Introduction And Brief History Finance Essay - Free Essay Example

Sample details Pages: 25 Words: 7434 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? KASB Bank Limited was incorporated on October 13, 1994 as Platinum Commercial Bank Limited. The name was subsequently changed to KASB Bank Limited on February 21, 2003, when the majority shareholding was acquired by the KASB Group, one of the largest financial services groups in Pakistan with leading positions in equity and debt market and making strong headways in consumer banking and asset management. The KASB Group established by Mr. Don’t waste time! Our writers will create an original "Introduction And Brief History Finance Essay" essay for you Create order Khadim Ali Shah Bukhari in 1952 has been working successfully in banking, securities, leasing, technology, research and community projects. The Group comprises of KASB Bank Limited and its three fully owned subsidiaries; KASB Securities Limited, a full service corporate entity providing premium brokerage, research, investment banking and advisory services, KASB Technology Services Limited, an Information Technology platform providing IT solution and KASB Funds Limited, an asset management company that has recently launched its first liquid fund in the name of KASB Liquid Fund. KASB Group enjoys the distinct advantage of having developed a strategic relationship with Merrill Lynch, a renowned global investment banking firm, on the KASB Securities side of its business.[1] KASB Bank Limited, with its presence in 13 cities, through its network of 35 branches, delivers a comprehensive range of banking services in Consumer, SME Middle Market and Corporate Banking. The working system within the Bank has been revamped by diverting resources towards segmented business areas which have been showing improved operational activities. Also being given a priority is the Human Resource development besides paying continued attention to the streamlining and improving the internal policies, procedures and processes. Information Technology infrastructure is also being revamped by acquiring solutions best suited to the Banks requirements and to meet the envisaged growth strategy. Vision Partnering Success ValuesMission V Ision Customer Focus and Innovation A Ttitude Passion and Quest that Drives Us L eadership Sense of Integrity, Trust Accountability U Pright Commitment to Being a Credible Corporate Citizen E Xcellence Distinction as a Habit S Ynergy Ability to Harness the Power of Teams *SOURCE: Official Website www.kasbbank.com Associated Companies The primary reason why I chose KASB Bank is that the KASB Group has had its presence in the Pakistani Markets since 1958 and it has been providing various financial services specializing primarily in Investment Banking, Research, Asset Management and Commercial Banking. This group has had close ties with the investor community of Pakistan and currently it is controlling four businesses i.e. KASB Bank, KASB Securities, KASB Funds and KASB Mudaraba. One of the main reasons for the inception of this bank was to facilitate the investors in their financial market trading transactions. Currently the bank has 104 branches and its operating in 43 cities in Pakistan. It is offering solutions to large portfolio of investment, corporate and consumer banking. According to the financial reports of first quarter of 2012, the banks assets have crossed Rs 100 Billion, which has double since December 31, 2010. Quite recently, KASB Bank was declared the Corporate Finance House of the Year in the category of Equity and Advisory (Banks) by a panel of senior industry experts, acknowledging the quantum and sophistication of investment banking deals executed by the bank during the year under review. COMMERCIAL BANKING Mahana Khazana Mahana Khazana is a type of account that provides the features of both a savings account and a current account. This product provides the customers with monthly interest earned on their profits. It also provides various facilities such as unlimited deposits withdrawals, running finance facility up to 90%, locker facility, free Visa Debit Card, real time online banking, utility bills payment facility through internet banking ATM, free Pay Orders for balances above 1 million, and 24/7 phone banking facility Maheena Asaan Plus Maheena Asaan Plus is a one year term deposit account. The profit is directly credited to the depositors Maheena Asaan Plus account, giving them extra cash to use every month. Minimum deposit required for this account is Rs.100,000 and maximum Rs.20 Million. There is a running finance facility of 75% of the amount investment. Also it provides free Cheque Book on minimum Rs. 1,000,000 invested, free Internet Banking, free ATM/Visa Debit card, and free Online Banking. Business Flex KASB Business Flex is a current account. It offers all businessmen and executives convenient and reliable banking solutions for all business dealings. It provides freedom and flexibility to transact wherever businessmen go. Some important features include free funds transfer facility to all KASB Bank Branches, Running Finance facility, no minimum Balance requirement, free unlimited Pay Orders Demand Drafts, and utility bills payment through Internet ATM. KASB SAMAR Savings Account This is a savings account for the senior citizens. This account can be opened by any individual of 60 years and above. In case of joint account one of the account holders shall be 60 Years or above. Some important features include, no minimum or maximum deposit limit, monthly profit payment, profit calculated on the minimum balance during the month, and unlimited number of transactions. KASB SAMAR Term Deposit Account This is quite similar to the KASB SAMAR Savings Account. Most of the features are same except for a few. For Instance, this is one year fixed deposit account which pays a monthly profit to the depositor. There is a minimum limit of Rs 50,000/- for this account. Middle Market and SME Banking KASB Bank offers Customized solutions for individual businesses. It also provides flexible financing to accelerate the growth. Another feature of this particular banking is One window financial solutions. AGRICULTURE FINANCE Various schemes such as KISSAN SARMAYA scheme has been designed and aimed at meeting all types of financial needs of agriculture sector. Farmers are eligible for KASB Agricultural Credit for each of the following purposes. Farm Credit Production Finance/ Working Capital Just like any other business credit can be provided for working capital needs of the farmers, such as seasonal requirements for crops i.e. purchase of seed, fertilizer, pesticides and weedicides etc. by the farmers. Also short term finance can be provided for sprayers, hired farm labor, power, diesel, oil for tractors and tube well operations, fuel wood for curing of tobacco, electric charges for Tube well operations etc. Short term finance for hire charges for storage and transportation, expenses on marketing, cost of packing and material and processing cost, working capital for storage of raw agriculture/ farm produce by farmers from field only, is also provided. Development Finance Credit can be given to purchase of farm machinery, equipment and allied accessories. Also it can be provided forLand improvement and leveling. Non-Farm Credit Non-farm credit includes financing livestock, dairy, poultry, fisheries, forestry etc. In term of period of finance, non-farm credit is divided into the following two categories Production Finance Short term finance for the items i.e. purchase of feeds, raining and veterinary expenses, artificial insemination, hired farm labor, power, etc. Development Finance Medium and long term finance for purchase of livestock, milk processing and chilling plants, motorcycle for milkmen, veterinary clinics, compound feed making industry, poultry farming, dairy farming, marine fisheries, cold storage for fisheries, forestry, apiculture, sericulture etc. Agriculture financing facilities are available throughout the country at designated agriculture lending branches. All types of financing are available for short, medium and long term depending upon farmers requirement and the nature of finance. CONSUMER FINANCE GharAsaan- Home Loan This is a Home Loan facility with installment plans for the customers. GharAsaan Variants have been designed in such a way that they are convenient and comfortable for customers with different needs. Cash Asaan Personal Finance Cash Asaan Personal Finance is a personal loan with affordable equal monthly installments. The customers can use Cash Asaan for everything that money can buy. TRANSACTION BANKING Correspondent Banking KASB Bank offers a wide range of Correspondent Banking Services such as Credit, Deposit, Collection, Clearing, and Payment services to banks and financial institutions. Trade Finance The Bank offers an extensive range of trade products and services through its global correspondent banking network which spans 69 countries. It aids importers and exporters find optimal solutions for their individual requirements for cross border trading. It provides all trade related services such as managing documentary collections, letters of credit and trade guarantees alongside the risk management and structured export finance. Cash Management The cash management services provide a wide range of innovative products, designed to facilitate the customers to efficiently manage their cash flows thus reducing their transactional and administrative costs, and efficient Accounts Payables and Receivables Management. Alternate Banking Call Centre KASB ONE Phone banking KASB Connect is a 24-Hour contact center which acts as a single access point for all our customers throughout the country. With just a single access phone call, customers can have access to a wide range of tele-banking solutions and personalized banking services. ATM Network The Bank has a network of 94 ATMs countrywide, which continues to expand by the day. Moreover, KASB is also part of the 1 Link, MNET and VISA networks. This allows using the KASB ONE VISA Debit Card across Pakistan at more than 4,000 ATMs countrywide and at more than 1.6 million ATMs worldwide. The KASB ONE VISA Debit card is also accepted on all VISA certified machines displaying the VISA Plus sign. Internet Banking Internet Banking lets the customers perform a variety of financial transactions; such as, funds transfer, bill payments, check account statements and applications for loans. Mobile Banking and SMS Alerts Mobile Banking allows the customers to perform various transactions, such as, fund transfer, bill payments, and balance checks. Also the Bank offers transaction based SMS Alerts service to all its account holders. Home Remittances KASB lets its customers receive their remittances instantly and absolutely free. It offers two options for receiving money in Pakistan; Cash Payments and Instant Credit of Funds for account holders. Instant credit of Funds facility is available for non-account holders as well through which they can receive funds on the same day. CORPORATE BANKING KASB Bank offers custom made products and services for corporate clients as the focus of the bank is on customers needs and to meet their expectations by delivering quality services quickly. Corporate Banking Unit is equipped with expertise in providing solutions for all On/Off Balance sheet needs of our clients, through the strength of KASB Groups presence in a range of financial services. The bank provides various tools for the clients to cater to their needs such as: Working Capital and Trade Finance solutions, including Imports, Exports, Guarantees, FOREX Options and Remittances. Long Term needs, through debt financing. Tailor made balance sheet structuring is also offered through the Investment Banking units expertise. Off Balance sheet, solutions for derivatives are managed througha highly skilled Treasury derivative unit. Cash Management through a dedicated and innovative cash management unit. INVESTMENT BANKING As the leading investment banking firm in Pakistan KASB has extensive knowledge of domestic markets and industries and well-established relationships with local and international investors. KASB is the only local investment bank to be affiliated with a global bulge-bracket bank, i.e. Bank of America Merrill Lynch. Our services include advising on: Mergers Acquisitions Privatizations Project Finance Restructurings Equity raising through IPOs/ SPOs and issuance of Global Depository Receipts Debt raising through issuance of TFCs, Sukuk and Syndicate Finance Structured Finance services through Quasi Equity and Securitization KASB has been very active in Pakistan and has concluded, among others, the last 6 consecutive cross border transactions in Pakistan which have resulted in a US$2.3 billion inflow of foreign exchange since 2006. KASB has generated more private sector foreign inflow into Pakistan than anyone else and continues to highlight investment opportunities in Pakistan to international corporations and global private equity/hedge funds. KASB has closed some of the largest transactions in Pakistans history including US$920mn Malayan Banking Berhad (Malaysia) investment in MCB Bank Limited, US$460mn acquisition of Paktel Limited by China Mobile, US$650mn GDR for United Bank Limited, US$150mn GDR for MCB Bank Limited and US$109mn Lucky Cement GDR.[2] TREASURY MONEY MARKET Products and Services The KASB Bank money market desk provides its customers with a variety of advisory and investment services. We offer our customers competitive quotes and investment advice based on their specific needs. We also allow our customers to invest in Government securities by opening an IPS (Investor Portfolio Services) account on their behalf with the State Bank of Pakistan. The main types of Government securities that our customers can invest in are: Treasury Bills (T-Bills) Treasury bills are zero coupon instruments issued by the Government of Pakistan and sold through the State Bank of Pakistan via fortnightly auctions. T-Bills are issued with maturities of 3-months, 6-months and 1 Year and are priced at a discount. T-Bills are risk free, SLR eligible securities, that are actively traded in the secondary market and are therefore highly liquid. They are issued with a minimum denomination of Rs.100, 000. Pakistan Investment Bonds (PIBS) PIBs are long term bonds issued by the Government of Pakistan and sold through the State Bank of Pakistan via periodic auctions. PIBs are issued with tenors of 3, 5, 7, 10, 15, 20 and 30 Years. Being backed by the Government of Pakistan, they present a low risk long term investment option. The Pakistan Investment Bonds offer a fixed semi-annual coupon and repayment of principal at maturity. They are highly liquid SLR eligible securities that are actively traded in the secondary market. The minimum denomination of PIBs is Rs.100, 000. FOREX MARKETS Products and Services The KASB Bank FX desk offers its customers a vast variety of FX products including: Ready Purchase/Sale The KASB Bank corporate desk provides all corporate and commercial customers the latest market rates for all transactions equivalent to US $5,000/- and above. For amounts less than US $ 5,000/-, the rates mentioned in the rate sheet are applicable. Forward Sale The outward forward sale allows Importers with L/Cs to book rates on their future commitments in order to hedge against any rate fluctuations and volatility. Forward Purchase The outward forward purchase allows exporters with L/Cs or contracts to book rates for their receivables in order to hedge against any future rate fluctuations. Foreign Bill Purchase (FBP) This facility allows customers to present their export bills and immediately receive rupee facility. The bank purchases and discounts the documents and receives the proceeds upon the maturity of the bill ranging from 12days to 180 days. The exporters can also present the bill against any forward booking for discounting, and adjust the proceeds of the forward contract through that bill. Foreign Currency Financing (FCF) The Foreign Currency Finance (FCF) facility allows exporters to avail foreign currency loans on LIBOR based interest rate for up to the maximum of six months. Foreign Currency Import Financing (FCIF) The Foreign Currency Import Finance (FCIF) facility allows importers to avail foreign currency loans for up to six months against DA or sight L/C using LIBOR based interest rates. FINANCIAL PERFORMANCE One very significant issue with the bank is that the bank has been experiencing losses since 2009, while its peers, in terms of balance sheet sizes and number branches, have been making profits. The overall industry is also doing fine as it can be seen in the exhibits provided at the end. The Net Interest Margin of the bank has been negative amplifying the losses of the bank. Despite the injection of Rs 13 Million in equity, the bank has been unable to cover the losses. Why this bank has been unable to generate income for its shareholders, will it be able to sustain itself and how can this situation be handled effectively are some intriguing questions and this is what I want find out by doing research on this bank. After a preliminary analysis of the annual reports of KASB Bank, I found out that the bank Liabilities (Deposits) are growing at accelerated rate as compared to past few years. Due to this there is a similar trend in the growth of the Assets of the bank but an interesting fact here is that the main assets (Advances) are not growing; in fact they are showing a declining trend since 2009. So the growth in Assets here is not because of Advances but because of Investments and other liquid assets. There has been a steady increase in Investments of the bank for past few years but in 2012, the investments figure has increased to more than twice of that of December 31, 2011. Similarly lending to other financial institutions has increased more than three folds. Furthermore there has been a substantial increase in Balances with other Banks. The Net Interest Margin is finally positive after three consecutive years but still the bank is producing losses. Assets of bank have been growing but the advances are not. This means that the bank is relying lesser on its core business, and that would be justified somewhat if the bank were making substantial profits from its non-core activities. But that is not the case, so it really doesnt make sense why the bank has restructured its balance sheet in such a way. The growth in assets is due to increase in the liquid assets. Liquidity is always inversely proportional to the Profitability of any firm. So if the bank has increased its liquidity it means that the profitability of the bank is going to decrease automatically. Looking at the historical profitability of KASB Bank such a step is unadvisable but the bank is doing it anyway. The rationale behind this would be identified and discussed in detail in this project. The above stated facts clearly show that there is a problem with KASB Banks financial structure and it needs to be looked into. Why the bank is altering its balance sheet structure and the implications it has on the banks performance have to be found out in order to identify the core problems and propose the best possible solutions. LITERATURE/INDUSTRY REVIEW The area of research for this study is the Profitability of KASB Bank. In simple words the business of banking is taking in deposits from various individuals with surplus resources at a specified rate and giving these out as loans to individuals with deficit in resources at a higher rate. The rate differential or the Spread is the main source of income for a bank. How well a bank manages this differential determines the income of the bank. Banks very rarely compete on competitive rates because that is a dirty game and it is discouraged through mutual understanding. So the margins for spread are quite similar in the industry. Profitability is a reflection of how banks are run given the environment in which banks operate. In fact, profitability should mirror the quality of a banks management and the shareholders behavior, the banks competitive strategies, efficiency and risk management capabilities, Herrero (2007).[3] A bank is operating on a very thin window which means that it cannot bear substantial losses consistently. Any loss in any particular period means that the equity of the bank is being wiped out in that period. In banks the equity proportion is quite low as compared to other business firms, so in case of losses it is quickly wiped out, leading the bank towards default. To avoid such circumstances banks have to be revived with equity injections so that they do not default on depositors money.[4] Pakistans financial sector consists of a wide range of commercial banks, specialized banks, insurance companies, leasing companies, microfinance banks and Islamic banks. All these institutes offer a wide range of products and services to facilitate their customers. NBP, HBL, UBL, MCB and ABL are the top 5 banks of Pakistan, and the share of these top banks is more than 50% of the total assets of the banking industry and exactly 50% of the total investments made by all the banks are contributed by these top 5 banks. Banks mostly prefer to invest in Government securities and approximately more than 83% of their investments are in this particular segment. This is because Govt. borrowing has increased manifolds over past few years and banks would obviously prefer lending to a default free entity, eliminating credit risk. Consequently the consumers or private entities suffer.[5] During the past few years, financial markets and institutions have undergone many changes and witnessed more than 40 transactions of acquisitions and mergers of bank and non-bank financial institutions for the purpose of consolidation and diversification. Today, banking sector is significantly contributing in the economic growth of the country in accordance with the SBP rules and regulations. Currently, Pakistan has 5 public sector banks, 22 local private banks, 7 foreign banks and 4 specialized banks. The NPLs are 5.6% of the total banking credit, showing the employment of better banking practices and improved asset quality in the sector.[6] In general, despite the apparent difference in tenors, NSS instruments have been a key substitute of bank deposits, particularly of fixed tenor. It is partly because NSS instruments offer early encashment facility without penalty. Typically, in the presence of significant interest rate differential, movement towards NSS instruments is understandable. However, it has not always been the case. For instance, while interest rate differential has been around 6 percent during FY02-06, flows towards NSS instruments have actually plummeted. This was largely on account of banning institutional investments in NSS, suspension of DSCs and SSCs sales through banks and disallowing banks to lend against NSS instrument. However, with removal of ban on institutional investment in late 2006, flow towards NSS instruments resumed. In recent years, upward revision of NSS rates has attracted strong flow of investments, though fixed deposits have revived as well, particularly in FY11 amid strong growth in overall deposits.[7] Prior to the recent financial crisis, the excess liquidity and competition among the banks prompted them to move away from the traditional limited product range of credit to the government and the public sector enterprises, trade financing, big name corporate loans, and multinationals. The borrower base of the banks expanded many fold as the banks diversified into agriculture, SMEs, consumer financing, mortgages, etc. The middle class which could not afford to buy cars or houses/apartments as it did not have the financial strength for cash purchases, has been the biggest beneficiary of these new products and services. Assets of the banking sector are growing at the rate of 15% whereas deposits are increasing with a rate of 14.5%. Advances have decreased by 0.2% and investments in securities have grown tremendously by 42.5%. Profit after taxes has also increased by 69.23% from last year.[8] Asset quality of overall banking sector has improved. NPLs of the banking system are driven by a number of factors including economic activities, legal system, unexpected shocks, and credit evaluation ability of the banks. Apart from of the underlying factors, increase in NPLs has strong influence on the banking spread. It not only reduces the earning assets of banks, but also imposes a cost in the form of provisions. In case of Pakistan, the banks are required to provide for the amount of nonperforming loans after adjusting for permissible partial benefit of collateral. NPLs to total loans ratio has improved from 14.7 to 16.2 in Dec 2011 as per SBP calculations. Same effect has been observed if we look at this ratio by banking segments (commercial, foreign, specialized banks). Overall ratio of provisions to NPLs has remained the same. Banks have lent mostly to textile sector whereas agriculture sector remained comparatively neglected. Highest NPL ratio has been observed by electroni cs sector, but banks have not lent a significant amount to this sector. Textile sector has shown 28% infection level which is quite high among all other sectors. The NPL situation in consumer financing has improved if we compare it with previous years.[9] Liquidity position of overall banking sector has improved if we check the liquidity position with total assets or total deposits as base. Total Advances have decreased, which has also caused the banks to invest excess liquidity in investments which are liquid assets causing the banks overall liquidity situation to be better off.[10] Distinct from other risks, market risk is an important risk for banks. Its distinction, particularly from credit risk, often gets blurred as market and credit risks may interact to reinforce each other and result in substantial losses if not managed jointly. Despite its significance, when measured in terms of current practices of calculating risk weighted assets, the contribution of market risk remains trivial in the overall risk profile of the banks. Moreover, efficient management has introduced good services and products which really have attracted more customers towards banking. Number of branches has also been on the rise, which has definitely increased the total deposits. This excess liquidity has been invested in securities or extended as loans. Interest income from both advances and securities raised the net income level of overall banking sector. Although expenses have also increased by 10% due to extension in branch network and hiring of employees, they are controlled and income has increased by 17% as compared to last year. Along with interest income there is an increase in fee, commission and other service charges leaving a positive impact on net income. Profit after taxes has increased by 69%. NBP in particular has shown record profits too.[11] More than 50% of the total advances extended to any sector are contributed by these top 5 banks. Therefore we can say that most of the banking business is concentrated around these top banks. Similarly these 5 banks have highest depositor base and enjoy more than 50% of total deposits. More than 75% of the profits of the banking sector have been earned by these banks. So, in order to remain in the market and continue doing business, the medium and small sized banks will have to remain committed to continuous improvement in service quality as well as product innovation.[12] The literature on Profitability of a bank is vast and a great deal has been written about the determinants of the Profitability. It is evident from the studies that there are two types of factors determining the profitability of a bank; internal and external. Internal factors may be bank specific characteristics and external may be macroeconomic environment and market/industry characteristics; Ramlall (2009).[13] Size, capital, efficiency and credit risk are considered as the most significant Internal determinants in most of the studies. Demirguc-Kunt and Maksimovic (1998) and Akhavein et al. (1997), all have identified that a positive relationship exists between size and profitability. As far as capital is concerned, if a bank has higher level of capital it can meet its regulatory capital requirement easily and may even have surplus funds to give out as loans in order for it to earn higher profits, Havrylchyk et al. (2006).Furthermore, if a bank has efficient operations it should be able to earn higher profits as it would be able to maximize its net markup/interest income, Molyneux and Thornton (1992). Finally, we know that in order to earn higher return one has to take higher risks. But if the credit risk is increasing it does not necessarily mean that the bank will be able to generate higher returns as more loan loss provisions would have to be kept aside, thus compromising profitability. This negative relation was found by Miller and Noulas (1997).[14] The external factors can be divided into Macroeconomic Determinants and Industry Specific determinants. The macro-economic factors include; interest rate, cyclical output, the level of economic development and stock market capitalization. Cyclical output and the level of economic development usually represent the business cycles since banks profits are expected to be related with the business cycles, being higher in case of boom and lower in case of bust, Demirguc-Kunt and Huizinga (2001) and Bikker and Hu (2002). Havrylchyk et al. (2006) found that stock market capitalization and banks profitability are negatively related as equity and bank financing are substitutes of each other. A good example is the quality of managerial decisions (Berger and Mester, 1999). The quality of bank management is closely related to corporate governance (DeYoung and Rice, 2004).[15] The industry-specific factors include, may be the regulatory environment and the market sentiments in which all the banks operate. Basically, a concentrated market will confer higher profits for banks as they are able to tap a higher market share relative to banks capturing only a small portion of the market. On the other hand, in case of a well-diversified market structure, banks are expected to enjoy low profits level on the back of a highly competitive market structure.[16] During the recent global financial crisis, Liquidity has had a very important role. When the crisis hit, the surplus units who had provided the funds in the market started pulling out. This substantially increased the demand for liquidity. Banks all over the world faced problems and in some extreme cases they had to merge with other banks. As a result, in order to revive the financial stability local authorities had to step in and inject liquidity in many countries, Longworth (2010); Bernanke (2008).[17] Later on, the authorities made it an obligation for banks that they increase their liquidity level in order to avoid inconvenience at the time of need. Policymakers have suggested that banks should hold more liquid assets than in the past, to help selfÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ insure against potential liquidity or funding difficulties. Since liquid assets such as cash and government securities generally have a relatively low return, holding them imposes an opportunity cost on a bank. If the regulation regarding liquidity is absent, the bank will only hold liquid assets until the point where it does not compromise the profitability of the bank. The reason for this behavior by banks is that liquidity compromises profitability. If one wants to increase liquidity, profitability will automatically be decreased and vice versa. However in time of need, the policymakers can regulate by ordering the banks to increase liquidity beyond that point, in order to ensure overall financial stab ility. The analysis of liquidity holdings for firms has been done in a great deal of literature. However, literature regarding the impact of liquidity and its relation to the profitability of a bank is limited. This relationship is not the focus of this paper; it is one of the angles that we will be looking at. Berger (1995) looked into the statistical relationships between earnings of banks and capital for U.S. banks over the period of six years, from 1983-89. He found out that in perfect capital markets with symmetric information,[18]there is a positive relationship between capital and return on equity. These results, according to various scholars, are consistent with the expected bankruptcy cost hypothesis. In other words, if the bank has higher level of capital, it will decrease the cost of funding and cost of issuing additional capital to such an extent that at some point it might even offset the costs completely. While Berger (1995) applies the concept of the expected bankruptcy cost hypothesis in the realm of capital, it is also conceptually applicable to the impact of liquid assets on profitability, whereby banks holding more liquid assets benefit from a superior perception in funding markets, reducing their financing costs and increasing profitability.[19] According to Morris and Shin (2010), illiquidity risk is one of the components of Credit Risk. The model gives a formula for illiquidity risk and the authors show that if the liquidity ratio of a bank increases it reduces the probability of illiquid default. If an increase in the relative liquid assets holdings of a bank decreases its probability of default, and if the expected bankruptcy cost hypothesis is indeed correct, then holdings of liquid assets should exhibit a positive relationship with bank profits. On the contrary, holding liquid assets means the bank will have low return relative to other assets, thereby having a negative effect on profitability. Thus, overall, we expect liquid assets to exhibit a nonÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ linear relationship to bank profitability in which increasing liquid assets would improve a banks profitability through the expected bankruptcy cost hypothesis, as long as the benefit of holding liquid assets is more than the opportunity cost of low return. Interest spreads and margins play a very important role in determining the profitability of a bank. A comprehensive review of determinants of interest spreads is offered by Hanson and Rocha (1986). That paper summarizes the role that implicit and explicit taxes play in raising spreads and goes on to discuss some of the determinants of bank cost and profits, such as inflation, scale economies, and market structure. Using aggregate interest data for 29 countries in the years 1975-1983, the authors find a positive correlation between interest margins and inflation. Brock and Suarez (2000), for example, show a negative relationship between bank spreads and NPLs over total loans for most Latin American banking systems.[20] The balance sheet structure of a bank is another determinant of the profitability of a bank. On the asset side, a larger share of loans to total assets should imply more interest revenue because of the higher risk. However, loans also have higher operational costs because they need to be originated, serviced and monitored. All in all, profitability should increase with a larger share of loans to assets as long as interest rates on loans are liberalized and the bank applies mark-up pricing. In this vein, Demirguc-Kunt and Huizinga (1999) report that banks with a relatively high share of non-interest earning assets are less profitable. In addition, government intervention can also affect the balance sheet structure. Fry (1994) shows that administered lending and deposit rates result in the misallocation of credit. On the liability side, a larger proportion of deposits should, in principle, increase profitability as they constitute a more stable and cheaper funding compared to borrowed funds. However, they also require widespread branching and other expenses. Such related costs seem to weigh more than the benefits in emerging countries (Demirguc-Kunt and Huizinga, 1999).[21] Bank size is generally considered a relevant determinant of profitability but there no consensus on the direction of influence. On the one hand, a bank of a large size should reduce costs because of economies of scale. In fact, more diversification opportunities should allow to maintain (or even increase) returns while lowering risk. On the other hand, large size can also imply that the bank is much harder to manage or it could be the consequence of a banks aggressive growth strategy. The empirical evidence is also mixed. Goddard et al. (2004), Garcia-Herrero and Vazquez (2007) show that very large banks in the industrial countries tend to be more profitable. Sitroh and Rumble (2006) found out that smaller banks are more profitable.[22] Market power may also influence profitability, according to two well-known theoretical models. The first one is the structure-conduct-performance hypothesis, which asserts that a positive relationship between the interest rate margin and concentration (a proxy for market power) reflects non-competitive pricing behavior. The second one is the efficient-structure hypothesis, for which a banks higher interest margin is attributable to more operational efficiency, better management or better production technologies. Since these banks will also gain a larger market share (another proxy for market power), the structure will become more concentrated due to efficiency gains (Berger, 1995). The policy implications of the two hypotheses go in opposite directions. Under the structure conduct theory, high profits stem from market power so that antitrust regulation is welcome to allocate resources more efficiently. By contrast, under the efficient-structure hypothesis, breaking up efficient banks , or forbidding them to grow, may raise social costs by leading to less favorable prices for consumers. The empirical evidence on concentration or market share and profitability is mixed.[23] Finally, the macroeconomic environment may also influence bank profitability through many different channels. Credit risk, for example, is influenced by economic growth, inflation and the level of real interest rates as they affect the borrowers repayment ability and the value of collateral. Demirguc-Kunt and Huizinga (1999) show empirical evidence that rapid economic growth and high real interest rates increase profitability for a large number of countries. Inflation is generally associated with higher profitability as it implies additional earnings from float, which tend to compensate for the higher labour costs (Hanson and Rocha, 1986; Bourke, 1989; and Boyd et al. 2001). Higher real interest rates have also been found to foster profitability, especially in developing countries (Demirguc-Kunt and Huizinga, 1999). This may reflect the fact that demand deposits frequently pay zero or below market rates, even more so in developing countries. In the same vein, interest rate volatility generally implies higher interest margins as banks generally manage to transfer the higher risk to their clients (Ho and Saunders 1981, Maudos and Fernndez de Guevara 2004).[24] COMPETITORS ANALYSIS Just like any business, the competitors of a firm are the whole industry, but to make the comparison more realistic one has to identify the immediate competitors. The immediate competitors that I have identified for this research are JS Bank and Silk Bank. The rationale for selecting these banks as competitors is that both these banks are similar to KASB Bank in terms of their Assets and number of branches. To check the performance of KASB Bank in all respects, it will be compared to these two banks. From the preliminary analysis of these three banks, I found out that JS Bank and Silk Bank are producing profits for their shareholders regularly while KASB Bank is not. The following financial analysis will put light on the banks standing as compared to its peers. KASB BANK 2011 2010 2009 PERFORMANCE Spread 10.28% -0.21% -8.76% Net Markup/interest Margin -0.66% -0.02% -0.074 ROE -0.027 -1.41 -0.99 ROA -3.45% -4.64% -7.08% Non Markup/Interest to TA 1.30% 1.65% 1.82% Net Markup/Interest expense to total income 1.05% -2.24% -3.97% Markup/Interest expense to Markup/Interest Income 110.28% 100.21% 108.76% Admin Expense-to-Profit Before Tax -0.89 -0.86 -48.00% Non Markup/Interest to Total Income 57.49% 49.21% 49.07% Admin expense to non-markup/interest income 2.94 3.08 2.52 Earnings per Share -1.29 -2.87 -4.54 LEVERAGE RATIOS Capital Adequacy Ratio 8.00% -3.56% 3.53% Total Deposits to Total Equity 6.59 24.07 10.04 LIQUIDITY Cash Cash equivalents to total assets 21.52% 6.17% 5.06% Investment to total Assets 21.30% 21.85% 22.26% Advances net of provisions to total assets 40.15% 51.34% 49.04% Deposits to Total Assets 84.71% 79.36% 71.82% Total Liabilities to Total Assets 95.18% 94.94% 91.12% Gross Advances to Deposits 56.85% 76.07% 77.74% Gross Advances to borrowing and Deposit 52.92% 66.60% 64.86% LOAN LOSS COVERAGE NPLs to Gross Advances 34.44% 27.08% 21.60% Provisions against NPLs to Gross Advances 16.62% 14.95% 12.15% NPLs to shareholders equity 128.95% 495.69% 168.58% NPLs write off to NPLs Provisions 4.86% 24.61% 47.64% Provision against NPLs to NPL 48.27% 55.22% 56.26% SILKBANK 2011 2010 2009 PERFORMANCE Spread 22.31% 12.53% 0.98% Net Markup/interest Margin 2.06% 1.17% 0.08% ROE 0.04 -0.08 -14.74 ROA 0.77% -1.56% -4.23% Non Markup/Interest to TA 0.93% 1.63% 0.96% Net Markup/Interest expense to total income 4.96% 0.85% -3.28% Markup/Interest expense to Markup/Interest Income 77.69% 87.47% 99.02% Admin Expense-to-Profit Before Tax 2.78 -2.55 -0.65 Non Markup/Interest to Total Income 43.20% 38.21% 40.50% Admin expense to non-markup/interest income 4.46 2.66 4.15 Earnings per Share 0.26 -0.42 -3.22 LEVERAGE RATIOS Capital Adequacy Ratio 6.65% 5.24% 0.56% Total Deposits to Total Equity 3.41 4.15 251.95 LIQUIDITY Cash Cash equivalents to total assets 5% 4.82% 4.77% Investment to total Assets 19.35% 18.15% 29.39% Advances net of provisions to total assets 55.07% 61.04% 46.75% Deposits to Total Assets 70.66% 76.66% 72.25% Total Liabilities to Total Assets 93.78% 93.35% 97.43% Gross Advances to Deposits 86.32% 95.01% 81.82% Gross Advances to borrowing and Deposit 67.57% 80.71% 62.74% LOAN LOSS COVERAGE NPLs to Gross Advances 19.93% 23.35% 29.29% Provisions against NPLs to Gross Advances 9.71% 16.19% NPLs to shareholders equity 58.63% 92.02% 6039.17% NPLs write off to NPLs Provisions 48.94% 2.66% 27.19% Provision against NPLs to NPL 48.74% 69.34% 71.43% JSBANK 2011 2010 2009 PERFORMANCE Spread 40.18% 31.66% 28.51% Net Markup/interest Margin 3.18% 2.65% 2.19% ROE 0.04 -0.06 -0.11 ROA 0.66% -1.03% -1.81% Non Markup/Interest to TA 1.41% 0.85% 1.03% Net Markup/Interest expense to total income 3.46% 2.31% -0.16% Markup/Interest expense to Markup/Interest Income 59.82% 68.34% 71.49% Admin Expense-to-Profit Before Tax 3.93 -2.97 -1.2 Non Markup/Interest to Total Income 41.64% 51.31% 60.56% Admin expense to non-markup/interest income 2.74 5.55 5.11 Earnings per Share 0.36 -0.50 -0.97 LEVERAGE RATIOS Capital Adequacy Ratio 16.13% 17.64% 23.99% Total Deposits to Total Equity 4.25 3.63 3.79 LIQUIDITY Cash Cash equivalents to total assets 7.42% 8.17% 10.90% Investment to total Assets 42.03% 34.79% 28.99% Advances net of provisions to total assets 33.08% 35.49% 35.54% Deposits to Total Assets 73.71% 66.72% 64.79% Total Liabilities to Total Assets 83.89% 85.18% 82.81% Gross Advances to Deposits 46.16% 55.20% 57.09% Gross Advances to borrowing and Deposit 42.78% 45.61% 46.17% LOAN LOSS COVERAGE NPLs to Gross Advances 14.97% 13.12% 7.04% Provisions against NPLs to Gross Advances 2.77% 3.64% 3.93% NPLs to shareholders equity 29.38% 26.29% 15.24% NPLs write off to NPLs Provisions 29.43% 25.88% 161.80% Provision against NPLs to NPL 18.50% 27.72% 55.72% PERFORMANCE / PROFITABILITY RATIOS The Profitability ratios of the competitor banks i.e JS Bank and Silk Bank, show that they are much better off than KASB Bank. Both these banks are generating profits at an increasing rate while KASB Bank is producing consistent losses for past three years. The negative ROE suggests that the losses are wiping out the equity of the bank. The ROE of JS Bank and Silk Bank is increasing steadily whereas The ROE of KASB Bank declined further in FY10 and then increased but remained a negative figure. The Return on Assets for KASB Bank has also been negative throughout showing that not enough return is being generated either because of the poor management or poor asset quality. The competitors for the three years ROA are more than KASB Bank, which means that they are utilizing their assets better. Net Interest Margin ratio is the difference between interest income and interest expense as a percentage of assets. The NIM ratio is negative for KASB Bank, it shows that the bank has been doing poor asset liability management. Non-interest income as a percentage of total assets is roughly the same for all banks. The ratio of interest expensed to interest earned shows that the interest expenses of KASB Bank are more than the interest income can cover which is an alarming situation. The competitors ratios suggest that their interest incomes earned are well above the interest expenses they have been incurring. Earnings before taxes have been negative so all the ratios associated with EBIT come out to be negative. The Administrative expenses as a percentage of non-interest income, as compared to peers, show that the bank has not been spending as much money as it should have on its human resources which can be reason for poor management of the bank. EPS has also been decreasing consistently. CAPITAL ADEQUACY RATIO Capital Adequacy Ratio is basically used to protect depositors and promote the stability and efficiency of financial systems around the world. Two types of capital are measured: tier one capital, which can absorb losses without a bank being required to cease trading, and tier two capital, which can absorb losses in the event of a winding-up and so provides a lesser degree of protection to depositors. The ratios calculated for these banks show that KASB Bank has had lower ratios than required by BASEL II and III. Silk Bank has even lower ratios than the required. Only JS Bank has had capital well above the required by the BASEL III. LEVERAGE RATIOS Total Deposits to Total equity ratio indicates the level of leverage in the Bank. The ratios show that KASB Bank has taken quite a lot of debt with respect to its equity. JS Bank has reasonable leverage. Total deposits are lesser times equity than other banks. It shows that KASB Bank has been taking on quite a lot of debt in past few years then it can handle. LIQUDITY RATIOS Liquidity is always inversely proportional to Profitability. We have seen in the ratios that the profitability of KASB Bank has been decreasing in past few years, it means that its liquidity has been increasing, and this notion is easily backed by the ratios that have been calculated. JS Bank has had an opposite trend over the years; the liquidity has been decreasing steadily. Silk Bank on the other hand has been maintaining the level of its liquidity. KASB and Silk Bank have a similar percentage of total assets in securities investments while JS Bank has been increasing the investments during past few years. Also in KASB Bank, the proportion on total assets being financed by deposits has been increasing and it has reached 84.71%, while the other two peer banks have kept it near 70%. Increasing the reliance on deposits to finance assets is not advisable after a certain extent and KASB Bank is taking substantial risk by doing so. LOAN LOSS COVERAGE Looking at the financials of all three banks, it is clear that KASB Bank has the highest proportion of NPLs with respect to total advances. In FY11, the NPLs as a proportion of total loan has reached 34.44% which is quite alarming especially when the bank is already in losses. Silk Bank has been reducing its NPLs and it has been successful in doing that. JS Bank has the lowest NPLs but they have been increasing over the years, although still quite less than both peer banks. However, if we look at the Provisioning for NPLs, KASB Bank and Silk Bank have been doing a better job than JS bank to cover their loan losses. Non-Performing Loans to Shareholders equity also gives us an interesting picture. KASB Banks NPLs are substantially more than the shareholders equity, thus wiping out the equity of the bank.

Stay-At-Home vs. Working Mothers - 743 Words

Husband: Honey is everything okay? Is this all that has been accomplished today, sitting on the couch watching T.V.? I wish that was my job everyday. Wife: Seriously? This is the first time I have been able to sit down all day! I got the children ready for school, made each child’s lunch, took them to school, had to fight the lines in Walmart just to get groceries, Abby forgot her backpack so I had to run it by the school, picked up the kids, ran Hunter to baseball practice, made supper, cleaned house, gave each child a bath, and then put them to bed. Now I am trying to take a breather and watch a T.V. show. Is that too much to ask? My job is never done unlike yours. Mothers play an important role in a child’s life. Whether it is being present when the baby takes their first step, or being in the crowd for the childs first recital. Two different types of mothers have evolved in society. One is a stay-at-home mother. 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Sale Promotion Essay Sample free essay sample

I ) Summary This study has covered the inquiry i. e. what consumer-oriented techniques need to be considered in bettering gross revenues publicity and organisation? The study illustrates the definition and the importance of gross revenues publicities in concern. Gross saless publicities are divided into two major countries ( consumer-oriented gross revenues publicity and trade-oriented gross revenues publicity ) . based on the difference of targeted parties and within the context of this study. merely consumer-oriented techniques will be discussed. The most common consumer-oriented techniques are trying. couponing. premiums. refunds. fillip battalions. price-off trades and trueness plan. This study chiefly analyses the advantages and disadvantages of these tools and the consequence of each techniques on concern net incomes. two ) Justification Most of the companies’ underside line is to maximise gross revenues volume and velocity up the merchandising procedure. The basic tools used to accomplish an organization’s communicating aims are publicizing. direct selling. public dealingss. personal merchandising and gross revenues publicity. I have chosen Marketing as my major in college ; I find that gross revenues publicity is the basic and of import tool to increase concern success. To be more specific. I choose to analyse consumer-oriented publicities in this study. which is one country of gross revenues publicities beside trade-oriented publicities. I. Introduction The undermentioned study combines researched information and collected informations to see what are gross revenues publicity and consumer-oriented gross revenues publicities techniques every bit good as the influences of these tools on test rates. which are defined as â€Å"speed and extent to which consumers in a market do a first clip purchase of a new merchandise or a new brand† ( Roddy. 2010 ) . Furthermore. this study discusses the effects of these tools used in publicity plan in order to carry through higher gross revenues publicity. Overall. this study states that gross revenues publicities every bit good as consumer-oriented techniques are really important as they have a great impact on concern success. These tools will help in forcing up the gross revenues volume every bit good as in heightening the company’s overall public presentation. II. What are Gross saless Promotions?A. Definition Gross saless publicities have been defined as short-run activities that are designed to promote consumers to buy a merchandise or promote resellers to stock and sell a merchandise ( Elliott 2010 ) . Gross saless publicities offer some excess benefit or inducement above and beyond the intrinsic value of the merchandise. Gross saless publicities are frequently used in combination with advertisement. which gives clients the ground to purchase a merchandise or service. gross revenues publicities. on the other manus. seek to actuate clients to do immediate purchases ( Terence. 2010 ) . In fact. gross revenues Promotions are used by most organisations. including makers. distributers. retail merchants. trade associations and non-profit establishments. They are targeted towards the consumer or concluding purchaser. concern clients. the trade or retail merchant and the company’s gross revenues force. B. The importance of Gross saless Promotion First. gross revenues publicity involves some type of incentive that provides an excess inducement to purchase. This inducement is normally the cardinal component in the promotional plan. ranges from a voucher. sample. price-off trade or premium such as the free film DVD as in the instance of Kellogg’s Corn Flakes. The publicity produced more than 2 million DVD and helped bring forthing 10 million units of cereal purchases. Kellogg Company took full advantage of this publicity to better purchase frequence and construct long-run repute for its group of household and grownup cereals ( Costello. 2000 ) Second. gross revenues publicity is an acceleration tool. which is designed to hike the merchandising procedure and maximise gross revenues volume. By offering an excess inducement. gross revenues publicity techniques can actuate consumers to purchase a larger measure of a trade name or shorten the purchase rhythm of the trade or consumers by promoting them to take more immediate action ( Belch 2009 ) . C. Major Gross saless Promotions Tools Harmonizing to Kotler ( 2001 ) . gross revenues publicity activities can be targeted to different parties in the selling channel. Based on that status. gross revenues publicities can be divided into two major classs: consumer-oriented gross revenues publicities and trade oriented gross revenues publicities. 1. Consumer Oriented Gross saless PromotionsConsumer-oriented gross revenues publicities include trying. couponing. premiums. refunds and discounts. fillip battalions. price-off trade and trueness plan. 2. Trade Oriented Gross saless PromotionsTrade-oriented gross revenues publicities include trader competitions and inducements. trade allowances. point-of-purchase shows. gross revenues developing plans. trade shows. concerted advertisement. and other plans designed to actuate distributers and retail merchants to transport a merchandise and do an excess attempt to force it to their clients. III. Consumer Oriented PromotionsA. Aims Different gross revenues publicities activities are used for different aims. As with any promotional mix component. sellers need to transport out a state of affairs analysis and make up ones mind gross revenues promotion’s specific function in the incorporate selling communications plan. In other words. the end of the publicity and the targeted parties of the publicity in the market must be determined. so that directors are forced to believe beyond the short-run gross revenues hole ( Pickton. 2005 ) . Therefore. the basic aims of consumer-oriented gross revenues publicity techniques are to increase short-run gross revenues. assist construct long-run market portion. entice consumers to seek new merchandises. enticement consumers off from competitors’ merchandises. encourage consumers to ‘load up’ on a mature merchandise. clasp and wages loyal clients ( Belch. 1993 ) . B. Consumer Oriented Gross saless Promotion Techniques 1. Free Samples Sampling is by and large considered the most efficient tool to bring forth test and it generates much higher test rates than any other techniques. Samples are offers of test sum of a merchandise. Some samples are free ; for others. the company charges a little sum to countervail its cost. It is known that the most common sampling methods include: delivered door to door. sent by mail. handed out in a shop. attached to another merchandise or featured in ads. The thought is that holding tried the sample a proportion of consumers will see the merchandise straight. derive a greater grasp for its benefits and Begin to purchase it. For new trade names of trade name extensions ( a new shampoo. fabric conditioner. nutrient or drinks ) this signifier of publicity is an effectual manner of deriving consumer test. For bing trade names that have a low test but high buying rate. sampling may be effectual. As it would look that many of those who try the trade name like it and purchase it once more. raising the test rate through free samples could hold a good long-run consequence ( Kotler. 2001 ) . However. although sampling is of import in promotional run. it has some restrictions. As companies have to give away free merchandises. it might be really dearly-won. Another restriction is that the sampled consumers may non reiterate buying and might return back to other trade names as they have more different picks. The cost of trying plan can be recovered merely if it gets a figure of consumers to go regular users of the trade name at full retail monetary value. 2. Coupons Coupons are certifications that give purchasers a salvaging when they purchase specified merchandises. They can excite gross revenues of a mature trade name or advance early test of a new trade name. Coupons can be delivered to the place. look in magazines or newspapers. or look on battalions. Nowadays. concerns distribute vouchers through direct mail. print vouchers within some publications or on the dorsum of supermarket dockets ( Volk. 2007 ) Couponing is the oldest. most widely used. and most effectual gross revenues publicity tool and is regarded as 2nd merely to trying for bring forthing test. Coupons are rather advantageous for both new and established merchandises. First. it is possible to offer a monetary value decrease merely to price-sensitive consumers who by and large purchase because of vouchers. while others who are non as disquieted about monetary value purchase at full monetary value. Coupons besides can cut down the retail monetary value of a merchandise independently from the retail merchants for cooperation Finally. as with vouchers. consumers can buy goods at a lower monetary value. it makes them loath to purchase new trade name and even reiterate purchase after initial test or seek a new. improved version of a trade name. On the other manus. when utilizing vouchers. companies have to get by with some jobs. The figure of consumers utilizing vouchers and when they use them are difficult to gauge. While trying induce consumers to buy instantly. vouchers provides clients longer period ( about two to six months ) so that they can buy before the expired day of the month. The job occurred is that harmonizing to a survey of voucher salvation forms by Inman and McAlister. many vouchers are used merely before the termination day of the month instead than the period following the initial voucher bead. Another job is that it is hard to pull new purchasers as most vouchers are likely used by consumers who already use the trade name and would likely buy the merchandise without the vouchers anyhow. As a consequence. it ends up cut downing the company’s net income. 3. Premiums Premiums are goods offered either free or at low monetary value that is an excess inducement for buyers. Harmonizing to Jobber ( 2010 ) . there are two basic types of premiums. which are free premiums and self-liquidating premium. Free premiums are normally little gifts included in the merchandise bundle or mailed to consumers who have sent in a cogent evidence of purchase. A premium may come inside the bundle ( in-pack ) or outside the bundle ( on-pack ) . both of these free premiums offer toys. balls. trading cards. compact phonograph record or other points included in cereal bundles. Based on â€Å"The Great American Blow-Up: Puffery in Advertising and Selling† of Ivan L. Preston ( 1975 ) . in/on-package premiums are consumers’ favourite type of publicity However. several jobs are associated with their usage. Similar to the two above tools. premiums are rather expensive ensuing from premiums every bit good as excess packaging. It is hard for concern to bring forth a desirable premium with a sensible cost. particularly in the grownup markets. Furthermore. sellers have to be cognizant that if premiums are ill designed. it may do a negative impact. lower net income because no 1 is interested in buying and higher cost of production. Self-liquidating premium is a premium that requires consumers to pay some or all of the cost of the premium plus handling and mailing costs. This premium offers consumers. who request it. lower-than retail value. which is the end of self-liquidating premium instead than doing a net income. The benefit of this tool is that it creates involvement in the trade name and good will ( â€Å"items such as cognition. contracts or repute that can hold a fiscal consequence on a concern and are hence measured in fiscal terms† ( Wood. 2008 ) ) that reinforces the brand’s image. Self-liquidating premium is frequently used together with advertisement publicity so it can spread out the advertisement message to consumers. However. there are some fortunes that consumers do non desire to pay excess money for the premiums added. which ends up retail merchants have a big stock of those premiums that are difficult to dispose of. 4. Refunds and Rebates Refunds ( besides known as discounts ) are like vouchers except that the monetary value decrease occurs after the purchase instead than at the retail mercantile establishment. The consumer sends ‘a cogent evidence of purchase’ to the maker. which so refunds part of the merchandise purchase monetary value ( Elliott. 2010 ) . Refunds and discounts can besides promote consumers to reiterate purchase as they can offer a impermanent monetary value decrease or refunds and discounts can hold a combination with others tools such as couponing. which besides fosters buying. The jobs which come up with refunds are that consumers have to make full in application signifier for refund and give up some personal inside informations such as phone figure and reference. which are rather troublesome. Therefore. people will non do an attempt to demand for refund. And sometimes. refunds make consumers confused about the existent monetary value and value of a merchandise or service. which means that sellers have to utilize this technique decently. 5. Bonus Battalions Comparison with the above tools. fillip battalions are less complicated as fillip battalions are the excess sum of the merchandise ( e. g. excess units or larger containers ) at the regular monetary value. In an easier manner. fillip packs offer consumers lower cost of each unit and more value of the merchandise with the same sum of money. Bonus battalions can be in the signifier of individual bundle at a lower monetary value or two related merchandises combined together ( toothbrush and toothpaste ) ( Schultz. 1998 ) . Bonus battalions are really effectual in short-run gross revenues. even more than vouchers. Consumers do non necessitate to make such complex stairss as vouchers and refunds to acquire the publicity. The decreased monetary values are designed straight on the label of bundle. which has a strong impact on the purchase determination at the clip of purchase. However. fillip battalions can besides hold negative effects. Bonus packs require a favourable show in shops so that consumers can detect them. It means that manufacturer must hold a good relationship with retail merchants or they must supply excess net income for the retail merchants to hold extra shelf infinite for their merchandises. As a consequence. cost of production additions if trade relationships are non good. Another disadvantage is that fillip battalions may merely involvement the current users who are more or less likely to purchase the merchandise anyhow or the unpatriotic clients. 6. Price-Off Deals Direct price-off trade is another common technique used by sellers. This tool is used to offer a decrease of the monetary value of the trade name. which is offered right on the bundle through peculiar monetary value battalions. The decrease. is usually is about 20 % to 25 % of the regular monetary value. which comes out from the producer’s net income border. The price-off does non from the retail merchant in order to maintain the retailer’s border and keep its aid and partnership. Price-off publicity is used for some grounds. First. as decrease is from the manufacturer. it can do certain that the promotional price-off reaches the consumer efficaciously. Similar to bonus battalions. price-off trade entreaties to consumers by the visual aspect of the merchandise so that they can acknowledge the price reduction. Hence. price-off trade besides can promote consumers to buy larger measure of the merchandise. take over in topographic point of other competitors’ trade names. However. price-off trades besides like vouchers and fillip battalions. merely attracts the current users non the nonusers so it do non increase much net income for the maker. 7. Loyalty Plans The purpose of trueness plans is to raise consumers’ buying rate by honoring them based on the sum they spend. The wagess can be price reductions. verifiers. free gifts and so on. American Airlines was one of the first companies to use this method when it presented its AAdvantage frequent-flyer plan in 1981. There are more than 50 million members in its AAdvantge plan while Marriott International has merely more than 20 million travellers into its Rewards Program ( Anonymous. 2011 ) . Nowadays. there are more and more companies try to develop trueness plan. such as Nestle. Kraft and particularly supermarkets. Why trueness plans become so popular? Loyal members are the chief consumers of companies. so developing strong relationship with them to promote them to utilize company’s merchandises and services continuously. And with this plan. sellers can follow their best clients every bit good as understand more about their demands and features so as to develop better relationships. The chief drawback is that this plan requires consumers to pay an tremendous sum of money in a given clip period to acquire the publicity. which may deter consumers from being loyal to the company. IV. Decision In short. there are a batch of techniques used to increase gross revenues volume and test rate. The common and of import tools used by sellers are sale publicities tools. which designed to promote consumers to buy more and retail merchants to stock and sell merchandises. Gross saless publicities have two major classs. consumer-oriented and trade oriented techniques. The benefits and drawbacks of every peculiar consumer-oriented tool. which are designed to aim on consumers’ behaviour. are discusses exhaustively. Although the purpose of these tools is to hike consumers’ buying rate and raise companies’ net incomes. it is the marketers’ occupation to take sagely which tool is appropriate for the current market so that it is to the full utilised. V. Recommendation When analyzing selling. it is necessary to understand really clearly all facets of selling every bit good as the publicity techniques. Furthermore. farther research is required to hold a more specific overview of the market every bit good as consumers’ penchant towards the merchandise and their demand of the new merchandise. Based on those. appraisals can be made ; hence. suited technique can be chosen and used decently and expeditiously. This recommendation could besides be taken into consideration non merely by concerns but besides by who intends to come in Marketing classs in college. VI. Bibliography 1. Belch. G. E. ( 1993 ) . Introduction to advertisement A ; publicity: an incorporate selling communications perspective ( 2nd erectile dysfunction ) . Homewood. Illinois: Irwin 2. Belch. G. E. A ; Belch. M. A. ( 2009 ) . Ad and Promotion:an incorporate selling communications perspective ( 8th erectile dysfunction ) . New York: McGraw-Hill 3. Costello. J. ( 2000 ) . Kellogg publicity creates Corn Flakes fad. The Wall Street Journal. 1. 4. Elliott. G. ( 2010 ) . Marketing. Australia: John Wiley A ; Sons 5. Jobber. D. ( 2010 ) . Principles and Practice of Marketing. England: McGraw-Hill Education 6. Kotler. P. . Armstrong. G. . Saunders. J. . A ; Wong. V. ( 2001 ) . Principles of Marketing. Australia: Pearson Education 7. Pickton. D. ( 2005 ) . Integrated selling communications. England: Prentice Hall Financial Times 8. Preston. I. L. ( 1975 ) . The Great American Blow-Up: Puffery in Advertising and Selling. Madison: University of Wisconsin Press 9. Roddy. M. ( 2010 ) . Gross sale ss publicity: how to make. implement A ; integrate runs that truly work. Philadelphia: Kogan Page Limited 10. Schultz. D. E. . Robinson. W. A. A ; Petrison. L. â€Å"Sales publicity necessities: the 10 basic gross revenues publicity techniques—and how to utilize them. † Business A ; Economics. 1998. lt ; hypertext transfer protocol: //books. Google. com. sg/books? id=o_mIiLQrNnsC A ; dq=sales+promotion+bonus+packs+technique A ; source=gbs_navlinks_s gt ; ( 6 June 2011 ) . 11. Publius terentius afer. A. S. ( 2010 ) . Ad. publicity. and other facets of incorporate selling communications. Mason. Ohio: South-Western Cengage Learning 12. Volk. J. †Coupons and Gross saless Promotion† . 18 June 2007. lt ; hypertext transfer protocol: //www. jonathanvolk. com/internet-marketing/coupons-and-sales-promotions. hypertext markup language gt ; ( 3 June 2011 ) . 13. What’s the best air hose trueness plan? Frequent-flyer plans 2001. The Economist. 14. Wood. F. A ; Sangster. A. ( 2008 ) Partnerships histories and company histories. Business Accounting 1 ( 11th erectile dysfunction ) . England: Pearson Education.

Smoking Is a Public Health Issue free essay sample

The evidence to support this statement comes from papers such as that by Prescott ( et al. 1998) who carried out a huge study looking into the effects of primary smoking and the risk of myocardial Chemical in the general population. The results of the study were absolutely unequivocal with a fling of an increased risk of myocardial infarction in women of 2. 24 and in men of 1. 43. The reasons for the sex difference are several including genetic factors (Bennett 2004) and hormonal factors (Chapman 1999)To take a step further back, we have to define Health An authoritative definition of Health comes from the WHO who currently tell us that health Is a state of complete physical, mental and social wellbeing and not merely the absence of disease or infirmity. ( WHO 1992). A difficulty with this definition is that today many people confuse the attainment of happiness with the attainment of health (Seem 2001). Ironically, in the context of this essay, Freud also offered us an observation on the definition of Health when he observed that most people equated ell-being with happiness rather than health (Freud 1975) and he amplified this by observing that he had been advised by his doctors to give up cigars In order to improve his health. We will write a custom essay sample on Smoking Is a Public Health Issue or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page He commented that he was far more healthy but much less happy (Caracas 1997). Although Frauds comment was clearly flippant, it does exemplify a deeper truth, that part of the problem with smoking is the pleasure that some people derive from it.One can always advance the argument that In a free society one should always have freedom of choice to damage yourself If you wish. Hegel 1971) That is clearly the case, but in adopting that view you must also accept two further consequences of that position. One is that society is expected to pick up the bill when you are ill (via the NASH) and that by smoking, you may not only damage yourself but you may well damage others through the medium of passive smoking. (Uses Singer 2001) Smoking Is a Public Health Issue By carmine argue strongly that it is and produce evidence to support this stance. On that basis we would suggest that the argument is already made since there is (et al. 998) who carried out a huge study looking into the effects of primary smoking and the risk of myocardial chemical in the general population. The results of the study were absolutely unequivocal with a finding of an increased risk of myocardial health is a state of complete physical, mental and social wellbeing and not merely the observing that he had been advised by his doctors to give up cigars in order to One can always advance the argument that in a free society one should always have freedom of choice to damage yourself if you wish. (Hegel 1971)

Society and Culture in Provincial America

The article titled, Crime and social control in provincial Massachusetts, by David Flaherty is basically a review of criminal activity in modern America. The analysis is majorly focused in the state of Massachusetts which in real sense represents a big part of what is generally referred to as provincial America.Advertising We will write a custom article sample on Society and Culture in Provincial America specifically for you for only $16.05 $11/page Learn More The article tries to bring out the importance of social control in addressing the issue of criminality in the United States. Among the major issues highlighted include the maintenance of homogeneity in the population, the establishment of a proper system for the prosecution of criminals as well as the involvement of certain interest groups (such as church leaders) in commending appropriate behavior and rebuking undesired character. This article is very relevant to the course as it clearly provides an illustration of how different components of society influence each other’s development over certain periods of time. Aside from this, American history focuses on various aspects of societal development including the development of criminal law and its application in conjunction with other strategies to reduce vices in society. The author’s main line of argument is that society makes criminals. This is drawn from his proposition that in order to address the issue of rampant crime, it is important for persons to first look at the roles they play in ensuring that the society around them is safe (Tolles 1957, 102). This includes encouraging the individual to personally exercise ideal morality before trying to establish ways of making the community function as a strong cohesive whole. According to the author, crime keeps on developing new facets as the years pass by. Provincial and national crimes are basically on an upward trend this is the main reason why the relevant crime-prevention authorities need to draw on the resources and skills of different members of their teams in order to arrest the situation. The author explains that crime cannot only be tackled using policing methods only. He asserts that there are some types of criminal activities, such as those linked to drug abuse, which are prevented by tackling the underlying challenge. These, the author says are dealt with by modifying the environment in which they happen or sometimes by altering the social conditions that are purported to have basic linkages as far as the activities are concerned. Flaherty also asserts that in order to reduce crime, a conscious effort has to be made in order to provide support to those individuals who fall victim to the acts of criminals. This, according to him provides the required support to police investigations as well as to ensure that victims are not targeted again.Advertising Looking for article on social sciences? Let's see if we can help you! Ge t your first paper with 15% OFF Learn More Using facts from the Massachusetts provincial criminal records over a given period of time, the author establishes that the art of crime prevention is an analytical process that starts by establishing the causes of criminal acts, the damage they cause to the victims and the amount of resources and skills that will be used to properly mitigate the situation. In this regard, Flaherty suggests that the prevention of criminal activities is most likely going to be effective if the strategies are based in the regions closest the occurrence, i.e. the interventions are more effective if carried out at a provincial level than at a national level. The approach taken is even more effective if a number of problem solving strategies are directed towards the solution of one criminal activity (Frank 2008, 238). Provincial governments, therefore, have a very critical duty as far as the control and prevention of crime is concerned (McDougall 2005, 46). The article has served to enlighten me in a number of ways, both as a scholar and as an individual. First is the fact that I have been able to establish the correlation between individual conduct and its effect in the security and character of society. In this regard, the article has shown me that change in society starts with the individual and that it is only until every member of a given community decides to lead a positive life that change happens. Secondly, I have been able to understand how the provincial culture determines the outlook of the entire society and that the input of various key social groupings can impact on a regions history. Pertaining to this, I have been able to link the basic social unit i.e. the family to the development of individual character which in turn has an impact on proper societal functioning. In his article, David Flaherty has raised a number of important questions. Top on the list is whether or not the destruction of the family structure is responsible for the surging crime rates. His discussion appears to support the ideology that stability of the family set up is important in the raising of a responsible citizenry. Another question raised by the author and which has also been resolved is the connections are between various social vices such as alcoholism and crime. The author suggests that it is imperative for agencies handling crime to address the underlying issues while seeking solutions for criminal activities.Advertising We will write a custom article sample on Society and Culture in Provincial America specifically for you for only $16.05 $11/page Learn More Reference List Flaherty, David.1981. â€Å"Crime and Social Control in Provincial Massachusetts†. The  Historical Journal, 24, pp 339-360 Frank, Andrew. 2008. American Revolution: people and perspectives. California: ABC-CLIO McDougall, Walter. 2005. Freedom Just Around the Corner: A New American  History: 1585-1828. N ew York: HarperCollins Tolles, Frederick. 1957. James Logan and the culture of provincial America. New York: Little Brown This article on Society and Culture in Provincial America was written and submitted by user Jul1ana to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

Expository Essay on Why Parents Are Strict

Expository Essay on Why Parents Are Strict There is a question on whether parents should be strict or not, and how strict they should be. If a parent is strict, many tend to think that such parents are always unfair to their children, but these parents tend to think that the best parents are strict. This is because every parent tries to instill discipline in his or her children. By being strict, parents feel that the children will always take them seriously and, therefore, will act to the teachings of their parents. Children raised by strict parents will always respect their parents as well as other elders. On the other hand, children prefer that parents not be strict because their strictness causes the children frustration. Teenagers tend to challenge their parents because they are already building their self-esteem and sense of autonomy, which they feel parents interfere with. This brings about controversy between the parent and children, especially the teenagers. Teens tend to be independent and rebellious, and, therefore, make many mistakes that make their parents angry. Most parents understand that the teenage is in a delicate stage of life. They try to give them some added freedom and the responsibility that goes with it. It is important to instill discipline when children are young because they will grow up with strong values. Therefore, parents should be strict enough to instill values, but they should also be their children’s good friends. The friendship between parents and children should be of paramount importance because children should learn to trust their parents more than anybody else. Caring parents will never lead their children astray, and they will always lead their children on the right paths. Parents and children whose relationship is not the best will continuously have issues that are not good for the family. Being too strict will drive teenagers away from the parents. This will leave the teenagers unprotected because they will lack parental guidance. Teens should learn to respect their parents and listen to them because their parents have the interest of their children at their heart. If teens are not constantly corrected by their parents they may end up doing things that can lead to various risks that could affect their lives negatively. The attitude of parents towards their children varies from one parent to another. Although some parents abuse their children in disciplining them, other parents will simply scold their children. The type of discipline practiced by a parent depends on how the parent wants to instill values in the children. Discipline and punishment are not synonymous. They are different, and parents should avoid punishment. They should not inflict physical harm on the children. Some parents go beyond too far in attempting to correct their children’s behavior. Some discipline procedures are not legal, and parents can be jailed for harming their children. There are laws that protect the rights of children and help to ensure their safety, and no parents should break those laws. On the other hand, these laws should not influence a parent in being too lenient. This can also be harmful as the child grows into adulthood. Tips on How to Write an Expository Essay: The purpose of an expository essay is to express a personal opinion on a topic. As such, it is one of the easiest essays to write. Determine an area of interest. Perhaps a social issue has been hitting the news. Maybe you have a pet peeve. If you have a topic in mind, fine. If not, tune into the current news items and blog topics. See what captures your attention. Once you decide on a topic, determine if you understand the topic well enough to discuss it. If not, do some preliminary reading. What are the issues surrounding that topic? Then, form an opinion and develop it into a thesis statement. You can support your opinion with reasons. You can also provide details with statistics, anecdotes, and explanations. Be sure to organize your ideas in a coherent fashion and to use transitional devices to help you go from one thought to the next. Finally, always proof-read your work.

The influence of technology on modernist and avant-garde architecture Essay

The influence of technology on modernist and avant-garde architecture - Essay Example After the liberal-national revolutions of 1848, there was the need to expand the economy of the colonial territories and to fill the political, military and economic conditions with the traditional European. This led to the development of cities in its suburbs. In addition, the decrease in mortality because of the improved standards of living in terms of nutrition and medical techniques in urban areas resulted in urbanisation. The increase in population in urban areas led to transformation of old neighbourhoods into slums as well as entry of jerry-built houses that would provide shelter to people working in the factories. However, the Housing of the Working Classes Act of 1890 and the slum clearance Acts of 1868 and 1875 were established to provide quality housing. As the construction of new houses for workers began, several architectural designs developed in order to produce engaging and beautiful buildings and improve the overall appearance of the urban centres. According to Conrad s (25), in organic architecture, the building, its furnishings and its setting and environment are considered as one thing. Furnishings such as tables, chairs, musical instruments and cabinets are said to be part of the buildings, as well. However, the heating, lighting or ventilation can be incorporated together with other features in the building or excluded. Conrads (25) argues that a human dwelling place should be a complete work of art that is closely related to modern life and fit for people to live. It should include harmonious entity, which is beautiful and suitable in providing the needs of the dwellers. An example of such a building is shown below. Winslow House in Chicago (1893) Conrads (95) states it is through the new evolving techniques that people are able to discover new materials and new ways to construct objects; hence, enabling individuals to learn how to design objects and develop a new attitude towards design. This includes the living environment of vehicles and machines, limitation of certain characteristics such as colours and they should be readily accessible to all. Additionally, they should be economical in terms of space used, time, materials and money. This can be seen in Gropius office (1932) as shown below. Bauhaus argues that the necessities of life are the same for most people. Additionally, he states that the home and its furnishings are mass consumer goods and their design is as a result of reason other than a matter of passion. Machines that produce such products use steam and electricity in order to help people from working manually when producing their daily needs as well as to provide them with cheap products that are better than those produced by hand. According to Conrads (96), Bauhaus workshops are laboratories that are suitable for production of mass products, which are well developed and can be improved with time. An illustration of Bauhaus workshop is as shown below. According to Conrads (96), the Bauhaus represents that the contrast between the industry and the crafts is less marked by the difference in tools used than by the division of labor in the industry, as well as the quality of the work in the crafts. The past crafts have changed, and new ones are expected to emerge in a new and productive industry in which they will carry out work for industrial production. The experiments in the laboratory workshops will produce models and prototypes that will be implemented in the factories to produce quality work. Moreover, the products that have been produced in the Bauhaus are also been produced in other firms with are closely related to Bauhaus. Some of the architectural features that describe a new building according to Le Corbusier houses designs include the supports, the roof gardens, the free designing of the plan, the free design of the facade and the horizontal window. For the supports, it is necessary to distinguish between the non-supporting and the supporting elements,