POLITEHNICA UNIVERSITY OF BUCHAREST FACULTY OF ENTREPRENEURSHIP, BUSINESS ENGINEERING AND MANAGEMENT MANAGEMENT OF THE DIGITAL ENTERPRISE Digital… [601482]

POLITEHNICA UNIVERSITY OF BUCHAREST
FACULTY OF ENTREPRENEURSHIP, BUSINESS
ENGINEERING AND MANAGEMENT
MANAGEMENT OF THE DIGITAL ENTERPRISE

Digital Marketing in IT SMEs in
Romania

Scientific coordinator ,
Prof. dr. ing. Scarlat Cezar
Master student: [anonimizat] 2

Bucharest
2017

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Contents
Table of tables and figures ………………………….. ………………………….. ………………… 4
Introduction ………………………….. ………………………….. ………………………….. …………. 5
1. Digital marketing ………………………….. ………………………….. ………………………. 6
1.1. Definitions ………………………….. ………………………….. ………………………….. .. 6
1.2. Marketing concept ………………………….. ………………………….. ………………… 7
1.3. The build of the marketing process ………………………….. ……………………… 8
1.4. Functio ns of marketing ………………………….. ………………………….. …………. 8
1.5. The marketing mix ………………………….. ………………………….. ……………….. 9
1.6. Online Marketing ………………………….. ………………………….. ……………….. 11
1.6.1. Online Marketing Domains ………………………….. ……………………….. 11
1.7. Digital marketing framework ………………………….. ………………………….. .. 13
1.8. Social media ………………………….. ………………………….. ……………………….. 14
1.9. Digital versus traditional marketing ………………………….. ………………….. 14
2. Interview theory ………………………….. ………………………….. ………………………. 16
2.1. Definition ………………………….. ………………………….. ………………………….. . 16
2.2. Types of interview ………………………….. ………………………….. ……………….. 16
2.3. Types of Topics in Ques tions ………………………….. ………………………….. .. 17
2.4. Wording of Questions ………………………….. ………………………….. ………….. 17
2.5. Aspects of qualitative research interviews ………………………….. ………….. 17
3. Churn rate study on Small and Medium -size enterprises (SMEs) ……….. 19
3.1. Definition of an enterprise ………………………….. ………………………….. …… 19
3.2. How are Small and medium -size enterprises (SMEs) defined in the
European Un ion ………………………….. ………………………….. ………………………….. . 19
3.3. Importance of SMEs ………………………….. ………………………….. ……………. 20
3.4. Advantages of SMEs: ………………………….. ………………………….. ………….. 21
3.5. Disadvantages of SMEs : ………………………….. ………………………….. …….. 21
3.6. Position of Romania in the world ………………………….. ……………………… 22
3.7. General data on Romania ………………………….. ………………………….. ……. 22
3.8. Romania in the European Union ………………………….. ………………………. 23
3.8.1. Birth rate ………………………….. ………………………….. ……………………… 24
3.8.2. Death rate ………………………….. ………………………….. ……………………. 24
3.9. Data interpretation of the evolution of enterprises by industry in
Romania ………………………….. ………………………….. ………………………….. ………….. 30

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3.10. Data evolution in the Information and communication sector ………. 32
4. Interview on Digital Marketing with IT SMEs ………………………….. ………. 35
4.1. Circumstances ………………………….. ………………………….. …………………….. 35
4.2. Objectives ………………………….. ………………………….. ………………………….. . 35
4.3. Methodology ………………………….. ………………………….. ………………………. 35
4.4. Interview guide ………………………….. ………………………….. …………………… 36
4.5. Results ………………………….. ………………………….. ………………………….. …… 37
4.6. Concl usions of interview research ………………………….. …………………….. 42
Conclusions ………………………….. ………………………….. ………………………….. ………… 44
Recomandations ………………………….. ………………………….. ………………………….. . 45
Bibliography ………………………….. ………………………….. ………………………….. ………. 47
Annexes ………………………….. ………………………….. ………………………….. ……………… 49

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Table of tables and figures

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Introduction
In the current economy , the whole society states that need more
entrepreneurs, that people should develop their own businesses.
Businesses do not appear out of nowhere, it takes a whole context, both
governmental, legislative, and social and human.
To understand how and why new businesses appear and what affects them,
we must first understand how the y are defined and why they are defined this way.
European Union wanted SMEs to be defined clearly for several reasons:
 In order to be ranked
 To trace their evolution
 To facilitate access to finance
 In order to be able to talk more easily with their owners
 To develop specific legislation in their case
The goal is to understand why entrepreneurs choose to open a business, why
do they fail or shut down a business. For this understanding it is needed to have clear
data on which type of industry has best perform ance and to understand the dynamics
of businesses that can be classified as small and medium sized.
Based on the data that has been developed in my previous researches in this
master program I will speak first hand with entrepreneurs or business executives to
get a real explanation, to understand their feelings, hardships and also what drives
them forward and gives them opportunities for their business to move on.
After study on different branches of the industry I have found that the IT&C
has had the best consistency over the years. In this paper I will try to identify sources
for this success, by interviewing companies that have a IT&C domain. I will talk
with both successful and less successful companies.
The interviews will be done in an unstructured int erview with company
executives and will try to approach a down to earth tone.

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1. Digital marketing
1.1. Definitions
Digital marketing is a branch of marketi ng that emerged with the apparition
of the internet, search engines and social media platforms. It has the same basic
functions as conventional marketing but has a different set of instruments.
Many new companies started to use digital marketing because it is somewhat
cheaper and easier to manage, but if you do not know how to use the instruments it
will get expensive and will not have the wanted results.
In this chapter I will try to explain what digital marketing is, what
instruments it has and some of the impact it had on the economy.
Marketing in a very basic sense is the process of communicating the valu e
of a product or service to potential customers for the purpose of selling that product
or service. However, marketing is everything a company does to acquire customers
and maintain a relationship with them.
Hence, we define marketing as the process by wh ich companies create value
for customers and build strong customer relationships in order to capture value from
customers in return. (Kotler, 2012, page 5).
As a distinct function of the enterprise or integrated into the commercial
function as its essential sub -function, marketing must be regarded as a fundamental
prerequisite for the profitability of any enterprise without which companies can not
direct their production activity, Satisfying in the best conditions and to the highest
possible degree the requirements of consumers.
Marketing incorporates and integrates several laws, principles and
techniques in which the client is at the forefront, including plann ing, organization
and control activities. These laws materialize in the ability to develop and retain
profitable customers. Contemporary economic practice assigns a significant place to
marketed marketing as a definite way to solve the problems posed by th e existence
of a strong competitive system and the remark of each firm within it.
The social definition of marketing highlights complex dynamic processes,
globalization and regulatory waiver. Thus, it can be considered that:” A social and
managerial proces s by which individuals and groups obtain what they need and
want through creating ami exchanging products and value with others. ” (Kotler,
2002, pagina 10).

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To illustrate efforts to achieve a more realistic definition of marketing
complexity, I will presen t some of the most commonly used definitions:

 The American Marketing Association (Balaure si colectiv, 2002, p. 20):
"Marketing is the process of programming and realizing the production, pricing,
promotion and distribution of ideas, goods and services that cause exchanges to
meet individual and organizational goals."
 Baker, M. (Baker, 1997, p. 4): "Marketing is both a managerial orientation –
some would support a business philosophy – and an economic function."
 McCarthy, E, J., Perr eault, Jr.W.D. (Balau re si col ectiv, 2002, p. 20): "Marketing
means the sum of all efforts directed by an enterprise to satisfy its consumers
with a profit."
 Stanton, W.J. (Stanton, 1981, p. 4): "Marketing is an entire system of economic
activities related to programming, pric ing, promotion and distribution of
products and services designed to meet the needs of current and potential
consumers."

1.2. Marketing concept

Marketing focuses on demand, so the sellers 'and manufacturers' markets are
moving towards a buyer and user market. Professor Levitt of Harvard University has
pointed out that "sales focus on the needs of the seller, and the marketing of those of
the buyer. The concern about the sale is the need for the seller to turn his product
into money; Marketing is the idea of meeting the needs of the buyer with the product
and the entire chain of activities associated with its creation, supply and
consumption" (Kotler, 2002, page 26).
Marketing, more than any other function of the organization, aims at attracting
new consumers by providing high quality goods / services and maintaining
consumers by providing satisfaction.
The role of marketing has developed as a result of the evolution of society. Thus,
consumers are increasingly sophisticated, competition is firmer, production i s
separate from consumption, o rganizations are becoming more and more complex,
and the environme nt is getting faster and faster.

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The concept of marketing is based on the following terms: needs, desires and
demands, value and satisfaction, exchange of trans actions and relationships (Fleaca,
2013).

1.3. The build of the marketing process

Figure 1.1. The build of the marketing process (Kotler 2012, page 5)

1.4. Functions of marketing
 Investigating the market, consumption needs
 Linking the enterprise to the economic and s ocial environment
dynamically
 Meeting con sumer needs in a superior way
 Maximizing economic profit / efficiency
(Anca Purcărea, Course Support, 2013)

The market should not be regarded as a theoretical notion, it is a clear and
essential target for the firm, the market segment that the firm will want to attack
must be chosen with great care, and the programs will be chosen according to the
characteristic s it presents .
The need for customers is essential, but their detection by the firm is often a
troublesome problem for the organization. Needs are of many kinds, they may be
actual or potential, some are expressed and others are not; In many cases, custome rs
do not know clearly to express their needs. Needs are through marketing research. Understanding
the market and
what the
customer needs
and what he
wantsCreating a
client –
centered
marketing
strategyBuilding a
marketing
program
that
delivers
superior
valueIt creates
profitable
relationships
and creates
the
customer's
pleasureCapture
value from
customers to
create profit
and fairness
towards the
customer

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Marketing can be reactive or anticipatory. Reactive marketing is noticed when
the company responds to customer requirements, is the answer to the well -known
consumer needs . Predictive marketing is used when consumers' needs are not yet
known but can be intuited, anticipated.
Some companies have managed to overcome these two types, prompting
potential consumers, it is called creative marketing.

1.5. The marketing mix

The mix of marketing is an instrument by which the company aims to achieve
its objectives in line with those of the market.
It consists of the 4P:
 Product
 Price
 Promotion
 Placement
The product has the following components: brand, features, packaging, design,
warranty, service, gauge.
The price consists of: actual price, discount, forms of payment, payment term,
rebate.
The promotion also has several components: advertising, direct ad vertising,
personal sales, sales promotion, public relations.
The placement includes the following: commercial, transport, distribution
channel.
Price is a determining factor in the process of selecting a product (it makes
sense to the extent that the rest of the marketing mix components are set).
The price set is not always the final price, as it is influenced by several factors,
including:
 Specific features
 Promotion
 Distribution
 The terms of the contract
 Time and energy of the buyer
 Travel expenses

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 Opportunity costs

Selecting goals is very important because it determines how we set the price.
This can be seen in the next figure:

Figure 1.2. Choosing the final price

Selecting Objectives

 Survival (profit is not important, price is low)
 Maximizing market share – seizing the market (low cost, low price)
 Maximizing immediate profit – cash-flow (short -term thinking)
 Product Quality Leader (high price)
In this context, the product is understood to be an integration of the physical
and chemical attribut es, the functions and advantages it can offer to consumers.
These include brand image, name, packaging, service warranty, delivery and
shipping conditions.
Placement is a marketing variable that helps the product or service reach the
consumer at the place and time required. Placement integrates the channels and
networks formed by them, the logistics of the goods through which products and
services are made available to customers, and the flows they generate.
Promoting refers to the forwarding of customer in formation messages and
actions to support and influence the sales process, respectively, in order to create
and maintain a favorable attitude towards the products and services concerned.
Advertising is promoted through advertising, sales promotion, public relations,
personal sales, branding and promotional events. (Constantin Bratianu, University
Course, 2004).
Selecting
Objectives
Demand
determination
Estimation of
costs
Competitive
price analysis
Selecting a
pricing method
Choosing the
final price

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1.6. Online Marketing

Online marketing is the fastest -growing form of direct marketing.
Widespread use of the Internet is having a dramatic impact on b oth buyers and the
marketers who serve them . (Kotler 2012, pag. 508)
The Internet has fundamentally changed customers’ notions of convenience,
speed, price, product information, and service. As a result, it has given marketers a
whole new way to create value for customers and build relationships with them.
All kinds of companies now market online. Click -only companies operate
on the Internet only. The success of the dot -coms has caused existing brick -and-
mortar manufacturers and retailers to reexamine how they serve their markets. Now,
almost all of these traditional companies have created their own online sales and
communications channels, becoming click -and-mortar companies . It’s hard to find
a company today that doesn’t have a substantial W eb presence. (Kotler 2012, pag
508)

1.6.1. Online Marketing Domains
The four major online marketing domains are shown in Table 1.1. . They
include business -to-consumer (B -to-C), business -to-business (B -to-B), consumer –
to-consumer (C-to-C), and consumer -to-busines s (C-to-B).

Table 1.1. Marketing domains

Targeted to customers Targeted to businesses
Initiated by business B-to-C
(business to consumer) B-to-B
(business to business)
Initiated by consumer C-to-C
(consumer to consumer) C-to-B
(consumer to business)

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Figure 1.3. Realizing online marketing

The instruments of Online marketing consist of the following, they can be used
together or separately:
1. Search engine optimization (SEO)
2. Search engine marketing (SEM)
3. Content marketing
4. Social Media Marketing (SMM)
5. Pay-per-click advertising (PPC)
6. Affiliate marketing
7. Email marketing Conducting
online
marketingCreating a
website
Placing ads
or
promotions
online
Using e -mailSetting up
online social
networks

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1.7. Digital marketing framework
Figure 1.4. Digital marketing RACE framework

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1.8. Social media

Social media is the term commonly given to Internet and mobile -based
channels and tools that allow users to interact with each other and share opinions
and content. As the name implies, social media involves the building of communities
or networks and encouraging participation and engagement. (CIPR, 2011)
Social media marketing has to be focused on using these media to help
achieve your marketing objectives – both protecting and expanding your brand:
‘Monitoring and facilitating customer – customer interaction, participation and
sharing through digital media to encourage positive engagem ent with a company
and its brands leading to commercial value. Interactions may occur on a company
site, social networks and other third -party sites’ (CIPR, 2011).

1.9. Digital versus traditional marketing
Digital marketing differs from traditional marketing a nd one of differences
are W.H.C.P. – Who, How, Cost, Profit.
WHO: You could say, the most important aspect of digital marketing is to
know and understand you customer. Who our customer is, can't be a be a kind of
idea of who, but rather a solid understatin g of your client, their age, sex, location
and even how they behave online. What type of devices do they use, is it mobile or
desktop. Where do they spend time online? Is it on Facebook, Twitter or maybe they
read a type of blog. We need to intimately get to know WHO our customer is.
HOW : The next question is how we find our customer? We need to know
exactly how to find our client. We can take part in market research to a point,
however, ultimately we need to get out and test. The path we take will depend on
the type of business.
Part of our strategy will be advertising. We can look at PPC; this is a type of
advertising where you only pay when somebody clicks on your ad. With this type of
advertising you can build up data to learn about your customer. Also, setting up
strategic partnershi ps online can be an extremely fast way to reach a big audience.
Cost: We must know this in an exact manner. When we start to advertise we
will naturally start to incur costs. We might generate a significant lead flow.
However, these leads cost us money. S o we must attribute that value to each lead

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that we have acquired. This is known as cost per lead. When we are aware this in a
precise manner we can then make digital marketing decisions based on this figure.
Profit: The big one! Without profit, we have n o digital marketing. We need
to know at all times what our profit will be. We need to know what our A.R.P.L is.
When we refer to A.R.LP, this stands for average, revenue, per lead. So we need to
know on average how much revenue each lead brings to us.
Differences between traditional marketing and digital can be summarized as
the following:

Figure 1.5 . Comparison between Traditional versus Digital Marketing

Traditional
Local audience
Hard to
measure
High cost
Static
(no way to
interact)Digital
Infinite
Audience
Local or/and
global
Customer
interaction –
Feedback
Takes time to
see results
Viral
Measurable

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2. Interview theory
2.1. Definition
 Simply put an interview in qualitative research is a conversation where
questions are asked to elicit information.
 The qualitative research interview seeks to descri be and the meanings of central
themes in the life world of the subjects. The main task in interviewing is to
understand the meaning of what the interviewees say. (Kvale,1996)
 A qualitative research interview seeks to cover both a factual and a meaning
level, though it is usually more difficult to interview on a meaning level.
(Kvale,1996)
 Interviews are particularly useful for getting the story behind a participant’s
experiences. The interviewer can pursue in -depth information around the topic.
Interviews m ay be useful as follow -up to certain respondents to questionnaires,
e.g., to further investigate their responses. (McNamara,1999)

2.2. Types of interview
Informal, Conversational interview
 No predetermined questions are asked, in order to remain as open and
adaptable as possible to the interviewee's nature and priorities; during the
interview the interviewer "goes with the flow".
General interview guide approach
 Intended to ensure that the same general areas of information are
collected from each interviewee; t his provides more focus than the
conversational approach, but still allows a degree of freedom and
adaptability in getting the information from the interviewee.
Standardized, open -ended interview
 The same open -ended questions are asked to all interviewees; this
approach facilitates faster interviews that can be more easily analyzed
and compared.
Closed, fixed -response interview
 All interviewees are asked the same questions and asked to choose
answers from among the same set of alternatives. This format is u seful
for those not practiced in interviewing. This type of interview is also
referred to as structured

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2.3. Types of Topics in Questions
1. Behaviors – about what a person has done or is doing
2. Opinions/values – about what a person thinks about a topic
3. Feelings – note that respondents sometimes respond with "I think …" so be
careful to note that you're looking for feelings
4. Knowledge – to get facts about a topic
5. Sensory – about what people have seen, touched, heard, tasted or smelled
6. Background/demographics – standard background questions, such as age,
education, etc.
2.4. Wording of Questions
 Wording should be open -ended. Respondents should be able to choose
their own terms when answering questions.
 Questions should be as neutral as possible. Avoid wording that might
influence answers, e.g., evocative, judgmental wording.
 Questions should be asked one at a time.
 Questions should be worded clearly. This includes knowing any terms
particular to the program or the respondents' culture.
2.5. Aspects of qualitative research i nterviews
 Interviews are completed by the inter man based on what the interviewee
says to be conformed and done.
 Interviews are a far more personal form of research than questionnaires.
 In the personal interview, the interviewer works directly with the
interviewee.
 Unlike with mail surveys, the interviewer has the opportunity to probe or ask
follow up questions.
 Interviews are generally easier for the interviewee, especially if what is
sought are opinions and/or impressions.
 Interviews are time consuming and resource intensive.
 The interviewer is considered a part of the measurement instrument and has
to be well trained in how to respond to any contingency.
 Interviews provide an opportunity of face to face interaction between 2
persons; hence, they reduce conflicts.

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What is an In -Depth Interview?

In-depth interviewing is a qualitative research technique that involves
conducting intensive individual interviews with a small number of respondents to
explore their perspectives on a particular idea, program, o r situation. For example,
we might ask participants, staff, and others associated with a program about their
experiences and expectations related to the program, the thoughts they have
concerning program operations, processes, and outcomes, and about any c hanges
they perceive in themselves as a result of their involvement in the program
In-depth interviews are useful when you want detailed information about a
person’s thoughts and behaviors or want to explore new issues in depth. Interviews
are often used to provide context to other data (such as outcome data), offering a
more complete picture of what happened in the program and why. The key
characteristics of in -depth interviews are the following:
Open -ended Questions.
 Questions need to be worded so that respondents expound on the topic, not
just answer “yes” or “no.” Many open -ended questions begin with “why” or
“how,” which gives respondents freedom to answer the questions using their
own words.
Semi -structured Format.
 Although it is important to pre -plan the key questions, the interview should
also be conversational, with questions flowing from previous responses
when possible. For example, if an interviewee remarks that “The elections
are approaching,” an appropriate response would be, How do you feel a bout
the candidates involved?”
Seek Understanding and Interpretation.
 It is important to use active listening skills to reflect upon what the speaker
is saying. The interviewer should try to interpret what is being said and
should seek clarity and understa nding throughout the interview.

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3. Churn rate study on S mall and Medium -size enterprises (SMEs)
I will start with a short reminder of what SMEs are and how they are defined
within the European Union.
3.1. Definition of an enterprise
What is an enterprise:
An enterprise is a form of organization of an economic activity that is
authorized by the law to perform acts of commerce, with the goal of obtaining profit,
in a competitive condition.

3.2. How are Small and medium -size enterprises (SMEs) defined in the
Europ ean Union
In the European Union which includes Romania small and medium –
size enterprises (SMEs) are defined by the EU recommendation 2003/361 .
Main factors determining if an enterprise is an SME are :
1. staff headcount
2. either turnover or balance sheet total

Table 3.1. Determining factors for SMEs (http://ec.europa.eu/growth/smes/business –
friendly -environment/sme -definition/index_en.htm)
Company category Staff headcount Turnover or Balance sheet total
Medium -sized < 250 ≤ € 50 m ≤ € 43 m
Small < 50 ≤ € 10 m ≤ € 10 m
Micro < 10 ≤ € 2 m ≤ € 2 m

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These ceilings apply only to individual firms. If a firm is part of a larger
group, then their staff headcount/turnover/balance sheet data must be analyzed too.
In the European Union SMEs represent 90% of all businesses. The definition
of being a SME is important because it grants acces s to finance and support program s
targeted for them in the EU.
In the EU SMEs generate 2 out of every 3 jobs, also they are the backbone
of the EUs economy creating more tha n 85% of the new jobs in the EU.
SMEs definition distinguishes between three different types of enterprises.
Each of these categories correspond to a type of relationship that an enterprise could
have with another. This helps in having a clear picture of a firms economic situation
and also to exclude SMEs that are not genuine.
The three categories are :
 Autonomous: if the enterprise is either completely independent or has one or
more minority partnerships (each less than 25%) with other enterprises
 Partne r: if holdings with other enterprises rise to at least 25% but no more
than 50%, the relationship is deemed to be between partner enterprises
 Linked enterprise: if holdings with other enterprises exceed the 50%
threshold, these are considered linked enterprise.

3.3. Importance of SMEs

Small and medium enterprises (SMEs) are considered the backbone of an
economy, whether we are referring to a random state, or if we are talking globally.
These companies represent an essential source of economic growth, dy namic and
flexibility in advanced industrialized countries, just like they do in emergent
economies and in development. The main argument for this is that SMEs are the
dominant form of business organization, representing roughly 95 – 99% of all
companies. According to the Organization for Economic Cooperation and
Development (OECD), SMEs represent more than 95% of enterprises and ensure
60-70% of the jobs.
Small enterprises are very important in promoting competitiveness and to bring
new products or techni cs to the market. SMEs increase their productivity mostly
through finance. Investments provide access to technologies and helps expand the

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business, thus ensuring the competitiveness of a company and, by extrapolating, the
one of a nation as a whole. It’s fair to say that the performances and the development
level of a national economy depends a lot on the capacity to create a good
environment for SMEs, which can supply quality services and competitive products
at a low cost and in quantities that are adjus ted to the market.
Regardless of the degree of development and standard of living of the population
of a state, SMEs are the biggest contributors to the gross domestic product. In
countries like Japan or China 60% of GDP comes from SMEs, in the USA that
percentage goes up to 65%, and in the UE SMEs generate 52% of GDP.

3.4. Advantages of SMEs:
 They present a high potential for creating new jobs, influencing political and
social stability
 They constitute a source of competitiveness for oligopols and monopols
 High flexibility regarding medium changes
 They have a major contribution in the GDP
 Through their high numbers they sustain the competitive mechanism
 Due to their small dimension, they have less bureaucracy and have a fast
response to the demands of the ma rket
 They contribute to the wellbeing of big enterprises for whom they
manufacture product or do services
 They attract foreign capital
 High potential for innovation

3.5. Disadvantages of SMEs :
 High commitment – Starting your own business requires a higher
commitment of time and energy
 High risk – Success depends totally on you and your business talents
 Delayed profitability – Where the market may not already be established, it
may take longer to become profi table
 Limited financing – Financing for a new business is more difficult to obtain

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3.6. Position of Romania in the world

Romania, joined the EU on 1 January 2007, began the transition from
communism in 1989 with a mostly obsolete industrial base and a pattern of output
that did not sooth to the country's needs. Romania's macroeconomic gains have
recently started to spur creation of a middle class and to address Romania's poverty.
Corruption and red tape continue to permea te the business environment.
After the global financial crisis, Romania signed a $26 billion emergency
assistance package from the IMF, the EU, and other international lenders, but GDP
had contracted until 2011. In March 2011, Romania and the IMF/EU/World Bank
signed a 24 -month precautionary standby agreement, worth $6.6 billion, to promote
fiscal discipline, encourage progress on structural reforms, and strengthen financial
sector stability; but no funds were drawn. In September 2013, Romanian authorities
and the IMF/EU agreed to a follow -on standby agreement, worth $5.4 billion, to
continue with reforms. This agreement expired in September 2015, and again no
funds were drawn. Progress on structural reforms has been uneven, and the economy
still is vulnerab le to external shocks.
Economic growth rebounded in 2013 -15, driven by strong industrial exports and
excellent agricultural harvests, and the fiscal deficit was reduced substantially.
Industry outperformed other sectors of the economy in 2015. Exports rema ined one
of the engine s of economic growth, led by trade with the EU, which accounts for
roughly 70% of Romania trade. Domestic demand was a second driver, because of
the mid -2015 cut, from 24% to 9%, of the VAT levied upon foodstuffs. In 2015, the
governm ent of Romania succeeded in meeting its annual target for the budget deficit,
and the external deficit remained low, even if it rose due to increasing imports. For
the first time since 1989, inflation turned into deflation, allowing for a gradual
loosening of monetary policy throughout the period.
An aging population, significant tax evasion, insufficient health care, and an
aggressive loosening of the fiscal package jeopardize the low fiscal deficit and public
debt and are the economy's top vulnerabilities .

3.7. General data on Romania
 The official exchange rate for Romanian GDP was estimated in 2015 to
be $177.3 billion or 167.87 euro

23
 2015 was the fifth year in a row with a positive growth of the economy
 The loss in output that incurred in 2009 and 2010 has been made up for
 The real growth rate is estimated to be 3.5% (2013 est.), 3% (2014 est.),
3.7% (2015 est.)
 Inflation rate has declined in the recent years, with a record low in 2015
 Public debt to GDP ratio is lower than 40% of the GDP (4th lowest in the
EU)
Table 3.2. Forecast for Romania by the EU
(http://ec.europa.eu/economy_finance/eu/countries/romania_en.htm)

The labor force of Romania was divided in the year 2014 by occupation:
 Agriculture: 28.3%
 Industry: 28.9%
 Services: 42.8%

3.8. Romania in the E uropean Union
Business demography covers:
 events in the life cycle of an enterprise such as births and other creations of
enterprises, deaths and other cessatio ns of units, and their ratio to the
business population;
 the follow -up of enterprises over time, thus offering information on their
survival or discontinuity;
European Economic Forecast Autumn 2016
Forecasts for Romania 2015 2016 2017 2018
GDP growth (%, yoy) 3,7 5,2 3,9 3,6
Inflation (%, yoy) -0,4 -1,0 1,8 2,9
Unemployment (%) 6,8 6,5 6,4 6,3
Public budget balance (% of GDP) -0,8 -2,8 -3,2 -3,2
Gross public debt (% of GDP) 37,9 38,9 40,2 41,5
Current account balance (% of GDP) -1,1 -2,2 -2,6 -2,8

24
 development over time of certain characteristics like size, thus offering
information on the gr owth of enterprises, or a cohort of enterprises, by type
of activity.
Summarizing, business demography statistics presents data on:
 the active population of enterprises;
 their birth;
 survival (followed up to five years after birth), and;
 death.

3.8.1. Birth rate
The birth of new enterprises is often seen as one of the key determinants of
job creation and economic growth. Enterprise births are thought to increase the
competitiveness of a country's enterprise population, by obliging them to become
more efficient in view of newly emerging competition. As such, they stimulate
innovation and facilitate the adoption of new technologies, while helping to increase
overall productivity within an economy.
3.8.2. Death rate
From a theoretical point of view, enterprise birth is related to the expectation
of making a profit. If the main objective of newly born enterprises is to make a profit,
enterprise births are most likely to occur where profits are consistently high, whereas
among loss -making activities, enterprise de aths will be relatively more frequent.
Table 3.3. Number of Birth – Deaths in t for all employee type companies

GEO/TIM
E 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Average
Europea
n Union
(aggrega
te
changin
g
accordin
g to the
context) – – – – – -13968 – – – – -13968

25
GEO/TIM
E 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Average
Europea
n Union
(28
countrie
s) – – – – – – – – 97809 – 97809
Europea
n Union
(27
countrie
s) – – – – – – – 76643 – – 76643
Belgium – – – – 10662 4857 10033 16519 14637 8994 10950.33
Bulgaria – – – – 13845 31969 11240 -4122 3387 375 9449
Czech
Republic – – – – -36855 25390 24060 14053 -33136 -18841 -4221.5
Denmark – – – – – -5729 -405 3378 -1034 -4949 -1747.8
German
y (until
1990
former
territory
of the
FRG) – – – – – -17098 4953 3455 -15804 -17906 -8480
Estonia – – – – 3723 -3392 729 2503 3024 1185 1295.333
Ireland – – – – -7576 -10701 -4879 -6229 2058 – -5465.4
Spain – – – – -65175 -75906 -38534 -46180 -47271 -33204 -51045
France – – – – 52565 153095 174357 134766 136893 134570 131041
Croatia – – – – – – – – -5326 -17615 -11470.5
Italy – – – – 2868 45854 7077 -8107 -45084 -56767 -9026.5
Cyprus – – – – 522 -451 -1734 -2762 -1791 -2474 -1448.33
Latvia – – – – -18 1194 4785 6114 3468 10400 4323.833
Lithuani
a – – – 12217 -12673 -8199 5046 12372 10128 23984 6125

26
GEO/TIM
E 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Average
Luxemb
ourg – – – – 564 512 567 603 638 683 594.5
Hungary – – – – -3779 -2642 -6038 -22282 -41891 -56869 -22250.2
Malta – – – – – – 1355 -1557 1303 728 457.25
Netherla
nds – – – – 50889 32876 30743 35811 15141 22540 31333.33
Austria 8129 8263 6279 11407 10639 7874 4647 2572 724 121 6065.5
Poland – – – – 76072 38717 63268 22491 -14880 – 37133.6
Portugal 16518 5677 23836 20453 -7549 -37468 -33381 -33522 -46502 -22163 -11410.1
Romania – – – – 22021 -55820 -51874 31162 -2931 47954 -1581.33
Slovenia – – – – 5755 4667 2250 2393 1305 7493 3977.167
Slovakia – – – – 14289 20939 22472 936 -6675 -190 8628.5
Finland – – – – 6771 1633 3954 – 8149 -614 3978.6
Sweden – – – – 7746 5945 10102 21311 -3363 2165 7317.667
United
Kingdo
m – – – – 26620 -85675 -13410 29745 19845 98075 12533.33
Norway – – – – 7493 6445 4578 10621 10703 13811 8941.833
Switzerl
and – – – – – – – – – – –
Turkey – – – – – 685 – – – – 685

27
Figure 3.1. Births – Deaths in t for all employee type companies
Table 3.4. Churn rate (Birth – Deaths)/Total population for all employee type
companies
GEO/TIM
E 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Average
Europea
n Union
(aggrega
te
changin
g
accordin
g to the
context) – – – – – -0.06% – – – – -0.06%
Europea
n Union
(28
countrie
s) – – – – – – – – 0.38% – 0.38%
Europea
n Union
(27
countrie
s) – – – – – – – 0.30% – – 0.30%
Belgium – – – – 2.04% 0.92% 1.88% 3.03% 2.61% 1.56% 2.01%
Bulgaria – – – – 5.10% 9.76% 3.47% -1.29% 1.05% 0.11% 3.03%
Czech
Republic – – – – -4.39% 2.72% 2.48% 1.42% -3.36% -1.95% -0.51%
Denmark – – – – – -2.72% -0.19% 1.55% -0.47% -2.29% -0.83% -100000-50000050000100000150000200000
Belgium
Bulgaria
Czech Republic
Denmark
Germany (until…
Estonia
Ireland
Spain
France
Croatia
Italy
Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Romania
Slovenia
Slovakia
Finland
Sweden
United Kingdom
Norway
Switzerland
TurkeyBirth -Deaths
2008 2009 2010 2011 2012 2013 Average

28
GEO/TIM
E 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Average
German
y (until
1990
former
territory
of the
FRG) – – – – – -0.58% 0.17% 0.12% -0.53% -0.60% -0.29%
Estonia – – – – 4.99% -4.66% 1.04% 3.47% 3.98% 1.49% 1.72%
Ireland – – – – -3.73% -5.37% -2.50% -3.29% 1.11% – -2.76%
Spain – – – – -1.98% -2.38% -1.24% -1.51% -1.57% -1.12% -1.63%
France – – – – 1.97% 5.43% 5.92% 4.53% 4.50% 4.23% 4.43%
Croatia – – – – – – – – -3.60% -12.08% -7.84%
Italy – – – – 0.07% 1.15% 0.18% -0.20% -1.14% -1.45% -0.23%
Cyprus – – – – 0.88% -0.79% -3.37% -5.41% -3.50% -5.01% -2.87%
Latvia – – – – -0.02% 1.50% 5.79% 6.95% 3.70% 10.72% 4.77%
Lithuani
a – – – – -9.02% -6.75% 4.18% 9.37% 6.71% 15.16% 3.28%
Luxemb
ourg – – – – 2.18% 1.92% 2.05% 2.11% 2.19% 2.26% 2.12%
Hungary – – – – -0.66% -0.47% -1.07% -3.99% -7.98% -12.00% -4.36%
Malta – – – – – – 4.10% -4.74% 4.15% 2.39% 1.47%
Netherla
nds – – – – 6.71% 3.42% 3.17% 3.53% 1.45% 2.14% 3.40%
Austria 2.67% 2.63% 1.94% 2.89% 2.61% 1.88% 1.09% 0.60% 0.17% 0.03% 1.65%
Poland – – – – 4.15% 2.03% 3.23% 1.13% -0.75% – 1.96%
Portugal 1.91% 0.64% 2.65% 2.17% -0.78% -4.05% -3.81% -3.96% -5.75% -2.80% -1.38%
Romania – – – – 4.29% -11.21% -11.52% 5.11% -0.45% 6.95% -1.14%
Slovenia – – – – 5.08% 3.90% 1.82% 1.91% 1.02% 5.57% 3.22%

29
GEO/TIM
E 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Average
Slovakia – – – – 4.13% 5.77% 6.01% 0.22% -1.65% -0.05% 2.40%
Finland – – – – 2.41% 0.58% 1.38% – 2.80% -0.21% 1.39%
Sweden – – – – 1.22% 0.91% 1.51% 2.98% -0.46% 0.30% 1.08%
United
Kingdo
m – – – – 1.23% -4.06% -0.67% 1.47% 0.97% 4.61% 0.59%
Norway – – – – 2.75% 2.38% 1.70% 3.87% 3.84% 4.79% 3.22%
Switzerl
and – – – – – – – – – – –
Turkey – – – – – 0.02% – – – – 0.02%
Figure 3.2. Churn rate (Birth – Deaths)/Total population for all employee type companies
-0.15-0.1-0.0500.050.10.150.2
Belgium
Bulgaria
Czech Republic
Denmark
Germany (until 1990 former…
Estonia
Ireland
Spain
France
Croatia
Italy
Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Romania
Slovenia
Slovakia
Finland
Sweden
United Kingdom
Norway
Switzerland
TurkeyChurn rate evolution
2008 2009 2010 2011 2012 2013 Average

30
3.9. Data interpretation of the evolution of enterprises by industry in
Romania

Popul ation of active enterprises in Industry, construction and services except
insurance activities of holding companies
Table 3.5. Population of active enterprises in Industry, construction and services
except insurance activities of holding companies

Numb er of births of enterprises in Industry, construction and services except
insurance activities of holding companies
Table 3.6. Number of births of enterprises in t
Industry, construction and services except insurance activities of holding companies

TIME 2010 2011 2012 2013 2014
Romania : 89,483 92,036 171,541 78,922

Numb er of deaths of enterprises in Industry, construction and services except
insurance activities of holding companies
Table 3.7. Number of deaths of enterprises in t
Industry, construction and services except insurance activities of holding companies

TIME 2010 2011 2012 2013 2014
Romania : 110,789 50,764 184,421 :

TIME 2010 2011 2012 2013 2014
Romania : 689,449 742,83 9 756,20 6 766,16 6

31

Graph 3 .1. Overview over enterprises in Industry, construction and services except
insurance activities of holding companies

We see that the evolution in the industry sector as a whole is not continuous,
although there are a hi gh number of births (see table 3 .6.) the death number is on the
rise as well. In the year 2012 there was a drop in the number of deaths, this could be
explained that a new government was established, bringing a sta bility to the country,
and the fact that many reforms were made. In addition the whole EU had grown out
of the recession and exports started to expand.
The high death rate is a serious indicator that although the entrepreneurs
exist, they do no stand tal l during the 5 year start of a business.
Business churn: birth rate + death rate Industry, construction and services
except insurance activities of holding companies
Table 3.8. Business churn: birth rate + death rate
Industry, construction and services except insurance activities of holding companies

TIME 2010 2011 2012 2013 2014
Romania : 29.05 19.22 47.07 :

0100000200000300000400000500000600000700000800000900000
2010 2011 2012 2013 2014Active enterprises
Births
Deaths

32

Graph 3.2. Churn rate for Industry, construction and services except insurance activities of
holding companies
The churn rate shows us the same story and evolution of the overall industry,
with the addition that although in 2012 we have fewer deaths, we also had fewer
births, giving a smaller rate than for example 2013, when the deaths exceeded births.
3.10. Data evolution in the Information and communication sector
Popul ation of active enterprises in Information and communication
Table 3.9. Population of active enterprises in Information and communication

TIME 2010 2011 2012 2013 2014
Romania : 26,482 29,424 33,722 35,272
The IT& C branch is probably the best growing in the world, and Romania is
no exception. There is an increase in total numbers every year analyzed.
Numb er of births of enterprises in Information and communication
Table 3.10. Number of births of enterprises in Inf ormation and communication
TIME 2010 2011 2012 2013 2014
Romania : 4,502 5,859 9,327 4,716

Births are on the rise until 2013 and after that there is a drop in 2014.
Decisions took in the last part of 2014 or in the year 2014 have had this effect. 05101520253035404550
2010 2011 2012 2013 2014Churn rate

33
Numb er of deaths of enterprises in Information and communication
Table 3.11. Number of deaths of enterprises in Information and communication

TIME 2010 2011 2012 2013 2014
Romania : 7,535 1,746 5,923 :
Deaths are shown to drop significantly between the years 2011 and 2012 and
have again increased in 2013.

Graph 3 .3. Overview over enterprises in Information and communication
In the overview it is easy to see that there is a lot of inconsistency in this
sector. On one hand there is a negative difference between births and deaths and
after that there is a big positive difference in 2012 and a positive difference in the
year 2013. This inconsistency shows that decisions made in the economy for this
sector are not good and do not give entrepreneurs the oppo rtunities needed. Although
this, entrepreneurs are attracted to IT&C (see table 3.10 .).
Business churn: birth rate + death rate Information and communication
Table 3.12. Business churn: birth rate + death rate Information and communication

TIME 2010 2011 2012 2013 2014
Romania : 45.45 25.85 45.22 :
0500010000150002000025000300003500040000
2010 2011 2012 2013 2014Active enterprises
Births
Deaths

34

Graph 3 .4. Churn rate for Information and communication

The graph ( 3.4.) shows us a convex image – with two high points (in 2011
and 2013) and the down point in 2012. This is different from the average because
although the low point is also in 2012, the high point is almost the same in both 2011
and 2013. This shows that in 2 012 there are decisions that were good and helped
entrepreneurs.

05101520253035404550
2010 2011 2012 2013 2014Churn rate

35
4. Interview on Digital Marketing with IT SMEs

Considering the fact that the IT&C branch has been one of the best convergence
point for entrepreneurs it will be the focus of this paper.
I will choose four companies from the IT&C domain, two of them will be from
the hardware sector and two from the software one. They will be separated again by
their success. The criteria will be the percentage that the revenue has grown. The
chosen companies will be interviewed to understand better their result.
Table 4.1. Classification of chosen companies for interview
IT&C Industry
Hardware Software
Successful 1 2
Unsuccessful 1 2

4.1. Circumstances
During my research I have found very different evolutions of the sectors of
industry, because of this more research is needed. Having identified that the IT&C
sector was one of the most consistent industries in the researched timeline it was a
excellent ca ndidate to do a in depth research. I have chosen the interview as my basis
for further research, because it will show me the tendencies of the sector and will
able to make a survey in the future.
4.2. Objectives
The objectives for this research is to identify what opportunities and
obstacles the IT&C sector had to affect it in the way of churn rate evolution. To see
the differences between successful and unsuccessful companies.
4.3. Methodology
a. Interviewees were selected based on their type of business within the sector
(hardware or software) and based on them belonging to the SME type of company.
b. What assumptions are there (if any)? Company executives will be sincere.
c. Are there any limitations with this method? Questions not asked cannot be
answered. Answers must be analyzed, information may contain misinformation .

36
d. The main instrument is a open -ended interview with company executives.
e. Over which period of time was this data collected?
One week
Data :
Software companies: Idea Perpetua, Gentla b, Ca talyst Solutions, Methos
Hardware companies: Balkan Developers, ITXS.

4.4. Interview guide
The interview will consist of a number of questions, these can be modified
or excluded and new question can be added during the interview and by the way it
evolves.
The interview must be long enough to answer the background and get in
depth of the companies and the sector but it should not be so long that the
interviewees would get bored.
The guide is p resented in the following table:

Table 4.1. Interview guide
Subjects Questions Answers
Company evolution and
obstacles How do you consider
that the company evolved
in the last three years ?

Would you consider that
you had a lot of obstacles
?

Did you have
opportunities ? Could
you name some ?

Digital Marketing Would you say that
Digital Marketing was a
opportunity for your
company ?

37
Subjects Questions Answers
Did you use Digital
Marketing ?

What was the impact of
Digital Marketing over
the company ?

Environment and
future How do you consider
that the environment
affect your company ?

How do you think the
organization will evolve
in the future ?

4.5. Results
I started the interviews by getting in contact with companies to find someone
willing to respond to my questions. It was extremely hard to convince firms to help
me for this study, there was a reluctance to why am I asking them, to the type of
information I need and what I will do with it. Companies were afraid that because
of responding they will lose something.
During the research I asked different of my connections that are well networked
in the SME sector and one of them offered to make a interview, I accepted because
I wanted to cement the connection and after that an idea transpired to me, to use his
business – business consulting – as a comparison with a different industry, to see if
there are similarities.
The results show a central theme for either successful and unsuccessful
companies. Although the number of companies within the data is low, the results
corrobor ated with the data compiled and the churn rate calculated during the
scientific studies in previous semesters and in this paper will show a real result that
has a anchor in the industry.
During my discussions company executives they told me that the evolu tion of
their companies in the last three years were, in general, tough but in the end good.

38
For example one of the CEOs said that the evolution consisted of : “The company
evolved very much in the last years from the point of view clients port folio and typ es
of services offered.”
One CEO said that in 2016 the development was unsteady. He said :” in the first
half of 2016 things went well, that is after a good year in 2015, when we used
outsourcing to a high degree, but in the second half contracts fell and t hat was seen
in both revenue and in the capital for investments”. Others said “There was a
constant evolution of the company, minor ups and downs.” and “We started the
company in 2016. There was a evolution in the number of clients and their
dimensions.”
A important response was that “…We had new clients, but the older ones have
grown with us and developed a better and better relationship with us.”
The general idea seems to be that there is a evolution in the number of clients
and most companies have had a increase but nothing spectacular.
Obstacles were a discussed issue with all the companies and there was a recurrent
motive throughout the interviews . They addressed financial problems, access to it,
bureaucracy was also a issue and the lack of understandin g from investors.
Responses were in the form of :”…some of the most important obstacles that
stand in the way of developing a business in general, in Romania, are the relation
with public institutions that is too bureaucratic, limited access to finance for a start –
up, and poor infrastructure regarding facilities and instruments needed for
businesses. ”.
Another respondent said that cost incurred by legislative problems have been a
important obstacle:” Legislative, there are problems with PFAs, they were modified
and because of it, costs with staffing ”.
Many problems come from staffing. One problem was :”…c hanging team
members and whole teams is one of our most important issues.” And a different
company: ”Finding new people is hard” and when asked if they do find new
employees the response was “hard to no avail.”
The same company said that there is a ”stigmata on IT companies”, everyone
says that these type of companies “work and have high profits”.
The guiding thread shows that external problems are with the public sector but
not only the state, also with banks. One CEO brought to attention that banks:”… do

39
not analyze the business, as a whole, the company and the idea, they only look at the
numbers, not the domain, they do not make differences between them.”
Regarding the opportunities there were clear responses and all of the respondents
have acknowledged that one of the best opportunities is:” Access to the European
market.” . Exampl es from the respondents include:” …one of the most important
opportunities…is access to the EU.. by offering services managed in
Romania,…with reduced costs and high profit.” .
Other opportunities are :” the weak software or high prices of some competition
that allowed us to win some contracts. ”’ “Internet infrastructure, speed, is great for
companies.” . Another convenience is the reduce costs that companies have in
Romania.
“Weak software” created by competition represents a chance to get new clients
and to make them loyal by solving their problems.
To the question asked if Digital Marketing was a opportunity every company
said yes, but not all of them used it.
When asked if they have used Digital Marketing answers were :”Yes we use
frequently Online Marke ting instruments : web design, Search Engine Optimization,
Search Engine Marketing, Social Media Marketing.” ; “Very little. We improved our
website and made social media accounts. ”.
One statement caught my attention :”Digital Marketing changed the game, it is
almost a environment by itself.” After using social media to communicate general
ideas with our potential clients and remaking the site “ using SEO and SEM, …, the
number of clients rose very much, we continue to optimize the site and to bring new
relevant content.”
When asked about the impact on their company, answers were divided, some
consider ed a beneficial impact, others s aid the impact was reduced.
The director that considers that Digital Marketing has a beneficial impact :”The
impact of Online Marketing, Digital Marketing, on the economy is huge…most
business now use or should use DM instruments due to the fact that clients interact
more and more time with smart equipment or on social media platforms.” . Another
supporter of DM explained the imp act on his company:” The impact of DM on my
company is medium to high from the awareness perspective… we use Digital
Marketing with Public Relations and visibility”. This being said, the actual
conversion is debatable, because in the last half year busines s slowed down in that

40
company. There were less advocate opinions like:” it had a very little effect. Some
customer noticed our new website and liked it. ”
The idea that comes to be considering Digital Marketing is that it is needed,
everyone said that it is a opportunity, that it should be used and that they tried to use
it, to various degrees of effectiveness and professionalism. It seems that the impact
of Digital Marketing depends very much on the user and when used properly it can
propel a companies reve nue and clients.
The environment is considered to affect firms differently and each one of the
directors has had a different perspective on which type of environment affects each
company most. One of the CEO said that:” The competitive environment affects all
competitors.it establishes performance standards, prices, etc….The client is the one
who dictate,…, the approach of an industry…” ; another said that the “competition
on the market is beneficial” and that “marketing m ade by the whole sector had a
serious beneficial impact” .
One of the respondents considered that:” A good work environ ment always
improves efficiency” and that this is the most important aspect of the environment
for his company.
The young company admini strator considers that:” The business environment is
tough, full of rapid changes…the clients make a company and so we want to offer
them what is best.”
Organic developing was also very important, combined with the developing of
the team. In many instances the fact that the team is adaptable gave us the
competitive edge we needed.
It seems that most of the leaders think that the business environment affects their
companies prices and quality of services, but they also have a clear understanding
that the cli ent is ultimately the one who dictates and that need the most attention.
Only by understanding and offering solutions to client needs can a company develop
in this hard driven business environment.
When asked what they think about the future and how their respective companies
will evolve responses were generally good. “The organization will evolve towards a
direction in tune with technology changes and client preferences, by addressing new
markets and services that offer new opportunities for capitalization of resources…” .

41
“We will use the same products, but we will center on the foreign markets…we
will have a increase in employees and … we will collaborate with business
incubators”, this is a daunting preview of the future but it seems to be well thought.
Others will rely on their team:”… the organization is on a growing path – both
knowledge and team members. ”
One of the respondents said “we did not maintain the development we wanted.”
The view for the future seems to be a good one, with high hopes and organized
vision. Companies in the IT sector have roughly the same problems with the ones in
different sectors, the difference is that, as some of them said, they have a good
infrastructure for internet speed. They have possible candidates that are well tr ained,
and there is a current to put IT companies in high regard.
To see that the problems are mostly the same in other sectors, I have interviewed
a company from the service sector, to find out their problems .
When asked about how the company evolved in t he last three years the company
CEO responded: “a percent of 15 year by year with a constant profitability” but also
that in 2015 the founder wanted to move in the UK and manage the company
remotely.
Obstacles found included some of the general problems li ke: “The low limit of
VAT” , “Access that is to hard and inefficient of grant or local funds”.
Another obstacle considered important to the company was:” The political
climate affects very much the economic side, government changes and government
reactions, make people to not be open to buying.”
The executive of the company said that “There is not trust that decision in the
political sphere are correct , this is due to corruption and incompetence.”
Opportunities include:” The labor force has a lower price than compared to
foreign one” and the “low life cost” .
Asked about Digital Marketing as a opportunity the answer was a clear:” Yes, it
was a opportunity” with it being used as “the principal channel for promotion”.
More than half their client come f or Digital Marketing, he said, and the overall
lead generator for the company is Facebook. Digital marketing “brought people to
events and there they were conversed into clients”.
For his company Digital Marketing gave him an idea to pass to video learnin g,
with a high impact on his company.

42
When talking about how the environment affected the company, he responded:”
That if the decisions in the political medium towards the fiscal plan and investments
in the economic sector, will not give an advantage, emig ration is already evaluated.”
For the future the plan is towards growth:” To grow is a must, we w ill open new
lines of business…. and staff will be hired with a estimate of 20% a year.”
There are some similarities between the answers of this company and the IT
sector companies that responded. Main obstacles consist of public sector problems
and Digital Marketing is considered a opportunity.
4.6. Conclusions of interview research
After analyzing the answers given by the respondents during the interview I can
take some conclusions to what the pulse of the industry is and what has helped this
branch of industry to maintain a relatively steady course in the last years, from the
churn rate perspective.
The first problem that I think is well grounded in the economic sector in general
and especially in the SME one is the lack of trust. Companies do no trust their
environment, their government and think as anyone like being a potential threat. I
found this by trying to get interviews with leaders of SMEs and by getting
stonewalled every time, they were afraid that I would uncover secrets of their
respective companies or that it would take their precious time.
During my discussions company executives they told me that the evolution of
their companies in the last three ye ars were, in general, tough but in the end good.
This seems to be a theme crossing over all the companies, with minor differences.
Obstacles presented by the respondents show a main bulk coming from the
public sector, every company said that bureaucracy an d decisions taken by the
government suffocate them. Decision vary from legislative one to financial and
fiscal ones.
Other obstacles reminded by the executives are some problems with the human
resource and one that attracted my attention was the lack of un derstanding that banks
have towards SMEs and especially to ones in the IT industry. This seems one of the
most interesting points that have emerged in the interviews.
I have seen that successful companies had a better, more detailed explanation of
their ob stacles, the less experienced ones did not seem to have a clear vision on what
their obstacles are.

43
Opportunities presented showed that the fact that Romania is in the EU is
important and that the low costs are a industry strong point. Surprisingly none of the
interviewed companies said when firstly asked about opportunities that Digital
Marketing was one, although when specifically asked they said that indeed it is.
Digital marketing seems to be an opportunity for most but for it to bear resu lts it
must be used properly, that is what emerges from the study. The successful
companies saw the opportunity and implemented it. As said some of the companies
base more than half their clients to digital marketing. These are the successful ones,
the others struggle a nd cannot find a constant growth and profit.

44
Conclusions

The objective of my research during the master program and implicitly of
my dissertation is to understand why small and medium size enterprises behave the
way they do, in the sense of their evolution.
I have found that the SMEs in the information and technology sector have
had a more moderate evolution in terms of consistency in their numbers. To find this
I have made a research in the data of business demography. From this I have realized
a churn rate to develop a easier way to the see the evolution. I have not found this
type of rate being used in the industry to this time.
Using data found, refined and transformed I realized that Romania has a
potential for developing long lasting companies of the SME type. Analyzing each
sector, the IT&C one rose to prominence beca use of the consistency and chose to
further understand why this type of companies do better and what hinders their
development.
To find this information I chose to use a semi -structured interview with
company officials so that they could explain to me wha t opportunities they had and
what obstacles.
As digital marketing is so important today and widely discussed I wanted to
find out if the technology and medium have presented themselves as opportunities
or obstacles and if companies are using them to thei r advantage.
To understand the constituent parts of SME evolution and the history and
development of digital marketing instruments in the first two chapters I have studied
and resumed a part of theory in regard to marketing and interview methodology.
In the research of SME evolution, f irstly I must state that in the past 9 years
the world has changed (both economically and socially) and this brings uncertainty,
as any change does. The EU tries to find its way and identity in the world, it tries to
find a sense of community between its states and that, alt hough harsh, translates into
costs.
After joining the EU Romania has developed very much in terms of
educ ation, ethics and risk taking in businesses, that means also entrepreneurship.
Maturity in regar d to entrepreneurship is starting to grow roots, people have
understood that a corner shop is not entrepreneurship.

45
Birth and death rates are clearly related to stability – when stable
gover nments, or state congruence is shown, people are more likely to t ake risks and
start a company of their own. This is clear when you look at Romanias development,
in stable condition, it grows very fast. The lack of education in this sector, of
entrepreneurship also shows that it has a problem, if change happens, many
entrepreneurs, companies, do not tackle it fast, and the companies die.
Education in the field of entrepreneurship is increasing, the churn rate shows
us, that although problems persist, small companies have managed to survive and
many entrepreneurs still o pen new businesses (more and more, there is a clear
growth).
In Romania the problem of change is very important, much more than in
other countries, changes happen over night, many of them are not thought through.
Taking the increase in VAT and taxation of firm that happened in 2009 as example
we can see very clearly that the impact was devastating (much more than in the rest
of the EU in the same period), it took more than two years to get better figures.
If we look at the churn rate – we can see that it s tates that entrepreneurship is on the
rise in both Europe and Romania, especially here. It shows that it is in the better half
and that it is on a increase. The response of the churn rate is both fast and real.
The responses from the interview more or les s showed the same problems,
changes in legislative issues, problems with fiscal entities (PFAs) and bureaucracy.
Opportunities showed that being a member of the EU is one of the most important
and the next would be digital marketing for the ones that are successful.
Digital marketing has emerged and is quickly becoming a must in every
industry. IT companies are prone to adopt new ideas and technologies faster and
after the research I think that is the reason why IT firms do better. Some of the
responses s howed the fact many clients come through this type of marketing.
Companies from the IT sector that understood the importance of using this
new instruments and medium offered by digital marketing have fared better and as
an industry I think that the link age to new technologies offered the IT&C sector the
edge it needed to bounce back from the economic crisis and set it aside as one of the
best performing in the world.
Recomandations

46

47
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48
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EN.PDF/99b25e07 -1892 -45d5 -9ae1 -cd47d0a37ca6?version=1.0
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code=tin00170&language=en
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30. http://www2.pathfinder.org/site/DocServer/m_e_tool_series_indepth_interview
s.pdf

49
Annexes

Revenue and profit evolutions of interviewed companies
Table A.1. Turnover and profit for ITXS company
Year 2013 2014 2015
Revenue – 76450 154706
Profit – 73611 145708
Graph A.1.1. Turnover for ITXS
Graph A.1.2. Profit for ITXS 020000400006000080000100000120000140000160000180000
An 2014 An 2015 An 2016Turnover
Turnover
020000400006000080000100000120000140000160000
An 2014 An 2015 An 2016Profit
Profit

50
Table A.2. Revenue and profit for GENTLAB company
Year 2013 2014 2015
Turnover 1942415 2868243 3386683
Profit 410213 694566 699791

Graph A.1.3. Turnover for GENTLAB

Graph A.1.4. Profit for GENTLAB 05000001000000150000020000002500000300000035000004000000
An 2013 An 2014 An 2015 An 2016Profit
Profit05000001000000150000020000002500000300000035000004000000
An 2013 An 2014 An 2015 An 2016Turnover
Turnover

51
Table A.3. Turnover and profit for IDEA PERPETUA company
Year 2013 2014 2015
Turnover – 32455 366933
Profit – 5134 198528

Graph A.1.5. Turnover for IDEA PERPETUA company

Graph A.1.6. Profit for IDEA PERPETUA company
050000100000150000200000250000300000350000400000
An 2014 An 2015 An 2016Turnover
Turnover
020000400006000080000100000120000140000160000
An 2014 An 2015 An 2016Profit
Profit

52
Interview guides – non -disclosed names of companies and respondents
Table A.4. Interview guide 1
Subjects Questions Answers
Company evolution and
obstacles How do you consider that the
company evolved in the last
three years ?

Would you consider that you had
a lot of obstacles ?

Did you have opportunities ?
Could you name some ?
In anul 2015 a fost foarte bine – am
folosit indeosebi outsourcing. In
anul 2016 la inceput jumatate de
an a mers bine,dar in cea de a
doua parte au scazut contractele si
s-a vazut rapid.
Am investit foarte mult in produse
noi si am folosit foarte mult din
capital.
O problema pe care am
intampinat -o a fost lipsa de capital,
de lichiditati. Am avut probleme
cu bancile in sensul ca bancile nu
stau sa inteleaga businessul, se uita
doar la cifre, nu se uita la
domeniu, nu se face o diferentiere
in functie de ti pul de business.
Cifrele nu spun toata povestea,
doar cat iese pe hartie ii
intereseaza.
Din punct de vedere legislativ am
avut obstacole importante. De
exemplu a fost modificata legea
persoanelor fizice autorizate –
PFA – iar acest lucru ne -a incurcat
mult, deoarece ne -au crescut
costurile cu resursa umana. Cu
resursa umana am avut si avem
probleme de recrutare, nu gasim
oameni care sa aiba aceeasi
dorinta de munca de care noi avem
nevoie dar si cunostintele si
experienta necesara. Solutiile
noastre sunt g lobale pentru o firma
si avem nevoie si de viziune.
Exista un stigmat pe firmele de it,
e ca o bula de imobiliare, scorurile
sunt mult crescute. Corporatiile au
crescut salariile, au luat oamenii
fara sa fie profitabil per om, doar
per departament.
Oportun itatile cele mai mari le -am
avut si le avem in exteriorul tarii,
unde putem vinde produse mai
scumpe.
Gradinitele au reprezentat o
oportunitate pentru firma,
deoarece au avut nevoie de
produse de educatie „tech
education” sau NetTech si noi am
putut sa venim cu aceste produse
specializate pentru ele.
Digital Marketing Would you say that Digital
Marketing was a opportunity for
your company ?

Did you use Digital Marketing ?

What was the impact of Digital
Marketing over the company ?
A fost si este dar din pacate nu a
existat o persoana potrivita pe
digital marketing, dar a ajutat.
Inca folosim Digital Marketing dar
nu la un nivel profesionistm
deoarece cum am zis nu am avut
persoana potrivita si inca nu am
reusit sa o gasim.

53
Subjects Questions Answers
Am incercat si social media dar nu
avem pe cineva care sa fie activ
macar de cateva ori pe saptamana.
Efortul de a folosi digital
marketing se rezuma momentan la
a face site -ul sa fie responsive.
Pe viitor vrem sa il mai dezvoltam
din punct de vedere al SEO si
SEM.
Impact a fost medi u spre mare din
perspectiva awareness, cu ajutorul
instrumentelor Digital Marketing
am reusit sa ajungem la mai multi
clienti. Se considra a fi si PR si
marketing si vizibilate, este un
complex pentru noi. Noi lucram cu
o firma de sales cu public speaking
– si mareste awareness. In plus noi
aducem solutii de digital
marketing pentru clientii nostri si
ne ajuta in acelasi timp. De
exemplu am realizat o aplicatie de
votare – pentru ei , si a ajutat
compania prin branduirea acestuia.
Environment and future How do you consider that the
environment affect your
company ?

How do you think the
organization will evolve in the
future ?
Exista multe trenduri de produse
in piata, multe pe care am reusit sa
le intuim si sa profitam de ele, in
general consider ca piata a afectat
pozitiv firma. Avem multi clienti
incantati care ne ajuta in piata.
Concurenta este puternica, asta ne
forteaza sa fim atenti la produsele
noastre si sa fim in cautarea
inovarii si a imbunatatii calitatii si
relatiei cu clientii.Marketingul
realizat de competitie a ajutat
piata, aducand noi clienti,
dezvoltand o mentalitate de
consumator pentru produse
digitale complete.
Axare pe piata exterioara,
imbunatatirea calitatii produselor
existente, preconizam o crestere
substantiala. Eu cred ca vom ave a
o crestere medie din punct de
vedere al angajatilor si a cifrei de
afaceri, deja cautam sa colaboram
cu acceleratoare de business, avem
o nevoie rapida.

54
Table A.5. Interview guide 2
Subjects Questions Answers
Company evolution and
obstacles How do you consider that the
company evolved in the last three
years ?

Would you consider that you had
a lot of obstacles ?

Did you have opportunities ?
Could you name some ?
Compania Idea Perpetua a
evoluat foarte mult în ultimii ani
din punct de veder e al
portofoliului de clienți și tipului
de servicii oferite. Astfel, în
ultimii 3 ani, am reușit să
colaborăm cu organizații
importante din România, să
creștem notorietatea de brand a
companiei, să dezvoltăm echipa
și să diversificăm serviciile
oferite cl ienților noștri.
Au fost numeroase obstacole,
bine-înțeles. Mediul de afaceri
este presărat cu numeroase
obstacole de ordin intern sau
extern organizației. Printre cele
mai importante obstacole ce stau
în calea dezvoltării unei afaceri în
general, în Român ia, se numără
relația excesiv de birocratică cu
instituțiile publice, accesul
restrâns la finanțare al unui start –
up, infrastructura deficitară în
ceea ce privește facilitățile sau
instrumentele necesare unei
afaceri.
Cele mai importante oportunități
de afaceri se leagă de accesul pe
piața europeană prin oferirea unor
servicii furnizate și gestionate în
România, implicând costuri
reduse cu marje de profit ridicate.
Digital Marketing Would you say that Digital
Marketing was a opportunity for
your company ?

Did you use Digital Marketing ?

What was the impact of Digital
Marketing over the company ?
Marketing -ul Online este un
instrument pe care noi îl utilizăm
în cadrul organizației noastre, cât
și prin prisma serviciilor pe care
le furnizăm clienților, p rintre
serviciile oferite de Idea Perpetua
se numără: webdesign, SEO,
SEM, SMM etc.
Da, utilizăm frecvent
instrumentele Marketing -ului
Online: webdesign, Search
Engine Optimization, Seach
Engine Marketing, Social Media
Marketing etc.
Impactul Marketing -ului Online
asupra economiei este unul uriaș,
prin faptul că majoritatea
afacerilor la momentul curent
folosesc sau ar trebui să
folosească instrumentele
Marketing -ului Online, ca urmare
a faptului că mare parte din
timpul clienților se petrece
interacționând cu echipamente de
tip smart sau platforme sociale
online.

55
Subjects Questions Answers
Environment and future How do you consider that the
environment affect your
company ?

How do you think the
organization will evolve in the
future ?
Mediul concurențial afectează toți
concurenții de pe piață, stabilind
standardele de performanță,
tarifele etc. De asemenea, clientul
este cel care dictează, de multe
ori, abordarea unei industrii,
indiferent de domeniu.
Organizația va evolua într -o
direcție în ton cu schimbările
tehnologice și de pre ferințe ale
clienților, abordând piețe noi și
servicii care oferă oportunități de
valorificare a resurselor umane și
know -how-ului existent, dar și de
diversificare și identificare de
avantaje competitive noi.
Table A.6. Interview guide 3
Subjects Questio ns Answers
Company evolution and
obstacles How do you consider that the
company evolved in the last three
years ?

Would you consider that you had
a lot of obstacles ?

Did you have opportunities ?
Could you name some ?
The company was on an almost
constant level in the last three
years, with minor ups and downs.
I wouldn't say a lot but we had a
few. Competition, financial
issues on some of our clients and
team member changes are some
obstacles that we faced.
A few new projects appeared that
helped us evolving. We
succeeded improving our
products by developing software
for these clients.

Other opportunity is the weak
software or high prices of some
competition that allowed us to
win some contracts.
Digital Marketing Would you say that Digital
Marketing was a opportunity for
your company ?

Did you use Digital Marketing ?

What was the impact of Digital
Marketing over the company ?
Yes, we used some of the
instruments. We did not put an
accent on it.
Very little. We i mproved our
website and made social media
accounts.
Considering it was very little.. it
had a very little effect. Some
customer noticed our new
website and liked it.
Environment and future How do you consider that the
environment affect your company
?
But the medium ? The business
environment ?
How do you think the
organization will evolve in the
future ?
A good work environment always
improves efficiency.
It is a tough business, we always
have to be on the lookout for new
competitors and also come with
new idea for our clients. It is very
dynamic, we have kept up until
now due to the fact that we are a
small company and can focus on
the small number of clients we
have, but it seems that we should
change our way of attracting new
clients.
I think the organization is on a
growing path – both knowledge
and team members.

56
Table A.7. Interview guide 4
Subjects Questions Answers
Company evolution and
obstacles How do you consider that the
company evolved in the last three
years ?

Would you consider that you had
a lot of obstacles ?

Did you have opportunities ?
Could you name some ?
Compania Balkan Developers
este aparuta de curand in piata
din Romania, am creat -o ca
tinteri antreprenori. Am infiintat –
o in 2016. De la infiintare
compania a evoluat rapid din
punct de vedere al numarului de
clienti si al dimensiunilor
acestora.
Obstacolele au fost multe la
numar, normal pentru o firma de
dimensiuni mici. Ele au constant
in probleme de oganizare interna
a organizatiei, lipsa de experi enta
dar au existat si numeroase
obstacole externe. Cele mai multe
sunt normale in romania, exemple
sunt birocratia excesiva cu tot
ceea ce inseamna stat, finantarea
este deficitara pentru un start -up,
infrastructura slaba.
Exista destule oportunitati cu
toate acestea. Infrastructura din
pucnt de vcedere al internetului
este excelenta. Acces la piata
europeana, costuri reduse cu RU.

Digital Marketing Would you say that Digital
Marketing was a opportunity for
your company ?

Did you use Digital Marketing ?

What was the impact of Digital
Marketing over the company ?
Marketingul online este una
dintre solutiile pe care le oferim
clientilor nostri si care reprezinta
o oportunitate pentru toate
companiile in acest moment.
Utilizam Digital Marketing,
printre i nstrumentele folosite sunt
SEO si SEM, suntem prezenti si
pe retele sociale dar inca intr -un
mod mai putin puternic. In plus
site-ul este inca in lucru.
Inca nu am putut sa contabilizam
impactul DM, dar de la aparitia
pe retelele de socializare am
primit n oi cereri de clienti.
Environment and future How do you consider that the
environment affect your
company ?

How do you think the
organization will evolve in the
future ?
Mediul de afaceri este dur, plin
de schimbari si el impune pretul
si calitatea serviciilor. Clientii
sunt cei care plasmuiesc o
companie, iar noi vrem sa oferim
clientilor ceea ce este mai bun.
Speram ca in mod pozitiv, in
acest moment este inca greu si nu
am reusit sa mentinem
dezvoltarea pe care ne -o doream.

57
Table A.8. Intervi ew guide 5
Subjects Questions Answers
Company evolution and
obstacles How do you consider that the
company evolved in the last three
years ?

Would you consider that you had
a lot of obstacles ?

Did you have opportunities ?
Could you name some ?

Did you have to hire more people
in the last three years? Firma a evoluat in ultimii patru
ani intr -un mod bun, organic, cu
o dezvoltare solida. Am avut noi
clienti, cei vechi au crescut
impreuna cu noi si am dezvoltat o
relatie din ce in ce mai buna.
Am avut parte de obstacole,
uneori clientii nu platesc la timp,
de exemplu. In domeniul nostru
este nevoie de multa intretinere a
utilajelor. Schimbarile din
domeniul legislativ ne -au incurcat
intrutcatva deoarece a trebuit sa
redactam contracte noi si sa
modifica m contractele cu
angajatii.
Am avut si oportunitati, au existat
momente de criza ale unor clienti,
in care furnizorii lor de servicii
nu i-au ajutat si noi am intervenit,
castigandu -le loialitatea. O alta
oportunitate a fost faptul ca
firmele competitoare din zona au
inchis, noi ramanand singurii din
zona.
Aparitia retelelor sociale ne -a
ajutat foarte multe, am putut
discuta foarte usor cu clientii si sa
primim comenzi.
Am angajat noi oameni odata cu
dezvoltarea afacerii. Au existat
anumite momente cand nu s-au
integrat unii angajati dar cu
discutii si motivare am creat o
echipa coeziva si puternica.
Digital Marketing Would you say that Digital
Marketing was a opportunity for
your company ?

Did you use Digital Marketing ?

What was the impact of Digital
Marketing over the company ?
Clar a fost o oportunitate, Digital
Marketing -ul a schimbat jocul, a
devenit aproape un mediu in sine.
Am utilizat Digital Marketing,
mai ales partea de SEO si SEM,
dupa refacerea site -ului acum doi
ani numarul de clienti a cres cut
foarte mult, din acest motiv
continuam sa optimizam site -ul si
sa aducem imbunatatiri.
Urmatorul pas pe care il dorim,
dar inca nu am gasit persoana
potrivita, este sa ne dezvoltam pe
social media.
Firma s -a dezvoltat atat de bine in
ultimii ani si dat orita Digital
Marketing si cred ca am avut o
crestere organica. Impactul a fost
pozitiv.
Environment and future How do you consider that the
environment affect your company
?
Mediul de afaceri este unul dur,
dar am rezistat bine, fiind singurii
din zona noastra. Dezvoltandu -ne
organic ne -am obisnuit cu mediul
si am reusit sa fim flexibili odata
cu el.

58
Subjects Questions Answers
How do you think the
organization will evolve in the
future ?
Viitorul pare sa fie unul bun,
avem cresteri de vanzari, echipa e
unita si lucreaza bin e impreuna.
Dezvoltarea noilor solutii tehnice
ne-au ajutat si ne dorim sa
implementam atat noi solutii
pentru gasirea clientilor cat si
pentru usurarea muncii nostre.

Table A.9. Interview guide 6
Subjects Questions Answers
Company evolution and
obstacles How do you consider that the
company evolved in the last three
years ?
Would you consider that you had
a lot of obstacles ?
Did you have opportunities ?
Could you name some ?
Did you have to hire more people
in the last three years? A slight inc rease, in line with the
growth of the Romanian market
and economy.
Low customer desire to try new
things / new technologies
Companies' mistrust of investing
in things that are not already tested
and which do not produce
immediately quantifiable results
We are constantly engaged in new
people. Last month I had
interviews for two interns for
Content Manager posts. In
addition, Internet development
has forced us to look for talented
new people.
Digital Marketing Would you say that Digital
Marketing was a opportunity for
your company ?
Did you use Digital Marketing ?
What was the impact of Digital
Marketing over the company ?
Yes, it was an opportunity because
it allowed us to test some new
concepts or project concepts more
quickly to get faster feedback on
their viability.
Ex: Using the advanced targeting
options used by online marketing
channels, we were able to reach all
potential users of a product in a
very short time and ask for
feedback.
Yes, we currently use multiple
digital marketing channels: ema il
marketing, google ads, facebook
ads, SEO, content marketing … etc
It has helped us to have a faster
growth of projects for a niche
audience.
It has made it possible to save time
by developing personalized
applications for certain processes
in the comp any;

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Environment and future How do you consider that the
environment affect your company
?
How do you think the
organization will evolve in the
future ?
Towards computerized
digitization of both marketing and
the various processes in the
company that can be fully
automated and shifted. (From
billing to more complex
processes).
The digitization of both marketing
and business processes in the
company is no longer a
destination but a "mainstream"
stream. If a company does not
assimilate "digitization" to bet ter
respond to consumer needs then it
will not survive on the market.