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Aurora Popa - The impact of financial crisis in Central and Eastern Europe
 

Aurora Popa - The impact of financial crisis in Central and Eastern Europe

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In the third quarter of 2009, Linea Directa Communications - part of Studio Moderna Group, one of the biggest and fastest developing direct marketing and call center companies, conducted by phone a ...

In the third quarter of 2009, Linea Directa Communications - part of Studio Moderna Group, one of the biggest and fastest developing direct marketing and call center companies, conducted by phone a survey among 1200 Sales/ Marketing/ General Directors about economic crisis and its consequences for Central and Eastern Europe

Objective of the survey was to investigate industries pains, needs and challenges during financial crisis.

The analysis included not only the kind of effects companies have experienced but also measures that have been taken or planned so far.

The managers answered where did the companies cut the budgets and where did increase it comparing to 2008.

Last part of the questionnarie is related to utilization of marketing and direct marketing channels. We will find if companies are interested to invest in sales and promotion activities during financial crisis and the evolution of budgets per each country.

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    Aurora Popa - The impact of financial crisis in Central and Eastern Europe Aurora Popa - The impact of financial crisis in Central and Eastern Europe Presentation Transcript

    • The impact of financial crisis in Central and Eastern Europe Sales and Marketing strategies used in 2009 Study CEE 2009: summary of results LINEA DIRECTA COMMUNICATIONS
    • INTRODUCTORY REMARKS Introductory remarks < quarter of 2009, Linea Directa Communications - part of Studio Moderna Group, one of the biggest In the third and fastest developing direct marketing and call center companies, conducted by phone a survey among 1200 Sales/ Marketing/ General Directors about economic crisis and its consequences for Central and Eastern Europe < the survey was to investigate industries pains, needs and challenges during financial crisis Objective of < included not only the kind of effects companies have experienced but also measures that have The analysis been taken or planned so far < The managers answered where did the companies cut the budgets and where did increase it comparing to 2008 < the questionnarie is related to utilization of marketing and direct marketing channels. We will find if Last part of companies are interested to invest in sales and promotion activities during financial crisis and the evolution of budgets per each country CEE SURVEY 2009 |2 LINEA DIRECTA COMMUNICATIONS
    • INTRODUCTORY REMARKS Eleven countries in CEE were surveyed, covering 15 industries – Significant number of responses achieved in ten sectors 9,9 5,6 1,4 3,8 2,5 11,3 8,5 11,3 10,0 14,1 1,4 19,7 1,4 16,9 COMMENTS 1,7 6,7 14,3 2,4 11,4 © The study was conducted in 9,0 3,6 40,5 7,6 1,7 18,6 14,8 eleven countries 2,8 1,7 8,3 6,7 7,5 43,3 16,4 10,3 5,8 4,2 © CEE was represented by 2,4 16,7 4,8 12,3 9,0 4,9 Slovakia Russia, Czech Republic, 35,2 5,7 5,2 14,8 7,5 15,4 12,7 Slovenia Hungary, Poland, Romania, 6,6 17,3 3,2 7,4 Russia Slovakia and Slovenia 8,4 Romania 11,0 10,5 1,0 23,6 18,5 10,5 Poland 0,5 8,7 7,7 12,8 12,0 Hungary The main participants at © 14,4 1,5 3,6 3,1 4,6 9,7 Czech survey was from industries © automotive, financial such as: l IT er s le e re ai ) el ns ts ity ce iv sa et th ca av uc ot io services, pharma/ helth care, vi ric R O le Tr od om lth at er ho t ec ic & ls ea pr ut W un el m ia /H FMCG, tourism/travel, retail, A er is m l, nc m oi ur m a na su m , To co as ar Fi on whosale, IT, le (g Ph Te -c s ie G til telecommunications and C U FM CEE SURVEY 2009 utilities |3 LINEA DIRECTA COMMUNICATIONS
    • SURVEY RESULTS The impact of the financial crisis on sales in CEE Sales level in 2009 comparing to 2008 COMMENTS © of companies from Only 4% Poland registered a drop in sales 18 33 more than 30% in 2009, while Slovakia 29 Romania has the biggest 31 Slovenia percentage 26%, followed by 28 Russia 28 Hungary with 14% and Russia 30 15 Romania with 12% 36 25 Poland 10 17 16 26 16 Hungary © the economic crisis, the Due to 17 38 24 number of companies that 7 9 22 Czech 24 11 47 reported an increase of sales is 32 33 13 16 extremely low: 9% In Czech, 9% 12 4 18 11 9 7 Romania and 10% in Slovakia. 1 The most affected industries are Increased Remained the Decreased 0-15% Decreased 15- Decreased 30- Decreased 50- Decreased above same 30% 50% 70% 70% automotive, constructions, real estate and retail. CEE SURVEY 2009 |4 LINEA DIRECTA COMMUNICATIONS
    • SURVEY RESULTS Measures planning to overcome crisis - Product innovation, development of new services in accordance with real needs of existing clients is considered the key to overcome the financial crisis <from 1-4 (4 being the most important), from a list with measures planning to overcome crisis, companies On o scale take in consideration as key measure product innovation, new services development, customized products launch in accordance with actual needs of the existing clients - in Slovenia (3,60) and Hungary (3,53). The need to innovate to survive is often the mantra of those who are successful in business. This is because innovation by its very nature means doing things differently. Every company needs to innovate to maintain a competitive edge, which is all the more important in turbulent markets. < from Romania relies on tapping into new customer segments, regional expansion (3,32). Entering new Companies markets into which existing products can be sold – new industrial sectors or new geographical areas – offer opportunities to build cash flow, profits and market share. < in Poland respondents pay much attention for new sales and distribution channels (3,29). < at survey don't take account on strategic partnerships during the crisis, although can bring long-term Participants benefits. The focus is currently now placed on overcoming the economic crisis. In Russia the score is only 1,78 for companies using these kind of strategies. CEE SURVEY 2009 |5 LINEA DIRECTA COMMUNICATIONS
    • SURVEY RESULTS Measures planning to overcome crisis - Cost reduction program, revised budgets and hiring freeze, working with new suppliers or renegotiating prices with older partners are the most used measure in the countries analyzed Financial pressures force firms to cut costs on a wide range of investments, such as marketing, training and research&development. When the economy is in a downturn, many business expenditures such as promotional, sales and market research outlays are cut first because they do not show tangible and immediate results. Moreover, reducing costs can be dangerously obvious to the market, producing a deterioration in customer service, an absence in sales reps, delayed delivery times or a lower quality product or service. In spite of tumultuous change, the customer's experience with the product must continue to live up to the promise of the brand, and management must not sacrifice its image and identity by cheapening its product. Not surprisingly, the most common strategic responses involve cost reductions and product-related strategies (focusing on core products or services, the introduction of new products and the rationalization of product lines). The least common strategic responses to the recession are those that involve major structural changes to the organization, namely mergers, partnerships and acquisitions. CEE SURVEY 2009 |6 LINEA DIRECTA COMMUNICATIONS
    • SURVEY RESULTS Measures planning to overcome crisis - the main benefits of outsourcing < survey, companies started also to outsource operations that are not core activities. For example, there are According to many small companies which are using external providers for activities related to accounting, IT or distribution, often because they want to decrease costs and they do not have another solution. < On the contrary, the main factor for multinationals in the outsourcing decision process is represented mainly by the decision of keeping in house the added value processes, focusing their efforts on the main activity, and also on developing specific seasonal projects. Nevertheless reducing cost is playing, even if sometimes is not recognize as a decision factor, an important role. Several studies showed that outsourcing can help reducing cost up to 40%, for all typies of companies. < striving economical times, resizing cost is the main point of discussions between specialists in all In the actual companies. For various players that are developing internal operations like research, marketing, distribution or training, the high sales price of their products is often having the roots in the internal higher costs of producing that product. By outsourcing, some companies aim to resize their internal costs and so to create an important competitive advantage. < training costs are in many cases high and companies are making real sacrifices in order to pay them, Recruiting and but often employees do not raise expectations and this cost in some cases is not worthy to be paid. Outsourcing the HR services can be the solution to address this situation. CEE SURVEY 2009 |7 LINEA DIRECTA COMMUNICATIONS
    • SURVEY RESULTS Measures planning to overcome crisis - the main benefits of outsourcing < "How we treat our customers?" is a key question that must be answered carefully. Some Customer Care services are made better by outsourcing, because these type of companies are specialized in providing services on specific markets and their experience in the execution of these activites is proved. < In Central and Eastern Europe there is a number of companies that offer locally and international services. If you have small projects or simply you want to reduce stuff and infrastructure costs, the best solution is to use an external partner. In the light of experience gained, such a company can give you better results and more quickly. < Using outsourced services, companies can reduce the costs with 10% up to 40%. But they must not only think about the fact that outsourcing reduces the costs, because also these services help to increase also the revenue and the quality of services provided to customers. CEE SURVEY 2009 |8 LINEA DIRECTA COMMUNICATIONS
    • SURVEY RESULTS The impact of the financial crisis on marketing and sales activities - companies with small marketing budgets dominated in 2009 Marketing budgets in 2009 COMMENTS 5,4 1,9 1,3 4,5 3,4 1,0 2,9 8,6 4,3 4,9 the smallest budgets undering © 6,0 7,5 1,1 8,6 14,8 10,2 250.000 € was reported 15,0 24,6 especially in Hungary (89,4%), 21,7 Russia (88,6%) and Romania (85,4%) 4. Above 1.000.000€ 3. 500.000 € - 1.000.000€ The biggest budgets, above © 2. 250.000 € - 500.000 € 89,4 85,4 88,6 1.000.000€ are meet in small 79,5 1. Less than 250.000 € 66,9 72,2 70,5 percentages in Czech (5,4%), Slovakia (4,9%), Poland (4,5%) and Slovenia (4,3%) Czech Hungary Poland Romania Russia Slovenia Slovakia CEE SURVEY 2009 |9 LINEA DIRECTA COMMUNICATIONS
    • SURVEY RESULTS The impact of the financial crisis on marketing and sales activities - Marketing budgets suffered in 2009 a lot of modifications The evolution of marketing budgets in 2009 COMMENTS © the biggest cuts in In 2009 Slovakia 9,8 31,1 18,0 21,3 8,2 11,5 marketing budgets are made in Russia (28,6%) and Romania Slovenia 16,2 43,9 18,7 14,6 5,6 1,0 (22,7%), companies reducing budgets at least with 30%. Increased Similar budgets as in 2008 are Russia 19,6 23,2 17,9 10,7 12,5 10,7 5,4 Remained the same in big percentages in Hungary Decreased 0-15% Decreased 15-30% (44,4%), Slovenia (43,9%) and Romania 15,1 26,7 16,4 19,1 15,1 6,2 1,3 Decreased 30-50% Poland (43,4%) Poland 19,2 43,4 19,2 10,1 7,1 1,0 Decreased 50-70% Decreased above 70% © other hand, there are On the also companies investing in Hungary 6,8 44,4 13,6 19,8 13,0 1,2 1,2 marketing communications, countries such as Russia Czech 13,0 39,5 24,9 10,2 8,5 2,3 1,7 (19,6%), Poland (19,2%) or Slovenia (16,2%) CEE SURVEY 2009 |10 LINEA DIRECTA COMMUNICATIONS
    • SURVEY RESULTS The impact of the financial crisis on marketing and sales activities - Marketing budgets suffered in 2009 a lot of modifications Marketing budget distribution on each channel in 2009 COMMENTS Direct mail the biggest budgets are spent in © mainly in events&fairs (Russia), Telemarketing internet promotion (Romania& E-mailing Hungary) - using banners, blogs, social networks, etc, Internet promotion mass marketing in Slovenia (TV, newspapers, radio) and SMS or Mobile marketing catalogues Catalogue The smallest budgets © Mass marketing (TV, billboard, (representing max 30% from newspapers) marketing budgets) are Events&fairs allocated for sending SMS& Public relations Mobile Marketing (Russia), Czech Hungary Poland Romania Russia Slovenia Slovakia telemarketing (Slovenia, Slovakia), direct mailing CEE SURVEY 2009 (Russia), emailing and PR |11 LINEA DIRECTA COMMUNICATIONS
    • SURVEY RESULTS The impact of the financial crisis on marketing and sales activities - the most used channels of communication Marketing channels used by companies in their communication with clients COMMENTS Direct mail - addressable © used channels are the most Direct mail - not addressed - drop mail internet (Slovenia), e-mailing (Russia), fairs&events Telemarketing (Slovenia), direct mailing E-mail marketing (Romania) and catalogues (Poland) Internet promotion (banners, Google adwords, bloging, social networking) © other On the hand, SMS& SMS or Mobile marketing Mobile marketing, drop mail, Catalogue telemarketing and mass marketing are considered less Mass marketing (TV, billboard, newspapers) important channels, especially in Fair/events Slovenia and Slovakia Czech Hungary Poland Romania Russia Slovenia Slovakia Public relations CEE SURVEY 2009 |12 LINEA DIRECTA COMMUNICATIONS
    • SURVEY RESULTS The impact of the financial crisis on marketing and sales activities - the objectives followed in promotion campaigns COMMENTS Generate new leads / acquiring new According to the study, © consumers companies organize marketing Additional sales to existing consumers campaign in order especially to increase the number of Better awareness of the brand / products clients, to improve customer retantion and loyalty and Repositioning of the brand / products maximize the existing customers through additional Build accurate database sales. Improve loyalty of customers Companies pay less atention © to develop accuarate databases (that can be used Czech Hungary Poland Romania Russia Slovenia Slovakia later in their communication campaign) or to create a better awarness and repositioning for CEE SURVEY 2009 brand/ products. |13 LINEA DIRECTA COMMUNICATIONS
    • SURVEY RESULTS The impact of the financial crisis on marketing and sales activities - direct marketing outsourcing COMMENTS The percentage of companies outsourcing The percentage of companies outsourcing direct marketing activities at group level direct marketing per countries In CEE region many are speaking now about outsourcing as a cost 84,8 saving measure for the 74,4 74,6 68,6 companies. 4% 61,5 61,5 15% 46,7 © is the biggest In Czech 32% 36,5 percentage of companies 5% 35,2 35,0 31,4 outsourcing direct marketing 25,6 25,4 18,3 activities (74,4%), followed by 13,1 Poland (61,5%) and Romania 21% 6% 2,1 3,3 2,0 (36,5%). 17% Czech Hungary Poland Romania Russia Slovenia Slovakia © over hand, 84,8% of On the Czech Hungary Poland Romania Russia Slovenia Slovakia 1. Yes 2. No 3. Dont know/No answer companies are not outsourcing in Hungary, 74,6% in Slovakia, 68,6% in Slovenia and 46,7% CEE SURVEY 2009 in Russia. |14 LINEA DIRECTA COMMUNICATIONS
    • SURVEY RESULTS The impact of the financial crisis on marketing and sales activities - direct marketing outsourcing The most outsourced direct marketing activities in CEE COMMENTS The most outsourced direct © Direct mail addressable marketing activities are the Direct mail not addressed - drop mail newest channels of communication such as Internet Telemarketing promotion (banners, google E-mail marketing adwords, bloging, social networking), fairs& events Internet promotion (banners, google preparation, mass marketing adwords, bloging, social networking) SM or M S obile marketing (TV, billboard, newspapers) Catalogue Less outsourced are © M marketing (TV, billboard, ass telemarketing, emailing, drop newspapers) mail and SMS or Mobile Fairs/Events Czech Hungary Poland Romania Russia Slovenia Slovakia marketing CEE SURVEY 2009 |15 LINEA DIRECTA COMMUNICATIONS
    • SURVEY RESULTS The impact of the financial crisis on marketing and sales activities - communication throug call center services The percentage of companies using call center (inhouse/ outsourced) COMMENTS 46 The biggest number of © S lo v a kia R e fu se to a n sw e r 3 51 companies developing internal D o n t u se ca ll ce n te r se r v ice s call center operations are in 61 S lo v e n ia 3 4 Czech (43%) 31 6 B o th ( in h o u se a n d o u tso u r ce d ) 62 R u ssia 6 The major companies © 26 O u tso u r ce d ca ll ce n tr e outsourcing to a contact center 51 are in Romania and Russia R o ma n ia 2 6 In h o u se ca ll ce n tr e 41 (6%) 1 78 P o la n d 3 19 The majority of companies don’t © 2 H ungary 2 68 use call center services - 78% in 4 25 Poland, 68% Hungary, 62% C ze ch 1 43 Russia, 61% Slovenia 4 53 CEE SURVEY 2009 |16 LINEA DIRECTA COMMUNICATIONS
    • SURVEY RESULTS The impact of the financial crisis on marketing and sales activities - typies of call center activities outsourced in 2009 The main services provided by Contact Center COMMENTS On a scale from 1 to 4 (4 © means that clients use very 4,0 often a type of service) the 3,5 3,2 most requested services are 3,0 2,7 infoline, inbound sales 2,5 2,1 2,3 (received calls from people who want to buy something), customer care& help desk and database management Last ones but not leas are © Customer care/Help Infoline Inbound sales Outbound sales Lead Generation; Database Market research Appointment setting market researchs services, desk profiling & client management services appointment setting services, segmentation lead generation (profiling and client segmentation) and outbound sales (calls made to CEE SURVEY 2009 sell). |17 LINEA DIRECTA COMMUNICATIONS
    • SURVEY RESULTS The impact of the financial crisis on marketing and sales activities - call center activities: pros and cons < use an internal call center department taking in consideration the personal relationship with Companies customers and the quality of dialogues. On the opposite side, they pay less atention for the easier way to manage the overflow of calls provided by a contact center and they forget about costs efficiency. < category is represented by the companies outsourcing to a Contact Center, the main reasons The second being: the possibility manage a big overflow of calls, taking the advantages of an advanced technology for a fast implementation of projects, allowing in the same time to focus on their core activities that can generate profit directly. Other advantages offered by outsourcing and recognized by the companies, in order of priority, are the professionalism of a contact center, through specialized trainings on each developed project, reduced costs with staff, equipment, utilities and so on, share risks with a foreign partner, focus on core business and so on <also companies that are not outsourcing call center activities because they have internally These are resources to do these operations, or they can not afford it because they have low communication budgets or they don't have enough informations about the process of outsourcing, what is about and what kind of benefits brings. CEE SURVEY 2009 |18 LINEA DIRECTA COMMUNICATIONS
    • CONTACT US Our local management and consultant team are eager to hear you opinion and to share their further knowledge with you If you.... ....contact us …are interested in Linea Directa Communications industry specific results Attn.: Dejan Grbic Slovenia Linea Directa d.o.o. …wish to discuss other Kolodvorska 9 issues related to the 6 000 Koper crisis Phone (Slovenia): +386 5 66 44 900 Fax (Slovenia): …want to share your +386 5 66 44 883 E-mail: opinion or comments dejan.grbic@linea-directa.eu Please visit our Website: www.linea-directa.eu Linea Directa Communications Office s |19