religious beliefs and rituals may dictate the use of certain items and discourage the consumption of others. The bondage or the attachment to religious belief guides a religious person. If the bondage of religion is strong, life will be guided by religious belief rather than logic and vice versa. i. They consume some item heavily during religious festival. ii. Certain items are restricted by the religious belief to consume. iii. Some stimuli influence the consumption. 3. 3. 2 Consumption pattern Muslims buy and consume certain specific food items heavily during the month of ‘Ramadan and buy lot of gifts during the ‘Eid-Ul-Fitr, and discourages its followers the consumption of certain items such as alcoholic beverage. . Marketing program to reach A devout member of ‘Islam’ may consider it immoral to be materialistic, where another member of the same religion may find nothing wrong in becoming materialistic. A marketer of cine-magazine will have no problem in reaching the later person, where it will be almost impossible for him to penetrate the market consisting of pe ople of the other mentality and religious beliefs. So a marketer should be very sensitive to determine a product or service for that particular group of people. 3. 4 Regional The way people lead their lifestyles may also vary according to where they live or from which part of the country they have moved to the other part of the country. People from a particular part of the country or people living in a particular part constitute what we call regional or geographic subculture. On this basis, there could be two different types of regional or geographic subculture. One could be based on geographic region of the country and other could be based on urban, suburban or rural distinction. 3. 4. 1 Character i. Where people live in, the part of a particular country has a certain influence in consumption. ii. The region where from he come has certain consumption pattern. iii. Ecological climate vary and that dictate the consumption. 3. 4. 2 Consumption pattern People from Sylhet, like certain food and beverage, like ‘shatkora’ one kind of lemon, which is used in preparing beef. People from Chittagong like spicy food. Fish is consumed by ever here in Bangladesh, but dry fish is consumed heavily by people living in the southern and coastal areas of Bangladesh. Those living in the hill districts display different patterns in food consumption, housing, and recreation than those of the people living in the other parts of the country. Different geographic regions of the country pose different problems that consumers must solve. The most obvious of these are the climatic conditions. Climatic conditions influence home construction clothing requirements, and recreational opportunities to name but a few. In addition, different regions of the country have different age distributions and different social histories. These variables in combination with the climatic variables have produced differing values and lifestyles which newcomers to a region generally acquire after a period of time. These regional variations influence the use of particular media, the types of products used, and the product attributes considered important. 3. 4. 3 Marketing program to reach Marketer should study the characteristics of that region and the people. A marketer should segment his market to satisfy every group. If s/he produces noodles for every segment he should prepare separate flavor and test. Regional nature, variety should be adopted for the product of service. Regional subcultures clearly influence many aspect of consumer behavior. The consumption process also is influenced by the urban, suburban, and rural distinctions, another type of regional subculture. The urban, and suburbanpeople, prefer ready or instant food, prefer eating out and enjoy their leisure in a way different from rural people. So marketer should identify this subcultural people to serve with certain marketing strategy. 3. 5 Age Subcultures may also be based on the age differences of people living in the same country and belonging to the same main culture. It is likely that those who belong to the teen age group will behave quite differently than those to the teen age group will behave quite differently. Because the outlooks, experiences, attitudes and other aspects vary among people of different age groups, their consumption patterns are likely to vary. 3. 5. 1 Teen agers: The teen agers are to be influenced more by popular heroes and heroines and will display more materialistic lifestyles. The youth market is a significant subculture for the marketer It is important to marketers not- only because it is lucrative, but also because many consumption patterns held throughout life are formed at this time. The youth, as they start their career in this age are flaunt with more luxury items. Since they have little obligation at this can spend whatever they are. Their consumption patterns lean toward personal care and luxury items. 3. 5. 2 The middle aged: This group on the- contrary are matured, worried about the future and making purchase decisions. As an attempt to build a reserve for the future, they are likely to be conservative in buying many material goods, and are found to investments. 3. 5. 3 The elderly people: They display quite different consumption behaviors with that of teen-agers and middle aged people. The elderly subculture consists of people who have gone on retirements or whose regular income generating activities have ceased. 3. 5. 3. 1 Characteristic i. Most of them live with their children; ii. Their health conditions gradually deteriorate; iii. They have emotional difficulties iv. They have minimum amount of money at hands to spend v. They are price/value conscious; vi. They are deal prone; like to shop as it has special meaning; are tuned in to the mass media vii. Read direct mail, package labels, and package inserts. These few characteristics make them behave quite differently than other groups. Because of their differences with other groups, they also require different types of products. 4. Marketing Strategy The elderly people, because of deteriorating health, will require more fat free foods, tonic items, medical advices and medication as well as hospitalization. Since they have limited incomes, they prefer comparison shopping. Because of their maturity and different attitudes, they are skeptical of advertising claims and are influenced more by the informed sources. The emergence of elderly market has created a need for many different types of products sue as old people’s clubs and a number of other products and services. Personal selling is more effective, should be remain careful about the problems of communicating with the elderly. 3. 6 Singles The singles subculture consists of unmarried individuals. This subculture is found to be increasing in urban and semi-urban areas. The size of this subculture is gradually becoming prominent to call a special marketing attention. Quite a few reasons are associated with the growing size of the subculture of the singles. 3. 6. 1 Character They could be delaying marriage; postponement of marriage; higher divorce rates; inability to find a suitable source of earning to bear family expenditures and so on. The singles have some special needs. Which can not be met through normal social interaction. 2. Marketing program to reach Marketers who can recognize their specific needs and can develop products aimed at meeting those specific needs can reap a considerable benefit. ingles night clubs; exotic telephone talk services, dating services, artificial sexual organs, bachelors’ hostels/mess, product that promise sex appeals, convenience foods, restaurants, sports equipment, etc. , could be some of the examples of products and services aimed at the subculture of singles. In a country like ours, the singles subculture is growing prominent in the urban areas, and as a result lot of hostels for both males and females have been established aiming to provide accommodation services to singles. 3. 7 Gender Subculture may also be formed based on gender difference, such as subculture of males and subculture of females. Since every society emphasizes distinct, specific roles for men and women, they are likely to behave differently. 3. 7. 1 Characteristic i. As their behaviors vary, they consume differenttypes of products and respond differently to marketing appeals. ii. Men are influenced more by aggressiveness, competitiveness, independence, self-confidence, and masculinity. iii. Women are influenced by neatness, gentleness, tactfulness, talkativeness, and feminity. 3. 7. 2 Marketing Strategy There are products which are equally used by men and women. But, different appeals in the same product are needed for these two groups. Cosmetics, perfumes, clothing, bicycles etc. , are used both by men and women. But different designs, colors, sizes, shapes, and fragrances are provided for by the marketers to appeal people of different sex. Bicycle is designed differently for men and women. Even promotional appeals are made different for these two groups. Again, among the females, those who are professionals, behave differently than those of non professionals /housewives. The working women, particularly those, who are married, will again require different types of products and services that may not be bought by unmarried working women. The shopping patterns of these two groups will also vary. Since characteristics, attitudes, and needs vary between these two groups they may be considered as two different market segments. 3. 8 Occupation People display different patterns of purchase behaviors according to their occupational involvement. People of different occupations may constitute occupational subcultures, such as subculture of the doctors, subculture of the lawyers, subculture of the teachers, subculture of the engineers, subculture of the defense personnel. . 8. 1 Characteristics A defense officer, will show different purchase behavior than someone belonging to the civilians’ society. Doctors’ may look at the nutritional aspect while buying a food item. 2. Marketing Strategy Marketers should recognize the differences in attitudes and behaviors among people of different occupations and formulate marketing strategies accordingly to be successful in each specific subculture. 3. 9 Social Class Social c lass may also be used as a determinant of subcultural differences. There could be subculture of the well-offs, subeulture of the middle class and subculture of the poor. 3. 9. 1 Rich subculture: People belonging to the subculture of the rich will display altogether different buying behavior than those of middle class and poor’s. Rich will be very selective in their purchases; 3. 9. 2 Middle-class Subculture: People of the middle class will have substantial control over their consumption decisions; poors will be very careful and cautious in taking their purchase decisions. 3. 9. Poor’s Subculture: The subculture of poverty consists of people living below the poverty line. Because of their low incomes, they will avoid buying pre-packed, instant, frozen food items as they are likely to be costlier than the fresh staple or as they have limited educational opportunities, they develop different attitudes, outlooks, and motivation resulting in different buying behaviors on the part of them. Most of their incomes are spent on basic necessities such as food, and housing. Only a small amount of their incomes are spent on clothing, transportation, recreation, and luxury. They basically look at low-cost items, favor shops where they get credit, and are attracted by different inducements offered by the marketers. 4. 0 CONCLUSION Subculture may be categorized into many different classes. Though in Bangladesh consist many subculture, we consider some of the important subcultural groups and show how they affect consumption and marketing decision. Because of the important differences within any culture, marketers must be aware of diverse subcultures -examining them individually and on their own terms. Those identified with a subculture tend to think and act alike in certain respects, and this has important implications for their lifestyle. Recognition of this has led to experimentation with market segmentation as a means of developing effective marketing strategy adapted to market targets that are believed to ha special promise. Marketers must recognize that even though their operations are confined to a particular country, or a division or district, or even to one city, subcultural differences’ may dictate considerable variations in what, how and when people buy. To deal with these differences effectively, marketers may have to alter their product, distribution systems, price, or promotion to satisfy members of particular subcultures. Bibliography Books 1. Chowdhury, Ashraful Islam; Consumer Behavior; seventh edition. Bangladesh Open University; 2007. 2. Philip Kotler and Armstrong Gray (2006); Principles of Marketing, Twelveth Edition 3. Lesikar, Raymond V and Marie E. Flatley. Basic Business Communication, 10th Edition. McGraw-Hill Company Inc. , New York 2005 Web sites http://en. wikipedia. org/wiki/Youth_subculture http://en. wikipedia. org/wiki/Subculture