Limitations of Marketing Research free essay sample

Explain the limitations of marketing research used to contribute to the development of Nivea. No matter how small or large a market research project may be, any type of research performed poorly will not give relevant results. In fact, all research, no matter how well controlled, carries the potential to be wrong. There are many reasons why research may not give good results but a common problem is deciding whether the research is really measuring what it claims to be measuring. There are 3 types of limitations of market research. These are Cost effectiveness, reliability and validity of data collected. Reliability is chiefly concerned with making sure the method of data gathering leads to consistent results. For example; Nivea need to make sure that in their market research that they were asking the same questions asked of each person, was the sample big enough and reflective of the people who will use/buy the product would the same results be obtained from a different set of people. Reliability estimates the degree to which a product is measures in contrast to validity which involves the degree of accuracy. In research, Nivea will want to use measurement tools that are both reliable and valid. They will want to create questions that offer consistent responses when asked multiple times as this shows reliability. Validity asks whether the research measured what it intended to. Validity implies reliability: a valid measure must be reliable. But reliability does not necessarily imply validity: a reliable measure need not be valid. Validity is usually considered more important than reliability, because if an instrument does not accurately measure what it is supposed to, there is no reason to use it even if it measures reliably. Nivea needs to consider when carrying out their market research for a product is does the product measure what it claims to measure and is it accurate, this reduces the chances of the business making the wrong decision. If they so happen to make the wrong decision this will affect one of its marketing objectives which is to retain customers and gain new ones, if the validity of their data is not correct then they will not reach this marketing objectives as customers opinions of the company will differ. Costs are also an important consideration in market research, Nivea need to consider whether or not the product theyre promoting is cost effective. Their market research has to weigh up the cost of undertaking the research against the potential benefits that may result. You could spend a lot of time and effort in trying to solve a problem through market research, only to find that the solution may not be worth implementing. Also, marketing is one of the few areas of a budget that can be reigned in without hurting Nivea too much as they are a very successful business however, one of their marketing plans is to continue producing successful skin products and boost sales yearly. To do this they have a few cost-effective ways that a company can market its products. Search Engine Optimization- Niveas customers are no longer waiting for direct mail pieces to arrive before ordering–they are finding products when they want them through Internet searches. In fact, almost 90% of new visitors to a web site originate from major search engines. And clearly, a top ranking on Google can translate into hundreds or thousands of visitors– and orders–a month. As web pages proliferate, increasingly more aggressive search engine optimization strategies are needed to remain visible to Niveas customers. Permission-based Email Marketing. Permission is the difference between legitimate email marketing and spam, turning email marketing into a highly cost effective marketing strategy. The idea is simple and time tested: Nivea deliver highly relevant, timely, and personalized email messages to their customers and prospects at a fraction of the cost of direct mail to avoid any cost limitations. 3. Public Relations- News releases, white papers, case studies, awards, and sponsorships of educational events are just a few of the relatively inexpensive ways Nivea keep their brand name in front of other competitors. Although these methods have succeeded so far for them in the near future they will have to alter their methods as well as their approach to the types of market research they decide to carry out, otherwise poor market research will increase the chances of Nivea making a wrong decision. D2) Make and justify three recommendations for improving the validity (the extent to which a test measures what it claims to measure) of the marketing research used to contribute to the development of your chosen organisation’s marketing plans. In this assignment I will be explaining how Nivea uses marketing research for its marketing planning by applying a Marketing Planning Process Model, a SWOT analysis on Nivea – giving at least 3 factors for each box) and their SMART objectives (stating what their business objectives are/might be) Marketing planning is concerned with establishing objectives and goals, allocating resources to meet these and setting out a clear plan of action. It also involves setting out ways of evaluating performance against marketing targets. Typically, the marketing planning process involves: a PESTLE audit, a SWOT analysis, setting SMART objectives, determining strategy and tactics, implementing strategy and tactics and evaluating effectiveness of marketing activity. A Marketing planning process model involves a PESTLE and SWOT As part of the marketing planning process, Nivea has to analyse its external environment. One useful way of analysing the external environment is by grouping external forces into six areas using a PESTLE analysis. PESTLE stands for political, economic, social, technological, legal and environmental influences. Political factors that affect a business are usually beyond the control of the organisation. However, the business needs to anticipate changes and identify the action it needs to take to either make the most of an opportunity or mitigate a threat. For example, a political factor that Nivea need to consider is that during a recession, any banks or financial services providers would have to consider the likely government scrutiny of any of their business decisions. Economic factors can affect the performance of a business. These relate to he national – or international economy. A economic factor that can affect Nivea are the periods of prosperity that they go through. This can happen in three ways for example when high employment and income drives demand within the organisation. It can also happen in the form of recession when demand falls, leading to lower income and employment within their organisation. Furthermore, in the form of recovery, when demand, income and employment gradually rise within the business. Social factors relate to the values and beliefs of society. This includes the population’s demographics (for example, size, gender, ethnicity, income, education, occupation). These social factors provide useful information for Nivea as it allows them to target their services at broad segments of the population, such as newspapers and magazines. Technological developments can affect businesses in a range of ways. For example, the development of e-commerce benefited business such Amazon. co. uk. Due to the rise in e-commerce Nivea had to produce a e-commerce website which eventually took business away from traditional shops.. Legal developments affect businesses in a range of ways. For example, if there was a change to the Data Protection Act it would affect Nivea and all other businesses that hold customer data. For example If a change in the act occurred then Nivea may not be able to expressly agree to the use of personal data for advertising or marketing purposes any more. Environmental factors can relate to the social, political and legal aspects affecting a business. For example, if Nivea decide to package their cream products in recyclable packaging. This may prove to be popular with consumers if there is a growing level of concern over waste. Similarly, the government may put pressure on businesses to increase the amount of recycling. SWOT analysis A useful approach to examining the relationship between a business and its marketing environment is by conducting a SWOT analysis. SWOT stands for: †¢ Strengths †¢ Weaknesses †¢ Opportunities and Threats. Strengths and weaknesses are internal to the business and can include issues such as the buildings, quality of the staff, IT systems and so on. The external element looks at the opportunities and threats present in the environment in which the organisation operates. Carrying out a SWOT analysis requires research into an organisation’s current and future position. The idea is to match an organisation’s strengths and weaknesses with the external forces (opportunities and threats). SWOT analysis draws together all the evidence from the various analytical techniques used. It is a way of producing a summary, which then provides the basis for developing marketing objectives or aims and ultimately strategies or plans. Strengths refer to the internal features of Nivea, which provide a competitive advantage. An example could be a highly efficient IT system which they use to design their products. The company also has a sound financial base, so it had the resources to put together a strong marketing campaign. Also, Nivea has staff with relevant skills – researchers with the scientific skills to develop products that men want and marketing staff with the skills to help promote these products effectively. Weaknesses are internal aspects of the organisation, which may not stand comparison with competition or are not performing effectively. An example might be major concerns and questions that Nivea have when launching a product For example; Was the product range still relevant for the target audience? Did it have the right sales and distribution outlets? Was its market research up-to-date? Opportunities focus on events and developments external to an organisation. This might include new territories for a product or service. Opportunities that Nivea will want to undertake is to open a new segment of a market. Also, NIVEA FOR MEN had seen an increase in the sales of male skincare products and it wants a greater share of this market, Nivea might might consider this. Furthermore, the company wants to take advantage of changing social attitudes such as men becoming more open, or certainly less resistant, to facial skincare products. Threats are developments external to the organisations, which could damage overall performance. These threats can originate from governmental policy, such as an increase in corporation tax or new laws. Threats to Nivea are consumers who are becoming more knowledgeable and price conscious. They often expect sales promotions such as discounts and offers. Also, the risk of competitors entering the market.

Sample Annotation of an Essay

Sample Annotation of an EssayA sample annotation of an essay is a very useful and informative method for readers to reference for help when they need it. It gives you an idea of what the examples are and can help you choose different options.The first annotation is to offer a general overview. It is important to keep in mind that this is a short essay and also to encourage readers to not become overwhelmed by reading it. For this reason, you should provide a wide range of examples in the first paragraph and show your own experience with things.The second annotation is usually the basic section. It will help you to provide additional information such as examples in which the article starts to make sense. Examples for both paragraphs should include the sentence that was quoted in your essay and the main point of the article as well.Annotations should always follow the sentence that was quoted in the introduction. This helps readers to understand the article and enables them to be more familiar with it. You should also indicate whether it is just one example or more examples can be included.After providing an explanation of the main points in the essay, it is advisable to move on to an additional example which is the summary in which the entire paragraph is composed. You should start your paragraph at the end of the essay with examples, giving further clarifications and suggestions.Your annotation should always indicate the exact page in which the sample was used. In cases of short essays, it is important to give examples in the first two sentences or three sentences and then end with examples that can be related to the essay. If the essay is longer, you may use more examples in the conclusion or an additional paragraph.You should note that even though you have provided extra information to explain further, your essay is not complete without this sample annotation. It will make it easier for readers to get a better understanding of the essay. Also, by incorporatin g it, it will help to know how to put the research and reference correctly into the essay.

Movie Summary East is East Essay Example

Movie Summary East is East Paper 1.0 Synopsis Sajid Khan is a British-Pakistani boy who lives in Salford, North of England in 1976. Sajid, now 15, has reached puberty and tried to figure out who he is and where he belongs. His father embraces Pakistani background and forces Sajid to do the same. He doesnt want to embrace his Pakistani life as he was born and raised as an English man. In school, he often gets bullied by his schoolmates due to his Pakistani background. He plays truant to avoid the bullies and to fill his empty mind by shoplifting then get caught. Sajid has two brothers, Nazir, and Maanir. Maanir is in Pakistan on a mission to find a Pakistan girl to wed to and bring her back in the UK and live there. Nazir rarely communicates with them and has an English girlfriend in England who is unaware of his true ethnicity. A devastated George, states all of his other children in England have become British, and he cannot lose Sajid as well. So, he decides to take him to Pakistan to meet his extended family. In Pakistan, Sajid cannot picture himself living there, so he becomes grumpy and ignorant all the time. Later, Sajid gradually appreciates his culture and new surroundings which please George. Sajid’s mother, Ella comes to Pakistan and intended to bring Sajid back to England but surprise to hear that her son isnt coming back home. Ella meets George first wife, they fight at first but instantly makeup, and George told Ella he loves her so much. The film ends with George and his England-based family returning home and Sajid fi nally proud of his Asian background while George is happy now serves Pakistani-style kebabs. (Wikipedia, 2001.) We will write a custom essay sample on Movie Summary East is East specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Movie Summary East is East specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Movie Summary East is East specifically for you FOR ONLY $16.38 $13.9/page Hire Writer 2.0 Cultural Elements I. Individualism Vs. Collectivism Scene George and Sajid have just arrived at the airport in Pakistan. When they leave the airport building, a great mass of people including their relatives is outside waiting for the British guests. Sajid is quite confused and mistakenly greets an old beggar woman who is

Free Essays on Robin Of Sherwood

The first story I read about Robin Hood was â€Å"Tuck, Much, and little John†. This story was about Robin and his outcasts including Tuck and Much as most of his other stories were about. But this story was about Robin, Tuck and Much in search of a man that could teach them how to wrestle. One day the three of them went fishing and they caught a fish that could feed them and all the outcasts. Little John had asked them for the fish and Robin said that he would have to knock Tuck off of the log and the first to fall in the river would get the fish. Little John beat friar Tuck and he also beat Much after he challenged him out of anger. Robin angrily pointed an arrow at Little John’s chest before Little John stated that he was only looking for a meal and that he wanted Robin to shoot him because he had nothing to live for. Robin did not shoot him and after talking to Little John made a deal that if Little John taught them to wrestle they would rebuild the house that the sheriff burnt down, the house Little John once lived in. The Second story I read was â€Å"The Silver Arrow†. It was about the Sheriff trying to yet again kill Robin Hood of Sherwood. He tried to lure Robin into a contest where the Sheriff knew Robin would be winner. It was a contest of the best Archer. The prize was 100 pounds and a Silver arrow. Robin wanted to join as much as it may danger his life and he did. Robin was victorious and he knew it would be hard to escape once he won but he had a plan. He had troops of outcasts ready to fight and although he won the battle and the contest he lost some men. Much retrieved the prized and brought them to Robin. The third story I read was â€Å"The Sheriffs Revenge†. This story was about The Sheriff trying to kidnap Robin’s son Martin Hood. When he succeeded in kidnapping little Martin Hood, Marion thought of a plan to save him without Robin Hood getting killed. She would pretend that she was going to turn Robin i... Free Essays on Robin Of Sherwood Free Essays on Robin Of Sherwood The first story I read about Robin Hood was â€Å"Tuck, Much, and little John†. This story was about Robin and his outcasts including Tuck and Much as most of his other stories were about. But this story was about Robin, Tuck and Much in search of a man that could teach them how to wrestle. One day the three of them went fishing and they caught a fish that could feed them and all the outcasts. Little John had asked them for the fish and Robin said that he would have to knock Tuck off of the log and the first to fall in the river would get the fish. Little John beat friar Tuck and he also beat Much after he challenged him out of anger. Robin angrily pointed an arrow at Little John’s chest before Little John stated that he was only looking for a meal and that he wanted Robin to shoot him because he had nothing to live for. Robin did not shoot him and after talking to Little John made a deal that if Little John taught them to wrestle they would rebuild the house that the sheriff burnt down, the house Little John once lived in. The Second story I read was â€Å"The Silver Arrow†. It was about the Sheriff trying to yet again kill Robin Hood of Sherwood. He tried to lure Robin into a contest where the Sheriff knew Robin would be winner. It was a contest of the best Archer. The prize was 100 pounds and a Silver arrow. Robin wanted to join as much as it may danger his life and he did. Robin was victorious and he knew it would be hard to escape once he won but he had a plan. He had troops of outcasts ready to fight and although he won the battle and the contest he lost some men. Much retrieved the prized and brought them to Robin. The third story I read was â€Å"The Sheriffs Revenge†. This story was about The Sheriff trying to kidnap Robin’s son Martin Hood. When he succeeded in kidnapping little Martin Hood, Marion thought of a plan to save him without Robin Hood getting killed. She would pretend that she was going to turn Robin i...

GBST300 Essay Example | Topics and Well Written Essays - 250 words - 5

GBST300 - Essay Example World Bank is mainly an institution concerned with development whereas the IMF focuses on maintaining orderly payment systems between countries. IMF has no subsidiaries while World Bank has subsidiaries across the world. The structure of World Bank is also more complex than that of IMF. It means different things to diverse people but the most vital aspect is the economic dimension of globalization, which has led to opening up of economies to global competition, giving room to ideas, goods, capital and people to interact and move freely between countries. Free market, justice to all people, and personal freedom are the main elements of neoliberalism. It relates to Washington consensus in the sense that it encourages economic policies that aimed at reforming and repairing the damaged economies of third world countries. Both neoliberalism and Washington consensus focus on making the world a better place to live in for all people around the world. He thinks so because via education and government accountability, poverty can be eliminated. However, the movie End of Poverty disagrees because corruption and poor policies to eradicate poverty does not exists. Poverty eradication demands sound policies and zero tolerance to corruption, which is deficient in many governments. In sum, government is not committed to eliminating poverty. The four gaps include human trafficking, lack of education, over population and corruption. These gaps make leaders in developing countries fail to take responsibility of their actions. The four traps drain most governments of the energy required to make progress in development because governments of developing nations tend to have their attention diverted to other things that just affect development negatively. As such, the countries remain contained within the poverty cycle. Globalization has destabilized the economies of poor states and uncovered people to

Homeland Security Essay Example | Topics and Well Written Essays - 1500 words

Homeland Security - Essay Example The suddenness of the attacks on September 11, 2001, and the manner in which America was caught off guard, would shape our perception of the war on terror and frame America's response. Previous wars had unfolded methodically in the public's eye, such as the extended debate that preceded the Civil War. However, the War on Terror had no such incubation period to give the American public time to orient themselves to the new face of war. America was thrust into war "without any troops or plans in place to confront this particular enemy. Just as important, it occurred in a context of public indifference to or ignorance of the threat posed by terrorists" (Callahan, Dubnick, and Olshfski 555). The US had made few, if any, plans to deal with a terrorist arrack on US soil, and the discussion of terrorism was largely restricted to the law enforcement, investigators, and prosecutors that had confronted domestic terrorism such as the Unabomber and the attack on the Murrah Federal Building (Calla han, Dubnick, and Olshfski 555). The Congress took aggressive action and on October 4, 2001 introduced HR 3026 "To establish an Office of Homeland Security within the Executive Office of the President to lead, oversee, and coordinate a comprehensive national homeland security strategy to safeguard the Nation" (HR 3026). On November 25, 2002 George Bush signed into law PL 107-296, the Homeland Security Act of 2002, which established the Department of Homeland Security (Gressle CRS-2, CRS-6). ... The Department of Homeland Security (DHS) would consolidate intelligence efforts, provide for broad powers of investigation, and limit specific legal standards in regards to terrorism. The Homeland Security Act and the formation of the DHS gave the government sweeping new powers to patrol the US borders and took a more liberal approach toward domestic surveillance. The DHS was formed to consolidate intelligence and investigations when "The establishment of the Department of Homeland Security brought under one authority 22 federal entities with vital roles to play in protecting our Nation and preventing terrorist attacks within the United States (The National Security Strategy). Border patrol and customs has been especially challenged with 500 million people crossing our borders each year, and 21,000 containers entering the US through 350 commercial ports of entry every day (Bodenheimer). Bender reports that, "The Secure Border Initiative, costing more than $2 billion this year alone, is a major effort to increase Customs and Border Protection personnel, introduce detection technologies, and construct a fence along the border with Mexico". The DHS has also placed sp ecific priority on the increased use of 'tamper-evident' containers, biometric identification technology, and radiation, chemical, and biological threat detection equipment (Bodenheimer). In addition, there has been an increased level of domestic intelligence activity designed to weed out suspected terrorist cells. Marrin describes these increased efforts as: Additional controversial domestic intelligence programs include the Justice Department's proposed Operation TIPS for public reporting of suspicious activity, the modification of

Difference between monetary and fiscal policy essay

Difference between monetary and fiscal policy essay Describe the difference between monetary and fiscal policy in the UK and explain how such policies can be used to achieve different macroeconomic government objectives. The main and most obvious difference between monetary and fiscal policy is that monetary policy is set by the central bank and fiscal policy is implemented by the government. In the case of the UK, monetary policy is decided upon by the Bank of England which since 1997 has been independent from the government. It would be worth considering the two types of economic policy in more detail now before turning to look at how they can be used to help meet macroeconomic government objectives. Monetary policy is the attempt to control macroeconomic variables through the setting of interest rates. It is a rather blunt policy tool as its effects can be felt throughout the economy as a whole. By changing interest rates, the Bank of England is trying to influence the overall expenditure in the economy as well as controlling inflation. Reducing interest rates makes borrowing the more attractive alternative to saving which then leads to more spending in the economy. Lowering interest rates can also make assets such as property increase in value which also leads to more spending as homeowners extend mortgages and consume more. By cutting interest rates, it is hoped that this increased spending feeds through to output and then to employment. Increasing interest rates on the other hand, has the opposite effect by making saving more attractive than spending and therefore overall spending in the economy is reduced. Fiscal policy is controlled by central government. It can be defined as, â€Å"a governments program with respect to (1) the purchase of goods and services and spending on transfer payments, and (2) the amount and type of tax† (Samuelson and Nordhaus, 1998). It involved the government changing levels of taxation and spending in order to influence the level of aggregate demand (AD). The purpose of fiscal policy is to reduce inflation, stimulate economic growth and to stabilise this growth and avoid periods of ‘boom and bust which characterised the economy during the 1980s and early 1990s. If monetary policy is described as a blunt instrument then fiscal policy is a precision tool that can target particular sectors of the economy and population in order to achieve the desired economic changes. Both these different types of policy are working towards achieving different macroeconomic objectives. It would be worth looking at these in greater detail now. There are four major macroeconomic objectives that any economic policy should be working to achieve. These are full employment; price stability; sustainable economic growth and; keeping the Balance of Payments in equilibrium. These four different objectives compete with each other and all achieve different levels of importance depending on the priorities of the government. During the 1960s, the Balance of Payments took centre stage. This was before the global economy made operating with a deficit a viable and sustainable option. Nowadays most governments operate with a budget deficit and the balance of Payments is no longer seen as a top priority for the government. In 2007/2008 the UK government showed a deficit of  £38.7 billion which is around 2.7% of gross domestic product (GDP). The general government debt is around  £614.4 billion which is around 43.2% of GDP (ONS, 2008). In the 1960s such levels of debt would be unthinkable but now they are just part of a global reality. In order to implement social programs and fulfil spending promises, the government is forced to borrow from global institutions. This has become a global reality. These current times of economic uncertainty only increases the amount of borrowing by governments all over the world. Full employment enjoyed similar prominence in the period after the war until the 1980s. Full employment meant that more people were contributing to the economy both in terms of output and through taxation. It also meant that the government had to spend less on social programs. This full employment was aided by a largely industrial economy which started to decline in the 1980s. Thatcher wanted to restructure the economy to make it more efficient and move it away from its industrial base. Full employment is still an important objective and it is one that is gaining prevalence again but during this current recession it isnt a realistic prospect. The current rate of employment stands at 74.1% (ONS, 2009) which is a slight decrease on the previous year. However, as the recession deepens, it is expected that this number will fall even further. Perhaps the most two important objectives for the government at present are sustained economic growth and price stability by keeping inflation low. The government is trying to foster sustainable growth in the economy which means growth without inflation. However, the past year has seen the UK economy slip in to a recession, making any sort of growth impossible. During this recession the level of inflation has fallen but this has not translated into economic growth. It was hoped that that low inflation would mean that spending would increase. However, the current economic climate has seen prices fall so much that consumers are now waiting to see if prices fall even further before spending (Monaghan, 2009). This essay will now turn to look at how the use of monetary and fiscal policy can be used to achieve these macroeconomic objectives. Perhaps one of the most significant changes that the current government introduced was giving the Bank of England independence when it comes to setting interest rates. Before the government was dictating both monetary policy and fiscal policy. The Monetary Policy Committee (MPC) is now tasked with maintaining price stability and also supporting the government in meeting its objectives for growth and employment (Budd, 1998). The government still sets the goals of monetary policy but it is up to the Bank of England to decide how best to achieve this through. The independence of the central bank is considered important for a number of reasons. Firstly, politicians are not experts when it comes to monetary policymaking. Secondly, central banks are more likely to have the interest of the country at heart rather than politicians who may be motivated by implementing populist policies for the sake of winning votes. Thirdly, politicians are unlikely to want to keep to monetary policies when t hey have adverse affects like high unemployment, although this wasnt the case with Thatcher. The final argument for having an independent central bank is that countries that have them tend to have lower levels of inflation (Alensina and Gatti, 1995). This essay will now look at how the MPC goes about meeting its objective of maintaining price stability. The present recession has forced the committee to consider radical solutions to the unique problems that the economy is facing. For the past year, the bank has cut interest rates on six consecutive occasions to the current record low of 0.5%. It was hoped that cutting interest rates to this level would stimulate spending in the economy and that this would translate to economic growth and would keep inflation at the. However, this has not happened because the banks have stopped lending the money usually required to facilitate the spending. This has forced the Bank of England to consider other options. One such measure introduced in the past month was quantitative easing. This idea is the equivalent of printing up large amounts of money, in the case of the UK it is estimated to be about  £75 billion, and throwing it out of a helicopter so that the people below could pick it up and spend it (Elliot, 2009). This is a rather simplistic view of what the Bank of England is trying to achieve. This  £75 billion will be used to buy government bonds and corporate debt over the next three months. By exchanging these bonds for cash that the bank has printed, it is hoped that this will increase the flow of money in the economy. With more cash, banks should start lending once again to other banks, businesses, and customers. This will increase spending in the economy which will lead to economic growth. However, the success of this measure rests on whether customers still want to borrow. The popular conception amongst the public is that we are in this position because we borrowed way above our means. It remains to be seen if once credit is made available again b y banks whether people will take it up again. If they dont, then the banks will be awash with money that will be doing nothing and this will not lead to economic growth but rather to inflation. The Bank of England has to achieve a fine balance. It has to provide enough money to banks to encourage them to lend again at competitive rates but it also has to make sure that there isnt a surplus of money that will send inflation out of control (Kollewe, 2009). Beyond cutting interest rates and printing there is little more that monetary policy can offer to delivering macroeconomic objectives. This essay will now look at how fiscal policy delivers macroeconomic objectives. Fiscal policy can be more fine tuned to target particular sectors of the economy and the population. It does not take the rather blanket approach taken by monetary policy. Perhaps the most effective fiscal policy to achieving macroeconomic objectives is through borrowing and taxation. For example, the government recently cut the lower starting rate of income tax. This encourages people on lower incomes to work more hours because they will be able to keep more of what they earn. This they can either spend or save, based on the level of inflation that is determined by monetary policy. Another measure introduced last year by the government was the 2.5% reduction of the rate of VAT. This was introduced at the end of last year as a way of boosting spending, especially in the run up to the busy Christmas period. However, this has not had the desired effect on household spending which is at its lowest level since 1991 (ONS, 2009). It could be argued that fiscal policy is not as much use as monetary policy to meeting macroeconomic objectives at the present time. The government is trying to stimulate spending in the economy by borrowing more money in order to fund tax cuts and increased spending in social programs. However, the effect of this may be that people are realising that they may face a higher tax burden in the future because of this increased spending and so are saving more in anticipation of this. The government is presently pumping money into sectors of the economy that provide large numbers of jobs. For example, it has just stated that it is prepared to make up to  £2.3 billion available to car manufacturers. The Business Minister, Ian Pearson, stated that this level of investment was necessary to, â€Å"ensuring the industry comes out of the current downturn with the skills and technology needed to be competitive in the global automotive market†. However, the success of this initiative again rests with the consumer. Will they want to borrow to finance things such as cars in the future? The car industry may be facing a downturn that will not recover after the recession. Because the economy is at present shrinking it means that the government is not getting as much income from tax revenues because less people are in work and those working arent getting as much. Welfare spending has had to increase to make sure that the standard of living does not fall in the UK. Those who have lost their jobs as a result of the recession have to be provided for by the state. All of this contributes to a much larger deficit which doesnt fit in with meeting macroeconomic objectives. With the global economic situation seemingly changing on an almost daily basis, it is hard to judge just how effective monetary and fiscal policies are in meeting macroeconomic objectives. It is also hard to judge which is the most effective way of delivering these objectives. This essay would argue that both policies are fairly weak at the moment. In order for monetary policy to work, it requires people to have the confidence to spend knowing that money is always going to be available to them. This could be just a person buying goods in the high street or a business buying services from another business. It would seem that UK consumers are willing to hold on to large quantities of money, even though the central bank has lowered interest rates to such an extent that it makes saving a very unattractive option. Consumer confidence is low, and when it is low people tend to hold on to their money rather than borrowing more. It remains to see just how effective this quantitative easing wi ll be. In many ways it seems that fiscal policy is working against monetary policy at present in achieving macroeconomic objectives. While on the surface it seems logical for the government to be borrowing big in order to fund tax cuts and create jobs, many people see this borrowing as storing up problems for the future because all this borrowed money will have to be repaid at some point. This means that people are saving more instead of spending which the government wants us to do to meet the objective of growth in the economy. In a growing, sustainable economy, both monetary and fiscal policy should serve to benefit each other and they should work for each other in achieving macroeconomic objectives. In a receding economy such as is being witnessed in the UK, there needs to be a delicate balance struck between the two. It would seem that this balance has yet to be achieved and at present they are fighting against each other. Bibliography and References: Alensina, A. and Gatti, R. (1995). How independent should central banks be?, The American Economic Review, 85(2), 196-200. Budd, A. (1998). The Role and Operations of the Bank of England Monetary Policy Committee, The Economic Journal, 108(451), 1783-1794. Dunkley, J. (2009). UK given approval for  £2.3bn auto bail-out, The Telegraph, 28 Feb. Elliot, L. (2009). Quantitative Easing, The Guardian, 8 January. Monaghan, A. (2009). UK inflation falls to lowest in lowest in almost 50 years, The Telegraph, 17 Feb. Kollewe, J. (2009). Bank of England cuts rates to 0.5% and starts quantitative easing, The Guardian, 5 March. Moore, E. and Warwick-Ching, L. (2009). Rate cut brings more misery to savers, The Financial Times, 5 March. Office for National Statistics (ONS) (2008). UK Government Debt and Deficit [online] Available from: http://www.statistics.gov.uk/cci/nugget.asp?ID=277 [Date accessed: 10 March 2009] Office for National Statistics (ONS) (2009). Employment [online] Available from: http://www.statistics.gov.uk/cci/nugget.asp?ID=12 [Date accessed: 10 March 2009]