Employee empowerment is a technique used by companies to motivate workers. This technique has been effectively used by Genentech Limited, a manufacturer of drugs in California. Genentech offers additional employee perks such as flexible work schedules, assigning full-time life coaches to employees, as well as organizing get-together parties for employees. All these activities are directed towards empowering its employees. Genentech believes that empowering employees helps in increasing motivation among workers.
The main issue that gave rise to employee empowerment at Genentech was high turnover in the organization (Huq, 2010). At first, the company’s efforts to retain employees were curtailed by application of ineffective employee motivation techniques hence the need to use better approaches arose. The provision of employee fringe benefits by the organization saw it through unbelievable increase in employees’ performances at work. There was a reduction in unfavorable behaviors among employees such as absenteeism, filing of complaints, and poor co-operation at work. The approach helped Genentech in building strong relationships between the executive management and its employees. According to Lashley, there was incredible increase in sales at Genentech. Customers would come back due to quality services offered to them by the delighted employees. The company thus successfully built a pool of loyal customers (Lashley, 2001).
In my view, if I was a senior manager at Genentech, I would deploy additional employee empowerment techniques such as creation of effective communication channels that encourage clear, open, and straightforward communication. I would also encourage sharing of information and ideas within the organization. I would recognize and reward hardworking employees as well as those who have demonstrated unique and creative innovations in the organization. I would also assign every employee a career mentor who would offer advice to employee mentees whenever it is needed.
Furthermore, I would ensure continuous training and development of all employees so that they would advance in their career paths. All employees would be given equal opportunities for training and development and promotions at the workplace. I would also involve employees in the day-to-day decision making activities of the organization. This would entail assigning more duties and responsibilities to employees to create shared responsibility.
Theory of Penetration Pricing
This theory postulates setting low prices when introducing new products into the market or when exploring new markets with an already existing product. The approach can also be used to increase market share in the industry. Penetration pricing often targets attracting potential customers. The theory of penetration pricing assumes that customers will switch to a new product because of its low price (Baker, 2011).
The approach has been effectively used in the mobile telephone industry where mobile phones manufacturer Nokia Corporation sold its new smartphones at lower prices as compared to those of its competitors such as Samsung and Blackberry. When Nokia Corporation deployed penetration pricing, the approach became successful because it discouraged the entry of competitors into the new markets, especially in Africa and Asia. The competitors were not willing to produce substitutes which they would sell at such low prices. They were afraid of incurring losses. The approach also succeeded due to well established goodwill among smartphone users who adopted the phones immediately after their introduction to the target markets. Additionally, the low prices attracted more distributors of smartphones, thereby increasing their availability in the market, and consequently delivering convenience to potential buyers.
In my opinion, penetration pricing is very effective because it helped the company in creating proper cost control and reduction mechanisms. This finally resulted into increased profits and efficiency in marketing of the smartphones. Penetration pricing does not give competitors time to come up with product substitutes. At Nokia Corporation the approach resulted into high product diffusion and adoption (Grunewalder, 2008). Nokia believed that low prices would attract more customers in developing nations as well as inducing existing customers to make more purchases. It led to increase in sales volume and low marginal costs. This helped Nokia Corporation realize huge amounts of profits.
If I was a senior manager at Nokia Corporation, I would deploy other marketing techniques such as promotional selling. This is because penetration marketing is more effective only when the product’s demand is highly price sensitive. Similarly, it is more suitable for mass marketing. It cannot be employed in segment marketing.
Other theories that could be used by Nokia Corporation to market its smartphones is intensive advertising and publicity. These techniques can be employed at the maturity stage of product development when competition sets in into the market. Nokia may also introduce incentive such as price discounts to its customers. However, caution should be taken when using penetration pricing because it may drive away customers who perceive price and quality as interrelated aspects of a product.