ON WEATHER SENSITIVITY IN RETAIL INDUSTRY: Magnitude of Weather Effects

Weather Effects

Kirk (2005) and Niemira (2005) suggest three theories that explain the magnitude of weather effects on consumer spending and retail sales. According to the first theory weather has temporary impact and adverse weather merely delays the sales in time but does not impact the overall consumption. First theory can be referred to as the Purchase Timing Theory according to which reduced sales in the current period will be offset by sales increase in future periods. First theory explains well the sale of products use of which is seasonal, so the beginning and the end of season are defined by the appropriate weather conditions. For example, lawn mowers and gardening tools are commonly purchased early in the spring before the start of the gardening season. However, if warm temperatures and rain occur later than usual, the sale of gardening tools will also occur later than usual (Murray et al., 2010). In other words, the sales will be postponed to a later period but will not be permanently lost. Deviation from the usual weather also delay the sales of seasonal garments (Bahng and Kincade, 2012) and durable goods such as cars, furniture, consumer electronics and building materials (Starr-McCluer, 2000).

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ON WEATHER SENSITIVITY IN RETAIL INDUSTRY: The Theories Regarding

According to Steele (1951) and Murray et al. (2010) four theories can be defined regarding the nature of weather effects on retail sales. According to the first theory, weather can create such conditions that consumers feel uncomfortable to leave their homes and go to the store. Cold temperatures and precipitation my hinder travel, keeping consumers away from stores. The results of a survey conducted among consumers show that snow acts as the strongest disincentive on consumers – 45% of respondents state they will not go shopping when snowing, 37% of respondents will not go shopping when raining, 35% will not go shopping in severe cold and 30% will not go shopping in excessive heat (Kirk, 2005). Starr-McCluer (2000) calls such impact of weather “the convenience effect” and states that excessive cold and heavy rain reduce sales of products purchase of which is easily deferrable, such as furniture and apparel. Moreover, research shows that rain has negative impact on shopping centre attendance (Parsons, 2001).

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ON WEATHER SENSITIVITY IN RETAIL INDUSTRY: INTRODUCTION

INTRODUCTION

Weather determines what shall we wear and eat, how shall we travel, where shall we spend our holiday, even what shall we do every single day. Furthermore, weather affects four basic purchasing decisions: what, where, when (Agnew and Thornes, 1995) and in what quantity to buy (Kirk, 2005). Retail sector is not traditionally perceived as weather sensitive sector, so there are only a handful of authors who studied weather sensitivity in retail. Weather sensitivity or weather exposure can be defined as sensitivity of sale, production or costs to meteorological elements such as temperature, sunshine, rainfall, snowfall, wind, etc. If volatility of output of certain sector is caused by changes in weather, sector is said to be weather sensitive. Uncertainty in future cash flows as a result of uncertainty of future weather is defined as weather risk. Lazo et al. (2011) conducted a national study on weather sensitivity of the whole U.S. economy and found that 2.3% of retail output and 2.2% of wholesale output are weather sensitive. The overall weather sensitivity of the U.S. economy amounts to 3.4%. Retail sector shows low relative weather sensitivity compared to mining, agriculture and energy sectors. However, assessed by absolute terms, retail sector shows greater sensitivity than traditionally perceived weather sensitive sectors which offers a sound argument for weather risk management in retail.

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APPRAISAL AS A MOTIVATION MECHANISM: CONCLUSIONS

A person’s motivation is a combination of desire and energy directed at achieving a goal. It is the cause of action. Influencing someone’s motivation means getting them to want to do what you know must be done. (U.S. Army Handbook, 1973). Effort should be focused on helping people to align company goals with individual aspirations. Motivation and goals cannot be imposed from outside by a boss – motivation and goals must be determined from within the person, mindful of internal needs, and external opportunities and rewards.

It’s becoming more widely accepted that the Right Herzberg’s findings about human motivation have been tested and proven time and gain. His theory, tell us that the factors that demotivate do not necessarily motivate when reversed. The conventional solution to dissatisfaction over pay levels would be to increase pay in the belief that people would then work harder and be more motivated.

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APPRAISAL AS A MOTIVATION MECHANISM: BECOME A GOOD LEADER

BECOME A GOOD LEADER

Develop Morale and Esprit De Corps

Morale is the mental, emotional, and spiritual state of a person. Almost everything you do will have an impact on your organization. You should always be aware how your actions and decisions might affect it. Esprit de corps means team spirit – it is defined as the spirit of the organization or collective body (in French it literally means “spirit of the body”). It is the consciousness of the organization that allows the people within it to identify with and feel a part of. Is your workplace a place where people cannot wait to get away from; or is it a place that people enjoy spending a part of their lives.

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.APPRAISAL AS A MOTIVATION MECHANISM: PERFORMANCE APPRAISALS

Performance appraisals work as a motivating mechanism. It refers to a process, which studies and evaluats the job performance of personnel. Formally (Mondy, 1987). Appraisal is an effective instrument in the human resources management, which if performed correctly and logically, the organizations will reach their personnel who will achieve their interest (Rezghi Ros tami, 2000). The act of motivating the employees is in the heart of the organizations. Success in every organization depends upon the personnel motivation conducted by their directors. (Abedinirad & Hazer, 1995).

Competent appraisal of individual performance in an organization or company serves to improve the overall effectiveness of the entity. According to D. McGregor, author of The Human Side of Enterprise, the three main functional areas of performance appraisal systems are: administrative, informative, and motivational. Appraisals serve an administrative role by facilitating an orderly means of determining salary increases and other rewards, and by delegating authority and responsibility to the most capable individuals.

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APPRAISAL AS A MOTIVATION MECHANISM: WHAT IS MOTIVATION?

WHAT IS MOTIVATION?

Motivation is the force that initiates, guides and maintains goal-oriented behaviors. It is what causes us to take action, whether to grab a snack to reduce hunger or enroll in college to earn a degree. The forces that lie beneath motivation can be biological, social, emotional or cognitive in nature.

Motivation is what we like to do well naturally. It’s like being right or left-handed. We don’t even think about it. We just write. The same is true for people known for excellence. They have a group of motivations that work in concert to help them perform at a higher level. Like all motivations, these were inborn and are as much a part of them as being blueeyed or tall.

“What lies behind us and what lies before us are tiny matters compared to what lies within us.” – Ralph Waldo Emerson Person’s Motivation Depends Upon Two Things

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THE CONSPICUOUS CONSUMPTION PHENOMENON IN EGYPT: Recommendations

In the light of what has been early mentioned, the following results can be concluded

• The social prestige and dominance have a clear effect role in the stimulus increase towards the conspicuous consumption phenomenon in Egypt.

• The rate of 66.7% of respondents has the desire to spend a large portion of their income on the conspicuous consumption.

• The installment selling, income increase, importing increase, reduction of customs and selling taxation are all factors that led to the increase of conspicuous consumption phenomenon in Egypt.

• Among the most important priorities of conspicuous goods in Egypt are the housing type, modern furniture, car brand, possession of jewelry and well-known brand clothes respectively.

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THE CONSPICUOUS CONSUMPTION PHENOMENON IN EGYPT: Consumption Rationalization

Consumption Rationalization

The economic theories are based on the hypothesis of rationality of consumer. Rationality means the consumer compares between the benefit money which he pays in buying the good and the benefit of the purchased good. If the good benefit exceeds the benefit of paid money or sum, he can carry out the purchasing process and vice versa. The benefit differs from a person to another according to the type and pattern of consumption. With the increasing rates of inflation and prices from a year to another, then the consumer has the desire to buy and consume by the quantities he used to consume before the rising prices on the one hand and the desire to reduce consumption on the other due to the higher benefit of money which he has against the decrease of goods and services which he buys because of their rising prices. The former is affected by what is known or called the permanent income hypothesis which differs from the current income which is the return income of work and job only.

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THE CONSPICUOUS CONSUMPTION PHENOMENON IN EGYPT: Question Results

First Question Results: the rate of 71.75% of respondents does not have adequate wealth to spend on the conspicuous consumption goods, while 28% of them have that wealth. This rate ranges from males and females as the rate of females who are unable to spend on the conspicuous goods consumption is 79.2% compared to 66.7% for males. This is a normal thing as males are more concerned than females with family spending.

Second Question Results: they indicate that 66.7% of respondents have the desire to spend a large portion of their income on the conspicuous goods consumption while 33.3% of them do not have that desire. This is attributed to social and psychological factors related to the desire to satisfy the possession intrinsic. They also indicate that 65.5% of males have the desire to spend a large portion of their income on the conspicuous goods consumption while 34.5% do not have that desire. The rate of females who have that desire is about 68.3% compared to 31.7% of them does not have that desire. This is attributed to the females’ possession desire and to highlight the aesthetic appearance and shape, in addition to satisfying the tendency of imitation and competition with others of social position.

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