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Big mac index & Starbucks index - Its relevance in global business development.

The global marketplace is an ever-changing space. This is perhaps especially true in the financial sector, where currencies from all over the world come together and are routinely evaluated and reevaluated with every fluctuation of the market. Certain currencies tend to stay fairly stable as far as valuation is concerned and the spectrum within which they move is narrow. For others, the fluctuations are far more significant. In order to look at the value of currencies in an interesting way, two special “indexes” were created. These are the Starbucks “Latte Index” and the “Big Mac Index”. What are the Latte Index and the Big Mac Index? The Big Mac Index is the older of the two indexes in question and was created in 1986 by The Economist. It was never intended to be a serious measure of currency valuation, but rather a lighthearted approximation of how global currencies compare to one another. The Latte Index was created by The Wall Street Journal in 2017 an...

Measurement of customer satisfaction in marketing research

We can measure customer satisfaction level of marketing research projects using PZB model. According to Parasuraman, Zeithaml and Beiry (PZB) model, Perceived Service Quality = Perceived Service - Expected Service . Based on their research work, they identified that customers consider five dimensions in their assessment of service quality which results customer satisfaction, as given below: Reliability: Ability to perform the promised service dependably and accurately Responsiveness: Willingness to help customers and provide prompt service Assurance: Employee's knowledge and courtesy and their ability to inspire trust and confidence. Empathy: Caring, individualised attention given to customers Tangibles: Appearance of physical facilities, equipment, personnel and written materials Scale can be developed for these attributes and weightage to be assigned. Then use an empirical model to calculate Perceived service. Assume...

Think in system 2, communicate in system 1

According to psychologists, there are two different types of thinking – system 1 and system 2. System 1 is fast-paced thinking we seem to do almost automatically while system 2 is more thoughtful and only activated when needed. We have two systems because a lot of our day is taken up by routine. To cope with the repetitive actions that don’t require much thought, we’ve developed an “automatic” thinking process in system 1. It requires less energy than system 2, so we use it throughout the entire day. System 1 is prone to errors and bias, making us think more emotionally and impulsively. On the other hand, system 2 is only engaged when it is needed. When we want to make an educated, rational decision, or when system 1 encounters something out of the routine, the part of our minds that do the “heavy lifting” comes into play. Brands and companies can utilise these thinking systems when building their marketing strategy. Businesses need to think in system 2 but communica...

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