This document presents a sales strategy for Innovation Living to increase sales in the Bulgarian market. It begins with an introduction to Innovation Living and outlines the report structure. The methodology section describes the research objectives, paradigm, approach, methods, theories, sources, and quality assessment. A literature review provides relevant definitions and concepts. An internal and external analysis is conducted. Field research includes interviews with Bulgarian retailers. The analyses identify opportunities for market penetration through direct sales representation and new distribution channels. A SWOT, segmentation, targeting, positioning, and balanced scorecard comprise the sales strategy. The strategy aims to improve sales performance through learning, internal processes, customer perspectives, and financial objectives.
Download luận văn đồ án tốt nghiệp ngành marketing với đề tài: Giải pháp marketing nhằm mở rộng thị trường tại Trung tâm kinh doanh VNPT – Vinaphone Hải Phòng, cho các bạn làm luận văn tham khảo
Thực Trạng Xuất Khẩu Vải Thiều Việt Nam Vào Thị Trường Nhật Bản. Dựa trên cơ sở lý luận từ đó thực tiễn hoá để hiểu được sự cần thiết của hoạt động xuất khẩu vải thiều. Phân tích thực trạng xuất khẩu vải thiều của Việt Nam sang thị trường Nhật Bản thời gian vừa qua. Đề xuất gợi ý các phương hướng để thúc đẩy xuất khẩu mặt hàng vải thiều của nước ta qua thị trường Nhật Bản trong thời gian tới
Tiểu luận môn Nghiên cứu thị trường: Phân tích các yếu tố ảnh hưởng đến quyết định mua bia Tiger của khách hàng tại Bình Dương cho các bạn làm luận văn tham khảo
Nhận viết luận văn Đại học , thạc sĩ - Zalo: 0917.193.864
Tham khảo bảng giá dịch vụ viết bài tại: vietbaocaothuctap.net
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Phân tích chiến lược marketing – mix với dòng sản phẩm collagen ADIVA của cô...hieu anh
Xuất phát từ những nhận thức trên, tác giả đã chọn đề tài “ Phân tích chiến lược marketing – mix với dòng sản phẩm collagen ADIVA của công ty TNHH TMDV Trần Toàn Phát
Đề tài Ứng dụng chính sách marketing-mix nhằm mở rộng thị trường của công ty ...Thư viện Tài liệu mẫu
Tải file tài liệu tại Website: inantailieu.com hoặc sdt/ ZALO 09345 497 28
Khóa luận Ứng dụng chính sách marketing-mix nhằm mở rộng thị trường của công ty cổ phần thương mại gia trang
Download luận văn đồ án tốt nghiệp ngành marketing với đề tài: Giải pháp marketing nhằm mở rộng thị trường tại Trung tâm kinh doanh VNPT – Vinaphone Hải Phòng, cho các bạn làm luận văn tham khảo
Thực Trạng Xuất Khẩu Vải Thiều Việt Nam Vào Thị Trường Nhật Bản. Dựa trên cơ sở lý luận từ đó thực tiễn hoá để hiểu được sự cần thiết của hoạt động xuất khẩu vải thiều. Phân tích thực trạng xuất khẩu vải thiều của Việt Nam sang thị trường Nhật Bản thời gian vừa qua. Đề xuất gợi ý các phương hướng để thúc đẩy xuất khẩu mặt hàng vải thiều của nước ta qua thị trường Nhật Bản trong thời gian tới
Tiểu luận môn Nghiên cứu thị trường: Phân tích các yếu tố ảnh hưởng đến quyết định mua bia Tiger của khách hàng tại Bình Dương cho các bạn làm luận văn tham khảo
Nhận viết luận văn Đại học , thạc sĩ - Zalo: 0917.193.864
Tham khảo bảng giá dịch vụ viết bài tại: vietbaocaothuctap.net
Download luận văn đồ án tốt nghiệp ngành quản trị doanh nghiệp với đề tài: Giải pháp Marketing nhằm mở rộng thị trường tại Công ty TNHH Anpha, cho các bạn làm luận văn tham khảo
Phân tích chiến lược marketing – mix với dòng sản phẩm collagen ADIVA của cô...hieu anh
Xuất phát từ những nhận thức trên, tác giả đã chọn đề tài “ Phân tích chiến lược marketing – mix với dòng sản phẩm collagen ADIVA của công ty TNHH TMDV Trần Toàn Phát
Đề tài Ứng dụng chính sách marketing-mix nhằm mở rộng thị trường của công ty ...Thư viện Tài liệu mẫu
Tải file tài liệu tại Website: inantailieu.com hoặc sdt/ ZALO 09345 497 28
Khóa luận Ứng dụng chính sách marketing-mix nhằm mở rộng thị trường của công ty cổ phần thương mại gia trang
Các nhân tố ảnh hưởng đến chiến dịch GM của các doanh nghiệp F&B - Green Mark...hNgc7
This document presents the results of a study on factors influencing environmental protection marketing campaigns of food and beverage (F&B) companies in Ho Chi Minh City, Vietnam. The study surveyed 262 respondents and used SPSS 20 for data analysis. It identified 5 factors influencing campaign effectiveness: (1) company awareness, (2) price, (3) green advertising, (4) environmentally friendly packaging, and (5) direct employees. Regression analysis showed price, company awareness, packaging, employees, and advertising predicted purchase intention in that order. The author proposes solutions to increase purchase intention for each factor.
Khóa luận tốt nghiệp đề tài xây dựng chiến lược markeiting cho sản phẩm bánh mì cho công ty cho các bạn sinh viên quản trị kinh doanh và marketing tham khảo
Đề tài: xây dựng chiến lược markeiting cho sản phẩm bánh mì, 9 điểm!
Tải luận văn thạc sĩ ngành quản trị kinh doanh với đề tài: Nghiên cứu các yếu tố ảnh hưởng đến quyết định mua sắm trực tuyến của người tiêu dùng Việt Nam. ZALO/TELE 0917 193 864
Download luận văn đồ án tốt nghiệp ngành quản trị du lịch với đề tài: Một số giải pháp nhằm hoàn thiện công tác Marketing Online cho Công ty TNHH Dịch Vụ Du Lịch Khánh Lan
Download luận văn đồ án tốt nghiệp ngành quản trị kinh doanh với đề tài: Thực trạng hoạt động marketing và một số giải pháp nhằm nâng cao hiệu quả hoạt động marketing tại công ty TNHH Tâm Chiến
http://lapduan.com.vn
CÔNG TY CỔ PHẦN TƯ VẤN ĐẦU TƯ THẢO NGUYÊN XANH
Trụ sở: 158 Nguyễn Văn Thủ, P. Đakao, Quận 1, Hồ Chí Minh
Hotline: 0839118552 - 0918755356 - Fax: 0839118579
Tiểu luận xây dựng chiến lược kinh doanh của công ty vinamil đến năm 2020_Nhậ...Nguyễn Thị Thanh Tươi
Dịch vụ làm luận văn tốt nghiệp, làm báo cáo thực tập tốt nghiệp, chuyên đề tốt nghiệp, tiểu luận, khóa luận, đề án môn học trung cấp, cao đẳng, tại chức, đại học và cao học (ngành kế toán, ngân hàng, quản trị kinh doanh…) Mọi thông tin về đề tài các bạn vui lòng liên hệ theo địa chỉ SĐT: 0988.377.480 ( Miss. Mai ) Email: dvluanvankt@gmail.com ( Bạn hãy gửi thông tin bài làm, yêu cầu giáo viên qua mail) Chúng tôi nhận làm các chuyên ngành thuộc khối kinh tế, giá cho mỗi bài khoảng từ 100.000 vnđ đến 500.000 vnđ
Khóa luận tốt nghiệp Quản trị kinh doanh: Thực trạng hoạt động marketing của Công ty TNHH TM-SX thuốc thú y Gấu Vàng cho các bạn làm luận văn tham khảo
The document outlines the internal publics of Anniston Army Depot, including employees, the Strategic Communications Office, command/management staff, students, and unpaid interns. It recommends hiring an additional employee for the Strategic Communications Office to assist with social media, The Morning Show, and the Tracks newspaper. It also suggests increasing the frequency of meetings between the depot's command and management staff from bi-weekly to weekly to improve communication and oversight.
This document is the preface to the second edition of the book "First Year English" published in 2009. It provides an overview of what is the same and what is different between the first and second editions.
The second edition retains many of the same features as the first edition, such as learning outcomes for each unit, summaries, questions, and exercises. However, it has been revised to include a larger, more technical vocabulary and some reshaped or expanded grammar sections.
The book is organized into two terms with four units each, covering topics in economics, business, accounting, and law. It includes appendices summarizing verb forms and an index. The preface explains that the second edition aims to help students
Các nhân tố ảnh hưởng đến chiến dịch GM của các doanh nghiệp F&B - Green Mark...hNgc7
This document presents the results of a study on factors influencing environmental protection marketing campaigns of food and beverage (F&B) companies in Ho Chi Minh City, Vietnam. The study surveyed 262 respondents and used SPSS 20 for data analysis. It identified 5 factors influencing campaign effectiveness: (1) company awareness, (2) price, (3) green advertising, (4) environmentally friendly packaging, and (5) direct employees. Regression analysis showed price, company awareness, packaging, employees, and advertising predicted purchase intention in that order. The author proposes solutions to increase purchase intention for each factor.
Khóa luận tốt nghiệp đề tài xây dựng chiến lược markeiting cho sản phẩm bánh mì cho công ty cho các bạn sinh viên quản trị kinh doanh và marketing tham khảo
Đề tài: xây dựng chiến lược markeiting cho sản phẩm bánh mì, 9 điểm!
Tải luận văn thạc sĩ ngành quản trị kinh doanh với đề tài: Nghiên cứu các yếu tố ảnh hưởng đến quyết định mua sắm trực tuyến của người tiêu dùng Việt Nam. ZALO/TELE 0917 193 864
Download luận văn đồ án tốt nghiệp ngành quản trị du lịch với đề tài: Một số giải pháp nhằm hoàn thiện công tác Marketing Online cho Công ty TNHH Dịch Vụ Du Lịch Khánh Lan
Download luận văn đồ án tốt nghiệp ngành quản trị kinh doanh với đề tài: Thực trạng hoạt động marketing và một số giải pháp nhằm nâng cao hiệu quả hoạt động marketing tại công ty TNHH Tâm Chiến
http://lapduan.com.vn
CÔNG TY CỔ PHẦN TƯ VẤN ĐẦU TƯ THẢO NGUYÊN XANH
Trụ sở: 158 Nguyễn Văn Thủ, P. Đakao, Quận 1, Hồ Chí Minh
Hotline: 0839118552 - 0918755356 - Fax: 0839118579
Tiểu luận xây dựng chiến lược kinh doanh của công ty vinamil đến năm 2020_Nhậ...Nguyễn Thị Thanh Tươi
Dịch vụ làm luận văn tốt nghiệp, làm báo cáo thực tập tốt nghiệp, chuyên đề tốt nghiệp, tiểu luận, khóa luận, đề án môn học trung cấp, cao đẳng, tại chức, đại học và cao học (ngành kế toán, ngân hàng, quản trị kinh doanh…) Mọi thông tin về đề tài các bạn vui lòng liên hệ theo địa chỉ SĐT: 0988.377.480 ( Miss. Mai ) Email: dvluanvankt@gmail.com ( Bạn hãy gửi thông tin bài làm, yêu cầu giáo viên qua mail) Chúng tôi nhận làm các chuyên ngành thuộc khối kinh tế, giá cho mỗi bài khoảng từ 100.000 vnđ đến 500.000 vnđ
Khóa luận tốt nghiệp Quản trị kinh doanh: Thực trạng hoạt động marketing của Công ty TNHH TM-SX thuốc thú y Gấu Vàng cho các bạn làm luận văn tham khảo
The document outlines the internal publics of Anniston Army Depot, including employees, the Strategic Communications Office, command/management staff, students, and unpaid interns. It recommends hiring an additional employee for the Strategic Communications Office to assist with social media, The Morning Show, and the Tracks newspaper. It also suggests increasing the frequency of meetings between the depot's command and management staff from bi-weekly to weekly to improve communication and oversight.
This document is the preface to the second edition of the book "First Year English" published in 2009. It provides an overview of what is the same and what is different between the first and second editions.
The second edition retains many of the same features as the first edition, such as learning outcomes for each unit, summaries, questions, and exercises. However, it has been revised to include a larger, more technical vocabulary and some reshaped or expanded grammar sections.
The book is organized into two terms with four units each, covering topics in economics, business, accounting, and law. It includes appendices summarizing verb forms and an index. The preface explains that the second edition aims to help students
This document provides an assessment of juvenile justice reform achievements in Kyrgyzstan. It finds that while the number of juvenile offenders has declined in recent years, the legal framework and practice are not fully in compliance with international standards. Key developments include the adoption of a Children's Code in 2007 and legal amendments in 2007 known as the "Law on Humanization" that decreased prison sentences for juveniles and increased diversion. However, the assessment notes political instability in recent years and that the UN Committee on the Rights of the Child has called for improvements such as limiting pretrial detention of juveniles and establishing separate juvenile detention facilities.
The document is a draft final report on whether the EU needs more STEM graduates. Some key points from the executive summary:
- There are concerns about ensuring an adequate future supply of STEM skills for Europe's economic development, given replacement demand from retirements and demographic changes. However, evidence shows no overall quantitative STEM skills shortages at the EU level currently.
- Reported shortages and mismatches are geographically defined and include bottlenecks in engineering and ICT skills. Barriers include a lack of work experience for recent graduates, employer expectations increasing during the economic crisis, and under-employment of some mobile STEM graduates.
- While projections indicate future STEM supply will match demand at the EU
Identification of Opportunities for Norwegian Businesses in Enhancement of Va...RICHARDBONYO1
Played a key research role and provided technical drafting services for the Identification of Opportunities for Norwegian
Businesses in Enhancement of Value Chains in the Kenyan Agriculture Sector
International Innovators is a business that provides services related to international business and exports. It aims to deliver high quality and cost-effective services through innovation. The business plan outlines the company's vision, services, management team, goals, and 5-year financial projections. It also includes a research report on the current export market and industry trends based on surveys conducted with local companies.
FINNISH SPORT SPONSORSHIP AND SPONSORED SOCIAL MEDIA CONTENTLaura Peltonen
In Finnish sports marketing sports organizations' social media networks are used to connect sponsoring brands with the fans. The main objective of this thesis is to help rights-holders and sponsors to recognize and create engaging sponsored social media content that generates desired reaction and engagement among the target audience. This thesis is a case study that investigates how different content factors affect the willingness of Finnish sports consumers to engage with sponsored content posts published by the rights-holders. The research focuses on investigating sponsored posts published by Liiga ice hockey teams on their social media platforms and the reaction they create among the target audience. The case organizations, Liiga ice hockey teams, are 15 Finnish ice hockey teams that compete in Liiga, Finnish top professional ice hockey league. To offer an international benchmark to the research also three NHL ice hockey teams and the sponsored posts published on their social media platforms are included.
The research was conducted by analysing the collected social media content posts with explanatory sequential mixed research method which combines both quantitative and qualitative methods. Based on the research results suggestions and recommendations are given on how sponsored social media content could be developed and targeted more effectively.
The document discusses ways to develop a thriving informal sector in African countries through vocational training. It identifies 10 key factors or guidelines that can help ensure training in the informal sector increases skills levels and supports economic development. These include introducing pre-vocational training for youth, acknowledging the sector's existing skills development roles, enhancing the role of professional organizations in defining training needs, giving youth a voice in access to jobs and enterprise creation, and organizing traditional apprenticeships. The document emphasizes that training must be part of a broader approach involving skills development, monitoring training outcomes, and providing material and financial support for enterprise creation to be truly effective.
This document outlines the 2010 Saskatchewan Kindergarten curriculum. It includes the core curriculum, broad areas of learning, cross-curricular competencies, and effective program components. It also provides outcomes and indicators for subject areas like arts education, English language arts, health education, mathematics, physical education, science, and social studies. The curriculum is designed to incorporate principles of early learning, actualize features of early childhood education, and use reflection to support student learning through play and inquiry.
Internship Report some solutions to attract more customers to come to torino hotel. I have been practicing at Torino Hotel for six weeks. Moreover, what I have gained from this course is how to serve guests in a reasonable and thoughtful way. In addition, because my theoretical level and practical experience is limited, I hope teachers will give me comments so that I can finish the internship report better.
This direct marketing plan aims to increase visitation, membership, and social media following for the Aviation Museum of New Hampshire. It utilizes direct mail, electronic newsletters, and social media. Tactics include four personalized postcard mailings using compiled lists, two scratch-off postcard mailings to the museum's house list, and seven personalized electronic newsletters. The plan aims to increase visitation by 10%, membership by 15%, and social media following by 30%. It is expected to exceed the $1,000 budget but provide a high return on investment.
THE DIGITAL TURN. Pathways for higher education in the digital age.
ABOUT THIS REPORT
This summary report presents key statements,
findings and recommendations by Hochschulforum Digitalisierung (German Forum for Higher Education in the Digital Age, abbreviated
HFD) with regard to shaping forward-looking
higher education for the digital age in Germany.
This condensed version of the report is geared
first and foremost towards readers with limited
time and above all to representatives of higher
education institution administrations and policymakers who have a key role in the strategic
development of the digital turn at German
higher education institutions (HEIs). The basis of
and background to the analyses and recommendations can be found in the full-length version of the report. It illustrates and documents
the findings of a three-year project involving
the work of over 70 experts who examined the
opportunities and challenges of digitalisation in
six expert groups.
Universal Studios -Strategic Business ProposalDoral Peoples
This strategic business proposal outlines plans for a joint venture between NBC Universal and Royal Caribbean Cruises to launch a cruise line. It analyzes organizational challenges like competing with Disney Cruise Line and Royal Caribbean's desire to enter the family cruise niche. The proposal recommends outfitting two Royal Caribbean ships with NBC Universal attractions and using Harry Potter popularity to test the new venture. With the right marketing, the joint cruise line could become a cornerstone of the industry and help NBC Universal expand its brand.
Serving Up Justice: How to Design an Emergency Feeding Program and Build Community Food Security
`
For more information, Please see websites below:
`
Organic Edible Schoolyards & Gardening with Children
http://scribd.com/doc/239851214
`
Double Food Production from your School Garden with Organic Tech
http://scribd.com/doc/239851079
`
Free School Gardening Art Posters
http://scribd.com/doc/239851159`
`
Increase Food Production with Companion Planting in your School Garden
http://scribd.com/doc/239851159
`
Healthy Foods Dramatically Improves Student Academic Success
http://scribd.com/doc/239851348
`
City Chickens for your Organic School Garden
http://scribd.com/doc/239850440
`
Simple Square Foot Gardening for Schools - Teacher Guide
http://scribd.com/doc/239851110
Serving Up Food Justice at School: How to Design an Emergency Feeding Program and Build Community Food Security
`
For more information, Please see websites below:
`
Organic Edible Schoolyards & Gardening with Children
http://scribd.com/doc/239851214
`
Double Food Production from your School Garden with Organic Tech
http://scribd.com/doc/239851079
`
Free School Gardening Art Posters
http://scribd.com/doc/239851159`
`
Companion Planting Increases Food Production from School Gardens
http://scribd.com/doc/239851159
`
Healthy Foods Dramatically Improves Student Academic Success
http://scribd.com/doc/239851348
`
City Chickens for your Organic School Garden
http://scribd.com/doc/239850440
`
Simple Square Foot Gardening for Schools - Teacher Guide
http://scribd.com/doc/239851110
Gloabal Panorama on Postal Financial Inclusion: Business Model and Key IssuesDr Lendy Spires
This document provides an overview of postal financial inclusion around the world. It identifies several business models that postal operators use, from acting as real estate providers or cash merchants, to offering proprietary financial services or partnering with financial institutions. It also examines key issues such as using the postal network's reach and staff, developing necessary financial and technological capacity, building trust, and establishing supportive regulations. The document aims to better understand opportunities and challenges for postal financial inclusion globally in order to help expand access to financial services.
This master's thesis examines event marketing as a promotional tool through a case study analysis of four companies. The thesis aims to provide understanding of the objectives of event marketing, how companies select specific events, how they evaluate event effectiveness, and the advantages and disadvantages of this approach. Through interviews with representatives from Nestle, Volvo, Fjällräven, and Pripps, the study finds that the main objectives are related to image and awareness. Selection criteria depend on company experience, and evaluation is difficult, relying mainly on marketing research. The primary advantage is penetrating media noise, while difficulty of evaluation is a disadvantage.
Global Advertising Specialties Impression Study - 2014 Edition
A cost analysis of promotional products versus other advertising media released at the 2014 ASI Power Summit.
The J Paul Company http://www.jpaulco.com
BIC is a global company established in 1945 that produces stationery, lighters, razors, and other products. It has a vision of creating simple, reliable products for worldwide use. This document analyzes BIC's shaver brand in the UK market. It provides an overview of BIC as a company, the UK hair removal market, an analysis of BIC's shaver brand personality and competitors, and a look at BIC's promotional activities. It concludes with identifying gaps in BIC's brand activities and providing suggested solutions.
This document is a marketing plan for Yellowhead Brewery. It begins with an analysis of the brewery industry, market trends, and Yellowhead Brewery's competitors. It then outlines the marketing strategy, including target markets, branding, and objectives. The marketing mix is discussed, including product details, pricing, promotion tactics, and customer service approach. Financial projections are provided, such as sales and expense forecasts, break-even analysis, and contribution margin. Controls for implementing and measuring the success of the plan are also mentioned.
Similar to Bachelor Thesis - Sales Strategy, Innovation Living (20)
Bachelor Thesis - Sales Strategy, Innovation Living
1. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
Author: Martin Milkov Malakov
/Date of Birth: 11.10.1992/
PBA of International Sales and Marketing Management
Tutor: Torben Ibsen Uldall Sorensen
Final Bachelor’s Project
PBA of International Sales and Marketing Management
Business Academy Aarhus
2nd of January 2017
Hand-in Date: 09.01.2017
Number of characters: 96490
Sales Strategy for the Bulgarian Market
2. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
Contents
List of Appendences ......................................................................................................................-1
Executive Summary.........................................................................................................................0
1. Introduction ................................................................................................................................1
1.1. Problem Formulation.......................................................................................................1
1.2. Report Structure...............................................................................................................1
2. Methodology ........................................................................................................................1
2.1. Research Objectives.........................................................................................................2
2.2. Research Paradigm ..........................................................................................................2
2.3. Approach ..........................................................................................................................2
2.4. Method..............................................................................................................................2
2.5. Strategy.............................................................................................................................2
2.6. Time horizon....................................................................................................................2
2.7. Theory and models..........................................................................................................2
2.8. Sources .............................................................................................................................3
2.9. Quality assessment..........................................................................................................4
3. Literature Review .................................................................................................................5
3.1. Market Definition .............................................................................................................5
3.2. Growth Matrix – H. Igor Ansoff.......................................................................................5
3.3. International Growth – why do businesses choose to pursue it?.................................6
3.4. Entry Strategies – how do businesses expand internationally?....................................6
3.5. Export – Direct and Indirect ............................................................................................7
3.6. Distribution Channels......................................................................................................7
3.7. Developing a sales strategy ............................................................................................8
3.8. Cultural Dimensions, affects and considerations .......................................................13
4. Innovation Living’s Business Model .................................................................................16
4.1. Customer Segments ......................................................................................................17
4.2. Value Proposition...........................................................................................................17
4.3. Channels.........................................................................................................................18
4.3.1. Distribution Channels............................................................................................18
4.4. Customer relationships .................................................................................................18
4.5. Revenue Streams............................................................................................................18
4.6. Key Resources ................................................................................................................19
4.6.1. Human resources ...................................................................................................19
4.6.2. Intellectual resources.............................................................................................19
4.6.3. Physical resources..................................................................................................19
4.6.4. Financial resources ................................................................................................19
4.7. Key Activities..................................................................................................................19
4.8. Key Partnerships ............................................................................................................19
3. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
4.9. Cost Structure ................................................................................................................20
5. External Analysis ...............................................................................................................20
5.1. PESTLE.............................................................................................................................20
5.1.1 Economic factors..............................................................................................................20
5.1.2 Social factors: ..................................................................................................................22
5.1.3 Legal factors: ...................................................................................................................22
5.2. Porter's Five Forces........................................................................................................23
5.2.1. Supplier Bargaining Power - Moderate 5/10 ........................................................23
5.2.2. Buyer Bargaining Power - High 8/10 ....................................................................24
5.2.3. Threat of Substitution 1/10 ..................................................................................24
5.2.4. Threat of New Entry 8/10......................................................................................24
5.2.5. Competitive Rivalry - High 9/10............................................................................25
5.2.6. Attractiveness of the furniture Industry 4/10......................................................25
5.3. ADL Matrix......................................................................................................................26
5.4. Analysis of the Competitors in Bulgaria.......................................................................26
5.4.1 Local Competition ........................................................................................................27
5.4.2 Foreign competition on the Bulgarian furniture market ...........................................27
5.5. Organizational Customer’s Analysis ............................................................................29
5.6 Market Trends and Demand for Design Danish Furniture in Bulgaria............................30
5.7. Bulgarian Culture according to Hofstede’s Six Cultural Dimensions ............................30
6. Insights Based on the Conducted Semi-structured Interviews.......................................32
7. SWOT – is market penetration the way to go?.................................................................33
8. Segmentation, Targeting and Positioning ..............................................................................33
8.1 Segmentation ......................................................................................................................33
8.2 Targeting .............................................................................................................................34
8.3 Positioning...........................................................................................................................35
9. Market Penetration Strategy for the Bulgarian Market - Balanced Scorecard.......................36
9.1 Learning and Growth Perspective ......................................................................................37
9.1.1 Hire a Sales Representative .........................................................................................37
9.1.2 Training Skills and Development ................................................................................38
9.2 Internal Perspective.............................................................................................................38
9.2.1 Develop a sales strategy..............................................................................................38
9.2.2 Improve work efficiency...............................................................................................39
9.3 Customer perspective.........................................................................................................39
9.3.1 Acquire new retailers to act as authorized dealers in Bulgaria; ...............................39
9.3.2 Build long-term relationships......................................................................................39
9.4 Financial perspective ..........................................................................................................39
10. Conclusion ..............................................................................................................................40
Bibliography.....................................................................................................................................1
4. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
List of Appendences
Appendix 1 – Project Description;
Appendix 2 – Questions for Semi-Structured Interviews;
Appendix 3 – Essence of the Held Interviews Relevant to the Assignment;
Appendix 4 – Contact Details of the Interviewees;
Appendix 5 – Sales Figures Table from Innovation Living;
Appendix 6 – Innovation Living’ Sales Prices for Retailers;
Appendix 7 – Strategy Map & Balanced Score Card;
*Appendences are uploaded as separate documents and are not included in this document.
5. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
Executive Summary
Innovation Living is a Danish Design Furniture Manufacturer since 1972. Innovation
specializes in producing compact, functional and comfortable sofa/beds for small living
spaces. It has production facilities in Denmark and China and sells its products globally.
However, most of the revenue in Europe comes from Western Europe. Even Though
Innovation operates in some parts of Eastern Europe, the markets there are considered new
and are yet to be developed and the full potential of them to be reached. This report will
combine market research with the best sales theories from modern academic literature and
will suggest how to increase the sales in the Bulgarian market in the future.
The report first presents a Literature review. In the literature review there are different
relevant for the research definitions included. Moreover, concepts and models supporting
the later on given recommendations are described, so that the researcher’s knowledge base
is supported.
Further, an internal analysis of Innovation Living is made through the business model canvas
in order to receive a better understanding of the company’s structure and current situation.
The business model shows that the company is financially healthy and that it has the
necessary structure, experience and current activities that will support a penetration of the
Bulgarian market.
The external analysis made examines the country profile of Bulgaria, the competitive
landscape and consumer behaviour. It also looks at the cultural considerations. Even though
the social and economic situation in Bulgaria is not that “pink” at the moment, the outlooks
for the near future are positive and also there are other pluses like low taxes and cheap
labour that makes the market attractive. The poverty in Bulgaria might be high, but as
Innovation Living is targeting a niche of people with higher income, it is not a factor that
matters, as there are still many affluent people in the Bulgarian society. In terms of
competition, it is highly saturated market in general, but there are still not that many
resembling offerings and room to grow.
The field research indicated that retailers have interest to and do work with foreign
importers, but that they would prefer to communicate with a native representative.
Overall the analysis point out that there is market for Innovation Living, but the company
will have to do more aggressive sales. The cultural differences between Bulgaria and
Denmark are quite big that is why it is proposed for the company to enter the market
directly with its own sales force. Innovation Living will have to search for and hire a
Bulgarian sales rep that will be responsible for the company activities in Bulgaria. The
company has this practice for its UK and Benelux markets. It will also take advantage of its
newly built production facilities in Ukraine.
In the long-term the experience in the Bulgarian market can be further used to enter or
enhance current activities in other similar Eastern European markets.
6. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
1
1. Introduction
Innovation Living is a Danish Design Furniture Manufacturer since 1972. Innovation
specializes in producing compact, functional and comfortable sofa/beds for small living
spaces. It has production facilities in Denmark and China and sells its products globally.
However, most of the revenue in Europe comes from Western Europe. Even Though
Innovation operates in some parts of Eastern Europe, the markets there are considered new
and are yet to be developed and the full potential of them to be reached. This report will
combine market research with the best sales theories from modern academic literature and
will suggest how to increase the sales in the Bulgarian market.
1.1. Problem Formulation
How can Innovation A/S improve its sales in Bulgaria?
1.2. Report Structure
The report will be following the structure below: (See figure 1.1);
Figure 1.1: Structure of the report
Source: Own Production;
2. Methodology
This chapter follows Richard Brook’s eleven step model of research design to plan and
present the methodological background of the research. (Brooks, 2013); (See figure 2.1);
Figure 2.1: The eleven step model of research;
Source: Brooks;
Methodology
Literature
Review
Situation
Analysis
Strategy Conclusion
7. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
2
2.1. Research Objectives
What is the current situation of Innovation Living both from internal perspective in
the organisation, and from external perspective assessing the furniture industry and
the Bulgarian furniture market?
How Innovation Living can improve its overall competitiveness in Bulgaria?
Who are the most attractive potential customers of Innovation Living in the Bulgarian
market?
How the distanced Bulgarian market could be managed most effectively and by
whom?
What strategic objectives Innovation Living could implement in order to improve its
market position in Bulgaria?
How Innovation Living can measure the performance on the Bulgarian market?
2.2. Research Paradigm
The report will follow a critical realism paradigm. It is about observing the cause and effect.
The sales at EEU are low, what would happen if a new sales strategy is implemented? This
question is followed from the paradigm and related to the case of this report. How can the
ongoing business process to be improved? The Critical Realism paradigm will help to get
better insight of what has to be improved.
2.3. Approach
The approach that the research follows is a deductive approach. (Brooks, 2013) A set of
assumptions are made based on the researcher’s inside information from Innovation Living
and the company experience with the Bulgarian market and other markets the company is
operating in. They will be proven throughout the report, either right or wrong, and will be
considered when recommendations are given.
A1: Having direct presence in the market will increase the company’s success in the market
in terms of attracting more partners
A2: Expanding the number of distribution channels in the market will result in bigger reach,
thus attracting new customers and overall increase in sales.
A3: Having a native sales representative will help the company to overcome the culture
barriers and will also contribute with inside knowledge of the market and consumers.
2.4. Method
The choice of data method gathering is through a multimethod qualitative study, as semi-
structured interviews will be conducted both in person and phone.
2.5. Strategy
The strategy of the research is chosen to be a case study as the goal is to receive a rich
understanding of the research topic. (Brooks, 2013);
2.6. Time horizon
The time horizon of the research is a cross-sectional as it was conducted in the range of few
consecutive months – three months in Denmark.
2.7.Theory and models
An internal analysis of the company and its operations will be made using the canvas
business model. The strategy will be analysed based using Porter’s Genic Strategy Matrix,
The Anssoff Grow strategy matrix, the Value Strategy, Degree of Internationalization
For conducting a meaningful external analysis a PESTLE will analyse the market environment
in Bulgaria. Implementation of the Porter's Five Forces Industry analysis will be define the
8. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
3
attractiveness of the industry and be a solid base to assess the level of competition within
the furniture industry. Gather relevant data through desk research to collect valuable
insights of the Bulgarian furniture market such as market indicators, trends, consumers.
Competitor Analysis will be made to find out the direct competitors, benchmark Innovation
Livings competences and product features with firms from the competition. Evaluate the
competitive advantages of the domestic competitors and the international firms penetrating
the market. Focus on delivering more customer satisfaction than the competitors and gain
market share.
ADL Matrix is applied to determine the current place of Innovation Living in its relatively new
Bulgarian market.
The Hofstede 6 Cultural dimensions analysis is used to evaluate the both the Danish and
Bulgarian culture and to compare them, pointing the essential cultural differences that have
to be considered when doing business;
B2B Customer Analysis is critical for Innovation Living success on the market. Identifying
well established retailers with reputation and strong position on the market, also
understand their buying behaviour, the buying process and also the preferences when
relating to a new supplier.
Essential part of the report is devoted to sales. Theory and models related to sales
techniques, sales planning, and consultative sellers vs transactional sellers. The Spin Model
is also included. The process of salesmen recruitment is explained. A competence profile of
a sale agent, aligned to fulfil a demanding role at Innovation Living as a foreign sales agent.
The strategy map framework is used to create a workable market penetration strategy of
Innovation Living for penetrating the Bulgarian market. All the four perspectives are of a the
strategy are developed and aligned to the specifics of the market and the company
operations in order Innovation Living to reach its potential in Bulgaria.
The Balanced Score Card is used for measuring the performance of the company while
implementing the new strategy. In order the strategy to deliver the desired outcome, the
targets specified in the balance score card has to be fulfilled.
2.8.Sources
The sources used in this research are both primary and secondary sources. The secondary
sources consist of academic journal articles, international publications and academic books.
The primary sources used are the public company information, the information acquired
during the 3 month internship within the sales department. Field research in Bulgaria was
executed, during which a sufficient amount of data was collected. Activities undertaken
during the field research are company and showrooms visits, observing both the businesses
and consumers shaping the industry and the supply of furniture, more precisely sofa/beds.
Taking into account the price/quality, customization and functionality;
Five semi-structured interviews with individuals involved in companies operating as resellers
in Bulgaria were performed. The goal was to get valuable information from companies which
are potential customers of Innovation Living In Bulgaria and are part of its target group. (See
Appendices 2,3,4);
The research could have been more extensive by conducting more interviews, but due to the
time frame and the nature of the contacts, it was not possible to gather more.
9. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
4
2.9. Quality assessment
The reliability and validity of the research is assured by using mainly five star academic
journal articles, reliable online sources and research conducted by verified institutions. The
primary data gathered also adds up to the reliability of the outcome of the research.
10. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
5
3. Literature Review
Validating the potential of a specific foreign market is one of the elements when expanding
to foreign markets. Introducing a product to a new market also comes with the need of
taking difficult decision - how should the company market their product. (Erin Anderson).
First to start more broadly by defining the word “market” will be given.
3.1. Market Definition
Market: “Markets include mechanisms or means for (1) determining price of the traded item,
(2) communicating the price information, (3) facilitating deals and transactions, and (4)
effecting distribution. The market for a particular item is made up of existing and potential
customers who need it and have the ability and willingness to pay for it.” (Business
Dictionary, 2013);
The four points that are outlined in the above definition of market should be taken into
account in the forming of a strategy not only when a new business is developed, but also
when a company wants to enter a new market or penetrate the one that is already operating
in.
To make it more specific a definition of a business market will be given:
Business markets: “Markets for products and services, local to international, bought by
businesses, government bodies, and institutions for incorporation, for use or for resale. The
main differences between business marketing and consumer marketing are the nature of the
customers and how they use the product. “(Hutt Speh, 2014)
Having defined what markets and business markets are it is relevant to take a look how an
already operating company within a B2B market can grow.
3.2. Growth Matrix – H. Igor Ansoff
According to the Ansoff Matrix developed by H. Igor Ansoff, found in the article “Strategies
for Diversification”, there are four strategies that companies can use to grow and each on
carries a higher risk.(See figure 3.1);
Figure 3.1: Ansoff Growth Matrix;
Source: Mind Tools, 2016;
Market penetration carries the lowest risk, making it the safes of all the options. The growth
here consists of expansion of the sales in a market that the company already operates in.
Product development is a bit more risky as it involves the introduction of a new product in
an already penetrated market.
11. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
6
Market development consists of introducing an existing product to a new market, which
increases the risk.
Last but not least, Diversification is the riskiest one as it consists of introducing a untested
product to a completely new market the knowledge for which is not sufficient.
It will depend on the company goals and current capabilities to choose the best fitting
growth strategy. As many of the barriers in the last 20th
century related to international trade
fell, many business began to pursue global strategies in order to gain competitive
advantage. Magdalea Kakol);
3.3. International Growth – why do businesses choose to pursue it?
The most common reasons for companies going international are growth or expansion.
International strategies may benefit the business by helping to diversify it and expand it.
(Katarzyna Twarowska). Going global also reduces the uncertainty of the local and national
markets (demand upturns and downturns for example.) Hence, the company does not need
to rely only on the current market that it is in. (Elmuti D., Kathawala Y.2001);
There are two main approaches to going international – through an international strategy or
a global strategy. (Yip G. 2002);
International strategy is basically working through international subsidiaries that act as they
were local companies and have minimum coordination from the parent company. Global
strategy on the other hand, consists of a wide variety of business strategies that have a high
level of adaptation to local business environment,(Ktarzyna Twarowska) It is basically a
general strategy that can be easily manipulated to fit different local environments when
necessary.
3.4. Entry Strategies – how do businesses expand internationally?
To go back to the beginning of the literature review, when expanding a business to a
foreign market, one of the biggest challenges and decisions to be taken is how to enter the
market. There are several types of entry strategies that are summarized under two major
types and differ by the level of risk involved: (Terpstra V., Sarathy R. 2001);
1) Non-equity mode – includes export and contractual agreements;
2) Equity mode – includes joint venture and wholly owned subsidiaries
(Terpstra V., Sarathy R. 2001);
Figure 3.2: Entry Strategies
Source: Hutt Speh, 2014;
The entry technique that is the least risky and has the least market control is Import and
Export. (See figure 3.2) On the other side of the spectrum are the Direct Investments that
usually constitute of acquisitions (also referred as Brownfield) or to build its own facilities
12. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
7
(known as Greenfield investment). Direct investments carry the highest risk, but also the
highest market control and expected ROI (return on investment) (Terpstra V., Sarathy R.
2001);
There are six types of entry strategies on the spectrum that all differ in risk, market
involvement, resources required, legal complications, competitive aspect, access to market
knowledge and potential ROI. The entry strategies are as follows: (Terpstra V., Sarathy R.
2001).
Exporting and importing
Licensing
Franchising
Joint Ventures
Strategic alliances
Direct Investments
For the purpose of the report and to stay relevant, only the Exporting entry strategy will be
further discussed.
3.5. Export – Direct and Indirect
As clarified earlier, this strategy is the least risky and the most commonly used one. It is the
process of selling goods or services produced in one market to other markets. ,(Ktarzyna
Twarowska,2013). Two types of exporting exist – direct and indirect.
Indirect export involves other agents to market the products to the foreign market, while in
direct export the company becomes directly involved in marketing its products to the
foreign market. (Hutt Speh, 2014);
Exporting is a good strategy when a company doesn’t have sufficient amount of resources
to make a significant commitment to the market, wants to minimize the risks related to
politics and economy and also is not that familiar with the requirements of the market and
the culture. (Hutt Speh, 2014);
The question that a company can ask at this point is, should the product be distributed
through a company-owned distribution channel or it would be more efficient to outsource
distribution to an independent organization?
3.6. Distribution Channels
Channel of distribution, also referred to as a marketing channel, is:
“A group of individuals and organizations that direct the flow of products from
producers to customers.” (Hutt Speh, 2014);
Most of these marketing channels have the so called marketing intermediaries (or middle
man) that are divided into two types – agents and brokers. (Hutt Speh, 2014)
In the case of this report, the company already collaborates with middleman to sell its
products.(Innovation Living, 2016) Therefore the report will not focus on discussing this
aspect of the distribution channels, but it will look further how the company can more
adequately approach and attract more middleman to collaborate with.
Back to the question – owned salesforce or independent organization?
The former option, an integrated channel, gives the business more control than the latter,
the independent organization. Having an ownership over the salesforce provides the entrant
13. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
8
with full control, but it also brings responsibility, commitment and attendant risks. (Ahmed
1977).
There are several factors that would influence the choice, as each one of them depending on
the situation would weigh the scale to one side or the other: (Erin Anderson, Anne T.
Coughlan, 1987);
Service requirements
Government pressure – using local agents when available
Product category age
Task-specialized knowledge and relationships
Transactional Costs
Market knowledge
Strength of patents
Competitive behaviour
The country in question
It is more likely a business to choose an integration of the distribution when:
- There is a greater level of transaction-specific assets in the sales force
- The less mature the product category
- The higher the service level associated with the product
- The less prevalent legal restrictions
- When there is an integrated distribution channel already in place
- The importance of the product is high – is it the core one for the business?
- The more important the trade secrets
- The more competitors have integrated distribution channels in the foreign market
- The more similar the culture of the home market is to the culture of country being
entered. (Erin Anderson, Anne T. Coughlan, 1987)
When the company decides to operate through an integrated salesforce, even if that involves
hiring a local sales representative, it will need to create a sales strategy that will be in line
with its marketing plan, will be complied with the business plan and will support the overall
strategic plan of the company. (JWPM Consulting, 2013)
3.7. Developing a sales strategy
A sales strategy has to be very detailed and specific otherwise it is simply a marketing plan.
It has to be clear who is doing what, when and where and most importantly, it must have
targets. A sales plan is:
“An operational plan that identifies how the annual sales revenue budget will be achieved by
aggregating sales budgets by customer, territory, and sales representative and listing the
week to week activity required to achieve the sales budgets.”
The sales plan is organized around a list of revenues sources and the customers should be
grouped the following way: (See Table 3.3);
14. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
9
Table 3.3: Customer Grouping;
Existing customers The 80/20 rule usually applies that is
80% of revenue is derived from 20% of
customers. The sales representative
should be able to make a judgement
about how much each customer is
expected to buy in over a year.
Identified new customers Create a list of the sales target for a year
from which 25% might become customers.
As yet not identified new customers Allocate an allowance in for growth as yet
not identified future customers
Major projects Depending on the type of company, make
an allowance for major project revenue.
Source: Own Production;
Setting up a sales plan serves as a great management tool to help forecast the annual sales
revenue, to achieve face-to-face visits, to identify how many sales reps are needed and what
the purpose of each sales visit would be. (JWPM Consulting, 2013);
The content of good sales plan content should contain the following aspects:
- Sales strategy
The company needs to create a general statement for the sales strategy that will reflect the
strategic direction of the organisation.
- Sales Model
There are many ways to structure the sales departments. One of the most common models
used is “every man for himself”. On the selling spectrum there are two types of sales
approaches - transactional or collaborative (William Walker, 2016) Depending on the type of
business, customers and goals, the sales model can be transactional oriented or relationship
oriented (collaborative) which will influence the level of sophistication, the number of
employees involved and the amount of time in the sales process.
Transactional selling approach
Simply put, a transactional sale is a short-term sale in which the buyer knows already exactly
what he needs. (John Tabita, 2012)The main decision criteria are price, features and
availability and the significance of the sales person very often diminishes. The person selling
will know the product and its price, but it won’t be required to convince the purchaser.
(William Walker, 2016);
Consultative selling approach
Consultative selling approach is also referred to as strategic, solution, complex, relationship
and even enterprise selling. (Ed Warner, 2009) It is long-term oriented, usually more than
one decision maker is involved and the focus is put on the value. The questions is not what
the customer is buying, but why. Not like in transactional selling, here the salesperson will
need to be very well educated about the product or service in question. Moreover, to know
more about the customer, what are the goals of the customer’s business and the results that
need to be achieved. When the customer is not very certain about exactly what he/she
needs, the salesperson becomes a coach that helps the customer to establish goals and
objectives and create an action plan that will deliver results. (William Walker, 2016);
15. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
10
The table below presents an overview of the differences between transactional selling and
consultative selling: (See table 3.4);
Table 3.4: Transactional vs. Consultative Selling;
Source: John Tabita, 2012
As consultative selling requires higher level of knowledge about the customer and what
he/she are aiming for, there are models that can be used to enhance the sales person’s
techniques.
The SPIN selling model was developed by Neil Rackham in 1998, after conducting a vast
research for 12 years about how large sales were made. One of the biggest findings is that
in sales calls it is the buyer who does most of the talking, which on its hand happens by
asking the buyer questions. But it is not about asking any kind of questions, the sales
person should ask certain type of questions and follow a certain flow. (See Figure 3.5);
Figure 3.5: SPIN Selling Model
Source: Strategic Learning, 2013;
16. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
11
SPIN stands for:
-Situation (questions) - to find out facts about the existing situation of the customer.
-Problem (questions) – to find about what problem the buyer is experiencing in this
current situation.
-Implication (questions) – to make the customer think about the consequences and
effects of the current problems.
-Need-payoff (questions) – to make the buyer focus on the solutions and the value of
the proposed solution.
What the creator of the SPIN selling model himself recommends is that a sales person
should always stay flexible and adapt the speech and the questions according to the specific
situation. It is not always necessary to follow the order of the SPIN questions in a strict
order. (Hutt Speh, 2014);
Another article introduces a concept that serves as an enhancement to the SPIN selling
model, called Social Style model. The model enhances SPIN in three main ways – the sales
person applying a certain style to the selling situation, recognizing and managing the
buyer’s style behaviours and practicing versatility.
Practicing style awareness improves sales people abilities to ask the right questions thus
achieve better success rate and versatility supports all aspects of client management and
selling situations. (Hutt Speh, 2014);
- Territory plan
It is important to segment the sales territory so that the resources and time are allocated
effectively to maximise the sales outcome. The sales territories can be segmented by
geography, industry, customer type, product type and customer size. The choice made can
have a huge impact over sales outcomes.
Figure 3.6: Sales Opportunities Grid
Source: LaForge and Carvens, 1982
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Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
12
Figure 3.7: 7 step process
- Significant sales opportunities
Each sales plan for the year should have identified and contain the so called “largest”
opportunities for the business and a more detailed plan should be prepared to capture
them. The matrix on the previous page gives an overview on how to allocate the sales
resource depending on the PCU opportunity. (See figure 3.6);
- Sales Budget
The sales budget should contain considerations for at least 12 months and sales targets for
sources of sales growth.
- Sales Activity Plan
A plan for the activity of each sales rep should be prepared that will match the goal of
achieving the targets in the Sales Budget.
- Sales Tactics
Sales tactics may include different considerations such as new initiatives designed to
increase the effectiveness of the sales activity. As well, cultural considerations, which are
very important when conducting sales in foreign markets?
- Resource plan
This plan provides a detailed month over month budget of the sales department expenses:
number of sales reps needed, support staff, equipment purchases, etc. Under this section an
outline of the recruitment plan can also be included, if new sales reps need to be employed.
The recruitment process consists of 7 Steps: (See Figure 3.7);
Determine the number of
sales employees needed
Identify the unique skills,
knowledge and personality
required for the job
Attract a sufficient number
of candidates
Produce one interview
process that accurately
reveals qualifications
Provide employment for
one or more candidates
Introduction of new
employee for the job
Follow-up on performance
in the job
What should be taken into consideration for sales force composition and number?
What preparations should the company make?
How does a company get sufficiently applications?
What sources are there for a company to make use of in order to find possible
candidates?
What tools can a company use?
Considerations about the interview process
How can interview process look like?
What the company must take into consideration when a candidate is offered a job?
What the company must take into consideration when a new employee to be
introduced in the job?
What needs to be followed up? Source: Own Production
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13
- Sales incentives
Create a scheme of incentives for the sales representatives and the costs should be
considered in the resource plan.
Incentives can take different forms. Apart from the fixed salary and pension, the company
can also offer a variable salary such as: provision, bonuses, paid company car, EBIDA or
stock options.
There can also be other benefits like free phone, health insurance, massage/fitness or it can
be reverences related to the work like parental leave or care taking days. (Jobber &
Lancaster) Also career development aspects such as company paid courses, coaching,
teambuilding and etc.
Related to the compensation, for the sales reps it is very common practice to receive a form
of a variable salary next to the fixed one. It is also referred to as performance based
remuneration. When developing a plan about performance based remuneration, it has to be
decided upon the period, goals, measurements, information access, the size of the bonus,
when it is paid and termination details. The periods can be monthly, quarterly, yearly or
individual for a very specific target. (Jobber & Lancaster)
- Training plan
The training plan in general should be ongoing for any sales department. It will contain all
the training activities planned, participants, cost of the training, schedule and impact on
other related activities.
- Operations plan
This plan contains everything related to working space, equipment needed to conduct the
tasks, software etc. This plan also can contain expenses and other capital discussions.
- Selling expense summary
The total costs for each month are summarized and listed.
Having discussed how to organize a salesforce, it is also very important to take a look at the
cultural factors and considerations that the new sales reps will need to take into account if
expanding to a foreign market.
3.8. Cultural Dimensions, affects and considerations
Culture, cultural differences and the influence of national cultures play an important role in
International Business (IB) field and over the last three decades have been widely studied.
The research paper by Reis, Ferreira, Santos and Serra (2013) examine different cultural
models and present the definition of culture given by Hofstede (1980):
“[t]he collective programming of the mind which distinguishes the members of one human
group from another, … the interactive aggregate of common characteristics that influence a
human group’s response to its environment”.
As well, Gould and Grein (2009) state that:
“[c]ulture consists of explicit and implicit patterns of historically derived and selected ideas
and their embodiment in institutions, practices and artefacts; cultural patterns may, on one
hand, be considered as products of action, and on the other as conditioning elements of
further action”.
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Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
14
Companies are not in isolation, and they operate in a physical, technological, economic,
social and cultural space to which they must adapt. (Scott, 2002);
According to Guusinger, (2001) one of the factors that culture can influence are the
international strategic options when operating abroad and can have a strong impact on the
choice of entry mode in foreign markets. (Kogut and Singh, 1988; Tihanyi et al., 2005) From
the research, some companies seem to prefer joint ventures and acquisitions rather than
Greenfield investments when entering culturally distant countries. (Shane, 1993);
Three main cultural models exist:
Edward Hall’s high and low context of culture (1976);
Trompenaar’s seven dimensions of culture (1993);
Hofstede’s Cultural dimensions (1980);
Hofstede’s model analyses the different variables of national culture while Trompenaar’s
model focuses on how culture is created. (Hampden-Turner and Trompenaars, 1997) Hall’s
(1976) model did not advance to an internationally comparable measurement and it analyses
only one single variable (context) in a binary output. (Reis, Ferreira, Santos and Serra, 2013)
All of the models have received certain critique regarding peer review, depth of the model
and simplicity. However, the most commonly used model by academia and professionals
today when trying to analyse the culture of a certain market is Hofstede’s model, thus the
literature review will further focus only on this model. (Reis, Ferreira, Santos and Serra,
2013);
Hofstede’s Cultural dimensions
In his book, “Culture’s consequences: International differences in work-related values”,
Hofstede (1986) presents the results of his empirical study through which he managed to
identify four basic cultural dimensions that are able to explain the variance in the countries’
scores of cultural values. The four dimensions are:
Power distance: the degree to which individuals in a culture accept unequal
distribution of power. (Hofstede, 1980);
Uncertainty avoidance: the tolerance of members of the group to unstructured,
ambiguous situations and whether the members of the group accept or try to avoid such
situations. (Hofstede, 1980);
Individualism – collectivism: defined as the extent to which individuals in a national
cultural setting “prefer to act as individuals rather than as members of groups”. (Hofstede,
1994)
Masculinity-femininity: the degree to which traditionally ‘masculine’ values (e.g.,
performance, competition, success and assertiveness) prevail over stereotypically ‘feminine’
values (e.g., solidarity, care for the weak, cooperation, quality of life, personal relationships
and friendship. (Hofstede, 1994) ;
Together with Bond (1988), in later work, a fifth dimension was included:
Confucian dynamism (also known as long term orientation), which relates to the
culture’s time horizon, and the importance ascribed to the future or the past.
The latest cultural dimension added to the model or the sixth one is:
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15
Indulgence the extent to which people try to control their desires and impulses,
based on the way they were raised. (Hofstede, 2016);
The following limitations when applying Hofstede’s framework should be kept in mind. One
of the obvious weaknesses is that the data is relatively old and doesn’t capture the effect of
recent political, economic and technological changes. Moreover, that the creation of the
model is based on data from only one company – IBM. (Pankaj Ghemawat and Sebastian
Reiche, 2011);
As outlined earlier, national culture differences have a reflection in business decisions like
foreign entry modes. But the understanding of national culture can also improve
management practises and Pankaj Ghemawat and Sebastian Reiche (2011) provided the
following findings:
Participative management can improve profitability in low power distance cultures
but worsen it in high power distance cultures
Quick fixes can improve profitability in more short-term oriented cultures but worsen
it in more long-term oriented cultures
Merit-based pay and promotion policies can improve profitability in more masculine
cultures and reduce it in more feminine cultures
Emphasizing individual contributions can improve profitability in more individualistic
cultures and worsen it in more collectivistic cultures
The findings can be used when deciding how to manage a sales rep for a foreign market
(tasks allocations, incentive strategies, etc.) after having made an analysis of the cultural
dimensions of the country in question.
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Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
16
4. Innovation Living’s Business Model
Innovation Living is an international furniture enterprise that has established production
facilities in three countries, on three continents, and has employees all over the world. The
company has full ownership over its supply chain until the distribution to the B2C - the
middle man or the retailers, thus it does not deal with the business to consumer aspect. One
of the biggest pluses for the company image are the “Danish design” and “Danish quality
stamp”.
Before an analysis of the Business models is made, it is relevant to take a look what growth
strategies the company is currently employing:
As shown on the figure below there are four types of generic strategy depending on the
Target Market Scope, the cost and the uniqueness of the product or service. Innovation
Living specializes in a niche market, more specifically the sofa/bed segment and serves
mostly customers who live in small living spaces. (Innovation Living, 2016) Based on this,
the generic strategic is determined to be a Differentiation Focus. (See figure 4.1);
Figure 4.1: Generic Strategies
Source: Hollensen, 2010;
As the main discussion of the report is related to the Bulgarian market and there is enough
data to determine the growth strategy according to the Ansoff Matrix. Innovation Living is
already present in Bulgaria with one authorized dealer in Sofia. The company sells products
from its usual product portfolio without any changes. Meaning that Innovation Living is
using the Market Penetration Growth Strategy;
Now, to receive a better understanding of the company’s concept and to see if it has the
necessary resources and capabilities internally to pursue a new strategy, an analysis of the
business model is made.
An overview of the company’s business model is presented on the next page (See figure
4.2);
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Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
17
Figure 4.2: Osterwalder Nine Block Business Model
Key partners All major suppliers of parts and materials, logistic partners, dealers and
chains, exhibition/fair executives, Danske Bank, External legal advisor
Key activities Design, production, sales & marketing activities
Key resources Human: Skilled management, Inspired well-known designer, Skilled
experienced experts in all processes of the production
Physical: production facilities/machinery, the building (warehouse,
showroom, offices)
Intellectual: XAL Information user friendly platform, containing data about
customers, procurement, financial data, inventory and transportation
Financial: Liquid/Financially stable company
Value
propositions
Functionality, Quality, Scandinavian Design, Brand Image, Customization,
Comfortability, Flexibility, (In some cases recycled or handmade)
Customer
segments
People of all ages living in small/one room spaces
In BG market: People with high standard of living (with greater disposable
income)passion for imported/ Scandinavian design furniture, High-
end/premium segment/luxury product
Customer
relationships
Personal focused customer relationships mostly aiming to retain existing
customers and less focused on new customer acquisition
Channels Own: Sales force, sales agents partner: dealers, wholesalers
Cost structure Costs related to KA: design, production, marketing & sales
Revenue
streams
Main: sales of furniture
Secondary: Sales of point - sale materials to Dealers
Source: Own production;
4.1. Customer Segments
The product in question is a niche product, with high level of innovation and diversification,
hence it holds a premium price. Therefore, Innovation Living is targeting furniture retailers
that are only distributing furniture in the same price-intervals. It is also important, that the
retailers are picking products that are unconventional and innovative and will attract end
consumers who seek to find unique design and functionality, and are willing to pay a higher
price.
In the Bulgarian market, the company currently operates only through one middle man –
Home Selection. Home Selection focuses exactly on three key aspects: Quality, Functionality
and Innovation. (Home Selection, 2016) It places emphasis on beautiful, functional and
proven quality furniture. The prices in their product range is medium to high.
In order to choose the right B2B customers, Innovation Living has defined a business to
consumer target group – people of all ages living in small/one room spaces, with a higher
disposable income. The company defines these people as young and extremely demanding,
having a dynamic lifestyle that the company’s products can be up to date with.
4.2. Value Proposition
The value proposition constitutes of products that are functional, with high quality, high
degree of customization, flexibility and Scandinavian design.
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Value Strategy - Customer Intimacy;
According to the Harvard Business Review, Customer Intimacy is one of the three value
disciplines. The other two are operational excellence and product leadership. Customer
intimacy observed as a value strategy refers to companies who continuously tailor solutions
(products or services towards the needs of their customers). This approach could be
expensive but it is the right one when the goal is improving the customer loyalty in the long
term. The focus is on the customer lifetime value, not on a single transaction. The idea is
that employees of Innovation Living strive to fulfil every customer desire, even it doesn't
seem important from their perspective.
The most special about Innovation Living’s products is their functionality. The different
sofas are designed to fit rooms of different sizes and to be adjustable depending on the
customer’s need at that current moment – to sit and read a book, to take a nap, etc.
Customers can also customize and give ideas for sofa’s to specifically fit their needs
through the D.I.Y. – Design It Yourself idea and slogan.
4.3. Channels
Innovation living’s marketing communications consist of both push and pull strategies –
they employ online and traditional marketing.
The company has its own website accessible from everywhere, as well as, it is present on
different social media channels – Facebook, Instagram, YouTube. Through these channels,
Innovation living manages to create brand awareness, also to educate and inspire its end
customers and to support its products through descriptions and video demonstrations.
The traditional marketing of the company consists of attending industry trade fairs that play
a very important role in their brand promotion in the B2B world. It is also creating its own
promotional materials such as product catalogues and brochures.
4.3.1. Distribution Channels
The distribution process flow is conducted through sales agents sourcing potential
wholesalers and retailers.
As mentioned earlier, the company operates through middle man, wholesalers and retailers,
and does not have its own brick and mortar stores. It has built its own salesforce and each
sales rep specializes for a different market. Hence, the company’s entry mode in foreign
markets is through direct export, collaborating with native sales representatives.
4.4. Customer relationships
The company conducts relationship based marketing or in other words, it follows the
diamond relationship model, where it has a personal approach to each B2B customers it
collaborates with. The sales reps act as key-account managers to their established partners.
They have constant communication with them and provide all the necessary information
support and information.
4.5. Revenue Streams
Innovation Living has two revenue streams:
Main: Sales of furniture
Secondary: Sales of promotional materials to Dealers
The company works with fixed pricing. When negotiating with the middle man, Innovation
Living directly sells its product to the distributor and then the distributor earns a percentage
of the final sale to the B2C customer. Here the risk falls on the middle man, as they stack up
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Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
19
inventory that needs to be sold. Nevertheless, Innovation Living needs to have certain
activities that support the middleman’s sales activities, so that is a win-win situation.
¨Innovation Living offer not the cheapest, nor the most expensive products.¨ - Quoted from
Jesper Frelund, Chief Executive Assistant;
However, the Innovation Living product prices compared to the price level of similar
products from the same sofa/bed segment in Bulgaria is quite high. Hence, the company
has a premium pricing strategy. Lowering the price of Innovation Products is not an option,
so the Innovation Living products are classified as luxury/premium and the pricing strategy
of the firm will be observed as premium pricing and it targets end consumers with high
disposable income.
4.6. Key Resources
4.6.1. Human resources
The company consists of 25 full time employees in the administration and one intern. The
team consists of CEO, Designers, Product Managers, Logistic Manager, International and
Area Sales Managers, Marketing Coordinators, Customer Service Team, It-Manager and a
Financial Specialist. It also has its own employees in the production facilities.
4.6.2. Intellectual resources
The company has created and poses a database called XAL that contains information about
their customers, procurement, financial data, inventory and transportation.
4.6.3. Physical resources
The company owns three production facilities and special machinery. It also has an
inventory storage space (warehouse), showrooms, offices and different equipment.
4.6.4. Financial resources
A detailed financial analysis of the company through ratios and financial report analysis
couldn’t be made, because of a lack of information from Innovation Living.
However, according to the company, it currently doesn’t have any liabilities. The flow of
revenue has slightly declined after the world’s financial crisis in 2007, but the company still
earns enough to be profitable and to re-invest back into the business. It recently started
building its own production facilities in Ukraine in order to support its activities in both
Eastern/Southern Europe and some parts of Asia. This will reduce the time to market in
certain countries as well as lower the costs for Innovation living in both production and
distribution.
4.7. Key Activities
The key activities of Innovation Living are as follows:
o Production and Design;
o Marketing and Sales;
o Distribution and Support;
4.8. Key Partnerships
The Key partner for Innovation Living are all the major suppliers of parts and materials that
make the production of the sofa’s possible and the dealers and wholesalers through which
the products are distributed to the end customers.
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4.9.Cost Structure
The costs of Innovation Living are compounded of both fixed and variable costs. The fixed
costs include salaries, administration costs, operating costs and equipment depreciation.
The variable costs include marketing activities and sales incentives and bonuses.
5. External Analysis
This section of the report includes relevant parts from PESTLE analysis of Bulgaria, Industry
analysis based on Porter’s 5 forces framework, in-depth analysis of the competition on the
Bulgarian Market, both domestic and foreign firms. Competitive benchmarking based on
select criteria. Analysis of organisational customers relevant to Innovation Living;
5.1. PESTLE
Most relevant to the project are considered to be the economic, social and legal factors and
accurate summarized information is provided.
5.1.1 Economic factors
● Bulgaria is the poorest country in the EU;
● Bulgaria has the lowest wages in EU; Based on recent data published by the Bulgarian
Government, the average salary is app.400 EUR, the minimum salary is app. 200 Euros, high
salaries are app. 800-1000 EUR; However the salary rates are higher in Sofia and the high
salaries account for app. 1500-2500 Euros (BG Govern Stats);
● The manufacturing industry accounts for 20.0% of GDP and 20.3% of the workforce is
working in it.
● Disposable income per capita totalled BGN 6,912 in 2015. The real value of disposable
income per capita is expected to rise by 4.0% in 2016.
● Bulgaria’s economic performance was good in 2015. The economic growth is expected to
keep moderate rates and higher wages will continue to boost household spending, thereby
supporting output growth. The country continued to benefit from a modest increase in
foreign investment inflows and a relatively stronger fiscal stance.
● High rates of unemployment;
● Sofia has the most favourable economic climate and provides excellent conditions for
start-up and growing business;
Source: Bulgarian Country Profile, Euromonitor, 2016;
Figure 5.1: Key Economic Indicators of the Bulgarian Economy
2010 2011 2012 2013 2014 2015
Inflation (% change) 2.4 4.2 3.0 0.9 -1.4 -0.1
Exchange rate (per US$) 1.48 1.41 1.52 1.47 1.47 1.76
GDP (% real growth) 1.3 1.9 0.0 0.9 1.3 3.6
GDP (national currency millions)
74,771
.3
80,759
.0
82,040
.4
82,166
.1
83,634
.3
88,571
.3
Birth rate (per '000) 10.2 9.6 9.5 9.2 9.4 9.2
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Death rate (per '000) 14.9 14.7 15.0 14.4 15.1 15.3
No. of households ('000)
2,996.
1
3,005.
6
3,011.
6
3,017.
2
3,023.
5
3,026.
9
Total exports (US$ millions)
20,570
.9
28,221
.7
26,666
.9
29,579
.4
29,327
.3
25,715
.2
Total imports (US$ millions)
25,472
.8
32,578
.8
32,708
.7
34,308
.3
34,660
.9
29,225
.8
Urban population ('000)
5,337.
0
5,314.
9
5,324.
9
5,307.
9
5,291.
7
5,267.
5
Urban population (%) 71.9 72.1 72.7 72.9 73.0 73.1
Population aged 0-14 (%) 13.2 13.3 13.4 13.6 13.7 13.9
Population aged 15-64 (%) 68.8 68.3 67.8 67.3 66.7 66.1
Population aged 65+ (%) 18.0 18.3 18.8 19.2 19.6 20.0
Infant mortality (deaths per '000
live births)
9.4 8.5 7.8 7.3 7.6 6.6
Adult literacy (%) 98.3 98.4 98.4 98.4 98.4 98.4
Source: Euromonitor, 2015;
Figure 5.2: Real GDP Growth and GDP per capital development in the period of 2010-2016;
Source: Bulgaria - Economy, Finance and Trade, Euromonitor, 2015;
Income and expenditure in Bulgaria
Bulgaria’s per capita gross income and expenditure levels are the lowest amongst
economies in the European Union (EU).In 2015, consumer expenditure per capita amounted
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to BGN 7,802 (US$4,425). The real value of consumer expenditure per is expected to raise
with 3.4%. Disposable income per capita totalled BGN 6,912 (US$3,921) in 2015. The real
value of disposable income per capita is expected to rise by 4.0% in 2016.
During the period 2015-2030, total disposable income will increase by a cumulative value of
89.8% in real terms – growing at an average annual rate of 4.4%.
As Bulgaria’s political, economic and cultural centre, Sofia gains most of the investment
(public and private) in the country (which results in higher employment rates compared to
the rest of the regions). The city also has the highest concentration of wealthy households in
Bulgaria. This delights the broader South-West region the largest consumer market in the
country, while the region also ranks top in terms of per household average spending;
Source: Euromonitor, 2015;
5.1.2 Social factors:
The country is experiencing a long-term decline in the population of all ages less than 60.
Total population was 7.2 million in 2015, a drop of almost 800,000 since 2000.
● Bulgaria is losing thousands of qualified workers each year through emigration
● 22 % of the population are poor people below the poverty line;
● The availability of skilled labour will continue to be a constraint despite the large pool of
unemployed.
● Aging population is a disturbing factor;
● Productivity growth is critical for accelerating income convergence. Productivity must grow
by at least 4% per year if Bulgaria is to reach average EU income levels. Growth prospects
could also be limited by significant population decline owing to emigration and ageing.
Source: (Euromonitor, Bulgaria Country Profile, 2015);
5.1.3 Legal factors:
● High corruption rates in Bulgaria;
● Competitive tax rate of 10%, the lowest in the EU;
● Member of the EU, EU free trade policies apply;
● No additional regulations regarding the import of furniture;
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5.2. Porter's Five Forces
Figure 5.3: Porter's Five Forces Industry Analysis Chart
Source: Based on Michael Porter’s 5 Forces model;
5.2.1. Supplier Bargaining Power - Moderate 5/10
In general, there are plenty of suppliers worldwide providing similar materials (wood/iron
frames, textile covers, mattresses and fillings). Definitely, offered products/materials from
various suppliers may differentiate in terms of price, quality, delivery time, order size, origin
of materials, certification and much more. Firms who has better agreements with a supplier
or partner with suppliers, providing them with superior materials gain competitive
advantage and become the preferred choice of the end consumers. The supplier bargaining
power is determined to be moderate. The suppliers can charge as much as they decide for
their products and services as far as their customers agree to pay. In a free market there are
no general limitations to accessing and cooperating with a certain supplier, it all comes to
negotiating more favourable conditions of cooperation. The suppliers might feel pressured
to lower their price, to win a client. Furniture manufacturers who are able to find and
cooperate with suppliers, offering superior products and services on better terms in the long
term compared to the competition gain sustainable competitive advantage, leading to
increased perceived value for the customer, more sales and bigger profits.
Table 5.4: Indicators of the supplier’s bargaining power;
Number of suppliers High
Size of suppliers Vary
Uniqueness of service Not unique
Your ability to substitute Great
Cost of changing Small
Source: Own Production;
0
2
4
6
8
10
Supplier's
Bargaining
Power
Buyer's
Bargaining
Power
Threat of
Substitution
Threat of New
Entrants
Rivalry among
Existing
Competitors
Porter's 5 Forces Shaping the Furniture
Industry
Porter's 5 Forces Shaping
the Furniture Industry
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5.2.2. Buyer Bargaining Power - High 8/10
The customer is always first, he is the decision maker. Fierce competition between
manufacturers provides the customer with wide range of products to choose from. The
buyer has the power to determine from whom to buy and to decide which offer suits his
needs best.
Table 5.5: Indicators of the buyer’s bargaining power’
Number of customers Medium
Size of each order Vary
Differences between competitors Low, might vary
Price sensibility High
Ability to substitute High
Cost of changing Low
Source: Own production;
5.2.3. Threat of Substitution 1/10
Thinking logically, there is no substitute to furniture. All the substituting products or
products with similar purpose/designation are also categorized as furniture products. So the
furniture is unique and irreplaceable concept. In other words, the furniture products can be
substituted only with other furniture products. Of course there is a wide range of functions
and model varieties which may have similar usage qualities and one product can replace
another. (Example: Sofa/Bed have the properties and applications both of a couch and a bed
and could substitute both. Also decreases the quantity of occupied space (measured in
sq.m), which makes it. in some cases, a preferred product for small living spaces).
Table 5.6: Indicators for threat of substitution
Substitute performance No substitution to furniture
Cost of change -
Source: Own Production;
5.2.4. Threat of New Entry 8/10
In the furniture Industry, the threat of new entry is high. A lot of new firms continuously are
being opened. Small investments of capital are required to buy wood and textile processing
machinery. It is not a necessity to operate complex technologically advanced machinery in
the process of furniture manufacturing. Old machinery, even a manual tools are used to
reduce costs. The administration also processes documentation smoothly without need of a
complex software. Rarely sophisticated CRM systems are used, only by large organisations
who can afford. Furniture manufacturing business can be launched with relatively small
capital. Most of the new entrants are local small firms. Economy of scale is determined to be
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medium to high, mainly because materials are cheaper when purchased in bigger volumes;
also the efficiency of the logistics is increased, leading to lowering of the transportation
costs per unit.
Table 5.7: Indicators of threat of new entry
Time and cost of entry Small
Specialist knowledge Small to medium
Economies of scale Medium to high
Cost advantages Medium to high
Technology protections Small
Barriers of entry Small
Source: Own Production;
5.2.5. Competitive Rivalry - High 9/10
There is high degree of competition within the furniture industry. Huge number of
competitors. The market is very price sensitive, meaning that a change of price, causes a
drastic change in the demand for products. The quality of materials and assembly can vary
depending on suppliers and the expertise of the work force. The furniture industry is not
characterized with high customer loyalty, often the customers are purchasing furniture from
different retailers and manufacturers. A firm which is able to provide a product with the
same perceived benefits cheaper, most likely is the preferred choice of the customer. The
industry is characterized with fierce price competition and could be described as Red Ocean.
Table 5.8: Indicators of the rivalry among competitors;
Number of competitors High
Quality differences High
Other differences High
Switching costs Medium
Customer Loyalty Low
Source: Own Production;
5.2.6. Attractiveness of the furniture Industry 4/10
Overall the furniture manufacturing industry is not very attractive scoring overall rating of
4/10, because of the high level of competition among opponents, the price sensitivity
influencing the demand. On the other hand it is safe industry because there are no
31. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
26
substitutions and companies with skilled salesforce can achieve high results being able to
satisfy the customer´s demands.
5.3. ADL Matrix
Using the ADL Framework are considered two main factors: the competitive position of
Innovation Living in the Bulgarian Furniture Market and the stage of industry life cycle. The
Industry is considered as mature. The meaning of mature in this case is that the industry is
already grown and it has well established customer base, the market and the market share
are stable, there are a lot of competitors and are focused to differentiate one from another -
exactly what it is happening within the furniture industry. However the Innovation Living
competitive position on the Bulgarian market is tangible, meaning that the company has
small insignificant market share, also it is present only in Sofia. The firm strives to
differentiate its products from the others and retain on the market. In order Innovation
Living to keep its market share and to pursue growth, it has to improve its competitive
advantage and to put more effort on sales and acquire new customers. Based on internal
information from the company, at this moment there are not enough people in the sales
department, which results in inability to acquire new customers. The currently hired sales
people at Innovation only manage to serve existing customer and are unable to negotiate
with potential customers.
Unfortunately, this is a weakness and could have a negative effect to the company
performance and sales figures, it can even result in withdrawal of the market. Further in the
report this problem is to be solved. Innovation Living needs to be active and to stabilize its
position on the market. (See figure 5.9);
Figure 5.9: ADL matrix
Source: Wilson, Richard M.S and Gilligan, Colin, 2005;
5.4. Analysis of the Competitors in Bulgaria
Competitor intelligence acquired based on the analysis will contribute to developing a new
strategy for Innovation Living by identifying the competitive advantages of the competition
and how Innovation Living can steal market share.
The competition of Innovation Living consists of other furniture manufactures supplying
directly or indirectly sofa/beds to the end consumers in Bulgaria. They are divided in two
categories: Local Competition and Foreign Entrants.
¨Market sources of furniture for Bulgaria are dominated by foreign, mainly of European
origin firms. Share of national production out of total consumption is 25%. Share of imports
32. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
27
out of total consumption is 75%, which means Bulgaria depends on imports.¨ (Furniture
Manufacturing, 2015);
5.4.1 Local Competition
¨There are more than 2300 wood processing and furniture manufacturers in Bulgaria,
which sell both on the domestic market and export internationally. 77.5% of them are micro
firms with 1 to 9 employees. There are only 10 macro enterprises accounting for 0.4% and
they employ more than 250 people. The rest are small and medium firms with 10 to 250
employed personnel.¨
The competition faced by Innovation Living consists of all companies selling sofa/beds as
part of their portfolio on the Internal Market.
In general the products produced by local firms are not homogeneous from customer
perspective. They have similar product ranges. Most local firms do not specialize in a niche
market like Innovation Living, but have broader product portfolios. A usual Bulgarian
manufacturer of commercial furniture offers all types of furniture to be used in all the
rooms, excluding bathroom and restroom furniture. These competitors are mainly B2C
oriented, but the larger ones sell both B2B (sales through retailers and resellers) and B2C.
Ergodesign, Videnov and Irim are well established companies owing a big part of the market
share of the domestic production.
Competitive advantages of the local firms over Innovation Living
● Lower Costs of manufacturing;
● Lower costs of transportation;
● Cultural similarity with the Bulgarian consumers;
● Shorter time to market;
5.4.2 Foreign competition on the Bulgarian furniture market
Companies from Denmark, Sweden, Germany, Italy, Poland, Ukraine and more countries are
already present in Bulgaria, distinguishing from the local competition. Due to the lack of
design, bad quality and similarity of products offered from the local competition, the
consumers seek alternative, especially from customers with higher income and the demand
for imported furniture is growing. The number of foreign companies on the Bulgarian
furniture market is growing. Ikea, Jysk, Cotta, Boconcept are only few market entrants.
Owned Showrooms, Distributors and resellers are commonly used to reach the consumers.
The table below illustrates the customer perceived benefits categorized as order winners
and order qualifiers.
Table 5.10: Order Winners and Order Qualifiers for Sofa/bed Purchase from end consumer
perspective;
Order Winners: Order Qualifiers:
Quality; Comfort;
Design; Customization;
Functionality; Time to market;
Uniqueness;
Source: Own Production, based on primary and secondary data;
In the table below are shown companies which are competing with Innovation Living in the
Bulgarian Market. All companies involved in it, produce and sell products under the category
of sofa/beds. The table provides competitive benchmarking. All criteria are ranked on the
scale from 1 to 10. (See Table 5.11);
33. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
28
Table 5.11: Competitive Benchmarking of firms in the Bulgarian Furniture Market
Innovation
Living
BO
Concept
IKEA Irim Ergo
Design
Cotta
Headquart
ers:
Denmark Denmark Sweden Bulgaria Bulgaria Germany
Product
range on
the BG
Market:
Sofa/Beds
only
Furniture
for home -
for the
living,
dining
room,
bedroom
Everything
for home
not limited
to furniture
All types of
furniture
for home,
office and
gardens,
hotels
Beds,
Furniture
for
bedroom,
sofa/beds,
mattresses
Furniture
for the
living and
dining
room
Point of
sales:
1 partner
showroom
(Home
Selection
showroom
in Sofia)
1 Owned
Showroom
in Sofia
only
(Boutique);
One brand
store in
Sofia
100 +( in a
lot of
stores
across the
country)
Available in
most cities,
also online
7 (Only can
be
purchased
in AIKO
stores)
Sales
Volume of
Sofa Beds
1 2 3 8 7 8
Time to
market:
7 (app. 3
weeks for
ORL)
7 (4 weeks
in not in
stock)
1(only
products
in stock are
for
purchase)
5 (2 weeks) 6 (3-4
weeks)
1 (only
products
in stock are
for
purchase)
Price of
Sofa/Beds
Sofa/Beds:
8 10 5 3 8 7
Degree of
customizat
ion:
6 4 3 10 7 2
Quality: 8 8 6 6 8
Functionali
ty of
sofa/beds:
9 7 6 10 7 8
34. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
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Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
29
Uniquenes
s of the
design of
the
product on
the
Bulgarian
market:
10 8 7 2 9 6
Brand
Recognitio
n in
Bulgaria:
1 4 9 9 6 5
Level of
Customer
Awareness
in Bulgaria:
2 4 9 9 6 5
Source: Own production, based on field research and company websites;
Results show that Innovation Living performance is satisfying and in some measurements
are superior compared to companies with longer presence and greater market share. The
Innovation Living product lines are competitive and have the potential to sell well in
Bulgaria. The product features such as design, quality customisation and uniqueness make
them attractive to consumers and stand out from competition.
Investing in marketing campaign, will improve the low level of customer awareness and
brand recognition; the existing concept offered by Innovation Living - Shop in Shop is a
good marketing tool but not enough.
Acquiring of new B2B customers is a must and more points of sale on strategic locations
across the country will enable the sales growth and improve the accessibility and consumer
awareness. The fact that Innovation Living is only accessible only in one showroom of a
private design store in Sofia is the main obstacle of weak sales. The company has to act
more offensive, gain market share and strengthen its presence on the market.
The outsourcing of Innovation Living production in the new facility in Ukraine will decrease
the time to market.
Innovation Living has to invest in marketing and business development activities to develop
the market and attract resellers with credible image and reputation.
5.5. Organizational Customer’s Analysis
This section of the report deals with analysis of the organizational buyers. Main area of
focus is B2B Customers of Innovation Living in the Bulgarian market and their characteristics
including assessment of their buying behaviour, involved individuals, and the buying
situation.
Briefly, Innovation Living only works with B2B customers. The goal of the management is to
develop long-term relationship with small number of customers in a specific market, in
order to keep its status of design brand, which cannot be purchased everywhere. Innovation
Livings selectively acquires new customers and does not sell to anyone.
35. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
30
All customers of Innovation are only companies who resell Innovation Living products for
profit. They don’t use the products in any other aspect in the business.
Most important factors influencing the buying decision for resellers are profit margins of
selling third party products, sales volume, payment options, delivery terms, volume of order
quantities.
In most cases a moderate rebuy situation will occur. As the orders will differ in models
ordered and quantity, depending on season, time of the year, end consumer needs and etc.;
Direct procurement is the main method, because it is common for small firms and the
decision is made individually in the organisation.
In Bulgaria, currently Innovation Living the only customer is Home Selection a designer
furniture store in Sofia, which is an authorized dealer of Innovation Living's products. The
customer has the following characteristics:
Company size: Small (1 to 9 employees);
Order Size: Small (Total revenue for 2016 of 55 130 DKK ); (See Appendix 5);
Position of the decision maker within the organization: CEO/Owner;
Buying situation: Moderate rebuy;
Communication: Direct (with the sales coordinator based in Denmark);
Associated resellers are Interior design studios and designer stores. Wholesalers
specializing in furniture sales in Bulgaria are: Videnov, Mondo and AIKO.
5.6 Market Trends and Demand for Design Danish Furniture in Bulgaria
¨A recent survey conducted by Alpha Research for the Bulgarian Chamber of Commerce
concluded that price had been a decisive factor driving furniture consumer preferences in
Bulgaria. Logically the competition on the Bulgarian market for furniture and design was
mainly focusing on price rather than quality of the products. Nevertheless, the survey
identified a new trend; the group of consumers buying new and expensive furniture is
growing, the group predominantly consists of young professionals with a high social and
economic status who are residents of Sofia or other larger cities.¨ - Source: Furniture and
Design Sector in Bulgaria, 2015;
Retailers selling imported design furniture accounted for essential growth with dynamic
rates. The import of design furniture has increased by 300%. Due to increase of disposable
income, more innovative products, matching customers’ expectations and the better leasing
schemes. A lot of foreign brands producing exclusive, designed furniture expanded in
Bulgaria. The most revenue comes from Sofia and the big cities. Great demand comes from
young enthusiastic people with a high social status and disposable income above the
average. Additional demand for quality designer furniture is created by the tourist industry,
which intensively grows. The growing demand for furniture and design in Bulgaria makes
Danish Furniture Design Brands even more popular for the customer and the fact that
Danish producers have the image and reputation for great designers for ages together with
the expertise of furniture manufacturing and the high quality materials used, create
excellent opportunities for the Danish companies to achieve sustainable, sizable growth in
the Bulgarian furniture market; (Furniture and Design Sector in Bulgaria, 2015)
5.7. Bulgarian Culture according to Hofstede’s Six Cultural Dimensions
For this analysis, Hofstede’s website (https://geert-hofstede.com/bulgaria.html) was used as
a source of information. (See figure 5.12);
36. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
31
Figure 5.12: Bulgaria Cultural Profile
Source: Own Production;
Power distance
As Bulgaria scores very high (70) it means that people in that country accept a hierarchical
order in which everyone has a pre-defined place and it doesn’t need to be further justified.
Centralization is normal and subordinates are told what to do.
Individualism
With a score of 30, Bulgarian society is regarded as collectivistic where close long-term
commitment to the member group is very important. Loyalty is paramount and it goes above
most other social rules and regulations. In this type of societies, offence often leads to
shame and loss of face. Relationships between employees and employer can often turn as a
family link like.
Masculinity
Bulgarian society with a score of 40 is considered more a feminine one rather than
masculine. In this societies the focus is on “working in order to live”, strive for consensus
from the management, valuing equality, solidarity and quality in the working live. Conflicts
are resolved by negotiation and compromising, and incentives such as free time and
flexibility are favoured.
Uncertainty Avoidance
The score of for uncertainty avoidance is very high (85) thus people in Bulgaria prefer to
avoid uncertainty. This constitutes in being intolerant to unorthodox behaviour or ideas.
Time is money in this society, there is inner urge to be busy and work hard, precision and
punctuality are the norm and security is an important element in individual motivation.
Long Term Orientation
The score of 69 for Bulgaria makes it a pragmatic culture, where people believe that truth
will vary based on situation, context and time. There is ability to adapt traditions easily to
changes, tendency to save and invest and perseverance to achieve results.
Indulgence
Bulgarian society has the tendency to cynicism and pessimism or a Restrained culture (low
score of 16). There is no much focus on leisure time and gratification control on the desires.
37. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
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32
Figure 5.13: Bulgarian culture vs. Danish culture
Source: Hofstede, 2016;
The figure above compares the cultural dimensions of the Bulgarian and Danish society and
it can be seen there are almost the total opposite of each other. Hence, Innovation Living
will have to consider adding a native sales representative to the team, as he/she will possess
the necessary understanding of the market and the skills to communicate effectively with
Bulgarian business partners. (see figure 5.13);
6. Insights Based on the Conducted Semi-structured Interviews
Generally 5 retailers from the Bulgarian Market were interviewed. 4 of them are small to
medium size and only AIKO is a whole seller. 2 of them (Acherno and Trinex Design) are
Design Studios, meaning that they are not only retailers but also consult and digitally
visualize interior design concepts.
Language preferences: Eventough some of the participants use English, it is recommended
to have someone speaking the local language and has knowledge of the culture. This makes
a lot easier the negotiation with new customers especially.
Order sizes, excluding the wholesaler are small to medium and the kept inventory is low.
Those boutique and design specialized firms offer customization and allow the end
consumer to order a product which is not in stock and they take it over to supplier.
All firms are present online, but not all sell online, especially those with premium pricing
offer personal selling.
The product range is wide but as Innovation Living carefully selects new dealers and
requires certain level of price/quality to be met, the same is with those specialized retailers,
they carefully select they partners.
For more extensive information gathered from the interviews see Appendix 2, 3 and 4;
38. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
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Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
33
7. SWOT – is market penetration the way to go?
The Information in the table is based on the internal and the external analysis conducted in
the project until this stage. It illustrates the Strengths and the Weaknesses originating from
the company internally. The Opportunities and Threats are external factors related to the
Bulgarian Furniture Market and the Industry that Innovation Living has to assess before
planning further actions.
Table 7.1: SWOT Matrix
S W
O T
Source: Own Production;
8. Segmentation, Targeting and Positioning
8.1 Segmentation
The Industry Innovation Living is targeting are Home and Garden Retailers industry and
more specifically, the Homewares and home furnishing stores. In Bulgaria, the Homewares
and home furnishing stores performs the best in 2015, growing by 4% in value terms.
(http://portal.euromonitor.com.ez-eaa.statsbiblioteket.dk:2048/portal/analysis/tab)
Between the two industries there have been differences in price positioning. While the Home
and Garden Retailers are firmly entrenched at the low-end of the price spectrum, Homeware
and home furnishing stores fall under three distinct price groups:
Very high Quality – Danish stamp
Scandinavian Designer
New production facilities in
Ukraine – shorter time to market
and lower costs
Wide product range
Customization of products
Brand Image
Price level – high for the
Bulgarian Market
Only one point of sale in BG
No actions towards raising
customer awareness
Not much experience in the
market
No knowledge of the culture and
the behaviour of the consumers
Lack of human capital, needed to
research, aquire and serve new
customers
More and more Bulgarian
customer look for innovative
solutions and Danish design
Still a decent percentage of the
people have a higher income
The economic and social factors
are having positive outlooks
Retailers look to work with
foreign importers
The costs of expansion and
operations in the country are low
The market is highly saturated
and there are a lot of indirect
offerings
Cultural differences – the cultural
barriers are very high between the
two countries
A large part of the population is
within the range of low to medium
income
Opportunities can be found only
in large cities, which limits the
potential of the market
39. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
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Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
34
- Low-end
- Mid-end
- High-end
The big furniture retailers in Bulgaria, both foreign and domestic, tend to fall in the broader
category, Home and Garden, making them more in-direct competitors. Moreover, most of
them are operating in the low-end, mid- end price ranges, as their product ranges are quite
extensive and have different “collections” targeting different customer groups.
Hence, Innovation Living will be looking for smaller, more niche furniture retailers that work
with carefully picked suppliers and have a certain vision that will fit the company’s products.
In the Bulgarian market there are currently 80 medium and 450 small retailers of furniture.
The density of furniture shops and showrooms is high, due to relatively low costs related to
showrooms (such as rent, electricity, staff salaries)
However, it is also relevant if they are working with imported furniture and not a very large
percentage of them sells imported furniture. The retailers who do, are usually located in the
big cities and import high-end products. (Innovation Living, 2016)
The company’s aim for the Bulgarian market is to become a premium dealer and expose
Innovation Collection, thus the company wants to target Interior Design Consultancies and
Boutique Furniture Importers in the following cities: Sofia, Varna, Plovdiv, Burgas and
Turnovo.
The smaller retailers usually have a small purchasing team or the decision maker is directly
the Owner of the store. As the products are more expensive and the order volumes are
small, communication plays an important role in keeping relationships, thus the buyer-seller
relationships will not be transactional.
8.2 Targeting
In the Bulgarian market there are currently 80 medium and 450 small retailers of furniture.
The density of furniture shops and showrooms is high, due to relatively low costs related to
showrooms (such as rent, electricity, staff salaries).
However, not a very large percentage of them sell imported furniture. The retailers who do,
are usually located in the big cities and import high-end products. (Innovation Living, 2016)
The company’s aim for the Bulgarian market is to become a premium dealer and expose
Innovation Collection, thus the company wants to target Interior Design Consultancies and
Botique Furniture Importers in the following cities: Sofia, Varna, Plovdiv, Burgas and
Turnovo.
Below a list of companies in Bulgaria from the chosen segment is presented. They are
selected as possible customers with high potential: (See Figure 8.1);
40. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
Martin Malakov, CPR: 1110923003, Program: ISM, Team: Z, Semester: III
Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
35
Figure 8.1: Targeting
Sofia ● Acherno
● Grandecor
● Casadecor
● Mirookki
● Jelanie
● Mebelipro
● Furnish Furnish.bg, also in city of Varna
● Perfecta mebeli /СБС Скандинавия/ - Only Representative of
Stressless and Ekornes in BG
Varna ● La Cassa lacasa.bg Interior Design Solutions- main
partners from Italy, but possible cooperation with
Innovation Living
● Best-furniture.bg - Design Imported Furniture
● Keys // Improter possible only for a small range of the
products offered by Innovation Living
● Bulmarket
● mebelibg
Burgas ● Mebeliverona
● Valdo
● Trinexdesign
● harlexmarket
Source: Own production;
The procurement is usually direct. The larger chains have a procurement team that is
responsible for the whole correspondence. In the smaller companies often the owner or the
CEO is the decision maker and it is easier to conduct negotiations for future cooperation.
8.3 Positioning
Figure 8.2: Positioning Map
Source: Own Production;
41. Final Bachelor Project - Sales Strategy of Innovation Living for the Bulgarian Market
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Tutor: Torben Sorensen, Hand-in Date: 09.01.2017
36
The positioning map above shows how Innovation Living are currently positioned in the
Bulgarian market compared to their competition. The two factors chosen for comparison are
Price level and Functionality, as these are assumed to be two of the closest related factors
that are looked at by end customers.
The only competitor outperforming Innovation Living in these two criteria is Irim.
Nevertheless, Innovation Living still has the two perceived advantages – Scandinavian design
and quality. The company shouldn’t try to reposition, but it should increase the awareness
of the brand and strengthen its current position. The current obstacles for Innovation in the
market are its low customer awareness and brand recognition, thus this is what the
company should focus on improving.
9. Market Penetration Strategy for the Bulgarian Market - Balanced Scorecard
The main goal for Innovation Living is to expand its presence in Bulgaria and to increase its
sales in the market. Hence, the company will adopt a market penetration strategy. (See
Literature review) As described in the literature review, this strategy is the least risky of all
four Ansoff growth strategies. Innovation Living is going to achieve this increase through
hiring a sales representative for this market.
The strategy is formed as a balanced scorecard that will serve as a tool for Innovation Living
to apply the strategy and to be able to track and measure the performance thus reaches its
overall goal. (See table 9.1) (Hutt and Speh, 2014) All of the objectives set in the balanced
scorecard are based on the S.M.A.R.T. goals model - Specific, Measurable, Attainable,
Realistic and Timely. (Hutt and Speh, 2014) Depending on the objective the targets are set
to be monthly, yearly or one-time based. The strategy is created for one year period.
Figure 9.1: The Balanced Scorecard
Source: Own Production;
*** In case the picture is hard to read, look at it in Appendix 7;