SALES STRATEGY FOR CORA ROMANIA Coordonator științific Absolvent: Lect. Univ. Dr. Corina Monica PELĂU Mihai ILINCUȚA București 2012 SUMMARY Introdu… [622407]
ACADEMIA DE STUDII ECONOMICE
FACULTATEA DE ADMINISTRAREA AFACERILOR , CU PREDARE
IN LIMBI STRĂINE
LUCRARE DE DISERTAȚIE
SALES STRATEGY FOR CORA ROMANIA
Coordonator științific Absolvent: [anonimizat]. Univ. Dr. Corina Monica PELĂU Mihai ILINCUȚA
București
2012
SUMMARY
Introdu ction ……………………………………………………………. ………………………………………………… 1
Chapter I . Theoretical aspects regarding the sales strategy of a company
1.1. Objectives of the sales strategy of a company……………………………………………………. … 2
1.2. Indicators for measuring the performance of a company ………………………………….. …….
1.3. Importance, role and integration of sales strategy in the company’s strategy…… ……
1.4. Components of sales strategy …………………………………………………………..
1.5. Customer analysis as b asis of a company’s sales strategy ……………………………..
6
8
12
16
Chapter II . The sales strategy of Cora Romania
2.1. Analysis and development of Cora Romania ……………………………………………………. …..
2.2. Analysis of the environment of the company…………………………………………..
2.3. Analysis of Cora’s customer profile……………………………………………………
2.4. Analysis of the “shopping cart”………………………………………………………..
2.5. Marketing strategies and instruments for the sales strategy of Cora Romania…………
Conclusions ……………………………………………………… ……………………………
Annexes
References 22
26
34
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47
54
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Introduction
The Romanian economy is emerging from a sharp depression. 2011 shaped a positive
outlook for Romania as the GDP real growth showed 1,6% in the first half of the year.
Growth was driven mainly by net exports, while domestic demand is still de pressed due to the
lasting effects of the wage cuts and VAT growth as of mid 2010. The year started also under
the influence of strong prices increase – the inflation reached 7,9% level, the most notable
being for food products. BNR estimates that Romania will end the year with a 5,1% inflation
level (level increased by BNR during the year under the market contraction signals), while
target for 2011 is 3,0%. After 2 years of significant and continuous decrease in consumers'
confidence, Romanians recorded th eir first rebound explained by a slightly better view on
their personal income and shaped also by a better perception on their readiness for buying
things. Both better perceptions are due to improved income levels – average salary increase
was in November higher with 8% vs. last year, income growth rate increased 5 times at the
end of 2011 vs 2010 (from 1.3% to 8.7%), while inflation significantly decreased (from
7.96% in December 2010 to 3.14% in December 2011). At the same time, the end of the year
was p ositively influencing consume rs willingness to spend more, 'moving' the Consumer
Confidence Index back to a little higher position than in Q4 2010 (CCI of 54). However, the
overall Romanian consumers' confidence remains conservative, lower than European an d
global average, as only one quarter of the consumers have positive perceptions on their
financial state, in an environment of increasing prices and political confrontations. In 2011 the
perception about the increase of food prices is even stronger than i n 2010. More than 4 in 5
shoppers consider that food prices are increasing in Romania . Smaller traditional trade
formats continue to struggle through 2011, being more and more affected by the ascension of
the modern trade sector. The modern trade sector co ntinued its powerful growth both in terms
of shopper engagement and revenue but also when it came to network development, as more
than 100 new stores opened their doors during the past year. While in 2010 the growth engine
was represented by supermarkets, discounters are making a powerful comeback taking the
lead with more than 60 new openings in 2011.
Keeping in mind all the data of the economy and the market, I’m going to present in
this paper how a well established sales strategy can help growth of a re tail company.
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I. THEORETICAL ASPECTS REGARDING THE SALES
STRATEGY OF A COMPANY
1.1. Objectives of the sales strategy of a company
Sales policy is the main engine of the economic policy, as the incomes obtained are
the factor on which the other economic obj ectives of the company proposed depend.
The very reason of establishing a company, of its existence and financing as an
organization, the purpose of its confirmation, are represented by the result that it wants, must
and tries to obtain at the highest le vel1.
Performance entails however the technical level (productivity of equipment and
people) , the economic level (low cost and best quality ) and the social level (both by meeting
the consumers’ needs and having satisfactory salaries and favorable climate) . Under these
circumstances, the company must meet, at a superior level, the requests regard ing the
technical side, competi vity and legitimacy, as well as to obtain efficiency, efficacity and
effectiveness (as a ratio between the level of satisfaction obta ined and the result reported).
In the same context, a company’s objectives may and must be subscribed to the main
levels of achievement in time and space, namely:
meeting the requests as they manifest , according to the signal of the downstream
market (as you sell what you have produced, but you will continue to produce what is
being requested and, above all, what has been sold );
reducing the costs (and increasing profits ), but not by diminishing quality (ensuring
there is a major reserve source for develo pment );
increasing production flexibility (by standardi zing the landmarks and the
operations ), in order to quickly adapt to circumstances in the environment ;
increasing reliability and production quality , that is : production of goods and
services that are superior to those on the market, according to the market’s opinion ;
reducing delivery time , and thus diminishing stocks ;
ensuring the agreement between the company’s goals and the personnel’s
aspirations.
The company’s final goals, nam ely its fundamental objectives , remain however: the
profit, growth or development, social security and responsibilities, and all these are
conditioned by quality and structure of the internal climate, as well as by the quality and the
size of the relationships with the enviro nment.
1 Ion Ionescu, Economia întreprinderii de turism și comerț (manual de studiu individual) , Editura Economică,
București, 2004, pag. 144 -145
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Economic efficiency2 must be one of the basic components of the entire economic
activity, as the resources’ volume has a limited character and only by their good use one may
provide economic growth and implicitly an increase in the population’s liv ing standard (social
efficiency) .
The concept of efficiency is ensured on the economic theory and practice by various
forms of manifestation of the results obtained by the economic agents, such as: profitability,
productivity of production factors, capita l efficacity , capital savings, etc.
The components of a trade company’s efficiency – economic efficieny and social
efficiency – cannot be seen separately, as they both represent a whole with respect to the
global di agnose on a trade company’s activity.
The exogenous and endogenous factors which influence the size of incomes and a
company’s performance are, therefore, the following:
volume of sales determined b y the company’s policy regarding the supply of raw
materials, materials, goods, the intensity of competition, the life phase of a product,
and, extremely tightly connected with it, the size of requests on the market;
price of products whose evolution depends on the trade margin used, the difference
between the sales price and the production price, the costs for supplies and the
inflation effects;
the amount of expenses made by the company.
The objectives of the selling force are various:
Identifying potential markets. Members of the selling force come into contact not only with
the respective cons umers of the company’s products, but also with the potential ones (often
named prospects), carrying out an information activity and aiming to attract these customers
towards the products that they are selling (prospecting) ;
The selling itself. By definitio n, the main objective of the selling force is to sell the
company’s products;
Defining the clients’ profile and locating them geographically. As a consequence of selling
and prospecting, the selling force is capable to deeply know the needs, the requests a nd the
expectations of various categories of consumers, lining and discriminating all these according
to several criteria: social and demographic criteria, geographical criteria, behavior criteria,
psychological criteria, lifestyle, etc.
Collection of info rmation on customers and competitors. The direct contact with
customers and prospects provide to the selling force representatives significant marketing
2 Manoela Popescu, Viorica Ionașcu, Bazele Comerțului, Editura Oscar Print, București, 2004, pag. 245 -253
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information which may be capitalized by the production company in order to improve the
marketing activi ty;
Negotiating and concluding contracts . The selling force has a mandate from the
manufacturer to negotiate and conclude/sign selling contracts for certain products, within the
limits of certain pre -established conditions. This fact supposes the developm ent of some
negotiating skills, as well as the good knowledge of the main judicial/legal aspects related to
concluding contracts;
Carrying out merchandising and advertising actions at the selling spot. In their relations
with the suppliers, the selling for ces of the manufacturing company may also carry put
merchandising and/or advertising services at the selling spot, they may carry out studies or
use specific materials, in the common interest of both the manufacturer and the supplier.
Providing technical a nd commercial consultancy to industrial and intermediate users.
When selling certain complex products, as representatives of the manufacturers, the members
of the selling forces also know in depth the characteristics of the product and they are able to
provide pertinent information to the buyers.
Providing marketing services regarding the use of the products. There are many cases
when the selling of certain products is also completed by providing certain services (such as
free repairs during the guarantee p eriod, for example), which become the task of the
specialized members within the selling forces.
The management of the selling forces has in mind the planning, the implementing and the
control of the activities carried out by the selling force, namely orga nizing, recruiting,
training, motivating, monitoring and evaluating the performances of the selling forces
representatives within the company. The logical seq uence of all these activities is represented
in the figure below:
Figure 1. 1 The main aspects of managing the selling forces
Establishing objectives
of selling forces Organi zing the selling
forces Recruiting and employing
selling forces
Training selling forces
representatives Control of activities
carried out by selling
forces Evaluation of selling forces’
results
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Planning of sales3 uses the data resulted from the researc h of the potential sales and
from the control over current sales and includes the following steps:
Establishing the objectives regarding the tot al sales – yearly or monthly ;
Establishing the level of the sales costs , drafting the expenses budget and establishing the
ratio which must be accomplished be tween the sales expenses and the sales amount. One
thing should be pointed out: sales costs do not include only the costs for the labour force
employed in the sales department, but also the price discount costs, the price for accounting
the clients and for solving the complaints;
Evaluation of current sales in terms of regions and areas, in order to es tablish those sales
that can be achieved in the future, taking into account the already existing degree of training
and motivation;
The analysis of sales in each region in order to decide whether the increase of sales budget
or the enhancement of the effor ts in those regions may lead to the improvement of the already
obtained results;
The analysis of the products’ profitability so as the effort can be oriented towards the
selling of the most profitable products;
The calculation of the sales’ total costs and then comparing them to the estimated ones; in
case it is necessary, the number of personnel involved in selling can be changed, until the
sales costs reach the planned level;
Distributing the sales personnel on each area and making sure, through the sa les
management, that each sales representative uses his/her time to its full and that important
customers are treated as they should ;
Establishing the sales levels that must be achieved in each area, individually; establishing
the number of new customers t hat must be attracted and the sales levels that must be achieved
towards the new customers;
Establishing the quality standards for: the number of phone calls that must be made by a
sales representative per day, per week or per month; the ratio in which the phone calls end
with an order; the average number of sales per each phone call made;
Changing the standards according to the classification of customers from the territory
covered by each sales representatives, into: major, medium and small customers ;
Establishing the quality standards with respect to: the contents of the conversations – to
what extent the sales representative is aware of the qualities of the product being sold and of
the customer’s needs; the efficiency of the conversation – whether the m essage is clearly and
3 http://www.tititudorancea.com/z/marketing_planificarea_vânzărilor.html
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persuasively conveyed; the interpersonal aspect of the conversations – whether the sales
representative establishes and maintains a good relationship with his customers.
Drafting some training programs for the sales department leaders hip and for the commercial
representatives in order to improve their performance;
Drafting some ways to co -interest and to channel the sales representatives’ efforts towards
the right direction;
Drafting the communication modalities that must be used with sales personnel , in order
to make sure that every one knows the objectives and the standards that they must achieve and
how they should do that.
1.2. Indicators for measuring the performance of a company
The expenses express the consumption of means of product ion, the labor and capital
force, made in order to obtain goo ds, to deliver and to sell the merchandises, with the purpose
of meeting the population’s needs. The expenses, according to their nature, may be:
exploitation expenses (expenses made for raw mate rials and merchandise, expenses for taxes,
expenses for the personnel ), financial expenses (expenses related to interests, to discounts
granted, to invest ment securities ) and exceptional expenses (indemnities, fines, penalties,
donations, grants ).
The prof it is a fundamental indicator, having a heavily specific character an d is
calculated by the differ ence between incomes and expenses.
According to the grouping of expenses and incomes, the profit is: exploitation profit,
financial profit and exceptional p rofit.
The productivity is the essential side of the economic activity. The commercial
activity’s productivity is expressed through the indicators of profit and the productivity rate.
The productivity rate is the synthetic indicator of efficiency and may b e determined by
various methods of calculation.
Any analysis of a company’s economic situation must point out is strong and weak
points, in order to adopt the best measures to stimulate the strong points and consequently to
remove or reduce the weak points . At the same time, from the commercial perspective, it must
point out the degree in which the company has a portofolio of customers, if there is a capacity
for a fast selling of products, is there is a dynamic character of the activity, and so on. From
the financial perspective, the analysis must establish if the company is profitable or if some
loans are necessary and how these loans may be obtained. The analysis from the perspective
of the human resources is just as important as all the other forms of an alysis, for the future of
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the company, as it reveals the qualifications of the labor force, its motivation and other
aspects which are related to the human resources working within the company.
The social efficiency of the commercial units may be estimated by indicators related
to the size of the material and human resources which are used in trade, in relationship with
the number of customers being served, the commercial services provided within the units, the
degree of d iversity of the products, the qua lity of the Public Relations and others.
The effectiveness expresses the degree of achievement of the objectives proposed,
more precisely the level of performanc e and the quality of the company ’s proposed activities.
The effectiveness may be immediate, as w ell as long -termed an d is determined by reporting
the performa nces obtained (the results) to the previously established objectives.
The immediate effectiveness is followed by certain companies which have a more
pragmatic attitude towards their activity and it aims mainly at the company’s economic
effectiveness. By contrast, the long term effectiveness entails both economic effectiveness, on
short, medium and long term, as well as the social effectiveness. The long term effectiveness
expresses a complex deve lopment of the company’s activity, with effects on the entire society
where such companies operate.
Knowing the performance of a company and reporting it to the results previously
established, does not implicitly suppose the existence of information on t he causes which led
to the achievements or to the failures of the company. In order to find out pertinent
information on how the respective results have been achieved, any company should analyze
its economic efficiency, that is the efforts made and the res ults obtained, as a consequence of
those efforts. Only by such an approach, the companies’ leadership can get to know exactly
the current situation of the company, and according to that they can make decisions on its
future.
It is fair, recommendable and to be expected that any entrepreneur to look at his/her
own financial situations, yet it is not enough4. In order to have a correct perspective and to be
able to make the best decisions, it is compulsory to have an attentive perception on the
competition a nd implicitly on the connection between his/her own activity and the
competitors’ activity.
The turnover is the most expressive „market” indicator, as it certainly shows the
company’s position on the market and moreover it can also be a planning tool.
4 George Lucian Costiniu, Analiza economico -financiară a întreprinderii de comerț și turism (note de curs) ,
Editura Pro Universitaria, București, 2007, pag. 95
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The turnover, an indicator of the financial performace, is a significant part of the
incomes obtained by a company, yet it should not be mistaken with the profit, the final goal of
any economic agent.
The productivity may have either an absolute expression, f rom the profit perspective,
or a relative expression, by the incidence of the productivity rates (as they indicate the degree
in which the resources used may contribute to obtain profit for the company).
From the structural perspective, profit may b e determined by using accounting
relationships between various indicators, yet, as a general rule, profit is obtained as a sum of
the result of exploitation, the financial result and the exceptional result.
1.3. Importance, role and integration of sales strate gy in the company ’s strategy
The role and importance of sales policy, as part of the marketing mix, are well known;
yet, there are some different points of view regarding the notion of sales and marketing,
expressed in the book “Marketing Myopia” (Levitt, 1960).
The difference5 between marketing and sales involves more than semantics. Sales are
focused on sellers’s needs, marketing is more oriented on buyers’ needs, as one may see in the
Table below:
Table 1.1 – The commerci al approach and the marketing ap proach
Approach Focus on : Implementing tools Maximizing profit
by
Com mercial Product’s qualities Sales and promotion Increasing sales
volume
Marketing Customer’s needs Marketing mix Satisfying the client
Sales focus on the sellers’ needs to con verts their products into money; marketing
intends to satisfy the client through its product and through an entire sum of aspects related to
the creation, the delivery and, finally, the consumption of the respective product. There are of
course differences between marketing and sales, but these differences are most of the times
scale differences, not of principles or methods.
On the modern markets, the offer usually surpasses the request, which triggers the
need to adopt a marketing philosophy of the follo wing type: “make as much as it sells, do not
sell as much as it is made ”.
5 Bill Donaldson, Managementul vânzărilr, Editura Codecs, București 2001, pag. 4
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The changes in the methods and delivery channels, as well as the increasingly
competitive environment have also altered the role of sales, turning them for good into an
essential pa rt of the marketing activity.
Sales have not died – the different approach on sales, by a different marketing
management, must aim at the integration of sales achieved at the personal level with the other
promotion tools, associating them to the other fun ctions within the company and considering
also the environmental factors which might affect these functions.
Personal sales are the final link of the exchange process occurring between the buyer
and the seller.
Sales management may be defined as the proc ess of planning, organizing, orienting,
endowing with personnel and controlling of sales operations made by the employees of a
company, in order to achieve its goals.
The most important difference between sales and the other elements of the marketing
activity is given by the personal contact. The need to establish a personal contact may vary
according to a wide variety of factors, such as the type of customer, the frequency of
purchase, the news elements of the product, etc. There are circumstances when th e role of
persuasion a nd information may be achieved by impersonal methods, such as advertising.
When it comes to sales, each situation is somehow unique, and sales managers must
look and try to understand the buyer – seller, accepting at the same time the fact that it is
impossible to have absolute control over all of these situations.
Table 1.2 – Comparison between advertising and personal sales6
Advertising Personal sales
Addressing the general audience Single individual -oriented
Carried out by imp ersonal, indirect contact Personal, direct contact
Less adaptable High degree of adaptability
Operating at wide scale (limited message
addressed to a large number of people ) Operates in depth (less contacts, more detailed
communication )
Single – direction Double direction
Benefiting of an organized feedback (by
means of marketing research ) Direct f eedback
Reported to a single contact, it is relatively
cheap Reported to a single contact, it is expensive
6 Bill Donaldson, Managementul vânzări lor, Editura Codecs, București, 2001. pag. 9
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It has an attractive effect (the strategy is
oriented after the consumption – the real or
the potential clients are those who contact
the company ) It has a drive effect (the strategy is oriented
after the production – new sales opportunities
are looked for actively )
An extremely important fac tor in providing success for the sales is the planning before
the contact. There is7 an old empirical rule which says that successful sales are: 40%
preparation , 20% presentation and 40% following up . No matter if these percentages are
accurate or not, the re is no doubt that success may be associated with preparation.
The main activities in sales management are depicted in the Figure below8:
7 Bill Donaldson, Managementul vânzărilor, Editura Codecs, București, 2001. pag. 85
8 Churchill Jr., G.A;.Ford, N.M.; Walker Jr., O.C. Sales Force Management , Irwin, Homewood, 1981, pag.19
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1.4. Components of sales strategy
The economic policy in the commerce includes various fields of activity: sales poli cy,
supply policy, stocking policy, type of product policy, pricing policy, personnel policy and
financial policy.
Sales policy is the main component of the economic policy, as it renders concrete the
estimated incomes which are intended, based on which the other economic objectives are
achieved.
The various branches of commerce discriminate sales policy for each of these, and the
ones coming out, as a matter of principle, are the sales policies in the branch of individual
consumption goods, in the branc h of raw materials and industrial equipment and in the branch
of agricultural products.
The economic policy9, in commerce, in general, and in sales, in particular, is
accompanied by an achievement strategy and by a complex of deisions according to which t he
following elements are established: nature of objectives, training of economic resources in
their achievement and the evaluation of the results that can be obtained.
Starting from the manner in which the action of the market factors and of the
commerc ial agents’ economic potential are put into practice, the following are seen as main
elements in fundamenting the sales policy:
Establishing the features specific to sales of merchandise in each field of the economic
activity;
Analysis of previous sales;
Sales forecasting ;
Determing the volume and the manner of using the resources;
Establishing the structure of the operational activity with regards to merchandise sales.
The analysis of previous sales, made in terms of years, trimesters or months, points
out multiple aspects of the mak et development, such as: the de gree of correspondence
between the request and the offer, expressed by sales volume, intensity of sales growth, the
changes in their structure and the factors which influenced them, sales ter ritorial distribution,
consumption according to seasons etc. The results of the analysis will be the base of the
leadership’s actions in improving their commercial actions and the methodology support in
forcasting sales evolutions on short, medium and long terms.
9 Fota C., Mărăcine M., Roșu – Hamzescu., Politici comerciale , Editura Arta Grafică, București, 1993, pag.296
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Fundamenting the sales policy based on the previous sales and results is made through
the interpretation of aspects regarding the manifestation of the commercial life development
which these aspects define.
Sales dynamics characterizes sales’ evo lution in a certain timeline and the changes
reported in their structure. It is reflected by chronological series, in which sales values are put
in parallel with the time series. Sales dynamics is characterized by absolute indicators, relative
indicators a nd by the trend in the sales evolution in the respective timeline, interpreted as
having a compulsorily regulatory character.
The trend in the sales’ evolution, also named central trend of the sales dynamic series,
is, for a longer period of time, the exp ression of the regulatory law evolution of sales under
the influence of some essential causal factors.
Sales structure and its change in time characterize the structure of request and the
changes in its evolution, as a consequence of some different paces i n the dynamics of the sales
in terms of groups of merchandise. A higher index of sales growth in a group of merchandise
also increases its weight in the total volume of sales. Sales structure is represented by the
weight indexes (the percent ration between the groups’ sales and the total volume of sales). It
has a n objective evolution resulted from the influence over request of the formative factors of
the market and a subjective one, representing the leadership’s option in the policy on the type
of product , on determining the competitors’ profile and on how to win the market.
Sales territorial distribution is the expression of the localization of market
releationships and of the request’s regional particular features. That is why it is associated
with sa les dynamics and their structure within a unitary system of indicators .
The seasonal character of sales is an expression of joint seasonality of offer and
request, of the manner in which they are correlated in time. The analysis of sales seasonality
must provide information on the amount of seasonal oscillations in relation with the normal
development of the phenomenon, the timeframe of the manifestation of commercial sea son
and the measures that must be adopted by the management with respect to the networ k’s
capacity, the labour force, the financial resources, in order to adapt all these issues to the
specific features of each commercial sea son and to be successful.
Selling the products10 is the action by which we endure the capitalization of the
productio n results, it is phase in the purchase activity which ends all the activities carried out
10 Gheorghe Bășanu, Mihai Pricop, Managementul aprovizionării și desfacerii , Editura Economică, București,
2004, pag. 359
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by the production unit, the sales agent for the product to be requested and accepted by the
customers.
By this action, there is actually achieved the very purpose of the one who is producing
and/or selling, namely to recover the expenses made on the occasion of the manufacturing and
preparing the product to be sold, aiming at the same time at obtaing profit.
Sales are a complex activity which in the market economy has an increased degree of
difficulty: “Selling is an art nowadays”11.
Sales are the “life blood” in a company, as it represents the flowing capital, needed to
support all other related activities.12
In order to sell, it is necessary to have the framework a nd the circumstances that are
best to make possible and stimulate action.
Merchandise sales appears as a complex and wide activity which in the market
economy has an increased degree of difficulty, which makes necessary to have the right
framework and the specific conditions that would render possible and stimulate economic
action.
From the perspective of the structure of sales modalities for merchandise, there have
come up several possibilities. Therefore, there are:
Classic sales , which are based on unscheduled but predictable request, addressed to
consumers or users of stores or other types of units and outlets;
Sales based on orders from certain categories of consumers or users, followed by their
immediate accomplishment;
Sales based on economic contracts concluded in advance at the request of the various agents
operating on the market;
The way to sell the products is in accordance with the products’ nature, the array of
use, the characteristics and the potential of purchase of those requesting t he products (the
customers), the distribution channels used, the modalities used in practice by the producer –
supplier13
When fundamenting the merchandise sales policies, the way in which the products
will be sold depends on the nature of the goods which are to be the subject of transactions,
their array of use, their characteristics and the purchase power of the customers, the possible
11 Gheorghe Bășanu, Mihai Pricop, Management ul aprovizionării și desfacerii , Editura Economică, București,
2004, pag. 359
12 Dumitru Patriche, C.A. Bob, Comerț și dezvoltare , Editura Europa Nova, București, 2000, pag. 191
13 Gheorghe Bășanu, Dumitru Fundătură, Management -marketing , Editura Diacon Core si, București, 1993, pag.
190
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distribution channels, as well as in accordance with a series of specific elements of each
market area, shaped up during the seller – customer dialogue or during the negotiation
process.
An extremely important role goes to the information actions, informing the potential
buyers on the selling forms and on their ways to achieve them, which are to be potentially
provided by ea ch company in relation to various ca tegories of customers .
Another important aspect with respect to setting up the action framework and the
specific conditions which can make possible and stimulate the sales expansion actions is
related to complex sales.
Irrespective of the proposed purpose, the existence of the competitive environment
and the dependence of the activity on the level of the existing economic resources and on
those which must be created, lead to three major objectives which are formulated in the sales
policy of ev ery economic agent:
Increasing the sales volume and the company’s market share;
Upgrading and modernizing the technical and material basis;
Increasing the profit .
To the above mentioned elements, one may associate other numerous objec tives which
are related to the strategy to follow in order to achieve the already adopted policy, as well as
the spectrum of decisions which must be made in order to achieve this strategy.
Modern companies, operating on the economy markets, include in thei r
communication system the so -called selling forces , which are seen as one of the most
important channels in the dialogue of the market agents, but also as an important criterion in
assessing the competitivity.
Selling forces include a group of company rep resentatives (employees or delegates)
which are invested with several competences.
All these are not limited only to the selling acts, but they occur also at the same time
with a wide range of other activities: identifying the potential markets, defining t he
customers’ profile and locating them from the geographical perspective , merchandising
actions in the distribution network, technical and commercial consultancy to industrial users
and intermediates, market research, negotiating the offer and how to conc lude a contract,
collection of information from clients contacted or on the competitors, etc. – which gives
significant attributes, of both prospecting and communicating and increases its promotional
value.
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A company’s selling force or forces14 is represen ted by the group of people
representing the company and who have the explicit main task of selling or making the
products or services to be sold, by means of direct contact with potential buyers, distributors
or prescriptors.
Sellers who make up the sellin g forces may have different names (commercial agent,
sales agent, commercial representative etc .), may be sedentary or travell ers, they may be
employees of the company or external collaborators.
1.5. Customer analysis as basis of a company’s sales strategy
Drafting15 the strategy in the field of sales is a complex action which takes a huge
volume of information which are refreshed, usually, at short periods of time, due to the
frequent changes reported in the manufacturers’ offer, as well as in the requirements of the
products’ and services’ market. Once drafted, the strategy in the field of sales of products
and services is systematically adapted according to the new elements which come up and
change the already considered ones.
A good strategy in the field of sales is the one which takes into account all the
competent actions of the sales management, interpreted in a tight correlation with the
interdependences which are specific to this field; of all these, there are worth mentioning the
following: wide -range information of the potential users on the products and services which
may be provided for purchase, directly or by means of intermediates (promoted by:
advertising, publicty of the products, of their brands, issuing sales offers, etc.); market surveys
and studies in order to identify the dimensional – structural requests of the future buyers –
users ; assessment of the forecast in sales; drafting the portofolio of sales and concluding
economic contracts; organizing the serving – sales, delivery – expedition activity of the
products ; organizing and upgrading the distribution/delivery and service networks; providing
and assisting the services associated to the products; monitoring the products’ behavior upon
users, etc.
Carrying out an efficient material sup ply activity , in accordance with the
requirements and the interests of the company, depends massively on the strategy which has
been drafted for this purpose.
14 Kotler, Philip, Managementul marketingului , editura Teora, București, 1997
15 Gheorghe Bășanu, Mihai Pricop, Managementul aprovizionării și desfacerii , Editura Economică, București,
2004, pag. 358 -405
Page | 17
By such a strategy, one should gain from the advantages of the competition on the
supply market for material and energy respurces, for technical equipment, semi -products,
furnitures, etc. The ways to interpret the issues related to such a subject are different, as the
approaches have a general character, and in some of the cases one method is to poi nt out the
specific situations (especially for the markets of certain products).
What is essential in the material supplying process is the “behaviour” towards the
suppliers. This behavior is influences by several factors, common or specific, whose
knowl edge is compulsory in order to draft a good strategy as a buyer.
In supplying16 the materials and the technical equipment, it is extremely important to
consider the selection decision with regards to the supplying sources and the suppliers. The
choice of suppliers has become a genuine “art”; this action is based on the previous strudy of
the data and main information by which we can achieve the characterization of each supplier
(data which are recorded into special catalogues filed according to the suppl ier and which will
represent the initial information documentation ). Based on the collected data and information,
one can achieve a comparative estimation which classifies each supplier according to a
percentage (or a grade ) assigned based on the importanc e of the established criteria. Several
systems have been established in order to grade the supplier . What are taken into account are
the objective and the subjective criteria. The estimation is made both for real suppliers
(current or with whom the compan y has already worked ), and also for the potential ones (new
suppliers or already existing ones ).
In the amount of the relationships established and promoted by the sales policy,
customers relations are subscribed to the framework of the external relations , just as the
realtions established with the suppliers.
The k ey for success in business is to have a good knowledge of the customers’ needs.
Any error of assessment of the customers’ needs may turn out to be extremely expens ive for a
company. In an econ omy market, the one element which gives the signal for production is the
solvable request.
Basically, the customers’ relations system may come down to the following three
fields:
Organizing the adequate framework of dialogue with the customers;
Establis hing the favorable atmosphere for the selling – buying activity;
Providing the adequate relations between the sales personnel and the customer;
16 Gheorghe Bășanu, Mi hai Pricop, Managementul aprovizionării și desfacerii , Editura Economică, București,
2004, pag. 434
Page | 18
As structural forms of the framework for dialogue with the customers, the
following may be used:
Organizing periodical meetings with the customers;
Organizing testing actions for the new products;
Using the media for information and advertising ;
Introducing modern techniques and sales forms (on line sales ).
The actions which are carried out in order to establi sh the favorable atmosphere for
the selling – buying action by the manufacturers suppose the improvement of the
information system with regards to the customers, namels the presentation of the products (at
the customers’ headquarters, at the company’s head quarters or via internet ).
Providing adequate relations between the sales personnel and the customer
entails a certain behavior to be adopted by the sales personnel, as well as a certain attitude
towards the work and towards the customers.
The management of the customers’ relations contributes to the improvement of the
company’s relations with the customer.17 In the context of these relations, the performance is
obtained bearing in mind the following aspects:
Satisfying the company’s internal and external customers;
Positioning the customers in the centre of the company’s activities;
Understa nding the customers’ needs ;
Dealing individually with the customers ;
Improving the communication with the customers ;
The value assigned by the company to its customers ;
Making the customers to become loyal .
According to the studies, the medium sized companies lose about 20 -50% of their
customers, every year, and they find it difficult to make loyal their best customers. It is well
known that attracting new customes is a lmost 5 times more expensive than maintaining the
already existing ones.
The management of the relations with the customers entails the process of managing
information regarding the customers, as well as communication with them, the final intended
effect being to make them loyal.
17 Andreia Anca Iacob, Emilia Pascu, Managementul relației cu clienții , Editura Pro Universitaria, București,
2008, pag. 83
Page | 19
Gaining (acquisition of ) customers is not equal to maintaining the customers18. There
are several different factors that determin the acquisition and maintaining customers.
Figure 1.3 – Factors that influence the acquisition of customers
Gaining new customers entails a good p romotion of sales and the adequate
advertising. Sales’ analysis allows identifying the less capitalized areas towards which the
company can target.
The distribution is the process of sep arating the customers and the poten tial customers
into distinct gro ups (segments) which share certain common features.
It is of an extreme importance that in their relations with the customers, the selling
forces of a company to provide merchandising and/o r advertising services on the selling spot
and to carry put surveys or to use specific materials, for the mutual benefit of both the
manufacturer and the supplier/customer.
18 www.locomarkid.ro/site/anul_III_semestrul_2_mrk_management_rel_clienti_htm
ACQUISITION OF
CUSTOMERS Customers’ distribution
Sales’ analysis Merchandising Advertising Sales promotion
Page | 20
Figure 1.4 – Factors that influence maintaining the cu stomers
Ensuring quality and, at the same time, customers’ satisafcction, which can also
trigger the customers to become loyal, may be achieved in two ways: a preemptive way and a
a remedial way. Thus, one can anticipate the satisfaction criteria of the customers and
ultimately achieve their satisfaction. The remedial way supposes identifying the reasons of
lack of satisfaction and solving them.
Among the benefits of making the customers loyal, there are some which are worth
being mentioned: a loyal/satis fied customer will always bring along with him other customers
or other projects; it is much easier to work with a loyal customer than it is with a new one,
because there is a certain sense of greater trust and flexibility from both sides ; the costs to
maintain a customer are less than the costs to attract a new customer. The personal
satisfaction brought by the continuation of the collaboration with a customer is much greater,
as it com es as a confirmation of quality collaboration, due not only to selling skills. In
achieving customers’ satisfaction an important role is played by customers’ expectations .
Expectations are shaped based on the previous buying experience, on advice received and on
information.
In the framework of the precontractual relations be tween the manufacturers and the
customers, the most important element is the negotiation.
Commercial negotiation may be defined as the process by which the manufacturer
and the customer are trying to calibrate their perspectives on the conditions of the ex change,
after coming into contact with the purpose of concluding a contract. MAINTAINING THE
CUSTOMERS Products’ quality
Service Satisfying the customers Constant support on
the distribution channel Trust and intimacy
Page | 21
Practically, the development of the transactions involves, on one hand, the delivery of
the merchandise, and on the other hand, collecting the counter value, namely, the payment o f
the merchandise’s price.
The delivery of the merchandise in compliance with the terms of the understanding,
of the delivery conditions and the payment modality, means the launching of the execution of
the contract. The activities connected with the deliv ery of the merchandise have specific
aspects for the expedition of the merchandise from the manufacturer to the customer,
uploading and downloading, quality and quantity reception, transportation, insurance, etc.
The delivery operations are accompanied by certain specific documents.
The payment is the reception by the producer/seller of the counter value of the
delivered goods.
In fundamenting the sales policy, an important role is played by the relations
established with the contractors/service providers , which include also the companies and
the private persons. They can be: commerce companies, transportation companies, advertising
agencies, banking service providers.
Page | 22
II. THE SALES STRATEGY OF CORA ROMANIA
2.1. Analysis and development of Cora Romania
The history of Cora starts with the wine merchant Jacques Delhaize in the 1850 ’s, he
imagined and put into practice in Belgium the branching principle, a central department
store/trade house which supllies merchandise to the selling subunits/ points. One of his three
sons, Louis Delhaize, would later on develop his own company which is the origin of the
nowadays group .
In the beginning of the 20th century, the uncles of the Delhaize brothers (Georges și
Rene) moved from Belgium and settled in n orth and east of France. The former established
Les Docks du Nord la Lille. The latter bought the company Sanal of Nancy and Sadal from
Strasbourg. In 1929, one of their nephews , Andre Bouriez joins Sanal Group with the desire
of reaching the top managemen t of the company. Yet, in 1945, a group of the competition,
Mielle, takes over the control of Sanal Sadal Group . In 1965 Andre Bouriez becomes
President of Mielle -Sanal -Sadal Group , after brining it close to the les Docks du Nord.
Even starting with 1968, the group starts to be interested in the hypermarket concept
and in 1974 Cora is established. Philippe Bouriez is appointed President of the group in 1975,
thus marking the beginning of a successful development. Nowadays, with the associations and
the fra nchises, there are 81 Cora hypermarkets in France, Romania, Hungary, Belgium and
Luxembourg, and the group continues to expand.
The Cora brand expands hugely internationally, as it is present with 81 hypermarkets
worldwide. Besides the Cora hypermarkets , the Louis Delhaize Group also includes a series
of chains of superstores, gardening specializes stores and pets stores, hard -discount stores, as
well as a cyber market and a bank, located in several parts of the world:
Match : 156 supermarkets in France, 65 in Belgium and Luxembourg, 17 in Antilles
and Guyana, and 19 in Hungary ;
Smatch: 124 supermarkets in Hungary, Belgium and Luxembourg;
Truffaut : 44 gardening stores in France,
Garden & Leisure : 7 stores in UK ;
Profi : 150 hard -discount stores in Romania , Belgium, Hungary and Luxembourg;
Ecomax : 52 hard-discount stores in Antil les and Guyana;
Cybermarket Houra delivering more than 50.000 products in France ;
Animalis : 27 pet shops .
Page | 23
Figure 4 Brands of Louis Delhaize Group (Source : www.cora.ro )
Cora ( social name of the company is R omania Hypermarche) joined the Romanian
market in 2003 and currently operates 8 stores in Bucharest Cluj , Baia Mare, Drobeta , Arad
and Constanta . Thus, in October 2003, Cora opened in Bucharest th e largest of such stores in
Romania, at that time. The store in Pantelimon is of 40.000 square metres in surface and
provides to customers more than 100.000 different products. The commercial area is of
16.000 square metres, to which is added a commercial gallery with 70 stores, as well its own
travel agency (Cora Voiaj), 80 cash registers and 2000 parking lots.
Opened in September 2005, Cora Lujerului has a commercial area of 14.000 square
metres and 1800 parking lots, of which 1300 lots are underground. In October 2006, Cora
opened its third hypermarket located outside the capital. Having a total surface of 20.000
square metres, of which the commercial area is of 9.000 square metres, with a parking place
of 1271 lots, the hypermarket in Cluj -Napoca has b een an important landmark in the retail
market of the western part of Romania.
Cora Sun Plaza, inaugurated in February 24th, 2010, has a surface of 13.000 square
metres, and 2.0000 parking lots. 2000.
With an investment of 4 million Euros, Cora Baia Ma re in the Commercial Centre
Gold Plaza of Baia Mare, is 4500 square metres and created 300 new jobs. The store in Baia
Mare also sells on line electronics and home appliances products.
Page | 24
The mission statement of Cora is to provide customers with quality ser vices and a
wide variety of products, in exchange of accessible prices, the values that it promotes being:
respects, honesty, professionalism, responsibility, power of example and solidarity.
The turnover in 2010 was of about 350 million euros with a tota l of 57500 m² selling
space and approximately 3500 employees . Cora is part of the retail market in Roamnia, a
segment with a superior growth rate in the Romanian economic environment.
In Romania, in 2009, traditional commerce was of about 55% of the to tal commerce,
according to some data from the Competition Council. Yet, in 20 10, for t he very fisrt time,
modern reta il including the supermarkets, the hypermarkets, and the discount cash & carry
type stores overpassed in weight the traditional commerce an d went beyond the 50% level of
the total market, according to a study made by the Competition Council. Modern retail in
Romania is estimated to 7 -9 billion Euros, and the hypermarket segment, where Cora
operates, at over 3.5 billion euros. According to its turnover, Roma nia Hypermarche holds 9%
of the hypermarket segment.
Cora objectives
Increase of turnover by 5% every year in the timeline 2011 -2012
Increase of market share up to 20.5% for 2011 and up to 21 % for 2012, in Bucharest
Increase of market sha re up to 9.5% for 2011 and up to 10 % for 2012, Cora Romania
(Bucuresti+ other cities )
Maintain the profitability rate at 5.9% for 2011 -2012
Cora mission statement
Cora’s mission statement is focused on satisfying our customers’ needs, to whom we
have to be closer, in order to get to know them better and make them loyal and keep them for
the long term, in spite of an increasingly competitive environment. Our slogan “You know
why you come back!” must be put into practice, our store shelv es to be full, clea n and well
arranged, the selling prices must be competitive, and our promotion campaigns must be
attractive, our collaborators in the commercial area to be nice and kind, competent and always
ready to serve the client.
Page | 25
Cora strategy
Cora strategy is to expand horizontally and to consolidate/maintain the already
existing stores. The expan sion plans of Cora are drafted for the upcoming 5 years, in 2016 –
2017 Cora chain is intended to count 20 hypermakets.
At the same time, we will continue our project to surpass the competition, by the types
of products that we put to sale to our customers, a project that we initiated in 2009.
The marketing and communication strategy is still focused on rendering the customers
loyal; therefore we will develop offers an d promotion campaigns where we will exploit the
databases of customers.
The acquisitions strategy is focused on concluding some strategic partnerships with 2 –
3 key su ppliers for each department ca tegory.
Cora management
Each store, taken individuall y, is part of a centre of cost/profit, and the consolidation
of the results is made at the end of each year.
Cora has a General Manager who establishes the strategy and the commercial
objectives. At the same time, there is also an Operational Manager who guides the stores.
Central services – acquisitions, marketing, communication, human resources,
accounting, IT &SAP are support services for the stores, each one of them being run by a
person assigned.
Cora’s structure is decentralized , each store manager applying his/her own policies in
order to achieve the established commercial objectives.
Policies to support the strategy and to achieve objectives
Policy to adapt to the selling prices of the competition – the best selling price for top
100 products ev ery week.
Policy to differentiate by types of products – niche products, offer of products for all
price segments for families which bring 80% of the turnover.
Policy to update the types of products – maintaining within the same number of sold
references we will provide to our customers the type of products adjusted to their requests and
expectations, according to the most recent market studies.
Policy to develop our own brands – we maintain the entrance of the Winny brand, we
are strongly developing the Cora brand sort of product (+4 points of percentage within this
timeline), we continue to develop the brand Tradition of Taste.
Page | 26
Policy of reshaping the store – we are reshaping and redoing the organizational
structure at the level of the store department and division for Pantelimon hypermarket.
Promotion policy – we are diversifying the type and duration of the promotion
camapaigns – during 2011 – 2012 we have added the “white nights” and “mistery products”
concepts – these actions are meant to increase the traffic by 10%, and the objective is to have
a retention rate, after such actions, of +2 to +4 %.
2.2. Analysis of the environment of the company
The economic environment, the country’s body of laws and the development and the
expansion of the competition , as well as the degree of maturation of the market, are all market
factors among which Romania Hypermarche is operating. We will analyze in detail, one by
one, each of these above mentioned factors .
The economic environment;
The legal framework ;
The main competitors .
The economic environment
The economic environment has not been a very favorable one in 2008 -2010, and the
predictions for 2010 were still dark, as the real estate crisis emerged in 2007 in the USA
caused a financial crisis followed by othe r economic, political, social crises, both at the
local and at the global levels. Table 2.1 includes the main economic and financial factors
of Romania in 2008 – 2010.
Table 2.1 – Main economic and financial factors in Romania in 20 08 – 2010 (Source
Cora R omania)
2008 2009 2010
Real economy
Real GDP % y / y 6,20 7,10 -8,50
Nominal GDP Bln. RON 413 504 461
Private consumption % y / y 9,80 8,40 -13,40
Raw build up of fixed capital % y / y 29,00 19,30 -11,00
Industri al production % y / y 5,40 0,90 -8,00
Retail commerce % y / y 17,80 13,76 -5,00
Balance of payments
Imports ( nominal ) % y / y 26,00 9,40 -34,00
Page | 27
Exports ( nominal ) % y / y 14,30 13,80 -15,00
Commercial deficit % GDP -14,40 -13,30 -6,70
Current account deficit % GDP -13,50 -12,30 -5,50
Current foreign investments
( flows ) % GDP 5,90 6,60 4,30
Prices
IPC % y / y 6,60 6,30 4,30
Labour market
Rate of unemployment % Dec 4,10 4,40 9,60
Raw salary ( real ) % y / y 22,60 23,60 2,00
State budget
Deficit of consolidated budget % GDP -3,10 -4,90 -7,30
Public debt % PIB 19,90 21,60 29,60
Interests
Monetary policy interest Dec 7,50 10,25 9,00
Rate of exchange
EUR / RON Dec 3,61 3,99 4,30
USD / RON Dec 2,46 2,83 2,90
The legal framework
Indeed, up to 2009 modern commerce has developed freely based on offer and request,
without being regulated particu larly by the sate, the only law regulating the commerce being
the Law on Competition. At the end of 2 009, the Romanian Parliament ado pted the Law
321/2009, which would later on be modified by Law 247/2010.
Law 321 was meant to clearly define the framework for the collaboration among the
great retailers and merchandise suppliers, yet it was still unclear or incomplete to some points
and this triggered the need for another law to modify/complete it. Law 321 in its current
format divides the merchandise catego ries into product categories (according to the conditions
required to store and the expiration date of the products), it regulates the terms of payment
and certain budgets that may or may not be the subject for commercial negotiations between
the two parti es. At the same time, this law defines the terms used for contractual negotiation,
as we will show below (excerpt from Law 321/2009, Chapter I, art 2.) :
« discount – direct financial advantage provided by the supplier to the merchandiser, applied
in perce nts to the price listed by the supplier ;
Page | 28
Acquisition cost at the merchandiser – net unit price which is evident in the acquisition
invoice, obtained by substracting the discount provided by the supplier, to which are added
the direct expenses specific for reselling and the costs of the services provided by the
merchandiser to the supplier;
Sales at loss – any sales made at a price lower than the cost of acquisition i;
Listing the product – the obligation assumed by the merchandiser to put at direct sale to the
consumer the types of products provided by the supplier through a commercial contract;
Cease of listing – cease of direct selling by the merchandiser of the products provided by the
supplier through the commercial contract . »
The main competitors
The competition on the market is critical in establishing the sales policy. In this
context, Romania Hypermarche adopts its sales policy in the beginning of every year;
however, according to the events occurring in the market area, this policy is adjusted/ adapted
to the new context.
The value of the wide consumption goods market in Romania, in 2010, was estimated
at 78.5 billion LEI, based on the data provided by the National Statistics Institute with regards
to the expenses made by the population for foo d products and non -food products (self –
consumption excluded) . In the consumption expenses there are included also the expenses
made for storage, processing or consumption of pets, but there are excluded the expenses
made in the food service units, accordin g to Table 2.2 and Table 2.3.
Table 2.2. – Evolution of turnover of Cora versus the main competitors in 2008 – 2010
(Source Cora Romania)
Network Type Turnover
2008 Turnover
2009 Turnover
2010
Metro cash&carry 5,401,094,000 5,725,000,000 6,014,000,000
Carrefour hypermarket 1,977,500 2,639,804,300 3,977,000,000
Selgros cash&carry 1,802,869,531 2,739,923,300 3,161,000,000
Kaufland supermarket 881,000,000 2,139,209,300 2,865,000,000
Real hypermarket 328,733,900 1,363,995,380 2,349,000,000
Cora hyperm arket 1,057,555,113 1,355,120,385 1,469,233,551
Billa supermarket 1,062,000,000 1,074,000,000 1,181,000,000
Rewe discount 313,000,000 833,000,000 1,150,000,000
Page | 29
First position is occupied by the oldest retailer in Romania, Metro Cash & Carry,
followed far by Carrefour Hypermarket, the 2nd player that entered Romanian retail market.
Cora Romania occupies 6th place in the main competitors list, but 3rd place in the hypermarket
category.
Table 2.3. – Development of CORA stores versus the main competitors in 2008 – 2010
(Source Cora Romania)
Network Type Stores Stores Stores
2008 2009 2010
Metro cash&carry 23 23 23
Carrefour hypermarket 7 11 23
Selgros cash&carry 15 16 18
Kaufland supermarket 25 31 41
Real hypermarket 1 14 20
Cora hypermarket 3 3 3
Billa supermarket 24 28 33
Rewe discount 34 52 66
Plus discount 40 52 86
Auchan hypermarket 1 5 6
Pic supermarket 4 4 4
Mega Image supermarket 18 28 43
Profi supermarket 35 44 54
Interex supermarket 9 11 11
Top 14 239 322 431
CORA network had in 2 008 – 2010, 3 stores, a small number com pared to its competitors.
The types of stores categorized by their sortiment, selling surface and price policy are : Plus discount 286,000,000 422,000,000 1,021,000,000
Auchan hypermarket 70,259,000 517,000,0 00 950,000,000
Pic supermarket 215,000,000 409,000,000 662,000,000
Mega
Image supermarket 250,000,000 350,000,000 486,000,000
Profi supermarket 138,406,305 305,000,000 441,000,000
Interex supermarket 203,000,000 284,000,000 397,000,000
Top 14 13,566,402,386 20,157,052,665 26,123,233,551
Total RO 58,578,098,000 69,005,000,000 78,500,000,000
Page | 30
In cash & carry stores , one can shop even if the customer is not reselling
Hypermarkets are frequently located in crowded areas ; cash & ca rry stores are located in the
proximity of populated areas ;
Hard discount stores are rather soft discount stores or even supermarket s by the number of
products they sell ;
Supermarket s have categories and types of products being sold similar to the hypermar kets
and cash & carry stores, and there is not a clear difference by means of special offers such as
a more developed category of fr esh products.
Cash & carry stores , supermarket s and discount stores are seen as direct competitors of
Romania Hypermarche . The competitors are, according to the category also the food and
agricultural product markets (for the vegetables and fruit category ), commercial malls (for
soft/textile goods, long use goods ), specialized stores (home appliances, electronics and IT ).
As we may see, the evolution of the turnover is tightly connected to the territorial
expansion . The networks which have chosen to invest in opening new units have reported
high increases in their turnovers. The problem is that these invest ments have been expe nsive
bearing in mind the unrealistic evolution of the prices in the real estate field.
Therefore, in this context, relevant are the evolutions of the net profits compared with
the ones of the turnov ers presented, below, in Table 2 .4, with the respective graphics, as
Annex “Benchmarking Cora – Carrefour”.
Table 2.4 – Evolution of net profit of Cora vs. its main competitors in 2008 – 2010
(Source Cora Romania)
Network Type 2008 2009 2010
Turnover Profit Turnover Profit Turnover Profit
Metro cash&c arry 5,401,094,000 4.32% 5,725,000,000 4.32% 6,014,000,000 4.32%
Carrefour hypermarket 1,977,500 3.87% 2,639,804,300 3.12% 3,977,000,000 1.86%
Selgros cash&carry 1,802,869,531 5.60% 2,739,923,300 4.42% 3,161,000,000 4.55%
Kaufland supermarket 881,000,00 0 -4.32% 2,139,209,300 2.46% 2,865,000,000 0.48%
Real hypermarket 328,733,900 –
15.36% 1,363,995,380 –
11.61% 2,349,000,000 –
8.68%
Cora hypermarket 1,057,555,113 1.81% 1,355,120,385 3.10% 1,469,233,551 4.93%
Billa supermarket 1,062,000,000 3.18% 1,074,00 0,000 3.27% 1,181,000,000 3.22%
Auchan hypermarket 70,259,000 –
17.15% 517,000,000 -0.57% 950,000,000 –
2.60%
Page | 31
Mega
Image supermarket 250,000,000 -2.95% 350,000,000 0.52% 486,000,000 –
0.61%
Profi supermarket 138,406,305 0.87% 305,000,000 -1.61% 441,000,000 0.16%
The very good evolution of the turnovers has, for a change, a strong impact in the
power of negotiation with the suplliers’ market, and consequently, a better positioning of the
prices in front of the customers, which is achieving one of the most important objectives,
knowing that the price is one of the most important attributes in positioning a store,
irrespective of the form of commerce that is practices. The impact of expansion on the
turnovers is pointed out in Table 2.5.
Page | 32
Table 2.5 – Evolution of weight in the turnover of the main retailers and in the total fast
moving consumer goods (FMCG) in 2008 – 2010 (Source Cora Romania)
2008 2009 2010
Network Type %
Turnover
14
Retailers %
Turnover
FMCG %
Turnover
14
Retailers %
Turno ver
FMCG %
Turnover
14
Retailers %
Turnover
FMCG
Metro cash&carry 39.98% 8.90% 28.40% 8.30% 22.98% 7.66%
Carrefour hypermarket 11.53% 2.57% 13.10% 3.83% 15.20% 5.07%
Selgros cash&carry 13.34% 2.97% 13.59% 3.97% 12.08% 4.03%
Kaufland supermarket 6.52% 1.45% 10.61% 3.10% 10.95% 3.65%
Real hypermarket 2.43% 0.54% 6.77% 1.98% 8.98% 2.99%
Cora hypermarket 7.41% 1.65% 6.72% 1.96% 5.80% 1.93%
Billa supermarket 7.86% 1.75% 5.33% 1.56% 4.51% 1.50%
Rewe discount 2.32% 0.52% 4.13% 1.21% 4.39% 1.46%
Plus discount 2.12% 0.47% 2.09% 0.61% 3.90% 1.30%
Auchan hypermarket 0.52% 0.12% 2.56% 0.75% 3.63% 1.21%
Pic supermarket 1.59% 0.35% 2.03% 0.59% 2.53% 0.84%
Mega Image supermarket 1.85% 0.41% 1.74% 0.51% 1.86% 0.62%
Profi supermarket 1.02% 0.23% 1.51% 0.44% 1.69% 0.56%
Interex supermarket 1.50% 0.33% 1.41% 0.41% 1.52% 0.51%
Top 14 22.27% 29.21% 33.34%
The weight in the total turnover of the fast moving consumer goods (FMCG) market
of the 14 retailers has increased from 22.27% in 2008 to 33.34% in 2009, yet the percentage
value is still low compared to the western countries where the weight of modern commerce is
over 50% ( France, UK, Italy ).
Market capacity (market’s degree of maturation )
In 2008 -2010 the market in Bucharest, as well as the on e in the country, has been in
full expansion from the perspective of building and putting into use new large stores
(supermarkets, hypermarkets , cash&carry).
One of the objectives that need to be followed by the marketing and communication
department is t o:
Page | 33
Identify potential markets
The marketing department comes into contact not only with the customers of the
stores, but also with the potential ones (frequently named the prospects), carrying out an
activity which involves informing and attracting these prospects towards the products being
sold (prospecting );
Area of the company’s market
With stores only in Bucharest and Cluj opened for the period taken in question,
Romania Hypermarche market is represent ed only by these two cities, but also by the
neighboring locations, and we may estimate that:
Cora Pantelimon store may also have customers from Pan telimon, Glina, Cernica;
Cora Lujerul store may also have customers Mogoșoaia, Chitila, Chiajna;
Cora Cluj Napoca store may also have customers from Florești.
In spite of all these, the number of these customers cannot go beyond 2% of the total,
the proximity area (Pantelimon, Militari, Mănaștur neighbourhoods ) being the most
important :
Cora Pantelimon : 55% customers from Pantelimon neighbourhood , 14% Titan, 5% Balta
Albă, 4% Iancului, 4% Dristor, 2% Obor, 2% Colentina, 2% Muncii, 2% Vitan, 2% Berceni,
6% other neighbourhoods , 2% neighbor areas ;
Cora Lujerul : 46% customer s from Militari neighbourhood , 26% Drumul Taberei, 7%
Rahova, 4% Crângași, 2% 13 Septembrie, 2% Ferentari, 2% Berceni, 2% Giulești, 2%
Domenii, 5% other neighbourhoods , 2% neighbor areas ;
Cora Cluj Napoca : 37% customers from Mănaștur neighbourhood , 16% Gr igorescu, 12%
Mărăști, 9% Zorilor, 7% Old city centre , 5% Gheorgheni, 3% Dâmbul Rotund, 2% Andrei
Mureșanu, 7% other neighbourhoods , 2% neighbor areas .
Page | 34
2.3. Analysis of Cora’s customer profile
Defining the customers’ profile and geographical location
As a consequence of the prospecting activities, the marketing department is able to get
to know in depth the needs, the requests and the expectations of the different segments of
consumers, differentiating them based on several criteria: social and demograph ic, behavior,
psychological, lifestyle, etc.
Based on annual customer surveys and studies, the conclusion has been drawn that the
customers of our stores have the following features:
Profile of customers based on education/occupation – first place is occ upied by
clerks who lead with 18.28% , closely followed by customers with management position with
15.82% , as well as freelancers or entrepreneurs, almost equal with clerks, with 15.64%.
a. Unskilled worker 9.65%
b. Skilled worker 10.94%
c. Clerk 18.28%
d. Management position 15.82%
e. Freelancer/entrepreneur 15.64%
f. Student 12.20%
g. Retired 14.47%
i. Others 3%
Visiting frequency – Most of Cora’s customers visit the stores daily with 37.63%
from the total number of customers , followed b y the ones who will show up for shopping
once a week , with about 10% less than the ones who show up daily and third placec is taken
by the customers who will come for shopping several times a week with 20.82% from the
total number of customers.
a. Daily 37.63%
b. Once a week 27.65%
c. Several times a week 20.82%
d. Once a month 6.41%
e. Twice a month 4.58%
f. My first visit 2.91%
Page | 35
The decision to buy when they go for shopping, of Cora customers , is mainly without
having a plan or a list of shoppi ng. This type of customers take the buying decision on spot
and they represent more than half of Cora’s total number of customer. They are followed with
almost half the first category percentage, meaning 28.49%, by the customers who go for
shopping both in mall stores and hypermarket.
a. Only in mall stores 6.97%
b. Only in the hypermarket 8.99%
c. Both 28.49%
d. Haven’t made a plan 55.55%
Collecting information about the customers and the competitors
Direct contact with customers and prospects pr ovides the selling forces with important
marketing information, which are capitalized by the company:
What are the reasons fo r customers not to come to Cora – alarmant reasons for
which the potential customers avoid Cora stores are price -quality ration pr oducts in the shelf
or lack of products with discounted sell prices. They totalize more than 20% of Cora’s
customers reasons for why they do not go for shopping in Cora stores.
The main competitors for foods – the main competitor for Cora in the food products
category is by far Carrefo ur who is first choice in 24.35% of the interviewed customers,
followed by Auchan with almost half of Carrefour’s percentage, 12.57%.
Carrefour 24.35%
Auchan 12.57%
Real 8.67%
Kaufland 5.86%
Others 3.57% a. Ration quality/price 10.36%
b. Employees’ behavior 8.67%
c. Lack of pro ducts in the
shelf/promotion 10.48%
d. Long time spent at the cash register 5.06%
e. Differences of price shelf/cash
register 15.42%
Page | 36
The main competitors for non-foods – the main competitors for Cora are the
specialized stores who will sell only this type of products and as predicted they are leading in
the customers preference with 35.38%, followed by Carrefour with only 17.45%.
Others 35.38%
Carrefour 17.45%
Kaufland 8.58%
Auchan 7.26%
Real 7.17%
The main suggestions that Cora customers had for the improvement of the buying act
are the following:
Lower prices (26% of the answers provided );
Employees’ behavior : they are not present at the departments, they look bored or th ey
are not available ;
More offers and promotion campaigns ;
Display and arrangement of products at the shelves ;
Need for more types of products for : cosmetics, dairy, vegetables and fruit, pastry,
clothing ;
The space at the cash register is too small and n arrow;
The possibility to exit at the cash registers if they have no shoppings made;
Higher temperature in the store .
Analysis of the customers private perdons
For the analysis of the private person customers, the date have been obtained from the
database of the Cora Hyper Card .
The maximum time taken by the customer to get to CORA
Store 10-15 min 16-20 min >20 min
PANTELIMON 48% 19% 34%
LUJERULUI 31% 25% 44%
SUN PLAZA 55% 26% 19%
CLUJ NAPOCA 58% 17% 25%
Page | 37
We may notice that by placing Cora Pantelimon , at the outskirts of Bucharest, there
results a value of 48% which meand that they take a time of about 10 – 15 min, for Lujerului
the customers take more than 20 min. (44% of them, as this store is neighboured by some
residential areas, at the ex it way from Bucharest ). For Sun Plaza, being located inside a mall,
the customers reach in a higher percentage 55% from a smaller distance, and for Cluj Napoca
most of the customers get there in about 10 – 15 min. (58%).
Customers’ presence in Cora networ k
Frequency 2-3 times per
week Once a week 2-3 times per
month Once a month
PANTELIMON 31% 37% 24% 8%
LUJERULUI 38% 41% 12% 9%
SUN PLAZA 41% 37% 11% 11%
CLUJ
NAPOCA 34% 41% 14% 12%
Being located inside a mall, Cora Sun Plaza benefits of more visi ts from customers,
having the highest percentage of the Cora network 41% (2 -3 times per week.), followed by
several percents by Lujerului , 38%, and then all the other stores.
Average income of customers per family
Store <500
RON 500-1099
RON 1100 –
1599
RON 1600 –
2099
RON 2100 -2699
RON 2700 –
3299
RON >3300
RON
PANTELIMON 1.80% 21.80% 25.40% 16.80% 10.40% 8.30% 15.50%
LUJERULUI 1.60% 27.40% 32.70% 15.70% 8.60% 6.90% 7.10%
SUN PLAZA 1.10% 20.85% 25.60% 18.63% 15.49% 9.06% 9.28%
CLUJ -NAPOCA 1.00% 21.43% 25.00% 13.00% 13.43% 7.43% 18.71%
We may notice that, as a general rule, those who shop in our network have, in most of
the cases, family incomes that are above the medium salary in Romania. This aspect is due to
the fact that the stores are located in Bu charest and in another large city of the country.
Page | 38
Customer categories according to their age
Store 18-25
years old 26-33
years old 34-41
years old 42-49
years old >50 years old
PANTELIMON 9.60% 14.30% 18.20% 17.50% 40.20%
LUJERULUI 5.70% 15.70% 23.70 % 28.10% 24.90%
SUN PLAZA 8.40% 13.66% 19.65% 16.87% 39.81%
CLUJ -NAPOCA 10.71% 18.86% 18.43% 15.00% 37.00%
In most of the cases, the bulk of the final consumers who shop at Cora have the right
age as to decide by themselves on what to buy and who have their own incomes. This is a
healthy and balanced structure of the customers, one that should be watched for and make
sure that it stays this way.
Gender of interviewed customers
Female Male
PANTELIMON 64.80% 35.20%
LUJERULUI 65.80% 32.00%
SUN PLAZA 74.43% 23.16%
CLUJ -NAPOCA 59.57% 40.29%
We may notice that in each store, most of the final consumers are females, as indeed
they are the main decision -makers at home and they are also the ones who manage, in most of
the cases, the shopping budg ets.
CORA product categories purchased by the customers
Categories PANTELIMON LUJERULUI SUN PLAZA CLUJ -NAPOCA
Soft drinks 4.2% 4.5% 7.4% 2.10%
Carbonated drinks 4.7% 3.4% 12.7% 2.10%
Basic foods 58.4% 29.1% 52.4% 44.40%
Cosmetics 7.2% 4.3% 21.3% 7.30%
Detergents 14.1% 8.0% 30.6% 6.60%
Hygene products 6.9% 7.0% 20.3% 12.70%
Sweets 20.7% 12.0% 15.0% 7.40%
Page | 39
Cleaning products 13.8% 7.5% 15.8% 7.70%
Textiles 22.2% 51.6% 34.8% 12.70%
House cleaning products 10.1% 5.8% 8.2% 0.40%
Most of the clients have focused on the category of basic foods, detergents, sweets and
textiles. This thing can also be associated to the previous point, as women are th e ones who
take care of the houses, in most of the cases.
Winny product categories purchas ed by the customers
Categorii PANTELIMON LUJERUL SUN PLAZA CLUJ -NAPOCA
Soft drinks 6.9% 9.9% 6.0% 2.60%
Carbonated drinks 8.7% 11.3% 13.7% 2.90%
Basic foods 66.6% 54.9% 62.7% 45.60%
Cosmetics 27.3% 24.4% 15.6% 9.60%
Detergents 10.7% 9.4% 23.8% 5.10%
Hygene products 16.3% 14.9% 28.8% 12.30%
Sweets 33.6% 24.3% 33.6% 16.10%
Cleaning products 12.3% 16.3% 17.7% 5.10%
Textiles 22.5% 16.1% 25.9% 15.90%
Just as in the case of the C ora brand products, the basic foods are the first to be
purchas ed, with 66.6% per store compared to the other categories/stores (cleaning products
33.6%, sweets 27,3% etc).
Analysis of customers legal entities – ABC method
Legal entities are the commercial companies that are Cora customers.
Legal entitie s have re ported a decrease in Cora sales, there are approximately 500
legal entitie s in the stores surveyed, and they represent 0.5% of the total number of customers
and 2% of the turnover.
Punctually, they are presented with offers for purchasing certain larger quantities of
products (for instance: water and beer – during the summer time).
This 0.5% of the customers is structured according the ABC method as follows: there
are 70% of them who bring 40% of the turnover and 30% of them who bring 60% of the
turnove r. The 30% who bring the bulk of the turnover are major companies for Romania
Page | 40
Hypermarche, and according to the specific activity of each legal entities customer, Cora will
present also special offers. For instant, one of its customers is a large manufactu rer company,
and this is being sold mineral water, stationary and cleaning products.
Most of the major customers are also the outlet stores located around Bucharest or in
the neighbourhoods of Bucharest (the so -called boutique owners). They are presente d special
offers for oil, sugar, sodas, and cleaning products.
As a general conclusion, irrespective of the type of customers and of the efforts made
to keep them, for Romania Hypermarche all customers are important, and offers are drafted
for all segment s, and a major advantage is represented by “being able to play” with all the
various categories of customers. Likewise, attracting new customers is just as important and
increasingly harder to achieve, as the competition grows bigger every day.
ABC analy sis of products – the top products being sold
Another method to analyze Cora customers is by the products that they buy. In order
to keep a unitary form and due to the simple analysis method, in order to establish a hierarchy
of the product categories, we will use the same ABC method.
The products that bring 80% of the turnover of Cora network have the selling prices
adapted to the market, so that the prices are no higher than the level of the competition. This
“sales top” is represented by the products of bare necessity, more precisely the food products.
Within the Cora network, there is a team called Pricing Control whose task is to check
all the prices on the market, so that the competitors’ prices correspond to the prices in Cora
network.
In case a price is different from the competitors’ price, then, the acquisition
department team is informed on this matter and the respective department will have to
renegotiate the acquisition price in order to have the selling price competitive and in
accordance w ith the one on the market.
Winny products have a good sales participation; in the table below we may notice that.
Winny products’ participation is of 5% of the turnover, the food department, within the entire
Cora network. For a better understand ing of the categories in which these products play an
important role, we present in Table 2.6 the products which bring 50% of the turnover made by
all Winny products, in Cora network.
Page | 41
Table 2.6 – Table with top most sold Winny products (Source Cora R omania)
Item Annual
turnover
2010 % in
annual
turnover
2010
Winny refined sunflower oil 1 l 677,562 11.15%
Winny napkins 25X25cm,100buc 523,761 8.62%
Winny kitchen towels 2 rolls 2sheets 280,652 4.62%
Winny kitchen towels 6 rolls 2sheets 154,327 2.54%
Winny baby wipes 80pcs 114,053 1.88%
WINNY eggs 30pcs 106,390 1.75%
WINNY butter 65% 200G 106,158 1.75%
Winny fine napkins 150 pcs 88,857 1.46%
Winny Lichid window washing liquid 5L 81,030 1.33%
Winny garbage bags 35L 20 pcs/set 77,226 1.27%
Winn y baby wet wipes 72 pcs 74,233 1.22%
Winny wet wipes 20pcs 72,735 1.20%
WINNY eggs box of 30pcs 72,462 1.19%
Winny aluminium foil 10 m 69,146 1.14%
WINNY Petit Beurre 400g 68,779 1.13%
Winny kitchen paper towels 4rolls 2 sheets 68,076 1.12%
Winny flour 000 1kg 67,805 1.12%
WINNY still water 8L 64,676 1.06%
Winny garbage bags 18L 20 pcs/set 64,538 1.06%
Winny toilet paper 1sheet 8rolls 64,109 1.06%
WINNY mineral water 2L 62,490 1.03%
WINNY cocoa biscuits 25g 61,716 1.02%
Winny toilet paper 1sheet 6 rolls 61,267 1.01%
In order to improve the indicators customer debit, average consumption and to
increase the sales, the products listed in this top are also operated by the following methods:
Catalogue promotions – they bring 2 5% of Cora network sal es. The timeline for such a
promotion campaign is 2 weeks;
”spot” local promotions – they are the one -day promotions (Hyper – Offer of the Day );
“White Nights ” promotions – this type of promotion is carried out in certain periods in the
year, in the time line – Wednesday to Sunday – and this type of actions are meant to increase
the traffic in the store and also the amount of money spent for each shopping session .
The presence of the products in the shelves is also essential in making the customers to
buy.
These “top sales” articles must be ordered so that they are present in the shelves all the
time, as a breakage in the stock might cause a loss in the turnover. The categories listed
below, representing 3% of the total products put out for sale, brin g 50% of the turnover of
Cora ne twork, according to Tabel 2.7 .
Page | 42
Table 2.7 – Top sales (Source Cora Romania)
Segment No items
segment Va Sal CJ Va Sal LJ Va Sal PA Va Sal SU Total sales
value
Butchery 95 6,757,892 18,329,539 22,347,734 18,670,585 66,105, 750
Sunflower oil 15 3,127,083 6,734,786 8,860,027 3,903,170 22,625,065
Coke carbonated drinks 16 1,981,423 5,630,559 7,715,311 2,589,868 17,917,162
Still mineral water 14 1,375,169 6,080,216 6,304,587 3,062,107 16,822,080
Yogurt/milk and yogurt
deriv ates 31 1,825,608 5,336,117 4,784,920 3,514,280 15,460,925
Ground coffee 17 2,063,289 4,598,455 4,844,645 2,362,016 13,868,405
White sugar 13 2,088,425 3,842,586 4,998,860 2,120,283 13,050,154
Medium blonde beer 17 1,815,653 4,044,160 4,570,253 1,344,2 71 11,774,336
Cigarettes 22 2,215,642 2,981,742 3,654,330 2,785,977 11,637,691
Yellow cheese 16 965,226 4,392,366 3,387,425 2,116,795 10,861,811
Carbonated mineral water 15 1,631,619 3,103,930 3,522,208 1,429,776 9,687,533
2sheets toilet paper 27 1,138,776 2,654,684 2,736,267 1,637,502 8,167,230
Fruit carbonated drinks 31 874,270 2,296,620 4,114,696 859,035 8,144,621
Bananas 2 1,046,432 2,530,006 2,543,329 1,470,488 7,590,255
Premium blonde beer 19 1,970,544 2,076,503 2,250,487 978,122 7,275,657
3sheets toilet paper 13 942,500 2,052,817 2,000,313 1,303,695 6,299,325
Butter 11 1,223,430 2,137,269 1,713,626 1,189,818 6,264,143
Sausages 15 878,939 1,816,951 1,561,589 1,060,649 5,318,127
Bakery 38 802,514 2,042,182 1,003,312 1,184,760 5,032,76 8
Apples 9 685,477 1,677,580 1,385,159 919,666 4,667,883
Sibiu Salame 8 454,284 1,660,971 1,615,455 897,678 4,628,387
Black olives 10 241,987 1,645,565 1,542,096 1,048,095 4,477,743
Bread 10 542,438 1,486,611 1,067,014 1,272,496 4,368,559
Cheese 4 180,155 1,784,810 1,311,644 1,055,858 4,332,467
Oranges 3 539,728 1,515,493 1,415,210 821,537 4,291,968
Chocolate bar 20 401,081 1,650,990 1,264,582 916,431 4,233,084
Tomatoes 7 141,757 1,396,717 1,779,958 740,923 4,059,356
Legend
Segment = Catego ry, Group ;
No items segment = the number of types of products ;
Va S al CJ/LJ/PA/SU = value of sales in Cluj -Napoca/Lujerului/Pantelimon/Sun Plaza
2.4. Analysis of the “shopping cart”
With stores only in Bucharest and Cluj, Romania Hypermarche market is represe nted
only by these two cities, but also by the neighboring locations, and we may estimate that:
Cora Pantelimon store may also have customers from Pan telimon, Glina, Cernica;
Cora Lujerul store may also have customers Mogoșoaia, Chitila, Chiajna;
Cora Cl uj Napoca store may also have customers from Florești.
Page | 43
In spite of all these, the number of these customers cannot go beyond 2% of the total,
the proximity area (Pantelimon, Militari, Mănaștur neighbourhoods ) being the most
important :
Cora Pantelimon : 55% customers from Pantelimon neighbourhood , 14% Titan, 5% Balta
Albă, 4% Iancului, 4% Dristor, 2% Obor, 2% Colentina, 2% Muncii, 2% Vitan, 2% Berceni,
6% other neighbourhoods , 2% neighbor areas ;
Cora Lujerul : 46% customers from Militari neighbourhood , 26% D rumul Taberei, 7%
Rahova, 4% Crângași, 2% 13 Septembrie, 2% Ferentari, 2% Berceni, 2% Giulești, 2%
Domenii, 5% other neighbourhoods , 2% neighbor areas ;
Cora Cluj Napoca : 37% customers from Mănaștur neighbourhood , 16% Grigorescu, 12%
Mărăști, 9% Zorilor, 7 % Old city centre , 5% Gheorgheni, 3% Dâmbul Rotund, 2% Andrei
Mureșanu, 7% other neighbourhoods , 2% neighbor areas .
Product list offered by Cora Romania
Suppliers’ market
The company is collaborating with a large number of suppliers, based on the exten ded
number of the types of products (over 70 000 items ): 700 suplliers .
Of the 700 suppliers, with 43 of them 50.42% is made of the total turnover and with
109, 30.09% , as we may note in the Table 2.8.
Table 2.8 – Suppliers’ market : the number of supplier s and the weight in the turnover
(Source Cora Romania)
Of the total number of suppliers, 3% are the external suppliers for categor ies of
products which belong to the non -food departments. No of suppliers % suppliers % turnover
548 78.22% 19.49%
109 15.58% 30.09%
43 6.20% 50.42%
700 100.00% 100.00%
Page | 44
The 43 suppliers with which the company achieves 50.42% of the turnover, they
usually are the multinational companies with famous brands and types of products which are
wanted by the customers, su ch as : Coca Cola, Procter, Unilever, Danone, Nestle, Henkel,
Kraft, L’Oreal, Colgate, Pepsi, but there are also some Romanian producers with a good fame
among the customers : Romaqua ( Borsec ), Napolact, Aldis, Cristim, Albalact etc.
The offer / The reques t
The company provides to its customers more than 70,514 items .
No. of
references
FMCG ( drinks, detergents -hygene , sugar products , basic foods, cosmetics ) 13,630
Fresh products (cold meats, dairy, frozen foods, vegetables and fruit, fish, bakery, m eats ) 10,947
Total for foods 24,577
Textiles 15,083
Home use products (gardening, house cleaning, cultural, cars, toys ) 26,560
Hom eappliances, electronics and IT 4,294
Total for non -foods 45,937
70,514
The products are grouped in 3 87 categori es. The weight of the categories in the total
turnover is depicted in Tabel 2.9.
Table 2.9 – Product categories : share in the total turnover (Source Cora Romania)
No. of categories % categories % turnover
257 66.41% 19.57%
86 22.22% 30.06%
44 11.37% 50.37%
387 100.00% 100.00%
An amount of 44 categories achieve 50.37% of the turnover, and these categories are
to be found in the top categories at the national level, the request in the company’s stores
being similar to the one in the other stores. A more detailed presentation of these categories is
in Table 2.10 .
Page | 45
Table 2.10 – Detailed presentation of the share of the main product categories in the
turnover (Source Cora Romania)
Category % turnover
Soda drinks 5.84%
Blonde beers 4.54%
Detergen ts 3.13%
Sunflower oil 2.01%
Types of cheese ( yellow cheese ) 1.90%
Soft drinks 1.79%
Still waters 1.63%
Yogurt 1.46%
Natural sugar 1.30%
Mineral waters 1.30%
Cigarettes 1.25%
Ground coffee 1.13%
Salames 1.13%
Cleaning products 1.12%
Toilet paper 1.05%
Whisky 1.05%
Cereals 1.00%
Fresh milk 0.95%
Dry/raw salames 0.92%
Cuisine 0.90%
Cold meats specialties 0.87%
55cm diag. TV sets 0.87%
Quality white wine 0.86%
Sausages 0.84%
Egges 0.83%
Shaving products for men 0.77%
Perfumes for men 0.77%
Perfumes for women 0.74%
Milk UHT 0.73%
Chocolate tablets 0.72%
Baby food 0.70%
Ice tea 0.68%
Air freshners 0.67%
Praline s 0.67%
Hair dyes 0.66%
Page | 46
We may notice a huge participation of food products, compared to the non -foods. The
detailed presentation of food/non -foods is made in Table 2.4.
Table 2.11 – Detailed presentation of foods/ non-foods products’ share in the turnover
(Source Cora Romania)
Product categories % turnover
FMCG ( drinks, detergents -hygene , sugar pr oducts , basic foods, cosmetics ) 42.00%
Fresh products (cold meats, dairy, frozen foods, vegetables and fruit, fish, bakery, meats ) 30.45%
Total for foods 72.45%
Textiles 8.87%
Home use products (gardening, house cleaning, cultural, cars, toys ) 9.56%
Hom eappliances, electronics and IT 9.12%
Total for non -foods 27.54%
The situation is a usual one for a local hypermarket, but also for the international
framework. In the case of supermarkets and discount stores, the weight of the food produ cts
would be higher, as the total of the non -food products would represent no more than 12% of
the store’s total turnover.
The structure of the product list
The list of products has been subject of a thoroughly detailed classification. For
statistic re ports, a certain degree of aggregation is required, and therefore we use a more
general classification . The classification criteria s are the following:
Depart ment
Division
Family
Sub-family
Typology
Segment1
Segment2
Page | 47
2.5. Marketing strategies and instrument s for the sales strategy of Cora Romania
The co mponents of the sales policy are represented by the selling forces in the stores
(the store manager, heads of departments, heads of divisions, the commercial workers, sellers,
merchandisers and reception des k workers) and the acquisition central units.
The objectives that must be accomplished by the selling forces in the store (heads of
divisions, heads of departments, store mangers) are:
The selling . This is done by the store manager, the heads of departm ents and divisions
and the commercial workers. The main objective of the selling force is to sel l the company’s
products.
The store manager establishes the objectives which are fixed in accordance with
Romania Hypermarche’s general objective . The heads of departments are in charge with the
results of each department and they establish the objectives for the division of each division
head. The heads of division are coordinating directly the commercial workers, they are
drafting the working planning (days, ho urs – meal breaks), and at their turn they check the
stocks and the forwarding of orders to the suppliers.
The commercial workers and the merchandisers are the basis of the selling act, and
according to how much and how they fill the shelves, the sales are achieved, as well as the
sales objectives. Their main attributions are:
the placement for selling of the product in the store/in the department (display,
sampling, conditioning, prepacking, branding, labeling etc.) Good positioning means
defining well the types of products, chosing the references – in order to find the best
place and to fully cover the request;
the selling surface assigned for each product, calculated in cm or in product facings;
the quantity of each product that will be presented within the department (including
weighing, dosage, weight checking, printing, coding, etc.) – the sufficient quantity for
the product to be visible and to avoid breakages in stocks between two supllies, limited
quantities in order to avoid useless stocks;
the displays and the arrangement of the merchandise, the furniture use for the display
(adapted to the type of product – vegetables and fruit, textiles, footware, books, video,
toys etc.): stands, pallets, baskets, modular shelves, windows, island displ ay cases,
counters, round stands, displays, exhibit displays;
Page | 48
emphasizing the surfaces with strong impact on the buyers: the shelf end, stands at hand
and look (meant for the new products and for “pushing” certain products on the market);
the best econom ical display of the merchandise, use of adequate equipment,
the nature of the materials used for singnalling and advertising at the selling place:
labels, posters, announcements, fliers, brochures, audio and video ads, entertainers,
promotional objects e tc.;
the display plan and the design of the store, the manner in which th customers are
directed, the flow of serving, the decorations, the light, the colors used, the ambiance,
etc.
The objectives that must be achieved by the acquisition departments are negotiating and
concluding the c ontracts, m erchandising and a dvertising at the selling place and t he sales
forms within Romania Hypermarche.
Negotiating and concluding the contracts . The acquisition central units have the mandate to
negotiate and sign sell ing contracts for all the products put out for sale in the selling area. The
commercial contracts are negotiated every year and they must help at achieving of the
commercial discounts objectives. Just as the objectives established for the selling force, th e
objectives of the acquisition units are established according to the strategy and general
objective of Romania Hypermarche.
Merchandising and advertising at the selling place . These actions are meant to increase
sales, attract customers and make them buy the products. These actions are negotiated by the
acquisition central units and they are included in the acquisition contracts. They are
negotiated in terms of total number of promotion campaigns/the timeline for each one/the
theme of the promotion campai gn, the discount granted, the quantities of merchandise firmly
engaged.
Sales forms within Romania Hypermarche . Within the selling surface, there are 2 forms of
selling: the self -service is the main form in Cora stores, as this form offers the customer the
freedom to choose on his/her own the products that they wish to buy; the main disadvantage
of this selling form is that the percentage of merchandise which is degrading is higher du e to
repeated handling/testing and the assisted selling , is encountered at the bulk merchandise
cases (cheese, olives, cold meats, sweets, frozen vegetables and fruit), at the cooked food
department, at the Cosmetics department (make -up stands). Assisted selling means serving the
customers by personnel, especially trained for th is type of sales. Eventhough it is a little more
expensive from the perspective of the fixed costs, this selling form is imposed on these
market segments by the current sanitary regulations and laws, on one hand (for foods), and by
Page | 49
the necessity of dimini shing the cases of stolen or broken goods (in case of make up and
cosmetic products).
Sales analysis and planning regroup all the useful information resulted from the previous
research/analyses/conclusions. The sales plan is the synthetic part of the s ales policy, whereas
the sales analysis is the analyti cal part of the sales policy. Sales analysis included several
stages/elements :
Establishing the objectives ;
Establishing the level of sales costs ;
Analysis of sales in each store ;
Analysis of promotio n activities ;
Analysis of products’ profitability ;
Calculation of total sales costs .
Establishme nt of the objectives of the annual and monthly turnover are established at the
level of each store and then aggregated for Romania Hypermarche. The objective fo r 2010
was to reach the same turnover as the one in 2008, and the detail is presented in Annex 1 . As
we may see, the turnover has a descending development starting with 2008 for the non -food
departments (the cause being the decline of the whole market ), followed by a decrease of the
other departments starting with 2010 ( in the context of the economic crisis ). The non -food
departments are those which are the most affected by the blockage of creditation and the
decrease of consumptio n, as we well see in Table 2.12:
Table 2.12 – The weight of departments in the total turnover (Source Cora Romania)
Dep Store Weight in turnover
% 2008 % 2009 % 2010
Food CJ 66.02% 72.82% 73.05%
LJ 72.90% 75.47% 78.00%
PA 73.27% 75.23% 77.59%
72.09% 75.01% 77.09%
Non-food CJ 33.98% 27.18% 26.95%
LJ 27.10% 24.53% 22.00%
PA 26.73% 24.77% 22.41%
27.91% 24.99% 22.91%
Establishing the level of sales costs . At the end of each year, the expenses budget is drafted,
and there are also established the objectives for t he upcoming year. The expenses must come
within the frame of a certain percentage of the objective turnover. The costs included in the
Page | 50
budget include also the costs foor the employed labour force from the stores and the central
units, the costs for the equ ipment which must be purchased in the store, the costs regarding
the reshaping/refurbishing the departments or the stores, the costs for the discounts and for
solving the complaints.
Analysis of sales in each store . In order to decide whether the increase of the sales budget or
the enhancement of the efforts in the store may improve the results , the analysed indicators
will be the following:
Customers flow (the number of customers that enter Cora stores )
Average consumption (the average turnover spent by a customer in Cora stores )
The turnover without the VAT (the sales in RON without VAT)
All these indicators are followed up daily and then they are aggregated in weekly, monthly
and yearly terms. According to the aspects mentioned above, there are also estab lished the
actions at the levels of the stores, according to Annex 2.
A great importance in achieving the objectives established are also the private label
products due to the increased productivity in this category of products an d to the importance
of their existence within certain categories, making it easier to adjus t the price to the
competitors. Ever since 2009 Cora had already achieved one of its majo r goals, to launch its
own brand Cora product, namely Winny, and to consolidate the turnover for Win ny products.
Evolution of the weight in turnover of Winny products
Page | 51
The evolution of the number of product references – private label
This objective was achieved as in 2009, 218 Cora products and 220 Winny products
were launched, and the weight of the Winny products increased by 0.58%,, and the Cora
products by 0.30%.
Analysis of promotion activities . Being carried out by the company, these activities are a
basic element in the sales analysis and planning. We will further present a study conducte d by
ISRA Center Marketing Research.
The study’s intention was to reach several objective: the criteria had in mind when a
certain store is chosen for shopping, the attitude regarding the promotions in the hypermarkets
and supermarkets; the categories of products which are being promoted and seen as being
interesting by the consumers; the degree of satisfaction towards the retailers’ promotions; the
main strong points, and weak points respectively in these campaigns; the negative experiences
of the consume rs in relation to certain products being promoted.
According to the results of the research, when they choose the store for shopping,
Romanians from the city mainly consider the level of the prices and the easy access to that
store – which is translated into the proximity to the house, and thirdly, come the types of
products being sold.
Compared to the people from other cities of our country, the people from Bucharest
are also more interested in the working hour time table and also in the number and av ailability
of the cash registers, which is explained by the crowds , specific for the stores in the Capital.
Compared to other age categories, young people do not have certain clearly
established criteria to guide themselves when chosing a store; at the op posite, the older
people, who have their own set of clearly established criteria, and the price is the most
important element in this.
Page | 52
The results of the study indicate that 7 out of 10 people living in the urban area visit a
store when they hear or read about a promotion campaign, noting that the respective
promotion is of interest for them.
Attractive promotion campaigns
Current situation . There is an increase of the weight of promo turnover in the total turnover
for non -food departments, which is a d angerous evolution for the mix of product types and the
commercial margin.
Table 2.13 – Weight of turnover in the non-food departments (Source Cora Romania)
Depart ment Store % turnover
2008 % turnover
2009 % turnover 2010
1 CJ 22.15% 21.21% 21.82%
PA 23.78% 22.50% 22.03%
LJ 22.26% 21.33% 21.01%
22.91% 21.80% 21.54%
2 CJ 17.45% 18.19% 20.37%
PA 23.80% 24.17% 25.73%
LJ 21.91% 22.24% 24.11%
22.10% 22.46% 24.20%
3 CJ 11.30% 12.70% 17.81%
PA 11.13% 12.90% 15.84%
LJ 12.01% 12.49% 16.52%
11.53% 12.69% 16.46%
6 CJ 23.43% 23.28% 30.96%
PA 20.07% 19.19% 25.42%
LJ 18.73% 18.36% 24.11%
20.04% 19.38% 25.77%
8 CJ 28.42% 27.40% 45.22%
PA 32.17% 30.95% 35.27%
LJ 29.06% 26.07% 35.84%
30.32% 28.33% 37.47%
Total 21.89% 21.39% 23.21%
Page | 53
Analysis of products profitability . Efforts may be directed towards the selling of the more
profitable products; this can be done by favorable placement of profitable products;
concretely, once the financial crisis started, the shelf placements have been reconsidered and
adjusted to the new realities in sales field, so as the profitability per liniar meter stay the same
as the one established as objective, namely 1500 euros/m/year.
Calculation of total sales costs and comparison to the estimated costs . Although in the
analysed timeline, the number of the employees has increased, in fact, this thing has been due
to the hypermakets’ horizontal development. At the same time, for each department of the
store, downsizings have been opera ted, with the constant intention of maintaining the same
productivity per employee as the one established, namely, 5000 euros/employee/year. Some
of the employees have been transferred from one department to another, and those who did
not perform well or h ad made mistakes, were fired.
Therefore, sales analysis and planning is a complex stage, and based on the accuracy of
the analysis of information and conclusions obtained, the sales policy is drafted,
respecting the guiding lines of the company’s strateg y.
Page | 54
Conclusions
Retail is an extremely complex field of activity, where we can seize the pace of
several fields, at the same tome: food, non food, labor force market , real estate or logistics. At
the moment of the shift from 2008 , from 6 .2% increase of GDP to -8.5% in 2009, the
consumers changed their behavior in buying and saving money; the difference of 14% in one
year was tough. The rate of unemployment has also changed from 4. 4% to 7. 8%, and
household consumption shifted from 9% in 2008 to -4.9% in 2009. For the very fisrt time
after the Revolution, the Romanians had to face a time of sudden decrease to which they had
to adjust fast. The Romanians were at that time the people from Europe with the least of
savings, yet this concern (of saving money) – has started to develop increasingly during the
recent 3 years .
Our case study presents in details the sales policy and strategy of Romania
Hypermarche. The timeline selected, 2008 -2010 , is a good timeline as 2008 was a very good
year in sa les, whereas 2009 was the year which reported the top sales on the Romanian
market.
2010 was a recovery year, the objective being to reach again the performance and
levels of 2008.
As far as Romania Hypermarche is concerned , there has been reported an incr ease in
the categoroies of strict necessity goods (basic foods ) and also the weight of the own brand
products (for example on the FMCG market, the weight of these products has increased by
3% in 2011 compared to 2010); there are also some categories where this weight reaches
almost 40% of the turnover : for instance cooking oil – source : GfK Romanian Retail Report.
For the consumers, the own brands propose similar products, also in terms of quality, with the
national brands, yet at a minimum price, 20% lower . In this more difficult time, it has come as
a natural fact for people to go to these products. In general, the non -food sector has been thee
most affected by the crisis, and within this sector, the category of long life products, such as
textiles or furn iture, have reported the highest decreases. One of the most affected categories
was the long life products. The market has decreased by 41% in 2009 compared to 2008, by
49% in 2010 compared to 2008. In 2011 , this market started to increase and almost reach ed
the 2009 market level.
This time, more difficult from the economic perspective, is also a denser one, more
oriented towards precaution, where efforts are bigger and sometimes for the same result. The
involvement and motivation of people plays a key ro le. The team is extremely important and
Page | 55
work team is als o extremely beneficial. Thinking for the perspective, things will improve and
the development will recover. The fact that what we do every day has an impact on the liv es
of our customers , motivates Romania Hypermarche team to permanently look for the best
solutions and stay performant.
Beside the strategic issues mentioned in the case study, Romania Hypermarche is also
extensively involved in the communities’ social life, as every year it is organize d the “the
Month of the open hearts” – an action which is intended to raise funds for the “Save the
Children” Organization and for the orphanage of Valea Plopilor. Rom ania Hypermarche is
committed to please the consumers in Romania and to build its strateg y according to their
requirements.
Annex 1 – Results for 2008 – 2010 (Source Cora Romania )
Store Turnover Variation of the turnover
2,008 2,009 2,010 09 vs 08 10 vs 09
CJ 65,094,425 76,586,351 80,697,735 17.65% 5.37%
LJ 231,204,700 279,106,414 264,988,071 20.72% -5.06%
PA 229,700,66 8 250,075,437 240,068,656 8.87% -4.00%
525,999,793 605,768,203 585,754,462 15.17% -3.30%
CJ 48,376,010 57,477,321 56,951,555 18.81% -0.91%
LJ 153,389,279 185,061,631 169,482,219 20.65% -8.42%
PA 147,684,178 163,809,927 149,444,686 10.92% -8.77%
349,449,467 406,348,879 375,878,460 16.28% -7.50%
875,449,260 1,012,117,082 961,632,922 15.61% -4.99%
CJ 24,102,890 21,998,853 20,891,308 -8.73% -5.03%
LJ 56,398,116 60,502,324 54,682,699 7.28% -9.62%
PA 52,921,310 56,092,488 49,633,734 5.99% -11.51%
133,422,316 138,593,666 125,207,742 3.88% -9.66%
CJ 15,908,165 13,665,368 12,421,625 -14.10% -9.10%
LJ 42,249,786 45,427,963 32,993,335 7.52% -27.37%
PA 35,529,075 36,434,062 27,031,079 2.55% -25.81%
93,687,026 95,527,393 72,446,038 1.96% -24.16%
CJ 18,379,719 14,371,026 17,472,117 -21.81% 21.58%
LJ 44,290,960 44,943,623 34,845,592 1.47% -22.47%
PA 49,212,279 43,773,624 35,864,325 -11.05% -18.07%
111,882,958 103,088,273 88,182,034 -7.86% -14.46%
338,992,300 337,209,332 285,835,813 -0.53% -15.23%
1,214,441,560 1,349,326,413 1,247,468,736 28.06% 11.11% –
7.55%
Annex 2 – Customers flow, Average consumption, Turnover ( Source Cora Romania )
Customers flow Average
consumption TO-VAT 01-03 Debit
v% Cos
v% TO-
VAT
v%
Department Store 2009 2010 2009 2010 2009 2010
Drinks CJ 408,141 391,745 33.79 22.09 8,832,754 8,021,315 -4.02% –
34.63% -9.19%
LJ 1,141,461 986,489 31.9 27 30,594,333 22,380,012 –
13.58% –
15.36% –
26.85%
PA 932,904 854,009 34.94 29.82 27,205,277 21,278,309 -8.46% –
14.64% –
21.79%
SU 0 376,917 0 17.38 0 5,506,246
Detergents CJ 263,308 269,113 30.95 27.93 6,416,630 6,405,650 2.20% -9.76% -0.17%
LJ 886,395 772,249 28.92 28.65 21,539,661 18,591,601 –
12.88% -0.93% –
13.69%
PA 633,292 591,067 37.08 36.08 19,643,193 17,831,804 -6.67% -2.69% -9.22%
SU 0 243,423 0 29.66 0 6,066,775
Sugar products CJ 432,598 444,764 17.82 17.89 6,422,862 6,630,123 2.81% 0.39% 3.23%
LJ 1,371,614 1,226,613 18.69 18.75 21,540,272 19,331,175 –
10.57% 0.35% –
10.26%
PA 1,061,532 988,833 21.44 20.69 19,037,259 17,109,048 -6.85% -3.50% –
10.13%
SU 0 456,257 0 15.7 0 6,020,531
Basic foods CJ 353,586 360,129 19.11 18.03 6,006,415 5,768,907 1.85% -5.65% -3.95%
LJ 1,131,137 1,028,423 20.82 18.23 19,787,106 16,178,207 -9.08% –
12.41% –
18.24%
PA 830,501 805,460 26.39 23.78 18,342,087 16,010,861 -3.02% -9.90% –
12.71%
SU 0 370,047 0 17.07 0 5,307,923
Cosmetics CJ 223,269 226,801 21.75 25.51 4,113,426 4,347,560 1.58% 17.29% 5.69%
LJ 771,837 680,433 25.8 26.13 16,735,820 14,941,471 –
11.84% 1.27% –
10.72%
PA 556,074 511,751 27.47 26.69 12,775,665 11,412,561 -7.97% -2.84% –
10.67%
SU 0 247,236 0 23.97 0 4,979,843
Packed fresh
products (cold
meats) CJ 223,938 209,032 18.13 13.42 2,771,429 2,440,721 -6.66% –
25.98% –
11.93%
LJ 780,957 669,704 16.78 15.18 11,009,931 8,543,187 –
14.25% -9.51% –
22.40%
PA 559,732 514,765 19.07 17.23 8,934,562 7,419,985 -8.03% -9.65% –
16.95%
SU 0 254,762 0 14.6 0 3,125,093
Dairy CJ 429,100 418,777 17.35 15.44 7,188,857 6,744,056 -2.41% –
11.01% -6.19%
LJ 1,153,434 1,052,770 19.91 19.24 19,297,818 17,018,966 -8.73% -3.38% –
11.81%
PA 836,989 802,158 23.35 22 16,357,892 14,762,609 -4.16% -5.78% -9.75%
SU 0 362,546 0 17.7 0 5,393,274
Frozen
products CJ 117,478 108,440 16.84 14.79 1,521,655 1,303,396 -7.69% –
12.17% –
14.34%
LJ 384,440 319,060 15.95 14.03 5,152,919 3,760,750 –
17.01% –
12.06% –
27.02%
PA 277,772 242,881 17.4 15.42 4,045,498 3,131,603 –
12.56% –
11.38% –
22.59%
SU 0 138,404 0 12.89 0 1,499,403
Vegetables and
fruit CJ 380,521 391,840 12.97 10.79 4,380,741 4,376,936 2.97% –
16.81% -0.09%
LJ 1,010,920 985,471 14.62 14.07 12,422,967 11,655,871 -2.52% -3.75% -6.17%
PA 695,084 710,957 16.34 15.83 9,506,470 9,416,635 2.28% -3.12% -0.94%
SU 0 346,544 0 12.86 0 3,744,863
Fresh products
(cold
meats +dairy )
bulk CJ 243,330 232,375 13.64 12.02 2,989,133 2,722,054 -4.50% –
11.88% -8.94%
LJ 597,721 532,568 15.61 15.68 7,839,675 7,015,292 –
10.90% 0.43% –
10.52%
PA 456,257 451,623 17.7 16.73 6,758,802 6,317,370 -1.02% -5.46% -6.53%
SU 0 245,189 0 14.68 0 3,023,855
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2010
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Page | 11
Feed -back
Figure 1.2 – Sales management – general outlook
External
environment
-potential
customers
-competitors
-legal restrictions
-technology
-natural resources
-social
environment
Organization
environment
-objectives
-human resources
-financial
resources
-production
capabilities
-research and
develo pment
capabilities
-target
markets
-products
-pricing
policy
-distribution
channels
–
communicati
on policy
-selling force Customers
management
Organizing the selling
force
Sales planning
Forecasting requests
Sales quotas
Decentralization
Territorial distribution
Establishing itineraries
Supervising
Personnel selection
Personnel training
Motivating the
personnel Perception of
sellers on job
description
requirements
-accuracy
-ambiguity
-conflict Performance :
-sales volume
-percentage of the
quota
-sales expenses
-productivity
-customers
services
-reports Evaluation and
control of the
selling force
-sales analysis
-cost analysis
-personal
assessm ents
Skills
Level of motivation Level of handicraft Marketing
strategy Activities of sales
management Determining
factors of sales
performance Result s Control Environment
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