round off philanthropy

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The Round-OfPhilanthropyTheory

CoverSaturday, August 27, 2011

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Cover Page 1


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The contents of this of this "idea book" including

facts and images have been copied from varioussources on the internet . I have mentioned the

source links to the best of my knowledge and do

not claim any copyrights for them. Although the

Basic Idea "The Round-off Philanthropy theory "is

mine and I have used these facts, images and infographics from the internet to explain the idea and

the impact it can bring to the world.

I have mentioned some companies in this "idea

book". I just want to make it clear that I have no

intention to dishonor or harm these companies inany way I am just presenting an idea that has been

haunting me for a while now.

Regards

Aditya

This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported

License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nc-sa/3.0/or senda letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

DisclaimerSaturday, August 27, 2011

8:47 PM

Disclaimer Page 2
http://creativecommons.org/licenses/by-nc-sa/3.0/http://creativecommons.org/licenses/by-nc-sa/3.0/http://creativecommons.org/licenses/by-nc-sa/3.0/http://creativecommons.org/licenses/by-nc-sa/3.0/http://creativecommons.org/licenses/by-nc-sa/3.0/http://creativecommons.org/licenses/by-nc-sa/3.0/http://creativecommons.org/licenses/by-nc-sa/3.0/http://creativecommons.org/licenses/by-nc-sa/3.0/


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"Keep the Change"

Well in one phrase the idea is -

Thinking of how can this phrase can be of a great

to the world ?

Let me tell you how !

Every one of us have seen those price tags of $ 1.99, or $ 19.99 or $ 199 well of-course if you are not an Amer

you must have seen similar ones in your native currencies I being an Indian have seen them in Rupees. These

are specifically fixed by the retailers to make the customers have a sense of reduced price and attract them to

those products. This is called psychological pricing.

Most customers generally leave the change or if they do take it home it ends up being an extra weight in the

pocket. Well this does not apply to everyone but most of the times it is used in a less productive manner than i

could have.

A few pennies or cents are of not much value to a customer individually but collectively these few pennies coul

add up to millions if collected in an organized manner and can serve as a funding for a multitude of social servi

projects. Today the retailing corporations are so huge that this small amount can add up to very large quantitie

and can help these corporations to do public welfare "If they want to!".

So getting straight to the point the idea to be precise is -

When a customer buys some products marked with these price tags and is offered to donate the change for a

philanthropic effort carried on by the retailing company individually (with well laid empathy gaining graphic ad

or a group of retailers. Then most of the customers would happily donate that money.

In case if the customer has brought more than one products then he or she can be requested to donate (but n

compulsorily )the round-off change for the cause

Why do I think that most people will happily donate if given a choice?

The answer is simple

If one buy something for $1.99 or $19.99 or $199.99 and so on psychologically one generally would see one'

donation as a very small amount as compared to the price one has paid to buy the product and if you align tha

feeling with the psychological impact of doing some good to others I personally think that people would happi

donate this amount("The Change").

IdeaSaturday, August 27, 2011

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Idea Page 3


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Now, its a good Idea but why would any multinational retailer take up such an effort knowing it would require

good amount of accounting and advertisement costs ?

The retailer can take up this happily because there are some hidden benefits for them in the game.

First of all management of change is not an easy job although these days a large amount of payments are

via credit or debit cards but they still have to keep change for people who buy products with cash. This wil

reduce there change management costs.

1.

Secondly, they can collect this some of money for the complete financial year and earn interest on this bas

amount via various banking operations. Only the interest earned will be enough to be utilized to cover th

advertising and accounting costs.

2.

Thirdly, the good will generated among the customers for the company by its philanthropic efforts would

strengthen the customers relationship with retailer

3.

NOW LET US MOVE ON TO SEE HOW BIG CAN THIS BE :

I have collected some rough facts for your contemplation

Idea Page 4


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Psychological pricing or price ending is a marketing practice based on the theory that certain prices have a psychological impact.

The retail prices are often expressed as "odd prices": a little less than a round number, e.g. $19.99 or 2.98. The theory is this drives d

greater than would be expected if consumers wereperfectly rational. Psychological pricing is one cause ofprice points.

Consumers ignore the least significant digits rather than do the proper rounding. Even though the cents are seen and not totally

ignored, they may subconsciously be partially ignored. Some[who?] suggest that this effect may be enhanced when the cents are

smaller (for example, $1999

).

Fractional prices suggest to consumers that goods are marked at the lowest possible price.

When items are listed in a way that is segregated into price bands (such as an online real estate search), price ending is used to

an item in a lower band, to be seen by more potential purchasers.

Judgments of numerical differences are anchored on left-most digits, a behavioral phenomenon referred to as the left-digit anc

effect. This hypothesis suggests that people perceive the difference between 1.99 and 3.00 to be closer to 2.01 than to 1.01 be

their judgments are anchored on the left-most digit.

Kaushik Basu used game theory in 1997 to argue that rational consumers value their own time and effort at calculation. Such

consumers process the price from left to right and tend to mentally replace the last two digits of the price with an estimate of t

mean "cent component" of all goods in the marketplace. In a sufficiently large marketplace, this implies that any individual selle

charge the largest possible "cent component" (99) without significantly affecting the average of cent components and without

changing customer behavior

Wal-Mart, a major retailer makes use of .98 price endings as opposed to .99 endings.

A recent trend in some monetary systems is to eliminate the smallest denomination coin (typically 0.01 of the local currency). T

cost of purchased items is then rounded up/down to, for example, the nearest 0.05. This may have an effect on future "odd-nu

pricing to maximize the rounding advantage for vendors by favoring 98 and 99 endings (rounded up) over 96 and 97 ending (rou

down) especially at small retail outlets where single item purchases are more common. Australia is a good example of this pract

where 5 cents has been the smallest denomination coin since 1992, but pricing at .98/.99 on items under several hundred dolla

still almost universally applied (e.g.: $1.99 $299.99) while goods on sale often price at .94 and its variations.

Take a penny, leave a penny (sometimes Give a penny, take a penny or penny tray) refers to a type of tray, dish or cup often f

gas stations,convenience stores, and other small stores in North America, meant for convenience in cash transactions.

The small cup or tray near a cash register is designated as a place for people to place pennies they receive as change if they do n

want them. Then, customers who, for example, need one cent for a transaction can take one of the pennies to avoid needing o

their own or breaking a higher-denomination coin or bill.

Source : Wikipedia www.wikipedia.org

The psychological pricing theory is based on one or more of the following hypotheses:

Some Facts about Psychological Pricing ...

Psychological pricingSaturday, August 27, 2011

6:51 PM

Psychological pricing Page 6
http://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Psychologicalhttp://en.wikipedia.org/wiki/Retailhttp://en.wikipedia.org/wiki/Homo_economicushttp://en.wikipedia.org/wiki/Homo_economicushttp://en.wikipedia.org/wiki/Homo_economicushttp://en.wikipedia.org/wiki/Price_pointshttp://en.wikipedia.org/wiki/Price_pointshttp://en.wikipedia.org/wiki/Wikipedia:Avoid_weasel_wordshttp://en.wikipedia.org/wiki/Wikipedia:Avoid_weasel_wordshttp://en.wikipedia.org/wiki/Kaushik_Basuhttp://en.wikipedia.org/wiki/Game_theoryhttp://en.wikipedia.org/wiki/Wal-Marthttp://en.wikipedia.org/wiki/Wal-Marthttp://en.wikipedia.org/wiki/Swedish_roundinghttp://en.wikipedia.org/wiki/Swedish_roundinghttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/Australian_5_cent_coinhttp://en.wikipedia.org/wiki/Gas_stationshttp://en.wikipedia.org/wiki/Gas_stationshttp://en.wikipedia.org/wiki/Convenience_storeshttp://en.wikipedia.org/wiki/Convenience_storeshttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/Cent_%28United_States_coin%29http://www.wikipedia.org/http://www.wikipedia.org/http://en.wikipedia.org/wiki/Cent_%28United_States_coin%29http://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/Convenience_storeshttp://en.wikipedia.org/wiki/Gas_stationshttp://en.wikipedia.org/wiki/Australian_5_cent_coinhttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/Swedish_roundinghttp://en.wikipedia.org/wiki/Wal-Marthttp://en.wikipedia.org/wiki/Game_theoryhttp://en.wikipedia.org/wiki/Kaushik_Basuhttp://en.wikipedia.org/wiki/Wikipedia:Avoid_weasel_wordshttp://en.wikipedia.org/wiki/Price_pointshttp://en.wikipedia.org/wiki/Homo_economicushttp://en.wikipedia.org/wiki/Retailhttp://en.wikipedia.org/wiki/Psychologicalhttp://en.wikipedia.org/wiki/Marketing


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Sales among the Top 75 foodretailers in North America

recovered from a slump in

2009, rising 7.7% during 2010,compared with a cumulative

drop of 0.2% a year ago. Total

revenues, encompassing salesof food and nonfood

merchandise, totaled $960.3

billion last year, compared with$891.4 billion in 2009. Revenue

among the 10 largest

Size of the world retail sector...

Retail SectorSaturday, August 27, 2011

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Retail Sector Page 7


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companies on the list rose 2.2%

to $666.1 billion in 2010.Read more: http://supermarketnews.com/profiles/top75/2011/#ixzz1WF5lh8ve

Pasted from

Retail Sector Page 8
http://supermarketnews.com/profiles/top75/2011/#ixzz1WF5lh8vehttp://supermarketnews.com/profiles/top75/2011/http://supermarketnews.com/profiles/top75/2011/http://supermarketnews.com/profiles/top75/2011/http://supermarketnews.com/profiles/top75/2011/#ixzz1WF5lh8ve


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http://www.mapsofworld.com/world-top-ten/world-top-ten-supermarket-countries.html

Major regions of the world with dominance of super markets...

Super MarketsSaturday, August 27, 2011

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Super Market Page 9
http://www.mapsofworld.com/world-top-ten/world-top-ten-supermarket-countries.htmlhttp://www.mapsofworld.com/world-top-ten/world-top-ten-supermarket-countries.html


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The Organisation for Economic Co-operation and Development is an international economic

organisation of 34 countries founded in 1961 to stimulate economic progress and world trade. It is a

forum of countries committed to democracy and the market economy, providing a platform to compare

policy experiences, seek answers to common problems, identify good practices, and co-ordinate

domestic and international policies of its members.

Most OECD members are high-income economies with a high Human Development Index (HDI) and are

regarded as developed countries.

Pasted from

Do You See the similarities among the two maps(Super Markets and OECD Countries)

Most of the super markets are in the OECD countries where people have a very high standard of living

and good domestic income and hence can afford to donate some of their change for a good cause...

OECD CountriesSaturday, August 27, 2011

7:37 PM

OECD Page 10
http://en.wikipedia.org/wiki/International_organizationhttp://en.wikipedia.org/wiki/International_organizationhttp://en.wikipedia.org/wiki/Democracyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/High_income_economyhttp://en.wikipedia.org/wiki/Human_Development_Indexhttp://en.wikipedia.org/wiki/Human_Development_Indexhttp://en.wikipedia.org/wiki/Developed_countrieshttp://en.wikipedia.org/wiki/Developed_countrieshttp://en.wikipedia.org/wiki/Oecdhttp://en.wikipedia.org/wiki/Oecdhttp://en.wikipedia.org/wiki/Oecdhttp://en.wikipedia.org/wiki/Developed_countrieshttp://en.wikipedia.org/wiki/Human_Development_Indexhttp://en.wikipedia.org/wiki/High_income_economyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Democracyhttp://en.wikipedia.org/wiki/International_organizationhttp://en.wikipedia.org/wiki/International_organization


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This is the map of the world marked according to the GDP of the

all the countries of the world...

You can still see that regions having the largest GDP are also home to largest supermarkets or to be

precise organized retail which is essential for this Idea to work.

GDPSaturday, August 27, 2011

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GDP Page 11


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Wal-Mart Stores, Inc., (NYSE: WMT) servescustomers and members more than 200

million times per week at more than 9,600

retail units under 69 different banners in 2

countries. With fiscal year 2011 sales of $4

billion, Walmart employs more than two

million associates worldwide. Walmart

continues to be a leader in sustainability,

corporate philanthropy and employment

opportunity.

From

Now let us study how much Wall-Mart can do if it uses this idea...

Wal-MartSaturday, August 27, 2011

7:31 PM

wal-mart Page 12
http://investors.walmartstores.com/phoenix.zhtml?c=112761&p=irol-irhomehttp://investors.walmartstores.com/phoenix.zhtml?c=112761&p=irol-irhomehttp://investors.walmartstores.com/phoenix.zhtml?c=112761&p=irol-irhome


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wal-mart Page 13


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The map shows the regions across USA where Wal-Mart stores are present.

Source: www.wikipedia.org

Wall-Mart in USASaturday, August 27, 2011

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wal-mart Page 14
http://www.wikipedia.org/http://www.wikipedia.org/


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Info graphic -1Saturday, August 27, 2011

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wal-mart facts Page 15


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http://www.ngretaileurope.com/news/walmart-does-bigger-always-mean-better/

http://www.ngretaileurope.com/news/walmart-does-bigger-always-mean-better/http://www.ngretaileurope.com/news/walmart-does-bigger-always-mean-better/


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Info graphic -2Saturday, August 27, 2011

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https://reader009.{domain}/reader009/html5/0514/5af8700bab603/5af8701a397a4.jpg

http://www.businesspundit.com/wp-content/uploads/2010/07/walmart.jpghttp://www.businesspundit.com/wp-content/uploads/2010/07/walmart.jpg


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Online sales of the Top 500retailers grew 18% to $150.0

billion in 2010 from $127.1

billion in 2009 while total U.S. e-

commerce sales increased yearover year 14.8% to $165.4 billion

from $144.1 billion, according to

the U.S. Department of

Commerce.Pasted from

Online RetailSaturday, August 27, 2011

7:58 PM

Online Retail Page 21
http://www.internetretailer.com/top500/?cid=2011-Top500-Article-Webhttp://www.internetretailer.com/top500/?cid=2011-Top500-Article-Webhttp://www.internetretailer.com/2011/05/03/top-500-return-double-digit-annual-growthhttp://www.internetretailer.com/2011/05/03/top-500-return-double-digit-annual-growthhttp://www.internetretailer.com/2011/05/03/top-500-return-double-digit-annual-growthhttp://www.internetretailer.com/2011/05/03/top-500-return-double-digit-annual-growthhttp://www.internetretailer.com/2011/05/03/top-500-return-double-digit-annual-growthhttp://www.internetretailer.com/top500/?cid=2011-Top500-Article-Webhttp://www.internetretailer.com/top500/?cid=2011-Top500-Article-Web


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As the world is moving on-line so should we..

Online Retail Info graphicSaturday, August 27, 2011

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http://www.onlinemarketing-trends.com/2011/02/online-retail-sales-trends-infographic.html

http://www.onlinemarketing-trends.com/2011/02/online-retail-sales-trends-infographic.htmlhttp://www.onlinemarketing-trends.com/2011/02/online-retail-sales-trends-infographic.html


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Net sales of Amazon.com wer

$34.20 billion, a 39.5%

increase from $24.51 billionlast year. North American net

sales totaled $18.7 billion, up

46.1% from $12.8 billion in2009. North America

accounted for 54.7% of sales

2010.Pasted from

A look at the largest retailer online...

Amazon.comSaturday, August 27, 2011

8:16 PM

Amazon Page 25
http://www.internetretailer.com/2010/01/28/amazon-com-grows-annual-sales-by-28-in-2009http://www.internetretailer.com/2011/01/27/amazon-sales-and-profits-boom-2010http://www.internetretailer.com/2011/01/27/amazon-sales-and-profits-boom-2010http://www.internetretailer.com/2011/01/27/amazon-sales-and-profits-boom-2010http://www.internetretailer.com/2010/01/28/amazon-com-grows-annual-sales-by-28-in-2009


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Comparing the might of the physical and online retail giants..

Info graphicSaturday, August 27, 2011

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Amazon Page 26


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Amazon Page 27


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Amazon Page 28


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Amazon Page 29


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Amazon Page 30


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http://www.onlinemba.com/

Amazon Page 31
http://www.onlinemba.com/http://www.onlinemba.com/


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Well I am not a great mathematician so what I am going

to estimate is just an idea of what amount of money canbe generated from this effort...

Wal-Mart has a total sales of 419 billion and it has the famous policy of pricing goods

like $2.98 so the $ 0.02 can be taken out from most products. Now since all products

are not prices the same and have different price slabs the number of products sold are

obviously much less than their total sales price as well as considering the fact that

most people buy products collectively rather than an individual product at a time andhence this round off money can reach upto 0.98 cents. And of-course not all will

donate.

So you can see its a complicated task to estimate how much money can be generated

from the process and I leave that to the talented mathematicians out there.

But even if 0.1% of the 419 billion sales is assumed can be generated from change

donations then that amounts to 419 million $ which is a huge amount.

Similarly for Amazon.com 34.2 billion's 0.1% will be 34.2 million $

Finally the retail sectors 960 billion can generate at least 960

million which is a whooping amount !

Rough estimatesSaturday, August 27, 2011

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Rough Estimation Page 32


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Now we can think of things to use this money for

For healthcare, education, food and shelter for the

poor

1.

For saving the environment2.

For helping victims of natural disasters3.

For generating new jobs for the unemployed4.

For a plethora of things that we can think of...5.

But we must save this Philanthropic

effort from the jaws of corruption whi

can misuse this money if it is not

properly regulated and destroy the ide

and all the good that it can bring...

ImpactSaturday, August 27, 2011

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Impact Page 33


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To be frank folks I am just another guy next door and dont know much about writing book

please forgive me for this very casual effort. I just wanted to express an Idea of mine and t

bring it forth so that may be one day it can be Implemented at some level and bring good t

society.I know that such efforts are already taking place rather I have taken inspiration from some

if this can be done in an organized way in a large scale it can do wonders

The Idea I present here in Itself can be used to solve many problems in our society, but it re

on large scale organization and honest Implementation.

ConclusionSaturday, August 27, 2011

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Conclusions Page 34


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Thanks for reading

my Idea book!Regards

Aditya [email protected]

Special Thanks to Microsoft For the wonderful Office Applications

EndSaturday, August 27, 2011

8:48 PM

round off philanthropy

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