Holistic Marketing Management, Volume 2, Issue 2, Year 2012

Editorial Board of “Holistic Marketing Management” (A refereed journal published four times annualy by the School of Management-Marketing of the Romanian-American University) Editor -in- Chief Theodor Valentin PURCĂREA Editorial Board

Bernd HALLIER

John SAEE

John L. STANTON Léon F. WEGNEZ William PERTTULA Levent ALTINAY Dana ZADRAZILOVA Riccardo BELTRAMO Sinisa ZARIC Gabriela SABĂU Hélène NIKOLOPOULOU Vasa LÁSZLÓ Peter STARCHON John MURRAY

Managing Director EuroHandels Institute Retail, Germany; President of EuCVoT; President of European Retail Academy; Member of the Astana Economic Scientists Club; Chairman of the Advisory Board of EuroShop; Chairman of the Board of the Orgainvent; Trustee of EHI Retail Institute at GLOBALG.A.P. Association of Management and International Association of Management, USA; Australian Graduate School of Entrepreneurship, the Faculty of Business and Enterprise, Swinburne University of Technology; Member of France’s National Academy of Scientific Research (CNRS) Professor of Food Marketing, Erivan K. Haub School of Business, Saint Joseph’s University Philadelphia, USA; Editor, Journal of Food Products Marketing Secretary General, International Association of the Distributive Trade, AIDA Brussels; Member of France’s Academy of Commercial Sciences Internet Marketing Professor, College of Business, San Francisco State University, USA Professor of Strategy and Entrepreneurship, Research Area Leader, Oxford School of Hospitality Management, Faculty of Business, Oxford Brookes University, UK Dean of Faculty of International Economic Relations, University of Economics, Prague, Czech Republic University of Turin, Italy University of Belgrade, Yugoslavia Memorial University, Grenfell Campus, Corner Brook, Canada University of Lille 3, France Szent Istvan University, Hungary Comenius University in Bratislava, Slovakia Faculty of Business, Dublin Institute of Technology, Ireland

Kamil PÍCHA

Faculty of Economics,University of South Bohemia in Ceske Budejovice

Constantin ROŞCA

President of Romanian Scientific Society of Management- SSMAR

Irena JINDRICHOVSKA Dumitru MIRON Valeriu IOAN-FRANC Iacob CĂTOIU Virgil BALAURE Gheorghe ORZAN

Luigi DUMITRESCU

Deputy Head of Department of Business Economics, University of Economics and Management, Prague, Czech Republic Academy of Economic Studies in Bucharest National Institute for Economic Research, Romanian Academy; Romanian Marketing Association Academy of Economic Studies in Bucharest Academy of Economic Studies in Bucharest Academy of Economic Studies in Bucharest

Lucian Blaga University of Sibiu

Holistic Marketing Management

!1

Marius D. POP Petre FILIP Ion VOICU SUCALA Virgil POPA Ana-Maria PREDA Ileana PONORAN Ovidiu FOLCUȚ Doinița CIOCÎRLAN Marius Dan DALOTĂ Mihai PAPUC Gheorghe ILIESCU Alexandru IONESCU Olga POTECEA Oana PREDA Nicoleta DUMITRU Monica Paula RAȚIU Costel NEGRICEA

Babes-Bolyai University, Cluj-Napoca Dimitrie Cantemir University, Bucharest Technical University of Cluj-Napoca, Management and Economic Engineering Department; University of Glasgow, UK, College of Social Sciences, School of Social & Political Sciences; Managing Editor, Review of Management and Economic Engineering Valahia University of Târgovişte Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University

Associate Editors Cristina NEAGOE Dan SMEDESCU Art Designer Director Alexandru BEJAN

Holistic Marketing Management

2

CONTENT

Theodor Valentin PURCĂREA

Editorial: In a time of deepening crisis, remaining in the game for customers thanks to the “relationship culture” necessary to the resilient organization................................

4

Vojislav BABIC

Management and trust during the Global Economic Crisis: The case of Serbia....................................................

7

Marius Dan DALOTĂ Roxana MATEI

Some aspects concerning small and medium enterprise’s growth and new technologies implementation ..................

19

Tudor EDU Costel NEGRICEA

Identifying marketing approaches used in the romanian mandatory car insurance market. A marketing research....

29

Mariana ENUȘI Cristina HARNAGEA

Consideration regarding the effect of inovation and integrated use of technologies and techniques for Small and Medium Romanian Enterprises based on knowledge....

Sinisa ZARIC

41

Leonica POPESCU Alina Irina POPESCU

Social cohesion through lifelong learning at European level......................................................................................

50

Emanuela Maria AVRAM

Higher education student choice influencing factors.......

59

Elisabeta Andreea BUDACIA

Advertising through Television............................................

65

Diana SOCA

The Focus of Companies on Clients – A Major Trend in the Current Business Environment......................................

Gabriela VÂLCEANU

Negotiation, the Core of Sales Activity................................

Ivona STOICA Nicoleta Rossela DUMITRU

Food Responsibility - A National Challenge. Case Study Implementation of a Social Campaign in Bucharest Schools.................................................................................

71 76

82

The responsibility for the content of the scientific and the authenticity of the published materials and opinions expressed rests with the author.

Holistic Marketing Management

3

Editorial: In a time of deepening crisis, remaining in the game for customers thanks to the “relationship culture” necessary to the resilient organization Peter. F. Druker, “The Father of Management” has argued that: << the best way to predict the future is to create it; the purpose of a business is to create a customer; business has only two functions, marketing and innovation, all the rest being costs; the entrepreneur always searches for change, responds to it, and exploits it as an opportunity; the aim of marketing is to know and understand the customer so well the product or service fits him and sells itself. >> Indeed, there is no doubt that customer relationship is the company’s most important asset that needs to be managed. Building a healthy relationship with customers involves understanding the importance of the “relationship culture” which is helping all parties concerned to interact and to ensure proper alignment between those parties.

Two years ago we showed that in today’s business climate there is a real need for having an informed approach to marketing based on facts and goals, a framework as Quaero’s “Six Dimensions” (actionable strategies, organizational alignment, appropriate measures, effective processes, information assets and analytics, enabling technologies - aligned strategies, processes, and organization driving the technology decisions) offering a solid understanding of marketing effectiveness and a clear roadmap for improving it1. We also underlined the opinion that customer marketing is becoming more central to brand building, customer marketing and brand marketing coming together, within organization structures lagging behind and silo fighting rage on.2 We also signaled that beginning with 2008 there were interesting opinions expressed by David Armano who has insisted on the followings: there is a problem with marketing, because many times it doesn’t allow marketers to gain an intimate understanding of human behavior3, and we have to take into account that “the real action happens in the comments”4; “unconventional times call for unconventional tactics”5 (speaking on his personal blog experience as one of the most effective manifestations of “marketing”) and we have to consider the so-called “marketing spiral” (introduced during his conversation with Gary Cohen and Jay Ehret6): awareness - interaction, engagement, participation, conversation, affinity - community. Two years later, during the spring of 2010, Tim Parker7 began to underline the importance of “the new rules of thought leadership marketing” (<< the customer has become the hunter, the marketer the hunted; an author's admirers now do the promoting; influencers have become critical marketing targets; online columns are potential new channels etc. >>), arguing that: marketers can’t control the new channels (influencers and quality online publications, viewed by readers as more credible); buyers are moving from biased to unbiased channels, the major cost in working the unbiased channels being the time. It has been observed that the new marketing reality implies a growing engagement in accepting the creative thinking challenge, progressing through knowledge and understanding towards mutual confidence, converting emotions into agreements and the relation based on these agreements into a loyal and emotionally connected one, for a certain period of time. << Never have I seen such a convergence of my two professional “sweet spots” – crisis 1

Your blueprint for success, http://quaero.csgsystems.com/six_dimensions/ Does Brand Marketing still matter?, February, 8, 2010, available at: http://quaero.csgsystems.com/blog/196does_brand_marketing_still_matter 3 David Armano - When marketing feels shallow, go deep, Sunday, July 13, 2008, http://darmano.typepad.com 4 David Armano - Digital marketing needs a reboot, Friday, July 25, 2008, http://darmano.typepad.com/logic 5 David Armano - Unconventional marketing, Sunday, October 12, 2008, http://darmano.typepad.com 6 David Armano - Accidental marketers: The podcast, Sunday, October 23, 2008, http://darmano.typepad.com 7 Tim Parker - The new rules of thought leadership marketing, April 16, 2010, http://www.socialmediatoday.com/SMC/ 2

Holistic Marketing Management

4

management and marketing/reputation strategy. And where they overlap is in mission critical marketing – for business and organizational survival >>… clearly pointed out Davia B. Temin (Temin and Company is a reputation and crisis management, strategic marketing, media strategy, and coaching consultancy),8 waiting for our reactions and comments at six observations on mission critical marketing, communications, and reputation management in 2009: marketing in a time of crisis (a massive reevaluation well beyond focus on marketing ROI, redefining marketing best practices day by day, both through technology and through resource scarcity); crisis thinking (it is necessary to understand what research tells us - “A staunch acceptance of reality” is crucial to resiliency and crisis management - and to consciously cultivate a better grasp of crisis planning, judgment, and management); the ultimate Rorschach Test9 (crisis being the ultimate Rorschach test, beyond survival being necessary to evaluate who remains focused on mission and sales, keeping his cool and quickly figuring out new ways to adjust, acting out, being compassionate throughout the process, putting the anxieties aside and working tirelessly for the organization, as well as to help the less-fortunate colleagues and communities); what we can learn from science (fiction; by using, in crisis planning, a dose of scientific imagination in order to help envision what might happen, and how we can guard against those eventualities, as well as react to them or others, should they unfold); “Caveat Lector” (“let the reader beware”; growing misinformation during the crisis on the Web, erroneous posting fueling irrational thinking and destructive consumer behavior, which is calling into question the reliance on the Web for accurate information); resilience in times of crisis (considering the three attributes of a truly resilient organization revealed by Diane Coutu10: a staunch acceptance of reality; a deep belief, often buttressed by strongly held values, that life is meaningful; an uncanny ability to improvise). It is also worth mentioning a few more recent comments11 to Coutu approach that there is also a need for both, a sense of precision of routine which can be employed during stressful times, and of considering the disadvantage of a resilient person who might rather sacrifice the company than himself in times of trouble.

Analyzing the observed phenomena in social media today within the context of the “attention economy” (created by individuals with different tie strength, the individuals competing constantly for our attention, a scarce and limited resource for everyone), Michael Wu (the principal scientist of analytics at Lithium Technologies, and voted as a 2010 Influential Leader by CRM Magazine12) underlined our difficult time thinking in terms of relationships: time, intensity, trust, and reciprocity contribute directly to the strength of a relationship, from a sociologist’s perspective; the weak ties and the strong ones are relative to our engagement circle which consists of the people that we can engage with easily; the strongest tie will win over the others when all things are equal, but due to contextual and extrinsic factors weaker ties may occasionally win some small amount of attention.

At the beginning of February last year, Thomas H. Davenport13 has argued the necessity for companies to develop a strategy for knowledge work that “not only provides a clearer view of the types of information that workers need to do their jobs but also recognizes that the application of 8

Davia B. Temin - Crisis and Marketing Strategies for 2009: Swimming Naked with the Black Swans, Temin and Company, Crisis_Marketing_Strategies_2009.pdf 9 http://www.rorschachinkblottest.com/ 10 Diane L. Coutu - How Resilience Works, Harvard Business Review, May 01, 2002 11 Daniel Dumke - Resilience from a Psychological Perspective, 2011-09-28, http://scrmblog.com/review/resiliencefrom-a-psychological-perspective 12 Michael Wu - The relativity and attention economics of customer relationships, Social CRM on Fri, 30/09/2011, http://www.mycustomer.com/topic/social-crm/relativity-and-attention-economics-customerrelationships/131550?mkt_tok 13 Thomas H. Davenport - Rethinking knowledge work: A strategic approach, McKinsey Quarterly, 2 February 2011 Holistic Marketing Management

5

technology across the organization must vary considerably, according to the tasks different knowledge workers perform.” He underlined that in order to improve access to the information that lies at the core of knowledge work there are two approaches (“free-access”; “structuredprovisioning”) in wide use, but making radically different assumptions about how this knowledge work should be performed and its productivity improved. Here we see a very strong link with the need for more data rich and analytically intense, for marketing accountability considered being tough intellectually and spiritually, considering all related interactions with customers that make up the customer experience as we showed in another Editorial, within the reality that the buying process has become collaborative, and must ensure critical touch points that drive engagement.

As all marketing expenses are related to the “health” of the customer relationship, we conclude with the opinion expressed by us in September 201114, namely that the economic recovery of the customer relationship affected by the current crisis requires the introduction of a functional culture of the relationship marketing, a culture based on a stated commitment of the company and a detailed implementation program of this „relational culture.” Within this context, we assumed the following definition: „Relationship marketing is the art of strategic building of relationships between key stakeholders brands in a organization, for the benefit of all relational landscape that stimulates the organization performance and profitability improvement, the quality and the depth of customer relationship.”

Theodor Valentin Purcărea Editor - in - Chief

14

Theodor Purcărea – Marketingul relațiilor cu clienții, Editura Universitară Carol Davila, Bucureşti, 2011

Holistic Marketing Management

6

MANAGEMENT AND TRUST DURING THE GLOBAL ECONOMIC CRISIS: THE CASE OF SERBIA Professor Sinisa ZARIC, PhD University of Belgrade, Faculty of Economics

Kamenicka 6, 11000 Belgrade Professor Vojislav BABIC, PhD University of Belgrade, Faculty of Economics

Kamenicka 6, 11000 Belgrade ISR Belgrade Abstract: The paper analyzes the trust influence on management and business indicators of Belgrade entrepreneurs during the global economic crisis. The first chapter points out that entrepreneurs are exposed to significant non-market risks in countries with underdeveloped institutional infrastructure. Due to that fact, creation of business strategies is more difficult.

Under the conditions of economic crisis, large number of decisions are made by the institutions that influence on the behavior of entrepreneurs, in order to seek answers for the crisis disturbances. In such conditions, solid stocks of social capital are of great importance for the stability of the economy and individual agents.In chapter 2 it was defined the term, structure and functions of social capital. Besides, it was considered the influence of social capital on the micro-economic sector. In chapter 3, it was measured institutional, financial and stakeholdersâ&#x20AC;&#x2122; trust of entrepreneurs and its impact on the investment trend, the volume of business and real salaries of micro and small enterprises. Based on empirical data, it was shown that low trust stocks have the negative influence on business indicators and development of firms.

Keywords: Economic crisis, Serbian entrepreneurs, social capital, trust, business parameters; JEL Classification: G01, O43, L26, D22, A13 Economic agents are performing within the business environment. David Baron (Baron, 2010) makes a distinction between the market and the non-market environment.

Operating within the non-market environment, the entrepreneurs are facing the problem of formulating so-called non-market strategies. It is of significant interest to get knowing how favorable the non-market environment is for business. In the same time, having in mind the character and the structure of the non-market environment, the economic agents have to be prepared for answering to the impulses coming from the government non-market environment. Many of the elements of the non-market environment (the network of institutions) are, in the same time, the factors of creating social capital. The social capital, definitely recognized as one of the kinds of capital - besides physical and the human one is not only having a positive impact on entrepreneurial activities, but is a capital in which one

7

could invest. The role of entrepreneurship in creating inclusive forms of social capital , considering it as a production factor (Svensend, G.L.H. and Svensend, G.T., 2005).

An entrepreneur is in a situation in which the stocks of social character and the character of relations within this specific “glue” of society (The World Bank 1998) influence his/her economic behaviour. An entrepreneur can participate in the government arena by building coalitions, lobbying and trying to limit the dangers that come from those institutions which significantly influence his/her non-market behaviour. In the time of global economic crisis, an entrepreneur faces dramatic or less dramatic changes in the field of market environment. Experiences of countries such as the peripheral European countries (Serbia), demonstrates that entrepreneurs have difficulties in anticipating the changes coming from the range of non-market environment. Generally speaking, in countries with insufficiently developed institutional infrastructure entrepreneurs are exposed to great nonmarket risks, in other words, they have difficulties in successfully creating their non-market strategies. Good networking (Kim,P., and Aldrich,H., 2005), solid stocks of social capital, as well as trust in other agents and institutions, will prove to be the factors of highest significance for the stability of economy and individual agents. The crisis incites making a greater number of decisions by institutions which influence on the entrepreneurs’ behaviour, with the objective to seek answers to crisis disturbances. In a situation with low trust in this segment of non-market environment actors, the low level of social capital disables adequate adjustment of actions in the entrepreneurial structure to the newly developed circumstances.

2. Social Capital Theory Approach A starting framework of this study relies on a social capital theory. The social capital represents an investment into social relations with an expected refund on a market.

Wealthy social environment, which allows frequent acquaintances and business contracts, presents a suitable ground for exchange of social norms, trust and reciprocity. The social capital includes information which are available to alters (members of entrepreneur networks), ideas, instructions, business possibilities, easier approach to financial capital, emotional and moral support, trust, cooperation, power and influence (Zaric and Babic 2010). The information collected through entrepreneurs networks, are more qualitative because they are: 1. cheaper, 2. more detailed and accurate, 3. the alters, with which they keep up constant contacts, have economic motivation to be reliable and 4. permanent economic relations become coated by social content added to trust expectation and opportunism absence. Increasing the number of business contacts based on trust, it makes an influence on decreasing transactional costs as well as the increase of physical capital decreases production costs. The way human, physical and financial capital are productive, the same goes for the social capital, too. Therefore, the social capital can be considered as the input in a production process. By its use, business can be done, profit can be realized on market, and new values can be created. Also, mission can be fulfilled, goals achieved and the contribution can be given to the world. According to The World Bank ”The social capital of a society includes the institutions, the relationships, the attitudes and values that govern interactions among people and contribute to economic and social development.

Social capital, however, is not simply the sum of the institutions which underpin society, it is also the glue that holds them together” (The World Bank 1998:1). After The World Bank initiative an upswing of quotations was registered in economic literature, including terms social capital and social network (Isham et al. 2002). According to Putnam, the social capital refers to relations among an individual, a social network, reciprocity norms and trust resulted from them (Putnam 2000). Under the term of social capital, Schiff implicates a

8

sum of social structural elements which affect interhuman relationships and represent an input for production or functional utility (Schiff 2002). Portes sees the social capital as the actors` ability to insure benefits through members in social networks (Portes 1998). To Pennar’s definition, the social capital consists of networks of social relationships that influence individual behavior and thus cause economic growth (Pennar 1998). The name ”social” in the term social capital, points to the fact that resources are neither personal property nor they are possessed by any single person. They can be only used within interrelation network. Entrepreneurs’ network is a personal and business network that an entrepreneur builds in order to realize his entrepreneurial ventures. Within business management, networks are treated as a variable of a social capital that enterprises exploit to overcome limitations related to their size and possible institutional barriers, providing access to other resources that can improve business (Curran et al. 1995). In addition to business networks, trust presents a significant input variable of the social capital. Numerous authors give it the importance of weighted variables and quite a number of them identify it with the social capital. A trust idea refers to correct expectations about the actions of other people that have a bearing on one’s own choice of action when that action must be chosen before one can monitor the actions of those others (Dasqupta 1998). The trust can be also explained as a firm belief in the reliability of an individual, company or institutions, i.e. the reliability and the veracity of their claims and statements without being checked before.

Trust can have an effect on developing entrepreneurship course, on forming different sorts of enterprises as well as on entrepreneurs’ behavior. In connection with it, low stocks of trust increase transactional costs, limit market entry as well as firm growth and competition.

It is possible to speak about the positive impact of social capital at the microeconomic, macro-economic and financial sector. Due to the nature of work, the emphasis will be on analyzing the impact of social capital at the micro-economic sector. The influence of social capital at the micro-economic development can be seen at the level of families, companies and communities. At the family level, social capital is used especially among the poor, to ensure the disease environment, harsh climate and government restrictions. In such cases social capital encourages the pooling of resources such as food, loans, etc.. In addition, good informal relationships enable the poor to start small business and increase revenue. The influence of social capital on firm level is manifested through the dense business networks that encourage economic cooperation and build trust between economic agents. Social capital positively affects the productivity of firms to exchange valuable information about products and markets and reduces the cost of contracting, regulation and enforced collection. Repeating business transactions and business reputation promote sides of acting in order to achieve mutual benefits. Social capital, created among firms, significantly reduces business risks. It allows the exchange of valuable information about products and markets and reduces the cost of contracting, regulation and enforced collection. As we know from Coase theory of the firm, one of transaction costs incurred in terms of market mechanism are the costs of incomplete contracts (Coase 1937). Signing a contract entails a dose of uncertainties, regarding the future state in which the laws and clauses will be applied. For example, the contract may specify the delivery of certain quantities of inputs at a specified price at some future date, and that no party knows with certainty if the market prices of inputs and outputs will be produced on that day. A possible solution would be to include in the contract each possible pair of market prices of outputs and inputs. This kind of contract is called a complete understanding or agreement.

However, in practice contracts are rarely complete for several reasons. The first reason is the high cost and time used for compiling a list of all possible pairs of unpredictable cases.

9

Another reason may pose some unforeseen events that took place, and could not be verified by a third-hand court. In these situations, developed commercial network, with significant stocks of social capital, eliminate or significantly reduce the risk factors. Social capital also facilitates the implementation of collective projects, because it reduces the risk of free riding and stronger interpersonal trust. According to Martin Raiser, firms belonging to networks increasingly avoid free riding, in order not to lose a reputation of reliability (Raiser 1999). Social capital encourages and facilitates the pooling of resources and access to alternative credit activities to those residents who were denied access to formal financial institutions. Several projects, based on increasing the stock of social capital, were conducted in Tanzania, Rwanda, Cambodia, Bolivia and Nicaragua under the auspices of the World Bank (The Initiative for Social Capital 2000). Consequently, in the field of Management, social capital leads to greater efficiency compared to traditional organizational models. Thus, in firms with Taylorian organizational form (Taylor 1929.), information is delayed or distorted while being transferred through a strict hierarchical chain of command. Taylorian form is increasingly replaced by a flexible management structure in which responsibility is transferred to each of the sectors in the company. In that way, workers are forced to make decisions independently, because they are not constantly obliged to consult their superiors in the hierarchical chain. Such organization of the company increases efficiency but on the other hand, it depends on the stock of social capital workforce. In such situations, lack of trust between social workers and managers can lead to opportunism and paralyze production. The Norwegian-Italian study from 2006. examined the influence of human and social capital on productivity (Greeve et al 2006).

The survey was conducted in three organizations involved in research and development (R&D) and provided consulting services. Analysis included the Italian company "GESTO", which provide business consulting services and two Norwegian companies "ALPHA" and "BETA" for applied research and consulting in the fields of economics and social sciences.

ALPHA is more concerned with applied research and consulting than BETA, where more emphasis is made on applied research work. GESTO and ALPHA are profitable organizations while BETA is non-profit. The BETA rewarding of employees is in relation to academic satisfaction and participation in projects. Within the database for the companies ALPHA and BETA were analyzed: employee participation in projects, salaries, working hours on projects and the number of permanent employees. The database for BETA contained even information about published works. The dependent variable for measuring productivity in the firm GESTO was measured by average number of days required to complete the project (which was 19 days per project) and the average number of completed projects within one year (14). The average employee in the ALPHA completed 20 projects for one year. In the ALPHA is measured the productivity of each individual through the payment per hour for participating in the project expressed in NOK.15 Since BETA is a nonprofit organization, the variable of productivity is measured by the weighted â&#x20AC;?publishing indexâ&#x20AC;? which has the following composition: articles published in international academic journals (4), articles in the Norwegian and Nordic academic journals (3), the number of international chapters in academic books (3), research reports (2) and BETA working papers (1) (Greve et al 2006). In the study, the independent variables were selected this way: 1. human capital, 2. tenure to measure effects of experience and 3. social capital.

In the firm GESTO, data on the social capital were obtained via an online questionnaire which was tested over 52 employees. The questionnaire covered the following topics: general staff contacts at the time of starting the project, getting advice while working on the 15

Norwegian Krone

10

project, providing advice during the work on the project, contacted with alters in the past two months, contacted alters at the time of commencement of the project, general advisory relationship and social relationship. In the case of companies ALPHA and BETA employees were asked two questions: ”From whom did you get advice at the time of starting the project?” and ”Who advised you during the project work and research questions?”. The study examined several hypotheses, but the most important for our analysis is the next one: H*: ”The Social capital has a direct impact on productivity. People with more social capital will be more productive than those having less of it.” (Greve et al.

2006). After the regression analysis, it is demonstrated the positive impact of social capital on productivity. in all three cases. Common to all three organizations is that social capital has a major contribution to productivity in comparison with other observed variables.

Additional reasons should be looked for in nature of work these three organizations go in for. All three organizations run most of the projects, unless they are ordered from other companies and institutions. Working teams in these organizations are small and the imperative is the ability to get advice from others in order to create greater productivity.

Social capital, in the form of opportunities to establish direct business contacts, affects more access to information, discovers new opportunities, learning from the mistakes that other people have previously made and enables more efficient troubleshooting and fulfilling tasks.

3. Measuring Belgrade Entrepreneurs’ Trust and Its Influence On Business During The Global Economic Crisis In this chapter it is presented part of the survey we carried out in 2011. about institutional, financial and stakeholders’ trust of Belgrade micro and small entrepreneurs before and during the Global economic crisis. Beside, we also examined the influence of previous variables on business parameters such as: investment trend, business extent and entrepreneur real earnings. As a methodological instrument it is used a questionaire16. In the survey it is started from the following hypotheses: H1 : Institutional trust of Belgrade entrepreneurs is on a low level H2: Index of financial trust and investment trend for next 6 months are in a positive correlation H3: Index of financial trust and business extent of enterprises are in a positive correlation H4: Index of financial trust and real salary of entrepreneurs are in a positive correlation As for institutional trust, it is measured in 19 institutions conected in a direct or indirect way with functioning of economic and financial spheres. For measuring it is used 4-level Likert scale which is defined the following way: 1. do not trust at all, 2. do not have enough trust, 3. have trust and 4. trust completely. The hypothesis H1 will be rejected if a majority of respondents have trust in more than 50% of institutions offered. Trust existence in each of the institutions implies that share of the answers which express institutional trust (sum of responses: ”have trust” and ”trust completely”expressed in percents) exceeds the share of answers which express institutional mistrust (sum of responses:”do not trust at all” and ”do not have enough trust” expressed in percents).

To the question: ”Will you please quote how high is your trust degree in each of the following institutions”, to the least degree respondents believe in political parties(3,1%), Agency for privatization (6,1%), Republic parliament (7,7%) and Serbian government (10,8%): 16

The sample included owners and managers of 65 small and micro private enterprises (from 1 to 100 employees) in the seven municipalities of Belgrade

11

Do not trust at all %

Do not have enough trust%

Have trust %

Trust completely %

Commercial Banks

23,1

41,5

33,8

1,5

Large Companies Central Bank (NBS) Municipal Administration

38,5 23,1

43,1 36,9

18,5 40

0 0

29,2

40

30,8

0

Public Utility Companies Serbian Government Republic Parliament Belgrade Stock Exchange Ministry of Treasury Ministry of Economy Privatization Agency Statistical Office of Serbia Political Parties Serbian Chamber of Economy

23,1 49,2 52,3 26,2 41,5 46,9 56,9

43,1 40 40 56,9 41,5 36,9 36,9

33,8 10,8 7,7 16,9 16,9 16,9 4,6

0 0 0 0 0 0 1,5

33,8

32,3

33,8

0

75,4

21,5

3,1

0

36,9

44,6

18,5

0

35,4

44,6

20

0

21,5

26,2

49,2

3,1

35,4 36,9

47,7 49,2

16,9 13,8

0 0

32,3

40

27,7

0

Belgrade Chamber of Economy Agency for Business Registers Agency for MSE Investment Funds Voluntary Pension Funds Table 1. Institutional trust of crisis

Belgrade entrepreneurs during the global economic

Practically 75.4% of respondents do not trust political parties at all, 56.9% do not trust Agency for privatization and 52.3% of them mistrust the Republic Parliament.

Speaking about institutions directly connected with economic and financial spheres, some better results are achieved in the case of the Agency for business registers, Central bank and commercial banks (due to the reforms in Serbian banking sector, and because of measures for increasing work efficency in the Agency for business registers in the period 2008-2010). Finally it could be concluded that majority of respondents do not trust 18 out of 19 institutions. So it can be stated that hyphotesis H1 is confirmed. In order to test differences within trust level in the same institutions the period before the recession in Serbia, we put the following question: ”Related to the period before the recession in Serbia (4th quarter of 2008.) – is your present trust with these institutions much lower, lower, without change, greater or much greater”, they answered following way (Table 2)

12

Much lower %

Lower %

Without change %

Greater %

Much Greater %

Commercial 20 27,7 50,8 1,5 0 Banks Large 27,7 24,6 46,2 1,5 0 Companies Central Bank 20 26,2 52,3 1,5 0 (NBS) Municipal 18,5 23,1 56,9 1,5 0 Administration Public Utility 16,9 30,8 52,3 0 0 Companies Serbian 26,2 24,6 49,2 0 0 Government Republic 26,2 26,2 47,7 0 0 Parliament Belgrade Stock 18,5 24,6 55,4 1,5 0 Exchange Ministry of 24,6 27,7 47,7 0 0 Treasury Ministry of 21,5 27,7 50,8 0 0 Economy Privatization 26,2 26,2 47,7 0 0 Agency Statistical Office of 13,8 23,1 63,1 0 0 Serbia Political 30,8 21,5 47,7 0 0 Parties Serbian Chamber of 15,4 26,2 58,5 0 0 Economy Belgrade Chamber of 15,4 24,6 58,5 1,5 0 Economy Agency for Business 12,3 21,5 63,1 1,5 1,5 Registers Agency for 16,9 29,2 53,8 0 0 MSE Investment 20 30,8 49,2 0 0 Funds Voluntary 21,5 21,5 56,9 0 0 Pension Funds Table 2. Institutional trust of Belgrade entrepreneurs now vs. before the recession According to the analogy with replies from table 1, a great percent of answers in the column â&#x20AC;?without changeâ&#x20AC;? testifies low institutional trust in the period before the

13

recession, too. On the other hand, a trend of further trust decreasing is evident in institutions such as: Republic Parliament and Agency for privatization (with 52% of respondents), Ministry of Finance, large companies and political parties (with 52.3% of respondents), investment funds (with 50,8% of respondents) and Ministry of Economy (with 49.2% of respondents), etc. The next part of survey was related to enterprise business parameters. To the question: ”Are you planning to reduce, leave unchanged or increase your investments in business in the next 6 months”, the respondents answered the following way (Table 3.)

Investment trend for next 6 months

Frequency

Reduce 12 Status quo 47 Increase 6 Total 65 Table 3. Investment trends for next 6 months

Valid Percent 18.5 72.3 9.2 100.0

The majority of them (72.3%) will keep an investment status quo, 18.5% of respondents will reduce investments while 9.2% will increase theit investment in the 6 months. To the question: ” Related to the period before the recession in Serbia is business extent of your firm significantly less, slightly less, without change, slightly increased or significantly increased”, most of respondents faces the recession consequences (Table 4.)

Extent of Business Percent Significantly decreased 52,3 Slightly decreased 38,5 Without change 7,7 Slightly increased 1,5 Table 4. Business extent of enterprises related to period before recession In order to examine etrepreneurs` real earnings we put the following question: ”Related to the period before the recession in Serbia (4th quarter of 2008.) is your real salary now significantly decreased, slightly decreased, without change, slightly increased or significantly increased”, 61.5% of respondents state that earning was significantly decreased, 30.8% state that it was slightly decreased, 4.6% of them state that salary was without change, while 3.1% state the earning was increased (Table 5.)

Real salary now vs. Before Frequency the crisis Significantly decreased 40 Slightly decreased 20 Without change 3 Slightly increased 2 Table 5. Real salary of entrepreneurs now vs. Before crisis

Percent 61.5 30.8 4.6 3.1

To examine a relation between business variables and financial trust of entrepreneurs, we have created an index of financial trust (Ift). It is synthetical index whose components

14

unclude trust measures in four financial institutions having the greatest significance for running business: trust in banks, trust in Central bank, trust in Ministry of Finance and trust in investment funds. The final model was set up as follows: Ift = Pb + Pcb + Pmf + Pi (equation 1) Pb - Trust in banks; Pcb - Trust in Central bank; Pmf - Trust in Ministry of Finance; Pi - Trust in Investment Funds The trust in institutions were weighted with: 5 : 3 : 2 : 1 respectively. To test hyphohesis H2 a correlation analysis was done between the Index of financial trust and entrepreneursâ&#x20AC;&#x2122; investment trend (Table 6) Correlations Index of Financial Trust Index of Financial Trust

Pearson Correlation

Investment trend for the next 6 months .298*

1

Sig. (2-tailed)

.016

N Investment trend for the next Pearson Correlation 6 months Sig. (2-tailed)

65

65

*

1

.298

.016

N

65

65

*. Correlation is significant at the 0.05 level (2-tailed).

Table 6. Correlation between the Index of financial trust and Entrepreneurs` investment trend As it is seen on the table 6, a significant linear correlation was found, showing a direct linear relation between the index and entrepreneursâ&#x20AC;&#x2122; investment trend. To test hypothesis H3, a correlation analysis was done between the Index of financial trust and business extent.

As a result, it was achieved a more significant Pearson coefficient value (Table 7.)

Correlations Index of Financial Trust

Business extent of enterprise

Index of Financial Trust Pearson Correlation

1

Sig. (2-tailed) N Business extent of enterprise

Pearson Correlation Sig. (2-tailed) N

.393** .001

65

65

**

1

.393

.001 65

65

**. Correlation is significant at the 0.01 level (2-tailed).

Table 7. Correlation between the Index of Financial Trust and business extent of enterprise

15

To test hypothesis H4 it was done a correlation analysis between the Index of financial trust and the variable: ”real salaries now vs. before the crisis” (Table 8.)

Index of financial trust Index of financial trust

Pearson Correlation

Real salaries now vs. before the crisis 1

Sig. (2-tailed)

.016

N Real salaries now vs. before the crisis

.298*

Pearson Correlation Sig. (2-tailed)

65

65

.298*

1

.016

N

65

65

*. Correlation is significant at the 0.05 level (2-tailed).

Table 8. Correlation between the Index of financial trust and changes in real salaries Also, it was received a significant Pearson coefficient value (.298*) which indicates the existence of a direct linear relationship between these two variables.

In the survey was also examined entrepreneurs’ trust in the following stakeholders: suppliers, competitive firms, foreign investors, consumers and employees of the firms. Generally, the majority of respondents (81.6%) has trust in suppliers, customers (70.7%) and employees in their firms (79.4%): Trust Level

Suppliers

Competitive Foreign Consumers Firms Investors No Trust at all % 1,5 18,5 32,3 3,1 Not enough Trust % 16,9 50,8 49,2 26,2 Have Trust % 55,4 29,2 18,5 56,9 Have Complete Trust % 26,2 1,5 / 13,8 Table 9a. Trust in suppliers, competitive firms, foreign investors and consumers during the global economic crisis Trust Level in employees No Trust at all % Not enough Trust % Have Trust % Have Complete Trust %

Percent of entrepreneurs 1.7 19.0 46.6 32.8

Table 9b. Trust in employees in respondents’ firms

16

To the question: ”Related to the period before the recession in Serbia (4th quarter of 2008.) – is your present trust in the same people much less, less, without change, greater or much greater”, most of the respondents have the same trust in stakeholders. However, concerning the period before the crisis a decreasing trend was registered with suppliers (16.9% of respondents), with competitive firms (24.7%), with foreign investors (27.7%), with consumers (21.5%) and the employed (10.3%). In the period of economic crisis, a good recipe for keeping business stability of small companies presents winning an preserving loyality of suppliers, employed people as well as consumers. For the analysis requests, an index of stakeholders’loyality has been created. Its components consists of 3 components such as: trust in consumers, trust in suppliers and trust in employees with weights 5 : 4 : 4 respectively Isl = Pc + Ps + Pe (equation 2) We have started from the following hyphothesis H5: The Index of Stakeholders’Loyality makes an influence on a change of a dependante variable ”the change of real salaries with the reference to the period before the recession”. Model of linear regression has been put the following way: y i = β 0 + β 1x i + ε i (equation 3) yi = dependant variable (real salary) β0 = y intercept β1 = slope xi = predictor (index of stakeholders` loyalty) εi = error in the observed value for the i cases After the regression, the next results are received (Table10) Model Summaryb Coefficient of determination Standard Error of Model R R2 Adjusted R2 the Estimate 1 .222a .049 .032 .695 a. Predictors: (Constant), Index of Loyalty b. Dependent Variable: Real salary now vs. before the crisis Table 10. Excerpt from the regression analysis As it can be seen, low values are received for the coefficient (R = 0.22) together with the coefficient (R2 = 0.049), so we can conclude that the hypothesis H5 was not confirmed. It means that entrepreneurs associate crisis cause with financial trust more than trust with stakeholders.

4. Conclusion The text puts emphasis on the measurement of trust and its impact on business operations of firms in Belgrade during the global economic crisis. Based on survey results, most entrepreneurs have no confidence in 18 out of 19 institutions that are directly or indirectly related to economic and financial sphere. This negatively affects the creation of business environment and business operations of firms. In relation to the period before the recession in Serbia, the trust of entrepreneurs mostly fell in the Parliament, the Privatization Agency, Ministry of Finance and the large companies. With the great majority of entrepreneurs there was a decrease in the volume of business and real wages related to

17

pre-recession period, whereas 18.5% of respondents intended to reduce their investment in their own business. The study measured the correlation between the Index of financial trust and the three business variables in firms. In all three cases, a significant positive correlation was achieved. In the survey it is found that most respondents have trust in suppliers, customers and employees, and that there is no trust in the competitive companies and foreign investors. In relation to the period prior to 4th quarter of 2008. there has been a slight decline of trust in all of these stakeholders. In addition to it, the survey found that more respondents associated the cause of crisis with institutional trust declining rather than with a lack of trust in stakeholders. Bearing in mind economic disparities in the state, it is rational to expect that in other parts of Serbia stock of measured trust would be lower, and the business environment and the firms’ parameters less qualitative.

Bibliography: [1]. Baron, D. (2010) Business and It`s Environment, Pearson [2]. Coase, R. (1937) ”Nature of Firm” in: Williams, O. and Winter, S. 2000. Nature of Firm, Podgorica, CID [3]. Curran, J., Blackburn, R.A. and Kitching, J. (1995) Small Businesses, Networking and Networks: A Literature Review, Policy Survey and Research Agenda, Small Business Research [4]. Dasgupta, P. (1988) ”Trust as a Commodity” p. 51 in: Gambetta, D. (ed.) Trust: Making and Breaking Co-operative Relations. Oxford: Basil Blackwell [5]. Greve, A. , Benassi, M. and Sti, A.D.(2006) ”Exploring of contribution of human and social capital to productivity”, Sunbelt XXVI, Vancouver, april [6]. Isham, J. et al. (2002) Social capital an well-being in development countries, Edvard Elgar Publications [7]. Kim,Ph. and Aldrich,H. (2005) Social Capital and Entrepreneurship, nonPublishers Inc [8]. Pennar, K. (1997) ”The tie that leads to prosperity: The economic value of social bonds is only beginning to be measured”, Business Weekly [9]. Portes, A.. (1998) ”Social capital: it`s origins and applications in modern sociology, Annual Review of Sociology 24 [10]. Putnam, R. (2000) Bowling Alone: The Collapse and Revival of American Community, New York, Simon & Schuster [11]. Raiser, M. (1999) ”Trust in Transition”, EBRD, Working Papers N 37 [12]. Schiff, M. (1992) ”Social capital, labour mobility, and welfare: The impact of uniting states”, Rationailty and Society 4. : 157-175 [13]. Svensend, G.L.H. and Svensend,G.T. (2005) The Creation and Destruction of Social Capital: Entrepreneurship, Co-operative Movements and Institution, Edward Elgar [14]. Taylor,F.W. (1911) Principles of Scientific Management, New York, NY, USA and London, UK: Harper & Brothers [15]. Bebbington, J et al. (2000) ” Induced social capital and federations of the rural poor” ,The Initiative for Social Capital, Working Papers N19: http://siteresources.worldbank.org/INTSOCIALCAPITAL/Resources/Social-CapitalInitiative-Working-Paper-Series/SCI-WPS-19.pdf [16]. The World Bank (1998) ”The Initiative on Defining, Monitoring and Measuring Social Capital” , Social Capital Initiative Working Paper No 1 (Apr.) [17]. Zaric, S. and Babic.V. (2010) "Social Capital Influence on Global Economic Crisis" in: Chavdarova, T. et al. Markets as Networks (eds.) , Sofia: St. Kliment Ohridski University Press

18

SOME ASPECTS CONCERNING SMALL AND MEDIUM ENTERPRISE’S GROWTH AND NEW TECHNOLOGIES IMPLEMENTATION Professor Marius Dan DALOTĂ, Ph.D. Romanian-American University 1B, Expoziţiei Avenue, Sector 1, Bucharest dalota.marius.dan@profesor.rau.ro

Assistant Lecturer Roxana MATEI, PhD Candidate, Romanian-American University 1B, Expoziţiei Avenue, Sector 1, Bucharest rmateiura@yahoo.com

Abstract: If managers of many SME do not clearly assume the necessity to modernize their organizations, they will not be able to take advantage of all its resources' potentialities, not only the technological resources, but also of the capacities and qualifications of the human resources. This article looks at how new technologies and their inherent risks have to be considered to achieve performance, to enhance productivity, and to strengthen competitiveness. The solution demands the understanding of the capacities of technologies, the possibility of exploring their benefits and the effort of acquiring an improving the management performance.

Keywords: Innovation management, Change management, SME’s growth, Performance management JEL Classification: M10 1. Introduction A major issue for all SMEs is how to survive by maintaining or increasing market share through innovation. The relative advantages or disadvantages to a manufacturing company of focusing on single or tightly-related portfolio of products or, of diversifying is well known. For small to medium-sized enterprises (SMEs), there is often little choice.

Many will have entered the market as single product or technology-led companies without the finance to broaden their product range even if this were considered strategically desirable[1]. This paper explores the characteristics of innovative SMMEs. The comprehension of new technologies and all its potential abilities can actually become a source of weakness, because managers cannot use them against competitors or to profit from the opportunities that these technologies can offer [2]. The solution of this situation demands that one understand the capacities of these technologies, their adequacy

19

to each business, the possibility of exploring their benefits and the effort of acquiring a new management mentality. At the same time, it is vital to understand how the new technologies are closely linked to the information systems and how their security guarantees business continuity.

Sustainable growth and profitability require technological innovation and attentive control perspectives. Innovation through new products and technologies has a tremendous impact on organizations’ growth. Growth plans rely on more than new products. They include innovation management and adequate management mentalities to adopt new technologies within several processes [3].

2. Factors contributing to SME’s innovation The conceptual relationship between entrepreneurship and innovation is related on factors affecting their development [4]: • Innovation and entrepreneurship are complementary because innovation is the source of entrepreneurship and entrepreneurship allows innovation to flourish and helps to realize its economic value.

• Entrepreneurship uses innovation to expand business scope and boost growth. Therefore, entrepreneurship and innovation are dynamic and holistic processes that are not confined to the initial stage of a new venture.

• The development of entrepreneurship and innovation, and interaction between them for the successful commercialization of innovation, require an organizational culture and a management style that are innovationfocused and supportive.

Organisations engaged in entrepreneurship and innovation face implementation problems that are as follows: • As a result of some technological innovations, SMEs are restructured, and this has led to a significant loss of jobs, lower staff morale, and problems caused by understaffing.

• Funding can be a problem. It is very hard for a small company to be innovative in product development because it is hard to find the funds required to promote that product.

• Managers do not like to lose control and they can feel “a bit of a threat if someone become too creative”, and this can hinder the development of innovation.

• Time, persistence, and risk taking are required to get a new product accepted by markets.

• The systems of innovation and entrepreneurship are very informal in many SMEs. • It the most situations is impossible to measure the outcomes of SMEs innovation and entrepreneurship because it is very difficult to separate them from the overall business of organisations.

20

Recruitment of staff and good people management are key issues facing innovative and entrepreneurial organisations. It is difficult to acquire people who are able to bring “new blood, new ideas, new thinking and new horizons to the organisation”. And retaining them is even more difficult.

Regarding process innovation, current literature suggested innovation was part of a long-term organisational evolution, customer relationships were important to long-term sourcing both financial and knowledge terms, and human resources [1]. Past literature identified several aspects of what was considered as critical success factors for innovative strategy in SMEs and effective strategic formulation in successful small hi-tech firms development, promoting a corporate culture, creating structure reflecting in the effective use of systems and technology and investors in people (currently known as process innovation), analysing competitors, developing co-operations and partnerships. We should add other important factors like flexibility, short communication lines, close relations with customers, motivation of management and labour force, less bureaucracy, little filtering of proposals with strong interest in product development and technological change as part of the characteristics and strengths of an innovative culture.

Focussing on new product development suggest that product innovation activities are the cornerstone of better-performed companies. Manufacturing SMEs by repeatedly introducing innovative new products opens up new market niches, which is essential to their survival. Innovation literature also places great importance on company learning, benchmarking, training and networking. Size, age and flatter hierarchies were found in literature to have effects on company innovativeness.

Company culture and ways of working is consistent with literature which suggests SMEs’ main impetus for innovation came from board level, with a spread of participation.

A good level of training is found in more innovative companies.

•

3.

Market-orientation, learning-orientation and continuous improvements in SMS’s innovation There exists both empirical and theoretical studies investigating the linear or causal relationships among the market-orientation, learning-orientation, innovativeness, and, thereby, their combined impact on firm performance. Most of the empirical studies focused on the large-scale organizations in western/developed countries, while ignoring the SMEs in general and SMEs in developing countries in particular. Specifically, studying the SMEs in developing countries contributes to the literature for three reasons: • The majority of the market-orientation and learning-orientation studies were conducted in developed western countries, e.g. USA, UK, using the measure scales of Narver and Slater (1990), Kohli et al. (1993), Ruekert (1992), Calantone et al. (2002), and others. However, replication of the market-orientation, learning-orientation, and innovativeness studies is warranted, because if these constructs are reliable and valid, they should also be applicable in different environments and economies, such as Turkey.

• Market- and learning-orientation studies mostly investigated large firms having 250 or more employees. However, the applicability of market-

21

orientation, learning-orientation, and innovativeness measures, and their research models, which were developed for large-scale firms, may have different meanings in a SME context. For instance, SMEs face particular problems in the formulation of their innovation strategies due to: - their deficiencies arising from their limited resources and range of technological competencies; - influence of their owners/managers on the decision-making; - dependence on small numbers of customers and suppliers; - focus on the efficiency of current operations. â&#x20AC;˘ Empirical studies on market-orientation, learning-orientation, and innovativeness in SMEs are fragmented or incomplete. For instance, studies exist that investigate relationships between: - market-orientation and overall firm performance; - export performance and financial performance; - learning-orientation and firm growth and innovativeness and firm performance; - firmâ&#x20AC;&#x2122;s innovativeness and performance.

Yet there remains a gap in empirical research investigating the relations among the market-orientation, learning-orientation, firm innovativeness, and firm performance as an integrated model in SMEs. The term "market-orientation" found a broad appeal in the marketing literature.

The literature describes market-orientation as a set of behaviors and processes, or an aspect of culture to create a superior customer value. By using a cultural framework, the boundary of the market-orientation concept is extended by incorporating the development of information about competitors, and interfunctional collaboration. The cultural framework of marketing, adopting a strategic view, identified three components of market-orientation: a) obtaining and using customer information; b) developing a strategic plan based on such information; c) implementing the plan to respond to customer needs.

Market-orientation is a cognitive, behavioral, and cultural aspect of a firm's marketing concept that puts the customer at the center of the organization and its development. Empirical studies on the effect of market-orientation on superior performance revealed inconsistent results for a model of market-orientation, learning-orientation, innovativeness, and firm performance in an SME context.

A market-oriented firm, which has excellent market information gathering and processing abilities, is able to predict the requirements and changes in markets accurately and quickly, allowing them to respond quickly and appropriately. Thereby, they enhance their competitive advantage. In this regard, it has been asserted in the SME literature that market-orientation provides small firms with a potential competitive advantage over large firms, because SMEs: - are closer to customers and able to exploit their needs and wants quickly and more flexibly; - are able to transfer customer intelligence quickly, with less deterioration, due to their reduced organizational layers and bureaucracy; - can implement the marketing plan fast, because it is less formal.

22

Considering that SMEs may lack a long-range focus and strategic orientation that their customer orientation in general and market-orientation in particular are critical determinants of performance and consistent with SME literature, it is hypothesized that: A.- Market-Orientation will positively lead to firm performance in SMEs. Another well-known factor that impacts firm performance is firm innovativeness.

The positive role of firm innovativeness on firm performance has been supported by many theoretical and empirical studies of new product developments, technology adoption and diffusion, process improvement, and innovation. Of particular importance to an SME's innovativeness is the reflection of the environmental uncertainty and the lack of technology competencies for new product development, cost effectiveness, operational efficiency, emerging market niches, and process innovation. The studies note that SMEs should be innovative to get a competitive advantage due to their limited resources, vulnerability to uncertainty, turbulence in business environments, and the extensive powers of customers and suppliers.

SMEs that follow a proactive business strategy foster innovativeness as a central part of corporate culture. SMEs can achieve leadership positions by applying aggressive innovation strategies in niche industries. High-tech SMEs, e.g. electronics, software, and biotechnology, for instance, demonstrate improved performance by generating new markets and industries due to their innovativeness. Because innovativeness has long been associated with entrepreneurial behavior, and theoretically linked to a high tolerance for ambiguity, taking risk, and evaluating uncertain situations more favorably, it is therefore hypothesized that: B.- Firm innovativeness will positively lead to firm performance in SMEs. Noting the importance of innovativeness for firm performance, it is also important to mention the mechanisms that promote the firm innovativeness in order to investigate the relations in a holistic way. According to recent studies, learning orientation influences firm innovativeness in three ways: 1.- since learning occurs through organizational observation and interaction with their environments, it is more likely to be committed to innovation; 2.- since learning organizations are linked with their environment, it has the knowledge and ability to understand and anticipate customer needs and emerging markets; and 3.- since organizations closely monitor the competitors' actions in the market, their strengths and weaknesses, and successes and failures, that environmental scanning contributes to firm innovativeness.

A lot of the theory on learning-orientation and firm innovativeness is based on empirical studies completed on large-based firms rather than SMEs. In this sense, there is a gap in the empirical investigation of learning-orientation and firm innovativeness in SME literature.

Organizational learning studies in SMEs note that learning in small firms is context sensitive, firm-specific, and work-based, which is, by nature, reactive and produces operational efficiency in the short-run - indicating adaptive rather than innovative behavior.

Exploitation of each bit of information and then utilizing such information in the workplace to advance new operational practices, in essence, develops new schemata or thinking ways, and knowledge for employees. The people become more adaptive to different views, procedures, and ideas, and become proactive to enhance the quality of workplace and the operations of firms and customer satisfaction. Therefore, it is hypothesized that:

23

C.- Learning-Orientation will positively lead to firm innovativeness in SMEs. Even though market-orientation and learning-orientation are antecedents of innovation, the effect of market-orientation on firm innovativeness is mediated by learningorientation. The market-orientation fosters a knowledge-producing behavior - providing a source of ideas for change and improvement by market information processing and marketing strategies. The knowledge generated by market-orientation has little benefit if not appreciated and implemented for firm innovation.

D.- Market-Orientation will positively lead to firm innovativeness via Learning-Orientation (Learning-Orientation will mediate the relationship between Market-Orientation and firm innovativeness) in SMEs. Even if there is a common agreement about the relationship among learningorientation, market-orientation, and innovativeness, there is no clear agreement about the direction of the relationship between learning-orientation and market-orientation. The studies promoting the relationship of learning-orientation â&#x20AC;&#x201D; market-orientation, essentially investigated the market information processing rather than market-orientation. In fact, Farrell and Oczkowski (2002) found that by investigating 340 organizations, marketorientation is able to encompass learning-orientation, but learning-orientation is not able to encompass market-orientation. Market-orientation firms are effective in producing knowledge and this culture of knowledge production, inevitably leads to knowledgequestioning values. In conclusion, organizations that are able to appreciate the value of timely and relevant information (market-orientation), will also be intelligent enough to challenge existing assumptions about the way the market operates (learning-orientation).

E.- Market-orientation will positively lead to learning-orientation in SMEs. One of the most studied factors, which has synergy with market-orientation, is learning-orientation. Many researchers argued that market-orientation only enhances performance when it is combined with a learning-orientation. Since market-oriented firms focus on customers and their feedback in the established markets, they ignore the emerging markets, technologies, and competitors. Learning-orientation, embracing the commitment to learning, shared vision, open-mindedness and interorganizational knowledge sharing, fosters a set of knowledge-questioning and knowledge-enhancing values that leverage the adaptive behaviors provided by market-orientation to a higher-order learning that leads to the development of breakthrough products, services, and technologies, and the exploration of new markets.

In addition, to learning-orientation, another mechanism emphasized by the management and marketing scholars is firm innovativeness, which refers to that portion of a firm's culture that promotes and supports novel ideas, experimentation, and openness to new ideas.

Continuous Improvement Management has eight major characteristics: 1.- CI requires a long-term commitment.

2.- A change is needed in the organization culture.

3.- Staff participation in the quality improvement process is vital.

4.- CI organizations put their customers and clients above all other considerations.

5.- The quality chain needs to be in place.

6.- Teamwork is an essential part of CI. 7.- CI means continuous quality improvement.

8.- CI is management led and driven.

24

Continuous Improvement Management is perceived by specialists as an evolutionary process which leads to a better way to compete, a process that adds value to existing processes and that encompasses the whole organization.

There is a substantial range of opinions and ideas about what constitutes innovation as folloving: • “what makes innovation challenging is the fact that it is very difficult to agree on a common definition, and also to decide which firms are the most innovative and how to quantify innovation activity”; • “innovative companies are especially adroit at continually responding to change of any sort in their environments and are characterized by creative people developing new products and services”; • "technological innovation is the process by which industry generates new and improved products and production processes”; • "innovation is the creation of any product, service or process which is new to a business unit"; • "innovation is about doing things differently or better across products, processes or procedures for added value and/ or performance"; • Peter Drucker defines innovation as "the means by which the entrepreneur either creates new wealth-producing resources or endows existing resources with enhanced potential for creating wealth".

Both of these definitions make reference to the terms change and creativity - they imply that innovation is the harnessing of creative ability within individuals and the workforce in response to change.

A distinction between "radical and incremental" innovation also exists in the literature.

• "Radical innovations refer to products and processes that result from advances in knowledge whereas incremental innovation refers to the continual process of improvement of techniques"; • "Innovation is the process of taking new ideas effectively and profitably through to satisfied customers". It is a process of continuous renewal involving the whole company and is an essential part of business strategy and every day practice.

Reflecting the above discussion, effective business innovation will be defined as "the harnessing of creative ability within individuals and the workforce in response to change, by doing things differently or better across products, processes or procedures through the continual process of improvement of techniques and the successful production, assimilation and exploitation of novelty".

Is it possible for organizations to progress from CI to effective business innovation as defined? To answer this, separate but related underlying questions need to be addressed.

• Why would SMEs want to become more innovative?

• How can SMEs progress from CI to effective business innovation?

• Why would SMEs want to become more innovative?

The idea that companies need to innovate to help maintain the correct strategic direction has been further developed. The innovation can help companies maintain or increase competitive advantage.

Brown (1994) believes that companies must innovate for three main reasons: • they may seek to gain advantage by taking an offensive stance and an industry lead in the use of new techniques;

25

they may have to innovate in response to innovation by competition; they may innovate to forestall or pre-empt innovation by others that would harm their own business.

A stronger competitive position cost, and quality are linked to an SME's approach to innovation. Can SMEs progress from CI to effective business innovation?

There are six main categories of innovation: product, process, application, system, core competence and horizontal transfer. The linkage between innovation and CI can be seen where each type of innovation goes through the CI process for successful innovation.

Successful innovation depends on the CI process, the Continuous Improvement strategy of CI and innovation will enable SMEs to develop their management understanding for future growth and competitiveness.

• •

4. Dimensions of SMEs growth through innovation Three main sources of growth can be determined [3]: a) Technological improvement – It is well known that processes and technology improvements can contribute to meeting quality and process - performance objectives. b) An increase in the quantity of capital – Very often, technology is deeply linked to investment because it is embodied in new machinery and better equipment. c) An increase in the number of workers, their skills and educational levels.

Industry growth depends on several internal and external factors, such as physical assets, technologies all along the chain value, human resources in general and qualification levels in particular and also organizational capabilities. In general, the firms are more likely to reap profits and social benefits when they are in high-growth industries.

SMEs can increase their activities and businesses in some ways and grow in some dimensions. The following dimensions can be identified: a) Raise the level of integration of the technologies – The management of technologies and the exploitation of all their potential is strictly linked to the possibility of integrate their synergies. b) Intensify innovative technology processes – This direction of innovation is a decisive contribution for the modernization of businesses and the implementation of competitive strategies. c) Increase the number of markets where the company operates – Internationalization and globalization are direct consequences of this decision. d) Increase businesses’ portfolios – The company that today is involved in a given industry can tomorrow widen its investment to other industries; e) Increase the number of operational uses of technologies – Many technologies can have applications in operations of a different nature.

To position strongly for future growth in the global marketplace, an organization has to make some effort to increase its investments in R&D and to focus on the implementation of advanced production innovations and practices.

The growth of an organization, the technologies that are being used along all its activities, and business strategies that have been formulated are strictly related. Even

26

organizational culture deals with technologies and growth[3].

Technological progress driven by a decision to enhance productivity and profitability often fosters growth. The competitive success of most enterprises is strongly related to decisions such as: • producing products and services according to high quality standards; • quantifying production in the correct manner; • anticipating and responding to changing consumer needs; • reducing production costs in order to enhance profitability.

The success of SMEs depends on: • using advanced technologies in an integrated manner, • being aware of changing clients’s needs, producing quality goods and services, • enhancing profits by reducing costs, • reaching new markets within a competitive perspective, • wide-open mentality.

The growth effort has to include: • New technologies for manufacturing with ecological safety.

• Designing and modelling of secure facilities.

• Adopting zero-waste procedures in manufacturing and processing.

• Upgrading of existing installations.

• Developing new organizational tools and methodologies.

• Reducing resource consumption in order to reach competitive production costs.

Many SME’s are not able to envisage growth as a competitive need and this difficult mentality and/or reluctance should be understood.

The identification of innovative improvements that could enhance organizations’ movements for growth is a decisive process to reach growth objectives. Innovation in production, distribution, and communication processes serve as a vital source of productivity growth and other competitive advantages. The success of most management innovation processes is also a function of competitive efforts.

The managerial decision regarding obtaining growth results has to take into account what is needed to reach a rapid modification in the professional qualification levels of workers and managers. It is indispensable that a strict and dedicated cooperation exists among governmental entities, industries and educational sectors. When an entrepreneur does not have experience and technical knowledge in the financial domain he may have a distorted perception of the reality, because an increase in sales does not necessarily correspond to an increase in profitability and, therefore, does not open the possibility of self-financing. It is well known that some entrepreneurs prefer self-financing because it provides them with more control. It is required to create new higher education models in the domain of

27

entrepreneurship. We agree that a new higher education models will require the commitment of governments, universities, and associations.

5. Conclusions Advanced manufacturing technologies, information and communication technologies and new services lead to the increases in productivity that is essential to any country’s economic growth under a perspective of competitive advantages. Successful organizations will be technological advances to create an appropriate organizational arrangement to support competitive growth.

Entrepreneurship and innovation should be regarded as ongoing, everyday practice in organisations. If managers of many SME do not clearly assume the necessity to modernize their organizations, they will not be able to take advantage of all its resources' potentialities, not only the technological resources, but also of the capacities and qualifications of the human resources.

Bibliography: Laforet Sylvie; Tann Jennifer – “Innovative characteristics of small manufacturing firms”, Journal of Small Business and Enterprise Development, Vol.13, No.3, 2006, pp. 363-380.

[2] Carneiro Alberto - “Adopting new technologies“, Handbook of business strategy, 2006, Emerald Group Publishing Limited, ISSN 0894-4318, pp. 307-312.

[3] Carneiro Alberto - “What is required for growth?“, Business Strategy Series, Vol.8, No.1 2007, pp. 51-57.

[4] Zhao Fang - “Exploring the synergy between entrepreneurship and innovation“, International Journal of Entrepreneurial Behaviour & Research, Vol.11, No.1, 2005, pp. 25-41.

[5] Darroch Jenny - “Knowledge management, innovation and firm performance“, Journal of Knowledge Management, Vol.9, No.3, 2005, pp. 101-115.

[6] Dalotă Marius-Dan - “Innovative change management in SME’s“, Conferința cu participare internațională, “Inovare, Competitivitate și etică în afaceri”, Universitatea Româno-Americană, noiembrie 2008.

[7] Collins, "Approaches to quality", Total Quality Management Magazine, (1994), Vol 6 No. 3, pp.39-43 [8] Mudrak Tomas; Andreas van Wagenberg; Emiel Wubben “Innovation process and innovativeness of facility management organizations”, Facilities Vol. 23 No. 3/4, 2005 pp. 103-118 [9] Keskin Halit - “Market orientation, learning orientation, and innovation capabilities in SMEs An extended model”, European Journal of Innovation Management, Vol. 9 No. 4, 2006, pp. 396-417 [10] Laura Pana - “Intellectics and inventics”, Kybernetes, Vol. 35 No. 7/8, 2006, pp.

1147-1164

28

[11] Dalotă Marius Dan, “Successful Implementation of Knowledge Management in Small and Medium Enterprises“, Rev. Romanian Economic and Business Review, Universitatea Româno-Americană, 2011, vol.6 nr.1

IDENTIFYING MARKETING APPROACHES USED IN THE ROMANIAN MANDATORY CAR INSURANCE MARKET - A MARKETING RESEARCH Lecturer Tudor EDU, Ph.D Romanian –American University 1B, Expoziției Avenue, Sector 1, Bucharest tudoredu@yahoo.com

Lecturer Costel NEGRICEA Ph.D Romanian-American University 1B, Expoziţiei Avenue, Sector 1, Bucharest negricea@yahoo.com Abstract: The mandatory car insurance market is becoming a significant one in value and a highly competitive one. Every individual and organization owning a vehicle must pay the yearly mandatory car insurance.

In this paper we aimed to identify marketing approaches used by companies offering mandatory car insurance services in Romania.

The main conclusion of this study is that the mandatory car insurance companies which are active in Romania make use of a tremendous number of marketing strategies and tactics covering a broad spectrum of aspects beginning with the environment screening and ending with the company adaptation to the peculiarities of the market.

Keywords: Marketing, secondary data, insurance companies, Romania JEL classification: M31 Introduction The size of the mandatory car insurance market is a significant one. The annual value of this market amounts up to several hundred millions EUR, in 2011 reaching approximately 500 mil EUR according to www.csa-isc.ro. The competition on this market is a strong one with 17 insurance companies (www.csa-ics.ro, 2011) competing for a slice of this market and a significant number of brokers and intermediaries.

These companies use different marketing approaches in order to gain clear competitive advantages. In this paper we aimed to identify marketing approaches pursued by the mandatory car insurance companies registered in Romania.

29

Being an exploratory research we considered applying a secondary data analysis as the appropriate method at this stage based on a model developed and adapted by the authors together with prof. Cătoiu through a series of studies performed beginning with 2009 (Cătoiu et al, 2002, Cătoiu & Edu, 2009, Cătoiu, Edu, Negricea, 2011, Edu & Negricea, 2011) Research methodology 1. Research purpose Identifying marketing approaches used by the mandatory car insurance companies registered in Romania.

2. Research objectives To identify: 2.1 marketing approaches in relation to the marketing environment 2.2 marketing approaches in relation to the determination of the buying behaviour on the market 2.3 marketing approaches in relation to the product policy 2.4 marketing approaches in relation to the price policy 2.5 marketing approaches in relation to the marketing communication 2.6 marketing approaches in relation to the distribution policy 2.7 marketing approaches in relation to the personnel policy 3. Research hypotheses 3.1 The mandatory car insurance companies gather information about the marketing environment related to: 3.1.1 industry/market features and tendencies 3.1.2 acquisitions and diversification 3.1.3 market share 3.1.4 suppliers and partners 3.1.5 Corporate Social Responsibility endeavours 3.2 The mandatory car insurance companies collect information about the buying behaviour in relation to: 3.2.1 brand perception (company and products) 3.2.2 brand attitude (company and products) 3.2.3 buying motives 3.2.4 product satisfaction 3.2.5 buying behaviour 3.2.6 buying intentions 3.2.7 segmentation studies 3.2.8 target markets 3.2.9 brand positioning 3.2.10 fidelity tactics and consumer reactions 3.3 The mandatory car insurance companies’ marketing approaches in relation to the product policy can be found in one or more of the following categories: 3.3.1 concept development and testing 3.3.2 brand name generation and testing

30

3.3.3 3.3.4 3.3.5 3.3.6 3.3.7 3.3.8 3.3.9 3.3.10 3.3.11 3.3.12 3.3.13

a test market product portfolio analysis underperformed products products launched in cooperation with other financial institutions offer analysis on B2C, B2B, B2G product assortment personal insurance agent as a part of the offer transparency in offer presentations perception about insurance coverage perception about claiming procedures online applications used for client informing and persuading/ offer description/ product usage

3.4 The mandatory car insurance companies pursue marketing approaches for the price policy in the following areas: 3.4.1 cost analysis for products/ services/ departments 3.4.2 profit analysis for products/ services/ departments 3.4.3 premium payment flexibility 3.4.4 insurance excess 3.4.5 demand analysis: market potential; sales potential; sales forecasting 3.4.6 disclosure of costs to clients 3.5 The mandatory car insurance companies consider marketing communication approaches related to: 3.5.1 motives which determine the choice for a means of communication 3.5.2 mass communication means 3.5.3 advertising message 3.5.4 advertising effectiveness: before/after broadcasting 3.5.5 events, fairs, exhibitions etc 3.5.6 sponsorships 3.5.7 promotional instruments such as special offers, prizes, coupons etc 3.5.8 brands: awareness, trust, loyalty etc 3.6 The mandatory car insurance companies use distribution approaches which cover the following areas: 3.6.1 channel performance: agents, partners, dealers 3.6.2 channel coverage 3.6.3 international cooperation and coverage 3.6.4 distribution effectiveness in relation to organisations and individuals 3.7 The mandatory car insurance companies consider marketing approaches in relation to the personnel policy which could refer to: 3.7.1 recruitment policy 3.7.2 training and courses 3.7.3 remuneration systems (flat wages, commissions etc.)

31

3.7.4 3.7.5 3.7.6 3.7.7 3.7.8 4.

procedures/ methods/ techniques used to interact with clients studies on staff satisfaction related to working conditions/ career development managerial processes and relations organisational culture and its forms

Research variables

Variable Marketing approaches

Table 1- Research variables Definition Directions for this research Objectives, strategies Objectives, strategies and tactics and tactics used in pertaining to: order to create and - business/ economic environment deliver value to or company customers in order to - buying behaviour gain value in return - product - price - marketing communication - distribution - personnel

Marketing environment

The sum of forces which act in a direct or indirect manner upon the organisation

Information about: - industry/market features and tendencies - acquisitions and diversification - market share - suppliers and partners - Corporate Social Responsibility endeavours

Buying behaviour

The sum of individual or group decisions directly connected to the acquiring and use of goods and services for the satisfaction of the current and future needs, including decision processes which precede and determine these acts

Information about: - brand perception (company and products) - brand attitude (company and products) - buying motives - product satisfaction - buying behaviour - buying intentions - segmentation studies - target markets - brand positioning - fidelity tactics and consumer reactions

Product

The product, service, idea or combination of these with which the organisation is present

Information about: - concept development and testing - brand name generation and testing - a test market

32

on the market

- product portfolio analysis - underperformed products - products launched in cooperation with other -financial institutions - offer analysis on B2C, B2B, B2G - product assortment - personal insurance agent as a part of the offer - transparency in offer presentations - perception about insurance coverage - perception about claiming procedures - online applications used for client informing and persuading/ offer description/ product usage

Price

The sum of money which must be paid by the buyer to the seller in order to acquire the offer

Information about: - cost analysis for products/ services/ departments - profit analysis for products/ services/ departments - premium payment flexibility - insurance excess - demand analysis: market potential; sales potential; sales forecasting - disclosure of costs to clients

Marketing communication

The endeavours in which the prospect is informed about the organisationâ&#x20AC;&#x2122;s offer and persuaded to purchase it

Information about: - motives which determine the choice for a means of communication - mass communication means - advertising message - advertising effectiveness: before/after broadcasting - events, fairs, exhibitions etc - sponsorships - promotional instruments such as special offers, prizes, coupons etc - brands: awareness, trust, loyalty etc

Distribution

The processes and routes through which an offer reaches a client

Information about: - channel performance: agents, partners, dealers - channel coverage

33

- international cooperation and coverage - distribution effectiveness in relation to organisations and individuals Personnel

The function and processes which handle recruitment, training and compensation of staff

Information about: - recruitment policy - training and courses - remuneration systems (flat wages, commissions etc.)

- procedures/ methods/ techniques used to interact with clients - studies on staff - satisfaction related to working conditions/ career development - managerial processes and relations - organisational culture and its forms

5. Population The researched population is represented by the Romania mandatory car insurance companies.

6. Secondary data study guide The study guide was designed in accordance with the research purpose and objectives. This guide was structured in the following chapters: • business/economic or company • buying behaviour • product • price • marketing communication • distribution • personnel For each section, the study guide had the following structure: Table 2- Business/economic or company research Features of the industry/market and tendencies on it

Acquisitions and diversification

Market share

Suppliers and partners

34

Corporate Social Responsibility endeavours

Other

Description

Source

Table 3.1- Buying behaviour research Brand perception (company and products) Buying intentions

Brand attitude (company and products)

Buying motives

Product satisfaction

Segmentation studies

Target markets

Brand positioning

Buying behaviour

Other

Table 3.2- Buying behaviour research Buying behaviour- information about: Brand Fidelity tactics and positioning consumer reactions

Other

Description

Source

Table 4.1- Product research Concept development and testing

Underperformed products

Brand name generation and testing

A test market

Product portfolio analysis

Products launched in cooperation with other financial institutions

Offer analysis on B2C, B2B, B2G

Product assortment

Table 4.2- Product research

35

Personal insurance agent as a part of the offer

Transparency in offer presentations

Perception about insurance coverage

Perception about claiming procedures

Other

Description

Source

Online applications used for client informing and persuading/ offer description/ product usage

Table 5- Price research Cost analysis for products/ services/ departments

Profit analysis for products/ services/ departments

Premium payment flexibility

Insurance excess

Disclosure of costs to clients

Other

Description

Source

Demand analysis: market potential; sales potential; sales forecasting; price sensitivity

Table 6.1- Marketing communication research Marketing communication- information about: Motives which Mass determine the choice Advertising communication for a means of message means communication

Advertising effectiveness: before/after broadcasting

Events: fairs, exhibitions etc

Table 6.2- Marketing communication research Marketing communication- information about: Sponsorships

Promotional instruments such as special offers, prizes, coupons etc

Brands: awareness, trust, loyalty etc

Other

Description

Source

Table 7- Distribution research Distribution- information about:

36

Channel performance: agents, partners, dealers

Channel coverage

International cooperation

Distribution effectiveness in relation to organisations and individuals

Other

Description

Source

Table 8.1- Personnel research Personnel- information about: Recruitment Trainings Remuneration policy and systems (flat wages, courses commissions etc)

Procedures/ methods/ techniques used to interact with clients

Studies on staff

Table 8.2- Personnel research Personnel- information about:

Satisfaction related to working conditions/ career development

Managerial processes and relations

Organisational culture and its forms

Other

Description

Source

7. Sources of secondary data The secondary data sources were structured in several chapters to facilitate the study: 7.1 Web sites of insurance companies 7.2 Web sites of regulatory institutions 7.3 Reports and statistics issued by public and private institutions 7.4 News Web portals 7.5 Newspapers 7.6 Specialised publications in insurance 7.7 Specialised web sites in insurance 8. Research conclusions After analysing the secondary data sources, 247 relevant references were identified. These references were analysed using the subcategories of the study guide.

In order to match these references with the research objectives, each objective was analysed considering on one hand the predefined subcategories and on the other hand the â&#x20AC;&#x153;otherâ&#x20AC;? subcategory.

Objective no. 1- Identifying marketing approaches in relation to the marketing environment

37

After analysing the data it was concluded that this objective had been accomplished. In this regard it can be said that the mandatory car insurance companies gather information about the marketing environment related to: • industry/market features and tendencies • acquisitions and diversification • market share • suppliers and partners • Corporate Social Responsibility endeavours The hypothesis formulated for this objective was partially confirmed because findings about regulatory issues had been found also.

Objective no. 2- Identifying marketing approaches in relation to the determination of the buying behaviour on the market The analysis of the gathered data concluded the accomplishment of this objective.

The mandatory car insurance companies collect data about the buying behaviour in relation to: • brand perception (company and products) • brand attitude (company and products) • buying motives • product satisfaction • buying behaviour • buying intentions • segmentation studies • target markets • brand positioning • fidelity tactics and consumer reactions The hypothesis formulated for this objective was entirely confirmed because the findings were within the pre-established boundaries.

Objective no. 3- Identifying marketing approaches in relation to the product policy The analysis of the collected data concluded the accomplishment of this objective.

The mandatory car insurance companies make product decisions which extend to the following categories: • concept development and testing • brand name generation and testing • a test market • product portfolio analysis • underperformed products • products launched in cooperation with other financial institutions • offer analysis on B2C, B2B, B2G • product assortment • personal insurance agent as a part of the offer • transparency in offer presentations • perception about insurance coverage • perception about claiming procedures • online applications used for client informing and persuading/ offer description/ product usage

38

Other product-related marketing approaches were uncovered by the collected data, as follows: cross-selling with non-financial services, bundles with non-mandatory insurance policies.

The hypothesis formulated for this objective was partially confirmed because other marketing approaches were found besides the ones asserted in this hypothesis.

Objective no. 4- Identifying marketing approaches in relation to the price policy The analysis of the collected data concluded the accomplishment of the 4th objective. The mandatory car insurance companies pursue price-related marketing approaches which cover the following areas: • cost analysis for products/ services/ departments • profit analysis for products/ services/ departments • premium payment flexibility • insurance excess • demand analysis: market potential; sales potential; sales forecasting • disclosure of costs to clients In accordance with the collected data in the “other” subcategory, the mandatory car insurance companies are also interested in analyses of claim levels and numbers.

The hypothesis formulated for this objective was partially confirmed because the collected data displayed also marketing approaches which were not found in the preestablished subcategories.

Objective no. 5- Identifying marketing approaches in relation to the marketing communication Based on the analysis of the collected data, the 6th objective was accomplished.

The collected data reflect that the mandatory car insurance companies pursue marketing approaches related to the marketing communications concerning: • motives which determine the choice for a means of communication • mass communication means • advertising message • advertising effectiveness: before/after broadcasting • events, fairs, exhibitions etc.

• sponsorships • promotional instruments such as special offers, prizes, coupons etc.

• brands: awareness, trust, loyalty etc.

Other marketing approaches were identified in relation to the marketing communication, pertaining to the use of direct marketing approaches.

The hypothesis formulated for this objective was partially confirmed because other marketing approaches were unveiled besides the ones mentioned in this hypothesis.

Objective no. 6- Identifying marketing approaches in relation to the distribution policy Based on the analysis of the collected data, the 6th objective was accomplished.

The mandatory car insurance companies’ marketing approaches pertaining to distribution refer to: • channel performance: agents, partners, dealers • channel coverage • international cooperation and coverage • distribution effectiveness in relation to organisations and individuals

39

The hypothesis formulated for this objective was entirely confirmed, the collected data being allocated in the preset subcategories of the study guide.

Objective no. 7- Identifying marketing approaches in relation to the personnel policy The analysis of the collected data concluded the accomplishment of the 7th objective. The personnel-related marketing approaches of the mandatory car insurance company lie, mainly, within the categories mentioned below: • recruitment policy • training and courses • remuneration systems (flat wages, commissions etc.)

• procedures/ methods/ techniques used to interact with clients • studies on staff • satisfaction related to working conditions/ career development • managerial processes and relations • organisational culture and its forms The collected data displayed also marketing approaches related to staff downsizing, job openings and staff churn rate.

The hypothesis formulated for this objective was partially confirmed because other marketing approaches besides those ones already mentioned were identified.

Conclusions The mandatory car insurance companies make use of a tremendous number of marketing strategies and tactics covering a broad spectrum of aspects beginning with the environment screening and ending with the company adaptation to the peculiarities of the market.

These findings provide sufficient information for a deep understanding of the marketing approaches used by the mandatory car insurance companies and this model could be effectively used by parties with an interest in this industry.

Bibliography: [1]. Cătoiu I. (et al.) (2002) Cercetări de marketing, Ed. Uranus [2]. Cătoiu, I.; Edu, T; (2009) The identification of the Romanian companies’ marketing needs and means of communication- a marketing research- paper published in the proceedings of the conference CHALLENGES OF CONTEMPORARY KNOWLEDGE-BASED ECONOMY (ICMEA)" - third edition, Alba Iulia, Romania, 13-14 November 2009 [3]. Cătoiu, I.; Edu, T.; Negricea, I. C. (2011) The identification of the Marketing Approaches used by the Romanian Internet Service Providers- a Marketing Research, paper published in the proceedings of the conference IECS 2011 “CRISES AFTER THE CRISIS. INQUIRIES FROM A NATIONAL, EUROPEAN AND GLOBAL PERSPECTIVE”, Sibiu, 2011, ISBN 978-606-12-0139-6 [4]. Edu, T.; Negricea, I. C. (2011) The Identification of the Marketing Needs and Means of Communication of the Romanian Marketing Companies – A Marketing Research, Romanian Economic and Business Review, Vol. 6, Issue 3, ISSN 1842-2497, Ed. Pro Universitaria [5]. www.csa-isc.ro

40

CONSIDERATION REGARDING THE EFFECT OF INOVATION AND INTEGRATED USE OF TECHNOLOGIES AND TECHNIQUES FOR SMALL AND MEDIUM ROMANIAN ENTERPRISES BASED ON KNOWLEDGE Assistant Lecturer Mariana ENUČ&#x2DC;I, PhD Candidate Romanian-American University 1B, ExpoziĹŁiei Avenue, Sector 1, Bucharest enusi.mariana@profesor.rau.ro

Lecturer Cristina HARNAGEA, Phd. City University London, United Kingdom Abstract: The last two decades have witnessed a significant increase in discussions about the different dimensions of knowledge and knowledge management (KM). Many factors have contributed to this growing interest including globalization, increased competition, diffusion of new ICTs (information and communication technologies) and new procurement routes, among others. There are a range of techniques and technologies that can be used for KM in construction of Small and Medium Enterprises based on knowledge.

The use of techniques for KM is not new, but many technologies for KM are fairly new and still evolving. Knowledge-based economy indicate that most of Small and Medium Enterprises based on knowledge do not adopt a structured approach for selecting KM technologies and techniques. The use of KM techniques is more evident compared to KM technologies. There is also reluctance among Small and Medium Enterprises based on

41

knowledge to invest in highly specialised KM technologies. The high costs of specialist KM technologies are viewed as the barrier to their adoption. In conclusion, the paper advocates integrated use of KM techniques and technologies in Small and Medium Enterprises based on knowledge.

Keywords: Small and Medium Enterprises based on knowledge, KM techniques, KM technologies, performance, competence Jel Classification: M10 1. Introduction The whole relationship that a company develops during its existence to realize its activity represents the economical, social, competitional and political medium for all organizations, especially for small and medium Romanian enterprises based on knowledge.

Stakeholders for small and medium Romanian enterprises based on knowledge keep in touch and relate to the suppliers, buyers, local and general public administration, state organizations, consumer associations, syndicates, employers, etc.

Small and Medium Enterprises based on knowledge interact and there is a consent regarding the existence of a strong and direct proportional relationship between the size of the company and its amplitude and competence (structure) of the medium.

The object of the Small and Medium Enterprises based on knowledgeâ&#x20AC;&#x2122;s activity is of economic nature and, in order to develop it, the enterprise contacts many other economic enterprises, initiating buy-sell relations, information-documentation relations, project relations, etc. The involvement of the labor force into the activity of the Small and Medium Enterprises based on knowledge is economical through their appointment contracts, but it brings the social aspect into the field of its medium, that means viewing the existence the employees as human beings. The social aspects becomes amplified through the consequences induced by the way the Small and Medium Enterprises based on knowledge contribute or not to meeting some of the needs of the population through the object of their production, etc.

The general trend is to develop the relationship inside the business medium and increase it to new partners and then passing to new, superior levels until the global level is reached. For various reasons, some of them being earning performance reasons, some small and medium enterprises based on knowledge could have a business contraction based on their own recession, the countryâ&#x20AC;&#x2122;s recession or the recession of the countries in which it operates.

In the Romanian economy, as well as the world economy, there is a general trend of blockage and economical crisis and the financial help for the Small and Medium Enterprises, especially the Small and Medium Enterprises based on knowledge, becomes very important and immediate.

2. Information and communication technologies in the Small and Medium Enterprises based on knowledge Information and communication technologies inside the knowledge management (KM) in Small and Medium Enterprises based on knowledge consist of a combination between hardware and software technologies. Hardware technologies and their components are important for the knowledge management system in the Small and Medium Enterprises based on knowledge because they have the role of platform for the software and for the

42

storage and transfer of knowledge. Some of the hardware requirements of a Knowledge Management system (KM) include personal computers or work stations to facilitate the access to knowledge, servers for high traffic for the organization to be in the network, open architecture for interoperability in distributed media, mass-media rich in applications that need the integrated digital network of services (ISDN) and high speed optic fiber to offer access to the public network (Internet) and private network (Intranet and Extranet) and facilitate the access to and exchange of knowledge (Lucca et al., 2000). In the next figure, we present an open architecture:

Figure nr.1 Interoperability inside the Small and Medium Enterprises based on knowledge Software technologies have an important role in facilitating the application of Knowledge Management (KM). The number of software applications has increased considerably in recent years, the suppliers of software offering different solutions for different tasks. The large number of suppliers that offer solutions to Knowledge Management (KM) makes the identification of the best solutions difficult. This led to the adoption of different models in organizations for establishing the Knowledge Management (Tsui, 2002b).

Socializing, as a process, occurs through team work of compatible individuals, with similar cultural profiles. The first software socializing instruments could be considerate distance collaborating software. This class of instruments sustains not only socializing, but also the other processes of knowledge conversion. In socializing, the accent is on sharing the knowledge and building the trust inside the team. Virtual media of communication opened to the public are: discussion groups, forums, intra-net, bloggs, chat and wiki pages.

- Discussion groups and forums facilitate the conversation of persons having common interests.

-The level of the professionalism varies and the orientation is practical in general.

-The Intra-net communication software are generally reserved to companies, due to high prices -Bloggs are a new communicating system that promises to become a new method of marketing and public opinion survey -Chat maintains an active informal network inside and outside a company -The editing system of Wiki pages is an efficient alternative to an asynchronous communication in text format between the members of the same team or outside of it.

The Internet technologies are supplemented by the software dedicated to the virtual collaboration inside an organization (groupware), with the help of which, members of a team can share experiences, such as conferences, presentations, discussions, or could even work together using visual instruments or modeling in real time. The classic example of

43

this type of software is Lotus Notes application, which facilities simultaneous work on documents but offering only the possibility of asynchronous discussions. A superior form is the videoconference, a solution for the real time communication. (Lotus Sametime and Microsoft NetMeeting). The present form of this software for cooperating at a distance combines the videoconference with simultaneous work on applications and documents (IBM –Boeing Team Space project). Although the main activity is that of combining explicit knowledge, the participation to these kinds of activities is a form of tacit learning.

The major deficiency is establishing a reduced degree of trust compared to meetings faceto-face.

Due to the complexity and speed at which the knowledge market is changing, there are also necessary methods of search and retrieval of expertise; these are search engines of persons by their capacities (by type and value of the tacit/implicit knowledge).

Such products are Lotus Discovery Server, which determines the profile of the persons from the online application form and from the documents whose authors these individuals are and Tacit Knowledge Systems Knowledge Mail, which use text mining on emails written by employers in order to determine their expertise.

Externalization is a difficult process, which has to be practiced and methodized.

Detailed interviewing of the experts or requesting the description of certain process could lead to the exploitation. Externalization supposes the creation of a mental model shared by the dialog members followed by the articulation of the new knowledge. These methods lead the positive results when the answers have to be expressed into a predefined ontology of the domain, increasing the clarity and concision of the obtained knowledge. This is the design approach of the expert systems that requires procedural knowledge from key members of the organization.

The knowledge management takes the majority of the discoveries of the expert systems and continues with a deepening of the research in the methodology and the creation of instruments of ontology.

The theoretical results of this research will be approached in the section dedicated to the methodology of knowledge management, which has as nucleus the activities regarding the life cycle of ontologies.

Alongside the software dedicated to the work with the ontology, the externalization instruments include the software dedicated to brainstorming and those of search and organization of the archives of discussion groups.

Internalization. The new acquired knowledge has to be understood thoroughly (through their function) and connected to the already existent knowledge system, in order to be used efficiently.

The problem of knowledge abundance makes necessary the existence of a standardization of quality and filtration of knowledge, in order to guide the study to the most relevant knowledge. The filtration could be seen as a phase of document classification from the point of view of their utilities. Alongside filtration, the assistance systems of internalization could offer metadata, the context within the taxonomy specified in the language of the domain ontology, the definitions of the terms, visualizations (e.g.Themescape). Furthermore, they could consist of instruments of exploitation of knowledge and the relationship between different pieces of knowledge, such as the project Lexical Navigation. To all these instruments dedicated to the internalization of the knowledge, the “classical” instruments can be added.

3. Techniques in Knowledge Management in the Small and Medium Enterprises based on knowledge

44

Statistical methods of analyses of quality necessary for the services of the Small and Medium Enterprises based on knowledge are seldom used by some firms. The necessary attributes of quality gives the clients satisfaction in proportion to the performance of the products/service and, implicitly, to the performance of the enterprise. The increase of the level of satisfaction is obtained by developing those attributes. Because the clients freely express their wishes above these attributes, the necessary quality is often called ”the client’s voice”.

To obtain some tactic and strategic solutions, to build competitive advantages on long or short term, Small and Medium Enterprises based on knowledge have to determine their clients and other persons they address, the zone/aria they come from, their social status, the price they are prepared to pay. Therefore they have to accomplish a segmentation of the market. For a particular solution of segmentation of the market to be efficient and lead to profit entrepreneurial strategies, there are 6 criteria that have to be performed: Identificability: the segments have to be well separated and to have clear differences between them Consistency: the identified segments have to contain enough units in order to assure marketing strategies specified for each segment.

Accessibility: the units of the segments have to be accessible through publicity or direct sales.

Stability: there must be no major changes between the units of the identified segments.

Sensibility: the units of the identified segments have to respond uniquely to the marketing efforts specified for each segment.

Actionability: the identified segments have to foresee the directions of the marketing efforts.

The obtained solutions regarding the segmentation of the market depend on the variable used and on the methods and procedures used for obtaining the classification.

The nature and quality of the segment depend on the variables used. Four classes of segmenting variables can be used: General observable variables: demographic variables, social-economic variables etc.

Observable variables specific to the product: the frequency of utilization, the consumers’ loyalty.

Unobservable general variables: variables referring to the life style etc.

Unobservable general variables specific to the product: benefits, utilities, preferences, intentions, etc.

After the identification of the amount of potential variables for segmentation, a method of stratification is used in order to identify the segments. M. Wedel and W. A Kamakura classify these methods in four categories: • A priori descriptive methods: frequency tables • A priori predictive methods: discriminant analysis • Post hoc descriptive methods: classification methods, mixed methods • Post hoc predictive methods: logistic regression methods, CRAID, CART, mixed regression methods, or with latent classes.

The descriptive methods are methods that analyze a set of variables, without any separation between dependent and independent variables. They are used to determine some market segments with properties defined by the segmentation variables.

45

The predictive methods are methods that analyze a set of variables with the purpose of explaining a dependent variable using a set of independent variables.

4. Example of market segmentation-descriptive approach At the launch of a new software product on the market, the producer firm carried out a test of the buyers of own products. The survey was carried out in Bucharest, having chosen 10 shops that sell the products of the firm. From these shops, 180 clients consumers were randomly selected. They were asked to complete a questionnaire with 17 questions.

The survey was carried out in order to find out the segmentation of the market depending on how the ratio price-quality was considered, how the advertisement and the package influence the buying decision and what the consumers appreciate most in the products of the firm: newness, originality, the ratio price-quality, the quality, or the fact that the product is an advanced and rapid software.

The variables used for segmentation are: What do you appreciate best in our firm’s products? newness originality the ratio price-quality quality it is an advanced, rapid software How does the ratio price-quality seem to you at the level of these products?

• satisfying • unsatisfying Do you think that presentation of these products influenced your choice? yes a little no Did it happen that, after you saw an advertisement for the products of the firm, you went and bought at least one of them? yes no Following the application of an analysis of multiple correspondences, 8 new cardinal independent variables were obtained, referred from here onwards with di.

The new variables are linear combinations of the firsts.

The modalities of the questions are correlated with the new variables, as follows: 1. What do you appreciate best in our firm’s products? newness: positively strongly correlates with d1 and negatively strongly correlates with d8 originality: positively strongly correlates with d7 and negatively strongly correlates with d2; the ratio price-quality: positively correlates with d2, d6 and negatively strongly correlates with d4; quality: positively strongly correlates with d3; it is a soft rapidly advanced: positively strongly correlates with d5; 2. How does the ratio price-quality seem to you at the level of these products? satisfying: positively strongly correlates with d6 negatively correlates with d1 and d8; unsatisfying: negatively strongly correlates with d6, positively correlates with d1 and d8

46

3. Do you think that presentation mode of these products influenced your choice? yes: positively strongly correlates with d4 and negatively strongly correlates with d3; a little: positively strongly correlates with d3 and negatively correlates with d1, d2, d4, d6 and d7; no: positively correlates with d1, d3 and d7 and negatively strongly correlates with d4; 4. Did it happen that, after you saw an advertisement with the products of the firm, you went and bought at least one of them? yes: positively correlates with d2, and d7 and negatively correlates with d6, d 1, d 8; no: positively correlates with d6, d1 and d3 and negatively correlates with d2, d 7; For choosing the number of layers, there is a possibility to arrange a hierarchical clasification and identification at the level at what the graphs should be cut to obtain a better aggregation.

After aplication of the Ward algorithm, the hierarchical clasification in figure nr.4 was obtained. Variations initial had a few answers, we made a stratification into 3 groups using mobile centers Tree Diagram for 90 Cases Ward's method - Euclidean distances

Figure nr.2 Classification tree obtained through Ward method Source: Cristina Boboc, Multidimensional Statistics Analyze, Application inside the studyâ&#x20AC;? Products and Services Therefore, a stratification into 3 groups will be used, with an iterative unhierarchical method of partition-the method of mobile centers.

Centers from three groups of variables and the variations between the centers of the 3 segments are: Cluster 1 2 3 Dimension 1 (d1) 0,12 0,10 -0,18 Dimension 2 (d2) -0,71 -0,13 0,35 Dimension 3 (d3) 0,44 -0,27 0,28 Dimension 4 (d4) 0,29 0,41 0,64 Dimension 5 (d5) -0,21 0,26 -0,31 Dimension 6 (d6) -1,21 -0,13 0,48 Dimension 7 (d7) -0,65 -0,08 0,27 Dimension 8 (d8) 1,29 -0,55 0,47

47

Taking into account the existing correlations between the initial variables and the centers of the three groups, the three segments of the market can be characterized as follows: Segment 1, that represents 9% of the market, consists of the persons that appreciate mostly the quality of the products of the firm, but they consider the ratio pricequality not satisfactory, and they are not influenced by the presentation mode and the advertisement in their buying decision.

Segment 2, that represents 53% of the market, consists of the persons that appreciate mostly the newness and the product is a new rapid software. They also consider the ratio price-quality being satisfactory and they are also influenced by the product presentation and advertisement in their buying decision.

Segment 3 that represents 38% of the market, consists of the persons that appreciate mostly the ratio price-quality and they are also influenced by the advertisement but not the presentation in their buying decision.

Starting from these three segments, the personsâ&#x20AC;&#x2122; characteristics in each of the three categories have to be studies and the degree to which they are devoted clients-consumers of the products.

The study can be continued to determine the characteristics of people who are part of the 3 categories and to the extent to which they are loyal customers of company products.

5. Conclusions and recommendations The constitution of the Small and Medium Enterprises based on knowledge and the actions of other Romanian economic actors follow complex aims and effects, but it is very clear that in the Romanian, European, or international economic medium, all of them very volatile due to globalization, the stability or certainty in movement becomes fundamental, because the turbulence seems to have emerged everywhere. Of course, in the case of the Small and Medium Enterprises based on knowledge, the firms have learnt long time ago, and are still learning, how to work towards success, but the present economic media that overlap more and more, this reaction is no longer sufficient because the competition become global and the means of its development have become complicated.

In the EU the national character of economy is blotting out more and more and the European economy combines more and more in its home as well as on other meridians with the economies from other countries or integrationist regional groups in various degrees.

The Small and Medium Enterprises based on knowledge are the engine of this economy and are the most developed link, but in a such context, Romanian enterprises confront with 3 important problems: the information, the influence and the financing that they have to manage as well as they could. These problems are not new, but now they have become explosive.

The performance of the Small and Medium Enterprises based on knowledge have to be optimal and, implicitly, the competence of their employees, through the acquisition the new information and communication technology (TIC), which are strictly necessary for developing their activity and assuring their sustainability.

The access to financing, as an essential ingredient of accelerating the innovative process inside the Small and Medium Enterprises based on knowledge, has to be sustained constantly for a sustainable development of these firms.

One of the important points of â&#x20AC;&#x153;Cartel of Bolognaâ&#x20AC;? refers to the access to financing as an essential ingredient of accelerating the innovative process inside the Small and Medium Enterprises based on knowledge. The uncertainty and the asymmetry of

48

information that feature in the Small and Medium Enterprises based on knowledge are amplified in the case of the innovative Small and Medium Enterprises, which makes their access to a financing more difficult. Firstly, the economic effects resulting from innovative activities have a higher degree of uncertainty. Secondly, the enterprises/contractors have more information about the nature and the characteristic of the products and the technological processes than the potential investors. Thirdly, the innovative activities are usually intangible, so their evaluation ex ante is difficult, using monetary terms, before they have commercial success. Therefore, financing the innovative Small and Medium Enterprises is very risky and has a high degree of uncertainty, creating reserve from investors and enforcing the government’s involving through specific programs, for supplying the private sources to financing the innovative Small and Medium Enterprises based on knowledge.

The economic structure of the Small and Medium Enterprises differs from the economic structure of a great company that operates on a market. Any company combines the own financial resources with the attracted ones. Lack of real guaranties from the Small and Medium Enterprises makes the access to the resources to be different. The financial structure for the innovative and Small and Medium Enterprises based on knowledge and the modality they finance their development depend on: -institutional efficiency of the capital market -regulation of the domain regarding the supervision of the involved institutions in financing businesses with high risk.

Bibliography: [1]. Boboc, Cristina, - (2007) Multidimensional Statistics Analyze, Application inside the study” Products and Services” Meteor Press Ed, Bucharest; [2]. Bulgaru M., Stoica G., Demetrescu M.C., Dobre I., Antonescu C., Epure E., Pistol Gh., Stanciu M. – (1983) Statistica ramuri neindustriale, Lito ASE; [3]. Davenport, T.H. and Prusak L (1998) Working Knowledge: How Organizations Manage What They Know. Harvard Business School Press, Boston; [4]. Egbu, C.O., - (2000a) Knowledge management in construction SME's: coping with the issues of structure, culture, commitment and motivation. Proceedings of the 16th Annual Conference of ARCOM (AKINTOYE A, Ed), 6–8 September, Glasgow Caledonian University, ARCOM, Reading, UK, Vol. 1, pp 83–92; [5]. Enusi, Mariana, – (2008) “Probability of Best Project based on Knowledge integration, Knowledge related issues abound in Knowledge applications of Small and Medium Enterprises” International Conference on QUALITY – INNOVATION – EUROPEAN INTEGRATION Sibiu, September 18, ISBN 3-901888-41-3, VIENNA, Clasa B+; [6]. Enusi, Mariana, – (2008)“Competence Knowledge management and the competence Knowledge management information systems of the Small and Medium Enterprises”, International Conference Business Excelance - ICBE – Brasov, October, Clasa B+; [7]. Enusi, Mariana, – (2008) “Portability of intellectual capital in Best Practice Cases for Small and Medium Enterprises based on Knowledge” Conference with international participation, Innovation, competitively and ethic in business, Bucharest, October, ISBN 978-973-749-459-7; [8]. Lucca, J., Sharda, R. and Weiser, M, - (2000) Coordinating technologies for knowledge management in virtual organizations. Proceedings of the

49

Academia/Industry Working Conference on Research Challenges CAIWORC'00, 27–29 April, Buffalo, New York; [9]. M. Wedel, W. A. Kamakura – (1998) Market Segmentation: Conceptual and Methodological Foundations, Boston, MA: Kluwer Academic Publishers.

SOCIAL COHESION THROUGH LIFELONG LEARNING AT EUROPEAN LEVEL Professor Leonica POPESCU, Ph.D Romanian-American University, 1B, Expoziţiei Avenue, Sector 1, Bucharest

popescu.leonica@profesor.rau.ro Lecturer Alina Irina POPESCU, PhD Academy of Economic Studies 6 Piaţa Romană, Sector 1, Bucharest Abstract: Social cohesion is one of the aims to be achieved through lifelong learning, together with personal fulfilment, active citizenship, and employability. In the context of rapid change there is a concern that many people would feel marginalized by the digital revolution and globalization. The upgrade of competences, skills and aptitudes becomes a stringent need to maintain employability, to reduce unemployment, or to become competitive on the labour market. This has to be done throughout the entire lifetime of individuals. This article aims to discover how lifelong learning contributes to increase social cohesion. It begins with a theoretical review of the construct of social cohesion, and then it explores the relationship between social cohesion and lifelong learning. In the end, several mini case studies are presented to bring real evidence into the discussion of how social cohesion can be strengthen through learning activities.

Keywords: social cohesion, lifelong learning, European Union JEL Classification: I00, I24 1. A Conceptual Approach to Social Cohesion The concept of social cohesion has gained increasing importance over the past years especially in policy making contexts. Efforts made to improve the competitive position of the European Union as a whole in general, and of the Member States in particular, led European policy-makers to focus on several issues that could prevent competitiveness, like: the demographical decrease of European population, climate change, immigrant waves, and economic disparities across European regions. Within the wider

50

context of the UE Regional Policy, the concept of economic and social cohesion was one of the cornerstones since the Agenda 2000 reforms [COM(97)].

Social cohesion is a complex construct. In the literature, many researchers and public bodies tried to define the concept through the numerous aspects that are included under its umbrella. Social cohesion was considered to be “an ideal towards which societies have to strive continually... a goal to which they aspire, but never fully achieve.” (BattainiDragoni and Dominioni, 2003, p.5) The Council of Europe adopted a functional definition of the concept: “Social cohesion is the capacity of a society to ensure the welfare of all its members, minimizing disparities and avoiding polarization. A cohesive society is a mutually supportive community of free individuals pursuing these common goals by democratic means.”

(European Committee for Social Cohesion, 2004, p.3). Social cohesion is viewed from the perspective of its objective, the guarantee of welfare and of the freedom of individuals to pursue personal development and active citizenship. In other words, all individuals have equal opportunities to improve their situation and are guaranteed basic social rights like adequate health care and decent living standards.

Many authors understood social cohesion as “shared values and sense of belonging”. Maxwell (1996) argues that social cohesion refers to “the processes of building shared values and communities of interpretation, reducing disparities in wealth and income, and generally enabling people to have a sense that they are engaged in a common enterprise, facing shared challenges, and that they are members of the same community”.

This view emerged from the works of the sociologist Emile Durkheim who described “the interdependence between the members of the society, shared loyalties and solidarity” (Jenson, 1998).

Social cohesion is defined also through the collaboration relationships between different community members. The Social Cohesion Network from Canada cited by Jeannotte (2003) adopted in 2002 a more behavioural definition: “social cohesion is based on the willingness of individuals to cooperate and work together at all levels of society to achieve collective goals” (Jeannotte, 2003, p.3). In the same view is situated the definition of the government of New Zealand, one of the most comprehensive definitions of the construct: “social cohesion describes a society where different groups and institutions knit together effectively despite differences. It reflects a high degree of willingness to work together, taking into account diverse needs and priorities. Social cohesion is underpinned by…individual opportunities (including education, jobs, health); family well-being (including parental responsibility); strong communities (including safe and reliant communities); and national identity (including history, heritage, culture, and rights and entitlements of citizenship)” (quoted from Senate of Canada, 1999).

Other comprehensive approaches have attempted to clarify the dimensions of social cohesion. In this regard, six dimensions were identified by Jenson (1998) and Bernard (1999): 1. equality–inequality 2. recognition–rejection (referring to the degree of respect and toleration of differences) 3. legitimacy–illegitimacy (with respect to the institutions that act as mediators of social relations) 4. inclusion–exclusion (as regards the degree of equality of social and economic opportunities) 5. belonging–isolation (involving the extent of shared values, identities, and feelings of commitment), and

51

6. participation –non-involvement.

Perhaps one of the clearer images of the social cohesion construct one develops is by picturing a puzzle, with pieces of different colours and sizes. Social cohesion refers to the nature and the extent of social and economic divisions within societies due to differences of income, ethnicity, political party, caste, language, or other demographic variable. Nevertheless, Easterly et al (2006) argued that “socially cohesive societies are not necessarily demographically homogenous, but rather ones that have fewer potential and/or actual leverage points for individuals, groups, or events to expose and exacerbate social fault lines, and ones that find ways to harness the potential residing in their societal diversity (in terms of diversity of ideas, opinions, skills, etc).”

Efforts were made to bring together various approaches to social cohesion. In this regard, Berger-Schmitt (2000) identified two main societal dimensions in the concept of social cohesion: 1. The reduction of disparities of opportunities, inequalities, and social exclusion – dimension that synthesize contributions to social inclusion / exclusion.

2. The strengthening of the “density and quality of relationships and interactions between individuals or groups, their mutual feelings of commitment and trust due to common values and norms, and a sense of belonging and solidarity…”

– dimension that embrace the views on social capital.

The complexity of the construct raised many challenges when it comes to its measurement. Various attempts aimed to measure social cohesion directly with the use of several indicators like: membership rates of organizations and civil participation (Narayan and Pritchett, 1999; Krishna, 2002; Knack, 2003); measures on social relations and trust (Knack and Keefer, 1997; World Values Surveys); performance measures of public and private institutions; and indirectly by using: income distribution measures like Gini coefficients and share of income to middle 60 percent (Rodrick, 1999); ethnic heterogeneity (Easterly et al, 2006); and measures of gender discrimination in education, income, and health.

Social cohesion was positively linked with economic growth. Building social cohesion has been a major task for not only for countries wrestling with development, but also for developed countries fighting for competitiveness.

2. Enhancing Social Cohesion through Lifelong Learning Lifelong learning (LLL) is a new paradigm that emerged in education, as a response to the rapid changes that have occurred on the labour markets due to the rapid adoption of technologies and globalisation.

European Commission (2001) defines lifelong learning as: “all learning activity undertaken throughout life, with the aim of improving knowledge, skills and competences, within a personal, civic, social and / or employment-related perspective.”

Briefly, lifelong learning is about: ! Learning throughout lifetime (“lifelong”) ! Valuing of forms of life-wide learning (formal, non-formal, informal) ! Personal development ! Active citizenship ! Employability ! Social inclusion Several points for discussion emerge from this definition. Firstly, lifelong learning

52

refers to all learning activities carried on by individuals across all ages, and in all learning contexts: formal, non-formal and informal. Formal education and training includes structured programs that are recognized by the formal education system and lead to approved certificates. Non-formal education and training includes structured programs that are not formally recognized by the national system, such as apprenticeship training programs and structured on-the-job training. Informal education and training includes unstructured learning, which can take place almost anywhere, including the home, community, or workplace. It includes unstructured on-the-job training, the most common form of workplace learning. Individuals are required to learn continuously to become “lifelong learners”.

Secondly, lifelong learning is about active citizenship. Little attention has been given so far to what lifelong learning for active citizenship means and how it can be achieved. It is stressed the need for individuals to become “learning citizens”. Thus, they are ‘placed’ in community context, emphasizing their role as active citizens, meaning citizens that become empowered to exercise their civil, political, economic, social and cultural rights. This empowerment of individuals in the lifelong learning context leads to their involvement in community networks, increasing thus the social cohesion of the community.

The concept of active citizenship provides the premises to overcome the challenges within the society which may develop into conflicts. Keeping constructive differences together is an important factor of social cohesion and is possible in societies where people are not categorised according to their ethnic, religious or other backgrounds.

Thirdly, lifelong learning ensures personal development of individuals. They are able to continuously update and upgrade their skills and competences, fact that ensures their personal development and employability. The lack of work may create an isolation of the individual from the society. Thus, the employability status reduces the chances of social exclusion. Also, personal development ensures recognition from others.

Fourthly, lifelong learning combats social exclusion. For different kind of reasons (e.g. disability, age, racism, and social class) several categories of people do not participate in society; through learning activities and with learning outcomes they become easier to integrate in societies. Social inclusion refers to giving all individuals equal opportunities to be a part of local communities and to contribute to making it better. Here we need to stress the shared responsibility of individuals, organisations, central and local governments and regions in providing and engaging in lifelong learning.

On the fifth place, lifelong learning means providing opportunities to learn for everybody. The concept of “lifelong learning for all” was adopted in 1996 by the OECD ministers of education, acknowledging the need for flexibility in the learning offer. The European Commission acknowledged the importance of engaging all individuals in learning activities, and signalled in a Memorandum of Lifelong Learning (EC, 2000) that a shift in the paradigm of education had started to take place. The document was based on the decisions taken at the Lisbon European Council (March 2000) that remarked: “Lifelong learning is no longer one aspect of education and training; it must become the guiding principle for the provision and participation across the full continuum of learning contexts.” (European Council, 2000). Also, they assigned Member States the role “to identify coherent strategies and practical measures with a view to fostering lifelong learning for all” (European Council, 2000).

Education is seen as a means to reduce inequalities within society. Several aspects need to be discussed here. Gender inequality was proven by the greater rise in educational attainment at both upper-secondary and tertiary levels for women than for men over the

53

past decades, and by specific sectors which are ‘dominated’ either by men or by women.

The socio-economic background has the most powerful impact on educational attainment, at all educational levels. The pattern that emerged was that the educational attainment of children is directly correlated to the educational attainment of parents, pattern that creates a vicious circle. Another problem when it comes to inequalities within society refers to minorities. From various reasons that vary from the lack of financial resources to the lack of knowledge of the language, minority groups have lacked equal access to learning resources or even have been denied learning rights. People with special needs represent another vulnerable category, and many European countries have implemented special measures to integrate them. Inequalities in society can also be created by the digital divide.

In the present-day societies, technological competences or the so-called ‘digital literacy’ are critical. Individuals without these competences are disadvantaged when it comes to accessing better jobs. Studies showed that the acquisition of technological competences is linked to social advantage, ethnicity, environment (urban / rural), and/or educational background (OECD, 2000).

To conclude, in the European Union lifelong learning was seen since its inception as a policy that contributes to strengthening social cohesion across Member States. In A Memorandum on Lifelong Learning (EC, 2000, p.4) policy-makers recognize “Two equally important aims for lifelong learning: promoting active citizenship and promoting employability... Both employability and active citizenship are dependent upon having adequate and up-to-date knowledge and skills to take part in and make a contribution to economic and social life.”

3.

The Contribution of Lifelong Learning to Social Cohesion: Case studies from the European Union The implementation of the EU Lifelong Learning Policy is currently made under the Lifelong Learning Programme (LLP) 2007-2013. The current programme is the successor to the Socrates, Leonardo da Vinci and ICT / Open and Distance Learning (20002006). The European Commission has initiated debates for the design of the new LLP, as of 2014. The Lifelong Learning Programme offers financial support for individuals and organisations for meeting the objectives of the Lifelong Learning Policy. It is structured on several sectorial sub programmes that focus on different stages of education and training and continuing previous programmes: ! Comenius for schools ! Erasmus for higher education ! Leonardo da Vinci for vocational education and training ! Grundtvig for adult education Also, transversal programmes aim to complement the sectorial sub programmes, aiming to promote European cooperation in fields covering two or more of the subprogrammes.

Several case studies were selected to identify and discuss the contribution of lifelong learning to strengthening social cohesion.

The social integration of immigrants through learning was aimed by a programme called “Individual 2000”. The programme was developed by the municipality of Botkyrka (Sweden) to reach inhabitants with low levels of education, especially immigrants, and to encourage them to resume their studies. The development of an infrastructure for adult learning aimed to enhance each individual’s knowledge, interests and experience. The challenge was represented by the reach of the target groups.

Information and guidance was given to selected target groups at: club and union meetings,

54

in shopping centres, by knocking on doors, at an educational fair, at local events such as markets and cultural events, via advertisements in local press and on internet websites.

Three adult learning centres were established: Botkyrka Learning Centre (responsible for guidance, admission to upper secondary education, flexible learning activities in vocational subjects, orientation and motivation courses, organization of educational workshops, development of teaching methods, and cooperation with public authorities and administrations); Tumba Adult Education (responsible for the provision of secondary education and college education for adults in core and general subjects); and The Slagstad Strand Adult Education and Introduction Division (responsible for the implementation of basic adult education for newly arrived refugees and immigrants).

A best practice example on the integration of different ethnic and social minorities comes from Latvia. The programme called “Development of Social Competencies and basic Skills for Adults” was implemented in 2002 by the Latvian Adult Education Association (LAEA) in co-operation with 10 regional adult education centres.

The project had had two major objectives: to foster social integration of ethnic and social minorities and to raise their social and basic skills in order to raise their employability.

Within this project, seminars were organised in 10 municipalities, mainly from the rural areas to improve the competences of ethnic and social minorities to better integrate them on the labour market and in the Latvian society.

As mentioned previously, the digital divide can ‘divide’ societies. To combat social exclusion that might occur due to the lack of digital competences, BBC Learning launched The BBC First Click project in UK. The main objective was to equip adults over the age of 55 that had no access to the Internet with computer and Internet literacy.

Basically, by calling a free advisory telephone line, individuals are directed to the closest local computer and web literacy course provider. Trainers are encouraging them to overcome their fear of technology and lack of skills, by engaging them in non-formal web and computer learning courses available free of charge. Courses are organised by a range of partners: learning centres, adult learning organisations, libraries, schools, charities and community associations. A BBC First Click beginner’s guide was prepared and handed over to the adult learners.

Projects were developed also at European level, not only at country or local levels.

For instance, For Diversity, Against Discrimination was a pan-European campaign organized by the European Commission’s General Directorate for Justice. Main objectives of the campaign were: to increase understanding of existing EU laws which protect all citizens from discrimination based on the grounds of sex, racial/ethnic origin, religion/belief, disability, age or sexual orientation; to make people more aware of their rights and responsibilities; and to fight against stereotypes and promote the benefits of diversity in society. Three target groups: young people aged 16 to 25, who are at risk of facing discrimination; employers and media. The main message was that a diverse Europe is something to be valued, message that comes out also from the motto ‘unity in diversity’ or ‘unity without uniformity and diversity without fragmentation’, in other words – cohesion.

Learning for improving language competences is also a way to promote social cohesion. Lire et Ecrire Communauté française is one of the largest civil society organisations involved in adult literacy, active in the French speaking part of Belgium. The organisation focuses on training adults with low or no literacy levels in French (both Belgians and immigrants), and training other trainers for such instruction. Each year, between 5000 and 6000 learners are trained to improve their literacy. Also, Lire and Ecrire

55

Communauté française develops campaigns to promote a more positive image for the individuals with low or no literacy skills.

Assessing the impact on social cohesion of lifelong learning actions is a difficult task. A study conducted to discover stakeholders’ opinions provides useful information in this respect. The survey was made available in six languages: English, French, German, Italian, Polish and Spanish throughout the EU-27, EEA countries, Bosnia and Herzegovina, Croatia and Turkey, and was completed by over 1800 respondents in 2011. People felt that there is a demonstrated monetary return on investment in learning (score 4.14), and that learning activities throughout lifetime are essential to keep on top of changes in the present day environment (score 3.92). Personal development and independence, employability and job prospects are other positive outcomes of learning. But, learning was not perceived as a tool for enhancing social cohesion as much as it was for individual development and prospects (Figure 1).

Figure 1. Stakeholders’ opinion on several aspects related to LLL Source: EC, 2012 4. Conclusions The construct of social cohesion is viewed as a way to ensure competitiveness at international level. An analysis of the literature reveals numerous attempts to define it: some more comprehensive, others more brief; some from a technical perspective, others referring to the aspects that form the concept. In any way, the definitions do not contradict, but complement one another.

In the light of the Lifelong Learning Policy of EU, learning throughout lifetime becomes a duty of the Europeans. If in the past education was considered a right, now, in the light of the emergence of the knowledge society learning becomes a duty. This shift in the paradigm acknowledges the advantages of learning, many of which lead to strengthening social cohesion.

56

Lifelong learning improves personal competences and generates personal improvement, independence and employability. These help people integrate better on the labour market and in society. Also lifelong learning has the power to integrate disadvantages groups. Although efforts have been made to reduce disparities, inequalities still remain (based on ethnicity, gender, social status, disability, or even digital competences).

Several case studies were selected to illustrate how learning activities promote social cohesion. Projects for a better integration of immigrants, for improvement of literacy skills among individuals (locals and immigrants), for fostering the awareness of the equal rights within EU societies and avoidance of discrimination in the case of young people, and for increasing digital literacy of older people are just several notable examples. Many other cases are surrounding us every day, and it is everybody’s job to contribute to greater cohesion within the EU and to respect the rights of others.

Acknowledgment: This work was co-financed from the European Social Fund through Sectoral Operational Programme Human Resources Development 2007-2013, project number POSDRU/1.5/S/ 59184 „Performance and excellence in postdoctoral research in Romanian economics science domain”.

Bibliography: [1]. Battaini-Dragoni, G., and Dominioni, S. (2003): The Council of Europe’s Strategy for Social Cohesion, Conference on Social Cohesion, http://www0.hku.hk/socsc/cosc/ Full%20paper/BATTAINI-DRAGONI%20Gabriella%2025.11.pdf (accessed 14 June 2012).Berger-Schmitt, R. (2000): Social Cohesion as an Aspect of the Quality of Societies: Concept and Measurement, Centre for Survey Research and Methodology (ZUMA), EU Reporting Working Paper No. 14, Mannheim, Germany.

[2]. Bernard, P. (1999): Social Cohesion: A Critique, CPRN Discussion Paper No. F/09, Canadian Policy Research Networks, Inc., Ottawa, Ontario.

[3]. COM(97): Agenda 2000 For a stronger and wider Union, Brussels.

[4]. Council of Europe (2004): A New Strategy for Social Cohesion, revised version 31 March 2004, Brussels.

[5]. Easterly, W., Ritzan, J., Woolcock, M. (2006): Social Cohesion, Institutions, and Growth, Center for Global Development, Working paper, http://www.cgdev.org/files/9136_ file_WP94.pdf (accessed 14 June 2012).

[6]. European Commission (2000): A Memorandum on Lifelong Learning. Brussels.

[7]. European Commission (2001): Making a European Area of Lifelong Learning a Reality, Brussels.

[8]. European Commission (2012): Strategies for Improving Participation in and Awareness of Adult Learning, Luxembourg.

[9]. European Council Lisbon (2000): Presidency Conclusions.

[10]. Ferroni, M., Mateo, M., Payne, M., (2008): Development under Conditions of Inequality and Distrust, Social Cohesion in Latin America, International Food Policy Research Institute, Working paper, http://www.ifpri.org/sites/default/files/publications/ ifpridp00777.pdf (accessed 14 June 2012).

[11]. Jeannotte, M.S. (2003): Social Cohesion: Insights from Canadian Research, Presented at the Conference on Social Cohesion, Hong Kong, November 29.

[12]. Jenson, J. (1998) : Les contours de la cohésion sociale: l'état de la recherche au Canada, Étude des RCRPP, N°F/03, Ottawa.

57

[13]. Knack, S. and Keefer, P. (1997): Does Social Capital Have an Economic Payoff?: A Cross-Country Investigation, Quarterly Journal of Economics, Vol. 112, No. 4, pp.

1251–1288.

[14]. Knack, S. (2003): Groups, growth, and trust: Cross-country evidence on the Olson and Putnam hypotheses, Public Choice 117: 341-355.

[15]. Krishna, A. (2002): Active social capital: Tracing the roots of development and democracy Columbia University Press, New York [16]. Maxwell, J. (1996): Social dimensions of economic growth, Eric John Hanson Memorial Lecture Series, Volume 8, University of Alberta.

[17]. Narayan, D., Pritchett, L. (1999): Cents and Sociability: Household Income and Social Capital in Rural Tanzania, Economic Development and Social Change, Vol. 47, No. 4, pp. 871–897.

[18]. OECD (2000): Schooling for Tomorrow: Learning to Bridge the Digital Divide, Centre for Educational Research and Innovation, Paris.

[19]. Rodrik, D. (1999): Where Did All the Growth Go? External Shocks, Social Conflicts, and Growth Collapses, Journal of Economic Growth, Vol. 4, No. 4, pp. 385–412.

[20]. Senate of Canada, The Standing Senate Committee on Social Affairs, Science and Technology. June 1999, Final Report on Social Cohesion, Senate of Canada, Ottawa, Ontario.

[21]. World Values Survey: www.worldvaluessurvey.org/

58

HIGHER EDUCATION STUDENT CHOICE INFLUENCING FACTORS Assistant Lecturer Emanuela Maria AVRAM, PhD Candidate Romanian –American University 1B, Expoziției Avenue, Sector 1, Bucharest emanuela.maria@yahoo.it

Abstract: Making the decision to invest in your own higher education is extremely complex as higher education has an essential role in the professional formation. Understanding higher education as a knowledge acquisition and formation process, it must be emphasized that the providers within this process aim mainly at satisfying at a high level the needs of the consumers (Vrontis Demetris, et al., 2007, p.980). Nonetheless, higher education institutions have been confronted lately with the decrease in the number of students, and thus knowing the factors that influence the students' decision making process represents a useful source of information for academic management with a view to adopting some optimal decisions regarding the attraction and retention of students.

Keywords: influencing factors, choice process, student, university Jel Classification: M31, I23

Introduction: The decision to enroll on the courses of a certain higher education institution is extremely important in the individual's life because during these university years one’s future career is being built. Therefore, when making a decision regarding the future university, individuals evaluate several alternatives offered by the market. The purpose of the present article is to identify the primary factors that influence the process of choosing a university and it is constituted by two main parts: in the first part are identified the main factors which influence the process of choosing a higher education institution, and in the second part are presented the conclusions.

1. Student choice influencing factors The factors influencing this process differ from one individual to another, but there are also several factors common for many individuals. According to Domino, S., Libraire, T., Lutwiller, D., Superczynski, S. & Tian, R. (2006) and Yamamoto, G. T.

59

(2006) parents have a great influence on their sonsâ&#x20AC;&#x2122; enrollment at university. The author Ming Joseph Sia Kee (2010) has referred to the factors of institutional nature that influence the studentâ&#x20AC;&#x2122;s decision making process and has identified various independent variables such as: the location of the university, the study programs, the reputation of the higher education institution, the existence of different educational facilities, the level of the tuition fees, the employment opportunities, the employed promotion, the promotion by university representatives, the possibility to visit the campus, the possibility to obtain scholarships.

The conceptual model developed by the author is presented in Figure No. 1 below.

Figure no.1 - Student choice influencing factors Source: Ming Joseph Sia Kee (2010) - Institutional Factors Influencing Studentsâ&#x20AC;&#x2122; College Choice Decision in Malaysia: A Conceptual Framework, International Journal of Business and Social Science, Vol. 1 No. 3; December 2010, ISSN 2219-1933 (Print), ISSN 22196021 (Online). p. 55.

According to Shanka Tekle, Quintal Vanessa, Taylor Ruth (2006, p. 34) factors such as academic reputation, variety of study programs, quality of education, campus location, costs, as well as the opinion of other persons - are factors of maximum significance that influence the students' decision to enroll at a certain university.

Moreover, Beneke Justin and Human Gert (2010) have identified a series of factors which exert influence on the process of choosing a university. Among these are the following: the geographic location, the reputation of the higher education institution, the level of the tuition fees, the development of various social programs, the possibility to obtain a certain scholarship and the recommendations from family or friends. Wagner Karl & Fard Pooyan Yousefi (2009) have identified based on a research several factors which influence the students' intention of choosing a certain higher education institution and these are the following: the cost of education, the content and structure of the study programs, the facilities offered by the university, the value of education and the influence exerted by family and friends.

Mubaira Tatenda Cynthia and Fatoki Olawale (2012, p.19) have discovered a series of factors which determine the process of choosing a university among which I mention: scholarships, the academic reputation, the level of tuition fees, the facility to access information and technology, the importance of the higher education institution,

60

cultural diversity, the recommendations from family and acquaintances, the image of the university, the quality of the offered facilities, the social life within the campus, the employment opportunities, the international partnerships, the admission requirements, the friendly attitude of the academic staff, the campus attractiveness, the location of the university, the facilities regarding sports activities, the quality of the teaching process and the existence of some flexible study modalities. In addition to this, Yvonne J. Moogan, (2011, p. 573) has pointed out through a research other factors which influence the youthâ&#x20AC;&#x2122;s decision to enroll at university and these are: the desire to be awarded a degree, the possibility to enhance the chances to obtain a decent job, the desire to have a high income in the future and the location of the university which acquires an increased importance in the decision making process. According to the model regarding the process of choosing a university presented in Figure No. 2 below, Kusumawati, A., Yanamandram, V. K. & Perera, N. (2010) have identified a series of factors which influence this process, and the most important variables taken into consideration are those of the academic marketing mix.

Figure no. 2 - Model of student choice on higher education Source: Kusumawati, A., Yanamandram, V. K. & Perera, N. (2010) - University marketing and consumer behaviour concerns: the shifting preference of university selection criteria in Indonesia, Asian Studies Association of Australia 18th Biennial Conference, Adelaide, South Australia, University of Wollongong, Centre for Health Service Development â&#x20AC;&#x201C; CHSD.CHSD, Sydney Business School, ISSN 1449-4418, p.7

61

It can be noticed in the figure above that the elements of the study programs offered by the university, the tuition fees, the location, the promotion policy, the academic staff, the educational processes and the physical facilities exert influence on the youth’s decision to choose a certain higher education institution with a view to continuing their studies. According to Vrontis Demetris, Thrassou Alkis, Melanthiou Yioula (2007), individuals choose a particular higher education institution based on the value it can offer them and by comparing the costs involved with the future benefits that may result from graduating the education institution in question.

2. Conclusions Consequently, it can be noticed that various authors in the specialized literature, who have referred in their works to the extremely complex issue of the factors which influence the process of choosing a university, emphasize several aspects considered of major importance in influencing the decision of choosing a particular university according to Table No. 1.1 below: Table no. 1.1 – The most important factors influencing student choice of a university according to the literature Influencing factors Authors - University reputation Shanka Tekle, Quintal Vanessa, Taylor Ruth (2006) Ming Joseph Sia Kee (2010) Beneke Justin și Human Gert (2010) Mubaira Tatenda Cynthia și Fatoki Olawale (2012) - Parents Domino, S., Libraire, T., Lutwiller, D., Superczynski, S. & Tian, R. (2006) Yamamoto, G. T. (2006) - Scholarship Ming Joseph Sia Kee (2010) Beneke Justin și Human Gert (2010) Mubaira Tatenda Cynthia și Fatoki Olawale (2012) - Recommendation from family and Shanka Tekle, Quintal Vanessa, Taylor acquaintances Ruth (2006) Wagner Karl & Fard Pooyan Yousefi (2009) Beneke Justin și Human Gert (2010) Mubaira Tatenda Cynthia și Fatoki Olawale (2012) - Campus services Wagner Karl & Fard Pooyan Yousefi (2009) Mubaira Tatenda Cynthia și Fatoki Olawale (2012) - University location Shanka Tekle, Quintal Vanessa, Taylor Ruth (2006) Ming Joseph Sia Kee (2010) Beneke Justin și Human Gert (2010) Yvonne J. Moogan (2011)

62

-

Tuition fees

-

Employment opportunities

-

Study programs

Shanka Tekle, Quintal Vanessa, Taylor Ruth (2006) Wagner Karl & Fard Pooyan Yousefi (2009) Ming Joseph Sia Kee (2010) Beneke Justin și Human Gert (2010) Mubaira Tatenda Cynthia și Fatoki Olawale (2012) Ming Joseph Sia Kee (2010) Mubaira Tatenda Cynthia și Fatoki Olawale (2012) Shanka Tekle, Quintal Vanessa, Taylor Ruth (2006) Wagner Karl & Fard Pooyan Yousefi (2009) Ming Joseph Sia Kee (2010)

Source: own research The decision to enroll at a certain university is the result of a long evaluation process which bases on considering rigorous information regarding the reputation and image of the institution, the future professional opportunities and the facilities offered. This decision has long-term consequences and has an impact on the quality of the individual's life involved in this process.

Bibliography: [1]. Beneke, Justin, Human Gert. (2010) - Student recruitment marketing in South Africa – An exploratory study into the adoption of a relationship orientation, African Journal of Business Management, vol. 4, no. 4, ISSN 1993-8233, p. 435447.

[2]. Domino, S., Libraire, T., Lutwiller, D., Superczynski, S. & Tian, R. (2006) Higher education marketing concerns: factors influence students' choice of colleges, The Business Review, Cambridge, vol. 6, no. 2, ISSN 1553 – 5827, p.

101-111.

[3]. Kusumawati, A., Yanamandram, V. K. & Perera, N. (2010) - University marketing and consumer behaviour concerns: the shifting preference of university selection criteria in Indonesia, Asian Studies Association of Australia 18th Biennial Conference, Adelaide, South Australia, University of Wollongong, Centre for Health Service Development – CHSD.CHSD, Sydney Business School, ISSN 1449-4418, p.1-16.

[4]. Ming Joseph Sia Kee (2010) - Institutional Factors Influencing Students’ College Choice Decision in Malaysia: A Conceptual Framework, International Journal of Business and Social Science, Vol. 1 No. 3; December 2010, ISSN 2219-1933 (Print), ISSN 2219-6021 (Online). p. 55.

[5]. Mubaira Tatenda Cynthia, Fatoki Olawale (2012) - The Determinants of the Choice of Universities by Foreign Business Students in South Africa, Asian Journal of Business and Management Sciences, Vol. 1, No. 8, ISSN: 2047-2528, p. 9-21.

63

[6]. Shanka Tekle, Quintal Vanessa, Taylor Ruth (2006) - Factors Influencing International Students' Choice of an Education Destination–A Correspondence Analysis, Journal of Marketing for Higher Education, 15:2, Print ISSN: 08841241, Online ISSN: 1540-7144, p.31-46 [7]. Vrontis Demetris, Thrassou Alkis, Melanthiou Yioula (2007) - A contemporary higher education student-choice model for developed countries, Journal of Business Research 60 (2007), ISSN: 0148-2963, p. 979–989 [8]. Wagner Karl & Fard Pooyan Yousefi (2009) - Factors Influencing Malaysian Students Intention to Study at a Higher Educational Institution, E-Leader Kuala Lumpur, 2009, ISSN 1935-4819, p. 1-12 [9]. Yamamoto, G. T. (2006) - University evaluation-selection: a Turkish case, The International Journal of Educational Management, vol. 20, no. 7, ISSN : 0951354X, p. 559-569.

[10]. Yvonne J. Moogan, (2011) - Can a higher education institution's marketing strategy improve the student-institution match?, International Journal of Educational Management, Vol. 25 Issue: 6, ISSN : 0951-354X, p. 570 – 589.

64

ADVERTISING THROUGH TELEVISION Lecturer Andreea BUDACIA Ph.D Romanian American University 1B, Ezpoziției Avenue, Sector 1, Bucharest

andreeabudacia@yahoo.com Abstract: Enterprises promote their goods and services on the market in order to be recognized and appreciated by consumers. These enterprises use a variety of methods, among which the most important are: advertising, public relations, promotions, brands, selling forces, promoting sales, sponsorship. These promoting methods can be used by any organization, no matter the field of activity or if they are commercial or non-profit, if the respective organization has as main objective the communication with and persuasion of potential clients to use their products or services. Advertising through television represents one of the most modern promoting methods with a decisive role in presenting and selling new products. Evaluating the efficacy of televised adevertising is a very important aspect for those who pay – enterprises that use this support, because, being an expensive tool, they need to reach their goal.

Key Words: advertising, television, indicators of televised advertising JEL Classification: M 31, M 37 1. Aspects regarding advertising as main promotion tool The process of advertising has a series of methods used to expose products, services and ideas and get the attention of potential buyers, in order for these products to be immediately bought. In the long run, an enterprise wants, through advertising actions, to determine the public to have a certain behaviour regarding its activity and to maintain the public’s fidelity towards the presented offer. Advertising has a set of characteristics, which were studied by Philip Kotler: ! public presentation – advertising is a way of communication meant for the general public, which suggests the idea that the offer which regards the respective product is standardized; ! influence – advertising is a means of communication with great influence, which allows the seller to repeat a message several times; moreover, it allows the buyer to understand and compare messages from different competitors;

65

! expression – advertising offers the chance to present the enterprise and its products, through the artistic use of the text, sound and color; however, sometimes the expressiveness of this instrument can reduce the importance of the message or it can distract the public’s attention; ! impersonality – advertising cannot be as insistent as a sales agent; the public does not feel obligated to pay attention or to respond in any way.

Taking into account the message, the goal and the nature of the product or service for which the enterprise decides to advertise, there are many methods to gain publicity. The main media through which the advertising messages can be transmitted are television, radio, cinema, printing machines, the internet, external and direct advertisements.

2. Advertising and television The television represents the advertising support which has known the fastest expansion in the last 50 years, being one of the most recent "media" for publicity. It ensures, through a unique combination of sound, light and movement, the advantage of an impression gained through the direct contact with the product or the respective service, also allowing the presentation of some persuading explanations.

Advertising through television represents one of the most modern promoting methods with a decisive role in presenting and selling new products. It has continuously evolved due to the impact that visual media have on the public and it also has the benefit of the scientific discoveries which lead to the development of international satellite communication. As a result, it is not limited anymore and it has a major impact on its public, on an international scale.

Television has a satisfactory flexibility because of its rapid broadcasting of the message at different times, including the maximum audience hours.

If the press, especially periodicals, is the most selective means and it allows great finesse in choosing and orienting its public – because every consumer can find a publication which he/she considers to be only his/hers – the television, on the contrary, is a non-selective medium that enters any direction. This is the reason why it’s considered to be the most appropriate for advertising products of daily use, for every population category.

The same reason makes it also the most expensive advertising tool and this is why it is the most important in publicity budgets.

Televised advertising was introduced for the first time for all products which have someone to pay for the transmitted message and it was named collective or compensatory publicity. In time, a more aggressive form has emerged, but only for certain products or lines of products and it was called brand publicity.

Taking into account all these aspects, we can identify a series of characteristics for televised advertising: ▪ the message has image and sound, it is animated and persuasive demonstrations can be made; ▪ the viewer is completely available for the message, being obligated to watch, listen and decode the real meaning of the message, having the so-called state of total receptivity; ▪ the audience in the case of television is wider, given the need to be informed, the need for entertainment and communication shown by the population nowadays and, therefore, in almost every family there is at least one television set.

Reduced selectivity, the lack of program flexibility and the high price are, however, inconvenients in the use of television as advertising support. This is why, in

66

choosing television channels for advertising messages, certain specific criteria are taken into account: ▫ the image of the company which owns the television channel; this image can be: popular, useful, luxurious; ▫ the effective audience, namely the number of people with the target characteristics which are exposed through publicity or the effective audience exposed to the commercial, which means the number of people having the target characteristics, who really noticed the respective commercial; ▫ the adjacent programs (those programs which precede and follow the commercial); ▫ the hour of broadcasting; the most expensive advertisements are broadcast around news programs (18,00 – 20,00) and the cheapest are broadcast after midnight; ▫ the broadcasting price, which varies depending on the day of the transmission, the hour, the adjacent programs and the number of permitted breaks (interruptions for publicity allowed during a television show).

3. Evaluation indicators of televised advertising Evaluating the efficacy of televised adevertising is a very important aspect for those who pay – enterprises that use this support, because, being an expensive tool, they need to reach their goal. In order to increase the efficiency of televised advertising, specialists should take into account the following recommendations: ▫ the image should transmit more than half of the message; ▫ a television show is more efficient if it uses more images than words; ▫ the passage from one image to another should be made in a simple manner, with short sequences, which should strictly refer to the description of the products or promotional services; ▫ static sequences should be avoided in commercials.

The information regarding the audience is very important for television channels, on the one hand, because in this way they can evaluate the success the broadcast programs, and, on the other hand, because, using this information, they can establish certain strategies concerning the advertising space, which is an important source of income. Moreover, knowing the audience indicators is also relevant for the enterprises that wish to develop promotional campaigns, as advertising space buyers, such as advertising agencies and media enterprises.

Measuring the TV audience is a problem of general interest, which should be well managed. Gathering data is a process that should follow professional norms; also, real information should be made public. In this context, in 2001, the Romanian Association for Audience Measurement was created; this association has three categories of members: television stations, publicity clients and advertising and media agencies. In 2002, the association was involved in writing Law nr. 504/2002, for the audiovisual, regarding the procedure of selecting the supplier for the National Service of TV Audience Measurement.

The objective of the association is to give to its members impartial, precise and clear information concerning the Romanian mass-media audience, their characteristics and succes. The goal of the association will be reached through a systematic exchange of information, know-how, research studies, conferences, etc.

In order for the present paper to have a more pragmatic character and to increase its utility, we tried to gather and study the entire set of indicators through which the audience of television programs can be measured and, at the same time, to give an explanation of its content and underline the importance of knowing the ratings by the

67

television channels which want to improve their activities. The results of the studies made in this respect are presented briefly below: ● The first indicator is the total viewing time, which represents all the minutes spent by viewers in front of the TV, at a certain time. ● Average Minute Rating (AMR) – represents the average number of viewers per minute, at a certain time, for a certain TV channel. ● Television Rating (TVR) – it is an indicator similar to the AMR and it represents the average number of viewers per minute of all TV channels, at a certain time. ● Reach (RCH) – represents the number of viewers who watched at least one minute a certain TV channel (or all of them), at a certain time; this indicator is also calculated as a percentage of the whole population. ● Exclusive Reach (ER) – represents the number of those who, at a certain time, have watched at least one minute only a certain TV channel. ● Average Time Spent (ATS) – represents the average time spent by a viewer on a certain TV channel (or all of them). Only the persons who have watched at least one minute, at a certain time, are taken into account. ● Average Time Viewed (ATV) – represents the average number of minutes spent on a certain TV channel, at a certain time, by all the persons in the target group (research universe). ● Share (SHR) – represents the part of the total viewing, that corresponds to each TV channel. ● Adhesion (ADH) – represents the importance of the audience of the target group analysed in the total of TV audience. "Total audience" is represented by a group of reference (the value of ADH is always expressed as a percentage).

ADH = AMR analysed target / AMR reference target x 100 ● Affinity (AFF) – is the report between the audience of the analysed target group and the audience of a reference group.

AFF = AMR% analysed target / AMR% reference target x 100 ● Emission Share (ESH) – is the duration of an event (TV program) depending on the total of the broadcasting time of a certain TV channel. This indicator is calculated as follows: ESH = Duration of the event / Duration of the broadcasting time on a day, of a certain TV channel ● Reception Share (RSH) – represents the rating of an event compared to the total rating of the respective TV channel on that day; it can also be expressed as the number of viewers that a certain program "brings" in a day compared to the total number of viewers that the TV channel has in a day of broadcasting.

RSH = AMR event x Duration of the event / AMR TV channel for the whole day x Broadcasting duration of the TV channel for the whole day ● ALFA (ALFA idx) – is the report between Reception Share and Emission Share calculated for a broadcast TV show. ALFA is an indicator; when its value is higher than 100, it means that the respective program obtained a rating higher than the audience average of the respective TV channel in that day.

ALFA = RSH / ESH ● BETA (BETA idx) – is the report between RSH calculated for a TV channel (the importance of the program for the respective TV channel) and RSH calculated for all the TV channels (the importance of the program in the broadcasting time). BETA expresses what the TV show has obtained for its TV channel in comparison with what other TV shows have obtained in the same broadcasting time for their TV channels.

68

BETA = RSH / Total RSH ● Emission Share Typology (EST) – indicates the importance, in terms of duration, of a certain TV show in the total duration of the programs with the same typology.

EST = program duration / duration of the programs with the same typology The variety of the presented indicators allows a clear evaluation of TV shows; among these indicators, rating and share are used the most frequently. Our research mirrors the fact that the level of these indicators is the main element depending on which the top management of a television establishes which TV shows will not be broadcast anymore, the broadcasting time, the salaries of the personnel. Regarding the last aspect, we should mention that, in order to motivate TV producers and anchors, some TV stations pay them depending on the publicity budget attracted by the respective TV show.

4. Conclusions We notice the fact that indicators contain mainly elements of quantity, without taking into account the fact that watching TV is a leisure, on the one hand, and that, on the other hand, it involves a series of cultural and educational needs. Therefore, aspects such as informative enrichment or knowing the public, educating it, its satisfaction or dissatisfaction felt as a result of watching TV are not a part of the presented and used indicators by TV channels. So, we propose the use of certain indicators of quality in order to evaluate television audience, indicators which should be used by all TV channels, because it is an issue of interest for all those who pay for advertising space. ● Technical indicators, which mainly refer to the quality of the received message and the real number of subscription payers. ● Specific quality indicators: the quality of the broadcast TV shows, the degree of information that the public has, the necessity and use of the information and its message, public knowledge enrichment, public awareness regarding the present problems of the Romanian and European society, but also regarding the overall evolution on an international and worldwide scale. ● Indicators which “serve” the viewer: ~ the level of professional training of TV presenters; ~ the efficiency of the organisation’s managers and their capacity to reach the established goals; ~ the organisation’s economic and managerial efficiency, the value of the resources with which the results have been obtained and the quality of management decisions; ~ offer accessibility: program hours, available time, waiting time for a certain program.

The advantage of television advertising is that it is realised through a commercial with a concise content, but suggestive, attractive and concentrated on the product. For a long time, television had a dominant position in the publicity mix, and the other media were neglected. However, in time, a reduction in television efficiency was recorded, which is due to the fact that advertising users annoyed viewers with numerous commercials and the result was a decrease in public attention and a reduced impact of advertising. Although the advantages of advertising through television are obvious, we recommend advertisers to also take into account its disadvantages in the realisation of the publicity mix and, in the present context of the economic-financial crisis, to reconsider its position in the promotional activity. Practically, the advantages and disadvantages of television advertising can have a major impact in the success of an advertising campaign.

Advantages of television advertising

Disadvantages of television advertising

69

" the television is the most powerful means of media communication; " the quality of the presentation, which has a good impact on communication efficiency; " the dynamic character given by the people involved in this process, the expressed feelings, voices, movement; " the high coverage makes possible the transmission of the message simultaneously to a large number of potential buyers; " the combination of image and sound.

" high prices; " certain restrictions in the case of products such as: cigars, alcoholic beverages, etc; " the message may not always reach the target audience; " there is the risk that during commercial breaks, the viewers turn off the TV or choose other activities; " the quality of the program can be an advantage or disadvantage for the commercial, as well as the hour of broadcasting.

Bibliography: [1]. V. Balaure (coordonator), Marketing, ed a-II-a revăzută şi adăugită, Ed. Uranus, Bucureşti, 2002 [2]. E.A. Budacia, Management şi marketing in audiovizual, Ed. Universitară, Bucureşti 2009 [3]. Ph. Kotler, Managementul Marketingului (traducere), Ed. Teora, Bucureşti, 2000 [4]. Ghe. Rusu, Promovarea exportului românesc, Ed. Scrisul Românesc, Craiova, 1989.

70

THE FOCUS OF COMPANIES ON CLIENTS â&#x20AC;&#x201C; A MAJOR TREND IN THE CURRENT BUSINESS ENVIRONMENT Lecturer Diana Soca Ph.D Romanian-American University 1B, Expozitiei Avenue, Sector1, Bucharest soca_diana@yahoo.com Abstract Under the impact of economic dynamism, sharpening competition, globalization and computerization, the late twentieth century is characterized by moving from a transactional to a relational marketing in which companies focus on developing relationships with customers, increasing their level of satisfaction and ultimately gaining their loyalty.

Keywords: relational marketing, customer loyalty JEL Classification: M31 1.Introduction Finding and keeping the right customers are the main concerns of companies managers (especially in services companies) nowadays. But building relationships isnâ&#x20AC;&#x2122;t easy, especially when a firm has vast numbers of customers who interact with the firm in many different ways, from email and websites to call centers and face-to-face interactions.

CRM (Customer Relationship Management) systems can be of a real use to managers in achieving their goals. When they are well implemented, CRM systems provide managers with the tools to understand each of their customers and provide services tailored on their individual needs.

2.Transactional marketing vs. relational marketing Research conducted by specialists suggest that there are four distinct types of marketing: transactional marketing and three categories of what they call relational marketing: database marketing, interaction marketing, and network marketing.

In transactional marketing, companies focus on the transaction, each sale or purchase is a separate event and no meaningful long term relationship is developed between the company and the customer. This is the case of many services, ranging from passenger transport to food service or visits to a movie theater.

71

Relational marketing is a business philosophy, a strategic orientation that emphasizes on building long term relationships with customers by creating a dialogue with them. Customers become partners and the companies need to take long-term commitments to maintain the relationship through quality, service and constant innovation.

In database marketing the focus is still on the market transaction, but now it also includes information exchange. Marketers rely on information technology, usually in the form of a database, to form a relationship with targeted customers and retain their patronage over time. However, the nature of these relationships is often not a close one, with communication being driven and managed by the seller. Technology is used to identify and build a database of current and potential customers, deliver differentiated messages based on consumers’ characteristics and preferences, and track each relationship to monitor the cost of acquiring the consumer and the lifetime value of the resulting purchases. The possibility of customers conversing directly with providers, combined with the existence of efficient databases lead to the development of a large-scale customized marketing. Instead of selling a product to a large number of clients in a given period of time, this type of marketing, also known as "mass costumization marketing" or "one to one marketing" uses databases and interactive communications to try to sell as many customized products and services as possible to a customer over a long period of time.

Although technology can be used to personalize the relationship, relations remain somewhat distant. Utility services such as electricity, gas, and cable TV are good examples.

Interaction marketing - a closer relationship often exists in situations where there is face-to-face interaction between customers and representatives of the supplier (or “ear-to-ear” interaction by phone). Although the service itself remains important, value is added by people and social processes. Interactions may include negotiations and sharing of insights in both directions. This type of relationship exists in many local service markets, ranging from community banks to dentistry, in which the buyer and the seller know and trust each other. It is also commonly found in many B2B (Business to Business) services.

Both the firm and the customer are prepared to invest resources to develop a mutually beneficial relationship.

Network marketing - in a B2B context, marketers work to develop networks of relationships with customers, distributors, suppliers, the media, consultants, trade associations, government agencies, and even the customers of their customers. The term “good networker” is used to describe someone who is able to put entities (individuals or companies) with mutual interests in touch with each other. This leads to the development of what is commonly known as “virtual” companies . A “virtual” company is a network of independent firms that work together to achieve a specific project, exploiting the possibilities offered by information technology and telecommunications.

3.Attracting and retaining customers Another dilemma that managers and marketing specialists face is the importance of attracting new customers versus the importance of keeping the already existent customers in the organization's portfolio. Which of the two activities should be the priority?

For which of the two should the company allocate most of its resources? managers often wonder given that firms don’t have the desired or needed amount of human and financial resources to meet all of their strategic objectives. The correct answer is that each organization must simultaneously perform steps for attracting and retaining customers, but investing a different amount of resources in each of the two areas, depending on the organization’s stage of evolution, the product / brand and the market. Initially, attracting customers is more important for the organization, instead when products reach a mature

72

phase, when there are no more unaddressed market segments and customers are divided between the various competitors, customer maintenance strategies become prioritary.

Identifying and attracting new clients is of major importance in the following situations: − the start of a new company or the entrance of a company on a new market − when applying an offensive strategy to increase market share or to increase market coverage − when opportunities are offered by the upward trend of a particular market segment − when replacing the customers who are migrating towards other companies − when recovering after the loss of a large number of clients (a crisis situation) − when identifying new customers that would generate a profit flow greater than that associated with the current clients The promoters of relational marketing point out the vital importance that retention and customer loyalty strategies have. The necessity of keeping customers has become essential once the companies have realized that attracting a new customer can be from 3 to 15 times more expensive than keeping an already existent customer. Also, according to the latest research, 1$ invested in advertising will bring on a long term 5$ while the same 1$ invested in CRM strategies, especially in customer loyalty, will bring 60$.

From a customer’s perspective, customer loyalty is the willingness to continue to seek the exclusive services of a company for a long period of time and also recommend them to friends and associates.

From an organization’s perspective, loyalty requires a marketing strategy that aims to build lasting relationships between the organization and the clients, relationships that will benefit all of them. Customer loyalty is very important for organizations because it leads to: • increased profits derived from increased sales - sales analysis reveals that with the passing years, loyal customers tend to buy more and more services offered by the company which they have a solid relationship with • profit from reduced operating costs - as customers become more experienced, they make fewer demands on the supplier (for instance, they have less need for information and assistance). They may also make fewer mistakes when involved in operational processes, thus contributing to greater productivity • profit from free advertising – loyal and satisfied customers recommend the company services to friends and associates. This type of advertising is more effective than any other type of advertising the company could use (discounts or offers) and ultimately lowers the costs of attracting new customers • profit from price premium - long-term customers are more likely to pay a price premium when they are highly satisfied. Moreover, customers who

73

trust a supplier may be more willing to pay higher prices at peak periods or for express work A retention strategy may have different objectives depending on the type of activity that the company carries. So you can choose: • retaining strategic customers - customers who represent the major part of the turnover. This category includes those who have important relationships with the organization, customers who buy large amounts of goods and market leaders • retaining distributors in the business to business market, reducing the risk of them changing supplier • retainig those customers who are most attracted by the competition’s offer Christopher Lovelock and Jochen Wirtz, in their work „Services Marketing – People, Technology, Strategy”, use the „wheel of loyalty” as an organizing framework for thinking about how to build customer loyalty. It comprises three sequential strategies: 1. The firm needs a solid foundation for creating customer loyalty, which includes having the right portfolio of customer segments, attracting the right customers, tiering the service, and delivering high levels of satisfaction.

2. To truly build loyalty, a firm needs to develop close bonds with its customers, which either deepen the relationship through cross-selling and bundling, or add value to the customer through loyalty rewards (financial, nonfinancial, higher-tier service levels, recognition and appreciation) and higher-level bonds.

3. The firm needs to identify and eliminate factors that result in the loss of existing customers and the need to replace them with new ones. This can be achieved by conducting diagnostics, developing proactive and reactive retention measures and also by putting effective complaint handling and service recovery processes in place and increasing switching costs. It is important to have information about the clients that droped the company services and the reasons that led to their renunciation. It is estimated that annually an organization of the North American market loses up to 20% of its customers. With mobile phone companies this rate reaches 30% and in some sectors (automobile dealers, Internet service providers) the loss rate can reach even 50%.

Some experts claim that a company should aim to keep all its customers. That is hardly possible since some clients disappear from the portfolio for reasons such as: moving to another area, natural death, bankruptcy. In fact retaining all of the customers isn’t even profitable. Sometimes there are situations when a company may find that some clients generate losses and maintaining relationships with unprofitable customers is not justified.

In order to adopt a client-centered strategy, managers must be aware of the following features of the 21st century consumer: • he appreciates quality • he tends to be disloyal to brands • he is well informed • he wants to share the problems that he is facing

74

he wants to inform companies about the products or services that he needs • he wants companies to share information with him • he wants to be able to receive his products anywhere and anytime This requires careful monitoring of the business environment in order to react and adapt to changes occurring in the needs of potential customers, demand, preferences and competitors, and it can be achieved trough marketing research based on surveys (questionnaires by mail, face to face interviews, customer panel, focus groups), the analysis of secondary sources and in-depth interviews.

•

4.Conclusions In the current business environment, companies tend to focus more and more on clients. Ted Levitt of Harvard University says: "If you don’t think at the customer than you don’t think at all". Customer orientation means that everything a manager does must be based on meeting the customer expectations. This requires prompt service (clear, concise and documented information, quick settlement of client complaints), positive, honest and open attitude in dealing with clients, high attention to detail and highly qualified personnel (with a high level of knowledge, able to assume responsibility and leave a good impression on clients).

Attracting, retaining and regaining customers are the main objectives of relational marketing and companies must implement effective strategies and programs to achieve these goals.

Bibliography: [1] Cetina I. , Brandabur R. and Constantinescu M. – Marketingul serviciilor – teorie si aplicatii, Ed. Uranus, Bucharest 2006 [2] Copulsky J. R. and Wolf M. J. - Relationship Marketing: Positioning for the Future, Journal of Business Strategy, 11, no. 4 (1990) [3] Faulkner M. – Customer Management Excellence, Jon Wiley & Sons, 2002 [4] Kaufman M. – Customer Relationship Management: The Ultimate Guide to the Efficient Use of CRM, Amacom, april 2001 [5] Kotler Ph. – Managementul Marketingului, Ed. Theora, Bucharest 2007 [6] Lovelock Ch. , Wirtz J. and Lapert D. – Marketing des services, Ed. Pearson Education France, Paris 2004 [7] Lovelock Ch. and Wirtz J., Services Marketing – People, Technology, Strategy , Sixth Edition, Pearson Prentice Hall, New Jersey 2007 [8] Nicole E. Coviello, Roderick J. Brodie and Hugh J. Munro – Understanding Contemporary Marketing: Development of a Classification Scheme, Journal of Marketing Management, 13, no. 6 (1995) [9] Purcarea Th. , Ratiu M. – Comportamentul consumatorului - o abordare de marketing, Ed. Carol Davila, Bucuresti 2007 [10] Purcarea TH. – Managementul relatiilor cu clientii, Ed. Carol Davila, septembrie 2011

75

NEGOTIATION – THE CORE OF SALES ACTIVITY Assistant Lecturer Gabriela VÂLCEANU, PhD Candidate Romanian-American University 1B, Expoziţiei Avenue, Sector 1, Bucharest gabrielavalceanu@yahoo.com "Let us never negotiate out of fear. But let us never fear to negotiate."

President John F. Kennedy Abstract In order to succeed in sales, we must understand the principles behind successful negotiation. Negotiation is more about finding a common ground you and your customer can agree upon, as opposed to simply trying to manipulate your customer into believing that your solution is the best answer to their problem. Take the time to understand effective negotiation and you will develop much stronger business relationships.

Negotiation is a specialized type of conflict resolution. We negotiate because we have to not because we want to. We negotiate because we cannot, otherwise, get what we want - not unless we enlist others. However, most people hate to negotiate. They dislike the confrontation that negotiation sometimes involves. They experience stress and fear. They worry that they aren't getting a good deal. Some people will do almost anything to avoid it.

Keywords: Sales techniques,negotiation,sales JEL classification: M30, M39 Negotiation is a powerful method for resolving conflict which requires skill, and experience. And, good negotiators aren't born they are made. Anyone can improve their skills and ability through practice and dedication. Which is worth doing because we engage in one negotiation or another everyday and many times a day.

Negotiation typically involves a tension between discovering shared interests maximizing joint gains or maximizing our own gains at the expense of the other side's when interests seem to conflict. Many negotiators manage this tension poorly. Some overdo the opportunity for unilateral gain which often means sacrificing potentially more significant joint gains. Or some underemphasize the existence and importance of conflicting interests which can mean they do less well than they should have.

Negotiation is a process for mutually satisfying needs. We negotiate because we have to, not because we want to. For there to be a negotiation, each party recognizes that

76

s/he can't get what they want on their own and that they need something from the others.

For negotiation to work each side has to walk away with at least some of its needs met.

An effective negotiator is when: -Purposeful not reactive. We choose our objectives after careful analysis and reflection rather than being "run" by our emotions. We are well prepared and systematic.

- Explicit about process as well as substance. Some negotiators find the substance or "what" of the negotiation easy to talk about, but they ignore the process issues. How the negotiation should be conducted, what issues will be discussed and in what order? What methods might be used to reach a resolution. Often when discussions on substance bog down, switching the discussion to process can help move things forward.

- Know that managing shared, differing and conflicting interests is a joint problem which forms the core of any negotiation. This is an example of a process issue. Often negotiators focus only on their own concerns and ignore the other side's. This can be fatal for if the negotiation is to conclude with anagreement, each side needs to walk away with at least some of its needs met.

Principles of negotiation Win/Win vs. Win/Lose Distributive negotiation, or traditional negotiation, is the style which is familiar to most people. In this model the objective is to convince the other side that s/he wants what you have to offer more than want what s/he has to offer. Negotiation means hard, tough bargaining. It is a win/lose model whose underlying assumption is the fixed pie. That is every time you take a slice there is that much left for the other side. But that is only true, if there is only one issue to decide.

Most people would consider the price for the sale of some object like a piece of art as one example. However, is there truly only one issue? Is it possible that the buyer would pay more if terms could be arranged or a payment plan, so s/he wasn't laying out the full price immediately? Would the seller take less if the buyer offered cash? Is delivery an issue that is important to one side? Does timing have an impact? Are there intangibles that are important to a side?

Whenever there is more than one issue to negotiate there is the potential for integrative negotiation. Differences in the parties' preferences make mutual gains possible.

Integrative negotiation or win/win focuses on the parties working together collaboratively to produce an agreement that provides gain for each side. That each side does better due to having engaged in the negotiation process than s/he would have done on their own.

The principle of compensatory actions - govern any form of negotiation. The result is reciprocal concessions, the objections like "if I can do", "if up claims, and I will raise", etc.. Without concessions for the partner can not get concessions from him.

The principle of legality and morality. Law is law and most people comply to avoid unwanted consequences. Morality trade agreements, where the law does not occur often remains a matter of ethics. But is not enough to negotiate only within the limits of what is legal and moral terms of object and conditions negotiation, but must abstain from misuse of these procedures and techniques for handling and communication partially or completely escape conscious control of the partner.

77

Methods of negociation 1) Learn to flinch.

The flinch is one of the oldest negotiation tactics but one of the least used. A flinch is a visible reaction to an offer or price. The objective of this negotiation tactic is to make the other people feel uncomfortable about the offer they presented. Here is an example of how it works.

A supplier quotes a price for a specific service. Flinching means you respond by exclaiming, "You want how much?!?!" You must appear shocked and surprised that they could be bold enough to request that figure. Unless the other person is a well seasoned negotiator, they will respond in one of two ways; a) they will become very uncomfortable and begin to try to rationalize their price, b) they will offer an immediate concession.

2) Recognize that people often ask for more than they expect to get.

This means you need to resist the temptation to automatically reduce your price or offer a discount. I once asked for a hefty discount on a pair of shoes hoping to get half of what I asked for. I was pleasantly surprised when the shop owner agreed to my request.

3) The person with the most information usually does better.

You need to learn as much about the other person's situation. This is a particularly important negotiation tactic for sales people. Ask your prospect more questions about their purchase. Learn what is important to them as well as their needs and wants. Develop the habit of asking questions such as; • "What prompted you to consider a purchase of this nature?"

• "What was your experience with…?"

• "What is most important to you about this?"

It is also important to learn as much about your competitors as possible. This will help you defeat possible price objections and prevent someone from using your competitor as leverage.

4) Practice at every opportunity.

Most people hesitate to negotiate because they lack the confidence. Develop this confidence by negotiating more frequently. Ask for discounts from your suppliers. As a consumer, develop the habit of asking for a price break when you buy from a retail store.

Here are a few questions or statements you can use to practice your negotiation skills: • "You'll have to do better than that."

• "What kind of discount are you offering today?"

• "That's too expensive." Wait for their response afterwards.

• Learn to flinch.

Be pleasant and persistent but not demanding. Condition yourself to negotiate at every opportunity will help you become more comfortable, confident and successful.

5) Maintain your walk away power.

It is better to walk away from a sale rather than make too large a concession or give a deep discount your product or service. However, it is particularly challenging to do when you are in the midst of a sales slump or slow sales period Negotiating is a way of life in some cultures. And most people negotiate in some way almost every day.

Types of negotiation strategies Direct strategies

78

Direct strategies are used when the turning point is clearly in favor of a party and bargaining power will require easily the strongest, with a short and decisive battle. Direct strategy is easy to practice when one opponent is strong, facing relatively weak opponents.

Indirect strategies When the ratio of forces and circumstances are not conducive to party wear to choose solutions, and side kicks are mainly psychological means to limit freedom of action of the opponent. Indirect or lateral strategy is used when the opponent is stronger. To use this strategy means to hit your opponent in its weakest points.

Conflicting strategies Clarification cooperative or conflictual nature of negotiations is important for choosing tactics and techniques used at the negotiating table. Strategies force, applicable under conditions of conflict, are simpler than cooperative.

Conflicting or competitive strategies are those that seek to obtain benefits, without making any concessions in return. Are hard and tense and is based on a disproportion of bargaining power between parties. Established business relationships through such strategies can be profitable, but not for long. They are strongly influenced by the changing of the market situation.

For example, on the international market there is strong demand for Apple's new tablet. Supply is insufficient and production is controlled by a single supplier. Taking advantage of its market position, it requires an exorbitant price. Some potential buyers will accept to pay that price as a pressure of the single provider that doesnâ&#x20AC;?t allow delivery in other conditions. When the market changes its position, with a large number of other manufacturers as good as the first one, the bargaining power between parties is changed.

Customers will seek to settle accounts with the old provider, be imposing low prices, or leaving it. The conflict still remains open.

In the conflicting strategies is essential to petition for nature and type of conflict of wills. It can be: - Conflict of beliefs and preferences - Conflict of interest - Conflict of investigating Conflict of beliefs and preferences is generated by the cultural and perceptual differences. It can be political, religious, ideological or psycho.

It is a conflict between fundamental values that partners join and not a rational nature. It is deep, high intensity and very difficult to reconcile. It is useless trying to convert an arab fundamentalist to another religion or the Gulf War between Saddam Hussein and the U.S. where today they still feel effects of the conflict. Typically, such conflicts are increasing, leading to exhaustion lasting and opponents. Effects may be irreconcilable positions.

Conflicts of interest are those of the base material and financial resources related to sources of raw materials, the division of earnings, competition, etc.. Behavior remains largely rational negotiating parties and their positions can be easily expressed in operational terms.

79

Investigating conflicts are those in which opponents adhere to one and the same ultimate goal, but disagree with the ways, methods and means used to achieve it. Biases are procedural.

Competitive strategies generate negative affect and aggressive tactics such as warning, direct threats and reprisals.

Cooperative strategies Are those that follow a balance between benefits and concessions, and to avoid open conflict, refusing to use aggressive means of pressure. We face a partner and not an adversary.

In early discussions, the strategy seeks to identify common points and interests in order to enable as many opportunities to agree with your partner and give satisfaction.

Resistance to more easily defeat your opponent, not answering his challenges, encounter no counter attacks, do not apply the principle "eye for an eye". Moreover, pass on his side, give it right whenever you get a chance, you listen carefully, show him respect, etc.. If you want to understand your partner, must be understood first. If you speak calmly, it increases the likelihood of you just talking.

Cooperative strategies is based on positive influence tactics and promises, recommendations, concessions and rewards.

Basic rules in personal negotiation A. Pass immediately to the point. Start with "The purpose of my visit is .." and formulate it as succinctly as possible. Potential customer wants to know why you are in office. On how quickly you make, the atmosphere in which you discuss will be more relaxed.

B. Be friendly and relaxed. Should establish an inter-human communication channel, otherwise there will be no sale. At the same time you can get personal information to be stored for future contracts.

C. Put the problem in terms of the benefits you offer, rather than strung a lot of boring information about product / service you sell. Talk to potential customers about the use those product / service you could bring himself or his clients. People do not care what you do, but suddenly become interested if what you can bring them their benefits.

Therefore, present your product start position "I am here to help you".

D. Be dynamic and enthusiastic. These moods are contagious, and a tonic atmosphere is an atmosphere conducive to sales E. Try to pluck a customer smile. The available of him to you will automatically become a favored one.

F. Use sentences of strength and specific terms of the scope of the client. Use a proper language - preferably even trade jargon - gives potential customers the assurance that not only you really know what you're selling, but needs specific to that he held.

Sentences of force, safe and positive, inducing message that the current acquisition is safe and profitable.

G. Tell why you are different, instead of saying what you are, plain and simple. If someone buys, for example a plasma TV, he believes that all TVs are the same. Show him that what you offer is not exactly like the other products in the same range, but do not use the word "competition"! Replace it with terms like "standard manufacturer" or "regular product". Make it the customer to feel that if they buy from elsewhere would be the mistake of his life, but for this be imaginative, not a liar!

80

H. There is one person that matters: the potential customer. Speaking of the needs and interests are automatically sets the right tone of conversation, able to smooth the way for the transaction.

I. Ask intelligent questions. This is the surest way to build credibility and trust to get the other party. By simply addressing some questions, you can get important information, you can create interest, you gain confidence, you can estimate the extent and manner in which the prospective client can be addressed. But questions must be carefully prepared in advance J. Identify personal desires and ambitions of the client's business. You can build such a solid enough interpersonal relationship. Sometimes, between the two categories of goals there is a strong connection.

Negociation methods of a Call Center While some people think of call centers as being potentially fraudulent telemarketing schemes, some legitimate businesses and organizations use call centers as a way to stay connected to their customers. Legitimate sales call centers are essentially phone banks whose operators work from a phone list, contacting potential customers who already have an established relationship with the business. A sales call center's representatives promote a variety of products and services, using a number of techniques.

Limited-Time Offer Call centers may negotiate with reluctant customers by using the “limited-time offer” technique. In the case that a customer is on the fence about making a purchase on the spot, the sales representative may offer a special, lower price if the customer will make a commitment to buy the product right away, rather than taking time to think it over.

Limited Quantity Much as in the case of the limited-time offer approach, a call center employee may negotiate with a hesitant customer by insinuating there are only a few products left to buy.

This approach is designed to make the prospective customer feel that she must buy the product immediately or risk losing out on the opportunity.

Buy-One-Get-One-Free A ploy of call center sales negotiation may include an offer of “buy-one-get-onefree.” In this instance, a customer who balks at the price of a product or service may be enticed to make the purchase when he’s led to believe he’s getting double his money’s worth.

Buy a Donation In the event a call center customer argues that she doesn’t have a need for the product or service being offered, a sales representative may negotiate a sale of an item that will then be donated to the customer’s charity of choice. An example is purchasing a magazine subscription to be donated to a hospital or library.

Up-Sell Up-selling, or getting a customer to buy more than he originally intended, is a common sales technique. Savvy call center sales representatives may use this approach as a negotiating tactic. An example is a call center selling vitamins; the sales representative would tell a prospective customer that he can have a free diet book with the purchase of the next-largest bottle of vitamins. With this approach, the customer may feel he is getting a deal, while the call center is actually making an up-sell.

Freebies

81

Freebies are commonly used in negotiating technique by sales call centers. With this approach, potential customers are offered free â&#x20AC;&#x153;extrasâ&#x20AC;? for making a purchase on the spot.

These offers may include free shipping, an upgrade to a better version of the product or an extended warranty.

In Romania there are famous cases where negotiation has failed. One such case was when the company selling Copper Min Abrud. Canadian Roman Copper, just one day after the Canadians had announced that they agree with the terms of the contract.

Copper Roman won in March, auction, with 200.8 million euros. Low copper has estimated reserves of 900,000 tonnes of copper, which represents 60 percent of the country's total reserves.

Officials said the deal fell because it could not reach agreement about the terms imposed by the Romanian government. These terms were divided into three stages: transparent investment environment and rapid payment worth 30 million euros.

Roman said, finally, that agrees with the conditions imposed by the Romanian state, but he said the sale will not occur.

From my point of view, negotiations collapsed because there were procedural flaws.

Prior to participation in sell Copper Min, Canadian firm tender dossier should be checked properly and this would have noticed that this company does not even have the necessary financial resources to pay for this acquisition. Besides asking price of copper resources is very small compared with the price of the stock exchange and this strategy, the sale at low price to the detriment of strategic interest can not be accepted by Romanian Gouverment.

During the negotiations are on to the Canadian company issues listed above and has not agreed to new conditions because profit from the sale has played an important role.

Canadian company wanted to invest little money and get a bigger profit from copper resources of our country.

Bibliography: [1]. Forces of sales management- Mihai Papuc, University Publishing, 2010 [2]. http://www.wall-street.ro/articol/Companii/132639/chitoiu-despre-cupruminabrud-dupa-ce-se-da-avizul-de-mediu-reluam-privatizarea.html [3]. http://economica.rtv.net/care-au-fost-obligatiile-de-mediu-impuse-de-romania-laprivatizarea-esuata-a-cupru-min_21667.html [4]. http://smallbusiness.chron.com/examples-sales-negotiation-12975.html [5]. http://fearless-selling.ca/tag/negotiating-tactics/ [6]. http://www.mindtools.com/CommSkll/NegotiationSkills.htm

82

FOOD RESPONSIBILITY - A NATIONAL CHALLENGE. CASE STUDY IMPLEMENTATION OF A SOCIAL CAMPAIGN IN BUCHAREST SCHOOLS Assistant Lecturer Ivona STOICA, PhD Romanian American University 1B, Ezpoziției Avenue, Sector 1, Bucharest stoica.ivona@profesor.rau.ro

Associate Professor Nicoleta Rossela DUMITRU, PhD Romanian American University 1B, Ezpoziției Avenue, Sector 1, Bucharest nicoletad01@yahoo.com Abstract “Those who think they have no time for healthy eating will sooner or later have to find time for illness.” (Edward Stanley) “Our food should be our medicine and our medicine should be our food.” (Hippocrates) Eating healthy does not mean giving up favorite food dishes or replace them with others, who have not heard and to be cooked by complicated methods. Your favorite dishes - steak, hamburgers, fries, delicious sauces - can be cooked to be not only tasty but also healthier. It is important to know the principles of healthy eating. The proportion of food consumed is very important. Healthy body needs five parts of carbohydrates (sugar and starch) in a part of a protein and fat. Excess or absence of a component can damage balance, favoring disease.

Key words: nutrition, quantitative research, social campaign, healthy life.

JEL classification: C18, C46, C82, C83, C87, E24, F16, M21, M31, M37, M51, O15 1.

Introduction Food and nutrition are very important issues in any society and has economic, social, environmental influences and human health. Statistical studies have shown an increase in young people suffering from disease, due to the fact that children, whose body is subject to change and growing, have an unhealthy diet and irrational. At least 40% of causes of death - heart disease, cancer, stroke, diabetes - are directly related to what we eat.

83

Modern man is feeding into an unhealthy way, eating junk food and more. We identify some of the direct consequences on our health, they apply a unhealthy diet such as obesity, heart disease, intestinal cancer, vascular attack, diabetes, anemia, neoplasm was Dieting in children is target marketing research and social campaign that we perform.

2.

Research Methodology

After identifying the problem it was decided to follow two directions in order to solve the problem identified: ♠ The first action will be conducting a quantitative research to determine the level of education of children in the diet, and the information of parents about it. Through this research we want to know what level of knowledge are two targets to know how to act in the second direction, namely the social campaign. ♠ The second direction is represented, as mentioned above, a social campaign designed to inform and motivate both parents and children to take a positive attitude to healthy eating.

2.1. Establishing the sample There have been two questionnaires, one applied to parents and other children applied because each group, that parents and children have different awareness of the problem studied.

The sample will be 800 children, 800 parents that a margin of error + -3%.

Parents are the ones who have to educate children in having a healthy diet and therefore must know how knowledgeable they are about this, children are questioned from another point of view, which is to check if parents are principles applied, to what extent, if they were perceived correctly, acting in any way and why?

Questionnaires will be applied after the child-parent scheme at the same time.

That period is the beginning of the 2013-2014 school choice in the third week of school at a meeting with parents.

Will be surveyed children from 16 schools, each school randomly choosing the 2 classes (please keep in mind that children of both classes will be chosen for different ages questionnaires). The respondents are provided by the children from class I to class VIII. The two classes will be chosen to fit in: ♠ first class selected to be between class I-IV ♠ second class chosen to be between class V-VIII This allows us to see changes and differences in perception of first-class children and those chosen in the second.

2.2. Objectives' [1] How are parents informed of the importance of healthy food given to children at this stage of development of their children (parent object); [2] What is the education of children about healthy nutrition (target children); [3] What foods are considered good for the body and health of parents and children (target children, parents);

84

[4] What is the importance they give to the purchased product packaging and composition on the packaging (target parents, children); [5] Sources of information on food given to children (parent object); [6] Who decides to compare the food consumed by children (parent object); [7] What are your favorite foods and why children (target children); [8] Nutrition experts are consulted by the parents (parent object); [9] To what extent children buy their own food to school.

2.3.

[1] [2] [3]

[4] [5] [6] [7] [8] [9]

Hypothesis 35% of parents are aware that their children should be fed healthy, 65% no; 25% of children were informed by parents that have to eat healthy 75%; Parents/ Children Dairy - 40% Meat - 43%; Vegetables - Dairy 32% - 28%; Meat - 14% sweets - 17%; Fruit - Fruit 12% - 8%; Sweets - 2% 4% vegetables.

35% of parents read the packaging, 65% no, 10% of children read packaging, 90% no Knowledge 55%; Internet 20%; Doctor 15%; Children generally prefer sweets, fast food products; 15% consult nutrition specialists, 85% no; 75% of children buy their own food, 25% only with the consent of a parent.

2.4. Desk Research Figure 1 Healthy food Source: http://fitandsexed.com Upon researching the office we aimed to find out what other social campaigns on healthy eating have been made. The research was done over the Internet. â&#x20AC;˘ Corn and milk The most popular social campaign is the "Corn and milk". This campaign was conducted at the initiative of government and schools in the country are to supply milk and corns, which are given to children to be consumed in the time they spend in school.

This campaign has not reached but for entirely, there are many administrative problems. More specifically schools were not supplied with two products in the same measure, urban schools face the favorite in the villages, and there were problems in terms of storage and fours products because of their watery. â&#x20AC;˘ "School Initiative Kraft Foods Romania" An educational program for healthy eating, was developed Romania Kraft Foods Initiative School in partnership with the Ministry of Education and Research Foundation and SERA, the program was launched in 1998 and later was expanded into 18

85

cities, including Bucharest, covering up today employs over 220 000 students from grade III. This campaign develops activities that children and their families learn to eat healthy lead active lives. To do this students and indirectly their families have access to information on healthy nutrition: book "Nutrition World" that more than 40,000 pupils each year receive free and www.lumeanutritiei.ro site containing sheets apart, the book can be read online, winning essays and drawings in the annual contest.

• FPAS - "Healthy life begins at the table" FPAS is a nongovernmental and nonprofit. The main objective of FPAS is to promote healthy eating among the population.

The "Healthy life begins at the table" is designed to promote balanced eating behavior. The campaign aims to answer questions about eating habits and lifestyle to promote a fair, highlighting the role of each nutrient as part of a balanced diet. The main objective of the campaign is linked to information and education on the definition of food balance • Feed Me Better Feed Me Better campaign seeks to educate parents and those responsible for infant use, to remove the junk food from their menu.

Signatures were gathered, was filed a petition to the British government and he took issue and promised to change the daily menu of students. The case has sparked debate on child nutrition in general and the influence which foods have on behavior, quality lunch in British schools: pizza defrosted in the microwave, fries in bath oil, food of poor quality and extremely cheap.

• Commercial Alert Commercial Alert an initiative group that opposes excessive promote commercial campaigns among young people, launched a global action to ban the sale of unhealthy foods to children less than 12 years. Its aim is to stop the growing epidemic of childhood obesity, which affects the whole world.

The statement was called by the World Health Organization (WHO) and included the prohibition of sale of such food in its global initiative against obesity. The release was signed by 135 organizations so far, 79 experts in medicine and specialists in child protection, as well as 22 officials from 18 different countries.

• TetraPak In the spirit of social responsibility TetraPak resume this year educational campaign in schools, which aims to form habits of eating healthy and responsible behavior towards the environment.

The educational program was held over 13.02.2006-9.06.2006 and educational campaign includes a contest to collect packaging. In the first stage seminars were held during which children were presented with the role of milk in a healthy diet and the steps he traversed from source to final consumer. The second stage of educational project includes a contest to collect Tetra Pak packaging. The first source is the collection of milk packaging that children receive in the program "Milk and Corn". Packages are then collected by waste management companies and REBU URBAN, for recycling later. The spotlight has SuperPak mascot character, with which scholars identify and dialogue with ease.

• Campaigns on the Internet http://www.bucurie.net/campanie.php - site offers a forum page where interested people can talk on healthy eating to participants. The target conversations are usually

86

parents. They are advising on food consumed by their children and other subjects derived from it.

3.

Social Campaign "Let’s grow healthy!"

General information Education is one of the most important elements of health. Promoting health in school health education is, and introduce changes in management schools, school environment and addressing students, parents and ambient.

Mention that the target groups addressed are the social campaign are the children (class I - VIII), parents and teachers.

After quantitative research conducted were found two major problems to be solved, namely to: ♠ Raising awareness of target groups on specific topics of healthy eating in children. ♠ Improving the level of knowledge of the target group of specific topics of healthy eating in children. ♠ Improving health promotion capacity in school groups - target through the experience and knowledge accumulation collaboration and modern teaching methods ♠ Establish mechanisms for collaboration between schools, parents and community.

The project "Let’s grow healthy!” wants to get collaboration between parties involved: teachers, parents, children and combining their efforts to improve the health of children by adopting an attitude in line with nutritional policies of the project.

The campaign "Let’s grow healthy!” aims to create a school - a model in which children, in addition to state education standards, training to benefit having the power to identify the values of a healthy life. Teachers and children are actively involved in project activities.

3.1. Methodology Selection of schools Criteria for selection of pilot schools will be: ♠ Will be selected only secondary schools; ♠ The lack of another national or international project underway in school; ♠ Co-director and school staff.

Target groups Target groups, mainly targeted are children, teachers and parents of children, and in the background another target group is represented by another person in the three schools selected.

Implementation Period BEGINNING FEBRUARY 2013

END OF TIME FEBRUARY 2014

PERIODE 1 year

87

Will be selected three schools in Bucharest for the implementation of the campaign and people will always be kept up to date through TV and other media on the conduct, the beneficial effects on children and parents benefits.

4.

Conclusions

It is important that parents be more careful with their children since an early period, she could be a child's diet quality, consistent blood group.

Such schools could help children during growth by hiring a nutritionist who can advise them how to parent your child eat healthy to prevent the dangers of obesity. Education is very important that food be useful to them and later learning to respect the rules of a healthy lifestyle and that he inspired such an attitude and willingness to healthy food.

Basically since the primary school, healthy eating should be promoted as a vital precept.

This would also help parents and thus potentially avoidable illnesses resulting from a nutritionally unsound.

It is important that children have a diet rich in iron, vitamin C, which allows the body to retain iron more easily thereby protecting red blood cells, vitamins B2, B12, E, A. Stress also has serious consequences for blood cells; the effects of using mobile phones from a young age are evil on the body which prevents oxygen getting to the blood cells.

It is also important that education as eating, chewing process be done correctly, slowly, should be avoided watching television or computer.

Eating healthy does not mean giving up favorite food dishes or replace them with others, who have not heard and to be cooked by complicated methods. Your favorite dishes - steak, hamburgers, fries, delicious sauces - can be cooked to be not only tasty but also healthier. It is important to know the principles of healthy eating. The proportion of food consumed is very important. Healthy body needs five parts of carbohydrates (sugar and starch) in a part of a protein and fat. Excess or absence of a component can damage balance, favoring disease.

Bibliography: [1]. Omar, M., Mohd Adzahan, N., Mohd Ghazali, H., Karim, R., Abdul Halim, N. M. and Ab Karim, S. - Sustaining traditional food: consumersâ&#x20AC;&#x2122; perceptions on physical characteristics of Keropok Lekor or fish snack, International Food Research Journal 18: 117-124 (2011) [2]. www.newamerica.net/publications/articles/2007/why_economists_cant_see_the_e conomy_5058 [3]. West Broadway Good Food Club, http://www.unpac.ca/economy/altfood.html [4]. Globalization and Food Safety, 05-23-2007, http://www.globalization101.org/index.php?file=news1&id=84 [5]. http://www.sciencedaily.com./releases/2008/06/ [6]. The Alternative Food Economy: Myths, Realities and Potential, Outcome of a conference held in March 2002, [7]. http://www.rgs.org/NR/rdonlyres/1CAF64D9-F9F0-4DEA-A0BB23E1A256B68D/0/Alternativefoodeconomy.pdf

88

[8]. http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/documents/digital asset/dh_125082.pdf [9]. http://responsibilitydeal.dh.gov.uk [10]. http://www.dh.gov.uk/en/Publichealth/Publichealthresponsibilitydeal/Becomin gaResponsibilityDealpartner/DH_126217 [11]. http://www.dh.gov.uk/en/Publichealth/Publichealthresponsibilitydeal/Becomin gaResponsibilityDealpartner/DH_126218

89