American Government


Question 1

Policy Making Process in the American System of Government

In the American system of government, the separation of power among the three branches of the government is taken to the extreme. The president is the chief executive (Stewart). The executive arm of the government, consisting of the president and his cabinet, do not hold office, unlike in a parliamentary system, at the pleasure of the legislature, and have considerable executive powers. However, they have no legislative powers. The American president unlike the prime minister of others countries does not command the majority in the legislature (Jeffrey). He and his cabinet officers cannot even introduce a bill, much less be assured of legislative approval of a bill they wish to enact. The power of the American president is often no more than the ‘power to persuade’. Policymaking is often a long, tortuous process of intense bargaining with considerable wheeling and dealing (Stewart). Policy process often gets caught in a gridlock and it requires quite an effort to get the policy process moving again. So much so, that some tend develop a belief that the whole process is a crisis and the system responds to crisis. That is the only thing it responds to. They believe that one has to be hit in the head before doing anything.

The American political decisions are made through consultations between the president, the cabinet, advisers, federal and state courts, and agency bureaucrats. Policy policies are made with a goal and course of action that the government will have to deal with issues affecting the country (Wong). The American public policies are solely based on law and are set by the people excluding the legislators. After the policies have been set, individuals or groups that do not comply with the set policies can be penalized. As noted, the process of formulating these policies is long and involves a number of steps (Wong).

The policymaking process can be quite fragmented. Different arms of the national government tend to have many areas of responsibility as well as overlapping jurisdictions. The fragmentation of the policymaking process makes the process to conform to what is referred to as the pluralist model. Generally, the general public in most cases is not well-vast with politics. This ignorance among the public is a threat to the decisions that the public makes. Conversely, people who make connections related to public policy develop a high level of expertise to deal with matters related to public policies (Jeffrey).

Courts in the United States have the responsibility of resolving conflicts involving contentious public issues. Indeed, one of the most perspective observers of American politics, Alexis de Tocqueville, suggested that “there is hardly a political question in the US which does not sooner or later turn into a judicial one.” This transformation of political issues into legal disputes furnishes judges with the opportunity to influence the course of public policy. Additionally, judges have sometimes been more than willing to seize the opportunities presented to them (Wong).

Since courts regularly decide cases that involve important policy issues, it might seem that they are in a position to dominate policymaking in the US. However, in actuality the relationship between judicial decisions and public policy is quite complex. Regents of the University of California versus Bakke, the U.S Supreme Court’s first ruling on affirmative action, reveal some of these complexities (Jeffrey).

Question 6

Current policy issue: Five Stages of Policymaking

Education policy issues in the United States can be approached from a variety of disciplinary perspectives, but the law holds a unique position. Few if any disciplines are as fundamentally intertwined with the history and current status of U.S schools. This is particularly true as regards equal access and equity issues related to gender race, gender, sexual orientation, disability, language-minority status, and social class. It is also seen in controversies about religious freedoms, speech issues, due process, and sexual harassment. Accordingly, a great deal of insights are to be found through a study of the rich history of litigation and today’s legal problems and challenges that affect the American K-12 schooling (Walker).

Walker argues that comparative studies of policy-making often focus on one or two of elements of policymaking. However, accurate depictions of policy processes and outcomes require investigation and analysis of all elements across the manner in which both goals and are articulated. Works in this vein have developed several key insights into the policymaking process and behavior which inform contemporary comparative policy studies. One is the finding that policy processes generally unfold as a set of interrelated stages through which deliberations concerning the education issue flow in a more or less sequential fashion. It changes from being an input to the government deliberations to being an output or subject of the government action. The sequence of stages through which decisions related to issues in education policy are made is often referred to as the policy cycle (Walker). Policy decisions that can address an issue such as the education policy issue can be divided into five distinct stages.

The American education policy issue begins with intelligence gathering. Intelligence gathering in this case involves the collection, processing, and dissemination of information for those who participate in decision-making process related to education issues in the U.S. It will then move to the promotion of particular options for addressing the problem by those involved in making the decision (Walker). In the third stage, decision-makers will have to prescribe a course of action to address the issue of racial segregation in American schools. In the fourth stage, the most proposed course of action will then be invoked alongside a set of sanctions to penalize those who fail to comply with these prescriptions. The policy can then be applied by the courts and the bureaucracy and runs its course until it is terminated or cancelled. Finally, the results of the policy can be appraised or evaluated against the original aims and goals (Walker).

This way of thinking about policy-making as a staged process of problem-solving is highly influential in the development of education policy sciences. The staged process forms the basis for further work on the subject. Through comparative studies of decision-making process in many sectors and jurisdictions, a simpler and more economical version of the policy cycle can emerge and can clearly link the stages of public policy-making with the logic of applied decision-making process (Walker).

Much comparative policy study has focused on detailing the operation of particular stages of the cycle. For instance, it may involve examining through a comparative case study techniques the nature of agenda setting dynamics in the U.S, or comparing the roles played by specific actors like the media (Walker).















Works cited

Jeffrey, Berry. Lobbying for the People: The Political Behavior of Public Interest Groups. Princeton: Princeton University Press.1977. Print

Lohrey, Jackie. The Five Stages of the Policy-Making Process. n.d. Web. March 23, 2015. Retrieved from <>

Stewart, Charles. “Congress and the Constitutional System in the Legislative Branch, Selected Readings. New York, N.Y.: Oxford University Press. 2005. (3-34). Print

Walker, Elaine. Educational Adequacy and the Courts: A Reference Handbook. New York: ABC-CLIO, 2005. Print

Wong, Kenneth K. Policy-Making in the American States: Typology, Process, and Institutions. Review of Policy Research. 2005. 8:3:527–548. Print

More Homework Help



Enhancing Brand Equity for Prada Group through Relationship Marketing Efforts




MKT501– Strategic Marketing

Student name and date

Name of Instructor




Executive Summary

Prada Group is one of the most reputed global fashion houses that cater to the high end clientele both men as well as women. The fashion house provides a complete solution to the unique and exclusive needs of simple yet refined fashion styles. The company has been successful in delivering high quality products to its customers encompassing a wide assortment. Though the company has been able to strike an initial chord with the customers and other stakeholders by offering good quality products and high service quality now the company wants to strengthen its brand equity by focusing on the relationship aspect.

The studies in the past have shown that the long-term relationships with the customers translate into significant positive business outcomes and profitability for the firm. The company has already earned a name for its unique selling proposition of being a high quality producer of unique goods but that needs to be instilled into the minds of the customer through constant interaction. It is believed that if the company starts focusing on the relationship marketing efforts rigorously through web-based interface then this will help in elevating the present brand equity of the firm to a much higher level. The present study explores that how such a marketing plan can be implemented using the targeted marketing and promotion via social media networking sites to woo the new customers and maintain an enduring relationship with the existing customers. Over the years the company has earned a reputation for class, elegance, style and simplicity which along with effective marketing strategy will surely harness more business success for the fashion powerhouse.

The marketing plan sets the two major goals as a target to attain at the accomplishment of this plan, namely, (i) to enhance the brand equity among the customers so as to resolve the problems pertaining to customer retention by adding 10% more new customers to the existing customer base of the firm and optimizing (minimizing) the propensity to switch among customers by at least 5% and (ii) to foster the relationship marketing efforts so as to improve the perception of relationship quality among stakeholders by reducing the perception-expectations gap in the relationship quality among the stakeholders to its minimum possible value and enhancing the perceived level of relationship quality on a positive side among stakeholders in a period of six months.

The study seeks to ascertain that strategic importance of relationship quality in enhancing brand equity and also to identify the factors that help in forming the perception regarding relationship quality so as to trace significant relationship marketing efforts for boosting the brand equity of Prada Group brands.




Executive Summary. 2

Product Statement 6

Situation Analysis. 7

External Environment Analysis. 8

Political Environment 8

Economic Environment 8

Socio-cultural environment 9

Technological environment 9

Environmental Perspective. 10

Legal Environment 10

Porter’s Five Forces Model 11

Cultural Trends. 12

SWOT Analysis. 13

Strengths. 13

Opportunities. 14

Threats. 14

Primary Research. 15

Issues Analysis. 20

Goals and Objectives. 22

Marketing Strategy Statements. 23

Target market definition. 23

Strategy Statements. 24

Value Statement 24

Proposition. 25

Accessibility. 25

Communication Statement 25

Marketing Implementation Strategy. 25

Marketing Budget 28

Table 2: Budget Allocation for Marketing Strategy Plan. 28

Appendix. 31


Report 32



Enhancing Brand Equity for Prada Group through Relationship Marketing Efforts

Product Statement

The organization called Prada Group is a popular and leading fashion house all across the globe. The fashion house is amongst the world’s top notch manufacturers and retailers of the luxury goods as well as the haute fashion items and occupies a leading position by catering to the design, production as well as their distribution. The wide assortment of the products of the company includes fashion apparels, accessories, handbags, footwear, eyewear, luxury leather goods, perfumes etc. The company has the ownership of four major brands whose operations are solely managed by the company, these brands are: Prada, Church’s, Car Shoe and Miu Miu. Once started as an Italian business venture the operations of the firm outstretches in different parts of the world encompassing the markets in three continents ( An integrated network of 345 outlets together takes care of the entire list of operations for retailing the company’s goods in a direct manner, besides there are more than thirty stores that are managed as franchise outlets and then there are several others that are operated through the concessions within the upscale departmental stores (some such noted outlets are the ones within Harrods, London; Saks Fifth Avenue, New York and KaDeWe, Berlin. The company that commenced its business journey in the year 1913 as a small store of leather cases and bags in Milan’s Galleria Vittorio Emanuele II, founded by Mario Prada, introduced its very first IPO in the year 2011 during the month of June and it is also listed on the Hong Kong Stock Exchange. The last company’s store has been put up during August, 2014 in the Amsterdam. The company has been so far successful by choosing the effective set of strategies in a deliberate manner evolving itself from a small business store owned by a family to have a strong global presence with a plethora of retail outlets and engaging itself in the manufacturing too. So far the firm has been able to undergo successful strategic interventions like its product line expansion plans and driven by the philosophy of continuous evolution has been looking for avenues that can be useful for the firm to strengthen its business further.  The present study brings a critical analysis of the company’s strategic position by (i) presenting its business environment (ii) identifying the strategic priorities of the firm to have a sustainable business with special emphasis on increasing the firm’s brand equity using relationship marketing endeavors and (iii) enlisting recommendations for future growth and success of the firm using a systematic and structured research. The findings of the study will be highly pertinent for the retail managers in the group to help them improve the business relationships thereby improving the overall brand equity of the firm.

Situation Analysis

The success acquired by the firm is not attained in a single day but is an outcome realized by persistent and dedicated efforts that have effectuated in terms of transitioning the small store for leather goods as a known name among the corporate dealing with luxury leather goods. The company introduced its flagship store in the year 1983 and following that it soon started to explore the markets beyond Italy. The company traversed a successful business journey by using careful strategic choices that includes transcending to footwear business, expanding into new markets like New York, London, Tokyo, unveiling new brands like to cater to niche customer segments (Miu Miu launched to cater to youngsters, launching an exclusive men’s label etc.), acquiring existing successful brands (Car Shoe, Church’s etc.) and so on. The company also attempted to introduce new product line extensions by engaging it in business of perfumery and branded phones too as a joint venture with other companies. The firm has been able to acquire the status of a global fashion house only recently post 2010 and hence it needs to focus on making persistent efforts for reinforcing its brand image among customers as well as retaining the large chunk of the customers it caters all across the globe by enhancing the firm’s brand equity.

Internal Environment Analysis

The examination of the firm’s internal resources on the basis of the VRIO  (value, rarity, inimitability and organization) framework proposed by Barney and Hesterly (2006) depicts that the firm is well equipped with the tangible as well as the intangible resources to handle the challenges of the future. The strong organizational capabilities comprising of its internal capacity to raise equity owing to its high brand image, the large borrowing capacity as well as the large reserves of cash held suggest that the firm’s financial performance is good. In addition to this the state of the art production and manufacturing facilities of the firm along with their strategic locations with latest technological equipment together suggest that the physical infrastructure of the firm is also sound. The firm is not involved in legal entanglements and uses highly innovative processes to design and manufacture its high quality products.  The human resource practices and procedures in the company are employee friendly and the level of employee satisfaction with the firm is on the positive side. This together with the organizational traits fosters an environment of trust and non zero-sum relationships with employees, suppliers and other stakeholders in the process. However it is revealed that the company needs to maintain its competitive advantage as customers are highly sensitive to unique value proposition. The continuous improvement has been an integral as well as inherent part of the philosophy of Prada Group but the firm needs to tap the advantages of the internet technology to connect to its customers in a better manner. It will enhance the efficiency of the operations along with yielding access to far off markets (Klososky, 2011).

External Environment Analysis

The environment of the firm is done on the basis of the PESTEL analysis that analyzes the politico-socio-technological and economic variables in the environment along with examining the ethnicities and demographics of the consumers as well. Such an analysis will yield an insight to identify the appropriate strategic options for the firm (Chernatony et al., 2011).

 Political Environment

As the firm is based in different parts of the world, the attitude of the ruling government will have an important and direct impact in dictating the outcomes of the retailing business. The political will in the country decides the nature of the governmental policies and legislative decisions at state and national level. A favorable political scenario can result in the opening of the economies through policies of liberalization and reduction in the trade barriers, ease and convenience in trading across the country facilitated by the smooth and efficient distribution channel while an unfavorable political environment or political instability will pose a hindrance to the operations of the retailing companies in terms of unnecessary delays and can adversely impact the business profitability too by causing a disruption in the distribution channels too. Also from the political perspective, the decisions pertaining to prices, taxes, regulations etc. will directly affect the business operations through impacting the firm’s profitability (Hitt et al., 2012).

Economic Environment

The economic conditions including the periods of prosperity and recession both tend to impact the profits of the company. If the prices of the transportation, fuel alternatives get affected it also influences the operations of the firm as it starts vying for cheaper ways to ship its goods more economically. The economic performance of Prada group has been sturdy during the precarious recessionary situation of 2008 global financial crisis. Though during recession the performance of the firm dwindled and spending power curtailments among the consumers led to reduction in demand, the trends in the business also exhibited a disappointing picture but still the overall performance of the firm has been strong and enduring; despite the tough economic times the firm managed to cater to its customers as a high end fashion brand successfully. There was a certain dip in the firm’s revenues but there was a substantive increase in the bottom line of the firm.

Socio-cultural environment

The detailed examination from this perspective reveals that as a global marketer the firm needs to cater to the diverse needs of its clientele according to their different social and cultural traits. In addition to serving to the diverse set of customers the company has also exhibited a keen sense of appreciation for promoting the workforce diversity as well. The firm employs a large pool of human resources chosen from the different parts of the world representing the mix of different social cultural and ethnic mix of individuals.

Technological environment

Further the analysis of the Prada group from technological aspect it is indicated that the firm is indulging in the use of the new age technological advancements offered by digital media for promoting its products. The company is making substantive efforts for exploiting the enhancements in the technology to produce the items of high finesse. Besides, the present day consumers are demanding purchase convenience and all time accessibility that can be attributed as the reason behind the popularity of online stores. The firm is trying to connect to such customers through internet who either due to paucity of time or some challenges like physically unfit to travel to stores directly. The company has its online channel as a website that displays the product attributes, the location of the nearest store and other relevant information requisites that can be availed anytime and at any place convenient to consumers.

Environmental Perspective

The environmental examination of the Prada Group suggests that the modern day businesses are running all across the globe and the societies are becoming more conscious towards adoption of sustainable business practices. It is important for the contemporary marketers to abide by the various environmental regulations in the regions where the company operates. The group has been vigilant in constantly improvising its operations for keeping abreast with the latest laws and regulatory practices that intend to reduce the carbon footprints of the firm by checking the CO2 emissions and other forms of environmental pollution by making economic use of energy and water. At present the company has envisaged the strategic alternatives that can help the firm in reducing the harmful impact to environment by adopting green business practices.

Legal Environment

The compliance to the country’s laws is mandatory for the company in all regions of its operations failing which the company can suffer heavily in terms of failed business licensing, negative word of mouth among employees and customers as well as getting stuck in the legal entanglements all of which can pose a threat to success and growth of the firm. The company needs to ensure that the various rules, regulations, laws pertaining to the local and international governments of the operating countries are strictly followed. These include the laws on furnishing the equal opportunity to employment, no compromises on ensuring the standards of safety and operations for the employees, no discriminatory practices among the workforce, respecting the social and cultural diversity among customers as well as employees etc. The examination of the company shows that it is practicing the stated rules, laws and regulations that confirm to the people’s safety including its internal customers like suppliers and customers, products and service quality standards and other operating standards pertaining to marketing practices too. In terms of the legal scenario, the changing demand can be used for explaining the environmental and ecological concerns affecting the company’s business.

Porter’s Five Forces Model

The use of the Porter’s Five Forces Model can also be useful for ascertaining the impact of the five important forces on the company’s business. In words of Porter (2008), “competition for profits goes beyond established industry rivals to include four other competitive forces as well: customers, suppliers, potential entrants, and substitute products” thus the use of five force’s model will reflect the true index of company’s strategic positioning in market. This analysis will help the firm strategically weigh the relative impact of the power of the various stakeholders in the process.

Buyer Power

·         High power of the buyers in the fashion retail sector

·         Rich customers who can afford a number of good quality alternatives, sensitive to product quality and uniqueness

·         Also presence of number of retail options in the market provides them huge large number of switching alternatives

·         Retailers need to emphasize on the quality else the business margins and volumes will be drastically affected thereby harming the business.


Supplier Power

·         Owning the production is an advantage that curbs  the power of the suppliers

·         A large number of suppliers of raw material yield them less bargaining power

·         Suppliers are given good remunerations and the connection with a globally recognized brand makes them continue with the Prada group. Hence suppliers’ power does not bother company much.

·          The little volatility in the economic condition inducing price increase in labor markets does not exert much pressure on the gross margins of the company.

Competitor’s Threats

·         The presence of major competing brands like PPR, LVMH Moet Hennessy Louis Vuitton is a strong threat to the company

·         So far company has been using acquisition strategies to combat the competition but now in order to ensure that the customer continue using Prada group products it needs to deliver something beyond just good quality.

·          The number of similar companies of same size in the retail sector is limited hence most of the competitors aim to exceed the level of customer service quality along with furnishing good products.

New entrant’s threats

·         The threat posed by new entrants is low as the company has a robust foothold in the market

·         The high entry barriers in the industry further reduces this risk


Threat of Substitute Products

·         The threat of substitutes for the group is controlled by maintaining exclusivity in products

·         It is equally important that the products are different in all respects including the conception, designing, crafting, manufacturing, distribution as well as at the final delivery point where it reaches the ultimate customer


Cultural Trends

The primary customer segment that the company targets comprises of rich, brand and fashion conscious people who are constantly yearning for an exquisite style statement and a unique fashion that no one else portrays.  The company needs to create differentiation among its customers offering them exclusive designs coupled with great styling that give a boost to the pride and status to its customers. Since the firm is catering to the needs of the global market it is imperative for the marketers to involve people in the workforce who are accustomed to the local dialect, business customs and etiquettes so as to ensure that the cultural, ethnic and social customs of the targeted community are respected and maintained in business dealings.

SWOT Analysis

The close examination of the company’s internal strengths and weaknesses along with ascertaining the external situations that either serves as the prospective opportunity or as the potential threat is imperative to decide for any future strategic action. The firms can exploit their strengths to their advantage optimizing upon the opportunities present by taking a remedial action to prevent the failings due to its internal weaknesses and safeguard it against the likelihood of the suspected threats.


The credibility that the company enjoys being enlisted within the fashion houses acclaimed world over as well as a popular retailing company of luxury goods among the customers is high. The assortment that the company offers by yielding variety of leather merchandises like bags, accessories, footwear etc. along with new product lines with perfumes and branded phones that too of fine quality is liked by the customers. The number of stores located in different continents and regions exposes the products to a diverse set of customer segments. The company provides the products of excellent quality and a good brand image works as an additional feather in the cap. Being confined to the luxury segment in retail sector the various macroeconomic factors does not impact the company as much as the discount stores.


The markets in the region of South East Asia Pacific is a lucrative market for the firm to focus upon, it has a great potential for the company with the emergence of the neo-rich class. This neo-rich class is usually comprised of people that have recently gained access to the financial prosperity and hence they spend lavishly for the leisure pursuits. This class is characterized by the couples/singles in the older age brackets whose children are settled in foreign lands for professional and work pursuits and are earning good salary packages. The monetary remuneration they send back to their aging parents translates into high spending power among this group that offers great business prospects to the company. Another advantage of these South East Asian markets is that they offer cheap labor due to high concentration of population in the area coupled with high unemployment rates; according to the study conducted by Conrad & Poole (2011) it has been shown that the high rate of unemployment will yield more bargaining power to the employers thereby increasing the profits of the company if they use such manpower. The firm can leverage the advancements in technology like the use of social media marketing to register its presence into various parts of the world saving down huge expenditures involved in setting up the physical infrastructure.


The increased use of the technological advancements has been responsible for the increase in the bargaining power of consumers. The modern people make use of digital interface via their laptops and smartphone devices to make decision regarding purchases. With the help of such means a large chunk of people indulge on comparative purchasing on internet by procuring information on prices, styles, looks and different variants of products as well as being demanding in asking for services like payment alternative modes, after sales issues so as to get the best deal for their money and comparing across the alternative product options yielding a solution offering the best value for money. Being a high end product price is not as much a source of competitive advantage for the company as much as quality and exclusivity.  The frailties in the financial and political sector impacts the retailing industry adversely, for example changes in the supply of labor, increment in wages, weakening of employment opportunities, mounting inflation in the operating countries impact the Prada Group business outcomes adversely. Also the imposition of import/export quotas and trade tariffs, disparities in foreign exchange rates inflate the operating costs and hence the global trade outcomes.

Table: SWOT Matrix


  • High credibility among consumers
  • Positive brand image
  • Wide assortment of products
  • The top-notch design and the iconic look of the products
  • The exquisite use of material that yield an elegant, sophisticated look to appeal to high-income class people
  • A good ecosystem in the company
  • It has a stable and strong capital base to fuel its upcoming marketing campaigns
  • High level of customer accessibility through a strong supply chain network

•           The presence of strong direct marketing channels in  countries like UK and US are likely to lead to the ignorance of emerging markets


  • Huge  emerging South Asian market with a large neo-rich class is waiting to be tapped
  • Promise of high enterprise support
  • Potential to connect to the customers through social media

  • High competition in the industry with technology offering comparative shopping alternatives to customers

·         Rich customers who can afford a number of good quality alternatives, sensitive to product quality and uniqueness

  • Threats of the new entrants
  • Social and political factors



 Primary Research

According to the study by Richardson (1996) the characteristics of fashion retail market can be outlines as a consumer goods market with easy to enter and exit system, erratic consumer preferences, presence of multiple competitors as well as number of options to manufacture, market and retail and most importantly unusual short product life. It is because of this reason, the leading fashion houses particularly in the apparel sector need to have an intrinsic proactive ability for capturing the mood of the market and acquire  the necessary information in prior on the emerging tastes and trends in color, styles and themes for preparing their own collections using the qualitative and quantitative evidence from the market research (Aktuglu, 2001). The organization has been continuously undertaking several quality initiatives which intend to make organizational improvements for enhancing the efficiency of different organizational processes. The previous such initiatives were focusing more on the operational aspects of business, in direct manner by aiming to improve the processes and indirectly by aiming to improve upon the products realized as the process outcomes. In the recent years besides the aspects of service quality and functional quality of the products the retention of the customers has caused the marketers to divert their attention on the emerging concept called ‘relationship quality’ which is perhaps acquired more critical status in contemporary times owing to presence of large number of switching alternatives before the customers and their mounting aspirations from the product and its suppliers.

Relationships are critical to the success of business as being customers the relationships tend to influence the perception regarding the product’s suppliers and the overall service quality of the business interactions based on the personal experiences, it is immaterial if the service encounter is discrete in  nature or a continuous one. The management of relationships in a strategic manner can be of immense importance to the marketer as it can help in enhancing the customer’s perception of service quality as well as reflecting in terms of improved sales, improved customer loyalty and better customer retention. It can be used by the company as a source of competitive advantage and in enhancing the brand equity of the company. Prada group is catering to different countries which are varied in number of respects; besides the political, legal and socio-economic disparities the regions are widely different in respect of culture, traditions and lifestyles manifested in the dispersed consumer behavior all across the globe. The marketers find the task of yielding the satisfaction to this wide group of global customers a daunting one but in order to survive in the market full of competing retail organizations and create a unique or distinct mark in the minds of the customers differentiating the firm from their competitors Prada group needs to reaffirm themselves as a brand. The creation of an identity for the brand can be used to imply that the company enjoys a unique position in customer’s mind which can be associated with their culture, tradition and lifestyle. The management of brands successfully is critical for the companies as it is a strong determinant of the preferences of the consumers for the class of similar products and services. But at the same time it is important to realize that development of a product in the form of a brand and that too as a successful brand is not a task for one day or a two but a persistent endeavor that must furnish the good quality products to the customers and also there is a rigorous activity to enhance the visibility of its products with a proper marketing communication that can be differentiated from the other similar offerings in the market. According to the literature, brand equity is “a set of assets and liabilities linked to a brand, its name and symbol that add to or subtract from the value provided by a product or service to a firm and/or that firm’s customers” (Aaker, 1991, p.15).  Some authors say it is “a set of associations and behaviors on the part of a brand’s consumers, channel members and parent corporation that enables a brand to earn greater volume or greater margins that it could without the brand name and, in addition, provides a strong, sustainable and differential advantage”  (Pappu et al., 2005). The challenge to address the needs of the different customer segments is not the only concern as the life cycle phases of the products may have an impact on the appeal the product carries to the customers else its growth would stagnate. Each product life cycle requires distinct type of strategies to be used by business marketers. In addition to this, simply ensuring that the customers are satisfied will not be sufficient enough for the marketers as the changing aspirations of the customers add more complexity to the already dynamic business environment thus calling for more innovative strategies from the customers (Kotler & Keller, 2006). It is known that the acquisition of customers is the first step in the customer relationship cycle and the company usually does so by using different strategies to lure the customer but the maintenance of this relationship in the long term, building relationships that translate into the positive word of mouth and repeated sales is the real challenge (Kotler & Armstrong, 2013). Further, the customer loyalty of the customers needs to be converted into repurchase intention and recommendation of the service provider to the other colleagues and friends. The past research suggests that retention of existing customers is a bigger and more expensive problem in customer relationship management rather than attracting a new customer. Reichheld (1993) has found in his study that building closer relationship with customers resulted in better returns to companies.

Thus the present marketing strategy plan will focus particularly on the management of relationships. The usual marketing strategies tend to emphasize on either the strategies on packaging, branding, advertising, product planning and pricing while some others deal with the distribution issues, promotion as well as financial performance optimization, however Prada group requires to focus on strengthening its brand equity which can be effectively done by the management of relationship quality with its different stakeholders (Kotler & Armstrong, 2013). A positively perceived relationship quality is likely to manifest itself into reduced costs, improvements in quality, and capacity enhancements therefore it is important to ascertain the impact of perceived relationship quality on brand equity. The importance of the social media networking and internet interface can be useful to tackle the challenges of growth and accelerating it through a seamless integrated network along with nurturing relationships with stakeholders (Klososky, 2011).

“Research Design is a framework or blue print for conducting research” (Malhotra & Dash, 2011, pg.70). This study was an exploratory study that used qualitative evidence procured from the individual interviews of eight espondents. The present research was based on the qualitative survey of opinions of the various supply chain partners of the organization on the perceived brand equity of the firm and how do they perceive the quality of their relationship with the firm. The study also sought their insights on whether they think that the firm needs to foster its relationship marketing endeavors. The members interviewed in the survey were involved in the various activities of the internal supply chain of the organization. These people were involved in profiles like distribution, marketing, purchasing, new product development, customer services, financing, operations etc. As customer is an important supply chain partner being the consumer of the final end product hence some interviews were also taken from the existing customers of the company. These surveys were conducted in the field settings during the non-peak work hours so as to ensure that the response rate is good. Also wherever possible (implying the availability of the contact number) a prior appointment was sought from the respondent so as to ensure that the participation is whole hearted.

With an objective of gaining an understanding regarding the linkages between the trust, satisfaction and confidence in buyer-seller relationships and brand equity and exploiting this favorably for Prada group an empirical study has been done based on qualitative evidence. Besides trying to deduce the presence of these linkages the study also attempted to learn the failings of the firm in context of the different factors that form the perception of relationship quality so as to locate the areas for improvement. The data on the demographic profile of the respondents was also collected on variables like age, gender, education level; income level, occupation as these may have impact on the perception of relationship quality by them.

The findings procured from the experience surveys of the industry experts as well as the face to face personal interviews from the various stakeholders using a survey employing open-ended questions mostly reveals that the perception of relationship quality among the supply chain partners is  influenced by factors like quality of communicational exchanges, the frequency of communication, conflict resolution endeavors, the extent of cooperation among partners, ability to comprehend the client’s needs, length of relationship, customer’s experiences with the products and services,  the perception regarding the employee’s competency and the expertise of handling clients and business information. The respondents confessed that all these indicators of relationship quality have a direct and positive bearing on the perceived brand equity among these respondents and positive brand equity is very much likely to be translated into word of mouth recommendation as well as a favorable intention to use the products of the company again.  The probe regarding the  factors where in the relationship with the  company was found to be lacking suggests that the company needs to make fresh efforts for reinforcing its product offering using well-designed campaigns of targeted marketing along with giving these efforts an impetus by incorporating aggressive and rigorous brand positioning endeavors. The company needs to strengthen its relationship with its loyal clientele and use the marketing strategies carefully for developing customer’s strong sense of affinity with its products. The company can leverage strategic advantage in this regard using social media network. The integrated marketing efforts intended to foster relationship quality between client and company along with effective positioning exercises will make sure that the company achieves more business success in future.

Issues Analysis

It can be concluded from the primary research that the market is characterized by consumer switching as the customers tend to purchase the fashion accessories which they find appealing and unique. However there are a few loyal customers who want to remain associated with the brand provided the brand is successful and looks after their distinct needs through its customized product offerings. The tendency of continually moving from one apparel provider to the other is less visible among the purchasers of the luxury segment. In addition to this, one must understand that the behavior to switch is influenced by a variety of factors including the confidence in the company, the interactions that happen between the client and the company, their mutual experiences, customer satisfaction and trust that all together tell them how they perceive the relationship with the firm apart from the excellent service and product quality.  All such factors keep a customer loyal to their current retail products provider.

Then there are a number of market factors too that push the customers to switch, more importantly the satisfied customers to switch.  Eventually every customer yearns for exquisite product quality and performance. The interactions among the respondents (customers, suppliers) exhibit that their propensity to switch is accentuated by occurrence of product failures or the service failure. Sometime during the service encounters the overall experience of the client is spoiled due to delivery delays or some conflicts that are not aptly resolved up to the satisfaction of the client or some miscommunication by the service executive hence it is evident that the relationship quality in the various activities is essential determinant to have a favorable perception of brand among the customers. The other factors beside relationship quality that also determine the decision to continue or discontinue the products of the company include price most importantly. The other important thing that needs to be acknowledged here is that the role of freebies and bonuses to guarantee customer loyalty is poor and as such their impact on inducing switching behavior is low. It has been further observed that the propensity to switch among the products/services providers is higher among females than males and in the sample also the higher percentage of females have shown the intention to switch. The sensitivity of the females towards the relationship quality factors is greater and many of them have switched in the past owing to poor perception of relationship quality despite the product quality being good. In addition to this, when asked on the preference to try a new provider, the females are drawn more towards the new entrants.

Thus summarizing it altogether it can be concluded that perception of relationship quality is a crucial factor for indicating the brand equity as a poor perception of the company’s relationship quality is likely to enhance the propensity to switch. Thus it is important for the marketers to locate the strategic ways for strengthening the relationship quality thereby improving the brand equity, however the systematic assessment of the market factors prior to adaptation is also imperative for the marketers. It is also clear from the study that the ultimate goal of customer is ultimate satisfaction and a happy experience.

Thus the study will focus on the management of the various business relationships strategically to (i) enhance brand equity of the company and (ii) yield customers an experience of exquisite kind that helps in fostering a positive association with the company and reduces propensity to switch, providing the company a source of competitive advantage which is robust against any duplication by competitors.

Further, the construction of relationship quality can be in terms of the factors like communication approaches as well as the behavioral aspects that include warmth, helpfulness, empathy, courtesy and respect and therefore the business interactions like the customer-employee interactions during service encounters induce different emotional feelings that transit swiftly across different states defining the overall experience and the perception of relationship quality.

The study proposes that the relationship marketing endeavors like communication, conflict resolution, the experience of the employees and their expertise, the relationship orientation exhibited by the service executives, service executive’s attributes and understanding the consumer needs with a customer oriented approach can be useful in enhancing the brand equity for the company and social media network can be a strategic interface for such an endeavor.

Goals and Objectives

Objective 1: To enhance the brand equity among the customers so as to resolve the problems pertaining to customer retention.

Goal 1: To add 10% more new customers to the existing customer base of the firm

Objective 2: To reduce the propensity to switch among customers by at least 5%.

Goal 2: To foster the relationship marketing efforts so as to improve the perception of relationship quality among stakeholders.

Objective 3: To exceed the customer expectations for building a long term association with the customers.

Goal 3: To reduce the perception-expectations gap in the product and service quality among the stakeholders to its minimum possible value within this quarter.

Objective 4: To enhance the perceived level of relationship quality among customers.

Goal 4: To improve the customer’s perceived level of relationship quality by at least two points on positive side within six months time.

Marketing Strategy Statements

The following statements comprise the choice of the strategic components for the proposed marketing plan.

Target market definition

The present market plan would be addressing the needs of the different stakeholders and hence these stakeholders are categorized into three main segments: customers, employees of the company and the other business partners like the suppliers of the raw material to the firm, distributors and the various individuals linked at different parts of the product’s supply chain. The customers will be segregated on the basis of existing and prospective customers and so is the category of employees and the business partners.

The company focuses on the high end consumers, business partners and employees as the target audience. With reviewing the products done by press and posting these reviews on their media (via their electronic links) will help the company reach the critical audience. The positioning techniques will vary for the different targeted segments as customers need to understand the product in terms of its quality attributes and its worthiness as sales driver; the retailers need information about the real profitability as well as the mark up and profit margin associated with the products. Initially the marketing plan would start responding to the needs of the customers then the online portal would also try to connect the business partners and the employees as well. The existing customers of the company pertain to high end income group who are less sensitive to prices but are motivated by product novelty. The psychographic traits of these customers reveal that they are looking for products and services that can give them a boost in their status and add to their pride. The age bracket that most shop from the company is in the 30 plus age group owing to high prices of the products the youngsters find them unaffordable. The behavioral characteristics of these customers reveal that they are regular users of the web-based services and have good exposure to digital media. They would be very much willing to have the information delivered conveniently at their doorstep.

This primary market is extremely important for the marketers as nurturing good relationships with the existing customers will ensure that they continue to purchase the products from the company and also recommend the company to others as well by propagating a positive word of mouth. The market segmentation would be based on then income level and tendency to purchase expensive high end fashion products. The focus will be more tilted towards the ones whose length of association with the company is less than three years’ time. Also the trends indicate that off late the addition of the new customers to the company has been at the rate of 8% on an average on per annum basis hence it is expected that the number of customers that this marketing plan currently needs to cater is around 0.2 million. The targeted customers will be imparted the benefit of being able to connect directly with the company to register their concerns and address their queries in an upfront manner.

Strategy Statements

Value Statement

The strategic initiative will yield the customers the opportunity to remain connected with the company 24 hours a day at their convenience (via their laptops or smartphone devices) at any desired place and time to learn about the product offerings, order their products online, electronically register their concerns, to have an advisor that can design a complete attire with dress and accessories uniquely tailored to suit their individual requirements. And the most interesting feature with round the clock accessibility would be the nominal price that the customer will foot in availing these services. As the customers perceive the brand as a value proposition itself hence being a member of the brand fan page or in the follower’s list would be another benefit to the customers. The use of the differentiation strategy offering products unique in style, color as well as appearance provides a sustainable competitive advantage to the company and company can display its new products, like new limited edition colored accessories on the web-based portal.


The main proposition that the present marketing plan focuses is the ‘place’ as connecting with the customers through web interface would help the company to transgress the geographical barriers and become available to their customers for all their fashion woes.


It is important for the company to learn that how many of the existing customers are connected with internet via smartphone devices or any other means to realize the maximum benefits of the proposed marketing initiative.

 Communication Statement

The marketing plan would employ web-based interface for establishing communication with the stakeholders (customers) using social media networking sites and mobile based applications for the same.

The measurement of brand equity would be obtained as “the difference between an individual consumer’s overall brand preference and his/her multi-attributed preference based in objectively measured attribute levels” (Park & Srinivasan, 1994, p.273). This measure comprises of ten items pertaining to the dimensions brand awareness, brand association, brand loyalty as well as perceived quality.

Marketing Implementation Strategy

The targeted initiatives for branding, establishing brand identity along with improving brand equity would help the company have a strong image among the customers and would also enhance the brand recall. Semenik (2002) states that, “effective marketing communication can be lethal for other competitors giving a competitive edge to the implementing brand. It is more about utilizing a constructive and predilection for the products and services of any particular”. In order to implement the proposed initiative in Prada group,  a two-phase process will be adopted: one intended to improve the perception of relationship quality and hence brand equity in personal service interactions and the other intended to attain the same objective indirectly through web (social media networking sites) or web-based interfaces (web-based mobile applications). Besides thinking for the strategies that attract new customers to the business the company should vie for the efforts that can build and foster long term associations with the customers. The use of referral programs has proved to be a good strategy in the past similarly the company can introduce new loyalty programs for having a more enduring relationship with its existing customers. The company can utilize social media marketing to connect directly with its customers.  In order to improve the relationship quality perception in direct interactions the strategic use of integrated marketing communications like different slogans, help signage, providing support to physically challenged customers like furnishing wheel-chairs, assistance in locating and picking the products, personally attending to their needs even if it is not a compulsory part of the SOP and so on would be employed within the stores of the company to ensure that all the customers have a happy experience from the store and they feel the desire to visit the store again. Also a visitor’s book will be maintained in all the stores of the company to record the experiences of the visitors and a monthly follow up of the grievances and complaints would be attended on individual basis. A systematic evaluation of the expected relationship quality and perceived relationship quality would be made and efforts would aim to minimize if not possible to eliminate the gaps wherever they exist. The prominent and persistent gaps will call for necessary managerial intervention with an aim to improve the quotient of relationship quality and enhance the brand equity for the firm.

In the case of the indirect channels like internet based social media networking solution, in addition to the above steps an effort would be made to ensure that the frequency of interactions across this interface with the customers, suppliers and other business partners is high and the exchange of information is almost on real time basis. It is expected that the customers for the luxury segment of retail products offered by the company have an inclination to use digital mediums via laptops and smartphone devices and value time as money. Therefore the company will ensure that it remains visible as a brand to such customers through web-based applications on recurrent basis that can also foster its brand equity by ensuring in-sight and in-mind as well. This interface will make use of the feedback exercise by procuring comments from the customers. The feedback can be regarding the overall experience during the service interactions with the service executives and once these feedbacks reveal the existence of gaps in expectations and perceptions of relationship quality factors then the appropriate managerial intervention would be yielded in terms of training for the service executives on giving impetus to the relationship marketing efforts for the customers. The online portal can be used by the company to give some tips on latest fashion to the customers as well as it can also help them in offering customized product solutions according to some special event in their lives. For example, if someone is dressing for the wedding then the portal can help the client in deciding the best wedding attire along with the most appropriate accessories for the event. The company can form strategic retailing partnerships with renowned companies for the website support to market and distribute its products. This type of frequent connections through internet interface will help in building enduring relationships with the clients and hence elevating the brand equity for the company. The company may use celebrity endorsements capitalizing on the professionals from different areas including sports, education and politics  as a part of its branding efforts.

The implementation of the relationship marketing efforts would be significant in presenting the missing quality link by integrating good service quality and product quality with the relationship quality. This integrated network would yield a sustained competitive advantage for the company and in promoting brand equity too as this source of competitive advantage would not be impacted by shifts in technology or capital changes.

Marketing Budget

According to the review of past studies, social networking tools are most easy and cost effective marketing channels than the conventional marketing options particularly from the budgetary perspective. However, the optimum mix of email marketing, advertisements (both print and audiovisual), press release, web page, podcast etc. can also be employed based on the overall effectiveness of these channels measured in terms of coverage, ROI, and the ease of lead conversion.

Table 2: Budget Allocation for Marketing Strategy Plan

Communication Channel Proportion Of The Budget (in percentage)
Web ads 45%
Social media sites 50%
E mail marketing 5%


The metrics like average lead close rate, average leads per business day month over month growth and month to date (MTD) growth per channel will be used for tracking the efficacy of the marketing plan under the supervision of digital marketing manager.



Aaker, D.A. (1991) Managing Brand Equity, Free Press, NY.

Anonymous. (n.d.) Retrieved from <>

Conrad, C., & Poole, M. S. (2011). Strategic organizational communication: in a global economy. John Wiley & Sons.

De Chernatony, L., McDonald, M., & Wallace, E. (2011). Creating powerful brands. Routledge.

Griffin, R. (2013). Fundamentals of management. Cengage Learning

Hennig-Thurau, T., Gwinner, K. P., & Gremler, D. D. (2002). Understanding relationship marketing outcomes an integration of relational benefits and relationship quality. Journal of service research, 4(3), 230-247.

Hitt, M., Ireland, R. D., & Hoskisson, R. (2012). Strategic management cases: competitiveness and globalization. Cengage Learning.

Klososky, S. (2011) Enterprise Social Technology: Helping Organizations Harness the Power of social media, social networking and social relevance, Greenleaf book press.

Kotler P. & Keller K. (2006), Marketing Management 12e, Pearson Education-Prentice Hall, New Jersey p. 593

Kotler, P., & Armstrong, G. (2013). Principles of Marketing 15th Global Edition. Pearson.

Kotler, P., Roberto, N., & Lee, N. R. (2002). Social marketing: Improving the quality of life. Sage.

Pappu, R., Quester, P.G. and Cooksey, R.W. (2005) “Consumer Based Brand Equity: Improving the Measurement – Empirical Evidence”, Journal of Product and Brand Management, 14,  3, pp. 143-154.

Park, C.S. and Srinivasan, V. (1994) “A Survey-Based Method for Measuring and Understanding Brand Equity and its Extendibility”, Journal of Marketing Research,

Porter, M. E. (2008). Competitive strategy: Techniques for analyzing industries and competitors. Simon and Schuster.

Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86(1), 25-40.

Retrieved from<>

Semenik R.J., (2000), ‘Promotion and integrated marketing communications’. Ohio, Cincinnati: South-Western, p. 7

Wong, A., & Sohal, A. (2002). An examination of the relationship between trust, commitment and relationship quality. International Journal of Retail & Distribution Management, 30(1), 34-50.

Woo, K. S., & Ennew, C. T. (2004). Business-to-business relationship quality: an IMP interaction-based conceptualization and measurement. European Journal of Marketing, 38(9/10), 1252-1271.





Hi, My name is Student Name, I am conducting a study for a retail fashion house to ascertain that strategic importance of relationship quality in enhancing brand equity and also to identify the factors that help in forming the perception regarding relationship quality so as to trace significant relationship marketing efforts for boosting the brand equity. Please furnish the maximum possible opinions on the following questions so as to help me in my research endeavour. The information shared here will be used only for the stated purpose and remain confidential with the researcher.



INSTRUCTIONS : Please tick(write in the response whatever is applicable

1.      Check your Category:

Distributor/                Retailer/          Customer/      Employee/      Any Other (Specify) —–

2.      Age :  ______________years
3.      Gender :
4.      Occupation :
5.      Highest formal education :
6.      Length of association with the brand : ______________years


  1. What are the factors that you look in when you are dealing with fashion accessories?
  2. What brands do you opt for when you are dealing with fashion accessories?
  3. Are you familiar with the brands of “Prada Group”? Name some.
  4. What is your perception of the product quality from this brand?
  5. What benefits do you perceive in this brand as you compare it with some other brands that you use in the same product category?
  6. Are you able to procure the value for money from this brand?
  7. What is your perception of the relationship that you have been able to form with this brand, if you think there is some relationship? If you think otherwise, give at least one reason why do you feel so?
  8. Please state some factors that you interpret in the context of ‘relationship with the brand’?
  9. How important is the relationship in your business dealings whether purchase, sale or any other activity?
  10. Would you like to switch to some new brand for the dealings of fashion accessories?
  11. Would your answer to the previous question remain the same if you have a strong relationship with the brand? If your answer changes, give at least two reasons to support your answer?
  12. Would your answer to the previous question remain the same if you have a positive experience with the brand? If your answer changes, give at least two reasons to support your answer?
  13. Would you like to recommend this brand to others?
  14. Would you like to continue to purchase the products of this brand?
  15. Do you think that this company keeps your best in mind?


Distributor 55 yrs male owner distribution agency HS Diploma 20 years knew all brands Considers the brand a reputable and trusted customer brand. Would recommend
Employee 32 yrs Female works in group Masters in Business 5 years knows all brand considers brand a trustworthy brand and a good employer would recommend
Customer 29 yrs Male businessman Bachelors 3 years could hardly recall other brands except the one that he uses likes it may be
Customer 30 yrs female housewife Associate 6 years almost knew just one, could recall the other with aid prefers the brand owing to exclusive product offerings, the store experience has been nice on the whole except for a one purchase when she quarreled with the store executive on some ambiguity in communication have tried other brands, might  recommend, will purchase from the brand that gives ultimate satisfaction
Customer 25 year Male Student Bachelors 2 years had a tough time in recalling the brands likes the products but uses other brands as well would recommend the watches for sure
Employee 28 yrs male company job Masters 6 yrs knew all brands one remembered on aided recall uses multiple products from the firm would like the executives to be more courteous
Customer 48 years male professional Masters 10 years difficulty in remembering the brand names keen to use new products, would make purchases from the stores that are convenient and have supporting store staff, have left using a previous brand due to some discord with the employees the overall experience is good but would like to have it better in terms of complaint handing issues
Retailer 42 years female owns a retail outlet Associate 11 years new all names perfectly relationship has been cordial and trusting, never had issues that could not be resolved would surely recommend





Why People Should Help those with Autism Disorder


There has been a misconception by many people that people suffering from autism should be avoided, essentially and primarily because autism patients are not easy to associate with. The difficulty in associating with individuals suffering from autism transcends majorly from the fact that the disorder makes them unable to communicate and even to relate well with the other members of the society. While these are reasons that can be strongly supported by scientific research and findings, there are on the other hand a number of sound and genuine reasons why it should be the responsibility of every person under the care of one suffering from autism to care and help people suffering from autism.  Helping people with autism ensures that such people strengthen the love they have for members of the society especially their parents;  that they are able to adapt to some mechanisms of associating well with the other members of the community and as a result have longer and happy life.

Despite their inability to have well-developed minds that can attain full functionality, people suffering from autism are able to love, especially their parents. As Clement (2013) observes, children with autism have signs “…showing clearly that though they may never have been able to say so directly, they do love and appreciate their parents (2).” Through caring for persons with autism the other members of the society can contribute significantly towards making the love that people with autism have for others grow, and by extension contribute to making the autism patients lead a more happy life.

To be able to adapt to the society and relate well with the other members of the community persons with autism disorder need to be helped. When other members of the society devote their time and other resources toward helping people with autism the inability to form good relationships with other members of the society by people with autism can be reduced. Through this, people with autism can adapt to mechanisms that do not fully call for a fully developed mind in order to attain some good relationships with the other members of the society. For instance, some activities such as learning are a good way that other members of society can help people with autism in, thereby helping them to be able to learn and with good learning skills these patients can be able to correlate better with the environment and the other people (Seok, DaCosta, and Boaventura & Yu).

When there is love and care for the autism patients from the other people in the community it can significantly contribute toward longer life in the autism patients. It is known that when a normal individual is stressed and cannot find love and care in the society they can easily resolve into thoughts such as those of committing suicide. The same case can easily and even strongly apply in the case of autism people, where if they are not helped they will resolve into thoughts that they are not loved, cared for and wanted. With devoted help from those interacting with autism patients, this form of thinking can be eliminated leading to happy stress-free life. Helping, showing that one cares and being there in every possible way to an autism patient is a sure way that such a patient can find meaning in this life, despite their challenged mental capacity and inability to form good relationships with the other members of the society.

In conclusion, helping people with autism should be a central concern for every person who is in a position to help such a patient. Helping such patients will ensure that they can feel loved and, for this reason, strengthen the love that they have for the other members of the community their parents being on the front line. Besides, devoted and genuine help by other to autism people will make the patients develop other mechanisms such as skilled learning, which are important in relating well with the other members of the society. Furthermore, with the help, care and protection by the other members of society will make autism people not to feel stressed that can lead to suicidal thoughts, hence ensuring they lead happy and prolonged life.












Works Cited

Clements, John. Letters to the Home Front: Positive Thoughts and Ideas for Parents Bringing

Up Children with Developmental Disabilities, Particularly Those with an Autism

Spectrum Disorder. London: Jessica Kingsley Publishers, 2013. Internet resource.

Seok, Soonhwa, Boaventura DaCosta, and Byeong Min Yu. “Spelling Practice Intervention: A

Comparison of Tablet PC and Picture Cards as Spelling Practice Methods for

Students with Developmental Disabilities.” Education and Training in Autism and

Developmental Disabilities 50.1 (2015): 84-94. ProQuest. Web. 9 June 2015.




  Financial Analysis            

Executive Summary

The present paper is a detailed ratio analysis carried out for Norfolk Southern Corporation and CSX Corporation for the fiscal year ended 2013. The financial statements used for ratio analysis are provided in Appendix 1. The ratio analysis was carried out to understand the relative strengths and weaknesses of the company with respect to profitability, short-term liquidity and financial leverage.

Norfolk Southern Corporation

Norfolk Southern Corporation, together with its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods. . The company was founded in 1883 and is based Norfolk, Virginia.

As of December 31, 2014, it operated approximately 20,000 miles of road in 22 states and the District of Columbia. The company also operates scheduled passenger trains; transports overseas freight through various Atlantic and Gulf Coast ports; and provides logistics services. In addition, it provides bimodal truckload transportation services primarily utilizing Road-Railer trailers, a hybrid technology that facilitates over-the-road and on-the-rail transportation in the eastern United States, as well as in Ontario and Quebec through a network of terminals. Further, the company engages in the acquisition, leasing, and management of coal, oil, gas, and minerals; development of commercial real estate; telecommunications; and leasing or sale of rail property and equipment.



CSX Corporation

CSX Corporation, together with its subsidiaries, provides rail-based transportation services in the United States and Canada. The company was founded in 1978 and is based in Jacksonville, Florida.

It offers traditional rail services, and transports intermodal containers and trailers. The company transports crushed stone, sand and gravel, metal, phosphate, fertilizer, agricultural, automotive, paper, and chemical products; and coal, coke, and iron ore to electricity-generating power plants, steel manufacturers etc. It also provides intermodal transportation services through a network of approximately 50 terminals transporting manufactured consumer goods in containers in the eastern United States, as well as performs drayage services, including pickup and delivery of intermodal shipments; and trucking dispatch services. The company operates approximately 21,000 route mile rail network, which serves various population centers in 23 states east of the Mississippi River, the District of Columbia, and the Canadian provinces of Ontario and Quebec, as well as owns and leases approximately 4,000 locomotives. It also serves production and distribution facilities through track connections.

Common Size Income Statement

The common size income statements for the two firms are as shown below:

From the common size Income Statements it is evident that Norfolk Southern Corporation has a marginally higher operating margin due to marginally lower operating expenses as percentage of revenue compared to CSX Corporation. However the EBT margin and the Net Profit Margin of Norfolk Southern Corporation is much higher than that of CSX Corporation primarily due to the strong other income of Norfolk Southern Corporation. According to the management discussion section, the other income of Norfolk Southern Corporation was boosted by a one-time gain of $97 million from land sale in Michigan and also high net returns earned from corporate owned life insurance (COLI).

It is important to note that CSX had a lower fuel expense as percentage of revenue compared to Norfolk primarily due to higher improvement in network efficiency and fuel savings initiatives such as the ONE Plan leading to a decrease in fuel expenses. Again both the firms witnessed higher labor expenses due to increase in pay rates and incentives and stock-based compensation. Thus

Although interest expense as percentage for both the firms was similar the one-time gain from land sale for Norfolk boosted its EBT margin and Net profit margin to 26.4% and 17.0% compared to 24.3% and 15.5% for CSX Corporation. With respect to revenue both the firms witnessed a revenue decline in coal segment due to decrease in carload volume and lower average revenue per unit caused by lower pricing. The other revenue segments such as Intermodal, general merchandise reflects similar trends for both the firms in terms of growth in volume and average revenue per unit.



Ratio Analysis

The key ratios analyzed for the two firms are:

  • Return on Equity
  • Return on Assets
  • Financial Leverage
  • Current Ratio


Return on Equity

The Return on Equity is the most commonly tracked metric as it measures the rate of return generated by the firm on the equity investment. It is defined as

ROE = Net Income/Average Shareholders’ Equity

Thus ROE for CSX = 1864/(10504 + 9136)/2 = 18.98%

ROE for Norfolk Southern = 1910/(11289 + 9760)/2 = 18.15%

From the ratio analysis it is evident that CSX Corporation has a stronger ROE compared to Norfolk Southern Corporation implying the superior ability of CSX to deliver rate of return on equity investment. The high ROE of CSX despite a lower profit margin in 2013 indicates stronger efficiency of the company’s management in utilizing the equity investment to generate returns for the equity shareholders. Another factor contributing to the higher ROE is the relatively higher financial leverage of CSX compared to Norfolk Southern Corporation.

Return on Assets

The Return on Assets measures the rate of return generated on the dollar assets of a firm. In other words it measures the ability of a firm to generate rate of return on dollar assets. It is defined as

ROA = Net Income/Average Total Assets

ROA for CSX = 1864/(31782 + 30723)/2 = 5.96%

ROA for Norfolk = 1910/(32483 + 30342)/2 = 6.08%

From ratio analysis it is evident that Norfolk Southern Corporation has a stronger ability to generate rate of return on its assets compared to CSX Corporation. This is evident from the fact that while both the firms have almost same amount of average assets in 2013, Norfolk Southern Corporation’s stronger net profit margin has translated to a higher ROA for the firm. The aggressive capital expenditure incurred by CSX in 2013 to maintain and improve its existing infrastructure and to position itself for long-term growth through expanding network and terminal capacity has resulted in strong increase in asset base for the company. The capital expenditures incurred by CSX, as noted by the management, are expected to provide operational benefits going forward. However this reduced the ROA in the current year which is expected to improve going forward.

Financial Leverage

The financial leverage is a measure of the financial risk in the form of bankruptcy risks arising due to use of debt in capital structure to finance asset purchases. The higher is the financial leverage for a firm, higher is the use of debt to finance asset purchases and hence higher is the financial risk for the firm. It is defined as

Financial Leverage = ROE – ROA

Financial Leverage for CSX = 18.98% – 5.96% = 13.02%

Financial Leverage for Norfolk Southern = 18.15% – 6.08% = 12.07%

It also measures the extent to which ROE has been boosted by use of debt in capital structure as higher levels of debt reduce the equity portion of the capital structure.

The higher financial leverage for CSX clearly reveals that the firm has been higher levels of debt to finance asset purchases which in turn has reduced the equity portion and boosted the ROE. Thus despite Norfolk Southern Corporation having a higher ROA, the higher financial leverage of CSX resulted in a higher ROE for CSX. The balance sheet of CSX reveals that a significant portion of the liabilities in the form of casualty, environment and other reserves. Compared to $166 million for casualty and other claims for Norfolk Southern, CSX has a combined $451 million in the form of casualty, environment and other reserves in the liability section of the balance sheet. Furthermore CSX has a higher level of long-term debt compared to Norfolk Southern implying that CSX has been primarily using debt for capital expenditures and hence the firm has a relatively higher financial risk of bankruptcy.

Current Ratio

The current ratio is a measure of short-term liquidity of a firm. It measures the ability of a firm to meet its short-term obligations with its short-term assets. It is defined as

Current Ratio = Current Assets/Current Liabilities

Current Ratio for CSX = 2602/2424 = 1.07

Current Ratio for Norfolk Southern = 3075/2305 = 1.33

The ratio analysis shows that Norfolk Southern Corporation has a stronger short-term liquidity position as indicated by its higher current ratio. The analysis of the balance sheets of CSX and Norfolk Southern Corporation reveals that CSX has a significantly lower amount of cash and cash equivalents primarily due to higher use of cash in capital expenditures. The high use of cash and cash equivalents in capital expenditures, share repurchases and dividends is also evident from the management discussion section of the annual report. Again the high level of current liabilities is due to the labor and fringe benefits payable and the casualty, environment and other reserves of CSX Corporation. Consequently CSX has a weaker short-term liquidity position compared to Norfolk Southern Corporation.


The ratio analysis shows that while CSX has a superior ROE compared to Norfolk, the high ROE of CSX is due to a high financial leverage implying higher bankruptcy risks for the firm. On the other hand Norfolk has a superior ROA, lower financial leverage, higher net profit margin and a higher current ratio implying that the financial performance of Norfolk Southern is superior to the performance of CSX.







Appendix 1: Financial Statements

Norfolk Southern Corporation and Subsidiaries  
Consolidated Balance Sheets  
Figures in $ millions  
2013 2012  
Current Assets  
Cash and Cash equivalents 1443 653  
Short-term investments 118 15  
Accounts receivables -net 1024 1109  
Materials and supplies 223 216  
Deferred income taxes 180 167  
Other current assets 87 82  
Total current assets 3075 2242  
Investments 2439 2300  
Properties less accumulated depreciation 26645 25736  
Other assets 324 64  
Total assets 32483 30342  
Liabilities and stockholders’ equity  
Current Liabilities:  
Accounts Payable 1265 1362  
Short-term debt 100 200  
Income and other taxes 225 206  
Other current liabilities 270 263  
Current maturities of long term debt 445 50  
Total current liabilities 2305 2081  
Long term debt 8903 8432  
Other liabilities 1444 2237  
Deferred Income Taxes 8542 7832  
Total Liabilities 21194 20582  
Stockholders’ equity  
Common Stock 310 315  
Additional paid-in capital 2021 1911  
Accumulated other comprehensive loss -381 -1109  
Retained Income 9339 8643  
Total Stockholders’ equity 11289 9760  
Total Liabilities and Stockholders’ Equity 32483 30342  
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income
Figures in $ millions except per share amount
2013 2012 2011
Railway operating revenues 11245 11040 11172
Railway operating expenses:
Compensation and benefits 3002 2960 2974
Purchased services and rents 1629 1604 1610
Fuel 1613 1577 1589
Depreciation 916 916 862
Materials and other 828 859 924
Total railway operating expenses 7988 7916 7959
Income from railway operations 3257 3124 3213
Other income-net 233 129 160
Interest expense on debt 525 495 455
Income before income taxes 2965 2758 2918
Provision for income taxes 1055 1009 1002
Net Income 1910 1749 1916
Per share amounts:
Net Income
Basic 6.1 5.42 5.52
Diluted 6.04 5.37 5.45








CSX Corporation
Consolidated Balance Sheets
Figures in $ millions
2013 2012
Current Assets
Cash and Cash equivalents 592 784
Short-term investments 487 587
Accounts receivables -net 1052 1114
Materials and supplies 252 274
Deferred income taxes 155 119
Other current assets 64 75
Total current assets 2602 2953
Properties -net 27291 26050
Investment in Conrail 752 695
Affiliates and Other Companies 546 511
Other Long term assets 591 514
Total assets 31782 30723
Liabilities and stockholders’ equity
Current Liabilities:
Accounts Payable 957 948
Labor and Fringe Benefits Payable 587 468
Casualty, Environment and Other Reserves 151 140
Current maturities of long term debt 533 780
Income and Other Taxes Payable 91 169
Other Current Liabilities 105 140
Total current liabilities 2424 2645
Casualty, Environment and Other Reserves 300 337
Long term debt 9022 9052
Deferred Income Taxes 8662 8096
Other Long-term liabilities 870 1457
Total Liabilities 21278 21587
Stockholders’ equity
Common Stock 1009 1020
Other Capital 61 28
Retained Earnings 9936 9010
Accumulated other comprehensive loss -523 -936
Non-controlling minority interest 21 14
Total Stockholders’ equity 10504 9136
Total Liabilities and Stockholders’ Equity 31782 30723


CSX Corporation
Consolidated Statements of Income
Figures in $ millions except per share amount
2013 2012 2011
Revenues 12026 11763 11795
Labor and fringe 3138 3020 3073
Materials, Supplies and Others 2275 2156 2229
Fuel 1656 1672 1668
Depreciation 1104 1059 976
Equipment and Other Rents 380 392 379
Total railway operating expenses 8553 8299 8325
Operating Income 3473 3464 3470
Other income-net 11 73 22
Interest expense on debt -562 -566 -552
Income before income taxes 2922 2971 2940
Income Tax Expense -1058 -1108 -1086
Net Income 1864 1863 1854
Per share amounts:
Net Income
Basic 1.83 1.8 1.71
Diluted 1.83 1.79 1.7




Working With Multi Cultural Clients


Counseling involves empathetic listening and creating a relationship with ones clients which form the core of counseling. This is followed by giving the client an opportunity to tell their story where we can assist them in rewriting their story efficiently and help them with their worries in the real world. As a counselor, working with multicultural clients is inevitable. Working with these clients brings in a lot of issues that need to be looked at in depth. For instance, in some cultures, it is wrong to look one directly in the eye when talking with them. In other cultures, avoiding eye contact is seen as a sign of dishonesty. This sharp contradiction in the cultures and cultural behavior dictate that a counselor must know their clients background well. Breaking down racial, ethnic, and cultural individuality is an important factor in counseling. This paper looks at working with multicultural clients (Jerry, Looby, & Sandhu, 2002).

Explore the relationship between appreciating diversity among racial, ethnic, and other minority groups and being an effective counselor. Substantiate your answer using examples

Appreciating diversity in clients is an important part of counseling. As a counselor, one should have an open mind. An effective counselor is well aware of their own racial and cultural background thus they respect diversity.  The counselor knows that their point of view is only one and they use caution when using their point of view to assess a client. They do not see diversity as always deviant. For instance, when a counselor has a gay client who is stigmatized, even if the they don’t accept the lifestyle of the person, the counselor will assess the client impartially not giving their personal opinion but rather their professional opinion (Jerry, Looby, & Sandhu, 2002).

An effective counselor is in a position to fully understand diverse races, ethnic and minority backgrounds.  They will also better understand their backgrounds and know how to overcome their inhibitions. The counselor will be able to better understand what their client is going through and advice them accordingly when they appreciate and accommodate peoples diversity (Zalaquett, Allen, & Zalaquett, 2013).

 What types of racial, ethnic, and other minority groups do you think you would work particularly well with? Explain why

I would work well with white and African Americans. I have lived with this group from my child hood. I know their lifestyle, beliefs, and attitudes. Understanding their story would be a lot easier as compared from other groups. I have adequate knowledge of inaccurate stereotypes and myths surrounding the two groups. I know my perception and how it may be a barrier in understanding the clients based on my beliefs of the two groups. However, knowing them can be a challenge to. I would find myself approaching them with their story in mind as opposed to listening to them (Zalaquett, Allen, & Zalaquett, 2013).

What types of racial, ethnic, and other minority groups do you think you would have difficulty working with? Explain why.

I would work with almost any race, ethnic, and minority groups. This can be attributed to the fact that I am a good listener. Listening and understanding a clients need and story is an important element in counseling. There are many instances that you might encounter a client of a similar race and ethnicity such as yours. But their background and upbringing and yours are totally different. The only way to know their story is by listening to them. It would however be difficult for me to understand someone who does not speak English well. I would have a hard time understanding them (Jerry, Looby, & Sandhu, 2002).

What steps would you like to take in the near future to improve your sensitivity to diverse clients and become an effective counselor?

There are arrays of steps that I will take to improve my sensitivity to diverse clients. First I would research on my clients backgrounds to help me better understand them. This includes their culture and story.   I would also reflect on myself and establish my beliefs and attitudes which will give me a good handle when dealing with diverse clients (Jerry, Looby, & Sandhu, 2002).


The world we are leaving in is rapidly changing with people traveling all over for different purposes. It is vital for every counselor to equip themselves with skills for handling diverse clients effectively.  Having an accommodative mind is also crucial. This is the ability to assist clients who come from different school of thought as once own. One should approach diversity with curiosity and a positive mind in order to be effective.



Jerry, T., Looby, E. J., & Sandhu, D. S. (2002). Multicultural Counseling: Context, Theory and Practice, and Competence. New York: Nova Publishers.

Zalaquett, C., Allen, I., & Zalaquett, C. (2013). Intentional Interviewing and Counseling: Facilitating Client Development in a Multicultural Society. California: Cengage Learning.