Gartner Says China's Economic Stimulus Policies Will Drive $39 Billion in IT Spending Through 2013

Stimulus-Driven IT Spending in China Will Reach Its Highest Level in 2010

STAMFORD, Conn., January 28, 2010 — 

The multiple stimulus policies issued by China's central government when the worldwide economic crisis hit China's export trade will continue to drive the purchase and consumption of IT products and services, according to Gartner Inc. Economic stimulus policies will drive IT spending in China to $38.9 billion through 2013, offering a significant opportunity for IT providers.

"The Chinese government is seeking to counter the decline in its export trade by encouraging domestic demand, and it appears that it is succeeding,"said Oliver Xu, principalresearch analyst at Gartner. "We predict that stimulus-driven IT spending will reach its highest level in 2010, primarily because most stimulus policy measures and plans were finalized and executed in mid-2009."

The main stimulus policies issued by the Chinese government include:

1. A $583.9 billion (4 trillion yuan) package that addresses infrastructure and public facilities/organizations
2. The Ten Industries Revitalization Plan, which aims to help enterprises in particular industrial segments
3. Various smaller subsidy programs and tax reductions for consumers

Mr. Xu said that the most visible stimulus-related IT spending will occur within the transportation services and equipment, healthcare, and construction verticals, which are highly dependent on IT and invest in it aggressively.

Telecom is the most in-demand segment. Gartner expects stimulus policies will drive IT spending in telecom to reach $4.5 billion in 2010, and for the period form 2009 through 2013 IT spending in this segment will surpass $14.2 billion. Hardware is the second-largest segment, with spending from the stimulus policies to reach $4.1 billion in 2010, and for the five years of 2009 through 2013 hardware spending will total $13 billion.

"The Chinese government will continue executing on stimulus policies implemented in 2009, even though economic performance indexes for first three quarters of 2009 already indicate substantial signs of recovery, Mr. Xu said. "The Ten Industry Revitalization Plan seeks to further long-term goals while also having an immediate effect on China's economy."

IT vendors seeking to benefit from China's economic stimulus policies should primarily target IT users in the construction, transportation and healthcare verticals, while also targeting the industries covered by the Ten Industry Revitalization Plan, which focuses on restructuring businesses and upgrading their technology. Gartner recommended that vendors target the highest level of contacts in companies that benefit from stimulus policies, because enterprises that have benefited the most from the stimulus policies are largely state-owned central and local companies and organizations, which make centralized IT purchases.

Overseas-based IT vendors are advised to target the product and service areas in which local competitors cannot perform well. Although none of the policies issued by the Chinese government specifically indicate that local IT vendors should be favored in IT purchasing, such vendors might gain an advantage through their private connections.

"Hardware, software and IT services providers should track government policies to see how they affect purchasing decisions and adjust their go-to-market strategies accordingly, as the Chinese government will likely change its policies as the global economic downturn progresses," Mr. Xu said.

Additional information is available in the report "Emerging Market Analysis: China's Economic Stimulus Policies Will Drive $39 Billion in IT Spending Through 2013." The report is available on Gartner's website at http://www.gartner.com/resId=1274216.

Contact:


Christy Pettey
Gartner
+1 408 468 8312
christy.pettey@gartner.com

IDC Energy Insights Forecasts Market for Meter Data Management (MDM) to Grow by Almost 30% to Reach $869.1 Million by 2013

IDC Energy Insights Forecasts Market for Meter Data Management (MDM) to Grow by Almost 30% to Reach $869.1 Million by 2013

27 Jan 2010
New IDC Energy Insights Study Shows MDM Critical Technology for Energy Companies Implementing Advanced Metering Infrastructure (AMI)

FRAMINGHAM, MA, January 27, 2010 – The market for meter data management (MDM) is growing at a fast pace with the introduction of smart metering, a new study published by IDC Energy Insights reveals. IDC Energy Insights forecasts the North American market to grow at a CAGR of 29.4% from $239.9 million in 2008 to $869.1 million in 2013.

According to IDC Energy Insights’ new study, Vendor Assessment: Industry Short List for Meter Data Management – Getting to Scale(Document # EI221319), smart metering is delivering exponentially greater volumes of data that can be used to support a whole range of offerings to customers. At the same time, this wealth of data can be mined for operational and business intelligence. MDM is a must-have technology for energy companies implementing advanced metering infrastructure (AMI).

IDC Energy Insights' research shows that currently, large utilities make up over 80% of the market for MDM in North America. The average deal size for a small utility is from $150,000 to $250,000, while larger utilities can have MDM contracts of $2 million to $4 million.

"The new energy economy is driving utilities to adopt new ways of serving their customers," said Jill Feblowitz, practice director of IDC Energy Insights. "The introduction of new technology, such as AMI/smart metering, is also changing the way companies interact with their customers."

This report uses IDC Energy Insights' Short List methodology to evaluate the vendors supplying MDM applications to the utility market. This analysis is intended to help energy executives arrive at a short list of IT suppliers that best address the needs of the business. Vendors evaluated for this study include Aclara, Ecologic Analytics, eMeter, Hansen Technologies, Itron, and Oracle.

"Companies are just beginning to test the scale of large implementations, as smart metering goes system-wide," continued Feblowitz. "Our research shows that scalability is the most important criteria for assessing the MDM. Utilities want to be confident that when they scale up from pilot to system-wide implementation of smart metering, the MDM will be able to handle increased volumes of meter data and process it quickly."

Among the key findings of this study are the following:

• Vendor offerings of MDM have proven capable of uploading and cleaning large volumes of data from system-wide implementation of AMI. The jury is still out on how well the MDM can perform in supporting large-scale billing of time-based or other exotic rates.

• There are almost as many possible variations of data delivery as there are meter configurations and customer information systems (CISs). The amount of work performed by MDM and capacity required will depend on the rest of the smart metering technology stack – configurable meters, network bandwidth, and CIS capabilities. Utilities should select the MDM within the context of the stack.

The introduction of AMI provides a means to collect an unprecedented amount of data. IDC Energy Insights' research shows that smart meters can now collect and deliver interval data for the mass-market customer. Most systems are capable of capturing and transporting very small intervals – some systems report capabilities of collecting one-minute interval data. This data can be used to support applications such as traditional billing, time-of-use (TOU) billing, market transactions for deregulation markets, presentation of data to the customer for energy education, and outage detection and restoration analysis.

For additional information about this study, or to arrange a one-on-one briefing with an IDC Energy Insights analyst, please contact Sarah Murray at 781-794-3214 or sarahbethmurray@gmail.com. Reports are available to qualified members of the media; reporters should email sarahbethmurray@gmail.com. For information on purchasing reports, email info@idc-ei.com.

About IDC Energy Insights

IDC Energy Insights provides research-based advisory and consulting services focused on market and technology developments in the energy and utility industries. Staffed by senior analysts with decades of industry experience, IDC Energy Insights covers both the utility and oil & gas segments, providing independent, timely, and relevant analysis focused on key business and technology issues. IDC Energy Insights serves a diverse and growing global client base, including electric, gas and water utilities, IT suppliers, independent power producers, retail energy providers, oil and gas companies, equipment manufacturers, government agencies, financial institutions, and professional services firms. IDC is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world's leading technology, media, research, and events company. For more information, please visit www.idc-ei.com or email info@idc-ei.com.

Contact

For more information, contact:

Sandra Collins
scollins@idc.com
508-988-6746

Vigorous IT Transformation Amid Modest Economic Revival Drive APEJ Public Sector Spending in 2010, Says IDC Government Insights

27 Jan 2010

Singapore and Hong Kong – January 27, 2010 – Despite improvements in the economy, governments in the Asia/Pacific (excluding Japan) or APEJ region will continue to maintain spending in 2010 until recovery from the global recession is secured. They have put in place ambitious IT transformation plans and this is expected to revolutionize the marketplace radically. More insights are revealed in the report, “Asia/Pacific Public Sector 2010 Top 10 Predictions” (Doc #HK9694102S), which discusses the top 10 IT predictions for the public sector in the Asia/Pacific region for 2010.

"We expect a marketplace driven by the growth of next-generation telecommunications infrastructures and rising use of mobile services. Greater attention will be paid to cloud services and business analytics. There will also be a demand in emerging markets with notable geo-political interests to build intelligent sustainable cities," says Alex S. Kim, Director for IDC Government Insights Asia/Pacific.

Kim adds, "The notion of intelligent or smart cities has emerged as the next wave for attracting new investments and retaining the presence of foreign companies. This up-and-coming business model of the 'Trinity' represents a holistic interaction between the public sector, vendors and citizens — all three working in sync to make inroads for building a smarter and more sustainable world." (See Figure 1)

Figure 1

With the advent of economic stimulus monies, the healthcare vertical will be revolutionizing its services through increased consumer participation and standards interoperability. Kim continues, "We have observed the sector's upcoming plans and it will be moving toward an evidence-based practice of medicine in an increasingly connected environment". For the education vertical, 1:1 computing will characterize the sector's transformation strategy as it takes a step closer to reality through the mass availability of affordable mininotebooks and learning content.

To assist government organizations and the vendors that serve this market, IDC Government Insights Asia/Pacific annually identifies the top trends for the year that will heavily influence the direction and magnitude of IT investment, management, and technology evaluation. Highlights of this report include:

• The public sector's new business awareness — also known as "Wal-Mart" effect of keeping costs low and productivity high — requires a great demand for organizational agility. Governments today are running businesses themselves and have to manage government organizations like a business. They should take cues from the private sector to gain efficiency amid shrinking budgets.
• The new business needs of governments are creating widespread consolidation, integration, and interoperability of IT systems and infrastructure. In doing so, tools and concepts to reduce redundancy and improve standardization, such as service-oriented architecture (SOA), will enable governments to adopt standardized best practices and processes that best fit the requirements of their agencies and departments.
• Governments will be more receptive to exploring and assimilating new stakeholder/citizenry engagement models through platforms such as new media and the widespread proliferation of mobile devices applications.

For more information on obtaining this report “Asia/Pacific Public Sector 2010 Top 10 Predictions” (Doc #HK9694102S), please contact Jace Tang at +65-6829-7723 or jtang@idc.com.

To set up an interview with Alex S. Kim, please contact Lay-Fang Tan at lftan@idc.com.

On-Demand Webcast On "Public Sector Top 10 Predictions for 2010"

To find out more about IDC Government Insights Asia/Pacific's Public Sector Top 10 Predictions for 2010, please register at IDC’s Webcast Portal to listen to the Webcast presented by Alex S. Kim, Janet A. Chiew and Gerald J. Wang. The webcast will be available from 27 January 2010 to 28 February 2010. The viewing instructions are as follow:

1. Click here to go to the synopsis page of the Webcast.

2. Click on the "Go to Webcast Portal" tab at the bottom of the page.

3. Register yourself at the Webcast Portal page.

4. If you are successfully, you will be directed to a page with the link to the Webcast.

3. You can now view the Webcast.

About IDC Government Insights

IDC Government Insights is headquartered in the metropolitan Washington, D.C. area in Falls Church, Virginia, with additional offices worldwide. IDC Government Insights is uniquely qualified to track, analyze, and forecast government technology spending based on in-depth government budget and spending analysis globally. Expert analysts examine IT value based on government-defined key result areas; decipher policy and regulatory goals to identify game-changing government strategies and inform critical decision making; survey government decision-makers to determine effectiveness of IT vendors’ go-to-market strategies; along with government-centric metrics and rankings of suppliers’ effectiveness in addressing specific government business problems, all with absolute independence and transparency. IDC is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world’s leading technology, media, research, and events company. For more information, please visit www.idc-gi.com.

Contact

For more information, contact:

Lay-Fang Tan
lftan@idc.com
+65-6829-7731

You Are On camera

Did you know that wireless hidden cameras are possibly all around you? That’s right.

There are people using them in the park, in college classes, in malls, department stores, in meetings, and in many other places that you frequent. Individuals have their personal reasons as to why they use these hidden cameras in public places. You may even encounter these cameras when you walk into your neighbor’s home or the home of one of your family members. They are virtually everywhere.

Even businesses are in on using wireless cameras to catch thieves. What may look like a pen in the shirt pocket of the clerk may not be a regular ink pen. Then again, the tie that the manager is wearing may not be your usual tie.

There are many faces to these cameras and that’s because the idea behind them is for them not to be seen. It is important in certain environments to make sure individuals are acting the way they need to. In other words, they have to be fair and moral. Anyone who can’t be that way when they think they are by themselves has the potential to turn in a heartbeat in other situations.

However, these cameras are not just found in businesses and homes. They are found virtually anywhere and everywhere. You never know when the book that someone is reading in the park may actually have a hidden camera inside of it. That is how well disguised these cameras are.

So if you find yourself in a situation in which wireless hidden cameras could come in handy, go ahead and give it a try. You can start out with one or go ahead and go with many. There are so many different scenarios in which these cameras are needed that it would be almost impossible to go down the entire list. Just keep in mind that they are all around, so be sure to be on your best behavior.

US Consumer Price Index - December 2009

On a seasonally adjusted basis, the December Consumer Price Index for
All Urban Consumers (CPI-U) rose 0.1 percent, the U.S. Bureau of
Labor Statistics reported today. Over the last 12 months, the index
increased 2.7 percent before seasonal adjustment.

The seasonally adjusted increase in the all items index was broad
based, with the indexes for food, energy, and all items less food and
energy all posting modest increases. Within the latter group, a sharp
rise in the index for used cars and trucks was the largest
contributor to the 0.1 percent increase, while the indexes for
airline fares, apparel, and lodging away from home rose as well. In
contrast, the indexes for rent and owners' equivalent rent were
unchanged and the index for new vehicles declined.

Grocery store food indexes showed broad-based increases, leading to
the food index rising 0.2 percent, its largest one-month advance in
over a year. The energy index also rose 0.2 percent; this was its
smallest increase in five months. The indexes for fuel oil and
gasoline rose, but the electricity index was unchanged and the
natural gas index declined.


Table A. Percent changes in CPI for All Urban Consumers (CPI-U): U.S. city
average


Seasonally adjusted changes from
preceding month
Un-
adjusted
12-mos.
June July Aug. Sep. Oct. Nov. Dec. ended
2009 2009 2009 2009 2009 2009 2009 Dec.
2009

All items.................. .7 .0 .4 .2 .3 .4 .1 2.7
Food...................... .0 -.3 .1 -.1 .1 .1 .2 -.5
Food at home............. .0 -.5 .0 -.3 .0 .0 .3 -2.4
Food away from home (1).. .1 .1 .1 .1 .1 .2 .1 1.9
Energy.................... 7.4 -.4 4.6 .6 1.5 4.1 .2 18.2
Energy commodities....... 16.2 -.4 8.5 1.1 1.9 6.3 .5 46.5
Gasoline (all types).... 17.3 -.8 9.1 1.0 1.6 6.4 .2 53.5
Fuel oil................ 4.8 -1.5 6.2 1.5 6.3 9.0 1.1 6.5
Energy services.......... -1.2 -.3 .0 .1 .9 1.4 -.1 -5.4
Electricity............. -1.9 -.6 -.1 .6 .6 1.4 .0 -.5
Utility (piped) gas
service.............. 1.3 .9 .4 -1.7 1.9 1.5 -.7 -18.1
All items less food and
energy................. .2 .1 .1 .2 .2 .0 .1 1.8
Commodities less food and
energy commodities.... .3 .2 -.3 .3 .4 .2 .2 3.0
New vehicles............ .7 .5 -1.3 .4 1.6 .6 -.3 4.9
Used cars and trucks.... .9 .0 1.9 1.6 3.4 2.0 2.5 9.2
Apparel................. .7 .6 -.1 .1 -.4 -.3 .4 1.9
Medical care commodities .1 -.1 .5 .6 .2 .0 -.1 3.3
Services less energy
services.............. .1 .0 .2 .1 .1 .0 .1 1.4
Shelter................. .1 -.2 .1 .0 .0 -.2 .0 .3
Transportation services -.1 .5 .6 .7 .4 .6 .3 3.9
Medical care services... .2 .3 .2 .4 .2 .4 .2 3.4

1 Not seasonally adjusted.



Year in Review

For the 12 month period ending December 2009, the CPI-U rose 2.7
percent, compared to 0.1 percent for 2008. The larger increase was
primarily due to the energy index, which rose 18.2 percent during
2009 after falling 21.3 percent in 2008. The energy upturn was caused
by the gasoline index, which rose 53.5 percent in 2009 after
declining 43.1 percent in 2008. The household energy index, in
contrast, declined 4.9 percent during 2009 with the index for natural
gas falling 18.1 percent and the electricity index declining 0.5
percent. The food index, which rose 5.9 percent in 2008, fell 0.5
percent for the 12 months ending December 2009, the first December-to-
December decline since 1961. The index for food away from home rose
1.9 percent while the food at home index fell 2.4 percent. Within
food at home, all six major grocery food groups posted declines in
2009 after rising in 2008. The dairy and related products group
declined the most, falling 7.6 percent, its largest annual decline
since 1938.

The index for all items less food and energy rose 1.8 percent during
2009, the same increase as in 2008. This identical increase was the
result of offsetting factors. Pushing the index higher were vehicle
prices, which rose in 2009 after declining in 2008. The indexes for
new vehicles rose 4.9 percent in 2009 and the index for used cars and
trucks increased 9.2 percent. Additionally, the apparel index turned
up in 2009, rising 1.9 percent after declining in each of the
previous two years. The medical care index rose more rapidly in 2009,
increasing 3.4 percent after a 2.6 percent increase the previous
year, and the tobacco index increased 30.1 percent in 2009 after
rising 6.3 percent in 2008. Largely offsetting these accelerations
was the shelter index, which posted its smallest annual increase
since its inception in 1953. It increased only 0.3 percent after
increasing 1.9 percent in 2008, with the indexes for both rent and
owners' equivalent rent increasing 0.7 percent. Also, the indexes for
recreation and for household furnishings and operations both declined
in 2009 after rising in 2008.


Consumer Price Index Data for December 2009

Food

The food index rose 0.2 percent in December after rising 0.1 percent
in each of the previous two months. The food at home index increased
0.3 percent, its largest increase since October 2008. Among the major
grocery store food groups, the index for meats, poultry, fish, and
eggs was unchanged while the other five groups all posted increases.
The index for cereals and bakery products rose 0.6 percent, while the
dairy and related products index increased 0.5 percent after
declining 0.7 percent in November. The indexes for fruits and
vegetables and for other food at home both rose 0.3 percent while the
index for nonalcoholic beverages increased 0.2 percent. The index for
food away from home increased in December, rising 0.1 percent after
increasing 0.2 percent in November.

Energy

The energy index, which increased 4.1 percent in November, rose 0.2
percent in December. The index for energy commodities increased 0.5
percent, with the gasoline index rising 0.2 percent after increasing
6.4 percent in November. (Before seasonal adjustment, gasoline prices
declined 1.5 percent in December.) The index for household energy was
unchanged in December. The fuel oil index rose 1.1 percent after a
9.0 percent increase in the previous month, but the index for natural
gas fell 0.7 percent. The index for electricity, which increased 1.4
percent in November, was unchanged in December.



All items less food and energy

The index for all items less food and energy rose 0.1 percent in
December after being unchanged in November. The index for used cars
and trucks rose 2.5 percent in December, accounting for almost half
of the increase in the all items less food and energy index. The
index for airline fares also continued to rise, increasing 2.4
percent in December after advancing 3.8 percent in November. Also
increasing were the apparel index, which rose 0.4 percent, and the
medical care index, which rose 0.1 percent. The shelter index, which
declined 0.2 percent in November, was unchanged in December. The
indexes for rent and owners' equivalent rent were both unchanged
after declining in November, while the index for lodging away from
home rose 0.5 percent in December. The index for new vehicles
declined in December, falling 0.3 percent after increasing in each of
the previous three months. The recreation index also declined in
December, falling 0.4 percent as televisions, sporting goods and toys
were among many recreation components that posted declines.


Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased
2.7 percent over the last 12 months to an index level of 215.949
(1982-84=100). For the month, the index decreased 0.2 percent prior
to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W) increased 3.4 percent over the last 12 months to an index
level of 211.703 (1982-84=100). For the month, the index decreased
0.1 percent prior to seasonal adjustment.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U)
increased 2.8 percent over the last 12 months. For the month, the
index declined 0.2 percent on a not seasonally adjusted basis. Please
note that the indexes for the post-2007 period are subject to
revision.


The Consumer Price Index for January 2010 is scheduled to be released
on Friday, February 19, 2010, at 8:30 a.m. (EST).


Item Structure and publication changes for January 2010

Effective with the release of CPI data for January 2010 scheduled for
Friday, February 19, the BLS will introduce several item structure
and other publication changes into the CPI.

Shelter. The expenditure weight for second homes will be moved from
Lodging away from home to a new, unpriced stratum under the Owners'
equivalent rent expenditure class. As such, the expenditure class
index for Owners' equivalent rent will now include both primary and
secondary homes, and the title of that expenditure class index will
change from Owners' equivalent rent of primary residences to Owners'
equivalent rent of residences. Both the expenditure class (Owners'
equivalent rent of residences), and the Owners' equivalent rent of
primary residence stratum within it, will be published.

Current Structure
Lodging away from home
Housing at school, excluding board
Other lodging away from home including hotels and motels

Owners' equivalent rent of primary residence
Owners' equivalent rent of primary residence*

New Structure
Lodging away from home
Housing at school, excluding board
Other lodging away from home, including hotels and motels

Owners' equivalent rent of residences
Owners' equivalent rent of primary residence
Unsampled owners' equivalent rent of secondary residences*


Medical care commodities. The item structure for Medical care
commodities will change:

Current Structure
Medical care commodities
Prescription drugs
Prescription drugs
Unsampled rent or repair of medical equipment*
Nonprescription drugs and medical supplies
Internal and respiratory OTC drugs
Nonprescription medical equipment and supplies

New Structure
Medical Care Commodities
Medicinal drugs
Prescription drugs
Nonprescription drugs
Medical equipment and supplies
Medical equipment and supplies
Unsampled rent or repair of medical equipment*

Telephone services. The item structure for telephone services will
also change:

Current structure
Telephone services
Land-line telephone services, local charges
Land-line telephone services, long distance
Wireless telephone services

New structure
Telephone services
Wireless telephone services
Land-line telephone services

Indexes that are deemed continuous will have the same reference base
previously used. New index series will have a December 2009 = 100
reference base. Unpublished series are indicated with a *.

Other publication changes
The index for State and local registration and license will be
retitled State motor vehicle registration and license fees.

A new index for Intracity mass transit will be published. Indexes
for Land-line interstate toll calls and Land-line intrastate toll
calls will be discontinued.


Expenditure Weight Update

Effective with the release of the January 2010 CPI on February 19,
2010, the Bureau of Labor Statistics (BLS) will update the
consumption expenditure weights in the Consumer Price Index for All
Urban Consumers (CPI-U) and Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI-W) to the 2007-08 period. The
updated expenditure weights for these indexes will replace the 2005-
2006 weights that were introduced effective with the January 2008 CPI
release. As originally announced by BLS in December 1998, CPI
expenditure weights will continue to be updated at two-year
intervals.


Facilities for Sensory Impaired

Information from this release will be made available to sensory
impaired individuals upon request. Voice phone: 202-691-5200,
Federal Relay Services: 1-800-877-8339.


Brief Explanation of the CPI

The Consumer Price Index (CPI) is a measure of the average change in
prices over time of goods and services purchased by households. The
Bureau of Labor Statistics publishes CPIs for two population groups:
(1) the CPI for Urban Wage Earners and Clerical Workers (CPI-W),
which covers households of wage earners and clerical workers that
comprise approximately 32 percent of the total population and (2) the
CPI for All Urban Consumers (CPI-U) and the Chained CPI for All Urban
Consumers (C-CPI-U), which cover approximately 87 percent of the
total population and include in addition to wage earners and clerical
worker households, groups such as professional, managerial, and
technical workers, the self-employed, short-term workers, the
unemployed, and retirees and others not in the labor force.

The CPIs are based on prices of food, clothing, shelter, and fuels,
transportation fares, charges for doctors' and dentists' services,
drugs, and other goods and services that people buy for day-to-day
living. Prices are collected each month in 87 urban areas across the
country from about 4,000 housing units and approximately 25,000
retail establishments-department stores, supermarkets, hospitals,
filling stations, and other types of stores and service
establishments. All taxes directly associated with the purchase and
use of items are included in the index. Prices of fuels and a few
other items are obtained every month in all 87 locations. Prices of
most other commodities and services are collected every month in the
three largest geographic areas and every other month in other areas.
Prices of most goods and services are obtained by personal visits or
telephone calls of the Bureau's trained representatives.

In calculating the index, price changes for the various items in each
location are averaged together with weights, which represent their
importance in the spending of the appropriate population group.
Local data are then combined to obtain a U.S. city average. For the
CPI-U and CPI-W separate indexes are also published by size of city,
by region of the country, for cross-classifications of regions and
population-size classes, and for 27 local areas. Area indexes do not
measure differences in the level of prices among cities; they only
measure the average change in prices for each area since the base
period. For the C-CPI-U data are issued only at the national level.
It is important to note that the CPI-U and CPI-W are considered final
when released, but the C-CPI-U is issued in preliminary form and
subject to two annual revisions.

The index measures price change from a designed reference date. For
the CPI-U and the CPI-W the reference base is 1982-84 equals 100.0.
The reference base for the C-CPI-U is December 1999 equals 100. An
increase of 16.5 percent from the reference base, for example, is
shown as 116.5. This change can also be expressed in dollars as
follows: the price of a base period market basket of goods and
services in the CPI has risen from $10 in 1982-84 to $11.65.

For further details visit the CPI home page on the Internet at
http://www.bls.gov/cpi/ or contact our CPI Information and Analysis
Section on (202) 691-7000.


Note on Sampling Error in the Consumer Price Index

The CPI is a statistical estimate that is subject to sampling error
because it is based upon a sample of retail prices and not the
complete universe of all prices. BLS calculates and publishes
estimates of the 1-month, 2-month, 6-month and 12-month percent
change standard errors annually, for the CPI-U. These standard error
estimates can be used to construct confidence intervals for
hypothesis testing. For example, the estimated standard error of the
1 month percent change is 0.04 percent for the U.S. All Items
Consumer Price Index. This means that if we repeatedly sample from
the universe of all retail prices using the same methodology, and
estimate a percentage change for each sample, then 95% of these
estimates would be within 0.08 percent of the 1 month percentage
change based on all retail prices. For example, for a 1-month change
of 0.2 percent in the All Items CPI for All Urban Consumers, we are
95 percent confident that the actual percent change based on all
retail prices would fall between 0.12 and 0.28 percent. For the
latest data, including information on how to use the estimates of
standard error, see "Variance Estimates for Price Changes in the
Consumer Price Index, January-December 2008". These data are
available on the CPI home page (http://www.bls.gov/cpi), or by using
the following link http://www.bls.gov/cpi/cpivar2008.pdf


Calculating Index Changes

Movements of the indexes from one month to another are usually
expressed as percent changes rather than changes in index points,
because index point changes are affected by the level of the index in
relation to its base period while percent changes are not. The
example below illustrates the computation of index point and percent
changes.

Percent changes for 3-month and 6-month periods are expressed as
annual rates and are computed according to the standard formula for
compound growth rates. These data indicate what the percent change
would be if the current rate were maintained for a 12-month period.

Index Point Change

CPI
202.416
Less previous index
201.800
Equals index point change
.616

Percent Change

Index point difference
.616
Divided by the previous index
201.800
Equals
0.003
Results multiplied by one hundred
0.003x100
Equals percent change
0.3



Regions Defined

The states in the four regions shown in Tables 3 and 6 are listed
below.

The Northeast--Connecticut, Maine, Massachusetts, New Hampshire, New
York, New Jersey, Pennsylvania, Rhode Island, and Vermont.
The Midwest--Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota,
Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.
The South--Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky,
Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South
Carolina, Tennessee, Texas, Virginia, West Virginia, and the District
of Columbia.
The West--Alaska, Arizona, California, Colorado, Hawaii, Idaho,
Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.


A Note on Seasonally Adjusted and Unadjusted Data

Because price data are used for different purposes by different
groups, the Bureau of Labor Statistics publishes seasonally adjusted
as well as unadjusted changes each month.

For analyzing general price trends in the economy, seasonally
adjusted changes are usually preferred since they eliminate the
effect of changes that normally occur at the same time and in about
the same magnitude every year--such as price movements resulting from
changing climatic conditions, production cycles, model changeovers,
holidays, and sales.

The unadjusted data are of primary interest to consumers concerned
about the prices they actually pay. Unadjusted data also are used
extensively for escalation purposes. Many collective bargaining
contract agreements and pension plans, for example, tie compensation
changes to the Consumer Price Index before adjustment for seasonal
variation.

Seasonal factors used in computing the seasonally adjusted indexes
are derived by the X-12-ARIMA Seasonal Adjustment Method. Seasonally
adjusted indexes and seasonal factors are computed annually. Each
year, the last 5 years of seasonally adjusted data are revised. Data
from January 2004 through December 2008 were replaced in January
2009. Exceptions to the usual revision schedule were: the updated
seasonal data at the end of 1977 replaced data from 1967 through
1977; and, in January 2002, dependently seasonally adjusted series
were revised for January 1987-December 2001 as a result of a change
in the aggregation weights for dependently adjusted series. For
further information, please see "Aggregation of Dependently Adjusted
Seasonally Adjusted Series," in the October 2001 issue of the CPI
Detailed Report.

The seasonal movement of all items and 54 other aggregations is
derived by combining the seasonal movement of 73 selected components.
Each year the seasonal status of every series is reevaluated based
upon certain statistical criteria. If any of the 73 components
change their seasonal adjustment status from seasonally adjusted to
not seasonally adjusted, not seasonally adjusted data will be used in
the aggregation of the dependent series for the last 5 years, but the
seasonally adjusted indexes will be used before that period. Note:
47 of the 73 components are seasonally adjusted for 2009.

Seasonally adjusted data, including the all items index levels, are
subject to revision for up to five years after their original
release. For this reason, BLS advises against the use of these data
in escalation agreements.

Effective with the calculation of the seasonal factors for 1990, the
Bureau of Labor Statistics has used an enhanced seasonal adjustment
procedure called Intervention Analysis Seasonal Adjustment for some
CPI series. Intervention Analysis Seasonal Adjustment allows for
better estimates of seasonally adjusted data. Extreme values and/or
sharp movements which might distort the seasonal pattern are
estimated and removed from the data prior to calculation of seasonal
factors. Beginning with the calculation of seasonal factors for
1996, X-12-ARIMA software was used for Intervention Analysis Seasonal
Adjustment.

For the seasonal factors introduced in January 2009, BLS adjusted 29
series using Intervention Analysis Seasonal Adjustment, including
selected food and beverage items, motor fuels, electricity and
vehicles. For example, this procedure was used for the Motor fuel
series to offset the effects of events such as damage to oil
refineries from Hurricane Katrina.

For a complete list of Intervention Analysis Seasonal Adjustment
series and explanations, please refer to the article "Intervention
Analysis Seasonal Adjustment", located on our website at
http://www.bls.gov/cpi/cpisapage.htm.

For additional information on seasonal adjustment in the CPI, please
write to the Bureau of Labor Statistics, Division of Consumer Prices
and Price Indexes, Washington, DC 20212 or contact Jeff Wilson at
(202) 691-6968, or by e-mail at Wilson.Jeff@bls.gov. If you have
general questions about the CPI, please call our information staff at
(202) 691-7000.


Recalculated Seasonally Adjusted Indexes to be Available on February
17, 2010

Each year with the release of the January CPI, seasonal adjustment
factors are recalculated to reflect price movements from the just-
completed calendar year. This routine annual recalculation may result
in revisions to seasonally adjusted indexes for the previous 5 years.
BLS will make available recalculated seasonally adjusted indexes, as
well as recalculated seasonal adjustment factors, for the period
January 2005 through December 2009, on Wednesday, February 17, 2010.
This date is two working days before the scheduled release of the
January 2010 CPI on Friday, February 19, 2010.

Consumer Price Index

Why is the consumer price index (or CPI) so important? Well, it is a quick way of determining how much more or less people are spending on a day-to-day basis, and from this figure we can determine the kinds of pressures that the economy is under

If the CPI number rises, it means that the average household or consumer has less money for discretionary spending.

Longer term, it means that wages will come under pressure as employees find that they are living on less, and will then either request higher pays, or look for employment opportunities elsewhere.

The vicious circle

Employers too, will find that the costs of running their business will go up. Higher operating costs, mean lower profit margins and lower margins mean that they will have less capacity to meet the higher wage demands employees are now requiring.

Higher costs equal lower profits, and that means lower share prices. To avoid posting lower profits, businesses must then consider passing these higher costs to their customers, which of course will trickle down to CPI numbers. Potentially a cycle could occur where higher prices cause higher costs and higher prices again.

So we can see why world central banks keep such a close eye on the rate of inflation.

Winners and losers

Some businesses may benefit from a CPI rise. They can use this as justification for putting up prices either by more than the CPI or pass on price rises that have not been affected by CPI, thus increasing their profit margins.

For example, a services industry may pass on a 5% price rise, whereas the cost of running their business may have only increased by 1-2%.

It is also important to note that even if the overall number does increase it may be that several of the 11 categories have actually fallen, but that the rises in the other sectors has been sufficient to cause an overall rise. A rise in alcohol and tobacco and healthcare is not going to have any affect on an individual, non-smoking, teetotaler with good health.

What does a higher CPI figure mean to my stocks?

The impact of CPI figures will vary from stock to stock and, probably more importantly, industry to industry. A services industry might have little exposure to CPI based values, whereas a manufacturer is likely to be more exposed, and therefore their profitability and share price can be influenced by a change in these figures.

It is often the unexpected numbers that have the biggest influence on the market. If the market expects a 1% rise and the actual figure turns out to be, say, 3% this is more likely to have an adverse affect. Most economic data has already been factored in before its release, but anything that greatly varies from that expectation is going to have a greater impact.

So we can see that it's not just the figure or percentage, but rather the variation away from the expectation that will cause a share price to rise or fall.

To summarise, the market does not like unexpectedly high rates of inflation as this causes uncertainty to companies profit outlooks. The inflation however will affect each industry in different ways.

How is it calculated?

CPI by definition is the measurement of the price change in a basket of consumer goods. The actual goods within this basket are divided into 11 categories:

alcohol and tobacco
clothing and footwear
housing
household furnishings
supplies and services
health
transportation
communication
recreation
education and
miscellaneous

CPI is simply the measurement of change in the overall cost of these items. If the original basket had a value of 100 and this quarter's costs have risen to 102 we'll see a CPI rise of 2%. The increase in CPI is called inflation. Very simple

By: www.fingala.com

CUSTOMER BUYING BEHAVIOUR

Customers make purchases in order to satisfy needs. The wealth of products and services produced in a country make our economy strong.All the behaviour of human beings during the purchase may be termed as “buyer behaviour”.. In this article there is a view about birth of buying ideas, what is buyer behaviour, How consumer buy, why consumer buy, types, Decision process, Motives,conclusion.

INTRODUCTION

Consumer is the king and it is the consumer determines what a business is, therefore a sound marketing programme start with a careful analysis of the habits, attitudes, motives and needs of consumers. In particular a marketer should find answer to the following questions:

What are the products they buy?
Why they buy them?
How they buy them?
When do they buy them ?

Where they buy them?

How often they buy them?

THE BIRTH OF BUYING IDEAS
Mr.A owns scooter. The scooter is causing dissatisfication because of some defects or troubles in it. He decides to replace it with another scooter. He anticipates the idea of a trouble free and dependable scooter. He decides not to buy a scooter of the same make, because of dissatisfication and lack of confidence. Thus a thought seed about a new scooter is born in him, the moment he thinks,”I must replace the scooter “ the buying ideas come up. With the thought in his mind, he thinks of the benefits. And this leads to further thinking: what sort of a scooter will give the benefits, he wants. The benefits make the desire. He may buy any one of many makes of scooter, which can give the desired benefits. He makes enquiries and observe through talking to his friends. He reads advertisement about the new scooters. He chooses one with all the possible advantages and which is wholly dependable. Mr.A is a prospective customer to a dealer.
WHAT IS BUYER BEHAVIOUR?
The wealth of products and services produced in a country make our economy strong. Almost all the products, which are available to buyers, have a number of alternative suppliers: substitute products are available to consumers, who make decision to buy products. Therefore a seller most of his time, seeks buyers and tries to please them. In order to be successful, a seller is concerned with.

• Who is the customer?
• What do consumers buy?
• When do consumers buy?
• How do consumers buy?
• From where do consumers buy?
• Why do consumers buy?

A buyer makes a purchase of a particular product or a particular brand and this can be termed “ product buying motives” and the reason behind the purchase from a particular seller is “ patronage motives”
When a person gets his pay packet, and if he is educated ,sits down along with his wife and prepares a family budget, by appropriating the amount to different needs. It may happen that after a trip to the market, they might have purchased some items, which are not in the budget, and thus there arises a deviation from the budgeted items and expenditure. all the behaviour of human beings during the purchase may be termed as “buyer behaviour”.
HOW CONSUMER BUY
1. Need/Want/Desire is Recognized
In the first step the consumer has determined that for some reason he/she is not satisfied (i.e., consumer’s perceived actual condition) and wants to improve his/her situation (i.e., consumer’s perceived desired condition). For instance, internal triggers, such as hunger or thirst, may tell the consumer that food or drink is needed. External factors can also trigger consumer’s needs. Marketers are particularly good at this through advertising, in-store displays and even the intentional use of scent (e.g., perfume counters).
2. Search for Information
Assuming consumers are motivated to satisfy his or her need, they will next undertake a search for information on possible solutions. The sources used to acquire this information may be as simple as remembering information from past experience (i.e., memory) or the consumer may expend considerable effort to locate information from outside sources (e.g., Internet search, talk with others, etc.). How much effort the consumer directs toward searching depends on such factors as: the importance of satisfying the need, familiarity with available solutions, and the amount of time available to search.
3. Evaluate Options
Consumers’ search efforts may result in a set of options from which a choice can be made. It should be noted that there may be two levels to this stage. At level one the consumer may create a set of possible solutions to their needs (i.e., product types) while at level two the consumer may be evaluating particular products (i.e., brands) within each solution. For example, a consumer who needs to replace a television has multiple solutions to choose from such as plasma, LCD and CRT television.
4. Purchase
In many cases the solution chosen by the consumer is the same as the product whose evaluation is the highest. However, this may change when it is actually time to make the purchase. The “intended” purchase may be altered at the time of purchase for many reasons such as: the product is out-of-stock, a competitor offers an incentive at the point-of-purchase (e.g., store salesperson mentions a competitor’s offer), the customer lacks the necessary funds (e.g., credit card not working), or members of the consumer’s reference group take a negative view of the purchase (e.g., friend is critical of purchase).
5. After-Purchase Evaluation
Once the consumer has made the purchase they are faced with an evaluation of the decision. If the product performs below the consumer’s expectation then he/she will re-evaluate satisfaction with the decision, which at its extreme may result in the consumer returning the product while in less extreme situations the consumer will retain the purchased item but may take a negative view of the product. Such evaluations are more likely to occur in cases of expensive or highly important purchases. To help ease the concerns consumers have with their purchase evaluation, marketers need to be receptive and even encourage consumer contact. Customer service centers and follow-up market research are useful tools in helping to address purchasers’ concerns.
Why Consumers Buy :
customers make purchases in order to satisfy needs. Some of these needs are basic and must be filled by everyone on the planet (e.g., food, shelter) while others are not required for basic survival and vary depending on the person. It probably makes more sense to classify needs that are not a necessity as wants or desires. In fact, in many countries where the standard of living is very high, a large portion of the population’s income is spent on wants and desires rather than on basic needs.
For example, in planning for a family vacation the mother may make the hotel reservations but others in the family may have input on the hotel choice. Similarly, a father may purchase snacks at the grocery store but his young child may be the one who selected it from the store shelf. So understanding consumer purchase behavior involves not only understanding how decisions are made but also understanding the dynamics that influence purchases.

TYPES OF CONSUMER PURCHASE BEHAVIOR

Consumers are faced with purchase decisions nearly every day. But not all decisions are treated the same. Some decisions are more complex than others and thus require more effort by the consumer. Other decisions are fairly routine and require little effort. In general, consumers face four types of purchase decisions:

• Minor New Purchase – these purchases represent something new to a consumer but in the customer’s mind is not a very important purchase in terms of need, money or other reason (e.g., status within a group).
• Minor Re-Purchase – these are the most routine of all purchases and often the consumer returns to purchase the same product without giving much thought to other product options (i.e., consumer is brand loyalty).
• Major New Purchase – these purchases are the most difficult of all purchases because the product being purchased is important to the consumer but the consumer has little or no previous experience making these decisions. The consumer’s lack of confidence in making this type of decision often (but not always) requires the consumer to engage in an extensive decision-making process..
• Major Re-Purchase - these purchase decisions are also important to the consumer but the consumer feels confident in making these decisions since they have previous experience purchasing the product.

For marketers it is important to understand how consumers treat the purchase decisions they face. If a company is targeting customers who feel a purchase decision is difficult (i.e., Major New Purchase), their marketing strategy may vary greatly from a company targeting customers who view the purchase decision as routine. In fact, the same company may face both situations at the same time; for some the product is new, while other customers see the purchase as routine. The implication of buying behavior for marketers is that different buying situations require different marketing efforts
Consumer Buying Decision Process
“Nothing is more difficult and therefore, more precious, than to be able to decide is quoted to be the words of Napoleon. This is amply true in the case of consumer too. It is for this reason that the marketers are bound to have a full knowledge of the consumer – buying decision process.
However it should be remembered that the actual act of purchasing is only one stage in the process and the process is initiated at the several stages prior to the actual purchase. Secondly even though we find that purchase is one of the final links in the chain of process, not all decision processes lead to purchase. The individual consumer may terminate the process during any stage. Finally not all consumer decisions always include all stages. Persons engaged in extensive decision making usually employ all stages of this decision process. Where as those engaged in limited decisions making and routine response behaviour may omit some stages. The consumer decision process is composed of two parts, the process itself and the factors affecting the process.
SURVEY BY THE MARKETING TEAM
A survey conducted by the marketing team of shoppers stop Ltd. Reveals the psychography of the modern shopper.
Acordingly the survey classifies customers in to the four segments namely

• Convenience Shoppers
• Value Shoppers
• Image Shoppers
• Experience Shoppers

Convenience shoppers for instance ,are people who consume relatively less amount of time while shopping. Also they look out for the width and depth of the range they purchase and conduct their annual shopping at one shot.
Value Shoppers always hunt for value for money ; Prefer quality reassurance and benchmark offerings among other related attributes.
Image Shoppers are fashion- conscious and look out for the latest trends and labels.
On the other hand , Experience Shoppers are attentive and prefer personalized services look out for the right ambience, prefer giving personal advice on clothing at the time of purchase , and prefer not to buy at one sold.
MARKETING IMPLICATIONS OF CONSUMER’S DECISION PROCESS
It was during 1960’s that a number of theories to explain the consumer ‘s decision process started appearing. The three leading theorists were Howard-sheth , Engel Kollat-Blackwell and Nicosia. Since then a considerable research on the marketing implications of the process has been developed and tested the applications of many elements of marketing.
Many of the marketing dtrategies and tactics will have to be developed in relation to consumer attitudes. Marketing strategies ,if effectively used, will go a long way in initiating and developing consumer attitudes in favour of the products.
THE IMPORTANT MOTIVES, INFLUENCING THE ULTIMATE BUYING BEHAVIOUR OF CUSTOMERS.
1. Fear : To overcome theft, you may purchase a burglar alarm(out of
fear)
2. Desire for money : Purchasing when the price falls down.
3. Vanity : Getting costly items to be admired by others
4. Pride : Possessing luxurious items for high position in the society
5. Love and affection : When you purchase toys, dresses for your sister, it is out of
affections.
6. Sex and romance : Spending much on dresses, ornaments etc.
7. Fashion : Imitation motives : Old people dress like young ones.
8. Possession : This refers to collection of stamps, coins etc.
9. Health and Physical :Purchasing health foods, vitamins etc.
Well being
10. Comfort and :Purchasing equipments like refrigerator, pressure cookers, mixy convenience etc.

ECONOMIC FACTOR AFFECT THE BUYER’S BEHAVIOUR
1.Disposal personal income :
The economists made attempts to establish a relationship between income and spending. Disposal personal income represents potential purchasing power that a buyer has. The change in income has a direct relation on buying habits.
2.Size of family income :
The size of family and size of family income affect the spending and saving patterns. Generally large family spend more and short family spend less, in comparison.
3. Income expectations :
The expected income to receive in future has a direct relation with the buying behaviour. The expectation of higher or lower income has a direct effect on spending plans.
4.Propensity to consume and to save :
This goes to the habit of spending or saving with the disposal income of buyers. If the buyers give importance to present needs, then they dispose of their income. And buyers spend less if they give importance to future needs.
5. Liquidity of Fund :
The present buying plans are influenced greatly by liquidity of assets i.e., cash and assets readily convertible into cash, eg bonds, bank balances etc.,
6. Consumer Credit :
“ Buy now and pay later” plays its role effectively in the rapid growth of markets for car, scooter, radio, furniture and the like.
Economic model suggests behavioural hypothsis :

• Lower the price of the product, higher the sales.
• Lower the price of substitute products, lower the sales of this product
• Higher the real income, higher the sales of the product.
• Higher the promotional expenses, higher the sales.

Internal influences of buyers

• psychographics (lifestyle),
• personality, motivation, knowledge,
• attitudes,
• beliefs, and
• feelings.
• demographics,

consumer behaviour concern with consumer need consumer actions in the direction of satisfing needs leads to his behaviour behaviour of every individuals depend on thinking process.
EXTERNAL INFLUENCES OF BUYERS

• culture,
• sub-culture,
• Locality,
• royalty,
• ethnicity,
• family,
• social class,
• reference groups,
• lifestyle, and
• market mix factors.

.CONCLUSION
Competing for the consumer is a never-ending challenge. This is due principally to the uniqueness and competitiveness of each individual market, for they are all different and all require different approaches" . Knowledge of the buying motives of consumers is essential for a marketer.The changes in the market are brought by the consumers.
REFERENCES
Consumer Behavior In Indian Perspective – Suja Nair – Himalaya Publishers
Consumer Behaviour – Walker
Modern marketing - - R.S.N Pillai, Bagavathi



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