Tim Cook announces the end of PC era
10th November 2015 – The chief executive officer of Apple Inc. Tim Cook states that there is no need in PCs anymore. He expressed his opinion for The Telegraph newspaper.
He thinks that the new iPad Pro can completely replace laptop and PC by its technical specifications and power. The CEO of Apple believes that when people will start using it, they will conclude that they practically do not need anything else other than their mobile phones.
Nowadays smartphones are reaching the size of iPads and Cook says: “I think if you have a larger smartphone, you might not need an iPad mini”. It has also been mentioned that the company is planning “to create an app or something else” that will provide a general safety for humans.
New 12,9 inch iPad Pro will be available for sale online this Wednesday( 11th November 2015) and in a couple of Apple stores this week.
This press release was adapted from mail.ru website and translated into English language.
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6th November, 2015 – Dmitry Medvedev has reached one million followers on Twitter.
According to the micro blogs’ statistics, the Russian Prime Minister Dmitry Medvedev has reached one million followers in his official twitter account.
The main tweets’ idea contains the information about the formal events and photos made by the Prime Minister himself. Mr Medvedev has only 19 friends on Twitter account. He also follows the ex-governor of California Arnold Schwarzenegger, the USA president Barak Obama and the official account of David Cameron, the prime-minister of the United Kingdom.
Medvedev’s Twitter account has become more popular than the account of the Russian president Vladimir Putin. (The president has 300 thousands followers; it has been registered two years later the Medvedev’s account). Although, the Russian Twitter version shows that Medvedev has over 4.2 million followers.
The Russian prime minister set up an English account in June 2010 when he had a business meeting in Silicon Valley in California. It has been published 890 ‘tweets’ for these 5 years. Also, Medvedev use Instagram and other Russian social media accounts in “ЖЖ” and “VKontakte”.
This press release was adapted from mail.ru website and translated into English language.
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Our research revealed that Lynx has established themselves as a brand that is sex orientated and is about making men more appealing and confident to the opposite sex (Bhasin, 2011). It is a brand that prides themselves on helping men to become more confident in the dating game and is primarily target at 18 – 24 year old men (Springer, 2009).
Lynx highly focuses their marketing campaigns at 18 – 24 year old males and their confidence towards sex and this has become very clear through their marketing campaigns as well as the use of celebrities that use (Jessica Jane Clement and Kelly Brook), who are seen as sex symbols.
People aren’t appealed to the marketing anymore and although it was successful 10 – 15 years ago, it is struggling now as it is seen as immature advertising and is becoming more appealing to the younger audience. Lynx’s targeted consumers believe that their adverts lack creativity and have become a bit too predictable and has been heavily linked to the younger audiences, which is damaging the brand, as consumer’s automatically link deodorant with their younger siblings.
Lynx’s target market is 18 – 24 and has been since 1983, when the brand was formed (Unilever global company website, 2015). This is difficult for Lynx because they have to continuously be updating their communications every 5 years to appeal to the target audience. The current 18 – 24 year olds are known as Generation Y, and so it was important for us to find out more about generation Y and the behaviour attitudes towards marketing communications.
This research project provides a thorough context analysis and evaluation of Volvo Company marketing activities. Volvo, a Swedish multinational manufacturing company, has become one of the biggest manufacturers of cars, trucks, buses and other equipment worldwide. Since 2010, Volvo Cars has been under the ownership of the Zhejiang Geely Holding of China. It formed part of the Swedish Volvo Group until late 90s, when the company was bought by Ford Motor Company. In 2010, Volvo Cars was acquired by Geely Holding. The project provides PEST analysis and SWOT matrix as well as corporate and marketing strategies of Volvo AG. Competitors audit of Audi, Mercedes-Benz, BMW and Lexus demonstrates its strengths in the automotive industry and gives a clear understanding of the current Volvo position in the market. Customers’ characteristics and attitude towards Volvo show how people treat this brand. In 2007, Swedish energy company Vattenfall and the Volvo Car Corporation has launched an industrial joint venture partnership to introduce Plug-in Hybrids on the market. Volvo has introduced its new campaign in order to promote their ecological and economical car line Volvo DRIVe which include seven models. The research project further discusses and analyses the DRIVe campaign, based on Fill (2011) marketing communications planning framework.
- Context Analysis
1.1 External context
Volvo has established a set of general principles based on consistently conducting business. The company comply with the laws, regulations and taxation of each country in which it operates by demonstrating its commitment to responsible business practice in policies, decisions and other activities. The Volvo group also claimed that they do not participate in any corrupt practices and do not support money laundering as well as any payments, gifts from a third party that could affect their objectives in the business decisions. The Volvo’s code of conduct states that its products and services are presented and complied with applicable regulatory and legal requirements. The company also proposes that they respect and value all employees and the minimum employment age is the age of completion of compulsory school, but never less than 15 years.
Since 2001, the Volvo has an average annual growth rate of 7 per cent which has been succeeded via organic growth and acquisitions. The long-term financial strategy of Volvo ensures the best use of capital in providing shareholders with a satisfactory profit and offering creditors reliable security. Annually, Volvo discusses the investor’s view of the company with credit rating institutes in order to assess the future ability to repay existing loans. Volvo’s financial representatives maintain good credit evaluations as a base for financing of certain business operations via loans. It is believed that net sales should increase by at least 10% by handling upswings and downturns in each sector to achieve better profitability in a business cycle. In 2013, the company’s net profit was $425 million. Volvo Cars claimed that operating profit rose 17 per cent by the end of 2014.
There is no official data about the Volvo buyers’ profile, however, different sources claim that the average Volvo car buyer is under 35 years old, medium to high income, well-educated and family oriented personality. People between 20 to 35 years old are more likely to start thinking about safety, quality and reliability of their vehicle. For example, the main Volvo cars website shows its concerns about child safety and pregnant women and provide a special comfortable seats, convenient seat belts and extra airbags. Volvo also considers the economic, environmental and social impact of the products and services they offer to their customers, as well as the effect of everyday processes on society and planet. They intend to improve efficiency and minimize the harmful carbon dioxide impact from its own production and, meanwhile, provide significant savings to their clients.
Volvo has never been slow in going forward in technological perspective. In 2013, Volvo launched Sunsun connect infotainment system with built-in USB and auxiliary connectors, wireless connectivity through Bluetooth and broadband technology. The cars also has been equipped with Park&Pay parking solutions which allow drivers to search for the closest parking and pay for the space from the comfort of their Volvo car. The Glympse app gives an advantage to drivers to share their current location with others and counts the estimated time of arrival. Volvo takes environmental sustainability very serious and they believe they can meet the continuously increasing need for transportation, generate productivity for their customers, and at the same time to reduce emissions of greenhouse gases and other harmful substances. In 2009, Volvo introduced its first eco-friendly and fuel-sufficient technology DRIVe with only 120g/km of CO2 what makes Volvo models the most efficient cars in their respective classes. Volvo DRIVe scheme on S40 and V50 models cost £35 a year to tax in the UK and brings a great value and enjoyment to the driver. Also, Volvo was the first car who introduce a new technology of autonomous parking without the driver inside. The driver uses a mobile phone application to activate the Autonomous Parking and then leave the car. Volvo Company always has innovation at its core what makes it especially competitive in the automotive industry.
1.2 Internal context
1.2.1 Organisation identity
The Volvo Company is based on the principle that every person has the ability and the willpower to improve business operational processes, and the desire to grow professionally. The corporate and brand strategy “Designed Around You” puts people at the core centre and is a foundation and a guide for the business, the products and the corporate culture. Its main concept is to provide the best possible safety for anyone who drives a Volvo or is around a Volvo. The company takes the position that the car is for everyday individuals, with a humorous tone than Volvo is not for well-off people. In fact, the design of Volvo vehicles is based on the drivers’ behaviour, driving satisfaction and maximum possible comfort. Safety is an existing philosophy of Volvo since 1927 and its employees work hard to stay at the forefront of the industry by taking an overall approach to safety.
Volvo also takes economic, social and environmental responsibility to manage risk, create industry opportunities and build trust amongst colleagues and customers. It is the most effective way to contribute to the development and wellbeing of society and eventually to achieve the Volvo’s vision – to become the world leader in sustainable transport solutions.
1.2.2 Culture, Value, Beliefs
Volvo is a global leader in sustainable transport solutions which employs around 110,000 employees, has production in 19 countries and sales in 190 markets. The company’s culture involves the lively and open dialogue between leaders, team members and other colleagues worldwide. They believe that the new Volvo Way, a fundamental policy guide for employees, helps to build energy, passion of work and respect towards the individuals in order to achieve common goals and have a strong motivation to grow further. Volvo also sponsoring two long-term cultural projects, Gothenburg Symphony Orchestra and The Gothenburg opera, as they believe that sponsorship provides useful opportunities to enhance their relationship with customers, employees, stakeholders and to strengthen the Volvo brand within the automotive industry. Three corporate values of quality, safety and environmental care, help Volvo to progress in terms of key benefits it brings to the customers. Volvo’s mission is to make people’s lives easier, safer and better. They believe that they are able create value for customers, pioneer products and services for the transport and infrastructure industries as well as work with energy, passion and respect for the individual. The launch of long-term sustainable strategy in 2012, will help Volvo to achieve these strategic objectives and take the position of the world leader in sustainable transport solutions by 2020.
1.2.3 Financial constraints
In 2012, Volvo cars sales fell by more than 10 per cent in China and the U.S., mainly due to the poor financial performance and weakness in these markets. Volvo sold approximately 40,000 vehicles in March, and 98,000 vehicles in 2013. In Europe, sales decreased 13 per cent including an 11 per cent drop in Sweden, comparing with the previous year. According to Volvo’s Financial Report 2012, the company’s structure is based on a combination of own cash flow, external borrowing and shareholder funding. Three new loan agreements (with China Development Bank, Swedish Export Credit Corporation and other European banks) signed in the period of from December 2012 to February 2013. However, Volvo Car Group reported an operating loss of 577 million, affected by a challenging market situation in the European regions.
1.2.4 Marketing Expertise
Since 1st January 2014 the Grey London, a global marketing agency, handles Volvo’s global creative account, worth of £18m in the United Kingdom and £30m in the United States. Creative agency launched its first global campaign “the Swell” for Volvo’s XC60 model which urged consumers to “seek feeling”. As safety is a major part of Volvo brand, an innovative safety concept called LifePaint has been developed by Grey London and aimed at cyclists to become noticeable on the road at night. Recently, 2000 light-reflective spray cans were given to six bike shops in London and Kent. If successful, the project will grow nationally and possibly internationally. LifePaint totally represents the Volvo’s vision that, “By 2020 no person will be killed, or seriously injured, by a new Volvo.”
1.2.5 SWOT matrix
SWOT analytical framework identifies strengths and weaknesses (internal factors), opportunities and threats (external factors) of Volvo Company. The following graph demonstrates the organisation’s position today and where it could be in the future.
1.3 Business context
1.3.1 Corporate strategy
All Volvo work is based on a sustainability perspective which contributes to long-term success. Long-term plans define the direction in a 5 to 15 years and the plans are aligned and reviewed regularly. The company has economic, environmental and social responsibility for the operations, products and services in the area where the Volvo Group has the potential to influence. (Appendix 1) The most recent strategy for 2015 aims at profitability improvement and organic growth. It includes logistics optimization, reducing product cost, improving white-collar efficiency and pushing sales. This will help Volvo to strengthen its relations with business partners and achieve the wanted position by 2020.
1.3.2 Marketing Strategy
In 2014, Volvo has announced its new global marketing strategy the ‘Volvo Way to Market’, which focuses on four areas: marketing tools, digital leadership, dealership and services. Also, Volvo has agreed to concentrate on three international motor shows in the U.S, Europe and Asia, where the company presents new products and innovations to the press and potential customers. Advertising spend is not at the same level of its main competitors, but Volvo plans to increase its investment into their brand message. The company focuses on sponsoring the Volvo Ocean Race, rather than other activities, as it is purely related to Volvo. The marketing strategy also includes digital commerce and industry-leading configurator/website which gives customers a simple and functional experience online. The ‘Volvo Personal Service’ concept provides a personal technician who take every customer through introduction and car ownership. In order to achieve these goals, Volvo has increased its marketing budget.
1.3.3 Brand Analysis
The Volvo brand, Latin for “I roll”, has become one of the most recognizable and famous worldwide, and identifies the company’s products with a reliable symbol of origin and a promise of performance. Volvo brand promises the better design, higher quality and improved productivity within the commercial vehicle industry. According to Volvo Club, the Volvo brand name is simple, smart and easy to pronounce in each country and with a much smaller probability of spelling mistakes. The logo is an ancient symbol for iron and the astrological symbol for Mars which, in turn, symbolizes the male gender and creates associations with steel, safety, quality and strength. The Swedish founders of the company, Assar Gabrielsson and Gustaf Larson, chose that symbol as they wanted a strong and powerful image for their vehicles. The Volvo already exists for 88 years and its logo has always been slightly changing since 1927, however, the symbol still remains the same. (Appendix 2) Volvo’s portfolio has a wide range of industry-leading brands such as Volvo Penta, Sunwin, Renault Trucks, Nova, Prevost and other. The Volvo’s human-centric brand strategy strapline “Designed around you” illustrates the future direction of the company’s brand development. Volvo has been sincere not only towards its brand but also to its customers.
1.3.4 Competitor Analysis
In 2014, Volvo cars’ sales grew 10.6 per cent comparing with its main competitors in the premium segment: Audi sales rose 4.2%, BMW sales increased 5.1% and Mercedes 5.3% (Volvo Car Group, 2015) Despite strong competition in the automotive industry, Volvo still focuses on the car safety technologies as well as quality and reliability what makes Volvo Cars even more noticeable in the global market and increase sales volume. (Appendix 2.1)
See “Sources. Competitors Audit” in Bibliography
- Customer context
1.4.1 Segmentation characteristics
In marketing, market ‘potential’ can often be segmented by using various demarcation criteria: demographics, socio-geographics, psychographics and so on. (Dahlen, et al., 2010) Volvo develops cars for their target market of customers whose major concern is personal and/or family safety, for example, newlyweds, young parents with kids, single parent with children or middle-aged people. Volvo divided its market into new and used cars based on their customers’ income and social class. New cars are suitable for high-income personalities (more than £ 50,000 per annum) and these customers are the business people who rely on safe, reliable transportation solutions every day. Slightly used Volvo cars may be eligible for younger people with middle income, known as working class. Volvo customer segmentation age fluctuates between 20 to 35 years. Besides, Volvo offers the following models all aimed at different market segments in terms of age, gender, income and lifestyles: Volvo S40, Volvo S60, Volvo S80, Volvo V40, Volvo V70, Volvo XC70, Volvo XC90 and Volvo C70 convertible. Many personalized extras (leather interior, body colour, sound system) are offered on the website and can be added according to customers’ preferences.
1.4.2 Levels of involvement
The purchase of a new car is often considered as a high involvement decision because the level of risk and responsibility are high. Volvo prices vary between £20,000 and £46,000 depending on the model, engine type, accessories and other options selected. The safety of the car has become one of the most important factors for customers, and people are willing to spend more and more in order to be absolutely confident that they are safe on the road.
When referring to Volvo, the customers are always connecting the word “satefy” in their minds what, in turn, helped the company to develop a reputation and take a strong position. For example, the Volvo V40 has been named as the safest car by scoring five stars in the Euro NCAP crash test. (Knapman, 2012) Also, Volvo was the first car who invented a pedestrian airbag in the front bumper. (Appendix 7) The company has positioned themselves as the most innovative and the safest car in the market.
1.4.4 Media Usage
Volvo has released many TV commercials of different models, and puts emotional appeal ahead of functional ability. The most recent ad of Volvo XC90 demonstrates its safety for all road users and how luxury fits with technology. Volvo also publishes its ads in magazines, journals and newspapers. Volvo uses social media (Twitter, Facebook, LinkedIn, Instagram and others) and media services in order to increase customer satisfaction and sell more cars. During the Volvo Ocean Race 2008-2009, the company reached 221,768 registered players from 180 countries for online game and 1.168 billion radio listeners from nearly 1,500 broadcasts. (Media Volvo, 2009) In 2014, Volvo has double its marketing spent over the next five years.
- Volvo DRIVe campaign
The environmental strategy for Volvo is all under the umbrella name of DRIVe. DRIVe is simply the word ‘drive’ which means leading the way, taking a leadership and that is what Volvo doing. DRIVe is about confidence in the environmental credentials of Volvo products and its customers’ expression of their responsible purchase. This environmental program has been built on three pillars: motion (it is all about power trains and engines), inside (it is about cockpit, the purity of the air in the cabin) and lifecycle (means having the least impact on the environment). Volvo produces several different models with engines that run on bioethanol and emits less than 120 grams of CO2 per kilometer. For example, Volvo S60 with 99g/km of CO2, Volvo V40 with 88g/km or Volvo V60 with 99g/km. (Volvo cars.com) Volvo has decided to focus on energy efficiency, carbon dioxide reduction, materials used and other alternatives. Everything Volvo does is designed around people, so every innovation they make is designed to simplify and improve people’s lives.
- Marketing communication objectives
The DRIVe campaign corporate objective is to continually minimize the environmental impact of Volvo cars in production, in use, in recycling and to reach zero impact on the environment. Apart from bioethanol, Volvo continues to innovate its cars that can be driven on electricity alone, for example, the most recent Volvo V60 Plug-in Hybrid. Volvo has an objective to change the culture of cars, from a manly car culture into a more intelligent and responsible car culture.
- Marketing communication strategy
Volvo, together with the European Commission, agreed that advertising cars should not be focused at all on power, tork and high speeds, but on fuel consumption. The following DRIP tactical approach describes and analyses the marketing communication planning of Volvo for DRIVe campaign.
By launching the DRIVe campaign, Volvo differentiates from other automotive brands and enables people to choose this brand over another. Volvo, famous for its innovative technology, also wants to take the position of environmentally friendly cars. The main distinguishing feature of the DRIVe engine range is that they are all four-cylinder engines, what makes it exclusively economically attractive to the potential customers.
Volvo DRIVe campaign reminds people about the environment and what harmful impact their cars have every day. Eco driving is an easy way to reduce fuel consumption and greenhouse gases by 5 to 15 per cent. This campaign reinforces people that Volvo cars are not just only about safety features but also about responsibility to the environment.
Volvo demonstrates how essential it is to take care about the environment, resources and air. They make potential customers aware that ultra-low CO2 means better fuel economy and cheaper tax band. Volvo uses the Internet for creating buzz around new Volvo environmental philosophy, using websites, blogs, brochures and press releases in magazines and newspapers. Volvo DRIVe already grabbed customers’ attention by new emotional TV advertisement together with Swedish singer Robyn.
Volvo allows people to arrange a test drive in order to make audiences aware of a brand’s presence and finally persuade an individual to buy and consume a particular product. The new environmental program DRIVe attracts potential consumers and retailers to purchase and distribute eco-drive cars.
2.3 Communication mix
Each tool of the communication mix plays a different role and can perform various tasks. This reflects their different capabilities, attributes and key characteristics. The promotional communication aims at informing and persuading the customer to buy the product and informing him about the quality of the products. Volvo has effectively used advertising, public relations, direct marketing and sales promotion methods.
Advertising has the capacity to reach huge audiences with simple messages (Fill, 2011), whether it can be on an international, national, local or direct basis. Volvo eco-friendly models advertising create awareness, change perception, attitude and build brand values, influence behaviour, known as calls-to-action. Volvo’s DRIVe models are XC70, XC60, V70, C30, S40, V50 (appendix 8) and each of these cars have pretty much the same advertisements.
The TV commercials evoke a powerful range of feelings that have the potential to connect with the target audience. These commercials deliver the strongest message about the environment and show that these cars are perfect for driving in town and beyond the city. Volvo demonstrated the main innovative points in their adverts while having a cheerful background music and a strapline “Because Life is Better Lived Together” (Appendix 9). The main advert about Volvo DRIVe, which has been presented by Swedish singer Robyn, has a highly emotional appeal showing every aspect of life. Also, Volvo has launched a series of informational videos on YouTube describing the importance of smaller engines, low fuel consumption and CO2 emissions.
Volvo has decided to get into media relations via press releases on their websites, automotive magazines (Top Gear, Diesel Car Magazine, Auto Express) and online/offline articles in newspapers (Financial Times, Edmunds, Left Lane News, Telegraphs, Business Insider). PR has a wide range of other tools such as events management, public affairs, sponsorship and lobbying. For instance, the Volvo Eco Challenge provides grants of up to £1000 to sailing clubs in the UK since 2008. Environmental care has always been one of Volvo’s commitments for about thirty years and the Volvo Eco Challenge delivers real environmental avantages and encourage young people to become more environmentally aware. Besides, in 2015, Volvo has renew its partnership with The Worldwide Fund for Nature (WWF) in order to stop the degradation of planet’s natural environment and build a future in which people live in harmony with nature. Volvo Group also organised the Sustainability Forum for leaders and stakeholders, the private sector and civil society who are accelerating actions and decisions towards sustainable development.
Volvo’s main websites provides test drive option to everyone to try new eco-cars on the road. The nearest Volvo dealer contacts the customer within 24 hours to arrange a convenient time for test drive. This option allows potential buyers to try new product before making a purchase and trust Volvo brand. Volvo Cars also provide other online services such as brochure request and call back option that creates and sustains a personal and intermediary free communication with customers, potential customers and other stakeholders.
Every new Volvo V60 Plug-in Diesel Hybrid comes with 3 years’ assistance cover, including free breakdown and recovery help and unique benefits such as Enhanced Journey Continuation Package for Business class. After 3 years, the car is still covered by Volvo Roadside Assistance by an authorized dealer every 12 months. Plug in Hybrid and any other eco-car comes with a 3 year warranty which also covers the first 60,000 miles and 12 years against rust perforation. The battery is covered for 8 years or 100,000 miles- whichever comes first. Volvo also offers V60 at 6.9% APR representative with £500 deposit contribution and 3 years complementary servicing when financed on Personal Contract Purchase with Volvo Car Credit. For example, Volvo V60 Plug-in Hybrid can be purchased with £10,458 deposit and 36 monthly payments of £699. However, such cars cannot be taken and driven until all payments are made. Recently, Volvo has announced its partnership with British Gas in order to provide benefits for new electric vehicle users. Customers who buy the new Plug in Hybrid model are eligible for a free car charging package from British Gas, which includes a charge point and free access to the Polar Charging network across the United Kingdom.
According to the analysis above, Volvo has a pulsing type of media schedule which have a consistently spread, steady pattern of regular but separated exposures. Volvo has advertised its eco-friendly cars in form of press releases, sponsorship and other announcements about the new products range. The schedule for new hybrid models has been introduced more slowly in order to spread a positive word of mouth. Volvo believes that rather than be seen a lot during specific periods, advertising of hybrids should be seen a little all of the time and should be near the period where customers are ready to purchase. Volvo excluded high repetition in advertising effectiveness as they did not want customers become bored, uninterested or irritated about the new product in advance. Volvo, as a recognizable brand, is likely to have immediate attention of customers and a quicker desired effect from the beginning.
According to AdAge (2014), Volvo is trying to increase sales volume from 470,000 to 800,000 cars in 2014 to 2019, and they increase marketing budgets in the same proportions. The quality of marketing has definitely improved in Volvo, for example, the company has included online services and improved their face to face or offline experience with customers. The DRIVe campaign and overall environmental program of Volvo, helped the company to allocate the right amount of resources into promotion of their vision and reach the specific level of profitability.
2.4 Control and evaluation
Every organisations review and evaluate the performance of their various activities, and Volvo is not an exception. In 2013, the company sold 7,739 V60 plug-in hybrids (Motavalli, 2014) but later the Volvo Cars reported a record sales in 2014 mainly in China and Western Europe. With 465,866 cars sold, Volvo still continues to expand in all markets in 2015. (Volvo car Group, 2015) Volvo’s highly competitive DRIVe cars with best in class performance and fuel economy are important factors behind the continued European success. In the Netherlands, positive sales driven by strong demand for the V60 Plug-in Hybrid and V40 were the base for increased market share to 5.5 per cent. The success of the promotional strategy shows that Volvo is operating well in achieving its objectives and planning to double its production by launching new XC90 T8 Plug-in Hybrid in China, U.S., Europe and other markets by 2016.
Due to the high cost of Volvo eco-friendly cars, many potential customers cannot financially afford such privilege and most of them either prefer other Volvo models or even another brand. However, if the price was lower, Volvo probably would not lost its customers and might increase sales volume. Despite this fact, the statistics show that prices tend to decrease after the newer model is released and demonstrated to the publics.
This research project critically analysed the internal, external, business and customer context of the Volvo Company and provided a broader discussion of DRIVe campaign. Volvo cars, known for its safety features and innovative technology, has demonstrated their concerns and ability to take care about environment. Several vehicle models with four-cylinder engines provide an outstanding performance and fuel-efficiency with lower level of harmful substances. In collaboration with the Grey London global creative agency, Volvo has double its marketing spend and, in turn, get a higher degree of brand awareness and interest amongst existing and potential customers as well as other stakeholders. Volvo’s objective is to change the car culture and become more intelligent and responsible towards people and environment. Further discussions was based on promotional tools such as advertising, sales promotion, direct marketing and public relations for DRIVe campaign. Volvo has definitely increased its profits and sales volume in the recent years worldwide. Today, Volvo continues to strengthen its competitive position in the automotive industry and the launch of sustainability strategy in 2012 will help the company to achieve its objectives and become the world leader by 2020.
This business report provides a thorough analysis and evaluation of the possible internationalization strategy for Optimax, a UK based eye laser private clinic. The report discusses the main reactive and proactive motives for Optimax to enter international markets and provides arguments for choosing particular countries for the short and long term development. Qualitative and quantitative research strengthen the arguments for choosing international markets by measuring political, commercial, industrial and financial risks as well as analyzing the overall country attractiveness including competitors information and market data. It is further discusses the overall strategic approach to market entry, in a form of franchising, for the short term development. The report provides valuable arguments and statistics for the link between the target market and the Netherlands market information. The “Seven P formula” of marketing mix evaluates the Optimax business activities in the foreign market.
The purpose of this business report is to identify how Optimax, a UK laser eye treatment clinic, can enter international markets. The paper provides a detailed and well-structured international marketing strategy for a business that is currently operating in the highly competitive market. It further discusses short and long term market selection propositions including standardization and adaptation to it supported by strong theoretical arguments. This report is written specifically for Mr. Russell Ambrose, the founder and proprietor of Optimax, in order to propose appropriate ideas and suggestions for business expansion from national to international level.
- Reasons to go international
After initial success in the domestic market, Optimax has the capability to exploit the competitive advantage internationally. There are a number of reactive and proactive reasons for Optimax to go international. Despite the fact that Optimax has 28 clinics nationwide and a good reputation, the business may still perceive the competitive pressure from Optical Express, Ultralase, AccuVision and other eye laser clinics in the UK. A further reason is that Optimax has enough financial resources, innovative technology and has already shown the best results under the safety conditions that gives a clear motive to go into international markets and double the firm’s revenue and profits. This leads to other proactive motives such as the desire for business growth, the capabilities to enter foreign markets and to provide a reliable service. Optimax has been approved for having an excellent internal and external management since 1991 and currently the company has a managerial motive to acquire more experience and knowledge in foreign countries. Likewise, Optimax has successfully compete in domestic market and realized that it is no longer an option to stay only in the UK as they also have potential for development.
- Market selection
Having considered both the proactive and reactive motives to go international with Optimax business, it is reasonable to choose the market or markets. Market selection is one of the most significant aspects towards the success of the internationalization process. Choosing the right markets and the right sequence of entry is an integral part of international competitive strategy. The Uppsala model of internationalization proposes that firms firstly select geographically and psychically close countries and then move to more distant countries. The following table illustrates a shortlist of six European countries which are psychologically and geographically close to the UK and provides environment and market analysis.
|Country||GDP per capita (USD)||Population (million)||Unemployment rate||Psychologically close||Geographically
According to qualitative research, Ireland, the Netherlands and Denmark are the most suitable countries for Optimax to expand internationally for short or long term. Ireland and the UK have the common travel area, linguistic and cultural similarities, good political and economic relationships and the UK is Ireland’s biggest trading partner. Similarly, The Netherlands have a strong partnership relations with the UK and both countries are under a constitutional monarchy. Dutch-British trade is simple by good relations, transparent legal framework and financial service system, good transport solutions and close geographical proximity. The Netherlands and the United Kingdom work together within the European Union, NATO and the UN, and agree on subjects such as the European internal market, free trade and EU funding. It is essential to note, that 90% of Dutch people speak the English language. Denmark and the UK have close relations in terms of export as both countries are full members of NATO and the European Union. In Denmark, 86% of people admitted knowing and speaking the English language. (European Commission, 2012) Political, commercial, industrial and financial risks are quite low in these three countries what makes it especially beneficial and accessible for the UK based Optimax to enter foreign markets. There are a couple of reasons for excluding Belgium, France and Germany as international partners for Optimax:
- Germany has a very competitive market due to its technological advances and innovations.
- France and the UK are not psychologically close.
- Belgium is expensive country to run a business. Language barrier exists.
The firm in international markets always deals with competitors in its own domestic market and in each international market it enters. The number, size and quality of competitors affect the firm’s ability to enter and compete profitably in a particular market. The graphs below provide information about direct and indirect Optimax competitors in Ireland, the Netherlands and Denmark.
|Clinics||Locations/sites||No. of procedures||Prices (approx.)|
|Optical Express||1 site in Dublin||N/A||€2,195 to €1,590|
|Laser Vision||1 site in Dublin||N/A||€1,990 to €3,990|
|Optilase||11 sites across Ireland||40,000||€795 to € 2,990|
|Wellington Clinic||1 site in Dublin||Over 40,000||Up to €4,100|
Country: the Netherlands
|Clinics||Locations/sites||No. of procedures||Prices (approx.)|
|Optical Express||1 site in Amsterdam||N/A||€2,195 to €1,590|
|Clinics||Location/sites||No. of procedures||Prices (approx.)|
|ReLex (at Copenhagen Eye Centre)||1 site in Copenhagen||N/A||€2,000 to €4,583|
- Long term
Despite the fact that Ireland and the UK have good political and economic relationships as well as cultural similarities, Ireland market may be considered as a highly competitive for Optimax to enter. In a competitive world, it is difficult to create added value. In order to obtain a sustainable competitive position, Optimax managers need to understand the nature of the dynamics of the Irish industry what includes many points to consider, for example, competitors’ marketing programs and their behaviour, best distribution method and its cost, consumer behaviour and preferences toward the UK eye laser clinics. In general, it is quite difficult to determine the competitive structure of international markets and requires a specific amount of time, resources and skills in order to enter such a competitive Irish industry market. Similarly, the market analysis of Denmark justifies that Optimax has the potential to successfully expand internationally due to its low competition and cultural similarities, however, the transportation fee may be higher. The expenses in moving equipment or personnel from the UK to Denmark are higher than from the UK to Ireland, or the UK to the Netherlands. The table below shows the geographical distance from the UK to Denmark, the Netherlands and Dublin in kilometers.
|From the UK, London to…|
|Denmark, Copenhagen||The Netherlands, Amsterdam||Ireland, Dublin|
|1,260 km||537 km||598 km|
Adapted from Google Maps
Optimax can establish itself as a late entrant in Ireland and an early entrant in Denmark market. Being an early entrant in Denmark, Optimax need to be in a position to react or even better anticipate potential entrants and increase barriers to late entrant. Optimax can gain a competitive edge and grab the opportunity to take the best market place. However, the cost of being an early entrant can be high due to technology or distribution channel establishment as well as the risk level of failure in the market can be also high. Both, Denmark and Ireland markets, require a greater amount of time for market screening and strategy development for a long time in order not to fail during the internationalization process. Two timeframes below illustrates the Licensing entry mode for Ireland and Joint Ventures entry mode for Denmark for a long period of time.
Licensing long term entry mode for Ireland
Joint Venture long term entry mode for Denmark
3.2 Short term
According to secondary research and the market selection tables in Section 3.0, the Netherlands market seems to be the most attractive for Optimax for a number of reasons: very low competition, most of Dutch people go abroad (the UK, Turkey) to do eye laser surgery, low cultural and geographical distance, low level of risk to fail and high demand for experienced eye specialists. The following business portfolio matrix illustrates that the Netherlands is a highly attractive country and, similarly, Optimax compatibility level with this country is also high. The matrix concludes that both factors are very compatible and, in turn, create a primary opportunity for Optimax to enter the Netherlands market and operate successfully.
With country markets and product categories in those markets developing at different rates in different time frame, success often depends on entering the market at the right time and applying the right strategy at the right time (Clarke and Wilson, 2009), also known as timing of entry in to international market. On a small scale entry, Optimax should take the position of a late entrant due to the existence of competitor in the market of the Netherlands. By taking such position, Optimax takes the competitive advantage over its main rival Optical Express. Late entrants are often able to gain more knowledge and learn from the mistakes done by their competitors. Due to the low level of competition, Optimax is able to imitate the early entrant and, meanwhile, to work well as the firm has enough resources to compete. As a late market entrant, Optimax can succeed by adopting distinctive positioning and marketing strategies. The selection of franchising as an entry mode for Optimax can give a greater access to a foreign market in the short term. Potentially, the franchise system provides an effective blending of skills centralization and decentralization, and has become an increasingly important form of international marketing. (Ghauri, 2010) The below illustrated strategy timeline shows the establishment of franchising mode entry for Optimax for a short term. It has been divided into two main stages: stage 1 is all about business and marketing strategy development, market analysis, final evaluation and assessment of future actions. Stage two includes legal deliberate business strategy implementation in to a foreign country, marketing management tactics and monitoring the internal and external changes within the business as it may suddenly require an emergent strategy adoption.
The overall strategic approach to market entry, in a form of franchising, for a short term for Optimax will be analysed and thoroughly explained in Section 4.0.
- Overall strategic approach to market entry
According to the Uppsala model theory, the firm should choose low-risk entry modes first in order to succeed in foreign markets. Contractual agreements between franchisor and franchisee provide clarity of corporate aims and objectives and meanwhile generate cooperation and trust between both business partners. Franchising strategy (direct or indirect), a low-cost entry mode with low level of risk for the short period of time for Optimax, implemented into the Netherlands market can provide a greater degree of control and quick development of international market thus generating economies of scale. In fact, Optimax can increase its degree of control by training its franchisee in relation to policies, values and processes. The incremental or organic learning model justifies the reasons for Optimax to enter the Netherlands market first, as the most geographically and psychically close country, and Denmark and Ireland countries that increase the level of internationalization complexity of the firm. The graph below demonstrates the path to internationalization of Optimax.
In term of adaptation, a key concept in international marketing, Optimax should keep its uniqueness and to develop an understanding and willingness to accommodate differences that exist in the Netherlands market. Ghauri and Cateora (2010) proposed a couple of basic requisites for cultural adaptation in foreign countries: tolerance, flexibility, humility, adjustability, ability to integrate, ability to command respect, liking for others, knowledge of country, curiosity and fairness. The following table describes the most important adaptation aspects that Optimax must take into consideration before entering the Netherlands market.
|Aspects for adaptation|
|Ø the Dutch people are conservative and pay attention to the smallest details|
|Ø highly tolerant of individual differences|
|Ø no poverty in the country|
|Ø they are private people and do not put their emotions on display|
|Ø the handshake is the common form of greeting (including children)|
|Ø most Dutch only use first names with family and close friends|
|Ø Dutch value their personal time (do not ask them to work late or come over the weekend)|
|Ø punctuality for meetings is taken extremely seriously|
|Ø the Dutch are detail-oriented and want to understand every innuendo before coming to an agreement|
|Ø contracts are enforced strictly|
Source: Kwintessential (2014)
Optimax, known for its high quality service standards in the UK, should follow a consistent level of quality in the Netherlands and make sure that services are performed in the same manner regardless its main franchisor. Optimax clients have confidence in their services because the firm has used an appropriate standard and has gone through independent assessment. Similarly, by having the identical standards in the Netherlands and the UK market, can help firms to improve communication, to stream internal processes and to minimise business costs and risks. (Gov.uk, 2014) The standardization area of personnel qualifications is particularly important to Optimax foreign market as it reflects the overall quality of the service what makes customers to choose Optimax. Due to the fact that the Dutch people strictly enforce contracts and agreements, it is more likely that Optimax, as the UK based firm, will be able to develop strong and trusted business relationships and agree on standardized terms and conditions with its Dutch partners.
- Target market supported by market information
The majority of Dutch people wear glasses or contact lenses (Statistics Netherlands, 2013). For older people, it is exceptionally rare not to use glasses or contact lenses. 61% of people reported to wear glasses, lenses or other reading or visual aids occasionally in 2012, versus 57% in 2001. Interestingly, more women than men wear glasses or contact lenses in the Netherlands. People in their 40s wear glasses, while the rate for people in their 50s is more than 90% and nearly over-75s wear glasses. The percentage of people wearing glasses (57%) is much higher than the percentage of contact lenses wearers (12%). It has also been revealed that 9% of people tend to use both. According to the Netherlands Statistics (2013), full-time contact lenses wearers are generally younger and the rate is higher (79%) comparing with people wearing glasses (54%).
- Branding and positioning
To launch a brand in a foreign market means deciding whether to portray the brand as local, global or from one of its origins associated with the product/service capability. (Clarke and Wilson, 2009) Optical Express, the main competitor for Optimax in the Netherlands market, left its brand name the same as it is in the UK. Similarly, Optimax should establish themselves with its brand name in the foreign market as it shows the quality, the experience the firm has and the individuality. However, it is recommended that the Dutch version of Optimax website contains more information about the company, its services and prices, the reputation it has in the UK and should be more oriented towards the Dutch customers’ preferences. Also, the word “optimax” sounds completely the same in the Dutch language, so in that sense, there should not be any misunderstandings or mispronounces with the Optimax brand name. Optimax brand could be positioned by emphasizing the attribute such as the service benefit or by implicit or explicit comparison with competitors.
- The “Seven P Formula”
The table below analyses the 7P’s of marketing mix and provide arguments for each point.
|In this case, product means service or production. Optimax should provide a wide spectrum of services in order to meet customers’ requirements. Service should be provided according to the culture (Inc. Language)|
|Optimax should consider the pricing factor in terms of service cost to the customer. It must be the same price as competitors’ or lower in order to successfully establish in the market. The price may go higher over time, if Optimax positions itself as the number one eye laser surgery in the Netherlands market.|
|Optimax should open its first venue in Amsterdam as it is more likely to be noticed by people. (Amsterdam population 820,000 approx.)|
|Optimax should invest in marketing programs, e.g. advertising (online and offline), PR (press releases, newspapers), promotions (vouchers, discounts, special sales) in order to increase awareness of the new service in the Netherlands. The use of online media (blogs, journals, forums) can help Optimax to get positive word of mouth|
|It is essential for Optimax to recruit and train the right staff in order to create a competitive advantage in the foreign market. The firm should follow its quality standards and show best practices in the Netherlands.|
|All Optimax services need to be underpinned by clearly defined and efficient processes. This will avoid confusion and promote a consistent service. The process can include direct communication with the customers by emails, SMS, Live Chat on the website or professional free consultation in the clinic.|
|Optimax clinic in Amsterdam must be well designed and simple. People must feel safe and calm. In that case, the firm will enhance customer experience and get positive feedbacks.|
This business report for Optimax critically analysed and suggested the possible internationalization strategy in three countries, the firm’s cultural adaptation and standardization to it as well as the 7P’s of marketing mix. All the statements were supported by arguments, graphs and table in order to provide a clear understanding of Glocalisation continuum or Internationalization process.
The central theme of this literature review is to critically analyse consumer behaviour theory and clearly justify the reason for dubious, criminal, deceptive or fraudulent behaviour of individuals aged under 30. The literature review also centers on critical thinking using industry examples and provides other supporting evidence based on different authors viewpoints. In this paper, the comprehensive discussion focuses on illegal downloads issue and demonstrates the application of theory to the chosen topic area.
Illegal downloading issue and statistics
There always has been a lot of discussions amongst different writers, authors and journalists about illegal downloading, also known as copyright theft or piracy of video, audio, games and other electronic products. The report, supported by the Intellectual Property Office, found out that almost one in six (18%) of internet users aged 12 or over accessed digital entertainment media using an illegal service. (The Guardian, 2013) The popular perception of those hurt by piracy is large companies and pop stars whose personal wealth is legendary, firstly noticed by Gursey (1995). In 2013, Philip Pullman stated that illegal downloading is ‘moral squalor’ and theft, similarly as reaching in to someone’s pocket and stealing the wallet. He also claimed that authors and musicians with a low budget still put a lot of effort and time doing their job in order to financially support themselves and, meanwhile, satisfy their audience. This argument was earlier supported by Rob and Waldfogel (2004) who found out that each downloaded album reduces purchases by approximately 20 per cent but raises individual consumer welfare. In contrast, Gurnsey (1995) stated that ‘piracy is not the only form of copyright theft’. (p.1) He suggested that while piracy represents the systematic and large scale abuse of copyright, at another level there is the casual everyday abuse of copyright which occurs in millions of homes, schools or universities and business enterprises across every country in the world. The Economic Times defined piracy as the unauthorized duplication of copyrighted content that is sold at significantly lower prices in the ‘grey’ market. Thus, for too many, both politicians and consumers, audio piracy is still perceived as a largely victimless crime. The Copyright, Designs and Patents Act 1988, amended by the Copyright and Trade Marks (Offences and Enforcement) Act 2002, currently protects copyrighted materials. People who distribute and download copyrighted recordings without permission face civil actions for potentially thousands of pounds of damages. (The Independent, 2009) Yet it 1995, Gursey claimed that ‘the sad fact is that the market for piracy is largely based on greed’, and if people accept this situation as inevitable part of human life, there always would be a low-cost market with illegal materials like audio, software, video in the next ten years. In fact, software firms frequently spend thousands or even millions of dollars in creating the programs, however many people illegally download it from unauthorised sources what has become a key issue for the computer industry. Evidence for in support of this assumption was found by five firms: Atari, Reality Rump, Top Ware Interactive, Techland and Codemaster in 2008. These computer game companies have suspected thousands of internet users who shared illegal downloads and sent warning notices to pay £300 fine in order to avoid the court. According to Daily Mail, a number of people had to pay approximately £16,000 after being taken to court by TopWare computer game manufacturer. (Revoir, 2008) Another unpleasant example, published by The Guardian in 2012, illustrates woman who was accused by Recording Industry Association of America (RIAA) for downloading and distribution of 1,700 music files and she had to pay $9,250 for each illegal downloaded material. Today, due to the technical change and innovation in hardware and broadcasting, there is a continuous battle as rights owners seek to control and remuneration for the use of their work. Piracy, or illegal downloading, still remains a significant issue in every industry. (Lee, 2012)
Fraudulent behaviour of individuals aged under 30
In 2008, more than 40 billion music files were illegally downloaded although state, federal and international laws restricting these actions (IFPI, 2009). According to WARC research (2014), almost 50 per cent of children between 8 to 15 years old admitted that they were able to download or access any content for free from the internet. This age group also showed an above-average propensity to agree that using file-sharing websites was easy (6%) and a usual thing to do (7%). It has also been mentioned, that a similar amount of people 16 to 24 years old stated that online content should be free and the report noted that ad-supported services, such as Spotify, YouTube and Blink box, tended to be the most popular with this age group. A number of authors (Summers, Schwarzenegger, Ege and Young, 2014) noticed that particularly in the music and TV industries, user behaviour has been influenced by the opportunity to download material for free. However, Ulsperger, Hodges and Paul (2010) claimed that college students in the U.S. tended to be more critical and serious about CDs shoplifting from the store comparing with illegal music downloading online. In turn, Levin et al. (2004) further identified that college students who illegally downloaded music and other files for free had lower ethics ratings than students who had never downloaded illegally. According to James McCoy, YouGov Research Director, children and teenagers in this generation grew up with digital material and now have an access to what they want, when they want it and sometimes not paying for it. (WARC, 2014) Similarly, Plowman and Goode (2009) agreed that concerns about price factor were one the strongest predictors of future desire to illegally download music, even amongst students and pupils who had never done this earlier. Consequently, all these research showed that students with more favourable attitudes and higher perceived behavioural control were more likely to download illegally than those who had less favourable attitudes and lower perceived control. Additionally, Cronan and Al-Rafee believed that moral obligations influenced digital piracy intentions.
Ethics, or moral philosophy, has been defined as a system of what is good and what is bad, however, people might still continue to engage in dishonest, criminal or dubious behaviour when trying to make a decision between right and wrong. People engage in an action that is admitted unethical or harmful and usually do not believe that what they are doing is right because “everybody does it”. (Ethics Alarms, 2015) From a psychological perspective, the more people are involved in illegal downloading or any other issue, the sense of responsibility and fear decreases noticeably. According to the authors’ viewpoints above, people between 16 to 24 years old believe that those companies or websites which provide illegal content should be severely punished rather than those who access the content. Such thoughts make people not feeling guilty or bad when downloading free music, movies or software from the internet as they believe they do not break the law and do not go against social and personal moral values. Solomon, et al. (2013) propose that ‘humans are social animals’ and look at others’ behaviour for signs about what to do in publics. They also suggested that people desire to ‘fit in’ or to identity with desirable individuals or groups is the primary motivation for many of consumption behaviour. Sometimes, however, many reference groups are involved in negative influence on consumption behaviours, e.g. illegal downloading.
Interestingly, educational levels also play a massive role in the likelihood that somebody pirates content. According to The Telegraph survey, it has been revealed that 3% of pupils who left school at the age of 15 had illegally downloaded material in the previous 12 months, rising to 6% of those who studied to between 16 and 19 years old, 10% of students who continued their education until they were around 20 years, and 27% of those students who were still studying beyond that age. (Sparkes, 2013) This has been more discussed by Solomon et al. (2013): people learn that every actions they take, result in rewards and punishments, and this response influences the way they respond in analogous situations in the future. Similarly, Blythe (2013) agrees and continues that illegal downloading shows how punishment fits into the learning process. So, the idea of sending a warning letter to internet users who illegally download or distribute materials, is based around operant conditioning (concept of reinforcement). Moreover, the ABC model of attitudes and hierarchies of effects best describes different behaviour and intentions to do something towards the particular product or service. The low-involvement hierarchy (Do, Feel, Think), properly illustrates a typical consumer who download stuff illegally but do put too much effort into evaluation of his/her decisions and potential issues it may cause. (Solomon, et al., 2013) Consumers does not have a strong preference for the brand over another, but instead acts on the basis of limited knowledge and then forms an evaluation only after the audio or video has been illegally used. Internet let individuals stay anonymous users, what makes it harder to detect the deviant behaviour. There is no face to face contact so internet users do not feel guilty for downloading illegal material and they are more likely to stay unpunished. In 1999, Albers-Miller highlighted the point that ‘when there is a lack of fear of punishment, people do engage in inappropriate behaviour.’ (Inderbitzin, Bates, Gainey, 2012) It is further discussed, that consumers are naturally want to minimise risk (Blythe, 2013), however, the perception of risk can be “traumatic” (Chaudhuri,2006) For example, in 2014, Mirror newspaper released an article about two teenagers Robinson and Graham who ran a website that allowed users to download music tracks for free before the official release. Despite the fact that website creators have tried to hide their identity online, the British Phonographic Industry (BPI), police and Homeland security have found and taken them to court. Both teenagers were jailed from one to two years. (Kennedy, 2014) It may also be a case that people perceive risk differently (Blythe, 2013), based on their age, confidence and other factors. A number of authors (Byongook, McCluskey, McCluskey, Perez) proposed that youths with low self-control are more likely to engage in the illegal downloading in any form. According to a general theory of crime, generation Y spends more time using computers what creates strong addiction and may cause criminal behaviour. (Gottfredson and Hirschi, 1990)
The above mentioned examples illustrate Freudian theory, where person’s selfish and illogical id is entirely oriented towards immediate satisfaction. It operates according to the pleasure principle that behaviour is led by the primary desire to maximise pleasure and avoid pain (Solomon, et al., 2013), what mostly describes people behaviour under age of 30 who illegally download internet content without thinking of potential negative consequences.
Worldwide solutions to an issue over time and parental influence
In 2011, audio, movie and other software companies started to work on a detailed proposal for a voluntary system whereby broadband providers (such as BT, TalkTalk, Virgin Media) block hundreds of websites promoting online piracy (Bradshaw, 2011) as the UK’s creative industries contribute £71bn to the UK economy and support about 1.68 million jobs. (BBC, 2014) According to Gibbs (2014), the launch of Vcap (the voluntary copyright alert programme) in 2015 will help to identify the IP addresses of users who download illegal material for free. Further actions involve sending a warning letter about the suspected infringement to the registered subscriber of particular broadband connection. Similarly, the identical scheme has been already developed in the United Stated. Hill (2013) claims that Mark Monitor, the United States anti-piracy group with 100 employees, automatically catch the IP addresses of those who use AT&T, Cablevision, Verizon and other internet providers. Another earlier example by Gurnsey (1995) claims that Russia has been made a significant progress in curbing piracy. Russia had introduced laws which included the hardest penalties seen anywhere in the world for large copyright theft: to close servers located in their territory and websites that promote illegal distribution. (Kim, 2012) Each of these industry examples and solutions make an important contribution to the understanding of the role of learning and memory. Some authors (Solomon, Bamossy, Askegaard, Hogg) claim that memory involves a process of gaining information and keeping it for a long period of time so that it will be available when required. So, once an internet user faced with a problem of illegal downloading and received a large sum of money to be paid for this act, he is more likely to remember this unpleasant experience and tend not to repeat such situations in the future. It is a very useful method of educating people not to infringe copyright.
A British study suggests that there are four main types of “pirates”, the serious ones actively and very often seeking out occasions to pirate (‘Devils’), the opportunistic ones that will rarely take a chance on pirating but not very often (‘Chancers’), pirates who are not actively pirating but accept receiving pirated material (‘Receivers’), and the ‘Angels’ who ignore any sort of pirating. (Cockrill and Goode, 2012) According to these classifications, different penalties in various forms reach internet users worldwide. A number of authors claim that parents play a huge role in the education process and are the key source of their children behaviour. 85 per cent of children in Australia have admitted that they never had a conversation with their parents about this issue. (source: news.com.au) The same viewpoint has been investigated by Solomon et.al. (2013) that children learn by watching their parents’ behaviour and imitating it. At a very early stage children see how their relatives obtain the things they need, so parents who pirate content are more likely to have children who do the same. In turn, Humphries (2011) provides an example of a 15 year old boy who faced up to two years in prison for downloading 24 films from BitTorrent at school. As long as parents and teachers are not clear about what is moral behaviour in the internet sphere and are not enough active in their children’s life, it will be quite difficult for adults to convey normative behaviour to children and teenagers.
According to the U.S. Guardian newspaper, piracy is most acute on college and university campuses where students have high speed internet as well as have more free time than money. Only a couple of universities have responded to the complaints of illegal downloading, while most of them stayed neutral to this issue as they believe that piracy issue must be dealt by police. (MacAskill and Conor, 2007)
Blythe (2013) claims that one of the problems with understanding consumer motivation is that people are usually unable to be specific what has driven them to a particular action. Solomon et al. (2013) add that personal and cultural factors combine to create a want which can be satisfied in any number of ways. According to the online survey by Australian news (2010), it has been revealed that convenience was as much of a motivating factor as money for people who illegally downloaded or streamed media. Later, a similar view has been published in WARC article (2014) which claimed that price is still the major motivator in the decision to use file sharing sites. Moreover, 50 per cent of adults and 50 per cent children who download free content from internet admitted that the main reason for such behaviour are cost saving factor, convenience and easy accessibility. Blythe (2013) further believes that sometimes people make wrong decisions, and rationalise their real motives afterwards rather than admit their mistake. Equally, people who are motivated by illegal and immoral needs, are extremely likely to keep it only to themselves. Gottfredson and Hirschi concludes that low self-control is the cause of crime and criminal activities and that an individual with low self-control is less likely to resist the easy, immediate gratification that crime and deviant behaviours provide.
In conclusion, more than 20 years ago illegal downloading, or piracy, has become a starting point to a massive issue by 2015. It has become one of the major threat to the music, movie and software industry. Many authors agreed that illegal downloads of audio, video or software material and peer-to-peer (P2P) content sharing problem are more likely to happen with people under 30. Children and teenagers usually have no clue about what is personal moral values, risk and do not think of potential negative consequences in the future. The above studies also discussed the point that educational level and parents’ behaviour has a significant impact on how likely the individual will be involved in criminal, dubious, deceptive and fraudulent act. A number of different industry examples prove the fact that copyright theft, or illegal downloading, can lead to severe punishments such as prison sentence or monetary fine, depending on how serious the problem is and the type of piracy. A lot of literature concludes that illegal downloading and distribution of pirated materials in any form still remains one the most significant issues due to its complexity in technological sense and consumer individual behaviour.