Impact of Recession on UK Low Cost Airline Industry

In this article I will talk on the two biggest low cost airlines i.e EasyJet and Ryanair’s progress during the recession and what worked for them. In an interview with Judith Bogner of Bloomberg TV, the former CEO Andy Harrison revealed the profits earned for the year 2009 came up to an amazing £43.7 million before tax, making EasyJet amongst the very few airlines to make a profit during the last twelve months of recession.  The formula of success according to Andy was their great value offering which includes great prices to the most convenient airports. EasyJet has stuck to their core values, which allowed them to do well during the recession and as business pickups in the country, they will further see many improvements which will lead to even greater profits.  In response to In response to the question on the fluctuating oil prices, he added that Easyjet’s hedging is a form of averaging, which means that their fuel prices respond with a lag to movement in market prices. So for 2010, they expect GBP100 million improvements as their fuel hedges adjust to market prices. Easyjet continues to grow steadily and they have expectations of 10% increase in capacity during 2010 as the passeneger numbers grew by 3 to 4 percent during the recessionary period. Easyjet remains focused on short haul a flight which proves to be working as they seem to be in line to achieve growth plans of 7 to 8 percent annually. The passenger growth easily outstripped easyJet’s capacity increase over the recessionary period of just 0.8%, indicating that demand is still matching its growth strategy despite the Europe-wide recession.

Gert Zonneveld, analyst at Panmure Gordon, said easyJet had weathered the recession so far but a lengthy downturn could dampen the airline’s recovery. “The company is performing well given the current economic environment, but a sustained downturn could clearly delay a profit recovery.”

Ryanair’s CEO Michael O’Leary commented on the tough recessionary times the airline industry was facing and he added “Ryanair’s ability to grow both traffic and profits during the half year is a testament to the strength of Ryanair’s lowest fare model, and our relentless cost discipline. However these results are heavily distorted by a 42% fall in fuel costs, which has masked a significant 17% decline in average fares.  We expect average fares to decline by up to 20% during Quarters 3 and 4, which will result in both these quarters being loss making.  Despite this our full year guidance remains unchanged and will be substantially profitable, at a time when many of our competitors are losing money, consolidating or going bust.  Recent weeks have seen the demise of SkyEurope and Seagle Air in Slovakia, and MyAir in Italy, and we expect further casualties this winter.  Ryanair is the only major European airline to grow traffic and profits strongly.  We are winning substantial market share from the big three high fare flag carrier groups led by Air France, BA and Lufthansa and we expect this trend to continue”

Ryanair’s relentless focus on costs continues to deliver savings.  While fuel remains unpredictable, they have continued to decrease airport and handling costs, through our web check-in initiatives, and staff costs, with a pay freeze in both the current and coming year.  At a time when many competitors are cutting pay and jobs, Ryanair continues to provide safe and sound employment without pay cuts. Some of the major highlights that took place in the first half of 2009 in the recessionary period are as follows: 

·        Average fares down 17% to €39.

·        Traffic growth up 15% to 36m pax.

·        Net profit up 80% to €387m.

·        Industry leading net profit margin of 22%.

·        Ancillary revenues grew 8% to 20% of total revenues.

·        Unit costs down 27% (ex fuel costs down 5%).

·        100% web check-in from 1st October.

·        Fuel hedges extended for fiscal 2011, Q.1 to 50% and Q.2 to 50%.

 

 Despite the economic gloom, British consumer like travelling during the summers and things are not looking all that bad as the passenger numbers for both Ryanair and easyJet have continuously increasing and load factors have remained above 80% in spite of the fact that Ryanair didn’t have a great third quarter in 2008 as they did bear a loss of EUR102 million, a swing of EUR147 million compared to 2007, and easyJet’s 2008 year-end results were down 45% to £110 million (figures from Deloitte’s Executive Report). However customer demand is still going strong but, during these complex economic times both holidays and business passengers are looking for the best value available. Given the strong cash positions of both Ryanair and easyJet, there is evidently plenty of growth in the low cost sector to see this recession through.

 

. Being a large business with large capital requirements and barriers to entry, the supply of airlines is quite inelastic as there is no easy entry or exit. However, the demand is elastic as customers have choices to use other airlines to travel as the industry has become quite competitive. However, during the times of recession, the two low cost airlines, Easy jet and Ryanair managed to do well as they realized the elasticity of demand and focused more on customer retention and satisfaction. This is one reason why the two airlines did well during the recession.

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Production Possibility Frontier of Japan

The country I chose and my reason:

The country’s production possibilities frontier, which I have chosen is Japan. The reason I have chosen this country is because it had undergone a lot of bombing in the past, which had crippled its economy. Yet after the war Japan’s economy grown rapidly because of the huge foreign investments particularly from the US and because of manufacturing boom which took place after World War II. According to a recent census conducted in 2010, Japan’s population is approximately 128,000,000 making it the world’s tenth most populated country.

 

Some major exports in the technological field:

  After the war, the constituents of exports gained ground through technology. Primary products, light manufactures, and crude items, which predominated during the 1950s, were progressively adumbrated by heavy industrial goods, complex machinery and equipment, and consumer durables, which required large capital investments and advanced technology to produce. This process was emphasized dynamically in the case of textiles, which composed more than 30 percent of Japanese exports in 1960, but less than 3 percent by 1988. Iron and steel products, which had grown rapidly in the 1960s to become nearly 15 percent of exports by 1970, declined to less than 6 percent of exports by 1988. Over the same period, however, exports of motor vehicles rose from under 2 percent to over 18 percent of the total. In 1991 Japan’s major exports were motor vehicles, office machinery, scientific and optical equipment, and semiconductors and other electronic components. The GDP of Japan according to 2009 stands as $5.073 trillion (in the nominal GDP list of countries) $4.141 trillion (in the GDP PPP in the list of countries). Japan is mostly seen as a heavily export-dependent nation. As a percentage of GNP, however, the country exports less than many other major trading countries of the world. In 1991, for example, it exported 9.3 percent of its GNP compared with 14.9 percent for Italy, 18.2 percent for France, 18.2 percent for Britain, 22.1 percent for Canada, 24.8 percent for Germany, and 47.0 percent for the Netherlands. The United States exported a smaller share of its GNP at 7.4 percent. But Japan’s dependency still held high in 1991, on automobiles as just under half of all automobiles produced in Japan were exported.

 

Main Issue: Strategies to raise production possibilities frontier:

This article deals with the major productions of Japan and certain strategies as to how Japan can raise its production possibilities frontier. In comparison to Korea, Japan excels in assembling computers and cars. Yet Japan is exceptionally better in making computers as compared to making cars in which they are a wee bit behind. In order to make further growth in their production possibilities frontier it is suggested that instead of spending time making cars in which the opportunity costs is high as compared to Korea, that they should invest their time making computers. In making more computers, as compared to making cars of higher opportunity costs, they can trade their computers with Korea to get cars. In this way their production output will be more.

 

The four main resources of any country are land, labor, capital and entrepreneurship.

According to the Global Entrepreneurship Monitor survey of 42 countries, just 15% of working-age adults surveyed in Japan believed they had entrepreneurial skills. In order to deal with this issue it is a must for the Japanese universities to train their young adults in such a manner that they increase entrepreneurial activity in both the business sector as well as in government, educational and other sectors.

 

Concerning land, Japan plays a major role in air pollution as it is responsible for acid rain. It is seen as a culprit in emitting toxic gases into the atmosphere threatening: forestation, air and water in the Asian continent. The two main reasons are:

 1.)  Motor vehicles which “are the primary source of acid-forming pollutants such as nitrogen oxides, and are responsible for growing levels of ground-level ozone, a substance which hastens the formation of acid rain.”

Coal burning power stations which emit toxins such as Sulfur dioxide (SO2) and Nitrogen Oxides (NOx) into the atmosphere.

It causes a lot of problems for infants, the elderly and pregnant women who suffer from lung and heart illnesses and as a result of acid rain precipitations are particularly the most vulnerable. In order to deal with these health issues, Japan is in the process of increasing her spending on environmental issues. Japan’s global environment-related spending will increase 6 percent from the previous fiscal year. This money can easily be spent on the output of other productions only if this land issue is dealt with quickly.

In order to deal with the labor issues, Japan’s executives can be compared to the global agent executives, so that Japan can know in which areas it can improve itself.

Comparing Japan Globally:

Japan’s overall competitiveness, has fallen in the world ranking since the early 1980’s and 1990’s and the IMD world Competitiveness yearbook 2007, ranked Japan 24th on the list placing them behind china who were 15th. It is predicted that China’s GDP will drastically overtake Japan’s GDP by 2016

 Another indicator of Japan’s low productivity is due to the lack of Japanese white collar workers which is one of the lowest among the G-7 countries, along with this fact there are lack of women and foreigners contributing to their economy and are not a considerable part of the country’s work force.

The globalization of human capital in Japan is being taken seriously and corrective measures are being taken to improve Japanese competitiveness in the global market place.

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Internal Marketing Communication

Internal marketing communication is a combination of internal communication and internal marketing methods. It is regarded as internal communication with a marketing objective. It is a tool to win employees trust, commitment and buy in to achieve marketing goals and strategies. Human resources are a very integral part of an organization. Employees of a company provides it with competitive advantage in many ways. In almost all businesses, especially service related businesses, employees are a main interaction between customers and the company. Their selling and marketing abilities make a product successful or unsuccessful. In order to be productive, the vision of employees must be in sync with the company’s vision and goals. Internal marketing communication is an effort by the top management to win employees support in their marketing strategy which in turn results in greater employee effectiveness. Internal marketing is based on the philosophy that employees are the internal customers of an organization and hence, it is necessary to promote the firm, its policies, mission, vision, products and strategies to the employees of the firm. Employees and business partners are called internal customers because they interact within the organization in order to generate long term value to the company. In order to be effective, a firm must accurately segment the internal customers (employees) according to their own buying behaviour. Employees can be divided into three segments: supporters (who support the internal strategy), neutral ( who neither support, nor oppose the strategy) and opposers ( who outright refuse to or are against the strategy). Internal marketing communication aims to identify all the three segments of employees within an organization and then target all the three segments effectively in order to achieve a corporate culture comprising of empowered employees, equitable reward and recognition system and an overall good organizational structure that promotes learning, total quality management and business re-engineering. Internal marketing communication also plays a role in the three P’s of marketing strategy, push, pull and profile. The most important role played by internal communication is to decide upon which strategy to use for the company. Internal marketing communication plays a key role in internal marketing by communicating internal information within all departments in order to achieve organizational objectives. It aims to achieve the following purposes in an organization:

It creates a common understanding of the business organization which helps employees to identify if their personal goals are in sync with the goals of the organization. It gives an understanding to the employees of what the organization expects from them and how they can meet organization expectations. This helps the employees (internal market) to perform better.

It helps in promoting a culture of employee empowerment in order to encourage them to learn to take responsibility and accountability. In this way, employees are encouraged to come up with innovative ideas which help in new product development. Moreover, motivated workforce results in less employee turnover rate for the company.

It encourages employees to offer a superior service to customers which in turn results in greater market share and more profits for the company. By recognizing the importance of customers and appreciating their contribution to the success of the business, employees treat the customers more favorably.

Internal marketing communication integrates the organizational structure, HRM, culture, strategies and vision with the social and professional needs of employees and helps in promoting coordination and cooperation among different departments.

Internal communication can take place in an organization formally or informally. Internal communication should be top-down and bottom up in an organizational hierarchy in order to achieve the real goal of internal marketing communication. For example, the organizational structure of a company should be such that the subordinates have direct access to even the top most management of the organization and doesnot have to depend on their immediate managers to convey their message to the top management. At the same time, the structure should be transparent enough that any message by the top management must directly reach the lower management or staff without being passed through different intermediate channels. The different forms of communication that can place through the formal and informal channels are:

Formal channels:

Formal channel of communication includes those forms of communication which are framed according to the organizational structure. They include formal channels such as intranets, email, newsletters or any other electronic means. The other forms of internal communication can take place through periodic sessions, Open house, briefings, staff magazines, notices and posters. Traditionally, memos were used to communicate a message in an organization. However, with the advancement of technology, they are now replaced with emails.

Informal channels:

While formal channels are an important medium of intra organization communication, informal channels play and equally important role in the organization. For senior management to achieve continuous efforts from the part of employees, informal communication plays an important role.  There is no need for a proper medium or place for informal communication, it can take place anywhere such as canteens, while walking etc. Informal communication channels enable two way communications in an organization which provides top management important information regarding employees’ perception about the company. Informal communication includes direct face to face interaction, over the phone. With the advancement of information technology, new sources of information communication have also established such as blogs on company’s websites, video or audio conferences etc. Before any product is launched or marketed in the market, employees must be the first ones whose comments and suggestions must be taken into account by the top management. If for example, a company produces products which are targeted for middle income earners, for such a product, the best way to initially test the marketing strategies such as sales promotion is through the employees of the firm as most of them belong to the same market segment and more or less, have the same economic conditions of an average middle income household. This does not only hold true for lower staff, but for also middle and top management. The organization must first attempt to look at the internal market before launching the product in the whole market. Therefore, the best and the cheapest way to test marketing strategies is through internal communication. The events at Heathrow terminal 5 and its later consequences is a perfect case study to explain how internal marketing communication could have played its role to regain the image it lost due to negative publicity and lost customers. The terminal was developed as a state of the art, world class terminal but due to lack of risk management and contingency plans, it ended up with negative publicity as mismanagement resulted in chaos. In order to avoid such mishaps in future and to regain the popularity and customer’s trust, the top management of Heathrow Terminal 5 must use internal marketing communications effectively. First of all, they must form a risk management strategy, which must be dictated to all the employees through formal and informal channels, in order to cater to any such problem arising in the future. Proper contingency plans must be developed and all the glitches in the system must be solved in advance. Secondly, the management and employees must take responsibility for their actions and must ensure the customers and media that the mistakes will not happen again in future. Accepting the mistakes and taking responsibility can result in positive publicity as customers would feel that they are accepting their mistakes rather than blaming others. Finally, the management must identify their areas of weaknesses which they must communicate among employees so that the organization learns from its mistake. For an organization aiming to get TQM, analysing mistakes and learning to overcome them is an essential part of continuous improvement. In conclusion, in order to ensure that the mistakes are not repeated again, the organization must make use of risk management, well trained staff and a good organization structure effectively. All this can be achieved by using internal marketing communications which would have long term benefits for the company.

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The Diamond Water Paradox Principle

According to the diamond water paradox, water is needed to sustain human life, yet it has no value in front of diamonds even when diamonds have no such specific use except to be used as jewelery or in industrial machinery. This phenomenon can be explained by the economic theory of marginal utility and the law of supply and demand. The supply of water is in such a large quantity that its most urgent use, which is drinking to remain alive, is easily fulfilled. Therefore, any additional unit of water can be applied to less urgent uses resulting in a less worth for people due to a greater supply. Comparatively,  the supply of diamonds is so low that the usefulness of one diamond is greater than a glass of water, therefore, people are willing to pay a greater amount for diamond as compared to water. We can apply the same concept to explain the reason why an athlete earns so much money. It takes a lot of time and effort to become a professional athlete. Not everyone is capable of becoming a pro athlete; therefore, the supply of a professional athlete is far less than other professions such as engineers, doctors, accountants etc. Moreover, there is an international demand for athletes as they are being liked by numerous fans that are willing to pay a large amount to buy tickets to see their favorite athlete compete. An athlete with a larger number of fans has a higher salary as compared to an athlete with a less number of fans. So, being in a less quantity ( low supply) and a large number of fans ( high demand) results in a high marginal utility of professional athletes, therefore their salaries are high and they make so much money by showing their performances to the audience.

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Ecopreneurship- Entrepreneurs and Ecology

Introduction

At a very basic level, an ecopreneur is a person or entity which provides environmentally friendly services, goods, and technology such as recycling, green construction, or organic food. (Schaper, Michael.2002).  The term ecopreneur became quite popular in recent times as people and organizations became more concerned about environmental degradation caused by the activities of large companies who are only concerned about economic success. An ecopreneur is a business person or entity concerned about the whole humanity and the world we live in, and whose primary motive is not only to make profits, but to serve the humanity and to ensure that the world’s resources are available for the new generations. Large companies are also becoming more and more concerned with the concept of ecopreneurship as they find long term benefits in this model.

Ecopreneurship defined

The term “ecopreneur” is derived from two terms which are “entrepreneur” and “ecology.

            An entrepreneur is a person who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods and who accepts the risks associated with them. ( Schaper, Michael.2002) He can be anyone who identifies an opportunity in a market and has a belief that it would succeed in the economy and on that belief he starts exploiting the opportunity. They may create a new organization or may be a part of an existing organization where they revitalize the organization in response to their perceived opportunity. Generally, the word entrepreneur is used to denote a person who starts a new business but with time and more understanding of the subject, the revised definition of an  entrepreneur also includes “intrapreneurs”, that is an entrepreneur operating within a corporate environment. Entrepreneurs are the strategic factors in economic development and the central factors in the trade cycle as they are the driving force of an economy.

            Ecology or environmental biology is the branch of biology which takes into consideration the examination of living organisms in the natural environment. It includes the study of individuals, populations, communities, and ecosystems. (Goliath.2002).The ecology has reached enormous importance in the last years because of man’s interest in the environment in which he lives and to find ways to protect the environment in order to make it sustainable.

            The word ecopreneur is a portmanteau of “ecological” and “entrepreneur.” An ecopreneur is an individual who is focused on ecologically-friendly issues and causes, attempting to do business in a way which benefits the environment. He may not be a person or entity only involved in products like solar powered cells, water conservation system or compostable packaging. In fact, an ecopreneur is anyone who ranks environment more than or equally to profits as his most effective criteria as a business owner (reuters, 2007) . “While many entrepreneurs may be motivated, at least in part, to the mantra of “greed is great” on their journey to becoming a millionaire, growing numbers of ecopreneurs are adopting a different course, focusing on solving the problems facing society through the businesses they create, greening their bottom line. Many are redefining their wealth, as we have, not by the size of their bank account or square footage of their home. Wealth is defined by life’s tangibles: health, wellness, meaningful work, vibrant community life and family.”(John Ivanko.) . The main aim of an ecopreneur is to build a firm which is more sustainable and environmentally friendly.

            Sustainability development is a pattern of resource use such that it not only meets present human needs, but also preserves the environment so that the resource can also be utilized by the future generations. Sustainability is the balance of three spheres which are Economic, Social and Environmental. The three spheres and their interconnection can be understood from the following diagram:

What is an Ecopreneur?

“An entrepreneur whose business efforts are not only driven by profit, but also by a concern for the environment”.(Schuyler. 1998). The terms such as “Sustainopreneur”, “environmental Entrepreneur” and “eco capitalist” are synonymous with ecopreneur. The characteristics of ecopreneurs are:

·         They all undertake business ventures which involves a measure of risk

·         They must identify a feasible business opportunity

·         Their activities must have a positive impact on the environment.

·         The degree of intentionality separates ecopreneurs from accidental entrepreneurs.

The driving forces behind ecopreneurship are as follows:

1.      Global population growth: Ecopreneurs realize that as the resources and land area is limited, so it is their responsibility to ensure that there are enough resources not only to fulfill the needs of the current population which is growing continuously, but also for the future generations. Hence they should find ways to conserve energy, materials, and resources by developing new technologies or finding ways to control birth rate and finding ways to meet the food and shelter demand for the growing population in order to make sustainability possible.

2.      Increasing life expectancy: Ecopreneurs value life, not only their own and of family members, but of the whole humanity. They want everyone to live a longer and healthier life, that is why they develop products and ways to increase life expectancy such as healthier food, purified water etc.

3.      Climate change: Climate shapes the way we live on this planet and the way we live, work and play is advertently changing the climate.  The pollutants released in the air due to use of fossil fuels is adversely affecting the climate. In order to sustain the climate, ecopreneurs are involved in finding alternate ways to produce energy such as using wind, water and solar energy.

4.      Resource scarcity: The diminishing natural resources are a great issue as we will be left with no natural resources if we do not sustain them. In order to sustain them, ecopreneurs constantly look for alternatives by recycling them or using a cheaper, abundantly available resource if possible.

5.      Lack of equity in the world: the people of the world are living in a continuum, with one end which has all the facilities of the world including the best quality food, water and home, while on the other end are people who do not even have the basic necessities of life. Ecopreneurs want to make sure that every living being on the world is treated equally so that no one is deprived of anything. That is why they are active members of movements such as WTO and also find ways to produce goods and services affordable by everyone. They are also involved in philanthropic acts such as giving charity donations to help the deprived people of the society (Environlution, 2010).

Ecopreneurs can utilize green issues as a competitive advantage for their enterprises on the basis of the four principles known as Natural Step principles. The guidelines in these principles are (Harper, gavin.2009):

1.      Energy and Resource Use Efficiency and Maximization:

“In nature, one-way linear flows do not long survive. Nor, by extension, can they long survive in the human economy that is a part of the earth’s ecosystem. The challenge is to redesign the materials economy so that it is compatible with the ecosystem”. (Lester Brown. Earth Policy Institute). By minimizing waste production and maximizing reuse of waste streams, sustainable business can potentially significantly increase profits.

2.      Ecosystem Services: Services related to protection of ecosystem and natural resources and preventing environmental degradation can be an inspiration for a green business idea for ecopreneurs.

3.      Natural step principles: ecopreneurs can see potential risks, such as extinction of substances extracted from the Earth’s crust or overharvesting etc, as opportunities for success through green business.

4.      Eco- efficiency and eco- effectiveness: ecopreneurs should find methods of decreasing waste while increasing productivity such that the waste of the production process and the product itself can be the raw materials of a new product of service.

Sustainability development over the next several decades offers vast new business opportunities with value up to $6.2 trillion (Connor, Michael.2010). Companies who are proactive in their approach and want to survive in the long run can utilize these opportunities to generate large profits and at the same time build rapport for being environment friendly. According to a study, by 2050, there would be vast opportunities for businesses as the global challenges of growth, urbanization; scarcity and environmental change would become the strategic drivers for businesses (Connor, Michael.2010). Moreover, in today’s time, the awareness and the effort to protect the environment have increased to a great extent. People expect from the companies that they should not only be there to make profits, but must also serve the society and the environment because, after all, the society and the environment are the driving forces of any company. The term “Corporate Social Responsibility” or commonly known as CSR is used to denote to a business’s responsibility towards the society and environment. Many companies are now engaged in CSR activities. But, the biggest hindrance in the company’s efforts to protect the environment and for long term good of the company is the stakeholders who expect only economic success from the companies which is usually measured in short spans of time. Capital is extremely mobile, so stockholders are more interested in policies that quickly generate profits by raise in share prices rather than in policies which would work for the long term success of the company (Cobb, John B.1998).  .

     By implementing ecopreneurial policies, companies can achieve both objectives, that is, generate profits to keep stockholders happy and at the same time achieve sustainability (Shah, Anup.2002). For example, companies can save fuel costs by using energy efficient mechanisms which would ultimately result is more profits as the total cost would reduce. Moreover, the company can also gain popularity by adopting green businesses which would help in gathering a larger market share as consumers today are more attracted towards companies which are environmentally friendly. Companies can also gain competitive advantage if they find niche in the green-industry and are able to become efficient by increasing the productivity (Goliath, 2002). Companies who enter the market with a long term vision of surviving and growing for decades such as Coca Cola and P&G, are concerned about the protection of natural resources and the environment as they would be needing them in the years to come, that is why they try to find means of preserving them or by finding ways to minimize their uses by reusing the same resources.

      We have examples of many companies who have become very profitable by adopting the business models of ecopreneurs. Industries such as recycling plants, energy production by using waste materials, using byproducts for packaging and making new products etc have grown a lot in the recent years and still there are innumerable opportunities in the green- industry. By exploiting these opportunities, companies can not only make profits but can also protect the environment and make it sustainable for the new generations.

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Essentials of a good Business Logo

It is vital for any successful business to have a unique and individual identity in the industry so that the customers can remember them and pick them up from the crowd. Perhaps the best way to have a unique name for a company is by creating a unique business logo. A business logo is an important part of the brand name as visual recognition enables the customers to remember the company name easily and helps them distinguish among the competition. A lot of research has proven that brand loyalty extensively depends on the recognition of the company by a customer and the best form of recognition is through the visual design of the product which ultimately depends of the logo of the brand. A successful logo design comprises of two step process: concept and execution. A unique and successful logo is dependent on the balance between these two qualities. First we will talk about the Concept stage of a good logo. The concept of the logo defines the type of information a logo will reveal about the company. Some companies prefer a simple and professional logo while some prefer to use flashy and complex logos, focusing more on the features and characteristics of the company. The conceptual stage involves a lot of brainstorming and word associations and researchers try to answer questions such as what does the company want the customers to think about the company when they see the logo and which physical entities represent those thoughts and ideas? The execution stage involves the actual artwork involved in designing the logo. It becomes vital as the logo design itself should be unique and must help the customers remind them of the company over the competition. Having a distinct and eye catching logo ensures that customers will recognize them by name. the concept of the logo is already established by logo design researchers and at this stage, the details such as the use of color, style and fonts will be established. A successful business logo depends on the designer’s ability to find an equal balance between both the concept and the execution. A business may not achieve a unique and successful logo if any one of the two stages are not implemented successfully which might result in a great concept failing in the execution process resulting in a terrible logo or an excellent execution of a bad concept.

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Importance of Logo Design in the Corporate world

In the corporate world, the image of the company or the individual holds a lot of importance as the image helps all stakeholders to build up a perception about the products or the company as a whole, which may be entirely different from the real picture. Business owners usually face a lot of difficulty communicating to their consumers how their products are different from the competition and this is where the image of the company plays an important role.

One of the ways to create an image of the company is through the use of logos. With time, this way of creating an image has become so important that now; every branded product or service has a unique logo to represent it.

As there are numerous logos for products or companies, it is very important that each logo should have an attached meaning which provides a subconscious message to the consumer about the company or the products when he/she sees the logo.

In order for a logo to be unique and meaningful, it must possess the following features:

Integrity: A logo must represent loyalty, honesty, determination and dependability of the company and the product.

Value: A logo should be designed such that it shows some value so that the customer can perceive that he/she is receiving some value for money.

Leadership: A logo must display the influence of the company that it is superior to the competition.

Innovation: A logo must represent the company as being creative and its ability to meet the demand of the consumers.

An entrepreneur who is looking for a logo for his company must first assess the elements he must use to present the image of the company in the market. If he is aware of the elements, a logo designer can create a logo for him which sends a subliminal message about the company’s image which easily records into the subliminal minds of the consumers.

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3 Simple Rules for a Good Logo Design

With the advent of many logo design companies and free lance logo designers, logo designing has become a famous profession and with its extensive use in all types of businesses, the demand for logo designers has increased vastly. Whether it is for a company, or just for a hobbyist who likes designing logos, there are certain rules of the logo designing game. Following are certain rules which the designers must follow at any level of experience he/she is at:

1.       Keep the design simple:

Designers spend a lot of time in trying to make their logos as sophisticated as possible and they end up making a mess out of the logo. The key to a unique and attractive logo is to keep it as simple as possible and yet attractive. The aim of a good logo is to get registered into the minds of the people so that they can recall the brand or the company when they come across the logo, physically or just mentally. Professional logo designers spend half the time in just creating and simplifying the logo concept while the other half is spent of creating and then revising the final logo.  Clever logos, such as Microsoft or Google have nothing but text written in different fonts and styles, but the clever use of typeface has made them unique and easily identifiable.

2.       Use proper colors:

Colors play an important role in your logo. Colors must be used according to the attributed industry colors such as green for gardening logos. Before deciding on which colors to use for the logo, ensure that the same colors would be used for your business cards, website etc, therefore, give extra importance to the colors you use for your logo.

3.       Design a flexible logo.

Flexibility, in relation to logo designing, means that the logo you design should look good in both colored and black and white versions. Moreover, the logo you design should be scalable so that it looks good in all sizes, whether it be on a small business card or a giant screen.

In conclusion, your logo design tell your customers who you are, so give them the right message and this could be achieved by following the three simple rules mentioned above.

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Importance of a Professionally Designed Logo for Businesses

Business owners or executives may be experts in managing the activities of the business but knowledge about the logo design of a company and its value is an entirely different thing about which, even the best managers do not have enough knowledge and understanding. This is why, large companies, who truly realize the value of a logo and the long term effect of the logo on the company, pay hefty amount of money to professional designers to get a logo made. But then again, there are those companies as well who do not bother to take care about the business logo for their organization. They do not know the intricacies of the logo designing business and are even satisfied with a funny picture and the company name written in bold as a logo.

For serious business owners who really give importance to all the aspects of their company’s reputation, it is always advisable to get a logo designed by a professional logo design company. You will just be amazed by the vast knowledge they have about logo design and the value of a good corporate logo. A professional logo design companies gives a deal of importance to gathering knowledge about the company, its products, its mission and vision and the long term goals of the company. Once all this information is gathered, the think tank of the logo design company input its intelligence and experience in coming up with the ideas for the logo design.

At times, it is also seen that even if the design of a product is not good, the company logo alone helps promote the sale of that product. A professionally designed logo ensures that it is simple and at the same time describes all about the company. A professional and creative logo doesn’t come up using any fancy programs which are easily available in the market, rather, it is the creative mind of the designer who creates a professional and custom logo design.

Always keep in mind that a professional logo cannot be made using programs or software, if this would have been the case, then advertising and designing agencies would not have hired professional designers at handsome salaries if they didn’t know their job. If you enter a superstore and just observe the shoppers for a while, you will see that most shoppers would reach out for products easily which have an attractive logo design, catching the eye of the customers from a distance. This little observation is a proof of a professionally designed custom logo which is visible to the client even from a distance and which easily registers into the minds of the customers. The companies making such products are that that truly realize the importance of a good logo design and that is why they spend time and money in designing the logo. The customer would buy their product even if similar products of a better quality are available in the market.

This is not done and shall never produce a professional logo. If it could, then do the leading advertising and designing agencies employ artists and designers who do not know their job? They spend so much time in designing a corporate logo design using simple tools like paint, brushes, pens and pencils. Many of these artists and designers have created a number of successful corporate logo designs. Designs that have launched many important products! To know the true value of a proper and renowned corporate logo design, just visit a superstore and wait there for some time observing the shoppers. Quite a few of them keep on moving around hunting for specific products and suddenly they can find out the product they need from a distance.

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