Marketing, Commerce and Tourism and A New Paradigm of Change

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TABLE OF CONTENTS

THE AGRY-FOOD SYSTEM CHALLENGES AND THE INSTITUTIONAL
IMPLICATIONS ON SMALL VEGETABLE FARMERS ...................................................14
ALBOIU Cornelia
A NEW PARADIGM IN CURRENT MARKETING: THE RELATIONAL MARKETING
.......................................................................................................................................................22
ANDREICA Romulus
TACHE Bianca
CALIN Ana-Maria
ASPECTS CONCERNING THE IMPROVEMENT OF POSTAL SERVICES PROVIDED
BY COMPANIA NAIONAL POTA ROMN ..........................................................26
ARON Georgiana
STANCU Daniela Georgiana
USING HIERARCHICAL METHOD WITH REAL RANKS FOR ANALYZING THE
CHANGES IN TOURISM ACTIVITY AT THE LEVEL OF THE ROMANIAN
DEVELOPMENT REGIONS.....................................................................................................31
BABUCEA Ana-Gabriela
RBONU Cecilia-Irina
VASILESCU Maria
POLISH E-COMMERCE MARKET THE PRESENT STATE AND DEVELOPMENT
PERSPECTIVES.........................................................................................................................37
BAJDOR Paula
INFLUENCE OF CRISIS ON RURAL TOURISM IN ARAD COUNTY............................47
BARBU Ionel
BARBU Sergiu-Aurelian
MINERAL WATERS CONSUMPTION IN THE ROMANIAN MARKET:
PERCEPTIONS AMONG THE SEGMENT OF YOUNG POPULATION FROM
BRAOV ......................................................................................................................................53
BOCOR Dana
NEACU Nicoleta Andreea
BLTESCU Codrua-Adina

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MARKETING MIX ANALYSIS FOR ROMANIAN CLOTHING MARKET....................58
BOTA Marius
COSMA Smaranda Adina 58
FLEERIU Cristina 58
THE UNDERSTANDING OF BRANDING PROCESS AS A MANAGEMENT TOOL
THAT HELPS THE COMPANIES TO DIFFERENTIATE ON THE MARKET...............68
BUDAC Camelia
BALTADOR Lia
PETRACU Daniela
CAR PURCHASING SELECTION OF WOMEN AND MEN: A DIFFERENT
BEHAVIOR..................................................................................................................................74
BUDIONO, Gatut Luhur
ESENGALIEVNA, Sabirova Gulzhanat
AN ASSESSMENT OF BRASOV INCOMING TOUR OPERATORS AWARENESS ON
SUSTAINABILITY ISSUES......................................................................................................82
CANDREA Adina Nicoleta
BRTUCU Gabriel
RESIDENTS' PERCEPTION TOWARDS URBAN SPORT EVENTS. THE CASE OF
eyoWf 2013 - BRASOV, ROMANIA........................................................................................90
ISPAS Ana
CONSTANTIN Cristinel
DEFINING THE COORDINATES OF THE WEB MARKET IN NOWADAYS
BUSINESS..................................................................................................................................100
CARAGANCIU Iulian
TOURIST DESTINATION IMAGE TROUGH THE IDENTITY OF
PERSONALITIES.CASE STUDY: CONSTANTIN BRANCUSI........................................105
CARUNTU Andreea Laura
STANCIOIU Aurelia- Felicia
TEODORESCU Nicolae
THE IDENTIFICATION OF THE MARKETING APPROACHES USED IN THE
ROMANIAN BANKING SECTOR - A MARKETING RESEARCH.................................114
CTOIU Iacob
EDU Tudor
NEGRICEA Iliu Costel 114
5

THE IDENTIFICATION OF THE ECONOMICS STUDENTS PERCEPTION OF THE
ROMANIAN LABOURMARKET ABSORPTION...............................................................124
CTOIU Iacob
IONESCU Alexandru
AVRAM Emanuela Maria
ECOLOGICAL ALIMENTATION - A ROMANIAN CONSUMER BEHAVIOUR CASE
STUDY........................................................................................................................................132
CETIN Iuliana
GHEORGHE Iuliana-Raluca
PETRESCU Consuela-Mdlina
NOWADAYS AUDIENCE PERCEPTION OVER THEATRE. DECIDING BETWEEN
CONVENTIONAL AND UNDERGROUND..........................................................................141
CICEO Andreea
THE CUSTOMER RELATIONSHIPS MANAGEMENT A NECESSITY FOR THE
SMALL AND MEDIUM ENTERPRISES..............................................................................147
CIOCHIN Iuliana
IORDACHE Carmen
DECUSEAR Nicolae Rzvan
REDEFINING THE RELATIONSHIPS WITH CLIENTS DURING TIMES OF CRISES
A NECESSARY OR COMPULSORY FEATURE.............................................................154
CIOCHIN Iuliana
GUST Marius
PARPANDEL Denisa Elena
THE ROLE OF THE DELORS COMMITTEE IN THE PROCESS OF CREATING THE
EUROPEAN ECONOMIC AND MONETARY UNION......................................................161
CNDEA Iuliana Marina
CNDEA Moise
ACTUALITIES AND ASPECTS OF THE BUSINESS TRAVEL IN ROMANIA.............167
COSMESCU Ioan
COSMESCU Denisa
ANALYSIS OF FOOD CONSUMPTION OF ROMANIAN POPULATION DURING
1990-2010....................................................................................................................................177
CONSTANDACHE Mihaela
CONDREA Elena
STANCIU Anca-Cristina
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WAYS TO SHAPE THE CONSUMPTION BEHAVIOR IN THE SPIRIT OF
ECOLOGICAL MARKETING...............................................................................................184
CROITORU Gabriel
RADU Florin
NITU Claudiu Valentin
EMPIRICAL RESEARCH ON COMPLEMENTARY SERVICES IN ROMANIAN
GROCERY RETAILING.........................................................................................................191
DABIJA Dan-Cristian
ABRUDAN Ioana Nicoleta
NEW RESEARCH IN CONSUMER BEHAVIOUR FOR HANDLING CUSTOMER
MIND..........................................................................................................................................199
DINU Gabriel
DINU Loredana
ROMANIAN TOURISM THE ETERNAL CHANCE OF ECONOMICAL RECOVERY
.....................................................................................................................................................203
DINU Loredana
DINU Gabriel
SENSORY DIMENSIONS OF THE DESTINATION BUCHAREST FROM THE POINT
OF VIEW OF YOUNG PEOPLE............................................................................................206
DIOIU Mihail-Cristian
STNCIOIU Aurelia-Felicia
TEODORESCU Nicolae
THE IMPLICATIONS OF INNOVATION PROCESS ON THE MARKETING OF
HIGH-TECHNOLOGY PRODUCTS.....................................................................................213
DOVLEAC Lavinia
BLESCU Marius
BLESCU Simona
CULTURAL HERITAGE, TRAVEL AND TOURISM, AND SUSTAINABLE
DEVELOPMENT: AN EXPLORATORY ASSESSMENT OF THEIR CURRENT
RELATIONSHIPS....................................................................................................................222
DUGULAN Diana
POPESCU Ioana Cecilia
VEGHE Clin

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KNOWING EMPLOYEES PERCEPTIONS DETERMINANT IN CREATING
A SUCCESSFUL ORGANIZATIONAL CULTURE............................................................230
DUMITRESCU Luigi
RDULESCU Violeta
PENTESCU Alma
DISCOVERING SOCIAL MEDIA BEHAVIOR PATTERNS IN ORDER TO IMPROVE
THE MARKETING STRATEGY IN THE CURRENT CHAOTIC ENVIRONMENT....240
DUMITRESCU Luigi
ICHINDELEAN Mihai
VINEREAN Simona
MARKETING RESEARCH REGARDING ROMANIAN CONSUMER PROFILES FOR
SOCIAL TOURISTIC SERVICES..........................................................................................247
DUMITRU Nicoleta Rossela
STOICA Ivona
MUNTHIU Maria-Cristiana
USE OF VECTOR AUTOREGRESSIVE ANALYSIS IN ECONOMETRIC
MODELLING............................................................................................................................252
ENACHE Calcedonia
A RISK-BASED BRAND EQUITY MODEL.........................................................................263
FLOREA Dorian-Laureniu
MUNTEANU Claudiu-Ctlin
ONLINE SOCIAL NETWORKSA COMPARATIVE ANALYSIS FOR THE
MARKETING WORLD...........................................................................................................270
FUCIU Mircea
GORSKI Hortensia
ATTITUDES, OPINIONS AND BEHAVIOUR OF MANAGERS OF BRAOV
COMPANIES ON THE APPLICATION OF ENVIRONMENTAL MARKETING IN
COMPANIES.............................................................................................................................279
FUNARU Mihaela
NICOLAE Carmen-Magda
IOSIP Alexandru
ENVIRONMENTAL COMMUNICATION AND ECOLOGICAL EDUCATION IN
ROMANIA.................................................................................................................................288
FUNARU Mihaela
NICOLAE Carmen-Magda
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THE ECOLOGICAL RISKS CONCERNING DEFORESTATION WITHIN
GLOBALIZATION...................................................................................................................295
GLBEAZ Alexandra
INFLUENCE OF CONSUMERS' EXPECTATIONS REGARDING CSR ON THEIR
INTENTION TO SUPPORT A COMPANY'S SOCIALLY RESPONSIBLE BEHAVIOR
DURING THE CRISIS.............................................................................................................300
GTEJ (BRADU) Cosmina Paula
MANAGEMENT STRATEGIES FOR SUSTAINABLE DEVELOPMENT OF NATURAL
AND ANTHROPIC ECOSYSTEMS.......................................................................................309
GVAN Smaranda
ANDRONESCU Alina
SUSTAINABLE USE OF NATURAL RESOURCES IN THE SPACE OF DANUBES
DELTA........................................................................................................................................316
GHEORGHE Silviu
POPESCU Liliana
BIBICIOIU Sorin
A HEDONISTIC APPROACH TO CONSUMER BEHAVIOR DURING THE
ECONOMIC CRISIS................................................................................................................320
IOAN Maria Elisabeta
ALDEA Roxana-Elena
THE CHALLENGES AND BUSINESS POTENTIAL OF SOCIAL MEDIA AND THE
TRANSFORMATION OF NOWADAYS CORPORATE COMMUNICATIONS............329
IONESCU Andreea
TATU Cristian Ionu
STRATEGIC CHANGE IN SMALL ENTERPRISES: AN OPTION OR AN
OBLIGATION? ........................................................................................................................338
IONITA Daniela
50 YEARS OF ACTIVITY TO INCORPORATE THE DOBROGEA BRAND............349
JUGANARU Mariana
JUGANARU Ion-Danut
MORARU Andreea
REDEFINNING THE BRAND IN THE 21
ST
CENTURY....................................................355
KALED K. Hameide

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PERMANENT PROMOTIONAL EXHIBITION ABROAD, CASE STUDY OF
ROMANIAN EXPORT CENTER IN SHARJAH..................................................................362
LIANU Costin
GUDEI Simona Corina
ROMANIAN SMEs OVERALL SATISFACTION WITH THE USE OF ONLINE
MARKETING TECHNIQUES: AN EMPIRICAL MODEL................................................370
MACOVEI Octav-Ionut
ICONARU Claudia
PERJU Alexandra
THE ANALYSIS OF THE TOURIST BEHAVIOR DURING THE ECONOMIC CRISIS
IN ROMANIA AND IN EUROPEAN UNION.......................................................................381
MAHIKA Elena-Cristina
DITU - FURTUNA Camelia
THE ECONOMIC AND SOCIAL IMPACT OF TOURISM...............................................391
MILEA Oana Maria
NEDEA Petronela-Sonia
PASCU Emilia
CONSUMER BEHAVIOUR: DOES HISTORY MATTER?...............................................397
MORARU Andreea Daniela
JUGANARU Ion-Danut
A CRITICAL ANALISYS OF BRAND EQUITY EVALUATION METHODS................402
PRICE STRATEGY IN THE INTERNATIONAL MARKETING.....................................410
MUETESCU Adina
ROMANIAN WINES PROMOTION STRATEGY DEVELOPMENT AND
HEALTHCARE IMPLICATIONS..........................................................................................417
NEACSU Onia (Bleaj)
BOBEIC Ana Maria
COMMUNICATION PARTICULARITIES SPECIFIC TO RELATIONSHIP
MARKETING. CASE STUDY: INTERACTIVE COMMUNICATION AND
EMOTIONAL COMMITMENT BASED ON AGE GROUP OF CLIENTS......................426
NEAGOE Cristina
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THE PREFERENCES OF CLIENTS REGARDING INTERACTIVE AND
UNIDIRECTIONAL COMMUNICATION ON THE ROMANIAN INSURANCE
MARKET...................................................................................................................................431
NEAGOE Cristina
E-COMMERCE - A VIABLE PART OF WINEMAKERS STRATEGY: STUDY ON
THE CONTENT OF ROMANIAN WEBSITES....................................................................438
NISTORESCU Tudor
PAVEL Silvia-Mihaela
CONSTANTINESCU Adina
ASPECTS CONCERNING THE HOTEL MARKET WORLDWIDE, EUROPE AND
ROMANIA.................................................................................................................................448
OLTEAN Flavia Dana,
AN EMPIRICAL MODEL OF ONLINE BUYING CONTINUANCE INTENTION........459
ORZAN Gheorghe
ICONARU Claudia
MACOVEI Octav-Ionut
ANALYSIS OF STUDENT PERCEPTIONS ON THE QUALITY OF HIGHER
EDUCATION IN ROMANIA..................................................................................................470
PARIZA-MANEA Natalia
CETINA Iuliana
EVALUATING THE EFFICACY OF MARKETING ACTIVITY IN THE FOOTWEAR
INDUSTRY AND THE NECESSARY MEASURES TO ENDURE THE CRISIS............474
PATIU Carmen Adina
THE IMPACT OF WINE TOURISM (OENOTOURISM) WITHIN SUSTAINABLE
DEVELOPMENT......................................................................................................................479
PDURARU Ctlin
GLBEAZ Alexandra
DRINK WATER, WASTEWATER CUSTOMERS AWARENESS AND ATTITUDE
.....................................................................................................................................................486
PETRESCU Dacinia Crina
TUTUNEA Mihaela

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TOURISM SEEN THROUGH THE EYES OF ROMANIAN CUSTOMERS THE 21
ST

CENTURY ECONOMIC PERSPECTIVE.............................................................................491
POPESCU Veronica Adriana
POPESCU N. Gheorghe
POPESCU Cristina Raluca
THE LEGAL FRAMEWORK OF CORPORATE SOCIAL RESPONSIBILITY.............502
POINCU (MUREAN) Laura
VOICULESCU Maria Iuliana
LEGAL AND ECONOMIC ASPECTS OF COMMERCIAL AND ELECTORAL
ADVERTISING IN ROMANIA...............................................................................................511
POINCU Cristian
VOICULESCU Nicolae
ROMANIAS STRUCTURAL COMPETITIVNESS IN THE EUCONTEXT - A
REVEALED COMPARATIVE ADVANTAGE APPROACH.............................................518
POPA Angela Cristina
STUDY REGARDING THE IMAGE OF SUPERMARKETS KAUFLAND, PENNY,
PROFI IN THE CITY OF ALBA IULIA................................................................................530
RADOVICIU Ruxandra
STREMAN Filimon
CUCEA Ramona
THEORETICAL AND APPLIED ASPECTS OF EVALUATION THROUGH
STATISTICAL QUESTIONAIRE..........................................................................................542
SIMION Doina Maria
RESEARCH FOR EVALUATING CUSTOMER SATISFACTION WITH THE
QUALITY OF AGRO-TOURISTIC SERVICES IN ROMANIA........................................548
ARON Georgiana
RELATIONSHIP MARKETING, USEFUL IN INSURANCE SALES..............................552
STOFOR Ovidiu-Ilie
TOURISM MARKETINGKEY CONCEPT OF TOURISM IN A WORLD OF
GLOBALIZATION...................................................................................................................563
STOICA Ana-Maria
CREOIU Raluca Ionela

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NEW TECHNOLOGIES SHAPING THE E-COMMERCE ENVIRONMENT................567
STOICA Eduard
BROTE Ioan Victor
IMPLICATIONS AND OPPORTUNITIES OF ONLINE ADVERTISING FOR
INCREASING THE ROMANIAN MARKETING WORK MARKET.
CASE STUDY: ONLINE ADVERTISING REGARDING JOB MARKETING
PROMOTION............................................................................................................................574
STOICA Ivona
DUMITRU Nicoleta Rossela
MUNTHIU Maria-Cristiana
YOUNG CONSUMERS ATTITUDE TOWARD THE PRODUCTS THAT REPRESENT
THE MAIN OBJECT OF CAUSE RELATED MARKETING CAMPAIGNS..................582
STREMAN Filimon
MIHALACHE Silvia tefania
GLOBAL HOTEL INDUSTRY- CHARACTERISTICS AND INTERNATIONAL
TOURISM: AN ECLECTIC PARADIGM.............................................................................593
TERENTE Anca-Simona
REFOCUSING MARKETING TO REFLECT SOCIAL RESPONSABILITY.................602
TRIC Gelu
CIORTUZ Adela
MODEL BASED ON KEY PERFORMANCE INDICATORS FOR ASSESSING THE
MARKET POSITION OF A COMPANY. CASE STUDY IN A CAR RENTAL
COMPANY................................................................................................................................611
URSACESCU Minodora
CIOC Mihai
BUSINESS DEVELOPMENT THROUGH INNOVATION AND RESEARCH...............620
VASILE Adrian
VICIU Tania Georgia
COSTEA Carmen Eugenia
A MARKETING REVIEW OVER THE CONTENT OF THE CONSUMERS PRIVATE
SPACE........................................................................................................................................625
VEGHE Clin
ACATRINEI Carmen
DUGULAN Diana

13

THE ECOAGROCLUSTER AN ANSWER TO GLOBAL CHALLENGES, FOCUS ON
SUSTAINABLE DEVELOPMENT.........................................................................................631
ZECA Ecaterina Daniela

14

THE AGRY-FOOD SYSTEM CHALLENGES AND THE INSTITUTIONAL IMPLICATIONS
ON SMALL VEGETABLE FARMERS

ALBOI U Cornelia
Ph.D./scientific researcher, I nstitute of Agricultural Economics, I NCE, Romanian Academy, Bucharest,
Romania, e-mail: coraalboiu@yahoo.com

Abstract: In this paper the agry-food system challenges and the implications on the vegetable supply chain
and particularly on small vegetable producers are analyzed. The research goal is to assess the role of institutions in
the Romanian vegetable supply chain development, more exactly the possibility of farmers to adapt to the dynamic
retail chains using new institutional economic theories. The results reveal a difficult adaptation of the Romanian
vegetable farmers to the agri-food system dynamics, to the dynamics of the great retail chains in particular, while
the role of institutions is not seen yet as an important driving force.

Key words: agry-food dynamics, institutions, vegetable producers

JEL classification: Q12, Q13

1. Introduction
The transition to market economy and globalization process had a considerable impact on
Romanian agry-food sector and consequently on vegetable producers.
The food industry and the agri-food sector are getting industrialized and globalized at a fast rate
(Cook et al., 2001). Boehlje (1996) defines agriculture industrialization as a process of application of the
concepts of modern industrial processing, production, procurement, distribution and coordination at the
level of the entire chain. Similarly, Reardon and Barrett (2000) associates agro-industrialization with: 1)
changes in the distribution and processing of agricultural production and inputs, 2) changes in the
institutional and organizational relations with impact upon vertical coordination, 3) changes in the
composition of production, technology and market structure. From the micro-analytical point of view,
agro-industrialization implies changes in the organizational management and the governance structure of
the agri-food systems (Cook, 2001). As a result, together with the industrialization, an adaptation of the
large chain stores to the consumers needs is taking place, these getting oriented to products with specific
characteristics, coming from reliable suppliers, which can supply a quality production, at a specified
quantity, quality and moment.
The globalization and the multinational system also have great institutional implications upon the
agri-food systems. Globalization practically determines an increase of the capital and information flow,
technological changes, foreign direct investments, global economic integration, thus facilitating
agriculture industrialization and the vertical integration of the agri-food systems (Pinstrup and Anderson,
2002).
An essential role in the agri-food system dynamics is also played by trade liberalization,
consumers requirements and the concerns for environment quality. An increased focus has been recently
noticed for food safety, as well as the increase of demand for semi-processed products. This tendency,
also motivated by the increase of consumers incomes, which has stimulated the dynamism of supply of
the great chain stores, materialized into the increase in their number, has a direct impact upon the farmers
production and marketing systems. Some consumers still prefer the small shops and the traditional open
markets, which make it possible a more personal and traditional interaction with the sellers (Estrada,
2004); however, both the small shops and the traditional production systems are subject to significant
changes and to the need to adjust.
Globalization also led to the consolidation of multinational companies. The high concentration of
the number of processors and retailers in the United States and European Union has practically altered the
traditional structure of the marketing systems along the agricultural chains, creating structures of
oligopoly type that result in the creation of vertical integration relations based on contractual relations
between the small producers and their customers.

2. Research problem and objective
According to agricultural statistics data in the vegetable sector, the farms with areas under 3 ha
prevail, 90% of these being administered by individual entities. The high land fragmentation and
dispersion of cultivated land areas, following land restitution according to Law 18/1990 and the following
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land laws, create significant limitations with regard to the adoption of new technologies (agricultural
works, production and marketing structure, updating farmers knowledge and information) and contribute
to the increase of production and transaction costs. At the same time, due to the lack of experience in
using the insurance instruments and to the lack of trust in the modern retail system and of the involved
transaction costs, any unfavorable weather phenomenon, the infestation with pests and diseases result in
direct losses for farmers. At the same time, the existence of a very high number of farmers who produce
for self-consumption but at the same time sell part of production at the farm gate or through
intermediaries do not allow for a clear delimitation between the commercial farms and the subsistence
farms and consequently constrain the adoption of adequate and coherent fiscal policies. All these factors
directly impact the farmers incomes, the price fluctuation, the promotion of environmental measures, the
increase of sector competitiveness and the market orientation of this sector.
In the last 20 years, the vegetable supply chain in Romania experienced a dramatic evolution
following the destruction of the former fruit and vegetable commercialization companies which led to the
year-round domestic vegetable supply failure and production fragmentation.
Moreover, stricter quality requirements imposed by modern retail chains are hardly met by small scale
farmer but even though when these requirements are met by larger farmers the contractual terms are not
respected, or even worse the hypermarkets avoid concluding the contract. Also, the main problem the
farmers have claimed that they have to face is the non-execution of concluded contracts.
In contrast with producers in industrialized countries who benefit from appropriate infrastructure,
effective institutional systems and agricultural policies that facilitate a widespread adoption of good
agricultural practices and environmental standards, producers in emerging economies may encounter
severe difficulties in complying with increasing levels of quality standards. These difficulties generally
result from idiosyncratic market failures characterizing the vegetable production (Swinnen and
Vandeplas, 2007) and the informational, financial and educational constraints of producers in these
countries. In Romania, for instance, some farmers claimed that these constraints could be mitigated
through increased vertical integration, i.e. production- processing-commercialization.
The objective of this paper is to to assess the role of institutions in the Romanian vegetable supply
chain development, more exactly the possibility of farmers to adapt to the dynamic retail chains using
new institutional economic theories. The rest of the paper is organized as follows: section 3 presents the
theoretical framework, section four present data and methodology used, section five reveals discussion
and results while the section six concludes, followed by acknowledgements.

3. Theoretical framework and empirical studies in the specialized literature
The agricultural sector in particular, the vegetable sector - finds itself in a relatively weak
negotiating position, due to the low level of concentration from which farmers approach the market. This
is a weakness that can only be overcome by resorting to collective actions. Further strengthening of the
coordination and collaboration action between various actors of the supply chain can come from the
collective actions (organizations and agreements), thanks to which opportunistic behaviour may be
countered and reduced, while encouraging collective behaviour. (DellAquila et all, 2011). Collective
actions may constitute a valid and useful counterweight by taking up a strategic role in restoring balance
to market relationships, acting as a contractual power and for redistributing added value, and contributing
towards models of cooperative behaviour.
Romanias production of vegetables is fragmented, mostly coming from the individual household farms
(90%) and only 10% from the commercial farms. The Romanian vegetable chain is characterized by
uncertainty in terms of what vegetable to produce and where to sell and, it negatively impacts the
farmers revenues and investment decision. The paper employs a qualitative and quantitative analysis in
order to assess the probability of farmers to participate in institutional arrangements such as collective
actions. In this context, the objective of the paper is to reveal the main characteristics of participating in
collective actions in order to better cope with the high level of requirements imposed by retail chains to
small producers which has been most often seen as a barrier to commercialization. At the same time, the
participation in collective action such as producers and organizations groups may play a role in improving
the institutional arrangements with the retail chains.
While competition at the retail stage stimulate changes in formats of retailing and outlets, the
tendency to concentration and consolidation also in upstream stages of supply chains creates a bias
against small farms and supports forms of association at farm level stage. This is the major challenge for
small vegetable farmers, either from the EU or other supplying areas: how to be part of modern EU-based
chains where the retail stage coordinates the other actors (DellAquila et all, 2011).
16

Concentration and consolidation underway in the vegetable sector, along with changes in
consumer choices will continue to shape the future of the fruit and vegetable economy in the EU and will
deepen as the sector becomes more global and interconnected. From this ground stem most of the
challenges and opportunities for firms and farms at all levels of the supply chains. Food retail has become
very concentrated in both Europe and other developed economies and this why for small farmers, getting
into a supermarkets procurement system implies being able to properly respond to: a) food safety and
quality requirements; b) the need to offer more added value in the form of more convenience (pre-packed,
pre-cut products), wider assortment and year-round availability; c) the need to shorten the length of the
supply chain, in order to improve the control exerted over the transactions within the chain; iv) the need
to develop and manage information technologies, so as to take advantage of applications allowing to
optimize the management of the operation within vertically coordinated (or vertically integrated) supply
chains (DellAquila et all, 2011).
All these requirements may mean further investments for small farms difficult to realize on an
individual basis. In many cases farmers simply do not have the knowledge or the money to make
investments in equipment and logistics support to meet these requirements on their own. Ongoing
developments of supply chains imply a significant bias towards large farms. This makes collective action
among individual farmers a further step to improve their situation. The problem is not only to concentrate
supply and give producers a prerequisite necessary to start interacting within modern supply chains, but
also to undertake contractual or co-ownership arrangements in order to successfully coordinate with
packers, wholesalers and large retailers, with the purpose of optimizing operations, so that production will
comply with demand, in particular with regard to quality attributes of the products (Fischer et al., 2007;
Camanzi et al., 2009).
The sector shows a rate of organization that on average is at a relatively low level and very far
from the objective of 60% established by the Common Market Organization: in 2006 it was 34% in the
EU-25 and 35% in the EU-15 (Agrosynergie, 2008). After the EU enlargement of 2007 to Bulgaria and
Romania, there seems to be an apparent overall decrease, due to an organization rate below 1% in these
two countries (Jacquin, 2010). The rate of organization is very heterogeneous among the Member States:
it has risen to over 80% only in the Nederland, Belgium and Ireland. In particular, in the case of
Nederland the rate of organization is over 100% because of transnational POs. At the same time, the rate
of organization shows a great difference between new and old Member States non only as percentage
level, but also in terms of variation: the former (EU- 10) varies from 6% in 2004 to 9% in 2007; the latter
(EU-15) varies from 32% in 2004 to 39% in 2007 (Jacquin, 2010).

4. Data collection and methodology
The paper is based on data provided by 30 farmers and 8 processors located in the S-E region of
Romania following a survey conducted in this region in 2010. In total, 30 structured questionnaires were
applied to farmers and 10 questionnaires to processors. The analysis is mainly a qualitative one and takes
into consideration stakeholder answers to the questions regarding their perception regarding the
contractual governance, the level of transaction costs along with a set of questions regarding their main
commercialization channels. An open comment has been also introduced in the questionnaire. The
description of the methodology and the data collection methods were structured as a set of criteria and
questions that were answered and analyzed by employing the structure proposed theory of institutional
economics referring to transaction costs, intuitional environment and contractual governance. All
measurements were made using the Likert scale, where 1 is the total agreement and 5 total disagreements
with regard to a set of appreciations referring to the five considered variables. The transaction costs can
be classified into ex-ante costs (costs of obtaining the information, bargaining and signing the contract)
and ex-post costs (contract monitoring costs and contract application/ execution costs). The level of
transaction costs influences the probability to adapt to the agri-food sector dynamics and hence it was
introduced as a qualitative variable. The contractual governance, the structure of contracts respectively,
is another variable taken into consideration in the analysis of small farmers adaptation probability to the
agri-food sector dynamics. This category practically includes all the aspects concerning prices and
payment mechanisms, quality, quantity, delivery frequency, rights and obligations and mechanisms to
settle down conflicts. Practically, according to the institutional theory, no contract can be considered fully
complete, due to the limited rationality of individuals. The formal environment (laws and ownership
rights) and the informal environment (unwritten laws, traditions, religion) can also facilitate or constrain
small farmers capacity to adapt to the agri-food sector dynamics

17

5. Results and discussion
In valoric terms, in 2010, the production of vegetables accounted for 24% of the total crop
production value. Nevertheless, following the EU integration, the vegetable supply chain seems the most
negatively affected sector, due to the high share of imports and the farmers impossibility or incapacity to
maintain stable contractual relationship within the chain. In addition, many of them are not able to enter
or form producers groups either because of lack of trust or willingness to cooperate. The land area under
vegetables accounted for 3.3% of total cultivated arable area in the year 2010. At the European Union
level, the share of area under vegetables is quite similar; the difference is that currently in Romania the
consumption needs are not fully covered by the current domestic supply.
The interviewed farmers have stated that the former vegetables and fruit enterprises are
considered very important, but these are spaces to rent at present for any other type of commodity except
vegetables. The storage is very difficult and there are few storage premises. At present there are only a
few storage units, which are not sufficient to cover the needs. As a result, it is extremely necessary to
build up glasshouses and cold storage facilities for a specialized production.
The sale of production is the most difficult problem as no specific markets for the sale of vegetables
production have been established the transaction costs are very high. The farmers who produce low
quantities of vegetables are obliged to lower the prices very much, which represents a disadvantage for
those whose main activity is vegetable farming and earn a living from the sale of their production. The
production is directly sold at the market place or directly at the farm gate (spot market) through
wholesalers.
The vegetable farmers feel threatened by the large retail chains as well as by the massive imports.
On one hand, the great chain stores refuse to buy the products at a correct price, and on the other hand the
imports represent an unjustified competition for the domestic production. In the hypermarket chains we
can see many fresh fruit and vegetables. Just imagine how many of these products come from other
countries and include the financial support that the respective countries provide to producers in their
selling price (farmer from Galati County). The lack of firm contracts and the production sale through
wholesalers are the main problems we have to face. In this way both farmers and the consumers are
disadvantaged (farmer from Braila).

Table 1: Percentage of formal relationships
Farmerbuyer
(wholesaler)
Farmer- processor Processor- retailer
Formal relationship % 1/30
3%
2/30
6%
1/8
12.5%
Source: Field survey, 2010

Table 1 reveals the relationship type for the three chain stages. The answers show that the
percentage of formal relationship is extremely low both at farmer-wholesaler level and farmer-processor
stage. A higher percentage of formal relationship can be noticed in the case of processor-retailer level.
The formal relationships include formal written contracts and financial participation arrangements,
including prices, qualities, quantities and any other financial support. Retailers tend to choose more
formal relationships with processors, in comparison with farmers, showing that downstream businesses
are more likely to coordinate and organize their relationships more systematically and in a standardized
way. Similar findings are also presented at the European level (Fischer et all, 2007), with the difference
that the percentages are much lower in Romanias case, especially at the farmer-buyer and farmer
processor level.
As far as the relationship and contractual aspects are concerned, the respondents were asked to
rate on a scale from 1 to 4 (1: extremely poor to 4: very good) their opinions on the following aspects
concerning: the quality of the relationship, trust, contractual terms and the level of enforcement of the
contracts. Table 2 reveals the answers of the interviewed stakeholders.

18

Table 2. Farmer-buyer relationship and contractual aspects
Very good Good Poor Extremely poor
The history relationship with the
buyer is
7% 13% 33% 50%
The respect of contractual terms
is
0% 13% 43% 43%
The trust in our partner is 3% 13% 33% 50%
The enforcement of this contract
is
0% 10% 37% 53%
Source: calculations based on the field survey, 2010

Table 3. The perception of the level of transaction costs among farmers
Very high High Reasonable Very reasonable
The level of transaction costs is 80% 10% 5% 5%
Source: calculations based on the field survey, 2010

As regards the transaction costs, the farmers perception is that their level is extremely high 80%
The distribution/sale of fresh vegetables also implies the fruit and vegetables stores, the
distribution activities of the private processors, a great number of private traders (wholesalers) as well as
the supermarkets, to which unfortunately the producers declare that they do not have access. In 2011, the
importance of modern trade is higher for Bucharest (73%), the hypermarkets being the most important
channel for buyers, with a market share of 45% in value. While at the country level the traditional trade
formats, namely stalls, general stores, boutiques, are maintained at the same level, in Bucharest these
decreased in importance at a faster rate. Furthermore, the market share of boutiques was down by half
compared to 2005, to reach 13%. At the same time, in rural areas consumers prefer the modern trade only
for 20% of the purchases of consumer goods.

Figure 1. Share of modern retail stores in grocery sales, Romania (%; 2004-2009)

Source: Euromonitor

Practically, there is a significant trend of consumers getting oriented towards the modern trade
formats, which implies significant transaction costs for the producers of vegetables to get adapted to this
dynamics.

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2004 2005 2006 2007 2008 2009
6%
8
11
19
23
25
9
9
9
8
9
9
1
1
4
5
6
8
84
82
76
68
62
58
Hypermarket Supermaket Discount store Others
19

Figura 2. Main shopping place (% of the population)

Source: Euromonitor

Referring to the products traded through different channels, no accurate measurement can be
made of the volume of commodities that are operated through different channels. The verbal information
can only indicate certain approximate estimates. It is estimated that more than half of the traded quantity
of vegetables is sold to a great number of intermediaries (figure 3 and 4). In general there are two ways:
farm gate sales (that is mostly common) and the sale by the road side (street trade).

Figure 3. Vegetable sale on spot market Figure 4. Vegetable sale on retail chains

Source: estimates on interviews with stakeholders Source: estimates on interviews with stakeholders

Another problem the vegetable farmers are facing is the absence of a reliable production-
marketing channel. The Bucharest wholesale market was initially built up in order to support the small
farmers to sell their products and to distribute the production at the production price. At present,
imported products are sold on the Wholesale Market (any kind except vegetables) and the rent fee is
extremely high for the Romanian producers, i.e. about 2000 euro/month/stall.
Another sale modality is the direct sale to stores and supermarkets. This marketing modality is
based upon the daily demand from the retail modern formats. Usually, as the analysis has already shown,
very few formal contracts are concluded with the retail chains. As regards the hypermarkets, only few
farmers can sell their products through this channel. It is estimated that less than 5% of the traded
vegetables are sold in this way. The hypermarkets ask for quality products in large quantities. Even when
the farmers comply with these conditions, some supermarkets/hypermarkets refuse to conclude contracts.
We even signed the contract with the hypermarket, accepting all their terms and conditions, and we have
been waiting for a year to have this contract signed back. There is a slavery type of relation between the
farmer and supermarket (farmer from Braila). Most of the active traders in vegetables sell vegetables on
the local markets themselves. Others act as intermediaries between the farmers and the sellers on the local
markets. As a result, the marketing structure is highly fragmented.

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Bulgaria Czech
Republic
Hungary Poland Romania
(urban)
Rusia
(Moscow)
Slovakia Slovenia Ukraine
10
39
29 29
42
35
30 29
13
34
16
16
11
18
15
23
42
48
25
22
31
17
27
9
10
56
20
33
30
23
18
39
21
39
Hypermarket Supermarket Discount store Other
10%
50%
20%
20%
Farmers directly on open
markets
Middleman
Imports
Farm gate
5%
50%
40%
5%
Farmers direct to
retail chains
Specialized
midlemen
Imports
Producers group
and organization
20

6. Conclusions
Effective business relationships can help to reduce environmental uncertainty (e.g., by securing a
more stable inflow of orders); contribute to better access to crucial resources (e.g., raw materials, capital,
specialised skills); and/or result in higher business productivity (e.g., by enhancing loyalty among
suppliers), (Dyer and Singh, 1998).
Nevertheless, the results obtained reveal that in Romanias case there is a high degree of
uncertainty among stakeholders both in terms of contractual relationships and contract enforcement. The
share of contractual relationship is higher at the processing-retailing level which is in line with the EU
findings, but much lower than in the EU both for the farmer-buyer and the processor-retailer level.
The perception regarding the level of transaction costs is negative and institutional environment is
not also perceived as a facilitating environment for adapting to the dynamic of agry-food chain and in
particular to the dynamics of vegetable chain.
This sector lacked a coherent strategy in the last two decades, being characterized by the
diminution of the capacity to face the market competition. At the same time, as a result of Romanias
joining the EU, its competitors from the EU both in the production and processing sector are testing the
Romanian market; in case the Romanian vegetable sector is not able to get reorganized and benefit from
the established intervention measures, it will not be able to face the strong competition coming from the
Single Market and not only.

7. Acknowledgments
This work was supported by the project "Post-Doctoral Studies in Economics: training program
for elite researchers - SPODE" co-funded from the European Social Fund through the Development of
Human Resources Operaional Programme 2007-2013, contract no. POSDRU/89/1.5/S/61755.

8. References
- Alboiu, C. 2009. Contractual relationships in Romanian vegetable supply chain. FAO
Publications, June 2009; paper preseted at IAMA Forum: Global Challenges, local Solutions,
Budapest, June2009;
- Bardhan, P. (1989) The new institutional economics and development theory: A brief critical
assessment. World Development, 17(9), 1389-1395.
- Boehije, M. (1996) Industrialization of agriculture: What are the implications? Choices, First
Quarter, 30-33.
- Camanzi, L., Malorgio G., Garca Azcrate T., (2009) The role of Producer Organizations in
supply concentration and marketing: a comparison between European Countries in the fruit and
vegetables sector, paper prepared for presentation at the 113th EAAE Seminar A resilient
European food industry and food chain in a challenging world, Chania, Crete, Greece,
September 3 6.
- Coase, R. H. (2000) The new institutional economics. In C. Mnard (Ed.), Institutions, contracts,
and organizations: Perspectives from new institutional economics, Northampton, MA: Edward
Elgar Publishing, Inc.
- Cook, M. L., Reardon, T., Barrett C., & Cacho, J. (2001) Agroindustrialization in emerging
markets: Overview and strategic context. International Food and Agribusiness Management
Review, 2(3/4), 277-288.
- DellAquila, C., Petriccione, G., Perito, M. (2011) The EU vegetable and fruit sector: overview
and post 2013 CAP perspective study, Directorate General for internal policies, Policy
Department B: Structural and Cohesion Policies, Agriculture and Rural Development,
www.europarl.europa.eu/studies.
- Fischer, C, Gonzalez, M, Henchion, M and P Leat (2007) Trust and economic
relationships in selected European agri-food chains. Food Economics, 4 (1): 40-49.
- Fischer, C, Hartmann M, Reynolds N, Leat, P, Henchion, M, A Gracia (2008) Agri-food
chain relationships in Europe empirical evidence and implications for sector
competitiveness, EAAE CD-rom.
- Gorton, M. (1999) Spatial variations in markets served by UK-based small and medium-
sized enterprises (SMEs). Entrepreneurship and Regional Development, 11: 39-56.
21

- Swinnen, J., Vercamme, J. and S. Rozelle (2008) Standards and Development.
Discussion Paper 199, KU Leuven (LICOS).
- Hobbs, J. E. (2004) Markets in metamorphosis: The rise and fall of policy institutions. In G. Van
Huylenbroeck, W. Verbeke & L. Lauwers (Eds.), Role of institutions in rural policies and
agricultural markets (pp. 199-212) Amsterdam, The Netherlands: Elsevier B.V.
- Jacquin E. (2010) Aid regime for the fruit & vegetables sector in the EU: state of play, Bruxelles,.
- North, D. C. (2000) Understanding Institutions. In C. Mnard (Ed.), Institutions, contracts, and
organizations. Perspectives from new institutional economics (pp. 7- 10). Northampton, MA:
Edward Elgar Publishing, Inc.
- Pinstrup-Andersen, P. (2002) Food and agricultural policy for a globalizing world: Preparing for
the future. American Journal of Agricultural Economics, 84(5).
- Reardon, T., & Barrett, C. B. (2000) Agroindustrialization, globalization, and international
development: An overview of issues, patters, and determinants. Agricultural Economics, 23, 195-
205.
- Swinnen J.F.M, Van Herck, K., (2010) Social Impact of Discount And Organized Food Retail
Formats On Remote Regions In Poland, Bulgaria And Romania, Licos Centre For Institutions
And Economic Performance, Catholic University Of Leuven (Kul), www.econ.kuleuven.be/licos.
- Williamson, O E. (1991) Comparative Economic Organization: The Analysis of Discrete.
Administrative Science Quarterly, 36 (2): 269-296.

22

A NEW PARADIGM IN CURRENT MARKETING: THE RELATIONAL MARKETING

ANDREI CA Romulus
Ph.D. student, Faculty of Agro-Food and Environmental Economics, Bucharest Academy of Economic Studies,
Bucharest, Romania, e-mail:

TACHE Bianca
MSc Student, Bucharest Academy of Economic Studies, Bucharest, Romania, e-mail: tache_bianca@yahoo.com

CALI N Ana-Maria
Ph.d Student, Faculty of Agro-Food and Environmental Economics, Bucharest Academy of Economic Studies,
Bucharest, Romania, e-mail: calin_ana_maria@yahoo.com

Abstract: Taking into account the current situation of the already established principles of marketing a
new paradigm regarding marketing refers to relational marketing which shows the conscious need of
interdependence between organizations and their customers. The relational marketing emphasizes the great
importance of the customers products or services and quality.

Key words: paradigm, marketing, quality, relations

JEL classification: M31 Marketing and Advertising, Marketing

1. Introduction
Changes all around the world have lately intensified significantly because of the current trend of
transition from the "old" economy (Old Economy) to the "new" economy (New Economy). The new
economy is the one that induces a new shape, complex links between market actors in order to create a
network economy (Kotler et al., 2002, p. 9). For its proper development it requires putting on its base the
modeling processes, based on specific structures, that realize exchanging between bidders and buyers.
The specific times during the evolution of contemporary marketing are related to the efforts of the
enterprises focused on specific targets, concentrating all available resources, although these targets might
have been more or less clear. A relevant presentation for each stage is represented in the next figure,
showing all the necessary steps and guidance in order to adopt a proper decision.

Figure 1: Marketing orientation

Source: Meffert, 2000, p. 5.

23

2. Concepts regarding relational marketing
The evolution reflected in the evolution of marketing shows all the way starting from the
orientation to customers needs, than to the marketing and competitors; after all these aspects the
environment gains an important role in this domain that generates an orientation toward the market
development stage of extensive marketing to a customer-orientation intensive development of marketing
feature (Bruhn, 2001, pp. 17-20). Marketing today is strongly marked by the organization relationships on
the market. In many cases, not only the final profit is the main or only interest for the company, but also
the image and relations the organization ensures on the market, fact that generates an important change in
the theory and practice of contemporary marketing, generating a new paradigm: relational marketing.
Relational marketing requires a totally different approach to relations with business partners and
primarily with customers, compared to the classical manner, based on the advantage of immediately
opportunities or benefits.
The theoretical foundations of relational marketing were supported by two very important
currents: the Nordic School, focused on marketing services with law parent representatives and the given
approach network interorganizational marketing, developed by the international Marketing and Buying
IMP (International Marketing and Purchasing Group) (Rao, Perry, 2002, p. 600). All the main similarities
and differences of the two theories made by these two schools have been analysed by Mattsson (1997, pp.
447-461).
The term of "relational marketing" was used first by L. Berry, in the International Conference on
the theme of marketing services, in 1983, and two years later it was used by B. Jackson, in the context of
the business to business market (Jackson, 1985, p. 120).
Relational marketing philosophy relies on gaining competitive advantages in practice, due to the
retention of the consumer for a longer period, in the circle of customers by maintaining permanent rise of
their satisfaction level with the services or products provided.
Relational marketing concept is based on three interdependence theoretical approaches, as
follows:
1. the behavioural perspective: this perspective on the relational marketing sets on a change in
economic staff attitude, beneficiaries (customers, consumers) and owner interests in business
development (personal, public and private organizations etc.). Behavioural dimensions of
these partners are judged in the light of the moment reactions, but more often, through their
duration, in satisfaction and benefits (products, services, brands, notoriety). The trust between
business partners enable them to focus on the long-term benefits, increasing competitiveness
and reducing transaction costs (Homburg et al., 2005, p. 12).
2. network perspective: this perspective reflects that suppliers and beneficiaries focus on the
interactive nature of the existing relations that are developed in business, all relations being
viewed from the organizational point of view. The organizational structure includes in this
case staff positions involved in the processing, collection and even in analysis of systematic
information.
3. management perspective: from this perspective a very important role is held by the
management relations existing in the organization, but also in relation to third exterior parties.
The central role of this perspective is by marketing approach.

3. Defining the relational marketing
Relational marketing has not acquired yet a general accepted definition. From Lindon, Landrevie
and Lvy point of view, relational marketing it is reduced to a whole designed to establish individual and
interactive relationship with customers, in order to create and maintain their attitudes sustainable and
positive with all aspects towards the undertaking brand " (Landrevie et al., 2003, p. 904). Relational
marketing is a new relational dimension expressed regarding the concept of marketing, with a strategic
vision for the relations of the management theory of the company. Secondly, the relational marketing
does not reduce the links to other market actors called upon to facilitate the relations (public bodies,
financial institutions, insurance agencies consulting and publicity, organizations for the protection of
consumers ' rights, etc.). Thirdly, relational marketing creates prerequisites for the development of a new
paradigm the interactive marketing.
The main meanings of this relational marketing are reflected in the next figure:

24

Figure 2: Integration of marketing relationships

4. Meanings and roles of the relational marketing
The main purpose of the relational marketing is to link the economic agent with all his business
partners, offering new changes for success thru the specialization of the offer regarding the more and
more specialized demand.
The relational marketing brings new elements for business success, all these elements being
related to:
- increasing the capacity of connecting of all market actors in an assembly
- long lasting relations
- participatory involvement
- development of long term relations on the market
Customer orientation supported by the relational marketing activities is moving to controlled
profitability arising from the relationship with the core of the application. The clients become the main
purpose of marketing efforts, enterprise taking a quantitative dimension by two new concepts, more
commonly found in theory and practice: customer lifetime value and the customer profitability. A proper
relational marketing scheme reflects the main necessary elements, as follows in the next table:

25

Table 1: Typical marketing courses in a relational marketing
COURSE
Foundations of
relationship
marketing
Marketing
strategy
Customer
behavior
International
marketing
Marketing
research
Internal
relatioships
Marketing
planning and
implementation
Key account
management
Global sourcing
Measuring
customer
satisfaction
TOPICS
Customer
business
development
Integrated
marketing
communications
Integrated
distribution
management
Global alliances
Database
marketing
Direct marketing
Source: (adapted from Canon and Seth 2000)

For an assured market success of individualized products and services todays request on the
market is the necessity regular information and of the main categories of customers, using databases
specialist, in this way being maintained proper relations and creating a real capital for the enterprise, but
with the require of big investments; relational marketing involves using methods to develop long term
relationship with customers in order to retain them, exceeding the customer satisfaction and developing a
healthy relationship them.

5. Conclusions
The continuous progress regarding the demand and also the offer on the market had a strong
influence on the marketing practices, generating a global orientation to prospecting, analising ang
improving the relations existing between producers and consumers. The market orientation to relations
existing on the market has a great influence on the business success, creating a strong and continuous
relation among all the existing actors on the market. The relational market permits the anticipation and
proper understanding of the customer needs, and for a long time, taking into account not only the number
of clients, but also the possibility of mentaining them for long periods in the economic aged database.

6. References
- Bruhn, M. (2003). Kundenorientierung. Bausteine fr ein exzelentes CRM, 2 Aufl., Becks
Verlag, Mnchen.
- Homburg, Ch.; Kuester, S.; Beutin, N.; Menon, A. (2005). Determinants of Customer Beneficts
in Business-to-Business Markets: A Croos-Cultural Compasion, in Journal of International
Marketing, vol. 13, nr. 3.
- Kotler, Ph.; Jian, D.; Meesincee, S. (2002). Marketing Moves, Boston, Harvard Business School
Publishing Co.
- Landervie, J.; Lvy, J.; Lindon, D. (2003). Mercator, 7e edition, Dalloz, Paris.
- Mattson, L-G. (2005). Relationship marketing and the analysis of two evolving streams of
research, Journal of Marketing Management, vol. 13, no. 5.
- Meffert, H. (2000). Marketing, Grundlagen marktorientier Unternehmensfhrung, 9, Aufl.,
Gabler Verlag, Wiesbaden.
- Rao, S.; Perry, Ch. (2002). Thinking about relationship marketing: where are we now?, Journal
of Business & Industrial Marketing, vol. 17, no. 7.

26

ASPECTS CONCERNING THE IMPROVEMENT OF POSTAL SERVICES PROVIDED BY
COMPANIA NAIONAL POTA ROMN

ARON Georgiana
Assistant professor, Ph.D. student, Dimitrie Cantemir Christian University, Bucharest, Romania, e-mail:
georgiana_anghel1983@yahoo.com

Lecturer, Ph.D, Dimitrie Cantemir Christian University,, Bucharest, Romania, e-mail:
degan_daniela@yahoo.com

Abstract: Despite the fact that the Romanian market of postal services has experienced a decrease of the
main sectors of activity (letters, packages and express courier) over the last years, CNPR continues to be the main
operator on the Romanian service market in the letter post segment, also considered as universal service provider.
Over the last few years structural changes have been made inside CNPR which were based upon the
extensive transformation of the postal worker behavior by increasing their skills and thus significantly improving
the quality of the entire range of activities.
"The client comes first" is not a mere slogan, but a basic principle of the Romanian Post, that guides all the
measured taken by the Post for their clients.

Key words: postal services; client; economic and financial indicators; economic crisis.

JEL classification: A10

In general, and in Romania in particular, the postal services have been developed to facilitate
permanent communication between people. As the need for such communication became constant, the
demand appeared for specialized services able to meet those needs.
The Romanian Post is the national postal services operator which also issues, edits and sells
stamps and postal articles and is also a provider of services with added value, such as: develops IT
programs, currency exchange programs, consulting services and transport services. It is the entity
responsible for fulfilling the obligations associated with Romanias joining the Universal Postal Union.
From this position, the Romanian Post has to ensure the necessary conditions for integrating the national
postal services into the international services and for adopting the state-of-the-art technology in this field.
CNPR is one of most democratic institutions able to maintain permanent commercial and
spiritual ties between people. This noble mission has closely accompanied the advancement of human
civilization and its origins go way back in time. The development of the interpersonal and social relations
has resulted into a constant improvement of the sector-specific organization structures and technological
processes and thus the post is now considered as one of the most important branches of the service
industry.
The post is a highly important economy sector as it represents the system able to facilitate the
transmission of information, goods and money at national level and to establish connections between all
the branches of national economy, the private sector and the private beneficiaries. Actually, the post
represents a vital function for any social organism.
To support the foregoing, see below the evolution of the main economic and financial indicators
at CNPR in the period between 2004 and 2010.

27

Table 1. Evolution of the main economic and financial indicators at CNPR in the period between 2004 and
2010
Period

Indicators

2004

2005

2006

2007

2008

2009

2010
Indicators from Balance Sheet
Fixed assets
Total

379,164,964

372,474,049

386,141,420

405,910,869

883,749,491

926,600,339

910,863,600
Current
assets - Total

184,857,754

252,799,090

274,497,668

387,495,650

441,487,787

303,845,031

193,918,709
Shareholders
equity
Total

337,539,520

381,599,048

396,792,501

405,972,565

853,294,634

677,965,905

558,408,859
Indicators from the Profit and Loss Statement
Net turnover 628,714,729 714,115,513 814,985,988 1,043,799,710 1,400,302,702 1,435,740,560 1,376,850,454
Gross result
profit/loss
Profit
189,936
Profit
29,049,707
Profit
31,979,935
Profit
34,380,037
Profit
4,558,601
Loss
181,523,116
Loss
121,028,436
Indicators from Other information
Average
number of
employees
33,888 34,256 34,617 35,122 35,576 35,520 34,731
Source: CNPR Balance Sheet (COMPANIA NAIONAL POTA ROMN)

Analyzing the data in the table above, it results that after a long period of growth, CNPR has been
experiencing constant decrease since 2009 from all points of view. This decline can mostly be attributed
to the current economic crisis present both in Romania and worldwide.
Considering this general economic context affected by the effects of the current economic crisis
and by the negative evolution of the internal indicators, C.N. Pota Romn S.A. decided to start in 2010
a reorganization and modernization process in all the companys main fields of activity.
For this purpose, the CNPR Reorganization and Modernization Strategy has been developed
whose general goal was to turn the Company into a profitable and competitive Company in line with the
quality standards observed by the other postal operators in the European Union, holding a strong position
on the postal services market to be fully deregulated in the future.
The principles providing the basis for the reorganization and modernization process were:
- harmonization of the CNPR regulations and commercial offer with the clients demands and the
directives and practices adopted in the Member States of the European Union;
- increasing CNPRs flexibility to the demands of the markets it operates on;
- separating competences, specialization of each center and diversification of the activities in
connected fields;
- full integration of an activity in a support and profit center;
- strict outlining of the interconnection points between the profit and support centers;
- measuring the performance of the retail network;
- determining the costs per product and every type of activity;
- personnel optimization, specialization and training;
- improvement of resource allocation.
As far as the quality certification system is concerned, CNPR must ensure the necessary
conditions for integrating the national postal services into the system of the international services and to
implement the latest technologies available in the field.
The certification of a Quality Management System proves any organizations commitment to
quality, irrespective of size or field of activity.
CNPRs ISO 9001 certification is a confirmation of the fact that the management system
developed within the organization is in line with the international standard. The ISO 9001 certification is
a natural result of the competitive management applied within the organization, representing a
confirmation of the managements capacity to manage the supply of services able to produce direct and
indirect satisfaction to all interested parties.
The implementation of the Quality Management System within the Compania Naionala Pota
Romn S.A. according to SR EN ISO 9001:2008 is likely to increase the clients trust in the constant
28

quality of the supplied services and thus it became an important factor in the growth of the companys
competitiveness and credibility.
Apart from the reputation and image brought by the certification of the quality management
system implemented inside CNPR, the quality certificate has other concrete utilization as well. It allows
the Romanian Post to participate in tenders for the supply of postal services as the ISO certification is
often a mandatory requirement.
Relevant quality goals achieved since 2010:
- On February 1, 2010, the Compania Naional Pota Romn S.A. obtained the quality
certificate according to the requirements of the SR EN ISO 900:2008 standard Quality
Management Systems for the following fields of activity: Postal activities performed under the
obligatory character of the universal service. Other postal and courier activities.
- In September 2010, Compania Naional Pota Romn S.A. started the project called
Implementation and certification of the Information Security Management System in the
Compania Naionala Pota Romn S.A.. The entire documentation of the Information Security
Management System according to the Standard SR ISO/CEI 27001:2006 has been prepared as
part of this project and the certification shall be obtained during 2011.
- CNPR started to develop the Internal Managerial Control System according to the provisions of
Order no. 946/04.07.2005 for the approval of the Internal Control Code; it includes the standards
concerning the management/internal control of public institutions and the development of the
managerial control systems, with subsequent changes and completions under the coordination
and guidance of the M.C.S.I. representatives. All system and operational procedures throughout
the entire postal network shall be developed according to the requirements of order no.
1389/22.08.2006 concerning the amendment and completion of MFP Order no. 946/2005.
- On November 30, 2010, the CNPR Department for Postal Services implemented and certified the
Information Security Management System according to the requirements of the SR ISO/CEI
27001:2006 standard for the following fields of activity: Postal activities performed under the
obligatory character of the universal service. Other postal and courier activities.
- During 2010, simultaneously with the yearly monitoring audits, the Departments for Integrated
Services and Courier made the transition to SR EN ISO 9001:2008, while maintaining the
certification of the Quality Management System.
- In the same context, the Department Stamp Factory maintained the certifications obtained both
for the Quality Management System according to the requirements of the SR EN ISO
9001:2008 standard and for the Environment Management System according to the requirements
of the SR EN ISO 14001:2005 standards.
- During 2010, the Department for Financial Services implemented and prepared the entire
documentation for the implementation of the Quality Management System according to the
requirements of the SR EN ISO 9001:2008 standard and for obtaining the certification.
In the period from January to December 2010, C.N. Pota Romn S.A. obtained the following
results:
- Out of the total number of internal mail items sent using the fastest category of standard services,
approximately 52% w a s delivered in d+1 and 80% was delivered in d+2 (d is the day the
mail item entered the postal network). Compared to 2008, there was an improvement by
approximately 30% for the items distributed in d+1.
- Out of the total number of international mail items sent from Europe to Romania using the
fastest category of standard services, 79.9% were delivered d+3 and 94.9% were distributed in
d+5, w h i l e 68.3% of the total number of international mail items sent from Romanian to
Europe using the fastest category of standard services were distributed in d+3 and 87.7% were
distributed in d+5.

In the same context, the Department Stamp Factory maintained the certifications obtained both
for the Quality Management System according to the requirements of the SR EN ISO 9001:2008
standard and for the Environment Management System according to the requirements of the SR EN ISO
14001:2005 standards.
C.N. Pota Romn S.A. prepares the statistical records regarding the mail items sent from the
fastest standard category according to the requirements of the SR EN 13850:2007 standard Postal
Services. The quality of internal and international European services is certified by an independent
29

certification body. The results of the measurements necessary for the assessment of the quality
objectives are audited by independent specialists.
Starting from its slogan The client comes first which guides all the measures promoted by
CNPR for its clients, the Romanian Post started a series of campaigns from which we would like to
mention as follows:
- Project COURIEL
The project COURIEL (Courier Routing through Innovative Emulation Learning Program) was
finalized in 2010. The Romanian Post participated in the project carried out under the aegis of the
European Commission as partner together with the Greek Post and the Hungarian Post.
The goal of this project was to improve and develop the skills of the operators working as
couriers using an innovative training framework based upon an interactive simulation environment. The
program was aimed at training the personnel in charge with the distribution and delivery of postal
items.

- Project "Social Partners Preparing For Change"
On March 12, 2010, t h e ma n a g e me n t of C.N. Pota Romn S.A s i g n e d an
agreement by which the Company joined the project Social partners preparing for change. This project
was developed by the Social Dialogue Committee for the Postal Sector within PostEurope. The purpose
of the project Social partners preparing for change is to provide the social partners at national and
European level with the necessary instruments to anticipate and manage the changes likely to occur in the
postal sector.
- Campaign A Book Opens up A New World
On J une 1, 2010, t he Romanian Post launched the campaign A Book Opens up A New
World, a social responsibility project. The postal public operator proposed all those interested in the
campaign to donate books in especially designed areas inside the urban post offices in order to be further
donated to school libraries in the rural areas.
At the beginning of the school year 2010-2011, the representatives of the Romanian Post donated
the 52,000 collected books during the events organized in dozens of schools from the rural area all over
the country.
- Campaign Stop the Floods With the Power of Our Hearts
In July 2010, CNPR launched the campaign Stop the Floods With the Power of Our Hearts,
whose aim was to raise funds and goods for those severely affected by the floods in Moldova. With this
campaign, the Company wished to join in in the effort made by the entire society to help those affected by
the floods. Both postal works and clients of the Romanian Post participated in this campaign.
The postal offices raised 114 tons of goods during this campaign which were then transported and
placed at the disposal of the responsible persons in each affected area.
- Campaign Every Child Deserves a Christmas Present
At the end of 2010, the Romanian Post started a nationwide campaign called Every Child
Deserves a Christmas Present; this campaign was aimed at collecting toys for orphans and children of
poor families. Just before Christmas, the representatives of the Romanian Post donated more than 32,500
toys and 400 educational games to orphanages and special schools all over the country.

Conclusions
As far as the improvement of the quality of postal services is concerned, Compania Nationala
Posta Romana has identified a series of strategic goals for the upcoming period whose achievement is
crucial for the Companys position on the postal service market and for satisfying the ever changing
demands of the clients in a highly competitive environment.
Strategic objectives:
1. Improvement of the postal network in order to make the activity more efficient;
2. Reducing operational costs;
3. Development of new services to damp the effects of electronic replacement (distribution of
insurance products, financial and banking products, e-commerce, hybrid post etc.);
4. Optimization and fluidization of the decision-making process at central and territorial level;
5. Surveillance and improvement of the quality management system.

30

6. Development of courier service (door-to-door):
- Strengthening the operations;
- Client orientati on (KAM, customized services);
- Comprehensive portfolio of services with added value;
- Development of a new structure to be in the top position on this market.

Prospects of Compania Nationala Pota Romn
In light of the complete deregulation of the market planned to start on January 1, 2013, t he
Romani an Post shall develop and implement a coherent strategy with the purpose to provide services
for clients of all categories and economic and social backgrounds.
The main strategic objective is to turn the Company into a profitable organization in line with the
quality standards observed by the other postal operators in the European Union, holding a strong position
on the postal services market to be fully deregulated in the future.
The specific objectives pursued by the CNPR in its development over the following years are:
- Financial recovery of CNPR, so that the Company may yield a gross profit of minimum 50
million lei at the end of 2014;
- Increase of profit share in the financial services segment at minimum 25% of the total income of
CNPR by the end of 2014;
- Increase of the volume of items sent by hybrid mail services at minimum 22% o f t h e total
volume of sent items processed by CNPR by the end of 2014;
- Keeping the market share at minimum 75% in the segment of sent mail in 2014;
- Increasing the market share to minimum 20% in the express domestic segment in 2014.

References:
- Cprrescu G., Burdu E., Androniceanu A, Miles L (2000). Management organizational,
Publishing Economic House, Bucharest.
- Cprrescu G., Aron (Anghel) G., Stancu D. (2009). Managementul resurselor umane-
Sinteze.Grile. Studii de caz. . University Publishing House, Bucharest.
- Internal data of Compania Nationala Posta Romana.
- CNPR Balance Sheet (Compania Nationala Posta Romana).

31

USING HIERARCHICAL METHOD WITH REAL RANKS FOR ANALYZING THE CHANGES
IN TOURISM ACTIVITY AT THE LEVEL OF THE ROMANIAN DEVELOPMENT REGIONS

BABUCEA Ana-Gabriela
Professor, Faculty of Economics and Business Administration, Constantin Brncui University, Trgu Jiu,
Romnia, gabibabucea@gmail.com

RBONU Cecilia-I rina
Associate professor, Faculty of Economics and Business Administration, Constantin Brncui University,
Trgu J iu, Romnia, cecilia.rabontu@gmail.com

VASI LESCU Maria
Junior teaching assistant, Faculty of Economics and Business Administration, Constantin Brncui
University, Trgu J iu, Romnia, maria_vasilescu1983@yahoo.com

Abstract: This study aims to indentify the changes in tourism activities of at the level of the eight
Romanian development regions in the last 20 years and to determine what are the factors which led disparities in
their changes, but also, what are their specific effects on each region. For this purpose, we had the last official data
available for specific indicators and we used the statistical methods for territorial ranking trying to determine the
rank for each region in the national hierarchy for this period.

Key words: tourism activity, Romania, regional level, rank, hierarchical method

JEL classification: R11,

1. Introduction
After 1989 all economic aspects saw new trends in Romania, completely different compared to
the previous period based on economic centralized economy. Nowadays, we face challenges strictly
related to globalization and some circumstances of economic uncertainty. The Romanian tourism faces
such issues too, but it continues to be seen as a lifebuoy of the Romanian economy, in terms of a proper
revaluation of its valuable inheritance and of a more aggressive and a more focused promotion on these
segments of consumers that must correspond to elements offered in various tourist regions.
Balanced development of tourism throughout the country contributes to economic and social
growth, mitigating imbalances emerged between different areas and representing an important source for
increasing populations income. In general, tourism development plays an important role and regional
development becomes crucial for all economies of the world and their development strategies, because
most countries promote development of this sector, in areas lagging behind economically and socially, to
improve regional economic structure.
A literature review shows that there are regional imbalances caused by a differential allocation of
natural and human resources, by different, specific evolutionary environments (economic, technological,
demographic, social, political and cultural).
Tourism represents a decisive factor for general economic progress, contributing to GDP growth,
countervailing external balance of payments and improving the quality of life. This sector may be the
most important generator of jobs, being a main source of economic recovery of those areas that have
tourist resources and exploit them properly.
Diversity of activities giving content to tourism and the presence of some of them in the structure
of other branches and sectors of the economy provides an industry interference character for tourism, with
complex and extensive links with other economic sectors, links to be considered when drawing a
sustainable regional strategy for tourism development. Tourism contributes to a higher capitalization of
resources, stimulating economic development, improving social structures and living conditions, acting as
a stimulating element of the global socio-economic system.

2. The role of tourism in socio-economic development
Although Romania's tourism potential was and is considered to be promising, both by Romanian
and foreign researchers, Romanian tourism is still in a stage of development and rehabilitation.
32

The number of foreign tourists visiting Romania suffered a decline in recent years. While in
Romania effects of mass tourism development are not yet as strong as in the Mediterranean or Latin
American countries, we can already think of possible future implications of increased flow of foreign
tourists. We will try to express several recommendations in accordance with the following analysis,
taking into account the main trends presented, which would contribute to improving the state of
Romanian tourism and to increasing its competitiveness at international level.
Regional development of tourism is based on the principles of regional development policy which
aims mainly at: reducing existing regional disparities, with emphasis on fostering the balanced
development and revitalization of disadvantaged areas (delayed development), preventing the production
of new imbalances; fulfilling integration criteria in EU structures and access to financial instruments to
support countries.
The contribution of tourism to economic and social life is different from one country to another,
from one region to another and from one county to another depending on the level of development and of
the policy promoted in connection with these activities.
As part of an economy, tourism shows itself as a means to diversify its structures by creating
specific activities as the hotel industry which takes into account not only housing and creating the
conditions and comfort for leisure, but also a number of additional benefits, whose range is very large,
from tourists information to business services or non-specific services.
Economic effects of tourism are present in the plan of economic efficiency of the other branches
of activities: their quantitative and qualitative development is stimulated, dismissed labour force is drawn
from other industries and new jobs in adjacent sectors are created. Surveys undertaken regarding this
show that jobs created in tourism determine another 60-80 new jobs in agriculture and construction.
Direct contribution of tourism on employment is particularly significant for economies with intensive
tourism.
International tourism plays an important role in increasing and diversifying exports, but it can
only be achieved in tourist areas properly promoted and supported by an appropriate accommodation
infrastructure. International tourism has a remarkable impact on the balance of payments through balance
of foreign exchange of tourism that can compensate, reduce or aggravate a deficit of balance of payments.
International tourism gives rise to activities that are part of current transactions and capital transactions.
Regional development strategy, drawn especially for regions that include objectives of certain
value in their areas, must take into consideration that increasing tourist influx, of any origin, positively
influences regional economy:
- directly, by total returns from tourism consumption (house, meals, taxes, shopping);
- indirectly, through bilateral contacts and local cultural influences, becoming familiar with local
economic values and potential business opportunities, employment in services, creating a
favourable image, civilizing infrastructure involved.
The prosperity of a region as a result of tourism development appears in several stages:
- immediately, as a result of direct consumption of tourism product;
- in the short run, by a continuous absorption of labour and encouraging greeting trade
("aggressive");
- in the long run, through capital concentration for investment in general infrastructure and tourism,
in establishments of tourists reception and for development of urban services.

3. The ranking method
In this study we use the most common statistical method for hierarchy in territorial development.
The method taking into account the relative distances between the individual values of the consider
indicators. The hierarchy process involves building a matrix of statistical indicators included in the
analysis, corresponding territorial units considered.
The method involves, at first, determinate the partial real ranks for each territorial unit and for
each indicator, depending on the situation. We calculated the ranks, in this case, the following formula
( ) 1
min max
min

= n
x x
x x
n r
j j
j ij
ij
, Equation (1),
which means that the situation reflects a more performance if it has highest values, where:
x
ij
= the value of the indicator j for the territorial unit i;
= the value of the indicator j for the territorial unit with lowest value;
33

= the value of the indicator j for the territorial unit with highest value;
n = number of the total territorial units in analyze;
m= number of the indicators in analyze;

Based on the partial ranks we determine actual average ranks for each territorial unit i, as an
arithmetic mean, as follows:
m
r
r
m
j
ij
i
=
=
1
, Equation (2).
Real final rank for each territorial unit shall be based on territorial unit with lowest average rank,
which indicates the maximum performance, namely a place, to the territorial unit with the highest average
rank, which indicates the minimum performance, respectively the last, N.

4. Romanian development regions ranking regarding tourism activities after 1998
For a complete and complex analysis in terms of tourism activity dynamics from 1990 to 2009,
we resorted to various representative statistical data, taking into consideration indicators which can
characterize territorial tourism activity, at the level of the eight regions of the country. We refer here to:
- existing accommodation capacity;
- accommodation capacity in use;
- number of arrivals (tourists stay);
- number of overnight stays;
- net use indices of tourists accommodation capacity in use;
Data used for the five statistical indicators established as relevant in the correct description of the
tourism activity of the eight development counties for two years: 1990 the first year after December '89
and 2009, for the latest regional data at the moment of analysis.
The algorithm for determining the final ranks and all calculations are presented in Table no. 1.
Aggregation of the five indicators into a summary that describes a real situation of regional tourism
activities in 2009 led to the hierarchy. Real final rank of each region was determined beginning with the
region with the lowest average rank, indicating a maximum performance (1st rank) to the region with the
highest average rank, which indicates the minimum performance (rank n).

Table 1 - The ranking algorithm for tourism activity at the development regions in 2009

Source: Calculated by the authors.

In accordance with results obtained by the ranking method, one can observe that the South-East
region has primacy in accommodation capacity, situation supported by existing accommodation places
especially in Constanta County, at the Romanian seaside, otherwise supporting the whole region. This
region is closely followed by the central region, sustained by Sibiu, the Europe's cultural capital in 2009,
and by highly developed mountain tourism in Brasov County.
In third place, we find North-West region with Iasi, Botosani and Vrancea counties as important
areas for tourists, and only in 4th place is found Bucharest - Ilfov where Bucharest hardly supports this
rank since it is a pole of power terms of accommodation capacity extremely necessary for business
34

tourism segment. Thus, it can be found that a region can be supported by a single county or a small
number of counties that put the region on a leading position, but if it benefited from well placed counties
in terms of accommodation capacity, they would leave behind the others.

Table 2 - The ranking algorithm for tourism activity at the development regions in 1990

By calculating regions ranking in 1990, we found that the hierarchy was not strictly modified
along the analysed period, meaning that first, second, third and fourth places were kept by the same
regions, led by the South-East region. The surprise is provided by West and South-West Oltenia regions
which have advanced from 7th and 8th places in 1990 to 5th and 6th in 2009, penalizing North-East and
South regions, issues summarized in the table below:
Table 3 - Changes in Romanian regions Hierarchy in 2009 compared to 1990
ID Development region
Ranks Change of
ranks
1990 2009
RO02 South East 1 1
RO07 Centre 2 2
RO06 North-West 3 3
RO08 Bucharest Ilfov 4 4
RO01 North - East 5 8 +
RO03 South Muntenia 6 7 +
RO05 West 7 5 |
RO04 South - West Oltenia 8 6 |

For an enlightening image we present a map of Romania with region ranks within hierarchy of
tourism activities at the development regions in 1990 and 2009:

Figure 1 Changes in regional hierarchy of tourism activities in 1990 and 2009

Source: Authors
35

5. Conclusions
Tourism is a sector that can contribute in significant proportion to economic growth and
development, in Romania, as in many other countries of the world, if it were supported by investments in
infrastructure facilities because tourism and regional development are closely linked.
It is clearly recognized that the picturesqueness of various natural areas of Romania,
supplemented by real treasures of culture - sometimes of universal interest - are as many motivations for
tourism. The influx of tourists and visitors in different regions is, of course, determined by the
attractiveness, value, number and quality of objectives of these areas, by available transport infrastructure,
food, accommodation and entertainment and by the level of knowledge and presentation through
ingenious advertising.
We found within the study conducted that distribution of accommodation capacity in Romania is
differentiated by regions and counties inside the region. At the same, it can be observed that, in some
cases, even if the share of number of beds in total is reduced, however the net use index has a significant
value. Thus, after the application of several statistical methods we have achieved a ranking of the regions
by using several criteria. There are regions in the top supported by a single county, which does not seem
very easy, which leads us to conclude that those counties could be considered a model for the surrounding
areas to develop a whole region.
The slow process of privatization combined with the lack of investment in infrastructure during
the '90s, as Romania was readjusted to life after communism, resulted in a tourist industry in a growing
pain. However, the new-found freedom and a developing middle class determined an increase of travels
abroad, encouraged by low prices in Greece and Turkey.
Tourism development will be achieved by upgrading infrastructure and tourism services,
diversification of tourism supply and development of ecological, spa, cultural and historical tourism.
A complementary development of road infrastructure, connected to the national transport network
capable of providing access to tourist areas, of social services infrastructure, that would increase living
standards in the region, is essential to ensure the country's tourism development.
Tourism development must take into account the principle of sustainable development, in order to
preserve natural and cultural heritage and to minimize the "human pressure" over environment.
Investment in tourism and culture will allow regions to use the benefits of tourism and cultural heritage to
enhance competitive advantage in performing sectors, of high cognitive and quality level, both on
traditional and emerging markets.

6. References
- Antonescu D., (2003), Dezvoltarea regional n Romnia concept, mecanisme, instituii,
Editura Oscar, Print, Bucureti,
- Babucea, A.G., (2010)., Analiza datelor, Craiova, Editura Universitaria
- Bdi, M., Baron, T. Cristache, S.E., (2002) Statistic pentru afaceri n Comer-Turism,
Bucureti, Editura Luceafrul
- Constantin, D. , (2000) , Introducere n teoria i practica dezvoltrii regionale, Ed. Economic
- Go, F.M., (1998), Tourism in the context of globalization, Papers de Turisme, nr. 23, pp. 151-171
- Hall, D.R., (1998), Tourism development and sustainability issues in Central and South-eastern
Europe, Tourism Management, vol. 19, nr. 5, pp. 423-431
- Iacob, A. I., (2002), Analiza statistic a variaiei teritoriale a capacitii de cazare existente i n
funciune n Romnia n anii 1994 i 1998, n Probleme actuale ale dezvoltrii regionale n
Romnia, Bucureti, Editura Oscar Print, 2002
- Light, D., Dumbrveanu, D., (1999), Romanian tourism in the post-communist period, Annals of
Tourism Research, vol. 26, nr. 4, pp. 898-927
- McKercher, B (1993), The unrecognized threat to tourism: can tourism survive sustainability?
Tourism Management, vol. 21, nr. 1, pp.131-136
- Mitru, C., erban, D., Mitru, C. A., (2003), Statistics for Business Administration, Bucureti,
ASE, Publishind House,
36

- Niculescu, G., Rus, F., (2010) Turismul n regiunile de dezvoltare ale Romniei, Editura
Academica Brncui, Tg-jiu
- Roberts, L., Simpson, F., (2000) Developing Partnership Approaches to Tourism in Central and
Eastern Europe, n Bramwell, B., Lane, B. (editors), Tourism Collaboration and Partnerships,
Channel View Publications,pp. 230-246
- Sharma, K.K., (2004), Tourism and regional development, Sarup and Sons Publishing House.
- Socol, C., Socol, A.,(2006) Modelul european: cretere economic, convergen i coeziune. n:
Economie teoretic i aplicat, v. 13, nr.8, p. 61-66
- Politica Regional a UE: http://ec.europa.eu/regional_policy/sources/docoffic/offi_en.htm
- WTO, Service trade: http://www.wto.org/english/tratop_e/serv_e/serv_e.htm
- www.insse.ro

37

POLISH E-COMMERCE MARKET THE PRESENT STATE AND DEVELOPMENT
PERSPECTIVES

BAJ DOR Paula
Assistant, Faculty of Management, Czestochowa University of Technology, Czestochowa, Poland,
paula.bajdor@googlemail.com

Abstract: At the moment, the Internet is the fastest growing distribution channel for polish e-
commerce market. Compared with the year 2010, the value of e-commerce market increased by 16%. In the year
2011. On the polish e-commerce market currently operates approximately 10 thousand e-shops, in addition to
several strong leaders (Merlin, Allegro or Empik) this market is very fragmented. The presented
article characterizes the polish e-commerce market and its development perspectives. Based on the survey
conducted, the polish on-line shops will be presented -branches of their business, net sales, number of
employees or number of customers.

Key words: e-commerce, Internet, market, on-line shops, stores

JEL classification: L81, L86, G32

1. Introduction
The Internet appearance and development, has led to creation of new ways of its use in many
areas of business and life. The one of these new Internets form, is electronic commerce (e-commerce, e-
trade, online-shops), which is becoming very popular, today, in Poland. For the businessmen e-commerce
is a vein of gold, and for the clients, e-commerce means comfort in dealing with different issues
without leaving the house or even without leaving its desks (Korper, Ellis, 2011).
According to Central Statistical Office, e-commerce is a trade which includes transactions carried
out by the network, IP based and other computer networks. Goods and services are ordered by the
network, but the payment and ordered goods delivery may be made in or outside the system.
Transactions can be made between the enterprises, with individuals, government institutions and other
private or public organizations. Orders received by the telephone, telefax or e-mail messages are not the
part of e-commerce (GUS, 2011). According to the WTO (World Trade Organisation) e-commerce is a
production, sales, advertising and distribution of products and services through the ICT networks
(Reynolds, 2004). The OCCP (The Office of Competition and Consumer Protection) includes the
activities in the field of e-commerce into traditional business, as it is being understood by the Business
Act from the 28
th
December 1988 (as amended), because e-commerce involves the use of electronic
media (Bajaj, 2005). However, the most popular e-commerce definition states that it is any transaction
realized by the ICT media (Chaffey, 2007). In this term, electronic commerce should rather be
translated as electronic market, because the translation of electronic trade is far reaching concept in
the original. Such a wide understanding of e-commerce causes that e-commerce is not something new,
but this activity has occurred in the 60s of the last century, together with the first electronic payment
systems or phone services. However, since that time, e-commerce has been developing through the
following services: telephone banking, credit card services, fax orders and EDI (Electronic Data
Interchange) and finally the Internet.
Despite the comfort offered by the e-commerce, it also brings the following benefits:
(1) less paper and paperwork,
(2) bigger efficiency due to shopping and ordering systems,
(3) less typical administrative actions,
(4) better access to the information,
(5) cost reduction/bigger profits in comparison to traditional sales modes,
(6) immediate and international sale offer,
(7) services avalaible 24h and for 365 days,
(8) using e-mail instead of phone or fax,
(9) online rush may cause a stream of potential clients, (Pankaj, 2005)

38

And the gains from e-commerce include as follows:
(1) Better information flow and transparency an all transactions stages,
(2) Price transparency,
(3) Increased Reach-alternative as an additional Communications medium,
(4) Reduced time-to-market,
(5) Faciliates Re-intermedation, (Botha, 2007)

However, in addition to these benefits, e-commerce has contributed to the issues raised
regulations, legal liability and security. One of the most important issues is payment mechanism issue:
how clients should pay for their shopping and how to make these payments safe.
Very often, e-commerce is understood in refer to buying and selling over the Internet only,
having e-commerce in mind, people think about Merlin or Empik (polish bookstores). But e-commerce
does not include only the electronic relations between the buyer and the client, it refers to any activity,
including non-financial, which is conducted via the Internet, ie. The query about the price or product
information.
E-commerce has a range of different perspectives:
(1) a communication perspective providing the information in regards to product, payment Or
delivery options,
(2) a business process perspective technologys application towards the automation of business
workflows and transactions,
(3) a service perspective that reduces the cost with the improvement on the products delivery -
speed and quality,
(4) an online perspective buying and selling products via the Internet and informations flow.

E-commerce activity is supported by digital technologies, which allow electronic communication.
These technologies include communication, conducted not only by the e-mail or website, but also use the
wireless and mobile technology, cable or satellite television.
Due to e-commerce, the new form of business has arisen, without it, it is impossible to imagine
doing business today. In the year 1999, The Secretary of Commerce, Wiliam M. Daley said that E-
commerce is much more than a service tool. It is becoming a basic element for most manufacturing
operation from design, to development, to product and to distribution (Pankaj, 2005).
E-commerce potential is so high, that it can change the way in which enterprises operating at the
market, and influenced the businessmen and clients behavior.

2. The methodology
The research conducted had the form of survey, consisting 43 questions, sent to online stores,
operating in Silesia region. We have received over the 60 survey filled by the stores. Questions included
in the survey, have dealt with:
(1) categories,
(2) operations period,
(3) number of employees,
(4) number of foods offered
(5) number of suppliers,
(6) sales channel used,
(7) international trade,
(8) marketing form used,
(9) Communications with the clients,
(10) hosting services,
(11) users profile,
(12) number of goods sold,
(13) security,
(14) payments,
(15) distribution,
(16) net assets,
However, due to pages limitation, this article presents the most important aspects of the polish e-
commerce market.

39

3. The polish e-commerce market
The year 2011 was a watershed year for polish e-commerce market, now at this market, operates
almost 10 thousand on-line stores and, probably, in the year 2012, this number will even increase. This
rapid growth, in terms under the number of on-line shops and sales value, is caused by the polish clients,
who are more convinced to buy on-line, like never before. They see a wide range of tools offered by the
Internet and they use it. In comparison to the performance in the previous years, in the year 2011, a
dynamic growth of people declaring making shopping on-line, was observed. In the year 2010, the
percentage of on-line buyers was 67%, but in the next year the percentage was 74%. (Szymanski, 2011)
Despite the difficult time for polish market, 33% on-line shops have increased its profits and
more that 40% of them have noticed better sale (Szymanski, 2011). The most popular trends on the
market, were as follows: recommendations, groups purchasing, comparison sites and sites with clients
opinions. The delivery offers has also expanded. The best-selling categories for on-online stores are
multimedia, clothing, jewelry, RTV and home appliances and house and garden equipment.
Figure 1: E-shops categories

Source: The Authors own work

Products in the segment of Home and Garden offer had a third of the store. Due to the large size
of this category, it is difficult to discern its characteristics. 17% of the total are shops
selling clothing, also offering categories such as "gifts" or "child". On the third place were the
e-pharmacies, which offer substitutes to drugs, dental and ophthalmic products. The lowest
percentage was recorded categories of "deli", "Automotive" and "entertainment", but the category
of "deli" has recorded a steady growth and it can be assumed that over the years will be put forward at the
beginning, one of the reasons for this increase is launching online sales by supermarkets such
as Carrefour, Auchan and M1.

40

Figure 2: E-shops operation period


Most of the polish on-line shops have been active from 2 to 5 years, there is also a significant
increase with stores have been active from 5 to 10 years. It might be also noticed a significant increase of
shops operating at least 10 years at the market (its number was doubled for the last 2 years). However, the
highest growth has been noted in the shops which operate for a very short time. It means that polish e-
commerce market is still growing and the new shops are being opened constantly.

Figure 3: The number of employees


In comparison with the previous years, has decreased the number of shops with less that 3
employees, the most numerous group are the stores which have from 3 to 5 employees. The number of
stores having 6 to 10 employees has doubled during the last year. The less growth was noticed in the
41

stores which have 11 to 50 employees, usually are the old stores with a good position, there are fully
completed and the employees rotation is caused by the normal staff turnover.

Figure 4: The number of types of goods offered


The average number of products offered by the on-line shops is between 1000 and 5000 products.
However the number of stores, offering over 5000 products, is still growing. And the smallest group of
shops are shops offering less than 100 products as well as offering more than 50 thousand products. The
number of stores offering products from 5000 to 50 thousand and from 100 to 1000 is similar.
Figure 5: The number of suppliers


Most on-line shops (29%) receive the products from the one to five wholesalers, a little bit less
shops (24%) cooperate with the six to ten suppliers. And only every fifth shop has been cooperating with
11-20 suppliers. The store cooperation with a small number of suppliers guarantee a management
42

processes centralization, but, from the other hand, this store offers less number of products than other.

Figure 6: The additional sales channels


Polish on-line shops very often use the additional sales channels, only 16% of them, has declared
that the on-line sale is the only sale channel. Every third shop, sells its product through auction sites, the
second, most poplar channel, is traditional sale and wholesale. Every tenth shop sells by mail order using
the printed catalogues. It the other category there is also shopping group, which are now becoming very
popular sales channel and can be expected that on the next year, this channel will gain a separate
category.

43

Figure 7: The marketings form used by e-shops


The most popular form of marketing used by polish on-line shops is the serach engine
positioning, this form is being used by over 80% shops. In the second place is the use of comparison sites
and the third, most popular form of marketing, is advertising in the form of a link on the website. Such a
big share of these forms is caused, that stores are convinced by its biggest efficiency. A very few shops
use the marketing form such as buzz marketing or public relation activities. And the smallest number of
shops (less than 2%), which do not use any marketing forms, was noticed.

44

Figure 8: The average of products sold per month


Majority of shops selling from 100 to 500 products per month, while the smallest percentage
of stores selling more than 10 thousand products per month. This is probably due to the fact that in
addition to several major online shops, polish e-commerce market are small shops, where the
average sale is between 100 and 500 products per month.
Figure 9: The available payment options


The most common methods of payment was cash on delivery, and in second place were the
payments made by bank transfer. Payment due upon receipt of the goods, is caused the lack in the trust of
customers to the business of the store. The second form of payment is popular due to the increasing
number of people having Internet accounts or Internet access to bank accounts. Still not very popular
45

form of payment is by credit card because the first is still a small percentage of people has it, and
secondly - people with credit cards use them as part of an emergency, because as we all know the money
from credit cards are "expensive." Unpopular is also the instalment plan, not only because of
the additional costs but also to the fact that the value of the transaction with an online shop rarely
exceed PLN 300.

Figure 10: Net sale


The largest group of shops where net sales is in the range of 100 thousand PLN to 500 thousand
PLN, followed there are shops where net sales is in the range of 10 thousand PLN to 50 thousand
PLN, while the smallest percentage of stores was reported in the range of sales over 50mln PLN.
However, it can be also seen a large growth rate in the range from 1 million to 5 million of net sales, this
indicates that a growing number of shops increase their sales.

4. Conclusion
Fewer and fewer online shops experience the problems with the deteriorating economic situation,
but a lot of shops complain of problems stemming from the cooperation with suppliers. Generally, the
results of research conducted, allowing the optimistic assumption that the polish e-commerce market will
continue to grow. With the progressive computerization of society, including e-commerce market will
be noted continuous growth associated with more online stores to boost sales or increase the number
of products offered. The study emerges a fairly optimistic picture of the polish e-commerce market . In
addition, compared to other foreign markets, the polish e-commerce market is just beginning as well as
in a sense, guarantees its continued growth.

46

5. References

- Bajaj K.K., Nag D.(2005), E-commerce. The cutting edge of business, McGraw-Hill, ND.
- Botha J.(2007), Managing e-commerce, Juta&Co., US.
- Chaffey D.(2007), E-business and e-commerce management, Prentice Hall, UK .
- Korper S., Ellis J.(2001), The E-commerce book, Academic Press, CA.
- Pankaj S.(2005), E-Commerce, APH Publishing Corporation, ND
- Pojcia stosowanie w badaniach statystycznych statystyki publicznej, (2011)GUS, Warszawa.
- Reynolds J.(2004), The complete e-commerce book, CMP Books LTD, CA.
- Szymaski G.(2011), Badanie polskich sklepw internetowych, Internet Standard, E-
commerce, Warszawa.

47

INFLUENCE OF CRISIS ON RURAL TOURISM IN ARAD COUNTY

BARBU I onel
Professor/Ph.D, Fac. of Engineering/Dep. of AIITT, Aurel Vlaicu Univ, Arad, RO, ionelbarbu@yahoo.com

BARBU Sergiu-Aurelian
Ec/M.Sc.stud. University of Applied Sciences Deggendorf, Germany, barbusergiu1988@yahoo.com

Abstract: In this paper we present an analysis of tourism in the county of Arad in the period 2006-2011 in
an attempt to see how economic and financial crisis has affected the rural tourism. For analysis we have selected
monthly overnights situation in the county of Arad for all structures and also the monthly overnight stats in rural
tourism. For this analysis we used statistical and mathematical processing. In principle we expect to occur a
decrease in overnight stays after 2008 in rural touristic pensions, and after 2010 to show a slight recovery of this
activity.

Key words: rural tourism, processing statistics, Arad

JEL classification: R1, C4, M2

1. Introduction
In this paper we present an analysis of tourism in the county of Arad in the period 2006-2011 in
an attempt to see how economic and financial crisis has affected the rural tourism. For analysis we have
selected monthly overnights situation in the county of Arad for all structures and also the monthly
overnight stats in rural tourism. For this analysis we used statistical and mathematical processing. In
principle we expect to occur a decrease in overnight stays after 2008 in rural touristic pensions, and after
2010 to show a slight recovery of this activity.

2. Choice of sizes and data collection
For this paper we used the official data from http://www.insse.ro. This data appeared in the
monthly statistical bulletin of January 2006 - December 2011, table 1.

Table 1: The values of the two variables
2006 2007 2008 2009 2010 2011
X Y X Y X Y X Y X Y X Y
Jan 22272 183 17780 228 19442 355 17010 343 16631 282 17146 862
Feb 26537 207 26500 150 23787 257 18904 247 15779 513 19104 726
Mar 26781 97 21170 111 24598 201 24237 246 23509 487 23099 1466
Apr 24526 149 25494 187 22402 254 21912 242 21627 1249 18430 1952
May 27232 749 28463 204 29618 453 28764 533 24517 750 31640 1550
Jun 31107 672 37089 244 32374 1105 33727 757 30518 619 35070 1487
Jul 34521 237 46551 287 36449 708 38776 631 29298 1389 39082 1458
Aug 35504 301 39846 318 36640 163 38917 941 33883 1733 44371 1473
Sep 34093 318 34038 337 27992 896 33515 447 34743 1168 34977 1637
Oct 32154 806 28741 184 31839 865 32319 604 28581 1043 34391 1176
Nov 28588 285 25891 188 28345 643 24858 593 25658 908 28254 1276
Dec 19885 126 22204 521 23630 347 20374 538 19869 939 20070 1105
Source: http://www.insse.ro

For the variables we chosed:
X - the overnight total in the Arad county (romanian and foreign tourists); independent variable
Y - the overnight total in the rural pensions in the Arad county (romanian and foreign tourists);
dependen variable.

48

3. Statistical and mathematical processing. Calculation of quantities and interpretation of the
results.
For the Y variable, using Eviews software we have made the following histogram and calculated
the following sizes:
Figure 1: Histogram of Y series

Average value. The arithmetic average is determined by dividing the sum of individual values of
the variable to the total number of units of the population and is calculated with
=
=

=
k
i
i
k
i
i i
N
N Y
Y
1
1
( 1 ) where k = 72
Using the Eviews soft, we get 648, so the average monthly number of the total overnights in the
rural pensions is 648.
Median value. Because the data volume is even, the formula for the median calculation is:
2
1
2 2
+
(
+
=
N N
Y Y
Me ( 2 )
With the Eviews soft we got 527 overnights. So, in 50% of the 72 analyzed months, the months
with the fewest overnights had values between 97 and 521, and in the other 50% of the months, the
months with the most overnights, we had values between 533 and 1952 as overnights in the rural
pensions.
Standard deviation. Can be defined with the formulas:
( )
=
=
N
i
i Y
Y Y
N
1
2
2
1
o ( 3 );
2
Y Y
o o = , ( 4 )
and with the help of the Eviews soft, we got the value 473 overnights. So, in average, the total number of
the overnights in the rural pensions is sliding from the overnights average with 473 overnights/month.
The simple variation coefficient. It can be calculated using the ratio of standard deviation and the
medium value.
( 5 )
Because the value of the simple variation coefficient is quite large, 73%, the series doesn't have a
high uniformity, and this is explained by the fact that there are wide variations between periods of peak,
summer months, compared to periods when tourism activity is lower, the months of autumn, winter and
spring.
The coefficient of asymmetry. It can be calculated using the formula:
( 6 )
0
2
4
6
8
10
12
14
16
0 400 800 1200 1600 2000
Series: Y
Sample 2006M01 2011M12
Observations 72
Mean 648.6944
Median 527.0000
Maximum 1952.000
Minimum 97.00000
Std. Dev. 473.0057
Skewness 0.872377
Kurtosis 2.757065
Jarque-Bera 9.309558
Probability 0.009516
( ) % 73 100
648
473
% 100 = = =
Y
V
Y
Y
o
Y
Mo Y
o
o

=
49

and with the help of the Eviews soft we get the value 0.87. Because the value of the coefficent of
asymmetry has positive value, that means the series presents a left asymmetry.
Coefficient of vaulting. It can be calculated using the formula:
( 7 )
With the help of the Eviews soft we get the value 2.75, that means the Y series is leptocurtica.
Figure 2: Representation of waveforms Y series

Analyzing the waveforms for the Y variable, it can be seen that in the analyzed period there is a
certain distribution of overnight stays in rural touristic pensions, with higher values in the summer season
and lower values in the other seasons. Before the crisis occurred in 2008 amid an increasing wave, in
2007 there is a decrease in overnight stays in rural pensions because more tourists are moving to other
accommodation structures.
The crisis in 2008 led to a significant increase in overnight stays in these pensions, a 64%
increase from 2006 and by 350% from 2007, if we refer to June, the peak month. These aspects indicate a
change in optical orientation from the tourists and more low priced services. In 2009, when the crisis was
in full action, it led to a decrease in overnight stays in rural pensions, 31%, still referring to June.
In 2009 there was an increase of this indicator, which keeps growing every year. If we compare
2011 to 2010 there are increases between 5%, July 2011 to July 2010, and even 140%, June 2011 to June
2010.
The study of the connection between the two variables. Point cloud representation.
Analysing how the points are arranged on the surface of the graph we can study the following
aspects: a connection based on grouping points, the connection's path, the connection's shape and
intensity. How points are plotted wide enough between the two variables means that between the two
variables there isn't a strong connection. y running the software Eviews report the correlation value is
obtained at the sample R-squared 0.044. In this case, as Ry / x <0.5 the connection between X and Y is
weak. To generalize this value to be used Fisher's exact test whose value is calculated F
calc
= 3.25.
Tabulated value of Fisher statistics for the probability of 95% and a total of 72 observations is F
tab
= 3.98
Study regarding the intensity of the connection between the variables with the help of the
correlation report. We will study the intensity of the variable's connections for the already studied sample
sizes between 2006-2011 with the help of the correlation ratio and we will generalize the result to the
level of total population using the Fisher test. By running the software Eviews we will get the correlation
ratio report for the R-squared sample 0.044. In this case, because Ry/x < 0.5 the connection between X
and Y is weak. To generalize this value we will use the Fisher test which calculated value is F
calc
= 3,25.
The tabulated value of Fisher statistics for the probability of 95% and a total of 72 observations is F
tab
=
3.98
Presentation of two plausible forms for the connection between the two variables
We will identify two plausible forms of the connection between the two variables, based on the
appearance of cloud points. In this case, there are the next situations:
( )
3
4
4
4

=
Y
Y Y M
o
|
0
400
800
1,200
1,600
2,000
2006 2007 2008 2009 2010 2011
Y
50

A - between the two variables there is a linear relation: Y = c(1)+c(2)X+t
B - between the two variables, there is a exponential relation: Y=c(1).c(2)
X
+ t
Figure 3 : The cloud points

Parameter estimation of regression functions and testing their significance. Estimated coefficient
values in the sample are c(1) = 249 and c(2) = 0.01. To generalize the results about the two arguments we
apply the Student test. Parameter c (1) value t
calc
= 1.09. For 95% probability, the tabled value is t
tab
=
1.96.
The parameter c(1) is very different from 0 to the level of the total population. We apply the
Student test for the parameter c(2) also: t
calc
=1,8, t
tab
=1,96. The c(2) parameter is not very different from 0
to the level of the total population.
Between the two variables there is an exponential connection: Y = c (1). c (2) X + e
Values of both coefficients c (1) = 249 and c (2) = 0.01. To generalize the results about the two
parameters we apply the Student test. For the Parameters c(1) and c(2) there are not calculated the values
of the Student test statistics.
Selecting the regression equation using the Akaike criterion. Akaike has the value 15.15 for the
liniar model and 16.26 for the exponential model. So, the liniar model represents more accurately the
connection betweent the two analyzed parameters.
This is reinforced by the fact that for the linear model we have a correlation coefficient greater
than for the exponential model, ie from 0.04 - 1.9.
Testing the chosed model. White Test. Corelation report 0.01.
The Fisher Test F
statistic
= 0,55, F
tab
= 3,98. Because the Fcalc value is smaller than the Ftab, we
can not reject the H
0
hypothesis, and that means the model is homoscedastic.
Looking at the chart we cannot have a strong conclusion regarding the independence of errors
(there are portions where errors are placed on the both sides of the Ox axis, without a rule - this is the part
where errors are independent, but on other graphical portions there are zones where the majority of errors
are positives or negatives - here the errors are correlated.

0
400
800
1,200
1,600
2,000
10,000 20,000 30,000 40,000 50,000
X
Y
51

Figure 4: Testing the independence of errors hyposthesis. The graphic method.

The Durbin Watson test. Dw calc= 0,47, it can be compared to d
1
and d
2
from the Durbin-Watson
distribution chart regarding , conveniently chosen, ( = 0,05 sau = 0,01), the number of exogenous
variables, k=1 and the observed values (T=72). In our case d
1
=1,59 i d
2
=1,64 (values obtained by linear
extrapolation) for the probability of 95% ( = 5%).
Because DWcalculate = 0.47, so 0 <DWcalc <d1 errors are positively correlated. If errors are
correlated the model is valid, so it cannot be used for predictions.
Jarque-Berra test. The assumption of normality of errors.

Figure 5 : The histogram displays errors and Jarque Berra test value

Assumptions that are issued are: H
0
: errors are normally distributed, H
1
: errors are not normally
distributed. Decision rules are:
- If JB
calc
s we cannot reject H0, so errors are normally distributed
- If JB
calc
> , H1 is accepted, thus rejecting the hypothesis of normality of errors
JB calc = 8,94, and
2
) 2 , (o
_
tab
= 5.99. How JB
calc
>
2
) 2 , (o
_
tab
, H
1
is accepted, so it reject the
hypothesis of normality of errors, so the hypothesis of normality of errors cannot be accepted.
How the three conditions (errors are homoscedastic - condition fulfilled, - errors are independent-
unsatisfied condition, errors are normally distributed - a condition not fulfilled) are not met, the model
-800
-400
0
400
800
1,200
1,600
2006 2007 2008 2009 2010 2011
Y Residuals
0
2
4
6
8
10
12
14
-400 0 400 800 1200
Series: Residuals
Sample 2006M01 2011M12
Observations 72
Mean -3.16e-14
Median -101.6460
Maximum 1439.804
Minimum -625.3365
Std. Dev. 462.3752
Skewness 0.863184
Kurtosis 3.051917
Jarque-Bera 8.949122
Probability 0.011395
2
) 2 , (o
_
tab
2
) 2 , (o
_
tab
52

cannot be used to predict the evolution of the analysed parameter for the next period.

4. Conclusions
The average monthly number of the total overnights in the rural pensions is 648.
In 50% of the 72 analyzed months, the months with the fewest overnights had values between 97
and 521, and in the other 50% of the months, the months with the most overnights, we had values
between 533 and 1952 as overnights in the rural pensions.
In average, the total number of the overnights in the rural pensions is sliding from the overnights
average with 473 overnights/month.
Because the value of the simple variation coefficient is quite large, 73%, the series doesn't have a
high uniformity, and this is explained by the fact that there are wide variations between periods of peak,
summer months, compared to periods when tourism activity is lower, the months of autumn, winter and
spring.
Because the value of the coefficent of asymmetry has positive value, 0,87, that means the series
presents a left asymmetry.
Coefficient of vaulting has value 2.75, that means the Y series is leptocurtica
Analyzing the waveforms for the Y variable, it can be seen that in the analyzed period there is a
certain distribution of overnight stays in rural touristic pensions, with higher values in the summer season
and lower values in the other seasons. Before the crisis occurred in 2008 amid an increasing wave, in
2007 there is a decrease in overnight stays in rural pensions because more tourists are moving to other
accommodation structures.
The crisis in 2008 led to a significant increase in overnight stays in these pensions, a 64%
increase from 2006 and by 350% from 2007, if we refer to June, the peak month. These aspects indicate a
change in optical orientation from the tourists and more low priced services. In 2009, when the crisis was
in full action, it led to a decrease in overnight stays in rural pensions, 31%, still referring to June.
In 2009 there was an increase of this indicator, which keeps growing every year. If we compare
2011 to 2010 there are increases between 5%, July 2011 to July 2010, and even 140%, June 2011 to June
2010.
These substantial growths, we believe that they are not only a change of the behavior of tourists
due to the crisis effects but also a result of concrete measures taken by the ministry to include Romania in
travel catalogs of major tour operators, the emergence of new pensions due to the irredeemable or part
irredeemable by the romanian investors and a slight improvement in the road infrastructure.

5. References
- Barbu, I., Olah, Gh., Barbu, S.A. (2010), Turismul rural n regiunea de dezvoltare Nord-Vest,
Lucrrile sesiunii de comunicri tiinifice a doctoranzilor n economie, Editura Universitii din
Oradea, pag. 238-245
- Barbu, I., ( 2011 ), Analiza evoluei turismului n judeul Arad, Lucrrile sesiunii de comunicri
tiinifice a doctoranzilor n economie, Editura Universitii din Oradea,
- Meter, I., Modelare economic, Editura Universitii din Oradea, Oradea, 2007, pag. 196
- Meter, I., Statistica Economic, Editura Universitii din Oradea, Oradea, 2007, pag 324.

53

MINERAL WATERS CONSUMPTION IN THE ROMANIAN MARKET: PERCEPTIONS
AMONG THE SEGMENT OF YOUNG POPULATION FROM BRAOV

BOCOR Dana
Aassociate professor, Ph.D., Faculty of Economic Sciences and Business
Administration/Department of Marketing, Tourism and International Relations, "Transilvania"
University of Braov, Braov, Romania, danaboscor@unitbv.ro

NEACU Nicoleta Andreea
Assistant professor, Ph.D., Faculty of Economic Sciences and Business Administration/Department
of Marketing, Tourism and International Relations, "Transilvania" University of Braov, Braov,
Romania, andreea.neacsu@unitbv.ro

BLTESCU Codrua-Adina
Assistant professor, Ph.D., Faculty of Economic Sciences and Business Administration/Department
of Marketing, Tourism and International Relations, "Transilvania" University of Braov, Braov,
Romania,
codruta.baltescu@unitbv.ro

Abstract: This article aims to identify perceptions and buying behaviour for mineral waters in the
romanian market. Main attention was paid to Romaqua Grup S.A. Borsecs activity and reputation. A qualitative
marketing research was conducted among the segment of young population from Braov, the main goals being to
highlight which are the most popular and consumed mineral waters, the satisfaction and contentment degree of
interviewed subjects regarding the mineral waters offered in the romanian market,and also to find out their opinions
regarding design and aesthetics, advertisements and prices of mineral waters with Borsec brand.

Key words: mineral water, Borsec brand, qualitative marketing research.

JEL classification: M31.

1. Introduction
The anticipation of future and planning of products which will suit changes that will occur in
consumers behavior, requirements and tastes, and the permanent alignment at the evolution of the
competitive environment are vital for the companys survival.
The Borsec resort, called The Pearl of the Carpathians is situated at 26 km from Toplita, on
the national road Toplita-Piatra Neamt, in Borsec Valley, from the north western part of Harghita county,
at an altitude of 900 m above sea level, which gives a specific microclimate with a beneficial nature,
because of the surrounding massive coniferous forests. Beside the environment of a rare beauty where
Borsec is located, the quality of its mineral waters ensures a privileged situation among the balneary and
climateric resorts from the world.
The reputation of the mineral waters from Borsec dates back in the XVI-th century. There is a
documentary attestation that the mineral water from Borsec has been transported with carriages, in 1954,
in oak barrels, at the royal court from Alba Iulia where Sigismund Bathory was treated. Because of the
curative effects and empirical experience, the mineral waters from Borsec were bottled in clay pots, put in
bags on the back of the mountain horses and transported in Transylvania, Moldavia, Romanian Country
and Hungary since XVIIIth century.
In 1806 starts the industrial bottling in glass bottles produced at Borsec. In the first year were
bottled 3 million liters of mineral water, which were transported with carriages in different locations,
arriving even at Viena. The water collected in the well from springs 1 and 2 was poured into bottles,
plugged with corks and sealed with wax. It is interesting that the bottling was made only in sunny days,
when the atmospheric pressure was maximum, and the CO2 content was maximum. The industrial
bottling has functioned permanently from 1806 until recently, with short stagnations during the two world
wars. The tradition was continued by the Queen of the Mineral Waters Borsec S.A and now by
Romaqua Group S.A- Borsec. Meanwhile, the bottling technology was upgraded, putting in operation
efficient bottling installations.
The objectives considered in this paper are the following:
54

- Identification and description of Romaqua Grup S.A.Borsecs activity on national and
international level;
- Identification and understanding the reasons and buying behavior for mineral water for the
segment of young population from Brasov;
- Understanding the opinions of young people from Brasov regarding the mineral water Borsec.

2. The description of Borsec mineral water
The natural mineral waters Borsec have a balanced mineral content, a low content of iron and a
high and stable concentration of natural CO2. All these features position Borsec as one of the best natural
mineral waters.
In Borsec there are more than 15 springs of natural carbonated mineral water, having a similar
chemical composition, stable in time, with variable flows, the most important as quality and flow being
springs 1 or 2. Because of their composition, mineral waters have cleansing effects on digestive disorders
(stomach, intestines, biliary system), kidneys and bladder and urinary system and on the peripheral
circulatory system. Because of a balanced chemical composition, without iron and viable in time, the
mineral water from Borsec has a pleasant taste, being one of the most popular mineral water in the world,
being exported in many countries as USA, Israel, Ciprus, Germany, Taiwan, Hungary and Moldavia. As a
recognition of the outstanding quality of Borsec mineral water, it was awarded medals and diplomas at
international fairs and exhibitions from Viena, Berlin, Trieste and Budapest and the honorable title of
Queen of Mineral Water, granted by the emperor Franz Josef.
On the occasion of the Mineral Waters Exhibition Spring of Life - editions 1999 and 2000
organized by UGIR, Borsec mineral water was awarded the honorary diploma, the medal The Gold
Brand, for the best natural carbonated mineral water and the excellence award for the romanian
industry. In the edition from 2001 of the same event organized by UGIR, Romaqua was awarded The
Gold Brand for the natural carbonated mineral water Borsec and The Platinum Brandfor tradition
and excellence in the romanian industry. Larex awards the company the excellence prize for ensuring
product quality for the year 2000.
In June 2001, the Accreditation Association from Romania (RENAR) has granted Romaqua the
accreditation certificate, recognized on the european level, for recognizing the competence of Borsec
laboratories to carry out tests in the field of mineral waters, according to present standards and methods.
The permanent concern for a continuous upgrading and increase of the quality level turned
Romaqua Grup in the first bottler of mineral water from Romania, receiving the international certificate
for quality management- ISO 9000 granted by TUV- Germany.
The company received the excellence prize for supervising the quality of products-2000- granted
by the National Center for Testing and Product Expertise-Larex.
Because of its chemical composition, the mineral water is fizzy, with calcium, magnesium, with a
very low content of iron. The chemical analysis shows that Borsec mineral water has the following
composition (e.g. Table 1):

Table 1: The chemical composition of the Borsec mineral water
Anioni Mg/l Cationi Mg/l
Cl- 29,7832 Na+ 53,5
SO4 2- 24,69 K+ 12,37
HCO 3- min. 1.800 Ca 2+ 310,62
Mg 2+ 97,28

The chemical composition and the fact that the mineral water is microbiological pure are proved
by certificates issued by the Ministry of Health from Romania, by the laboratory SNAM/1999 and by the
Chemistry Lab VITTEL S.A.-France (Rapport D'Essai No C3-229/14.09.1992, M93/60/21.09.1993).
Merchandising features: mixed waters bicarbonated, with calcium, magnesium and an
insignificant iron content.

3. The activity of the company Romaqua Grup S.A. Borsec on national and international level
Regarding the volume of the market, at the end of 2011 ,the romanian market for bottled water
has reached 12 million hectoliters and a value of 1.4 billion lei. This quantity represents a consumption of
54.55 liters/person and an increase in consumption with 3% compared to 2010. In 2012 the consumption
of natural mineral water will have an increasing trend, between 3% and 5%. 90% of the population in
55

Romania prefer the local brands because of the reputation and because of the high price of imported
products. The consumption of mineral water in Romania is two times lower than the european average,
although Romania is the third country, after France and Italy, having a good potential for resource
exploitation.
The most important competitors in the romanian market are : Romaqua Group, European Drinks,
Coca Cola, QAB, Apemin Tusnad. The market share for Borsec is 26% on the mineral water market,
followed by Coca Cola, according to data provided by the research company Nielsen. The cumulative
shares in volume and in value are presented in the table below (e.g. Table 2) :

Table 2: Top 5 producers and top 5 brands of mineral water (apr. 2010 - march. 2011)
Cumulative share in volume (%) Cumulative share in value (%)
Producers:
Romaqua Group
Coca Cola
Own brands
European Drinks-Food
Bucovina Enterprises
59,5 67,0 Romaqua Group
Coca Cola
European Drinks-Food
Bucovina Enterprises
Own brands
Brands:
Borsec
Izvorul Alb
Izvorul Minunilor
Bucovina
Calipso
43,2 55,2 Borsec
Izvorul Alb
Izvorul Minunilor
Dorna
Bucovina

The bottled mineral waters represent a traditional market, highly fragmented from the point of
view of the number of producers, with famous brands and a high degree af loyalty from consumers.
In 2010, Romaqua Group has recorded a turnover of 142,5 million euro, 52% being represented by
Borsec with sales exceeding 335 million liters. From this volume, only 2% were exported. In 1805 Borsec
mineral water was exported only in Hungary and in Austria. At the moment, the most important market
for export is Hungary. Other markets for exports are : USA, Canada, Greece, Moldavia, Denmark,
Holland, Great Britain, Israel, Taiwan, Lebanon.

4. Research methodology
The topic of the research is called Reasons and buying behaviors of mineral waters by the
segment of young population from Brasov. Borsec has experience in offering a 100% natural water and
in branding, combined with a deep understanding of the way in which consumers think, these being in a
unique position for sending the message of vitality.
This market research will offer specific information about how consumers perceive the quality of
mineral waters offered on the market, about their buying behavior regarding these products and the
reasons for purchase.
The qualitative analysis method chosen is the depth semi-structured interview ( semi-directive).
This method was used in order to find out in detail the reasons and buying and consumption behaviors of
mineral waters. This direct communication technique represent a free conversation, a dialogue, a semi-
directive communication which involves the formulation by the researcher of questions with the aim to
find out from the interviewed persons, in detail, opinions, perceptions, attitudes regarding the topic, in
order to discover the main reasons of its behavior.
Because the issues linked to consumer satisfaction regarding Borsec mineral water are diverse, it
is necessary to structure the interview based on a list of topics or more important issues. These issues are
intended to be deep and are approached by the researcher when are not brought in discussion by the
subject of interview.
The population taken into account includes most young people from city of Brasov, Brasov
county, which are pupils, students or have a stable job.
From 50 persons, 8 persons were chosen randomly, as follows:
- A young man and a young woman, students at Transilvania University from Brasov, with age
between 19 and 23 years old.
- A young girl, pupil in the 12th grade at the Unirea National College, with the age between 16
and 19 years old.
56

- A young woman and a young man employed as skilled workers, age between 26 and 30 years
old.
- A young man employed as an unskilled worker, age between 23 and 26 years old.
- A young man without job, age between 19 and 23 years old.

5. Research objectives
The following research objectives were established:
1. Identification of interviewed subjects opinions regarding the mineral waters from the romanian
market and identification of most popular and consumed mineral water;
2. The satisfaction and contentment degree of interviewed subjects regarding the mineral waters
offered on the romanian market;
3. Identification of purchase methods and frequency of mineral waters purchase
4. Finding out opinions regarding design and aesthetics of mineral waters with Borsec brand.
5. Opinions regarding advertisements made by mineral water producers on the romanian market, in
particular Borsec brand.
6. Identification of opinions regarding the price of mineral waters on the romanian market.

6. Results of the research
Analyzing the subjects opinions regarding the mineral waters from Romania, half of those
consider that on our market there are many brands of mineral water, and less than half say that these are
very good. One fourth of the subjects say that the mineral waters are healthy, with healing effects and
with a balanced content of minerals. Among the subjects opinions were noticed with a low frequency
ideas that the mineral waters from our country are not appreciated at their true value and that they are
better than those from other countries from the European Union. Half of the subjects say that the best
mineral water is Borsec, on the second place being Perla Harghitei with a quarter of the answers, followed
by Dorna and Biborteni, each with one answer.
Regarding the opinions on Borsec mineral water, those are varied.
of the interviewed persons of the research consider that this mineral water is slightly too fizzy.
Two of the subjects say that the water maintains the bubbles even after the bottle is opened several times
and almost half of the persons say that water has a good taste, but a little bit salty. Only a few say that
the water is naturally fizzy, that is recognized at the international level.One fourth of the subjects say that
this water is one of the purest.
Half of the subjects say that they have the possibility to choose when it comes to mineral waters,
more than half being satisfied by the offer of mineral water from our market, while only one fourth are
very satisfied. Half of the subjects are very satisfied with Borsec mineral water,while one fourth say that
they are a little bit dissatisfied.
Regarding the quantities of mineral water purchased most often by the subjects, one can notice
the fact that the quantity of two liters appears most often, followed by 1.5 liters. Some persons buy a
pack, others buy one liter and others half a liter.
The buying frequencies vary from one person to the other. The most often water is purchased
after a few days, than weekly, and only one person says that buys mineral water daily.
Five of the interviewed subjects say that the mineral waters are a bit overpriced for the romanian
market, while only three say that the price would be affordable. Half of the interviewed persons say that
the price of Borsec mineral water is too high, only two say that the price is affordable and only one
person say that the price is in accordance with quality.
All the interviewed persons have mentioned the fact that the promotional activities and
advertisements from Borsec were noticed at television. Internet, press, radio or sales points were answers
with a frequency of 1 in subjects opinions. Opinions regarding advertising made by Borsec are different.
Only one quarter of the interviewed persons consider that the company has a good advertising, while
other opinions regarding this issue are divided: the advertisements are conceited, there is no focus lately
on correlating the brand with natural, value and perfection, and the advertising is weak in comparison
with competitors.
Half of the interviewed persons are influenced by package when they buy the Borsec mineral
water and the other half are not influenced. Three of the subjects mention that the Borsec mineral water
has a bottle with thin neck which can be easily handled. Most of the interviewed persons say that the
colors from package, blue and green inspire them purity, natural and cold water while only one person
says that the dark blue color does not give a good impression. Less than half of the interviewed persons
57

say that all information, slogan and validity term are well presented on the label and are sufficient for
each customer. One person says that the package looks too old and gives the impression of a low quality
water and the label is not attractive. Two of the interviewed persons say that the bottle loses its form after
part of the water was consumed. Regarding opinions on improving and changing the package for Borsec,
there were many proposals. Half of the subjects wish that the mineral water to be bottled in glass and not
in plastic bottles, one fourth wants to find this water in bottles of 2 liters or in larger quantities that one
can find on the market. Two of the interviewed persons say that the package should not be changed or
improved, being proper for the product. We can notice other opinions with a lower frequency and desires
that the Borsec mineral water to have a cooler design, colorful, a better visual look and a bottle made of a
tougher material.
Regarding the slogan of Borsec mineral water, one fourth of the persons say that it symbolizes the
quality of Borsec mineral water and fits because it is recognized on international level as the best mineral
water. There are also some negative opinions, one subject saying that the slogan is false and another
person saying that it is exaggerated.

7. Conclusions
The beautiful history of this true romanian brand dates back 2000 years ago. In 1806, when
Borsec became an industry, it offered the opportunity to many people to benefit from the unsurpassed
taste and exceptional qualities of its mineral waters.
The behavior of young people from Brasov regarding mineral waters show the fact that the
frequency of purchase is high enough and quantities are normal, in bottles of different sizes. Young
people are generally satisfied with the offer of mineral water and with the brand Borsec.
Regarding the variety of the mineral waters offer, young people consider it very diverse and the
volume of the offer is considered high. The price for mineral water on our market is considered too high.
The promotional activities of companies and advertising influence in a small degree the buying behavior,
as well as the package. One can notice that advertisements for Borsec were best remarked at television,
but they are considered weak in comparison with competition.

8. References
- Banu, C. (2007) Suveranitate, securitate i siguran alimentar. Bucureti: ASAB.
- Dima, D.; Pamfilie, R.; Procopie, R. (2001) Mrfurile alimentare n comerul internaional.
Bucureti: Editura Economic.
- Lefter, C. (2004) Cercetarea de marketing Teorie i aplicaii. Braov: Infomarket.
- Malhotra, N.K. (2004) Marketing research. An applied orientation. New Jersey: Pearson
Education International.
- Neacu, N.A. (2012) Merceologie alimentar. Braov: Editura Universitii Transilvania din
Braov.

58

MARKETING MIX ANALYSIS FOR ROMANIAN CLOTHING MARKET

BOTA Marius
Teaching assistant / Ph.D., Faculty of Business /Department of Hospitality, "Babe-Bolyai"
University, Cluj-Napoca, Romania, marius.bota@tbs.ubbcluj.ro

COSMA Smaranda Adina
Associate professor / Ph.D., Faculty of Business/ Department of Hospitality, "Babe-Bolyai "
University, Cluj-Napoca, Romania, smaranda.cosma@tbs.ubbcluj.ro

FLEERIU Cristina
Ph.D. student, Faculty of Economics and Business Administration./Department of Marketing "
Babe-Bolyai " University, Cluj-Napoca, Romania, cristinafleseriu@yahoo.com

Abstract: Today the business environment is continually changing. The Romanian clothing market is a
crowded one with a lot of powerful competitors. The paper analyses what kind of marketing mix politics are used by
the companies involved in clothing sector. The main goal of the study was to identify the attitude of the Romanian
people regarding the acquisition of clothes and the characteristics of the supply on clothes. The competition
appeared and the clothing companies try to differentiate itself form others using marketing mix instruments. The
Romanian companies should adapt their offer, taking into account the costumers specific needs and wishes.

Key words: marketing mix, Romanian clothing market, supply on clothes, demand on clothes

JEL classification: L63, M31

1. Introduction
Today, more than ever, the business environment is continually changing. The clothing industry
is a very global industry, with constantly increasing trade flows all over the world. The Romanian
clothing industry has a long tradition and experience from the 19
th
century, as well as a good fame around
the world as its products are present in many countries of the world. The Romanian clothing market is a
crowded one with a lot of powerful competitors, especially Asian firms with their cheep products.
Companies are today aware that they must offer the right product, in the right place, at the right price and
at the right moment of time in order to be competitive.
Since 1 January 2005, The WTO Agreement on Textile and Clothing no longer exist. There was
implemented a measure stipulated for some time, that is the total abolishment of the quota system for the
imports of textiles and clothing. Before the Agreement took effect, a large portion of textiles and clothing
exports from developing countries to the industrial countries was subject to quotas under a special regime
outside normal GATT rules. The total liberalization of the world trade with textiles and clothing opened
the way to the imports from Asia as well as to the interest of the big companies for the cheap workforce
in these areas. The Asian firms (Chinese, Indian) and the companies from Turkey became powerful
competitors on both domestic and foreign markets. China becomes the biggest player on the UE market
with a share of almost 30% in the European market. China is the most competitive production base for the
time being due to an immense oversupply of labour in the rural provinces and young educated workers
who make possible the keeping of the wages at very low levels.
To determine the role of the clothing industry in national economy is enough to look at the
following aspects:
- Production of clothes represents 2.6% of the total production achieved in the country;
- Clothes exports represent approximately 10% of Romanian exports;
- The 215,000 employees of companies working in the clothing industry is a significant proportion
of approximately 13% of employees in Romanian industry;
- Before joining the European Union, Romania has an honourable position among major global
suppliers of clothing. Exporting garments worth 4.63 billion dollars, Romania ranks 11
accounting for 1.7% of world clothing market.
Competition intensifies in almost every industry, so companies must develop innovative products
and business processes to survive. Successfully products must touch the customer emotionally. A clear
59

understanding of the customers psychology is essential for companies to sustain themselves in the
market. The companies formulate their strategies in such a way that the product become more appealing
to the consumers, and turns an ordinary customer into a long term client. Brands plan their marketing so
as to create and maintain a long term relationship with the customers.

2. Material and method
We used for our investigations exploratory and descriptive research. In order to a closely
identification for some problems and the specific ways to solve those it is been used exploratory research.
To obtain information about situation already existing on the market it is been used descriptive research.
We obtain primary and secondary data through:
- two personal (face to face) interviews based on short questionnaires one for the demand and the
other for the supply ; the information we got was neither sensitive, nor threatening; we used
clear, unambiguous, structured and unstructured questions; for the clothing supply we got
responses from a representative group of 150 stores; for the clothing demand we used for
identifying the representative sample STATGRAPHICS soft; for a standard error of 0,03 the
sample was 1068 Romanian people;
- statistical data and published studies;

The main goal of the first conducted study was to identify the attitude of the Romanian people
regarding the acquisition of clothes. The questionnaire was structured in two parts: the first one contains
eight questions which give us basic information like:
- The main reason for buying clothes;
- The place where these clothes are bought;
- The appreciation of the importance of some aspects which determine the acquisition;
- The fashion genre preferred by the Romanians;
- The appreciation of the quality of the products made in: Romania, China, Turkey, U.S.A. and
E.U.;
- The suggestions of the Romanian customers regarding the improvement of the clothes made in
Romania;
- The average monthly amount spent on clothes;
- The opinion of the Romanians regarding the recognition of Romanian brands at national level.

The second part of the questionnaire includes questions used for the classification of the
respondents: the age of the respondents, the gender, their education, their occupation and their monthly
average income.
The main goal of the second conducted study was to identify the characteristics of the supply on
clothes. The questionnaire is structured in two parts: the first one contains questions which give us basic
information:
- The clothing style for sale in Romanian stores;
- The targeted market segment for stores;
- The criteria on which the supply is established;
- The brands for sell in the store;
- The made in country for the clothing offered for sell;
- The appreciation of the clothes made in Romania;
- The income of the target market segment;
- Methods for pricing the products.
The second part of the questionnaire includes questions for the classification of the respondents
in this case the stores.

3. Results and discussions
The starting point of our investigation was the situation of the Romanian companies involved in
the clothing sector after the total liberalization of the world trade with textiles and clothing and the crises
period. Our research was conducted on two separate studies: one for demand and the other for supply.
The first study reveals that more than a half of the interviewed persons are buying clothes
because of the need (Figure 1).
60

Figure 1: The main reason for buying clothes

Source: own calculations based on questionnaire

The second reason for buying clothes is the pleasure of buying according to 23% of the
interviewed people. Only for 12% of the Romanians, the sales represent the main reason for buying
clothes.
Table 1 shows the aspects which are influencing the buying decision and their importance. Using
the calculated average for each aspect it can de made a top of this aspects. It can be notices, that the
Romanian customers consider the material from witch the clothes are made being the most important
aspect in the buying process.

Table 1: The importance of the aspects which are influencing the buying decision
The answer

The aspects
Very
important
4
Important

3
Less
important
2
Not
important
1
Weighted
Average

The brand 259 363 316 130 2.7
The made in country 154 379 368 167 2.49
The design 471 430 121 46 3.24
The price 472 420 139 37 3.24
Its fashionable 209 372 325 162 2.59
The advice of a person 87 292 440 249 2.2
The composition of the
material
505 458 83 22 3.35

The second important aspects are the design and the price, followed by brand, fashion, and the
made in country. On the last place it can be find the advice of a person.
Analysing the respondents answers, the Romanian clothing customers profile is:
- Due to the fact that the clothes are strictly necessary products all the people regularly become a
customer. The percentages of the women and men buying clothes are almost equal. The
customers form urban areas spent more on clothes that the people from rural areas;
- The majority of the Romanian customers of clothes has a high-school degree;
- The biggest segment of the population (40%) earn between 400 and 1000 RON per month;
- For 57% of the Romanian costumers the need represent the main reason for buying clothes;
t he need
57%
pleasure of buying
23%
sales
12%
making a good deal
7%
anot her aspect
1%
61

- Almost 70% of the costumers prefer specialized stores for buying clothes;
- Only a very small percentage (4%) of the Romanian customers are using the Internet or the
product catalogues as an alternative for buying clothes;
- It can be notice that the material from which are made the clothes represent the most important
criteria in buying decision for the Romanian customers;
- The product design and price represent the second most important criteria in the decision of
buying clothes;
- The Romanians are preferring the classical, casual and sport clothes;
- The clothes made in the U.S.A. and European Union have an image of best quality products;
- The Romanians consider the staff made in China and Turkey having the lowest quality
comparing to the medium quality clothes made in Romania;
- Most of the Romanians (36%) spend monthly between 50-100 RON for clothes;
- The majority of the Romanian costumers spend 53.11 RON per month for buying clothes;
- Half of the Romanian customers spend on clothes less than 70.93 RON, and the others 50%
spend over this value;
- The opinion of the customers is that the notoriety of the Romanian brands is at a very low level.
The second study focused on supply offered by Romanian clothing market. As we assume, it can
be notice in Figure 2, that the clothes for women are present in almost all the stores, followed by the
clothes for men and children. It seems that the women are the best customers for buying clothes.

Figure 2: Target market


It is important to say that there are stores selling clothes for all categories (women, men and kids)
and stores specialized in sealing clothes for one category.
The study was conducted on the classical 4Ps of marketing mix for clothing industry as: clothing
product, price, placement and promotion. For product we consider the following aspects: the clothing
style for sale in Romanian stores, the criteria on which the supply is established and the made in country
for the clothing offered for sell. In most of the stores there are casual clothes for sell. The elegant style is
the second most sold type of clothes. The sport and business clothes are present in many of the studied
stores (Figure 3).

Women
Men
Kids
Another
62

Figure 3: Clothing style for sale in stores


In Figure 4 we can observe the criteria on which the range of existed products to be sold is
established. We can easily notice that the most important aspect used to establish the supply is the
clothes brand. On the second place are situated the design and the composition of clothes. It is interesting
to observe that the price does not represent such an important criterion, occupying only the fifth position.
For many stores the made in country doesnt represent an important aspect to establish which products
are for sale:

Figure 4: The criteria on which the supply is established


Although the general impression is that in Romania is being sold only the clothes made in the
cheap Asian countries, the stores we studied present a different reality. In most of the stores are sold
clothes made in UE (excepting Romania), or made in Romanian factories. Only on the third and fourth
places are the clothes made in China and Turkey (Figure 5):

Sport Casual Business Elegant Another
The brand
The made
in country
The design
The price
The material

Another
It is in
fashion
63

Figure 5: The made in country


We have considered for price the used methods for pricing the products and the income of the
target market segment.
Figure 6: Methods for pricing the products


In Figure 6 there are presented the methods used by the stores to establish the prices for their
products. Hence the frequently used method is taking into account the costs, 45% of the stores used it. We
can also observe that the stores which take into account the competition or the demand are in equal
percentages 25%.
In Table 2 it can be notice that half of the stores which were part of this study have as a target the
persons with medium income. It is interesting the fact that almost 46% (24.67% + 20.67%) from the
stores consider that they are the target for people with big income. Only 4.66% (3.33% + 1.33%) form the
stores consider that their target are the people with small income. These answers prove once again that the
price doesnt anymore differentiate the company from the competition.

Table 2: The income of the target market segment

Score
Big
Income
1

2

3

4
Small
Income
5
Frequency 37 31 75 5 2
Relative
frequency 24.67% 20.67% 50% 3.33% 1.33%

From distributions politics points of view we consider an important thing to know if the store
belongs to a Romanian manufacturer or to an importer. We found out that one third (33%) of the stores
belong to a Romanian manufacturer and the other two third (66 %) represent a foreign brand (Figure 6).

Romania
China
Turkey
U.E. - without Romania
S.U.A.
Another country
Another
method
5%
Taking into
account the
costs
45%
Taking into
account the
competition
25%
Taking into
account the
demand
25%
64

Figure 7: Romanian manufacturer type of the store


If we refer to the Romanian manufacturer it can be noticed from Figure 7 that the most of the
studied stores represent the company stores, followed by authorized distributor and franchise store in the
same percentage (almost 14% each).

Figure 7: Importer type of the store


In the case of importers the fact is different (Figure 7). The company store represents the biggest
percentage (43%) and the franchise store represents 32%, an important percentage. This fact shows us
that the franchise system is more used in developed marked countries than in Romania.
Analysing the question regarding the emplacement of the stores we can find interesting things. It
looks like the actual tendency is that the stores are placed in a mall or in a shopping centre. The stores
which are isolated are not preferred by the sellers on the Romanian market (Figure 8).

Figure 8: The location of the store


The company
store
Authorized
distributor
Franchise store
The
company
store
Authorized
distributor
Franchise
store
Independent
store
6%
Another
location
1%
Mall
74%
Shopping
center
19%
t
65

As we expected the majority (69%) of the Romanian customers is buying the clothes from the
specialized stores (Figure 9). Fairs and expositions are preferred by 16% of the customers for buying
clothes. Only very small percentages (4%) of the Romanian customers are using the Internet or the
catalogues as an alternative for buying clothes. A significant percentage of 7% of the Romanians is
buying clothes from the market, second-hand stores and from the black market.

Figure 9: The place of shopping


As we expected the majority (69%) of the Romanian customers is buying the clothes from the
specialized stores (Figure 9). Fairs and expositions are preferred by 16% of the customers for buying
clothes. Only very small percentages (4%) of the Romanian customers are using the Internet or the
catalogs as an alternative for buying clothes. A significant percentage of 7% of the Romanians is buying
clothes from the market, second-hand stores and from the black market.

Figure 10: The location of the store


If we analyse the question regarding the emplacement of the stores we can find interesting things.
It looks like the actual tendency is that the stores are placed in a mall or in a shopping centre. The stores
which are isolated are not preferred by the sellers on the Romanian market.
Further we analysed the promotional mix (Figure 11). The study reveals that the advertising is the
most used promotional method, followed closely by sales promotion.

Independent
store
6%
Another
location
1%
Mall
74%
Shopping
center
19%
t
66

Figure 11: The promotional mix


From store representatives responses it appears that both public relations and direct marketing are
pretty much used as methods to promote the clothing products.

4. Conclusions
The crowded Romanian clothing market create the necessity and for marketers the opportunity to
an efficient use of marketing mix elements for differentiation. The opinion of the customers is that the
notoriety of the Romanian brands is at a very low level.
The domestic market seems lost for the Romanian companies in the face of the Asian imports
especially after the total liberalization of the world trade with textiles and clothing. There is no market in
Romanian at this moment for the domestic products. Too many products are manufactured that the
domestic market cannot absorb. The specialists maintain that, unless one has a network of shops, one
cannot adapt the price of the products according to the market conditions, cannot withdraw a product that
does not sell; all in all, one does not have many chances.
The correlation between the demand and supply is not very appropriate. The Romanian
companies must adapt their product offer, taking into account the costumers specific needs and wishes
and the characteristics of the competition. The most important suggestions made by customers to improve
the clothes produced in Romania are:
- To improve the design;
- To have more models;
- To find all the measures;
- To adapt the products to the current fashion tendencies;
- To improve the quality of the row materials;
- To improve the quality of the execution.
The competition appeared and the clothing companies try to differentiate itself form others using
marketing mix instruments. The Romanian companies should adapt their offer, taking into account the
costumers specific needs and wishes.

5. References
- Agins, T. (2000) The End of The Fashion: How Marketing Changed the Clothing Business
Forever. Harper Paperbacks, USA.
- Bota, M. (2005) The impact of the accession to the UE on the Romanian textile industry, Studia
Universitas, Series Negotia, Vol. 1, p. 113-119.
- Bota, M. (2009), The Romanian clothing market, Studia Universitas, Seria Negotia, Vol. 3, p.
103-107.
- Bota, M.; Boriceanu, M.; Cosma, S.A. (2008) The segmentation of the Romanian clothing
market. Analele universitatii din Oradea - Seria Stiinte economice, Editura Universitatii din
Oradea, Vol. IV, p. 764-770.
229
204
138
129
0
50
100
150
200
250
ADVERTISING SALES
PROMOTION
PR - PUBLIC
RELATIONS
DIRECT
MARKETING
67

- Burns, L.D.; Bryant, N.O. (2007) The Business of Fashion: Designing, Manufacturing and
Marketing. USA: Fairchild Pubns.
- Cosma, S., Bota, M. (2004) Bazele Marketingului. Editura Alma Mater, Cluj-Napoca.
- Frings, G.S. (2007) Fashion: From Concept to Consumer, 9
th
Edition. SUA: Prentice Hall.
- Johnson, M.J.; Moore, E.C. (2000) Apparel Product Development, 2
nd
Edition SUA: Prentice
Hall.
- Lal, K., Mohnen, P.A. (2009) Innovation Policies and International Trade Rules The Textile
and Clothing Industry in Developing Countries. USA: Palgrave Macmillan.

68

THE UNDERSTANDING OF BRANDING PROCESS AS A MANAGEMENT TOOL THAT
HELPS THE COMPANIES TO DIFFERENTIATE ON THE MARKET

BUDAC Camelia
Assistant professor / Ph.D., Faculty of Economics/Department Management, Marketing, Business
Administration "Lucian Blaga" University, Sibiu, Romania, camelia.budac@ulbsibiu.ro

BALTADOR Lia
Teaching assistant / Ph.D., Faculty of Economics/Department Management, Marketing, Business
Administration, "Lucian Blaga" University, Sibiu, Romania, lia.baltador@ulbsibiu.ro

PETRACU Daniela
Assistant professor / Ph.D., Faculty of Economics/Department Finance, Accounting, "Lucian
Blaga" University, Sibiu, Romania, daniela.petrascu@ulbsibiu.ro

Abstract: This paper aims to be a brief presentation of branding as a management tool, both on its
importance as a tool for the success of an organization on the market and the low level of understanding and use of
the Romanian managers.
An emerging economy like Romanias today needs strong brands that could support the Romanian
organizations in a global economy to win new markets and enforce their products and services, to distinguish
themselves from their competitors and provide a more flexible supply range.

Key words: brand, branding, brand values, brand positioning, brand identity

JEL classification: M31, M39

1. Introduction
The term brand is an English word; its origin comes from the language of the North Germanic
tribes (Scandinavia) - brandr - to burn that describes the identity of a product, service, organization or
location.
American Marketing Association (AMA) defines brand as a name, term, sign, symbol or design,
or a combination of these terms, designed to identify products or services of one or more sellers and to
differentiate themselves from competitors with the purpose to have an advantage against them.
To expand the scope of the brand concept, we will highlight some definitions given by the
pioneers and great theorists of branding. Walter Landor, founder of Landor Associates, and also one of
the fathers of modern branding said: "In short, a brand is a promise. We identify and validate a product or
service that delivers a promise of satisfaction and quality. "
Another industry pioneer and a famous scholar in the field, Wally Olins (2009) said that "a brand
is, ultimately, an organization, product or service with personality" while one of the most appreciated
authors at the moment, Marty Neumeier (2003) further summarized by stating: "A brand is an instinctive
and personal feeling, towards a trademark, institution or product."
The last quote we will mention is the one of the famous professor David Aaker (1996) who stated
that "a brand is the most valuable real estate asset in the world, a corner in your consumer's mind. The
brand is a collection of perceptions in the minds of consumers. "

2. Sections
According to their features, brands can be of several types, classified as follows:
- Product and / or service brand, e.g. iPhone, Clorox, Fulga, Gmail, etc.
- Organization brand, e.g. Google, GE, Coca-Cola Company, Crucea Roie (the Red Cross), BCR,
etc.
- Personal or individual brand, e.g. Oprah, Martha Stewart, Mircea Badea, etc.
- Location and / or country brand, e.g. New York, Munich, London, Spain, United States, Iceland,
etc.

69

Why brand and not trademark? The meaning of the English word brand includes the concept of
trademark (which it does not identify itself with) and in addition it refers to intangible, abstract elements.
If a trademark is a sign capable of graphic representation serving to distinguish the goods or
services of a natural or legal person from those of other people, the brand refers to other attributes
designed around a brand: reputation, trust, preferential options, and so on. We could thus define a brand
as the sum of tangible attributes (name, visual identity, smell, sound) and intangible ones (positioning,
values, personality) symbolized by a trademark.

2.1. About branding: definition, concept
Branding is designing and managing brands to increase their net value. This activity is also called
brand management; either of these two definitions name basically the same thing stated above. In his
book "Brand Simple", Allen P. Adamson (2009) defines branding as "the execution and management of
things that determine how people perceive the brand."
Like any other asset, brand management is very important for the success of the company in the
market. "If launched and supported effectively, the brand is a major corporate resource - sometimes the
most valuable financial asset of an organization. The brand, as finance, investment, human resources,
research and development, marketing, information technology and other corporate resources, needs
authority, rules, proper funding, commitment and management. If thus supported the brand-resource will
be as effective as any other resource, if not, the resource is exhausted."(Olins 2009)
Brand design, launch and management involve both human and financial resources and the
cooperation of several professionals from different disciplines such as design, marketing, human
resources, finance and management. The brand consulting agency has the role of management and
coordination in the process of branding and the general manager is the main responsible within the
company. Branding involves a well organized process, with clear stages, whose complexity varies only
for reasons related to the size of the organization starting such a project. This process, together with its
component stages, each stage specificities and deliverables that can be obtained at the end of each stage
will be dealt with below. It is an accurate methodology that requires a mix of investigation capabilities,
strategic thinking, and excellence in design as well as project management.
Successful management of a brand must be focused on values capitalization so that these
attributes could represent a natural extension of general perception. The stated goal of any brand manager
is to strengthen the brand values so that they may be easily recognizable and identifiable to the public.

2.2. Stages of branding
In management we got used to define each activity as a process, as long as there is an input and
an output; it may be defined in stages, standardized and optimized. The same thing happens in branding
where, we have an input the client's need, his brief and an output the launching of its new brand
identity, with one remark: the process is ongoing and the feedback from the market determines the
strategy and tactics that will be implemented in order to maximize brand capital. Figure 2.1 illustrates
such a process, a process which we will further develop.

70

Figure 2.1 Stages of branding

Stage 1 - Research and analysis

In this first phase we get to know the organization, its mechanisms, the people behind it and those
whom the organization serves. We begin by analysing the whole business to have a general view: the
business model and strategy, marketing strategy, current and past communication, portfolio of products /
services. In order to assess the importance of criteria and objectives in the decision of company
rebranding, there are used strategic tools such as "corporate brand matrix". There will be scheduled
individual interviews with a fixed duration of up to one hour with the general manager, company staff and
strategic partners. Then we move to market and consumer research in order to have a closer
understanding of market needs and our customers motivators.
Of course, the success of a company on the market is also due to an accurate and constant
assessment of supply and strategy of the direct competitors. This should also be analysed to ensure that
the criterion of differentiation is based on solid arguments.

Stage 2 Strategy

At this stage, the consultants knowledge will be correlated with the business expertise of the
company; there will be analysed and discussed specific situations and cases; the brand strategy will be
clarified by restricting the focus until finding that core idea which will be the start for the new brand.
There should be used a summary and specific procedures to see the big picture, to create a constructive
dialogue, to discover the essence of the brand and develop a platform to support these ideals.
The process will be developed through a series of brainstorming sessions and a final workshop
under the guidance of a strategic consultant, with the purpose to find those unique attributes and
positioning differentiators that a brand should have.
Thus, the brand strategy document will be composed of the following elements:
- Introduction to the brand universe - a brief description of the conceptual universe of the new
brand;
- Mission and Vision - a mission statement and vision of the brand;
- Brand values - naming them with according explanations;
- Brand Positioning - is a comprehensive formula of how we deliver our vision on the market,
bringing all the people involved a common idea. This positioning defines the category to which we
belong to, the consumer benefit and his reason to believe at the highest level;
- Brand character: the constituent elements are grouped into two categories, as follows:
- two, three features are prominent, a principle applied perfectly in branding as well, in
fact, there are the features that give meaning and coherence to the brand;
- ten, fifteen main features that complement the prominent ones in order to create an
overall identity image of the fundamental features that define it;
- Brand tone of voice: defining tone of voice used in brand communication.
Also in this stage the creation brief will be written for the visual brand identity, and if considered
appropriate the name may be changed, this is also the appropriate moment to set naming strategy.
71

Naming is basically the brand name (verbal identity) as the first and most important contact of a
brand with the public and consumers. It may bring to the brand favourability and benefits or throw it into
obscurity. A "winner" name must be unique, memorable and legally available, but above all it must be
consistent with the strategy and visual identity. Name development should consider criteria that vary from
language to marketing as follows: to be memorable, easy to pronounce, to support the message and brand
positioning, easily to be searched especially in the current context - social media, available on Internet, to
be legally registered as a trademark, not to have connotations or unwanted meanings in other languages,
and not in the least, to be agreeable!
Another important criterion is the language related to creating name sound.

Stage 3 Identity

Symbols imply intelligence, imagination and emotion in a way that no other form of expression
does not, say those from the University of Georgetown.
After the agencys briefing, the creative team will begin the first stage of symbolist search to
shape the creative approaches, both visual and verbal. They will come up with an initial set of identity
proposals which will be presented to the top management; in fact, this is the first process of elimination
and feedback. Based on the feedback received both the final candidates and primary uses will be
identified.
On the basis of specific evaluation methods a selection committee presided by the general
manager will choose the final concept. If necessary, internal questionnaires will be used as well as a final
pre-test of the concept on a number of selected existing customers. The same process is used in the case
of verbal identity with the remark that these final candidates are pre-tested in terms of international
significance (if any) and evaluated through focus group and a legal availability research will be made.
Depending on the option chosen, there will be defined communication applications on various
materials, fonts and colours used, imagery, if the case, sound and animation criteria, the final brand
architecture.
In this stage the following items related to brand identity will be developed:
- Visual identity: logo, colour palette, letter types (fonts), line design, stationery items (business
cards, letterheads), elements of presentation (ppt);
- Verbal identity: name, slogan, key messages;
- Elements of signage;
- Animations and sound;
- Other factors to shape the visual identity: mascots, avatars, illustration, photography;
The expected results following this stage, take in consideration: establishing key messages,
symbols research, the final name candidates, creating visual identity, fonts and color, sound and
animation, applications, completing brand architecture.

Stage 4 - Brand reality / Conceptual universe

This stage aims to create the universe and the premises which help the brand to grow organically
and to show its personal role and influence to create value. Reality shows that each brand which has
proved successful on the market, has a conduct of a character; a character that guides community to
express itself coherently and consistently in accordance with its character. It evolves in line with
community it belongs to and it sets new objectives along its development.
Using criteria of branding, linguistics and psychology there will be created the criteria for brand
personality, a vision document that will define its evolution scenarios as well as the tone of voice of the
organization. Then there will be remapped all the points of interaction with the brand, thus defining the
universe of its existence. It will be ensured that the brand experience will be comprehensive and coherent
so that each group of decision makers could be part of the same experience.
As branding operates with perceptions, it is absolutely necessary to focus on points of interaction
(or contact) with the consumer; in Figure 2.2 the most of them are listed.

72

Figure 2.2 Points of brand interaction

The expected results following this stage, take in consideration: creating the documentation of
vision and brand personality, the tone of voice and ways of expression of the brand, creating applications
for each interaction.

Stage 5 - Implementation and launch

As it is in life, development is a long process, the way you present yourself to your audience is
essential for later success. Thus, the brand must be coherent and consistent, from the inside up to the
external launch, so that maximum impact is obtained.
Creative team and the consultant's communications department will be involved in finalizing the
implementation of identity, web presence development and communication of basic materials.
An external consultant will start the process of trademark protection, according to the customer's
specifications. A strategic consultant and the PR and communications team will work closely with the
General Manager to prepare the internal launch and specialized seminars with the company management.
The same formula will train and assist the external launch to all the publics of the newly created brand.
Finally, constant evaluation criteria will determine the success of the new brand on the market.
The expected results following this stage, take in consideration: completing the implementations
of identity, initiating the process of trademark protection, implementing applications and brand
architecture, developing web presence, internal and external launch, creating criteria for measuring
success.

Stage 6 - Management

Any strategic asset is consistent when supported by sets of rules and procedures, constant
evaluation and coherent actions. Successful management of a brand should be focused on capitalization
values so that these attributes would represent a natural extension of the general perception. The stated
goal of any brand manager is to strengthen the brand values so that they are easily recognizable and
identifiable to the public.
There will be created the final documents on strategy and communication standards, a brand
manual, preferably in electronic format in order to be easily modified, updated and maintained, and to
take constantly into account of the new developments occurred.
Since every brand needs guidance for organic growth will be created by the consultant with a
client team management model it using the company's internal resources and a special package designed
to integrate and account supervision.
73

The results obtained during this phase are: creating communication standards and brand manual,
account integration and supervision, post-launch evaluation and reporting.

3. Conclusions
We have shown in the above pages that branding is not just a marketing concept, but also an
excellent modern management tool which relates to business strategy, the company's communication,
human resources and financial value.
The ultimate goal of a branding program is to give a new breath to the organization and / or to its
products and services, to create prerequisites for leadership, to generate connections and emotions and not
in the least to generate more financial value, as margin of profitability and as an asset by itself as well.
A properly executed strategy, a positioning according to the needs identified in the market,
supporting brand values and a remarkable performance will create premises for success of the new brand.
So designing a brand through a well-executed branding program will generate reputation for an
organization, product and/or service, attract loyal customers and employees and it will bring more
financial value and not in the least long-term stability in the market.

4. References
- Aaker, David, Building Strong Brands, The Free Press, 1996.
- Aaker, David, Managementul capitalului unui brand, Brandbuilders Group, 2006.
- Adamson, Allen P., Brand Simple, Publica, 2009.
- Ctoiu, Iacob (coord.), Tratat de Cercetri de marketing, Uranus, 2009.
- Gladwell, Malcom, The Tipping Point: cum lucruri mici pot provoca schimbri de proporii,
Publica, 2008.
- Kotler, Philip, Keller, Kevin Lane, Managementul marketingului, Ediia a Va, Teora, 2008.
- Lindstrom, Martin, Branduri senzoriale: construii branduri puternice folosind toate cele 5
simuri, Publica, 2009.
- McEwen, William J., Fora brandului, Allfa, 2008.
- Muzellec, L. and Lambkin, M. C., Corporate Rebranding: the art of destroying, transferring and
recreating brand equity?, European Journal Of Marketing, 2006.
- Neumeier, Marty, The Brand Gap, New Riders Publishing, 2003.
- Olins, Wally, Manual de branding, Vellant, 2009.
- Olins, Wally, Noul ghid de identitate, Comunicare.ro, 2004.
- Porter, Michael E., Despre concuren, Meteor Press, 2008.
- Corporate University, Fundamentals of Marketing&Branding, suport de curs, 2005.
- Sinclair, Roger, The Encyclopaedia of Brands & Branding in South Africa, 1999.
- Trout, Jack, Ries, Al, Poziionarea: lupta pentru un loc in mintea ta, BrandBuilders, 2004.
- Trout, Jack, Trout despre strategie: cum s cucereti piaa i s ocupi un loc n mintea
consumatorului, BrandBuilders Group, 2005.
- Wheeler, Alina, Designing brand identity: a complete guide to creating, building and maintaing
strong brands, John Wiley&Sons, 2006.
- Corporate Univesity, Brand Leadership. Unveiling the True Value of Your Brand, suport de curs,
2005.
- Young&Roubicam Group, BAV Whitepaper, internet, 2003.
- The Chartered Institute of Marketing, Branding eGuide, internet, 2003.
- Interbrand, Brands and Branding, The Economist, 2004.
- Landor Lexicon, http://www.landor.com/index.cfm?do=thinking.dictionary.
- http://www.zibs.com/sinclair.shtml.

74

CAR PURCHASING SELECTION OF WOMEN AND MEN: A DIFFERENT BEHAVIOR

BUDI ONO, Gatut Luhur
Associate professor, Department of Management, University of Pancasila, Jakarta, Indonesia
gatutelbudiono@yahoo.com

ESENGALI EVNA, Sabirova Gulzhanat
Professor, Catherda of Law, Kazakh-Russia International University, Aktobe, Kazakhstan
Solnyshko080900@mail.ru

Abstract: Women and men are having a different buying behavior in selecting their type of car in terms of
class, style, and car size; these are influenced by age, class, and style as well as car size. Women are more car
efficiency minded instead of car technical characteristic evaluation. They need efficient car instead of luxury car or
stylish and sizy. Men are always choosing car efficiency instead of technical characteristics and sometimes
considering car class, style and car size. Compare to women who need more car efficiency, men are more detail
consider to car characteristics evaluation. Car seller explains efficiency superiority, practicality and car safety for
women, and explains to men technical characteristics, style and car size in detail. This is useful for auto
industrialists to modify its products for additional attractiveness, quality and size or car type preferably to
consumers; industrialist can improve sales volume later.

Keywords: womens choice, mens choice, characteristics, class, style and car size.

JEL classification: M10, M21, M31

1. Background of Information
Car ownership would really help women and men would be able to go any journey direction they
want. Car buying decisions is important for consumer to faster their daily mobility economically, faster
social access and comfortable, nevertheless car buying selection is more important. Presumably women
and men behavioral factors influence car selection efforts before buying.
Physically and psychologically women and men are having different needs, standard evaluation,
interest, and behavioral selection influencing their choice of buying car for daily activities match with
their needs criteria considers to cars characteristics, style, and cars size. Which car characteristics most
prominent have chosen by women and men, hence it is predicted that there is significant different
between women and men of selecting the car in terms of car class, style, characteristics and car size.
The paper has identify and limited to women and men behavioral factors influencing car selection
before buying a car, and provides behavioral differences total picture prior to car buying decisions. The
women and men car selection is influenced by some variables as in car characteristics, class, and car size
match with their criteria. They are few brands car users in Jakarta, the study did not distinguish the age of
the respondents.
The results of this study are useful for science to identify various factors affecting
women and men to choose their car, useful information for science development, specifically
concerning women's studies in the future. This research can be useful for women
and men consumers considering purchasing variety car standard selection. This research information will
be useful for auto industrialists to modify its products for additional attractiveness, quality and size or type
of car preferably to consumers, so that industrialist can improve sales volume later in the future.
This study would also useful for car dealers; they can identify how to persuade
consumers unboring and yet effective and well-targeted. The research results are also useful for
transportation policy makers or other vehicle trade and the role behavior of women and men in the
vehicles selection types before buying a car because of many factors that affect women and men in
selecting different attributes such as cars and women and men individual characteristics.
In recent years there have been some researches regarding economical product buying behavior
prediction. Some most up to date researches among other are in transportation and womanhood with
regard to auto mobile dynamic engineering and car ownership (Miller 1996), and destination interest
majority have driven behavioral change in car characteristics selection prior to buying decision as stated
by Salvini and Miller (2003) and PB Consult (2002). It is interesting to remember that car ownership
comprehension that buying cars should have considered to green environment. Analysis of individual and
75

families travelling around Indonesia has varied reflecting some differences in journey intention and
number taken by women and men. Data shows that women have different behavior in their trip model
compared to men. Most women are traveling short distances between home and their work office, most of
their journey in the context of the family as the primary role of housewife (Wachs 1997). Wachs also
have identified that the lower income women more likely to use public transportation to transport over
their economic activities. Mokhtarian (1997) found that women change their traveling behavior and mode
of journey due to traffic congestion; furthermore women are better to reduce car usage compared to men
(Matthies et al. 2002). Based on the fact, it can be estimated that there are differences behavior of
automobile ownership and usage behavior.
Sex differences may be driving behavioral differences vehicle ownership policies goals at all
levels of age (Prskawetz et al. 2002). The Widowed women as heads of households are less likely to
choose having a car and may have fewer cars compare to male household head car ownership and the
differences possibly occur even more dramatic due to higher age would diminishing trend of car
ownership. These trends indicate marital status and age affects car ownership rate, the older a person is
more likely to choose not to purchase or own a car. However, as an example that female drivers total
number showed an increase, while the percentage of men in American public riders tend to decrease,
according to information obtained from the Department of Transportation driver's rate of women rose
from 44% in the year 1972 to 49.7% in 2000, compared with the percentage of male drivers decreased
from 56% in 1972 to 50.3% in 2000 (FHWA 2004). These conditions are a sign that generally women
have more powerful influence in buying car process selection than men. Some data indicate half of new
cars bought by women and the marketing research Ford Motor Company stated that their research data
showed women influence 80% of car purchase decisions and tend to have different options or reasons for
car selection compared to men car buyers.
The way someone selecting and decide to buy car have been widely studied from different types
of studies. So far the transportation planners are always interested to understand deeper about the choice
of car type and how much the number of cars purchased by domestic consumers and how the disignation
of the use of vehicle, and actually there are a lot of research have been done by previous expert regarding
such matter. As an example, a similar field study carried out by Manski and Sherman (1980), multinomial
logit models have been developed to investigate how many cars have purchased and how the way to
select such purchased car. Several car type selection models have been developed for individual and
household owner of one or some cars in their house (Manski and Sherman, 1980). Mannering and
Winston (1985) model the number of cars, car type and the use of cars within an interconnected
framework; they form a separate model for an individual or household ownership of a car or some cars.
Hensher and Le Plastrier (1985) using nested logit structure to model car ownership structure based on
basic composition variety of options before buying a car. Brownstone et al. (1996) has developed buying
a car tendency using selection of stated-preference data. Their study has used six alternative hypotheses
with a different specific attributes. Yamamoto et al. (1999) developed consumer transactions competition
period risk model by estimating economic risks maybe occur for every transaction in order to determine
bargaining transaction separately considering choice differences possibility between survey respondents
and somebody who are not respondent observed during study. Relatively new research conducted by
Mohammadian and Miller (2002b, 2003a, 2003b) developed a study regarding dynamica of car selection
and selection of transaction type of car using nested logit, mixed logit, and machine learning methods.
The model uses dummy variables to specify sexes, nevertheless there have no research yet regarding car
type selection based on differences of gender behavior.

76

2. Conceptual Framework

Abolfazl (Kouros) Mohammadian, 2004, supported by some other similar research done by Ben-
Akiva and Bolduc (1996) and Bhat (2000) as well as (Mohammadian and Miller 2002a).

3. Hypotheses
The research predicted that there are significant differences between choices of car made by women
and men with regard to characteristics, class, style and size of the car. It is needed to find differences of car
buying selection between women and men and identify various factors influence car purchase selection
between women and men resulted in differences of car purchases between women and men.

4. Methodology
The research was inspired by previous research done by Abolfazl (Kouros) Mohammadian from the
University of Illinois, Chicago, USA, 2004. This type of research is a descriptive study carried out by doing
some testing quantitative hypotheses. This study is a survey aimed at testing the hypothesis about the
various factors that affect women and men choose the type of car in the social and economic life. They are
car users of some brands like Honda, Mitsubishi, Isuzu, Suzuki, Toyota, Daihatsu, Nissan, Mazda, Kia,
Daewoo, Hyundai, Timor, BMW, Peugeot, Renault, Citroen, Mercedes, Chevrolet, Chrysler, Jeep, Audi
and Ferrari in Jakarta. Respondents were randomly selected according to car owners convenience of how
easy they can be found in any place. Car user are located in Jakarta during 2008 amounted 533.992 car
buyer (Kompas, ATPM/ Gaikindo, 2008). It is necessary to determine sample techniques with convenience
sampling method of 100 respondents of all car users. The research used degree of confidence at significant
level o = 0.05, Bound of Error is 5% based with homogeneous population (Chochran, 1991). The research
used convenience sampling consists of 100 people applied to woman and man who use certain car as stated
above who reside in Jakarta. Selection of respondents conducted by convenience sampling method, in
which researchers determined the respondents as easy as possible by way of encounter and asked
permission to fill out questionnaires the respondents were in place around the city of Jakarta, among other
locations as in the PGC Mall Cililitan East Jakarta, Palm d'Ivoire Mall North Jakarta, Pondok Indah Mall
South Jakarta, Orchid Garden Mall West Jakarta, Grand Indonesia Hotel Indonesia Mall Central Jakarta.
Variables and measurements in this study refer to a previous study conducted by Abolfazl (Kouros)
Mohammadian, University of Illinois, Chicago, 2004. This study measured the number of variables which
are female, male, car characteristics, car class, style, and car size. Purchasing decision-makers in this study
were responders car owner woman or man in Jakarta with no age limit who decided to use the car based on
car characteristics, car class, style and size. There are several alternative options which are car with
characteristics, class, style and size of vehicle known as luxury class, middle class, and lower class. Style
cars like sports cars, sedans, jeeps, pick-ups, vans, mini-van. Size cars 1000 - 1500 cc, 1600 - 2000 cc, 2200
Women
Men
Car style

Car class

Car size

Charracteristics
77

- 2400 cc, 2500 - 3000 cc. Car characteristics measured are fuel consumption, car sale price, purchase price,
year made, latest model, maneuverability, axle ratio, rotary per minute, horse power, trunk size, cabin size,
leg room size, length, car wide, engine size, ease of engine, spare parts availability, operating costs, power,
practicality, security primacy of performance, capacity haulage, fashionable, used cars, new cars, ease of
spare parts, availability of service stations, car insurance. Actually, many other car characteristics can be
assessed but this study limits the assessment of particular matter to be concise, focused and consistent with
previous research principles (Mohammadian and Miller 2002a), that for technological reasons, many of
these variables are highly correlated. There parameters are mostly similar to Ben-Akiva instrument and
Bolduc (1996) and Bhat (2000) and (Mohammadian and Miller 2002a). Subsequently respondents were
asked to give statements regarding these items based on 5 (five) point Likert scale as in 5 = Strongly Agree,
4 = Agree, 3 = Quite Agree, 2 = Disagree, 1 = strongly disagree.
Careful data collection techniques and test instruments was done. Measuring devices in this
study was a measuring tool has been used in previous studies. Hopefully this study presents good
information, because the test equipment used is also scalable test equipment, SPSS 11.5 version was used in
this study. Instrumentation test based on Cronbachs alpha technique with reliability test
coefficient of 0.87 means reliable so that research can be proceed (Nunnaly, 1978). Data collection
techniques were using primary data questionnaires. The data collected inform respondent reasons to select
and use such car. Data collection techniques were using questionnaire indirect communication. Analysis
was using path analysis methods to test the effect between variables and hypothesis testing
using maximum likelihood estimate, P-Value with alpha 0.05. The hypothesis was formulated as
reject Ho and accept Ha when P-value < 0.05. Ho = no effect of independent variables to
dependent variable. Ha = independent variable affects the dependent variable. The study presents car
selection information results including some reasons conducted by woman and man.

5. Data Analysis
In this section is displayed the hypothesis testing tables reflects the results of analytical studies.

Table 1, Woman and car charracteristics selection
Variables Mean Std. Dev n df
Correlation
r
2
ANOVA Hypotesis
r
t. test t. tab
Woman 4.3600 0,77618
50 48 0,266 1,912 1,684 0,071 0,062
a

Ho : rejected
Ha : accepted
Car charracteristics 3.6690 0,30916
Sources: Research data processing

Table 1 shows information about female choice mean value (Y) equal to 4.3600, this
figure shows averagely respondents strongly agreed to question has been raised. The
female choice standard deviation (Y) is equal to 0.77618, calculated mean standard deviation is
quite small, below mean value, and the variable was good. Mean variable characteristics of the car (X) is
equal to 3.6690, this value indicates that the average respondent had agreed to the questions have been
raised. Car characteristics standard deviation (X) is equal to 0.30916, which means that
calculated standard deviation is quite small, because it is below the mean value meaning that the variable
was good.Car characteristic t test (X) 1.912 and (df) = 48, t table at 95% confidence level (significant 5%)
is approximately 1.684. and the Pearson correlation = 0.266. Comparison of t test and the t table, and the
Pearson correlation, we conclude that the value of t test> t table, meaning that there is a low relations
between variables woman (Y) and car characteristics (X) so hypothesis conclusion: Ho = rejected and Ha
= accepted, r square is: 0.071, means: woman (Y) is influenced by car charracteristics factors (X) is equal
to 7.1%, and the rest is influenced by other factors. Value = 0.062 by ANOVA because ANOVA > 0.05
means that the regression model can not be used to predict the female variable (Y).

Table 2, Woman and car class selection
Correlation
r
2
ANOVA Hypotesis
r t. test t. tab
Women 4.3600 0,77618
50 48 -0,051 -0,353 1,684 0,003 0,725
a

Ho : rejected
Ha : accepted
Car class 3,2934 0,67196

Table 2 shows information of the mean or average female choice variable (Y) is equal to 4.3600,
this value indicates average respondents strongly agreed to question has been raised. Female standard (Y)
78

0.77618, which means that the calculated standard deviation is quite small because the value is below
mean and variable was good. Mean car class (X) indicates the value 3.2934 average respondent had
agreed to questions have been raised. Car class standard deviation (X) 0.67196, which mean that standard
deviation is quite small because the value below mean, and variable was good. Car class t test value (X) -
0.353 and (df) = 48, t table 95% confidence level (significant 5%) of 1.684, then the inferred value of t
test < t table shows relationship between female (Y) and car class (X) so that the conclusion of the
hypothesis: Ho = accepted and Ha = rejected.

Table 3, Woman and car style selection
Correlation
r
2
ANOVA Hypotesis
r t. test t. tab
Woman 4,3600 0,77618
50 48 -0,028 -0,191 1,684 0,001 0,849
a

Ho : rejected
Ha : acepted Car style 2,9430 0,59514

Table 3 shows mean of the woman (Y) 4.3600 indicates that average respondents strongly agreed
on the questions have been proposed. Female standard deviation (Y) 0.77618, it means that calculated
standard deviation is quite small because below the mean, the variable was good. The car style mean (X)
2.9430 shows respondents agree to the questions have been proposed. Car style standard deviation (X)
0.59514, means that calculated standard deviation is quite small because below the mean, the variable
was good. Car style t test (X) -0.191 and (df) = 48, t table 95% confidence level (significant 5%) is equal
to 1.684, it was concluded that the value of t test < t table shows no relationship between Woman (Y) and
Car style (X) so that hypothesis conclusion: Ho = accepted and Ha = rejected.

Table 4, Woman and car size selection
Correlation
r
2
ANOVA Hypotesis
r t. test t. tab
Woman 4.3600 0,77618
50 48 0,291 2,110 1,684 0,085 0,040
a

Ho : rejected
Ha : accepted
Car size 3,0600 0,57932

Table 4 shows female mean (Y) 4.3600 it shows average respondents strongly agreed to the
question has been raised. Woman standard deviation (Y) is 0.77618, meaning that the standard deviation
is quite small because below the mean, the variable was good. Sie of the car mean (X) is 3.0600 indicates
average of respondents agreed to the question has been raised. Size of car standard deviation (X) 0.57932,
meaning that standard deviation below mean is quite small, the variable was good. Car t test (X) 2.110
and (df) = 48, t table 95% confidence level (significant 5%) is 1.684, the Pearson correlation = 0.291. T
test compare t table as well as the Pearson correlation, we conclude that t test > t table, meaning there is a
low relationship between female (Y) and size of a car (X) so that the conclusion of the hypothesis: Ho =
rejected and Ha = accepted. R square is 0.085, meaning that woman (Y) is influenced by car size (X)
equal to 8.5%, and the rest is influenced by other factors. ANOVA = 0.040 < 0.05 regression model can
be used to predict female variable (Y).

Table 5 - Man and car charracteristics selection
Correlation
r2
ANOVA Hypotesis
r t. test t. tab
Man 4,6038 0,49379
53 51 0,034 0,246 1,684 0,001 0,807
a

Ho: rejected
Ha: accepted Car charracteristics 3,6042 0,24604

Table 5 shows the mean of man (Y) is 4.6038 respondents strongly agreed to question have been
raised. Male standard deviation (Y) 0.49379, meaning that standard deviation below the mean is quite
small, the variable was good. Mean of car characteristics (X) 3.6042 respondents agreed to question has
been raised. Car charracteristics standard deviation (X) 0.24604, standard deviation below the mean is
small enough, the variable was good. T test of car charracteristics (X) 0.246 and (df) = 51, t table 95%
confidence level (significant 5%) 1.684, we conclude that t test < t table shows no relationship between
man (Y) and car characteristics (X) so that the conclusions hypothesis: Ho = accepted and Ha = rejected.

79

Table 6 - Man and car class selection
Variabel Mean Std. Dev n df
Correlation
r
2
ANOVA Hipotesa
r t. test t. tab
Laki-laki 4,6038 0,49379
53 51 0, 510 4,232 1,684 0,260 0,000
a

Ho: Ditolak
Ha: Diterima
Kelas Mobil 2,7923 0,61090

Table 6 shows the mean of man (Y) 4.6038 the respondents strongly agreed to the question have
been raised. Male standard deviation (Y) 0.49379, standard deviation is quite small, below the mean
value, the variable was good. Mean car class (X) 2.7923 reflects the average respondent simply agrees to
the questions that have been proposed. Standard deviation of car class (X) 0.61090, standard deviation
below the mean is small enough, the variable was good. Carclass t test (X) 4.232 and (df) = 51, t table at
95% confidence level (significant 5%) 1.684, Pearson correlation = 0, 510. T test compare t table, and
Pearson correlation test is concluded t test > t table, showing the strong relationship exists between man
(Y) and the class of car (X), hence hypothesis: Ho = rejected and Ha = accepted. R square 0.260 means
the male (Y) affected by car class (X) 26%, the rest influenced by other factors. ANOVA = 0.000 < 0.05
regression model can be used to predict man (Y).

Table 7 - Man and car style selection
Variables Mean Std. Dev N df
Correlation
r
2
ANOVA Hypotesis
r t. test t. tab
Man 4,6038 0,49379
53 51 0,584 5,137 1,684 0, 341 0,000
a

Ho: rejected
Ha: accepted Car style 2,6600 0,61424

Table 7 shows the mean of male (Y) 4.6038 the respondents strongly agreed to the question has
been raised. Standard deviation of male (Y) 0.49379 standard deviations below mean is small enough, the
variable was good. Mean style of car (X) 2.6600 the respondents stated they were quite agreed to the
question has been raised. Car style standard deviation (X) 0.61424 standard deviations below the mean is
small enough, the variable was good. t test of car style (X) 5.137 and (df) = 51, t table at 95% confidence
level (significant 5%) 1.684, Pearson correlation = 0.584, t test compare t table, as well as the Pearson
correlation test is concluded t > t table, these conditions show a strong relationship male (Y) with the
style of car (X), hypothesis: Ho = rejected and Ha = accepted. r square 0, 341, means that man (Y) is
influenced by the style of car (X) 34.1%, the rest is influenced by other factors. ANOVA = 0.000 < 0.05
regression model can predict the male (Y).

Table 8 Man and car size selection
Variables Mean Std. Dev N df
Correlation
r
2
ANOVA Hypotesis
r t. test t. tab
Man 4,6038 0,49379
53 51 0,372 2,862 1,684 0, 138 0,006
a

Ho: rejected
Ha: accepted Car style 2,7311 0,63898

Table 8 shows the mean of male (Y) 4.6038, average respondents strongly agreed to the question
has been raised. Standard deviation of male (Y) 0.49379, meaning that the standard deviation below the
mean is small enough, the variable was good. Mean size of the car (X) 2.7311 the respondents simply
agree to the questions that have been proposed. Standard deviation of the car size (X) 0.63898, meaning
that the standard deviation below mean is small enough, the variable was good. T test of car size (X)
2.862 and (df) = 51, t table at 95% confidence level (significant 5%) 1.684, r = 0.372, t test > t table
shows low relationship of men (Y) and size of the car (X), the hypothesis: Ho = rejected and Ha =
accepted. R square = 0.138, means that men (Y) is influenced by the size of car (X) 13.8%, and the rest
influenced by other factors. ANOVA = 0.006 <0.05 then the regression model can predict the Female (Y).

6. Conclusions
The analysis can be summed up that women are not very detailed attention to the car
characteristics, for woman efficiency of the car is more important. Woman does not require luxury and
medium class vehicles but economical vehicles and not consider the style and size of the car she bought
80

while engange with vehicle purchase selection process. Similarly, men car buyers do not consider car
characteristics detailed but its efficiency, but always consider car class in the car purchase selection
process, man sometimes influenced by class and style and size while enganged in car selection purchases.
So men are more concerned about detail in considering car selection purchases than women who only pay
attention to the efficiency of the car. In accordance with the results of the study it is recommended that
car seller should better explains the advantages of various efficiency factors, practicality and car safety
when dealing with women car shoppers. Meanwhile, when dealing with male car buyers, the salesman
should explain more details in terms of technical factors characteristics, style and size of the car.

7. References
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82

AN ASSESSMENT OF BRASOV INCOMING TOUR OPERATORS AWARENESS ON
SUSTAINABILITY ISSUES

Post doctoral researcher, Ph.D., Department of Economic Sciences and Business Administration,
University Transilvania, Brasov, Romania, adina.candrea@unitbv.ro

BRTUCU Gabriel
Professor, Ph.D., Faculty of Economic Sciences and Business Administration, University
Transilvania, Brasov, Romania, gabriel.bratucu@unitbv.ro

Abstract: The main purpose of this paper is to identify Brasov incoming tour operators awareness
concerning sustainable tourism development. Based on a qualitative exploration of the interviewed managers
perceptions of sustainability issues, the general understanding of the concept of sustainable tourism is examined as
well as their interest in eco-certification and the practical application of different sustainable initiatives is analyzed.
The outcomes of the research reveal a moderate interest concerning sustainability issues and eco-certification
among Brasov tour operators and outline the necessity of further promotion and networking in the destination for a
better understanding and use of sustainable development tools.

Key words: tour operators, sustainability, eco-certification, sustainable supply chain management

JEL classification: D22, L83, Q56

1. Introduction
Tourism can have several negative impacts on the environment; in some cases it can cause long-
term environmental degradation which destroys the very features that once attracted tourists to a place,
leading tour operators and their customers to abandon the older destination in favor of new, undamaged
ones.
As intermediaries between tourists and tourism service providers, tour operators bring together a
variety of tourism-related services to form a complete holiday package, including goods and services
provided by a supply chain of subcontracted companies, organizations and agents. Although tour
operators are not always in direct control of the environmental and social impacts of those products,
consumers increasingly expect the companies they buy from to ensure that their products also provide
environmental and social sustainability. For tour operators, this means that effectively implementing
sustainability policies requires working closely with suppliers to improve sustainability performance in all
the components of a holiday throughout the life cycle of a holiday package (Tour Operators Initiative
for Sustainable Tourism Development, 2003). According to the United Nations Environment Programme
(2005) the key business benefits for a tour operator acting sustainable are: revenue growth, cost savings,
access to capital, human capital, brand value and reputation, preservation of destinations, improved
service, risk management and license to operate and pre-empting government regulations.
In the international context of growing concern about the sustainable management of natural
assets used by tourists, this article presents the findings of a research conducted with Romanian incoming
tour operators from a well-known urban destination: Brasov. Based on a qualitative exploration of the
interviewed managers, the general understanding of the concept of sustainable tourism is examined along
with their interest concerning the eco-certification of their tourism products and the application of
different sustainable practices is explored.
The main purpose of the present paper is to outline incoming tour operators perceptions of
sustainability issues and the opportunities for the implementation of a sustainable supply-chain
management. The main objectives of the research concern: tour operators interest in sustainable tourism
development, the identification of sustainable initiatives of the studied tour operators and their interest in
eco-certification. The article begins with a review of the literature focused on the role of sustainable
instruments in the tour operating business and continues with a presentation of the framework of Brasov
tourism. Afterwards the applied research method is described and the following section presents the
83

findings of the conducted qualitative research. The final section presents some conclusions of the study
and practical implications tour operating industry in the studied tourism destination.

2. Literature review
A recent business trend emphasizes that firms are expected to go beyond their profit-oriented
activities and boost the wellbeing of the community, making the world a better place (Robins, 2005). In
this regard, as tourism contributes to the wellbeing of society, if the companies within this industry
augment their performance, their positive effect on society will also increase (Nicolau, 2008). The
challenge for tour operators is to practically integrate sustainability into their supply chain when they are
only just beginning to understand it. The United Nations Environment Programme (2005) mentions five
action areas for tour operators activities aimed to integrate sustainability principles into its business
practices:
1. Internal management. At the most basic level, sustainability practices can be applied to the
operations and activities that take place within a companys headquarters and at its country
offices. Changes might include using sustainably produced paper for brochures, minimizing
energy use and waste production, and ensuring acceptable staff working conditions.
2. Product development and management. A tour operators choice of services, routes and
activities for its products determines the sustainability of the holidays it offers. The challenge
in this case is to design holiday packages that have lower environmental and social burdens
while still yielding acceptable economic returns.
3. Supply chain management. Most elements of a holiday package are delivered by suppliers
who are subcontracted by the tour operator. Thus, the selection and contracting of service
providers is an important opportunity to influence the sustainability of products. Actions here
might include setting sustainability standards in consultation with suppliers, assessing them on
their performance and supporting improvements, and providing incentives for meeting the
standards.
4. Customer relations. Tour operators can help raise consumer awareness of sustainability issues
by providing information on appropriate behavior, such as purchasing local products,
respecting local cultural norms, and avoiding environmental impacts such as littering or
wildlife disturbance.
5. Co-operation with destinations. Tour operators, either individually or through joint industry
forums, can influence the sustainability of destinations by supporting sustainable decision-
making by destination authorities and other local actors and by engaging in philanthropic
activities.

If a tour operator addresses the sustainability practices of particular suppliers or destinations, tour
operators therefore need to demonstrate responsibility for business impacts, while not dictating terms of
business which may be inappropriate to destination level interests. The ethics of business also extends to
the need for tour operators to take commercially realistic steps, which meet the needs of all stakeholders,
including the financial interests of shareholders/owners, and employees (Schwartz & Font 2009).
However, as Schwartz and Font (2009) have outlined, the different goals and priorities of
suppliers and operators, the low-cost focus in European markets and the complexity of tour operator
supply chains can explain the difficulty of putting theory into practice. Van der Duim and Van Marwijk
(2006) recognized that the task of truly changing the current ways of ordering of tour operators would be
particularly laborious.
Only recently did tour operators begin to evaluate the environmental impacts of their operations
and those of their suppliers (Baddeley and Font, 2011). Tappers research (2001) highlighted the disparity
between business approaches to engagement with sustainable tourism among a variety of small, medium
and large tour operators. Cash flow and ever-diminishing tour operator contract rates are blamed by many
authors for the lack of financial investment in technical solutions (Font et al. 2006; Tapper 2001).
Payback from no-cost/low-cost measures could be used to fund technical solutions that require initial
financial investment; however, a lack of willingness or ability to engage means that this opportunity is not
always exploited (Baddeley & Font, 2011). Second, human barriers include resistance to change, a lack of
qualified staff and training programmes, a lack of understanding and the inability to plan (Amoah &
Baum, 1997; Bohdanowicz et al., 2011; Dong & Wilkinson, 2007). Tour operator resources and those of
their suppliers may be too limited to engage in technical assistance or investment programmes (Schwartz
& Font 2009). The third issue cited repeatedly is the lack of demand. A green gap exists between the
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results from surveys claiming customers want sustainable products and their actual purchasing behaviour
(Baddeley & Font, 2011).
Recent research has also begun to address operator approaches to environmental management
(Herremans et al., 2005) and the role of tour operator associations in developing a common approach to
sustainability management (Tepelus, 2005; Van der Duim & Van Marwijk, 2006). Essentially, research to
date has identified that, while there are a wide range of examples of good practice across the industry,
there is considerable opportunity for more operator-led initiatives and more widespread activity (Schwarz,
Tapper & Font, 2008).
Miller (2001) provides a substantive contribution to understanding smaller and larger tour
operators attitudes towards corporate social responsibility, and the factors which determine a responsible
approach, highlighting factors such as moral obligations and public relations. Herremans, Reid and
Wilson (2005) provide an examination of inbound, National Park based, Canadian tour operators
implementation of environmental management systems (EMS). It usefully highlights the significance of
business values and informal approaches within smaller businesses, and the need for learning and
communication tools. As reported by Van Wijk and Persoon (2006) in an examination of sustainability
reporting among European tour operators, there is still much work to be done. They note that tour
operators need to move beyond policy and reporting statements towards practices which actively improve
sector sustainability.

3. The framework of Brasov tour operating industry
The city of Brasov is centrally located and offers various natural and historic (one of Romania's
best preserved medieval city) tourism development opportunities. Its natural assets as well as local culture
and heritage architecture, provide a wealth of interpretive and sightseeing experiences. Brasov is an ideal
primary service area as it offers the most complete mix of visitor services including several excellent
hotels, good restaurants, a complete variety of stores and retail outlets, inbound and outbound tour
operators. It is also the main gateway to other destinations in the county and therefore has an important
role to play in distributing information (MacGregor, 2005).
Brasov Branch of the National Statistics Institute (2010) reported a constant growth of tourist
arrivals in Brasov city in the last years starting from 184.651 arrivals in 2003 to 295.521 arrivals in 2008.
However, due to the international crisis the number of tourist arrivals in 2009 was 26 % lower than the
previous year, counting 218.485 tourists. The year 2010 has brought a slight recovery of tourist arrivals to
251.188, a value which is however 15% lower than the one registred in 2008. This positive trend
continued in 2011 (Brasov Branch of the National Statistics Institute, 2012) when tourist flows reached
the highest level in the last 10 years - 319.513 arrivals: 76% Romanian and 24% foreign tourists, mostly
from: Germany, Israel, Italy, France, USA, UK, Spain, Republic of Moldavia and Austria.

Figure 1: The evolution of tourist arrivals in Brasov between 2003 and 2011

Source: Brasov Branch of the National Statistics Institute, 2012

Tourist arrivals
0
50000
100000
150000
200000
250000
300000
350000
2003 2004 2005 2006 2007 2008 2009 2010 2011
85

Although Brasov has attracted more tourists in 2011 than the previous year (an increase of 24% for
Romanian tourists and 12.8% for foreign tourists), their average length of stay is has decreased (2.72%
for Romanian tourists and 4.65% for foreign tourists) reaching the lowest value in the last four years: 2.12
days. While Brasov has enjoyed relative success over the past 30 years because of its proximity to
Bucharest, its markets remain primarily Romanian with foreign travelers providing less than quarter of
visitor nights. The average length of stay of tourists in Brasov in the last 4 years has varied between 2.13
and 2.19 days, which could be a consequence of the tourists perception of the destination as a transit
point or mostly suitable for weekend getaways.
According to the Ministry of Regional Development and Tourism (2012) there are 133 travel
agencies in Brasov and 88.72% of them have a tour operating license. However, there is no statistical
evidence concerning the number of incoming tour operators in Brasov. Most of Brasov tour operators are
members of the National Association of Travel Agencies (ANAT) but there is no network representing
the interest of incoming tour operators either on national or regional level. Six incoming tour operators
are members of the Association of Ecotourism in Romania (AER), an NGO which has achieved a
partnership for nature conservation and tourism development among tourism associations, non-
governmental associations acting in local development and nature conservation, nature conservation
projects and travel agencies. AER created an Ecotourism Certification System as a mechanism for putting
into practice the basic principles of ecotourism, in order to ensure nature conservation and sustainable
development of local communities through tourism. The Ecotourism Certification System addresses two
different categories of applicants: ecotourism programmes / tours provided by tour operators or guides
(i.e. eco-tours of maximum 15 participants) and small-scale accommodation structures in rural and
natural areas (eco-lodges and guesthouses of maximum 25 rooms). Five of the tour operators interviewed
in the present research are members of the Association of Ecotourism in Romania and three incoming
tour operators located in Brasov area have eco-certified tourism products.

4. Methodology
As the main interest of our study was to outline the perceptions and awareness of incoming tour
operators concerning sustainability issues, a qualitative research methodology was used. The advantage of
qualitative methods in exploratory research is that use of open-ended questions gives participants the
opportunity to respond in their own words, rather than forcing them to choose from fixed responses, as
quantitative methods do. Open-ended questions have the ability to evoke responses that are (FHI, 2005):
meaningful and culturally salient to the participant, unanticipated by the researcher and rich and
explanatory in nature. Thus, we have chosen semi-structured face-to-face interviews as the main data
collection method in the present research. An interview guide was developed from the existing research
literature listing topics for the interviews and data needs in case the informants failed to think of any ideas
related to the topic at hand. The interview guide covered the following themes: general perceptions
regarding sustainability issues, sustainable initiatives implemented by the studied businesses, managers
knowledge of tourism eco-certification systems and their interest in the eco-certification of their tourism
packages. Interviews were conducted with 10 managers of incoming tour operators from the city of
Brasov during a month period in March 2012. The collected data was afterwards processed using content
analysis and the discussions and conclusions are presented in the following sections.

5. Data analysis
In order to assess the awareness of Brasov incoming tour operators concerning sustainability
issues, a total of 35 invitations to participate to this research have been sent but only a 10 of the
approached managers have agreed. The low response rate can also reflect Brasov tour operators lack of
interest concerning sustainable tourism development.
The first interviewed tour operator is a small company specialized in incoming tour operations all
over Romania, including few days stay in Brasov area, attracting mostly tourists from Holland, UK, USA,
Sweden and Australia. It is a member of the Association of Ecotourism in Romania and its manager
shows a high interest in sustainability issues and ecotourism development.
The second respondent manages a specialised tour operating business in horseback-riding
adventures in Transilvania, focused mainly on the UK, German, French, Scandinavian and Austrian
markets. This is the most eco-oriented interviewed subject and has extensive knowledge and interest in
sustainability issues.
86

The third analyzed tour operator is specialized in both incoming and outgoing photo tours and
sees the AER and TIES membership as a great image capital and guarantee of service quality and
business sustainability.
The fourth respondent manages a tour operating business with both incoming and outgoing
activity. On the inbound market it specialises in hiking and cycling tours offered mostly to British,
American, German and Danish tourists. Although the company is a member of the Association of
Ecotourism in Romania, eco-certification doesnt seem to be a priority on short-term, as it is not seen as a
real opportunity to attract more clients.
The fifth tour operator is an eco-oriented specialised in tailor-made tours, mainly attracting
British, American and Canadian tourists. The manager of this company is highly committed to the
sustainable development principles and the AER membership and eco-certification system.
The sixth respondent is managing an incoming tour operating business and although it is not
specialised in ecotourism experiences it promotes sustainable and responsible tours, especially on the
British, American, German, Australian and Spanish markets.
Although the seventh tour operator has mainly an outgoing activity it promotes incoming tours on
the European market, without focusing on the sustainable tourism segments. The manager is eco-oriented,
is interested in both the membership and eco-certification system of the Association of Ecotourism in
Romania and intends to invest in an eco-guesthouse.
The eighth tour operator is focused on the outgoing activities but it is also aiming to gain a better
position on the international market with incoming packages which are not highly eco-oriented. However,
due to the collaboration with an international tour operator specialised in responsible tours in natural
areas, the managers awareness concerning sustainable has increased in the past years. Eco-certification
doesnt seem to be the priority for the next years, even though the tour operator wants to extend its
inbound activity.
The ninth respondent is also managing a tour operating business mainly focused on the outgoing
market, but offering incoming packages as well. The manager is interested in sustainability issues but
doesnt consider eco-certification on a short-term period.
The last tour operator is focused on mass-market outgoing activities with a little focus on the
incoming market, mostly trying to attract German tourists. The manager has little interest in sustainability
issues and doesnt consider the eco-certification of the incoming packages included in the companys
offer.
Although all the respondents have declared their interest in sustainable tourism development, it
seems that the members of the Association of Ecotourism in Romania are more preoccupied about this
subject outlining that any tourism package must be created and organised considering the influences it
has on the natural environment and local communities. A tour operator specialised in ecotourism
activities mentioned that conservation is on top of the list of items that they care about in developing
their business. Another tour operator, which is a member of the Association of Ecotourism in Romania,
has also chosen the membership of the International Ecotourism Society (TIES) in order to reinforce the
companys sustainable initiatives and be identified by tourists as a sustainable tour operating business.
The interviewed mass-market oriented tour operators, who offer both outgoing, domestic and incoming
tourism packages, have shown less interest in sustainable tourism development than the other respondents
which are very well positioned on the incoming tourism market.
The majority of the respondents mentioned the importance of environmental quality in tourists
experience in a destination while two of them outlined that foreign tourists, especially those originated in
developed countries, tend to have higher ecological standards when choosing a tourism destination. Six
of the tour operators mentioned that most of their clients are eco-oriented tourists (five of them are
members of the Association of Ecotourism in Romania), while the other four participants, which have
both outgoing and incoming activities, are not well positioned on the ecotourism market. Five managers
highlighted they have received requests from international tour operators for ecotourism packages.
All the interviewed subjects acknowledge the negative impact of their tour operating activities on
the environment, mostly mentioning transportation and greenhouse emissions, sewage and pollution
issues in accommodation units, as well as waste problems, especially for activities in the natural
environment. However, most of the respondents consider it is less their responsibility to solve these
problems and more that of local and national authorities or service suppliers. Nine of the studied tour
operators mentioned they are taking different measures in order to act more sustainable: promoting
locally produced food, local guides and accommodation using renewable energy resources, selective
garbage collection and recycling, excluding motorised sports from their tourism packages, promoting
87

public transportation among their clients, promoting separated paths for hiking and mountain biking tours
in order to minimize land erosion, educating tourists to respect the sustainable tourism principles. All
interviewed subjects reported paper use limitation and paper recycling measures in their offices, an
apparently small effort but very important in this particular field, which is intensively paper consuming
(especially in the form of catalogues, brochures, flyers and travel documents). The managers of tour
operating businesses offering both outgoing and incoming tourism programmes mentioned the problem of
catalogues and brochures, which are not selectively collected in an organised manner, giving certain
opportunities for less sustainable travel agencies to avoid recycling. A stronger cooperation of Brasov
tour operators with the local recycling company is advised in order to set up an organised selective
garbage collection each season that could facilitate paper recycling.
Among the tour operators who are not members of the Association of Ecotourism in Romania
three of them are not familiar with their eco-certification system, while only one of them expressed an
interest to eco-certify certain tourism packages. Surprisingly, even two of the tour operators who are
members of AER cant perceive the use of eco-certification, mostly mentioning the financial implications
and little recognition on the international tourism market.

6. Conclusions
The present qualitative research reveals useful information that can help destination managers in
their attempt to raise the awareness of incoming tour operators concerning their role in the sustainable
tourism development process. Although most interviewed managers have shown their interest concerning
sustainability issues, they seem to have limited understanding of all aspects included in the sustainable
tourism framework. At the same time, the interviewed tour operators have reported few implemented
sustainable practices, mainly placing the responsibility for different initiatives to other parties (local
authorities or service suppliers). The members of the Association of Ecotourism are more eco-oriented
than mass-market operators especially due to their focus on a specialized segment of consumers, who are
known to be interested in sustainability issues. We consider that all Brasov incoming tour operators
should rather promote smaller guided tours, as customers often seek greater detailed interaction and are
very aware of their social and cultural responsibilities. Brasov incoming tour operators positioning on
eco-oriented market segments may become a competitive advantage compared to other competitors,
especially useful in the present international context when Romanian tourism is struggling to recover after
from the economic crisis. Despite this opportunity, eco-certification doesnt seem to be popular among
mass-market operators and its role is minimizes even by some of the eco-specialized operators. Thus, we
recommend a better promotion of such certification schemes in order to ensure a better understanding of
their advantages by both tour operators and tourists.
Considering the main outcomes of our research we have formulated a series of recommendations that can
assist tour operators in the process of sustainability improvement. As tour operators offer tourism
products comprised of contracted goods and services, the effective implementation of sustainability
policies requires working closely with suppliers to improve sustainability performance in all the
components of a holiday package. This corporate responsibility to promote sustainable tourism must
therefore be extended into all areas of business for a tour operator, from the way it manages and equips its
main offices, to the types of promoted tourism packages and supplier selection. Sustainability should also
be a big part of a companys marketing strategies and relations with its customers, as well as its
partnerships and presence in the destination.
The main results of our research highlight the potential for Brasov tour operators to address a
sustainable supply chain management (SSCM) as most sustainability impacts take place in the supply
chain. For a tour operator, effectively integrating sustainability into its supply chain requires the establish-
ment of a coherent company policy and accompanying management system that set out clear targets and
actions on economic, environmental and social performance. The management system should include
procedures for monitoring, reviewing and reporting on progress made in integrating sustainability
principles into the companys supply chain.
It is highly recommended for Brasov tour operators to develop further understanding of their
business impacts and to communicate sustainability issues to suppliers and consumers. From the financial
perspective, improved sustainability can lower costs through greater operating efficiency, reduced waste
generation, and reduce consumption of energy and water. Sustainability practices can also lead to
increased revenue and shareholder value by generating more repeat business and attracting new business
from customers who value good environmental and social performance. A strong positive reputation as a
company that cares about sustainability issues, coupled with improvements to the quality of the tourism
88

experience provided to clients, can result in increased customer satisfaction and loyalty, strengthened
brand value, enhanced publicity and marketing opportunities, and better acceptance by local communities
in destinations. At the same time it is particularly important to raise customer awareness of the value of
ecolabels and other eco-certification schemes, in order that suppliers are encouraged to apply for them,
encouraged through additional tour operator promotional opportunities.
Although it casts some light on the perception of sustainability issues within the tour operating
sector in Brasov, our research has certain limitations. Firstly, due to the low response rate and
respondents selection, the results cant be extended to all tour operating businesses either from Brasov or
other tourism destinations. Secondly, the present research doesnt analyze tour operators motivating
factors and barriers in the sustainable development process and impacts on their current activities. Further
research should investigate the impact of sustainable tourism practices and eco-certification, from both
operator and supplier perspectives. The whole notion of tour operator responsibility to destination
sustainability requires exploration in terms of addressing impacts in a way which is commercially viable
to both parties, while not imposing unrealistic standards on supplier businesses.

ACKNOWLEDGEMENT: This paper is supported by the Sector Operational Programme Human
Resources Development (SOP HRD), financed from the European Social Fund and by the Romanian
Government under the project number POSDRU/89/1.5/S/59323.

7. References
- Amoah, V.; Baum, T. (1997) Tourism Education: Policy Versus Practice, International Journal
of Contemporary Hospitality Management 9 (1) p. 5 12.
- Bohdanowicz, P.; Zientara, P.; Novotna, E. (2011) International Hotel Chains and
Environmental Protection: An Analysis of Hiltons We Care! Programme (Europe, 20062008),
Journal of Sustainable Tourism (Forthcoming).
- Brasov Branch of the National Statistics Institute (2010) 2010 Annual statistics yearbook.
- Brasov Branch of the National Statistics Institute, (2012) 2011 Annual statistics yearbook.
- Dong, B.; Wilkinson, S.J. (2007) Practitioner Perceptions of Sustainability in the Building
Code of Australia. Paper presented at the AIBS Transitions International Conference, Adelaide,
Australia.
- Family Health International (FHI), (2005) Qualitative Research Methods: A Data Collectors
Field Guide, North Carolina, USA.
- Font, X.; Tapper, R.; Cochrane, J. (2006) Competitive Strategy in a Global Industry: Tourism,
Handbook of Business Strategy 7 (1), p. 5155.
- Herremans, I.M.; Reid, R.E.; Wilson L.K. (2005) Environmental management systems (EMS)
of tour operators: learning from each other, Journal of Sustainable Tourism 13 (4), p. 311-338.
- Macgregor, J. (2005) Brasov County Sustainable Tourism Strategic Framework and
Implementation Plan.
- Miller, G. (2001) Corporate responsibility in the UK tourism industry, Tourism Management
22, p. 589-598.
- Nicolau, J.L. (2008) Corporate Social Responsibility: Worth-Creating Activities, Annals of
Tourism Research, 35 (4), p. 990-1006.
- Robins, F. ed. (2005) Why Corporate Social Responsibility Should Be Popularized but Not
Imposed. Proceedings of the European Academy of Management Conference, Munich.
- Schwartz, K.; Tapper, R.; Font, X. (2008) A Sustainable Supply Chain Management Framework
for Tour Operators, Journal of Sustainable Tourism, 16 (3), p. 298-314.
- Schwartz, K.; Font, X. (2009) Sustainable Supply Chain Management: UK Outbound Tour
Operator Practices. Occasional Paper No. 15. Leeds. International Centre for Responsible
Tourism, Leeds Metropolitan University.
- Van Der Duim, R.V.; Van Marwijk, R. (2006) The Implementation of an Environmental
Management System for Dutch Tour Operators: An Actor-Network Perspective, Journal of
Sustainable Tourism 14 (5), p. 449472.
- Van Wijk, J.;W. Persoon (2006) A long-haul destination: sustainability reporting among tour
operators. European Management Journal 24 (6), p. 381-395.
89

- Tapper, R. (2001) Tourism and Socio-Economic Development: UK Tour Operators Business
Approaches in the Context of the New International Agenda, International Journal of Tourism
Research 3 (5), p. 351366.
- Tepelus, C.M. (2005) Aiming for sustainability in the tour operating business, Journal of
Cleaner Production 13, p. 99107.
- Tour Operators Initiative for Sustainable Tourism Development and the Center for
Environmental Leadership in Business (CELB) (2003), Supply chain management for tour
operators. A handbook on integrating sustainability into tour operators supply chain systems.
- United Nations Environment Programme (UNEP), (2005), Integrating sustainability into
business, a Management Guide for Responsible Tour Operations.

90

RESIDENTS' PERCEPTION TOWARDS URBAN SPORT EVENTS. THE CASE OF eyoWf 2013
- BRASOV, ROMANIA

Post doctoral researcher, Ph.D., Department of Economic Sciences and Business Administration,
University Transilvania, Brasov, Romania, adina.candrea@unitbv.ro

I SPAS Ana
Professor, Ph.D., Faculty of Economic Sciences and Business Administration, University
Transilvania, Brasov, Romania, ispasana@unitbv.ro

CONSTANTI N Cristinel
Lecturer, Ph.D., Faculty of Economic Sciences and Business Administration, University Transilvania, Brasov,
Romania, cristinel.constantin@unitbv.ro

Abstract: The aim of our research is to identify Brasov residents attitudes regarding the role of sport
events in local tourism development. The research has been focused on residents awareness regarding the
organization of the European Youth Olympic Winter Festival in Brasov and their intention to actively participate in
this process. The outcomes reveal a poor information of local residents especially due to few and late promotional
actions performed by local authorities. As people have a positive attitude regarding such events we recommend that
local authorities should develop strategies to help spread the benefits of these events to the wider community.

Key words: tourism development, sport events, residents, attitudes, marketing

JEL classification: R11, L83, M31

1. Introduction
Events are important motivators of tourism and figure prominently in the development and
marketing plans of most destinations. The roles and impacts of planned events within tourism have been
well documented and are of increasing importance for destination competitiveness. The term event(s)
tourism was not widely used, prior to 1987 when The New Zealand Tourist and Publicity Department
(1987) reported: Event tourism is an important and rapidly growing segment of international tourism
(Getz, 2008).
Event tourism must be viewed from both demand and supply sides. On the supply side,
destinations develop, facilitate and promote events of all kinds to meet multiple goals: to attract tourists
(especially in the off-peak seasons), serve as a catalyst (for urban renewal, and for increasing the
infrastructure and tourism capacity of the destination), to foster a positive destination image and
contribute to general place marketing (including contributions to fostering a better place in which to live,
work and invest), and to animate specific attractions or areas (Getz, 2008). Events have become a major
instrument for cities, not only to compete for attention and raise the public profile but also to attract
tourist expenditure and upgrade urban infrastructure (Richards, 2007; Roche, 2000). For the local
population, large-scale events in particular are often a double-edged sword (Mller, 2011): on the one
hand, residents are confronted with higher costs associated with events such as monetary expenditure, in
the form of rising prices for housing or an increasing tax burden when a city supports and hosts particular
events. Large-scale construction programmes to build venues and accommodation or upgrade the
transport infrastructure commonly extend over many years and come with a budget of sometimes several
billion euros (Chalkley and Essex, 1999). These costs can also take on non-monetary forms such as social
exclusion and displacement, environmental destruction, disruption of urban services and so on (Lenskyj,
2002; Waitt, 1999). On the other hand, events can result in increased revenues, urban revitalization and
function as catalysts for upgrades of the urban infrastructure and public services (Getz, 2008). The
amenities of the tourist infrastructure as well as new exhibition halls or sports venues are left as legacies
for the population to use a long time after the event has concluded (Mller, 2011). If planned with
foresight, venues can be converted for community use after the event, as happened with the curling and
speed skating venues of the Olympic Winter Games in Vancouver 2010 (Mller, 2011). The inflow of
tourist expenditure might result in new jobs and increased tax revenue (Preuss, 2004). Lasting social
91

benefits are potentially available to the host community through properly planned and promoted special
events. These include the enhancement of community spirit and pride, the promotion of cooperation and
leadership within the community, the strengthening of support for local cultural traditions, and the
building of greater cross-cultural understanding (Getz, 1992).
Considering the substantial growth in major sport events as well as the increased competition
amongst tourism destinations eager to host them, residents support can become a competitive advantage
for event hosting. Consequently, the aim of this paper is to develop a deeper understanding of the social
dimension of Olympic tourism development, by exploring resident perceptions of Brasov 2013 European
Youth Olympic Winter Festival (EYOWF). The first section of this paper provides a background to previous
research concerning sport events with an outline of previous resident perception studies which explored
how and why resident perceptions and attitudes to mega events may vary. The second section is focused
on the presentation of the event and host tourism destination while the third part of this paper outlines the
research methodology. The paper then presents the results of the resident perceptions research and finally,
some conclusions and implications for destination and event management are outlined that contribute
towards a better understanding of the social dimension of event tourism development.

Festivals and events have become one of the fastest growing sectors of tourism (Gursoy et al.,
2004) and at present there is a strong association between events and tourism (Quin, 2006). Various
authors have proposed theoretical frameworks for understanding the variation of resident attitudes and
perceptions toward tourism and events within the community, and how it may assist in understanding the
variation in residents reactions toward tourism development (Ritchie et al., 2008). Residents may have
more positive perceptions of tourism if they perceive that their tourism exchanges bring individual
benefits, but will have negative perceptions of tourism if they perceive these benefits to be outweighed by
costs (Ritchie et al., 2008). Ap (1992) noted that the social exchange theory (Emerson, 1972) is useful in
understanding residents perceptions of tourism impacts, as exchange behaviour is related to perceptions.
Gursoy & Kendall (2006) also used social exchange theory as a basis for their research, which modeled
how resident attitudes toward a mega sporting event were influenced by residents community concern,
their emotional attachment to the community and their eco-centric attitude or environmental sensitivity.
A study by Bachleitner & Zins (1999) suggests that residents involvement in decision making is
an important factor in their perceptions towards tourism development, while Fredline & Faulkner (2002)
believe many residents feel disenfranchised by the planning process and this may result in negative
resident perceptions toward the event. Davis et al.s (1988) study showed that residents with the most
negative attitudes toward tourism had a low level of knowledge about tourism, highlighting the
importance of information and the potential role of the media.
Despite a number of research studies being conducted on mega events and the Olympic Games
(Ritchie and Hall, 1999; Gursoy & Kendall, 2006; Ritchie et al., 2008; Konstantaki & Wickens, 2010),
few have focused on resident perceptions and even fewer have developed a longitudinal approach to
better understand these perceptions and how or why they may vary over time (Ritchie et al., 2008).
Ritchie et al. (2008) emphasized the need to include resident perceptions into a triple bottom line
approach to measuring the impacts of mega sporting events, and in particular the Olympic Games. Ritchie
and Hall (1999) explored mega events and human rights, giving particular attention to housing
implications, residents aspirations and public participation. Assessing the perceptions of residents toward
mega events is one potential indicator within the broader social impact assessment of mega events
(Ritchie et al., 2008). The concept of social impact assessment, and more broadly sustainability, stresses
the importance of a long term approach and integrating community interests into decision making
(Ritchie et al., 2008). Understanding the social dimension of hosting a mega sport tourism event is crucial
in order to develop local support for hosting such events (Fredline, 2005).
Solberg and Preuss (2007) refer to the development of a pool of volunteers as part of the soft-
infrastructure benefits of events: enhancing the knowledge and skills - the human capital - of residents.
Like sport in general, all sports events depend heavily on volunteer labour a major hidden subsidy
which raises significant questions about the nature and scale of economic impacts (Coalter and Taylor,
2008). Smaller events probably draw such volunteers from governing bodies and local sports clubs, but
large scale events recruit and train substantial numbers of volunteers.
Even though event-related publicity helps increase the residents familiarity with the sport
tourism event, it can also act as a platform for shaping a positive or negative attitude (Chon, 1992). Other
factors that have been implicated with shaping residents attitudes towards sport tourism development
92

include gender, age (Mason & Cheyne, 2000; Kim & Petrick, 2005), social status (Ritchie et al., 2009),
and education, occupation and income (Waitt, 2003). However, some of these studies suggested that the
differences in attitudes can be best attributed to the heterogeneity of urban communities rather than
demographic variables (Konstantaki & Wickens, 2010).
Most of the sport event literature focuses on the effects of mega events on host destinations and
residents attitudes and opinions regarding this theme. Although Brasov will not host a mega event, but a
European winter sports competition, we consider the investigation of residents attitudes and involvement
opportunities as very useful, especially considering the fact that this is the first European event Brasov is
hosting since the University Winter Sports Competition held in Poiana Brasov in 1981. Moreover, if this
event will be a succesful one, local authorities along with the Romanian Olympic Committee intend to
propose Brasov as the host of the 2022 Winter Olympics (Buna ziua Brasov, 2012).

3. Brasov, host of the 2013 winter edition of the European Youth Olympic Festival
The City of Brasov is located in the Central-Eastern part of Romania, at the foot of Mount Tmpa
(967m) and it is situated at an average altitude of 625m, with the Postvarul and the Piatra Mare
Mountains in its background. Brasov has a remarkable potential for tourism development, because of the
appealing elements that endows it: diverse terrain, picturesque scenery, interesting local customs and unique
cultural heritage. Brasov attracted more than 300.000 tourists in 2011, placing the city on the second place
among Romanian destinations, following the countrys capital - Bucharest. The City of Brasov attracts
almost half (49.4%) of the countys tourist arrivals. The majority of Brasov visitors (74%) are Romanians.
From the total foreign tourists which have been accommodated in Brasovs tourism structures, 76.4% were
Europeans and 18.6% from Asia (Brasov County Statistics Institute, 2012).
Braov has been chosen as a host destination for the winter edition of the European Youth
Olympic Festival in February 2013 along with other nearby winter sports destinations: Predeal, Rnov,
Sinaia and Azuga. Some 1,500 athletes from over 45 countries are expected at this sport event, along
with couches and staff members, but also 1,000 journalists from all over the world and a couple of
thousands tourists, according to the organizers. The European Youth Olympic Winter Festival will bring
a variety of benefits to Brasov as a city but also as a tourist destination (Candrea & Ispas, 2010),
especially the opportunity to attract tourists and to promote Brasovs image on the international market.
To fully understand the extent of this event, an overview of previous Olympic Festivals of
European Youth is required: starting with the first winter edition of the EYOF, which took place in
Aosta, Italy and finishing with the latest, the winter edition that took place in Liberec, the Czech
Republic. Considering the fact that most attending tourists to the event are those who compete, the
evolution, in time, of attending figures of the Olympic Festival of the European Youth is presented in
table 1.
Table 1: The evolution of the number of attendants at EYOF
Organizing country Year
Number of
attendants
Attending
countries
Aosta (Italy) 1993 708 33
Andorra la Vella (Andorra) 1995 447 40
Sundsvall (Sweden) 1997 991 41
Poprad (Slovakia) 1999 819 40
Vuokatti (Finland) 2001 1111 40
Bled (Slovenia) 2003 1242 41
Monthey (Switzerland) 2005 1200 41
Jaca (Spain) 2007 1284 43
Szczyrk (Poland) 2009 1620 47
Liberec (Czech Republic) 2011 1500 49
Brasov (Romania)* 2013 1500 45
*expected
Source: http://eyowf2013.ro/history
Judging from previous information, the number of attendants to EYOF tends to grow,
generally, except the last edition (2011), where the numbers dropped with 7% in comparison with the
former edition. The explanation for this reduction might consist in the present international economic
and financial situation, but it can be compensated by an extension of the attending countries. Therefore,
we can conclude that, at the tenth edition of the event, the numbers of attendants had doubled in
93

comparison with the first edition.

The concepts of marketing connections, key shareholders management and consumers are
recently acknowledged in the marketing literature (Bowdin et. al., 2006). Several festivals and events
start their life-cycles on the premises of a 'partner relationship' within a group of dedicated people. As
the EYOF is an Olympic festival, the first partnerships that have to be concluded are with the national
and international Olympic organizations (Romanian Olympic and Sport Committee, European Olympic
Committee Association, International Olympic Committee). Furthermore, the relationship between
these organizations and the local authorities has to be based on communication and mutual support. The
collaboration between authorities, government, local population, travel agencies within the country or
abroad and volunteers is very important for this event. As the key members are not only the personnel, the
volunteers and participants, but also community residents, the management of an event should be based on
partnerships with the local community. Residents are important actors in the development and promotion of
a tourism destination, but also in the deployment of events. A negative attitude on the behalf of the local
population can influence the failure of an event (Ispas & Heranu, 2011).
At the time we have started our research among Brasov citizens, there was no Romanian webpage
dedicated to the event and the main public information that residents had access to concerned negative
media news about land concession, investment costs, late construction works and other problems faced by
local authorities in their attempt to ensure the infrastructure necessary for the EYOWF competitions.
At present, 9 months before the event, negative information is promoted in the national media,
unfortunately supported by the general secretary of the Olympic and Sport Committee in Romania, the
vice-president of the 2013 EYOWF organising committee, who has pointed out the delays in the bids
organisation for accommodation, transportation, medals, cups and other necessary goods and services due
to buget defficiency as well as the lack of a test competition in the winter season, which is compulsory for
every new sport facilities (Gazeta Sporturilor, 2012). Several problems have been mentioned by the
president of the EYOWF 2013 organising committee: delays in event planning, the necessity to solve
security problems and attendants transportation as well as the need for many volunteers in this project.
There have already been discussions with the representatives of the University of Transylvania in order to
involve local volunteer students who speak at least 2 foreign languages in the event(Gazeta Sporturilor,
2012).
Since we started our research, the offical webpage of the event has been created although it has
several limits. However, it brings reassuring news concerning the progress report presented by the
Romanian delegation at the European Olympic Committees (EOC) General Assembly gathered in Soci
(Russian Federation), which showed that all aspects of the preparations are in accordance with the
requirements of the EOC calendar, and all the development works will definitely be finished by October
2012. From the same website we have found out that the selection of volunteers has begun, following
important criteria such as: good knowledge of English, working with computer, communication skills,
polite, experience in media communication, medical education, technical skills, driving license.
Considering these issues, the present paper outlines residents role in the framework of event tourism
development in the Romanian tourism destination, Brasov and investigates their attitudes and support for
tourism activities as a key element of a successful sport event.

4. Methodology
Our research is part of a survey meant to study residents attitudes toward tourism development
and support for specific tourism options in a Romanian urban destination: Brasov. The local residents
attitudes toward event tourism are considered important for destination management organisations in
order to gain local support for tourism projects and initiatives. In order to capture the attitudes of Brasov
residents towards tourism development and events we have chosen a quantitative method using a survey
based on a questionnaire. Residents were approached by voluntary students in their home based on a
randomly selection and asked to fill a questionnaire. The researched items were assessed with a binary
scale or using a five-level equally distanced Likert type scale labelled as Strongly Agree (1), Agree
(2), Neither Agree nor Disagree (3), Disagree (4), Strongly Disagree (5). The final part of the
questionnaire collected socio-demographic information on the respondents.
Each interviewer was assigned several randomly selected streets from one quarter and they have
chosen different households using a sampling interval. The interviewers were given instructions regarding
how to present the study to encourage the response of one adult member of the family. After the
presentation of the study, the interviewer left a questionnaire. The questionnaire was collected within the
94

next 2 days by the same interviewer, who checked for any problems during completion. The data
collection process was carried out between October and November 2011.
The final sample counted 1326 people living in Brasov with the following socio-economic and
demographic characteristics: the majority of the respondents were females (56.9%) with an age of
between 16 to 34 years old (60%). Most of them were married with children (about 34.7%) or single
(34.5%) and had mostly high school degree (about 42.1%). Most of the respondents have a low (45.2%)
or medium (39.2%) income. About 17.2% of the respondents were employed in the field of
tourism/hospitality industry. Only 9.3% of the interviewed subjects live close to tourism areas while
81.6% live at medium distance or far from the city tourism centre.

5. Research outcomes
The collected data was analyzed using SPSS Version 16.0 and the outcomes are focused on
residents attitudes regarding the future development of tourism in Brasov area and regarding the
organisation of the EYOWF in 2013. Some descriptive analyses have been performed and different
signification tests as t-test and Anova test. A Homogeneity analysis has been also put in practice in order
to find the main socio-demographic characteristics of residents that are aware of the 2013 Brasov edition
of the EYOWF in comparison with the ones that are not aware of this event.
A general outcome of the research shows that residents better appreciate the positive effects of
tourism activities on the local community than the effects on their personal life. In this respect, 88.7% of
respondents perceive a positive impact of tourism on the community and 81% consider that the benefits
of tourism development overcome its costs. Most answers indicate a neutral attitude (33.4%) regarding
the positive effects of tourism on the respondents professional activities while almost a quarter of the
interviewed subjects (24.6%) strongly disagree with this statement. In this respect, we can conclude that
Brasov residents do not perceive a direct personal economic benefit from the development of tourism
activities in the community. This conclusion is strengthened by the results of t-test for independent
samples, which reveals that the attitudes of residents employed in the tourism field do not differ
significantly from the ones of people working in other fields.
Concerning respondents attitudes regarding future tourism development we have found that
residents are more supportive of diversified development than of a specific type of tourism (see figure 1).
In this respect, the most appreciated initiatives are those focused on the promotion of natural attractions -
parks, protected areas, lakes, mountains, etc. (mean = 1.51 points), but favourable scores have also been
recorded for sport activities (hiking, biking, ski, snowboard etc.) and events (festivals, sport contests,
etc.).

Figure 1: The mean of residents attitudes regarding tourism development on an 1 to 5 scale (1= strongly agree)

Considering the results presented in the above figure, we found that Brasov residents have a
positive attitude regarding events and support this kind of activities. Starting from this outcome, we
deepened the analysis in order to find the most supportive segments of such initiatives (table 2).
95

Table 2: The influence of socio-demographic characteristics on residents attitudes regarding tourism
development through events and sport activities

Characteristics Events
(festivals, sport contests, etc.)
Sport activities
(hiking, biking, ski, snowboard etc.)
Mean Test
result/significance
Mean Test result/significance
Gender
Male 1.67 F = 1.79 1.67 F = 0.006
Female 1.73 Sig. = 0.18 1.66 Sig. = 0.94
Age
16-24 years 1.77 F = 2.50 1.69 F = 0.36
25-34 years 1.75 Sig. = 0.029 1.68 Sig. = 0.87
35-44 years 1.65 1.65
45-54 years 1.62 1.61
55-64 years 1.49 1.63
Over 64 years 1.63 1.63
Marital status
Single 1.74 F = 0.88 1.71 F = 0.97
Married without children 1.73 Sig. = 0.44 1.60 Sig. = 0.40
Married with children 1.65 1.63
In a partnership 1.71 1.65
Education
Secondary/vocational school 1.67 F = 3.32 1.59 F = 2.50
High school 1.66 Sig. = 0.019 1.65 Sig. = 0.05
Graduate 1.72 1.67
Post-graduate 1.96 1.87
Proximity to tourism areas
Close 1.77 F = 1.58 1.72 F = 0.61
Middle 1.58 Sig. = 0.205 1.60 Sig. = 0.542
Far 1.71 1.66

The results of the bivariate analysis show a low influence of the populations socio-demographic
characteristics on the attitudes regarding tourism development through events and sport activities.
According to the ANOVA test, in the case of education we can find significant differences in attitudes;
people with a higher education have a less positive attitude regarding the effect of both events and sport
activities on tourism development. There is also a significant relationship between the age of respondents
and the attitude regarding a positive influence of events on tourism development (sig.<0.05). We can
notice that the attitudes towards the effect of events on the local community are positive especially in the
case of elder citizens. For the rest of socio-demographic characteristics differences are not statistically
significant (sig.> 0.05).
As the local population of Brasov has very positive attitudes regarding the impact of events and
sports activities on the tourism development, we consider that the organization of the European Youth
Olympic Winter Festival - 2013 is a promising opportunity to boost local tourism, which should be
welcomed by local residents. In this respect, the next step of our analysis focuses on the notoriety of this
event among Brasov citizens.

Table 3: Residents awarness concerning Brasov EYOWF 2013

Frequency Percent Valid Percent
Cumulative
Percent
Valid No
687 51,8 52,6 52,6
Yes
619 46,7 47,4 100,0
Total
1306 98,5 100,0
Missing 99,00
20 1,5
Total
1326 100,0
96

Despite the short time left till the EYOWF 2013 winter edition hosted in Brasov less than half of
the interviewed residents are informed about this event (47.4% from the valid answers). This percent
could take values between 44.69% and 50.11% at the level of the entire population with a 95%
probability. Therefore, in the most optimistic situation, only a half of Brasovs population knows that
such an important event will take part in their home town at the beginning of the next year.
The analysis of residents intention to participate as volunteers in the organization of EYOWF-
2013, has shown that only a third of the respondents are hypothetically disposed to attend the event as
volunteers. This percent could be between 30% and 36% at the level of the entire population with a 95%
probability.
In order to find possible associations between respondents socio-demographic characteristics and
awareness about EYOWF-2013, we processed a Homogeneity analysis, taking into consideration the
following variables: monthly income, education, proximity to tourism area, gender and the two
dichotomous variables presented above. In this kind of analysis the answer categories are graphically
represented by dots. The similar categories placed close together, while objects with different
characteristics are relatively far apart.

Figure 2: The homogeneity analysis

Figure 2 illustrates the characteristics of two groups we have identified. Brasov residents who are
familiar with the EYOWF are mainly males, they live close or at a medium distance from tourism areas,
they are mostly graduates, with medium incomes and are willing to participate as volunteers in the
organisation of this event. The other group is represented by people that didnt hear about the event and
are not disposed to attend as volunteers. They are mainly females, living far from tourism areas, have low
incomes and lower education. We can also find a certain isolation of post-graduates and people with high
incomes that are quite far from both mentioned groups.
In conclusion, Brasovs population is not enough informed about this very important event
although there is little time left until its deployment. All these outcomes are related with one of the
statements regarding the necessity of a higher involvement of local institutions in tourism promotion.

-2 -1 0 1 2
Dimension 1
-2
-1
0
1
2
D
i
m
e
n
s
i
o
n

2
Yes
No
Yes
No
Low income
Medium income
High income
High school
Graduate
Post-graduate
Close
Middle
Far
Male
Female
Do you know that
Brasov will host the
EYOF winter edition in
2013?
Do you intend to attend
the EYOF in 2013 as a
volunteer?
Monthly income
Education
Proximity to tourism
areas
Gender
97

Figure 3: Residents opinions concerning the necessity of a higher involvement of local authorities in tourism
promotion

As it is illustrated in figure 3, respondents have positive attitudes concerning the improvement of
local institutions involvment in various activities meant to promote local events, places and natural
attractions, museums and traditions. Destination planners should consider a better promotion of sport
events among residents in order to attract their support as both participants and volunteers.

6. Conclusions
Residents perceptions are crucial in assisting tourism planners with selection of developments
that aim to minimize the negative impacts of events on the local community (Gursoy et al., 2002). From
the perspective of tourism destinations sport event tourism implies the development and promotion of
event related services which can bring economic and social benefits to the local communities.
Understanding the potential impacts of events and how these may impact on residents is a critical aspect
of sport tourism event management and planning. However, residents involvement and support is not
always immediate, they must be informed by the local authorities concerning the economic and social
benefits of the event. Keeping residents informed is an important component in maintaining support,
since a lack of information is frequently associated with negative attitudes (Davis et al., 1988; Keogh,
1990; Lankford and Howard, 1994).
The results of our research have shown that Brasovs population is not sufficiently informed
about this very important event although there is little time left until its deployment: less than 50% of the
respondents are informed about the EYOWF hosting. At the same time, only a third of the respondents
are hypothetically disposed to attend the EYOWF as volunteers. However, pressures to appear socially
responsible may lead individuals to overstate their commitment in the context of such surveys; therefore
we suppose that the percent of citizens who actually want and are able to involve in this event as
volunteers is much lower.
The event organizers dialogue with local residents and uptodate information about EYOWF
planning is even more important in the case of Brasov, where communication and exchange of
information between citizens and the city administration is close to non-existent and there is wide-spread
mutual distrust. We appreciate that the event website section dedicated to volunteer selection from the
category "ordinary people living in cities involved in the European Youth Olympic Winter Festival -
Brasov 2013" is insufficient; further promotion to this group of residents is needed (in local media and
local authorities websites), especially considering the low percent of respondents willing to attend the
EYOWF as volunteers. Although the event website gives Brasov residents the opportunity to enrole as
volunteers for the EYOWF, the lack of a subscription deadline might be considered as a limitation.
76,3
18,8
3,7
0,8
0,3
0
10
20
30
40
50
60
70
80
%
1 - Strongly
agree
2 3 4 5 - Strongly
disagree
98

Certain authors believe that by examining and understanding residents perceptions, event
organisers and managers can maximise residents perceived positive impacts and decrease their perceived
negative impacts (Kim & Petrick 2005). A variety of research approaches and many comparisons will be
required, from evaluations of those attending events to qualitative studies of what people are looking for,
meanings they attach to their experiences, and influences on future attitudes and behavior (Getz, 2008).
Although it provides a useful insight into residents knowledge and interest concerning the 2013
EYOWF hosted in Brasov, the present research has certain limitations. The main limit of our study is that
it wasnt focused on Brasov residents attitudes toward the EYOWF 2013 but on their perceptions of local
tourism development. Another limit concerns the research focus on Brasov residents, while the local
communities from nearby resorts hosting different sport competitions of the 2013 EYOWF have not been
taken into consideration. The third limitation of our study is that we have only analyzed residents
knowledge of the event and interest in participating as volunteers, without outlining their perceptions of
the event benefits on their community and personal life. Despite these limits, the outcomes of our
research show a general interest of local community members towards sport events, which are seen as
important promotors of local tourism development. Considering the various international studies
investigating the attitudes of the host population with respect to the events and their impacts, we must
outline the necessity of further research in Brasov and other host destinations of the 2013 EYOWF sports
competitions (Rnov, Predeal, Azuga and Sinaia) in order to cast some light on residents opinions,
attitudes and behaviour both before the event and after.

ACKNOWLEDGEMENT: This paper is supported by the Sector Operational Programme Human
Resources Development (SOP HRD), financed from the European Social Fund and by the Romanian
Government under the project number POSDRU/89/1.5/S/59323.

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Brasov, Journal of Tourism, 10, pg. 61-67.
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of the Olympic Games, Planning Perspectives, 14, pp. 369-394.
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newspaper, Accessed 21st of April 2012.

100

DEFINING THE COORDINATES OF THE WEB MARKET IN NOWADAYS BUSINESS

CARAGANCI U I ulian
Ph.D. Student, Faculty of Economics, Lucian Blaga University, Sibiu, Romania
j.caraganciu@gmail.com

Abstract: The aim of this paper is to show that the web market is a developing market, which has its
special characteristics. We try to present why the standard market analysis approach cannot be implemented for
this type of market.

Key words: E-commerce, E-commerce Types, Web Market

Jel Clasification: A11, A12

Web market is an evolving concept in nowadays world. With the development of the internet and
its evolution to the WEB 2.0, which is the more user driven type of internet as it is the user that further
influences the appearance and the suggestions of websites, there was a great increase in the number of e-
commerce websites.
WEB 2.0 internet has given the opportunity for web markets to be closer to their clients needs.
Thus the standard of quality for an e-commerce company has risen, in terms that a website has to be user
friendly otherwise it will not be used by the potential customers. (Tim OReilly 2005)
The barriers to entry to the web market imply rather low costs, in general, as compared to a real
shop or moreover a network of shops. Although the entry costs are quite low on the market, there has
already been established a chain of e-commerce websites with large market power.
E-commerce websites are a growing industry and their market share is constantly growing as new
people start to put their trust in online sales. The amount of e-commerce sales may vary depending on the
type of product they are offering, as some products do not require to be touched or felt by the client.
The market size follows a constant growth as we can see in figure 1 presented bellow.

Source: US quarterly retail e-commerce sales 1st quarter 2010 US Census Bureau

As we can see that even during a year the sales of e-commerce are constantly growing. These
numbers mean that a lot of people are starting to trust online purchases if the payment method is easy
enough. The figure we presented relies only on e-commerce sales in the US, because the US holds the
majority of the registered websites on the web. Thus it is to hold most e-commerce websites. Not to
mention the fact that the US are the leading country in innovating sales methods.

33865
34827
36587
38141
38707
31000
32000
33000
34000
35000
36000
37000
38000
39000
40000
2009 Q1 2009 Q2 2009 Q3 2009 Q4 2010 Q1
Figure 1: E-commerce Growth in the US, sales volume, milions USD
E-commerce Growth
101

The top 5 registered domains, such as .com, .us etc, are presented in the figure 2.

Figure 2: Top 5 Active Domains on the WEB, by the number of registered domains

Source: http://icannwiki.com/index.php?title=Domain_Statistics (last visit 27/04/2012)

Although the .com domain, not necessarily means that it is registered in the US, most of those
domains are at least targeted towards the US market. After analysing Figure 2, we can say that the
number of registered domains with the domain extension of .com, is strictly superior to the other types of
registered domains.
The web market in terms of e-commerce, is a market with specific type of competition, as the
prices are transparent and easily compared by the clients, with the help of search engines, such as Google.
But since the web market is based on the internet on this market reputation plays a even greater role than
on the real market. Customers tend to select the websites they trust, and which already have a good
reputation on the market. This can be because clients are paying money for just seeing the picture or the
description of the product and a promise that the product will be delivered on time.
E-commerce websites win clients over the real market by a number of significant factors. Most
important of those factors are as follows:
- Lower prices than those of the real market;
- Multiple payment methods;
- Home delivery.
Lower prices can be assured by the e-commerce websites due to the lack of costs. These costs
which e-commerce doesnt have are related firstly to the lack of huge costs with rent of space for a real
shop. Secondly e-commerce companies have less staff then the companies which own a retail store.
Multiple payment methods means that the number of payment methods supported by e-
commerce websites is not only great, but also a lot larger than the ones supported by real stores. This can
also be related to smaller costs, thus the e-commerce company can delay their revenue gain further and
can accept longer credit terms as well as this enables them to accept pay checks.
Some of these payment methods which would not be possible for the real market include third
party websites such as paypall.com, which ensures the security of the transaction for a small fee. This
type of websites has the role to facilitate further the purchase as well as to make the customer feel more
secure about using online payments.
Home delivery is a very important factor to a certain range of customers. Because there are
customers who do not have enough time to go to the store themselves to make the purchase. The home
102827361
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0
20000000
40000000
60000000
80000000
100000000
120000000
Active domains on the WEB
.com
.net
.org
.info
.biz
102

delivery system is also a setback for other customers as it takes time, and if the customer is to go to a
local retail store the wait associated with the product delivery can be avoided.
The delivery of most of the e-commerce companies is based on the help of fast delivery
companies, such as UPS, FedEx, American Express, as well as local mailing system. The fact that
delivery is made by other companies it enables e-commerce businesses to operate world-wide, as the
website can be accessed globally. The delivery cost is for fast delivery is usually transferred to the client
which in itself enables web-markets to be operating in neighbouring countries as well as the one where it
was established.
At this moment we are to assume that every e-commerce company can be considered
international by default, which gives out another important role attributed to the web market, its crucial
role for the supply chain. As B2B evolved over the years everyone is trying to go into lowering their
costs, which will make them more competitive on the local market. Real market stores tend to find the
suppliers with the lowest prices possible. This search is what gives B2B an advantage. As you can find
every information concerning suppliers on the web and moreover even order online or via e-mail from the
desired company (Karthik N.S. Iyer, Richard Germain, Cindy Claycomb 2009). It is even possible to
integrate an e-commerce into a stores intranet system to facilitate accounting as well as purchase
requests.
It is time that we try to delimitate e-commerce websites into more categories. The categories
presented could be used to better understand the role and field of influence of each particular type of
category. The categories are as follows:
- Stand Alone E-commerce website;
- The duplicate of a real business on the web;
- Software retail e-commerce;
- Auction type e-commerce;
- Database resellers.
The standalone e-commerce website is the one where it is very complicate to determine its real
area of influence because this type of business doesnt have a presence on the real market. An example of
a well-known e-commerce of this type is amazon.com. It is a pure e-commerce, thus we cannot truly
determine its geographical market.
The duplicate of a real business/store on the web, it is one of the easiest to determine its area of
influence it terms of geographic coverage as it is basically the same with the business which it gives an
online presence to. For example if we take Wallmart.com its geographic market is the same as is its
stores presence, thus people who buy from walmart.com are the same people who know of the Wal-Mart
stores and trust them.
Software retail e-commerce is a specific type, where you cannot really calculate the costs
accurately. Because in the costs of product development are in a field of labourand the costs for research
and development, which makes it very hard to calculate. An example of such type of e-commerce is
kaspersky.com where you can buy software online without customers country of origin being of any
importance.
Auction type e-commerce is basically an e-commerce where clients sell products to other clients,
via the principle of the highest bidder. These websites are not a real threat to the real market stores as they
mainly sell used items. An example of such e-commerce is ebay.com. Although it started to be selling
new items as well as the used ones, the concept of ebay.com is stuck in peoples minds as something
which sells used items.
Database resellers are the ones that sell statistical data or other types of data to the companies or
the clients willing to pay for them. These websites are the ones that sell content so they have a well-
defined customer, and are limited geographically to the type of data they sell.
In the following figure we can see the data about people willing to purchase online content if it
were easily accessible. This data can show how many clients are willing to buy content online if it is
accessible and uses a comfortable type of payment.

103

Figure 3: Consumers willing to pay for content if has a flexible payment method, percentage

Source: Changing Models: A Global Perspective on Paying for Content Online, Nielsen, February 2010

Although there are many factors which could influence ones opinion about buying online
probably the most important is the flexibility of online payments which is reflected in Figure 3.
From the total of consumers that participated in the questionnaire we can see that there are more
percentages of people willing to buy online if the website has a flexible payment method, than the ones
that disagree to buy online. As well we can observe that the amount of people with no option who, given
the correct amount of information could be part of either, is also higher that the amount of the ones that
disagree.
The existent market analysis and the tools for the determination of the dominant position cannot
be applied accurately to the web market. There are a number of reasons why the web market cannot be
accurately analysed using these methods. Firstly most of these tools for market analysis rely on a number
of principles which are rather hard to determine for the online market. Among the data required for such
an analysis there are things like, market share, geographic location of the market, market size. These
factors cannot be precisely calculated for an e-commerce due to the following reasons:
- An e-commerce even though it is established in a country, in may still sell to
neighbouring countries, thus is very non discriminative towards the origin of their
customer. This makes it quite hard to calculate the accurate and precise market size, as
well as the geographic boundaries of the market;
- Being present on the web makes it hard to determine e-commerces market share as we
do not have the data about its market size and even market location. This makes it even
more difficult to make a market analysis;
- Even the website extension (such as .com, .ro, .org) do not indicate a lot more about the
location of the web company, because a lot of websites to seem global create a .com
domain, which makes it even harder to determine the geographical position, if the contact
information is not provided on the website.
With this being said we can see why e-commerce requires a new perspective for market analysis.
Being a different market first we would have to decide upon the method to successfully delimit its market
location and size, and consequentially determine its market share deriving from sales divided by market
size.

Conclusions
In conclusion we can say that e-commerce is an emerging market. Selling online gives the
companies the opportunity to be present online in practically any country in the world where the
websites language is understood.
The flexibility of payment methods makes e-commerce more client-oriented and a lot more
versatile for sales. The low costs of maintenance are contributing further to the possibility to create
convenient methods of payment for the client.
104

The Web market is a fast growing market with specific behavior, where reputation is an
important asset to the companys credibility. These concepts make it hard to be covered by existing
market theories.

References:
- Tim O'Reilly (2005-09-30). "What Is Web 2.0". O'Reilly Network. Retrieved 2006-08-06
- Karthik N.S. Iyer, Richard Germain, Cindy Claycomb B2B e-commerce supply chain
integration and performance: A contingency fit perspective on the role of environment
- Changing Models: A Global Perspective on Paying for Content Online, Nielsen, February
2010
- Quarterly Retail E-Commerce Sales 1st Quarter 2010 US Census Bureau
- http://icannwiki.com/index.php?title=Domain_Statistics

105

TOURIST DESTINATION IMAGE TROUGH THE IDENTITY OF PERSONALITIES.CASE
STUDY: CONSTANTIN BRANCUSI

CARUNTU Andreea Laura
Ph.D. student, Faculty of Marketing /Department Marketing, Bucharest Academy of Economic
Studies, Bucharest, Romania, andreea.caruntu@ yahoo.com

STANCI OI U Aurelia- Felicia
Professor, Faculty of Marketing /Department Marketing, Bucharest Academy of Economic Studies,
Bucharest, Romania, stancioiufelicia@hotmail.com

TEODORESCU Nicolae
Professor, Faculty of Marketing /Department Marketing, Bucharest Academy of Economic Studies,
Bucharest, Romania, teodorescu.nicolae@gmail.com

Abstract: In a century dominated by the 3D technology, in which the tourism destination image is
determinant in the process of taking the buying decision; it can be stated that sometimes it can take the place of its
identity. Thus, an important role is given also to the perception of the image of its personalities. Constantin
Brancusi has an important ole among the personalities from Romania, the way in which is perceived the image of
the tourism destination Targu Jiu among the visitors can represent a starting point for the development of marketing
strategies. The aim of this paper is to identify the role that personalities have in building the tourism destination
image.

Key words: tourism destination, image destination, Constantin Brancusi, tourism form.

JEL classification: M 31

1. Introduction
The permanent changes in the environment in which we live influence the tourists image on
tourist destinations. The image perceived by tourists is a key factor in choosing a certain destination. Each
person has in mind a specific image of the destination, the image formed on the basis of those seen in the
media, from those heard, read and, in the last instance, on the basis of their own experience, especially in
the last two decades when internet access became easier.
The existence of the possibility to choose among several tourism destinations leads to a powerful
competition and, further, in establishing and developing strategies for the proper promotion of tourist
destination. In order to attract more visitors, it is necessary the existence of a sustainable and competitive
advantage, to help making a clear differentiation of the tourist destination.
When choosing tourist destinations, the visitor takes into consideration, firstly, the image formed
across the years on them. Depending mainly on this factor, but also on other factors (example, friends
experience), he decides to take into consideration the favorite tourist products, characteristic to that
destination. As tourism services are intangible, images become more important than reality (Gallarza et
al.; 2002, Kozak and Dekrop 2009).
For the destination to benefit, the images must be different, appealing, simple and most
important, credible and based on reality

2. Conceptual framework
The development of tourism from the last decades has offered tourists the possibility to choose
among more destinations, so that the challenge to understand the way in which tourists perceive the
tourism destination image has become more needed for developing marketing strategies.
Marketing places and destinations are exciting as well as challenging (Fyall et al. 2003; Kozak
and Baloglu, 2011). Tourists are becoming more sophisticated and looking for higher standards in quality,
innovation and responsiveness as a consequence of developments in technology, increase in mobility and
increase in the spread of word-of-mouth communication (Mill and Morrison1992; Kozak and Baloglu,
2011).The globalization has allowed tourists to benefit from tourist products of their country, but also
from other countries, some at thousand of miles away.
106

The destinations should create a competitive advantage by attracting tourists as well as
developing and staging memorable experiences as good as or better than competitive destinations (Kozak,
and Baloglu, 2011).
Representing one or more attractions, where tourists can consume the biggest part of their
financial and time resources (processing after Stancioiu, 2004); the destination elements include
(Middleton and Clarke, 2001):
- natural attractions: landscapes, seascapes, beaches, climate, flora and fauna and other
geographical features of the destination and its natural resources;
- built attractions: buildings and tourism infrastructure including historic and modern architecture,
monuments, promenades, parks and gardens;
- cultural attractions: history and folklore, religion and art, theatre, music, dance and other
entertainment, and museums;
- social attractions: way of life and customs of resident or host population, language and
opportunities for social encounters.
Places differ in their histories, cultures, politics, leadership and particular ways of managing
public-private relationships (Kotler et al., 2002).
Regions are in a permanent competition to attract tourists, trying to identify always new elements
contributing to the existence of their needs and also to find solutions to provide them with what they need
even before they know this. Many times consumers have certain needs hidden, that they have not
recognized but with the time passing they come to the surface and is necessary the existence of tourist
products that satisfy these needs.
Another challenge is the creation and strengthening the image of a destination, there are
numerous definitions regarding this concept. Destination image should be envisioned as consisting of two
main components; those that are attribute based and those that are holistic (Echtner and Brent, 2003). The
important role of destination image, both in terms of understanding travel behavior and in designing
effective tourism marketing strategies, underscores the need to develop methodologies to
comprehensively and accurately measure the concept (Echtner and Brent, 2003).
Destination image characteristics can be classified as functional, (e.g. climate, prices, roads,
nightlife, mental picture of physical characteristics) and psychological (e.g. friendly people, generally
safe, general feelings and impression of the atmosphere of the place. (Chen, 2006).
In order to create efficient strategies for the destination image it is necessary to understand the
way in which is formed the image of a tourist destination, extremely useful is the model 3GAP (figure
1).The model tries to deconstruct destination image formation and identify those elements that have a
dynamic influence on how destination image is formulated in the mind of the consumer (Kozak and
Decrop, 2009).
Figure 1: Model 3 Gap, creating image destination

Source: Metin Kozak, Alain Decrop, Handbook of tourist behavior: theory & practice, Routledge, 2009,
p.36

Tourists give consciously or in their subconscious, a crucial importance of the concept of
107

destination image in the moment in which they start making plans for vacation. Starting from this concept
there will be taken all decisions on purchasing tourist products. All destinations have images, often based
more on historic rather than current events, and it is an essential objective of destination marketing to
sustain, alter or develop images in order to influence prospective buyers expectations (Middleton and
Clarke, 2001).
In order to clarify the image of a tourist destination, starting from the specificity of the image
perceived by residents of different regions is necessary to further study the image perceived by unknown
persons: (tourists or visitors, respectively temporary users), the non-travelers (those who do not wish to
visit the destination at least in the period immediately from emotional and rational reasons), then by those
returning (those who keep in memory certain images and then compare them with the existing image )
and finishing with those perceived by professionals who notice, analyse and then create artistic and
psychological images) (Stancioiu et al.,2011).
Tourist destinations increasingly embrace branding techniques to develop unique positions,
identities, and personalities in a highly competitive environment at national and international levels
(Kozak and Baloglu, 2011).
According to Stancioiu et al. the family of brands it is extremely important in creating the
identity of a region (Stancioiu et al. 2011). For creating the tourist brand Oltenia, important are, firstly,
the brand Romania, the country tourist brand ( with the logo Romania land of choice), the brand
Transylvania, the brand Moldova, the brand of Banat, the brand of Muntenia, the brand of Dobrogea, then
the brands from Oltenia (Mehedinti, Gorj, Dolj, Olt and Valcea), the brands of local communities (
Drobeta Turnu-Severin, Orsova, Strehaia, Targu-Jiu, Tismana,Craiova,Calafat, Slatina, Ramnicu Valcea,
Calimanesti, Caciulata, Horezeu etc) and the brands of local/individual associations of promoting tourism
in Romania (Stancioiu et al.,2009).

Figure 2: The family of tourist brands of the tourist brand Oltenia

Source: Stancioiu A.-F., Pargaru, I.,Mazilu,M. (2009): Brandul destinatiei-cateva repere conceptual-
metodologice in marketingul destinatiei, proceedings of The Second International Tourism Conference
Sustainable Mountain Tourism Local responses for Global Changes, Eselnita, publicat in Editura
Universitaria,Craiova,2009,p.288

On the basis of the designed brand identity, as well as trough communication strategies developed
by the marketer of tourist destination, the tourist creates an image of the destination, image which
constitutes an important factor in the future choice. The satisfaction or insatisfaction that the tourist is
feeling regarding a tourist product depends largely on the expectations that he has had concerning that
destination, the destination image previously owned by him and the way he perceived the performance at
destination (Pike, 2002, Stancioiu, 2011).
The micro destination Oltenia, trough its positioning, cultural traditions, historical monuments,
its personalities, benefits from ideal conditions for building a special image of the destination. Oltenia is
well known for the personalities born in this area. An important personality of this area is Constantin
Brancusi, the biggest Romanian sculptor, and one of the founders of modern art.
Tourists can be influences in the image they have on the tourist destination, among other
elements, as sacred places, and also by important personalities. Sacred places are revered, not only in real
108

life but also in advertising, since they are immediately recognizable, highly visible and normally connote
positive values. (Solomon et al., 2006). In commercial terms, the art revitalize the tourism product,
sharpens its market appeal, give new meaning to national character, and permit much tighter sales and
promotional efforts. Simply stated, the arts, as an element of tourism, improves the product and
strengthens its appeal, making tourism saleable (Zapped and Hall1992; Smith, 2009).
In this context, we can take into consideration the personality Constantin Brancusi as an essential
factor in determining the image of the tourist destination Targu-Jiu in parallel with the fact that the
Monumental Ensemble Heroes Path is located here.
In the sense of those explained by DEX, Constantin Brancusi is a person with outstanding skills
and special intellectual and moral qualities, which makes and performs in a practical way trough the
success in a certain activity domain. He has been regarded from more perspectives, considered by the
musician Erik Satie as being the brother of Socrates showing polyvalent personality. Man of
unshakable principle, a peasant prince by his own description, subtle of mind, radically modern in his
work, Constantin Brancusi (1876-1957) brought to twentieth-century a unique body of work and wisdom
that command heartfelt respect.(Lipsey,1997). By its entire work, and personality Constantin Brancusi is
part of the big gallery of Romanian personalities, occupying the ninth place in the campaign Great
Romanian, together with personalities as Stefan cel Mare, Mihai Eminescu, Mircea Eliade etc.

3. Methodological and operational framework
The purpose of the research was carried out to assess the way in which tourist destination image
can be perceived by tourists through the identity of an outstanding personality from the modern art world,
Constantin Brancusi, and to identify new elements that provide the basis for future marketing strategies of
the destination.
The research has been performed in the period January 2012- April 2012 on a sample of 820
young people, actual and potential tourists, with higher education in promoting, with an age between 20-
25 years.
The main objectives of the research were:
a) identifying of the information known about Constantin Brancusi;
b) to catch the feeling inspired by the works of Constantin Brancusi;
c) identifying the way in which tourists perceive the city, inhabitants and tourist services;
d) identifying the importance given to the works of Constantin Brancusi in promoting the
tourism image of the city Targu-Jiu.
The method used was the statistical survey and the instrument use was the written questionnaire,
semi structured, completed by the respondent.
Disciple of Auguste Rodin, Constantin Brancusi was born on February 18, 1876 in Hobita (Gorj
County) and died on 16 March 1957 in Paris. Moving to Paris in 1904 brought the sculptor worldwide
notoriety, his works being appreciated both in France and in the United States of America.
Of the works of Constantin Brancusi, we remember: the Kiss (1907), Prayer (1910), Pasarea
Maiastra (1910), Miss Pogany (1912-1933), the Bust of Dr. Carol Davila.
The monumental ensemble located in the central park of Targu-Jiu, is well known worldwide,
being part of the great gallery of artistic ensembles. At the request of the National League of the Women
from Gorj, Brancusi has sculpted the pieces in honour of the heroes dead in the battle field of the war for
bringing together Romania.
The complex comprises: The Gate of the Kiss, about which Mircea Eliade was saying that it has
in the life of the Romanian people the role of a magic creature, that watches to all the important acts from
a persons life:, the Silence Table, measure the time passing, and the Endless Column, considered in 2007
by Unesco as being not only a masterpiece of modern art but also an extraordinary engineering work.
Across the time numerous authors have given a special attention to the complex, considering it
either as symbolizing in a triptych concentration: the mystery of sacrificial love, of Easter joy and eternal
light (Daniel 2007, Stancioiu et al. 2011), or as the cosmic representation of human life, starting from
birth, continuing with marriage and ending with death.
The city Targu-Jiu is the residence of the Gorj County, its name coming from the river Jiu and it
had been mentioned for the first time in the year 1406, under the name Jiul, in a demand given to the
monastery Tismana by the voivode Mircea cel Batran.
The ensemble of Constantin Brancusi is, in great-extend, the most important tourist objective of
Romania being well known worldwide due to the notoriety of the works of the great sculptor.
109

The city of Targu-Jiu owns a lot of heritages, a fact confirmed by the results of the research (the
primary reason for the visit was relaxing and leisure tourism 17%, followed by 16%, cultural tourism ,
visit to relatives and friends 4% and business travel1%) , while 61% of the respondents have not visited
the city of Targu-Jiu (figure 3). 72% of respondents who have not visited the city of Targu-Jiu wished to
visit at some point the city while 28% are not interested in a possible visit.

Figure 3: The distribution of the tourism forms for the city Targu-Jiu in respondents perception

An important element of the research regards the respondents knowledge about Constantin
Brancusi and the association of personalities with the area. Thus, 93% of the respondents have heard
about Constantin Brancusi (figure 4). A large proportion which may encourage the marketer to develop
positioning strategies for the tourist destination Targu Jiu which is the starting point for marketing
strategies specific to tourist product/products.
Figure 4: The distribution of the answers concerning the notoriety of Constantin Brancusi

The results of the research have highlighted that of those 93% that answered that they have heard
about Constantin Brancusi only 43% know the fact that the great sculptor was born in Hobita, Gorj
county, while 49% answered they did not know, 7% with Curtea de Arges and 1% with Curtisoara.
This fact can be explained either through the lack of an efficient promotion, made by the local
administration o the locality Hobita or of the city Targu-Jiu, either through the lack of promoting in
general all the elements concerning Constantin Brancusi.
In what regards the association of Constantin Brancusi with its own works, from the research it
has been concluded that 39% associate its image with the Endless Column, 36% have chosen various
combinations of its works, 14% with the Gate of the Kiss, 5% with Silence Table, 2% with the Heroes
Path Ensemble, 2% with Oltenia, 1% with the city Targu-Jiu (figure 5).

17%
1%
16%
4%
1%
61%
Turism de relaxare si
odihna
Turism de afaceri
Turism cultural
Vizita la rude
Altul.Care?
Nu am vizitat
93%
7%
Da
Nu
110

Figure 5: The distribution of answers concerning the association of the works with Constantin Brancusi

Concerning the works visited, there have been obtained the following results: 63% of those that
have passed through the city Targu-Jiu have visited not one work but more, while the rest have chosen
one work as it follows: 11% have visited the Endless Column, other 11% have visited the Gate of the
Kiss, 8% the Monumental Ensemble Heroes Way, 2% Silence Table (figure 6).

Figure 6: The distribution of answers regarding the works visited by the respondents

Other personalities that define the area, reminded in the research are: Tudor Vladimirescu,
Ecaterina Teodoroiu, Horatiu Malaele. From the research it shows that 85% of the respondents associate
the area with Constantin Brancusi, 6% with Tudor Vladimirescu, 1% with Horatiu Malaele, 1% with
Ecaterina Teodoroiu, while 7% of the respondents had another option (Figure 7).

14%
39%
1% 0% 0%
2%
5%
1%
2%
36%
Poarta Sarutului
Coloana Infinitului
Madame Pogany
Sarutul
Pasarea Maiastra
Ansamblul Calea Eroilor
Masa Tacerii
Targu-Jiu
Oltenia
Combinatii
11%
11%
4%
8%
0%
2%
1%
63%
Poarta Sarutului
Coloana Infinitului
Madame Pogany
Ansamblul Calea Eroilor
Sarutul
Masa Tacerii
Pasarea Maiastra
Combinatii
111

Figure 7: The distribution of answers concerning the association of the area with important personalities

The high percentage reconfirms the idea of Lipsey who has stated that Brancusi has given to
twentieth-century a unique body of work and wisdom that command heartfelt respect. (Lipsey, p.225)
In order to understand better the connection between personalities and the determination of
destination image decisive are the results regarding the interest for art of the respondents. Thus, 51
percent of those surveyed have different activities related to this field, of which :28% visit
regularly/permanently art galleries, museums; 10% read books about art, 9% are involved in artistic
activities, 3% participate in the initiative of artistic associations and 1% participate in courses about
art.(Figure 8)

Figure 8: Distribution of the answers concerning the interest for art of the respondents

An important role in the creation of the tourist destination image is had by feelings of those who
have visited the works placed in the city of Targu Jiu, as part of their experience. Therefore, it results that
the majority (29%) had a feeling of relaxation, at little distance was the feelings of pride (27%),
excitement (26%), some of inspiration (13%) and motivation (1%) (figure 9).

1%
85%
6%
1%
7%
Horati u Mal ael e
Constanti n Brancusi
Tudor Vl adi mi rescu
Ecateri na Teodoroi u
Al tel e.Care?
10%
3%
28%
9%
1%
49%
Studiez/citesc carti
despre arta
Particip la initiative ale
unor asociatii artistice
Vizitez
periodic/permanent
galerii de arta,muzee
Sunt implicat in activitati
artistice
Particip la cursuri despre
arta
Nu sunt interesat de arta
112

Figure 9: The distribution of the answers concerning the feelings of the respondents towards the works
visited

The importance of the works for the image of the city Targu-Jiu comes also from the answers
given to the question concerning the fact that a proper promotion of the brand Constantin Brancusi could
increase the interest of possible visitors for the city Targu-Jiu, 97% of the respondents answered that they
consider that realizing such a promotion could bring more tourists to the city Targu-Jiu.

4. Conclusions
The research performed has underlined the fact that 97% of the respondents have heard of
Constantin Brancusi and the fact that 85% of them associate Brancusi with the area, confirm the
increased importance that a personality can have , such as that of Constantin Brancusi in building the
image of a tourist destination, besides other elements of attraction, natural and human.
Taking into account the fact that 18% of those who have visited have opted for a form of tourism
"loisir, recreation and leisure ", 16% for cultural tourism and taking into consideration that 50% of the
respondents have activities related to art, it can be asserted that in drawing up product strategies specific
for the tourist destination Targu Jiu, it must be taken into consideration equally, the tourism of loisir,
recreation and leisure and the cultural one.
The fact that 97% of the respondents answered that they consider that a proper promotion of the
brand of Constantin Brancusi could increase the interest of visitors towards the city Targu-Jiu confirms
the necessity of concentrating the attention and efforts of the marketer for developing, trough proper
strategies, of all the elements that can be related to the personality of Constantin Brancusi (inclusively
souvenirs).
Moreover, considering that the destination is represented by natural, human attractions,
infrastructure, tourist structures, as well as of persons, it can be concluded that, in the case of Targu-Jiu,
the main determinant in building the tourist destination image is represented by the personality of the
great sculptor Constantin Brancusi, all other attractions spinning around it.

5. References
- Chen, J.S. (2006) Advances in Hospitality and Leisure. Available at http://books.google.ro/books.
- Echtner, C.M.; Ritchie, B.R., (2003) The Meaning and Measurement of Destination Image.
Available at
http://www.jcu.com.au/business/public/groups/everyone/documents/journal_article/jcudev_0128
55.pdf .
- Kotler, P.; Haider, D.H.; Rein, I. ;( 2002) Marketing Places. New York: Free Press.
0%4%
0%
29%
0%
13%
26%
27%
1%
Suparare
Furie
Rusine
Relaxare
Iritare
Inspiratie
Entuziasm
Mandrie
Motivare
113

- Kozak, M.; Baloglu (2011) Managing and Marketing Tourist destinations strategies to Gain a
Competitive Edge. Available at http://books.google.ro/books.
- Kozak, M.; Decrop, A., (2009) Handbook of Tourist Behavior. Theory and Practice. New York:
Routledge.
- Lipsey, R. (1997) An art of Our Own: The Spiritual in The Twentieth-Century Art. Available at
http://books.google.ro/books.
- Medlick, S. (2006) Dictionary of Travel Tourism and Hospitality.3
rd
edition, Butterworth
Heinemann
- Middleton, V. T.C.; Clarke, J., (2001) Marketing in Travel and Tourism.3
rd
edition, Butterworth
Heinemann.
- Smith, M. K. (2009) Issues in Cultural Studies. 2
nd
edition, New York: Routledge.
- Solomon, M.; Bamossy, G.; Askegaard, S.; Hogg, M.K., (2006) Consumer Behavior: A European
Perspective, 3rd edition: Prentice Hall.
- Stancioiu,A.F.;Teodorescu,N.;Pargaru,I.;Vladoi,A.D.;Baltescu,C.(2011) Imaginea Destinatiei
Turistice-Element de sustinere in Constructia Brandului.Studiu de Caz :Muntenia, Economie
Teoretica si Aplicata,No. 2(555),p.139-152.
- Stancioiu, A.F., Pargaru, I.; Vladoi, A.D.; Teodorescu, N.; Puiu, C. (2011) Oltenia
microdestinatie pentru turismul balnear si cultural. Economie Teoretica si Aplicata,No.
12(565),p.45-56.
- Stancioiu,A.F.; Pargaru,I.;Mazilu,M. (2009) Brandul destinatiei-cateva repere conceptual-
metodologice in marketingul destinatiei, proceedings of The Second International Tourism
Conference Sustainable Mountain Tourism Local responses for Global Changes,p.288.
- Stancioiu, A.F. (2004) Strategii de Marketing in Turism, Bucuresti: Editura Economica.

114

THE IDENTIFICATION OF THE MARKETING APPROACHES USED IN THE ROMANIAN
BANKING SECTOR - A MARKETING RESEARCH -

CTOIU Iacob,
Professor Ph.D, D. H.C, Faculty of Marketing, Academy of Economic Studies, Bucharest,
iacob_catoiu@yahoo.com

EDU Tudor,
Assistant Professor PhD, Faculty of Management-Marketing, Romanian-American University, Bucharest,
tudoredu@yahoo.com

NEGRICEA Iliu Costel,
Assistant Professor PhD, Faculty of Management-Marketing, Romanian-American University, Bucharest,
negricea@yahoo.com

Abstract: The banking sector is by no means the most important pillar of any economy. Any organisation
needs a bank to conduct its activity and any individual interact with a bank or several at least to pay the bills, save
and borrow. The purpose of this research is to identify the marketing approaches of the Romanian banks in relation
to aspects of this competitive industry. The main conclusion of this study is that the Romanian banks use a
significant number of marketing approaches covering all aspects of the business, some bearing similarities in the
industry, while others striking through their uniqueness.

Key words: Marketing, secondary data, Romanian banks

JEL classification: M31

1. Introduction
The banking sector is the backbone of any economy. A bank can lend a state, supports the activity
of any organisation and assists every individual in various ways, providing a wide array of services.
Offering services to organisations and individuals, and in some instances to a particular state, a
bank must be able to make sound marketing decisions which can be very different and difficult
considering the aforementioned types of prospects and the highly competitive banking industry. The
banks must be able to adapt, change strategies, release products and services and predict new needs to
provide attractive offers to customers (Avram, Furdui & Preda, 2010).
The purpose of this research is to identify the marketing approaches of the Romanian banks in
relation to all aspects of this business. In order to reach this goal we considered necessary at this stage to
design and conduct a study based on the analysis of secondary data.
The research was conducted based on a model developed and tested by the authors commencing
with 2009. The model was initially designed based on the work lead by Prof. Ctoiu (Ctoiu, et al., 2002)
and subsequently developed and tested by the authors in studies about the professional marketing services
(Edu & Negricea, 2011) and internet services (Ctoiu, Edu & Negricea, 2011).
For this study the model was adapted to the peculiarities of the banking industry.

1. Research purpose

The identification of the marketing approaches used by the Romanian banks.

2. Research objectives
2.1 The identification of the marketing approaches in relation to the marketing
environment
2.2 The identification of the marketing approaches in relation to the determination of
the buying behaviour on the market
2.3 The identification of the marketing approaches in relation to the product policy
2.4 The identification of the marketing approaches in relation to the price policy
115

2.5 The identification of the marketing approaches in relation to the marketing
communication
2.6 The identification of the marketing approaches in relation to the distribution policy
2.7 The identification of the marketing approaches in relation to the personnel policy
2.8 The identification of the marketing approaches in relation to the location

3. Research hypotheses

3.1 The Romanian banks gather information about the marketing environment related
to:
3.1.1 industry/market features and tendencies
3.1.2 acquisitions and diversification
3.1.3 market share
3.1.4 suppliers and partners
3.1.5 Corporate Social Responsibility endeavours

3.2 The Romanian banks collect information about the buying behaviour in relation to:
3.2.1 brand perception (bank and products)
3.2.2 brand attitude (bank and products)
3.2.3 buying motives
3.2.4 product satisfaction
3.2.5 buying behaviour
3.2.6 buying intentions
3.2.7 segmentation studies
3.2.8 target markets
3.2.9 brand positioning
3.2.10 fidelity tactics and consumer reactions

3.3 The Romanian banks marketing approaches in relation to the product policy can be
found in one or more of the following categories:
3.3.1 concept development and testing
3.3.2 brand name generation and testing
3.3.3 a test market
3.3.4 product portfolio analysis
3.3.5 underperformed products
3.3.6 products launched in cooperation with other financial institutions
3.3.7 offer analysis on B2C, B2B, B2G
3.3.8 product assortment
3.3.9 working/ transaction hours
3.3.10 transparency in offer presentations
3.3.11 perception about usage safety of bank products
3.3.12 online applications used for client informing and persuading/ offer
description/ product usage

3.4 The Romanian banks pursue marketing approaches for the price policy in the
following areas:
3.4.1 cost analysis for products/ services/ departments
3.4.2 profit analysis for products/ services/ departments
3.4.3 bank interest flexibility
3.4.4 bank commissions
3.4.5 debt re-planning
3.4.6 demand analysis: market potential; sales potential; sales forecasting
3.4.7 disclosure of costs to clients

3.5 The Romanian banks consider marketing communication approaches related to:
3.5.1 motives which determine the choice for a means of communication
3.5.2 mass communication means
116

3.5.3 advertising message
3.5.4 advertising effectiveness: before/after broadcasting
3.5.5 events, fairs, exhibitions etc
3.5.6 sponsorships
3.5.7 promotional instruments such as special offers, prizes, coupons etc
3.5.8 brands: awareness, trust, loyalty etc

3.6 The Romanian banks use distribution approaches which cover the following areas:
3.6.1 channel performance: partners, dealers, ATMs
3.6.2 channel coverage
3.6.3 ATM deployment
3.6.4 ATM network effectiveness
3.6.5 international cooperation
3.6.6 distribution effectiveness in relation to organisations and individuals
3.6.7 online banking
3.6.8 mobile banking
3.6.9 sales force

3.7 The Romanian banks consider marketing approaches in relation to the personnel
policy which could refer to:
3.7.1 recruitment policy
3.7.2 training and courses
3.7.3 remuneration systems (flat wages, commissions etc.)
3.7.4 procedures/ methods/ techniques used to interact with clients
3.7.5 studies on staff
3.7.6 satisfaction related to working conditions/ career development
3.7.7 managerial processes and relations
3.7.8 organisational culture and its forms

3.8 The Romanian banks pursue marketing approaches in relation to the location in the
following areas:
3.8.1 location selection for subsidiaries
3.8.2 office placement
3.8.3 office design
3.8.4 online presence

4. Research variables

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

Marketing
environment
The sum of forces which act in a direct or indirect
manner upon the organisation
Information about:
- industry/market features and tendencies
- acquisitions and diversification
- market share
- suppliers and partners
- Corporate Social Responsibility endeavours

Buying The sum of individual or group decisions directly Information about:
117

behaviour connected to the acquiring and use of goods and
services for the satisfaction of the current and future
needs, including decision processes which precede and
determine these acts
- brand perception (bank and products)
- brand attitude (bank and products)
- buying motives
- product satisfaction
- buying behaviour
- buying intentions
- segmentation studies
- target markets
- brand positioning
- fidelity tactics and consumer reactions

Product The product, service, idea or combination of these with
which the organisation is present on the market
Information about:
- concept development and testing
- brand name generation and testing
- a test market
- product portfolio analysis
- underperformed products
- products launched in cooperation with other
financial institutions
- offer analysis on B2C, B2B, B2G
- product assortment
- working/ transaction hours
- transparency in offer presentations
- perception about usage safety of bank products
- online applications used for client informing and
persuading/ offer description/ product usage

Price The sum of money which must be paid by the buyer to
the seller in order to acquire the offer
Information about:
- cost analysis for products/ services/ departments
- profit analysis for products/ services analysis:
market potential; sales potential; sales forecasting
- disclosure of costs to clients / departments
- bank interest flexibility
- bank commissions
- debt re-planning
- demand

Marketing
communication
The endeavours in which the prospect is informed about
the organisations offer and persuaded to purchase it
Information about:
- motives which determine the choice for a means
of communication
- mass communication means
- advertising message
- advertising effectiveness: before/after
broadcasting
- events, fairs, exhibitions etc
- sponsorships
- promotional instruments such as special offers,
prizes, coupons etc
- brands: awareness, trust, loyalty etc

Distribution The processes and routes through which an offer
reaches a client
Information about:
- channel performance: partners, dealers, ATMs
- channel coverage
- ATM deployment
- ATM network effectiveness
- international cooperation
- distribution effectiveness in relation to
organisations and individuals
- online banking
- mobile banking
- sales force

118

Personnel The function and processes which handle recruitment,
training and compensation of staff
Information about:
- recruitment policy
- training and courses
- remuneration systems (flat wages, commissions
etc.)
- procedures/ methods/ techniques used to interact
with clients
- studies on staff
- satisfaction related to working conditions/ career
development
- managerial processes and relations
- organisational culture and its forms

Location The process involved in choosing the placement and
designing the interior of an office
Information about:
- location selection for subsidiaries
- office placement
- office design
- online presence

5. Population

The researched population is represented by the banks registered in Romania.

6. Secondary data study guide

The study guide was designed in accordance with the research purpose and objectives. This guide
was structured in the following chapters:
- business/economic or company
- buying behaviour
- product
- price
- marketing communication
- distribution
- personnel
- location
For each section, the study guide had the following structure:

Table 2- Business/economic or company research
Business/economic or company- information about:
Features of the
industry/market and
tendencies on it
Acquisitions and
diversification

Market share

Suppliers
and
partners
Corporate Social
Responsibility
endeavours
Other Description Source

Table 3.1- Buying behaviour research

Table 3.2- Buying behaviour research

Table 4.1- Product research
Product- information about:
Buying behaviour- information about:
Brand perception
(bank and
products)
Brand attitude
(bank and
products)
Buying
motives
Product
satisfaction
Buying
behaviour

Buying
intentions

Segmentation
studies
Target
markets
Brand
positioning
Buying behaviour- information about:
Brand
positioning
Fidelity tactics and
consumer reactions
119

Concept
development
and testing

Brand
name
generation
and
testing
A test market

Product portfolio
analysis

Underperformed
products
Products
launched in
cooperation with
other financial
institutions
Offer
analysis
on B2C,
B2B,
B2G
Product
assortment

Table 4.2- Product research
Product- information about:
Working/ transaction
hours
Transparency
in offer
presentations
Perception about
usage safety of
bank products
Online applications used for
client informing and
persuading/ offer
description/ product usage

Table 5- Price research

Table 6.1- Marketing communication research
Marketing communication- information about:
Motives which determine the
choice for a means of
communication
Mass
communication
means
Advertising
message
Advertising effectiveness:
before/after broadcasting
Events: fairs,
exhibitions etc

Table 6.2- Marketing communication research
Marketing communication- information about:
Sponsorships Promotional instruments such as
special offers, prizes, coupons etc
Brands: awareness,
trust, loyalty etc

Table 7- Distribution research

Table 8.1- Personnel research
Personnel- information about:
Recruitment
policy
Trainings and
courses
Remuneration systems (flat
wages, commissions etc)
Procedures/ methods/ techniques
used to interact with clients
Studies
on staff

Table 8.2- Personnel research
Personnel- information about:
Satisfaction related to working
conditions/ career development
Managerial processes
and relations
Organisational
culture and its forms

Table 9- Location research
Location- information about:
Location selection
for subsidiaries
Office placement Office design Online presence Other Description Source

Price- information about:
Cost
analysis for
products/
services/
departments
Profit
analysis for
products/
services/
departments
Bank
interest
flexibility
Bank
commissions
Debt re-
planning
Demand analysis:
market potential;
sales potential; sales
forecasting; price
sensitivity
Disclosure
of costs to
clients
Other Descri
ption
Source
Distribution- information about:
Channel
performance:
partners,
dealers,
ATMs
Channel
coverage

ATM
deploy-
ment
ATM
network
effective-
ness
International
cooperation
Distribution
effectiveness
in relation to
organisations
and
individuals
Online
banking
Mobile
banking
Sales
force
Other Descrip-
tion
Source
120

7. Sources of secondary data

The secondary data sources were structured in several chapters to facilitate the study:
7.1 Web sites of banks
7.2 Web sites of regulatory institutions
7.3 Reports and statistics issued by public and private institutions
7.4 News Web portals
7.5 Newspapers
7.6 Specialised publications in banking
7.7 Specialised web sites in banking

8. Research conclusions

After analysing the secondary data sources, 628 relevant references were identified. These
references were analysed using the subcategories of the study guide.
In order to match these references with the research objectives, each objective was analysed
considering on one hand the predefined subcategories and on the other hand the other subcategory.

Objective no. 1- The identification of the marketing approaches in relation to the marketing environment

After analysing the data it was concluded that this objective had been accomplished. In this
regard it can be said that the Romanian banks gather information about the marketing environment related
to:
- industry/market features and tendencies
- acquisitions and diversification
- market share
- suppliers and partners
- Corporate Social Responsibility endeavours

The hypothesis formulated for this objective was entirely confirmed because the findings were
placed within the pre-established subcategories.

Objective no. 2- The identification of the marketing approaches in relation to the determination of the
buying behaviour on the market

The analysis of the gathered data concluded the accomplishment of this objective. The Romanian
banks collect data about the buying behaviour in relation to:
- brand perception (bank and products)
- brand attitude (bank and products)
- buying motives
- product satisfaction
- buying behaviour
- buying intentions
- segmentation studies
- target markets
- brand positioning
- fidelity tactics and consumer reactions

The collected data displayed also marketing approaches pertaining to buying benefits.
The hypothesis formulated for this objective was partially confirmed because other findings were
uncovered as well.

Objective no. 3- The identification of the marketing approaches in relation to the product policy

The analysis of the collected data concluded the accomplishment of this objective. The Romanian
banks make product decisions which extend to the following categories:
121

- concept development and testing
- brand name generation and testing
- a test market
- product portfolio analysis
- underperformed products
- products launched in cooperation with other financial institutions
- offer analysis on B2C, B2B, B2G
- product assortment
- working/ transaction hours
- transparency in offer presentations
- perception about usage safety of bank products
- online applications used for client informing and persuading/ offer description/ product usage

Other product-related marketing approaches were displayed by the collected data, grouped as
follows: product adaptation (product simplification / product automation / product integration), new
services/products launching campaigns offers for newly wedded people; new products, such as EURO
ATMs and bank cards with photos; business loans.
The hypothesis formulated for this objective was partially confirmed because other marketing
approaches were found besides the ones asserted in this hypothesis.

Objective no. 4- The identification of the marketing approaches in relation to the price policy

The analysis of the collected data concluded the accomplishment of the 4
th
objective. The
Romanian banks pursue price-related marketing approaches which cover the following areas:
- cost analysis for products/ services/ departments
- profit analysis for products/ services/ departments
- bank interest flexibility
- bank commissions
- debt re-planning
- demand analysis: market potential; sales potential; sales forecasting
- disclosure of costs to clients

In accordance with the collected data in the other subcategory, the Romanian banks are also
interested in analyses of exchange rates
The hypothesis formulated for this objective was partially confirmed because the collected data
displayed also marketing approaches which were not found in the pre-established subcategories.

Objective no. 5- The identification of the marketing approaches in relation to the marketing
communication

Based on the analysis of the collected data, the 6
th
objective was accomplished. The collected data
reflect that the Romanian banks pursue marketing approaches related to the marketing communications
concerning:
- motives which determine the choice for a means of communication
- mass communication means
- advertising message
- advertising effectiveness: before/after broadcasting
- events, fairs, exhibitions etc.
- sponsorships
- promotional instruments such as special offers, prizes, coupons etc.
- brands: awareness, trust, loyalty etc.

Other marketing approaches were identified in relation to the marketing communication. These
approaches referred to media centres and online/offline advertising, advertising of new services/products.
122

approaches were uncovered besides the ones mentioned in this hypothesis.

Objective no. 6- The identification of the marketing approaches in relation to the distribution policy

Based on the analysis of the collected data, the 6
th
objective was accomplished. The Romanian
banks marketing approaches pertaining to distribution refer to:
- channel performance: partners, dealers, ATMs
- channel coverage
- ATM deployment
- ATM network effectiveness
- international cooperation
- distribution effectiveness in relation to organisations and individuals
- online banking
- mobile banking
- sales force

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

Objective no. 7- The identification of the marketing approaches in relation to the personnel policy

The analysis of the collected data concluded the accomplishment of the 7
th
objective. The
personnel-related marketing approaches of the Romanian banks lie, mainly, within the categories
mentioned below:
- recruitment policy
- training and courses
- remuneration systems (flat wages, commissions etc.)
- procedures/ methods/ techniques used to interact with clients
- studies on staff
- satisfaction related to working conditions/ career development
- managerial processes and relations
- organisational culture and its forms

The collected data displayed also marketing approaches related to staff downsizing and job
openings.
approaches besides those ones already mentioned were identified.

Objective no. 8- The identification of the marketing approaches in relation to the location

Based on the analysis of the gathered data, the 8
th
objective was accomplished. The Romanian
banks marketing approaches in relation to the location cover the following areas:
- location selection for subsidiaries
- office placement
- office design
- online presence

The hypothesis formulated for this objective was entirely confirmed because the findings were
placed within the pre-established subcategories.

3. Conclusions
The Romanian banks use a significant number of marketing approaches covering all aspects of
the business, some bearing similarities in the industry, while others striking through their uniqueness.
123

These findings could be sufficient for a thorough understanding of the marketing approaches
considered by the Romanian banks and this model could be effectively used in this industry.

4. References
- Avram, E. M.; Furdui, I.; Preda, O.- Emerging Risks in Bank Credit Activity in terms of
Financial Banking Marketing Annals of the University of Craiova Economic Sciences
Series - ISSN 1223-365X, 2010 - VOL. III, 2010, Craiova, Romania, BDI: CEEOL, RePEC
International Databases, p. 1-10
- Ctoiu I. (et al.) (2009), Tratat de Cercetri de marketing, Ed. Uranus
- Ctoiu, I.; Edu, T.; Negricea, I. C. (2011) The identification of the Marketing Approaches
used by the Romanian Internet Service Providers- a Marketing Research, paper published in
the proceedings of the conference IECS 2011 CRISES AFTER THE CRISIS. INQUIRIES
FROM A NATIONAL, EUROPEAN AND GLOBAL PERSPECTIVE, Sibiu, 2011, ISBN
978-606-12-0139-6
- Edu, T.; Negricea, I. C. (2011) The Identification of the Marketing Needs and Means of
Communication of the Romanian Marketing Companies A Marketing Research, Romanian
Economic and Business Review, Vol. 6, Issue 3, ISSN 1842-2497, Ed. Pro Universitaria.

124

THE IDENTIFICATION OF THE ECONOMICS STUDENTS PERCEPTION OF THE
ROMANIAN LABOURMARKET ABSORPTION

CTOIU Iacob
Professor Ph.D, H.C, Faculty of Marketing,
Academy of Economic Studies, Bucharest, Romania, iacob_catoiu@yahoo.com

I ONESCU Alexandru
Associate Professor PhD., Faculty of Management-Marketing,
Romanian-American University, Bucharest, Romania, alex.ionescu78@gmail.com

Teaching Assistant PhD. Student, Faculty of Management-Marketing,
Romanian-American University, Bucharest, Romania, emanuela.maria@yahoo.it

Abstract: Due to the economic world crisis, deep changes occurred on the labourmarket at national and
international levels. In this context, many higher education graduates have to face the lack of jobs. This article is
aimed at developing awareness with regard to economics students perception of Romanian labourmarket
absorption. The outcome of this research represents a valuable source of information to be used by the academic
management in making proper and successful decisions.

Key words: labourmarket, students, investment in education, costs, benefits.

Jel Classification: J21, J24, M51.

1. Introduction
Many specialized literature studies refer to the education impact on employment and income-
earning opportunities, job satisfaction. Due to the current economic crisis, the world labour market had to
face deep changes: rise of unemployment, decrease of job number, difficult access to a well paid job, fall
of income. According to Negricea, Edu and Ivanescu (2011), these deep transformations affect students to
a greater extent because of the impact on family and other community groups leading to changes of
values and perceptions of future careers and social development. However, education is the only major
resource for a better future offering a chance for a new start. This article is aimed at identifying the
economics students perception of the Romanian labour market absorption. The article is made of five
parts: the first part is the introduction, the second part addresses the Romanian labourmarket, its
evolution, employment and income-earning opportunities according to the educational level. The third
part presents the research method, the fourth shows the research outcomes regarding the economics
students perceptions of the Romanian labour market absorption, the fifth part presents the research
conclusions and in the end of the article the limitations and proposals for future research are presented.

2. Romanian labourmarket and the impact of education on employment and income-earning
opportunities
Specialized literature authors such as Boeri (1994), Chletsos Michael, Kollias Christos (1996),
Commander and Tolstopiatenko (1997), make references of labour market changes occurred due to the
transition process in former communist countries, loss of jobs and governmental reforms, labour market
privatization, emphasizing that unemployment is a major challenge in Central and Eastern European
transition countries, because the labour market changes had a negative effect on population and quality of
life. Many researchers estimated the income variable in transition economies through a regression model,
using education and experience as independent variables, and income as dependent variable. (Boeri, T.,
and K. Terrell, 2002, p. 61). According to Boeri, T., and K. Terrell (2002), the rise of an individuals
education level by one year leads to an increase of the income by 2%-5% in planned economies. In the
context of transition to market economy, the incomes vary considerably at individual and organizational
levels.
Romanias transition to market economy has triggered deep economic and social changes. This
transition process from a planned economy to a market economy, begun in 1989, implied labour force
125

reallocation. In a planned economy the employment opportunities are centred in heavy industry,
agriculture and the public sector. Romanias transition determined a chain of effects such as the reduction
of the number of employees and the rise of unemployment, and also governmental implementation of
some social programs and labour market measures meant to mitigate these difficulties. Due to the
transition to the market economy, employment opportunities increased in business sector, because of
privatization and international trade development. (Boeri, T., and K. Terrell, 2002). The implementation
of a macro-stabilization program in Romania, starting in 1992, represented a partial economic recovery,
similar to some transition countries in Central Europe. (Nria Rodrguez-Planas, Jacob Benus, 2010, p.
68).
As they were losing security of employment, the Romanians, like other peoples, sought levers
that would ensure employment stability. In this context, the authors Dostiey Benoit, Sahnz E. David
(2008, p. 19) consider that education and age play an important part with regard to the labour market
entry and further earning opportunities. Bellman et al (1995) and Earle (1997) reached the conclusion that
age has a significant influence on unemployment rate, the elders having more difficulties in finding a job
and facing bigger risk of losing it.
Many research studies show that education is an essential factor in lowering unemployment rate,
increasing the labour stability and improving the income level. (Alkafri Saleh, 2011, p. 5). The same
studies show that a higher educational level shortens the necessary time for finding a job. (Alkafri Saleh,
2011, p. 10) Besides knowledge, the academic environment can provide continuity and value to a society
that strives to make its way through economic and social difficulties. Starting from the individual needs,
the University can lay the sound basis for a harmonious development of all societys structures (Negricea
C., Dumitru N., Edu T., 2011, p.66). Better education contributes to the unemployment rate decrease. In
Romania, in 2010, 80% of the higher education graduates were employed, while only 42% of low
educational level people had a job.
However, the unemployment rate is quite high in Romania. In 2008 it started to rise reaching
7.12% in February 2012.
According to Eurostat, the highest unemployment rate was reached in January 2004: 8.79%,
while in January 1997 it was 4.93%. In December 2008, the unemployment rate was 5.70% , growing till
September 2011 up to 7.65%.
(http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=132.STS.M.RO.S.UNEH.RTT000.4.000)
With regard to salaries, in Romania the income level has been decreasing since 2008, the civil
servants being the most affected.
Although at present the Romanian graduates incomes are low as compared to other EU
countries, we consider that the personal investment in higher education generates medium and long-term
financial benefits in all countries, for both education beneficiaries and the entire society, by lowering the
unemployment risk and ensuring optimum professional integration.

3. Research method

In order to emphasize the economics students perception regarding the integration into the labour
market, we have elaborated a selective research of the economics students in Bucharest, sampled so as to
reflect the whole structure. The selective research has its advantages, such as: shorter data collection time,
lower data collection costs. Also, it has its disadvantages, for instance: errors can occur; the results are not
as accurate as the outcome of a total quantitative research. This research, which is an exploratory
research, has been performed because at present there is no data concerning the economics students
perception of the Romanian labour market absorption. The exploratory research is the research aimed at
clarifying and better understanding the coordinates of a problem, (Ctoiu I. Coord. ,2009, p. 74); in the
near future our intention is to conduct a quantitative research, whit results that could be extrapolated to
the entire targeted population.
Someones perception represents a complex process, which consists of a mental activity of
observation, understanding, evaluation of stimuli, by means of sensory receptors... The most important
characteristic of perception is selectivity, due to consumers particularities, and it is complementary to
the need. (Ctoiu I., Teodorescu N., 2004, p. 18)
The research scope is to identify, through exploratory research, the economics students
perception of the labour market absorption in Romania.

126

The research objectives are as follows:
- O1: Identification of the students perception regarding the economic sector in which they would like
to work after graduation.
- O2: Identification of the students perception concerning the right career start time.
- O3: Identification of the students perception concerning the utility of knowledge acquired in
academic years
- O4: Identification of the students perception regarding the final educational cycle level (bachelor,
master, post-graduate, doctoral, post-doctoral programs)
- O5: Identification of the students perception regarding the number of necessary interviews for
finding the proper job.
- O6: Identification of the students perception regarding the expected salary of the first job.

Research hypotheses:
o H1: There is a significant interdependence between the final educational level and the expected salary
of the first job.
o H2: There is a significant relationship between gender and expected salary of the first job.
o H3: There is a significant relationship between gender and the economic sector in which he intends to
work after graduation.
o H4: There is a significant interdependence between the respondents enrollment years and career start
estimates.

The research was performed based on questionnaires, and conducted at the Romanian-American
University and at the Academy of Economic Studies from Bucharest in February March 2012. Most
questions were closed questions, with fixed answer choices. The questionnaire was filled in by economics
students over 18 years old of the Romanian-American University and the Academy of Economic Studies,;
128 questionnaires were collected; Table 1 below shows the structure of the sample by gender and age of
the respondent:
Table 1: Structure of the sample
Gender of
respondent
Age of respondent Total respondents
19-22 years 23-26 years over 26 years Total
percentage
Total number
Male 20.3% 17.2% 1.6% 39.1% 50
Female 31.3% 25% 4.7% 60.9% 78
Total 51.6% 42.2% 6.3% 100% 128
Source: own research

4. Research results
The questionnaire includes closed questions aimed at identifying the economics students
perception concerning the Romanian labour market absorption. With regard to the economic field in
which they would like to work after graduation, the results are presented in Table 2:
Table 2: Economic field in which the students desire to work after graduation
Economic field No. of respondents % of respondents
Accounting 8 6.3
Finance 6 4.7
Marketing 52 40.6
Management 35 27.3
Economics 6 4.7
PR & Advertising 10 7.8
Other field 9 7
Undecided 2 1.6
Total 128 100

The research outcome shows that most of the respondents - 40.6% desire to work in marketing
after graduation, and 27.3% would like to work in management. The percentage of those who want to
work in PR and Advertising, and the percentage of the students who would consider choosing other field
127

are quite similar, 7.8%, respectively 7%. Only 1.6% are undecided about the field in which they would
like to work after graduation.
As to the relationship between gender and the chosen field after graduation (Table 3), the
research reveals that 27.3% of the women desire to work in marketing, as compared to 13.3% of the men.
The lowest percentage field is Accounting for men, only 0.8%, and political economics for men,
respectively 2.3%. None of the respondents would like to work in IT after graduation.

Table 3: Relationship between gender economic field in which the student desires to work
Economic field in which the student desires to work after graduation
Gender
Account-
ing
Finan-
ce
Marketing Manage-
ment
Political
economic
s
Economic
IT
PR and
Advertising
Other
field
Unde
cided
Total
Male 0.8% 1.6% 13.3% 14.1% 2.3% 0% 3.9% 3.1% 0% 39.1%
Female 5.5% 3.1% 27.3% 13.3% 2.3% 0% 3.9% 3.9% 1.6
%
60.9%
Total 6.3% 4.7% 40.6% 27.3% 4.7% 0% 7.8% 7% 1.6
%
100%

As to the educational level that the respondents would like to complete, the situation is presented
in Table 4 below:
Table 4: Level of tertiary education desired to be completed
No. of respondents % of respondents
Bachelor degree 11 8.6
Master degree 96 75
Postgraduate diploma 5 3.9
Doctorate degree 14 10.9
Postdoctoral diploma 2 1.6
Total 128 100

According to the research, 75% of the respondents desire to complete the master level, and only 10.9%
want to complete the doctoral level. 8.6% would like to stop at the bachelor level and only 1.6% desire to
attend post-doctoral programs.
Correlating the tertiary educational level desired to be completed to the expected salary of the
first job (Table 5) we have found out that 6.3% of the respondents who want to complete the bachelor
level expect a first job salary between 1001-2000 RON, as compared to 49.2% of those who desire to
complete the master. The respondents who want to complete the bachelor level seem realistic as to the
expected salary of the first job, no respondent expecting over 5000 RON, as compared to the master
students, 2.3% of them expecting over 5000 RON at the first employment. Concerning the students who
would like to complete doctoral and post-doctoral level, most of them expect 1001-2000 RON for the first
job.

Table 5: Relationship between the tertiary educational level desired to be completed expected salary
Expected salary of the first job (RON)
Education level 200-500 501-1000 1001-2000 2001-3500 3501-5000 Over
5000
Total
Bachelor 0% 0.8% 6.3% 0.8% 0.8% 0% 8.6%
Master 0.8% 12.5% 49.2% 7% 3.1% 2.3% 75%
Post-graduate 0% 0% 3.1% 0.8% 0% 0% 3.9%
Doctoral level 0.8% 1.6% 4.7% 3.1% 0.8% 0% 10.9%
Post-doctoral level 0% 0.8% 0.8% 0% 0% 0% 1.6%
Total 1.6% 15.6% 64.1% 11.7% 4.7% 2.3% 100%

With regard to the respondents perception concerning usefulness of knowledge acquired during
their tertiary education in order to face the labourmarket challenges, the situation is shown in Figure 1:

128

Figure 1: Perception regarding usefulness of knowledge acquired during tertiary education


More than half of the respondents, respectively 57% believe that the information and knowledge
acquired during the academic education are useful on the labour market. Only 0.8% of the respondents
consider the knowledge not being useful on the labour market while 13.3% consider being very useful.
Regarding the students perception of the salary desired on the first employment, the situation is
presented in Figure 2:
Figure 2: Salary desired on the first employment


The research reveals that more than half of the respondents, respectively 64.1% are very realistic as to
their future salary on the labour market. Thus, 64.1% of the respondents have first employment salary
expectations between 1001-2000 RON, while 2.3% have unrealistic expectations, that are non-compliant
with the current evolution of the labour market, as they expect over 5000 RON for the first job. A small
percentage, 1.6% of the respondents, has a poor opinion regarding the salary expectations for the first job,
as they consider the salary to range between 200-500 RON.
Correlating gender to the expected income of the first employment, we have obtained the result
presented in Table 6 below:
Table 6: Relationship between gender expected income for the first employment
Salary desired for the first employment (RON)
Gender 200-500 501-1000 1001-2000 2001-3500 3501-5000 Over 5000 TOTAL
Male

0% 6.3% 25% 5.5% 0% 2.3% 39.1%
Female

1.6% 9.4% 39.1% 6.3% 4.7% 0% 60.9%
TOTAL 1.6% 15.7% 64.1% 11.8% 4.7% 2.3% 100%
129


The research shows the female respondents are more realistic than the males with regard to the salary
level. Thus, 39.1% of the women expect an income between 1001-2000 RON for the first employment,
and only 25% of the men expect this salary. Also, the study reveals that the percentage of the women who
want a salary over 5000 RON for the first employment is 0%, while 2.3% of the men expect this salary;
the percentage of the students who expect a salary between 2001-3500 ron for their first employment is
similar for both genders, but the values are quite low, 6.3% for the women and 5.5% for the men.
However, 4.7% of the women hope to earn between 3501-5000 RON at the first employment, while no
man expects this salary for the first job.
With regard to the contribution of the Romanian educational system to the youth integration into
the labour markets, the research shows (Table 7) that most respondents, 35.9% , expressed their
disagreement and only 3.1% showed their agreement, which means a significant mistrust in the
contribution of the Romanian educational system to the youth integration into the labourmarket.
Regarding the belief that studying abroad helps finding a proper job, more than half of the respondents,
50.8%, agreed, and only 0.8% fully disagreed with this statement. Therefore, the youth have a favorable
opinion on studying abroad, and have high confidence in foreign educational systems.
As to the optimism about the future career, more than half showed their agreement 50.8%,
which means that the economics students have a positive opinion on their future career, and only 0.8%
showed total disagreement in this respect.
With regard to the current economic evolution and its influence on the job seeking graduates,
most respondents, 49.2%, consider that the current economic environment is unfavourable to the job
seeking graduates. Only 1.6% of the respondents are optimistic about the current economic evolution.
As to the statement The Romanian labour market is not favourable for professional development,
33% of the respondents expressed their disagreement, considering that the Romanian labour market is
unfavourable for a future career, and only 3.9% have a positive opinion concerning their future careers on
the Romanian labour market.

Table 7: Students opinion
Questions Total
agreeme
nt
Agree
ment
Indifferen
ce
Disagreem
ent
Total
disagreem
ent
The contribution of the Romanian educational
system to the youth integration into the labour
markets is remarkable.
3.1% 25% 18.8% 35.9% 17.2%
Studying abroad helps me find a proper job. 27.3% 50.8% 17.2% 3.9% 0.8%
Im optimistic about my future career. 36.7% 50.8% 3.1% 8.6% 0.8%
The current economic evolution is unfavourable
to the job seeking graduates.
49.2% 37.5% 10.2% 1.6% 1.6%
The Romanian market is not favourable to my
professional development.
19.5% 33.6% 22.7% 20.3% 3.9%

Regarding the number of interviews needed for finding a job (Figure 3), 63.3% of the respondents
consider that 1-5 interviews are needed, and 10.2% consider that over 15 interviews are necessary.

130

Figure 3: Job interviews needed for employment


5. Research conclusions
The economics students perception of the labour market absorption is important, as it provides
useful information to the academic management. As the research study shows, most of the respondents,
41.4% consider they will start their career immediately after completing the current academic program,
22.7% estimate they will start the career when they have found a job. Only 3.1% of the respondents have
clear career objectives and consider starting working only if the job is financially attractive. According to
the research study, 18.8% of the respondents already have a job, which influences their academic
attendance. A small percentage, 7%, considers that a thorough training is needed for a career start,
therefore they estimate this will happen after completing further educational levels.
Correlating the respondents career start estimates to their academic year, the research revealed (Table 8)
that only 3.1% of the first year respondents estimate to start their careers immediately after completing
the current educational level, as compared to the 3rd year respondents, 14.8%, who believe to enter the
labour market as soon as they graduate. Regarding the completion of further educational levels, the I and
II year master students, 100%, want to enter the labour market immediately, with no further educational
programs. As to starting a career as soon as they find a job, the II year master students reach the highest
percentage in this respect, 8.6%, only 1.6% of them consider entering the labour market if they find a
long-term job. Concerning the financial attractiveness, only 1.6% of the first year students want to enter
the labour market when finding a financially attractive job, while 0.8% of the II year master respondents
would like the same thing. As to the current working situation, the research showed that 5.5% of the II
year master respondents are already employed, as compared to 0.8% of the first year students.

Table 8: Correlation between academic year career start estimates
Academic year
Career start estimates Bachelor
I year
Bachelor
II year
Bachelor
III year
Master
I year
Master
II year
Total

After completion of the current academic
cycle
3.1% 9.4% 14.8% 3.9% 10.2% 41.4%
After completion of further educational
levels
1.6% 1.6% 3.9% 0% 0% 7%
As soon as I find a job 3.1% 3.9% 1.6% 5.5% 8.6% 22.7%
When I find a long-term job 0% 3.1% 0% 2.3% 1.6% 7%
When I find a financially attractive job 1.6% 0.8% 0% 0% 0.8% 3.1%
Already employed 0.8% 7% 1.6% 3.9% 5.5% 18.8%
TOTAL 10.2% 25.8% 21.9% 15.6% 26.6% 100%

With regard to students perception concerning the benefits of speaking a foreign language in finding a
proper job and the educational level that can offer the highest chance for employment, 99.2% of the
respondents are aware of the importance of speaking a foreign language for facing the labour market
challenges, irrespective of the educational cycle they attend; the master students are most aware of this
issue, 66.4% of them agree that speaking a foreign language is useful for employment.
131

In this respect, based on the students perception of the integration into the Romanian labour
market, the academic management may adopt useful development strategies, ensuring long-term success
and competitive advantages.

Research limitations and proposals for future research
This is a selective research, aimed at identifying the economics students perception of the
Romanian labour market absorption. The sample comprised 128 respondents. The respondents were
selected at random, including different number of students from various academic years. The research
results cannot be extrapolated to the entire analysed community, but we conducted this research in order
to provide some guidelines for a broader future research, based on a bigger sample, so that the results
could be extrapolated to the entire analysed community.

Acknowledgements
This article has been elaborated within the project POSDRU/88/1.5./S/55287 Doctoral
Programme in Economics at European Knowledge Standards (DOESEC), project co-financed from the
European Social Fund through SOP Human Resources 2007-2013 and coordinated by the Academy of
Economic Studies, Bucharest jointly with the West University of Timisoara.

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000

132

ECOLOGICAL ALIMENTATION:
A ROMANIAN CONSUMER BEHAVIOUR CASE STUDY

CETIN Iuliana
Professor, Department of Marketing, Academy of Economic Studies, Bucharest, Romania, e-mail
cetina.iuliana@gmail.com

GHEORGHE I uliana-Raluca
Ph.D. student, Academy of Economic Studies, Bucharest, Romania, e-mail raluca.i.gheorghe@gmail.com

PETRESCU Consuela-Mdlina
University of Medicine and Pharmacy, Bucharest, Romania, e-mail consuela2883@yahoo.com

Abstract: In todays modern markets a new consumer lifestyle has emerged especially when it comes to the
attitude of having a healthy diet and consuming organic or ecological food. Nowadays people tend to have dietary
concerns that may determine an increase in the need for interventions that led to changing consumers behaviour in
choosing healthier eating habits. Therefore, communication is an important tool in contributing towards a healthier
food choice and an improvement in developing healthier eating habits. However, communication based on the value
of health is not an easy practice as marketing strategies applied may often not be the right ones. Five hundred fifty
persons in Romania were asked to self-administer a questionnaire in order to understand the attitude of consumers
on their intention towards buying ecological food products. Four variables were hypothetically considered to
predict the Romanian consumers intention of buying ecological foods: health consciousness, consumers
perceptions towards ecological food, availability of ecological food products information, and trust in ecological
food. Furthermore, it was concluded that Romanian consumers place high level of importance on the trust they have
in ecological food products and explain, at the same time, the attitude they have towards buying these products.
Moreover, health consciousness plays also an important role in the consumers process of determining whether to
buy or not an ecological food product.

Key words: Food, organic food, green food, health communication

Abbreviations: EU- European Union, USDA- National Organic Standards Board of the Department of
Agriculture, RON- Romanian National Coin

JEL classification: M31, D18, N3

1. Introduction
In recent years we have witnessed an overwhelming worldwide economic growth due to the
populations consumption behaviour. In todays modern markets a new consumer lifestyle has emerged
especially when it comes to the attitude of having a healthy diet and consuming organic or ecological
foods. Furthermore, there is a growing constant demand for ecological foods because consumers believe
that these types of foods have greater quality and safety, are even healthier (Magkos et al., 2006), and
have a positive environmental impact on agricultural practices.

1.1. Background
In 1999, the Codex Alimentarius Committee adopted the guidelines for the production,
processing, labeling and marketing of the ecological foods. This codex defined the organic agriculture
as a holistic management system which promotes and enhances agro system health, including
biodiversity, biological cycles and soil biological activity.
An organic label indicates the fact that a good was produced in an environmental-friendly way
whereas the organic term is being referred to as a process claim not as a product. Products that have an
ecological-agricultured background are defined by technology and by the input used in the production
process and not by the inherited properties of the product. Despite the process stage, consumers often
perceive ecological products as representing an environmental friendly mode of production as well as
having intrinsic quality and safety characteristics. (Vindigni et al.,2002)
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1.2. Definition of ecological or organic food
In 2000, USDA institution set up a national, generally, accepted definition of the concept
organic. Due to the USDA definition, the organic food must be produced without the use of synthetic
fertilizers, pesticides, hormones, genetic engineering, irradiation and antibiotics. Even if a variety of
agricultural products including grains, meat, dairy and eggs can be produced organically, the term
organic does not mean natural food. However, there is no definition of what natural food means.
Moreover, the food producers refer to the term natural food as being the one that has been minimally
processed and is at the same time preservative free. In conclusion, natural foods include organic foods,
but not all natural foods are considered organic.
Mahlanza et al. (2003) consider ecological farming as crop culture and livestock production
based on natural inputs without the usage of synthetic variables as pesticides, fertilizers, plant regulators
and growth hormones. Grunet and Juhl (1995) consider that under the livestock production, animals are
reared by using organic diets comprising of natural grass and disease control which is based on cultural
and biological practices, without acaricides, antibiotics and other growth hormones. In crop production,
the process looks alike the livestock one according to Tshuma et al. (2010). Crop production, nutrition
and disease control are based on the principles of crop rotation which means that producers have to use
organic manure and beneficial natural bacteria, weeds and pests under the principles of applied pest and
weed management in order not to use synthetic variables as inputs in crop production.
Green product is an ecological and environmental-friendly product. Shamdasami et al. (1993)
considered a green product as having more environmental friendly content, and, in Elkington and
Makeowers (1988) opinions, as having environmental friendly packaging, in order to reduce the
environmental negative effects. In other words, a green product is an element that encompasses strategies
based on recycling or recycled components, reduced packaging or using less toxic materials, so as to
reduce the negative impact on the natural environment.

1.3. Green consumers
Green consumers are known as consumers who are ecologically aware of environmental issues
and are interested in solving them. (Soonthonsmai, 2007) .Green consumers usually organize petitions,
boycott the activities of manufacturers and retailers and promote the preservation of the environment.
(Fergus, 1991). Ottoman (1992) reached the conclusion that consumers accept green products when
they convince themselves that their primary needs for performance, quality and affordability are met and
when they understand how a green product can help solve environmental problems.

Research upon ecological food purchase and consumption issues is well known and documented
in the literature on consumer behaviour.

Studies undergone in the United Kingdom, Australia and United
States include case presentations that link the purchase of ecologic food with the concern for health
(Carra, 1999; Magnussen et al., 2003; Lockie et al., 2002; Grankvist and Biel, 2001; Magnusson et al. ,
2001; Wandel and Bugge, 1997) , the safety quality of the conventional food products (Tregear et al.
1994; Baker et al. 2004), environmental consideration (Williams and Hammit, 2001; Lockie et al., 2004;
Schifferstein and Onde Ophnis, 1998; Grunert and Juhl, 1995) and personal value (Lea and Worsley,
2005).

134

2.1. Objective of the study
The objective of this study is to understand the attitude of consumers on their intention towards
buying ecological food products in Romania.
The study is meant to clarify the role of four variables in predicting the Romanian consumers
intention of buying ecological foods, as follows:
a. health consciousness;
b. consumer perceptions towards ecological food;
c. availability information upon ecological food products;
d. trust in ecological food.

2.2. Health consciousness and the intention of buying ecological food
According to Davis et al. (1995), the most frequent reason for purchasing ecological food is due
to the fact that is healthier. Therefore, health concern is at first sight the main reason for purchasing and
consuming ecological food (Tregear et al., 1994; Padel and Foster, 2005; Wandel and Bugge, 1997;
Magnusson et al., 2003).
Moreover, previous studies undergone by Lockie et al. (2002) and Grankvist and Biel (2001)
prove that the variable health is a primary reason in the purchase of ecological food and in addition, the
health consciousness of the buyer has been found to be a good predictor of attitude, intention and
purchase of ecological food (Magnusson et al., 2003; Magnusson et al., 2001).

2.3. Consumer perception towards ecological food and the intention of buying ecological
food
In 1965, consumers began to have certain attitudes towards pesticides used in farming (Padel and
Foster, 2005; Bealer and Willits, 1968). According to some research studies, a number of reasons were
found in the process of the consumers chosen intention of purchasing ecological food. Positive attitudes
towards improved tastes (Sachs et al., 1987), environmental -friendly (Davies et al., 1995) and better
wildlife (Lea and Worsley, 2005) reasons were identified.

2.4. Availability information upon ecological food products information and the intention
of buying ecological food
Empirical evidence has shown that the consumers difficulty in identifying environmental-
directed products was partly due to the lack of available information (Goldman and Clancy, 1991).
Availability information refers to ease the difficulty of obtaining or consuming a specific ecological food
product. Although in some cases the intention of purchasing is high, it is impossible to achieve the
product because of low information or distribution.

2.5. Trust in food quality and the intention of buying ecological food products
Many specialists who have studied the ecological food products purchase behavior have asked
respondents about the importance of the price in their decision making. The price paid over and above the
fair market price, is actually justified by the true value of the product. As such, price may be an
indicator of a consumers trust towards food quality (Brown, 2003).

3. Materials and methods

3.1. Conceptual framework
The intention to purchase ecological food is influenced by the perceptions of the consumer on
ecological products, the available information, trust that these products are healthier and health
consciousness related to the promotion of a healthy lifestyle.
Therefore as exposed in the earlier section, a proposed conceptual model for the study is shown in
figure 1.

135

3.2. Hypothesis
Given the literature review description, the following hypotheses are developed:

H1: There is a significant relationship between a Romanian consumers intention to purchase
ecological food products and the perception they have towards them.
ecological food products and health consciousness.
ecological food products and the availability of product information.
ecological food products and the trust they have in this type of food products.

3.3. Research Design
A quantitative research was conducted on 550 persons in Romania. The information was gathered
from self-administered questionnaires during July 2011-September 2011. The questionnaire contained
closed-ended questions measured on a 5 point Likert scale (1-strongly disagree, 5-strongly agree). The
questionnaire was designed especially to determine consumers buying pattern and their views on
ecological food products.
Out of 550 questionnaires, 530 were validated (96.36%).
Reliability tests were conducted using the Cronbachs alpha coefficient to check the consistency
of measurement items.
As table 1 reveals, the reliability of every measured variable is satisfactory because the
Cronbachs alpha exceeds 0.70.

Table 1: Cronbachs alpha values
Factor Status Cronbachs alpha
Perception towards
ecological food
Independent
variable
0.78
Health
consciousness
Independent
variable
0.65
Availability of
ecological product
information
Independent
variable
0.98
Trust Independent
variable
0.70
Purchase intention Dependent variable 0.86

All data were analysed and explored using the Statistical Software Package for Social Sciences
(SPSS) version 13. The technique used in this study to analyze the information gathered was the
multiple regression. In order to describe the sample characteristics certain demographic data such as age,
marital status, occupation, education level and the income were included in the questionnaire as well.

136

Figure 1: Conceptual framework

4. Results

4.1. Demographic analysis of respondents
The responses of 530 persons were included in the study. The vast majority were females
(54.89%) with age ranged between 21-30 years. Most respondents were not married (88.7%), were
employed (45.3%), with a masters degree (56.6%) and an income ranging from 1001 to 2000 RON
(32.1%).

4.2. Correlation Tests
Pearson correlation tests were used to analyze the individual relationships between every
independent variable and the dependent variable. The tests indicated that health consciousness and trust in
ecological food are significantly related to the intention of purchasing ecological foods (Table 2).
Table 2: Relationships between the independent variables and the intention to buy ecological food
Variable Pearson
Correlation
(R)
Sig. value (p)
Perception towards
ecological food
-0.10 0.23
Health
consciousness
0.54 0.001
Availability of
ecological food
information
0.12 0.18
Trust in ecological
food
0.40 0.001
p significant for values < 0.01

Perception towards
ecological food
Health
consciousness
Availability of
ecological product
information
Trust in ecological
food
Intention to purchase
ecological food
products
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4.3. Regression analysis
Multiple linear regression test using the stepwise method was conducted to measure the impact of
independent factors on the intention of purchasing ecological food products. The stepwise regression
method has taken into consideration the most significant variable first and included it into the model after
that it took other significant variables and so on as shown in table 3.
Table 3: Model Summary
Model R R
Square
Adjusted R
Square
Std. Error of
the Estimate
Durbin-
Watson
1 0.407
a
0.166 0.149 0.766
2 0.573
b
0.328 0.73 0.709 2.26
a. Predictors: (constant), health consciousness
b. Predictors: (constant) health consciousness, perception towards ecological food, availability of ecological
food information, trust in ecological food
R Square gives a measure of how much of the variability in the outcome is accounted for the
predictors. For the first model the value is 0.166, which means that health consciousness accounts for
16.6% of the variation in the intention of purchasing the ecological food. However, for model 2, the value
of R Square increases to 0.32 or 32.8% of the variance in intention of purchasing ecological food.
The Adjusted R Square value shows the percentage of the success of the model. For the first model, the
variable is 0.14 which means that it has accounted for 14% of variance in scores. The second model,
though, has an adjusted R Square value of 0.73 which means it has an accounted percentage of 73% of
the variance.
The Durbin-Watson statistic is a test applied whether the assumption of the independent errors are
tenable. The model has a value of 2.26 which is close to 2 value which means that the assumptions
have certainly been met.
The ANOVA table contains an analysis of variance that tests whether the model is significantly
better at predicting the outcome. For the first model the F-ratio was 10.137, which is unlikely to have
happened by chance (p=0.02). For the second model, the value of F-ratio was 5.83, which is highly
significant (p<0.001). It was concluded that the second model significantly improves the ability to predict
the outcome variables.
Table 4 describes the parameters of the model. As analyzed up to this point, the second model is
more interesting to analyze because it includes all predictors and has the best adjusted R square value.
The b values show the relationships established between the predictors and the dependent
variable. Accordingly, health consciousness and trust have a positive relationship between them and the
dependent variable. Moreover, if health consciousness increases, the purchase intention increases and the
same happen for trust too. Each of beta values have an associated standard error indicating whether or
not the b values differ significantly from 0. Therefore, if the t-test associated with a b value is
significant, meaning p<0.05 then the predictor has a significant contribution to the model. The smaller the
value of Sig and the larger the value of t, the greater is the contribution of the predictor. Accordingly,
for the second model, from the magnitude of the t-statistics it can be concluded that variable trust has a
slightly more impact than variable health consciousness.
The standardized beta values are all measured in standard deviation units and are directly
comparable. The standardized beta value for trust is 0.52 and for health consciousness is 0.11. This result,
once again, proves that the trust variable has more impact on the model (Table 4).

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Table 4: Coefficient values

Model
Unstandardized
Coefficients
Standardized
Coefficients

t

Sig.
B Std. Error Beta
1 Constant
Health
consciousness
1.46

0.70
0.39

0.02

0.40
3.74

3.18
0.000

0.002
2 Constant
Health
consciousness
Trust
Availability of product
information
Perception
0.93

0.02
0.08

-0.02
-0.04
0.66

0.02
0.02

0.03
0.05
0.11

0.52
-0.10

-0.09
0.45
1.41

0.77
3.26

-0.78
-0.78
0.16

0.44
0.00

0.43
0.43

5. Discussion
The regression model shows that Romanian consumers place high level of importance on the trust
they have in ecological food products. Also the health consciousness has depicted a strong relationship
with the dependent variable analyzed. Customers form expectations about the value and satisfaction of
various market offerings that are delivered and bought accordingly. If a person perceives the outcome of
performing a behavior as positive, then he/she will have a positive attitude and, implicitly, trust the seller.
People take into consideration several implications of their actions before they decide which option to
make. These perceptions are not fixed and can be changed if the product has high level of awareness,
good image and promotion strategies have been applied. The marketing promotion has an important role
in establishing a trusty relationship. Ecological food products are always advertised in mass media and by
national NGOs as being more nutritional and healthier. When these values are being communicated
effectively, the consumer will develop a positive impression and trust in these products, which could turn
into intention of buying ecological food products.
Regarding the variable health consciousness, the results found are the same as the ones
conducted by earlier studies, which once again showed that a persons health is a current factor in
developing a positive attitude towards buying ecological food products (Baharrel and MacFie, 1991;
Schifferstein and Onde Ophnis, 1998; Wandel and Bugge, 1997).
Consumers nowadays have different ways of getting informed about their health issues through
reading newspapers, books, magazines, etc. Nevertheless, with the evolution of information technologies,
consumers have read and had access to considerable amount of information. All this information obtained
have led to a growth in demand for ecological food products due to their benefits and nutritional values
based on the concept that healthy living means also consuming good food and practicing an appropriate
dietary habit.
Many consumers believe that ecological grown foods are safer and provide various healthier
benefits (Baharrel and MacFie, 1991; Jolly et al., 1989).
The variables consumer perception towards ecological food product and availability of
ecological food products information, even if they did not have a significant impact towards the
customer purchase intention of ecological products, they can be significant to other factors that may play
an important role in the purchase process.
In conclusion, based on the case study, two factors have significant influence on the purchase
intention of buying ecological foods which are health consciousness and trust. Through health
consciousness, consumers will be more prudent in choosing the right dietary foods. The more information
is given to the customer, the more trust will rise in ecological products.

6. Limitations and further research
One limitation of this study is that the sample was restricted to a single geographic area in
Romania. Moreover, the number of respondents may not show the complete responses of the population
139

regarding the ecological food consumption. Therefore, additional studies are required to be conducted in
order to determine the consumer groups that are most appropriate to promote ecological food as a way to
conduct a sustainable consumption among the population and create at the same time a strong correlation
with the purchase of ecological foods.
It is recommended to increase the awareness of ecological food product values and benefits in
order to develop more health consciousness among consumers. A method of doing so is to carry out
effective product awareness programs in trade shows, exhibitions, magazines and advertisements.
Nevertheless, at the same time, it is important to innovate ecological foods through additional values such
as: freshness, taste, presentation.

Acknowledgments
This article is the result of the project POSDRU/88/1.5/S/55287 Doctoral Programme in
Economics at European Knowledge Standards (DOESEC). This project is co-funded by the European
Social Fund through the Sectorial Operational Programme for Human Resources Development 2007-
2013 coordinated by the Bucharest Academy of Economic Studies in partnership with West University of
Timisoara.

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141

NOWADAYS AUDIENCE PERCEPTION OVER THEATRE.
DECIDING BETWEEN CONVENTIONAL AND UNDERGROUND

CI CEO Andreea
Ph.D. student, Faculty of Marketing, "Academy of Economic Studies", Bucharest, Romania,
theociceo@yahoo.com

Abstract: The aim of this paper is to reveal the changes regarding nowadays theatre audiences needs,
motivations and preferences. Why the audiences are not satisfied anymore with the theatre that they have attended
for a long time? Which are the motivations that make them search for something else? What is that something
else? And how does it succeeds in bring them more than they already have? How they manage to take their
decisions and according to what? These are the main questions this paper dares the reader to find the answers.

Key words: theatre audience, behaviour patterns, motivation, cultural consumption


1. Introduction
The issue of high and popular culture has been debated for a long time, in order to understand
which are the differences between the two and who are the people that attend them. In what concerns the
first matter, namely what makes the difference between them, scholars have relatively reached an
agreement.
The chore difference is that the two rest on different economic models. While popular culture is
market based and profit oriented since the late nineteenth century, the arts (or high culture) have
functioned in non-profit area, a fact that suggests that arts serve a larger social purpose. One might argue
that this larger social purpose is not being fulfilled, whether because insufficient corporate and patron
funding or because the arts have failed to demonstrate their value to legislators and to the public.
Therefore, arts institutions often find themselves attempting to attract participations and interest by
emulating popular culture. (Foreman-Wernet, Dervin, 2005, p. 170)
Yet, the second matter who attends high or popular culture, is still subject of discussion,
whether because scholars cannot harmonize their opinions or the past years have brought changes and
thus the need to upgrade our theories about cultural consumption. So, there is no surprise that a new
consumer of culture has been born (Kolb, 2005, p. 2). In these circumstances, high and popular culture
organizations should rethink the way they approach their consumers and the kind of experiences they
deliver them.
This present paper aims to reveal insights regarding the new theatre consumer that is no longer
satisfied with the conventional theatre (expression of high culture), but in a search for a different
dimension of the theatre the underground (expression of popular culture).
Within this paper, the author starts from the premise that the underground theatre is an
independent one; independent from a financial point of view as it owns its existence to donations and
sponsorships and not governmental subscriptions; independent because it is not conditioned by a theatre
auditorium, but it can be played in the most unconventional places (e.g. factories, basements, clubs/bars,
etc.); independent because it stands for fighting the taboos and clichs; independent for it affords to
choose freely its performers and directors (Herghelegiu, 2010).
Thus, the paper answers to questions such as: Who are the people that prefer the conventional
theatre? And the underground one? Why people choose one or other? Why not? Why frequenting both?
Which are the triggers that make them act in this way? Eventually, how they take their decision? On what
grounds?

In the 1970s, the interest in high and popular culture subject raised, through the published work
of Herbert Gans that alleged that cultural and social stratification are directly linked to each other.
According to this thesis, individuals in higher social strata are those who prefer and
predominantly consume high or elite culture, and individuals in lower social strata are those who
prefer and predominantly consume popular or mass culturewith, usually, various intermediate
situations also being recognised (Chan, Goldthorpe, 2007, p. 169). And so, Gans defined the cultural life
142

as consisting of four strata: high, middle class, lower middle class and working class cultures (Kolb,
2005, p. 34).
In the strata of high culture, the art product is seen as a unique creation of the artist, while the
responsibility of the audience is to discover and understand the meaning of the vision in order to
appreciate the art. But for this, the audience needs a prior knowledge of art and artists. This is the reason
why, high culture is only available to certain social classes that have perquisite knowledge. The middle
class culture concentrates mainly on audiences desires. The audience puts equal importance both on
understanding the message the artist wishes to convey and enjoying the art product. Usually, this
audience consists of professionals members of society, with a critical thinking, enjoying the various
opinions that art contains. For the lower middle class culture strata, the enjoyability of the content of the
art is most important, but it still wants the art to have a meaning easily understandable, making a clear
distinction between right and wrong, expressing the value of conventional society. According to the
working class culture, the cultural product is only for satisfying the audience. Due to the low educational
level, the audience wishes an understandable message that offers, as well, the opportunity for relaxation
and escapism, without wanting to risk their limited leisure time and money. (Kolb, 2005, p. 34-37)
Next, Bourdieu argued that there is a structural homology between social position and cultural
practices, as well as between cultural practices in different cultural fields. Bourdieu considered legitimate
taste and high cultural activities (taste for and participation in the classical fine arts, etc.) typical to the
dominant classes, ultimately as means of power. As indicators of cultural capital or, more generally, of
social status, he saw them contributing to social exclusion, cultural dominance and inequality (Purhonen,
Gronow, Rahkonen, 2010, p. 267). To conclude, Bourdieu assumed that the class cannot be treated as
analytically and empirically separable from status (defined as a specific style of life), in that the class
structure is to be seen as determined purely by social relations arising in economic life, i.e. relations
within labour markets and production units (Chan, Goldthorpe, 2007, p. 169).
On the contrary, Peterson found that although higher education and income groups were more
likely to consume high culture, they were also more likely to consume a variety of popular cultural
formswhat he termed the cultural omnivores. Cultural univores, who consumed a much narrower range
of cultural genres were much more likely to have lower income and education levels. Omnivores were
also found to be much less likely to reject other cultures and to be open to, and tolerant of, the views of
others than those with narrower cultural tastes (Snowball, Jamal, Willis, 2009, p. 468). The omnivore
thesis also differs from accounts of cultural consumption as an aspect of lifestyles that is fluid, flexible,
and transient, in the sense that consumption patterns are individualized, elective, do not reflect well-
established communities, and involve short-term commitments (Sullivan, Katz-Gerro, 2007, p. 124).
Closer to this view, it is Kolbs (2005) proposal of segmenting the consumer of culture according
to his level of involvement with the culture form (Table 1).

Table 1: Consumer of Culture. Segmentation according to his level of involvement
Type of Segment Description
Consumer Light and generalised culture use
Fan Use focused on specific stars and shows/events
Cultist Heavy, specialised use with associated social activities
Enthusiast Serious interest in entire culture form with structured activities
Petty Producer Amateur producer of culture form
Source: Adapted after Kolb, 2005, p. 47

The reason for this is Kolbs faith that the new consumer of culture can enjoy both high and
popular culture to the same extent, without having to make differences between them or choose among
them, regardless of his social status or belonging to a certain social class.
Moreover, consuming both high and popular culture, at the same time, could be interpreted as a
form of edutainment, as the individual entertains himself and learns simultaneously (Addis, 2005, p.
729).
Regarding the Romanian theatre sector, as far as the author knows, there have not been conducted
previous researches with the aim of revealing the new trends in theatre audience behaviour. That is why
the following research has been undergone to unleash the discovery of a new theatre consumer
behaviour.

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3. Methodology
In order to bring into focus the new traits that characterise the nowadays theatre audience, the
author considers that an exploratory research may help most as it reveals a large range of insights that
may raise questions that have not been raised so far. The author opted for the focus group as method of
gathering the needed qualitative data. The arguments for this decision are listed below.
A focus group is qualitative research, which means that the obtained results are not percentages,
statistical testing or tables. Instead, this methodology is less structured than surveys or other quantitative
research and tends to be more exploratory as well. Rather than providing quantifiable responses to a
specific question obtained from a large sampling of the population, focus group participants provide a
flow of input and interaction related to the topic or group of topics that the group is centred around. While
they appear to be less formal than a survey, focus groups do provide an important source of information
for making business decisions, for instance. What focus groups offer is a more in-depth understanding of
the targets perspective or opinions and allow researchers to capture subjective comments and evaluate
them. To sum up, this methodology is exploratory, its intent being to provide an understanding of
perceptions, feelings, attitudes and motivations. (Edmunds, 1999, p. 2-3)
A focus group comprises eight to twelve persons who are led by a moderator in an in-depth
discussion on a particular topic or concept. The participants in the group have some common
characteristics that relate to the topic discussed in the group (for this particular research all participants
should have attended at least once during the current season, both conventional and underground
theatre). A focus group permits free discussion about a problem or topic and, guided by the moderator,
participants minds can range freely. Interaction with each other can produce ideas and suggestions that
exhibit synergy. A moderator has to keep a discussion alive and guided it towards a conclusion. Effective
guiding, not leading, is what a good moderator must do. Discussion must be kept to the topic of interest.
Therefore, the moderator must move the group away from irrelevant discussion that is not helpful and
still leave the group free to air valuable ideas. (Proctor, 2005, p. 223-225)
Last but not least, it is important to underline that qualitative research in general, focus groups in
particular bear several limitations. Qualitative research does not pick out small differences quite as well
as large scale quantitative research. Nevertheless, qualitative research can detect minor problems that are
not apparent in a quantitative study. Another limitation is that qualitative studies do not provide samples
that are representative of the target population of the research. In terms of the sort of data produced, small
sample size and free-flowing discussion can lead qualitative research projects along many different
avenues of thought. Influential or dominant characters within a discussion group can also lead the group
off on tangential discussions or bias the group view. There is also the problem of the discussion leaders
competence. The usefulness of qualitative research depends very much on the skills of the researcher.
(Proctor, 2005, p. 222)

4. Research results
The term theatre has both rational and emotional connotations for the theatre audience. From
the rational point of view, theatre means actors, stage, costumes, directing, performance. But
beyond these first impressions, theatre is the synonym of emotions, passion, feelings. Moreover,
the conventional theatre is perceived as being classic from the actors, plays, stage and auditoriums
perspective, while the underground theatre is perceived as different. It seems that the conventional
theatre has among the theatre audience an old and dusty image, totally opposed to the modern and up-to-
date image of the underground.
Further, the profile of the conventional theatre audience seems to be outlined by a dull lifestyle
(routine, quietness), unlike the active and dynamic lifestyle of the underground audience ready to
meet his friends for a drink on a Saturday night or even during a working week. Fashion style is another
coordinate of the profile as it seems to make a difference between the two theatre audiences. For the
conventional theatre, certain etiquette needs to be respected, namely classic jacket and pants, in contrast
with the lack of formality for the underground audience (cut blue jeans, low waist blue jeans).
However, isolated, it appeared the idea that fashion style has no relevance for theatre audience profile,
this being exclusively linked to someones personality and his wish of feeling comfortable (everyone
may dress oneself as they wish). As regarding the age, it seems that people of all ages attend
conventional theatre (both old and young people), while the underground audience is more likely to be
young (students and young intellectuals).
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The reasons why people decide to attend conventional theatre are closely linked to a wide variety
of needs as: the curiosity to see how plays read while in high-school, for instance, are played or how
well-known actors play live on stage; social needs going out with friends and spending the evening in a
pleasant manner; esteem needs confirming ones status of cultivated person or intellectual; self-
actualization needs reflecting more profoundly over the problems of ones inner world (a story with a
deeper meaning that makes me think at myself).
Attending underground theatre responds to motivations such as: curiosity still, having a
different connotation than in the case of conventional theatre I was tempted to go to the underground
theatre as well, just to see how it is and which the differences are; the possibility to find available tickets
right before the play; the opportunity to relax and enlighten at the same time coffee and theatre in the
same cup; and to reflect over ones existence, as an underground play seems to be closer to the ones
reality.
Apart from the motivation that may be a trigger of the decision to attend or not conventional or
underground theatre, theatre audience usually complete their information from different sources. It seems
that personal sources such as family, friends or acquaintances are considered to be the most trustful, due
to the reliable information they usually provide and the lack of any hidden intentions unlike advertising.
Internet is another useful source of information as the theatre audience may browse the sites of any
theatre organization, as well as other peoples reviews. Commercial sources such as street posters or
advertisements in free publications such as Sapte Seri play mainly the role of driving peoples
attentions over the play and informing them about its existence, rather than being a persuasive source.
Although, at a general level there does not seem to be distinctions regarding the manner of informing
about conventional or underground theatre, isolated it appeared the idea that the underground theatre may
use other ways of informing as well, such as sending SMSs to people from their data base, concerning
their weekly programme.
The reasons why theatre audience prefer either of the two theatre forms - conventional or
underground lie in the perceived differences regarding mainly the product, price and placement. By
product, the author refers to aspects like: the chore play, cast, space, atmosphere and the theatres staff.
The conventional and underground approach in terms of play themes differ as the underground
theatre prefers taboos unlike the classic pieces of the conventional theatre. Still, the plays relevance for
the audience has been put to question: are classic plays more profound due to their time longevity or have
the underground ones a greater impact over the audience precisely for their contemporaneity and
connection with real life?
Apart from the approached themes, the conventional and the underground plays also differ from
each other through their duration as the first ones seem to be long(er) and may include intervals in
contrast with the latter ones which are shorter ( isolated, perceived as too short) and do not need
intervals. According to the time that the audiences are inclined to spend at theatre (either because of their
lack of time or preference for this art), they might prefer one or another from the two choices. However, it
should be beard in mind that due to the nowadays lifestyle, always engaged in a race against the clock,
the audience might be more prone to target shorter plays in order to save their time receive maximum of
satisfaction in a minimum amount of time.
In terms of cast, conventional plays may imply a large number of actors and, what is more, well-
known actors to the large public that have a solid career behind them (already consecrated actors, you
do recognize them easily). Underground plays are performed by a small number of actors (sometimes
the space itself does not allow large casts) who are generally at the beginning of their career (very young
actors, actors without experience). The quality of a theatre play, from the cast perspective, tends to be
attributed to consecrated actors as they are seen as a safe choice that will assure the audiences that their
decision is the right one. A play performed by young actors brings no guarantee, neither the one that they
will give everything on stage just to gain themselves a name [in the theatre industry].
Referring to the space, it seems that in the case of the conventional theatre it is perceived as
impersonal due to the great distance placed between actors stage and the rest of the auditorium (the
audience part). This may lead to a real discomfort for audience (I could barely see their faces.). Still, in
the underground theatre, the actors stage is synonym with the audiences area, meaning the actor
performs right next to the audience; mixing with it and making it part of the performance as well unlike
the conventional theatre where you cant get up on the stage to say something too. Such an approach
favours a closer and deeper relationship between the actor and the audience. Although the distance
between the actors and the audience does not seem to be crucial in savouring the performance, the
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underground closeness facilitates a more direct transfer of emotions and feelings and a way of seeing
beyond the actors mask (they are more human).
The atmosphere seems to be mainly linked to the degree of comfort that one experiences. In the
conventional theatre, the comfort is translated in terms of comfortable seats and lack of smoking inside
the auditorium. However, the comfort of the seats depends on the type of ticket one has. Generally, the
cheapest tickets are reserved for less comfortable seats like the bracket seats (strapontina) which are far
from the stage. In the underground theatre the audience may seat on a wood bench throughout the entire
performance, in a smoking place if the play is performed in a bar (this might be a hold-back for non-
smokers) and still feeling more at ease regarding their gestures and actions than in the conventional one.
As audiences of a conventional theatre, the contact between them and the theatres staff is
relatively minimal, reduced to the ticket checking and showing ones seats in the auditorium (a very
short interaction, during the performance the interaction does not exist anymore). Yet, the
underground staff assists the audience during the performance due to the fact that the place is subject to a
double consumption the play and the bar. In addition to this, it was brought into discussion the fact that
the conventional theatres try to set up specific areas in which the audience may acquire refreshments, for
instance. Still, this seems to bring them closer to the cinema image, resulting in a negative impact over
the audience.
The tickets price seem to be a hot issue as in both cases conventional and underground theatre,
it is perceived as being high. The difference, however, stands in the discounts applied by the conventional
theatre for certain categories of audience such as students or retirees. Moreover, the underground prices
are thought to have suffered a consistent increase over the past years. Nonetheless, attending the
underground theatre does not imply just buying the ticket but also making consumption for the bars sake.
And this aspect is considered to be an extra expense for the audience. Therefore, the existing discounts
and the extra underground expense may determine the targeted audience to choose the more affordable
option.
Purchasing the tickets is another point of interest and difference. In the case of conventional
theatre, it is considered to be difficult to purchase tickets and, so, it is imperative to purchase them with
several days before the performance itself or else the audience may not be able to attend it. Yet, for the
underground plays, tickets may be bought on the spot, right before the play. The way of purchasing the
tickets makes the difference as well. Usually, in order to buy tickets for conventional theatre one has to
book them a priori and then purchase them from the box office. As for the underground theatre, the online
purchase seems to be a usual thing unlike the conventional case. What should be treated with caution is
the increased audience need of purchasing the tickets online in order to save time and avoid the queues
from the box office (I just want two clicks for the tickets.).
The above information represents the results of a qualitative study. Therefore, these should be
treated accordingly. In order to validate their relevance and assure the representativeness of these results
at national level a quantitative research is recommended to be conducted.

5. Conclusions
Conventional theatre offers the greatness of an auditorium, imposes respect through the stage
separated from the audiences place and demands a certain etiquette and behaviour. But the nowadays
theatre audience needs more than that. The audience needs a strong connection with the actors, a certain
intimacy, closeness, so that emotions and feelings may be transmitted directly, in a personalized manner.
Moreover, the audience wants itself to be part of the performance, and not just a simple observer. The
audience needs plays that speak about itself. Not about somebody else or another time. The ultimate goal
is the understanding of ones self and reality. And all these are more prone to be offered, at the moment,
by the underground theatre.
As a final remark, this paper reveals the changes occurred in the theatre audience behaviour and
the grounds on which preferences towards conventional or underground theatre are built. Being aware of
such information should be of vital importance for any theatre who is really concerned about its audience.
Identify the nature, composition and preferences of current and potential audiences, paying attention to
any changes in terms of needs, motivation or satisfaction may prevent potential loss of audience or
encourage new audience to attend performances of a certain theatre. Moreover, it may help theatre to
target their future programmes, events, fund-raising and advertising more precisely, for a maximal result
(Hill, OSullivan, OSullivan, 2003, p. 70).

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Acknowledgements
This work was co-financed from the European Social Fund through Sectoral Operational
Programme Human Resources Development 2007-2013, project number POSDRU/107/1.5/S/77213
Ph.D. for a career in interdisciplinary economic research at the European standards.

6. References
- Addis, M. (2005) New technologies and cultural consumption edutainment is born!, European
Journal of Marketing, 39 (7/8), p. 729-736.
- Chan, T.W.; Goldthorpe, J.H. (2007) Social stratification and cultural consumption: The visual
arts in England, Poetics, 35, p. 168-190.
- Edmunds, H. (1999) The Focus Group Research Handbook. Chicago: NTC Business Books.
- Foreman-Wernet, L.; Dervin, B. (2005) Comparing Arts and Popular Culture Experiences:
Applying a Common Methodological Framework, Journal of Arts Management, Law, and
Society, 35 (3), p. 169-187.
- Herghelegiu, T. (2010) Definition of the underground theatre from a theatre director point of
view one-to-one interview realised by the author.
- Hill, L.; OSullivan, C.; OSullivan, T. (2003) Creative Arts Marketing. Second Edition. Oxford:
Butterworth-Heinemann.
- Kolb, B.M. (2005) Marketing for Cultural Organisations. New Strategies for Attracting
Audiences to Classical Music, Dance, Museums, Theatre and Opera. Second Edition. London:
Thomson Learning.
- Proctor, T. (2005) Essentials of Marketing Research. Fourth Edition. London: Prentice Hall.
- Purhonen, S.; Gronow, J.; Rahkonen, K. (2010) Nordic democracy of taste? Cultural
omnivorousness in musical and literary taste preferences in Finland, Poetics, 38, p. 266-298.
- Snowball, J.D.; Jamal, M.; Willis, K.G. (2009) Cultural Consumption Patterns in South Africa:
An Investigation of the Theory of Cultural Omnivores, Social Indicators Research, 97 (3), p.
467-483.
- Sullivan, O.; Katz-Gerro, T. (2007) The Omnivore Thesis Revisited: Voracious Cultural
Consumers, European Sociological Review, 23 (2), p. 123-137.

147

THE CUSTOMER RELATIONSHIPS MANAGEMENT A NECESSITY FOR
THE SMALL AND MEDIUM ENTERPRISES

CIOCHIN Iuliana
Professor/ Ph.D., Faculty of Management Marketing in Business Affaires Rm. Vlcea/ Department of
Economical Sciences, Constantin Brncoveanu University of Piteti, Rm. Vlcea, Romnia,
e-mail: iulianaciochina@yahoo.com

I ORDACHE Carmen
Associate Professor/ Ph.D., Faculty of Management Marketing in Business Affaires Rm. Vlcea/ Department of
e-mail: iordache72@yahoo.com

DECUSEAR Nicolae Rzvan
Assistant Professor / Ph.D., Faculty of Management Marketing in Business Affaires Rm. Vlcea/ Department of
e-mail: dec_vl@yahoo.com

Abstract: Nowadays it is said that marketing is managing profitable customer relationships. In a world
where product life cycles are shortening day by day, products being replaced faster with others, the marketing
paradigm must change too. When the replacement of the products is succeeding at this rate, it was obvious that the
unit value remains the relationship with the clients. Not incidentally Philip Kotler said that modern marketing
should focus on relationships and not transactions. Therefore, companies must constantly evaluate the degree of
satisfaction of customers and respond promptly to any signs of dissatisfaction from them. Firms should not forget
that the sensitive core of their business is the client, and if his interests are neglected, business can not last.

Key words: consumer, customer relationship management, SME, marketing.

JEL classification: D12, D22, L22.

1. Introduction
Today, the business environment around the globe is going through a period of massive changes,
global competition, and significant changes in markets, where the old answers no longer fit with the new
realities. The main agents of change for a company are customers. Increasing consumer power in the
current context is related to the fact that the greatest majority of products provide an offer that exceeds
demand, the competition between manufacturers is the increasing, and the consumer has the opportunity
of an extended option. Because he is the one who is choosing, the center of power has shifted from
companies to consumer. To survive and progress in business, firms need to establish strategies to cope
with customers that are demanding, informed, self-centered, capricious, anxious, more inclined than ever
to complain, so much harder to please and difficult to loyal, because they are very unstable and at any
time can choose to buy from elsewhere. A recent development in marketing highlights how important is
for the business success to focus on building long term profitable relationships with the customers.
The new type of marketing based on relations highlights the importance of the cooperation
between the various participants - suppliers, employees, distributors - in order to provide an optimal value
to the target customers.
Shifting the companys orientation from one type to another was not an easy task, the companies
being "forced" to create a true "customer culture" that emphasizes the maintenance of mutually beneficial
long term relationships with the customers, the SMEs being more flexible in the changing process.

2. General aspects regarding the marketing of the relationship with the customer
The intense competition, the rapid changes and the instability of the environment in which SMEs
are operating are making the task of finding, attracting and educating a new customer, more difficult and
more expensive to accomplish. In this context, the marketing specialists say that currently, the best way to
increase market share is by increasing customer acquisition and by finding more products and services
that can be sold to the same customer. Extremely high competition, globalization, technology and the
power of the new client are factors that have shaken the traditional way in which firms thought the
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marketing process. Consumers that are increasingly demanding and difficult require special relationships.
Philip Kotler said, "today the focus is on relationships, not transactions." Currently all those involved in
marketing agreed that customer relationships are essential for success of the company. Transactional
marketing went into obscurity, being replaced by a relational marketing, whose distinctive feature is the
creation of mutually beneficial long term with a different group of customers.
The objective of relationship marketing consists in the permanent identification and sustainable
value creation for the customer, and this objective is reflected in long term customer satisfaction.
Relationship marketing focuses on keeping customers and then on attracting new customers. The way that
this can be achieved is the direct involvement of customers in defining and achieving the expected value
from the company. The obvious differences between old marketing - transactional and the new one -
relational will be revealed as follows:

Table 1. The features of relational marketing - transactional marketing
Transactional marketing Relational marketing
- Orientation to a single act of purchase; - Orientation to repeat purchasing by retaining and
creating customer loyalty;
- Limited contact between customer and seller; - Frequent and close contacts between the customer
and vendor (ongoing relationship);
- Focus on the benefits of product characteristics; - Focus on long term performance;
- Focus on short-term performance - High customer involvement;
- The quality is the responsibility of production
processes;
- The quality is everyone's responsibility;
- The goal is customer satisfaction; - The aim is customer delight;
Source: Danciu Victor, Marketing strategic competitiv, Ed. Economic, Bucureti, 2004, p. 152

Relational marketing makes a difference in the communication process and that is why
companies must have as its main subject of discussion, the client's thoughts, feelings, habits, motivations,
desires and needs in order to understand the product positioning, as it falls in the consumer life and what
changes are to be made in order for the results to be favorable to both parties for discussion.

3. Customer satisfaction - a long term relationship
For customer-oriented firms, the complete satisfaction of the customer is both a goal and an
essential factor of success. In defining the term of satisfaction discrepancies are occurring not only in the
variables that operationalize this concept, but it also refers to the nature of this concept. Thus, the
literature talks about satisfaction, customer satisfaction or consumer satisfaction. On this issue said:
"Everyone seems to know what customer satisfaction is until it is asked to give a definition. Regarding
this issue it is said: everyone seems to know what consumer satisfaction is until is asked to give a
definition. Since then nobody knows anything. Although sometimes the definitions seem opposed to
each other, they share three things that can be identified as follows:
1. Consumer satisfaction is an emotional or cognitive response, with a prevalence of the
emotional dimension. The researches established that approximately 77% of individuals are
using predominantly affective concepts in order to describe the satisfaction on products or
services.
2. This response has a certain "direction", intentionality (focus) to a particular reference or target
(expectations, product, brand, consumer experience, seller, method of purchase etc.).
3. The response occurs at a point in time (after consumption, after choosing, after purchase, as a
result of experience, etc.).
Here are some aspects related to the company's ability to satisfy customers and to gain loyalty:
- dissatisfied customers tell on average to 10 to 20 others about their bad experience. Some of
them, especially in the digital age of communication, speak to even more peoples;
- the cost of attracting a new customer is at least five times bigger than the cost of maintaining a
customer already won;
- up to 93% of dissatisfied customers will not buy from you another time (if they have a choice)
- and they will never explain why!
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- about 96% of dissatisfied customers do not tell to the companies about the poor services that
they received, but they simply leave them preferring the competition. However, 95% of
dissatisfied customers become loyal customers if their complaints are taken into account and if
they are well and quickly resolved;
- because many companies sell identical or similar products and services, quality is the only
variable that can distinguish a company from its competitors;
- by providing those services that gain customer loyalty, a company can obtain both profit
growth and costs reduction, as well as increasing productivity per employee;
- customers are willing to pay more to get better service.
The literature shows the variables that influence the speed with which consumers change their
position to the product:
- variability of product performance;
- the ease with which the product can be evaluated;
- the degree of emotional involvement of the consumer to the product;
- the accuracy of the information;
- the accuracy with which memory reminds the direct experience with the product.

Undoubtedly, during this period and on short-term the guarantee of success in SMEs will be
based on complete satisfaction of consumers. The today's consumers trend to project their own
dissatisfaction, stress and frustration on the producing companies brands resulted in reactions that lead to
the development of strategies meant to increase satisfaction among consumers. It is interesting to notice
that although firms make increased efforts to improve consumer satisfaction, the sense of customer
satisfaction has not increased accordingly, and the customers are always waiting for a newer, better,
cheaper product that would satisfy the most expectations.
According to most experts there are three levels of consumer satisfaction:
1) The survival level, in which there is some satisfaction of the customers but there is no
guarantee for the firm that those customers will buy with other occasions. Statistics say that those
customers who are satisfied will easily change the company when a new better offer will appear on the
market. Philip Kotler showed that 44% of the satisfied customers changed the brand later.
2) Exceeding expectations, consumers of a product or service may be satisfied with it and yet to
start buying from the competition because they get bored relatively quickly, they want to feel the taste of
change, are increasingly eager to test the brands that they are seeing in the commercials, believes that
competitions offer is more attractive and more satisfactory. With the continued growth of customer
expectations, the company will have to offer more and more in order to support that impression. The
stagnation, or worse loss of performance would be fatal for the company on the long term.
3) Customer excitement, which in the current situation, it is offering a chance for the companies
because, as Philip Kotler noted, it creates an emotional affinity for a product or service, not just a rational
preference, and this underlies high customer loyalty, knowing that a very happy and excited customer
become less inclined to change the brand in question. Sam Walton, founder of Wal-Mart chain of
supermarkets observed, long time ago, that the secret of business success is: "to make your customer
happy. A happy customer is a good thing for any business and customers will return again and again".
Brian Tracy, highlight a fourth level in terms of satisfaction, which is reached in his view only by
the most respected and successful companies in the world. This is the surprise of the customer, a level
where firms exceed customer expectations so much that they will not only buy from them repeatedly, but
they will turn into true supporters, followers, advising others to buy from that company, customers
behaving like true lawyers. Statistics say that a satisfied customer in such a degree will share its
satisfaction with at least five people.
Since there is no better advertising than that made by extremely satisfied customers, companies
will spare no effort to increase the number of these customers.

4. How to keep and to loyal the customers
During the boom period nobody was concerned about customer loyalty. The focus was on
maximizing profits from each transaction, a policy that led to a sale today and a client lost the next day.
But nobody cared, because growing market allowed rapid replacement of lost customers. Profits euphoria
blocked thinking ahead. Even today, marketing myopia as Theodore Levitt called is still present.
Contemporary marketing continues to focus on attracting new customers. In a logical way, companies
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spend most of their budgets (not less than 70%) in order to acquire new customers, despite the fact that
the analysis shows that the overwhelming proportion (90%) of income in coming from transactions with
the current customers of the company.
Turning a new customer into a loyal one for the company, involves passing through several
stages. Always, the loyalty to a product or service was directly linked to consumer satisfaction, by the
literature.
The companys benefits that derive from total customers satisfaction and by default from loyalty
and keeping them are endless:
1) A loyal, satisfied customer can be more easily persuaded to buy larger quantities, being much
cheaper for the company to sell to an old customer instead of attracting a new one. They are bringing
significant revenues, constant over a longer period. Most authors agree that is five times cheaper to keep a
customer than to attract a new one, eventually from the competition. And on top of that, the profitability
of an old satisfied customer is much higher than a new customer and that is because it takes a long time
until the second it reaches the volume purchasing of the first.
2) The loyal customers of a company will be willing to buy other products of the company, as it
will introduce new products or to improve the existing ones. And that's because the client and company
created a relationship of trust.
3) The loyal customers, satisfied with the products of a company will be less prices sensitive and
not easily migrate when a similar product will be available on the market at a lower price. The costs of
serving a kept customer are dropping in time, while the profits are increasing. This is because sales
relationships become a routine, there is no need for so many papers, documents and things are solved
much faster. There is already a relationship of trust which saves time for both parties. So, serving a loyal
customer is less expensive than serving a new one.
4) A loyal customer, fully satisfied will advertise for the company he is purchasing from and for
its products. Statistics say that a satisfied customer will show its enthusiasm for a product on average to
five other people.
5) A loyal customer is less inclined to pay attention to the competitors products and advertising
and generally to their offers.
6) Loyal customers save companys time. Once customers have established a relationship with
companys personnel will be served more quickly, and being known the preferences.
9) Loyal customers provide the company with ideas for new products / services.
People stop at some point to buy from a company because they perceive a sense of indifference
on its part. Chevrolet motto sums up this idea: "never forget a customer, do not let your client forget you".

5. The SMEs and the customer relationship management
SMEs have different characteristics from those of large companies. In addition to size, there are a
number of qualitative characteristics which serve to underline the difference. These attributes are
summarized as follows:
- Scale of operations. SMEs serve predominantly a local or regional market rather than a
national or an international market. They tend to have a very limited share of a given market. They are
relatively small in a given industry.
- Ownership. The equity of SMEs is generally owned by one person, or at most, a very few
people. Small firms tend to be managed directly by their owner or owners.
- I ndependence. SMEs are independent in the sense that they are not part of a complex
enterprise system such as a small division of a large enterprise. Independence also means that the firms
owner/managers have ultimate authority and effective control over the business, even though their
freedom may be constrained by obligations to financial institutions.
- Management style. Small firms are generally managed in a personalized fashion. Managers
of small firms tend to know all the employees personally, they participate in all aspects of managing the
business, and there is no general sharing of the decision-making process.
Other characteristics are pointed out from perspective of finance, organization and business
operation. Compared with large firms, SMEs generally lack of financial resources which suppresses their
potential growth, similarly, they do not have the benefit of a team of specialist experts.
Externally, SMEs have little control of or influence on the environment in which they operate, so
they find difficult to position themselves against a strong competitor.
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All these characteristics presented above make help the SMEs to have a closer relationship with
their customers. They can focus to a narrow market share or even a niche and by serving it very well can
protect that market share from the competition.
Even they are small firms the SMEs need to implement a CRM system in order to better serve
their clients.
The life cycle of CRM comprises three phases: acquiring, enhancing, and retaining. Each phase
supports increased intimacy and understanding between a company and its customers. Theses three
phases are:
1. Acquiring new customers: the company acquires customers by promoting product and service
leadership.
2. Enhancing the profitability of existing customers: the company enhances the relationship by
encouraging excellence in cross selling and up selling, thereby deepening and broadening the
relationship.
3. Retaining profitable customers for life: Retention focuses on service adaptability, delivering
not what the market wants but what customers want.
Each phase impacts customer relationships in different ways so that focus and strategies vary
from phase to phase. They are described in the table below.

Table 2. Focuses and strategies of CRM phases
Phase Focuses Strategies
Acquire Differentiation Innovation
Convenience
Enhance Bundling Reduce cost
Customer service
Retain Adaptability Listening
New products
Source: Kalakota Ravin et al (1999), e-Business: roadmap for success. Addison-Wesley Pub Co Addison-
Wesley Pub Co.

Based on CRM life cycle the SMEs can implement a CRM system that comprises four steps,
namely:
Step 1: The identification of customers. The identification of customers enables the company to
select those customers that they regard as being strategically significant and who they believe can
contribute to the success of the company. These customers have unique needs and due to their value to
the company, will have products developed to meet these needs. It must be possible to identify these
customers and so obtain as much detail as possible. This involves collecting as much data as possible in
order to obtain as clear a picture as possible of the customer and their profile. This may require the
development of a database or the continued maintenance of a database in order to ensure that the data
stays as recent as possible. Having this information enables the organization to determine those customers
that have been with the organization for a long period and those that have recently started using the
products and services of the organization.
Step 2: The differentiation of service. The differentiation of service implies that different
customers receive a different level of service and a different product from the company, depending on the
value to the company and their specific needs. This requires the organization to identify the top (or most
significant) customers and adapt service accordingly. Identification of these top customers takes place
using sales figures or by calculating the CLV associated with each customer. As the company is aware of
the value of their customers, service levels can be adjusted accordingly.
Step 3: Interaction with customers. This step refers to the importance of interacting with the
customer in relationship building efforts through a variety of communication tools and technologies. This
is necessary as the relationship can only develop and be sustained if there is communication with the
customers regarding their needs, perceptions and desires. This involves developing methods of
communication proactively with customers regarding the organizations products and attempting to
initiate dialogue with customers. Use can be made of technology, but this is not essential. The customers
with whom communication takes place are not necessarily all the customers, but only those that the
organization regards as being strategically significant. This interaction with the organization increases the
expectations of the customers regarding the service received as well as the quality of the relationship.
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Step 4: Customization of products, services and communication. Customization is carried out
by the company in order to ensure that customer needs are met. It requires that the company adapts its
product, service or communication in such as way have something unique for each customer.
Communication can be customized to address the specific needs and profile the customer, and company
also makes use of personalization as part of this process. Products can be customized as to the specific
desires that the customer has of the organization. In the case of the financial services, it refers to the
product package that is offered to the customer. The purpose of customization is to increase customer
satisfaction, and the loyalty that is exhibited by customers.

6. Example from a companys CRM system from Valcea County
Few years ago a SME from Valcea County tried to implement a CRM system and succeeded. The
company is producing PVC windows with double and triple glass. The target market for is represented
both by individuals and companies who wants to change their windows and doors as well as the new
constructions.
Because the company started its activity in 1999 at the time of implementing the CRM system
has already a strong database with all the customers served data.
The CRM system focused on two directions:
- finding new customers;
- contacting the served customers in order to see if they are satisfied with the products they
bought from the company. The feedback was very good, many customers being surprised that
the company is interested about the behavior of its products. The customers were also
informed about the new products of the company and the discounts they have if they place a
new order or if they bring a new client. For the next six month about 15-20% of the orders
came from people that heard about the companys products from the old customers of the
company.
Six month after the windows and doors were installed the company send its people to verify if the
products are working fine and with the same occasion reestablish the contact with the client and reminds
him about the offers.
Due to this system that was implemented in 2009 the company managed to overcome the
difficulties caused by the economic crisis and it didnt reduce its activity.
Today the CRM system is working very well generating constant orders from the customers. As
an observation in the last year the old customers become more demanding and required especially roller
shutters and painted glass, becoming more obvious for the company that new client segments are
emerging.

7. Conclusions
Today, when the existence of a large number of loyal customers is vital for companies, is difficult
and risky not to focus on building relationships with customers. Who continues to go on the old
marketing line makes it on its own risk.
After EU accession, Romanian SMEs have to face ruthless competition and markets. They need a
revolution in how they think business and marketing process in an effort to reduce the distance that
separates them from European firms.
The last decades have recognized market and customer orientation as a new business philosophy.
Lack of marketing departments and specialists within these companies allow them to suffer from what
Theodore Levitt called marketing myopia, demonstrating an exaggerated focus attention on the product
instead of the consumers. A good relationship with the customer, the consumer satisfaction on a
developed market as the EU, is no longer a differentiator factor, but mandatory for any company, a
necessary condition but not sufficient in order to continue business. Customer satisfaction is linked to
quality products and services, boosting business competitiveness.

8. References:
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element central este clientul, Editura Inage, Bucureti, 1998.
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- Berndt Adele, Herbst Frikkie, and Roux Lindie, Implementing a customer relationship
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Editura Curtea Veche, Bucureti, 2004.
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Curtea Veche, Bucureti, 2004.
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Bucureti, 2001.
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2000.
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economic, Editura Coresi, Bucureti, 2002.
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clieni, Editura Business Tech, Bucureti, 2004.
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pieele, Editura Brandbuilders, Bucureti, 2003.
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Bucureti, 2004.
- Kotler Philip, Marketing de la A la Z: 80 de concepte pe care trebuie s le cunoasc orice
manager, Editura Codecs, Bucureti, 2004.
- Kotler Philip, Zece pcate capitale de marketing: semne i soluii, Editura Codecs, Bucureti,
2004.
- Levinson, Jay Conrad, Guerilla creativity: creaz mesajul tu de marketing irezistibil, Editura
Business Tech, Bucureti, 2002.
- Levinson Jay Conrad, The way of the guerilla: Cum s dobndeti succes i echilibru ca om de
afaceri n secolul XXI, Ed. Business Tech, Bucureti, 1998.
- Maxwell John, Atitudinea nvingtorului, Ed. Amaltea, Bucureti, 2002.
- Puiu Alexandru, Management. Analize i studii comparative, ed,III, Editura Independena
economic, 2007.
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Bucureti, 2003.
- Ries Al, Trout Jack, Poziionarea: lupta pentru un loc n mintea ta, Editura Brandbuilders,
Bucureti, 2004.
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Bucureti, 2004.
- Tracy Brian, Cele 100 de legi ale succesului absolut n afaceri, Editura Amaltea, Bucureti, 2003.
- Tofler Alvin, Previziuni i premise, Editura Antet, Oradea, 1999.
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internaionale, Editura Amaltea, Bucureti, 2004.
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Model, M.Sc. Thesis in Accounting, Swedish School of Economics and Business Administration,
2003.

154

REDEFINING THE RELATIONSHIPS WITH CLIENTS DURING TIMES OF CRISES A
NECESSARY OR COMPULSORY FEATURE

CIOCHIN Iuliana
e-mail: iulianaciochina@yahoo.com

GUST Marius
e-mail: mariusgust@yahoo.com

PARPANDEL Denisa Elena
Assistant Professor / Ph.D., Faculty of Management Marketing in Business Affaires Rm. Vlcea/
Department of Economical Sciences, Constantin Brncoveanu University of Piteti, Rm. Vlcea, Romnia,
e-mail: parpandeldenisa@yahoo.com

Abstract: The purpose of this paper is to highlight the profound changes in markets as a consequence of
globalization, increased competition, technology development, communication paths and the complexity of modern
customer who made their presence felt, requiring a paradigm shift in the marketing theory. The objectives of the
research are to analyze the relationship marketing that emphasizes the importance of cooperation between the
various participants - suppliers, employees, distributors - in order to provide an optimal value to the target
customers. The expected results are aiming the transition from theory to practice, from rigidity to flexibility of
Romanian companies.

Key words: consumer, business environment, change, client, crises.

JEL classification: D12, D22, D4.

1. Introduction
Currently, the business world is undergoing a period of profound changes of the market, the old
answers do no longer match new realities. Tom Peters says that, in this world of chaos, successful
companies are those that do not prove a great resistance to change and accept its inevitable occurrence.
The main agents of change for business are customers. They require it to re-design, to adapt continuously,
to increase the level of performance offered, they are actually making it highly dynamic. Companies that
do not deal in an effective manner with changes that customers require do not have many chances to
resist, because customers are those who hold power.
The effects of globalization, stiff competition, technology development, communication routes
and distribution and the complexity of modern customer have made their presence felt, marking a
significant mutation of marketing theory paradigm. Relational marketing emphasizes the importance of
the cooperation between the different participants, suppliers, distributors and employees in order to
provide an optimal customer target value.

2. The role and importance of the customer in the business
As customers, modern consumers are part of a universe that is expanding through uninterrupted
new offers, they enjoyed previously unimaginable opportunities, every minute are bombarded with
thousands of adverts and all sorts of insistent approaches. The current crisis creates an excess of goods,
the entrepreneurs must find new consumers for categories always improved of products and services
increasingly specialized.
After the shock received by the customer on power loss, firms must awake to reality. They have
finally agreed that their existence is in the hands of customers, leading to sales and ultimately profits.
Some have understood very late what Peter Drucker had said many years ago: "the only profit center is
represented by the client". There is no doubt that in the current circumstances, any business that ignores
the interests of the client, may not last. So it becomes evident the need for in-depth knowledge of the new
consumer and its behavior.
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The consumer is now more educated and more informed, developments in technology being the
trigger of communication revolution we are witnessing. (according to some statistics, people in the urban
environment are exposed to 3,000-6,000 advertising messages per day, depending on the country). Godin
(2004)
- The consumer today is more intelligent and usually knows what is in its interest. Brian Tracy
confirms the above, saying: "the customer always acts in such a way as to satisfy the interests and seeking
to obtain the highest quantity and quality, the best at the lowest price" (Tracy, 2003). Thus, they try to
increase so to maximize the benefits from an acquisition and to reduce to a minimum the costs or
expenses incurred.
- Current Consumer is less demanding in terms of quality and more sophisticated in the
purchase process. Jack Welch at General Electric has synthetized perfectly the importance of quality and
its benefits: "quality is the best guarantee of the loyalty of our customers, the strongest defense against
foreign competition and the only way to sustainable and sustained earnings growth."
- Current Consumer is becoming increasingly squeamish, has increasing claims, taking
advantage of the existence of a large number of vendors who try to satisfy all needs.
Current Consumer is increasingly sensitive to prices, globalization, Internet extreme competition
and shaping markets, policies and business activity of firms. Many firms have established production
areas which ensure lower costs. Consumers take advantage of the current context, quality and low price,
firms must "sooner or later, respond to this request (Werner and Weiss, 2004).
Kotler claims that in this era, the firms get lower prices, but "you cannot build a viable business
based only on discount prices. And the quality is required so that the client feel that makes a purchase
based not only on price but also on value" (Kotler, 2004).
Current Consumer has increasingly less time available, the whole economy relying on customers'
desire to have things they want faster, there is a direct relationship between the speed with which a
company serves its customers and how they perceive the product or service. The speed in service
providing offers companies a competitive advantage in almost any field.
Current Consumer is more egocentric and selfish. Philip Kotler argues that many of the customers
have developed such an individuality that will be considered and treated more differently than everyone
else (Kotler, 2004). This focus on the ego of consumers provides marketing people a competitive
opportunity to offer them products and services tailored to the individual, and with a degree of emotional
involvement and expression of status and personality of the individual, based on the understanding that
every customer is unique and wants to be treated in a unique and original way.
Consumers are less and less loyal, the long-term success of a business is conditioned by the
existence of a growing number of loyal customers, "retaining a customer requires as much skill as
winning a customer" (Kotler, 2004). In order to remain in the market, companies must find ways to more
effective marketing to build long term relationships with customers.
The consumer is more difficult to be influenced advertising, since he is accustomed with the rules
of the game of marketing, the principles and even the techniques of marketing and advertising
professionals use to persuade consumers to buy certain products (Iliescu and Petre, 2004) . Today few
advertisers shall make it possible to ignore the fact that the only opinion that matters is that of the
consumer, Leo Burnett said, in this sense, his younger colleague: "If you cannot turn yourselves in
consumers, you may leave advertising industry" (Steel, 2005).
- The consumer is more interested in environmental issues that may affect ones health; the
percentage of "ecologist consumers" that actually selects the products according to ecological criteria is
increasing (Cave, 2005).
- We live in an economy, an economy in which the consumer was crowned as the King of the
market. The ratio between the power companies and the consumer is today reversed or at least balanced
firms are now dependent on the clients and not vice versa.

3. The need for client-orientation of the Romanian companies
Although it is known Francis Bacon's dictum: "knowledge is power", few Romanian firms will
work to know in depth, their market and customers, it will still pass some time until market research will
be something typical for any business, small or large. Romanian managers do not seem very concerned
about understanding the ever-changing behavior of consumers, to improve their level of knowledge about
consumers. They do not seem to understand that today's customers are not thinking like they used to five
or ten years ago.
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Companies best suited to market requirements are those that are aware of the expectations and
satisfaction of customers, interact with them, they are committed towards customers and comply with
them. These companies may have a feature that is missing in many Romanian companies: to think as
consumers think of their products. They always try to think as if they were themselves consumers. There
is even a witticism in which says that once you enter a business with a will, you have to act more likely as
your client than as yourself. These companies do not ever forget that the decisions consumers take when
purchasing, all power is from them, so the only opinion that matters is that of the consumers.
It is also apparent from those companies for which success means to be one step ahead of the
consumer, to anticipate their movements. The managers of these firms are thinking permanently what the
client wants in the future, over the next few weeks, months, or more than two years. Such an approach
would prove to be vital to any Romanian firm in the new context.
As the market makes the rules, businesses are dependent on the clients, who must receive the best
treatment that a firm can offer. Romanian companies should start to treat each customer as if it were the
only one that they have to treat, that is with respect and seriousness. Commitment to serve customers in a
perfect manner will prove the only and best way to ensure long-term success for companies in Romania.
Possession of a customer is a function that must be met by all of the companies, not just the
marketing department. This explains the fact that 50% of Japanese firms don't have a marketing
department, and 90% of them have no special compartment for marketing research.
Customer-orientation mentality on the part of all the employees of a firm does not appear by
itself; it must be planned, implemented, and rewarded. Unfortunately, few Romanian companies are
investing in professional training programs to create an organizational culture focused on customer
service. Even more so now, in the crisis conditions, when the battle cannot be won only by means of a
strategy based only on the best price, firms must focus on retention through high-quality services.
For a firm, being close to the customer is to adopt an attitude of openness and sincere
understanding of its needs and desires. Treating each customer with empathy and sensitivity is always
positive for businesses. Customer oriented organization gives them the opportunity to express their views
and grievances. When customers talk, firms should listen to. Unfortunately, many Romanian businesses
do not listen and do not care about their opinions, have gained a bad reputation. In the current
environment, to know what customers think, what they want, will become a Romanian visa requirement
for any company. To listen to customers and understand them will be the first thing that Romanian firms
should do (attraction, but mostly the default retention, the success of any business depends on it). The
way they react when Romanian companies are facing complaints will be decisive for their success or
failure. Currently, Romanian firms are known for a tendency to react negatively, rather that receive
complaints from customers. The irony is that those disgruntled buyers, but whose complaints have been
heard and resolved, often become more loyal than those who have expressed no dissatisfaction. Today
any company oriented to the customer must examine periodically the satisfaction of the consumer and to
set goals to improve it. It happens often in Romania, where the firm has a comfortable position in the
market and a good image among customers; it shows a false sense of security. If these firms do not learn
how they can better cater to customers, unless it is permanently adapted to market requirements and are
not always striving to exceed the expectations of consumers, they may, in the future lose their privileged
position.
Orientation towards the client requires moving the Centre of gravity of the communication
process from the product to the consumer. It is amazing that so few Romanian firms (large firms even
with professional marketing departments) do not understand the need for this ad in their mutations. The
majority of marketing messages made by Romanian companies, say too much about them and focus
almost entirely on what the company offers; they the client as a simple consumer of the products they
supply, instead of focusing on the benefits potential customers can gain if they choose to accept the offer
of that company.

4. The need to redefine the relations with customers
Lack of concern for customers or for the creation and maintenance of deep relationships with
consumers was evident and revolting in most companies in Romania, in the period after 1990. While sales
and profits went too (competition being relatively low, incomparably less than in developed countries,
high levels of involuntary consumption), few firms have raised the question of the development of long-
term relations with customers. For many years, Romanian firms were being targeted rather to maximize
profits on short-terms, focused on the collection of course immediately and thus, overviewing the value in
the perspective of a customer.
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Unfortunately for many Romanian owners, the profit was even more important than the health or
safety of the people. The numerous cases reported by the media, marketing of products with expired
validity terms, manufacture of products under unsanitary conditions, the use of outdated equipment in the
fun parks, distribution of food suspected to be infested with viruses, have eroded consumer confidence.
So, it is no wonder that today, Romanian businesses seem to suffer from the consumers ' perception that
their owners are indolent, greedy and indifferent to the interests of the customers, employees, and even
firms and their interests in the long term. There is a strong current of suspicion and mistrust of consumers
towards environmental practices in Romania.
The most important Romanian companies who want to build lasting relationships with customers
focus on honesty and integrity. In business, trust is an essential element, glue any relationships. If there is
no trust, a relationship cannot exist, and the long-term success of a company is virtually impossible. In
almost every area, companies have the most reliable and highest profits. Marketing studies have shown
that, today, consumers tend to support businesses they trust.
In Romania, many companies that are bankrupt, and the growing number of those who agonizing
are eloquent examples of behaviors that have abused the confidence of consumers in exchange of short-
term profits. Referring generally to such behavior, Philip Kotler compared the owners of such companies
with some vampires, which emptied the blood marks, and left them without life, humble themselves,
customers are dust and powder for companies focused on short-term benefits; such companies commit the
acts of suicide of firms through self-punishment - and by design brands. Romanian firms have made the
mistake of considering that once granted confidence by customers, the latter was granted forever and
began to be almost complacent about the mediocrity (several new mentality to "leave that goes and so")
or worse, as we mentioned above, have begun to take advantage of the confidence that had been granted
at the beginning when such companies were high.
The owners of the Romanian companies who do not comply with the customers, forgetting the
old saying "you get respect if you show respect seek to rapidly enrich on behalf of consumers. Those
who still have an arrogant attitude towards customers (and somewhere a naive vision of what it means to
a client today) like: "if I sell they will come" must make rapid changes for this concept is far from helping
to build viable relationships with consumers.
A drop in consumer confidence was sharpened against the habit of Romanian to make all sorts of
valuable promises to customers, without coverage in reality. Companies were not aware that as soon as it
is launched on the market, everything they do, everything they say is analyzed, reviewed, put under
magnifying glass by customers. Today promises of firms in our country do no longer enjoy the popularity
and they are even viewed with skepticism or doubt. So, they have to be careful what they promise,
because repeated disappointments of consumer turn to anger and no one should underestimate the
strength of an angry customer.
Customer dissatisfaction produces lasting damage by undermining the existence of firms, any
dealings with them. For creating quality relationships with their customers and keeping them for a long
time, Romanian firms must learn to respect each promise they make. They are required to prove
everything they say, so they should never make promises that are not able to honor them. This is the only
way that they can form a clientele. In order not to undermine confidence in the company products, there
must be a balance between the "brand promise", the quality and service that is "effective" brand
experience
All this set of factors caused the Romanian firms to operate in an environment that is often
hostile, it is unlikely that they are entrusted with confidence. Sometimes because of the local and central
media approach which has sanctioned behaviors likely to affect the interests of consumers.
Now when things have changed, in terms of competition we can witness an increase of interest
paid to consumer behavior and, in particular, to the phenomenon of turning clients more loyal. For
turning clients more loyal forming a stable clientele - the relationship with customers should be
cultivated. Someone said that this is somewhat similar to the cultivation of the Earth by digging plants,
watering and dedicating yourself to take care of the plants and then harvest the fruits, a work that requires
continuous effort and concentration. Any interruption in the process can produce losses, development of
relations requires patience, a lot of attention, involvement and dedication time. Romanian firms preferred
instead of cultivating client relationships, increase investment in advertising, to manipulate and earn a
customer.

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5. The relationship between Romanian companies and their customers
The level of satisfaction offered by the Romanian companies to consumers is not very high. This
explains why when new, more powerful competitors arise, local firms are losing many customers at the
expense of new competitors. The Romanian consumer loyalty towards indigenous products doesn't record
highs. The explanation is given by the fact that many employers believed they will achieve business
success by maximizing profits only.
Very often Romanian owners have in mind only the criterion of low price when it comes to the
choice of suppliers of raw materials and are not hesitating to change suppliers whenever it appears an
offer more advantageous from the point of view of quality, even if the price is lower. This makes the
product does not have any more the promised quality, depending on the quality of the raw material. To
these are added the concept of wage policy, attracting employees wages reduced or a weak high staff
fluctuation.
Romanian firms still in this situation must give up such unhealthy concepts, specialists providing
that "a company that aims to make only short-term profit, will not win anything on a long term basis, for
the greatest profit is given by repeated sales, and in these companies there will be no repeated sales".
Getting feedback from the client, improving products and services, lack of flaws are things that any
company would need to undertake in order to achieve a high profit.
To survive, indigenous companies do not have any other chance than to do their best to please
customers. "A satisfied customer is the foundation of any successful business.
At the same time, firms that do not consider the quality as its main priority, will fail the high
levels of customer satisfaction in the current conjuncture. As today's quality is defined by customer, and
the Romanian consumers today become more educated in this respect, the approach that any firm should
have towards maximum quality should start by understanding the needs and expectations of consumers of
products manufactured by them. The next step would be to give consumers more than they expect, to
make an effort to give the product changed and thus to gain an advantage in the minds of customers.
Introducing total quality Management systems is recommended, bringing increasing customer satisfaction
by improving quality. Incidentally, today, without the implementation of total quality Management
programs, firms must pray that all firms competing to be incompetent (Sagrove, 2000).
The obsessive attention to quality of products should be added and special attention should be
paid to services provided to customers. The quality of the services offered is a problem for companies in
Romania, its solving will prove vital for the success of any of them. As people speak only of two types of
services: the exceptional and the bad, it is obvious the direction to which firms in this area must move: to
provide flawless, high class products and services, which attract and gain customers faith. In Romania
one cannot hear and see that too often, companies are proposing to achieve excellence, to become
champions in the field of services.
There is a need to develop systems that companies use effectively to attract the emotional
involvement of every employee in providing full satisfaction to the customers. If in the West many firms
offer employees bonuses depending on the score, the criterion being customers satisfaction,
unfortunately in Romania there are few such companies, which have provided companies with incentives
for employees to treat particularly well the client.
If they exist, employees would involve more and would discard behaviors and so the rumors
encountered among employees, such as: "what do I care if the customer is satisfied with me? I didn't win
anything "The current client is no longer the timid person in the early 90s that accepts any behavior on the
part of employees in order to have a product that is needed or wanted. Often the client is dominated by
emotions to their purchase decision, and a warm and friendly behavior of the person who provides the
product can influence the decision and even faithfulness. The existence of superior strategies for customer
service can provide firms an advantage in relation to the competition. Romanian consumers today,
demanding and vigilant do no longer tolerate products that you want, and leave the service disabled,
inappropriate. They expect the companies raising standards of goods and services that it provides. This
may be the key to achieve a significant competitive advantage and long-term success in business. Process
improvement should be seen by firms as a contest without the Romanian line.
The tragedy is that many employers are not Romanians in running a normal evaluation, realistic
and objective of their companies, their products and services. In Romanian are arrogant, too many patrons
who consider that do not need to know the opinion of clients on their performance.
How long time, Romanian firms have treated customers with the superiority of the dominant
positions of strength and power, many customers have the Romanians gave to cry, convinced that they
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would not have any chance to be taken into account, that the firm will do little or nothing to fix the
problem reported, or fear they will not be treated with due respect. Even when policemen's idea, as true
that Romanian firms are often negative reactions when faced with complaints of dissatisfaction on the
part of customers attitude as blunt and the unfortunate. With view to this conviction, as a result of the lack
of dialogue with customers, Steven Covey emphasizes the importance of listening in building a
relationship with consumers: "to let your ear listen requires patience, open and sincere desire to
understand. When customers have a real problem and you listen with the sincere desire to understand, you
will be astounded how fast they open to you. They can hardly wait to reveal their feelings. And you have
to make them feel that after that are not judged, they will not be laughed at and will benefit from the same
deference" (Covey, 2000).
Therefore, Romanian firms should ask customers whether, in their opinion, they could change
anything or add anything for a better satisfaction. It may be an open discussion on the acceptance of a
client and with constructive criticism.
According to the Romanian company, the customer is not right, but, in the current context, such
attitudes like: "we have quite a lot to work even without searching for other complaints" should give up,
which can lead to bankruptcy in the longer term. The slogan "when customers talk, Whirpool listens" was
effective and brought the company success. If they want to succeed and become the best in their field of
activity, Romanian firms must learn to use it constructive feedback from customers and to sacrifice
hubris, vanity.
The companies will accept faster feedback received from customers and suggestions will be put
into practice, for becoming more successful. And once you attained a higher degree of satisfaction of
clients you will register and increase the loyalty of customers. Marketing theory has defined several tools
to track and measure customers satisfaction. Romanian firms should acquire several methods to analyze
the satisfaction they offer to customers. From practical experience of firms developed abroad we list on
the most effective: polls, gathering suggestions and complaints, the fictitious clients etc. No company in
Romania would have to ignore customers.

6. Conclusions
Until yesterday ignored, the management relationship with customers has become a priority for
everyone, more than ever, and the ability to develop personalized relationships with customers is crucial
today, is the key to the future of the company. Creating relationships with customers based on their value
and satisfaction is the very essence of the thinking and practice of modern marketing.
Romanian firms need a revolution in the way they think about business and marketing process in
their effort to decrease the distance that separates them from the European firms.
The last decades have recognized market orientation to the client as a new philosophy of
business. Many Romanian companies are for a long time on the road which requires a transition from
being product-oriented to being marketing-oriented. However, unfortunately, in Romania, plenty of
companies still witness what Theodor Levitt called marketing myopia, demonstrating an exaggerated
concentration on the product, to the detriment of consumers ' needs, the mistake that the well-known
author described as: "too much looking in the mirror instead of looking out of the window".
To succeed, therefore, in the strong competitive environment of contemporary Romanian market,
firms must be intensely focused on customers, luring him and then keeping them and helping them to
grow by providing higher values. What successful businesses have in common today, in addition to the
passion with which they are committed to understanding and meeting the needs of target customers on the
market, is the ability of leaders to motivate all employees to contribute to the building of lasting
relationships with customers by providing a high degree of value. Tom Peters and Robert Waterman, in
their search of excellence, Lessons from the best managed companies in America (Meteor Press
Publishing House, 2011, p 123) identify approaching reviews as one of the eight factors assuring the
success of the company.
As long as customers on the domestic market are almost as demanding as those of developed
markets, satisfying their needs and cementing a relationship with them are the inevitable existence of
human resources capable of change, adaptability, creativity.
Within the scope of current affairs, companies operate in a world of relationships. Normally, to
have good relations and long-term customers, Romanian firms must first found relationships or
partnerships with employees; build a team with them with a view to customer satisfaction. The creation of
such mutually beneficial alliances or partnerships will be the key to success for any company in Romania.
Acting in an environment that emphasizes more creativity and innovation will be very hard for companies
160

to gain an advantage of Romanian competition unless they invest to training of employees for training
and professional development.
The current economy requires significant structural changes in terms of marketing and how to do
business, mainly from the passing from predictability to unpredictability, flexibility, rigidity in accepting
the need for certainty of uncertainty. The only thing that remains constant is change.

7. References
- Cave, Susan (2005), Cum s nvei comportamentul consumatorului ntr-o sptmn, Editura
Cosmos, Bucureti, p. 15-36.
- Covey, R. Stephan (2000), Eficiena n 7 trepte sau Un abecedar al nelepciunii, Editura Alfa,
Bucureti, p. 152.
- Danciu, Victor (2004), Strategii competitive de marketing, Editura Economic, Bucureti, p.31-
42.
- Godin, Seth (2004), Marketingul bazat pe permisiune: Transform necunoscuii n prieteni i
prietenii n clieni, Editura Business Tech, Bucureti, p. 79-112.
- Iliescu, Dragos, Petre, Dan (2004), Psihologia reclamei i a consumatorului, Editura
Comunicare.ro, Bucureti, p. 96-102.
- Kotler, Philip (2004), Marketing de la A la Z 80 de concepte pe care trebuie s le cunoasc orice
manager, Editura Codecs, Bucureti, p. 80-110.
- Kotler, Philip (2004), Kotler despre marketing. Cum s crem, cum s ctigm i cum s
dominm pieele Editura Brandbuilders, Bucureti, p. 85-89.
- Peters, Tom, Waterman, Robert, (2011), n cutarea excelenei. Lecii de la companiile cel mai
bine administrate din America, Editura Meteor Press, Bucureti, p. 123-156.
- Sagrove, Kit (2000), Managementul calitii totale n aciune, Editura Rentrop & Straton,
Bucureti, p. 12-57.
- Steel, John (2005), Adevr, minciun i advertising, Editura Brandbuilders, Bucureti, p. 81.
- Tracy, Brian (2003), Cele 100 de legi ale succesului absolut in afaceri, Editura Amaltea,
Bucureti, p. 41-57.
- Werner, Klaus, Weiss, Hans (2004), Noua carte neagr a firmelor de marc, Editura Amaltea,
Bucureti, p. 46.

161

THE ROLE OF THE DELORS COMMITTEE IN THE PROCESS OF CREATING THE
EUROPEAN ECONOMIC AND MONETARY UNION

C NDEA I uliana Marina
Ph.D., teaching assistant, Faculty of Economics/Department of Economic Sciences, "Petre Andrei" University,
Iai, Romania, cindeaiulia@yahoo.com

C NDEA Moise
Ph.D., associate professor, Faculty of Economics/Department of Economic Sciences, "Petre Andrei" University,
Iai, Romania, cindeamoise@yahoo.com

Abstract: The aim of this paper is to study the role of the Delors Committee (the committee which
conducted the Economic and Monetary Union (EMU) project, later included in the Treaty of Maastricht) in the
creation of EMU. The international and institutional context of the early to mid-1980s, characterized by a European
Economic Community (EEC) of 12 Member States, a successful European Monetary System (EMS) and an obvious
sign of optimism following the success of the Single European Act and the perspective of achieving the single market
is extremely important for understanding why the Delors Committee was entrusted the task of proposing concrete
steps for completing the creation of EMU at this very moment. The research methodology refers to the analysis of
the institutional and international context of the early to mid-1980s, which reveals the concrete role of the Delors
Committee, as well as the analysis of the extent to which the Delors Committee meets the conditions of the definition
of the concept of epistemic community.

Key words: committee of experts, European monetary integration, institutional and international context

JEL classification: F15, F33

1. Introduction
The Economic and Monetary Union is a key area where a lot has happened over more than fifty
years of European integration. It is true that the 1957 Treaty of Rome does not clearly state the creation of
EMU; the concept was not included in a document until the almost final form of the Treaty of Maastricht
in 1992. What is remarkable is that, although the concept was not included in any document from the very
beginning, this form of integration has made considerable progress, becoming what we now call the Euro
area. The international and institutional context of the early to mid-1980s, characterized by a European
Economic Community (EEC) of 12 Member States, a successful European Monetary System (EMS) and
an obvious sign of optimism following the success of the Single European Act and the perspective of
achieving the Single Market is extremely important for understanding why the Delors Committee was
entrusted the task of proposing concrete steps for completing the creation of EMU at this very moment.

2. The institutional and international context
The EMU project dates since 1970. However, monetary integration did not materialize at that
time due to the unfavorable international context and the divergences regarding the economic and
monetary policies of the Member States. The Bretton Woods System, which had provided an international
monetary system of stable exchange rates for more than 20 years, fell during the same period. The
response of the Member States to the 1973 oil crisis and the recession that followed revealed major
differences regarding the economic and monetary policies within the EEC.
One of the lessons learned in the late 1970s was that there is no trade-off between inflation and
unemployment. In March 1979, the EMS became operational; the Member States were on the verge of a
major change regarding the economic and monetary policy regime. Although the main goal of the
monetary policy was that of reducing inflation, during the 1980s not all the central banks achieved this
goal with the same success rate. Overall, recurrent inflation was caused by monetary policy easing, which
happened when central banks were taught to protect other policy objectives such as stimulating economic
growth. Indeed, in most Member States of the EEC, central banks were not independent, with the
exception of Germany, Italy and, de facto, the Netherlands (Hasse, 1990).
A significant change in the monetary policy occurred in 1983, when the French government
realized that one cannot impose "socialist policies" and other countries, such as Italy, reached the
162

conclusion that reducing inflation should be a very important political objective. However, these changes
were not sufficient for the launching of EMU. The Single Market Program contributed to the renewal of
the idea of EMU in Europe. As a result of the four freedoms - free movement of goods, services, persons
and capital, the creation of EMU was now regarded as necessary by the heads of state and government.
The global factors practically forced the companies within the community to militate in favor of
EMU. Companies such as Fiat, Philips or Volvo, due to the loss of international competitiveness,
understood the need of creating a European market and a single currency. At the same time, politicians
from the Member States began to realize the adverse effects of a fluctuating US dollar on the European
economy and the need for a response from Europe, especially since the attempts of coordinating the
international exchange rates within the G7 meetings had failed in a period of strong fluctuations of the
dollar against the German mark. In addition, policy makers realized that economic interdependence,
globalization and expanding international capital markets reduced their power of maneuver in this area.
At the same time, during the late 1980s, one could notice a convergence of the policies in the
international context of the EMS, which had successfully developed in the mid 1980s, after a slow start.
The German mark had become the de facto anchor currency and the EU governments had started to
practice policies of reducing inflation. The method used was to follow and copy the German monetary
policy step by step. Therefore, in the late 1980s, the EMS was seen as a political symbol of successful
European integration.

3. The role of the Delors Committee in creating the EMU
The explanations why the EMU was accepted and included in the Maastricht Treaty show little
concern for the importance of the Delors Committee of monetary experts in this process. We shall further
analyze the role of the Delors Committee (the committee which conducted the European and Monetary
Union project, later included in the Treaty of Maastricht) in the creation of EMU.
In June 1988, the European Council mandated the committee headed by Jacques Delors the task
of studying and proposing concrete stages of the EMU" (Delors Report, 1989, p.3). The president of the
committee, Jacques Delors, and French president, Franois Mitterrand, supported the EMU. They were,
in turn, supported by the German chancellor Helmut Kohl. A clause regarding the need for EMU had
already been included into the Single European Act (Levitt, 1996).
Therefore, the members of the Delors Committee were selected by the European Council during
the Hanover summit in June 1988. The council named Jacques Delors the head of the committee and
decided that it should be composed of the presidents or governors of the 12 central banks, another
member, Frans Andriessen, and three personalities named by common agreement by the heads of state or
government (...): Alexandre Lamfalussy, the general manager of the Bank for International Settlements
(BIS), Niels Thygesen, professor of Economics (Niels Thygesen had been supporting the European
economic and monetary integration for some time. In 1975, he was one of the nine economists signing the
"Manifest for European Monetary Union", which appeared in "the Economist" on November 1, 1975 and
which represented an attempt to re-launch the EMU by introducing a parallel currency) and Miguel
Boyer, president of Banco Exterior de Espaa. The rapporteurs, Gunter Baer and Tommaso Padoa-
Schioppa, were elected by the president of the committee, Jacques Delors (Gunter Baer was a top official
of the Bundesbank and was elected at German chancellor Helmut Kohls request; Padoa-Schioppa had
been rapporteur for a previous report in 1987, called the Padoa-Schioppa Report. It analyzed the context
of the European Community enlargement through the accession of Spain and Portugal and the prospect of
completing the Single Market).
Completed in April 1989, the Delors Report proposed a three-stage process towards the EMU,
involving the close coordination of the economic policies, strict rules regarding the financing of budget
deficits and setting up an independent community institution which to define and implement the
community monetary policy. The first stage envisaged the enhancement of economic policy convergence
and removing the control of the exchange in order to ensure the free movement of capital within the
European Community. The second stage implied the early establishment of the European System of
Central Banks (ESCB) and the completion of economic and monetary convergence. And the third stage
involved the replacement of the national central banks with the ESCB, the irrevocable fixing of parities
and the introduction of the single currency.
The Delors Report was elaborated in a relatively short period of time and was adopted
unanimously. However, the committee had two members dominating the sessions: the president of the
committee - Delors and the president of Bundesbank - Karl Otto Pohl. Therefore, hierarchy had been
established within the Delors Committee.
163

Few are those who have noticed that the Delors Report, which was mainly elaborated by the
officials of the central banks, strikingly resembles the Maastricht Treaty articles which refer to the EMU.
Dyson, Featherstone and Michalopoulos studied how the central bank officials managed to
introduce the principle of central bank independence in the treaty (Dyson et.al., 1995). The key factor
explaining the influence of the central bank officials in the creation of the EMU is represented by the
"structural changes in the nature and structure of capitalism, in particular the relationship between the
EEC Member States and the global financial markets and the inflation phenomenon" (Dyson et.al., 1995,
p.484). Therefore, according to these authors, the main determinants of the EMU process are the changes
in the global economy, including the changing perceptions regarding the economic and monetary policy
objectives.
In 1994, Kenneth Dyson conducted a study on the EMU, written from the perspective of the two-
level game, which regards the political actors, the negotiation relationships and what he calls "the
structural power of the international political economy." According to Dyson, the process of monetary
integration is shaped by "the will and power of the central actors involved", which are influenced by four
factors: first of all, the actors must act on a stage; then, they must have certain economic beliefs; thirdly,
the actors are confronted with structural changes of the international political economy; the fourth factor
is represented by their experience regarding the process of European economic and monetary integration
(Dyson, 1994). By "structural power", Dyson means the control over a great number of factors in the
external context, such as: control of the anchor currency, control of capital supply and demand and
control of the economic principles (Dyson, 1994, p.16).
Immediately after publication, the Delors Report was not well received by either the decision
makers or the public. The members of the Delors Committee (the official name was "Committee for the
Analysis of the EMU") - the 12 presidents of the central banks, the president of the European Committee
and another European commissioner - who had prepared the report, unanimously agreed with its contents.
The report envisaged the irrevocable fixing of the exchange rates between national currencies and, finally,
the introduction of the single currency. In order for these objectives to be achieved, it also stipulated the
need for a "common monetary policy" and "a high degree of economic policy compatibility (...)
particularly in the fiscal area (Delors Report, 1989).
The fact that an agreement on the creation of EMU was reached so quickly surprised the
academic community. Even more surprising was the fact that the Treaty of Maastricht encompassed all
the recommendations of the Delors Report. By accepting the Treaty, the Member States committed
accepted to transfer their sovereignty to the monetary policy at European level. Not only did the Member
States agree to institutionalize their monetary policies at European level, but they also decided to provide
the European System of Central Banks an independent status. It is, indeed, intriguing how a monetary
arrangement that was going to materialize much later was accepted by the 12 Member States during
1989-1991. According to Rosenthal, the EMU proposals materialized so quickly in the late 1960s and
early 1970s because the officials in charge of negotiating the Werner Report had known each other and
had been cooperating for quite some time. However, the public became really interested in the EMU
project only after the Treaty was signed.

4. The role of epistemic community of the Delors Committee
One usually relies on epistemic communities in order to solve certain international problems
when unilateral or bilateral agreements fail. Ruggie does not provide a clear definition of the epistemic
community; he only states that they can play roles that influence the members perception of the social
reality (Ruggie, 1975, p.570).
An epistemic community can arise when the national governments aim at coordinating policies at
international level. Policy choices involve a number of consequences, which can only be estimated partly;
hence, the need for information. Epistemic communities, whether national or transnational, are a potential
supplier of the information needed by policy makers.
Adler and Haas identified four mechanisms through which epistemic communities exert their
influence: first, policy innovation (they decide upon the nature of the problem, policy objectives and at
what level the problem should be solved). In fact, these initial choices define the national interests;
second, policy diffusion, which refers to the mechanism through which the community members
communicate in order to make their views known; third, policy selection can take place. In this case, the
decision makers ask for the help of a selected epistemic community, which they know will support the
respective policy. This approach allows the legitimization of political elections by appealing to
communities of experts; fourth of all, policy persistence - sharing the same ideas, beliefs and goals over
164

time increases the credibility and authority of the members of the epistemic community; finally, policy
evolution as knowledge. Epistemic communities can contribute decisively to knowledge, which is
extremely important because the final understanding of a policy issue determines the outcome of the
respective policy (Adler and Haas, 1992).
Peter Haas, studying "the role of epistemic communities (in understanding the cause-effect
relationships in the case of complex problems) of helping countries identify their own interests, proposing
certain policies and identifying certain issues that are to be put under negotiation"(Haas, 1992, p.2),
defines the concept as follows: "An epistemic community is a network of professionals from various
fields, who 1. Share the same beliefs (...), 2. Share the same causal beliefs derived from the analysis of the
practices that cause certain problems and serve as a basis for elucidating the multiple linkages between
the possible policies and the expected earnings, 3. Share the same notion of validity in order to validate
knowledge in their field and 4. Share a common policy initiative - a set of practices associated with
certain problems towards which professional competence is directed, out of the belief that this will lead to
welfare". The author identifies some more characteristics as well: "the members of the epistemic
community have an inter-subjective logic, share the same way of thinking, the same reasoning and the
same beliefs and use the same discursive practices; they also share the same responsibility regarding the
production and implementation of knowledge"(Haas, 1992, p.5).
The members of the epistemic community distinguish from other members of the scientific
community by the fact that they try to accomplish a goal that they believe in: "The members of the
epistemic communities try to engage in activities which best reflect the beliefs of the community and tend
to identify themselves with the groups that seek to promote these beliefs". However, the author argues
that the members of a sub-domain of a discipline can form an epistemic community. This means that a
certain category of economists, the Keynesians for example, could be considered an epistemic community
if they share the same beliefs, ideas or goals. Guided by the same reasoning, the central bank officials
cannot form an epistemic community. Instead, the central bank officials that support the EMU can be
regarded as forming such a community.
We shall further analyze the extent to which the Delors Committee meets the four conditions of
the definition of the concept of epistemic community proposed by Peter Haas. First, the committee
members shared the same normative beliefs, meaning that they believed that enhancing economic and
monetary integration will have positive effects on the European Community, provided that it is based on
certain principles. Second, they shared the same causal beliefs, based on the EMS experience and the
monetary policy in general. They were convinced that inflation is harmful to economic growth. Then,
they admitted the need for exchange rate stability in order to ensure the proper functioning of the Internal
Market. Moreover, the de facto domination of the German mark as the anchor currency and therefore the
primacy of the Bundesbank in determining monetary policies was not a politically satisfactory scenario.
At the same time, although the creation of a new European institution was favored, the Delors Committee
did not consider the existence of an economic supranational authority to be appropriate, because the
participating governments would have no longer been fully responsible for the national macroeconomic
and fiscal policies.
The third condition, sharing the same notion of validity, is very similar to the second one, which
is why we find it to be met. It is difficult to accurately determine the difference between conditions two
and three because, for example, the fact that the committee members were convinced that inflation
hampers economic growth applies for both the first and the second condition.
The fourth condition, a common policy initiative, is clearly satisfied, since the members of the
committee were selected precisely because they had been given "the task of studying and proposing
concrete stages for creating the EMU(Delors Report, 1989).
How did the national governments benefit from consulting the Delors Committee? When the
European Council asked the committee to analyze the possibility of an economic and monetary union, not
all EU governments were enthusiastic about this idea. The English government even vehemently opposed
the project. Given this context, it seems incredible that the British agreed, however, to consider a possible
EMU. Their explanation was that the report would not require the acceptance of its recommendations,
being merely an exercise. In fact, the main reason why the British did not oppose the EMU was their fear
that West Germany, France and Benelux could create an EMU, thereby eliminating the influence of
England on the creation process of the monetary arrangement.
Secondly, the governments of the Member States were aware that the introduction of the single
currency was questionable as it involved institutionalizing a monetary regime that had been de facto
dominated by the German monetary policies and, thus, the supremacy of the German mark. The
165

governments anticipations regarding the possibility that the German monetary regime to become the
center of the European monetary policy prove that they were also aware that if a European central bank
was to be created, then it would take the Bundesbank model, namely it would be politically independent.
In the absence of any prohibitive agreement, countries could form a multilateral monetary area
outside the European Community. The idea of having a word to say in this scheme and the risk of being
excluded were major concerns for countries like Spain or England. Moreover, the fact that the project of
EMU was to be elaborated by the Delors Committee explains why these countries accepted the type of
EMU largely based on the German model.
Thus, it was convenient for all the Member States to assign the task of initiating policies to a
group of central bankers and independent experts and to make sure that they suggested the independence
of the European central bank. This was a very important step considering that most of the national central
banks were still taking instructions from their national governments. Also, no political agreement
regarding the acceptance of a macroeconomic or fiscal authority for defending the monetary institution
had been signed.

5. Conclusions
The Delors Committee was not a mere actor, which had no connection with the political struggle
of the states. It was asked for advice namely because national decision makers needed legitimacy and
know-how for the next step in international cooperation.
In addition, central bankers had to be trained in terms of monetary policies, which meant that they
could also give their consent regarding the single monetary policy. The global factors and the perception
of the global economy made national governments skeptical regarding the uncoordinated independent
political decisions, and, as a consequence, they became increasingly interested in the idea of a common
policy.
Thus, central bankers became very important actors mainly because the Member States realized
that the interdependence of their economies means limiting their possibilities of maneuver in solving
internal problems in an isolated manner, without coordinating their policies with those of other countries.
The Delors Committee functioned exactly as the definition of an epistemic community suggests.
The national governments looked for a group of experts that they knew would support their political
choices and, moreover, they could use the knowledge, experience and advice of the experts in order to
base their decisions. Without the report of these experts, the national governments would have been
suspicious of the reasons and purposes of the other governments.

6. References
- Adler, E.; Haas P.M. (1992) Conclusion: Epistemic Communities, World Order and the
Creation of a Reflective Research Program, International Organization, 46(1), Cambridge
University Press, p.375-387.
- Delors Report (1989) Report on Economic and Monetary Union in the European Community
(Committee for the Study of Economic and Monetary Union), Luxembourg: Office for the
Official Publications of the E.C.
- Dyson, K. (1994) Elusive Union. The Process of Economic and Monetary Union in Europe,
Longman Publishing Group, London and New York, p. 10-17.
- Dyson, K..; Featherstone, K.; Michalopoulos, G. (1995) Strapped to the Mast; EC Central
Bankers between Global Financial Markets and Regional Integration, Journal of European
Public Policy, 2(3), p. 475-479.
- Haas, P.M. (1992) Introduction: Epistemic Communities and International Policy Co-
ordination, International Organization, 46(1), Cambridge University Press.
- Hasse, R. (1990) The European Central Bank: Perspectives for a Further Development of the
European Monetary System, Bertelsmann Foundation, Gtersloh.
- Levitt, M. (1996) EMU A View from the Banking Sector, Journal of European Public
Policy, 3(3), p. 499-514.
- Ruggie, J.G. (1975) International Responses to Technology: Concepts and Trends,
International Organization, 29(3), Cambridge University Press.

166

Acknowledgements
This paper has received financial support through the project Post-Doctoral Studies in
Economics: continuous training program for elite researchers SPODE, finance contract no.
POSDRU/89/1.5/S/61755, project funded by the European Social Fund through the Human Resources
Development Operational Sectorial Program 2007-2013.

167

ACTUALITIES AND ASPECTS OF THE BUSINESS TRAVEL IN ROMANIA

COSMESCU I oan,
Professor Ph. D, Faculty of Economics Sciences/Department of Management, Marketing, Business
Administration, Lucian Blaga University of Sibiu, Romania

COSMESCU Denisa,
L.C. Welting Marketing Romnia SRL

Abstract: Loosely, the term business travel refers to the peoples journeys concerning their jobs, precisely
to their official meetings, or commercial or others such as the participation to the different events organized by the
economic enterprise, institutions or administrative agencies for their representatives in order to diversify and grow
the quality of the economic goods, materials or services, for which they have specialized. Even though, mostly,
these facts involve the ongoing of a paid activity, being incorporated in the tourism, because the organization and
the accomplishment of these implies the usage of the facility of housing, food, recreation, as well as the services
typical for the travel agents. So far, much more from now on, business travel is the privilege for the developed
countries, having an established, original market economy. Yet, business travel is the most important niche for
Romania through which she can enter in the run of the international tourism, with great advantages for the social-
economic future of the national community.

Key words: business travel, fair trade and exhibition, market of business travel.

Jel Classification: L83

1. Theoretical aspects concerning business travel
Business travel part of the tourism is the most dynamic form of tourism, quoting circa 20% of
all the international travels and almost 24% of the touristic profits, being at the same time one of the most
grandiose and expensive activities (Minciu R., 2004).
Conceptually, business travel refers to the movement in another city, at a length bigger than 50km
from the original city of the traveler, and this travel must be determined by a business, an event or a
purpose concerning education.
There are several types of business travel: individual trips/travels, group trips/travels, travels
determined by different events (MICE domain- Meetings, Incentives, Conventions, Exhibitions), team-
buildings, and training travels (Prvulescu M., 2008).
Practically, business travel takes different forms:
- The assembly, as an event organized in multiple ways (assembly, colloquy, conclave,
conference, congress, union, meeting, reception, gathering, seminar, symposium, summit,
workshop) for discussing common problems (commercial or non-commercial), consisting of
even hundreds of persons, lasting for a couple of hours or even a week, using services of
tourism and even relying on the premises of organization which justify the affiliation to
business travel (Davidson R., 1994);
- Exhibitions and trade fairs, mean that there are presented products and services to a target
public having as purpose the promotion of sales and the guests information; this
organizational form of business travel stimulates journeys of exhibitors and guests, planning
several touristic services, such as catering and accommodation of the guests;
- Internal training, where all the participants belong to the same company or openevents,
where the host institution offers programs for all those interested in them;
- Products launching, meaning that they are specialized events used at the moment by many
companies as a way of promoting their products and services before launching them on the
market; they usually have a diversified audience including media, suppliers and consumers,
and the time allocated is quite short (sometimes only a few minutes) but with a relatively
high budget;
- Cordial travels were defined in 1998 by the Society of Incentive Travel
Executives(SITE), as a management tool which , by offering exceptional travels, are meant
168

to incentives or to admit the high level of the participants performance while
accomplishing the tasks within the organization;
- Individual business travels, which are initiated by entrepreneurs who want to include in
their strategy of developing their firms -to a national or international area (multinational,
transnational)- actions that imply all basic and complementary services of tourism ,
including loisir tourism;
- Travelling for business, of the office holders, national or international, a chance through
which the interests of the local and national communities are promoted on various areas
(economic, social etc.). However, through their complex content, business travel can have
lots of definitions and classification, literature and the practical reality is that it is evolving
more and more lately.

2. Particularities, extents and advantages for the destination of the business travel
The main characteristics of business travel may be the following:
- It represents the form of tourism which maintains a high level of the quality of services;
- It reaches the highest level during spring and autumn, but it also has activity during winter
and summer;
- It represents a complementary part of loisir tourism (for free time or holiday);
- Many of the investments for infrastructure are especially dedicated to business travel
(hotels, restaurants, facilities concerning transport and traffic) and offer advantages which
can be used by typical tourists and also by the people living in that area;
- Business tourism has less negative effects on the environment than does the classic tourism;
- Statistics show that almost 40% of the business tourists return to the same places along with
their families.
Business travels may have an internal or an external character depending on the direct user and
their results.
The internal form of the business travel addresses to the employees of a company and has as
purpose the impulse of the staff so that labor productivity and the performances could be improved.
They take the shape of:
- Seminars or assemblies of the leaders of the company and the employees (in order to detect
and solve problems and to share experiences);
- Staff training and updating the training usually go off in special institutions (universities,
research institutes, training centers ), in adequate hotels or in a touristic framework, not in
firms;
- Rewarded travels (incentive).
The external form pursues the good evolution of the activities and the prosperity of the firms as a
whole. It consists of:
- Professional travel (work on field, market research, administration/ supervising works,
assisting);
- Participation to the fairs, exhibitions, congresses, colloquies.
Actually, the economic reports which are generated by this branch determine the market of
business travel, namely the meeting point of the providers of these specialized services with their
customers.
The main providers of the branch of gatherings and conferences are those who can assure all the
facilities of this market. Big conference centers are the most appropriate place for meetings, but
museums, theaters, castles, ships and even parks can be a perfect place for events that require a
memorable location in order to be outstanding. Hotels have as well an important role for business travel,
due to their ability of hosting a great number of big or middle events. The domination of hotels in this
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field is being disputed by other types of location such as conference centers which consists of public
funds, and whenever there are delegations for several days these centers contribute to the local economy.
Universities may also be included, because they have invested in hosting and meetings, in order to raise
their own budget.
On the other side, there are the customers. They can be included in three categories: corporate
sector, associations and the public sector (Rogers T., 2003):
a. Corporate sector is represented by the companies which have like main purpose organizing
commercial meetings: conferences to discuss strategies, launching new products and
organizing training for employees. The leisure activities which often accompany these
conferences allow the participants to improve their team spirit.
b. Associations (the second biggest category of customers) divide intro two types: professional,
when the reason of the meeting is strictly related to work and voluntary. There are local,
regional, national and international associations. Although its members are much dispersed,
they have to meet regularly in order to catch up with the latest news and updates in their field
of research. The battle between destinations is big because it implies the organization of
conferences of the international associations which imply a great number of delegates; it
takes longer and as a general rule is less frequent. Fortunately for tourism agencies which are
involved in this program, the number of international associations is getting bigger due to the
growth of professional training.
c. The public sector the local and central authorities usually buy the services offered by
the organizers of business travel, for delegations, as well as for organizing events at a local,
national or international level. The educational and health system are the most important
factors, but also organizers of such activities.
Business travel has developed as one of the most dynamic sector of economy, tending to evolve
more due to the spread of international relations in every branch, especially as a result of globalization of
economic life.
Taking into account the truth of this statistics, according to the report of the Union of
International Association (UIA), published in 2011, in 2010 there have been 359.673 meetings in 256
countries, more detailed 11.047 towns. The balance on each continent showing the number of organized
meetings is as following:

Table 1: Market share upon the organizing of meetings in 2010
Continent 2006 2007 2008 2009 2010
Total 100 100 100 100 100
Europe 56,8 58,3 56,7 57,66 56,19
North America 13,9 14,9 16,5 15,96 17,17
Asia 14,9 12,9 13,7 12,8 13,08
South America 6,4 6,00 4,71 5,19 5,12
Africa 4,8 4,8 4,6 4,25 4,03
Australia and Pacific 3,2 3,1 3,8 4,14 4,41
Source: Press Release June 2011- Union of International Associations International Meeting Statistics for
the year 2010.

Comparing to year 2009 (when the number of meetings was the highest) the number of meetings
has declined with 12% (1.253 meetings). Analyzing the regions, the number of meetings has declined
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with 11% in Africa, 11% in Europe, 6% in North America, 16% in South America, 2% in Australia and
Pacific, but only in Asia it has grown with 14,9%.
In terms of competition between countries, here is the hierarchy of the first ten countries which
organized international meetings:
Table 2: Top international meeting countries in 2010
Country Number of meetings Percentage of all meetings
1. USA 936 8,1
2. Japan 741 6,5
3. Singapore 725 6,4
4. France 686 6,0
5. Belgium 597 5,2
6. Spain 572 5,0
7. Germany 499 4,3
8. Korea Rep 464 4,0
9. UK 375 3,3
10. Austria 362 3,1
Source : www.uia.org
The first ten countries in the statistics, gather ca. 60% of the total of international meetings, and
the rest belonging to the majority of the countries of the contemporary world; this shows the differences
between the levels of development and also the capacity of organizing such events.
Here are the statistics of the organizing ability of the first ten cities which were ranked as
destinations for international meetings:

Table 3: Top international meeting cities in 2010
Country Number of meetings Percentage of all meetings
1. Singapore 725 6,5
2. Brussels 486 4,4
3. Paris 394 3,6
4. Vienna 257 2,3
5. Seoul 201 1,8
6. Barcelona 193 1,7
7. Tokyo 190 1,7
8. Geneva 189 1,7
9. Madrid 175 1,6
10. Berlin 165 1,5
Source: www.uia.org
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It can be seen that these ten cities gather ca. 27% of the total of international meetings, proving
that there is a great interest of the organizers, and that they fulfill all the requirements and the background
of the meetings in relation to the external part of the chosen destinations for such meetings of a great
range.
The meetings taken into account in this hierarchy fulfill the criteria imposed by UIA (Union of
International Associations): they are organized or sponsored by international organizations which appear
in Yearbook of International Organizations and in International Congress Calendar; or there are
national meetings to which will participate international guests, and they are organized by the national
branch of an international association.
Basic tourist services and many of those supplementary and complementary serve the business
travel as well as the leisure or the one in the free time, but active by their nature. Transport, housing, food
supplies, information and promotion services, or the activities of the tourism agents and even the tourist
attractions are presented on both markets, even if the offered services may be different. Moreover, the
motivations of the customer regarding the two forms of tourism (business and leisure) find each other in
perfect relation, hence the requirement in choosing the destination of business travel.
Thats why Great Hotels of the World (a worldwide alliance of the independent luxurious
hotels) have published in 2011 their predictions for the 10 most popular destinations all over the world for
business travel and also active tourism. It is noticeable the fact that in the survey made by Great Hotels of
the World the European destinations are more, and they took over the American ones. These are the most
favorable places in the world for business meetings, conferences, congresses but also for leisure and
active tourism.
1. Montenegro after registering lately a significant growth in leisure tourism, Montenegro
develops rapidly as a common destination for meetings and conferences. Montenegro, located
on the Adriatic coast, offers unique experiences for active tourism but also for teambuilding
activities. The facilities for meeting and conferences offered here are excellent. The hotel
industry is expanding, and there is a lot of investment in building hotels and in infrastructure.
2. Croatia known also as Adriatic Pearl thanks to its high standards regarding tourism,
Croatia has a lot to give to business travel and more. Croatia has tempting destinations such
as Dubrovnik, Zagreb, Split and Hvar, and excellent connections due to its 9 international
airports; due to these things, Croatia becomes an attractive option for congresses, meetings
and trips.
3. South Africa- South Africa becomes more attractive through its gorgeous landscapes, its
sunny climate, multiculturalism and the fact that they consider money very important. World
Cup was the best opportunity for South Africa to show its great infrastructure. Johannesburg
and Cape Town have become very popular destinations among the customers, due to their
capacity to host events for different capacity and prices. Many hotels and conference centers
are being built, and the existent facilities are being renewed.
4. India- India is considered to be an ideal destination for meetings and congresses due to its
new technology and facilities, for its known hospitality, rich heritage and natural beauties.
She also represents an exotic destination where active tourism is present.
5. Lisbon Portugal- Lisbon is ranked as one of the best destinations for meeting in Europe due
to its geographical position, its modern infrastructure, mild climate and the great variety of
places. Lisbons reputation as an international business destination will enhance in 2011.
6. Turkey Turkey, having excellent transport links, represents a good meeting point for
Europeans and Asians and has a variety of locations for conferences and for hosting. The
luxurious resorts from Turkey, the boutique hotels, conference centers perfectly supplied with
services and hospitality at the highest standard.
7. Greek Islands- the multitude of hotels with good facilities for meetings and conferences
combined with a mild climate during the year, with better infrastructure and frequent flights,
make these islands a popular destination. Crete, Rhodes and Mykonos have registered a
growth of 20% in year 2011, comparing to year 2010.
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8. Island Island offers unique places for active tourism and also excellent facilities for
business meetings and conferences. The proposal for leisure tourism is worldwide known:
thermal springs, volcanoes, icebergs, cannons, etc. The demands for leisure trips have
doubled during the last 6 months in Island because of the request of unique and memorable
destinations.
9. Sardinia- Sardinia is s perfect destination for any kind of events including business meetings,
conferences and congresses. The main companies worldwide choose Sardinia as destination
due to its good connections with the major European cities as well as for the multitude of
hosting places and good facilities.
10. Seoul, North Korea- Seoul, the second biggest city in the world, has a rich culture, history,
technology and good and always ready to give something new to everyone. The Tourism
Organization in Seoul wanted to place the city, regarding business meetings, among the top
five cities in the world.
So here the already known destinations are ready for another top, top ten destinations for business
meetings and leisure, in 2011, having remarkable material, natural and organizational resources in order
to enter the competition, in the near future.
As well as does loisir tourism, business travel has lots of advantages which benefit the local
communities and also the countries which host such great events. Moreover, business travel improves the
profit, as well as he brings a decline of season.
The duration of a season impose a major problem to the tourism, but business travel has an
important role in solving this problem.
The importance of this market (besides being very profitable) reflects in the ascension of the
occupied places outside the season, which is admitted by many organizers countries and cities. The
months registering the maximum of international gatherings, are October, respectively September.
Another major advantage of the business travel is the high benefit. This new form of tourism
implies relatively high costs, but due to the socio-economic profile of the travelers (medium and superior
management class), tend to benefit the providers offering superior quality services: over three-star hotels,
first-class transport, the rooms of the conference centers, restaurants, touristic and cultural activities, local
transport, guides and shops.
Business travel has as well a positive impact upon the environment. Although the number of
delegates in a place at a conference is big, they spend their most time in conference rooms, and when they
go out in the evenings they dont appear to be a stressful factor for citizens. Also, they travel by train or
plane, so that they dont cause any pollution or overcrowd.
The chance of promotion is another advantage. Therefore, a guest who leaves the conference with
a good impression, he will definitely recommend to others. That is the reason why the local authorities
make a great effort to impress the business tourists. These tourists are usually influent people, whose
opinions are taken into account and may use the destination for a future event. These efforts vary: a
speech of the mayor at the beginning of a conference, a documentary about the local places to visit, a
private tour to see the city and its surroundings, a traditional meal. No matter which option is chosen, the
aim is still that to form a good image in order to be transmitted to others, but also for future events of
loisir tourism in the area.

3. Strategic points in business travel in Romania
The general positive evolution of the Romanian market has as effect a growing of the business.
As a consequence of these positive trends, business travel may evolve, although until present moment this
modern form of tourism had not had a development.
Before 1990, Romanian business travel had little development. The only events were those
organized by Expositional Complex Romexpo. However, the lack of experience in the field of organizing
big congresses and international conferences has been felt after 1989, due to which not even now
Romania is implied in organizing such events.
At the moment, business travel is the most stable branch of the Romanian tourism, having
developed in the late two-three years a constant growth. According to the information offered to mass-
media, it can be seen that it is registered a permanently growth in this branch, with more than 20% a year,
starting from 2005 until now.
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Business travel registered a development in our country due to the investment of the great
international hotel chains (Sofitel, Crowne Plaza, Best Western, Hilton, Marriott), developing the offer of
hosting for business travel and adjusting it to the international requirements (4-5 star-hotels, typical
facilities for business travel- conference rooms, improvements ).
A series of conference centers and exhibitions have also been built, making Romexpos offer
larger, and have developed a material basis for this branch of tourism.
Almost two thirds of the total of the 2 million tourists in Romania in 2010, have visited this
country for participation to conferences, team-buildings and trainings. These visits have been mostly in
cities, Bucharest representing the main location for business travel, where almost 80% of the total number
of people hosted in hotels were last year just because of the work. Also in big cities, such as Timioara,
Cluj-Napoca, Sibiu, Iai or Constana the required MICE (Meetings, Incentives, Conventions and
Exhibitions) branch of infrastructure is developing, due to the presence of international airports and the
development of new accommodation at a very high level. Therefore, the number of arrivals at borders is
bigger with more than 25% in 2010, than in 2009.
At national level, the business travel market represents 64% of the total tourism industry.
Moreover, only 23% of those visiting Bucharest do it just for visiting the place, and comparing to the
classic tourism, those visiting Romania for business issues spend almost double than the first category.
In the late two years, Romania has developed a lot business travel. Foreign companies choose
cities from Romania in order to organize congresses and conferences, to which even hundreds of people
can participate. One of the main reasons for which Romania is preferable by these is the low prices. The
prices are lower than in other countries. This is due to the lower level of management price, of the
translating services, of technical services and sometimes of the chosen halls for the events. For the first
three elements mentioned above, the costs are from three to ten times lower than in other countries from
West Europe.
The customer has included, beside the organization of the congress or conference, a full package
for a year. The service package is complex: firstly, they are hosted in luxurious hotels, and the transfers
from the airport to the hotel, plane tickets and secretarial services are included in the package. Also a
series of visits, leisure activities and meals are organized for the participants.
Business travel is the only branch of tourism industry in Romania which has an efficient effect
and is somehow growing bigger. This can be proved by the incomes of the urban hotels, which confirm
that, the level of business travel has risen up to 65 and 85%. This tendency of growth was registered
during 1997-1998, grew bigger after year 2000, and after 2004 it has begun to emphasize. It has been
growing a lot until the end of 2008, along with the emergence of economic crisis which has reduced the
number of tourists planning a business trip; therefore, since 2008 there has been a decline of the business
travel in Romania. Even with this decline of business travel, this branch still remains one of the most
profitable among the Romanian tourism.
Another trend in this field is the rising of the medium sum spent during the staying in Romania,
from 160-180 Euros a day up to 300 Euros a day.
In Romania the number of hotels fitted in this standard has lately grown. We can exemplify by
hotels such as- Park Hotels and Marriott in Bucharest, Ibis Hotels in Constana, Bucharest and Sibiu,
Eden Hotels in Predeal and many others. Business travel is the one which launches the accommodation.
In order to cover the business field, hotels are required to have a series of facilities and services in
concordance with the requirements of this branch. These hotels must be provided with conference rooms,
equipped with special and performing audio-visual technology, adequate light sources and air-
conditioned, internet and the possibility of broadcasting the meetings and conferences.
Business travel is therefore considered to be the main income source for hotel industry in
Bucharest and the other important cities. The majority of the tourism agents have seen the profitability of
business travel and therefore they have adapted their services to the requirement of this branch. The
proposal of the tourism agents include services for organizing congresses, conferences, symposiums,
gatherings and other events belonging to this branch. Some of the agencies which have developed their
services for this branch are: Marshall Tourism, iriac Travel, Happy Business Travel and Conference
Agency, Eurotravel TGV, Global Business Travel, International Olympic.
The organizing of conferences and gatherings represent the reference point for business travel,
meaning that, according to hotel managers, it is the most profitable and efficient part of the entire
industry. The companies specialized in this field and not only they offer within the resorts in Bucharest, a
series of halls, with a capacity of 50 up to 1000 places, and all the audio-visual technology, light sources
and a pleasant environment in concordance with the standards imposed.
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Table 6: Number of conference halls according to the capacity
Continent The capacity of the halls
1-50 51-100 101-200 201-500 500+
Bucharest 82 51 37 24 14
Rest of the country 323 150 110 34 10
Total 405 201 147 58 24
Source: The National Association of the Professional Organizers of Fairs and Exhibitions
In the wake of the evaluation, it has been revealed the lack of location hosting a big number of
participants, counting 5.000 places. Perhaps, one of these types of hall is at the present the Sala Palatului,
also known as the Big Hall, having a capacity of 4060 places and which will be shortly used for these
purposes.
The House of Parliament, the second biggest building in the world, after Pentagon, has built in
1994 the International Center of Conferences, which offers 12 spacious halls, the biggest being called The
Uniting Hall and which can offer almost 1000 places. It is a modern conference center (which hosted
Crans-Montana FORUM, OSCE ministerial in 2001, Francophone Summit in 2006 and other major
events), Museum of Contemporary Art.
Moreover, the Conference Center of the Chamber of Commerce and Industry or the Expositional
Complex Romexpo offer to business branch a series of important locations serving as halls for gatherings,
exhibitions and training. We cannot exclude the business centers developed at the seaside or in the
mountains.
The development of the air transport has contributed a lot to the emergence of the business travel.
Beside the national flight company Tarom, there are other great flight companies such as: Air France,
KLM, Alitalia, Malev, Carpatair, LUFTHANSA, BRITISH AIRWAYS, CZECH AIRLINES, SWISS
AIR LINES and low cost companies: SkyEurope, Wizzair, BlueAir.
At the moment in our country there are 16 commercial airports from which 11 are part of the
trans-Europe network. The biggest Romanian airport, due to the great number of tourists, is Otopeni with
nearly 3 million passengers in 2010, as it can be seen in the label:

Table 7: Airports in Romania
City Airport Custom-house Passengers 2010
(*2009)
Length of raceway
(foots)
Arad Arad Yes 1,758 6.500
Bacu Bacu No 44,847 8.200
Baia Mare Tauii Magheru No 6,309 5.900
Bucharest Aurel Vlaicu Yes 385,759 10.400
Bucharest Henri Coand Yes 3,035,511 11.400
Caransebe Caransebe No 73 6.500
Cluj-Napoca Someeni Yes 244,366 6.000
Constana M. Koglniceanu Yes 111,142 11.400
Craiova Craiova When required 1,557 8.200
Iai Iai When required 41,959 5.900
175

Oradea Oradea Yes 37,891 5.900
Satu Mare Satu Mare No 9,276 8.200
Sibiu Sibiu Yes 60,475 6.500
Suceava Salcea When required 12,766 5.900
Trgu Mure Vidrasau Yes 4,215 8.500
Timioara Traian Vuia Yes 608,212 11.400
Tulcea Cataloi No 29,054 6.500
Source: The Guide of worlds airports
The income source for air companies in Romania and a great part of the tourism agencies is
produced from the selling of tickets, which in 2010 registered 350 million Euros.
Business travel also offers the possibility of renting a car (known as rent-a-car). These services
began to be active in Romania in 1975, when ONT Carpati opens the first office. After 1990, big rent-a-
car companies have opened branch offices: Avis, Hertz, Europcar, Budget, Eurodolar but also local
companies began to develop and offer quite good services
It must be mentioned that it has been an important factor the introduction of online reservation
systems (Amadeus, Worldspan), both for tickets and the rent of cars or reservation at hotels. It must be
appreciated the activity of tourism agents who gained the IATA license, being specialized in producing
air tickets. The ability in Romania to expand this sector is weak.
The International Congresses and Conferences Agency (ICCA) identified 5315 international
conferences in almost 100 countries, after an analysis regarding the international conference organized by
its members in 2010.
Table 8: Meetings of International Association in 2006-2010
Country 2006 2007 2008 2009 2010 Place
Hungary 51 76 75 94 97 20
Romania 16 1 12 17 12 53
Serbia and Montenegro 1 0 3 12 10 58
Bulgaria 3 12 5 11 6 67
Total 4.468 4.981 5.315 5.497 5.315 -
Source: International Congress and Conference Association ICCA 2006-2010

There are two reasons for this weak performance. Firstly, Romania doesnt have many conference
centers fulfilling the requirements on the international market of conferences and exhibitions both on
the associations group and the governmental and business one.
The second reason is that, despite the great efforts of the ICCA, there is a lack of studies on the
market and also a lack of promotion in order to assure international conferences.
Under the strategic intents, business travel has become the most important niche which assures
Romania a place on the international tourism scene. It is necessary that Romania, The National Authority
of Tourism and private companies to take part to the International Specialized Fairs.
The infrastructure for business travel is very high (conferences centers, hotels), and gatherings at
a European level can be organized here. The International Conference Centre at the House of Parliament
is one of the potential options for Europe because it is good provided with the latest technology.
If for loisir tourism it takes a brand name, namely an image of Romania, a thing which is very
hard to get, business travel represents the niche which ANT can create an image and a different brand.
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This implies that ANT to realize, firstly, a market research in order to answer the following
questions:
a. Why in Romania?
b. From the point of view of the business travel, how is Romania seen worldwide (to start in
Europe)
c. A presentation of the infrastructure in Romania and of all the conference centers. After
researching these, it is necessary to emerge a development strategy and to promote business
travel, as well as participating to the specialized fairs, etc.
In order to be ranked as one of the destinations for international conferences and gatherings,
according to the European Union, and also for a decline of the seasonal character of the tourism, Romania
has to take into account:
- The establishment of the size and format of the conference centers with multiple uses in
Bucharest and Constanta in order to fulfill the request of the potential market;
- Development of the conference centers with multiple uses in Bucharest and Constanta in
public-private partnership;
- The promotion of Romania as touristic destination for international meetings in collaboration
of ONT with The National Association of the Professional Organizers of Fairs and
Exhibitions in Romania.

4. References
- Constantini, M. (1996) Complementi di storia economica del turismo, Editura Universita Ca
Foscari di Venezia.
- Davidson, R. (1994) Business Travel, Londra, Editura Pitman.
- Le Goff, J. (1994) Negustorii i bancherii n evul mediu, Bucureti, Editura Meridiane.
- Minciu, R. (2004) Economia turismului, Ediia a III-a revzut i adugit, Bucureti, Editura
Uranus.
- Rogers, T. (2003) Conferences and Conventions. A global industry. London, Butterworth
Heimann.
- Swarbrooke, J., Hower, S. (2002) Business Travel and Tourism, London, Editura
Butterworth.
- Stnciulescu, G. (2003) Managementul operaiilor de turism, Bucureti, Editura All Beck.
- *** (2007) Planul pentru Dezvoltarea Turismului Naional 2007-2026.
- *** (2006-2012) Tribuna economic.
- www.paralela45.ro
- www.anat.ro
- www.wttc.org
- www.uia.org
- www.eMarketer.com
- www.wall-street.ro

177

ANALYSIS OF FOOD CONSUMPTION OF ROMANIAN POPULATION DURING 1990-2010

CONSTANDACHE Mihaela
Associate professor Ph.D., Faculty of Touristic and Commercial Management / Department Business
Administration, Dimitrie Cantemir Christian University, Constanta, Romania,
mihaela_constandache@yahoo.com

CONDREA Elena
Professor Ph.D., Faculty of Economic Sciences, Department Economics, OvidiusUniversity, Constanta,
Romania, elenacondrea2003@yahoo.com

STANCI U Anca-Cristina
Professor Ph.D., Faculty of Economic Sciences, Department Economics, OvidiusUniversity, Constanta,
Romania, castan22us@yahoo.com

Abstract: An important factor in ensuring population health is represented by food consumption. The
present paper aims at analyzing Romanian population food consumption during the 2000-2010 period, its evolution
in time, it identifies its main features and their effects on population health. Amid the economic crisis the purchasing
power of population is impaired leading to insufficient consumption of fresh fruits and vegetables and a low intake
of vitamins, calcium, phosphorous, and iron (especially in children, women and elderly people) which could be an
important risk factor in the development of chronic diseases.

Key words: food consumption, eating behaviour, population health, quality of life

JEL classification: I 15

1. Introduction
Public health is a top priority for the European Union. Through the policy which it promotes, the
European Union aims at preventing diseases; it promotes a healthy lifestyle as well as protecting citizens
from health threats. The main factor in ensuring population health is food quality.
Beyond the common trends manifested in the diet, every historical region and every nation is
distinguished by certain particularities.
The Romanian nation food habits specific to every period, was grafted to the historical period
weather particularities, by the socio-economic development level and last, but not least, by the adopted
lifestyle. After the year 2000 Romanians eating behavior starts to be characterized by chronic imbalances
characteristic of modern human eating behavior, including caloric excess intake of fats and carbohydrates
(especially refined concentrated sources), and the uncontrolled usage of rigorous mechanisms of food
additives.

2. The economic context of Romania during 1990-2010
According to the classical economic theory, the consumer income and the price of products
represent major determinants of food demand. These relationships are assumed to be significant
especially in low-income groups. Given the large share of low-income consumer segments in Romania, is
grounded the belief that, in our country, the importance of these factors is and shall remain significant in
the near future.
During the first years of transition, between 1990-1992, there has been a reduction in gross
domestic product (GPD) of Romania, with an annual average rate of 9.1%, and then, during 1996-1999
gross domestic product to suffer another fall of 8.6% (Figure 1). This fall of the GPD was accompanied
by an increase in unemployment of 11.8% in 1999, 8.8% higher than the one registered in 1991 (3%).
Thus, the real average income fell sharply during 1990-1999, which was demonstrated by the reduction
with 43% real earning index in 1999 compared to 1990. However, a growing phenomenon of about 22%
of the inequality of income distribution and poverty incidence was noticed.
One can appreciate the fact that socio-economic transition after 1990 is characterized by a decline
in living standards, accompanied by inflation and unemployment expansion, all these resulting in
nutritional imbalances widening, especially in deeply disadvantaged groups by such evolution as children,
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elderly, unemployed and altering all of the common and most serious health condition. There are years
where the majority of budgets of most families in Romania have been guided towards trying to cover the
daily requirement of food, many of the high quality food products, being unfortunately, less accessible
because of financial impediments.

Figure 1. Romanians GPD rate increase, during 1990-2010, [% related to the previous year]

Source: Eurostat

Between 2001 and 2008 Romanias macroeconomic performance has improved somewhat,
compared to the previous period, Romanias gross domestic product registering an annual average growth
of 5.84% during this period. Thus, at the end of 2008 the gross domestic product of Romania reached
131.66 billion of euro, which represents an increase of 62.6% of this indicator than the one registered in
2000. However, the GPD per inhabitant, in 2008, calculated at the purchasing power standard is only
26%compared to the average recorded in 27 EU states. The unemployment rate has also registered a
decrease by 6.1% during this period from 10.5% of the year 2000, at 4.4% recorded in 2008. The average
real incomes of the population has doubled during 2000-2008, an increase of 119.2% being registered, an
increase of the real earning index in 2008 compared to 2000.
From 2008, following a period of economic recession which the whole Europe faced, Romania
has also registered an economic recession, the gross domestic product suffering a decrease by 8.2% in
2010 compared to 2008. The unemployment rate has increased by 2.6%, from 5.8% in 2008 at 7.3%
recorded in 2010, and the real average income has declined as evidenced by a reduction of 5.1% of the
real earning index in 2010 compared to 2008.

3. The food consumption of Romanian population during 1990-2010
The main determinant of long-term changes in food consumption is the consumers income.
The decline in real income (table 1) and the increase in product price between 1990 -1999
determined a decrease in the purchasing power of population which was reflected in the changes
occurring in food consumption patterns. Another cause of substitution effects occurred in the
consumption structure changes is that until 1999 the consumer price indices of food products were
superior to the total consumer price indices. Thus, this period is characterized by reduced fruit
consumption (by 27.06%), sugar (by 23.44%) and vegetable fats (14.5%), from the category of vegetable
products that is, fish (by 56.86%), meat (by 20.82%), eggs (by 16.26%) and animal fats (by 35.29%),
belonging to the group of animal products. On the other hand, there is a substantial increase in potato
consumption (by 44.95%), vegetables (by 22.83%) and cereals and cereal products (by 9%), from the
category of vegetable products and milk and dairy products (by 38.47%), from the category of animal
-15
-10
-5
0
5
10
GPD rate increase, [% related to the previous year]
179

products. With regard to drinking, between 1990-1999 there is an increase in the consumption of
nonalcoholic beverages by 89.42% and of wine consumption, until 1998, by 74.05% compared to the
year 1990, while the consumption of beer decreases until 1997, by 21.84% compared to 1990, the same
tendency being recorded for the consumption of distilled alcoholic beverages.

Table 1. Evolution of average net nominal monthly earnings, during the period 1990-2010
Year Average net nominal
monthly earnings, [lei]

Consumer price index
(CPI), 1990=100, [lei]

Average net nominal
monthly earnings
recalculated at the 1990s
prices
1990 3381 100 3381
1991 7460 270.2 2760.92
1992 20140 838.8 2401.05
1993 59717 2987 1999.23
1994 141951 7071.9 2007.25
1995 211373 9353.4 2259.85
1996 321169 12983.4 2473.69
1997 632086 33076.9 1910.96
1998 1042274 52624.2 1980.60
1999 1522878 76728 1984.77
2000 2139138 111767.1 1913.92
2001 3019424 150290.7 2009.06
2002 3789202 184162.1 2057.54
2003 4839648 212291 2279.72
2004 5986386 237504.5 2520.54
2005
*
746 258912.1 0.288129
2006 866 275900.37 0.313881
2007 1042 289245.48 0.360248
2008 1309 311949.38 0.419619
2009 1361 329380.27 0.413200
2010 1391 349450.21 0.398054
* Since 2005, the earning is expressed in RON;

Table 2 presents the coefficient of elasticity of food demand in relation to income. The economic
model mentioned had as dependent variable the costs of each product share of total food consumption
expenditures, and the dependent variable, the average net nominal monthly earnings. As referred to the
variation of the expenditures concerning the acquisition of certain foods during the period 1990-1993, it
can be remarked a decrease in income population by 10%, which determines the increase of expenditures
with the purchase of cereals and cereals products by 4% in 1993 compared to 1992, for potato acquisition
by 13.34% (in 1992 compared to 1991) and by 9.36% (in 1993 compared to 1992), for vegetable
acquisition by 6.68% (in 1992 compared to 1991) and by 4.16% (in 1993 compared to 1992), for milk
acquisition and dairy products by 6.33% (in 1991 compared to 1990) and 3.71% (in 1993 compared to
1992) (table 2). Also, the same decrease by 10% of income population generates the decrease
expenditures for the purchase of fish and fish products, by 39.71% (in 1992 compared to 1991) and
49.75% (in 1993 compared to 1992), for meat acquisition, meat products and offal by 5.4% (in 1991
compared to the year 1990) and 6.46% (in 1992 compared to 1991) for eggs acquisition by 15.31% (in
1992 compared to 1991) (table 2).

Table 2. Consumption elasticity for food commodities, on groups of goods, related to the variation of consumer income, during 1990-2010
Anul

Consumption elasticity, [%]
Cereals
and
cereal
products
Potato Vegetables
and
vegetable
products
Fruits
and fruit
products
Sugar
and
sugar
made
products
Vegetable
fats
Milk and
dairy
products
Eggs Fish and
fish
products
Meat, meat
products
and edible
offal
Animal
fats
Nonalcoholic
beverages
Beer Wine
and wine
products
Distilled
alcohoic
beverages
1990 - - - - - - - - - - - - - - -
1991 0.221 1.057 0.624 1.345 0.152 0.491 - 0.633 0.092 - 1.063 0.540 0.379 0.942 0.148 0.422 - 0.799
1992 - 0.055 - 1.334 -0.668 - 0.198 0.547 1.529 - 0.016 1.532 3.971 0.646 - 0.139 0.131 - 0.539 0.332 - 1.251
1993 - 0.408 - 0.936 -0.416 - 1.331 0.147 0 - 0.371 0.157 4.975 - 0.193 0.332 - 1.169 - 0.011 - 0.868 0.995
1994 - 1.578 - 27.017 -3.380 - 86.394 8.172 - 32.389 3.625 5.160 48.131 - 10.092 - 5.688 28.793 - 25.208 39.915 - 13.173
1995 0.209 0.542 0.452 - 0.391 - 0.381 1.187 0.432 0.136 0.639 0.280 0 2.782 - 0.571 0.743 0.447
1996 - 0.130 0.378 0.114 1.077 0.606 0.454 0.246 0.116 0.399 - 0.230 - 0.846 - 2.433 - 1.099 0.311 0
1997 - 0.184 - 0.345 0.147 0.458 0.836 0.329 0.005 0.237 1.528 0.119 0.367 - 0.529 0.180 - 0.654 0.179
1998 - 0.529 0.812 1.949 0.807 0.832 1.991 0.293 2.122 9.480 1.500 - 2.509 - 1.104 6.563 - 2.086 - 18.548
1999 - 1.432 11.056 30.816 - 26.321 9.109 50.996 - 0.981 11.553 - 173.078 - 28.578 - 14.423 65.146 51.819 - 153.063 - 45.330
2000 0.065 - 0.125 4.365 - 0.668 - 2.466 - 3.918 0.140 - 0.260 - 4.156 1.167 - 0.795 - 8.162 - 2.652 - 0.582 4.502
2001 0.139 0.360 1.851 1.580 0.880 0.925 0.471 1.767 0 0.748 0 11.178 - 0.233 1.905 11.846
2002 0.725 0.989 0.144 - 2.524 - 0.903 - 2.285 3.474 1.962 7.958 4.924 6.366 - 3.316 1.213 2.358 6.189
2003 - 0.481 0.570 1.732 2.445 0.338 0.595 0.456 0.043 0.879 1.021 - 1.811 1.032 0.779 - 1.732 - 2.700
2004 0.252 0.267 0.320 2.407 0.532 - 1.182 0.609 1.811 1.073 0.831 1.102 - 0.209 1.546 2.407 - 4.264
2005 - 0.177 0.008 -1.017 - 0.158 0.525 1.204 0.010 - 0.141 1.065 0.327 - 0.444 0.380 - 0.291 - 6.623 0
2006 - 0.411 - 0.075 1.281 1.069 0.672 0.633 0.366 - 0.308 0.265 0.279 0.642 1.672 1.496 2.715 - 5.132
2007 - 0.065 - 0.105 -0.833 - 1.765 - 1.279 - 0.901 0.191 - 0.261 - 1.636 - 0.373 - 1.177 0.662 1.165 0.764 - 1.457
2008 - 0.087 0.242 0.478 - 0.117 - 0.518 0.387 0.053 - 0.026 0.353 - 0.011 0 0.596 0.038 0.345 2.356
2009 1.018 4.425 2.985 4.546 - 6.487 - 5.632 5.935 6.358 - 10.729 - 0.858 - 9.903 1.734 7.454 6.959 12.874
2010 0.227 - 1.365 -0.934 - 0.415 4.400 2.131 1.079 0.440 1.143 3.285 3.865 0.204 2.087 5.256 6.570

181

Between 1994 -1996 the decline in income has stagnated, a slight increase being recorded
from year to year. Corresponding to this period, the population increased revenues by 1% has
generated a decrease of expenditures for the purchase of potatoes by 27.02% (in 1994 compared to the
year 1993), expenditures for the purchase of cereals and cereal products by 1.58% (in 1994 compared
to 1993), which demonstrates, once again, the operation of substitution effect of population
consumption structure, expenditures for the purchase of vegetable fats by 32.39% (in 1994 compared
to 1993), that is animal fats by 5.69% (in 1994 compared to 1993), but the most worrying still remains
the declining share of the purchase of fruits and fruit products 86.39% (in 1994 compared to 1993)
and the expenditure ratio for meat acquisition by 10.09% (in 1994 compared to 1993) (table 2). On the
other hand, the increase of income by 1% has determined the expenditure increase for purchasing fish
and fish products by 48.13% (in 1994 compared to 1993), the expenditure for the purchase of eggs by
5.16% (in 1994 compared to 1993) and that the expenditures for the purchase of milk and dairy
products by 3.63% (in 1994 compared to 1993) (table 2).
After the last stage of price liberalization in April 1997, a more important decrease of the
population purchasing power had taken place. Against this background, one can observe a decrease in
consumption goods whose prices have been semi given (meat), but a revival of potatoes, vegetables
and eggs consumption (in 1998). In this way, in 2007 the same substitution effects work in the
consumption structure, a decrease by 10% of income population generating an increase by 3.45% of
expenditure for potatoes acquisition, but a decrease of expenditures made with fish acquisition by
15.28% and that of fruits by 4.58%. The period 1998-1999 is characterized by a new stagnation of
income decline, which registers a slightly increase from year to year, generating a further amendment
consumption expenditure ratios. Thus, the increase by 1% of income population has determined the
increase of expenditures for vegetable purchase by 30.82% (in 1999 compared to 1998), of
expenditures for vegetable fats by 51% (in 1999 compared to 1998), expenditures for the purchase of
eggs by 11.55% (in 1999 compared to 1998) expenditures for the purchase of potatoes by 11.06% (in
1999 compared to 1998) (table 2). The same increase by 1% of income population has determined a
decrease of expenditures for the purchase of fish and fish products by 173.08% (in 1999 compared to
1998), expenditures for meat purchase, meat products and organs by 28.18% (in 1999 compared to
1998), expenditures for the purchase of fruits and fruit products by 26.32% (in 1999 compared to
1998) and expenditures for the purchase of animal fats by 14.42% (in 1999 compared to 1998).
During 2000-2008, amid an improvement in the economic situation of Romania and as a
result of duplication of consumer income (table 1) proven by the increase in real earnings index in
2008 by 119.2% compared to 2000, the consumers purchasing power has increased, which is
underlined by the increase consumption of all merchandise groups except for cereals and cereal
products whose consumption decreased by 5.9% in 2007 compared to 2000. The biggest consumption
increase (by 212.09%, in 2008 compared to 2000) was in nonalcoholic beverages, followed by fruits
and products obtained from fruits (by 86.97%, in 2006 compared to 2000), fish and fish products (by
76.92% in 2006 compared to 2000), beer (by 67.27% in 2007 compared to 2000), meat and meat
products and offal (by 50.97% in 2006 compared to 2000).
Regarding development expenditure ratios for food acquisition for the 2000-2008 period, it
can be noticed an income increase by 10% which generated a decrease of expenditures for the
purchase of cereals and cereal products between 2003-2008, the most significant registered decreases
being of 4.81% (in 2003 compared to 2002) and of 4.11% (in 2006 compared to 2005). Income
increase by 10% has determined an increase of expenditures made for the purchase of vegetables and
vegetable products, by 43.65% (in 2000 compared to 1999), by 18.51% (in 2001 compared to 2000),
by 17.32% (in 2003 compared to the year 2002) and by 12.81% (in 2006 compared to 2005).
Regarding the share of expenditure for fruits and fruit products purchase, it registered an oscillating
evolution, significant being the increase by 24.45% (in 2003 compared to 2002) and by 24.07% (in
2004 compared to 2003), to an income increase by10%. The share of expenditure for the purchase of
milk and milk products had increased every year, to income increase by 10%, the most significant
increase being of 34.74% registered in 2002 compared to 2001. As far as share expenditure for the
purchase of eggs is concerned, to a 10% income increase it registered a 17.67% increase (in 2001
compared to 2000), by 19.62% (in 2002 compared to 2001) and of 18.11% (in 2004 compared to
2003), and after 2005 to decrease every year. After the 41.56% decrease registered in 2000 compared
to 1999, of the share of expenditure for the purchase of fish and fish products to a 10% income
182

increase, it registered later a slightly significant increase, of 79.58% (in 2002 compared to 2001), of
10.73% (in 2004 compared to 2003) and of 10.65% (in 2005 compared to 2004). Also, the 10%
increase of population income has determined the annual increase of share expenditure for the
purchase of meat and meat products, by 11.67% (in 2000 compared to the year 1999), by 7.48% (in
2001 compared to 2000), by 49.24% (in 2002 compared to 2001), by 10.21% (in 2003 compared to
2002) and by 8.31% (in 2004 compared to 2003) (table 2).
The decrease of population income during 2008-2010 as a result of the economic recession,
has determined new changes in the food consumption structure, except for fish and fish product, all
food commodity groups recording a decrease in consumption. Thus, the average annual consumption
of fruits and fruit products has decreased from 66.7 kg /per inhabitant in 2008, to 63.3 kg / per
inhabitant, corresponding to the year 2010, consumption of milk and dairy products has decreased by
12.05% (in 2010 compared to 2008), the consumption of eggs has decreased by 10.49% (in 2010
compared to 2008), meat consumption has registered a 9.91% decrease (in 2010 compared to 2008),
the beverages consumption following the same decreasing trend, higher in the case of alcoholic
beverages.
Lower income population by 10% has determined a decrease of share expenditure for the
purchase of fruits and fruit products by 45.46% (in 2009 compared to 2008), expenditure for the
purchase of milk and dairy products by 59.35% (in 2009 compared to 2008) and by 10.79% (in 2010
compared to 2009), and of expenditures for the purchase of eggs by 63.58% (in 2009 compared to
2008) and by 4.40% (in 2010 compared to 2009). For other food groups, the 10% decrease of income
population has caused a delayed reaction to decrease the share of expenses incurred for their purchase.
This is the case of expenditure for the purchase of fish and fish products which has increased up to
107.29% in 2009 compared to 2008, for the following year to register a 11.43% decrease. The same
evolution was registered by expenditures for meat purchase, meat products and offal which have
increased by 8.53% (in 2009 compared to 2008), as for later to decrease by 32.85% (in 2010
compared to the year 2009). An opposite trend to lower income population of 10%, was registered by
the share expenditure for the purchase of potatoes in 2009 which decreased by 44.25% (compared to
the year 2008), and in 2010, along with increased revenues decline, to register an increase of 13.65%
(compared to the year 2009). As for the share of expenditures for the purchase of vegetables and
vegetable products, the lowering in population income by 10% has determined its decrease by 29.85%
(in 2009 compared to 2008), for later to increase with 9.34% (in 2010 compared to 2009), a similar
evolution being also registered by the expenditure the purchase of fruits and fruit products which
decreased by 45.46% (in 2009 compared to the year 2008), for later to register a slightly increase of
4.15% (in 2010 compared to the year 2009) (table 2).
As for the share of expenditures for the purchase of food and beverages, in total consumption
expenditures, as expected, it is higher for lower-income social categories (farmers, unemployed,
retired) and lower for those social categories with higher income (employers and employees).
Engels law is confirmed in terms of time series analysis. Whatever type of social category,
during the periods with low income population, the share of expenditure on food and beverages has
increased, but for the periods with a slightly economic increase, when the population income has
reached the share of expenditures for food and beverages, to decrease. Thus, having as background
the declining average of real wage income for the period 1990-1993, there was an increase of the
average food expenditure in total household spending budget, for all social categories. For the 1994-
1996 period, having as background a slightly increase of population income, the share of expenditure
on food and beverages has decreased, from 68.7% to 57.6%. The decrease in household income in
1997 has determined a slightly increase of share for the purchase of food ans beverages, at 58.8%, as
for the ulterior period, between 1998-1999, due to a slight increase of income population, the share of
food expenditure to decrease at 53.5%. During 2001-2008, as a result of the increase in income
population, the share of food and beverage expenditure decreased from 58,25% (corresponding to the
year 2001) to 48% (for 2008). During 2008-2010, a new lowering in income population was
registered, which determined an increase in the share of food expenditure, up to 48.7% in 2010.
Differentiating cost structures can be also highlighted by a comparison of income. In this way,
in 2010, the spending power of low-income group (decile 10 above 1394 lei), although it represents a
lower weight in the total expenditure, were 194.31% higher compared to the ones of the lower income
group (decile 1, up to 236 lei), actually reflecting the net income differentiation in Romania.
183

4. Conclusions
Reduction in real income, as well as, enhancing income distribution inequality in the
expenditure pattern has led to mutations in the structure of families expenses. Thus, in the periods
with significant reduction in household income (1997, 2000, 2009-2010), the consumers must reduce
their consumption expenses and a series of involuntary mutations occur, resulting in the expenditure
for food purchase and consumption of agricultural products from own resources, accompanied by the
falling share of acquisition of non-food products. During such period, mutations occur also in the
structure of food consumption which determines involuntary changes of food habits, some of them
being considered beneficial by specialists (such as increased margarine consumption at the expense of
butter, due to the relatively affordable price of margarine). However, families of farmers use the
highest proportion of products from own resources (44%, corresponding to 2010), that is products
obtained from areas in use or livestock, so that the largest share of production costs is recorded (3.6%
for 2010). Own resources consumption contribution is significant for other social categories, that is
retired (20.2% in 2010), unemployed (16.3% in 2010) and employees (8.75% in 2010). This can be a
survival and adaption strategy to the problems of poverty (inability to purchase food from the market
or lack of other alternatives). In periods when household incomes slightly increase (1998-1999, 2001-
2008) there is an increase of expenditure for acquisition of non-food products, the payments for
services, capital expenditure and for default of the payment of taxes, fees, contributions and other
taxes, having as background a slight decrease in expenditure for the purchase of food and the
consumption of agricultural products from own resources.

5. References
- Costin, G.M., Segal,R. (2001) Foods for special nutrition Foods and Health, Academica
Publisher, Bucharest.
- European Commission (2012) Eurostat Statistic Database. Available at
http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/ .
- INS (2011), Romanian Statistical Yearbook.

184

WAYS TO SHAPE THE CONSUMPTION BEHAVIOR IN THE SPIRIT OF ECOLOGICAL
MARKETING

CROI TORU Gabriel
Associate Professor, Faculty of Economic Sciences/Department Management Marketing, "Valahia"
University, Targoviste, Romania, croitoru.gabriel2005@yahoo.com

RADU Florin
Assistant Professor, Faculty of Economic Sciences/Department Accounting and Management I nformation,
"Valahia" University, Targoviste, Romania, florinuniv@yahoo.fr

NI TU Claudiu Valentin
Faculty of Economic Sciences/Department Management, "Dimitrie Cantemir Christian" University,
Bucureti, Romania, valynitu@gmail.com

Abstract: Green customers (buyers) gather way on the market through their ecological concerns and
principles. These ones influence the selection systems and decisional processes used when purchasing goods.
The reactions of green customers on the market, resulted in actions towards products, brands and firms,
influenced by internal and external factors represent the environmental behaviour of purchase. Environmental
reasons act as incentives derived from ecological consciousness.
Those persons that possess an ecological consciousness will purchase goods that satisfy diverse needs,
from the biogenic (hunger, thirst, cold etc) to the psychogenic ones (membership, safety, affection, esteem etc),
that have a null impact on environment and health. The safety of green customers will be provided by pets in
case of animal lovers, the latter ones representing the sub-segment of the toughest green customers. The need of
esteem will be satisfied by the use of luxury clothes and shoes made of ecological materials. The ecological
reason is the result of selection, systematization, processing and interpretation of information regarding the
ecological products, processes, manufacturers and traders. As the informing process aims to increase
awareness and to facilitate the understanding, the green customers will have a positive perception of those
products, brands and firms that match the criteria referring to environment protection and life quality.
In order to emphasize this behaviour, a study was conducted with the view to determining the
knowledge level of the students from the Faculty of Economic Sciences - Valahia University from Targoviste in
the field of ecological nutrition and, based on the results, some directions to follow were determined. The
thematic goal of the present research was the knowledge of students interest for getting ecological education
and for ecologic products consumption.

Key words: ecologic marketing, green customers (buyers), ecological reason, environment protection


1. Introduction
Green buyers manifest on market through their concerns and beliefs of the ecology. They
influence the selection and decision making systems used in the purchase. Reactions and ways to react
on market of green buyers, materialized in actions to products, brands and companies, under the
influence of internal and external factors, is to compare the ecological behavior (Danciu, Victor,
2006, 55).
Manifestations of consumers towards organic products and companies can vary because of
different pressures of the many factors that can affect the whole decision making process. Various
factors (Danciu, Victor, 2006, 56) exercising influence on buying behavior of green consumers have
their origin, on the one hand, inside or personal psychic (psychological factors) and the external
environment (environmental factors), on the other hand.
Ecological reasons acts as incentives arising from ecological consciousness. People who have
environmental conscience will consider as reasons to buy products that satisfy different needs, from
biogenic (hunger, thirst, cold, hot, etc.) to the psychogenic (belonging, security, affection, esteem,
etc.) in ecological key so if they have zero impact on the environment and health. Green consumer
safety will be ensured by pets if animal lovers, which is the toughest green subsegment. The need for
185

esteem will be satisfied with luxury clothes and shoes for which manufacturing were not used leather
and fur animals.
Ecological motivation is the result of selection, grouping, processing and interpreting
information about products, processes, organic producers and retailers. Since the information to
process aims to recognize and especially to facilitate understanding, green consumers will perceive
favorable those products, brands and companies that meet criteria related to environmental protection
and quality of life.
Consumers are environmental because of successive accumulation of information and
knowledge that takes time. They are not born with experience of environmentalists, but must "learn"
many things about the environment, health and what quality and their deterioration mean and how to
preserve and improve them. Consumers who accept ecologic products, brands and companies prefer
to go green as a result of several acquisitions that enable them to acquire knowledge and experience
about the environment, health and protection.
Ecological attitude is the result of learning based on ecological experience ecological features
and profiles of individuals, targeted on the environment and their interactions with other people,
organizations and regulations, usually green. Green Consumers will have a favourable attitude toward
products, brands, prices and promotional activities of firms ecological oriented, which through the
work and their results have a minimum impact on the environment.
As the result of learning, attitudes may change. In terms of potential consumer attitudes green,
this has two connotations. One may be favourable for the purposes of changing the attitude of a large
number of consumers in favour of more and more products, promotional messages etc., ecologically
oriented. The other may be unfavourable, if companies are not careful and do not maintain consistent
and convincing efforts to protect the environment and health.
Personality is the sum defining characteristics of each individual that make him unique as a
result of heredity and experience. Green consumers buy products that fit their personality. By their
nature, most organic consumers are proactive, educated, extroverted and ambitious. Although
"personal ego" is richly drawn, in case of green consumers it is doubled by "social ego". They are
involved public and it is important how they are seen by other members of society.
Legislation of "green" marketing is part of the ecological regulations. Ecological connotations
of legislation for environmental protection lead countries to use economic incentives that can take the
form of tax cuts or subsidies for the use of green technology or environmental conduct. Regulations
are directly turning to the products and logistics. Political will is important for consumers because it
gives a signal of official concerns. Political signals can result in supplementary regulations on waste,
ensure environmental protection, legal standards and exhaust gas emissions, regulations concerning
the prohibition or supervise the use of raw materials or products (E, cereals and meat from the bodies
genetic modified).
Education, occupation and social class play an important role in shaping consumer awareness
and environmental action. Green consumers have a good and higher education, are mostly women and
good professional positions.
Consumer behaviour is learned, above all, of culture. The culture and traditions are those that
determine, in large part, inclinations and practices of green consumers. As group norms or shared
beliefs and treated by individuals, the values are in the fundamental beliefs of the markets in general
and consumers in particular. Attitude towards new, change, more favourable in developed countries,
explains in large part, why green consumers in these countries are more numerous and are at the
forefront of the environmental movement.
Economic factors, incomes are always one of the determinants of consumption patterns.
Organic products are generally more expensive and to purchase and consume them, people who
accept and prefer must have money. People who have environmental beliefs are more willing to pay
extra for green products and to help with money environmental groups.
Green marketing mix and organic offers on the market plays an important role in buying
behaviour. Organic products help green consumers to decide by quality, content, packaging and
environmental benefits promised or provided. Environmental communication act to facilitate
environmental behaviour if that is credible, persuasive and has transparent character.
186

Stimulus Knowing the
problem

Information
Evaluate the
alternatives
Buying
decision
After- purchase
behaviour
The decision to purchase organic products is the result of analysis and subsequent decisions,
known as the comparing process (Ristea, AL, John-Franc, V., Tanasescu, D., Thomas, A., melted, M.,
2002, 201) (Figure 1).

Figure 1: Ecologic buying process

Feedback

2. Organic consumers' purchasing strategies
Depending on identified needs, green consumers develop and use purchasing strategies that
rely on ways of satisfying their needs.
Regarding the control strategy, green consumer put familiar products under scrutiny to
ecological and demanding expressions (buzzwords) describing the compatibility with the
environment. Green Consumers use specific environmental expressions to strategically address the
green purchases in all links of the chain value.
An important control strategy is relating to health and is best described by the revolution in
food tastes which are moving increasingly toward "clean food". Described as "a new standard of
health and confidence" clean foods contains no artificial preservatives, irradiation, dyes and synthetic
pesticides, fungicides, ripening agents, growth hormones or medical residues and exclude those which
are processed, packaged, transported and stored to retain maximum nutritional value.
Attractiveness of clean food is motivated in part by lack of confidence in the capacity to keep
food clean. The consequence is reflected in sales of organic products, bottled water, alternative
medical treatments and nutritional supplements.
In terms of differentiation strategy, green consumers want to feel that they are different.
Generally, they are considered to be more active and efficient in solving environmental problems than
companies.
Organic consumers are, by definition, very sure of their intentions. As they want to do
something today, their knowledge and involvement increase, they become more aware that they can
do something else. The gap between what they feel must do and what they do makes them feel guilty
and sometimes defensive. Buying green products and environmental activities around the house
remount them mentally, helping to harmonize environmental beliefs with actions.
In terms of strategy information, consumers seeking organic products must be able to
distinguish "green" products of the "brown" (inorganic), in which magazines and catalogs they find its
and how to identify products and packs. It is a difficult task, because the identification and
differentiation are not always easy. Alkaline batteries are made from recycled paper products, for
example, are easily distinguished from "brown". Some green products with limited appeal, such as
shower heads with low jet and cleaning products based on lime, are often placed in stores and catalogs
in areas difficult to identify. Others, such as soda, used as an alternative for cleaning and disinfection,
or white vinegar are easy to find in stores, but not necessarily labeled as "green".
In terms of maintaining the lifestyle strategy, many consumers are too reluctant to change
their habits and lifestyle. Even if a small number of consumers strongly committed to environmental
issues will be sacrificed in the name of altruism, most consumers are not ready to give up the products
with attributes such as quality, performance, convenience or price. To become attractive, organic
products should still work at and they must have competitive prices and offer superior benefits to
attract buyers.

187

3. Consumer environmental behaviour of students from the Faculty of Economics,
Valahia
University of Targoviste
The study aimed to establish the level of knowledge held by students of the Faculty of
Economics, University "Valahia " of Targoviste on nutrition and on its results were outlined some
potential courses of action on ecological consumer behaviour modelling. Researched community was
represented by the students of the Faculty of Economics, University " Valahia " in Targoviste, date
form of research (1856 students). The research objectives were:
- determine the difference between the concept of "ecology" and the "environmental
protection" because the notion of ecology is often limited to the environmental
protection;
- find out the awareness about the content of "green products";
- determining the degree to which respondents have the information necessary to
identify an organic product and distinguish it from non-organic one;
- determining motivations to buy organic products;
- consumers' willingness to pay more to purchase a green product;
- Knowledge of the training conditions of behaviour.
Sampling method used was not chosen, so sampling by quotas. Sample reproducing the
community structure had a size of 200 people. For sampling were used statistics such as: total number
of students enrolled at the Faculty of Economics from Targoviste and their distribution per year of
study, specialization and sex, and data were collected between 13 to 23
rd
April, 2011. Below are
outlined the main conclusions drawn from the statistics of every question.
Regarding the first question: What do you suggest the word "ecology"?, were obtained quite
varied responses, depending on the similarities between them, the answers were grouped into five
categories.
Figure 2: The meaning of ecology word

The answer with the highest percentage referred to "environmental protection", resulting that
students from the Faculty of Economics does not make any difference between the terms "ecology"
and "environmental protection", most of them reducing term "ecology" to the "environmental
protection".
On the second question, How would you define the term "environmental protection"? are
identified five possible answers. The version with the largest weight is the "nature protection",
students associating the of term "environmental protection" on the healthy nature, clean, decreasing
human action on nature. Other identified versions were the terms of "recycling" and "sustainable
development", but they having a much lower share.
67%
17,50%
4,50%
12,50%
77,90%
20,34%
5,29%
14,53%
58%
15,16%
3,90%
10,82%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Percentage in total requested people Percentage in total people who gav e a
signif icant answer
Percentage in total answers
1. Environmental protection 2. Health 3. Animal protection 4. Others 5. No answer
188

Figure 3: Definitions of environmental protection term

On question three, How often you read the following information on a product label? From
the analysis of answers of six questions about a product label results that respondents regularly read
on the label products purchased only information as expiry date and manufacturing company. Read
information with a much lower frequency are on the product's ingredients, its chemical composition
conditions in which it has been packed and manner and storage conditions, the negative aspects on
lack of interest of interviewed people for a healthy diet.

Figure 4: Information read on a product label

On question four, Have you ever bought an organic food? Approximately 37% of respondents
answered that "yes" have bought organic products, 19.5% have ever bought, and 43.5% were not able
to comment. From the correlation of responses to "Question 5" with the "Question 3", result the
following values:

66%
71,48%
59,19%
9%
5,55%
8,07%
1%
10,43%
11,21%
5%
0,54%
4,48%
19%
12%
17,05%
0%
10%
20%
30%
40%
50%
60%
70%
80%
1. Environmental
protection
2. Recycling 3. Sustainable
development
4. Other 5. No answer
Percentage in total requested people Percentage in total people who gave a signif icant answer Percentage in total answers
0
24%
76%
5,50%
76%
18,50%
18%
66,50%
15,50%
42,50%
48%
9,50%
18,50%
50%
31,50%
3%
42%
55%
0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
1
Expiration date Product ingredients If it is natural or
chemical
Packing conditions Manner and storage
conditions
Manufacturing
company
c. Never
b. Sometimes
a. Always
189

Type of answer Number of people
On percentage
(%)
a) Have correctly identified the word
that defines a green product
45 61
b) Have not correctly identified the
word that defines a green product.
29 39
Total people who bought an organic
food
74 100

Analyzing these results shows that 39% of those who said they purchased an organic product
in fact did not, they mistaking organic products with products that have only one or two of the
characteristics of products certified as organic.

On question five, How do you consider are the prices for organic products. From the analysis
of global environmental score (1.76) results that respondents consider that prices for organic products
are quite large. Analysing percentages shows that 44% of respondents consider prices as high, 26.5%
consider them accessible, 21.5% cannot pronounce and only 8% consider being very large.

37%
43%
20%
a)Yes b)No c)Idontknow
0,00%
5,00%
10,00%
15,00%
20,00%
25,00%
30,00%
35,00%
40,00%
45,00%
Series1 26,50% 44% 8% 21,50%
a)Available b)High c)Veryhigh d)Idontknow
190

4. Conclusions
This study shows that students from the Faculty of Economics, University "Valahia" of
Targoviste not have enough information on the environmental field, most of them not doing the
distinction between the terms "ecology" and "environmental protection".
In terms of ecological nutrition, most respondents were unaware of the existence of organic
food, only 13% of them could correctly identify a green product.
At least in words, this subject shows interest, approx. 73% of respondents said they do not
have enough information in the field, also respondents do not refuse the idea to pay more for buying
organic products, being necessary a correct and fully information regarding the benefits of these
products, they to be accepted and consumed.

5. References
- Danciu, Victor (2006) Marketing Ecology. Green Ethics of production and consumption,
Bucharest Publishing House.
- Ristea, A.L. (Eds.), Ioan-Franc, V., Tanasescu, D., Thomas, A., Topia, M. (2002)
Marketing- Assumptions and challenges of highly competitive economy, Bucharest, Ed
Expert.

191

EMPIRICAL RESEARCH ON COMPLEMENTARY SERVICES IN ROMANIAN
GROCERY RETAILING

DABI J A Dan-Cristian
Lecturer / Ph.D., Faculty of Economics and Business Administration Teodor Mihali St. 58-60/Department of
Marketing, "Babes-Bolyai University Cluj-Napoca, Romania, e-mail: cristian.dabija@econ.ubbcluj.ro

ABRUDAN I oana Nicoleta
Assistant Lecturer / Ph.D. Student, Faculty of Economics and Business Administration Teodor Mihali St. 58-
60/Department of Marketing, "Babes-Bolyai University Cluj-Napoca, Romania, e-mail:
ioana.abrudan@econ.ubbcluj.ro

Abstract: The attaining of an adequate market positioning requires from the retail company not only a
thorough study of consumers needs and desires, but also an attentive differentiation of its customer service. The
creation of comparative competitive advantages takes place/ occurs in grocery retailing not only through the
operated retail format (supermarket, hypermarket, etc.) or retailers own brands, but also through the customer
service being performed.
After a succinct review of theoretical concepts assumed by retail service, the present article presents a
classification of complementary retail services provided by grocery retailers in Romania. An empirical research
carried out in two different periods in Romanian grocery retailing highlights the evolution of consumers
perception of the existence of two complementary services provided by the analysed stores loyalty
programmes and merchandise return policy.

Key words: Complementary services, retail marketing, grocery retailing

Jel Classification: M30, M31

Introduction
Within service policy, the retailer may focus on two main vectors personnel and
complementary services accompanying the main activity. While personnels qualification and training
and retailers care for their adequate knowledge/ competence in counselling clients represent an
essential goal for any retail chain, the inclusion of an assortment of complementary services
represents a much greater challenge. Thus, it is difficult to anticipate which of the complementary
services will attract consumers and retain them. On the other hand, their inclusion in the global offer
may incur significant extra costs. As a consequence, finding those complementary services that are
best suited for the consolidation and development of the store image represent a real challenge for any
retailer.
Certain authors consider customer service policy to be the third important factor of retailers
success, after the assortment and price policies (Mattmller, Tunder, 2004, p.290). Although the
retailer may formally be considered a service provider from the point of view of customer service,
financial and merchandise handling processes, from the institutional point of view, it cannot be
included among typical service providers, but, instead, must be approached differently (Homburg,
Krohmer, 2009, pp.964-1000; Mller-Hagedorn, Natter, 2011, pp.420-412).
Service policy is tightly connected to service characteristics, meaning service intangibility,
perishability or impossibility for service storage, integration of external factor, be it client, material
good or information (highlighting the process characteristic), service variability or the existence of an
associated risk (service quality varies depending on the degree of implication from human factor in
the service accomplishment), inseparability of service delivery from its use, and more individuality of
services (compared to consumer goods), which is increased adaptability to customers needs and
expectations (Zeithaml, Parasuraman, Berry, 1985, pp.33-46).

192

1. Customer service policy goals and classification
In customer service management, the retailer will also operate depending on the goals it can
achieve through the service. Overall, the retailer establishes economic goals (revenue, profit/ return,
profitability, market share, etc.) and customer-related psychographic goals which naturally contribute
to the fulfilment of the economic ones. Among psychographic goals there are: the improvement of
retailers image, the increase in the customers satisfaction and gratification level, the creation of a
positive image in consumers mind or the enhancement of service quality (Liebmann, Zentes,
Swoboda, 2008, p.526).
Although it is rather difficult to classify service, in the literature there are several attempts to
create a typology of services depending on their specific characteristics. Thus, the authors consider
clients expectations, the delivery output, the type of delivery attributes or the moment when the
service is being delivered (Liebmann, Zentes, Swoboda, 2008, pp.527-528; Berekoven, 1995, p.166;
Fassnacht, 2000, p.89).
In implementing and controlling service, the retail management must take into account the
consumer target segments (the entire population or just certain groups employees, students, retirees,
etc.). Meanwhile, it must be taken into consideration an adaptation of service content to operated
format, to delivery frequency (permanently, seasonally, only once) and distribution channels (direct,
indirect or online), to communication means and techniques being utilized, and to overall costs. Last
but not least, service quality will also be considered which may differ from one retail format or
distribution channel to another (Berekoven, 1995, p.175; Liebmann, Zentes, Swoboda, 2008, pp.531-
534).
It will be important for each retailer to become aware of the future service development
trends. Some of these are foreseeable reduced merchandise delivery time, increase in customer
involvement in the retail service and the necessity of personnels better knowledge of the products
offered, offering of a larger assortment of products and services under one roof (one-stop-
shopping), together with future possibility of article rental (such as household or gardening tools,
etc.) (Liebmann, Zentes, Swoboda, 2008, p.537).

2. Complementary services
In order to attract and retain clients to a store, more and more retailers decide to include in
their offer complementary, extra or add-on services. Although the possibility to use a shopping basket,
the cash or card payment, or product weighting may, in some cases, be thought of as fundamental
services, absolutely necessary for the retail service, and not complementary ones, many retailers
underline these facilities that they seem to provide to consumers. Even personal selling and clients
counselling are sometimes considered special services, being underlined at retailers entrance. Figure
1 presents a comprehensive classification of most complementary services that may be delivered in
retail units.

193

Figure 1 Potential complementary services in retail units

Source: Homburg, Krohmer, 2009, p.976.

Offering all these potential complementary services is not an easy task. For this reason, retail
management must decide the number and types of services that must or may be offered to customers,
the number of target segments that may be approached through the use of these services, but also the
frequency of their provision (Homburg, Hoyer, Fassnacht, 2002, pp.86-101). Nevertheless, the
decision regarding the array of such services must be correlated with the specific format of the retail
enterprise (cash & carry units will provide various counselling, finance and maintenance service for
their institutional clients), with the peculiarities of the retail chain, with the necessities imposed by a
certain location (creating a bus line to ensure customer transportation to and from retailers), or with
the specific legislation of a state (prohibition to offer living animals for sale in most European
countries, situation that is not encountered in Asian countries).
Several studies prove the increased importance of service policy in retail. The addition of
complementary services to a retailers offer leads to increased satisfaction and loyalty among their
customers. A more generous offer of complementary services exerts positive effects on both retail
image and turnover (Homburg, Hoyer, Fassnacht, 2002, pp.86-101). Personal selling and
complementary services play an important part in both food or non-food (daily goods) retailing and
textiles or specialised products (do-it-yourself stores, electronic and household goods stores). Even in
the case of furniture stores (Ikea), the quality/ price ratio is on a par with services (Swoboda, Hlsig,
2007).

In order to highlight the complementary services provided by Romanian retailers, an analysis
of secondary data (retailers own web sites, printed catalogues of retail chains), and a survey among
retailers customers regarding two main complementary services (loyalty programmes and
merchandise return) were conducted. The field research, carried out in two different intervals, reveals
aspects of the evolution of consumers perception of the complementary services provided by the
various retail brands. The exploratory research employed the use of an operator administered
questionnaire and referred to large retail chains, subsidiaries of Western retail enterprises, and to some
national (regional or local) chains which broke into the Romanian market. The selection of
Merchandise
Order

Information

Service
Lenght of guarantee
Guarantees extension
Exchange
policy
Type of exchange
Repair
Maintenance
Alterations
Care
Adjustments
Storage
Elimination
Delivery
Receiving
Installation

Installation Relocation Maneuver Assemblage
Telephone
Fax
Internet
Credit card
Cheques
Store card
Leasing
Credit
Parking
Children playground
Luggage storage
Lounge
Packaging

Client counselling
Information regarding
merchandise
Information regarding
products utilisation
Inviting clients
to special events
Personal
communication
Exchange
Maintenance
Other services
Guarantee
Transportation
Payment/
financing
194

respondents was made according to sex and age groups as presented in Romanias Statistical
Yearbook of 2010. The face-to-face interviews were conducted in the second largest city in Romania,
where the majority of the 30 identified food retailers are subsidiaries of Western Europe large
retailers. These have penetrated the Romanian market 16 years ago, due to the growth opportunity in
this sector.
In fact, two studies have been carried out at two different moments (t
1
and t
2
), using a similar
questionnaire, adapted to food retailing. It was not our intention to focus on a specific retail format,
thus the number of questionnaires varied among the formats (hypermarket, supermarket, etc.).
Classification of retail formats (hypermarket, supermarket, discount, etc.) has not been introduced to
respondents, but it has been carried out by the authors (Barth, 1999, p.88; Dabija, 2010,
p.77; Liebmann, Zentes, Swoboda, 2008, pp.394-419).
Thus, the retail formats investigated were the two cash & carry units (Metro and Selgros),
which, although should hold a distinct position in wholesale trade, on the Romanian market are very
active on the retail trade market; discounters Lidl, MiniMax Discount, Penny and Profi; Auchan,
Carrefour, Cora and Real hypermarkets, proximity chain CBA and a series of independent proximity
units; Billa, Carrefour Express, Carrefour Market, Oncos and Unicarm supermarkets, and the
category killer retail format. Kaufland is the only unit included in this category, because the unit
offers on a large surface (a characteristic of super- and hypermarkets) a large assortment of food and
non-food products at everyday low prices (peculiarity of discounters). According to field literature,
category killers will, in time, lead to the extinction of discounters, hyper- or supermarkets (Gilbert,
2003, p.248).

4. Secondary observation
4.1. General considerations regarding complementary services
Thus, Romanian retail brands, for instance, use a fairly wide range of complementary
services. Besides customer services department located near the entrance (Cora, Kaufland, etc.),
clients have the possibility to call, usually toll-free, during the stores working hours, a call centre
department that provides them with information on the retail unit, the services available, the
assortment of products, stores location, etc.. Customers may receive information from the information
boards placed near store entrance regarding new products, special offers or promotional items.
Another service that is available is free transportation for products purchased. This service usually
accompanies large non-food goods that exceed a minimum value. This service is quite often not
readily available, the delivery being made subsequently, following the purchase. Retailers also
propose to their customers various payment facilities - cash, meal or gift tickets, debit or credit cards.
Granting credits are also possible, retail brands cooperating with banks, financial institutions or credit
cooperatives. The customers that are unable to identify the price of a certain item may resort to
automated price readers located in most of the store departments. Disabled customers, pregnant
women or parents with small children have access to priority cash registers. People pressed with time
and those who do not cook may place orders for sweets, cakes, salads and other various dishes. Other
retailers include among additional services free shopping bags, shopping carts, special bags for frozen
products, scaling and packaging of products, free testing of non-food items. Other retailers add
services such as documents photocopying, announcement boards, music, products sampling, sales
personnel assistance, invoice issuing, credit, exchange machine, ATMs, desk for issuing veterinary
certificates, adjustments of clothing products, fitting rooms, etc.

4.2. Research findings detailed on retail formats
The services that are provided by all major retailers: cash & carry (Metro and Selgros),
hypermarkets (Auchan, Carrefour, Cora and Real), supermarkets (Billa, Carrefour Market, Oncos and
Unicarm), discounters (Lidl, MiniMax Discount, Penny, Profi) category killers (Kaufland) and
proximity units (CBA and Carrefour Express) are the acceptance of debit cards, meal tickets besides
cash as means of payment, the offering of shopping bags, website with location finder for all chain
units and contact information.
Generally speaking, most additional services are provided by hypermarkets. All of them
provide product testing and information desks, ATMs, co-branded credit cards, scales and price
tellers, freshly cooked products, departments assisted by store personnel, free parking and electronic
195

newsletter, dedicated cash registers for disabled customers, pregnant women or purchases of few
items, customer telephone line, electronic newsletter, merchandise return. Some of them ensure food
recipes, postal services, dry cleaning and washing, barbershops, beauty salons, tourism agencies,
pharmacies, packaging (Cora and Real), insurance (Carrefour and Auchan), petrol station (Carrefour),
documents copying (Real) and electronic payment of utilities (Cora and Carrefour), trust contract,
water dispenser, etc . Among the hypermarkets, it is Cora that has the largest number of available
customer unique services: medical assistance, loyalty card, Facebook account, online shopping,
PrePay recharge. Auchan and Real are the hypermarkets with the fewest number of services. Figure 2
presents a comparison of complementary and ancillary services made available by the Carrefour
hypermarket.

Figure 2. Complementary and ancillary services at the Carrefour Romania

Source: www.carrefour.ro

The smallest number of additional services is provided by the small proximity unit formats,
Oncos and Unicarm supermarkets and discounters. The assortment of discounters services is
slightly wider, all of them offering free parking on the site and online catalogues. Among the
discounters, Profi has the greatest number of additional services - loyalty cards, freshly cooked
products, personnel assisted departments, Facebook account, online radio, cooking receipts on
companys website, while MiniMax discount has the least (dedicated customer telephone line).
Supermarkets (Billa, Carrefour Market, Oncos and Unicarm) provide a wider range of
services (except for Oncos and Unicarm , as it has been mentioned above). The difference between
the two groups of supermarkets seems to be created by the origins of the supermarket chains
international or local. Both Billa and Carrefour Express offer scales, departments assisted by
personnel, customer information desk, recycling facilities, customer telephone line, merchandise
return and the possibility to pay utilities. Carrefour Express, in addition, has Carrefour photo service,
co-branded card and satisfaction guarantee and sells Romanian lottery tickets. Billa designated special
cash registers for purchasers of few articles and for disabled customers, online catalogues, freshly
prepared food products, parking and PrePay accounts recharge.
Kaufland chain is the category killer of the category, which positions itself as the
discounter with the widest assortments of products and also of complementary services. Its stores
offer free parking, recycling facilities, ATM machines, co-branded card, information desk, the
opportunity to check the prices and the weight of the products, freshly baked products, personnel
assisted service for some departments, various guarantees, such as that of the waiting in checkout
queues and of finding expired products, home delivered catalogue, merchandise return and customer
telephone line. Its website offers promotions catalogue, the possibility to create an online shopping
list and culinary recipes.
Ancillary services
Carrefour Photo
Carrefour Voyage
Carrefour Assurance
Carrefour Financial Services
Carrefour Romanian Lottery
Carrefour Telverde
Carrefour Recipes
Carrefour petrol station

Carrefour free merchandise
transportation;
Carrefour customer transportation;
Clothing adjustments;
Merchandise repair and exchange;
Babycare;
Free shopping bags;
Product return within 48 hours.

Complementary services

196

Cash & carry units (Metro and Selgros) provide a similar range of additional services
(product testing desk, fitting rooms, scales, co-branded credit card, online catalogues, freshly baked
products and personnel assisted service for some departments, counselling, courses for their clients,
information desk, free delivery, free parking, recycling box, merchandise return, price tellers,
socializing networks accounts, online shopping list, online shopping, electronic newsletter. Selgros
has included among its services money exchange machines and ATMs.

5. Field researchs findings
Overall, the two pieces of research being carried out highlighted a positive image of the two
additional services that are being studied. The customers average evaluation is rather favourable (the
evaluation was carried out on a scale from 1 to 7) for all retail formats and brands. Consumer
satisfaction with loyalty programmes employed by the retail units recorded a slight decrease from
4.79 to 4.74 between the two moments of research, while customers perceptions of merchandise
return increased from 4.61 to 4.76.
As it may be seen in Table 1, the respondents average satisfaction level with the loyalty
actions of proximity units decreases between the two moments of study, all the while being attracted
to Kaufland, which, although does not feature customer cards and loyalty programmes, it succeeds in
creating loyalty in the minds of its consumers. Customers react in a favourable manner as a
consequence of the satisfaction brought by overall activity of this retailer. Kaufland also succeeds in
improving its merchandise return policy, its customers indicating a superior degree of satisfaction
(4.93 as opposed to 5.69).

Table 1 Average values for overall research, proximity and category killer formats
Retail format Convenience
Category
Killer
Overall
research
Period t
1
t
2
t
1
t
2
t
1
t
2

CRM 4.73 4.40 4.60 4.84 4.79 4.74
Return policy 4.56 4.49 4.69 4.93 4.61 4.76

Customers perceptions of the two additional services provided by the cash & carry units
records a substantial augmentation between the two periods, both overall and for each cash & carrier.
Thus, Metro customers are more pleased with the return possibility (5.29) than are those of Selgros
(4.88), both values being higher compared to the previous period (table 2). The reason thereof lies
probably in the existence of customer cards that entitle individual consumers to make acquisitions at
cash & carry units and which determines the respondents to assimilate them to loyalty programmes.
Consumers have a more favourable perception towards these cards than towards Coras loyalty cards,
which are, indeed, loyalty cards (table 4).

Table 2 Average of customers responses for cash & carry units
Cash & Carry Metro Selgros Global
Period t
1
t
2
t
1
t
2
t
1
t
2

CRM 4.79 5.55 4.95 6.00 4.86 5.59
Return policy 4.84 5.29 4.73 4.88 4.79 5.22

The global level of satisfaction with discounters is on a positive trend as well, owing to the
increase in satisfaction for both types of additional services of Penny Market, while for Lidl the
satisfaction degree between the two moments decreases.

Table 3 Average of customers responses for discounters
Discount Lidl Penny Global
Period t
1
t
2
t
1
t
2
t
1
t
2

CRM 4.90 4.68 4.57 5.04 4.63 4.81
Return 4.90 4.88 4.28 4.60 4.54 4.81
197

The most spectacular evolution in the perception of loyalty programmes for hypermarkets is
recorder for Real, which improved consumers perception of both loyalty programmes and return
policy. All the other hypermarkets face a reduction in satisfaction levels for their customer
relationship management. However, it seems that Auchan and Carrefour improved between the two
moments of time their return policies, since consumers are more satisfied with this policy at the
second moment of time.

Table 4 Average of customers responses for hypermarkets
Hypermarket Auchan Carrefour Cora Real Global
Period t
1
t
2
t
1
t
2
t
1
t
2
t
1
t
2
t
1
t
2

CRM 4.74 4.57 4.84 4.80 5.48 4.97 4.99 5.18 5.01 4.83
Return 4.63 4.92 4.70 4.86 4.73 4.68 4.54 4.95 4.65 4.87

An interesting situation may be noticed in the case of supermarkets. Thus, while consumers
perception of loyalty programmes of Billa, Carrefour Express, Oncos and Unicarm recorded a
moderate or abrupt decrease, Profi recorded a slight increase, from 4.45 to 4.48. This situation may be
explained by the fact that this chain has continuously strived lately to widen its assortment and even
introduced a customer card. As far as return policy is concerned, all supermarkets are faced with a
deterioration of consumers perception of thud service. The only exception is Billa, where consumers
believe that this chain has succeeded in improving this service between the two analysed moments.

Table 5 Average of customers responses for supermarkets
Supermarket Billa Carrefour
express
Oncos Profi Unicarm Global
Period t
1
t
2
t
1
t
2
t
1
t
2
t
1
t
2
t
1
t
2
t
1
t
2

CRM 4.75 4.63 4.75 3.00 4.75 4.48 4.45 4.48 4.74 4.03 4.68 4.42
Return 4.51 4.54 4.67 2.50 4.76 4.55 4.48 4.36 4.61 4.22 4.59 4.41

Therefore, the research as a whole reveals that the retail chains featuring customer cards
register a lower level of satisfaction as compared to those that do not feature this tool, but, instead, use
their overall customer service to attract and retain their customers.

Conclusions
As the research indicates, not all of the complementary services are in direct relationship with
the retail chains core activity. However, retailers management continue to provide them. Their aims
are to achieve better differentiation from their competitors, to attract a larger number of customers
who, upon coming to buy a lottery ticket, decide to spend some time in the store to study its offer, the
new items and, no doubt, to make purchases.

Acknowledgment: This paper has been co-financed from the European Social Fund, through
the 2007-2013 Human Resources Development Operational Sector Program Project number
POSDRU/1.5/S59184 Performance and excellence in the post-doctoral research within the
economic field in Romania.

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th
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Entscheidungshilfen, 2
nd
Edition, Vahlen, Mnchen.
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nd
Edition, Pearson Education, Essex.
198

- Homburg, C., Hoyer, W., Fassnacht, M. (2002) Service orientation of a Retailers
Business Strategy: Dimensions, Antecedents, and Performance Outcomes, Journal of
Marketing, 66 (4), p.86-101.
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rd
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nd
Edition,
Vahlen, Mnchen.
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th
Edition, Kohlhammer,
Stuttgart.
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199

NEW RESEARCH IN CONSUMER BEHAVIOUR FOR HANDLING CUSTOMER MIND

DI NU Gabriel
Teaching Assistant Ph.D., Faculty of Economic Sciences/Department of Economic Sciences, "Eftimie
Murgu" University, Resita, Romania, g.dinu@uem.ro

DI NU Loredana
J unior Teaching Assistant Ph.D., Faculty of Economic Sciences/Department of Economic Sciences, "Eftimie
Murgu" University, Resita, Romania, l.dinu@uem.ro

Abstract: Anticipating consumer behaviour, identifying ads that consumers remember, selecting media
channels that are the most accessible can be made through new methods that combine several specialized
disciplines, such as neurology, and marketing. With this revolutionary tool and daring, the neuromarketing,
researchers distinguish personal patterns to those taken (received) in research groups.

Key words: consumer, behaviour, neuromarketing, MRI


1. Introduction
Consumer behavior research marks the progress every year, gaining new approach.
Market research has never been a model in terms of professional ethics. But these findings
link market research field to that of science fiction in terms of their implications. Neuroscientists have
used laboratory research to sketch a map of brain activity responses to the desires and needs for
certain products. About this new field is said to click the buy button in the consumer's mind.
In a direct relationship with post-industrial society, stand new ways to influence consumer
behavior. In this respect it refers to satisfying consumer needs. Postmodernism is seen as a major
conceptual background that enables a superior understanding of changes in contemporary society, by
an increasing number of researchers in marketing.
Postmodernist social orientation was characterized by emotions and feelings, and postmodern
consumer looking more like for a way to relate with others in communities, and less than looking for a
way to make sense of life. Consumption is no longer perceived to be a priority and overcontrolling of
the social interbond, but is secondary and subordinated to the social bond. Postmodern man is looking
for products and services, not so much for their use value, functional or symbolic value, but especially
for their value to establish social relationships.
The new methods for studying consumer behavior shall contribute to the decision process by
triggering direct act of acquisition, which will influence companies from top down and bottom-up,
with big corporations setting the base of their own research departments of consumer behavior.

2. Method and results
The fundamental science underlying neuromarketing is neurology, which study how the brain
creates the mind. In other words neurology is how the brain causes us to perceive, to think, to make
decisions, to feel emotional, to communicate. Techniques used in neurology are psychophysiology
(planning / levels detection), magnetic resonance imaging (MRI) Magnetoencephalography (MEG)
and electroencephalogram (EEG). The most interesting tool is MRI neuromarketing. This technique is
used in specialty practices, the seriousness of this practice being the subject of TV specials, where
patients move in and out of cars which make noise and different sounds.
The current challenge is the use of science to discover the subconscious of consumers.
Studying consumer subconscious techniques was born at Harvard Medical. In the late '90s, marketing
professor Gerry Zaltman and his collaborator began scanning people's brains at the request of
different companies.
The prominent professor Sean Kelly at Harvard University said that marketers have even used
hypnosis in groups of market research for specific market topics.
200

The new discovery has reached climax following the research conducted by Clinton Kilts, a
professor and vice president of the Psychiatry and Behavioral Sciences Department, expert in
addiction and author of numerous professional papers at Emory University Hospital, USA. The
research was continued by BrightHouse Institute for Thought Sciences, where Clinton Kilts became
manager, using neural findings of Emory University Hospital. The Institute has an advertising agency
whose clients are: Coca-Cola, Pepperidge Farm, K-Mart and Home Depot.
Consumers brain research through neurological instruments has become a boom in past years
in the U.S.
BrightHouse Institute methods are based in part on an experiment that Kilts conducted in
early 2002. He gathered a group of research subjects and asked them to look at a number of products,
assessing how much they liked or disliked them. Then while their brains were scanned by the MRI
scanner, he showed them pictures of the products again.
BrightHouse Institute has begun using magnetic resonance imaging, traditional technology
used in health, to create images of brain activity to reveal what people feel for things, for certain
products and services, much more accurate than people can explain through their feelings.
Brain scan results surprised him. When watching the image he observed that whenever a
subject saw a product, he identified it as one to which he was very attached to, it could be observed
that that product would represent the person a lot. Thus his brain showed increased activity in the
median prefrontal cortex. That brain region is associated with the identity of each individual, with
self-image.
In market research, these methods study sensory feedback, cognitive and emotional stimuli of
consumers to products or services. The brain scan reveals areas of brain activation sequence. Pleasure,
interest and desire to buy is activated in all segments of the public, but only on the basis of hierarchy.
In a study published not long ago, called The source of neurons, researchers monitored the
brains of 67 subjects who tasted Coca-Cola and Pepsi. Half of the subjects chose Pepsi to Coke, MRI
images in the cortex of the brain, revealing activity in the region for thinking and in the region of
emotions and memories.
The results show that Pepsi should have half the market, but consumers actually drink Coke
for reasons related less to taste and more about brand. However it should be noted also that the studies
showed that Pepsi is sweeter and Coke is stronger. Many people who prefer small quantities of Pepsi
would probably like to consume an entire bottle of Coke to one of Pepsi, because people were tired of
his sweet taste.
When subjects learned that they drunk Coca-Cola, three quarters of them said that it is better
for the sake of brand and less for the sake of taste.
Human brain is often viewed as a "black box", something rather mysterious. Marketers
undertake activities advertising, direct marketing, sales target set, target market. The results of these
marketing efforts can be measured in time, sales, preferences and other. We understand quite well the
beginning and the end but not the middle part, which is vital. The middle part is the mind of
consumers.
Neuromarketing has contrary opinions. Since the BrightHouse Institute supports it because
they created it, another entity should have been formed to oppose the scientific approach. This is
about the American Association Commercial Alert.
This is because, at physical level, neurological research in marketing is conducted using
magnetic resonance on human subjects. Magnetic waves can harm subjects if they have metal inside
their body (cardiac prostheses, rods, etc.). or if they wear metal such as coins or jewelry. Risk which
subjects undergo is low, however, this does not mean that there is no possibility. Subjects undergoing
these tests report dizziness or nausea because of brain investigation in the drum of the MRI
equipment.
Criticism to Emory University about neural findings were strengthened by the principle that
universities are places where it clears the mind and not for commercial purposes.
We wonder then how can a technique which aroused so much criticism, can be used , and
have gathered so many subjects in "focus groups". The answer is simple: each subject is paid for
participation in these experiments.
We must highlight a statistical aspect regarding this practice, namely that there were never
problems during a brain scan.
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It was definitely discussed the moral conduct of some market companies, which using such
techniques had an unfair advantage over other companies which did not have the financial resources
and therefore could not enjoy the almost certain results of this technique.
Large companies include the cost of such research in the annual budget. Magnetic resonance
imaging (MRI) are not yet as expensive as one might think, being a little more expensive than average
costs of other types of research, but not everyone can afford.
Many financially potent companies have learned about images of the brain and were really
eager to use them to get results for their sales department. An example is DaimlerChrysler, which
used technology among young people at the University Ulm in Germany, to highlight types of car
design they preferred.
The popularity of this instrument has made it to be used even in the field of political
marketing in the United States, obviously. Professor Marco Jacobin, of California University, Los
Angeles, has made several studies on the political issue regarding election loyalty against George
Bush Jr., John Kerry and Ralph Nader. In the first election campaign after the attacks of September
11, 2001, neuromarketing techniques were also used.
We also noted that in the United States after 2007, interest in neuromarketing fell slightly, as
is still seen as an expensive technique, that on the one hand, on the other hand, companies who had
financial resources to use the technique got the results and now they use them and competitors do not
have the resources needed to use it.
After 2002, these market research methods were developed in Europe, especially Germany,
France and Austria, the first attempts were related to when a customer comes in contact with a new
advertisement. However a difference appears. Because research by MRI is very expensive, Europeans
use electroencephalogram a cheaper neurological tool.
Romania, the country we live in, is ready for such market instrument only at a theoretical
level, as there arent the necessary resources for implementation of such an approach, being a subject
far too distant from the realities we live.

3. Conclusions
The best neuromarketing product is anticipating consumer behavior, identifying ads that
consumers retain, the selection of media channels that are accessible and how consumers personal
patterns differ from those taken (received) in research groups.
Marketers will use these techniques to better measure the consumers preferences and the question
whether we like a product will be closer to the truth. This discovery will help researchers to create
marketing products and services with an unique and practical design, and companies to handle more
brain responses.
Neuromarketing tells the marketers what consumers react to, which could be the color of the
container, which makes it sound to vibrate, or idea which they have and that consumers would
embrace it.
Most importantly, perhaps, merit of this technique is to have opened means of using it in
more areas, to establish certainty about some market aspects through brain scanning.
So, specialists in the field can learn how the human brain responds to the advertisement and
they can improve to perfection a popularity of a brand appealing to a sample of consumers who are
shown some pictures while being inserted into a machine and subjected to a radio-magnetic flow.
It is important to determine for the future what suddenly stopped the rising of a marketing
tool with a huge success through its positive results of which some companies enjoy today, lack of
money or criticism coming from consumer protection associations?
About this revolutionary new method of research of consumer behavior has been said many,
beyond justified criticism this practice has proved a huge success. No one would have thought a few
years ago, that the resounding success of some products on the market is due to neuromarketing.
Answering the question why buy a product is clear: the selling shop knows in advance that we like
that product.
Besides talks for and against violation of human brain, response to our study with straight
answers as consumers has been created, and hence to the coming out of new techniques has been only
one step. The new technique also appeared in Harvard, with Professor Gerry Zaltman on forefront and
202

is based on conscious and unconscious retrieval of thoughts using neurobiology, psychology,
semiotics, linguistics, art theory, called ZMET (Zaltman Metaphor Elicitation Technique).
Finally, as young professionals, we can tell that we would like to use in a research such a tool,
but as its use is very financially difficult even for well-known companies, we are pleased to discuss
this issue, hoping that you will do the same thing.

4. References
- Reading the consumer mind (2004) http://www.cognitiveliberty.org
- Inside the mind (2004) http://www.economist.com
- Media maze: neuromarketing, part I (2005) http://www.immediaconnection.com
- Gli strumenti d'analisi del Neuromarketing: Schemi consensuali e pensieri (2005)
http://www.neurolinguistic.com
- a veut dire quoi ce mot? (2006) http://www.liberation.fr
- Neuromarketing Could Make Mind Reading the Ad-Man's Ultimate Tool (2008)
http://www.commercialalert.org
- Peut-on "fabriquer" des clients? (2008) http://www.alternatives-economiques.fr

203

ROMANIAN TOURISM THE ETERNAL CHANCE OF ECONOMICAL RECOVERY

DI NU Loredana
J unior Teaching Assistant Ph.D., Faculty of Economic Sciences. / Department of Economic Sciences,
Eftimie Murgu University, Resita, Romania, l.dinu@uem.ro

DI NU Gabriel
Teaching Assistant Ph.D., Faculty of Economic Sciences. / Department of Economic Sciences, Eftimie
Murgu University, Resita, Romania, g.dinu@uem.ro

Abstract: Tourism activity should be followed not only in terms of existing realities, but also in terms
of real opportunities. The future of the Romanian tourism depends on the ability to realize its great potential
that we have, to accommodate the growing demands of tourism demand and raising the quality of its work in all
respects. Achieving these objectives requires that, along with the definition of the tourism strategies at the level
of the agents in the field, in accordance with the interests of the Romanian economy, to develop a national
revival of tourism.

Key words: tourism; tourists; tourism forms; trends

JEL Classification: L83; L80; H12

1. Introduction
The tourism plays an important role that cant be challenged in the national and international
economy, in the social behavior of those who practice it in the existence of those who ensure the
operation just because of the scale that it took.
Romanian tourism decline has various causes such as: the economic crises, the reduced level
of consumption, the exchange rate, the low quality of services, poor management, marketing almost
nonexistent, lack of strategy and a clear enough concept for developing the field, myopia government
policy, the dilapidated state of infrastructure, significant investment and competition in the area.
Romania has rich and varied natural and human resources and their effective exploitations in
the interest of national economy can be an opportunity to develop our country. The tourism potential
that we possess is immense and valuable, but, unfortunately, less capitalized. Although it is maybe,
the economical branch with the greatest competitive international advantage, its economical
performances are, in the present day, modest.
In its evolution, the tourism has faced and it is facing many problems. It had and it has to deal
with a large number of constraints. Despite the fact that Romania has one third of potential SPA
Europe only in 2011, 2000 years after the discovery of this tremendous treasure, true pearls of the
Romanian balneary tourism get out from the crowd.
During this time we only boasted with the natural potential of Romania and we watched how
poor countries take us forward, the most available examples are Bulgaria and Hungary, while the
entire infrastructure of our resorts has turned into ruins.
SPA tourism is not seasonal or weather related, the product can be sold 365 days of the
year (either rain or wind), it can be sold individual, in group or mass is settled by health
insurance houses, it can revive the other segments too: the cultural tourism, sports tourism, leisure
tourism etc. It is a solution to remove the bankruptcy of dead tourist areas such as the seaside, in
whose vicinity are three important SPA reservations, some famous in their time: Mangalia, Eforie and
Techirghiol. There is not something that cant be done, believe the experts from the Ministry of
Regional Development and Tourism. However, we keep in mind that until the Second World War,
balls and casinos rhymed perfectly with mineral waters and curative mud.
Herculane resorts, Olanesti, Slanic Moldova, Sarata Monteoru or Eforie were valued by
aristocrats and European medical cream than Baden Baden, Wiesbaden or Karlovy Vary. A great
contribution had, indeed, the Austrian government from Transylvania, which we owe resorts from
Ardeal and Bukovina.
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Romania has a potentially huge SPA: one third of the total reserves of Europe: hot springs,
mineral, mud, salt mine, areas of ozone covering all Switzerland, a curative potential covering all 14
groups of diseases recognized by specialists. Also, these resources are found in all historical
provinces: Banat, Oltenia, Wallachia, Bucovina, Moldova and Transylvania.
In short, we have anything to anyone, anywhere, in any quantity. We can sell health with the
cup and the river, too, given that in Romania are fugitive mineral springs flowing from thousands of
years by the woof of the man before flowing in Danube, and some mud pits from the wilderness
have higher resources than the Dead Sea.
Meanwhile, in Romania there didnt exist, until recently, no resort approved. But all are in a
sorry state in terms of infrastructure, medical equipment and qualified personnel.
Dubious privatizations, lack of any strategy, disaster management, restitutions awry, all led to
the ruin of historic towns, famous since antiquity for the miraculous properties of their water and
sludge, such as the legendary SPA Herculane or Geoagiu. However, none of them was officially
certified as any resort in Romania, much less in Europe. The result: no house of European insurance
or medical services dont reimbursed the medical services or recovery provided in these resorts, and
European taxpayers are treated in Bohemia or near Balaton, while Romania cant draw any huge euro
insurance budgets of some countries such Germany, Netherlands and Scandinavian countries.
Closely with the Institute of Balneology, Ministry of Regional Development and Tourism
reviewed all mineral resources in Romania. Following this inventory we have seen that resources are
qualitatively and quantitatively sufficient intact for a long time yet. The second one was the state
inventory SPA centers and qualified personnel, which in some places was not satisfactorily, By
adding tourism infrastructure, that is accommodation, canteens and restaurant, ten baths were
approved and declared spas: Baile Felix, Covasna, Sovata, Ocna Sibiu, Baile Olanesti, Calimanesti-
Caciulata, Herculane Techirghiol, Amara, Govora baths, while the other cities with the potential to
revert to eligible from investments foot modernization or reconstruction. So we now have. One
advantage of this status is that the state could benefit from a government program support, but most
important is that it may form an association of health resorts in Romania, with such facilities to access
structural funds of the European Union.
Promoting, remains at this time, the recovery gate of these areas. The first step is to convince
physicians of the Union, not only on the curative properties of our natural resources, they can be the
first to recommend certain courses in certain places, they are the first promoters. But, on the other
hand, Romania cant risk going out in the official campaign resorts in this state. Than follows
investments in the touristic and road infrastructure. If man comes and doesn't find what you promised,
you've lost him forever.
In short, in addition to curative potential, the need for accommodation, leisure and
maintenance must be the same. This means that in addition to bathrooms, we need SPAS, medical
services, accommodation, ski, tennis, hiking, top restaurants, casinos, road infrastructure.
All this, plus SPA resources, must be submitted as a package tourist fairs. We must be aware
that Europeans are active people, even if some oh them are retired, they dont come only to cure
various diseases, they come to spend, to travel and to do sport. Western tourists dont come to stay in
his room in pajamas. He wants to come, visit, buy and have a good time.
Among others, currently the Ministry of Regional Development and Tourism started the
reconstruction of three emblematic cities: Borsec, Herculane and Sulina. The three towns are caught
in the United Nations Development Programme. According to the tourism minister counselor, three
brands were chosen precisely because the state of perfect historical degradation and abandonment in
which they are from a long time. If in Herculane they are to start an investment of 25 million,
government money that will be found in the construction of a SPA, along with the renovation of the
historic center. Upper comes easy to light, contributing to its revitalization and a ski slope which
tenfold the number of tourists. Sulina, where was sketched the first draft of the European Union, may
return to that charming and cosmopolitan town that we no longer know, only from stories.

2. Conclusions
The problems of Romanian tourism are the result of a period of low investment and product
changes or pending based changes or incorrectly applied. Overcome shortcoming and difficulties
205

especially need a coherent policy at central and local levels, supported by a heavy marketing
investment and further research that prints Romanian tourism a sustainable development.
Analyzing the current situation we can see that Romania, with all state of crisis that through
the tourism, it remains a country with an extremely valuable tourist, who requires properly studied
and exploited in the interests of all people

3. References
- Niculescu G. (2005) Promovarea strategiilor de dezvoltare n turism, Editura Academic
Brncui, Trgu Jiu
- Ni I.; Ni C. (2008) Piaa turistic a Romniei, Editura Economic, Bucureti
- www.business24.ro
- www.mdrt.ro.

206

SENSORY DIMENSIONS OF THE DESTINATION BUCHAREST FROM THE POINT OF
VIEW OF YOUNG PEOPLE

DIOIU Mihail-Cristian
Ph.D. student, Faculty of Marketing, The Bucharest University of Economic Studies, Bucharest, Romania,
ditoiu.cristian@gmail.com

STNCIOIU Aurelia-Felicia
Professor, Ph.D., Faculty of Marketing, The Bucharest University of Economic Studies, Bucharest,
Romania, stancioiufelicia@hotmail.com

TEODORESCU Nicolae
Professor, Ph.D., Faculty of Marketing, The Bucharest University of Economic Studies, Bucharest,
Romania, teodorescu.nicolae@gmail.com

Abstract: For a marketer, any destination that has the objective of connecting the consumers
emotions with the locations elements must surprise the tourist by stimulating all his senses. Although this leads
to an efficient positioning and creates a competitive advantage, marketers have focused primarily on the visual
and auditory senses, neglecting the other three senses of the consumer. Thus, instead of having brands with five
sensory dimensions, today we have two-dimensional brands. This studys objective is to identify those sensory
dimensions of the destination Bucharest perceived by internal tourists, starting from the destinations forms of
tourism and appealing elements.

Key words: sensory dimensions, destination, forms of tourism, sensogram


1. Introduction
According to World Tourism Organization & European Travel Commission (2009, p. 17) in a
globalizing world it is important that every town and every country obtain as many competitive
advantages as they can, starting from a distinct location experience (sense of the place) that must be
present not only in the feelings of the residents, but in the image perceived by those that do not inhabit
that particular place as well. As a rule, tourists choose to visit certain places based on the analysis of
the images representing that destination, images that have been created in time by different media
forms under the influence of other tourists (Urry, 2002, p. 7).
Continuingly evolving, tourism marketing had initially taken into consideration the product,
but today it increasingly shifts its focus on the consumer. Although it is known that information
reaches the consumer through all of his senses, marketers have mainly been addressing sight and
hearing, thus creating two-dimensional brands, flat, much more difficult to position in a space that is
oversaturated by visual and auditory forms of communication, and neglecting in this manner the other
three senses. By addressing all the senses it is possible to create five-dimensional brands (5 D) that
would focus on the consumer and would thus provide him with a complete experience.
Sensory marketing starts by comprehending the consumers perceptions, it starts from those
stimuli that affect the senses and it arrives at the consumers answers by interpreting those stimuli
(Amorntatkul & Pahome, 2011, p. 1). The sensory marketing plan makes sure that the strategies
which have as objective to create multi-sensory experiences about products, events, places and
communication, influence the consumers behaviour in a different way from transactional or
relationship marketing (Rodrigues, et al., 2011).
In tourism, communication should make use of an interactiv media mix which should
stimulate all the tourists senses, therefore making it possible to obtain an awareness of the wanted
motivation (Isacsson, et al., 2009, p. 167) and even more to obtain the manifestation of the
authenticity or experience of the location, wich are phisically linked to the perceived sensations
(Markwell, 2001). Because perception represents the state of being aware or of comprehending the
207

sensorial information (Krishna, 2011, p. 3), the tourists senses are stimulated as he interacts with the
surroundings, and by analysing the relationship between tourists senses and the visited place, the
organisations that deal with destination marketing can find the solutions for obtaining the desired
experience (Pan & Ryan, 2009, p. 631). Their objective is to create in the perceptual reality of a
person, a structure that is characterised first of all by harmony, a perceptual image of the product
that would represent for that subject the sum of his optimal sensations (Trevisani, 2007, p. 80-81).
The human brain represents the brands goal, the brain being also the place where an image is
created as a result of individual experiences with a certain brand or company (Hultn, et al., 2009, p.
6), the human senses playing an important role in the process of making services become tangible
(Goldkuhl & Styven, 2007).
Before developing a marketing plan for a specific tourist destination, it is necessary that the
sensory dimensions perceived by the tourists in relation to its image be measured, and based on their
intensity, it can be created a sensory profile of the destination which points out the main forms of
tourism that can help marketers create specific tourist products.

2. The framework
The objective of this study is to identify some sensory dimensions of the destination
Bucharest that are perceived by internal tourists, starting with the analysis of those forms of tourism
and tourist attractions that are associated with the destination, and then moving on to measuring the
image of the destination Bucharest from a sensory point of view.
The study was conducted between February and April 2012 on a number of 636 respondents-
young people aged 20 to 24 years holding university degrees or that were still undergoing university
programs. The structure of the sample was composed of 76% women and 24% men, coming both
from an urban (84%), as well as a rural environment (16%). They had the following places of origin:
Bucharest 36,3%, Muntenia - 34,1%, Moldova - 12,3%, Oltenia - 9,7%, Dobrogea - 5,2%,
Transilvania - 2%, Maramure - 0,2% and Banat-Criana - 0,2%. Data was collected using a
questionnaire. The following sensory research represents the follow-up of another study that had as
objective the identification of the main forms of tourism and of tourist attractions that are associated
with Bucharest by young people with ages ranging from 20 to 24, coming from different parts of the
country. The first study was conducted between October 2010 - January 2011 on a sample of 1887
young people, holding a university degree or students, and it used as method - the statistical sampling
and as an instrument to collect data - the questionnaire (Stncioiu, et al., 2011, p. 143-144). The
sensory dimensions of the destination Bucharest have been identified based on the forms of tourism
and on a part of the tourist attractions identified in the first study, according to the respondents
opinions.
In order to measure the level of interaction between the senses in terms of the indicators of
performance of a certain brand, in the holistic model, which has five sensory dimensions, it is
necessary to represent them under the form of a sensory model a sensogram (Lindstrom, 2009, p.
103).
The answers provided by the subjects proved to be relevant from this point of view because
98% of them had visited Bucharest. The main motives of the responds for visiting the destination are
the following: business tourism and job-related motives - 29%, tourism designed for loisir, relaxation
and rest - 27%, visiting relatives or friends - 19%, another form of tourism - 14% and cultural tourism
- 11%. Out of all the people that had visited Bucharest, only 7% of them had reported that they would
prefer not to visit it again. The reasons why 2% of subjects have not visited Bucharest so far are the
following: 54% - insufficient time, 23% - do not know, 15% - lack of financial resources, 8% -
insufficient information about the rest/relaxation/recreational/entertainment possibilities.
The respondents considered that the appropriate advertising methods are: the mix between the
traditional form and the online one (67,9%), the online one (26,6%) and the traditional one (5,5%). As
for their trust in the sources of information, the highest levels of thrust are represented in a decreasing
order by the following: 1. Sites, 2. Guide books, 3. Trade journals, and 4. Socializing networks,
(where 1= the source that ranked the highest in terms of trust-value and 4= the source with the lowest
level of trust).

Table 1: The sensory dimensions of the main forms of tourism particular for the destination Bucharest
208

Form of tourism The visual
dimension
(%)
The auditory
dimension
(%)
The olfactory
dimension
(%)
The gustatory
dimension
(%)
The tactile
dimension
(%)
Business and job-related
tourism
74,8 46,9 16,7 15,2 24,8
Visiting relatives or friends 63,5 44,5 42,9 53,9 23,7
Cultural tourism 84,9 54,1 29,2 26,4 26,7
Source: research processed data
According to the previous study, the forms of tourism associated with Bucharest are business
and job-related tourism, visits to relatives or friends and cultural tourism. For these forms of tourism,
the sensory dimensions perceived by the tourists have been identified (Table 1).
The proximate percentages of the five sensory dimensions in the case of the tourism form
Visiting relatives and friends denote a sensory equilibrium that can be explained by the purely
subjective character of this form of tourism. Whereas cultural tourism offers a high sensory potential
for development when it is taken into consideration the visual dimension which has the highest
percentage from them all, an aspect considered to be normal by the marketers, in the case of the
Business and job-related form of tourism, it is surprising the high percentage scored by the visual
dimension (74,8%).
During the initial study, the tourist elements associated with Bucharest have also been
identified.

Table 2: The sensory dimensions perceived in the case of the main tourist attractions associated with the
destination Bucharest
Tourist attractions The visual
dimension
(%)
The auditory
dimension
(%)
The olfactory
dimension
(%)
The gustatory
dimension
(%)
The tactile
dimension
(%)
Dmbovia 79,5 30 48,7 2,3 15,7
Herstru Park 82,3 47 63,4 8,9 24,1
The Palace of Parliament 96,4 13,2 8,3 0,9 10,4
The Arch of Triumph 95,9 14,5 6 1,2 8,5
Cotroceni Palace 94,3 15,7 6,3 5,3 5,3
uu Palace 94,8 12,3 6,4 2,2 6,4
The Old Court 88,8 16,8 12,3 6,9 11,2
Ghika Palace 93,1 13 8,5 4,9 7,9
Casa Scnteii 93,7 13 5,3 4,2 7,9
Old Historical Centre of
Bucharest (Lipscani
District)
77,7 56,4 45 41,8 20,9
Village Museum 91 27,7 25,8 8,6 16
National Museum of
Natural History Grigore
Antipa
94,5 26,7 11,5 3,3 15,2
Museum of the Romanian
Peasant
93,5 22,2 13,8 8 14,6
National History Museum 93,1 18,1 7,5 1,2 9,6
National Art Museum 92,8 18,4 6,8 1,7 10
The Romanian Athenaeum 75,8 54,5 5 7,4 6,9
The National Opera 71,4 80 5,8 1,7 5,8
Theatres (The National
Theatre, ndric
Theatre , The National
Operetta Theatre Ion
Dacian)
78,1 73,3 10,5 3 10
Royal Palace Great Concert
Hall
84,7 54,2 6,9 3 6,8
The Patriarchal Cathedral 82,7 55 17,6 3 12,7
Monasteries (Radu Vod
Monastery)
88,4 45,1 15,9 3,8 10,2
209

Universities (The Bucharest
University of Economic
Studies, The University
Politehnica of Bucharest,
The University of
Bucharest)
93,2 37,3 10,8 7,2 17,3
Luxury hotels (The
InterContinental Hotel, J.W.
Marriot, Howard Johnson,
Pullman, Radisson, Hilton,
Rin Grand Hotel, Capa)
80,8 21,4 23 28 28,3
Nicolae Ceauescu 73,9 38 4,1 1,9 3,6
Out of all these tourist attractions, Table 2 presents not only the ones that obtained a high
percentage according to the subjects opinions, but also those touristic attractions which are present in
guide books as well and that are considered to be representatives by the authors. It was highlighted the
sensory potential of the tourist attractions presented earlier. Thus, from a visual point of view, The
Peoples House (The Parliament Palace) is the central element of focus when taking the destination
Bucharest into consideration, from an aural point of view - The Romanian Opera, the olfactory aspect
is highly represented by Herstru Park, the gustatory analysis reveals that The Old Historical Centre
of Bucharest (Lipscani District) is on the top of the list, and the tactile dimension is mainly dominated
by luxury hotels. Lipscani District is the most sensory balanced tourist element, but luxury hotels or
Herstru Park also has sensory potential.
By assessing these results, in which the most appealing touristic elements are known, and by
correlating them with those forms of tourism for which the destination Bucharest is well-known, it
can be developed 5D products and brands, precisely by embedding in the products platform, as well
as in the forms of communication, those sensory dimensions that have market potential. At the same
time it is tried achieving excellence in the sensory dimension for which the product/brand is already
known. These products subsequently lead to the creation of a complete, synesthetic experience of the
destination and to the forming of a distinct image.
From a sensory point of view, the image of the destination Bucharest is measured by
correlating the five dimensions in different combinations the way the tourists perceive it. Table 3
presents the sensory combinations perceived by the tourists in the case of Bucharest.

Table 3: The sensory dimensions perceived by the tourists in the case of Bucharest
The visual
dimension
The auditory
dimension
The olfactory
dimension
The gustatory
dimension
The tactile
dimension
Choices
(%)
x x x x x 23,7
x x x

19
x x

17,6
x x x

x 6,3
x x

x 6,3
x

6,3

x

6,1
x x x x

4,2

x x

x 3
x x

x x 2
x

x

1,3
x x

x

0,8
x

x

x 0,6

x

0,6
x

x 0,5
210

x

x x

0,3
x

x x 0,3

x

x

0,3

x

x 0,3

x 0,3

Although it can be observed that the visual and aural dimensions are the most strongly
represented ones, it can be seen that nevertheless, in the case of the destination, a certain amount of
perception is present at the level of every sense, a perception for which most of the respondents have
opted (23,7%). The emergence of the olfactory dimension in the combination ranked as second, after
visual and auditory dimensions, is surprising. The gustatory dimension comes off least in what
concerns the perception of the destination.
By measuring every sensory dimension perceived by the tourist and the interaction between
the senses related to the intensity felt by the consumer, it can be created the sensory profile of the
destination Bucharest. This profile appears under the form of a sensogram (Figure 1), a sensory model
like Lindstrom (2009) uses. It can be seen that the destination does not excel at any sensory
dimension, the highest intensity being perceived on the level of the aural dimension, and the lowest
one at the level of the gustatory dimension. In this sense, in order to expand the sensory experience in
the case of the destination Bucharest it is recommended that the aural dimension be maximized by
associating the city with various musical events, such as The George Enescu Festival, or taking it a
step further and obtaining a specific aural signature. At the same time it is necessary to improve the
other four dimensions as well, focusing especially on the gustatory one, a poorly represented
dimension in the case of the destination Bucharest.

211

Figure 1: The sensogram of the destination Bucharest


Hence, depending on the percentage obtained by each sensory dimension, the marketer will
have to establish for each touristic attraction those appealing components of the touristic product that
better correspond with the consumers intentions. Seeing as the attraction elements of a specific
destination are very complex, this assignment becomes even more difficult to fulfill, as the research
study must be continued in order to cover the other segments (the segment chosen and presented in
this article corresponds to the new positioning for Bucharest - Europe is younger in Bucharest).

3. Conclusion
The consumer receives information through all five senses, an aspect that the marketer cannot
neglect any more, especially in the case of the field of tourism that can thus become tangible. A
mans senses create in this manner a link in order for the product to reach the memory and emotions
of the consumer. This might be a solution to obtain destination brands, clear images backed by
complex identities that can form a certain world for every tourist, just as it is perceived by him
(everyone feels differently).
It can be identified the sensory potential of a certain place starting from those touristic
attractions that are representative for that destination and from the forms of tourism that make the
touristic destination visible to the world. Depending on the results of the sensogram, it can be chosen
those products that will then be developed according to the identified sensory directions, in such a
manner as to obtain a unique experience for the tourist by way of his interaction with the destinations
contact points. If the destination meets tourists expectations, or better yet, surpasses them, the impact
in choosing the destination is very important. In the case of such experiences, multiple sequences of
memories are created by stimulating all the senses and these sequences of memories will help create
the desired image, which is a favorable one for the destination.
The fact that each consumer perceives the location differently represents an advantage from
the point of view of segmentation, but this can also be a source for error. Practically, the scales must
be calibrated by correlating every sense with the other and analyzing the impact that senses would
have on the consumer. Taking into consideration the factors that form perception as well, the most
important one is the factor related to the physiological characteristics of the sensory channels, as well
as the ones related to the distortions of perception, respectively, the influencing of expectations,
selective display, selective attention and selective interpretation (Datculescu, 2006, p. 36-38).
The objective of every touristic destination that seeks to obtain a privileged position in the
mind of the consumer and to interconnect his emotions with the specific elements of the place should
be to create harmonized experiences by stimulating every one of his senses.
0
1
2
3
4
5
Visual
Auditory
Olfactory Gustatory
Tactile
212

In order to be considered a competitive destination, research must be continued in the sense of
developing the instruments needed to make a full assessment of its profile by using the
interconnection between the senses, as a result of the multi-sensory experience.

4. References
- Amorntatkul, N.; Pahome, T. (2011) How sensory marketing applies to the hotel and
restaurant industry in order to influence customers behaviour in Thailand, Master Thesis,
Mlardalens Hgskola, Eskilstuna & Vsters.
- Datculescu, P. (2006) Cercetarea de marketing - Cum ptrunzi n mintea consumatorului,
cum msori i cum analizezi informaia, Bucharest: Brandbuilders Grup.
- Goldkuhl, L.; Styven, M. (2007) Sensing the scent of service success, Sweden European, 41
(11/12), p. 1297-1305.
- Hultn, B.; Broweus, N.; van Dijk, M. (2009) Sensory Marketing, UK: Palgrave Macmillan.
- Isacsson, A.; Alakoski, L.; Bck, A. (2009) Using Multiple Senses in Tourism Marketing:
The Helsinki Expert, Ecker Line and Linnanmki Amusement Park Cases, Tourismos: An
International Multidisciplinary Journal of Tourism, 4 (3), p. 167-184.
- Krishna, A. (2011) An integrative review of sensory marketing: Engaging the senses to affect
perception, judgment and behavior, Journal of Consumer Psychology, doi:
10.1016/j.jcps.2011.08.003.
- Lindstrom, M. (2009) Branduri senzoriale: Construii branduri puternice folosind toate cele
5 simuri, Trans. Sofonea, M. Bucharest: Publica.
- Markwell, K. (2001) An intimate rendezvous with nature? Mediating the tourist-nature
experience at three tourist sites in Borneo, Tourist Studies, 1 (1), p. 39-57.
- Pan, S.; Ryan, C. (2009) Tourism Sense-Making: The Role of the Senses, Journal of Travel &
Tourism Marketing, 26 (7), p. 625-639.
- Rodrigues, C.; Hultn, B.; Brito, C. (2011) Sensorial brand strategies for value co-creation,
Innovative Marketing, 7 (2), p. 40-47.
- Stncioiu, A.-F. et al. (2011) Zestrea turistic - dimensiune important n evaluarea/modelarea
imaginii unui ora. Studiu de caz: Bucureti, Economie teoretic i aplicat, XVIII (4), p.
142-154.
- Trevisani, D. (2007) Psihologia marketingului i a comunicrii, Trans. Doroga, C. Bucharest:
Irecson.
- Urry, J. (2002) The tourist gaze, 2nd ed. London: Sage.
- World Tourism Organization & European Travel Commission (2009) Place Brands, In:
Handbook on Tourism Destinations Branding, Madrid: World Tourism Organization &
European Travel Commission, p. 15-17.

213

THE IMPLICATIONS OF INNOVATION PROCESS
ON THE MARKETING OF HIGH-TECHNOLOGY PRODUCTS

DOVLEAC Lavinia
Teaching Assistant, Ph.D., Faculty of Economic Sciences and Business Administration/Department of
Economic Sciences and Business Administration, Transilvania University of Braov, Romania,
E-mail: dovleaclavinia@yahoo.co.uk

BLESCU Marius
Lecturer, Ph.D., Faculty of Economic Sciences and Business Administration/Department of Economic
Sciences and Business Administration, Transilvania University of Braov, Romania,
E-mail: marbalasescu@yahoo.com

BLESCU Simona
Lecturer, Ph.D., Faculty of Economic Sciences and Business Administration/Department of Economic
Sciences and Business Administration, Transilvania University of Braov, Romania,
e-mail: simonabalasescu@yahoo.com

Abstract: This paper highlights the role and importance of Open Innovation model on the marketing
activity developed by high-technology companies. In this area, the technology is advancing continuously and
new products are appearing rapidly. Competition in high-tech market is very tough and not all companies have
the resources to cope with change. For these companies, the ideal solution is to apply the Open Innovation
model. The paper includes some results of a qualitative marketing research which had as main objective finding
the opinions of managers from high-tech industry regarding the need for innovation process and the choice of
the most effective innovation strategies.

Key words: open innovation, high-technology products, marketing, qualitative research.


1. Introduction
By introducing innovations in practice, the organizations can obtain products with improved
features, high quality services, new production processes which are more efficient and greener,
improved models of business management system, modern methods of labor management, etc.
Generally, the organizations make decisions to innovate for different reasons: to increase
market share, to conquest new markets, to improve products quality, to expand the range of products,
to replace obsolete products, to reduce the environmental impact, etc. The innovation works as a
system, including all activities of an organization. In fact, all business functions are under the impact
of innovation and its development is different depending on the nature of activity.
The innovation processes have a high degree of uncertainty regarding the final results for
various reasons. The success on the market becomes less transparent and more uncertain and
launching a new product is risky. For a new product, the quality criteria is no longer decisive for the
commercial success and the innovation degree of risk increases even more.
When a company decide to innovate, it has to take into account all the available resources
(human, financial, material, know-how) and to analyze objectively if it is able or not to deal with such
changes. The decision to innovate will change the entire business and therefore will change the
company's marketing vision. Causing the changes in product mix, the innovation process change the
potential customer segments, the market strategies and the marketing mix strategies.
The Open Innovation model can help companies with limited resources to keep up with
changes occurring on the high tech market. It is known that this market is dynamic and risky and the
competition is fierce. Open innovation provides companies the opportunity to cooperate, to join forces
to create effective products that bring them profits and provides to the consumers the satisfaction they
want.
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2. The characteristics of high-technology products
The Ordinance no.21/1992 on consumers protection states that the high-technology product is
essentially a durable product, basicly a product relatively complex, consisting of parts and
subassemblies, designed and built to be used on an average duration of use and which can carry out
repairs or maintenance.
The high-technology products can be defined by five main features they have simultaneously
(Sahadev, 2004):
- Short product life cycle - such products cross the life cycle phases more quickly than ordinary
products. The advanced technology evolution happens very quickly and this leads to a much
shorter product life cycle and to the necessity of making decisions on the moment (Bridges,
1991).
- High level of risk in the changes of users behavior - using high technology products can
generate radical changes in consumption behavior of users; sometimes, such changes can be
destructive meaning the failure of product adoption by consumers.
- Indispensability of infrastructure - a high technology product can not exist in isolation; the
organization should create a real services network to support the product and become an
important component of its marketing mix. The infrastructure includes complementary products
required for the high-tech product functionality, installation services, repairs and proper
maintenance.
- Lack of clearly defined industry standards - a key feature of high technology products is the
fact that they are constantly evolving. As a result of this constant evolution, the products which
satisfy the same needs align to specific but different standards.
- Uncertainty on product functionality - sometimes consumers find difficult to align their needs
to the benefits that high technology products can offer.
Many manufacturers consider that the main advantage of a high-technology product is
precisly the sophisticated technology included but they neglect the consumers perception on this
matter.
The consumers perspective is different from the manufacturers perspective. Their interests
seem to be somewhat opposite (Rosen, Schroeder, Puriton; 1998). The producers are interested into
the product creation. Some of them are based on the misconception that consumers are not able to
describe exactly what they want and arent aware of the products they seek. Because of this approach,
the consumers could consider hostile some of the products.
Because technology tends to worry the consumers and some of them are intimidated by the
idea of learning to use a new product involving advanced technology, the marketing of high-
technology products has the task to explain the new technology to the consumers, to educate them
regarding new trends and to help them make an informed choice.
In fact, analysing more deeply, the marketing of high-technology products consists of those
integrated activities, processes and decisions of the organization, based on innovation and on the
direct relationship with end users, offering them a superior value through products and services
capable to satisfy new needs and specific requirements for advanced technology, enabling new
feelings and experiences, in profitable conditions for the organization and protecting the natural and
social environment.

3. The necessity of innovation in high-tech industry
Innovation is the driving force of competitiveness, growth, profitability and creation of a
sustainable value. Innovation, as defined by the OECD, is the global process of technological and
commercial creativity, the transfer of a new idea or a new concept to the final stage of a new product,
process or service accepted by the market (www.oecd.org).
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Innovation is essential for a business interested in development. Ultimately, innovation has
been brought into attention by the way in which some of the world companies have used a fast rhythm
of developing new products as a very powerful weapon against competition.
The innovation process has some defining features (Fisk, 2008):
- Disturbing element through innovation the conventions are defied and the weaknesses must
be modified or eliminated;
- Factor of development if innovation is properly managed as a process and as a strategic risk
and benefit, it leads to product development and creation of new markets;
- Business model - innovation lead to reconsideration of how to run the business, how to create
value for customers and business partners;
- Creative force innovation involves radical exploring of all the possibilities and their ways of
valorification;
- High degree of applicability - innovation must have maximum impact on consumers;
- Innovation determines market shaping - innovation leads to reconsideration of the functionality
of markets, customers, partners, distribution channels etc.
An innovative organization must simultaneously fulfill the following conditions (Lctu, S):
have a high degree of responsiveness to demand fluctuations, demonstrate flexibility and capacity to
adapt rapidly to changes of the nature of materials and their processing conditions, be able to
manufacture a wide range of quality products at small costs and in a short period of time, have the
ability to successfully integrate new technologies into the existing system in terms of minimum cost.
Also, an innovative organization must have: strategic skills, resulting in: long-term vision,
ability to identify and even anticipate market trends, availability and ability to collect, process and
assimilate technological and economic information; organizational skills, such as: risk propensity and
its control, cooperation between various intern departments, cooperation with public research,
external consultants, customers and suppliers, investment in human resources.

Innovative companies must face three types if risks (Blythe, 2003):
- Market risk - is closely related to the "cost of change", the cost paid by consumer for the
transition from an existing solution to a completely new one; the originality and complexity
level of the product will determine the amount of cost change for potential client; a lower cost
of change means a lower market risk.
- Technological risk - new technology might be ineffective or could be quickly overtaken by
another technology. An efficient and original technology means a lower risk.
- Strategic risk is related to the degree of companys familiarity with the market and
technology. A higher degree of familiarity means a lower risk. As the high technology product
cross the life cycle stages, the consumer becomes more familiar with it.
-
Organizations in high tech industries have a very developed innovative capacity. They occupy
the first place worldwide in terms of number of patents approved every year.The most innovative
company in the world in 2010 was considered IBM with 5,866 patents per year, followed by Canon
with 2,551 patents, General Electric and Hitachi. On the places 5, 6 and 7 are Toshiba, Samsung and
Sony, companies producing high technology goods for individual consumption.
Patent activity has always been an indicator of innovation. However, innovation comprises
much more than mere patent filing volume. In 2011, Thomson Reuters, the worlds leading source of
intelligent information for businesses and professionals, developed a range of metrics based on
various facets of innovation that relate to patenting and science. The Thomson Reuters 2011 Top 100
Global Innovators includes companies that invent on a significant scale, that are working on
developments which are acknowledged as innovative by patent offices across the world, and by their
peers; and, whose inventions are so important that they seek global protection for them.
The most prevalent industry within the Top 100 list is Semiconductor & Electronic
Component Manufacturing; 14 of the 100 companies are from this sector. Fifty percent of these
innovation leaders are from North America and 43% are from Asia. The remaining company is from
Europe. For Europe, the top two industries are Machinery Manufacturing at 17% and Chemical
Manufacturing at 13%. Europe leads the world in Machinery Manufacturing; 63% of the Top 100
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Global Innovators in Machinery Manufacturing are in Europe, with more than half of them in
Sweden.

4. Open Innovation Model
The current environment of the organization from high technology industry has a big
influence on how the marketing activity is developed. The tranditional approach is no longer effective
because of the transition from analogue era of marketing to digital era of marketing. This idea arose
from the references to the modern economy as being a digital economy. In this new context markets
are more fragmented and so are the communication tools for companies addressing to customers. But
more alarming is the accelerated speed of change. Pressing need for speed and efficiency forces
manufacturers and retailers to consider more innovative and effective ways to build relationships not
only with consumers but also with partners or direct competitors. As a consequence they are currently
developing new forms of partnership.
The innovative organizations from high technology industry increasingly use open innovation
strategy. The concept of open innovation is based on the idea that organizations can not lead all R&D
activities alone, so they must capitalize the external knowledge that can be purchased.
The organizations from high technology industry simultaneously fulfill two conditions:
The percentage of R& Ddepartment spending in product value added exceeds 10%;
The percentage of scientists and engineers from technical department in all company positions
exceeds 10% of the average of employment in the industry.
By applying the open innovation strategy, the ideas and internal knowledge can reach the
market through external channels, outside the current business of the company to generate additional
value (Gassmann, 2006).
The organization applying open innovation develope research projects inside it, but it has
access to external projects from whose ideas it can benefit. But in turn, the organization provides
results and ideas of research and development projects to the external environment (other
organizations or institutions).
The elements that led to the creation of Open Innovation Model are among others: the
existence of competent employees who have important knowledge and availability for geographical
and functional mobility, a more important role of providers in the development of innovation, an
increased number of alliances and partnerships to develop new ideas and technologies
(http://www.openinnovation.eu/
openinnovatie.php).
The principles of open innovation differs fundamentally from the traditional model of closed
innovation and the following table presents the principles of both models.

Table 1. Closed Innovation Model against Open Innovation Model
Closed Innovation Principles Open Innovation Principles
Inside the organization are the most talented
employees from the industry.
Organization must cooperate with capable
employees from outside.
R&D activity is developed only inside the
organization.
R&D activity from outside the organization can
also create value for it.
The organizations discoveries get first on the
market.
It is not necessary for the organization to conduct
its own researches. It can use others researches.
The winning organization is that who launch first
an innovation on the market.
For the organization is more important to build an
efficient business model, rather than getting the
first on the market.
Ctreating the best ideas in the industry lead the
organization to success.
Effective using of internal and external ideas lead
the organization to success
Intellectual property rights must be protected so
other organizations cant use them.
Organization should buy and use intellectual
property rights from others if they are better.
Source: adapted after Chesbrough, H. (2003a).

217

For years, the logic of closed innovation was considered the right way to bring new ideas to
market and successful companies all played by certain implicit rules. They invested more heavily in
internal R&D than their competitors and they hired the best employees. Thanks to such investments,
they were able to discover the greatest ideas which allowed them to get to market first. This, in turn,
enabled them to reap most of the profits, which they protected by aggressively controlling their
intellectual property to prevent competitors from exploiting it. They could then reinvest the profits in
conducting more R&D, which then led to additional breakthrough discoveries, creating a virtuous
cycle of innovation (Chesgrough, H., 2003).
Any organization, no matter its size, can adopt the Open Innovation model. There are many
advantages. All the partners benefit from participation in this process in terms of knowledge,
technology or financial resources.

Panasonic and Open Innovation Model
Panasonic decided to use Open Innovation Model for Blu Ray 3D product development,
working in partnership with Hollywood studios and with prestigious research institutions in Belgium
(IMEC laboratory). Being a member of the Patent Cooperation Treaty, in 2007 Matushita Electric
Industrial (the future Panasonic) occupied first place in the world, holding 2,100 patents registered.
The following year the number of patents decreases sharply, Panasonic reaching the second place,
being overtaken by Huawei Technologies Co. from China.
In 2009 Matushita becomes Panasonic and take again the world leadership in terms of number
of patents: 1891. This was followed by Huawei Technologies (1847) and Robert Bosch (1586), as
shown in Table 2.

Tabel 2. Worldwide companies ranking by number of patents between 2005-2009

*In 2008, Matushita Electric Industrial Co. became Panasonic Co.
Source: Panasonic Anual Report 2010.

In 2010, Panasonic had globally, 91,539 patents of which 45% were developed in Japan, 22%
in U.S.A. and 14% in Europe. Their number was smaller in 2010 compared to 2009, when the total
was 94,139 patents.

Disadvantages for Open Innovation Model
Companies applying Open Innovation Model may face some problems that occur during
interaction with other organizations. Thus, there may be some conflicts of interest which could affect
all partners involved if are not handled properly.
The most common problems encountered in the case of open innovation are those related to
coordination (Rodriguez, Lorenzo; 2010). They occur in the relations between organizations involved
in open innovation. Also, coortination problems can occur in the process of searching and selection of
ideas, knowledge and partners involved into the innovation. For example, building a very complex
high-tech product which combines multiple technologies from several companies situated in different
218

locations means a huge amount of work in terms of coordination to achieve their full potential. In
strategic terms, this product's competitive advantage doesnt come from the contribution of technical
knowledge of multiple technologies, but from how to coordinate and link partner companies in the
project (Zabala, 2009).

5. The results of qualitative marketing research on innovation
Given the importance of innovation in high tech industry, it was considered appropriate to
conduct a qualitative marketing research on "Opinions of managers on the particularities of marketing
in the area of innovation and high technology product development."
The research was based on depth interview method. The sample used consisted of seven
managers of international companies which produce and sell high technology products, and they
develop their activity in Romania. Depth interviews were conducted during January-February 2011
based on a list of themes and subthemes.

The general assumptions for thie research were:
More and more companies from high-technology industry use the principles of open innovation
model.
Many high technology companies choose to cooperate with other bodies and institutions in
R&D activity in order to create high-tech products and innovative services.
According to managers from high technology industry, the decision to purchase a high-
technology product has a high degree of complexity.
Many companies in high technology industry have the intention to involve consumers in
creating and developing innovative products.
The main objectives for this qualitative research were:
Determination of the types of existing innovations inside the companies.
Identification of innovation strategies applied by the companies.
Evaluation of the role of research and development activity inside the company.
Determination of particularities of assimilation and launch new high-tech products on the
market.
Identification of the main factors affecting the adoption of innovation proposed by the
company.
Establish specific aspects for the marketing mix of high technology products.

The interviews were structured on four themes, such as: innovation process inside the
company, the development of new high-technology products, the behaviour of high-technology
products consumers, particularities of the market and marketing mix for high-technology products.
The respondents answers were processed according to the principles of the content analysis.
Regarding the process of innovation into the company, the interviewed managers considered
that the adoption of innovation within a company from high technology industry gives it some major
advantages. Innovation can increase sales and profit and "make the difference between markets".
Innovation provides competitive advantage and improve company performance, contribute to
accelerating change and create new values within, supports the company to be flexible and globally
competitive, to conquer new markets and then to become a leader on them etc. One manager believes
that innovation leads to transformation and restructuring of the company, offering new business
opportunities. Another manager believes that innovation contributes to the creation of new values and
it is a source of new experiences for consumers.
Less than half of the managers recognized that the innovation process has some difficulties
for company: the risks of change are high and can lead to failure that must be accepted, innovation
requires new technologies and processes that are difficult to control by a single company. One of the
managers said that "the failure is part of the innovation process".
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Related to the types of innovations adopted by the company, 5 of the 7 managers say they
have adopted the concept of "open innovation". The main types of innovation used by the high-tech
companies are: product innovation, process innovation and technological innovation. One of the
managers says that within the company the innovation is done differently by type of consumer or
business solutions. Another manager said his company innovated in the promotion activity. The
sources of innovation used by companies are numerous and varied. They are found both within the
company (employees) and outside it (customers, business partners, universities, research institutes and
laboratories, virtual environment).
The innovation strategies applied by the companies are tailored to customer segments,
depending on geographical areas where the activity is developed or the types of new products that will
be developed. The strategies used are: the creative platform strategy, the creative solutions strategy,
the continuous innovation strategy, the accelerated innovation strategy, the miniaturization product
strategy, the innovation strategy according to the environmental protection, the partially innovation
strategy and the total innovation strategy. The last strategy refers to eco-systems consisting of
products, services and relationships with partners.
When a company decides to innovate, it gives a greater importance to R&D activity.
Regarding the second theme, the development of new high technology products, according to all seven
managers, R&D is essential for the success of high technology companies. Each company has, in
global strategic areas, research centers for the behavior of individual and organizational consumers
and customer satisfaction, concept development labs and product design labs. Depending on financial
resources, companies are investing billions of dollars in R&D annually. These efforts are aimed to
create new values based on combining the concepts of "inspiration" and "shared experience".
For the assimilation of new products companies make partnerships and strategic alliances to
obtain know-how, technology, procedures, infrastructure, etc. These partnerships are growing because
companies often apply the open innovation model. There is concern for creating flexible platforms
and products that do not affect the environment (either during their production or their use). A very
important element in the competitive environment is the speed and frequency of which new products
are launched on the market, without being ignored the aspects of quality. One manager mentioned a
solution for avoiding that the assimilation of new products and launching become a failure: "new
products must be compatible with their predecessors and those to come".
When a company decides to innovate and create new products, it is forced to change its
product policy. Company becomes more flexible, more open to new, more willing to take risks. It
must also change the product strategies, adapting them to the new situation imposed by the process of
innovation. High-tech product strategies used mainly by companies are: new global product strategy,
integrated solutions strategy, high customized solutions strategy, the strategy of unique products with
exceptional performance, "green" products strategy, the strategy for selection and focus on certain
categories of products, product and services packages strategy.
Managers must not forget that innovations have a strong impact on consumers and this impact
is not always positive. Therefore, sometimes products are not received by consumers as companies
expect. The factors affecting the adoption of innovation results by consumers are typically:
demographic characteristics (age, gender, education level), how the products meet customer
expectations, the degree to which the products make their lives easier, the extent to which consumers
are involved in creating products, the extent to which is guaranteed the person s safety during use,
aspects of product complexity, compatibility with existing products, product testing opportunity, the
products capacity of saving energy and being environmentally friendly, and not the least, the early
adopters opinions about the experiences using high-tech products.
The decision of innovation and adoption of new technologies within the company is reflected
into the pricing policy and strategies. Pricing decisions are made based on costs, competition and
economic situation and the strategies usually used are: skimming strategy, strategy of high prices (for
repositioned products), the strategy of aligned prices (by retailers pricing level), market penetration
strategy or discounts strategy.
Regarding the high-tech products promotion, the companies rely on PR activities,
sponsorships (especially in sport), the organization of events and presentations, participation in
exhibitions in the field. Being innovative companies, they must make their presence felt in any
220

context related to innovation. Also, the Internet is a powerful marketing communication tool that all
companies consider very effectively.

6. Conclusions
Companies must still perform the difficult work necessary to convert promising research
results into products and services that satisfy customers needs. Innovators must integrate their ideas,
expertise and skills with those of others outside the organization to deliver the result to the
marketplace, using the most effective means possible.
For young companies, innovation comes naturally. It is the rationale for their existence. The
challenge is to create products and services consumers actually want and to do it in a way that allows
for survival in the marketplace. For mature corporations, innovation is more of a balancing act. In
these situations, the objective is to maintain and enhance the value of existing lines while investing in.
Faced with thousands of potential projects, high tech companies confront significant
challenges in identifying those projects with the highest potential and allocating their best resources
against them. When major capital investments are required, resource allocation decisions must be
made well in advance of market or customer data. Product introductions must also be timed
appropriately to meet rapidly changing market needs, particularly when product introduction windows
are narrow.
The companies that want to stay competitive must innovate constantly because high-tech
products cross the life cycle stages more quickly than ordinary products, which are determined mainly
by the rapid pace of evolution of technology. Innovation can be understood as a creative openness to
exceptional ideas, as an activity of creating new products or improved products, and not ultimately as
a business strategy. Innovation is presented in various forms and manifestations and each organization
is aware that only through innovation can better meet the market and the environment.
Innovations dont influence only the organization, but they can shape the entire market -
customer needs, participants structure, the channels that link them, the rules by which they act.
Innovation is not just about creativity but also about the profitability of activities. Ideas can be quickly
imitated, but what really makes the difference is applying them in an unusual way. The companies
must be aware that the pace of competition will only accelerate and their success depends on
identifying the right opportunities at the right time.

7. References
- Blythe, J. (2003) Marketing Strategy, McGraw-Hill, p. 156.
- Bridges, E., Coughlan, A.T., Kalish, S. (1991) New Technology Adoption in in an Innovative
Marketplace: Micro and Macro Level Decision Making Models, International Journal of
Forecasting, nr.3, vol.7, p. 257-270.
- Chesbrough, H. (2003), Open Innovation: The New Imperative for Creating and Profiting
from Technology, Harvard Business School Press.
- Chesgrough, H. (2003) The Era of Open Innovation, MIT Sloan Management Review, vol.44,
nr.3, p.35-41.
- Fisk, S. (2008) Geniu n Marketing, Meteor Press, Bucureti, p. 47-50.
- Gassmann, O. (2006) Deschiderea procesului de inovaie: ctre o ordine de zi, R&D
Management, vol.36, no.3, p. 223-226.
- Lctu, S: Inovarea, surs a avantajului competitiv, available online at http://mastermrufeaa.
ucoz.com/s6/Lacatus_Sebastian_EAA.pdf.
- Rodriguez, J.L., Lorenzo, A.G. (2010) Open Innovation: organizational challenges of a new
paradigm of innovation management, Analele Univeristii Constantin Brncui din Trgu
Jiu, seria Economie, nr.3.
- Rosen, D.E., Schroeder, J.E ., Puriton, E.F. (1998) Marketing High Tech Products: Lessons in
Customer Focus from the Marketplace, Academy of Marketing Science Review, vol.6.
- Sahadev, S., Jayachandran, S. (2004) Managing the distribution channels for high-technology
products, European Journal of Marketing, vol. 38, no.1/2, 2004, p.121-149.
- Zabala Martnez, J. (2009) El desafo de la innovacin abierta, available online at
www.elpais.com.
221

- http://inoventiv.svasta-icg.ro/wp-content/uploads/2011/11/Top-100-Global-Innovators.pdf
- http://www.openinnovation.eu/openinnovatie.php.
- www.oecd.org

222

CULTURAL HERITAGE, TRAVEL AND TOURISM, AND SUSTAINABLE
DEVELOPMENT: AN EXPLORATORY ASSESSMENT OF THEIR CURRENT
RELATIONSHIPS

DUGULAN Diana,
Assistant Professor Ph.D. student, Faculty of Marketing, Academy of Economic Studies in Bucharest,
Romania, diana.dugulan@yahoo.com

POPESCU I oana Cecilia,
Associate Professor Ph.D., Faculty of Marketing, Academy of Economic Studies in Bucharest, Romania,
ioanaceciliapopescu@yahoo.com

VEGHE Clin,
Associate professor Ph.D., Faculty of Marketing, Academy of Economic Studies in Bucharest, Romania, c_
veghes@yahoo.com

Abstract: The cultural heritage represents an important asset that can be engaged and capitalized in
order to support the sustainable development of the local communities. Turning to the best account of the
cultural heritage represents also an important driver for the sustainable development of the travel and tourism
industry.
The paper explores the connections between the cultural heritage, travel and tourism industry and the
sustainable development based on the related indicators expressing the extent of the cultural heritage, the
development of the travel and tourism industry, and the level of sustainable development in ten member
countries of the European Union.

Key words: cultural heritage, travel and tourism, sustainable development, European Union


1. Introduction
The cultural heritage, is defined by UNESCO as an assembly of monuments (including
architectural works, works of monumental sculpture and painting, elements or structures of an
architectural nature, inscriptions, cave dwellings and combination of features), groups of buildings
(groups of separate or connected buildings which, because of their architecture, their homogeneity or
their place in the landscape, are of outstanding universal value from the point of view of history, art or
science), and sites (works of man or the combined works of nature and man, and areas including
archaeological sites) which are of outstanding universal value from the historical, aesthetic,
ethnological or anthropological point of view (UNESCO, 1972).
Together with other forms of capital physical, natural, economic, human, social, and
organizational, the cultural heritage represents one of the major resources that can be employed in
order to support the sustainable development (Svendsen and Srensen, 2007). The capitalization of
the cultural heritage represents an important driver for development, including here the tourism
activities in a specific area: when properly managed, it can enhance the livability of their surrounding
areas and sustain productivity in a changing global environment (Pereira Roders & van Oers, 2011).
Culture, cultural heritage and development have been making an incalculable contribution toward
improving human livelihoods and well-being in lasting and sustainable ways (Bandarin et al., 2011).
According to the Leask and Rihova (2010), the heritage contribution in tourism development,
based on the capitalization of the available cultural resources, can be enhanced through (1)
implementing strategies of sustainable growth and effective diversification of the local economy, (2)
developing heritage tourism policies and products that meet the needs of community, policy-makers
and tourists, (3) improving the stakeholder communication and participation in the creation of the
authentic and individual visitor experiences, and (4) connecting the sustainable tourism development
with the heritage conservation, community integration, and stakeholders.
The most frequently quoted definition given to the sustainable development is that
223

provided by the United Nations World Commission on Environment and Development in the
Brundtland Report (1987), stating that it refers to the development meeting the needs of the present
without compromising the ability of future generations to meet their own needs. The European
Union (2010) views the sustainable development standing for meeting the needs of present
generations without jeopardizing the ability of futures generations to meet their own needs,
providing a better quality of life for everyone, now and for generations to come.
At the intersection of the travel and tourism industry and the sustainable development stands
the sustainable tourism, which, according to UNESCO should: (1) make optimal use of environmental
resources that constitute a key element in tourism development, maintaining essential ecological
processes and helping to conserve natural heritage and biodiversity; (2) respect the socio-cultural
authenticity of host communities, conserve their built and living cultural heritage and traditional
values, and contribute to inter-cultural understanding and tolerance; and (3) ensure viable, long-term
economic operations, providing socio-economic benefits to all stakeholders that are fairly distributed,
including stable employment and income-earning opportunities and social services to host
communities, and contributing to poverty alleviation (UNWTO sustainable tourism development
conceptual definition in Pomering et al., 2011).

2. Methodological Notes
In this context, the assessment of the relationships between the cultural heritage, travel and
tourism industry, and the sustainable development aims to provide answers to the following questions,
that can be seen in this context as research objectives: (1) How significant is the relationship between
the cultural heritage and the development of the travel and tourism industry? (2) Is there a noteworthy
connection between the cultural heritage and the sustainable development? (3) What is the
contribution of the travel and tourism industry to the sustainable development?
The research hypotheses associated to these objectives state that: (1) there must be a
significant relationship between the cultural heritage and the development of the travel and tourism
industry; (2) the contribution of the cultural heritage (mainly through its capitalization) to the
sustainable development is rather moderate; and (3) the contribution of the travel and tourism industry
to the sustainable development is rather moderate.
The exploration of the connections between the cultural heritage, travel and tourism industry
and the sustainable development has been conducted at the level of ten member countries of the
European Union selected taking into consideration the volumes of the international tourist arrivals and
international tourism receipts. The selection aimed to identify and build a group of observation units
representing European countries holding top positions as tourist destinations in terms of the
international arrivals and tourism receipts. The availability of the statistical data was a supplementary
criterion of selection that accompanied the previous mentioned ones. The employment of these
criteria led to the following list of countries: France, Italy, United Kingdom, Austria, Greece,
Netherlands, Denmark, Belgium, Portugal, and Sweden. Unfortunately, the lack of data regarding the
cultural heritage have excluded from the list major tourist destinations such as Spain and Germany,
or tourist destinations from the Central and Eastern Europe such as Poland and Hungary. Still, the
quality of the research sample including the selected countries can be assessed, in terms of the
representativeness, as good: together, at the level of the year 2010, these countries attracted 224.6
millions of international tourists (representing 61.9 % of the total international tourists of the
European Union, respectively 47.1 % of the total international tourists in Europe) and accounted for
196.9 billions of US$ in international tourism receipts (representing 59.3 % of the total international
receipts of the European Union, respectively 48.5 % of the total international receipts in Europe).
The selection of the statistical indicators expressing the extent of the cultural heritage, the
development of the travel and tourism industry, and the level of sustainable development in the
European Unions countries has provided the following results:
- the cultural heritage: the number of the cultural sites on the UNESCO World Heritage List
and the total number of admissions in the five most visited museums in the selected countries.
The identification and selection of the indicators related to the cultural heritage represented a
relatively difficult to accomplish task: the limited number of these indicators (cultural
statistics continuing to be an under construction field of the EU statistics) and the lack of
those directly related to the content of the cultural heritage were the main causes in this
224

respect;
- the travel and tourism industry: the international tourist arrivals, the international tourism
receipts, the contribution of the travel and tourism industry, respectively the travel and
tourism economy, to the formation of GDP, respectively in generating employment;
- the sustainable development: GDP per capita, the share of GDP that is used for gross
investment by the government, business, and household sectors, the energy intensity of the
economy, and the employment rate of the population of 20-64 years old. The European Union
employs a system of more than 100 sustainable development indicators to provide an overall
picture of progresses achieved towards sustainable development in terms of the objectives and
targets defined in the European Union Sustainable Development Strategy. The indicators are
organized in ten themes: socio-economic development, sustainable consumption and
production, social inclusion, demographic changes, public health, climate change and energy,
sustainable transport, natural resources, global partnership, and good governance. The
selection of the appropriate indicators of sustainable development represented a challenge in
the context of this research as an important number of them refer to the aspects that are, at
least apparently, less connected to the cultural heritage and the travel and tourism industry.
For the purpose of this study, only the above-mentioned indicators, related to the socio-
economic development theme, have been selected.
Pearson correlation coefficients have been calculated in order to assess the relationships
between the cultural heritage and the travel and tourism industry, the cultural heritage and the
sustainable development, respectively the travel and tourism industry and the sustainable
development.

3. Main Findings
Values of the considered indicators related to the cultural heritage extent, travel and tourism
development, and the state of the sustainable development in the selected countries are presented in
the table below. They suggest the diversity of the countries included in the research sample, the
existing differences illustrating, in fact the dissimilarity of these countries profiles as tourist
destinations.

Table 1: Values of the cultural heritage, travel and tourism, and sustainable development considered
indicators for the selected countries in 2010
Countries
IT
A
IT
R
T&T
I
GDP
T&T
I
Emp
T&T
E
GDP
T&T
E
Emp
GDP
/ cap
Inv
Energ
Int
Em
p
Rate
WH
S
V5
M
France
76.
8
46.
3 107.6 1095 284.6 2847
2740
0
19.3
1
166.6
6 69.1 32 22.1
Italy
43.
6
38.
8 89.8 1018 217.1 2478
2350
0
19.4
5
143.7
3 61.1 42 10.2
Great Britain
28.
1
30.
4 89.0 1391 231.2 3144
3020
0
14.9
1
115.4
7 73.6 24 23.8
Austria
22.
0
18.
7 17.2 187 52.1 559
3140
0
20.4
9
143.2
6 74.9 8 3.1
Greece
15.
0
12.
7 22.8 418 50.2 785
1730
0
16.6
2
165.4
7 64.0 17 2.6
Netherland
s
10.
9
13.
1 23.2 211 62.1 549
3320
0
18.2
2
181.9
6 76.8 8 4.4
Denmark 9.1 5.5 9.8 84 26.0 227
3720
0
17.2
3
104.0
5 75.8 3 1.9
Belgium 7.2
10.
3 12.4 115 42.2 393
2950
0
20.2
0
212.6
1 67.6 11 1.8
Portugal 6.9
10.
1 14.4 377 35.8 943
1480
0
18.9
7
179.6
6 70.5 12 2.4
Sweden 4.9
11.
1 13.3 117 38.9 335
3430
0
17.8
1
156.6
7 78.7 13 3.9
Notes: ITA International Tourist Arrivals (2010; millions); ITR International Tourism Receipts
(2010; US$ billions); T&TI GDP Travel & Tourism Industry contribution to the formation of GDP (2010;
225

US$ billions); T&TI Emp Travel & Tourism Industry contribution in terms of employment (2010; thousand
jobs); T&TE GDP Travel & Tourism Economy contribution to the formation of GDP (2010; US$ billions);
T&TE Emp Travel & Tourism Economy contribution in terms of employment (2010; thousand jobs); GDP /
cap Gross Domestic Product per capita (2010; /capita); Inv Share of the total investments of the
government, businesses, and households in the GDP (2010; % in GDP); EnergInt - |Energy Intensity of the
Economy (2010; in Kilograms Oil Equivalent / thousand ); EmpRate Employment Rate of the population
aged 20-64 (%); WHS Number of the cultural sites on the UNESCO World Heritage List (2010); V5M Total
number of the Visitors of the top 5 Museums (2010; millions).

The assessment of the relationships between the extent of the cultural heritage and the
development of the travel and tourism industry reveal the strong connections between the specific
research variables: for all of these variables, the bivariate correlations proved to be significant at 0.05
or even 0.01 level of significance (2-tailed), as the results presented in the Table 2 reveal.
Thus, the number of the cultural heritage sites included on the UNESCO World Heritage List
correlated significantly with the international tourism receipts and the international arrivals, which
suggests that, on the one hand, these sites represent important attractions (and motivators) for the
tourists visiting different destinations, and, on the other hand, they contribute to the revenues
generated by the travel and tourism industry.
The correlation between the number of the cultural heritage sites and the total number of the
visitors of the five most visited museums, although significant (at a 0.05 level, 2-tailed), suggest that,
although the most of the tourists visit both cultural sites and museums, there is a segment of cultural
tourists that do not associate these objects of their holidays. More, the comparative analysis of the
correlations between the number of the cultural heritage sites, respectively the number of visitors of
the five most visited museums, and the travel and tourism related indicators reveals that there appears
to be a stronger connection between visiting museums (than cultural heritage sites) and the overall
performances of the industry.

Table 2: Correlations of the cultural heritage and the travel and tourism indicators

The appropriate capitalization of the cultural heritage seems to determine improvements of
the performances of the travel and tourism industry, in terms of the international arrivals and receipts,
and supports the overall contribution of the travel and tourism industry to the formation of the GDP
and to the creation and maintaining of the direct and indirect workplaces.
The analysis of the associations between the extent of the cultural heritage and the selected
indicators of sustainable development corresponding to the socio-economic theme reveals the lack of
Correlati ons
1 .670* .776** .892** .888** .830** .863** .847**
. .034 .008 .001 .001 .003 .001 .002
10 10 10 10 10 10 10 10
.670* 1 .771** .840** .918** .924** .934** .935**
.034 . .009 .002 .000 .000 .000 .000
10 10 10 10 10 10 10 10
.776** .771** 1 .948** .891** .741* .899** .796**
.008 .009 . .000 .001 .014 .000 .006
10 10 10 10 10 10 10 10
.892** .840** .948** 1 .966** .865** .967** .906**
.001 .002 .000 . .000 .001 .000 .000
10 10 10 10 10 10 10 10
.888** .918** .891** .966** 1 .948** .997** .970**
.001 .000 .001 .000 . .000 .000 .000
10 10 10 10 10 10 10 10
.830** .924** .741* .865** .948** 1 .939** .993**
.003 .000 .014 .001 .000 . .000 .000
10 10 10 10 10 10 10 10
.863** .934** .899** .967** .997** .939** 1 .966**
.001 .000 .000 .000 .000 .000 . .000
10 10 10 10 10 10 10 10
.847** .935** .796** .906** .970** .993** .966** 1
.002 .000 .006 .000 .000 .000 .000 .
10 10 10 10 10 10 10 10
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Number of World Heritage
Sites
Number of Visit ors of Top
5 Museums
International Tourist
Arriv als
Receipts
Travel & Tourism Industry
and GDP
and Employment
Travel & Tourism
Economy and GDP
Travel & Tourism
Economy and
Employment
Number of
World
Heritage Sites
Number of
Visitors of Top
5 Museums
International
Tourist
Arriv als
International
Tourist
Receipts
Travel &
Tourism
Industry
and GDP
Travel &
Tourism
Industry and
Employment
Travel &
Tourism
Economy
and GDP
Travel &
Tourism
Economy and
Employment
Correlation is signif icant at the 0.05 level (2-tailed). *.
Correlation is signif icant at the 0.01 level (2-tailed). **.
226

connections: only one bivariate correlation, between the number of the cultural sites on the UNESCO
World Heritage List and the employment rate of the population aged 20-64, proved to be significant
(at 0.05 level, 2-tailed). No correlation of the number of visitors of the five most visited museums and
the sustainable indicators proved to be significant.

Table 3: Correlations of the cultural heritage and the sustainable development indicators

The single correlation that proved to be significant has registered a negative value of the
Pearsons coefficient, according to which a higher number of the cultural sites inscribed on the
UNESCO World Heritage List appears to be associated to a lower employment of the population aged
20-64. Also, the higher number of the cultural heritage sites seems to associate, even if in a less
significant manner, to a lower GDP per capita. The associations reveal, although at a very low level of
significance, relationships determining a favorable impact over the investments made by the
government, businesses, and household, respectively the energy intensity of the economy.
Visiting museums does not appear as a cultural activity producing significant effects in terms
of the sustainable development. An increased number of visitors can be associated, in a positive
manner, to a very modest increase of the GDP per capita and to a visible decrease of the energy
intensity of the economy, and in a negative manner, to a decrease of the employment rate of the
population aged 20-64 and of the investments made by the government, business and households.
Correlati ons
1 .670* -.351 .018 -.080 -.664*
. .034 .320 .961 .825 .036
10 10 10 10 10 10
.670* 1 .039 -.341 -.313 -.105
.034 . .915 .334 .379 .774
10 10 10 10 10 10
-.351 .039 1 -.063 -.355 .697*
.320 .915 . .863 .313 .025
10 10 10 10 10 10
.018 -.341 -.063 1 .533 -.201
.961 .334 .863 . .112 .578
10 10 10 10 10 10
-.080 -.313 -.355 .533 1 -.252
.825 .379 .313 .112 . .483
10 10 10 10 10 10
-.664* -.105 .697* -.201 -.252 1
.036 .774 .025 .578 .483 .
10 10 10 10 10 10
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Number of World
Heritage Sites
Number of Visit ors of
Top 5 Museums
GDP per capita
Share of Total
Investment s in GDP
Energy Intensity of the
Economy
Employment rate (20-64)
Number of
World
Heritage Sites
Number of
Visitors of Top
5 Museums
GDP per
capita
Share of Total
Investment s
in GDP
Energy
Intensity of
the Economy
Employment
rate (20-64)
Correlation is signif icant at the 0.05 level (2-tailed).
*.
227

The capitalization of the cultural heritage appears to have a rather modest contribution to the
sustainable development. Although the literature approaching the topics of cultural heritage and
sustainable development has identified ideas, examples, or even good practices, mainly at the level of
the local communities, of how an appropriate capitalization could improve the development of these
communities, the exploratory analysis of the associations between the related indicators denotes that
connections between the cultural heritage and the sustainable development are rather poor.
The analysis of the associations of the travel and tourism and the sustainable development
related indicators reveals that there is not at least a single significant correlation between them.
Apparently, the travel and tourism produces performances that do not contribute or have a limited
contribution to the sustainable development of the economies of the selected countries.

Table 4: Correlations of the travel and tourism and the sustainable development indicators

The performances of the travel and tourism industry generate the most favorable effects,
although not at a significant level, on the energy intensity of the economy, as the increases in these
performances appear to be associated to the lower levels of the intensity. Also, increases in the
international tourist arrivals and the international tourism receipts seem to associate to the increases in
the investments made by the governments, businesses and households. Instead, the performances of
the travel and tourism industry seem to produce rather unfavorable effects over the GDP per capita
and the employment rate of the population aged 20-64, the increases in these performances appearing
to be associated to the decreases of both the indicators.

4. Conclusions and limits of the research
The exploratory assessment of the relationships between the cultural heritage extent, the
travel and tourism development, and the state of the sustainable development has been conducted at a
level of sample including countries with significantly different profiles as tourist destinations. The
indicators used in the assessment, although relevant, are obviously not sufficient to allow drawing
consistent conclusions about the relationships between the cultural heritage and travel and tourism,
cultural heritage and sustainable development, and travel and tourism and sustainable development.
Still, the measured correlations of the related indicators have led to the following conclusions:
- there are significant relationships between the cultural heritage and the travel and tourism
industry. The appropriate capitalization of the cultural heritage may determine improvements
of the performances of the travel and tourism industry and supports the overall contribution of
the industry in terms of the GDP formation and of the employment;
Correlations
1 .948** .891** .741* .899** .796** -.100 .159 -.126 -.387
. .000 .001 .014 .000 .006 .784 .660 .728 .269
10 10 10 10 10 10 10 10 10 10
.948** 1 .966** .865** .967** .906** -.125 .082 -.158 -.420
.000 . .000 .001 .000 .000 .730 .823 .662 .227
10 10 10 10 10 10 10 10 10 10
.891** .966** 1 .948** .997** .970** -.113 -.139 -.249 -.398
.001 .000 . .000 .000 .000 .757 .701 .488 .254
10 10 10 10 10 10 10 10 10 10
.741* .865** .948** 1 .939** .993** -.241 -.338 -.314 -.393
.014 .001 .000 . .000 .000 .503 .340 .376 .261
10 10 10 10 10 10 10 10 10 10
.899** .967** .997** .939** 1 .966** -.074 -.121 -.233 -.357
.000 .000 .000 .000 . .000 .840 .739 .517 .311
10 10 10 10 10 10 10 10 10 10
.796** .906** .970** .993** .966** 1 -.212 -.247 -.280 -.384
.006 .000 .000 .000 .000 . .556 .491 .433 .273
10 10 10 10 10 10 10 10 10 10
-.100 -.125 -.113 -.241 -.074 -.212 1 -.063 -.355 .697*
.784 .730 .757 .503 .840 .556 . .863 .313 .025
10 10 10 10 10 10 10 10 10 10
.159 .082 -.139 -.338 -.121 -.247 -.063 1 .533 -.201
.660 .823 .701 .340 .739 .491 .863 . .112 .578
10 10 10 10 10 10 10 10 10 10
-.126 -.158 -.249 -.314 -.233 -.280 -.355 .533 1 -.252
.728 .662 .488 .376 .517 .433 .313 .112 . .483
10 10 10 10 10 10 10 10 10 10
-.387 -.420 -.398 -.393 -.357 -.384 .697* -.201 -.252 1
.269 .227 .254 .261 .311 .273 .025 .578 .483 .
10 10 10 10 10 10 10 10 10 10
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Arrivals
Receipts
and GDP
and Employment
Travel & Tourism
Economy and GDP
Travel & Tourism
Economy and
Employment
GDP per capita
Share of Total
Investments in GDP
Energy Intensity of the
Economy
Employment rate (20-64)
International
Tourist
Arrivals
International
Tourist
Receipts
Travel &
Tourism
Industry
and GDP
Travel &
Tourism
Industry and
Employment
Travel &
Tourism
Economy
and GDP
Travel &
Tourism
Economy and
Employment
GDP per
capita
Share of Total
Investments
in GDP
Energy
Intensity of
the Economy
Employment
rate (20-64)
Correlation is significant at the 0.01 level (2-tailed). **.
Correlation is significant at the 0.05 level (2-tailed). *.
228

- the relationships between the cultural heritage and the sustainable development are rather
poor, which suggests that, on the one hand, the cultural heritage is an asset less turned to the
best account, and, on the other hand, that capitalization of the cultural heritage, where
conducted, generates a rather modest contribution to the sustainable development;
- finally, the relationships between the travel and tourism and the sustainable development are
also poor as, apparently, the travel and tourism produces performances that do not contribute
or have a limited contribution to the sustainable development of the economies of the selected
countries.
These results should be considered in the context of the two obvious limits of this exploratory
research. The first refers to the limited number of variables considered in the assessment of the
relationships between the cultural heritage and the travel and tourism industry, the cultural heritage
and the sustainable development, respectively the travel and tourism industry and the sustainable
development. Obviously, a set of twelve variables, although relevant for the scope of the research,
could not provide a solid basis for the analysis of these relationships. Further improvements should be
made consisting in the increase of the number of research variables by including more indicators
regarding the extent of the cultural heritage, the level of development of the travel and tourism, and
the state of the sustainable development.
The second refers to the limited number of observation units considered in the assessment of
the relationships between the cultural heritage and the travel and tourism industry, the cultural
heritage and the sustainable development, respectively the travel and tourism industry and the
sustainable development. The list of the European Unions member countries has been established
only after the assessment of the availability of the data for the selected indicators. Unfortunately,
some European countries representing significant tourist destinations such as Spain and Germany
were not included in this analysis as there were not available data for the indicator regarding the total
number of visitors of the five most visited museums. Further improvements in this respect depend
significantly on the existence of the statistical data for the considered indicators for the countries to be
involved in the research process.

5. References
- Bandarin, F.; Hosagrahar, J.; Sailer Albernaz, F. (2011) Why development needs culture.
Journal of Cultural Heritage Management and Sustainable Development, 1 (1), p. 15-25.
- Blanke, J.; Chiesa, T. (2011) The Travel & Tourism Competitiveness Report 2011. Beyond
The Downturm. World Economic Forum: Geneva, Switzerland. Available from
http://www3.weforum.org/docs/WEF_TravelTourismCompetitiveness_Report_2011.pdf.
- European Commission (2010) Sustainable development. Available from
http://ec.europa.eu/environment/eussd/.
- Leask, A.; Rihova, I. (2010) The role of heritage tourism in the Shetland Islands.
International Journal of Culture, Tourism and Hospitality Research 4(2), p. 118-129.
- Pereira Roders, A.; van Oers, R. (2011) World Heritage cities management. Facilities, 29
(7/8), p. 276-285.
- Pomering, A.; Noble, G.; Johnson, L. W. (2011). Conceptualising a contemporary marketing
mix for sustainable tourism. Journal of Sustainable Tourism 19 (8), p. 953-969.
- Svendsen, G.L.H.; Srensen, J.F.L. (2007) Theres more to the picture than meets the eye:
measuring tangible and intangible capital in two marginal communities in rural Denmark.
Journal of Rural Studies, 23, p. 453-471.
- UNESCO (1972) Convention concerning the protection of the world cultural and natural
heritage. Available from http://whc.unesco.org/en/conventiontext.
- World Commission on Environment and Development (1987) Our Common Future, Chapter
2: Towards Sustainable Development. Avaialable from http://www.un-documents.net/ocf-
02.htm.
- * * * (2011) Cultural Statistics. Eurostat Pocekbook. Eurostat Statistical Books:
Luxembourg. Available from http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-32-
10-374/EN/KS-32-10-374-EN.PDF.
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EU Sustainable Development Strategy. Eurostat Statistical Books: Luxembourg. Available
from http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-31-11-224/EN/KS-31-11-224-
EN.PDF.

230

KNOWING EMPLOYEES PERCEPTIONS DETERMINANT IN CREATING
A SUCCESSFUL ORGANIZATIONAL CULTURE

DUMI TRESCU Luigi
Professor Ph.D., Lucian Blaga University of Sibiu, Sibiu, Romania, dumitresculuigi@yahoo.com

RDULESCU Violeta
Lecturer Ph.D., Academy of Economic Studies, Bucharest, Romania, vio.radulescu@yahoo.com

PENTESCU Alma
Ph.D. student, Academy of Economic Studies, Bucharest, Romania, alma.pentescu@yahoo.de

Abstract: The basis of internal marketing is treating employees as customers. The employees
satisfaction level is linked to the companys offer, being also bound to the way the employees perceive the offer
as reflected by the organizational culture. Besides the existing structures and systems within the company, the
organizational culture has a fundamental role in the implementation of employee orientation. In order to be
successful, the organizational culture is constantly subject to a conscious and strictly conducted process of
change.
This paper aims to underline the importance of knowing the employees perceptions in order to build a
culture of success, as well as how to acquire this knowledge. By researching the employees perceptions, the
companies can establish what their current organizational culture is and how to improve their old policies
without losing the spirit of tradition.

Key words: internal marketing, organizational culture, employees feedback, customer orientation

JEL classification: M31, G21

1. Introduction
Practicing an internal marketing which assures a motivating organizational climate, reflected
in a successful organizational culture, is the companies unique option (Dumitrescu, Apostu, 2009, p.
333).
The organizational culture represents all the strategies, techniques and means by which the
management wants to inform the employees about the rules, boundaries and values that must be
implemented within the company. Thus, the organizational culture is the result of a unitary process
implying all employees and concerning the internal aspects of the company (Schneider, 1988, pp.
352-353).
In order to achieve an organizational culture of success, the top management of the company
has to be aware of this concept and of all the necessary steps of the process of change, as well as how
to manage effectively the employees perceptions regarding the existing organizational climate. It is
possible that the employees perception on the organizational climate to differ from the reality.
Nevertheless, even if so, for the employee him/herself what he/she perceives represents the truth.

2. Organizational culture key of the companys success on the market
The organizational culture does not only mean leadership and power, it also represents a
determinant factor for the quality of the employees work, having an important influence on it
(Dygert, Jacobs, 2006, p. 21).
It is obvious that a successful organizational culture is the result of the way the old practices
are improved, without losing the specific traditions within the company (rituals, symbols, stories
associated with some types of employees, etc).
Regarding the content of the organizational culture, the definition proposed by Bruhn is
relevant, according to which the organizational culture represents the assembly of common values
231

and rules and their representation, as well as thought and behaviour models which influence the
decisions, activities and behaviour of the employees (Bruhn, 2001, p. 276).
Not only the research, but also the day-to-day activities of the successful companies show that
in order to improve the results and quality of work, as well as to create a competitive work
environment, the analysis of the organizational culture within the company is necessary. Even if
specialists sustain it, the full understanding of the role the organizational culture has within the
success of the company is more difficult, because as Dygert (2006) says the culture of an
organization is like the climate: even though it is everywhere it usually passes unnoticed until the bad
weather catches everyones attention.
The main components of a successful organizational culture are:
a) mutual trust among the employees;
b) personal integrity proved by the employees;
c) the need that all employees engage to the principle of shared fate.
Based on the The Model of organizational and process transformations proposed by Dr. Johnson
Edosomwan (Edosomwan, 1995), the desired organisational changes are being influenced by four
systems, the organisational culture being part of the social system (fig. 1).

Figure 1: Edosomwan Model of organizational and process transformations

A short analysis of the Edosomwan Model highlights the fact that management leads culture
and culture leads behaviour.
Building an organizational culture of success depends on the way the company succeeds to
coordinate the following vital elements:
a) change;
b) competition;
c) cooperation;
d) control.
From this perspective, a culture of success is a means of cooperation through which
everybody is interested in the success of the others (Dygert, Jacobs, 2006, p. 37). A culture of success
is mainly characterised by a trust based communication.

MANAGERIAL
SYSTEM
- Policies
- Leadership
- Procedures
- Mission & Vision
- Values
- Systems & Services
SOCIAL SYSTEM
- Organizational
culture
- Structure
- Teams
- Values &
Creativity
- Partnership
TECHNICAL SYSTEM
- Work plans &
Products
- Tools &
Techniques
- Work processes
- Job description
-
BEHAVIOURAL
SYSTEM
- Habits
- Attitudes
- Perceptions
- Behaviour types
Desired organizational changes
(changing and restructuring plans,
approaches, strategic mechanisms,
evaluation of results and procedures)
232

3. Studying the employees perceptions
The aware and guided (with certain limitations) process of changing the organizational culture
contains following steps:
a) identifying the current culture of the company;
b) modifying the existing culture;
c) controlling the changes within the organizational culture.
Identifying the current organizational culture is the first step in the changing process of the
companys culture. The aim of this step is to see what type of culture the company is currently
adopting: clan, adhocracy, hierarchy, market (fig. 2). The information needed in this process is
obtained from employee feedback. This feedback reflects the employees perceptions toward different
cultural aspects, specific to the organizational climate in which they work.

Figure 2: The relation between organizational culture and customer orientation

Source: Bruhn, M. (2001) Customer Orientation Base for a Successful Business, Bucharest: Economica
Publishing, p. 279

The employees feedback enables to constantly incorporate their opinion in the organizational
culture, thereby it triggers and leads to changes and improvement. Being aware of the employees
perceptions, the company can focus its efforts on what is really important for them and for the
business.
The employees perceptions regarding the different cultural aspects of the company are
influenced by following factors:
- employees trust in the company the employees credibility is influenced by the
manner in which the promises, made at corporative as well as individual level, are
being kept;
- expedience is determined by the companys availability to help employees satisfy
their needs;
- certainty the extent to which the employees are being guaranteed that the
information they receive is true;
- empathy whether managers see things from the employees perspective.

Organic processes (emphasis on flexibility, spontaneity, individuality)
Mechanic processes (emphasis on control, order & stability)
Clan Culture
Customer
Orientatio
n
- Sense of belonging
- Managers as mentors
- Loyalty & tradition
- Attachment to the
company
- Employee potential
development
Adhocracy Culture
Hierarchy Culture Market Culture
- Dynamism & initiative
- Innovative managers
- Innovation &
development
- Business growth
- Drawing new resources
- Standardization &
formality
- Coordinating managers
- Rules & procedures
- Constancy & stability
- Simplified processes
- Orientation towards
performance &
competition
- Managers as governors
- Tasks & objectives
- Competitive advantages
- Success
External point
of view
(emphasis of
competition,
differentiation)
Internal point
of view
(establishment
of simplified
integrated
processes)
Reduced
Tendency
High
Tendency
Low
Tendency Middle
Tendency
233

The fusion of these factors determines the employees perception, and for them their
perception is reality. In this context, the company must coordinate these factors in order to obtain the
desired perception.

4. Using marketing research in order to study the employees perceptions
Alongside other methods, marketing research enables the obtaining of employee feedback
towards the organizational climate they work in.
A valid example is the marketing research conducted on 400 employees of the most important
commercial banks of Sibiu. One of the objectives of this direct, selective marketing research, which
took place between 20 January - 20 March, is to get to know the employees perceptions toward
certain cultural aspects, like beliefs, values, behavioural rules, roles etc.
The research was conducted according to the marketing research process content (Balaure,
2002, p. 132). For the informations preparation and processing we used IBM SPSS Statistics.
The results of the research are: of 400 respondents (representing 100%), 3% strongly agree
with the statement Within the department I work in, I can criticize without any disadvantage, 19%
agree, 41% agree only to some extent, 25% disagree and 12% strongly disagree with this statement
(fig. 3).

Figure 3: Respondents opinion regarding the possibility to criticize without any disadvantage

Moreover, 79% of the respondents express their agreement towards the promptitude of decision
making within the company, while 21% express their disagreement about this matter (fig. 4).

Figure 4: Respondents opinion regarding the promptitude of decision making

Regarding the relationship with the manager, of the 400 respondents (representing 100%), 32%
strongly agree about the tasks clarity, 46% agree, 18% agree only to some extent, 2% disagree and 2%
strongly disagree (fig. 5).

234

Figure 5: Respondents opinion regarding the tasks clarity

Furthermore, 28% of the respondents strongly agree with the statement Im satisfied with the
managers reaction to feedback, 37% agree, 25% agree only to some extent, 7 disagree and 3%
strongly disagree with the above mentioned statement (fig. 6).

Figure 6: Respondents opinion regarding with the managers reaction to feedback

Of the 400 respondents (representing 100%), 43% strongly agree about the accessibility to the
manager, 32% agree, 17% agree only to some extent, 5% disagree and 3% strongly disagree (fig. 7).

235

Figure 7: Respondents opinion regarding the accessibility to the manager

Regarding the respect and appreciation received from the manager, 95% of the respondents express
their agreement, while 5% express their disagreement about this matter (fig. 8).

Figure 8: Respondents opinion regarding the respect and appreciation received from the manager

Furthermore, 12% of the respondents strongly agree about their participation in the decision making
process, 34% agree, 33% agree only to some extent, 17% disagree and 4% strongly disagree (fig. 9).

Figure 9: Respondents opinion regarding their participation in the decision making

Moreover, 99% of the respondents consider knowing very precise their tasks and the objectives (fig.
10).

236

Figure 10: Respondents opinion regarding their tasks and the objectives

As for the statement Im sufficiently trained for the work that I do, 31% of the respondents strongly
agree with this statement, 54% agree, 13% agree only to some extent and 2% disagree (fig. 11).

Figure 11: Respondents opinion regarding their proper qualification for the job

47% of the respondents strongly agree with the statement Women and men have equal chances of
development within the company, 34% agree, 11% agree only to some extent, 5% disagree and 3%
strongly disagree with the above mentioned statement (fig. 12).

Figure 12: Respondents opinion regarding the gender discrimination

In terms of the degree of satisfaction with the work conditions, of the 400 respondents (representing
100%), 97% are satisfied with the work conditions within the company, while 3% are unsatisfied (fig
13).

237

Figure 13: Respondents opinion regarding their degree of satisfaction with the work conditions

Moreover, 81% of the respondents are satisfied with the career advancement possibilities (fig. 14).

Figure 14: Respondents opinion regarding their degree of satisfaction with the advancement possibilities

Of the 400 respondents (representing 100%), 72% are satisfied with salary, while 28% are unsatisfied
(fig. 15).

Figure 15: Respondents opinion regarding their degree of satisfaction with the salary

In terms of the degree of satisfaction with peer collaboration, 99% of the respondents are satisfied
with their colleagues (fig. 16).

238

Figure 16: Respondents opinion regarding their degree of satisfaction with the peer collaboration

As for the degree of satisfaction with the manager, just 5% of the respondents are unsatisfied (fig. 17).

Figure 17: Respondents opinion regarding their degree of satisfaction with the manager

Of the 400 respondents (representing 100%), 88% are satisfied with the top management, while 12%
of the respondents are unsatisfied (fig. 18).

Figure 18: Respondents opinion regarding their degree of satisfaction with the top management

Furthermore, 86% of the respondents are satisfied the communication and information within the
company (fig. 19).

239

Figure 19: Respondents opinion regarding their degree of satisfaction with the internal communication

In conclusion, most employees work within a commercial bank for 1 to 4 years (51% of the
respondents), are aged between 26 and 40 years (59% of the respondents), have a master degree (49%
of the respondents), are female (78% of the respondents) and come from urban areas (85% of the
respondents).

5. Conclusions
The conducted research revealed that, in terms of employees perceptions, the commercial
banks of Sibiu have a hierarchy organizational culture, being formal and highly structured
organizations with well-established procedures. Within these organizations, the leader is seen as a
coordinator, organizer or administrator. The bond that provides the cohesion of the commercial banks
consists in the compliance with the established rules and policies, only effective operations being
important.

6. References
- Balaure, V. coord. (2002) Marketing, second edition, Bucharest: Uranus Publishing
- Bruhn, M. (2001) Customer Orientation Base for a Successful Business, Bucharest:
Economica Publishing
- Dumitrescu, L.; Apostu, C. (2009) Marketing and Service Quality. Bucharest: Expert
Publishing
- Dygert, C.B.; Jacobs, R.A., (2006) Management of the Organizational Culture Steps to
Success, Bucharest: Polirom Publishing
- Edosomwan, J. (1995) Edosomwan Organizational an Process Reengineering. , Los Angeles:
Saint Lucie Press
- Schneider, B. (1988) Notes on Climate and Culture Managing Services, Prentice Hall

240

DISCOVERING SOCIAL MEDIA BEHAVIOR PATTERNS IN ORDER TO IMPROVE THE
MARKETING STRATEGY IN THE CURRENT CHAOTIC ENVIRONMENT

DUMI TRESCU Luigi
Professor, Faculty of Economic Sciences, Lucian Blaga University, Sibiu, Romania,
dumitresculuigi@yahoo.com

ICHINDELEAN Mihai
Teaching Assistant, Faculty of Economic Sciences, Lucian Blaga University, Sibiu, Romania,
mihaitichi@yahoo.com

VI NEREAN Simona
Master Student, Faculty of Economic Sciences, Lucian Blaga University, Sibiu, Romania,
simonavinerean@yahoo.com

Abstract: Marketing used to imply paying for your target audiences attention. Nowadays, with the
development of inbound marketing, marketers have to attract customers with valuable and useful information
that will make them eager to buy. The ever-evolving technology has led to an intense focus on inbound
marketing, in its many forms, in order to lower marketing costs and gain a position in the social web. In this
context, this paper explores how companies can benefit from social media marketing by understanding how
much of their time customers spend on social media, and which platforms do they find the most engaging.

Key words: consumer behavior, social media marketing, inbound marketing, online marketing.


1. Introduction
A great marketing challenge is to see the full experience of a customer online, a holistic
perspective. To best tailor marketing strategies marketers need to see the customer in a full context
and fully comprehend his/ her behavior as it happens. After this first step, marketers have to use this
invaluable knowledge in order to trigger the best opportunities for them and hopefully lead to a sale.
Some companies see customers as isolated transactions, but that is not how customer behavior
happens in general, and especially in the online environment where people spend a lot of their time
and ask for interaction and engagement from the companies they intent to buy or are loyal to.
However, to best study the online behavior, the first thing is important to research and study
is how much of their time is spent on these social media sites because this timeframe can provide
insights regarding general involvement in social networking and availability for potential brand
engagement. Therefore, social media can be used for marketing opportunities.

2. Inbound Marketing and Online Behavior
The ever-evolving internet has caused many changes in marketing. Now, there is search
engine marketing (SEM), email marketing, blog marketing, viral marketing, social marketing and so
many more. These, however, can be encompassed under one concept inbound marketing.
In its most basic form, inbound marketing represents the marketing focused on getting found
by prospects and customers. In a more expanded form, inbound marketing has 3 main components:
content creation, search engine optimization and social media.
Needless to say, inbound marketing is the opposite of outbound marketing, or traditional
marketing, where a marketer would push his/her message to poorly targeted audiences without regard
of whether that particular message interrupted their activities. For example, instead of
inconveniencing people with a television ad, marketers can create a viral video or an informative
video that potential customers want to see and hopefully share with their friends leading to electronic-
word-of-mouth (eWOM).
This point of sharing is where inbound marketing gets enhanced through social media
marketing. Social media amplifies the content and the process of any business. When anything related
241

to a particular business gets distributed and discussed on social networking sites, that is when a
company becomes authentic in their messaging and it attracts the right customers and draws their
attention in a valuable way.
Social media is about the shift of power to consumers. More than ever, companies are feeling
the power of social media in developing and reliably delivering on a compelling brand promise
(Barwise, Meehan, 2010).

3. Using Social Media Marketing in a Chaotic Environment
Todays chaotic environment if filled with an uncertainty that covers everything from the
economys trend to the loyalty of customers and brand reputation. Companies are turning to social
media marketing because it represents a smarter and more efficient way of allocating marketing
resources. Basically, a social media marketing strategy is better in this chaotic environment because
of three main aspects:
- Higher marketing ROI The return on investments is considerably higher because it costs far
less to create content and promote it by sharing in on different social platforms.
- Customer interaction Social media marketing is re-writing relationship marketing and
companies should get involved in order to create a long lasting engagement through
interactions, valuable information, promotions, contests and dealing quickly with complaints.
- Customer service Using social media marketing, any complaint or negative comment can be
addressed in a rewarding manner for the person who expressed dissatisfaction. A prompt
response and a solution to the problem can provide an opportunity for connecting, helping. In
the online environment, customers want to see that they matter, they are heard and their
problems are fixed by the company they trusted by purchasing a product or service. If these
conditions are met, the person who first complaint may further develop positive word-of-
mouth
- Targeted visits to company websites Social networks are a very important tool in driving
targeted prospects on company website that can further lead to sales.

4. Researching Online Consumer Behavior Patterns on Social Media
In order to study the online behavior in an appropriate and rewarding manner, the first thing
that is important to research is how much of their time is spent on social media sites. Social login
patterns can represent a marketing multiplier because every business has two main tasks: to acquire
customers and to sell them products and services. Therefore, the purpose of the present research is to
identify the applicability of the corresponding analysis regarding the amount of time spent on social
networking sites and discover which social media websites are most engaging for the respondents.
These two aspects are critically important to study in order to fully comprehend the social media
behavior and develop a successful marketing strategy accordingly. To fulfill the main purpose of this
exploratory research, the following objectives and hypotheses were established:
Objective 1: Determining dimensions that reflect a pattern of the time spent on social media.
Hypothesis 1: At least one dimension is identified.
Objective 2: Determining which social media websites are the ones respondents frequent the
most.
Hypothesis 2: Facebook and YouTube are favored by the respondents.
For this study, a survey was used as research method and a questionnaire as research
instrument. The data was gathered online from individuals, namely from the students of the Lucian
Blaga University of Sibiu, Romania, studying for a Bachelor, Master or Ph.D. Degree.
As a sampling technique, we used the convenience sampling which implies a non-probability
sampling. The sample size was represented by students of the Lucian Blaga University of Sibiu,
Romania in the following proportions: 26.69% (Bachelor degree, first year of study), 18.22%
(Bachelor degree, second year of study), 31.36% (Bachelor degree, third year of study), 7.2% (Master
degree, first year of study),15.25% (Master degree, second year of study), 0.42% (Ph.D. degree, first
year of study) and 0.85% (Ph.D. degree, second year of study).
The sample size was computed by the formula
, where z is a known tabular value

for a specific level of significance, s represents the sample standard deviation of the selection variable
242

(number of students by their year of study and study cycle) and e is the standard error. A confidence
level of 95% was chosen, therefore the z
0.95
is 1.96 and the sample standard deviation is s = 28.65
students by their year of study and study cycle. The chosen sampling standard error is e = 3.66
students by their year of study and study cycle. By applying the formula, we have determined a
sample size of n = 235.51 = 236 students. The sampling process was executed by applying an online
questionnaire to these 236 students.
The data was collected using a primary research, which involved getting original data by
conducting a field research. For this research, the information was collected directly from respondents
via the internet, from September 17 to November 18, 2011. Also, this paper is based on an exploratory
research whose primary objective is to provide insights into and an understanding of marketing
phenomena; therefore a exploratory statistical technique was used for this study, namely
correspondence analysis.
Correspondence analysis is a multidimensional scaling technique used for scaling qualitative
data that scales the rows and columns of the input contingency table in corresponding units so that
each can be displayed in the same low-dimensional space (Malhotra, Birks, 2007). The results of this
analysis provide information that is similar to the results produced by Factor Analysis, only by
exploring the structure of categorical variables as opposed to scale variables. The normalization
method used for this procedure was symmetrical.
Table 1: Summary of correspondence analysis
Dimension
Singular Value Inertia Chi Square Sig.
Proportion of Inertia
Accounted for Cumulative
1
2
3
4
Total
,429 ,184

,702 ,702
,236 ,056 ,213 ,914
,150 ,022 ,086 1,000
,000 ,000 ,000 1,000
,262 62,020 ,000 1,000 1,000

The correspondence analysis solution that represents the relationship between the row and
column variables should imply as few dimensions as possible. In this case, the maximum number of
dimensions should be min(number of rows, number of columns) 1= min(5,5) 1 = 4.
In this first table (Table 1) that characterizes correspondence analysis, the singular values can
be viewed as the correlation between the row and column scores. They are equivalent to the Pearson
correlation coefficient in correlation analysis. For each dimension, the eigenvalue represents the
inertia and thus denotes the measure of the importance of that dimension.
The term inertia in correspondence analysis is used by analogy with the definition in applied
mathematics of "moment of inertia," which stands for the integral of mass times the squared distance
to the centroid (Greenacre, 2007). Inertia is a measure of the variation in the data
As observed, the first dimension displays the highest inertia whereas the second is orthogonal
to the first and displays as much of the remaining inertia, and so on. Also, the inertia of any dimension
can be evaluated by comparing it to the total inertia. For instance, the first dimension shows 70.2%
(0.184/0.262) of the total inertia, while the second dimension displays only 21.3% (0.056/0.262).
In this procedure, the chi-square is not a model fit statistic and is not used in its traditional
way of comparing models with different variables. In this case, chi-square tests the hypothesis
whether or not the
total inertia value is different than zero. In this model, the significance value is smaller than 0.05
which indicates that the inertia of the model is significantly different than zero.
The Correspondence Analysis further explains the dimensions that account for most of the
variation, namely in this model there are two such dimensions, since the third dimension only
accounted for 8.6% of the inertia.

243

Table 2: Overview row points

Table 3: Overview column points

As a statistical method, correspondence analysis decomposes the overall Chi-square statistic
as Inertia =

, leading to the discovery of a smaller number of dimensions so that the
deviations from the expected values can be represented visually. This technique resembles Factor
Analysis because the total variance is decomposed in order to arrive at a lower-dimensional
representation of the variables that allows the reconstruction of most of the variance or covariance of
the matrix of interval or ratio variables.
For correspondence analysis, each row and column point contributes to the inertia observed,
but the points that contribute the most to the inertia of a dimension are the highly important to that
particular dimension. A points contribution to a dimensions inertia is the weighted squared distance
from the projected point to the origin divided by the inertia for the dimension.
For example, always connected students are dominant points in the first dimension,
contributing 82% of the inertia (Table 2). Among the column points (Table 3), the students who spend
more than one hour per session contribute 83.6% of the inertia for the first dimension alone.
In addition to examining the contribution of the points to the inertia per dimension, the final
part of the tables examines how the inertia of a point is spread over the dimensions by computing the
percentage of the point inertia contributed by each dimension. The first two dimensions contribute
virtually all of the inertia for students who are always connected, log in several times a day or
occasionally. However, the inertia for users who log in once a week is not contributed by the first two
dimensions. (Table 2).
Similar results occur for the column points (Table 3). The first two dimensions contribute all
of the inertia for more than an hour spent on social media sites. For every active column point, two
dimensions contribute at least 86.6% of the inertia. The third and forth dimensions contribute very
little to these points, however they do contribute to the timeframe of 5 to 15 minutes log in.
Log in pattern
Mass
Score in
Dimension
Inertia
Contribution
Contribution
1 2
Of Point to Inertia
of Dimension
Of Dimension to Inertia of Point
1 2 1 2 Total
Always connected ,110 -1,790 -,358 ,155 ,822 ,060 ,978 ,022 ,999
Several times a
day
,636 ,118 ,324 ,021 ,020 ,282 ,184 ,767 ,950
Every three days ,157 ,335 -,424 ,016 ,041 ,119 ,465 ,410 ,876
Once a week ,021 ,683 -,073 ,021 ,023 ,000 ,202 ,001 ,203
Occasionally ,076 ,727 -1,292 ,050 ,094 ,538 ,346 ,602 ,947
Active Total 1,000 ,263 1,000 1,000
Time spent per
log in session
Mass
Score in
Dimension
Inertia
Contribution
Contribution
1 2
Of Point to Inertia
of Dimension
Of Dimension to Inertia of Point
1 2 1 2 Total
Less than 5
minutes
,097 ,306 -1,054 ,034 ,021 ,458 ,115 ,751 ,866
5 15 minutes ,356 ,270 ,028 ,023 ,060 ,001 ,490 ,003 ,493
16 29 minutes ,208 ,386 -,199 ,016 ,072 ,035 ,839 ,123 ,962
30 60 minutes ,186 ,150 ,797 ,036 ,010 ,500 ,051 ,786 ,837
More than 61
minutes
,153 -1,535 -,095 ,155 ,836 ,006 ,998 ,002 1
Active Total 1 ,263 1 1
244

The row and column scores are the coordinates of the row and column points in the bi-plot
(Figure 1). The symmetrical normalization helps the interpretation of this figure as the row and
column point that are close together are more similar than the points that are apart.
The second dimension separates the respondents who are always connected, and as a
consequence spend more than one hour per session on social media sites. The first dimension
separates the students with different log in and time spent patterns, while still providing an
examination of the relationship between these two variables, as a result of the symmetrical
normalization. For instance, the respondents who engage in social media several times a day are more
likely to spend from 5 to 15 minutes per session (Figure 1).
However, those who only get online once a week are just as likely to spend from 5 to 15
minutes or from 16 to 29 minutes per session. The students who log in every three days are near the
16 to 29 minutes per session, while the ones who are not frequent users (less than once a week) seem
to stay on such sites less than 5 minutes. Interestingly, the 30 to 60 minutes timeframe spent per
session is not strongly associated with any particular log in behavior.
Giving the results discovered after performing the correspondence analysis, we proceeded to
discover on which social media sites they spend time and which one of these platforms are most
frequently accessed by the respondents of this research. We studied how many respondents just view
social media, and how many actually have accounts on these social media websites. The results are
displayed in the figure below.

Figure 1: Row and column points with symmetrical normalization

245

Figure 2: Social media metrics in terms of viewing and having an account

Facebook is the most popular social network that gathers the highest proportion of
respondents who are viewing it, and also have a personal account. Facebook is the most interactive
social networking platform and allows people to add friends, comment on profiles, join discussions or
chat with friends, or engage in social games such as Farmville or Cityville. These are some of the
reasons 92% of respondents stated that they view and have a Facebook account. Similarly, the
respondents enjoy spending time on Hi5, another social network but with less features that what
Facebook provides.
The other social networking websites studied through this survey question (Friendster, Orkut,
Bebo) are not very popular with the respondents of this research, but they do present an interest to
some extent to the people who are very active online and want to be present on all the social
networking sites. Myspace is social media site that gets views particularly because it promotes music
and artists, but not as many respondents have an account on this platform.
Social media news sites like Reddit and Digg have not registered high scores indicating that
respondents do not interact by voting articles and commenting on them. However, to some extent, the
respondents are engaging in blogging or reading blogs on Wordpress, Blogger and Livejournal. The
microblog social network, Twitter, allows respondents to post tweets in 140 characters, but this
platform is used only on an average of 14% in terms of views and accounts.
Regarding sharing and watching videos online, YouTube is more popular than Vimeo. More
than 80% of the respondents watch videos using Googles platform, but only 50% actually have an
account which allows them to create playlists, share videos and subscribe to different channels.
Similarly, from the social media platforms concerned with sharing photos, respondents favor Flickr
over Zoomr.
As observed from the chart above, Wikipedia is highly used in terms of views and checking
for information, but few respondents (6.30%) have an account and contribute on this free internet
encyclopedia.
The business-related social networking site, LinkedIn, gathers more than 150 million
professionals worldwide, however, the respondents of this research have displayed a small interest in
this website.
The information obtained through the data analysis confirms all the hypotheses developed for
this research, leading to the achievement of all of the proposed objectives.
Facebook
Twitter
Bebo
Friendster
Livejournal
Wordpress
Digg
Zooomr
Vimeo
92.02%
8.82%
13.87%
40.34%
1.26%
8.40%
6.72%
0.42%
1.26%
10.92%
15.13%
7.98%
0.84%
0.84%
0.42%
80.25%
8.82%
55.46%
92.02%
7.56%
14.29%
39.92%
1.68%
2.52%
5.88%
1.68%
1.26%
7.14%
7.98%
2.10%
0.84%
1.68%
0.84%
50.00%
4.20%
6.30%
Viewing social media Account on social media
246

5. Conclusion
Discovering the pattern of customers on social media can lead to a better targeting of how to
approach them with brand messaging on social media.
More specifically, a company would not want to be too pushy with its customers if they fall
into the category of those who engage in social media several times a day and spend 5 to 15 minutes
per online session. There should be engagement in the form of games, interactions, information or
viral aspects, but these activities should be segmented in a way that the customers do not perceive
them as intrusive or too much.
In the online environment the key is to create valuable content and engagement so that
consumers will want to share it with others. Also, due to the magnitude of online marketing and social
media, it is important for companies to find out where there customers spend their time, on which
social networking site and pursue them there with engaging activities and interactivity. A relevant
positioning on social media can make or break a company of any size, because consumers now have
the power to search and choose the brands they want to be in contact with, and give positive or
negative reviews or feedback on different platforms.

6. References
- Barwise, P.; Meehan, S. (2010) The One Thing You Must Get Right When Building a Brand,
Harvard Business Review, December Issue
- Malhotra, N.K.; Birks, D.F. (2007) Marketing Research An Applied Approach, 3rd
European Edition, London: Prentice Hall Financial Times Publishing, p. 703.
- Greenacre, M.J. (2007) Correspondence Analysis in Practice, London: Academic Press, p.35-
55.

247

MARKETING RESEARCH REGARDING ROMANIAN CONSUMER PROFILES FOR
SOCIAL TOURISTIC SERVICES

DUMI TRU Nicoleta Rossela
Associate Professor/ Ph.D., Faculty of Management-Marketing/Department of Management-Marketing,
Romanian American University, Bucharest, Romania, nicoletad01@yahoo.com

STOI CA I vona
Assistant Professor / Ph.D., Faculty of Management-Marketing/Department of Management-Marketing,
Romanian American University, Bucharest, Romania, stoica.ivona@profesor.rau.ro

MUNTHI U Maria-Cristiana
Teaching Assistant/Ph.D. student, Faculty of Marketing/ Department of Marketing, Bucharest Academy of
Economic Studies, Bucharest, Romania, cristiana.munthiu@gmail.com

Abstract: In Romanias present economic-social context, the incomes barely satisfy the basic needs for
a big part of the population and under the circumstances and only 8% of the Romanians can afford one holiday
per year. It has been developed a research study of the social tourist services consumer behavior aims to shape
a touristic profile. In this market research, it has been identified the criteria that segment the tourism market in
best way. Tourism operators might find this study's results useful by adapting their offer according to the needs
of their target consumer.

Key words: social tourism, consumer behavior, social touristic services, market segmentation

JEL classification: C46, C81, C83, C87, D03, D12, M31, L83

1. Introduction
In Romanias present economic-social context, where the incomes barely satisfy the basic
needs for a big part of the population and under the circumstances where only 8% of the Romanians
can afford one holiday per year, the social tourism is the sole solution of attracting into the touristic
circuit an ever increasing number of people.
The economic activity of the touristic units finalizes into services designed for the market
(domestic or external). As services provider, the touristic company has permanent relations with the
market; at the same time, it also intervenes as beneficiary (buyer) for the goods and services necessary
for the organization and deployment of its own activity.
The special mobility of the markets phenomenon under the actual circumstances imposes to
the touristic companies new ways of involvement into its mechanism, an increased reaction capacity
towards the markets demands. In order to discover these demands and analyze them, in the social
tourism, like in other fields as well, it is appealed to the market research.

2. Methodology research
The study concerning the behavior of the consumer of social touristic services in Romania
aims at outlining a touristic profile of the consumer of such touristic services, having as objectives:
1. Determination of the populations knowledge (information) degree, concerning the so-
called social tourism. (Ionescu, 2000)
2. Establishment of the number/weight of people that have benefited of social tourism
programs, reported to the populations total number.
3. Outlining of the tourists major motivations in practicing the social tourism.
4. Determination of the tourists attitude from the three aspects (affective, cognitive, co-
native) in relation with the social programs of tourism.
5. Assessment of the tourists preferences for certain forms of tourism (depending on
seasonality, the offers features, the period of deployment etc.).
The questionnaire was distributed to a sole agency in Bucharest, where there have been filled
up 20 forms, as well as to a number of 10 agencies in the countryside (Ploieti, Trgu Mure, Cluj,
248

Iai, Piteti, Brila, Timioara, Baia Mare, Suceava and Craiova), each of them filling 28
questionnaires.
The determination of the market segments, as an essential component of the analysis of the
studys results, supposes the determination of the order of the aimed segmentation criteria:
occupation, income, civil status, residence environment and the age of the interviewed people. In the
paper there are presented structural and non-parametrical correlation methods in view of determining
the criterion which best segments the touristic market. In order to establish the order of the
segmentation criteria, it is used the non-parametrical test _
2
. The methodology imposes that, once
determined the value of _
2
for each of the mentioned criteria, to proceed to a comparison of the
obtained results, so that, to the one which it corresponds the biggest value of the _
2
test, this should be
considered the criterion which will best segment the market.
The first segmentation criterion taken into account is the occupation of the interviewed
people. The answers recorded and presented in table 1 have allowed the determination of the samples
structure according to this criterion, as well as its graphic representation (Figure 1):

Table 1: Frequency distribution Figure1: Samples structure according
to the occupations of the respondents
Types of
occupations
No.
respondents
Structure
(%)

Peasant, worker 53 17,66
Clerk (high school) 38 12,66
Employee (high
education)
45 15
Unemployed 42 14
Retired 62 20,66
Pupil, student 42 14
Private entrepreneur 18 6
Total 300 100
Source: Extracted from SPSS output view Source: Extracted from SPSS output view

From the viewpoint of the interviewed persons occupation, the biggest weight is taken by the
retired people with 20,66%, followed by workers and by the people involved in agriculture with
17,66%, categories with incomes, generally, rather small, to which there are addressed these
programs.
The smallest weight is detained by the private entrepreneurs, which are supposed to earn
enough income in order to afford stays on their own.
The distribution of the answers of the ones questioned according to their occupation and to
the degree of information on social tourism, is the following:

Table 2: Distribution of the answers according to the degree of information on social tourism and occupation
(the empirical and the theoretical function)

Peasant,
worker
Clerk
(high school)
Employee
(high
education)
Unemployed Retired Pupil, student
Private
entrepreneur
Total
Yes 32 (37) 24 (27) 31 (32) 29(30) 49 (43) 34 (29) 11 (13) 210
No 21 (16) 14 (11) 14 (13) 13(12) 13 (18) 8 (13) 7 (5) 90
Total 53 38 45 42 62 42 18 300
Source: Extracted from SPSS output view

The calculation algorithm of _
2
supposes, in the first stage, the determination of the theoretical
function which will be presented in the form of frequencies that are being awaited to result according
to the null hypothesis (A
ij
).
Basing on the data in table 2 it is determined a _
2
calculated, as follows:
Peasant, worker
Clerk (high school)
Employee (high education)
Unemployed
Retired
Pupil, student
Private
entreprene
249

Equation (1) _
2
c
= 0,67 + 1,56 + 0,33 + 0,81 + 0,03 + 0,07 + 0,03 + 0,08 + 0,83 + 1,38 + 0,86 + 1,92 +
0,30 + 0,8 = 9,67
Acknowledging the existence of 6 degrees of liberty = (rows-1) x (columns-1) = (2-1)(7-1) and of a
signification level: n = 0,05, it is ascertained that the value of the theoretical _
2
is: _
2
t
= 12,59;
The last stage of the algorithm of the application of the _
2
test resides in the comparison of the
values for the calculated _
2
and the theoretical _
2
, as follows:
_
2
c <
_
2
t
, situation where the null hypothesis is accepted, respectively the variable occupation does
not influence significantly the populations knowledge degree, in the case of the social tourism.

Another criterion of segmentation approached is the monthly income of the interviewed
people, which is presented in six groups (table 3), at their level being also established a structural
form represented in the Figure 2 :

Table 3: Frequency distribution
Groups of incomes (lei) Nr.
Struct
ure
%

under 6.500.000 164 54,67
6.500.001 8.500.000 49 16,33
8.500.001 12.500.000 24 8,00
12.500.001 16.500.000 13 4,33
16.500.001 18.500.000 25 8,33
over 18.500.000 25 8,33
Total 300 100

The obtained results reflect the fact that, little over half of the interviewed ones have very low
incomes, and this entitles them to appeal to this form of tourism (these incomes may be scholarships,
in the case of the students, or pensions).
For this criterion also it has been applied the _
2
test (chi square Test), in the conditions of
recording the data combined between the level of knowledge of the rural tourism and the monthly
incomes of the questioned people (table 4).

Table 4: Distribution of the answers according to the social tourism knowledge degree and according to the
income (the empirical and the theoretical function)

Under 650
Ron
650 - 850
Ron
851-1250
Ron
1251-1650
Ron
1651-1850
Ron
Over 1850
Ron
Total
Yes 118 (115) 36 (34) 14 (17) 6 (9) 18 (17) 18 (17) 210
No 46 (49) 13 (15) 10 (7) 7 (4) 7 (8) 7 (8) 90
Total 164 49 24 13 25 25 300

The application of the same calculation methodology regarding the _
2
test leads us to the
determination of _
2
c
and the establishment of _
2
t
, followed by the comparison of their values.
Equation (2) _
2
c
= 0,07 + 0,18 + 0,11 + 0,26 + 0,52 + 1,28 + 1+ 2,25 + 0,05 + 0,12 + 0,05 + 0,12 _
2
c
=
6,01
For (rows-1) x (columns-1) = (2-1)(6-1) = 5 degrees of liberty and a level of signification: n
= 0,05 , it is obtained the value _
2
t
= 11,07;
16,33%
54,67%
8,33% 8,33%
4,33%
8,00%
under 6.500.000
6.500.001
8.500.000
8.500.001
12.500.000
12.500.001
16.500.000
16.500.001
18.500.000
ov er 18.500.000
Figure 2: Samples structure according to the respondents income
250

As _
2
c <
_
2
t
, it is stated that the null hypothesis is accepted, respectively the variable income
does not influence significantly the populations knowledge degree, in the case of social tourism.
The last criterion analyzed of segmentation is the age of the interviewed persons. The
collected data regarding this feature have been previously distributed on groups of age, fact that
allowed the determination of the samples structure on groups, as it follows (table 5, graphic 3):

Table 5: Age frequencies distribution Figure 3: Samples structure according to the respondents
age
Groups according
to the age
Nr.
Structure
%

under 18 years old 12 4
19 24 years 48 16
25 30 years 64 21,33
31 40 years 68 22,66
41 50 years 46 15,33
51 60 years 35 11,66
over 60 years 27 9
Total 300 100

It may be noticed that more than half of the questioned ones are young, with ages comprised
between 25 and 50 years old, who know or who even benefited of social tourism stays, the lowest
weight being occupied by the persons over 60 years which, also probably because of their state of
health, cannot participate in these programs.

Table 6: Frequencies distribution for the social tourism knowledge degree and the age of respondents -
years (the empirical and the theoretical function)

Under
18
19 24 25 30 31 40 41 50 51 60 Over 60 Total
Yes 12(8) 31 (34) 52 (45) 40 (48) 26 (32) 31 (25) 18 (19) 210
No 0(4) 17 (14) 12 (19) 28 (20) 20 (14) 4 (10) 9 (8) 90
Total 12 48 64 68 46 35 27 300

In Table 6 there are presented the data of the empirical and theoretical function, that led to
the determination of the non-parametrical correlation coefficient.
Equation (3) _
2
c
= 2 + 4 + 0,26 + 0,64 + 1,08 + 2,57 + 1,33 + 3,2 + 0,5 + 1,14 + 1,44 + 3,6 + 0,05 +
0,12 = 21,93

The determination of the coefficient _
2
t
= 12,59 has been achieved taking into consideration
the 6 degrees of liberty determined as: (rows-1)(columns-1) = (2-1)(7-1), as well as the signification
level: n = 0,05
The relationship established between the two non-parametrical correlation coefficients: _
2
c >
_
2
t
, indicates us the existence of the situation where the null hypothesis is not accepted, respectively
4.00%
16.00%
22.66%
11.66%
9.00%
15.33%
21.33%
sub 18 ani; 1924ani; 2530ani;
3140ani; 4150ani; 5160ani;
peste 60 ani
251

the variable age influences significantly the populations knowledge degree, in the case of the social
tourism.
By comparing all the values of the non-parametrical correlation coefficients _
2
c
, which have
been calculated separately for each criterion, it may be noticed that the variable which best segments
the market is the age.

3. Conclusions
The results come in the support of the operators in tourism who, turning them into account,
can adapt their offer depending on the demands of the beneficiaries of social tourism offers. The
social tourism may intervene both as a regulating element, but also as a compensatory element.
(BITS)
On another side, much more sensitive than other sectors to the prices conditions, the social
tourisms sector is obviously the most susceptible to respond to the fundamental need of the touristic
industry of prolonging the annual duration of exploiting its equipment.
In another order of the ideas, by ensuring an annual period of complete and repairing rest,
susceptible to restore the physical, nervous and psychological balance, it can be finally achieved the
raise of the labors productivity.
Considered from the aspect of the international exchanges, the social tourism represents the
sole genuine opportunity offered to the millions of Europeans, if we only refer to our continent, an
opportunity of learning to know and respect the other peoples that represent their community.
(Dumitru, 2008)

Acknowledgements

This work was cofinaced from the European Social Fund through Sectoral
Operational Programme Human Resources Development 2007-2013, project
number POSDRU/107/1.5/S/77213 Ph.D. for a career in interdisciplinary
economic research at the European standards.

4. References
- . Ionescu I., (2000)Tourism, social-economic and cultural phenomenon, Oscar Print
Publishing House, Bucharest;
- *** BITS, Le tourisme social dans le monde;
- Dumitru N.-R., (2008) Touristic promotion social tourism particularities, Editura
Universitar, Bucureti;
- Kotler, Philip, Bowen, John, Makens, James (2009) Marketing for Hospitality & Tourism (5th
Edition), Publisher Prentice Hall.

252

USE OF VECTOR AUTOREGRESSIVE ANALYSIS IN ECONOMETRIC MODELLING

ENACHE Calcedonia
Ph.D., Faculty of Cybernetics, Statistics and I nformatics /Department "Statistics and Econometrics"
Academy of Economic Studies, Bucharest, Romania, calcedoniaenache@yahoo.com

Abstract: Romanias foreign trade signifies a large system of trade and financial relations that connect
economic operators having complementary interests and coming from different national economies. The sum of
the feedback and feedbefore expansions is a trend captured by the foreign payment balance that reflects
the way in which our country pays its own way in international trade and also the way the national currency
evolves on the currency market. The present paper intends to investigate the effects exercised by domestic
absorption and RON/EUR exchange rate on Romanias agricultural imports from EU countries on the basis of
Vector Autoregressive Model - completed in three types of results: impulse response function, forecast error
variance decomposition and the Granger causality.

Key words: Vector Autoregressive Model, Sims-Bernanke decomposition, Granger Causality Test,
international trade

JEL classification: C52, E20, F40

1. Introduction
Adjusting the Romanias food, beverages and tobacco trade deficit from 1.56 percent of GDP
in 2008 to 0.75 percent in 2010 contributed to the financial deterioration of foreign trade companies
amid the global financial crisis. Currently, trade companies that only perform import trading activity
make about 30 percent of imports and represents over 50 percent of the importing companies.
To assess the factors influencing trade balance with food products, beverages and tobacco we
utilized the Vector Autoregressive Model (VAR), a method often applied in time series analysis,
mainly because of the flexibility and ease of use. It can be treated as a general form of both the
univariate autoregressive model, as dependent variables are lags of explanatory variables, and
simultaneous equations, because it builds at the same time a system of equations. Moreover, each
equation also includes lags of the other endogenous variables. In general, the model does not included
exogenous variables, as it is done in modelling.
VAR analysis has been imposed in the macro-econometric studies since the 70s, its main
promoter, Cristopher Sims, considering that all the variables must be treated as endogenous variables,
thus avoiding the corruption of model with identification restrictions that were arbitrarily established.
Later on Lutkepohl (1991), Watson (1994) and Waggoner and Zha (1999) gave updated surveys of
VAR techniques. Furthermore, important new developments in analyzing the relations between
economic variable have been brought about by the discovery of the importance of stochastic trends in
economic variables and by the development of cointegration analysis by Granger (1981), Engle and
Granger (1987), Johansen (1995) and many other.
One of the VAR model characteristics is the fact that it captures the dynamics of several
variables simultaneously, and the impulse response functions capture the propagation of the shock of
a dependent variable upon the system.
Thus, it may answer to very important questions in terms of the economic policy authorities,
such as the following one: How do imports of agricultural products react to an innovation in domestic
absorption?

2. Overall picture of the Romanias external trade of food, beverages and tobacco
In Romania the share of trade deficit for food, beverages and tobacco stood at 0.75 percent of
GDP in 2010, mainly due to the depreciation and the contraction of domestic absorption. Also, the
degree of coverage of imports by exports was 71.59 percent, 24.61 percentage points below the
Central European countries (Czech Republic, Slovakia, Slovenia, Hungary, Poland). However, until
the first quarter of 2009, Romania's export activity from the onset of the global financial crisis was
among the least affected of the region.
253

17.32%
9.94%
7.99%
6.31%
6.09%
5.64%
4.11%
42.60%
Exports
Italy
Bulgaria
Hungary
Netherlands
Spain
Germany
France
Other countries

Table 1: External trade of food, drinks and tobacco in EU countries
SITC (0+1):
Food, drinks and
tobacco

RO DE SI FR CZ SK PL HU LV
Share of
exports in
GDP (%)
Average
2003-
2008
2009
2010

0.79
1.48
1.9

1.63
1.94
2.00

2.05
2.9
3.21

2.24
2.16
2.35

2.2
2.41
2.47

2.59
2.52
2.75

2.77
3.47
3.58

3.73
4.56
5.12

3.62
5.04
6.49
Share of
imports in
GDP (%)
Average
2003-
2008
2009
2010

2.47
2.85
2.65

1.96
2.17
2.27

3.79
5.02
5.26

1.72
1.82
1.89

2.99
3.22
3.37

3.81
4.07
4.33

2.08
2.6
2.71

2.55
3.25
3.41

5.62
6.39
7.38
Share of
trade balance
in GDP (%)
Average
2003-
2008
2009
2010

-1.68
-1.36
-0.75

0.33
-0.23
-0.27

-1.75
-2.12
-2.05

0.52
0.34
0.46

-0.79
-0.81
-0.9

-1.22
-1.55
-1.58

0.69
0.88
0.88

1.17
1.3
1.72

-2.00
-1.35
-0.88
Share of
trade balance
in current account
balance (%)
Average
2003-
2008
2009
2010

16.06
32.56
16.97

-6.26
-3.92
-4.46

50.39
164.4
244.11

-107.98
-22.68
-26.29

24.46
33.46
22.77

17.96
59.68
45.57

-14.59
-22.58
-18.86

-15.55
-1064.29
140.84

12.35
-15.64
-29.72
Coverage of
imports through
exports (%)
Average
2003-
2008
2009
2010

31.9
52.17
71.59

82.98
89.32
88.05

53.92
57.79
61.06

130.17
118.73
124.16

67.91
61.98
63.54

73.64
74.82
73.29

133.23
133.75
132.39

146.03
140.11
150.47

64.39
78.8
88.01
Source: EUROSTAT; own calculations

In 2010 the geographical spread shows that EU Member States were the main partners of
Romania in trade with food products, beverages and tobacco. Thus, for this category of products,
intra-EU exports represented 73.65 percent of the total output and come mainly from the following
seven countries: Italy (17.42 percent), Bulgaria (10.00 percent), Hungary (8.04 percent), Netherlands
(6.35 percent), Spain (6.13 percent), Germany (5.67 percent) and France (4.13 percent). At the same
time, intra-EU imports recorded a 81.59 percent share of total inflows, mainly in relation to Hungary
(17.62 percent), Germany (12.56 percent), Bulgaria (11.49 percent), Netherlands (6.95 percent),
Poland (6.19 percent) and Italy (5.85 percent).

Figure 1: Structure of Romanias external trade of food, beverages and tobacco
by main partner countries in 2010

12.56%
17.62%
6.19%
11.49%
5.85%
3.14%
6.95%
36%
Imports
Gernany
Hungary
Poland
Bulgaria
Italy
Austria
Netherlands
Other countries
254

-70
-60
-50
-40
-30
-20
-10
0
EU 27
Romania
Source: Statistical Bulletin of International Trade (2011), National Institute of Statistics; own calculations

It is expected that the imports will continue to grow at a slow pace in the next period, the
consumers confidence being significantly down, with direct impact upon the foreign demand.

Figure 2: The Consumer Confidence indicators in the European Union countries
(conjectural balance, seasonally adjusted)

Source: EUROSTAT

With the EU accession of Central and Eastern European countries regional specialization can
disadvantage in terms of presence on international markets small economies and those with less
diversified economic structure or that are specialized in the export of agricultural products.
Introduction of European standards on agriculture, the norms that favour intensive agriculture and
limit the production of certain traditional agricultural goods, is expected to have a negative impact in
countries with a tradition of small-scale agricultural production, such as Poland, a risk that is still not
covered so far.

3. The econometric model

3.1 VAR methodology: a brief review

The model we cover here is similar to that presented by C.A.Favero (2001), C. Botel (2002)
and C. Enache (2010). We consider that the process that generated the time series Y
t
= (y
1t
, y
2t
, ,
y
nt
) is the sum between a deterministic trend and a purely stochastic part:
Y
t
=
t
+ x
t
,
where
t
is the deterministic part and x
t
is a zero mean stochastic process. The deterministic
component may be zero (
t
=0), may be a constant (
t=

o
) or may have a linear trend (
t
=
o
+
1
t).
The purely stochastic component of process x
t
includes the stochastic/cointegration relations trends. It
is presumed that it has zero mean and VAR representation. The noticeable process y
t
takes over the
deterministic and stochastic properties from
t
and x
t
. The integration and cointegration order is given
by x
t
.
We presuppose that the stochastic part is generated by a VAR process of p order (VAR(p)):
Y
t
= A
0
+ A
1
Y
t-1
+ A
2
Y
t-2
+ + A
p
Y
t-p
+ u
t,
where:
255

Y
t
=
(
(
(
(
t , k
t , 2
t , 1
y
y
y
, A
p
=
(
(
(
(
(
k
kp
2
kp
1
kp
k
p 2
2
p 2
1
p 2
k
p 1
2
p 1
1
p 1
a a a
a a a
a a a
; A
0
=
(
(
(
(
(
0
k
0
2
0
1
a
a
a
; u
t
=
(
(
(
(
t k
t
t
u
u
u
,
, 2
, 1

The process is stable if det (I
n
-A
1
Z -
-A
p
Z
p
)0, for any z1. The implications of this
stability condition all the roots of the polynomial determinant are outside the unit circle. In this
situation, x
t
is integrated of zero order I(0). If the above condition is respected, x
t
process is
independent in time, and the variation and co-variation structure is constant. If the polynomial
determinant has a root unit z=1 and all the other roots outside the circle unit, then part of the variables
are integrated and there may also be cointegrated variables. The model can be written with the lag
operator L
j
y
t
=y
t-j
, thus:
(I
n
A
1
L A
2
L
2
A
p
L
p
)Y
t
= A
0
+ u
t
,
or:
A(L)Y
t
= A
0
+ u
t
,

In the case of a VAR process, each series can be estimated by the least square method or by
another method (e.g. the maximum verosimility method). The estimated model is written:
Y
t
=
0
+
1
Y
t-1
+
2
Y
t-2
+ +
p
Y
t-p
+ v
t
where v
t
is the dimensional vector (k, 1) of residues. We note with
v
the variance-covariance matrix
of residues.
The VAR process parameters can be estimated only by starting from stationary time series.
Thus, after the study of series characteristics, these are either stationarized by differentiation, before
estimating the parameters, in the case of DS series (with random tendency), or a component of trend
type is added in VAR specification, in the case of a deterministic trend.
VAR analysis is finalized into three types of results: impulse response function, forecast error
variance decomposition and Granger causality.
The impulse response function (IRF) describes the effect of a shock administered to a variable
on the future values of each variable in the system, following the trajectory of this impact in
time, at different moments. IRF is defined as:

s
t
s t
u
y
e =
c
c
+
, where: the element on row i,
column j of matrix
s
identifies the effect of the increase by one unit of variable u
j,t
at a time
moment t on the variable y
t+s
, in the conditions when the other variables are maintained
constant.
The variance decomposition (VD) provides information on the relative importance of each
shock in the hierarchy of the effects on the variables in the system. As the innovations cannot
be anticipated, forecast errors are induced in the variables of interest. VD represents a
calculation of the share in the total of these variations that is due to shocks coming from each
variable.
The Granger causality (GC) tests reveal what variables are useful for the forecast of other
variables. We can state that X causes Granger on Y if a Y forecast made on the basis of a set
of information that includes the history of X is better than a forecast that ignores the history of
X.
i. In order to test whether X is a cause for Y in Granger sense, the regression equation is
estimated:

= =

+ + + =
k
i
k
j
t j t j t i t
X Y Y
1 0
1
c o | ,
where k is fixed so that errors are white noise.
256

, 0 :
2 1 0
= = =
l
H o o o

= =

+ + u + =
k
i
k
j
t j t j t i t
Y X Y
1 0
1
c o
, 0 :
2 1 0
= = =
l
H o o o
The tested hypotheses are the following:

X is not the cause for Y,

The testing of null hypothesis is based on the Fisher-Snedecor test. The null hypothesis is
rejected if the value calculated for F statistics is higher than the critical value.
ii. In order to test whether Y is a cause for X in Granger sense, the regression equation is
estimated:

The tested hypotheses are the following:

Y is not cause for X,

The testing of null hypothesis is based on the Fisher-Snedecor test. The null hypothesis is
rejected if the value calculated for F statistics is higher than the critical value.
iii. Following the application of the two tests, the following conclusions are possible:
a. Unidirectional causality: X is cause for Y (XY), if the null hypothesis is
rejected at i and is accepted at ii;
b. Unidirectional causality: Y is cause for X (YX), if the null hypothesis is
rejected at ii and is accepted at i;
c. Bidirectional causality: XY, if the null hypothesis is rejected both at i and at ii;
d. The two variables are independent if the null hypothesis is accepted at i and ii.

3.2 Modelling stages

For the final results of the investigation to be relevant it is absolutely necessary that the
econometric model to be submitted at each stage of modelling, to diagnostic-type analysis for testing
statistical properties. The main steps of modelling are: testing the order of integration of the variables
of interest, selecting the number of lags of the VAR, test for the existence of cointegration, testing
VAR stability, testing the quality of 'white noise' of the stochastic terms of the equations of VAR,
identifying the structural innovations, testing the stability of the model coefficients.
Testing the integration order. In conjunction with the test for the existence of cointegration, this
first stage is applied for choosing the model specification. An integrated series is that
nonstationary series that can be transformed into a stationary series by calculating the first order
differences (first order integrated series - I(1)), i.e.:

,
1
) 1 ( 1
= A =
t t t t
y y y y and if the trend was
not entirely eliminated, we may proceed to calculating the second order differences (second order
integrated series - I (2)),
1
) 2 ( 2
= A =
t t t t
y y y y
thus: etc.. The series that is finally achieved, as it
does not include a trend and is therefore stationary, is considered to be a zero-order integrated
series - I (0).
Determining the number of delays. To determine the order p of the VAR model the Akaike and
Schwartz criteria can be used. The order selection procedure consists of estimating a VAR
representation of all VAR models for an order between 0 and h, where h is the maximum possible
delay allowed by the economic theory or the available data. The calculation corresponding to the
two criteria are:
n
k
n
t
t
n
k
e u
n
e
n
VTR
AIC
) 1 ( 2
1
2
) 1 ( 2
1
+
=
+
|
.
|
\
|
=
|
.
|
\
|
=

. 0 :
1
= -
i
H o
. 0 :
1
= -
i
H o
257

n
k
n
t
t
n
k
n u
n
n
n
VTR
SCHWARTZ
1
1
2
1
1
+
=
+
|
.
|
\
|
=
|
.
|
\
|
=

The test for the existence of cointegration. To estimate a VAR that includes both the variables in
first differences (assuming that the variables in levels are I (1)) and varying levels (nonstationary
separately taken into account) the methodology developed by Johansen (1991, 1995) is
recommended. The matrix of the coefficients attached to the variables in levels contains
information on long-term properties of the model. Be there an Y
t
vector of variable I (1). A VAR
model is described by:
Y
t
=
1
Y
t-1
+
2
Y
t-2
+ ... +
k
Y
t-k
+ u
t
where:
i
, i=1,2,...,k is the matrix of the coefficients associated with vector Y
t-i
.

If the component
series of vector Y
t
are stationary in differences, a reparameterization of the model is necessary:
Y
t
=
1
Y
t-1
+
2
Y
t-2
+ ... +
k-1
Y
t-k-1
+ Y
t-k
+ u
t.
The Y
t-k
component describes the linear combination of Y
t
variables in levels, so that contains
information on the long-term properties of the model. The rank matrix indicates the existence
and number of long-run equilibrium relationship (cointegration) between variables Yt. The trail of
matrix {(the sum of the elements on the main diagonal - tr()} and its maximum value (
max
)
are the statistics used to evaluate the number of cointegrating relations. In the first case, the null
hypothesis tested is tr() r, where r is the number of cointegrating relations. The maximum own
value criterion tests the null hypothesis of the existence of r cointegrating relations, given the
alternative of r+1 relationships.
VAR stability testing. A VAR is stable if the effects of shocks on the variables in the system are
fully reduced, after a period of time. If VAR is explosive, then the confidence intervals for the
shock response functions can not be built, as standard errors can not be determined by usual
methods. The VAR stability is checked if all characteristic roots of the matrix of the estimated
coefficients of the VAR have modules less than 1 and lies within the circle of radius 1.

Diagnosis of residual terms. One of the key assumptions of the VAR methodology is that the
residuals (errors), u
t
, are "white noise", i.e. they are completely random. More specifically, they
should be normally distributed, have a constant variance (i.e. to be homoscedastic) and not to be
autocorrelated.
Identification by the Sims-Bernanke method of error ortogonalization. The method allows a free
distribution of restrictions within the matrix describing the structural relations, contemporary with
the system of variables (matrix A). Imposing restrictions on the matrix is highly relevant, since it
establishes the dependencies between the analyzed variables thus suggesting a hypothesis on the
relationships existing in the economy. At least n (n-1)/2 restrictions are necessary for an accurate
identification. If the number of constraints is larger, the system is over-identified. Unlike other
methods used in practice (e.g. the Choleski decomposition) the Sims-Bernanke method allows the
over-identifying restrictions to be tested empirically. Thus, the identification of structural
innovations, on which the results of analysis are largely dependent, is not a totally a priori
practice.
Testing the stability model coefficients. This step is necessary to check the viability of the model
which must confront the Lucas critique. For this purpose, in the present study we utilized
CUSUM and CUSUM of squares two statistical tests used to check the stability of model
parameters, introduced by Brown, Durbin and Evans (1975) - that are the most popular and the
most commonly used in the speciality literature.

3.3 Data description, innovation orthogonalization by the method Sims Bernanke and the
results of the diagnosis analyses for testing the statistical properties

In the present study, we used the VAR technique to assess the factors influencing Romanias
imports of agricultural products from EU countries, using the quarterly data from the period 2004-
2010.
258

The variables, data sources and descriptions used in the econometric estimates are presented
below:
- Imports of agricultural products from EU countries, millions of lei, average prices of 2000.
Source: National Institute of Statistics (IGA)
- Domestic absorption, millions of lei, average prices of 2000. Source: National Institute of
Statistics (DA)
- RON/EUR exchange rate. Source: National Bank of Romania (E)
The imports of agricultural products from EU countries we deflated by unit value indices of
international trade and all the components of domestic absorption (final consumption, gross fixed
capital formation and change in inventories) we deflated by the corresponding price indices. The
existence of a significant seasonal component was determined for all variables, except the RON/EUR
exchange rate. We seasonally adjusted the concerned series using the TRAMO/SEATS method.
For the three variables included in the study testing the integration order was made through
two procedures: the Augmented Dickey-Fuler test and the Phillips-Perron test. All variables are
integrated of order I, which is consistent with a first difference stationary representation.

Table 2: Tests of Stationarity

* null hypothesis of unit root existence is rejected at the 1% level; ** null hypothesis is rejected at
the 5% level;
*** null hypothesis is rejected at the 10% level

The choice of the optimum number of lags in estimating the VAR model was based
on the Akaike, Schwarz and Hannan-Quinn criteria. Given the limited number of observations in the
sample, we considered only the models with up to 4 lags. The Akaike Information Criterion (AIC)
and Hannan-Quinn criterion (HQ) indicate that a VAR with lag two is optimal while the Schwartz
information criterion (SC) indicates that one lag is the optimal lag length. Since the diagnostic
analysis of the residual terms and the statistical properties are satisfactory, for the model we
considered the AIC and HQ criteria indicating two lags.

Table 3: VAR Lag Selection Criteria
VAR Lag Order Selection Criteria
Endogenous variables: IGA DA E
Exogenous variables: C
Sample: 2004Q1 2010Q4
Included observations: 24
Lag LogL LR FPE AIC SC HQ
0 -354.9296 NA 1.81e+09 29.82747 29.97472 29.86653
1 -298.3005 94.38185* 34420366 25.85837 26.44740* 26.01464
2 -286.7403 16.37697 29026291* 25.64502* 26.67582 25.91849*
3 -280.6548 7.099744 41291861 25.88790 27.36046 26.27857
4 -272.7163 7.276958 56615458 25.97636 27.89069 26.48423
* indicates lag order selected by the criterion
LR: sequential modified LR test statistic (each test at 5% level)
FPE: Final prediction error
AIC: Akaike information criterion
SC: Schwarz information criterion
HQ: Hannan-Quinn information criterion

The non-stationarity of series motivated the use of the Johansen multivariate procedure in the
analysis, which, by both criteria used,
trace
and
max
, identified, at a statistically significant level of 5
percent, the presence of a long-term stationary relation (cointegration) among non-stationary series.

Augmented Dickey-Fuller test Phillips-Perron test
Level First difference Level First difference
IGA
DA
E
-1.27
-1.94
-1.63
-6.09*

-2.65
*
-4.34
*
-1.11
-1.74
-1.63
-6.25*
-2.7***
-4.30*
259

Table 4: Johansen Test and Maximum Eigenvalue Test Results
Trend
assumption
Lags
interval
Johansen Trace Test
No
deterministic trend
2
Hypothesized
No of CE(S)
Trace Statistics Critical Value
R=0
*
R= at most 1

R= at most 2
27.78500
9.798742
0.151316
24.27596
12.32090
4.129906
2
Johansen Maximum Eigenvalue Test
Hypothesized
No of CE(S)
Trace Statistics Critical Value
R=0
*
R= at most 1

R= at most 2
17.98626
9.647426
0.151316
17.79730
11.22480
4.129906
*denotes rejection of the hypothesis at the 0.05 level

The VAR stability, verifying that all the characteristic roots of the matrix of the estimated
VAR coefficients have modules less than 1 and lies within the circle of radius 1, is satisfied for the
estimated model.

Figure 3: Inverse Roots of AR Characteristic Polynomial

As regards the diagnosis of residual terms, the results of the tests are satisfactory for the model.
With a comfortable margin, the tested hypotheses (no serial correlation, normality and
homoscedasticity) are not rejected at conventional significant levels of 1 percent and 5 percent.

Table 5: VAR Residual Heteroskedasticity Tests:
No Cross Terms (only levels and squares)
VAR Residual Heteroskedasticity Tests: No Cross Terms (only levels and squares)
Sample: 2004Q1 2010Q4
Joint test:
Chi-sq df Prob.
62.11148 72 0.7907
Individual components:
Dependent R-squared F(12,13) Prob. Chi-sq(12) Prob.
res1*res1 0.549748 1.322726 0.3114 14.29344 0.2824
res2*res2 0.406382 0.741632 0.6943 10.56592 0.5664
res3*res3 0.457328 0.912962 0.5596 11.89053 0.4545
res2*res1 0.370243 0.636906 0.7787 9.626309 0.6487
res3*res1 0.367160 0.628527 0.7854 9.546165 0.6557
res3*res2 0.474627 0.978695 0.5118 12.34031 0.4188

260

Table 6: VAR Residual Serial Correlation LM Test Table 7: VAR Residual Normality Tests

Ortogonalization of innovation or the identification of structural shocks, u
t
, is made by
imposing zero restrictions on the matrix coefficients describing the structural, contemporary relations
of the variables of interest (matrix A). The variable in a row is influenced during the quarter by the
variables of the columns. "0" means no influence, and "1" indicates the existence of influence. Also,
each variable is influenced by itself.

Table 8: A Matrix structure
IGA DA E
IGA 1 1 1
DA 0 1 0
E 0 1 1

The imposed restrictions indicate that, within a quarter time horizon, the agricultural
imports from EU countries are affected by the domestic absorption and the RON/EUR exchange rate.
In turn, the domestic absorption influences the RON/EUR exchange rate.
As it can be noted from Figure 4, for both CUSUM test and CUSUM of squares test, the tested
indicator chart does not protrude outside the critical band corresponding to a significance level of 5
percent. Therefore, at this significant level, the hypothesis of stable coefficients cannot be rejected,
the result giving one more validation to the investigated model.

Figure 4: Coefficients stability test

3.4 Assessments of the results provided by the econometric model
VAR Residual Serial Correlation LM Tests
H0: no serial correlation at lag order h
Sample: 2004Q1 2010Q4
Lags LM-Stat Prob
1 7.975100 0.5367
2 4.208369 0.8972
3 5.117943 0.8239
4 14.45968 0.1069
5 12.75214 0.1741
6 4.362529 0.8860
7 9.896278 0.3589
8 8.610097 0.4740
9 6.302057 0.7093
10 5.217201 0.8150
11 13.70889 0.1331
12 2.003225 0.9914
Probs from chi-square with 9 df.
VAR Residual Normality Tests
Orthogonalization: Cholesky (Lutkepohl)
H0: residuals are multivariate normal
Sample: 2004Q1 2010Q4
Component Skewness Chi-sq df Prob.
1 0.147317 0.094043 1 0.7591
2 0.209482 0.190159 1 0.6628
3 0.358353 0.556473 1 0.4557
Joint 0.840675 3 0.8397
Component Kurtosis Chi-sq df Prob.
1 1.071275 4.029980 1 0.0447
2 1.972594 1.143527 1 0.2849
3 2.090621 0.895884 1 0.3439
Joint 6.069391 3 0.1083
Component
Jarque-
Bera df Prob.
1 4.124023 2 0.1272
2 1.333686 2 0.5133
3 1.452357 2 0.4838
Joint 6.910066 6 0.3292
261

According to the estimated model, we can simulate the impulse response function in the three
series as presented in Figure 5.

Figure 5: IGA responses to structural innovations
(innovation = a standard deviation)

It is noted that imports of agricultural products from EU countries respond positively to shocks
in the domestic absorption (DA) and in the RON/EUR exchange rate (E) in the first three quarters,
respectively in the first quarter and then negatively. Referring to the own innovations, the IGA
responds negatively in the period from April to June and positively afterwards.

Table 9: Variance composition of IGA

% of IGA variance explained by innovations in:

Period S.E. IGA DA E
1 50.56170 100.0000 0.000000 0.000000
2 55.84195 94.59443 0.249708 5.155857
3 57.24331 91.03915 2.655642 6.305205
4 59.45719 84.44928 9.623187 5.927530
5 62.34506 76.99428 16.97678 6.028945
6 65.34570 70.42042 21.13459 8.444989
7 68.34472 64.63952 21.93647 13.42401
8 71.19874 59.60822 20.91841 19.47337
9 73.70638 55.66064 19.55185 24.78751
10 75.73483 53.05276 18.60047 28.34677
11 77.23687 51.71136 18.16287 30.12577
12 78.23936 51.30496 18.01009 30.68495

Going further with the analysis, examining the variance decomposition, it results that after
three months, the variation of agricultural product imports from European Union countries is 91.04
percent explained by own innovations. On a longer time horizon, the shocks of the domestic
absorption and of the RON/EUR exchange rate have an increasing contribution in IGA. These results
highlight the difficulties of adapting a relatively stable and less elastic demand to a variable and
hardly modifiable on short and medium term supply. In these conditions, the depreciation of LEU is
less accurately reflected in the consumer prices of food products.
262

The analysis was continued by applying the Granger causality test, whose results are
presented in Table 10.
Table 10: The Granger Causality Test

As it can be noticed, the variable domestic absorption causes the imports of agricultural
products from EU countries in the Granger sense (p-value of the test: 0.03846), therefore the influence
of DA has a regular, predictable character. The null hypothesis, according to which the RON/EUR
exchange rate does not Granger cause the imports of agricultural products from EU countries, is
rejected at 10 percent. In this respect, taking into account the possibility of type I errors, we can say,
in the context of the same analysis, that E is causing IGA, i.e. the value of agricultural imports from
EU countries are explained by the past values of the RON/EUR exchange rate.

4. Conclusions
Adjusting the current account deficit from 11.6 percent of GDP in 2008 to 4.0 percent in 2010
contributed to the financial deterioration of foreign trade companies amid the global financial crisis.
Romania's national currency has not participated in the Exchange Rate Mechanism II (ERM
II), being traded under a flexible exchange rate regime. In the period between autumn 2008 and the
early months of 2009, the leu depreciated 12 percent against the euro, while volatility has exceeded 30
percent. Subsequently, due to the multilateral external funding agreement developed under the
coordination of the International Monetary Fund and the European Union, the evolution of the
RON/EUR exchange rate has become stable. In the following period, with the reduction in
consumption and investments, a deterioration of the banking portfolio provides and increasing of
arrears to suppliers is expected, as the only importing companies had over 45 percent of the
commercial debt in the economy, at the end of 2010.

5. References
- Botel, C. (2002) Causes of inflation in Romania, June 1997-August 2001. Analysis based on
Structural Vector Autoregressive, Occasional Papers No. 11, National Bank of Romania.
- Capanu, I.; Wagner, P.; Mitrut, C. (1994) System of National Accounts and Macroeconomic
Aggregates. Bucharest: All Publishing House.
- Enache, C. (2011). Statistical Analysis of the Sustainable Development Trends in Romanias
Agriculture. Doctoral Thesis, AES, Bucharest.
- Enders,W. (1995) Applied econometric time series. John Wiley&Sons, Inc.
- Favero, C.A. (2001) Applied macroeconometrics. Oxford University Press, Oxford.
- Statistical Bulletin of International Trade (2003-2011), National Institute of Statistics.
- Unit Value Indices in International Trade - Statistical Publication (2003-2011), National
Institute of Statistics.
- http://epp.eurostat.ec.europa.eu
- http://www.bnro.ro
- http://www.insse.ro

Pairwise Granger Causality Tests
Sample: 2004Q01 2010Q4
Lags: 2
Null Hypothesis: Obs F-Statistic Probability
DA does not Granger Cause IGA 26 3.82016 0.03846
IGA does not Granger Cause DA 0.77285 0.47439
E does not Granger Cause IGA 26 3.32054 0.05584
IGA does not Granger Cause E 1.64908 0.21616
E does not Granger Cause DA 26 2.13707 0.14296
DA does not Granger Cause E 0.42619 0.65852
263

A RISK-BASED BRAND EQUITY MODEL

Ph.D. student, Faculty of Marketing/ Department of Marketing, The Bucharest Academy of Economic
Studies, Bucharest, Romania, floreadorian@yahoo.com

Ph.D. student, Faculty of Marketing/ Department of Marketing, The Bucharest Academy of Economic
Studies, Bucharest, Romania, munteanu.katalyn@yahoo.com

Abstract: This paper provides a conceptual framework that emphasis the increasing importance of
brand equity as intangible asset. In many branches, the wealth of the biggest companies lies on brand equity, so
its no longer enough to analyse its capacity to get profite; brand risk needs to be determined for a proper track
of the total risk exposure.
Thus, our model sets three meaningful components of brand equity, based on Kapferers explanation,
and attaches to each one the subsequent risk. This is the starting point for a new era in brand valuation that
comprises applied models with dual standpoint, of both profit and risk.

Key words: Brand equity, risk, marketing modelling

JEL classification: M31 (Marketing)

1. Introduction
Brand equity development represents nowadays one of the dominant concerns of every
manager. Although trademarks have been known and used since Antiquity marks have been found
on early Chianese porcelain, on potery jars from ancient Greece and Rome, and on goods from India
dating back to about 1300 BC (Keller, 2008, p. 43) firms acknowledged only recently the
importance of brands in the value creation for the costumer. Todays big brands are the most
profitable assets for their owners, overtaking the tangible assets of the companies. As Keller and
Kotler (2008) remark, in the present-day marketing, the stress is not anymore on tangibles, but on
intangibles. However, many companies are still unable to build positive equity for their brands,
squandering an important part of their potential.
Since brand potential was first acknowledged, branding has rapidly developed as a branch of
the marketing science and practice. Thus, many brand-related concepts have been theorized brand
awareness, brand loyalty, brand power, brand asset, brand value, brand recognition, brand salience,
brand image, brand experience, brand reputation, brand mantra, brand positioning, brand preference,
brand associations, and so on generating the scientific delusion of a mystified complexity, unable to
be explained in an integrated approach.
An important step forward consists of the introduction of brand equity, as an integrated
concept, which discipline the epistemological universe of branding. The race to get awareness,
loyalty, value, image for a brand can now be replaced by only one word equity. Nonetheless, many
approaches towards brand equity are still to be harmonized in order to get a wide accepted view. In
many contexts, brand equity and brand value are used as synonyms, while Keller recommends the use
of brand equity only when referring to brand associations in the consumers minds. A research
among marketers emphasis the lack of other departments support as main hindrance to better
marketing performance (Ambler, 2003, p. 253).

2. Conceptual background
One of the most used definition of brand equity is in terms of customer-based brand equity,
which is considered to be the differential effect that brand knowledge has on consumer response to
the marketing of that brand (Keller, 2008, p. 49). Customer-based brand equity appears when
consumers have a high awareness, they are familiar with the brand and develop strong, favorable and
unique mental associations (Keller, 2008, p. 53).
Brands are considered bridges between past and future. This metaphor means that brands
make the prospective performance and profits foreseeable, based on the previous results of a product.
264

In order to emphasis this characteristic, its necessary to adopt a chronological model that enlighten
the transformation of brand equity on time factor. Such model can be developed by discriminate
between brand assets, brand power and brand value, based on the explanation of Kapferer (2012, p.
13-14).
Thus, in the light of the simplest definition of a brand, as a name that influence markets
(Kapferer, 2012, pp. 12), brand assets represent the sources of influence. This influence can stream
from brand personality, brand awareness, brand values, brand image, brand authority or brand
reputation. All this are examples of brand assets. In order to reduce and control the number of brand
assets variables, Kapferer (2012, p. 16) recommend four indicators that express the origins of brand
influence: aided brand awareness, spontaneous brand awareness, evoked set and brand consumption
or trial. Brand assets also include benefits offered by the brand, patents and know-how owned by the
brand. Aaker (2005, p. 21) nominate 5 assets and liabilities of brand equity: brand loyalty, brand
awareness, perceived quality, brand associations, and other proprietary assets. Young & Rubicams
Brand Asset Valuator considers 2 major assets: vitality and stature. Brand vitality is defined by
differentiation and relevance, while brand stature includes brand esteem and knowledge (Keller, 2008,
p. 393-394). A fifth pillar was added to the previous four namely energy in order to measure the
customers perceptions of a brands innovativeness and dynamism (Mizik, Jacobson, 2008). Further
on this paper, we operate with three widely accepted brand assets: brand awareness, brand reputation,
and brand image.
Brand power can be seen as the market performance emerged from the brand assets. Thereby,
brand power is expressed in terms of market indicators of a brand: market share, market penetration
rate, customer loyalty rate, and market leadership.
Brand value consists of the brand ability to generate profit. Although many approaches can be
called down, the best way to express brand value is considered the net present value (NPV) generated
by a brand. In other words, brand value equals the discounted cash flows resulted after deducing the
production and marketing costs as outflows.
The causal chain displayed here doesnt contain direct and implicit relations, but conditioned
relations between brand assets, power and value. This means that the same brand assets can generate
different power, and further, different value for a brand. Thus, a brand can have a good reputation,
values and image well outlined, and still unable to reach a significant market share. Likewise, a brand
with an important market share can hold a small value if the costs related with obtaining and
sustaining this share are too high. As a conclusion, we can state that brand value consists of the
expected profit, generated by brand assets, as a result of brand power (Kapferer, 2012, p. 15).
Contrarily, Elliot and Percy argue that powerful brands are those which have developed a
high loyalty of their customers. Customers loyalty has positive influence on brand profitability. On
one hand, powerful brands are favored on distribution issues, which provide more accessibility for a
brand. This aspect can strengthen brand loyalty and increase profitability. For example, if the
preferred beer brand is not available in a pub, probably the customer asks for other brand, repealing
loyalty. On the other hand, brand loyalty gives the chance to practice higher prices, with a higher
profit margin. The explanation is simple: loyalty decrease price elasticity of demand (Elliot, Percy,
2007).
Brand assets, brand power and brand value need to be seen as ways to express brand equity.
Actually, these can be used as temporal dimension of brand equity in order to explain brand equity
formation and development. Thus, brand assets form the brand background, as awareness, reputation
and image are built in a long time. A good reputation is always the result of a long string of
interactions between customers and brand. Brand power is an expression of the current state of a
brand, as a result of the own strategy, but also of its competitive environment. Without any changes in
the assets, a brands power may increase if it uses, for instance, penetration pricing, or decrease under
the competitive pressure. Finally, brand value is a prospective expression of the profits that a brand
will get. While brand power can be directly calculated knowing the market volume, total sales and
other related figures, and brand assets can be accurately established using marketing research, brand
value is just an estimated measure. Previous research has shown a major influence of the economic
crisis on the growth and development of global brands (Munteanu, 2011). This proves that brand
value is sensitive to so many factors, including macroeconomic ones, that are practically impossible to
assess accurately. Furthermore, if we consider to assess brand equity as the consumers differential
265

response, we can discover that the difference between branded and unbranded product reaction
declines which means that brand equity declines without grasping any change in terms of brand
assets. In this case, we must look on the economic environment to find any trend that neutralize our
brand assets. For example, during the current economic crisis, many brands have lost equity without
spoiling their image or reputation. The explanation regards the decrease of available markets on which
brands have to perform, as buyers have less financial resources.
There are two major directions concerning the extent of the benefits of brand equity. The first
considers that brand equity provides added value for both customers and brand owner. This is the case
of Aakers five components model of brand equity. The second direction was opened by Riezebos
(2003), who discriminates between brand equity and brand added value. Built on Aakers model,
Riezebos model fixes market share size and stability as a brand equity component. From this
perspective, brand added value refers to the consumers valuation of the product, while brand equity
to the strategic, management and financial benefits that give value for the company (Riezebos, 2003).
Nevertheless, Aakers approach is still valuable, at least for two reasons. Firstly, he nominates brand
associations as a brand asset, which proves the strong relationship between brand equity and brand
positioning Keller (2008, p. 355) regards brand associations as responsible in getting a specific
position. Secondly, Aaker identifies a sixth asset, the synergy created between the other five
components.

3. Introducing risk into brand equity analysis
As brand equity became the ultimate indicator of the performance of marketing departments,
brand managers are more focused than ever on building, measuring and managing brand equity.
Nontheless, branding literature ignores almost completely a very important factor in defining brand
equity: risk. This gap places branding science at a primeval level of epistemological development, if
we compare it with other economic sciences. For instance, the idea that profit and risk are inseparable
and must be equally considered was first submitted in finance theory in modern portofolio theory, to
be more precisely by Harry Markowitz in 1952.
In terms of branding, the only approach of risk belongs to Abrahams (2008), who similarily
states that a brand strategy should be presented in terms of reward and risk, with due attention to
each (Abrahams, 2008, p.13). He defines brand risk as the total variability and volatility
controllable or uncontrollable on brand performance (Abrahams, 2008, p. 21). Anyway, the problem
that Abrahams points out is not the absence of books and papers regarding brand risk, but the
adequacy of a managers underpinning knowledge of risk and uncertainty conceptually, familiarity
with suitable risk assessment approaches and an ability to deal appropriately with the risk issues
identified (Abrahams, 2008, p. 5).
Abrahams suggests a risk model formed of six components: identity risk, presence risk, equity
risk, reputational risk, status risk, and market risk (Abrahams, 2008). A closer look to this components
results valuable for identifying the sources of progress that a new model can achieve, in order to
provide a useful management tool. Identity risk is about exclusivity and consistency. Exclusivity
depends on the brand capacity to protect its elements as legal asset, while consistency is especially the
problem of global brands, which have to adapt locally and maintain a unitary image. Presence risk
regards brand awareness and attention, and include a qualitative and a quantitative component. The
qualitative component consists of brand saliency in consumers minds, and the quantitative one takes
into account the number of consumers for whom a brand reaches a particular level of saliency, in a
given period of time. Equity risk describes aspects that affect brand capacity of maintaining its
differentiation and competitive advantage. This approach links brand equity to positioning. Reputation
risk refers to the failure probability to meet consumers expectations, and consists of conformity
meeting and exceeding customers standards -, and compliance a sort of ethic risk, concerning
implications in ethical scandals. Status risk implies potential loss of a brands relative position. Unlike
reputation risk, that is almost completely attributable to brand management, status risk is a zero-sum
game. Its impossible for a brand to go up a position, without another brand losing one. According to
Podolny (2005), status affects the new products chances of success, by influencing consumers
behaviour towards the uncertainty of trying a new product. Finally, the last component of Abrahams
model, market risk, convey the probability of changes in the external environment of a brand. The two
constitutive parameters are motivations defined, in this context, as changes of target segments
266

needs and interests , and constraints, that restrict the strategic freedom on the market, whether
legislative or social.

4. Using risk as pivot in brand equity modelling
As Abrahams stated, we must focus on brand performance in order to identify possible factors
that induce variability. Therefore, we will take into consideration performance on the three level of
brand equity we mentioned above: brand assets, brand power, and brand value, so we can talk about
brand assets risks, brand power risks, and brand value risks.
Brand assets risk reflects the probability of undesirable evolutions of brand awareness,
reputation or image. As awareness is usually a stable asset it cant be lost in a short interval
reputation and imagine remain the two risky assets. As a matter of fact, a reaseach of Economist
Intelligence Unit (2005, p. 2) among entrepreneurs conclude that reputation risk is the most important
out of 13 studied risks. Three major factors may be reported in order to argue its importance: impact,
ubiquity, and complexity (Abrahams, 2008, p. 20). The occurrence of reputation risk has a significant
impact on brand power and value, being one of the most frequent cause of failure for top brands.
Ubiquity refects the fact that reputation risk is an indirect consequence of a plurality of problems,
most of them related to delivering the promised value. Reputation risk is a complex one for the
following reasons: (1) its confuse and irregular categorization, (2) the lack of a widely accepted
evaluation technique, and (3) the widespread of risk sources, and thus, of subsequent responsibility
(Abrahams, 2008, p. 20-21). Unlike Abrahams model, where equity and reputation risks are two
separate risks, in this case, reputation risk is just a part of equity risk. Note that in the present model
equity risk has a much larger extent, being the integrative concept of all risks related with a brand.
Brand image risk implies problems related to brand associations, and consequently, to brand
positioning. For instance, a strong brand association may become diffuse because of an inappropriate
brand extention, or because of the competition that transforms the association into a competitive
parity point. Another potential image risk is borrowing of negative secondary associations from
another entity, for example, an endorser.
Brand power risk this is, the probability to experience market share (or other market
performance indicators) loss links especially to competitive factors, and it is pretty similar to market
risk from Abrahams model. Without any changes in terms of brand assets the levels of awareness
and reputation are constant market share may have a significant volatility under the influence of
some factors as: emergence of a new competitor, co-branding actions, promotional activities, or other
similar contexts. Usually, brand power risk are exogenous, being incontrollable. Therefore, in order to
prevent its impact and to reduce exposure, brand management has to establish its proactive and
reactive competitive strategies.
Brand value risk is the most genuine brand risk, in the financial meaning. It can be calculated
more objectively than the other risks using financial and strategic planning methods, such as scenario
technique. Similarily to reputation risk, brand value risk has a complex nature, both endogenous and
exogenous. Forthcoming cash-flows can decline due to management attributable operational
deficiencies, but olso due to the growth of marketing or R&D costs, that are needed to sustain a
specific brand power this growth is induced by competitive conditions.
As most brand equity models, the current one is a verbal and graphical model. Typically for
this kind of model, the risk-based brand equity model has a lack of quantification as main limitation.
Nevertheless, this model has at least three advantages that represent important steps forward for a
better management of brand equity. Firstly, its a dynamic model, an uncommon feature for a
descriptive model. Thereby, brand risks can be tracked in time in order to determine positive or
negative evolutions. Secondly, this model introduces brand risk as a brand equity major component,
which contributes to the general integration of marketing, management and finance in a common
vision. To be noted that, unlike the other components brand assets, brand power, and brand value ,
brand risk is not on the timeline; its a timeless element that brings at the moment risks concerning the
components on the timeline. Thirdly, this model rigorously gathers the underpinning elements of
brand equity, making it an operational model widely accepted and understood by all functional
departments of a firm.
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Although they are not seen as brand-related issues, many of this risks are already dealt by
firms management. A good example of strictness concerning rating, tracking, assessing and
controlling risks is the banking sector. A hasty browse of the banking literature is enough to identify
numerous risks, that should be assigned to brand equity, from a branding perspective: market risk,
sector risk, reputation risk, client-product risk, and so on. While some of this risks are differently
defined ie: market risk is defined as the risk of adverse deviations of the mark-to-market value of
the trading portofolio, due to market movements, during the period required to liquidate the
transactions (Arboleda-Florez, Bessis, 2011, p. 32) which suggest a different approach, others
contents have strong branding references ie: sector risk is the risk related to banks positioning
strategy on the market, and it can be generated by a strong concentration of rentability on a small
number of markets (Opritescu, 2007, p. 67). Its quite obvious that sector risk has closely the same
content as the equity risk from Abrahams model.
It should be said that all the risks included in our model concern the brand owner. Thus, the
risk-based brand equity model presents brand equity from the owner perspective it can be named an
owner-based brand equity model. This specification is useful in order to make the difference between
owners brand-related risks and customers brand related risk this is, the risks related with a brand
that a customer perceive before, during, or after a purchase. In the same time, this naming highlights
the difference between customer-based and owner-based brand equity. According to Elliot and Pearcy
(2007, p. 86), customer-based brand equity can be explained like this: brand awareness drives to
brand-related attitude creation, that will influence emotional associations. These are responsible for
brand preference, that creates loyalty. While customer-based brand equity is the differential effect
that brand knowledge has on consumer response to the marketing of that brand (Keller, 2008, p. 49),
owner-based brand equity represents an economic asset and potentially source of profits and risks.

5. Implications for brand management
The absence of risk literacy in branding was not a problem 30 years ago, but it certainly is
nowadays. This issue transcends marketing field, as brand equity became the most important asset of
many companies. As evidence, in 2010, 80 percent of S&P 500 Index resided in intangibles,
comparing to 1975, when only 17 percents was represented by intangibles assets
(www.standardandpoors.com). Consequently, brand risk management needs to be more closely
handled and its importance has to rise in the general context of risk management.
But not only the increasing percent of brand equity in total capitalization has to be a warning
signal for the risk management. Brand management has became more and more complex, and the risk
sources more difficult to assess and control. Furthermore, risks need to be managed in an integrated
approach that links brand risks to all the other sort of risks. Risks never arise alone, and never affect a
singular aspect of a firms activity. For instance, as we mentioned before, reputation risk can be the
indirect effect of many other risks. After its occurance, reputation risk becomes the cause for other
risks, generating a vicious circle.

Present Timeline

Brand equity
1.Brand assets 2.Brand power 3.Brand value

4.Brand risk

4.1.Brand assets risk 4.2.Brand power risk 4.3.Brand value risk
Figure 1: The risk-based brand equity model
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On this point, a natural step forward for brand management is defining the cost of brand
equity. In terms of the risk-based brand equity model, brand equity belongs to the brand owner,
usually a company. In accounting terms, brand equity is part of shareholders equity. Brand equity
creation and development requires investments Keller (2008, p. 49-50) considers that the money
spent on marketing activities shouldnt be graded as expenses, but as investements in what consumers
have learned, felt and experienced related to the brand. This investments are necessary to get a high
awareness and a good reputation brand assets formation that will lead to obtaining and sustaining
a high market share brand power formation. These investments are made when the investor has the
hope to obtain a specific return on investment (ROI), return on equity (ROE), or return on marketing
investment (ROMI) depending on capital structure and approach. The desired, hoped, or expected
rate of return represents the cost of equity, according to financial theory. The use of ROMI holds the
recommendation of Webster, Malter, and Ganesan (2003). In terms of branding, the process of owner-
based brand equity formation can be defined as a conversion of financial equity into brand equity,
with an eye to profit making. Thus, the expected rate of return on brand equity formation is nothing
else but the cost of brand equity. As investing in brand equity implies risks, return on investment has
to be higher than in the case of a risk free investment. According to Capital Asset Pricing Model
(Elton, Gruber, Brown, 2009, p. 286), this differential return is called risk premium, and represents
the remuneration for taking risks.
Rate of return has two major drawbacks. Firstly, brand equity development requires
permanent attention and action. Sometimes, marketers run simultaneously more than one activity;
each one means an investment in brand equity. The hard task is to isolate the singular effect of each
activity, in order to calculate the rate of return. Secondly, rate of return should be carefully used by
brand management, otherwise it can lead actually to the enhancement of brand risks. ROMI is
proportional with the profit obtained by that investment, that, in turn, is the main part of the brand-
related cash-flows. Thus, the strategic decision of investment depends on brand value. This can lead
to a deliberately increase of brand value on a specific period of time harming the other brand equity
components, especially brand assets. For instance, a luxury brands management can initiate a one
month sales promotion campaign, while the price will be 70% cut. On account of its luxury image, it
may get significant sales and profits, increasing brand value on short-term. But this growth harms
brand assets, especially its image and positioning, affecting overall brand equity on long-term. The
opposite situation has to be avoided too, although its less probable. The uncontrolled investements in
gaining brand awareness, reputation, and image will undermine its value as marketing costs increase,
at a diminishing marginal utility.
In the light of this assertions, we can define brand risk management as the strategic effort for
a well-balanced development of brand assets, power, and value, by avoiding their cannibalization,
and building positive mutual influences. This definition stresses derived risks, caused by inefficient
management, or even bad faith. This involves a serios issue of corporate governance that has to be
considered by the shareholders and top managers when brand performance is discussed. From the
owners perspective, the ultimate goal of brand management is to increase the total wealth of the
shareholders.

6. Conclusions and further research
Any business involves risks, and branding as an important part of it cant make an exception.
A risk-oriented way of thinking is imperative for brand managers in order to insure growth and
stability for their brands.
Moreover, a risk literacy in branding will help to harmonize different approaches towards
business that marketing, management, finance, and other economic sciences developed over time.
This can also lead to a better cooperation of the functional departments and a significant improvement
of business efficiency. From the marketing perspective, a risk-oriented approach will increase the
weight of its words in business decisions.
Abrahams was the first to apprehend this need and he started to fill the gap by introducing a
six components model that suggests some risk sources for brands. This sources are: identity risk,
presence risk, equity risk, reputational risk, status risk, and market risk. This model places brand
equity risk at the same level of importance to the other risks.
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We attempt to provide a new model that places brand equity on the top of the model as
integrative notion on the ground of Kapferers explanation that consists of three components:
brand assets, brand power, and brand value each one with powerful denotative features. Then, we
build on this frame the related risks for each component, resulting a comprehensive model of pure
risks. The word pure" is wisely used to express the risks that arise from the three brand equity
components. Besides pure risks, our model detects derived risks which cant be ascribed to any pure
risk. As we mentioned before, this risks are the consequence of a corporate governance issue
concerning the quality of brand-related decisions.
In order to get practical value, this conceptual model needs to be shifted into an applied
model. This opens a very wide range of future research. First of all, its important to agree on the
subcomponents included in the model ie: whether we include or not brand awareness, reputation,
and image into brand assets component. The most difficult will be to agree on brand assets design, as
brand power is quite clear and brand value is a separate issue. The choice has to meet two conditions:
(1) the selected subcomponents have to best assess the major component, and (2) to reveal all the
potential sources of risks. Then, its vital to develop wide accepted methods to assess brand risks.
Such model is useless, unless this risks are quantifiable this means both procentual and financial
quantification. Finally, an integrated applied model should be developed to gather and combine the
assessing methods. Going through all this stages requires the joint efforts of a versatile group of
researchers, able to apply marketing, management, finance or accountability knowledge for a new era
in brand valuation. As a final conclusion, this paper provides a conceptual framework that emphasis
the increasing importance of brand equity as intangible asset. In many branches, the wealth of the
biggest companies lie on brand equity, so its no longer enough to analyse its capacity to get profite;
brand risk needs to be determined for a proper track of the risk exposure.

7. References
- Aaker, D. (2005), Managementul capitalului unui brand cum s valorificm numele unui
brand, Brandbuilders
- Abrahams, D. (2008), Brand Risk: Adding Risk Literacy to Brand Management, Gower
Publish Ltd.
- Ambler, T. (2003), Marketing and the Bottom Line, Prentice Hall, .
- Arboleda-Florez, J., Bessis, J. (2011), Risk Management in Banking, Third Edition, John
Wiley & Sons Ltd.
- Elliot, R., Percy, L. (2007), Strategic brand management, Oxford University Press.
- Elton, E., Gruber, M., Brown, S. (2009), Modern Portofolio Theory and Investment Analysis, ,
8
th
Edition, John Wiley & Sons Ltd.
- Kapferer, J.N. (2012), The new strategic brand management, 5
th
Edition, Kogan Page.
- Keller, K.L. (2008), Strategic Brand Management: building, measuring and managing brand
equity, Prentice Hall.
- Keller,K.L., Kotler,P. (2006), Marketing Management, Prentice Hall, 12
th
Edition.
- Mizik, N., Jacobson, R. (2008), The Financial Value Impact of Perceptual Brand Attributes,
Journal of Marketing Reseach, Vol. XLV, p. 15-32.
- Munteanu, C.C. (2011), The Effect of the Economic Crisis on the Value of Global Brands,
Ovidius University Annals, Economics Science Serie, Volume XI, Issue 2, p. 879-883.
- Opritescu, M. (2007), Managementul riscurilor i performanelor bancare, Universitaria,
Craiova.
- Podolny, J.M. (2005), Status Signals: A Sociological Study of Market Competition, Princeton
University Press.
- Riezebos, R. (2003), Brand management: a theoretical & practical approach, Financial
Times/ Prentice Hall, Harlow.
- Webster, E., Malter, A., Ganesan, S. (2003), Can Marketing Regain Its Seat at the Table?,
Marketing Science Institute Report No.03-133, Cambridge, MA.
- Economist Intelligence Unit (2005), Reputation: Risk of Risks, The Economist Intelligence
Unit.
- www.standardandpoor.com .
270

ONLINE SOCIAL NETWORKS
A COMPARATIVE ANALYSIS FOR THE MARKETING WORLD

FUCI U Mircea
Teaching assistant, Ph.D. Student, Faculty of Economics, Romanian-German University of Sibiu, Romania,
mirceafuciu@yahoo.com

GORSKI Hortensia
Professor, Ph.D., Faculty of Economics, Romanian-German University of Sibiu, Romania,
tenzig11@yahoo.com

Abstract: We are in an age of continuous change. The development of the Internet and of the
information and communication technologies have led to important shifts in the way companies do business.
This paper aims to present the concept and the evolution of a new internet-based instrument: the online social
network (OSN). We underline the impact of these new changes on the marketing concept, and the importance of
OSN for a companys future development. We are presenting a comparative analysis, from the users profile
point of view (age, education, gender, number of visits etc.) between the worlds largest OSN, Facebook, and
the world business oriented OSN. The article also presents a profile analysis of the Romanian, Bulgarian and
Romanian Facebook user.

Key words: marketing, social networks, information technology, users


1. Introduction
The transition to global economy and the strong development of means of communication and
modern information technology, is fertile ground that managers, marketers and organizations should
use to inform potential clients or consumers in a faster and more efficient way. The world of business
is changing. The development of the Internet has become one of the most if not the most important
method of communication in the first decades of the 21
st
Century. In the last years a new method of
communication has arisen: the online social network. The fast and strong development of this new
means of communication has created a new way for individuals to communicate faster, better and at
the same time has made it possible to personalize/customize the message that can be sent. It is
imperative that managers and marketers alike use this new tool in order to identify the needs and
desires of clients and consumers and at the same time it offers them the possibility to target the
individuals in a more precise way due to the information presented about the users in online social
networks.

2. Online Social Networks concept and development
The business and marketing environment have evolved greatly in the last 20 to 30 years. If we
look back at the evolution of the economic world in the last Century, we can clearly observe a clear
development of this environment. Before we can start to understand the development of the online
social networks, we have to understand the evolution of the marketing concept in the last century.
Philip Kotler has made a short presentation of the marketing concept evolution in his book Marketing
3.0 (2010):
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Table 1: Marketing evolution from 1.0 to 3.0
Evolution
Marketing 1.0
product orientation
Marketing 2.0
consumer orientation
Marketing 3.0 value
orientation
Objective To sale goods
To satisfy and keep
clients
To make the world a
better place
Potentiating
factors
Industrial revolution Information technology New technology wave
The manner
in which
companies see
the market
Mass consumers with
physical needs
A smarter consumer
A human being with
heart and soul
The marketing
fundamental
concept
Product development Differentiation Values
Marketing
general
directions for
the company
Product specification
Company and product
positioning
The companies
mission, vision and
values
Proposal value Functional
Functional and
emotional
Functional, emotional
and spiritual
Interaction with
the consumers
Transaction between a
company and several
consumers
An individualized
relationship
Cooperation between
more companies and
consumers
Source: Kotler, P., Kartajaya, H., Setiawan, I., Marketing 3.0 de la produs la consumator
i spiritul uman, Publica Publishing House, Bucharest, 2010, p. 20;

The development of the Internet as a marketing tool has started in the early 90s, when World
Wide Web was opened to the general population. The development of www and of graphic interface
programs, like Mosaic and later Netscape has led to an explosive increase of the Internet usage.
The introduction of the Microsoft operating programs in the mid 90s has turned into one of
the biggest and fastest developing businesses of the last century. The great majority of the worlds
populations (at least in the urban areas) are Internet users. This has lead to the development of a new
and visible marketing tool and later to a new marketing environment. Currently, almost all
organizations have an Internet page or are in some manner present on the Internet. In this day and age
you do not exist if you are not on the web.
This is the type of marketing we find ourselves in today. From the second half of the 90s the
new technological changes and advances have created the premises for the rapid development of
marketing, mainly through three major elements (Kopeland and Malik, 2005): (1) computers are
becoming increasingly accessible to the widest percentage of population; (2) mobile phones which
in time have become extremely cheap; (3) low-cost Internet connection the access to internet is
becoming easier (Meerman, 2010)., it is currently estimated (EuroStat, 2011) that in Romania 37% of
the population uses the Internet on a weekly basis.
These three major elements are just vessels for the new evolutions of information and
communication technologies. Thus, a new wave is developing: that of communication means for
social dialogue (social media). Philip Kotler divided the social media platforms into two main
categories (Kotler et al., 2010): (1) social media systems designed for expressions, which include the
blogs (Twitter or Youtube) and social networking, sharing sites etc. (Facebook, MySpace, Flickr etc.);
(2) social dialogue means based on collaboration, a good example being the site Wikipedia.
A social network consists of all the people friends, family, colleague and others with
whom one shares a social relationship, say friendship, commerce, or others. Traditional social
network study can date back about half a century, focusing on interpersonal interactions in small
groups due to the difficulty in obtaining large data sets (Wasserman and Faust in Hu and Wang,
2009).
But what is an online social network? An online social network is a site through which people
connect with friends/acquaintances, either people they know from outside the virtual environment, or
the ones only from the virtual environment (Zarella, 2010), whom they have common interests and/or
activities with.
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Other authors state that a social network site is a web-based service that allows individuals to
(1) construct a public or semi-public profile within a bounded system, (2) articulate a list of other
users with whom they share a connection, and (3) view and cross their list of connections and those
made by others within the system. (Boyd and Elison, 2007). Online social networks meet the
individuals need to be connected to an online environment and aim to facilitate access to information,
to develop knowledge, experiences, opinions and documents, therefore enabling the possibility to fun,
and also the possibility to strike commercial bargains (Veghes and Pantea, 2009)
The online social networks have developed greatly in the last years. Even if most people do
not know it, in reality the online social network was born in the late 1990. Even then a form of
collaboration platform was used. It started with the BBS. Short for Bulletin Board System, these
online meeting places were effectively independently-produced hunks of code that allowed users to
communicate with a central system where they could download files or games (many times including
pirated software) and post messages to other users (Nickson, 2009).
The first recognised online social network was launched in 1997 (Boyd and Elison, 2007), but
due to the inability of sixdegree.com to maintain a sustainable profit, it was closed in the year 2000.
The modern idea of online social networking has emerged in 2002, with the launch of Jonathan
Adams Friendster network. This network was created following the Match.com pattern. Friendster is
a pioneer in the development of online social networking and it focused on helping people remain in
touch with friends and discover new people and things that are important to them.

Source: Boyd, D.M., Ellison, N., B., Social network sites: a
definition, history and scholarship, Journal of Computer Mediated
Communication, vol.13, (1), 2007,
http://jcmc.indiana.edu/vol13/issue1/boyd.ellison.html

Currently, we have more than 150 online social networking sites worldwide, of which 10
online networking sites have more than 100 million users.

273

3. Comparing online social networks Facebook vs. LinkedIn
It is imperative for companies, managers and the marketing specialists to understand the
typology of the individuals that use the online social networks (OSN). Understanding the profile of
the clients or consumers using online social networks will help managers and the marketing strategists
target the clients in a more personalized and direct manner. In order to do that we must see which are
the most common used OSN.
Nowadays, more than 60% of the Internet users are connected to one or more social media
(including online social network) sites. A recent research of OnlineMBA (Fach, 2012) has sown that
57% of Facebook users are female and 43% are male. The age groups of Facebook users are: (1) Less
than 24 years old 46%; (2) Between 25 34 years old 22%; (3) Between 35 44 years old 18%;
(4) More than 45 years old 14%. Regarding the education level of the main Facebook users, the
distribution is as follows: (1) Less than High School Diploma 9%; (2) High School Graduate 10%;
(3) University Student 57%; (4) Bachelors of Graduate Degree 24%. The same study shows that
the average friend count on Facebook is 130, the average visit count on mobile devices is 200 million
/ day, and usually the users have a Facebook visiting time average of 23 minutes.
Currently, the largest OSN in the world is Facebook.com with more than 839 million users
worldwide, which are relatively evenly distributed across Europe, North America and Asia.

Figure 1. The distribution of Facebook.com
users across continents in April 1
st
, 2012

Source: developed by the authors based on the data
from
http://www.socialbakers.com/countries/contine
nts, accessed and retrieved on April 17, 2012

As we can clearly see from figure 1, Europe, North America and Asia have the largest number
of Facebook.com users in the world with an average of 223,24 millions of users (26,61%) of the entire
population that uses Facebook.com. At the same time, we can clearly see that South America and
Africa have only 13,78% and 4,77% of the worlds Facebook.com users and the lowest level of users
in the term on f numbers is registered by Australia and Oceania with less than 2%.

274

Figure 2. The distribution of Facebook.com
users among the first 10 countries in April 1
st
, 2012

from
http://www.socialbakers.com/countries/contine
nts, accessed and retrieved on April 17, 2012

As we can see in figure 2, there are several countries that have more than 20 million users of
Facebook.com. The country with the largest number of users is the United States of America with
more than 157 million active users which represents 18,72% of a total of more than 839 million
Facebook.com users. The next 3 countries, India (5,47%), Brazil (5,40%) and Indonesia (5,06%) are
followed by Mexico, Turkey , UK, Philippines, France and Germany with less than 5% of the world
users.
Another important online social network is LikedIn.com which was created in 2003 (Boyd
and Elison, 2007) and has reached large numbers of users. The difference between Facebook and
LinkedIn is that the first one is used more for personal reasons; the second one is used for business
reasons, for finding jobs, making connections with people from the same field of activity. The main
profile (Fach, 2012) of the LinkedIn.com users is as follows: Gender distribution: 50% - Male and
50% - Female; Age distribution: (1) Less than 24 years old 4%; (2) Between 25 34 years old
15%; (3) Between 35 44 years old 49%; (4) More than 45 years old 32%; Education distribution
is: (1) Less than High School Diploma 3%; (2) High School Graduate 10%; (3) University Student
37%; (4) Bachelors of Graduate Degree 50%. The study has pointed out that 64% of LinkedIn
users have an account because they want to grow their businesses, 66% of the users have accounts for
business purposes, and there are approximately 2 million companies active on LinkedIn.

Figure 3. The distribution of LinkedIn.com
users among the first 10 countries in April 1
st
, 2012

from http://www.socialbakers.com/linkedin-
statistics, accessed and retrieved on April 17, 2012
275

As we can observe, the majority of LinkedIn.com active users are in the United States with
43,46% of a total of more than 134 million user worldwide. The rest of the 9 countries analysed have
less than 10% of all the LinkedIn users. If we analyze figure 2 and figure 3 in a comparative manner
we can observe that five of the countries are found in both cases as users of Facebook and of
LinkedIn. We can see a graphic comparison for the users of these 5 countries in figure 4.

Figure 4. LinkedIn and Facebook users in top 5 countries

Source: developed by the authors based on the data from
http://www.socialbakers.com

It is clear that even with a huge difference in the number of users (Facebook: 839 million +;
LinkedIn: 134 million +), the main users of these two online social networks are from the United
States and India. If we continue our statistical study based on several online sources, we can observe
that companies have started taking very great care of developing strategies based on the online
system. Most of these companies have started using online social networks sites since 2005 or 2006,
depending on the development state of the OSN. If we take a look at companies worldwide we can
observe on their website multiple links to several online social media sites like: Facebook, Twitter,
Blogger, YouTube, MySpace etc. A study of august 2011 (Henrikson, 2011) has shown the following
distribution of online social media sites usage by large sized companies worldwide:
- Facebook 71% of the companies;
- Twitter 59% of the companies;
- Blogger 50% of the companies;
- YouTube 33% of the companies;
- Message Boards 33% of the companies;
- MySpace 6% of the companies.

Based on the figures presented in this section we can clearly see the differences between the
two analysed online social networks. We can clearly see the importance of creating a profile of the
users of OSN. But companies must take into consideration the individual aspects related to the profile
of the OSN users in each country and even region. Figure 1 clearly shows the differences between the
worlds regions, it is the same thing for countries. The profile of the Facebook and LinkedIn users is
influenced by the level of Internet access in the country, education, income, interests, motivations etc.

4. Facebook user profile Romania, Bulgaria and Hungary
Like stated before it is very important for companies, managers and marketers alike to
understand the new trends generated by the information and communication technologies and
especially by the Internet. Using the online social networks, managers must create specific and
personalized strategies adapted to each individual, to each country and each culture. Further on, we
276

are presenting several aspects regarding the Facebook.com profiles for Romanian, Bulgarian and
Hungarian users.
In Romania (SocialBrakers, 2012), at the beginning of April 2012, there were more than 4,64
million Facebook users. According to the National Institute of Statistics, at the end of 2011, Romania
had a population of 19,042 million. The Facebook users represent a level of penetration of 21,15% of
the population and a level of 59% of the online population. According to the same source, Bulgaria
and Hungary have 2,32 million users, respectively 3,96 million users. At the same time the
penetration level for the population was of 32,42% for Bulgaria and 39,60% for Hungary. A higher
level is registered by the online penetration level which is of 68,27% for Bulgaria and 64,07% for
Hungary (figure 5 and 6).
Figure 5 Facebook user penetration level in Figure 6 Facebook user statistic in
Romania, Bulgaria and Hungary Romania, Bulgaria and Hungary

Source: developed by the authors Source: developed by
the authors

Other important aspects that have to be taken into consideration when creating a profile for
Facebook user, is the age and the gender of the users. These two elements together with education,
income and preferences can clearly offer an exact picture of the Romanian, Bulgarian and Hungarian
Facebook user (figure 7 and 8).

Figure 5 Gender distribution or Facebook Figure 6 Facebook user age group
users in Romania, Bulgaria and Hungary distribution Romania, Bulgaria and Hungary

Source: developed by the authors Source: developed by the authors
277

The analysis of the two figures above shows us that there are no important differences between the
three countries. With regard to the gender aspect, we can see that in Romania there are 51% male
users and 48% female users, and at the same time in Bulgaria and Hungary the results are similar,
with 52% female users and 48% of the users are male.
Regarding the age of Facebook users, we can see the following: (1) under 18 years old the
percentage is between 14 and 15 percent in all three countries; (2) between 18 24 years old
Romania has a slight advantage to Bulgaria and Hungary with a level of 31%, respectively, 26 % and
24%; (3) between 25 34 years old Romania and Bulgaria have the same level of 30% and Hungary
has 25% of its users in this age group; (4) between 35 44 years old the analysis shows that
Bulgaria and Hungary have the same level of 18 % and Romania trails with 14%; (5) between 45 55
years old the users from Bulgaria and Hungary with this age are between 8 and 9%, followed by
Romania with 4%; (6) the users over 55 years old vary between 5 and 9 % depending on the country.
As outlined before, the differences between the 3 countries is not great, but even with the
small differences we can clearly see that Hungary Facebook users are a bit more evenly distributed
than the other two, but we must also consider that the population of both Hungary and Bulgaria is
somewhere around 10 million individuals, when Romania has 19 million, which means a greater
potential for internet and consequently Facebook development.

5. Conclusions
The evolution of the informational age in the past two and a half decades has opened the way
to new opportunities for companies and managers. Since the beginning of the year 2000, a great leap
has developed in the Internet environment. New tools, like email, blogs, forums, collaboration sites,
online social networks etc., have emerged offering companies and managers alike new possibilities to
develop strategies and methods to understand the needs and desires of the consumers and to reach
them faster, better and in a more personalized manner. In this paper we have presented a new
instrument, which has and will allow managers and marketing specialists to do so: the online social
network.
We have underlined the evolution of the marketing concept in the last century; we have
presented some definitions regarding the concept of online social networks presented by different
authors, as well as several aspects regarding the evolution of this new tool. In order for managers and
their companies to know how and where to promote their products and services they must make the
difference between the different types of online social networks. After a careful analysis of several
demographic figures we can clearly notice that the great majority of Facebook users are under the age
of 35 years old with higher education degrees from North America, Europe and Asia. At the same
time, the majority of LinkedIn users are over 35 years old, they have graduated from a higher
education institution, and they are especially from the United States, India and the United Kingdom,
and the main objective of this OSN is to develop business relations and company growth. Currently,
one in every nine persons in the world is connected to one or more online social networking sites,
approximately 200 million pages are visited every day and the duration of a visit is of an average of
23 minutes.

Taking all this into consideration, as well as the profiles of the consumers for each country, as
well as the globalization of business and the possibility to reach your client and / or a company
anywhere in the world at any time, managers must use these new opportunities to further develop and
grow bigger in the real and in the digital world.

6. References
- Boyd, D.M., Ellison, N., B., (2007), Social network sites: a definition, history and scolarship,
Journal of Computer Mediated Communication, vol.13, (1), available at
http://jcmc.indiana.edu/vol13/issue1/boyd.ellison.html;
- Eurostat 2011, Information society statistics,
http://epp.eurostat.ec.europa.eu/portal/page/portal /information_society/data/main_tables
278

- Fach, M., (2012), Social Media Demographics, March 9, Search Engine Journal,
http://www.searchenginejournal.com;
- Facebook and LinkedIn Statististiks (2012), www.socialbakers.com accesed on the 17 19
aprilie 2012.
- Henrikson, J.U. (2011), The Growth of Social Media, August 30, Search Engine Journal,
http://www.searchenginejournal.com;
- Kotler, P., Kartajaya, H., Setiawan, I., Marketing 3.0 de la produs la consumator i spiritul
uman, Publica Publishing House, Bucharest, 2010, p. 20;
- Kopeland, M.V., Malik, O., (2004), How to ride the fifth wave, Business 2.0 Magazine, july ;
- Nickson, C., (2009), The History of Social Networking, January 21, digital trends.com
- Veghes, C., Pantea, C., (2009), Social networking: reasons to join and things done by the
romanian consumer, Journal of the Unversity of Oradea - economics, vol. 4 (1), pp. 869-873;
- Wasserman, S., Faust, K., (1994) Social Network Analysis: Methods and applications,
Cambridge Univ. Press, in Hu, H., Wang, X., (2009), Evolution of a large online social
network, Physics Letter A Journal, vol. 373 nr. 12 13, pp. 1105 1110.
- Zarrella, D., (2010), The social media marketing book, OReilly Media Inc, Sebastopol,
California, SUA;

279

ATTITUDES, OPINIONS AND BEHAVIOUR OF MANAGERS OF BRAOV COMPANIES
ON THE APPLICATION OF ENVIRONMENTAL MARKETING IN COMPANIES

FUNARU Mihaela
Ph.D. Student, Faculty of Economic Sciences and Business Administration, "Transilvania" University from
Braov, Romania, mihaela.funaru@yahoo.com

NI COLAE Carmen-Magda
Braov, Romania, carmen.nicolae@unitbv.ro

I OSI P Alexandru
Braov, Romania, alexiosip@yahoo.com

Abstract: The article presents results of a marketing qualitative research on attitudes, opinions and
behaviour of managers from Braov on the adoption of environmental marketing in their firms. Research
objectives aimed at identify the reasons for which companies use environmental marketing, benefits it can bring
on short, medium and long term, economic and social implications that it has assumed on costs, prices,
environmental protection, the company's image in the market, legislation, etc. It identifies how the companies
intend to take a proactive advantage of market opportunities and obtain success versus adopting reactive
attitudes and losing a number of advantages. Following analysis and interpretation of data it was concluded
that the proactive approach of environmental marketing bring benefits for the company image, is a long-term
strategy of it, bringing a range of opportunities and long - term advantages. At the same time, it is estimated
that the largest obstacle in implementing environmental marketing in companies consists in high additional
costs, and also a lack of consumers education. It is also necessary to specify that the data obtained are not
representative and could not be extrapolated to all industrial companies in the city of Braov, because sampling
was not random and the sample was not representative of the population studied.

Key words: ecological /environmental /green marketing, social responsibility, environmental
protection, strategic vision

JEL Classification: M31

1. Introduction
We are in a period of unprecedented technological development and globalization of business
where limited resources, environmental degradation are increasing and it is important for society to
recognize existing and future threats to human health and the environment, to the very life and the
future evolution of mankind due to pollution and excessive consumption of resources.
Everyone is responsible for preserving the environment, both individuals and companies.
Thus, appropriate measures must be taken to preserve the environment, human health, to enhance
people's lives for a future of all mankind.
Considering the importance of awareness of environmental issues facing world problems of
limited non-renewable resources, it is important to study and analyze the situation in Romania
regarding the awareness of these problems in Romanian companies and measures that they took until
now and applied to reduce energy consumption of non-renewable resources, protecting against
environmental degradation, placing the importance of preserving human health, environment and
quality of life higher than a profit as big as possible and immediately.
It is interesting to know and analyze the attitudes, opinions, behaviours of leaders of
Romanian companies on these issues, the real measures they have taken in this respect, their vision on
the future of business in such a world, which, however, the trend is to act for the purposes of
preserving the environment, concern for human health and quality of life.
In business, success can not be achieved without knowing the environment and the consumer
market.
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In this respect, it is necessary to carry out marketing research, to study the market,
competition, the user, the consumer, to make predictions, to evaluate the environment and situation.
Right key for an effective marketing research is not the technique used nor the great amount of data,
but the immediate control of useful information.
Marketing research refers to the investigation, collection, filtering, processing, analysis,
interpretation, use and dissemination of information describing a situation of marketing, in order to
develop a decision. Particularly, the notion of market research can specifically refer to the
documentation presented as the final research report.
Marketing research process are indispensable to scientific substantiation of decision, they
reduce uncertainty about the marketing behaviour aspects of the organizations. They provide
information about consumers, their behaviour and the environment which are absolutely necessary for
design and implementation of future plans and strategies. In making decisions, managers are calling
on the experience and intuition, but strategic decisions, systematic and objective investigation of the
market is a necessity.

2. Qualitative marketing research - semi-directive depth interview
Qualitative research methods are used either to explore a world little known, vaguely defined
problem or to understand a phenomenon, to make in-depth analysis in order to capture all the
subtleties.
If research is exploratory one, then qualitative methods are used for investigation prior
quantitative studies.
Qualitative methods are used in order to allow the researcher to form an overview of the
problem investigated, a more complete vision possible.
Thus, qualitative research can be used to:
- A more accurate formulation of the problem under investigation, so that it can achieve further
precise study;
- Formulate hypotheses about the relationships between variables and researcher familiar with
the investigation;
- Eliminating certain possibilities by testing;
- Making tools for obtaining information, taking into account all aspects of the situation
analysis.
Therefore, using specific techniques will be identified certain critical significant aspects
related to the problem investigated.
If marketing research aimed at deep understanding of a phenomenon, then qualitative
methods are used in order to carry out independent investigations. In this case, qualitative methods are
used to investigate complex phenomena.
The purpose of qualitative research
Qualitative research can solve alone or together with quantitative research, a wide range of
marketing problems. In most cases, qualitative research may be aimed at one of the following:
1. Familiarize researchers with the issue studied or sector concerned. In this respect, it can perform
exploratory analysis documentation, case studies, interview with experts.
2. Identification of the working hypotheses.
3. Exploring consumer motivations and attitudes, their value system.
4. Understanding the buying and consumption behaviour and decision-making.
5. Structuring forms, objectives, understanding their meaning.
Types of qualitative research
Qualitative research is an investigation into different levels of complexity, designed to
identify, clarify and define what is relevant, significant and important for a problem, opportunity or
marketing context. It allows a deeper understanding of concepts and essence of phenomena and
processes considered.
Qualitative research seeks answers to questions like: Why? and How? Knowledge which
addresses the root causes of attitudes, behaviours, preferences and opinions of consumers and
subjective elements, emotional or unconscious behind them.
Making a qualitative research involves completion of a similar general phases of marketing
research: discovering and defining theme of investigation; establish hypotheses and research
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objectives; choosing methods for gathering information that may be considered an individual or group
of persons; sample composition and recruitment of participants; preparation conditions to achieve the
primary activity of obtaining information, collecting information, processing, analysis and
interpretation of information, the final report. Qualitative research can be grouped into exploratory
research and qualitative research to investigate the attitudes, motives and behaviours.
Qualitative research to investigate the attitudes, motives and behaviour is based on the direct
communication techniques that can be unstructured or semi structured and indirect technique called
projective techniques. These research techniques are based on either individual or group techniques.
Within the individual direct communication techniques are included informal discussions, in-
depth interview method, group discussion method, the method of verbal protocol.
Depth interview method, depending on the level of structure is of three types: non-directive
depth interview (unstructured), depth semi-directive interview (semi-structured) plus paper and pencil
interview involving a high level of structuring.
Depth interview method is a non-directive unstructured communication involving to find out
in detail from the subject his beliefs and feelings in relation to everything related to the topic under
consideration, in order to discover the main reasons for his behaviour. Therefore, this method is
recommended to be used when you want a detailed examination of consumer and purchasing
behaviour of products or services, including some of great value when they want information to be
obtained are very sensitive issues related to, when considering the specific work of specialists, etc.
Dialogue is recorded on tape, re-transcribed and then analyzed the content.
A variation of the depth interview is a semi-structured or semi directive depth interview. The
main difference there is that discussion takes place on an interview guide, a list of topics (5-6 topics).
They are raised by the operator if the subject did not address in its spontaneous exposure or not
deepens. Not impose a specific order to address the issues set out in the general theme.
Qualitative methods, such as those mentioned above, require a content analysis as a specific
method of analysis. Content analysis is a set of research techniques of communication way
envisaged that the systematic and objective methods for describing the messages leads to getting the
indicators (quantitative or qualitative) that allow the inference of knowledge with regard to the
conditions of production - reception of these messages.
Content analysis is considering the use of three types of analysis: syntactic analysis, lexical
analysis and thematic analysis. Thematic analysis, mainly used in marketing research involves
identifying issues, determining their frequency of occurrence, frequency etc. themes association.

3. The concept of green marketing
Ecological marketing can be defined as "a holistic management process responsible for
identifying and satisfying consumers and society in a profitable and sustainable way" (Karna, J.,
2003).
Ecological marketing is similar to classic marketing. The difference is that philosophy must
find a balance between technical and economic perspective of markets and social - environmental
approach.
Ecological or green marketing goes beyond social marketing by four key ways (Luca, GP, L.
Bacali, 2003):
Green marketing has, as finality, an open perspective rather than a long term perspective;
It focuses more on the natural environment;
It treats the environment as something intrinsic value, far beyond its usefulness to society;
It puts emphasis on global issues rather than the private companies.
American Marketing Association (FDA), in 1976, considered environmental marketing as
"the study of positive and negative aspects of marketing activities on pollution, exhaustion of energy
and the non-energy resources" (Polonsky, MJ, 1994).
Environmental or green marketing can be defined as a responsible marketing to meet
consumer and society needs in a profitable way for the company, and sustainable environment.
Attribute of "green" associate with marketing impart some new valences. They can have
multiple meanings, such as environmentally sustainable, natural, environmental conservation and
preservation.
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Green marketing is defined as "the process leading to ecologically sustainable exchanges by
creating innovative products and services through the management and consistent distribution,
communication and public relations, that allows satisfy consumers needs and companies' objectives
that satisfy the company's priorities and those of society "(Dumitru, C., 2003).
Consumers are becoming more demanding on quality of life and how it is affected by their
consumption, these pressures leading to increased social responsibility of firms. Ecological
marketing stimulus is increased environmental awareness of consumers. He is a sequel, an adaptation
of the marketing philosophy to requirements of each era of marketing. He tries to integrate
responsibility and environmental issues in marketing management concepts.
A definition of environmental marketing is given by Polonsky (1994, p.2) who says that
"green marketing is all activities designed to generate and facilitate any exchange intended to satisfy
human needs and desires so that their satisfaction has been done with minimal impact on the
environment".
In this definition, the author emphasizes that the interests of the company, consumers are
provided in terms of protecting the environment and with minimum negative impact on the
environment.
Ecological marketing is based on balanced approach of social, technological, economic and
physical aspects of business and society, focusing on developing sustainable, the long term quality,
the true and real needs of consumers, improving quality of life, on the environment and health impact
(Funaru, M., 2009).
Ecological marketing is marketing that leads to profitability of the organization, but also
sustainable (protection) environment. Marketing is part of the organization, but also a result of other
components (total quality, technology, strategic management, societal marketing etc.).
Green marketing is a factor or an important element in finding viable and effective solutions
to environmental degradation and quality of life.
Green path is the path which should ensure future continuity on earth in terms of balance,
health and a better quality of life.
Faced with the negative effects of pollution, producers, consumers are obliged to act, to take
measures, to find solutions for their prevention.
In short, green marketing is the marketing mix approach in terms of ecological principles
(Dumitru, C., 2003).

4. Qualitative research on the topic - Attitudes, opinions and behaviour of managers of
companies from Braov on the application of environmental marketing in business
In the study presented in this paper, the purpose of in-depth interview semi directive
qualitative research is to identify managers' opinions of the Brasov companies on the application of
the environmental marketing in their business, benefits, problems faced in this regard.
J ustification for the choice of qualitative method chosen
A qualitative semi directive depth interview method was chosen because it was considered
most appropriate method for their intended purpose and circumstances. Respondents are people in top
management of companies and a focus group would have been impossible to organize. This method
was chosen because:
- Interviews are conducted in those locations of respondents, respectively Brasov office
managers;
- Discussions take place on a interview guide in order to maximize the relevant
information collected, guide containing a list of four topics;
- The interview is 60 minutes;
- Discussions are audio recorded and then analyzed in detail, which provides more
relevant results based on the issues.
Research objectives
1. Identify reasons why companies use environmental marketing.
2. Identify perceptions regarding short, medium and long term benefits that green marketing
brings in enterprises.
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3. Identification of attitudes on the economic and social implication that application of
environmental marketing in enterprises has related to costs, prices, environmental protection,
company image on the market etc.
4. Identify the reasons for environmental enforcement.
5. Identify measures, proposals, strategies, application way of ecological marketing in business
to improve, streamline their business, protecting the environment and human health.
6. Identify how the companies intend to take advantage of opportunities and successful in the
market adopting a proactive attitude versus a reactive attitude, losing so many opportunities
and advantages offered by the market.
Sample size and its formation
Sampling is non random. The sample consisted of a total of 8 people. Sample members are
part of top management Brasov industrial companies. It took into account the size of the company
having as criterion the number of employees.
It was considered that the industry is representative on the application of principles of
ecological marketing, consumer social responsibility and environmental health and in particular on
non-renewable resource consumption and environmental pollution.
Also has been considered as representative of topic researched the medium-sized companies,
large and very large.
The sample is not statistically representative, but must reflect the structure of the population
studied in relation to the theme addressed.
The sample was formed as follows:
2 managers - medium firm;
3 managers - large company;
3 managers - very large company.
The selection questionnairewas developed to meet the following requirements:
To exclude from research subjects who are not allowed to participate:
o Firms that participated in qualitative studies in the last six months regardless of
subject;
o Companies participating in a study on the same subject regardless of time;
o Companies that have not adopted environmental marketing and no environmental
management system.
To verify the criteria to be met by the participants in that interview:
to hold a leading position in industrial firm to enable knowledge and / or influence the
environmental marketing or environmental management activities in company (that is to
occupy one of these functions: General Manager, Deputy Manager, Executive Manager,
commercial manager, environmental responsible, owner).
Design of interview guide
Semi directive depth interview is conducted based on an interview guide, a list of topics. The
overall theme is presented to the subject. The discussion is directed to the themes in the interview
guide. It uses open questions presenting only major topics discussed, the remaining questions are
under discussion only when subjects are not address them or not discuss them in depth. Not impose a
specific order to address the issues set out in the general theme.

Themes and sub-topics of semi directive in-depth interview
Theme1.The attitude of Brasov managers on environmental issues from the perspective of social
responsibility the company's strategic vision and advantages or disadvantages from a proactive or
reactive approach.
Theme2. Refers to opinions of Brasov managers on adopting green marketing in companies through
the implications involved in it (company image, costs, regulatory restrictions, etc.), but also on
medium-term and long term benefits.
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Theme3.The reasons for companies adopt green marketing as strategic vision.
Theme4. The behaviour of Brasov managers on adopting environmental marketing in their businesses
from the current economic crisis approach, strategic perspective and social responsibility.
Qualitative primary data collection
Qualitative research uses unstructured data collection methods as opposed to quantitative
research methods which use structured data collection.
In a semi directive depth interview the amount of raw data obtained is very high quality and
must be synthesized. Data should be collected in a transparent, comprehensive and complete way,
including contradictory data.
In a semi directive depth interview, raw data are obtained mainly from audio recordings that
are re-transcribed and analyzed later. Identification data are obtained from recruitment questionnaire
of participating subjects of interview. The interview will be recorded with the permission of subjects.
The purpose of each meeting is to discuss opinions, attitudes and behaviour of managers on
adopting green marketing in their firms. Subjects are told the interest starting from the general
aspects, untargeted, and then reaching to the depth of the problem addressed. Allow freedom to
subjects to address the investigated issue and develop it as deeply possible.
Analysis and interpretation of data obtained
After analyzing the responses of subjects in the interview guide, they found that:
Theme1. The attitude of managers from Brasov companies on environmental issues.
Most members of the sample said that social responsibility of environmental and human
health is a must. They believe that preventive actions and proactive attitude are the best choice, and it
is necessary to respect and comply with minimum legislation.
Theme2. Opinions of Brasov managers on adopting green marketing in their businesses.
Regarding the implications of adopting ecological marketing in companies, most respondents
agree that this requires additional costs, but at the same time, provide a better image for company.
Also, some subjects are the opinion that the law is burdensome, are always changing and ambiguous.
In terms of adopting ecological marketing mix, most subjects thought that is important to
adopt and design ecological products with the lowest possible impact on environment. Also they
considered ecological communication regarding their actions as important. Most believe that the
implementation of the environmental marketing in firms assumes savings in natural resources and
energy, involving long-term advantages.
Theme3. The reasons for companies adopt green marketing as strategic vision.
Most respondents consider adopting green marketing as a social responsibility. The majority
says that the reason for green marketing is that it is a necessity and the reasons against it are
represented by the higher costs involved and the lack of environmental education and involvement of
both managers and consumers.
Theme4. The behaviour of Brasov managers on adopting environmental marketing in their
businesses.
About the behaviour of Brasov managers on adopting environmental marketing in the current
economic crisis, some subjects are the opinion that this is not an impediment, others say it has reduced
spending on environmental protection.
Regarding strategic perspective, the majority believes that the adoption of green marketing in
their business involves long-term advantages, but that brings a positive image for the companies.
Regarding adoption of environmental marketing in terms of social responsibility, most
respondents consider that it is a necessity, but also shows a trend in present days, to be followed, no
doubt, in future, by all companies.

5. Research findings
Based on qualitative research such semi directive depth interview, the research will continue
in the form of quantitative research.
Based on research chosen theme will be an investigation that will require a representative
sample and thus there will be able to extrapolate the results to the entire population under
consideration.
1. Most members of the sample believe that the proactive approach of environmental marketing
brings benefits for the company image.
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2. Most of the interviewees consider that environmental enforcement is a necessity in business,
the responsibility of each undertaking.
3. Most respondents believe that they are influenced in taking decision to implement
environmental marketing by the legislation, by the need for compliance with its regulations,
but also by the positive image it brings to market for company.
4. Some respondents argue that ecological marketing approach is a long-term strategy of the
company.
5. Sample members are interested in green marketing opportunities in terms of long-term
benefits.
6. Most interviewees said that the biggest obstacle in implementing environmental marketing in
firms is costs and lack of education of consumers.
7. Managers attitude regarding environmental is positive in words, no different from the
national level, but in reality is in the area of taxation, compliance with legislation.
8. Environmental regulations are inconsistent, respondents believe, there are rapid and frequent
changes of legislation within one year, forcing companies to comply quickly, assuming this
extra effort.
9. Also, the authorities responsible for this area seek just to apply sanctions, dont give viable
solutions to managers for problems in this field and provide no benefits to firms involved in
overcoming regulatory requirements.
10. All companies involved in this research have implemented environmental management
systems, have an environmental policy, act proactively and preventively to avoid any possible
environmental accident.
11. Most subjects consider long-term benefits that can be obtained (reduced consumption of
resources and energy, reduce costs, the company's good image in the market), however, agree
that, currently, their efforts are not appreciated at their true value as due to lack of education
of consumers, but also because of indifference and not proper involvement of authorities.
12. The crisis, according to subjects, is not an impediment to environmental investments, this is
true, especially for multinational companies that have resources, have an appreciated image
on the market and continue to maintain the highest standards.
13. Social responsibility and environmental protection are basic requirements in terms of
collaborators, they must meet high quality standards, comply with environmental legislation,
to apply an appropriate environmental policy at their companies. These are the criteria by
which firms choose their business partners.
14. It is also important for a company that is respected in the community to be known, to
maintain high standards, for it is necessary to take action in view of environmental protection
and ecological marketing. Company's image and its reputation locally and internationally are
very important.
15. Large and prestigious companies want the product to have as small an impact on the
environment. Thus, from product design is being considered criteria innovative, efficient,
environmentally friendly, reducing environmental impact. This applies at all stages of product
life cycle. The same requirement applies to employees, but to all activities within the
enterprise (for example, procurement, supply, recycling).
The limits of qualitative research
Depth interview method can make more detailed investigations with the possibility of
obtaining relevant information, but latent, difficult to obtain by other methods.
However semi directive depth interview presents a number of limitations which include:
Quality of information depends heavily on operator skills that may influence the answers
obtained;
Sometimes it is necessary the presence of a psychologist to interpret other categories of
information (respondents mimics, gestures, etc.);
As the interviews were conducted in the location chosen by the respondents that are working
offices where there were breaks generated by the work done, leading to disruption of
discussion, even the loss of important information.
Conclusions obtained could not be extrapolated to all industrial firms in the city of Brasov,
because sampling was non random and the sample was not representative of the population studied.
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6. Conclusions
The aim of qualitative research presented in this paper is to identify opinions and behaviour of
Brasov managers on the environment, implementing a green marketing mix, and assuming social
responsibility by companies on the impact of their activities on the environment, in the context of the
existence of non-renewable and limited natural resources facing all mankind.
Thus, it was considered important to study and analyze the situation in Romania in terms of
awareness of Romanian companies on these issues, opinions and behaviour of managers, and the
measures it took until now, their vision on the future of business in such a world, which, however, the
tendency is to act for preserving the environment, concern for human health and quality of life.
The study shows that managers are interested in compliance with environmental legislation,
they have implemented environmental management systems and, at least in terms of product, it is
designed with minimal impact on the environment, this criteria being pursued at all stages of its life.
At the level of their firms, managers assume the responsibility to protect the environment and
achieving sustainable activities with low environmental impact and human health, while achieving
training activities, awareness, empowerment and involvement of their employees in this direction.
Managers believe that small steps matter, it is important to start now on this road taking
advantage of market opportunities, because the world is experiencing this trend to sustainable
activities and to environmental protection. Sooner or later everyone has to comply, voluntarily or
forced, there is no possibility of return or avoidance. Public pressure will compel companies to adopt
this attitude of protecting the environment and the realization of organic products, friendly with
consumer health and the environment.
Managers consider additional short-term efforts that involve the adoption of green marketing
in businesses and reduce their negative impact on the environment, but consider that it is a good long-
term strategy. Long-term benefits and opportunities due to a proactive attitude make their short term
efforts to be rewarded.
Also a problem facing managers is the ambiguous, changeable and unsubstantial law that
makes the efforts of company to be greater due to coercion to comply quickly on short-term to the
changes occurred. Managers do not feel they are supported in their actions in this area by the
responsible institutions. Locally, they say, obtaining environmental and organic products, there is a
trend of indifference from consumers and the public who have no environmental education and they
are not willing to pay more for these products.
Even if the data obtained from carrying out this qualitative study are not representative of the
population studied and may not be generalized, they are a starting point in a subsequent quantitative
research that will analyze in detail these issues and will be able to draw relevant conclusions on
importance of adopting ecological marketing in companies in terms of obtaining sustainable and
viable long term development.

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marketing. Probleme i studii de caz. Bucureti: Uranus
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marketing. Aplicaii n SPSS. Braov: Infomarket
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ACKNOWLEDGEMENT: This paper is supported by the Sectorial Operational Programme Human Resources
Development (SOP HRD), ID76945 financed from the European Social Fund and by the Romanian
Government.

288

ENVIRONMENTAL COMMUNICATION AND ECOLOGICAL EDUCATION IN
ROMANIA

FUNARU Mihaela,
Ph.D. Student, Faculty of Economic Sciences/Department of Marketing, "Transilvania" University, Braov,
Romnia, e-mail: mihaela.funaru@yahoo.com

NI COLAE Carmen-Magda,
Ph.D. Student, Faculty of Economic Sciences/Department of Marketing, "Transilvania" University, Braov,
Romnia, e-mail: carmen.nicolae@unitbv.ro

Abstract: This article discusses the importance of education and communication actions on
environmental protection and tries to define these concepts for deeper understanding in order to implement
educational, informative and practical ecological actions in Romania.
Also, there are presented some examples of pro-environmental, educational activities conducted in
Romania that have had positive effects in terms of educating people, especially children and young people in
secondary education on environmental protection, their awareness of the need of knowledge and importance of
information on the implications of natural environmental degradation, on eco-systems, humans and whole
society, with direct effects on the present and future generations.
Article raises the issue of responsibility of state institutions in ecological education of population, but
its role in ensuring the implementation and environmental compliance. It is important that every citizen led by
the Romanian state to assume responsibility for environmental protecting actions and achieving sustainable
development in Romania.

Key words: environmental communication, sustainable development, environmental education,
environmental protection

JEL Classification: Q56

1. Environmental protection through awareness activities of population

1.1 Environmental education
Education is an interpersonal transfer of ideas, approaches and fundamental data considered
relevant to harmonious human life. This information is presented and taken in a formal (school,
college) or non-formal (private discussion) framework.
Ecology is the science of ecosystem interrelationships between living organisms and the
abiotic environment, a synthetic science focused on integrated understanding of processes in our
environment.
Environmental education is trying to transfer some pragmatic ways of thinking regarding
ecosystems, species, including human populations, understood in their evolutionary context, into the
transformations in time and space plan. In the same time in addition to the scientific way,
environmental education is also about ethics and morality, which contributing to positioning the
human individual in society, in ecosphere and civilization in general.
Environmental education includes both scientific approaches such as biology, chemistry,
physics, geography, etc, and approaches of human society on its historical, political, social,
economical aspects. Environmental education also includes philosophy and art approaches.
Environmental education contributes to a deeper understanding of the connection between
individual and group actions at social level and environmental changes of our habitat (present and
future).
Formal and non-formal environmental education should be included in compulsory education,
but it must continue throughout the individual existence. Diversity ways of achieving this purpose is
extraordinarily high, from the compulsory education hours to transfer of information through media,
lectures, artistic activities, etc.
Environmental education involves changing people's mentality by support of nature actions
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Most environmental problems are complex. In other words "environment" as the subject of
environmental education, includes not only nature but also society, culture, economy and politics.
Environmental education awakens a sense of love for nature, provides environmental
information and the behavior of saving and recycling natural resources encourages active civic
attitude of personal involvement in environmental protection.
Purpose of education is to promote the formation of skills and attitudes necessary to
understand the interrelationship between people, culture and environment, to develop a conscious and
responsible work, which aims to improve the environment.
Education and public awareness activities for decision making are key components of any
conservation strategy. You can obtain support from the public and promote development by
improving awareness and understanding of environmental issues, both in population and tourists.
Environmental education helps awareness and understanding of personal values through
"discovery" attitude and understanding, helping students to evaluate and clarify their feelings
regarding the environment and how they contribute to its problems. It helps each person to understand
that people have different values and differences between them should be addressed to prevent and
solve environmental problems.
Environmental education also emphasizes skills to act as citizens influencing the local or state
politicians and international institutions to develop environmental laws.
Environmental education presents environmental issues facing the community. Both students
and their parents are directly or indirectly responsible for environmental issues. One of the goals of
environmental education program is to help students develop the ability to think critically and
creatively. Some students may, in future, make decisions to protect the environment.
Environmental education cultivates a value system. Children are maturing and the system of
values which they promote influences choices and decisions that they take on all aspects of their lives,
including environmental issues. There is a link between values, beliefs, attitudes and developing an
environmental ethic.
Teaching environmental education as a school subject can have an impact on student life and
on their families. They learn to know their rights as citizens, having power to act and feel that they
matter. They can take decisions on environmental issues.
Currently, the educational system in Romania is characterized by a severe lack of organized,
coordinated, systematic concern for environmental education issues. To be in the future, an informed
and educated public, who acknowledges his role in dynamic of society, Romanian education needs to
be modernized. It is very important to make environmental protection education since in school time.
Environmental education has the objectives: increased awareness of environmental and social
responsibility issues through public information, knowledge essential aspects of the environment as a
whole, the formation of skills and habits of observation, experimentation and research, training of
environmental ethics (attitudes, principles, beliefs) and create new individual, social and group
behaviors that reflect concern for the maintenance of environmental quality and the ability to take
direct action and practical decisions that affect the environment.
People must feel they are part of nature and to develop a sense of responsibility towards it.
The first step must be done through formal education. Adult education should focus on better
understanding of environmental issues and that such destructive practices are unacceptable in modern
society.
With the accession to European Union and beyond, environmental protection in Romania
started to be a priority of economic and social development aimed at achieving a clean and healthy
environment that does not affect the potential development of future generations. It is necessary to
ensure environmental protection and conservation of natural resources in accordance with the
requirements of sustainable economic and social development and better education and awareness on
achieving these goals.

1.2 Communication in the environmental protection activities
In 1990 a large number of environmental education activities as well as many public
campaigns have been run by nongovernmental organizations (NGOs). However, still many people
dont know the importance of conserving natural capital. Environmental issues have to be transmitted
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by the media and incorporated into school curricula at various levels.
Information on the nature, condition and the causes that produce environmental changes are
essential in defining effective environmental measures. Informing citizens about environmental
problems and their solutions is the first step in awareness and public involvement on decision making.
The right of citizens to have access to environmental information is one of the most powerful
mechanisms for conservation of natural capital. Knowing the real situation, the further information
can be assessed more effectively and more discerning.
Social groups and individuals use communication to maintain the identity and cohesion, to
formulate and transmit information and to structure relations with other groups.
Effective communication is two-way going through the following sequence: source (person,
organization, institution) - post / transmission channel - receiver (person, organization, institution).
In reality there are many variables that influence this mechanism.
In conclusion, the message must be perceived and understood prior to induce behavioral
change. Understanding the message depends on the values, standards, beliefs, interests and personal
knowledge.
There are differences between meanings that are intended to be communicated by source and
the interpretations made by receiver.
The most common means of communication refer to unidirectional transmission of
information (advertising, publicity); information provided as part of a dialogue; education (long
process of transmitting knowledge and attitudes and values).
Messaging related to nature conservation faces several obstacles, such as the tendency to
ignore the individuality of people and target groups, selection of one-way methods of transmitting
information in detrimental of interactive ways and communication between groups that have not the
same goals and objectives.
Nature conservation can have different meanings for different groups, so it is preferable to
avoid using a specialized language very strictly, as the transmission of negative messages. The choice
of instrumental approaches such as public campaigns consisting only in dissemination of information
is less efficient than direct dialogue and interaction between stakeholders.

2. Educational activities of environmental protection made in Romania
Environment protection in Romania is a priority for economic and social development aimed
at achieving a clean and healthy environment that does not affect the potential development of future
generations. It is necessary to ensure environmental protection and conservation of natural resources
in accordance with the requirements of sustainable economic and social development and better
education and awareness on achieving these goals.
In this respect, there were presented some examples of activities carried out in Romania for
environmental protection.
In 2010 it held an environmental education campaign carried out among children of the
secondary education from Bucharest called "Playing and select" and aimed at awareness of selective
collection, as part of the waste stream from collection to recovery.
In the campaign, the National Environmental Protection Agency, in partnership with several
companies in Bucharest, they were organized events that aimed to educate students on ecological and
environmental awareness through selective waste collection activity. In that action, was presented a
report about "Selective waste collection" and presented a collage of animated films with the same
subject and were arranged four separate collection points by placing garbage bins, paper, plastic and
glass.
Early education is the formation of future behavior for responsible citizens. What children
learn in early years represents more than half they will memorize in the rest of their lives. Therefore,
education must begin in childhood, physical and mental components of development go alongside
with personality components.
Given this objective, REPORTER Press Group, in partnership with the National
Environmental Protection Agency, National Environmental Guard, Environmental Protection Agency
from Bucharest and other state institutions, in 2011 launched the project "Eco Attitude =
Responsibility, Information, Action ". This project was conducted in 14 schools in Bucharest and
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Ilfov and aimed to educate students in 8th grades to protect the environment.
Protecting the environment is a major objective of public interest and an obligation and
responsibility of all.
The objective of this project was the awareness of protecting the surrounding nature,
stimulating artistic and creative potential of children of all ages. Environmental care is an essential
component of moral, social, cultural and spiritual development. Children need to be educated of very
young according to the needs of environmental protection with a strong emphasis on respect for the
nature.
The project included activities such as: information and enrollment of schools in
environmental education campaign "Eco Attitude"; provide schools participating in the project with
selective waste collection containers (plastic and paper / cardboard); distribution of information
material (that contain useful information on how the collection, type of waste, etc.) in all schools
involved in the project; provide an "ecology hours" in each school by the organizers and partners of
this project, the presentation and interactive involvement of all children, a competition between the 14
participating schools listed on the selective collection of PET bottles, cardboard / paper, electrical and
electronic waste, batteries, lamps, etc.
In 2009 took place VERDIS project, a project that was an initiative of the Associations Eco
Tic and MoreGreen and was a campaign of environmental education and awareness of the problem of
selective collection and recycling among high school and middle school students in Romania. The
project included 20 schools in five cities: Bucharest, Brasov, Cluj, Iasi and Galati.
The project proposed these schools a contest focused on the collection of WEEE (waste
electrical and electronic equipment), plastic and paper. In addition, schools made in March a local
campaign for accountability on selective collection. The program continued with a new challenge:
creating a Green notebook of the school for an environmentally friendly behavior.
"Let's Do It, Romania!" is the largest social involvement project in Romania, which aims to
empower citizens and authorities regarding proper waste management and environmental
enforcement. The project aims to clean natural areas throughout the country in one day, in carrying
out this action being appointed a large number of volunteers, citizens and public institutions.
In 2010 and 2011 thousands of volunteers participated in the "Let's Do It, Romania!"
campaign and gathered tons of garbage.
In 2010, the Ministry of Environment launched the EcoWeb, where you can find
environmental educational materials for both students and the general public.
EcoWeb project was conducted by the National Environmental Protection Agency (NEPA)
with the U.S. Embassy and Romania Peace Corp. EcoWeb project has three main objectives: create a
publicly accessible website with educational materials about the environment, highlighting the
contributions of different individuals or organizations involved in environmental education, creating a
network of communication and collaboration between NGOs, schools and public authorities.
The website created for this project is publicly available and contains useful materials for
environmental education. EcoWeb project is funded by the U.S. Agency for International
Development (USAID) through the "Small Project Assistance" program coordinated by Romania
Peace Corp. The project is co-financed and implemented by National Environmental Protection
Agency.

3. Contradictory attitudes on environmental protection in Romania
Despite these activities and initiatives on environmental protection, Romania is characterized
by contradictions. If on the one hand some try to do something in the nature protection, others, on the
other hand, acts in the opposite direction. This is obvious even at public institutions.
Thus, it is necessary to answer some questions. Are all these activities sufficient to protect the
environment? Are state and local authorities seriously involved in protecting the environment? Laws
on environmental protection were adopted. We know that NGOs with environmental activities still
involve some local authorities in some environmental campaigns. But is enough what they do to
protect the environment and educating people on environmental protection? My opinion is that they
don't do enough in this matter and the reality confirms this statement.
Thus, in all countries of the world, Ecology discipline is part of university curricula.
In Japan the population is educated at all age levels that the only way to survive is
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environmental education. Environmental education in Eastern Europe takes place in secondary
education and hours of practice. India has introduced environmental education in all school and
university courses. In The United States environmental education is a landmark in order to train
students' perception on climate change and finding ingenious solutions to remove humanity from the
impact of over-population and consumption of vital resources. Ecology and Environment Disciplines
are taught daily in all high school years.
In Romania, Ecology discipline that aimed at changing students' conception about the world,
life and their training to find sustainable solutions to preserve the pristine environment is reduced in
secondary education.
In the 2005-2006 school year in secondary education, technological chain, with profile of
Natural Resources and Environmental Protection was removed discipline that targets the practical
training of students in ecology and environmental protection and that ensures their specific skills and
training.
This has not deterred teachers from around the country to achieve extracurricular activities in
order to prepare students in secondary education in ecology and environmental protection. Moreover,
environmental education made the teachers from other school subjects to stick together and now the
teachers made together national and international projects and programs aimed at environmental.
Currently, in Romania, there are many schools where environmental education is a priority,
evidence of maturity and environmental accountability. This is confirmed by the large number of
environmental programs addressed and the large number of teachers and students involved in
environmental actions.
By enhancing environmental education in schools they manage the formation of right
attitudes on environmental protection not only among young children in kindergarten, but also among
teenagers, students or young graduates who are currently employed. Teachers in turn can carry out
projects on environmental issues that are funded or rewarded by companies.
In Romania, special containers for selective collection are few and poorly distributed on the
area of municipalities and districts. However it is important that they began to exist and their number
increases every year.
It is also worth mentioning that from the earliest age, children learn to become
environmentally friendly and reuse materials.
At the same time, deforestation were rampant, wood is used by some for developing thriving
business. Local authorities can not stop illegal logging, either because they are overwhelmed or they
close watchful eye. Illegal logging is already a phenomenon. The forests are cut from Maramures,
Bacau, Bistrita, but also in the south and Arges and Gorj.
In recent years thousands of hectares of forest have been razed to the ground. Following the
process of restitution, the state remained at 4.2 million hectares of forest. They account for 26.7% of
the country, compared to 29.3% as European average. Various proposals for protecting forests over
100 years old remained unanswered.
Another problem is the deforestation of areas protected by law and of national natural
reservations. Moreover, those who received forest areas through restitution cut what they want and
how they want on the principle of private property.
Every year there is exact same problem: logging and the same promises made by politicians,
especially during election campaigns.
The massive deforestation in recent years affects us all, whether we live in town or near a
(former) forest. Romanian Forests feel the overall effect of environmental climate change.
Deforestation problem applies in cities too, where trees are cut for more car parking and
wider highways. We all contribute to this destruction, being aware of the evil we produce.

4. Conclusions
After analyzing the current situation in Romania on measures to educate and protect the
natural environment and those against law, official statements and environmental strategies some
pertinent questions raise. What should we do? Environmental activities in Romania are they real or
fake and what is the truth and what is the lie? Are we or not ecologists in the true sense?
Does Romanian State really support environmental actions, protect the environment or
293

everything is facade?
Environmentalism in Romania is not always about ecology, the science that deals with
studying habitat. He became, in secret, almost a political movement. Romanian environmentalism has
no longer any real impact in Romanian society.
What Romanian State does to protect the environment? It adopts laws, laws that anyone does
not respect, laws that are used by certain groups of interest. Is this ecology? Massive deforestation of
the Romania forests, does it mean protecting the environment?
In Romania, ecologists are still considered dreamers while the West has turned ecology into a
creed, a duty of balance and harmony of nature.
In conclusion, environmental protection is a problem of all, on the one hand the development
of society, and on the other side a problem of the recovery, conservation and environmental
protection. To resolve this problem as effectively, strategies in the field were developed and also
action plans at international, European, national, regional and local level.
An environmental strategy should define the general guidelines, principles, objectives and
criteria for identifying actions leading to economic and social sustainable development and to take
account of environmental issues. Without environmental protection it can not ensure sustainability.
Sustainable development includes environmental protection and environmental protection is a
condition in obtaining sustainable development.
Romania has a stunning natural capital, far more than other EU countries. However, in
Romania, resource consumption and waste generated are large, ranging over the natural regeneration
capacity of the environment.
In June 2006 the EU adopted a Sustainable Development Strategy for an enlarged Europe. In
accordance with the European Union, Romania has adopted the development strategy of Romania for
2007-2013.
This strategy has in the foreground the environment and declining resources. Romanian State
passed legislation aimed at protecting the environment, pollution and waste collection. Other
governmental or independent authority established rates of consumption of resources to ensure their
continuity over time. Regional or county level, local authorities are involved in developing programs
for the sustainable development objectives.
Accession to European Union and the obligation to develop strategies and action plans for
environmental protection is an important step for Romania in its sustainable development actions. But
some aspects of sustainable development and environmental protection and natural resources of the
country remain only in theory and on paper.
In Romania there are environmental laws, there is a sustainable development strategy, there
is, therefore, the institutional basis to carry out all the objectives in this direction. However the
question is the responsibility of Romanian State in assuming its role as the main coordinator of
environmental education activities at national level in order to adopt legislation in the field and
monitor its correct application.

5. References
- http://ecourbis.ecosapiens.ro/Conf.univ.dr.Mirela Mazilu
- www.ahgr.ro
- http://www.ecoweb.anpm.ro/page/3-Ce-inseamna-Educatie-Ecologica
- http://www.educatieecologica.ro/educatie.html
- http://www.educatieecologica.ro/
- http://www.anpm.ro/
- www.romprest.ro/campanii/campania-de-educatie-ecologica-lsquo
- http://www.stopco2.ro/2009/05/28/verdis-o-campanie-de-educatie-ecologica-eco-tic-si-
maimultverde/
- http://www.maimultverde.ro/cms/verdis
- http://www.invatasaiubestinatura.ro/index.
- http://www.ecomagazin.ro/ecoweb-primul-site-din-romania-pentru-educatie-ecologica/
- http://proiect-biologie-mediu.blogspot.com/2008/01/defririle-masive-las-romnia-fr-pduri.html
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- http://jack72.ecosapiens.ro/taierea-padurilor-o-problema-nerezolvata-nici-pana-in-prezent/
- http://www.green-report.ro/revista/dezvoltarea-durabila-si-protectia-mediului
- http://www.protectia-mediului.ro/dezvoltarea-durabila/index.htm.

ACKNOWLEDGEMENT: This paper is supported by the Sectorial Operational Programme Human Resources
Development (SOP HRD), ID76945 financed from the European Social Fund and by the Romanian
Government.

295

THE ECOLOGICAL RISKS CONCERNING DEFORESTATION WITHIN
GLOBALIZATION

GLBEAZ Alexandra
PhD. Student, Faculty of Agri-food and Environmental Economics, Bucharest Academy of Economic
Studies; Bucharest; Romania; alexandra.galbeaza@gmail.com

Abstract: Over the years, forestry has become one of the main interest areas for many countries from
all over the world. Currently, there are nearly 178 million hectares of forests and other wooded land within
European Union. However, it seems that the total forest surface has increased by 5% for 20 years, although the
rate varies obviously between countries. There are many rumors that things started to improve even since the
concept of sustainable development was launched. However, despite all these things, the specific feature of
Romania consists of the high forests drying due to an exceedance of critical threshold concentration of sulfur
dioxide forest ecosystem. Thus, the main objective of the present paper is to underline briefly the main
information of the real situation regarding deforestation in Romania.

Key words: globalization, deforestation, ecological risks, carbon emissions

JEL classification: Q

Introduction
It is a fact that forests provide humanity the necessary daily oxygen, provide a safe shelter for
a wide range of plants and animals and offer an wonderful green picture, so important nowadays.
Almost 1.5 billion of the poor of the planet are directly addicted to woods for the basic activities such
as food and fuel wood. Still, deforestation continues. Every year, almost 14.6 million hectares of
forest disappear. The causes are well known: an irresponsible management regarding forests, laws that
are not conceived correctly and little used, thing which encourages illegal cutting. A hectare destroyed
means nothing else than jeopardizing 300 species of birds, about 400 mammals, insects as well as
many other species of plants. Therefore, it should not be a surprise that climate changes occur, that
humanity is threatened by floods, landslides and hundreds of species are about to disappear.

1. The present situation of forests and the way this sector is organized
It has been noticed that during 1990 2005, global forest resources continued to decrease
annually with approximately 13 million ha. This brand has continued until nowadays. Meanwhile,
planting and natural expansion of forests were significantly reduced compared with deforestation, the
balance between deforestation and forestation being a negative one. Specifically, during 2000 2005,
7.3 million ha of forest were cleared annually (which is equal to the area of Sierra Leone or Panama)
in a slightly down in comparison to 8.9 million ha annually, the value that was recorded during 1990
2000. However, it appears that the huge damage was in South America (2000 -2005) followed by
Africa with 4 million ha annually. It is considered that global forest resources reached to almost 283
carbon gigatones stored only in its biomass (Giurgiu, 2010). The carbon stored in the forest biomass,
in the wood, in the litter and soils, all together led to much more than the atmospheric carbon quantity.
According to Plan B3 developed by Earth Policy Institute, deforestation is responsible for the annual
carbon emissions valued at 1500 million tones. Therefore, stopping deforestation by 2020 would be
one of the most effective measures in order to minimize the future growth temperature.. It is
considered that 15% of total CO2 emissions exist due to deforestation.
Unfortunately, this process is an ordinary thing in Romania, this adding to the massive
deforestation in the last two centuries taking into consideration that the percentage of forest cover
decreased from 60% to 27% as it is now. Concerning this issue, Romania is still considered a poor
country regarding the forest surface, far behind the European countries that are closed to the
Romanian natural geographical conditions.
In 1800, Romania had almost 8.5 million ha of forest, meaning 35-45% of the territory, the
area that has been falling down ever since, so that in 1974 it reached around 6.5 million ha (27% of
296

the territory) and now wooded area fell below the ideal ecological target. The causes of this drastic
cuts involve industrial pollution (about 6-7%) and even more, abusive deforestation, irresponsible and
excessive grazing produce great drawbacks as possibilities for forests regeneration are very low. It is
well known that energy within Romania is lower profiled on turning coal, the fuel oil and natural gas
while Western European energy based on coal type is just 20% and therefore the CO2 emissions are
10 even 20 times lower.
Even before the Kyoto Protocol entered into force, the European Union developed the first
program regarding climate changes so as to reduce the carbon emissions. Several years later,
European Union committed itself to reduce greenhouse gas emissions by 2020 with 20% (compared
to the level from 90s); to increase the percentage of the renewable resources regarding total energy
mix from 7% in 2006 to 20% within EU general consumption by 2020, thing that might lead to some
forestry issues. As far as the Kyoto Protocol is concerned, the European institutions take into
consideration the reduction mentioned before from 20% to 30%. In Romania - the agriculture, forestry
and fishery sector has a great influence upon the gross domestic product as it stands about 6% of GDP
and the average within European Union is 1.7%.

Table 1. The agriculture, forestry and fishery sector percentage within GDP
GDP 2007 2008 2009 2010
2011
(first
semester)
Agriculture,
forestry and
fishery
23992,2 34126,3 31734,9 30728,6 2229,2
Total GDP 416006,8 514700 498007,5 513640,8 106723,5
% GDP 5,8 6,6 6,4 6 2,1
Source: Romanian Statistical Yearbook 2010

The problem of ecology, more exactly the ecological efficiency issue has become more and
more important so as to be aware of what nature offered and still is offering us plenty of production
and consumption goods, but as man does anything to preserve, he cannot offer something in return.
After the United Nations Conference upon Environment and Development in Rio de Janeiro (1992),
an international attention has been given to the National Forest Program (NFP) considered an
effective tool for solving the forest issues both in the developing countries and the developed ones.
Most of the Intergovernmental Panel on Forests and the Intergovernmental Forum on Forests
subsequent documents have many references as far as their elaboration and implementation is
concerned.
It has been recognized that NFP can lead to some solutions regarding the most difficult issues
and even harmonize some opposite interests in order to pay attention to the new concept, the so-called
sustainable forest management. That is why the national forest plan was something that has been
addressed in the Ministerial Conferences for the Forests Protection in Europe such as those which
took place in: Helsinki (1993), Lisbon (1998) and Vienna (2003). However, the same message that all
these conferences tried to send was the importance in strengthening synergies for sustainable forest
management. Romania, as a country that signed the concerned paper (starting even from 1994)
together with United Nations Food and Agriculture Organization adopted some strategies and policies
according to European requirements. On this line, a basic objective represents the harmonization of
the economic imperatives concerning the welfare and environmental improvement. Firstly, statistics
show that in Romania the total forest area consists of 6.390.536 ha. In comparison with 21.12.2004
the national forest surface has grown up to 8.385ha. Taking into account all types of ownership, the
national forest surface can be seen as following (Figure 1):

297

Figure 1. The national forest area distribution regarding the type of property

1 Total
2 Forest public property managed by RNP
3 Forest public property of the administrative units
4 Legal persons forest private forest
5 Other owners
Source: ROMSILA database

Secondly, it seems that at the beginning of 2006, the forests potential was that of 20.3 million,
of which 1.9 million m
3
/ year 1.9 million m
3
of it being inaccessible forest area. That is why the
main products represent 14 million m
3
secondary products 4 million m
3
and hygiene goods: 2.2m
3
.
However, according to Technical techniques for forests placement (2000) the limit cuts for the 5
type of production classes and main species are the one that follows:
Spruce: 100 -120 years
Fir: 100 120 years
Pine: 50 80 years
Beech: 100 12- years

2. Deforestation and degradation regarding natural ecosystems
According to Government Regulation number 1325/2004, for the year 2005 the collection
within Romania forests was approved the maximum total wood volume being that of 18.2 million
m
3
devised on properties or owners. Due to agriculture, forest and rural development minister orders,
distribution has been changed (Lawn, 2006).
Holm: 120 -1 40 years
0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
1
6390536
2
4234142
3
852650
4
613236
5
687649
6
2859
298

Oak: 110 13- years
Linden: 50 100 years
Poplar: 15-30 years
Many forests from our country are managed in the countrys forest regime (91%) and to a
small extent in a grove system (5%). In almost 4% of the total area (trees damaged and weak
production) rehabilitation and replacement work is in progress. The strong demographic increase and
the industrial development had a great impact upon natural ecosystems and its elements. One of the
most affected ecosystems were and have always been represented by the forest ecosystems which
started to reduce in Enological era and has continued to be like this ever since . It is a fact that forest
area have gained a great significance in the last two / three centuries. The forest decline manifested in
two forms: deforestation meaning the complete and permanent removal of forest cover (which is not
followed by regeneration or the concerned forestation area) and forest degradation meaning their
destruction in terms of composition, consistency, state of vegetation, production capacity, quality
characteristics, status health [Bran, 2010]
Deforestation and forest degradation have three major consequences: the biomass and
recoverable forest volume, ecological process changement (elements, carbon storage, reduce
resistance to disturbance), reduction of biological diversity at all levels (genetic species, communities,
landscapes);
All these consequences lead to some ecological risks such as:
- reducing the amount of carbon stored in wood and forest soils;
- a significant reduction of raw materials for industry and consumption;
- a need to replace wood as a renewable energy source with other sources, some having less
environmental claims;
- population impoverishment by depriving it as a source of income;
- reduction of resources that are inputs to various industries;
- massive forest fragmentation.

3. Ways that would help to an increase regarding the surface area covered by forest

- Forestation of the degraded lands for an efficient agriculture. One of the main functions
of forests is to protect soil against erosion, assure water balance, improve climatic
factors, producing also the necessary raw materials, so useful for both population and
economic growth. It is well known that there is a mutual connection between forest and
soil, as forest contributes to the disintegration of rocks, the formation of soil moisture,
etc. Forests protect rocks, steppe areas, lands at high altitude and even those who are
exposed to the industrial pollution. The existent ecosystems on the degraded forests are
most of the times artificial, their main objective being that of stopping land degradation
and improving the current conditions.
- Establishment of protective forest for watercourses, ways of communication and crops
against pests and for the lands protection. In Romania, the first concerns regarding the
economic efficiency of the so called forests belts were launched in the early twentieth
century in order to improve agricultural conditions. Thus, it appears that forests belts are
very useful especially when they are installed as a network.
- Creating new forests on lands with agricultural uses. In order to prevent damage caused
by natural factors pests, reduce the erosion of soil, improve water retention capacity, air
quality and increase wood production, a National Program of Rural Development should
be initiated, especially with the new European Union requirements. Therefore, local and
national authorities would be really involved. It would be the perfect modality to create
jobs, stimulate communication among countries, cooperation within professional
authorities, national and international organizations, developing the idea of forestation at
a high level.

299

4. Conclusions
The forest decline is fueled in addition to their degradation as a consequence of a
unsustainable management and a series of external factors such as: pollution, climate hazards. The
increased degradation of the environment and consequences of past centuries that followed have
shown that maintaining it in the least altered form is a prerequisite for ensuring sustainable
development. Not even the forest area does not make any exception to this rule, in the last year it has
been increasing the interest for sustainable development.

5. References
- Giurgiu, V. (2010) De la declin la progres n silvicultur. Romnia post-criz. IPID,
Bucharest.
- Ioan, I., Bran, F., Radulescu, C.V. (2010) Dimensiunea managerial a conservarii
naturii, Bucharest: Editura Universitara Publisher.
- Lawn, P.A. (2006) Sustainable Development Indicators in Ecological Economics.
Current Issues in Ecological Economics. Northampton: Edward Elgar Publisher.
- Europe commission (2011) Strategia forestier european: principii i aciuni.
Available at
- http://www.europarl.europa.eu/ftu/pdf/ro/FTU_4.3.2.pdf.
- Eurostat (2007), Forestry statistics, Eurostat Pocketbooks, 2007 Edition. Available at
http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-76-06-322/EN/KS-76-06-322-
EN.PDF.
- IPCC: Climate change 2007. Synthesis Report. An Assessment of the Intergovernmental
Panel on Climate Change, 2007.

300

INFLUENCE OF CONSUMERS' EXPECTATIONS REGARDING CSR ON THEIR
INTENTION TO SUPPORT A COMPANY'S SOCIALLY RESPONSIBLE BEHAVIOR
DURING THE CRISIS

GTEJ (BRADU) Cosmina Paula
Ph.D. Student, Faculty of Economics and Business Administration, "Alexandru I oan Cuza"
University/Doctoral School of Economics, Iai, Romania, gatejcosmina@yahoo.com

Abstract: The purpose of this paper is to investigate the link between individuals expectations of
corporate social responsibility (CSR) and their intention to support the socially responsible behavior of
companies. The data was collected using a survey of 150 respondents from different backgrounds that are
supermarket customers. The results show that expectations of CSR (excepting the economic ones) tend to have a
significant positive influence on the intended CSR support by customers. The paper empirically considers and
challenges Carrolls acknowledged classification of CSR, and links it with the intention to support the socially
responsible behaviour of companies in general.

Key words: Corporate social responsibility, Consumer behavior


1. Introduction
In the past years, expectations towards CSR have been increasing and, with this, the demand
that companies behave in a socially responsible manner (Gatej (Bradu), 2012).Though corporate
social responsibility (CSR) is a contested and always evolving concept, in the past years it has become
more and more important. This importance is also reflected in the public relations and marketing
literature (Kotler & Lee, 2005; Maignan & O.C Farrell, 2005).
Different research studies have focused on clarifying and developing the concept, but also on
attitudes and reactions to CSR (Sen & Bhattacharya, 2001).
Although professionals from this field have talked about business social behavior, there have
been few studies regarding the customers expectations towards the contribution of CSR on the
contractors behaviour (Mohr, Webb, & Harris, 2001).
This paper investigates the link between the consumers` expectations towards corporate social
responsibility and their intention to support the socially responsible companies.

2. Corporate social responsibility and consumers` expectations towards socially
responsible companies
Definitions of corporate social responsibility (CSR) have first appeared in USA in the 1950`s
(Carroll, 1991). During the following years, efforts have been made to clarify and develop this
concept. The first definitions focused on the connection between `business responsibility` and
`business power`. By the 1980`s the focus shifted from developing new definitions to further research
on CSR and its dimensions. All these definitions have in common the idea of the stakeholder
expectations and social preoccupation. The basic idea is that no company can afford to act against
society (Matten & Moon, 2005).
Carroll (1979) defined CSR based on normative arguments and suggested that a company has
to fulfill four main responsibilities. Hence, the definition encompasses the economic, legal, ethical
and discretionary expectations that society has of organizations at a given point in time (Carroll,
1991).

301

Figure 1: Carroll`s model of CSR

Source: Carroll (1991)

In the model proposed by Carroll (1991) the definition of the corporate social performance
should comprise three articulated and interrelated aspects: a basic definition of the total social
responsibilities of a company, an enumeration of the issues for which a social responsibility exists,
and a specification of the philosophy of corporate response to social pressures (social
responsiveness).
Considering the first mentioned aspect, an exhaustive definition of corporate social
responsibility should emphasize the whole range of social obligations a business has towards society:
economic, legal, ethical and philanthropic (discretionary) responsibilities. These four types of social
responsibilities form the concept of corporate social responsibility (CSR) in the vision of Carroll, and
they should be analyzed together.
According to Carroll (1979, 1991), the corporate social responsibility is more than complying
with economic and legal obligations; it also includes ethical and philanthropic responsibilities as
another two dimensions.
Carrolls model has two weak points. One of the weaknesses is related to the voluntary aspect
of corporate social responsibility. Some CSR scholars consider that mandatory aspects should not be
part of CSR.
Carroll`s model of CSR has been empirically tested among US managers (Aupperle et al.,
1985), and consumers in different countries (Maignan, 2001). It has also been used as a starting point
for research on CSR reporting (Ellerup Nielsen and Thomsen, 2007).
According to previous research using Carrolls model of CSR (Maignan, 2001, Podnar and
Golob, 2007),customers are likely to differentiate among the four proposed dimensions of CSR, as
suggested in the following hypothesis:
H1: Consumers have high expectations towards supermarkets regarding their socially
responsible behaviour.
H2: Customers will differentiate among the four dimensions of CSR: (a) economic, (b) legal,
(c) ethical and (d) charitable/philanthropic.
A certain number of stakeholders often share similar expectations about the desirable socially
responsible behaviour of companies (Maignan et al., 2005).Dawkins and Lewis (2003) observed that
in the last decade, CSR issues have become a dominant driver of public opinion. These issues are
302

defined by the stakeholder expectations, which represent the minimum level of corporate
responsibility or the minimum to which companies are expected to conform (Monsen, 1972).
According to Carrolls classification (1979), these factors are related only to the CSRs legal,
ethical and philanthropical dimensions. Moreover, both researches (Aupperle et al., 1985; Maignan,
2001), which have used Carrolls classification (1979), have come to the conclusion that the economic
dimension of the CSR was directly related to the other three.
Consumers tend to incorporate their expectations and their concerns into their behavior
towards the companies (Klein, Smith, & John, 2002; Maignan et al., 2005). The consumers
expectations regarding CSR actions have an impact on their behavior towards the companies (Creyer
& Ross, 1997; Nebenzahl, Jaffe, & Kavak, 2001).
More than that, the reactions of the individuals depend on the congruency between
expectations and the companys actions (Dawkins & Lewis, 2003; Hallahan, 2001). Many consumers
are ready to put pressure on companies through boycotts, in order to convince them to be more
socially responsible. The CSR expectations act as a benchmark for the intention to purchase the
companys products (Creyer & Ross, 1997)
Golob, Lah and Jancics article approaches an interesting subject regarding the consumers
expectations, which motivates companies to integrate CSR into their marketing strategy and to
communicate this fact. The paper goes beyond the consumers expectations and answers, researching
the change in the consumers value system and the way this system affects the expectations and
answers regarding CSR.Moreover, studies regarding consumers expectations of social responsibility
communication are rare. The results of the study show that consumers expectations are generally
high when it comes to CSR, a fact that is also highlighted by Carroll (1979) and other authors.
Expectations are influenced by motivation and situational involvement. This has been observed in a
study conducted among the Slovenian consumers, with results that assert the need for marketers to
incorporate CSR in their marketing and communication strategies.
For instance, consumers expect companies to be socially responsible and appreciate
companies that employ minorities, do not employ children and support the local educational
institutions (Harrison, Newholm, & Shaw, 2005). More than that, consumers want to be informed
about the companies CSR practices, because they find it hard to determine whether these rise up to
the standard levels when it comes to social responsibility.
Auger, Devinney, Louviere, & Burke (2010) found that there is a relationship between
growing consumer awareness and expectations and environmental degradation, climate change, and
the pervasiveness and power of multinational enterprises. The fact is that consumers are increasingly
aware of CSR issues, even if we are dealing with economies in transition.
We therefore propose the following hypothesis:
H3: Higher expectations for the (a) legal, (b) ethical, and (c) discretionary CSR willbe
positively related to the customers intention to support the socially responsible behavior of
supermarkets.
H4:Higher expectations for the (d) economic CSR will benegatively related to the customers
support of socially responsible behaviour of supermarkets.
The interaction of the customer's expectations regarding CSR and the perceived quality of
services and products has been mentioned in many studies (Brown and Dacin, 1997).Sen and
Bhattacharya (2001) have discovered that consumers react positively to CSR activities and the
company's ability to exceed expectations.
Aupperle et al., 1985, Maignan, 2001 and Podnar et al., 2007 have created scales to measure
the customer's expectations regarding the companies socially responsible behaviour and to measure
the customers' support for the socially responsible companies. The authors have created and validated
these scales in their studies using data gathered from respondents from different countries (Slovenia,
Germany, France, United States etc). The purpose of these studies was to measure the consumer's
expectations regarding CSR and their support for socially responsible companies.
These scales were also used to measure the expectations of consumers from the Iasi area,
regarding the supermarkets where they usually do their shopping.

303

3. Methodology
In order to obtain the necessary scale, a literature review was necessary to find the scale that
refers to the expectations regarding corporate social responsibility (Aupperle et al., 1985, Maignan,
2001, Podnar & Golob, 2007). After this, we generated a pool of items and also examined the items
for consistency and validity. We carried out a pre-test to assess the quality and validity of the items
and reliability measures.
Based on the results, we have also corrected some formulation inconsistencies. The result was
a 22 item instrument, such as: companies should reinforce their voluntary activities for society
welfare companies should consider moral standards on account of profit companies should
always conduct business in line with legal principles and companies should always improve
economic performance. All items were measured using a seven-point Likert scale, anchored at
strongly disagree and strongly agree.
To measure the intention to support the socially responsible companies, we have adapted the
questions used by Podnar and Golob (2007) to fit the context of our research.
Data collection has been carried out in March 2012 and has targeted supermarket customers
from Iasi. As the sampling method we used quota sampling with gender and age as relevant variables.
The study was applied on a pilot sample of 150 individuals, male and female, which were the main
customers of supermarkets from Iasi. Peolple who have been interviewed live in Iasi and have
purchased goods from a supermarket in the past month.

4. Results
Except for the economic expectations, in average, the means for the measured variables are
relatively high, averaging over 5.0 on the seven-point Likert-type scale.
The means for the variables studied show that on average all but measures for theeconomic
expectations of CSR are quite high, averaging around 5.0 on the seven-pointLikert-type scale. The
mean and standard deviation scores for all variables are shownin Table 1.

Table 1: Descriptive statistics of the variables
Variable N Mean Std. Deviation
Charitable CSR 150 5.2320 1.15371
Economic CSR 150 3.3756 1.29621
Legal CSR 150 5.4053 .88990
Ethical CSR 150 5.9133 .95522
Intention to
support
150 5.1086 1.08578
Valid N (list wise) 150

As for the respondents general expectations towards the supermarkets social responsibility, the
average mean was 4.98, which means that they have medium to high expectations towards the
supermarkets CSR. This mean value partially confirms hypothesis number one, that customers expect
supermarkets to have a socially responsible behaviour.
Table 2: Descriptive statistics of the CSR Expectations
Variable N Minimum Maximum Mean Std. Deviation
CSR Expectations 150 3.73 6.45 4.9816 .56499
Valid N (list wise) 150

We have also analyzed the subjects expectations towards social responsibility by gender, in
which we used the t test for independent samples. The result was t(148) = 0.100 for the p>0.05
statistical significance, which means that there is are no significant difference between male and
female subjects regarding their expectations towards the supermarkets social responsibility.

304

Figure 2: Expectations towards CSR by gender

As a result of the last two analyses we can state that hypothesis number one is partially
confirmed.
Figure 3: Means expectations towards the CSR dimensions

As for the means of the four CSR dimensions, the highest mean belongs to the ethical
dimension (5.91), followed by the legal dimension (5.4) and the charitable dimension (5.23).
The last one was the economic dimension with a mean value of 3.37, which means that the
respondents expectations towards it are not very high.
In order to observe if the differences between mean values by dimension are significant,
we have used the t test for dependent samples.
Ethical dimension Legal dimension
When comparing the two means, t(149)=6.038, for the p<0.01 statistical significance,
which means that consumers have higher expectations towards the ethical dimension
compared to the legal one, with statistically significant differences.

Table 3: Comparison between the etical and legal expectations
Dimension Mean T-test result Statistical significance (p)
Ethic Expectations 5,91 6,038 0,000
Legal Expectations 5,40

Legal dimension Charitable dimension
When comparing the two means, t(149) = 1.538 for the p>0.05 statistical significance,
which means that there is no statistical difference between expectations towards the two
dimensions.

305

Table 4: Comparison between the caritable and legal expectations
Charitable
Expectations
5,23 1,538 0,126
Legal
Expectations
5,40

Charitable dimension Economic dimension
When comparing the two means, t(149)=12.424, for the p<0.01 statistical
significance, which means that consumers have higher expectations towards the charitable
dimension, in comparison to the economical one, with statistical significant differences.

Table 5: Comparison between the caritable and economic expectations
Charitable
Expectations
5,23 12,424 0,000
Economic
Expectations
3,37

As a result of the analyses we can state that hypothesis number two is confirmed and
that the customers expectations are different when it comes to the four CSR dimensions: (a)
economical, (b) legal, (c) ethical and (d) charitable/philanthropic.
In order to see if there is a correlation between the consumers expectations towards the
legal, ethical and charitable dimensions and the support for socially responsible
supermarkets, we have conducted a correlation test.
We have obtained an r=0.395 correlation coefficient, for the p<0.01 statistical
significance, which means that there is a connection between the customers expectations
towards the three dimensions and supporting the companies (the higher the expectations, the
higher the probability that companies will be supported). The degree of relationship is
positive, the correlation value is between 0.30 and 0.50 and the relationship is medium.
This test confirms that hypothesis number three is confirmed and that the consumers
high expectations towards the legal, ethical and charitable/philanthropic dimensions are
positively linked to supporting the supermarkets that behave in a socially responsible manner.

Table 6: Correlation between the legal, etical& caritable expectations and the intention to support the socially
responsible supermarkets

Intention to support
Expectations
towards legal,
ethical &
charitable
dimensions
Intention to support Pearson Correlation 1 .395**
Sig. (2-tailed) .000
N 150 150
Expectations towards legal, ethical &
charitable dimensions
Pearson Correlation .395** 1
N 150 150
**. Correlation is significant at the
0.01 level (2-tailed).
306

In order to measure the relationship between the higher expectations towards the
economic dimension of CSR and the support for the companys responsible behaviour, we
have conducted a correlation test.
We have obtained an r = 0.131 correlation coefficient, for the p > 0.05 statistical
significance, which means that there is no correlation between the two variables.
The results of this test infirm hypothesis number four, with no connection between
expectations towards the economic dimension and the support for supermarkets that behave
in a sociable responsible manner.

Table 7 Correlation between the economic expectations and the intention to support the socially
responsible supermarkets
Intention to
support Economic expectations
Intention to support Pearson
Correlation
1 -.131
N 150 150
Economic expectations Pearson
Correlation
-.131 1
N 150 150

5. Conclusions and future research
Our results offer an insight into how the CSR consumers` expectations are relatedwith the
intention to support the socially responsible behavior of companies.
The findings underline that it is potentially fruitful for the companies to become socially
responsible and that the marketers should really think into incorporating CSR in the companys
marketing communication and objectives.
The empirical findings suggest that consumers have great expectations especially regarding
the ethical and legal dimensions of CSR. Fulfilling these expectations is a way for companies to do
well by doing good. The studies findings can also have an important significance for the corporate
communication specialists.
The economic dimension seems to be less important (mean score below3.5), which implies
that cultural differences among stakeholders from different countries exist (Katz et al., 2001;
Maignan, 2001). Similar to the studies in Germany, France and Slovenia (Maignan, 2001, Podnad &
Golob, 2007), our results suggest that the Iai respondents established a distinction between economic
and other types of responsibilities.
Our study also had some limitations. First of all, the study has only been applied on
consumers from Iasi.
Future research could examine the consumers` expectations from all over the country and not
only Iasi and not only towards the supermarketsbut towards companies in general.
Future research could also examine the links between the expectations towards CSR, attitudes
towards socially responsible companies and the intention to support the socially responsible
companies.
Future research can also be carried out regarding the customers' behavior towards the socially
responsible companies, and the way that information about the company's CSR activities influences
the customers' attitudes.
Amongst the most interresting finds, we can mention the fact that people have different
expectations regarding the four CSR dimensions and that they have the highest expectations towards
the ethic (5.91) and the legal (5.4) dimensions.

307

6. References
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between corporate social responsibility and profitability. Academy of Management Journal,
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- Carroll, A. (1979). A three-dimensional conceptual model of corporate performance.
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company strategy. Journal of Business Ethics 44, no. 23 , 185193.
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Acknowledgements
This work was supported by the the European Social Fund in Romania, under the
responsibility of the Managing Authority for the Sectoral Operational Programme for Human
Resources Development 2007-2013 [grant POSDRU/107/1.5/S/78342]

308

309

MANAGEMENT STRATEGIES FOR SUSTAINABLE DEVELOPMENT OF NATURAL
AND ANTHROPIC ECOSYSTEMS

GVAN Smaranda
Associate professor, Faculty of Sciences Education/Department of Sciences and Methods, University of
Piteti, Piteti, Romnia, samigavan@yahoo.com

ANDRONESCU Alina
Ph.D. student, Faculty of Science/Department of Natural Sciences, University of Piteti, Piteti, Romnia,
alina_andronescu1986@yahoo.com

Abstract: This paper aims to highlight the importance of conserving natural resources in order to
maintain a sustainable socio-economic development. In this respect, we tried a theoretical approach on how to
keep a balance between economic activities and natural capital protection. To clarify these issues, this paper
presents the economic importance of natural resources and their sustainable strategies use. Even if a series of
approaches were already made for designing strategies, an important part remained only in the concept level.
In this context, we focused on methods of implementing of the economic sustainability principles. Our studies
have led to an understanding about the importance of improving technologies used in the economic sector, by
their appropriateness to the needs of contemporary society.

Key words: Sustainability, ecosystems, natural resources.

JEL classification: Q01, Q23, Q27, Q28, Q34

1. Introduction
To keep welfare, which it acquired in recent decades, human society is forced to change their
attitude towards exploitation. Without prompt and immediate operation, humanity could produce an
ecological crisis, with direct repercussions on the economic field. In this context, Mulder (2007)
considers that improving current technologies will underpin the process of changing industrial society.
Applying the concept of sustainability requires both an economic sector development and developing
methods to protect natural capital. Natural capital through its components is used as support for
economic activities.
Sustainability was defined by the World Commission on Environment and Development
(WCED) as: "Sustainable development is development that meets the needs of the present without
compromising the ability of future generations to meet their own needs". To those events, held in the
year following the accident at Cernobyl (1987) followed a series of conferences that were aimed to
find a balance between socio-economic development and natural resource conservation.
To obtain goods and services necessary for its development, human society still creates many
imbalances in natural ecosystems. Orecchini (2007) argues that today humanity is challenged to
develop her economic activity on principle closed circle that refers to consumption the resources in
sustainable way. As an overall reduction in resource exploitation can not be considered sustainable,
we must find ways to recycle waste from the processing resources.
Cabezas, Pawlowski, Mayer and Hoagland (2005) show that human society, through its
policies should promote the importance of natural systems, importance that lies in its ecosystems,
biogeochemical cycles and biodiversity.
The aim of this paper consists in arguing the need for new strategies of natural ecosystems
management in order to ensure sustainable economic development. In this paper are presented both
the negative impact of human activities on natural systems and the strategies for sustainable
exploitation.

2. Mountain ecosystems: base systems of socio-economic development
Mountains have many resources that can be economically recovered. These include: minerals,
forests and pastures. Floristic diversity of landscapes gives them a great tourist value. Also, mountain
310

ecosystems have major sources of water and energy. Mountain territories are a framework for
agricultural activities: 20% of EU farmland is located in mountain areas (Dax, 2002).
Forests represent a part of natural capital for economic activities and play an important role in
maintaining the balance of mountain ecosystems. The wood that results from the forest exploitation is
processed into different products such as paper, furniture fuel (Atta-Krahk and Tang Ya, 2000).
The first conference of mountain forests, held in Strasbourg (1990) was entitled Protection
of Forests in Europe and its main purpose was about forest management adaptation strategies in
current environmental conditions. Following the conference discussions, we can observe that the
participants had been recognized both the importance of socioeconomic mountain forests and its role
in protecting human society (Jeanrenaud, 2001).
Among conifers, pine species have a particular importance which lies both in the economic
value of pine wood and the wide variety of genre. The large number of species allows the existence of
the genre in different environmental conditions, which leads to a large amount of wood raw material,
regardless of the habitat in which species exist. Pine wood has the advantage of being able to be used
for a wide range of services. For example, Pinus pinaster is used to obtain resins. They are an
important resource, having a significant impact on the economy of the southern United States.,
Northern Italy and the Mediterranean basin, in Eastern and Southern Asia (Koleos, 2007).
Mountain lands are used mainly in agriculture and forestry. These sectors offer many goods
and services which are essential for maintenance of life quality (Dax, 2002).
Environment offers many benefits derived from tourism activities. Tourism is regarded as the
largest branch of the economy which is widely practice. McMinn (1997) believes that one employee
from nine works in tourism. This area provides about 6% of gross income of various countries;
percentage varies depending on the economic development and the tourism potential of that nation. In
countries that are less developed, tourism has proven to be a real solution to social and economic
problems.

3. The impact of human activities on natural ecosystems
When natural resources are irrational exploited, economic sector development is
unsustainable. The human society consumes resources which is unable to produce with a rate that
does not allow the environment to recover.
Pressure of human activities on the environment is reflected in global issues such as
greenhouse effect, ozone layer degradation and biodiversity loss. For the co-existence of the natural
sector with the economic one it requires that the environment created by anthropogenic human
activities to complement the natural one. Anthropogenic activities that underpin economic
development sometimes exceed the limit of endurance of the natural. When this happens, the
phenomenon of pollution occurs and affects the natural environment. To illustrate the human impact
on natural resources, Ehrlich and Holdren (1972) described the following equation:
I = PAT (Equation 1)
I - Environmental impact.
P Population.
A - Affluence (consumption of services and products per capita).
T- Technology, (environmental burden per product or service unit).
Since the expected exponential growth of the population, according to Ehrlich and Holdren's
equation, the environmental impact will be increasingly more.
To keep a balance, variables A and T must decrease, or at least one fall and the other remains
constant. As the trend towards, consumption can not be reduced and it will grow with increasing
population. So, the ecological balance depends directly of improved technology.
While the industries development increased the atmospheric concentration of volatile organic
compounds increased to. Due to the volatile property and currents of air, compounds do not remain in
areas where they were launched, but are transported long distances causing global environmental
problems (Omer, 2008).
Mountain ecosystems are one of the most fragile systems, upon them are acting a big number
of disturbing factors. Uncontrolled tourism, forestry and mining, diversion of watercourses and
biodiversity loss are just some examples of human activities that result in reduction of mountain
resources and disrupt the balance of forest ecosystems. For the most part, these activities are designed
311

to provide goods and services to human society, but not without a major impact on the environment
and consequently human in health. Studies by Szaro et al., (2002) showed that a big part of the
Carpathian forests are affected by high levels of tropospheric ozone. Depending on the period in
which it acts, the tropospheric ozone produces various physiological abnormalities on plants.
Even if the importance of economic, social and cultural biodiversity is recognized, it
diminishes increasingly due to human activities which are not based on the principle of sustainability.
One of the major mistakes of society is made when is not taken into account the importance
of all natural systems. Terra is a system whose components (subsystems) are interdependent
connected. Certain subsystems of the ecosphere are not particularly important in economically. This
approach can be viewed in two ways:
- The impact of human activities directly or indirectly affects all natural ecosystems. Ex:
Although most industrial activities are not carried in the high-mountains or in areas of Antarctica air
pollution effects are felt in these regions because of the mass movement of air.
- On the other hand, any change in the balance of an ecosystem will affect the proper
functioning of the other to an extent which depends on the relationship that exists between them.
Tourism, like any other economic sector tends to degrade the environment through its actions.
For example, a hotel building may affect the proper functioning of the ecosystem in which it is
located by: downstream water pollution, destruction of vegetation, habitat destruction of species.
Moreover, McMinn (1997) shows that the environmental impact tends to be even higher if investors
are not residents.

4. Protection of natural resources-vector of sustainable development
In recent decades increased interest in the environment was evidenced by the existence of
numerous events which were interested in sustainable economic development:
The first conference was held in Stockholm in 1972 and the theme was about relation between
environment protection and economic development. There was recognized the economic impact of
natural ecosystems. The concept of sustainable development was very well set out in Principle 13: n
order to achieve a more rational management of resources and thus to improve the environment,
States should adopt an integrated and coordinated approach to their development planning so as to
ensure that development is compatible with the need to protect and improve environment for the
benefit of their population.
In 1983, he attended Stockholms second conference, which resulted with the establishment
of the World Commission on Environment and Development (WCED). The year 1987 marked the
development of Brundtland Report by WECD. In this report, sustainable development was defined as
the development that meets the needs of present generation without compromising the ability of
future generations to meet their own needs" (WCED, 1987).
In Rio de Janeiro year 1992 was held the United Nations Conference on Environment and
Development. Following the discussions taken by the 115 participants was officially recognized the
need for environmental protection in conjunction with economic development.
United Nations Summit on Sustainable Development (2002) brought together 104 countries
and deepened the concept of sustainable development.
As a result of these events, more than 300 programs have been implemented worldwide in
order to protect biodiversity, river basins, carbon capture and landscapes.
Despite all the steps taken to develop the principles of sustainable development, governments
still face many problems of implementation.
ONUs Convention since 2000 for the Conservation of Biodiversity proposed the reduction of
species extinction. In 2010, it was found that this goal was not reached. Moreover, the Organization
for Economic Cooperation and Development (OECD) argues that without a continuing effort to
conserve biodiversity, it will continue to decline (OECD, 2010).
Regarding the protection of mountain areas, there have been many studies aimed to clarify
the economic importance of natural ecosystems, especially of the mountains becaouse of their
resources.
Engau and Hoffmann (2011) show in the paper entitled: Corporate response strategies to
regulatory uncertainty: evidence from uncertainty about post-Kyoto regulation, the growing
involvement of the governments, in recent decades, in economic activities in the imposition of
312

environmental regulations. A number of authors support the idea of setting international standards for
the protection of natural capital, giving them both the need for this action and its implementation
difficulty (Lave, 1988, Faucheux and Froger 1995, Taru and Polasky 2005).
The real challenge is represented by the practical application of principles developed in the
conferences mentioned above. Real progress will be in the creation of technologies that truly support
sustainable development. Not to belittle the importance of public debate on sustainability, Sikdar
(2000) presents the main issues arising in its implementation: Although policy frameworks have
shown willingness to implement some measures that combat pollution and exploitation of resources, it
is limited lack of appropriate technologies.

5. Management improvement of natural ecosystems
The negative impact of economic activities on natural ecosystems forces businesses to change
their management strategies and include in their plans appropriate means for preserving the
environment.
Any economic activity that brings harm to the environment should be changed, or if this is not
possible, it should be replaced by a sustainable one. Chapter 3 will present solutions that bring
researchers from various fields of conservation and environmental protection in the context of
economic development.
A growing number of European countries show their interest in the sustainable development
of natural ecosystems. To achieve this, governments allocate large sums for both conservation and
restoration of natural areas. Regarding measures to increase the economic potential of agricultural
regions and biodiversity conservation, Dietschi, Holderegger, Schmidt and Linder (2007) suggest
their classification as follows:
- Switch, on the same region, an intensive management with an extensive
one;
- Use organic fertilizer types at the expense of the chemical;
- Adaptation of traditional management principles to current socio-economic
requirements;
- Encourage farmers to financial management and exploitation of the
temperate grasslands.
Biodiversity, represented by the abundance of species in different ecosystems, has aroused in
the latest recent years the interest of businessmen. Thus, there was a change of management strategies
that allowed the exploitation of biodiversity as a source of raw materials and developing new
technologies. In this respect they have developed new technology based practices in their processes
using living organisms (mainly bacteria and microscopic fungi) or certain components (e.g. tissues,
cells, etc.). Applicability of these types of technologies is quite extensive with many economic
benefits.
Human society can improve the way they manage their resources. There are no losses in
nature caused by unused products. What is waste for one body represents an energy source to another.
Based on this principle, also us, the human species, we can use waste from a economic sector, as a
source of energy for other economic sectors. In this context, Stabnikova, Wang Ding and Tay (2005)
noted that in Singapore, the annual food waste was about one million tons, reorienting the only one
1. Due to its high in nutrients, food waste can be reused successfully in various fields, such as in
agriculture, in the form of compost. By applying these biotechnologies, an opened cycle of resources
is switching to closed one. The first cycle is still used frequently and consists mostly of: resources
exploitation, consumption and waste. This model can not be used for a long time because of the
resource depletion and waste accumulation. The second cycle is based on a model which, after the
operation and use of resources, the products obtained are reused and so the cycle closes (Orecchini,
2007).
Current technologies improvement is urgently required in the process of sustainability.
Mulder (2007) describes six types of environmental technologies.
1. Pre-industrial technologies;
2. Classic environmental technologies that are designed to prevent the pollution
effects;
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3. Good Housekeeping technologies, to reduce pollution;
4. End-of-pipe technologies. avoid excess consumption of natural resources;
5. Technologies to prevent hazards caused by pollution;
6. Sustainable technologies.
Recognizing the importance of biodiversity for business, Houdet, Trommetter and Weber
(2012) support the development of a relationship between the economic and ecological field which is
more than just a compromise. In order to most effectively use of resources, they suggest combining
the strategies outlined in the Polluter Pays principle, with those of the Beneficiary Pays principle.
Thus, the polluter, the economic operator turns into gainer of natural systems benefits.
As pointed out above, tourism is an important sector of the economy with its numerous
benefits. Since in most cases, economic benefits also bring environmental damage, tourism is not an
exception. McMinn (1997) proposed that the local characteristics of the areas in which they are
carried out, as would long-term benefits for both tourism and the environment.
Bilgin (2009) offers a comprehensive approach to sustainable development in his work
entitled The PEARL Model of Sustainable Development. It describes a model of sustainable
development based on the relationships established between: Perception, Environment, Action,
Relationship and Location.

Figure. 1. The PEARL Model of Sustainable Development

Source: (Bilgin (2009), The PEARL Model of Sustainable Development, Soc Indic Res,
DOI 10.1007/s11205-011-9824-7, p.2.)

The patent proposed by Bilgin shows how ecological, social, political and cultural capitals are
closely related with the functions of perception, environment, operation, collaboration and location.
He manages to illustrate very well the whole assembly of processes and components involved in
shaping the sustainable development. Thus, following Fig. Two it can be observed, indirectly, the
interdependencies between the actions of human society and natural ecosystems.

6. Conclusions
Sustainable development involves the exercise of economic activities correlation to the
protection and improvement of the environment where these activities take place.
Sustainable
Development

Environme
nt

Perceptio
n

Location

Relationshi
p

Action
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Beyond the ideological arguments brought to keep a clean environment, where we can carry
out our recreational activities, natural environment is a support material for any socio-economic
activity. Thus, the adoption of conservation and protection measurements of natural ecosystems
should not remain in the concept zone, supported only by some environmental organizations. We
directly depend to these planet resources and we urgently need the involvement of economic sector by
keeping its good features.
Mountain ecosystem, as a subsystem of the natural environment, is one of the most important media
for development of economic activities. Even if some of these activities dont take place in mountain
areas, they are recognized as a source of raw materials for a wide range of services. The sustainable
development of the current economy requires the proposal and a implementation of some
management strategies of mountain ecosystems. It is imperative that these strategies also consider
ways to conserve natural resources found in the mountains. Therefore, it requires a management
activity focused on the socio-economic development and protection of mountain resources.
For a long-term operation of the global economy is necessary to focus all the attention on
protecting the natural environment, without discriminating against one of them. Current economic
policies tend to pay more attention to those areas that provide a direct and immediate profit. However
it seems this strategy argued, should be understood that there is interdependence between natural
systems. This interrelation makes a system status operational to influence the operation of all other
systems.
To achieve sustainable development objectives, working with professionals in various fields
is required. The large number of economic, ecological, statistical, political studies may not be used
because of insufficient cooperation. Implementation of measures to protect the environment and
economic development is a responsibility of both ecologists and specialists in economic fields.
As a final conclusion, we believe that applying a global eco-economy would benefit both the
environment and economic activities.

Acknowledgements
"This work was partially supported by the strategic project POSDRU 107/1.5/S/77265, inside
POSDRU Romania 2007-2013 co-financed by the European Social Fund Investing in People.

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development. Oxon: CABI Publishing.
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systems theory: Ecological and other aspects. Journal of Cleaner Production, 13(5), p.
455467.
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didactice din mediul rural, Ministerul Educaiei and Cercetrii, Romnia.
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Priorities. Vienna: Federal Institute for Less-Favoured and Mountainous Areas. Available
at: http://www.mtnforum.org/sites/default/files/pub/22.pdf .
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incentive payments and plant species richness under different management intensities in
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316

SUSTAINABLE USE OF NATURAL RESOURCES IN THE SPACE OF DANUBES DELTA

GHEORGHE Silviu
Ph.D. student, Faculty of Management, Economic Engineering in Agriculture and Rural Development,
Specialization Engineering and management in catering and tourism, University of Agronomic Sciences and
Veterinary Medicine - Bucharest, Romania, tulcea@antrec.ro

POPESCU Liliana
Associate Professor, PhD., Faculty of Management, Economic Engineering in Agriculture and Rural
Development, Specialization Engineering and management in catering and tourism, University of Agronomic
Sciences and Veterinary Medicine - Bucharest, Romania, liliana_r_popescu@yahoo.com

BI BI CI OI U Sorin
Ph.D. student, Faculty of Management, Economic Engineering in Agriculture and Rural Development,
University of Agronomic Sciences and Veterinary Medicine - Bucharest, Romania, office@abeonaturism.ro

Abstract:The scope of the research is to build up a model of sustainable use for the natural resources
of the Danubes Delta space. In order to achieve this we pursued to reveal the importance of the deltas space in
international, European, and national context, acknowledging the relative importance of different natural
resources of the Danubes Delta, analysis of relations between economic activities and natural resources,
acknowledging the implementation measures of ecologic policies, evaluation of economic and social impact of
preservation regime and revealing the sustainable use as an ethical concept.
The undergone research envisaged to be a contribution to the development of knowledge base on the
Danubes Delta through one of the most important relation with socio-economic implications the use of
natural resources.

Key words: Ecotourism, Economic instruments, Danubes Delta natural resources, Sustainable
tourism.

JEL classification: F0, F01, Q01, Q1, Q26.

1. Introduction
Pursues to reveal the importance of this space at national and international level, respectively
the elements that justify the statute of biosphere reserve. Meanwhile, there were clarified some aspects
that are involved by this statute, respectively the relations between ecologic issues and local
population and its cultural and historical values. A special focus was given to the implications of the
implementation of Law nr.82/1993 regarding the establishment of the Danubes Delta Biosphere
Reserve.

2. Material and method
Presents details for every type of reserve soil, fish, plants, hunting, and landscape. The structure
of the presentation follows the specific indicators of each resource, being made some remarks on the
dynamic of their availability and use. A large space is dedicated to soil resources, respectively to
ownership regime in the Danubes Delta, since the conclusions reached regarding the relation between
this regime and the intensity of the pressure on the resources revealed that its importance is very large.

2.1. Economic activities in the danubes delta outcome of the sustainable valuation of
natural resources

Were presented and analyzed the influence factors for the main economic activities,
respectively for the resources that are valued by the in the space of the Danubes Delta. In the same
time, there are showed the situations and factors that triggered to processes with negative effects on
the population and the ecosystems. Considering the relative importance, an in-depth analysis was
made for fishing, agricultural, reed harvesting and transportation activities.
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Fishing represents the most important activity that has more forms of manifestation. In the
analysis of this activity we considered the commercial use of this resource. The aspects approached
are the way of managing the resource, respectively the legal base and the ruling forms on the access to
the resource. The information resulted there were then grouped in problems against the needs of
decision making at local level. A special focus was given to fish captures that neither is nor reported
and to poaching, since these could significantly influence the efficiency and effectiveness of
protection measures and administrative rules.
On the base of the data provided by the Direction for Agriculture and Rural Development
Tulcea, respectively the usual analysis methods there was formulated a synthetic picture on the
situation of the agriculture, suing quantitative and qualitative indicators. Reed harvesting is also a
traditional activity. For this we identified the opportunities and constrains and considering the new
regime of leasing we also made some appraisal regarding the results of this way of allocating the reed
resources.
Tourism represents for the Danubes Delta the most important non-extractive valuation
possibility. The wilderness and the originality of the landscapes attracted a large number of tourists,
and in space of the Danubes Delta there were developed numerous arrangements. The indicators of
tourism traffic revealed that ecotourism represents a viable option for the inhabitants, which will
conducts to a more equitable repartition of the benefits. We also formulated here some proposals in
order to favor the investments in this sector, respectively the risk aspects that has to be considered in
planning and ruling.

3. Results and dicussions

3.1. General measures for implementing ecological policies in the space of the
danubes delta

Respond to the need to harmonize the economic policies from the Danubes Delta with the
environmental ones in the context of structural and sectorial adjustment programs by monetary,
budgetary, market, energy, and investment policies. Among the proposals advanced, we mention:
supporting the development of alternative economic activities by granting some loans in order to
reduce the pressure on the fishing resource; granting mini-loans for supporting the preservation of
local traditions in the use of natural resources; the taxes and fees harvested by the Tulcea County
Council to be used for subsidizing the best practices in the delta agriculture; increasing the
investments in the valuation of wind and use of solar energy; formulation of a set of rules regarding
the traffic of the pleasure boats, and also the river boats of other type on the channels and lakes of the
Danubes Delta.

3.2. Direct measures for implementing ecological policies in the space of the danube
delta

Presents the means of implementing environmental policy in the space of Danubes Delta.
The synthetic picture outlined on the base of a critical analysis of the implementation tools
shows that the legal instruments are prevailing. In the research we attempted to identify all the legal
documents and the measure in which way overlap, or become synergetic in ruling the use in the spirit
of sustainability. We also analyzed the horizontal measures, respectively the environmental projects
that were implemented or are undergoing, being financed from internal and external founds.
Here there are made some observations on the complementarities, respectively the
redundancy of the objectives, measures or outcomes of these projects.

3.3. Indirect and supporting measures implementing ecological policies in the space of
the danubes delta

Is referring, mainly, to the institution of the ownership. There are drew some arguments for
transferring the land situated beyond fishing and agricultural arrangements in the perimeter of the
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Danubes Delta Biosphere Reserve, from the county and local public domain, which is administrated
by the Tulcea County Council and by the Local Councils from the Danubes Delta, to the public
domain of national interest, including the terrains permanently covered by water that are comprised in
the DDBR, being exempted the terrains that according to the law are the object of private property
right of physical persons and the terrains of the reserve that according to the law are the object of
public or private property right of local and county public administration, together with the natural
resources that are generated by them, consisting as natural heritage, public domain of national interest
as is expressed from the Law ne.213/1998 regarding the public property and its juridical regime.

3.4. Sustainable use of fishing resources of the danubes delta

Aims to bring the conceptual clarifications and practical considerations needed for a
constant availability of the resource and equitable repartition of the benefits. In this respect, there was
mad a diagnosis for fish resource of the Danubes Delta taking in account the spatial repartition,
structure of the species, dynamic of the fish population and the factors which influence it, the dynamic
of the captures, dynamic of the fishing efforts, the property regime for the resources. Since the
administration of this resource is a key element in order to provide a harmonized co-existence
between people and nature, there were analyzed the most important patterning methods.

4. Conclusions

1. The locals quality of life and their economic activities were and are influenced by the
ruling protection regime.
2. There was evaluated the impact of introducing an administrative (lease) tax on fish
resource according to the profit obtained in harvesting and the food discomfort generated by the
transfer of the tax.
3. The quantitative and qualitative level of the environmental impact was determined for the
content, intensity, extension, moment of producing, persistence, reversibility and flexibility.
4. The decision needed for fulfilling sustainability are made on the base of a substantiation
which is beyond the limits of economic relations. In fact there are needed changes in the value
systems; respectively it is needed to internalize the ecological values for those persons who are
involved in decision making. Therefore, there are detailed some ethical implications triggered by
sustainability in general, and sustainable use of the resources in particular.
5. There were presented synthetically the main working hypothesis and ideas resulted from
the efforts involved in the phases of documentation, data collection, synthesizing and systematization
of information, analysis and interpretation. We also detailed the elements which we considered as
reference ones in the elaboration of the model for sustainable use of natural resources, focusing on the
equitable repartition of benefits, respectively the incentives for the local population to protect the
resources of this unique space, with universal heritage value.
The conclusions reached are useful for those involved in the planning and ruling of fish
resource use in the Danubes Delta.

5. References
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- [2] Cocean Pompei, Vlsceanu Gheorghe, Negoescu Bebe, 2004, Geografia General a
turismului, Ed. Meteor Press, Bucureti.
- [3] Glvan Vasile, 2001, Turismul n Romnia, Ed. Economic, Bucureti.
- [4] Neacu Nicolae, 2000, Turismul i dezvoltarea durabil, Ed. Expert, Bucureti.
- [5] Negu Silviu, 2003, Geografia turismului, Ed. Meteor Press, Bucureti.
- [6] Institutul Naional de Statistic. Turismul Romniei- breviar statistic 2000-2010.
- [7] Monitorul Oficial al Romniei, Legislaia din domeniul turismului 1997-2010.
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2008.
319

- [9] Revista Vacane i Cltorii, 2005-2010.
- [10] D. A. D.R. 2000 -2009, Clrai, Romania.

320

A HEDONISTIC APPROACH TO CONSUMER BEHAVIOR DURING THE ECONOMIC
CRISIS

IOAN Maria Elisabeta
Ph.D. student, Faculty of Marketing/Department Marketing, "Academy of Economic Studies", Bucharest,
Romania, elisabetaioanas@gmail.com

ALDEA Roxana-Elena
Ph.D. student, Faculty of Marketing/Department Marketing, "Academy of Economic Studies", Bucharest,
Romania, aldea.roxana@yahoo.com

Abstract: The article aims to study the hedonic consumption by taking a deeper understanding of how
consumers choice and emotions have been affected by the economic crisis. The research goals are to identify the
main factors that influenced the consumers purchases (price, income, sales and promotions). As expected the
results showed that the economic crisis affected the level of pleasure felt when buying and the budget for
shopping. Also the consumer becomes more sensitive to the products prices, sales and promotions.
.

Key words: hedonism; pleasure; consumer behavior; economic crisis; price

JEL classification: M31; G01

1. Introduction
At the end of 2007 the economic crisis started to be felt in U.S. and it was spreading
all around the globe. The implications of the global economic crisis adversely affected the
socioeconomic conditions of almost all countries in the world, but in varying degrees
(Porfirev, 2010).
2008 represented the year when the economic crisis begun in Romania. This period
can be characterized as being full of uncertainty, frustrations and vulnerability. Romanian
consumers were more affected than previously thought. Initially, the European crisis was
seen from afar, then was taken seriously after economic indicators also fell and media
showed the first negative effects on economy.
The economies of the most important states from European Union where at risk
(Germany, England, Norway) and so Romania. The consumer was affected by the crisis in
two ways: psychological an financial. In those previous economic periods, the effect of
income on well-being was actually quite strong among those who make less money, because
within these people, differences in income translate into differences in how well basic needs
are met. Once enough money is earned to meet basic needs, money in relation to happiness is
a very personal equation. If money is what you value, then money, indeed, will make you
happy. After the basic needs were satisfied the effect of income on personal happiness
diminishes (Popa, 2011).
Ben-Shahar (2007) defined happiness as the experience of a combination of pleasure and
meaning. Pleasure is the feelling of positive emotions and meaning entails a sense of purpose
or a sense of fulfillment in life. Both are essential for happiness: seeking pleasure without a
sense of purpose is hedonism and the pleasure gained in this manner may be ephemeral; for
pleasure to last long, it should be derived and sought in the context of meaning. On the other
hand, the pursuit of a purpose in life should be accompanied by pleasure, for pleasure, the
author avers, is a precondition of a meaningful life (Wu, 2010).
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Consumer behavior was modified by the lower yearnings, all of this lead to lower
default value shopping. From a psychological view, the economic crisis lead to lower
consumption of momentum, so consumption is associated with emotional gratification such
as sensory pleasure, aesthetic beauty or mental arousal, this took place when the pleasure is
not a primary motivation for consumption (Iliescu&Petre, 2004, p. 114).
Research made by Dichter (1960) are perhaps the first under (Vigneron and Johnson,
1999) have advanced the hypothesis that consumer choices are influenced by non-cognitive
reasons, irrational and unconscious. And, indeed, there are a number of products or services
whose value is more emotional than their functional utility.
This paper starts with a discussion of the theoretical background of the hedonism in
the section 1, then continues with a short description of the perspectives motivational
hedonism and the emotional factors that leads to pleasure.

The origin of the word ,,hedonism comes from the Greek word hedon which literally
means pleasure or delight (OShaughnessy et al., 2002). Since the ancient time of hedonism
was considered to be fundamental psychological idea then were guided both wise and
ordinary people in their lives, their goal is pursuit of pleasure and well-being.
OShaughnessy defines hedonism as a concept that focuses on gaining pleasure and consider
it fundamental to human life. As the few critics think, hedonism is something that victimizes
consumers, so that they are forced to consume, and realizing that even this can lead to
consequences that changes the psychological state of mind and their financial way of
spending money. They say that today creates a new marketing concept called, hedonic
consumerism, which undermines the ethical values, traditional prevalent in this society
(hedonism in the context of purchase).
The period between 1960s and 1980s, was prosperous for consumer behavior research
that had as its main purpose the consumer decision-making. Product acquisition was seen as
an activity that passed through moving consumer stages: problem recognition, information
search, evaluation of alternatives, selection and evaluation after purchase. Stages of decision
making processes was seen as a utility or cognitive behavior of consumers.
After 1980, researchers have found that the emotional aspects of the acquisition
process werent studied in a thorough way, such as emotional part of the acquisition. Then he
felt the need to emphasize the feelings and emotions consumer analysis, profound in terms of
hedonic analysis (non-cognitive).
In acceptance of F. Fenouillet (2012) the motivational hedonism has four
perspectives: hedonism of instinct, lack of arousal hedonism, hedonism as finding an
optimum, hedonism as satisfaction to psychological needs. On an eudaimonic view,
hedonism of impulse is much closer to the psychological needs related to impulse buying.
The feeling of satisfaction is directly related to the hedonism impulsive. This mean that the
society drives the consumer to buy products but given the importance of emotional state, the
individual most of the time takes in consideration the emotions felt at the moment and lose
sight of utility products he buys. One of the main effects of the crisis was that the consumer
encountered difficulties in maintaining the same purchasing preferences.
According to the Maslows hierarchy, the new needs come when the previous ones
are fulfilled. Once the physiological needs (i.e. food, water, sleep) have been satisfied,
individuals turn their needs to the fulfilment of more advanced psychogenic requirements
such as social acceptance and self-esteem (Engel et al., 1995). Most of our needs are not
planed more over we buy products by instinctively. The purchase decision factor had greater
emotional impact than the utilitarian factors. Most of the times the product creates a
subjective substitute to its key features.
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Consumption of different classes of products generates emotional arousal levels, and
these depend the emotional desire to consume resources of the buyer. During the crisis
consumers took some of his decisions and the consumer emotionally, although the price
factor had a greater impact. Emotional factor was treated more research done by Babin,
Darden and Griffin (1994) and in other similar research that has been drawn that consumers
may be portrayed as intellectual and emotional entities in a frame shopping. In consumer
behavior can be observed by a predilection needs, both emotional and utilities. The hedonic
consumer is influenced by the emotional value of the product and the acquisition represents
for himself satisfying the need of self-esteem.
Consumers between the years 2008-2011, have become more likely to buy products
and services that are strictly needed. If by that time (2008), products were purchased by an
hedonic impulse and rewarding satisfaction of consumer desires, after the gauge year, the
consumer has become more sensitive (self-conscious) about the things that brought them
pleasure before. The financial stability period represented for the consumers a psychological
state of security. In this instance, the consumer was influenced and the susceptibility to make
decisions on impulse was shown by an investigation of Eun, Eun and Judith (2006), who
demonstrated that the hedonic consumption has a significant link positive emotions of buyers.
The Maslows model had some changes regarding the needs and values,
those become increasingly important to consumers during economic downturns; the
hierarchical sense wasnt affected so much or in determining what level an individual or
society has reached in fulfilling a certain level of needs. The self-esteem, respect of others
and confidence become more important as personal assets than the friendship and family.
In the past, impulse buying was seen as a irrational consumer behavior. Rational
economic behavior of a person may sometimes differentiated features such as consumer
spontaneity. Style of a consumer purchase can be considered as impulsive. Impulse buying
has been described as an unplanned purchase behaviour characterized by the sudden,
powerful and often persistent, urge to purchase that is initiated spontaneously upon
confrontation with a particular item, and accompanied by feelings of pleasure and excitement
(Rook, 1987). Impulse purchases also entail a sudden mental match between the meaning of a
product and consumers self-concept (Arnould, Prince, Zinkhan, 2002, p. 349).
Impulse purchase distinguishes from other forms through mindless, habit and time-
pressured purchases. At some point consumer may engage to make impulse buying and this
type of buying is related to different characteristics of the products, consumers culture and
emotional factors.
The implications of buying are various, but when speaking about impulse buying
there is a direction to take decisions based on the present emotions and the tendency of
fulfilling imagined future needs. This may be sometimes become a problem because after
acquiring the product there are two intense emotions of satisfaction and guilt. Based on
observation made by other researchers the consumers could buy particular stuff despite
awareness that they did not consider it appropriate and may later regret this experience and
feel guilty.
The state of the person is given on income but also by the attitude, if it is to take
psychologically. Consumer attitude puts happiness in things that are missing. After
purchasing the desired product, consumer attitude changes, the pleasure is short lived, and is
limited. We believe that limiting the pleasure is on the emotional value of the product, this
emotion. As the product value is higher or the product has great significance for us both
pleasure will be greater. On the other hand, we see that the product will determine the price
lower and lower hedonic while, so pleasure is fleeting, and in terms of hedonic happiness will
be limited in time.
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Hedonism is actually given by our positive attitude to life and turns largely on other attitudes
that we can cultivate: self-respect and self-esteem, hope and optimism for a brighter future,
gratitude for what we have received, humility in our expectations, relinquishing painful
regret.( Mike W. Martin 2008).
Most times consumers after a hedonic purchase they needed a justification. People
think the reasons for choice. Although it is difficult to imagine why getting things / objects
become primary hedonic (feels good), because their benefits are very diffuse and difficult to
identify. In addition hedonic alternatives often go beyond their need. Thus they are seen as a
loss and their acquisition or use is associated with luxury, indulgent (Indulgence) or guilt
(Guilt). (EG, (Kivetz and Simonson 2002) (Prelec and Loewenstein, 1998)). Low prices may
also further enable them to experience greater hedonic benets of shopping (Jin, Sternquist,
and Koh 2003).
Studies made on impulse purchase showed that the process of buying implies the happiness
feeling it is determined by the action of purchasing a product with money. People who have
money are considered to be happy if they are part of a group in which revenues are average,
but the same can be said if it is part of a high-income group (high and very high income).
Happiness in consumption can be divided into two categories: absolute and relative.
Happiness in consumption depends on whether goods are inherent inherently evaluable or
veiled. Happiness, taking a particular case of assets that depend on absolute desire, while
desire happiness depends on relative property surrounds (Nicolao, Irwin and Goodman,
2009).
In other words, human happiness is on the goods of value, but also can be happy and
things that are desired by society. Because humans are social beings, the desire to fit in a
group is so large that buying products and things to feel belonging to the group. You can see
that most times to be a friend or wish to have aspirations to fit in a group but have the same
desires as those who are already, they will buy the product though it does not mean they will
become more happy.
The same thing happens when the object / product desired, coveted is purchased but
once the consumer gets used to it becomes an object reference that later become part of you,
reflecting your image actually. Perceptual, good things become less in the same shape over
time, even if objectively speaking, the object does not change (the object did not intervene,
changed). The authors, Nicolao, Irwin and Goodman asked whether this notion of the
'hedonic treadmill' might cause people to be happy with less material purchases rather than
hedonic purchases.

3. Methodology
In this research we used in the questionnaire the Likert scale in order to validate some
of statements that we made regarding to the pleasure that the consumers felt when they
bought products in the crisis period 2008-2011. We focused on the main factors that are
influencing the hedonic pleasure when buying: economic crisis, impuls, emotions of buying
and we focused on the reactions to a five-point scale ranging from strongly disagree strongly
to strongly agree.
We conducted an exploratory study and applied the snowball method. The questionnaire was
posted on a online platform. There were 121 completed questionnaires and 65 % of them
where females and 35% males. Most of the people that completed the questionnaire where
from Bucharest (92%) and the rest from other counties. The people that participated on the
study had their age between 20 and 40 years old and over 75% of them had an university
degree.
The purpose of the research was to measure customer hedonic satisfaction in the
acquisition and influences bof the emotional factor and economic crisis. As the crisis started
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to be more obvious the consumer`s choices become more difficult to make. The pleasure of
buying started to be affected by the crisis and the trend changed from buying into saving. The
satisfaction perceived after buying was lower because the consumer was invaded by the
feeling of guilt instead of pleasure, like before the crisis. We made the first hypothesis as the
following:

H1: Satisfaction of buying a product, during the crisis, was lower than today.
During the crisis consumer took some of his decisions emotionally, although the price factor
had a greater impact. Emotional factor was treated more in the research done by Babin,
Darden and Griffin (1994). Studies made by Deaton showed that the consumer factors like
unemployment and income had a great influence on the decreasing feeling of happiness.
Other research made by the same author showed that enjoyment is actually higher, and
happiness and smiling are exactly the same at the end of 2010 as they were at the beginning
of 2008 when the crisis was affecting all the majors economic sectors (Deaton, 2011).
Satisfaction and the pleasure when buying diminished in the crucial period of the crisis and
when the prices grown.The consumers couldn't afford the same products as before so they
had to give up to some pleasures more expensive in terms of financial.
As we saw below the satisfaction lowered during the crisis. An important factor that affected
the consumer was the income and the price of the products. Consumers made their choices
more conscious, the quantity and quality, sometimes diminished as well because of the
available money to spend. So we set the second hypothesis:

H2: The hedonic purchases are influenced by the sum of money available to spend
One important result of research on the role of price in inuencing consumers perceptions
and purchase behaviors is the recognition that price plays a dual role in the way it inuences
consumer behavior (Lichtenstein, Ridgway, and Netemeyer 1993; Monroe 2003). In the
traditional economic sense, price indicates the amount of money that buyers must give up to
acquire the specic product or service. If it serves as an indicator of monetary sacrice, price
is playing a negative role. As the price increases the consumer belives that also the gaining
increases and at the same time the pleasure for buying in high. The higher the price the
greater the pleasure felt but the amount available for shopping. Many of us believe that
money is a solution to existing problems, but really just feeding money to hedonic treadmill,
the more we buy more so we want more (Brickman et al., 1971). Insofar as money is
pursued in the belief it will make us happy, the paradox of money is a special instance of the
paradox of getting. But it stands on its on in challenging our tendency to regard money as the
solution to all our problems. If we take into account the monetary value we could say that
happiness is and is not on money.But the existence of money creates the opportunity to buy
products that leads us to feel pleasure. The paradox of money does not buy or bring
happiness, but is only an illusion.(Martin, 2008)
In the third hypothesis we observed the consumer as he passed the period crisis, 2008-2011,
as following:

H3: Hedonic buyers where more sensitive to the sales and promotions in the period of crisis
Transaction value refers to the psychological satisfaction or pleasure obtained from taking
advantage of the nancial terms of a deal (Grewal, Monroe, and Krishnan 1998). We propose
that buyers will perceive greater transaction value from obtaining a good deal on their
purchase in comparison with ordinary buyers. Because of economic crisis some consumers
have the tendency to respond to sales and promotions and obtaining a good deal should be
important to them. Buyers experience a high feeling of pleasure when buying. Bargains
can provide increased sensory involvement and excitament among consumers (Babin, 1994).
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Obtaining a good nancial deal may even heighten this high. Another reason is that a good
nancial deal can provide buyers an excuse to buy, allowing them to quickly satisfy their
urge to buy, while at the same time reducing the strong feelings of guilt that are often
experienced after purchases (Faber and OGuinn 1992). The value of completing the
transaction should be greater for buyers as their focus is pleasure (Monroe, 2012).
The forth hypothesis focuses on the hedonic pleasure obtained when buying products and
they are influenced by price as the main factor.

H4: In the crisis period, the hedonic consumers bought products influenced by the price
The consumers tend to engage in higher levels of price comparisons than less price conscious
consumers (Alford and Biswas 2002). Low prices may also further enable them to experience
greater benets of shopping (Jin, Sternquist, and Koh, 2003).
Some consumers however, may feel an added pressure to save money during an economic
downturn, thus switching to lower priced food items. In Engel research, some participants felt
better buying cheaper priced food items in order to save additional money, whereas some of
the other participants felt that the quality of a food related product was more important than
the price, in downturns. Therefore one can argue that some consumers are motivated to buy
cheaper alternatives when it comes to essentials such as food items, in order to save money
during economic downturns, whereas others will not forgo the perceived quality in switching
to lower-priced alternatives, even when they are additionally price sensitive (Engel et al,
1995).

4. Analysis and results
The article aims to contribute to existing literature on consumer behaviour, by taking a deeper
understanding of how consumers choice and emotions have been affected by the economic
crisis.
Consumption generally depends on consumers having disposable income, feeling confident
about their future, trusting in the economy and embracing values that encourage consumption
(Quelch et al, 2009). With the wave of bad economic and financial news that has been at the
forefront of world media since 2008, consumer confidence and buying power has
experienced a steep decline; driving consumers to adjust the way they consume in
fundamental and perhaps even permanent ways (Quelch et al, 2009 and Fiona Ruxton, 2010).
The hedonic feeling when buying had suffered a lot because the primary focus of the
consumer is to ensure subsistence and then to fulfill other hedonic desires.
In this recession period (2008-2011) we observed that the consumer is influenced in a high
rate by a list of shopping 25%, the income-53% and the quality of the product, 50%. A lower
influence was felt on the impulse buying, 11% , the felt satisfaction before, and possession of
a credit card.
The consumers often make decisions based on previous product purchases. This
greatly influences his behavior on the shelves. Left by previous purchase satisfaction may
result in the future to become true consumer product.
The study also found that 19% of respondents were influenced to a large extent by the
products previously purchased and only 9% of them were influenced to a lesser extent.
Another feature of previous purchase is that 13% of consumers were influenced by emotion
felt before purchasing.
The state of pleasure that underlies a products choice by consumers is personal
satisfaction. The Consumer perception of personal satisfaction has a very high state of
satisfaction, 44% of people said that buying products and satisfaction of pleasure is made to
feel happy. Economic crisis has affected 6% of respondents to a greater extent and 37% in
moderately / medium. They were most heavily affected by the crisis in 2009 to a heavily
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extent followed by 2010. After 2010 the economic crisis started to fade away and the
shopping basket increased.
Feeling of happiness is experienced in shopping by 26% of respondents, and spending money
on products gives psychological comfort for 35% of respondents (they agree with this
statement) and only 8% chose a scale from 1 to 5 strongly agree.
Although the economic crisis has affected many sectors, most consumers were able to
accomplish small pleasures, this segment was 46% of respondents (agree) and 19% (total
agreement).
21% of respondents buy products without being planned, on impulse. An important factor is
the income. Many of those who maintain their lifestyle as before the crisis have incomes over
3000 Ron, they mostly have completed some form of higher education - master. 74% of
respondents said that with few exceptions, have maintained the same preferences, and
purchase satisfaction was perceived as average. 30% of consumers said economic crisis has
constrained their consumption decisions. Most of the respondents answered to the question:
How long will it take you to decide if a product goes in your shopping cart or not?, that it
takes between 2-5 minutes (49%). 37% of respondents affirmed they take between 0-1
minutes to decide whether to buy or not a product.
The consumers become less loyal to certain products, some of them affirmed that they
remained loyal to a fewer brands.
In order to maintain their business the managers should work hard to sustain a long
term strategy of improving their products, renew their actual brands and get rid of old brands
that don`t make profit enough to stay on the market.
A future research could investigate more about the economic crisis and changes of
consumer behavior between sexes and their choices. Another direction could be the effects of
the global crisis on e-commerce market and how they overcome the loses of that period and
their strategies regarding this area.

5. Conclusions
Through our research we observed that the consumers habits and reasons of buying
have changed because of the level of income. During the crisis period the consumers goals
took other directions like becoming aware of their usually consumption budget.
The pleasure achieved by spending money diminished, than it was before the crisis.
Now, consumers have become more careful in their income distribution in terms of products
they buy and reducing their budget meant loosing a part of their pleasures. For some of the
consumers shifting from buying expensive goods to less expensive changed their motives of
buying. this affected their personality and habits of purchase.
In a few years its expected that the consumers purchasing habits and pleasure
purchasing may return to their usual way after the economic crisis. The recession changed
their life style and habits in a good way, the consumer become more aware of the money
spent.

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THE CHALLENGES AND BUSINESS POTENTIAL OF SOCIAL MEDIA AND THE
TRANSFORMATION OF NOWADAYS CORPORATE COMMUNICATIONS

I ONESCU Andreea
Ph.D. student, Faculty of Marketing/Department of Marketing, Bucharest Academy of Economic Studies,
Bucharest, Romania, andreea.s.ionescu@gmail.com

TATU Cristian I onu
Teaching Assistant, Ph.D., Faculty of Marketing/Department of Marketing, Bucharest Academy of
Economic Studies, Bucharest, Romania, cristi@cristitatu.ro

Abstract: Customers presently interact with companies in ways unimaginable even five years ago. The
rapid growth of Social Media provides organizations with a great deal of information and yet, marketing
practitioners seem to have a limited understanding of what Social Media exactly means, how it can be best used
and quantified. This article intends to provide some clarification by describing the concept, and emphasize the
difference from related concepts. We then provide a classification of Social Media which groups applications
currently subsumed under the generalized term into more specific categories by characteristic. Finally, we
present some pieces of advice for companies which decide to utilize Social Media.

Key words: Social Media; User Generated Content; Web 2.0; Social networking sites; Virtual worlds


1. Introduction
As an effect of globalization, of the IT revolution, of all the changes of past decades, peoples
needs have evolved: the world went through industrial society, information society and now it tries to
adapt to the knowledge society. Before, people were satisfied with just having information, now they
want to actively participate in the creation, transmission and sharing of it. Taking into account the
continuous increasing importance given to the Social Media, it is clear that it has become an important
instrument in the marketing practice which will be included in the marketing communicational mix in
the future from the standpoint of integrated marketing communication. For a company, a cause or a
person to stay relevant and connected to its public and consumers, it is clear that the traditional media
are no longer enough but should be used together with Social Media.
Armed with a range of new communication tools, customers interact with companies in ways
unimaginable even five years ago. The rapid growth of these new communication channels,
commonly referred to as Social Media, provides organizations a great deal of information, as
consumers join and create online communities in increasing numbers. Not all feedback is positive, but
the value that can be extracted from this communication has enormous potential. Companies that
monitor and act on these findings see a unique opportunity to improve their business performance.
This may mean changing the way products are developed and marketed. It could mean creating new
interdepartmental efforts to ensure proper dissemination of opinions and information received from
customers. These new information channels require a rethinking in the definition of customer value
for the current top management of companies and finding suitable methods and tools for evaluating
the effectiveness of their marketing efforts through social networks.
More than 82% of the Romanian Internet users own at least one account on a social network,
according to socialnetworks.ro, an Evensys initiative. Also, Romania is among the top 10 countries
worldwide as rate of increase in the number of Facebook users. Companies are becoming increasingly
interested in communicating with target audiences through social networks, but this approach can be
successful only in the context of a coherent strategic approach to marketing through social networks,
closely followed by an analysis of relevant and accurate measurement of the efforts needed and the
results generated in terms of business value for the company.
Historically, firms have been able to control the information available about them publicly
only by strategically placed press releases and highly skilled public relations managers. Nowadays,
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however, they are left in the open as mere observers, not being able to control or alter what their
consumers post or comment on their brands, products and services or employees. This might seem as
a natural evolution if we take into consideration that the Internet started out as a giant Bulletin Board
System (BBS) that allowed users to exchange software, data, messages, and news with each other
(Kaplan, Haenlein, 2010). The current trend toward Social Media can therefore be seen as an
evolution back to the Internets roots, since it retransforms the World Wide Web to what it was
initially created for: a platform to facilitate information exchange between users. This does not mean
that we are back to the same point, because the technological advancements of the last 20 years have
fundamentally changed the face of the Web and now enable a form of virtual content sharing that is
not only different but also more powerful than the BBS of the late 1970s.
This article brings forth the challenges and opportunities that emerge from this evolution for
companies, and provides a framework to better understand the rapidly evolving field of Social Media.
We begin by providing a definition and classification of Social Media by looking at their background,
technical specificities, and differences from other concepts such as Web 2.0, Marketing 2.0 and User
Generated Content. We then focus on six types of Social Mediacollaborative projects, blogs,
content communities, social networking sites, virtual game worlds, and virtual social worldsand
present ways in which companies can efficiently make use of these applications. Based on this
analysis, we then derive a set of recommendations companies should follow when thinking about
developing their own Social Media strategy, be it with respect to these aforementioned types or other
applications which might emerge in the future.

2. Defining Social Media
Even if the term Social Media seems to be overused lately by both consumers and managers
or academic researchers, we can still find confusion regarding to what exactly should be included
under this term, and how Social Media differ from the seemingly-interchangeable related concepts of
Web 2.0, Marketing 2.0 and User Generated Content. Thus, it is only natural to provide insight
regarding the roots of Social Media and what they include.
According to Kaplan and Haenlein (2010), the era of Social Media as we understand it today
probably started about 50 years ago, when Bruce and Susan Abelson founded Open Diary, an early
social networking site that brought together online diary writers into one community. The term
weblog was first used around that same time, and truncated as blog a year later when one blogger
jokingly transformed the noun weblog into the sentence we blog. The popularity of the concept
rose with the wider availability of high-speed Internet access, leading to the creation of social
networking sites
such as MySpace (in 2003) and Facebook (in 2004). These two social networking sites along with
Twitter helped coin the term Social Media and had a great contribution to the prominence it has
today. The
most recent addition to this group have been the so-called virtual worlds: computer-based
simulated environments inhabited by three dimensional avatars. Perhaps the best known virtual world
is that of Linden Labs Second Life (Kaplan, Haenlein, 2009c).
In order to formally define Social Media we must first draw a line to two related concepts
often used in conjunction with it: Web 2.0 and User Generated Concept. First officially used in 2004,
Web 2.0 represents the collaborative and interactive revolution of the traditional World Wide Web,
symbolically named Web 1.0, promoted as such by Tim OReilly through the first O'Reilly
Media Web 2.0 conference in late 2004. This way, the content and information is no longer
exclusively offered by mass media, governments and companies to the visitors but also by other users
interconnected through informal networks on the Internet, who actively participate in the creation,
transmission and sharing of information all over the globe (OReilly, 2005). This means that the
World Wide Web has become more interactive than ever, each user being able to enrich, alter and
share the information galore already present. Concrete examples of Web 2.0 usage are: Flickr,
YouTube, File sharing sites, Social networking sites such as Facebook or Twitter, Recruiting sites like
Ejobs.ro or BestJobs.ro, Blogs and Wikis. For the purpose of our article, we consider Web 2.0 as the
platform for the evolution of Social Media.
While Web 2.0 represents the technological and ideological foundation, User Generated
Content
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(UGC) can be viewed as the sum of all the ways in which people make use of Social Media. The term,
which achieved broad popularity in 2005, is used frequently to describe the various forms of media
content that are created by end-users and publicly available. According to the Organisation for
Economic Cooperation and Development (OECD, 2007), UGC needs to fulfil three basic
requirements in order
to be considered as such: first, it needs to be published either on a publicly accessible website or on a
social networking site accessible to a selected group of people; second, it needs to show a certain
amount of creative effort; and finally, it needs to have been created outside of professional routines
and practices.
Sandy Carter (2008), Vice President of SOA (Service Oriented Architecture) and Marketing,
Strategies and Web Channels at IBM and one of the most influential leaders in Social Business and
Web 2.0 technology, explains on her blog how we should understand the Marketing 2.0 concept. She
explains how the combination between conventional marketing instruments such as direct marketing,
e-mail marketing or event marketing and the new Web 2.0 technology such as Twitter, blogs,
Facebook, MySpace, RSS brings forth this powerful marketing prodigy that is Marketing 2.0. In brief,
the evolution brought by the Marketing 2.0 model is that the emphasis is no longer on the one-to
many communication and discussions (basically a monologue, one way communication) but on
creating a continuous dialogue, many-to-many (two-way communication) between the company and
its clients, thus being in permanent connection with their preferences and interests in order to remain
relevant on the market.
Bearing in mind the three concepts clarified above, we can give a more detailed definition of
what we mean by Social Media. Simply put, Social Media implies the use of web and mobile
technologies to transform conventional communication into an interactive dialogue. Andreas
Kaplan and Michael Haenlein (2010) define Social Media as a group of Internet-based applications
that build on
the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of
User Generated Content.
Anthony Mayfield (2008), Vice President and Head of Content & Media at iCrossing UK,
explains in his book What is Social Media? that the best way to understand this concept is as a
group of new kinds of online media, which share most or all of the following characteristics:
Participation - social media encourages contributions and feedback from everyone who is
interested. It blurs the line between media and audience.
Openness - most social media services are open to feedback and participation. They
encourage
voting, comments and the sharing of information. There are rarely any barriers to accessing and
making use of content password-protected content is frowned on.
Conversation - whereas traditional media is about broadcast (content transmitted or
distributed to an audience) social media is better seen as a two-way conversation.
Community - social media allows communities to form quickly and communicate effectively.
Communities share common interests, such as a love of photography, a political issue or a favourite
TV show.
Connectedness - Most kinds of social media thrive on their connectedness, making use of
links to other sites, resources and people.
Whilst the great majority of articles and books written on this subject give concrete examples
of the elements and groups which make up Social Media (Reuben, 2008; Mangold, Faulds, 2009;
Zarella, 2010; Sterne, 2010), there is little information on the systematic way in which different Social
Media applications can be categorized, especially taking into consideration applications which may be
forthcoming, as the online environment is so dynamic and prone to change. Two authors that actually
did that in a systematic manner (Kaplan, Haenlein, 2010), relied on a set of theories in the field of
media research (social presence, media richness) and social processes (self-presentation, self-
disclosure), the two key elements of Social Media. They present the social presence theory as the
different degrees of social presence - defined as the acoustic, visual, and physical contact that can be
achieved - different media allow to emerge between two communication partners. The higher the
social presence, the larger the social influence that the communication partners have on each others
behaviour. Media richness theory is based on the assumption that the goal of any communication is
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the resolution of ambiguity and the reduction of uncertainty. They state that media differ in the degree
of richness they possessthat is, the amount of information they allow to be transmitted in a given
time intervaland that therefore some media are more effective than others in resolving ambiguity
and uncertainty. Applied to the context of Social Media, they assume that a first classification can be
made based on the richness of the medium and the degree of social presence it allows. The concept of
self-presentation is portrayed as the desire one has to control the impressions other people form of
him in any type of social interaction people have. On the one hand, this is done with the objective of
influencing others to gain rewards and on the other hand, it is driven by a wish to create an image that
is consistent with ones personal identity. For example, the number one reason why people decide to
create a personal webpage is the wish to present themselves
in cyberspace (Schau, Gilly, 2003). Closely related to self-presentation is the last element of the social
dimension of Social Media, self-disclosure. It is defined by the authors as the conscious or
unconscious revelation of personal information (e.g., thoughts, feelings, likes, dislikes) that is
consistent with the image one would like to give. Self-disclosure is a critical step in the development
of close relationships (e.g., during dating) but can also occur between complete strangers; for
example, when speaking about personal problems with the person seated next to you on a bus, train or
an airplane. Applied to the context of Social Media, they presented a second classification based on
the degree of self-disclosure it requires and the type of self-presentation it allows.
The complete classification the authors provide combining the two hereinabove mentioned
dimensions can be visualised in Table 1.

Table 1: Classification of Social Media by social presence/media richness and self-presentation/self-
disclosure

Social Presence / Media Richness
Low Medium High
Self-presentation/
Self- disclosure
High Blogs
Social Networking
Sites
(e.g., Facebook)
Virtual Social
Worlds
(e.g., Second Life)
Low
Collaborative
projects
(e.g., Wikipedia)
Content
Communities
(e.g., YouTube)
Virtual Game
Worlds
(e.g., World of
Warcraft)
Source: Kaplan, A. M., Haenlein, M. (2010), Users of the world, unite! The challenges and opportunities of
Social Media, Business Horizons, Vol 53, Nr. 1, pag. 62

What we can observe here is that with respect to social presence and media richness,
applications such as collaborative projects (e.g., Wikipedia) and blogs score lowest, as they are
primarily text-based and hence only allow for a relatively simple exchange. On the next level are
content communities (e.g., YouTube) and social networking sites (e.g., Facebook) as they enable the
sharing of pictures, videos, and other forms of media in addition to the basic text-based
communication. Scoring highest at this dimension are virtual game and social worlds (e.g., World of
Warcraft, Second Life), which try to replicate all dimensions of face-to-face interactions in a virtual
environment. Regarding the self-presentation and self-disclosure dimension, blogs usually score
higher than collaborative projects, as the latter are rather focused on specific content domains.
Moreover, similarly, social networking sites allow for more self-disclosure than content communities.
Virtual social worlds require a higher level of self-disclosure than virtual game worlds, as the latter
have strict guidelines that force users to behave in a certain way according to their character (e.g., as
warriors in an imaginary fantasy land).

3. Social Media: Challenges and Opportunities
Details on each of these six different types of Social Media will be provided further, along
with a discussion on the challenges and opportunities they offer companies.
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3.1. Collaborative Projects
Collaborative Projects can be argued to be the most liberal form of User-Generated-Content,
as they allow the simultaneous content creation by many end-users. One can differentiate between two
types of collaborative projects: wikis and social bookmarking applications. According to Mayfield
(2008), wikis are websites that allow people to add content to or edit the information on them, acting
as a communal document or database. The best-known wiki is Wikipedia, the online encyclopaedia
which has over 4 million English language articles and is available in more than 280 languages
(Wikipedia, 2012). Social bookmarks and social news services are essentially peer-to-peer referral
networks and each one is an expansion of the former tell-a-friend call to action. (Zimmerman,
Sahlin, 2010). Using this, one can notify many people at a time rather than e-mailing a small number
of people the link to a site or just some content. Because social bookmarks and social news services
rely on popular input from real people rather than from algorithms, some Internet users place a
greater value on these search results. Two examples of such bookmarking services are StumbleUpon
and Delicious; they recommend Web sites, blogs, videos, products, or content.
Collaborative projects offer multiple benefits for companies. To start with, theyre free
always a positive factor for online guerrilla marketers. In addition, companies may benefit in many
other ways by using these services such as: improved search engine ranking, increased brand visibility
and traffic, increased readership and membership, increased earnings or triggering the influentials
(Zimmerman, Sahlin, 2010). Apart from these clear opportunities, the collaborative projects can also
present challenges for companies. Firms must acknowledge the trend of collaborative projects
becoming the main online information source for more and more consumers. Hence, although not
everything found on Wikipedia may actually be true, what matters is that it is believed to be true by
many Internet users. This may be particularly crucial as regards to corporate crises.

3.2. Blogs
Perhaps the best known and the oldest element of Social Media, blogs are basically online
journals with dated posts displayed in reverse chronological order. Dan Zarella (2010), in his book
The Social Media Marketing Book describes a blog as a type of content management system (CMS)
that makes it easy for anyone to publish short articles called posts. He explains that blog software
provides a variety of social features, including comments, blogrolls, trackbacks, and subscriptions that
make it perfect for marketing purposes and stresses the fact that blogs make great hubs for other social
media marketing efforts, as they can be integrated with nearly every other tool and platform. Although
blogs are usually managed by only one person, they allow for interaction through comments on the
posts. Recently, blogs have begun to take other media formats than the initial text-based ones, even
though they are still by far the most common type found online. Even if many firms use blogs
intensively and even encourage their employees to do so, this type of Social Media does not come
without risks. On the one hand, dissatisfied or disappointed customers can engage in creating protest
websites or blogs to criticize the company offerings or to file virtual complaints (Ward, Ostrom,
2006), resulting in the public availability of negative and damaging information about the company
and its products or services. Furthermore, companies can also be surprised by some employees
writing negatively about them on blogs, after they have encouraged them to be active online, a
consequence they have to accept.

3.3. Content Communities
Content communities, or media sharing sites, enable and ease the sharing of media content
among people, as their name so vividly suggests. They organise and share particular kinds of content,
the most popular content communities tending to form around photos (Flickr), bookmarked links
(delicious), videos (YouTube) (Mayfield, 2008) and PowerPoint presentations (Slideshare). One
major challenge for companies active in this area is the risk of content communities becoming a
platform for sharing copyright-protected materials, as users are either not required to create a personal
profile page or if they are, these pages usually only contain basic information, such as the date they
joined the community and the number of videos shared. Although major content communities have
specific rules that ban and remove such illegal content, it is sometimes difficult to avoid popular
videos from being uploaded to YouTube. Conversely, the high popularity of content communities
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makes them a very attractive communications channel for many firms, such as Cisco, Microsoft,
Apple and Google, which rely on content communities to share recruiting videos, as well as keynote
speeches and press announcements, with their employees, investors and public.

3.4. Social Networking Sites
Highly loved and promoted primarily by the young generation (20 to 29 years old) (Stelzner,
2012), social networking sites allow people to build personal web pages, profiles and then connect
with colleagues, online or offline-only friends or just acquaintances to share content and
communication. The biggest and best known social networks are Facebook, MySpace, and Bebo
(Mayfield, 2008). Several companies are already using social networking sites to support the creation
of brand communities (Muniz, OGuinn, 2001) and even as a distribution channel for their products or
services -mainly small businesses or freelancers find this possibility very attractive and cost effective.

3.5. Virtual Game Worlds
Virtual worlds are platforms that replicate a three dimensional environment in which users
can appear in the form of personalized avatars and interact with each other as they would in real life
and taking this into account, they are probably the ultimate manifestation of Social Media, as they
provide the highest level of social presence and media richness of all applications discussed thus far
(Kaplan, Haenlein, 2010). Virtual worlds are available in two forms. The first one, virtual game
worlds, requires its users to behave in a certain way, according to strict rules as the whole virtual
world unfolds as a huge multiplayer online role-playing game. Examples of virtual game worlds
include World of Warcraft, which counts around 8.5 million subscribers who explore the virtual
planet of Azeroth in the form of dwarves, orcs, night elves or humans and fight monsters or search for
treasures and Sonys EverQuest, in which 16 different races of players travel into the fantasy world of
Norrath. Marketers can leverage the high popularity of virtual game worlds not only by using in-game
advertising - a similar concept to the product placement in movies but also by using different
elements specific to those worlds in traditional communication campaigns in order to draw the interest
of the millions of fans and players.

3.6. Virtual Social Worlds
The second group of virtual worlds, the virtual social world, allows more freedom of
behaviour to the players, enabling them to live a virtual life of their choice, as similar or as different
from their real life as they imagine it to be. Similar to the virtual game world, the users appear as
avatars and interact in a three-dimensional virtual environment; however, in this realm, there are no
rules restricting the range of possible interactions, except for basic physical laws such as gravity. This
allows for an unlimited range of self presentation strategies, and it has been emphasized that with
increasing usage intensity and consumption experience, the players of virtual social worlds show
behaviour that more and more closely mirrors the one observed in real life settings (Haenlein,
Kaplan, 2009; Kaplan, Haenlein, 2009a, 2009b). One of the most popular example of virtual social
worlds is the Second Life application, founded and managed by the Linden Research Inc company.
Besides doing everything that is possible in real life,
Second Life also allows users to create content and to sell it to others in exchange for Linden Dollars,
a virtual currency that is actually traded against the U.S. Dollar on the Second Life Exchange. These
virtual social worlds offer a lot of opportunities to companies from a marketing point of view:
advertising, communication, v-commerce, marketing research and even human resource and internal
process management (Kaplan, Haenlein, 2009c).

4. Social Media and estimated corporate reactions to its ever-growing importance
Social Media have become such powerful and wide spread instruments among the consumers
that the companies cannot afford to ignore them anymore or consider them a young peoples fad.
Underestimating its influence over consumer behaviour is a mistake companies should not make. But
what is even worse for a new social media marketer is to apply the same strategies from the offline
broadcast world to the social Web. Hence, what any company and marketer should do first is analyze
its brand communication and values and its positioning on the market, then establish measurable goals
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and objectives for its Social Media presence and specifically decide which Social Media tools can best
accomplish this, of course taking into account the pre-established media budget.
Before any company even thinks of launching into a Social Media conversation, it has to
listen. As almost any person does when joining a new forum, companies have to lurk in every
medium theyre going to enter to get a sense of the rules and customs, and of who the influential
people are. Furthermore, it is crucial to ensure that all chosen Social Media activities are aligned with
each other, as nothing is more confusing than contradicting messages across different channels.
What is true for different types of Social Media also applies to the relationship between Social
Media and traditional media: the integration of the two is essential. Even though they might seem
completely different they only represent the two sides of the same coin: the corporate image of the
firm in the eyes of the customers.
While engaging customers in Social Media is of paramount importance for any company, it is
also very important to support causes that are important to consumers, because people tell others
about things to which they are emotionally connected. Organizations can leverage emotional
connections by embracing one or more causes that are important to their customers (Mangold, Faulds,
2009). Moreover, companies should utilize the power of stories: the more memorable they are, the
more likely they are to be repeated and marketers should always make sure that all the Social Media
applications used by the company can be freely accessed by all employees.
In the end, it does not matter what a company did good or wrong in Social Media if it cannot
realistically measure or report this back to everyone involved and create a history for future
references. Therefore, the four pillars of Social Media success are Monitoring, Analytics, Engagement
& Reporting, with Collaboration & Workflow as a foundation powering all of them (uberVu, 2011).
Also, what the company uberVu describes is that these four pillars follow each other in a feedback
loop that allow companies to observe the social media environment, orient themselves by
understanding what the data is portraying, make a decision and act on it. Companies can then measure
their impact and improve their approach for the next iteration.

5. Conclusions
For a company, a cause or a person to stay relevant and connected at the same time with its
public and consumers, it is clear that traditional media is no longer enough for the job, and that they
have to be utilized together with Social Media. The most noteworthy example on this is the path to
The White House of Barack Obama, precisely because of his strategy to leverage the power of Social
Media and to call to action both young people as well as the older audience, this way succeeding in
becoming the most powerful man in the world from an unknown senator in just four years. There are
many learnings from this case study taking into account the staggering figures: 500 million mentions
on blogs, 137.922 followers on Twitter, 850.000 friends on MySpace. This is also pointed out by Eric
Qualman in his book Socialnomics: How social media transforms the way we live and do business:
if Facebook would be a country, it would be the third largest one after China and India. Hence,
companies no longer have a choice whether to use Social media or not, but rather on how well they
put them into practice.
Today, more or less everything is about Social Media, it is the core activity of internet
marketing. Because they allow firms to engage in timely and direct end-consumer contact at relatively
low cost and higher levels of efficiency than can be achieved with more traditional communication
tools, this make Social Media not only relevant for large multinational firms, but also for small and
medium sized companies, and even non-profit and governmental agencies (Kaplan, Haenlein, 2010).
Future evolutions of Social Media may include the development of social shopping:
companies will use social networking websites, particularly Facebook, to sell products within the
social network of targeted local markets. In addition to that, more and more users will sign in with a
social identity versus manually filling out a form on a company website, while Search Engines will
incorporate social feeds and content, such as Facebook and Twitter updates.
Furthermore, content communities have a tendency to increase in importance for Social
Media experts, especially sites like YouTube (Stelzner, 2012). Taking into account the present
consumers needs for freedom, mobility and the accelerated pace at which Social Media applications
become obsolete the natural trend will be toward the rapid development of Mobile Social Media and
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integrating technologies. Other interesting future evolutions of Social Media and its methods of
measurement may include, according to the pioneer of the field, NextStage Evolution company,
actually reading the minds of consumers with the help of the World Wide Web, by simply visiting
a site that uses the companys technologies and analyses.
The question remains, what will the next evolutionary step in corporate communications be
when Social Media will become obsolete? The consumer needs point into the direction of filtering
useless information, rumours or groundless promises, but still there are countless of possible
surprising evolutions.
No one can accurately predict whether we will still be using MySpace or Second Life in two,
five or ten years time. The unique way that the internet continually improves in response to user
experience is driving innovation on an unprecedented scale (Mayfield, 2008). But what is beyond
doubt is that social media however it may be referred to in the future is here to stay and transform
our shared reality and with it companies continuous efforts in finding competitive advantages on the
market.

6. References
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of virtual store exposure on real life brand attitudes and purchase intent. Recherche et
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qualitative analysis of Second Life. Advances in Consumer Research, 36(1), 873874.
- Kaplan, A. M., Haenlein, M. (2009c). The fairyland of Second Life: About virtual social
worlds and how to use them. Business Horizons, 52(6), 563572.
- Kaplan, A. M., Haenlein, M. (2010). Users of the world, unite! The challenges and
opportunities of Social Media, Business Horizons, Vol 53, Nr. 1.
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promotion mix. Business Horizons, 52, 357365.
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http://www.icrossing.co.uk/what-we-think/ /
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http://oreilly.com/web2/archive/what-is-web-20.html
- Qualman, E. (2011). Socialnomics: How social media transforms the way we live and do
business. New Jersey: John Wiley and Sons.
- Reuben, R. (2008). The Use of Social Media in Higher Education for Marketing and
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- Stelzner, M.A. (2012). 2012 Social Media Marketing Industry Report. How Marketers Are
Using Social Media to Grow Their Businesses. Retrieved April 20, 2012 from
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Publishing.

338

STRATEGIC CHANGE IN SMALL ENTERPRISES: AN OPTION OR AN OBLIGATION?

I ONI TA Daniela

Assistant professor / Ph.D. student, Faculty of Marketing, Academy of Economic Studies Bucharest,
Romania, daniela.ionita@ymail.com

Abstract: Strategic change is an important research topic especially in times of economic crisis. The
goal of the present research is to study how small companies marketing strategies have evolved during the
economic crises. Change was assessed from a context, content and process perspective and results show a
variety of outcomes. Small companies are bound by entrepreneurs core competencies. Thus a radical change is
unlikely. The most frequently changed strategies are related to product, while positioning and pricing strategies
are the most inflexible. Those who tried several changes seem to be in a better position.

Key words: strategic change, marketing strategies, small enterprises


1. Introduction
Small enterprises have an important role in economic and social life of a country. In
European Union (EU) 98.7% of all businesses are small enterprises (with less than 50 employees).
They provide 50% of the private sector jobs and contribute to 40% of the total value-added created by
businesses in the EU. While small and medium enterprises (SMEs) continued to be the backbone of
the EUs economy, they had to operate in an uncertain economic climate. The crisis that hit the EU-27
in 2009, decreasing its GDP by 4.2 %, had immediate impact on SMEs. The number of SMEs in 2009
felt by 2.1%, with small and medium size firms being hit harder than micro firms. Despite this
challenging environment, in 2010 the EUs SMEs started to bounce back (European Commission,
2011).
In Romania were registered 553,089 SMEs in 2008, out of which 98.2% were small
enterprises. SMEs situation became difficult since the end of 2008 when the economic crisis started.
In 2009, 195.751 SMEs interrupted their activity which represents 35% from the total (Nicolescu,
2010). This dramatic situation raises the question if Romanian SMEs are prepared to deal with a
difficult business environment by adapting their strategies according to the new conditions.
This article aims to identify the strategic changes adopted from the marketing perspective-
by small enterprises in Romania during the crisis, what factors influence them, how new strategic
alternatives are generated, selected and implemented.
The paper is organized as follows: first we present the theoretical background followed by
research methodology. Then we introduce an empirical study, present the results and discuss the
conclusions.

To resist during economic crisis, it is obvious that SMEs with declining performance cannot
continue to do things like in the past, but they need to change. Change becomes the only solution to
the problem. When practitioners are concerned about change, this is reflected also in the academic
world. For example, restructuring, layoffs and the need to increase efficiency during 1990s generated
a strong focus on change through business process reengineering (BPR) and this was reflected also in
the academic literature (Fenton, 2007). The recession from the beginning of 1990s was another
moment when academics were highly concerned with organizational change (Bohman & Johansson
Lindfors, 1998). The literature covers several facets of change: strategic change, process change
through BPR, technological change, etc.
Most researchers have focused on change in large companies, while relatively little research
was done in SMEs. Two distinct research areas were highlighted in the last twenty years: strategic
change and process change or BPR.
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Strategic change means a significant change in companys strategies, structures, systems,
processes and organizational cultures (Balogun, 2001; Balogun & Jenkins, 2003). It can be classified
according to the extent of change - transformation and realignment - and the speed of change -
incremental or "big bang" - into four types: (1) Evolution: a radical move gradually implemented, (2)
Adaptation: a sequential change generated by the need to align with the environment, (3) Revolution:
a radical change that is based on simultaneous initiatives on many fronts and (4) Reconstruction: a
necessary move to re-align how the company operates, usually reactive and quickly implemented.
The reasons for strategic change, its benefits and costs have also been investigated (Parnell,
1998). The most frequently mentioned reasons were (1) the level of performance, (2) changes in the
external environment and (3) a more effective alignment with internal resources.
Regarding the benefits of change, the most important are (1) improved performance through
a better fit with the environment, (2) placing the business in a better position to profit from an
undeveloped market segment and (3) improving company's ability to adapt. The costs of change
which have been most frequently investigated were the financial costs, the related risk that a change
of strategy may negatively affect organizational culture and consumer confusion.
Of special interest is the content of strategic change, namely the future development
alternatives (Bohman & Johansson Lindfors, 1998). If during periods of relative stability and
favourable conditions strategic choices are addressed in a routinized way, during dramatic periods of
recession, strategic choices are generated according to the limits of something called space for action.
Space for action has an objective dimension expressed by earnings, financial performance - and a
subjective dimension, defined by the way in which a company sees its choices as acceptable-
unacceptable or positive-negative.
Not only is the content of a strategic change important but also the processual aspects. When
a company faces a dramatic change, individual and shared meanings are reconstructed (Ericson,
2001). Therefore, implementing a strategic change is as important as its content. Implementations
models were developed based on best practices. They are based on a set of five factors of success:
commitment, social and cultural issues, communication, tools and methodology and interactions. The
gender perspective can also influence the way in which change is managed (Paton & Dempster,
2002). Females favour a "softer", more holistic, participative and open approach. They prefer less
systematic and formulaic analysis techniques and seem that are better equipped for multi-tasking.
Beyond male-female clichs, it is obvious that implementing a strategic change requires some
capabilities and some tools.
One of capabilities, called strategic scanning, is defined by how managers gather strategic
information about events and trends. There are two complementary ways: focused search, when they
are looking for specific information necessary to decision-making and scanning search, when data are
collected to detect signals that indicate some changes in the environment and to prepare for them. This
latter approach must be exercised and converted into a skill that improves organization's peripheral
vision to identify early warning signals and therefore a rapid response and adaptation (Lesca, Caron-
Fasan & Falcy, 2012).
Another important capability is strategic flexibility. It captures the extent to which new and
alternative options in strategic decision making are generated and considered and is influenced by the
cognitive models of decision makers (Combe & Greenley, 2004).
Similar to strategic flexibility, another capability was identified: strategic agility. This is
actually a meta-capability based on three capabilities: strategic sensitivity (sharpness of perception),
leadership unity (ability to make bold and fast decisions) and resource fluidity (internal capability to
reconfigure and redeploy resources) (Doz & Kosonen, 2010).
Regarding the tools used in strategic change, it seems that in ambiguous situations creative
action-based techniques are more useful than rational-logical techniques. Creative techniques rely on
intuition and experimentation while rational-logic techniques are designed to reduce uncertainty by
collecting and analyzing as many data (Kallio, Saarinen, Salo, Tinnila & Vepsalainen, 1999).
Another useful tool in strategic change, but unfortunately often used incorrectly is
performance metrics (Melnyk, Hanson & Calantone, 2010). Companies trying to change their
strategic direction must change performance metrics and focus less on intended outcomes and more
on the means by which these outcomes are to be achieved. The main reason is that there may be issues
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with the incentive systems when the focus shifts from doing more of the same thing to doing
something differently.
Beyond the content and process of strategic change, the factors, capabilities and tools
necessary to implement it, we cannot ignore a significant problem, namely inertia. The business
model of a company tends to be naturally stable and hard to change. Its stability is further increased
by the search for efficiency which characterizes period of rapid growth (Doz & Kosonen, 2010).
Therefore strategic inertia in decision-making can be extreme (OKeefe & Wright, 2010). Even if the
company exceeds inertia - usually forced by external negative factors - the trend is to minimize the
impact of externally imposed changes. Repeating the same way of doing things has created a pattern
that is difficult to change with a new one, which can be costly and risky. That is conservatism to
change is the result of another process, namely learning (Harrison & Easton, 2002).
BPR is also a form of organizational change aimed at transforming the organizational
subsystems of management, people, information technology and organizational structures. Here
change is seen in terms of business processes and the main goal is improved products in terms of cost
and quality (Kettinger, Teng & Guha, 1997). Traditionally, BPR has been used mainly by companies
with low business performance. Although there are a variety of BPR projects, most of them were
rather operational and generated a performance improvement of working processes without creating
radical changes across the entire company (Kallio, Saarinen, Salo, Tinnila & Vepsalainen, 1999).
The drivers of BPR are similar to those of strategic change: (1) internal inefficiency, (2)
changed customer/supplier requirements and (3) external changes uncontrollable and unpredictable to
the industry (Kallio, Saarinen, Salo, Tinnila, & Vepsalainen 1999). Models have been developed for
implementing BPR projects (Teng, Grover & Fiedler, 1996) and a variety of methods, tools and
techniques were elaborated. At least 72 techniques are used in BPR projects such as: role activity
diagramming, fishbone analysis, process simulation techniques, out-of-the box thinking, and value-
chain analysis (Kettinger, Teng & Guha, 1997). Many of them are intellectual property of major
consulting firms and have been developed during the 1990s when either for justified reasons or the
desire to be "fashionable", large companies started such projects. Even if nowadays the concept of
BPR is less used due to its association with the period of restructuring and layoffs, the idea of
constantly evaluating the business processes remains valuable (Fenton, 2007).
Although research in SMEs is relatively limited, it seems to be related more to strategic
change than to BPR. The explanation is simple: their internal processes are simple and flexible and
their limited resources did not allow waste.
One of the issues investigated, is the role of ownership and management in strategic change
(Brunninge, Nordqvist & Wiklund, 2007). Thus, closely held SMEs exhibit less strategic change than
other SMEs and the involvement of outsiders - directors, managers which dont have property rights
but have decision power- has a positive effect on strategic change. The value that a team of
management/shareholders can bring is superior - in terms of internationalization or access to foreign
markets - compared to firms with one associate (Loane, Bell & McNaughton, 2007). More people
means extended technical capabilities, greater knowledge of international markets, new business
contact networks or access to financial resources.
Another issue investigated is innovation management in SMEs as a process of change
(Hotho & Champion, 2011). Not all SMEs are the same, being identified three clusters: the first group
innovates by focusing on internal optimization, the second group focuses on the external environment
and the alignment to it and the third group needs to crystallize their ambitions in a clear strategic route
before they can improve upon internal resources and capabilities (Sluismans, Beck, den Hertog &
Lommelen, 2009).
Another issue investigated is transferring the contacts network from an owner-manager to
another person. For SMEs, the contacts network is essential in identifying, creating and delivering
value, so the transfer is essential in the evolution of the firm (Gilmore, Carson, Grant, Pickett &
Laney, 2000).
A special case is strategic change in new ventures. For these companies, there is no
question of changing the strategic direction to another one, but how to develop the initial strategic
direction (Nicholls-Nixon, Cooper & Woo, 2000). This is the result of experimentation, trial and
error process for adapting to the environment. Experiments can be related to peripheral aspects
(product line extension, initiating price changes) or central aspects (product scope or partnership
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status). As the environment is more hostile, the frequency of strategic experimentations increases. But
a higher frequency of changes positively influences firm performance in a less hostile environment.
Often organizational change research has been largely acontextual, ahistorical and
aprocessual. This approach cannot capture and explain the phenomenon of dynamic change.
Therefore change research should explore context, content and process of change together with
their interconnections over time (Pettigrew, Woodman & Cameron, 2001).

To properly understand how entrepreneurs think and behave it is necessary to use research
methods that allow a closer look to decision-making process providing an inside perspective. If the
researcher is closer to the essence of the phenomenon, the results are richer and more authentic. It is
recommended rather to use qualitative researches like in-depth interviews, allowing respondents to
express own opinions relative to the manner in which they manage their business, why, where, how
and when, using own words (Gilmore & Coviello, 1999). Moreover, to conduct research on change, to
examine this continuous process in context, a longitudinal research by means of comparative case
study methods is recommended (Pettigrew, 1990).
The goal of the present research is to study strategic change- from a marketing perspective- in
small enterprises (under 50 employees). The purpose is to find out how marketing strategies have
evolved during economic crisis. The research objectives were: (a) Defining change from a business
perspective, (b) Determining the cognitive models used in strategic change, (c) Describing the context
of change, (d) Identifying the change content (how strategic alternatives are generated, the conditions
necessary to generate those alternatives and criteria used for selecting between them) and (e)
Evaluating the implementation of change in terms of management, costs and benefits.
According to the goal and objectives of the study, the exploratory research was the most
appropriate type. The research strategy was qualitative and the research design was the case study. In
order to capture as many relevant aspects and their dynamics longitudinal multiple case study was
used. Multiple case study design allow researcher to compare and contrast findings while the
longitudinal approach allows to understand change in organization (Bryman & Bell, 2007).
The unit of analysis is the small enterprise (under 50 employees) from various industries.
The research sample was made of four typical cases: a construction company, a retail company, an
Internet service company and a professional services company. The interviewed persons were
entrepreneurs who were involved in companys management.
Each case was investigated during a period of twenty-two months from June 2010 till April
2012. Three semi-structured in-depth interviews were taken from each company. The main discussion
topics were marketing strategies, organizational learning, strategic change and change management.
The interviewer encouraged respondents to present what they consider important relative to the
suggested discussion topics, without feeling limited by them
The interviews lasted between 70 and 90 minutes and were audio recorded. For the data
analysis, the content analysis was applied. The analysis units were grouped by exhaustive and
exclusive categories.

4. Results
Company A is a retail company with two associates (husband and wife) which started in
2004as an online store specialized in sports materials and equipments. After three years, in 2007 the
first showroom is opened focused on bicycles. In 2009 opens the second store was opened which has
also a service area for bicycles repairs. In the same year the company started a sport lifestyle program
(organizing sport events e.g. bike trips) designed as a separate business unit.
At the first interview, in June 2010, future plans envisaged that by 2012 the company will
expand with five more stores in the country (through a franchise). The company is positioned between
the big sports retailers (Intersport, Decathlon, Hervis) with large supply and financial power and small
shops opened by professionals. The company has a brand with a relatively high level of awareness.
The customer segment is represented by medium to high income people, aged between 30 and 45
years who play sports for fun or fitness.
The product strategy is focused on product diversification by adding additional
equipments/materials for sports like tennis or skiing. The sport lifestyle program is aimed to support
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sales, as it encourages customers to use the purchased product, to practice that sport: "If you buy a
racket and you are given the opportunity to play, you'll buy other things like tennis shoes, clothing. It
draws you in and this means involvement and subsequent purchases."
Because the company sells only premium brands and targets medium to high income
customers, the prices were aligned at medium to high level "Even if prices are higher, this is the
segment that we target, making no compromise to weaker brands. We have only well-known brands."
Regarding the promotion strategy, the company relies heavily on customer recommendations
"Word of mouth is working very well on the hobby side. They learn from each other what to do." The
company does not use other promotional techniques except some promotional events, which had good
mass media coverage (radio) and even sponsors.
Regarding change, the entrepreneur perceives it as a departure from what is now "If things do
not work as you expected, somehow you have to adapt your behavior, to change the way of knowing".
Business changes cannot be dissociated from personal changes and vice versa "Personal change
affects any business and vice versa. If I think about the last two years, most of business changes have
influenced the personal ones."
Change in general, is influenced by how the entrepreneur perceives the future: "I do not think
that the future can be predicted but I think there are some paths, a corridor where things happen.
Clearly I relate on the future, I don't wait to see some things happening ... and here's the vision, the
strategy and I have a competitive advantage because I was able to anticipate some things in the
market and this gave me confidence in myself. I rely on the rational side, on thinking and
observations."
Regarding the context, in the last two years the company has experienced a significant
decrease of sales. Except for major retailers whose sales increased during this period, small businesses
were highly affected some of them were bankruptcies. This situation influences how the entrepreneur
reacts "When I see an opportunity I am enthusiastic, willing to do, I have energy, time to analyze, to
discuss with others... on the other hand (a threat, n.a.) I try to postpone, I think maybe it is not
necessary, maybe things will recover, I avoid to talk about the subject. " But both situations - a threat
or an opportunity-incite change "When you are given a kick in the ass you are forced to make some
changes ... and some of those changes may not be bad". Instead, in the comfort zone "when you are
on track", you do not initiate changes.
Regarding the moment of change, the entrepreneur is aware that either due to his personality
or overload with routine activities sometimes he postpones the changes. The cost of delay is
significant: "If you wait ... you risk others do it before you. If you don't do it the moment you thought
of, if you do it a year later there are already many there and the impact is not the same". This was the
case with an idea of tennis championship that has not been implemented.
Regarding the content of change, it is important that the company has the ability to generate as
many quality solutions. And this means creativity "Some are more creative and not everyone has the
talent to generate new solutions," a method "[] to keep your ears open to what others say... clients,
friends, anyone, to listen to atypical opinions" and willingness to modify your routines "[] if you
are open enough to question your thinking way, maybe you will see things differently."
A new idea generation exercise could be fostered by involving as many participants but the
employees are less motivated and the other associate has a different personality "She deals with
operational issues and I have the vision. The evolution direction came more from me than from her. It
is very difficult that every time I have a new idea she starts with a negation... I mean the beauty of a
discussion, I think if you generate negative emotions, when you are cut off so ...<how do you know?>,
<others have done it and it didn't work > you lose energy. "
Changes in strategy focused on product area. It is intended to introduce soon a new product
category running "A diversification of products and services that I think is needed, on portfolio
level I still have ideas that are on standby and some of them will happen this year if it goes well,
others will happen over three years. It's an evolutionary change, most are improvements."
The positioning strategy is the same - a specialized multisport shop - and the customer
segment remained unchanged, even though revenues dropped. The entrepreneur is unwilling to
address other segments because it would be inappropriate with the brand and he would feel
uncomfortable with other customers "I would rather prefer to close temporarily, because it hurts my
brand. If I have started in one way and then I go with something else, I will alienate the existing
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customer base that will no longer find itself in my brand. And I will try to get in a market that I don't
know and I don't like." Another product strategy employed, was lateral expansion by organizing sport
events. The problem is that this kind of activities consumes financial resources, time and commitment
while the financial results -at least for some events - will come in two-three years.
In conclusion, the major change of marketing strategy was not about marketing mix or
targeting and positioning, but on the vision side, how the business was designed "Comparing with
2009 the perspective is different. Till now we should have five stores in the country, a franchise and
instead we are in the survival mode. I saw the company as something big with 100 employees and now
I see it with 3-4 people. From this growth pathway I am now in a situation that I see it as a family
business, a source of income."
Company B is a software testing company. It was founded in 2005 by four partners with IT
background and has 40 employees. Testing activity is considered a niche business because customers
are large companies with complex applications (e.g. billing, human resources software). The majority
of customers are from telecommunications, banking and oil industries, companies which can be
managed only with information technology (IT) support. As their number in Romania is relatively
limited, the company began to expand into foreign markets, especially in the Middle East. The
employees represent the most important resource because if the company invests in their professional
development (training, certifications) they can provide a high quality service. In 2009 the company
saw at its foreign customers an opportunity, namely the need for another type of service called
business technology optimization. The company is getting involved in this activity and after
completing a project that was highly appreciated it gets another five projects. Competitors are, in
general, Indian firms "[...] not necessarily competent but hard-working. If you say < stay there!>, he
stays there from morning to night and works."
The quality standard of services offered by this company is high and therefore the fees are
medium to high. "From my point of view you cannot live in this market if you don't provide quality.
We are so. If one comes and tells me <you are too expensive > and I cut the price at half and I do a
sloppy job, I don't know how to do it. We know only how to do it well. "
In terms of customer acquisition strategy both in Romania and on foreign markets, they work
with a large developer or a local company to use their networking. They didn't invest in their own
sales force as it would be too expensive and therefore they use their own specialists for pre-sales
activity. Promotion strategy is based mainly on customer recommendations "[...]here it does not work
with TV advertising." The company's website serves only for presentation, it is a way for the potential
customers to check them. They have tried to participate at specialized fairs but "It is more for
appearance. We went to the fair, so as the world could see us."
In June 2010, the firm faces the following situation: five projects from foreign markets are in
standby because the beneficiaries temporarily stopped the development. But the company decides to
risk and opens an office - that requires some investments - in that foreign market. All four associates
support this decision, knowing that the results will come in the next two years.
In the last two years the company has revised its financial targets "I thought it would be good
to change our targets a bit because it would not be very realistic, especially when we are interested in
survival." Even if they didn't achieve the past results, the context is not alarming.
In terms of change content, the company has focused heavily on the second line of business
and started to learn how to use different kinds of products of another vendor, less expensive. Although
they tried to directly approach the customers using their own networks, they failed "We have tried, but
I cannot say we were very aggressive. What's the idea: think of a big customer and the systems he has,
if I'm wrong and he loses millions of Euros, what he can do to me, but to put me in jail. But he has
still lost the money ... (while if he works, n.a.) with a large partner, he knows that he can sue him and
recover the money. The focus on the second line of business comes from the changes that have
occurred in the software testing services market "This business (software testing, n.a.) is in an
uncertain situation because many competitors came out. If last year we were three, maximum four
companies to a bid, now we are ten and I expect some of them, especially those who are new, to come
with dumping prices just to enter and after that they'll see what they'll do. "
Changes in the product strategy were driven by their specific field of activity "However, we
are in an industry where something new always appears. You must read and learn.
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Learning is - for this company - an essential process: "I believe that by learning we are preparing for
the future. The fact that we want to go to attack that market, plus we have learned that those
customers don't want always X products, so we get ready to provide other products... from my point of
view is learning."
In the last two years the firm didn't change the customer segment- large banking and telecom
companies - due to the specific services they provide: "We are targeting the same customers, as small
customers we don't have what to offer."
A real problem has proven to be the pricing strategy. Due to the relatively high level of prices,
the external partner started to use them only to win contracts because they had the necessary
competencies to respond to a request for proposal. Once the contract was signed, the external partner
used cheap, Indian implementers. For the reasons outlined above, the company has been consistent
and refused to discount the price as this would be reflected in the quality of services. Thereby they
were not co-opted in external projects. Starting this year, the foreign partner began to feel the cost of
this strategy because customers were not satisfied with the quality of services. Consequently he
started to work again with them including repairing the poor quality work of those cheap
implementers.
Although the company seems that it doesn't have gone through radical strategy changes, the
major change is at the shareholders level. Although initially all four associates have agreed the new
strategic direction - focus on the Middle East market with a new line of services - after a while two of
them refused to continue "Divergent business views began to appear. For a job like his to work,
people should have a common direction. When the other two didn't want to go on that business line,
we didn't understand. The cost of strategic change was the separation of the associates. The
associates who were involved in company's operational activities were those who believed in the
strategic change: "For me, this company is my life ... and I and the other are the ones who actually
developed it. The others were involved in the initial investment, came with important information,
where opportunities could be ... but if they think that is enough, I dont like to fight with them. I want
to go with this company, you need to survive."
Company C is a construction company founded in 2006 by a single shareholder who has
extensive experience in construction. Initially it starts with four employees and was growing rapidly
to twelve due to the economic boom from 2007 and 2008. The main objectives were to develop the
business, to purchase construction equipments not to depend on others. The plan was to hire an
engineer for the intermediary management level but the economic crisis stopped the development
plans.
The firm is working in civil and industrial constructions and is positioned to provide all
inclusive services. Those competencies that the company does not have are provided with the help of
collaborators. The company is recognized for the quality works and additional services they offer: "I
work from head to tail, the client does not need others and besides I do everything. I am supplying
with materials if needed, if people are asking me to go with them to choose the tiles, I go with them to
choose the tiles, although it is not my job. I mean, I do more than is usual. The product strategy can
be characterized by customization: "I consider being very important to adapt to the customer and
don't try to go into an area where you want. I give him the appropriate advice without imposing them.
The quality is that accepted by the customer, he defines it."
The entrepreneur believes that the price he is charging is at the medium level and it is justified
by the fact that his employees are properly paid. To provide a quality service, he realizes that
employees are a critical resource and therefore he keeps them motivated. In terms of customer
acquisition strategy, the major approach is referral: "I rely heavily on recommendations, this means
that each client must be more than satisfied, to very satisfy."
The effects of the economic crisis in constructions were disastrous. If till 2009 the company's
objective was development, starting with that year the main objective was survival. The problem is
that this objective cannot be sustained for a long period of time "[...] two-three years ago I wanted to
be on the market until the market rises. Now, this is not an option anymore. Three years have passed
since then, it's time to make profit or to change the industry." The entrepreneur finds that the
constructions market has changed dramatically from pre-crisis years. But although he is aware that a
change must be made quickly, he is postponing: "I know it's a big problem with inertia, but I cannot
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define how big it is ...the problem is that when things go normally, at some level, you don't take
actions.
The entrepreneur sees no solution to this problem, change content is unknown "For one year
or so, I am thinking about it, I didn't managed to clarify myself ... I know I have to make changes but I
don't know what changes." Unlike the situation when in the external environment opportunities were
identified and solutions were obvious, this new environment creates problems for which is more
difficult to find solutions, "An opportunity leads you to change, it shows you the steps, and you know
what to do. When confronting a threat you must find your way and this is much harder."
The entrepreneur takes into account to reduce the price, hoping that sales will increase. But
this would mean to give up to his employees and take some poorly trained, even if he does not believe
that's right: "I was still keeping my people who worked well and very well, I cannot go now to look for
people to do that thing that cost 100 lei per day, to do some poor quality work, I wouldn't be able to
make this change. I cannot do it, I will not accept it and I don't think I should."
Although the entrepreneur is considering changing its field of activity which is a radical
change, there is also hope for another type of customers or another "type" of product: "I want to see
how to enter the business market, corporates, institutions " or " People still have to live somewhere ...
probably they are going to need smaller dwellings, new house with ground floor plus three floors and
apartments of 60-80 sqm."
Changing the field of activity does not necessarily mean that the construction company will
disappear "[...] and now I am thinking to let the construction company. Not to demolish it, but to leave
it. But first, we have to find another business, and then to leave it."
Company D is a company with two associates, which provides Internet services and was
founded in 2002, initially as a hobby. It has five employees mainly with data-entry jobs, to solve what
could not be automate. The company has developed a portal that provides aggregate information
about online shops offers and visitors are forwarded to those companies websites. The company has
two types of customers: the end user who receives information and the online shop which receives a
potential customer. The portal was designed as a general site that provides information about different
kind of products, mainly electronics and computer components. In 2010 the company planned to
expand into services area like banking and tourism.
The company has defined from the beginning a clear positioning: "The place where you can
find information about prices". The benefit it offers is speed of search and the value added is
information. In the same year, the company has redefined the pricing system as the first tariff plan -
by number of visitors and number of products - could not cover small online stores. Moreover, the
company has planned to develop the end users base, by stimulating interactions between them and
creating an active community. End-users are closely tied to the products offered on the portal.
The promotion strategy is exclusively on the Internet. There were some attempts to promote
the company using Internet paid advertising but the results were poor.
The long term objective of shareholders is to develop the company to a level where it can be
sold profitably: "We grew the business, we made it work and then we will sell."
Regarding the changes made during the last two years, the company managed to develop the
end users community: "We have implemented it, it's alive and working. It doesn't have all the
functionalities planned at the beginning but most of them are. As far as time and resources allowed
us.
Currently the associates are concerned about the portal graphics "The fact that you want to
add new information in a predefined space, forces you to change." The associates tried to identify
those changes that must be made with minimum effort but maximum impact. This seems relatively
simple because the initial portal architecture was properly designed. The entrepreneur recognize that
there is some inertia: "There is biological inertia, a tendency to go on automatic pilot those activities
that can be transferred. As you want to introduce changes in those automatic activities, you will find
resistance. As you want to introduce changes in things that are creative, you're in the right area. "
The major change mentioned by the respondent is not at company level, but rather at personal
level, it is about a new way of understanding: "The change relates to the transition from a pro-active
approach, from making to a more reflective-receptive attitude, to pay attention to signs, to accept
them in my life or not."
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A change of attitude on a personal level has consequences on the business side. For example,
accepting that two opposing views can make sense simultaneously, the entrepreneur is willing to try
such an approach in the company "Let's take mobile phone shopping. If I want to accept this new
concept... I realize that its implementation requires giving up something that already exists and works
...and what you want to bring it doesn't fit with what you have. What are you going to do? Follow the
instinct and try to integrate it? And let the old and the new that contradicts [...] and in this way you
can order by mouse or by phone ... it is white and black, it's both."
The entrepreneur has a holistic view of change: "There are two types of changes: those that
you can do on a chessboard with some chess pieces. No matter how you try, there are a finite number
of moves that you can do, because that's the game structure. Changes in a closed system mean that I
do some permutations, and after a while I'll repeat them. On the other hand, there are open systems
that accept infusion from another system ... the so-called intuition, inspiration is something that
comes from outside and that says < what if the chessboard is bigger?>".
Such a vision is not built with traditional tools such as senses and thinking: "You can gain a
new understanding that you cannot represent it in any way with the senses or intellect or experience.
It can happen to put things together and suddenly you find yourself on top of a building and you see
things differently. A new vision requires the involvement of other people: "If I want to implement
what I believe, I need other people to resonate. Because I cannot implement it alone and I expect
others to follow [...] you cannot find conformity without a previous personal understanding. As others
will understand things similarly we will try to change to the qualitative side. "

5. Conclusions
Change means for all respondents doing different things. It is seen as a deviation, more or less
significant, of what is done today or as a redefinition of what they are or do. Change can be viewed on
a personal level or at company level but we should not ignore the influence that each side has on the
other one. How change is defined, is influenced by how the respondents relate to the future. There are
a variety of cognitive models: some believe that the future is complex and unpredictable and therefore
they must adapt quickly to what is happening, others believe that even if you do not know the future
you can prepare by learning, while another one has a relative rational approach and believes he can
identify some patterns of future development.
Change is triggered by positive or negative factors, some internal other external. The
difference between scenarios is significant: a change generated by a positive factor, such as a market
opportunity, is totally different compared with a change triggered by a negative factor, such as a
falling demand. In the first case the entrepreneur is involved, motivated, optimistic, and eager to try
various solutions while in the second case he tries to delay, to avoid thinking about the problem in the
hope that it is a temporary situation. Moreover, in the first case is much easier to identify solutions to
the problem - the change content - while in the latter case the solutions are much harder to find. The
assumed risk in positive scenarios is higher than for negative scenarios. Although entrepreneurs know
that the change moment should not be delayed, for reasons that seem rather personal, there is a
general inertia, a postponement of action. Even if the general context of change is the same for all
respondents - the economic crisis - its effects vary from case to case: for some are dramatic because it
raises the question of whether to quit entrepreneurship or to change the industry, for others not so
dramatic, even insignificant.
As for how to generate new strategic alternatives, these are based either on seeing the same
things but differently (e.g. the client that wants to build a house is not willing to take it from scratch,
but rather prefer to buy a house already built at "gray" that can be customized) either see other things
(e.g. shopping by mobile phone). The most frequently mentioned changes in marketing strategy were
at the product level. All respondents are trying to expand the product range or come up with
additional services. It should be noted however, that entrepreneurs are tied to their core product either
by their professional competence (construction company, IT services and Internet services) or by
hobby (sports equipments store). It is therefore extremely difficult for them to migrate into another
area of activity that they do not know. In terms of pricing strategy, this seems to be the most
"inflexible" and this derives from the positioning strategy. All respondents offer products/services of
high quality and for them is difficult to reduce this level in order to charge a lower price: either that
they did not know how to make poor quality products or because they don't accept such a
347

compromise. Communication strategy has remained unchanged since entrepreneurs do not think, in
general, that standard promotional techniques have any benefit for them. They count on
recommendations and word-of-mouth but they did not try to be proactive, to stimulate referrals to
generate new customers. Rather they preferred to address a different type of customer or other
geographic markets to increase sales.
It is interesting to note that generating new ideas of strategic directions is much dynamic in
companies with more than one associate. . This is because the confrontation between two or more
views creates solutions. It is true that these solutions can either unite the associates around a common
strategic direction or separate them. The criteria for choosing a solution / strategic directions are both
financial and nonfinancial: risk, convenience, professional pride and group welfare.
The implementation of changes seems to be relatively organic. They planned the framework
of change, not the details and activities. Roles and responsibilities seem clearly divided. The major
costs of change are related to selecting a wrong direction or resistance to change. The main benefit -
beyond survival and development - is that a good change invigorates them, give them confidence and
energy to continue.
The fact is that for all respondents, change is a necessary thing that should be stimulated, both
in good times and in bad times.

6. References
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Change in SMEs: The Effects of Ownership, Board Composition and Top Management
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content framework. European Journal of Marketing , 38 (11/12), p. 1456-1480.
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Accelerating Business Model Renewal. Long Range Planning , 43, p. 370-382.
- Ericson, T. (2001) Sensemaking in organisations - towards a conceptual framework for
understanding strategic change. Scand. J. Mgmt , 17, p. 109-131.
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change in small and medium-sized enterprises: how do owner-managers hand over their
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349

50 YEARS OF ACTIVITY TO INCORPORATE THE DOBROGEA BRAND

J UGANARU Mariana
Professor / Ph.D., Faculty of Economic Sciences /Department of Business Administration, "Ovidius"
University, Constanta, Romania, mjuganaru@univ-ovidius.ro

J UGANARU I on-Danut
Associate professor / Ph.D., Faculty of Economic Sciences /Department of Business Administration,
"Ovidius" University, Constanta, Romania, juganarudan@yahoo.com

MORARU Andreea
Teaching assistant / Ph.D., Faculty of Economic Sciences /Department of Business Administration,
"Ovidius" University, Constanta, Romania, amoraru@univ-ovidius.ro

Abstract: SC Dobrogea Group SA in Constanta is nationally and internationally known for both the
remarkable quality of its products and the sustained efforts in developing marks while building a strong brand.
To the investments made in equipment and modern technologies, investments in its staff and especially in client
have added. The Dobrogea Group stands for a strong emotional relationship with many generations of
consumers, and signifies their trust that the bakery producer Dobrogea respects its promises and offers them
traditional healthy products that are permanently adapted to changes in taste preference and in modern
lifestyle.

Key words: company, mark, relationship, customer, brand


1. Introduction
The image of Constanta in the minds of many Romanian consumers identifies with the
Dobrogea brand, while for many Romanians in foreign countries this brand means a return to
childhood and the rediscovery of national and traditional habits.
Established in 1961, Intreprinderea de Morarit si Panificatie Dobrogea Constanta
(Dobrogea Milling, Baking and Pastes Enterprise of Constanta; originally called Constanta Milling
and Baking Plant) was at that time the biggest and the most modern unit profile within the country.
Whether it happened randomly or not, this aspect has remained a feature preserved with great effort in
its 50 years of existence.
Even if not talking about marketing, between 1961 and 1990, IMP Dobrogea developed a
marketing activity limited only by socialist economic principles: unique pricing, central
distribution/partition, limited promotion and production determined by plan. The only aspects that
have escaped the stiffness of the socialist economy have been the creativity of the team of specialists,
the concern and commitment of each employee to be involved in making great, qualitative products
and the development of a we are the best consciousness. There were exactly these aspects that
marked the start of transition to a market economy in 1990. In the 22 years of market economy in
Romania it has been clearly and obviously shown the continuous rise of the Dobrogea brand.

2. The Dobrogea Trademark
For economic agents, a trademark stands for a distinctive sign made of letters, words, figures,
graphical symbols or drawings, a color or a combination of colors, being used separately or assembled
in a manner as suggestive and attractive as possible. A trademark is the one that offers identity and
individuality to the goods of a producer. For this reason, domestic and international law provides the
procedure for trademark registration. By using the trademark, companies ensure differentiation of
their own offer from that of their competitors; they establish a certain position of the company and its
products on the market and they ensure communication in the external environment because they send
a series of messages which are able to personalize the product or the producer and to develop a certain
image or perception. We also witness a great growth of the role and importance that consumers attach
350

to trademarks. Thus, the consumer uses the trademark in order to identify the products, to recognize a
product/producer, to ensure a certain level of quality and satisfaction; and it also stands for a way of
asserting his/her own personality. The trademark has determined significant changes in consumer
buying behaviour; it has even generated the so-called consumer brand behaviour, this large aspect
being studied and developed by marketing theory and practice.
Dobrogea has been manufacturers brand or manufactory brand since the beginning of its
activity. Dobrogea Group SA has currently a portfolio of several brands of products: (1) Dobrogea
flour products; (2) Eugenia:, Digesta and Merlin biscuit products; (3) Neptun, Bonpana,
Bongrana and Bongrana Sana backery products; (4) Matina, Captain Crantz and Diet
breakfast cereals; (5) Fresh frozen products; (6) Crantz, Funky and Junior snacks; (7)
Experta and Experta Bio for bread machine mixes.
There are also a variable number of brand lines and product brands within each brand range.
One should remind that the Dobrogea Group realizes now more than 300 products from 5 fields of
activity: milling, bakery, biscuits, frozen products, breakfast cereals and snacks.
Some examples are relevant to these aspects. For the milling products range, the Dobrogea
trademark is used as brand mark, brand line and product brand, these products being made: wheat
flour 000, wheat flour 550; wheat flour 650; wheat flour for cookies; wheat flour for pizza; white
flour for sponge cakes. The following brands are used for the biscuits products range: (1) Eugenia
brand line for the sandwich biscuits products, encompassing the following product brands:
Eugenia Clasic, Eugenia Mini, Eugenia Junior, Eugenia Dark; (2) Digesta brand line for
digestive biscuits; (3) Merlin brand line for sweet biscuits; (4) Saltza brand line for crackers.
As regarding the bread products SC Dobrogea Group SA offers to the market about 100 bread
specialties. We select for analysis the most important ones:
(1) Bongrana brand line used for packaged bread, having a long validity term, without additives and
preserving agents, which keeps the flavor and taste of the real Romanian traditional bread. To produce
Bongrana bread, specialists from the Dobrogea Group created a unique, innovating technology
which valorizes the bread self preserving capacity due to the activation of the natural factors present
in the wheat flour. We can notice more assortments within this brand line: Bongrana Graham,
Bongrana Wholemeal, Bongrana Rye and the newest brand Bongrana Sana Omega 3, which is
the brand for white flour bread that contains sage seeds; it is low in fat and sugar; and stands for a
great source of protein and omega 3 from vegetable origin.
(2) Bongrana Sana brand line which contains: (a) Bongrana Sana high fiber product brand for
bread made of a variety of ingredients (different types of flour, seeds, flakes), which is very tasty and
healthy supplying the human metabolism with a high content of soluble and insoluble fibers; (b)
Bongrana Sana low carbohydrates brand for bread which is high in fibers and low in
carbohydrates, making it ideal for maintaining a proper level of glycaemia (an important aspect for
diabetics).
(3) Bonpana brand line is used for baked bread the real Romanian traditional bread, which is
fresh, tasty, healthy, without additives and preserving agents, packed in paper bags, having foil
windows closed with clips to maintain freshness and unique taste. As product brands we can mention:
(a) Bonpana White; (b) Bonpana Wholemeal and (c) Bonpana Multigrain.
(4) A special position is held by the Benecol brand line. (a) Dobrogea Group together with Raisio
Group, Finnland has introduced on the Romanian market the first bread able to reduce cholesterol.
Benecol Rye Bread is made of rye flour and plant stanol ester, which is one of the 10 biggest
discoveries in nutrition. It is bread rich in fibers and low in carbohydrates, which makes it a good diet
recommended for diabetics; (b) Biscotii Benecol is the brand for healthy pulled bread.
(5) Labyrinthum product brand is used for the ecological Roman Ancient Bread made of spelled
wheat after a 2000 year old recipe, which is based on a natural process of fermentation. This
assortment has a special flavor due to honey and olive oil; it is healthy, nutritious and tasty, being a
great source of vitamins and minerals.
(6) For the sponge cakes brand line it is used: (a) Dobrogea product brand for sponge cakes
obtained through modern technology, made of well selected raw materials. Many assortments are
produced: with cocoa and raisins, with Turkish delight and raisins, with chocolate, with walnut cream;
and (b) Traditional Sponge Cakes product brand which is used for affordable assortments, being
directed towards a certain segment of buyers.
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From the above presented selection, we can notice that marketing specialists from the
Dobrogea Group successfully manage a modern brand policy. On each product, one finds the
manufacturer brand Dobrogea, the brand line and/or the product brand.
For the flour and sponge cakes the name of the manufacturer brand coincides with the product
brand, but for other products range distinct product lines have been developed for each and every
product. The manufacturer brand Dobrogea is a single brand due to the fact that its holder is SC
Dobrogea Group SA and it is part of a jointed brand category, which is complex and it is made of a
set of different signs, each brand being susceptible of protection. The brands within the SC Dobrogea
Group SA portfolio are part of the word marks category (made of written signs: names, labels,
slogans, figures, letters, such as: Neptun, Matina. Diet, Fresh, Eugenia Junior, Bongrana
Sana Omega3), but also of the figurative marks category (these are made of all graphic
representations that may be protected - emblems, seals, colors, vignettes).
SC Dobrogea Group SA holds a trademark entitled Fresh for the chain of 23 stores in
Constanta County, 14 of them being located in all neighborhoods of Constanta city. In these stores the
products made by the company predominate, but other food products are also sold there, this fact
usually developing: (a) association relationships involving consume of their own products (such as:
flour with yeast, salt, essences and spies, bread with diary products, meat products, canned fruits and
vegetables) and (b) at a lower level, indifference relationships with their own products (for instance:
cigarettes, handkerchiefs/napkins and so on). Nonetheless, products of direct competitors are not sold
there. Another characteristic of these stores is that they are organized in a self service system,
however the bread aisle has a shop assistant that is to make eye contact and to ensure a better
communication with customers. Some of the stores in Constanta city are equipped with facilities for
baking products directly in store, thus creating the affect of attracting customers eager for hot
products. Moreover, the stores are also equipped with slicing and packaging machines, some bread
assortments offering thus a different service from that of the competitors, while customers appreciate
this method.
All brands from SC Dobrogea Group SA are registered with the State Office for Inventions
and Trademarks, which guarantees their protection and prestige, but also a great responsibility. SC
Dobrogea Group SA brand comprises: (1) the brand name DOBROGEA, being considered the
identification generic element of the society and its products; (2) the logo, respectively the visual
representation of the brand name, which is made of a rectangle with short sides slightly curved, inside
which the brand name is inscribed with white letters on a red background; (3) the emblem is
represented by a red mill on a white-blue background on which DOBROGEA GRUP is inscribed.
At the societys level it is reasonable to mention the brand equity, which represents a set of
assets and liabilities on a mark, which is added or subtracted from the value of a product. Brand assets
relate to brand loyalty, brand awareness, perceived quality and brand associations. The capitalized
value is determined by deducting from these assets the costs on brand management and capital
invested in the brand. Balaure (2000)

3. The Dobrogea Brand
In has been recently noticed in the expression of marketing specialists the use of the brand
concept as a replacement for the mark concept. I have observed this aspect several times and I have
tried to analyze how and if those particular persons have used correctly the two concepts in certain
situations/contexts. In marketing theory I have met the following approach: the mark stands for a
unique sign used to identify a company and its products or services, while the brand expresses
emotional connections, relationships between consumers and the mark. It has been observed that the
products themselves are not able to provide a sustainable brand-customer relationship, neither by
promoting various forms, nor by moving prices. Every time a customer comes in contact with a
company (through its products/services, its shops, its staff or its undertaken promotional activities),
he/she may whether develop or diminish a brand-customer relationship. The brand unites a variety of
actions/concerns of the company by means of which an advantage is created for both those who sell
and those who buy. Considered the global leader in research on brand, William I. McEwen, who
works within the Gallup Organization, states that: Brands identify, define, and express the
experience of using the particular products and services with which consumers connect ... Brands
that thrive offer a return to the customer, whether its tangible or intangible, rational or emotional.
352

And they provide this return each and every time the customer encounters the brand McEwen
(2008). The brands role is to ensure development of mutual relationships, which is focused on
bringing value to both manufacturer and buyer/consumer. If new buyers are no longer attracted and
brand-customer existent relationships begin to deteriorate, then the brand will certainly disappear
from the market. In order to properly define the brands role, we should try to understand its
significance and the importance of its attributes and advantages.
Brand attributes refer to those characteristics or components of a product, which can be
objectively evaluated, being specific to a single brand. However, these characteristics may also be or
not advantages for buyer/consumer. Advantages should be understood as those characteristics that are
perceived by consumers as being aspects related directly to the products performance and
attractiveness or to the process of using that particular product, McEwen (2008). If attributes are those
that create the company, the advantages are the consumers evaluations, that is what they obtain from
a product or mark and they stand for an important asset in the development of the brand-customer
relationship. For this reason we may consider that the starting point of marketing actions should be
exactly the companys communication on the benefits of its products.
Marketing specialists consider that a brand should express a promise made by the company,
which should be communicated not only inside the company (employees), but also outside it, to
current and potential customers respectively. It is important to understand that any promise made must
meet three conditions: to be reliable, to be attractive and to have the ability to communicate with
customers. The credibility of a companys promise does not mean that consumers start to believe
everything and immediately. The promise based on curiosity determines the customer to try a certain
product or a certain mark. In order for the promise to be attractive, it is necessary that the customer
becomes aware of the fact that the brand he/she is choosing will offer a real compensation for the
investment made. Communication with clients should be made in such a way that they dont feel like
being only simple product buyers who try the product once, but permanent users. A company can
communicate with customers through its employees by means of their uniform and attitude towards
the customers; the exterior and interior design which helps create the ambiance inside and outside the
store; the product packaging designs; web sites and telemarketing.
Throughout the process of developing a brand, an essential contribution falls to the
companys personnel. They are involved in keeping the promises made to customers, in structuring an
effective communication and on developing sustainable customer-brand relationship that is based on
both rational and emotional aspects. McEwen (2008)
For the Dobrogea Group the focus on developing a strong brand has existed since the
beginning of activity, that is more than 50 years ago, but it has come into prominence after 1990 when
the market economy model has not only allowed, but also required this new effort. Companys
managers have been increasingly clear that in the new market condition, in order to be successful is it
no longer sufficient to produce only high level quality products. The most important aspect in a
companys activity has become the development of a customer-brand relationship that is the
development of the Dobrogea brand.
A first step in this effort has been shaping the attributes and benefits of the Dobrogea Group.
Therefore, the brands attributes are: research and development activities for obtaining new products
that meet the requirements of consumer segments and that are adapted to new tendencies in the field
of nutrition; capitalization of Romanian traditions in making products; use of modern technologies
which follow the European legislation regarding food safety and environment protection;
responsibility in developing products that ensure consumers' health; implementation of international
standards for quality assurance: ISO9001:2008 for a quality management system, ISO14001:2004 for
environmental management, ISO22000:2005 for food safety, ISO17025:2001 for physico-chemical
analysis laboratories; activity recognition at a national and international level: the European Quality
Award Trophy given by Business Assembly in December 2008, Vienna, creative trophies for
intellectual property work given by OSIM (State Office for Inventions and Trademarks - SOIT)
Bucharest, between 2005 and 20011; The Strongest Brand and The Most Efficient Promotion
rewards granted by Piata (The Market) Magazine in 2010; Degrees of Excellence and Awards of
Excellence to rank number 1 in the countys top companies between 1995 and 2011 and for being
among top national companies; attainment of ICEA Organic Certification, Italy for bio products;
export activities in 10 countries and so forth.
353

A significant part of the above mentioned attributes also represent advantages of the brand
Dobrogea offered to customers. Therefore, surveys conducted with students from the Faculty of
Economic Sciences show that products made by the Dobrogea Group are purchased and consumed for
the following benefits expressed by customers: they are healthy, of best quality, nutritionally
balanced, and varied; due to raw materials and modern technologies used in the production process;
the products follow the European legislation regarding food safety and quality; a good quality-price
rate is ensured; the products are natural, without additives and they are designed in correlation with
nutritional and lifestyle habits of modern consumer, preserving at the same time the freshness and
flavour of Romanian traditional products.
Consumers of bread in Constanta (and not only) choose from among many competitors the
products from the Dobrogea Group because they obtain the following benefits: they eat healthy bread,
they can choose from a variety of assortments (white, brown, with added seeds, rich in fibers), the
products are fresh and properly packed to ensure hygiene and freshness. Besides, the Dobrogea Group
offers bread products having different weights, quality levels and prices, as according to wishes,
consumption habits and purchasing power specific to different market segments. Both healthy persons
and those who have various health problems (high levels of cholesterol, heart problems, diabetics,
people on diets and so on) find at the Dobrogea Group the kind of bread they wish.
The traditional taste and the taste of childhood are important advantages of the brand
Dobrogea when we refer to sponge cakes, Eugenia cream biscuits, pastries (Dobrogeana pie), farina
etc. not just for consumers in country, but also for Romanians abroad. To see how bread is baked and
to enjoy the smell of fresh bread are advantages of the Dobrogea brand for stores equipped with
ovens.
The promise of the brand is: A reliable partner for healthy nutrition! In order to keep its
promise, communication is developed both inside and outside the company. It is vital to communicate
with employees in order to develop team spirit, creativity, to express the concern, respect and
appreciation for the societys most important resource. For every employee, Dobrogea means more
than a company, it is a second family. Communication with customers is achieved in different ways
such as: communication through product and its package, communication with the sales staff,
communication through advertisement (mass media, radio, TV) or communication and education
campaigns for healthy nutrition. Out of these campaigns we should mention: interactive conferences
held in Constanta and Bucharest about the risks of high cholesterol levels; attendance to conferences
and events for consumers with the main objective of communicating reasons and benefits of a healthy
diet; events for women concerned about a healthy lifestyle and a healthy diet held in Constanta and
Bucharest.
"Today I eat healthy" campaign was organized in partnership with the Ministry of Health,
between September 2010 and June 2011 and aimed at informing and making youth and students
aware about healthy nutrition. "Reduce your cholesterol naturally" campaign was held in partnership
with the Ministry of Health, the public health authorities and Constanta City Hall. It aimed at
providing information about the risk of high levels of cholesterol and how the products of the
Dobrogea Group can help consumers.
Communication with foreign consumers is made by participating at international trade fairs
such as: Anuga-Kln, Alimentaria-Barcelona, but also by organizing events such as: Eugenia Week
in Chicago- USA, May 2010; Eugenia Nights in New York, September 2010; the first USA festival
of the Romanians origins in September 2010, Chicago etc.
We should not forget about the communication of the Dobrogea brand with the local
community. The most recent activity took place between 2
nd
and 6
th
April 2012 in the Other School
program. More than 2000 pupils have visited the Dobrogea factories and have learnt how wheat,
bread, biscuits and other products they already use are made. In partnership with the Romanian Radio
Broadcasting Company for children, a summer camp was held in 2011, where more than 5,000
children have learnt about healthy nutrition along with their friend "Eugenia". In partnership with the
County Department of Youth and Sport, the Dobrogea Group supports the children to practice sports
organizing Cup June 1
st
". In partnership with the County Office of Education, the Dobrogea Group
supported students who have been awarded by NASA, ranking number one at the International
Contest "Genesis International Space Settlement Project" and supported students participating in
National Physics Olympiad.
354

We should also remember the companys involvement in social support programs for
cafeterias, churches and foundations for children with special needs, as well as the environmental
concerns for biodiversity conservation of Danube Delta.

4. Conclusions
The few selected aspects of the activity of SC Dobrogea Group SA are clear examples of
brand strength. The reached level is the result of efforts undertaken by specialists in 50 years of
activity. The Dobrogea brand considers customers the most important partners, the reason why it
awards them with desired products, communicate with them and educate them on a healthy diet,
offering at the same time great emotional satisfaction.

5. References
- Balaure, V. (coord.) (2000) Marketing, Publisher: Uranus, Bucharest.
- Balton, M.; Cegarra, J.J. (1990) Le nom de marqu Cration et stratgies de marques, Mc
Graw Hill, Paris.
- Kobler, Ph.; Keller, K.L. (2008) Managementul marketingului, 5
th
Edition, Publisher: Teora,
Bucharest.
- Guttaman, E.; Mocanu, L. (2009) Procedura privind depunerea unei opozitii la inregistrarea
marcii comunitare, Publisher: OSIM, Bucharest.
- Lindstrom, M. (2009) Branduri senzationale: construiti branduri puternice folosind toate cele
5 simturi, Publisher: Publica, Bucharest.
- McEwen, J. W. (2008) Forta brandului, Publisher: Alfa, Bucharest.
- Vrauceanu, D. (2003) Marca in Marketing dictionar explicativ (Malcomete, P. coord.),
Publisher: Economica, Bucharest.
- http://www.osim.ro
- *** Prezentare (2012) Dobrogea Grup Constanta peste 50 de ani de activitate pe piata
Romaneasca, Constanta.

355

REDEFINNING THE BRAND IN THE 21
ST
CENTURY

KALED K. Hameide,
Assistant Professor, College of The Arts/Department of Fashion Studies, Montclair State University,
Montclair, New J ersey, USA, hameidek@mail.montclair.edu

Abstract: The Internet and further advances in communication have resulted in the creation of new
tools and business models that are directly impacting old school marketing practices. Examples of such models
are mass customization and open innovation, both of which have created a new framework that is having a
strong impact on the traditional product development process and the way marketers need to approach and
redefine the brand. The aim of the paper is to investigate the impact of such models on redefining the brand
through the creations of Micro-brands and the repositioning of the consumer in the branding process.

Key words: Branding, Technology, Micro-brands, Mass-Customisation


1. Introduction
Although the industrial revolution could be credited for the birth of branding in modern times,
it wasnt until the second half of the twentieth century that branding as we know it today exploded in
the business scene. Technological advancements in communication and marketing tools together with
flourishing economies and increase in consumerism made branding the buzzword of the eighties.
Since then everything seemed open to become branded. On the other hand, the end of the twentieth
and the beginning of the twenty first centuries have witnessed a dramatic communication revolution
as seen in the birth of the internet and other communication advances such as in mobile and wireless
technologies. From a marketing perspective these developments had an equally dramatic impact,
creating a range of new products and services and accordingly new marketing tools and opportunities.
As with any developments of such nature and magnitude, new business models develop to respond
and benefit from these needs and opportunities. Mass Customization and Open Innovation are two
models that have utilized such new platforms and proved to have an impact on the traditional product
development process. The impact of such models has been thoroughly examined from the logistic,
production, and inventory management perspectives. However, their impact on marketing strategies
and most importantly on the core of such strategies, which is the brand, has not been equally
approached. In this paper we will attempt to focus on that equally important perspective and examine
the impact of these innovations on the future of the brand and the branding process.

2. The Brand Logic
Brands exist mainly to reduce risks for consumers by encouraging them to buy a branded
product that they can trust and anticipate its level of quality and service. Thus, brands make it easier
for consumers to make safer choices that will eventually satisfy their needs as promised by the brand
and in the process provide a certain reward or value that can be either emotional or rational.
Brands are also built on the premises of differentiation and bringing something new and
different that other competitors in the market cannot, i.e. a new idea or concept packed with a mix of
offerings and features that are different and unique. The more unique and distinctive the idea, the
more legitimate and valid the brand will be, and the more attractive as well.
Once a brand is recognized and appreciated by the customers, it aims at keeping them
attached and loyal by consistently living up to their expectations and remaining relevant and fresh.

2.1. The Definition
Based on the above stated logic behind having a brand, we could put together a definition
that captures that rationale as well as the essence of the term from a holistic perspective:
A brand is an entity with a distinctive idea expressed in a set of functional and experiential
features with a promise of a value reward relevant to its end user, and an economic return to its
producers (through the building of equity). A successful brand has a strong identity (mentally and
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physically), is innovative, consistent, competitively positioned, and holds a matching positive image
in the consumers mind.
This definition captures the essence and role of the brand as we understand and perceive it
today. It highlights the products (or service) as the core of the brand and acknowledges the other
elements that complement the functional attributes of its physical product. It also demonstrates that
branding is indeed a story, a process, and that a brand is in many ways a living being with a life cycle
that pretty much resembles that of ours (i.e. birth - growth decline - demise). It is built on features
and meanings, on functions and emotions, as well as on history and future prospects.
This is important, as we will need to revisit the definition as we proceed with our discussion
of the impact of new technological and business models on the role of the brand.

2.2. Who is Responsible For The Brand?
If a brand is a story, then who is responsible for creating it? A holistic perspective will show
that the brand story is actually co-written by three main partners: The company, the consumer, and the
culture (and external environment).
Culture: Culture dictates new social trends, beliefs and behaviors. It defines what is cool
and acceptable by various age groups and market segments.
Customer: Brand customers experience the brand and consume its products and therefore
play an important role in the life of the brand. For starters, a brand is developed with the end users in
mind and with the goal of satisfying their unfulfilled needs. In addition, the users are the ultimate
judges of the brand, and it is they who decide the brands true and final positioning based on their
experiences with it, among other factors.
Company: The Company is the producer of the brand and the one that bares the ultimate
financial and marketing risks as well as the creative, production, and logistic responsibilities of
developing the brand.
Accordingly, we could conclude the following simple yet important equation:

The Culture + The Company + The Consumer = The Brand

3. Technology and New Business Models
Technological and communication innovations such as the internet, mobile and wireless
technologies have helped introduce new tools, capabilities and business models that among many
things enabled the consumer to directly interact with the brand and play a rather direct role in its
development and marketing. Its a development that as we will discover redefines the role of players,
especially the consumer or end user, and reposition them in the brand development process. A good
example of these new trends and models is for instance the concept of mass customization.

3.1. Mass Customization
Mass Customization (MC) refers to the concept of allowing each consumer to customize or
adapt products features according to his/her needs within a standardized platform and with an
acceptable price premium.
According to the above definition, mass customization could be seen as the middle of the road
between mass customization and pure customization as it gives consumers an option to customize
features of a product, given that it is based on a mass-produced structure or frame. There are many
successful examples of MC from various industries such as:
- In Apparel, Threadless.com: probably one of the most successful examples offering mass
customized t-shirts online.
- In Computers, Dell: mass customized computers and laptops
- In Sports Gear, MiAdidas: mass customized sport shoes for the Adidas brand
- In Publishing, PersonalNovel.de: an online company that offers customers the opportunity to
customize novels.
On the other hand, a similar model known as open innovation environment refers to an
environment of community sourcing, whereby every new input element might add to or tweak an
existing distinctive feature such as the Linux operating system.
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In each one of the above examples the consumer plays a direct role in designing the final
product that he would to consume which in itself demonstrates an interesting and significant paradigm
shift in the way and level by which companies manage their brands and interact with the final user.
From a marketing perspective, the model seems to create a product that brings a high level of
satisfaction as it is co-designed by its end user according to their specific needs and desires which
may be a marketers dream come true. However, this does raise a couple of other intriguing questions:
How do these developments and technologies while affecting the nature of the product would in
return affect the brand concept? And would the above stated classic perspective and definition for
the brand still holds or do we need to develop a new definition as we re-examine the branding
process?
To further appreciate these questions and the implications of such developments we will start
by examining the following hypothetical scenario.

3.2. The Coca-Cola Dilemma
Some soda drinkers who would like to switch to a diet soda drink such as Diet Coke for
example are held back by the difference in taste of the sugar free drink. Now let us assume that with
the help of technological innovation a company like Coca Cola manages to develop a vending
machine that allows customers to adjust the sweetness level of the coke to their taste so thateach
customer will still be getting a low calorie diet drink yet with an acceptable taste. While that would be
a great application of mass customization it would raise a series of questions such as: How would we
define the diet coke brand now? And what does diet coke mean for each of its consumers? We will
attempt to answer these questions as we proceed.
We already understand that a brand has in its core a product with one or more distinctive
functional features that possess a strong identity and deliver a value to the user. We have also seen
that mass customization allows each user to alter the product by manipulating and altering its features.
However, we can easily deduce that manipulating and altering products features do not in itself alter
the brand otherwise every product update would mean creating a new brand. Yet it does impact the
brand in the form of creating new brand extensions or rather a series of what we may call micro-
brands. Micro-brands could be seen as a group of satellite brands that are variations of the mother
brand.

4. Micro-Brands
By definition, a mass-customized brand (MC brand) is a brand where every consumer decides
on the distinctive feature of his/her customized item. In both cases, the end result is a variety of
distinctive features and variations of the mother brand. This variety of features ends up creating
what we may call a series of Micro (or satellite) brands, where a micro brand is a limited yet
distinct version of the original (or mother) one.
It is essential to remember that mass customization is a middle of the road option between
cookie-cutter mass production and total bespoke, made-to measure, one-of-a-kind products. There is
still a level of commonality and control, which makes it necessary to link these brands to the mother
brand and create a common base and identity that links these satellite brands together. It is a
confirmation that they are still the same family of siblings but simply not the twins they used to be.
This is why mass customization is usually done at the product level but not at the brand identity level,
which needs to remain intact as the umbrella or back bone that defines the mother brand and
maintains the brand personality and ultimately its core value.
Accordingly we can say that: Satellite micro-brands are a set of sub brands with a common
unifying identity and feature base, yet with a score of distinctive features customized and defined by
the end user; these customized features create a unique experience with an equally high level of
satisfaction among users and ultimately a higher level of loyalty to the mother brand. Micro-brands
are obviously harder to predict since they are actually created and shaped by the user. In addition they
impose some logistic and production challenges as the platform needs to be flexible enough to
accommodate the unplanned variations and the limitations in quantity. On the other hand the level of
control, such as the common platform imposed by the producer minimizes some of these challenges.

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4.1. Micro-Branding vs. Brand Extensions
We have described micro brands as a form of brand extensions, yet the difference between
brand extensions and micro brands is that brand extensions are about creating new and totally
different products under the same brand but here the new created products share a commonality of
purpose (my customized Adidas running shoes as well as yours are still running shoes, your
customized levis jeans are still that and so is every mass customized product but each in its own way).
They are simply variations in a theme. Thus the key issue is that these changes while they may alter
the product features and enhance its functionality should not alter the brand meaning and value. If you
and I can create our own Adidas running shoes we will get different shoes but not necessarily a
different experience or brand value on the contrary we should have a closer level of experiential
satisfaction. This is referred to as experiential branding.

4.2. Micro-Brands and Experiential Branding

At the end of the day what branding really does is create an experience, i.e. while products are
consumed, brands are actually experienced. Thus, we can conclude that the goal of any brand and its
marketing strategies is to deliver the elements that would trigger these experiences. The belief is that
the same set of experience components delivered to a group of people who share similar sensory
perceptions, emotional drivers, personal histories and living environments will trigger effectively
similar experiences in each one of these people. (Bernstein, 2009). This is referred to in marketing as
experiential segmentation and experiential branding. Experiential branding is the discipline of
understanding and defining brands in terms of the way they are experienced, in order to differentiate
them in the most powerful dimension: relevance (nothing is more relevant than an experience)
(Bernstein, 2009).
In reality, this seems hard to achieve, not just because each user is subject to different external
factors (or noise) but because the products (which are traditionally a constant) are subject to different
users perceptions (a variable); thus, while you and I may be buying the same exact product, we most
likely will have different experiences. However, if we refer again to our customized Adidas running
shoes that are attainable because of new technologies, what we would have here is a situation where
the product and its features are not identical anymore, and the product is no longer a constant. Yet,
most likely, each of the users is getting an almost equal level of emotional satisfaction. Thus, while
each user would define the branded product differently, it would satisfy all users in a closer way.
Experiences are generally measured by the level of satisfaction, and in this case the users experiences
generate closer levels of satisfaction than could have been achieved before when the same product
was meant to satisfy different people under different perceptions.
It is important to remember that while mass customization alters the products features and
thus functionality, these alterations caused to the features are never meant to be big enough to shift the
product into a different category (i.e. running shoes fail to function as such and accordingly move into
a different category); to achieve this, customization has to be handled with a certain level of control
and limitations, which is exactly what mass customization is all about. Therefore, the emotional
reward and satisfaction would outweigh the discrepancy in functionality and features and manage to
generate an equally satisfying experience for all users.
So now we can conclude that mass customization does not necessarily create a new brand out
of an old one but rather extend it into micro variations that may look and function slightly different
yet deliver a better and rather consistent experience to all users.

4.3. Micro-Brands and Positioning
Positioning is an important concept in branding that refers to how the brand is perceived in
the market by consumers relevant to its competitors. Thus it is important that we examine the impact
of such changes on the concept. It is apparent that under the new environment, the few elements the
company can fully control are the initial features, or the product base, along with the identity, tools,
and options it allows the users to customize. Thus, the role of the company is really shifting more
towards being a service provider or a facilitator. So what the customer/user is really looking for is a
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suitable and innovative environment that will make the experience and process simpler and more
effective. Is it easy to manipulate the product? Does the platform or software offer necessary tools for
manipulation? Does the system crash? Does the system offer a responsive and effective feedback
mechanism? And so on. And just as the major focus of all service providers is the users experience,
positioning based on experience and the emotional value of the brand becomes essential and
paramount. The classic concepts of product positioning and brand image may seem irrelevant for the
most part since they are predetermined and established by the user before the product is even fully
developed and consumed. Therefore, as a product, the brand is inherently positioned or pre-positioned
by the ultimate user, which as we mentioned should be a marketers dream come true, as the end
product is predetermined, pre-designed, and pre-demanded by the end user. This might hypothetically
mean that the producer is making a product that is pre-sold.
Thus, we can say that whenever the customers intervention is high, the image tends to be
more innovation-dependant (experiential positioning focused) while it is more features-driven
(product positioning focused) when the customers intervention is minimal. This will be clearly
evident in the case of brands that possess some kind of a monopoly or secret formula, as in the case
of pharmaceutical products (e.g. secret anti-aging formula) or the case of Coke. These brands will be
less susceptible to the customization of their monopoly feature, which in return will remain the core of
the branding experience (and positioning strategy). The Coke taste or the secret beauty formula will
remain an attractive feature as long as it is out of reach and cannot be manipulated (If consumers are
ever allowed to manipulate them then what would be attractive to consumers is tools and platforms
available for them to alter and manipulate the product).
On the other hand, from an innovation perspective, what mass customization and open
innovation among other technologies create is a state of continuous innovation and development, a
situation that is too hard and too costly to imitate otherwise. Once again, if the product core is
continuously innovated (as in open innovation) or augmented (as in mass customization) by the help
of the user, the company will focus many of its resources on the innovation of its platform (which can
also be open sourced at certain levels) and on its role as a process, a service provider, and facilitator.
This does not necessarily mean that the company is totally abdicating its full responsibilities in the
development process but surely sharing many of them.
To some people, this idea of a brand with a score of distinctive features rather than one or a
few common distinctive features might seem like a contradiction to what a brand is all about. Yet in
reality, the idea of having just one key benefit is neither a reflection of how products are invented nor
really a reflection of how people choose, buy, and appreciate them. It is mainly a requirement of a
certain type of hard sell advertising (Grant, 2006). This has been the way things worked in a mass-
produced environment in order to differentiate among similar products, which is obviously irrelevant
in the new model. As a result, marketing and advertising strategies need to change in a way that is
more responsive and accommodating to the new environment and the nature of the newly created
satellite-brands. Under MC, a brand is inherently differentiated, and the sum of distinctive features
created by the series of satellite brands do not qualify for the current mass-produced, hard sell
advertising strategies and marketing campaigns. There is a need for a more direct, personal, and
focused approach to communication and marketing messaging, which some of the new alternatives
offered by new technologies such as behavior targeting, internet seem to support.

5. Rethinking The Branding Process
The most dramatic implication of these changes remains the redefinition of the relationship
between the producer and the customer, as well as the role of each in this new relationship. The new
relationship is that of a partnership. This partnership changes the dynamics of brand development,
as the role of the producer shifts from a product maker to mainly a service provider as we just
mentioned. Within this framework, the promise of consistency is an element of service, image is a
function of technical innovation, and the relationship is that of sharing rather than dictating. This by
all measures is a major paradigm shift.

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5.1. Redefining The Brand
Based on what we have discussed, it seems inevitable that we consider revisiting the brand
definition under the new environment to interpret these new relationships and influences. One
interpretation that would focus on the effect of mass customization as a new and rising trend is:
A brand in a mass-customized environment is an experiential proposal manifested in unique
product variations within a web of satellite micro brands created through a partnership between the
manufacturer and the users, whereby the manufacturer establishes a brand identity, product base, and
the platform and technology necessary for the user to co-design and define the desired variations. A
mass-customized brand is inherently competitive, innovative, and pre-positioned with the goal of an
economic return to its producer and a higher level of emotional and experiential value to its end user.
By comparing this definition to our initial one we notice a couple of important observations:
- While the nature and structure of the brand may differ under the new model, its goal for
financial
return and generation of value remains the same.
- The role branding plays in minimizing our purchase risks would seem to decline with the
increase of user input. This may impose few threats, as the customer gets more confident and ready to
switch and try other alternatives. While that may indicate a lower propensity to brand loyalty, it really
means that brands need to work harder and use innovative tools to maintain the customer. Keeping up
with technological advances that facilitate the customization process and offering more and easier
options can be one way to do this. Loyalty remains all about service.
- Our initial definition implies that effective positioning is only achieved by some brands,
especially the successful ones, while under the new model; every satellite brand is inherently pre-
positioned most importantly by the end user himself. On the other hand, the mother brand is
positioned on the basis of experiential and emotional grounds more than on a product one.
- Many of the signs attributed to successful brands in the first definition such as innovation,
consistency, and positive image are inherent in the new satellite brands and are most often
influenced by the end user himself, which can lead to a higher (and probably unprecedented)
level of satisfaction.
- Finally, under the new model, the brand is in a continuous state of innovation that is, for the
most part, relevant and with less financial burdens.

6. Conclusion
In conclusion, it is safe to say that new technologies and models have a direct impact on the
branding process in a manner that require a serious attempt to re-evaluate the process and the
conventional old-school concepts associated with it. Our analysis demonstrates that these
innovations could actually strengthen the brand, improve its image, and increase customer loyalty. On
the other hand they impose new principles for communicating and interacting with the customer, a
stronger focus on experiential value, redefinition of the concepts of positioning, consistency, and
distinctiveness, and above all redefining the relationship between the brand, the company, and the end
user. This attempt to understand the impact of these new technologies on the brand and to redefine it
accordingly should not by any means be seen as the ultimate call on the new brand, it should instead
be seen as a wakeup call and an invitation to further examine the new meaning and role of the brand
in the twenty-first century.

7. References
- Bernstein, Lawrence (2009) Experiential Branding and the Consumer Experience Myth.
Available http://www.canadianmarketingblog.com/archives/2009/04/experiential_
branding_and_the_1.htm
- Hameide, Kaled (2011) Fashion Branding Unraveled. New York: Fairchild
- Grant, John (2006) The Brand Innovation Manifesto. West Sussex: John Wiley & Sons

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362

PERMANENT PROMOTIONAL EXHIBITION ABROAD, CASE STUDY OF ROMANIAN
EXPORT CENTER IN SHARJAH

LI ANU Costin
Ph.D.Lecturer, Faculty of Marketing and I nternational Business, Spiru Haret University, Bucharest,
Romania, clianu@gmail.com

GUDEI Simona Corina
Ph.D.Lecturer, Faculty of Marketing and I nternational Business, Spiru Haret University, Bucharest,
Romania, corinagudei@yahoo.com

Abstract: This present paper is meant to show, based on the experiment developed for the first time in
Romania, that the concept of single country permanent exhibition used as an instrument of export promotion,
may act as an export inhancer. Business organizations from Romania have organized for the first time, a
permanent exhibition on the national flag n Sharjah UAE in 2011.
Experience acquired in the first year of the exhibition has been gathered in this paper which is
arguing that the benefits of such promotional instruments requires time, proper selection of companies and
managerial skills.

Key words: export promotion instruments, permanent exhibition

JEL classification: M3, M16, P45, O53

1. Introduction

1.1. Romanian strategic approach on export development
The globalization and trade liberalization makes harder for the companies to identify and
anticipate the constrains on the foreign markets. Cautious financial institutions, new restrictive credit
rules and banking regulations required a bolder behavior of the comapnies trying to recover slowly
from the global financial crisis through exports on foreign markets.
In this context, small and medium enterprises need the tools and financing solutions
including public authorities support as alternatives to find business partners on foreign markets. For
the businesses innovation, branding are valuable assets but beside it public support might be
essential to find customer.Along with public goods such as attractive reforms and legislation or
friendly businnes environment, new instruments to support export companies may be requiered.
The present context requires essentially changes at company managerial level engaged in
international trade and export activities in terms of increasing capacity for innovation and
cooperation in the network, in clusters or internationale value chains in order to develop most
sustainable competitive advantages.
The present context requires also change in the management of trade support institutions -
Trade Promotion Organizations in order to identify and apply the best solutions to support the effort
of export companies, to create competitive advantages on foreign markets. The emergence of new
trade powers and the growing importance of non- EU markets have caused structural changes into
the global trading flows redirecting a part of the export to non- EU target markets.
In this context the Romanian exporters should make significant efforts, difficult for SMEs
without support services, to meet the new business models and to overcome the present model of
doing exports in EU, based on lohn arrangements and subcontracting. They must focus their efforts
towards increased value addition and develop their value chain in order to be closer to the buyers.
This requiers value chain management, innovation and developing international brands.
Addressing new constraints, requires better export strategy, analysis, new marketing skills
and determination to continue changing the way export is managed. The most important cause of low
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value added exports, based on labour intensive, cut-and-trim type is related to the way managers
are looking to their exports, as production function only, with marketing function non existent or
weak, under-developed.
A bottom up National Export Strategy (NES) , based on structural dialogue and
consultations with the businesses was firstly developed and implemented in the period 2005-2009.
After that, the strategic cycle has been renewed during 2010-2014. Romanias National Export
Strategy 2010-2014 is meant to have an essential contribution to the positive development of exports
due to bottom-up approach through consultations and partnerships with enterprises based on good
practices, developed into a comprehensive methodology by International Trade Center in Geneva.
The strategy had to address major constraints of business community identifying ways to
overcome these constrains in order to achieve competitiveness In the second strategic cycle new
initiatives has been envisaged in order to bring sustainability in export development.
Regarding the export promotion the two strategic cycles made in consultation with the
businesses since 2005 has lead to introduction of new instruments to support and promote exports
targeting mainly to promote competitive identity of the Romanian exports through active sector and
regional branding.
Promoting brands and branding become key words in export promotion. Since Few
Romanian brands are internationally recognized, main areas of intervention were decided to be active
promotion of existing brands and developing new brands.
Before 2005, most of the promotion actions and support were targeting to assist existing
exporters, that means only those companies which already had export contracts in their business
activity. NES is now targeting other two categories of customers as important as the first category of
existing exporters. Those categories are:
- Aspiring exporters, firms that do not export, but have limited knowledge about foreign
markets and strong plans to get access on foreign markets;
- Potential exporters, those companies which do not exports and are ignorant about export
advantages and even afraid to get acces on foreign markets, due to high risks percieved to be
difficlut to overcome when doing exports.
Strategy takes into account now new instruments to bring those type of exporters closer to the
markets through:
stimulating the participation to specialized fairs as visitors, supporting the development of
export strategies and training in this regard (the "Passport to export" program);
creating regional centers of export promotion for existing, aspiring and potential exporters;
better market information particularly on market access area;
increased availability of business information on opportunities in foreign markets;
awareness programs and meetings to encourage local companies to become international, to
expand outside;
identifying target markets and support at the enterprise level to penetrate these markets;
providing general advice and assessment of export capacity;
assistance to encourage business alliances between producers to increase production capacity
and diversify production and external marketing;
providing specific information such as international standards;
providing relevant information and statistics on market reflects, the growing importance of
these activities due to globalization and relocation;
providing assistance of local enterprises in order to increase their ability to adapt to specific
customer requirements;
strengthening the know-how and knowledge transfer between present exporters and potential
exporters of the sectoral associations.

1.2. Regional export center - a strategic option
One important strategic objective NES 2010-2014 is to stimulate a geographical shift or
reorientation of part of the exports towards non EU markets. In order to do that promotional
instruments and activities has to focus on non EU target markets. More fairs and trade missions will
be organized in non- EU markets in a so-called 40-60 scheme, where at least 40% of the evvent
should be outside EU.
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The concept of regional exhibitions center in non EU countries, became, in the new strategy,
an important new instrument of promotion since it ensures a longer presence of 1-2 years in a foreign
market to exhibit products. This new type of instruments has become in recent years an effective
method used by the national promotional organisms. The advantage of this method is that it provides
a consistent presence on the national export offer on a target market.
In this way, once established, the permenant exhibitions may become centers for launching
exports on target markets, acting like export incubators or hubs to find proper routes on the
market.Indeed representatives of the companies present on this centers can identify most profitable
routes and distribution centers, can have their offer visualised by potential cusotmers and can get
more information in the market compared to a shorter presence of 2-4 days offered through
participation in a trade show or international fair. Especially SMEs, uanble to act like big, well
established companies, and unkown in the markets, may take crucial advantage .
Based on these considerations, the Ministry of Economy,Trade and Business Environment
together with the Romanian Trade and Invest (Romanian national trade promotion organization)
entered into consultation during 2010 with the Romanian export association in the Export Council
about the opportunity of such an instrument.
Romanian National Export Council is a private-public partnership which by law is
responsable to elaborate and implement a NES and to find new instruments of export promotion.
Article no.1.
(1) Sets up the Export Council, organizational structure at national level, with public-private
character, without legal personality, beside the Ministry of Economy and Trade, with the aim to
harmonize the sectorial, intersectorial and regional strategies to The National Strategy of Export as
well as to determine the targets and priorities in the export field.
(2) The Export Council has responsabilities in the fields of co-ordination and harmonization
of the activities of elaboration and unitary implementation of sectorial and intersectorial strategies and
politics, as well as to monitorize the system of supporting and promotion of export with state budget
financing.
(3) The Export Council is formed with representatives from public institutions, employers
and professional associations with competences and activity in the export field, mentioned in the
annex that is integrant part of this Decision. The Export Council is an open organizational structure,
to which may also adhere other public institutions and associative structures from the private sector
with competences in the export field, according Export Council rules and functional regulations.
Article no.2. The Export Council has the following competences :
a) harmonize the sectorial, intersectorial and regional strategies within the framework of The
National Strategy of Export, with a view to determining priorities for export growing ;
b) identify resources of public and private financing to fulfil programmes and actions
mentioned in The National Strategy of Export ;
c) propose programmes to assure the increase of the competitivity of the export offer ;
d) initiate actions to increase and diversify the export of goods and services with high added
value ;
e) analyse the current problems of the foreign trade activity and formulate proposals to
improve it ;
f) suggest modifications of the legislative framework to elimine the export barrieres and
generate an increase of the export volume ;
g) support the develop of the activities of promotion of servicies and specialized assistence
to exporters ;
h) monitorize progress, results and impact of implementation of the measures, instruments
and mechanisms of supporting and promotion of the export with state budget financing
included in the National Strategy of Export ;
i) mediatize actions, programmes and measures regarding the growing of the export.
Article no.3.
(1) The leadership of the Export Council is assured by two co-presidents, representing the
public sector and the private sector, nominated from the members of the Council during its first
meeting.
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(2) In order to fulfiling its competences, the Export Council may organize sectorial
committees.
(3) The Secretariate of the Export Council is assured by the General Directory Export
Promotion from the Ministry of Economy and Commerce. To assure the activity of the secretariate,
the table of functions of the Ministry of Economy and Commerce is extended with 3 positions of
public employees.

After these consultations many business associations agreed to support creation of such a
center in UAE. It has been decided that the center should be the place of a permanent exhibition
under national flag in Sharjah UAE. Institutions and associations in Romania and Export Council
were encouraged to develop in this location a permanent exhibition center under the auspices of the
Sharjah Chamber of Commerce. It was considered an attractive location situated inside the
International Expo Centre Sharjah.
Romanian General Expo in Sharjah was established in the international exhibition center of
Sharjah Chamber of Commerce on April 2011. The launch of the exhibition was made in a favorable
context in offered by the the Islamic Conference in Sharjah held in April 2011. The conference was
organized by O.I.C. (Organization of Islamic Countries) with the main objectives to increase
cooperation trade and joint investment between the 57 Member States of OIC. In parallel with the
conference the International Islamic Exhibition took place. At this event the Islamic countries had
sent exhibiting companies, which triggered a large numbe of visitors. Part of the influx of visitors
and experts, commercial partners and potential buyer have been redirected to the in Romanian
exhibition space.
Since Sharjah Expo Center is organizing during the whole year, a part of the traffic of visitors
towards the center was ensured by this good positioning. Thus, the exhibition enjoyed visitors from
the Arab countries as well from India, China, Thailand, Turkey, Indonesia, Egypt, Iraq, Bangladesh,
Australia. Romanian Trade Center gave to those interested, the opportunity to know the potential of
the Romanian industry, to see the goods and the Romanian product performance and to establish
contacts with Romanian companies present in the stand. Organizing the center in such a place allowed
the right promotion to a vast consumer market of 1.4 billion people which level of consumption is
largely covered by imports (993 billion USD).
A new model of promoting Romanian products internationally was created. The exhibition
was aimed not only for exports to the U.A.E.(United Arab Emirates) but also in other countries and
the Middle East. Organization of the pavilion and promotional activities were done based on the
brand manual ,,Romania, your reliable trade partner", a registered export brand.
Sharjah showed to be a good location for this purpose and recognized as such by the national
government promotional organisms in China, India, Egypt and more recently U.S. (United States). All
these countries have or intend to open a regional exhibition centers in Sharjah, near the Chamber of
Commerce and Sharjah Expo International Expo Center.
All countries that have such projects based their decision on the following considerations:
economic and commercial position of Sharjahs emirate in the U.A.E. (most industrialized
place where there are many re-export companis) and the U.A.E. in the Gulf and Middle East
countries (the logistics processing center and re-export);
pro-national regional exhibition centers in the emirate authorities, who as a result of
cooperation between the U.A.E., has specialized in supporting such centers and provide
framework conditions to encourage the creation of national promotion centers.
The presence of the companieis in the Romanian Trade center in Sharjah that took place
during three successive stages as follows:
In the first stage of the exhibition (April - July 2010) 34 companies exhibited out of which,
till end of March 2012, after allmost one year, two companies have opened stores in U.A.E.
In the second stage (July-November 2011) at the number of 34 companies listed in the first
stage (that continued to exhibit) 8 additional companies were added, resulting 42 companies present
in the exhibition center. This fact was possible by rearranging of exhibiting area.
In the last stage they have shown interest to exhibit a number of 19 firms. Most of
participants have expressed for a extended presence of export supply in Sharjah emirate using the
366

opening provided by the organizers considering that they will have better chances of entering on the
UAE market.
During these stages Romanian companies had the opportunity to participate in the business
meeting wich were organised for each participating company.In conclusion throught this way of
promoting, Exhibition Centre refresh and improved their substantial range of products and the export
demand has increased and diversified in terms of assortments.

1.3. Performance evaluation Sharjah Exhibition Center
Romanian companies present in the center had the opportunity to better prospect the market
and to gether information on competitors or on market acces conditions not only on Gulf markets but
on Middle East markets too. The representatives of Romanian companies got valuable information
about technical and quality requirements, about prices. But, the most important advantage was the
fact that they were able to get closer to the potential buyerr, to understand distribution channels and to
meet their representatives.
Also in the category of positive results we mention the following aspects:
Romanian businessmen present in the center benefited from match-making events,
creating good prospect for export deals and identified new opportunities to attract
foreign investments;
Most of participants, rather coutious at the begininig about their chances on the market,
became after 6 months of presence more confident on the potential benfits of an
extended presence in Sharjah. Using the opening provided by the emirate organizer, SS
General trading, exhibitors considered after one year of presence that such a presence
gave them better chances of entering on market;
The offer of Romanian export companies became stage by stage more consistent,
comprising a very wide range of producs ans services such as: industrial equipment,
furniture and clothing specially designed for the Middle East market, ingredients for food
processing industry, traditional Romanian food (jam of Topoloveni) marble, building
materials and wood products, clothing, footwear, glassware, electrical, equipment and
environmental services, renewable energy, higher education and research services,
household products;
According to report made by participants export pre- contracts have amounted to
22,742,000 US dollars.
In order to understand and better measure the impact of Sharjah Center a study was
conducted. Information needed to assess the effectiveness of this model to promote foreign export
were collected through questionnaire tool. This was the means by which representatives of exhibiting
companies provided answers to questions that would lead to important information for achieving the
purpose of research. The main objectives of the study include:
identify sector profile of the firms participating in the exhibition Sharjah
classification of exporting companies present at the exhibition the following categories:
potential exporters, aspiring develop;
identify the major obstacles percieved by Romanian exporters ;
measure percieved attractiveness of U.A.E.and Middle East markets in terms of:
obtaining export licenses, transfers of technical documents or samples; endorsement of the
technical parameters of products for export, making advance payments, delivery dates;
shipping and transport conditions, discriminatory trading conditions;
measure the export capacity of Romanian companies ;
measure percieved addvantage of location in Sharjah Expo;
identify the most appropriate ways of presenting the Romanian offer in terms of design
presentation stands.
The information collected, processed and analyzed helped to establish the following
conclusions:
1. Romania's participation in the General Exhibition Sharjah 2011 was a significant achievement
opening the way for a good practice to support the advantages of permanent export market to be
better capitalized.
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2. Whole the experiment gravitates around the importance of the existence of individual brands in
export on non EU markets . Romanian companies which based their exports on cut and trimm
subcontracting on EU discovered new path of strategic development, through creating more
powerfull brands.
3. Out of the 57 companies participating in the International Exhibition Sharjah 2011, 14%
represented technical industrial companies, 12% clothing and fashion design sector, 9% other
(consulting services, construction, chemistry, gardening, IT, education services) , 7% and
decorative art glass, pharmaceutical products and cosmetics 5%, 4% furniture and articles of
wood.
4. Most of the exhibiting companies familiar with exports, 50% of exhibitors making sporadic
export in small quantities with low-impact turnover and 50% are developed exporters which
conducted operations consistent with the major contribution in export turnover.
5. The main obstacles encountered in the export activity, in the opinion of respondents are : the
absence of efficient distribution channels, price of their products compared with the
competition that requires a rethinking of the production function but also improving logistics ,
the obligation of making advance payments (necessary condition for the first delivery of
products), shipping and transport conditions.
6. Most of respondents considered that the Romanian economy is attractive both in the UAE and
Middle East market in the terms of trade and export, but unattractive in terms of investment.
7. In terms of export capacity of Romanian companies, the image formed is favorable among
exporters.Most of them are confident that through a good distribution chanel they areable to
take a market share;
8. The image of the promotional center is relatively favorable among participants which agree
most of them that localtion inside the Sharjah Expo was a good choice and the center may act
in the future as an efficinet export incubator;
9. Most percieved advantages of the Romanian Exhibition Centre in Sharjah Expo, according to
respondents opinion are: promoting the economic potential of Romania in the UAE and the
Middle East and boost exports to these markets.
10. Regular repetition of this type of exhibitions in the Center with participation of diversified
Romanian export companies is viewed favorably by the exhibitors.
11. Regarding the presentation of the Romanian offer in terms of stand design , the opinion is
divided equally between the two models namely:
-
general stand all products type or multisectorial
-
thematic stand for a limited number of interrelated products or, at least, an arrangment
were sectors should be clearly diveded in different rooms
12. An Internet presence of the center (web site or portal) is viewed as an efficient promotional
tool by the exhibitors.
13. Introduction of some additional selection criteria to enter in the center of Romanian
companies is looked differently. On one hand some respondents are considering a selection
based on degree of matching the products to the market needs is important. But there are also
opinions which draw attention on the fact that all the companies should have acces on this
center if they consider they have chances to export.
14. Regarding the quality of match making services ensured by local organizers, SS General
Trading, respondents are divided.Even some respondents consider that the services were good
(cosmetics, food, bio and health products, glassware, furniture), others considers that the
company is not able cover all type of businesses interested to get orders on the market;
15. Most companies had business contacts useful and practical ways to continue expressing the
view that Sharjah Exhibition Centre sould continue in 2012 an beyond.
16. Most of Romanian companies have not a coherent strategy to access the Middle East market
and have not developed marketing mix at the managerial level (lack of promotional materials,
low capacity of communication and adaptation).
17. Organizers are unable to cover with complete market studies all categories of export
products which may be a main vulnerability of the Centre.
368

18. There are significant cultural barriers regarding business development in terms of
communication, mutual trust and ability to think long-term collaboration, both from the
Romanian companies and Gulf companies.
In terms of opportunities and effectiveness of this in the Exhibition Centre there are following
categories of companies:
Companies which got export orders in the market or are in advanced stage to get
contracts on the market;
companies that are in process of registration with their products on the market (food,
cosmetics, health care);
companies that have not signed export contracts, mainly due to high prices of the products,
but still retain their interest of U.A.E. market;
companies that have expressed their intention to leave the center having no real export
possibilities.
Considering that this is the first time when such a promotional instrument is used, in less then
one year of existence, evidence show that is premature to guage the exact impact of the center on
Romanian exports on the market, in spite of the fact that there are first indications that the center is
already contributing to growth of Romanain export on the market which doubled on 2011 compared
with previous year.

2. Conclusions
Experience acquired in the first year of functioning offers the possibility to continue work
with specific adjustments required in the management of center.
In 2012 the exhibition center should be streamlined so as to become a veritable incubator
Romanian export companies. For a better management of the Sharjah Expo Centre various solutions
should be considered such as:
- more carefull selection of participants in the center based on market study research able to
identify companies best placed to be effcient on the market;
- better match making services ensured by local organizers;
- periodic campaigns to promote the export offer of the center channel or potential for
promotion and marketing (specialized fairs, road shows, display products to distributors,
event center, media target groups of customers);
- organizing in the center seminars and thematic events;
- analysis of monthly activity reports received from the SS General Trading (local partner) and
setting with SS General Trading ways to improve services;
- continue organizing three events in the Sharjah Exhibition Complex, in May, July and
November 2012, with the participation of at least 45 new companies and innovative creative
products.
Romanian experience reveals that Romania's permanent exhibition in Sharjah U.A.E. is a
valuable experiment that with a better management can help overcome some important constraints of
the market acces for Romanian exporters such as those related to market research, product promotion,
identify the best distribution channels, certification procedures.
This center can be a valuable alternative to other export promotion instruments provided by
the public authority but a more accurate evaluation of its performance may take place after its second
year of existence has passed.

3. References
- Hotrrea de Guvern nr. 1828 din 22.12.2005 publicat n Bucureti n M.O. nr. 65/24 ianuarie (2006)
privind Strategia Naional de Export 2005-2009
- Carta Alb a IMM-urilor din Romania 2011, (2011) ediia a IX-a, Bucureti
- Meassuring the Impact of National Export Strategy, ITC Geneva, Montreux, (2004), format electronic
- Avantajele competitive ale industriilor procesatoare din Romania, ASPES, Bucureti, Martie (2007),
cap.5.
- Export Strategy Desing, Guidelines for Strategy Makers, ITC Geneva, www.intracen.org.
- www.portaldecomert.ro
369

- Epure M., D.A.Grdan, I.P.Geangu, C.S.Gudei - Cercetri de markeing - Teorie i practic, Editura
Fundaiei Romnia de Mine, Bucureti, 2006
- Costin Lianu, Managementul Strategiei Nationale de Export, Editura Economica, Bucuresti 2008.

370

ROMANIAN SMEs OVERALL SATISFACTION WITH THE USE OF ONLINE
MARKETING TECHNIQUES: AN EMPIRICAL MODEL

MACOVEI Octav-I onut
Ph.D. student, The Bucharest University of Economic Studies, Bucharest, Romania
octav.macovei@mk.ase.ro

I CONARU Claudia
claudiaiconaru@ase.ro

PERJ U Alexandra
alexandra.perju@doesec.ase.ro

Abstract: Online marketing techniques have been adopted by Romanian Small and Medium
Enterprises to different extents. While some online marketing techniques are more popular than others, the
general perception towards the usefulness of using them is favourable. Moreover, most of Romanian SMEs
initial expectations towards the outcomes of use are confirmed, resulting in a high degree of satisfaction with
the decision of turning to online marketing techniques for meeting companies goals. However, our main
analysis is not descriptive in nature. We thus employ a modified framework of initial ECT-IT in order to test and
validate an empirical model of Romanian SMEs overall satisfaction, as a function of perceived usefulness and
confirmation of initial expectations. Our hypotheses are validated with Least Square Regression analysis and
the models fit indices are presented.

Key words: online marketing, techniques, satisfaction, SME

JEL classification:M31, L81

1. Introduction
A pervasive online presence has become compulsory since more and more consumers use the
Internet on a frequent basis. More than half of the EU population is using the Internet on a regular
basis for different purposes, which also include information gathering for products and services
(Eurostat, 2011). Statistics yield serious implications especially for retailers whose main target is
young consumers: nine in ten young individuals aged 16-24 use the internet regularly (Eurostat, 2011)
giving retails the possibility of almost full potential reach. Thus, integrating both offline and online
marketing efforts can offer a competitive advantage in attracting and retaining customers.
There are several online marketing techniques that companies can adopt and adapt to the very
specification of their overall strategies. In a study on 500 US companies, the most effective reported
online marketing techniques are: e-mail marketing, online social media, blogging, micro-blogging,
paid advertising (banner ads, pay per click), search engine optimisation, but also content-based online
marketing (newsletters, white papers, e-books) (Hinge Research Institute, 2011).
Hinge Research Institute also reports a strong correlation between growth, value and the
adoption of online marketing strategies. High growth, high value companies are more likely to use
online marketing strategies. Also, companies that have obtained more than 40% of their leads online
tend to have superior financial performance (Hinge Research Institute, 2011). Hinge Research
Institute concludes that the online marketing strategy can be very attractive from a return on
investment perspective.
Especially small and medium enterprises are likely to adopt inexpensive, modern marketing
techniques due to their ease of use and general affordability (Nathan, 2012). The AT&T Small
Business Technology 2012 Poll reports that 79% of the 1200 small US nationwide enterprises are
using word-of-mouth for promoting their business, 63% are using companys websites and 39% are
using social media channels (Nathan, 2012).
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According to Rogers Diffusion of Innovation theory, individuals can adopt an innovation and
latter continue or discontinue its use (Rogers, 1995). As well as individuals, enterprises can continue
or discontinue the use of online marketing techniques at any given time.
This papers aim is to explain why enterprises continue to use online marketing techniques in
order to sustain the overall marketing goals. In order to meet this papers objective, we have
employed and adapted the ECT-IT framework to the specificity of our study. Expectations-
Confirmation Theory for IT usage has been adapting the expectation-confirmation paradigm to the
study of IT related information systems (Bhattacherjee, 2001).
The rest of the paper is structured as follows: the second section of the paper emphasises more
on satisfaction as key variable in ECT-IT framework, the third section of this paper presents current
studys methodology followed by data analysis and results. The last sections deal with conclusions,
limitations and acknowledgements for this paper.

2. Theoretical background
Much research effort was directed towards the study of consumers satisfaction with their
purchase decisions and less effort towards studying enterprises satisfaction with their marketing
decisions. Marketing managers take various decisions, have expectations regarding the outputs of
their decisions, judge the outcomes in term of meeting expectations and report either satisfaction with
prior decisions or dissatisfaction with their decisions. Satisfaction leads to a continuance intention to
use, act or perform certain behaviour (Bhattacherjee, 2001).
Satisfaction has been widely defined as a post-evaluative judgement over a particular decision
(Oliver, 1997; Churchill and Suprenant, 1982). It is an attitudinal variable, and as such is an important
determinant of intention as per Technology Acceptance Model (TAM) (Davis et al., 1989).Judgement
of satisfaction is entirely subjective and individual and depends on the individuals initial expectations
(Oliver, 1997), while perceived usefulness represents salient beliefs that are developed based on
realistic consideration of actual situational factors (Davis et al., 1989).
Similarly, the confirmation-disconfirmation paradigm shows that satisfaction is an evaluative
outcome of the gap between performance and expectations (Oliver, 1997), with higher performance
levels associated with more positive disconfirmation and increased satisfaction. Perceived usefulness
refers to beliefs regarding performance.
An individual is more likely to be satisfied with experience or decision when he or she
perceives better performance, therefore greater usefulness. The effect of perceived usefulness on
behavioural intention has been consistently reported in most empirical studies in various contexts,
including information technology and electronic commerce (Gefen and Straub, 2000). In this sense,
an individual is more likely to continue usage when such usage is perceived to be useful.
The role of satisfaction in predicting behavioural intentions is well established in the
marketing literature (Anderson et al. 1994; Cronin and Taylor 1992; Oliver 1980; Patterson et al.
1997). Recent studies demonstrated that satisfaction can also be considered a key predictor of
intention to continue IT usage (Bhattacherjee 2001).
Bhattacherjee develops the ECT-IT framework which position that continued IT usage is a
function of satisfaction and perceived usefulness. In ECT-IT framework, the main predictors of
satisfaction are post-usage perceived usefulness and the confirmation of initial expectations
(Bhattacherjee 2001). Satisfaction is an affect (attitude), captured as positive (satisfied), indifferent, or
negative (dissatisfied) feelings (Bhattacherjee 2001).
The rationale of the framework is as follows: an individual forms some initial expectations
about the performance of IT before using it. The degree to which his/her expectations are met leads to
both satisfaction/dissatisfaction and a perceived usefulness of the IT. Satisfaction is determined by a
confirmation of expectations which means that the IT performance rose to his or her expectations.
Dissatisfaction occurs when initial expectations are not met.
EDT-IT framework of reference is outlined in Figure 1.

372

Figure 1. ECT-IT framework (Bhattacherjee 2001)

3. Research model and hypotheses
We employ ECT-IT framework as a base for study SMEs overall satisfaction with online
marketing techniques. The model proposed is shown in Figure 2. The reasoning of the model is the
following:
Before making a decision, individuals form initial expectations about possible outcomes
resulting from different courses of action (Zeelenberg et al, 2000). Expectations form the basis for all
kinds of behaviour (Olson et al, 1996). The outcomes of a certain decision or behaviour are measured
in terms of results. When the results of a certain behaviour met individuals initial expectations then
expectations are confirmed. Thus, we state our first hypothesis:
H1: SMEs initial expectations about the possible outcomes of implementing online
marketing strategies will positively influence their confirmation.
The initial expectations can be confirmed, disconfirmed or positively disconfirmed over time.
Various studies of expectation-confirmation paradigm validate the assumption that confirmation of
expectations leads to both increased satisfaction and increased perceive usefulness of an
act/decision/behaviour (Bhattacherjee 2001, Oliver 1980). We thus state our second and third
hypothesis:
H2: SMEs confirmation of initial expectations will positively influence overall satisfaction
with using online marketing techniques
H3: SMEs confirmation of initial expectations will positively influence perceived
usefulness of using online marketing techniques
When judging the outcomes of certain behaviour, individuals draw some conclusions to the
usefulness of behaving in such way. It is important to note that these perceptions are post adoption of
the behaviour and they lead to increased satisfaction. We thus state our forth hypothesis:
H4: SMEs perceived usefulness of online marketing techniques will positively influence
overall satisfaction with using online marketing techniques

Figure 2.Model of SMEs overall satisfaction toward the use of online marketing techniques

4. Methodology
In order to collect data from a representative sample of Romanian SME, a database with over
3000 of firms was purchased. From this database we selected only those firms having the slightest
online presence by choosing those e-mails accounts which were set up on companys domain name
(name@companydomainname.ro). A total of 1605 e-mails addresses were selected. We have written a
SMEs Initial Expectations
SMEs Perceived
Usefulness of OMT
Confirmation of SMEs
Initial Expectations
SMEs Overall satisfaction
with using OMT
H2
H1
1
H3
H4
Perceived usefulness
Expectations Confirmation
Satisfaction Continued IT usage intention
373

cover letter expressing the purpose of the study and kindly asked the potential respondents to return
the questionnaire attached to the e-mail. A total of 171 Romanian SME returned the questionnaire
with a 10.65% response rate. 5 questionnaires were however incomplete and dropped from the
analysis resulting a number of 166 valid questionnaires.
Each construct measuring initial expectations, confirmation of expectations, perceived
usefulness and overall satisfaction had 4 items, totalling a number of 16 items. Descriptive data was
also gathered using multiple-answer questions.
The proposed model was analysed with the help of IBM SPSS Statistics software package,
and the procedure has two important steps, the reliability and internal consistency analysis of the
construct variable and the path coefficient analysis which consists in a series of successive simple and
multiple linear regressions, in order to establish the Beta standardized coefficients to validate the
hypotheses and the Pearson R Square coefficient of determination for the dependent models
variables. Data analysis and results are presented in the next section if this paper.

5. Data Analysis and Results
Before the analysis, the database was checked for missing values, duplicate answers and
unusual cases or outliers. There were only five cases of multiple missing answers which were
removed, the database being ready for further analysis.

5.1 Descriptive statistics
Our sample of 166 Romanian SME will be analysed according to field, turnover and age or
experience of the company (Table 1, Table 2 and Table 3).
Our samples field of activity consists mostly of services, ITC, fashion/design and
Finance/Accounting. The most active industry in the online environment is the services industry,
including tourism services, transportation and education services. The next important segment
consists of IT & C firms, which include hardware components and software products selling online
stores and computer related services like components assembly, debugging, repairing or software
installation.
As per turnover, most of the online active companies accounted for a turnover between
50.000 and 500.00 Euro (86%). Only 8% reported a turnover over 500.000 Euro and 7% under 50.000
Euro.
Most of the firms in our sample have 5 to 10 years of market experience.

Table 1. Field
Finance/Accounting 7%
IT&C 18%
Food industry/HoReCa 12%
Engineering 5%
Marketing and research 8%
Services (education,
transportation, tourism)
23%
Furniture/decorations 7%
Fashion/Cosmetics 11%
Other 9%
Table 2. Turnover
under 50.000 Euro 7%
50.001- 200.000 Euro 33%
200.000 500.000 Euro 54%
over 500.001 Euro 8%
Table 3. Age
Less than 1 year 3%
1-4 years 38%
5-10 years 57%
more than 10 years 14%

Most of the Romanian SME use content marketing, search engine marketing techniques and
e-mail marketing in order to achieve their marketing goals. All companies relate to content marketing,
having a corporate website or corporate blog. Around 78% engage in both search engine optimization
and search engine paid advertising to increase their rank in search engine results pages in order to
reach a wider target audience, 64% rely on e-mail marketing by using either opt-in mails for
promoting their products or services, offering discounts and generating quick response from the
customers, or newsletters in which describe new products launches, characteristics, improvements,
campaigns, testing and others, in order to establish a long-term relationship with the customers.
Almost half of the respondents use social networks, from which the most used by far is Facebook,
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followed by LinkedIn and Google Plus and 39% turn to paid advertising which includes banner ads,
pop-up messages, advertising video and audio clips, flash animations and games especially on other
websites, social networks or blogs.. 34% of the questioned companies use other forms of online
content marketing which can include articles, white papers, e-books, presentations, tutorials,
catalogues, leaflets, brochures all with marketing purposes. Only 6% of our respondents uses media
content, which remains an untapped potential, being both economic and efficient online marketing
technique, especially if the case of video clips, being well known the big number of worldwide users
that Youtube or simillar websites like Google Videos or Trilulilu in Romania have. Also the other
forms of media content websites which include podcasts, documents and presentations have greatly
expanded, like Slideshare.net, Podcast.com or Itunes from Apple.

Table 4. Online marketing techniques

Paid advertising
(banners, pop-
up, Flash)
SEM
(SEO
+
PAID)
E-mail
marketing
(Opt-in and
newsletters)
Social
networks
(Facebook,
Google+)
Media
content
(Youtube,
Trilulilu)
Content
Marketing
(website, blog)
Other Content
(articles, white
papers leaflets)
39% 73.5% 64% 47.5% 6% 100% 34%

Further, we will analyse Romanian SME level of initial expectations, confirmation of
expectations, and satisfaction with online marketing techniques. Before implementing various online
marketing techniques, Romanian SME had high initial expectations regarding the outputs of use. Most
of the Romanian SME agreed that they expected an increase in sales volume, companys reputation
and notoriety and a wider target audience (Table 5).

Table 5. Romanian SME initial expectations towards implementing online marketing techniques
Mean Std.
Deviation
N
Before turning to OMT, we were hoping that OMT implementation
would increase our sales volume
4.36 .624 166
would help us reaching a larger target audience
4.21 .703 166
would increase our companys reputation
4.09 .695 166
would increase our companys notoriety
4.30 .656 166

From table 6, we can observe that most of Romanian initial expectations were confirmed.
Implementing online marketing techniques can and will increase sales, increase company notoriety
and reputation and wide the target audience.

Table 6. Romanian SME confirmation of initial expectations
Mean Std.
Deviation
N
Indeed, the use of OMT increased sales volume 4.30 .585 166
Indeed, the use of OMT helped us reach a larger target audience 4.30 .690 166
Indeed, the use of OMT increased our companys reputation 4.02 .700 166
Indeed, the use of OMT increased our companys notoriety 4.36 .662 166

As a result of expectations confirmation, Romanian SME are satisfied with their initial
decision of using online marketing techniques in order to achieve online marketing goals.

375

Table 7. Romanian SME satisfaction with online marketing techniques
Mean Std.
Deviation
N
We are content with our decision to use OMT 4.44 .637 166
We are happy with our decision to use OMT 4.17 .669 166
We are pleased with our decision to use OMT 4.19 .687 166
Overall, we are satisfied with our decision to use OMT 4.40 .660 166

5.2 Items Reliability and Internal Consistency Analysis
Internal consistency is a measure that tests whether several items of each construct produce
similar scores. Cronbachs alpha with values from 0 to 1 was employed in order to test if the items
were properly selected for each construct. According to George and Mallery, a Cronbachs alpha
value greater than 7 is acceptable and a Cronbachs alpha value greater than 8 is good (George and
Mallery, 2003)
The first construct analyzed (Table 8) is Initial Expectations [IE] that has a good Cronbachs
Alpha value of 0.809. This value will be improved after Item 3 - Before turning to OMT, we were
hoping that Online marketing Techniques [OMT] implementation would increase our companys
reputationwill be removed from the construct, thus resulting a final Alpha of 0.814, the items
corresponding row value from Cronbachs Alpha if Item Deleted column. The Corrected Item Total
Correlation, which shows the correlation between the item and the scale score minus the item of
interest, item 3 in this case, is 0.503, the lowest from the column, but over the accepted value of 0.3,
confirming again that the removal decision is justified.
Table 9 shows a Cronbachs Alpha value of 0.821 for Expectation Confirmation [EC]
variable, which is very good, showing an accurate items description of the construct. No item should
be removed, because all the Cronbachs Alpha if Item Removed values are under 0.821, resulting that
the construct cant be improved.
The Inter-Item Correlation Matrices for the two variables were also computed, and all the
inter-items Pearson R coefficient of correlation values were over 0.3, the accepted limit for ordinal
Likert type items, except the R involving the Item 2 and Item 3 intersection from [IC], which was
0.281, but regarding the fact that item 3 was removed from the construct, this inconvenience
disappeared.

Table 8 Initial Expectations [IE] Table 9 - Expectation Confirmation [EC]

Reliability Statistics
Cronbach's Alpha Cronbach's Alpha Based on
Standardized Items
.809 .808
Item-Total Statistics
Corrected
Item-Total
Correlation
Cronbach's Alpha
if Item Deleted
Before turning to OMT, we
were hoping that OMT
implementation would increase
our sales volume
.701 .722
implementation would help us
reaching a larger target
audience
.577 .785
implementation would
increase our companys
reputation
.503 .814
implementation would increase
our companys notoriety
.735 .708

Standardized Items
.821 .821
Corrected Item-
Total Correlation
Cronbach's
Alpha if
Item
Deleted
Indeed, the use of OMT
increased sales volume
.562 .811
helped us reaching a
larger target audience
.630 .782
increased our companys
reputation
.637 .779
increased our companys
notoriety
.759 .720

376

Table 10 - Perceived Usefulness [PU] Table 11 Satisfaction [S]
Standardized Items
.753 .751
Corrected
Item-Total
Correlation
Cronbach's Alpha if
Item Deleted
Generally, use of OMT
is useful for achieving
marketing goals
.550 .696
increases a companys
profit
.632 .647
target audience
.606 .664
efficiency
.416 .761

Standardized Items
.844 .845
Corrected
Item-Total
Correlation
Cronbach's
Alpha if
Item Deleted
We are content with our
decision to use OMT
.750 .773
We are happy with our
decision to use OMT
.592 .839
We are pleased with our
decision to use OMT
.701 .792
Overall, we are satisfied with
our decision to use OMT
.679 .802

The next two models construct variables will be further subjected to the same analysis.From
Table 10 results a Cronbachs Alpha value of 0.753 for Perceived Usefulness [PU] variable, over 0.7,
but which can be slightly improved after Item 4 Generally, use of Online Marketing techniques
[OMT] is removed from the construct, resulting a final Alpha of 0.761. Items associated Corrected
Item-Total Correlation value of 0.416 is the by far the lowest from the construct.
For Satisfaction [S] (Table 11), the Cronbach's Alpha is 0.844, the best from all the
constructs, and no item has to be removed.
The Inter-Item Correlation Matrices were also computes for these variables, and except an R
coefficient involving the Item 4 removed from [PU], all the values were over 0.3, showing that the
items accurately describe the same construct or latent variable.
After the reliability and internal consistency analysis and the removal of the two inconsistent
items, the four construct variables were built using the Mean option from SPSS.
The Correlation Matrix shows the Pearson R correlation coefficient for all the variables
intersections and its associated Significance level or probability (Sig.). All the coefficient values are
over 0.5, showing strong correlations among the variables, and their probability is under 0.01, thus the
all the results being significant.
The Correlation Matrix is very useful when examining the mediating effect of some variables
and to see relationships between variable that havent been hypothesized in the model.

Table 12 - Pearson Correlation Matrix

5.3 Least Squares Regression Model
The second important step of the analysis consists in three successive linear simple and
multiple regression for each dependent variable of the proposed model. The regressions are made with
IBM SPSS Statistics using method Enter and Least Squares technique.
[IE] [EC] [PU] [S]
[IE] Pearson R 1 .647
**
.568
**
.579
**

Sig. .000 .000 .000
[EC] Pearson R .647
**
1 .635
**
.879
**

Sig. .000 .000 .000
[PU] Pearson R .568
**
.635
**
1 .713
**

Sig. .000 .000 .000
[S] Pearson R .579
**
.879
**
.713
**
1
Sig. .000 .000 .000
**. Correlation is significant at the 0.01 level (2-tailed).
377

Table 13 Model Summary
Dependant R R Square Adjusted R Square Std. Error of the Estimate Durbin-Watson
Satisfaction [S] .902
a
.814 .811 .23788 1.797
a. Predictors: (Constant), Perceived Usefulness [PU], Expectation Confirmation [EC]
Expectation Confirmation [EC] .647
a
.419 .415 .40783 1.859
a. Predictors: (Constant), Initial Expectations [IE]
Perceived Usefulness [PU] .635
a
.403 .400 .38835 2.441
a. Predictors: (Constant), Expectation Confirmation [EC]

Table 6 Model summary shows the Pearson R correlation coefficient and Pearson R Square
determination coefficient values, the last showing the strength of the regression. The best R is for
Satisfaction [S], 0.902, which is a dependent variable explained by two predictor variables, [PU] and
[EC], thus explaining the strong relationship. The R square of this multiple regression is 0.814,
meaning that [S] as dependent or outcome variable can be explained by [PU] and [EC] as independent
or predictor variables in a proportion of 81.4%.
Expectation Confirmation [EC] and Perceived Usefulness [PU] as dependent variables are
explained through two simple regressions by [IE] and [EC] as predictors, having good similar R
values of 0.647 and 0.635, showing strong relationships.
The Durbin-Watson statistic values are between 1.5 and 2.5, the recommended interval in
order to not exist serial autocorrelation in the residuals, thus the independence of the errors regression
assumption being validated.
For each of the three regressions the ANOVA table was computed, and all the Sum of
Squares, Mean Square and F values are very high for a probability under the Significance level of
0.001, showing that the cumulative effect of the predictors on the dependent variable is strong and
consistent.
The next step of the regression procedure consists in analyzing the Standardized Beta
Coefficients (Table 14) which will compute the Beta or path coefficients associated to the relationship
among models variables in order to validate or invalidate the hypotheses.

Table 14 Standardized Beta Coefficients
Dependant:
[S]
Standardized
Coefficients
Sig. Dependant:
[EC]
Standardized
Coefficients
Sig. Dependant:
[PU]
Standardized
Coefficients
Sig.
Beta Beta Beta
[EC] .715 .000 [IE] .647 .000 [EC] .635 .000
[PU] .259 .000

The Beta coefficient values are all significant, under 0.001, and have values over 0.2, thus all
of the models hypotheses are validated. All the relationships are very strong, over 0.6, except the
effect of [PU] on [S], which has a pats coefficient value of 0.259, showing a weaker influence of the
predictor. This happens because the dependent variable [S] is explained by two independent variables,
[EC] and [PU], the second having a stronger influence and an associated path coefficient of 0.715, the
greatest from the model. Although the Beta between [PU] and [S] is 0.259, the Pearson R correlation
coefficient of this relationship is 0.713, very high, but lower that the R between [EC] and [S], which is
0.879 for a probability under 0.001 level.
The Standardized Beta coefficients (Table 14) also computed for each of the three
regressions the Tolerance coefficients, which are all over 0.5, and the Variance Inflation Factor (VIF)
values, which are under 5, thus validating the lack of multicolinearity assumption. Next, the
Colinearity Diagnostics tables computed the Condition Index value of 23.971 for the multiple
regression with [S] as outcome, which is between 15 and 30, showing a moderated risk of
multicolinearity, but regarding the ordinal variables using five points Likert scales, this is normal and
accepted. For the two simple regressions, the CI values were under 16, showing no major risk of
multicolinearity, thus the lack of multicolinearity assumption for linear regression being once again
validated.
The last important regression condition, the residuals distribution normality, will be next
verified using the graphic method.
378

Figure 3 The Histogram of Standardized Residuals

Figure 4 The P-P Plot of residuals

The Histogram of Standardized Residual (Figure 3) shows the residuals values follow a
normal bell shaped Gaussian distribution, validating the residuals normality assumption. Next, the P-
P Plot (Figure 4) shows that the residuals can be estimated with a straight regression line, being
symmetric to this line, once again confirming the residuals normality distribution regression
assumption.

Figure 5 Model of SMEs overall satisfaction toward the use of online marketing techniques

6. Conclusions and limitations
Expectation-Confirmation paradigm can be adapted to the study on SME satisfaction with
online marketing techniques. Marketing Managers evaluate their satisfaction based on the
confirmation of their initial expectations and the perceived usefulness of implementing such
techniques. Our proposed model can explain 81.6% of the variation of satisfaction.
If initial expectations are confirmed, then marketing managers will perceive both an increased
usefulness and an increased level of satisfaction with their decision to adopt and implement online
marketing techniques.
Expectations
Confirmation [EC]
Satisfaction [S]
Initial
Expectations [IE]
Perceived
Usefulness [PU]
R=0.419
R=0.816
R=0.403
.65
.64
.71
.26
379

The study shows that initial expectations are high; the initial expectations items have means
from 4.09 to 4.36. Initial high expectations are mostly confirmed; the expectations confirmations
items range from 4.02 to 4.36. This leads to an increased satisfaction with the decision of using online
marketing techniques (the satisfaction items ranging from 4.17 to 4.47) and increased perceived
usefulness of using online marketing techniques (the perceived usefulness items ranging from 4.03 to
4.45).
Although this study provides meaningful implications, it has some limitations. First, the
model was empirically tested using a sample of Romanian SME. Thus, it cannot be assumed that the
sample is representative to the worldwide population. Future research should replicate this study and
test this conceptual model in a different country or culture setting. Second of all, some authors may
argue that the sample size of 166 Romanian SME may not be representative for the entire investigated
population. Third, the predictive power of the model can be increased if several other satisfaction
predictors are validated and included in the model.

Acknowledgements

This article is a result of the project POSDRU/88/1.5./S/55287 Doctoral Programme in
Economics at European Knowledge Standards (DOESEC)". This project is co-funded by the
European Social Fund through The Sectorial Operational Programme for Human Resources
Development 2007 to 2013 coordinated by The Bucharest Academy of Economic Studies in
partnership with West University of Timisoara.

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Emotion, 14(4), p. 521-541.

381

THE ANALYSIS OF THE TOURIST BEHAVIOR DURING THE ECONOMIC CRISIS IN
ROMANIA AND IN EUROPEAN UNION

MAHI KA Elena-Cristina
Ph.D. student, Faculty of Commerce/Department of Tourism, "Academy of Economic Studies" University,
Bucharest, Romania, cristinamahika@yahoo.com

DI TU - FURTUNA Camelia
Ph.D. student, Faculty of Commerce/Department of Tourism, "Academy of Economic Studies" University,
Bucharest, Romania, camelia_ditu@yahoo.com

Abstract: The tourism industry is undoubtedly affected by the global economic crisis. This study
aims to provide a perspective from the point of view of changes occurred in the tourist behaviour in a less-
favourable economic environment like the current global economic crisis but also in terms of looking for proper
solutions.
The research objective is to highlight the manner in which the crisis caused changes in the
tourist behavior.
This paper is an exploratory research, based on the evolution in recent years of indicators
relevant to the investigation and seeks confirmation of the fact that 2009 was the peak year for tourism
crisis.

Key words: tourism, consumer behaviour, global economic crisis

JEL classification: D12, G01, L83

1. Introduction
Was the crisis predictable? Aside from World Conspiracy scenarios it can be concluded that
there were enough voices that warned about this danger. Were they taken into account, even as a
hypothesis? Apparently not! And this is perfectly demonstrated scientifically if we take into account
data from fields as psychology, sociology, anthropology and even simple observation of native
intelligence as crook Joseph Weil (1875-1976). In his memoirs Weil makes a fine irony, a perfect
psychological portrait of human nature: "The desire to get something for nothing was very expensive
for many people who had to do with me or with other crooks. But I found that this is how things
works. According to my estimation, the average person is 99% animal and 1% human. The animal
part triggers very few problems. But that 1% human leads to all disasters. When people will learn that
- although I doubt it - they can not win something out of nothing, crime will diminish and we will all
live in great harmony." (VerticalNews, 2012)
This brief reflection of Weil fits perfectly with the pre-crisis world situation and concisely
describes the socio-economic situation of Romania after 1989!
But the economic experts, the American ones, who had sophisticated and abundant forecast
models and economic databases, what have they predicted?
Here's what Charles R. Morris says in the introduction to the bestseller "The economic crisis
and its prophets": "Of the 102 separate forecasts made both for unemployment and the GDP, 101 were
wrong in the same direction. Note that the forecasts were made in late 2007 or early 2008, when the
credit collapse was already widely described in the press for months, and the government was taking
extraordinary measures to diminish the effects." (Morris, 2010)
How is it possible in a market economy in which there are economists and leading economic
institutes forecast, where the competition for winning clients depends on the quality of studies and
forecasting accuracy, to be wrong in such a degree? Moreover, as Ch. R. Morris claims: "They did not
understand what is happening, or had no idea about the overall effects of the phenomenon". The
explanation, in my opinion, lies in what Weil argued more than 30 years before. An economic
analysis is not complete and may not be accurate without enclosing socio-cultural knowledge
382

(psychology, anthropology, sociology, economic history). It turned out that a strictly quantitative
economic analysis, made with the best models by leading economic experts, can give errors, often
very expensive and unpredictable in amplitude, without taking into account other related items
pertaining to the mentioned.
The economic theory is based on two basic principles: 1) economic laws have demonstrated
long-term validity, 2) large number of rational economic agents (hypothesis). (Malia, M., Georgescu,
C., 2010) I would like to intervene in what Professor Lucian Liviu Albu, director of the Economic
Forecasting Institute of the Romanian Academy, claims in "Economy at a crossroads? But what about
economic science? ", part of the work " Romania after crisis: re-professionalization " by using the
word "hypothesis". In my opinion, the two principles outlined above were based on the assumption
that economic and decisional specialists, operating locally and worldwide, are rational. The crisis has
removed this assumption so there is a major requirement for changing the paradigm.
Were there voices that forecast this crisis? Yes, there were. We can be proud, as Romanian,
that among them was Anghel Rugina, renowned scientist in economics, Professor of Economics and
Finance from Northeastern University in Boston where he remained till the retirement, in 1986. By
the age of 95 years when he died in the U.S. (Dinu, C., 2008), the famous scientist visited Romania
several times after 1989 and in 1990 he spoke about the American economy that was, in his opinion,
on the brink. It took more than a decade and a half for the Romanians and the world to understand the
smoothness and solid documentation of the famous scientist Anghel Rugina.
Ch R. Morris presents us three other respected voices of the U.S. economic stage, Buffett,
Soros and Volcker who saw the current financial crisis and the devastating long term effects and that
shared their predictions to the world. Unfortunately nobody took their opinions into account, not even
the Wall Street finance specialists , or the U.S. authorities. (Morris, 2010) The same scenario
happened in Romania during 1990 to 2000, when scientist Anghel came to his native country and
proposed to the officials a well argued scientific plan for economic recovery, a plan that will be
implemented by one of American states after the economic crisis. The romanian scientist firmly
believed in an economic miracle possible in the Romania of those years, which was in a terrible crisis.
(Dan, C., 2005)
You can not help wondering how human nature has changed over this past 2000 years? Too
little, from the time when, a thousand years ago, the ambassador that brought bad news (even real and
justified) used to be decapitated and the one who brought good news was filled with gifts!

2. Which are the causes of the current crisis?
There are undoubtedly many causes for the crisis triggered in late 2007 and early 2008.
According to Soros, the recent credit crisis is "the end of 60 years big bubble about credit creation."
There are three "hidden causes" in Soros's view: 1) the silent commitment of central banks to absorb
the irretrievable debt of member banks dating from 1930; 2) the expansion of trade and the
globalization of financial markets and the willingness of the nations with emerging economies (often
obtained through persuasion) to maintain large dollar reserves, 3) U.S. tax regulators have virtually
abdicated after 1980. (Morris, 2010)
According to Professor Lucian Liviu Albu, this is "not the economists fault, although he
recognizes that some of the causes of the crisis "are not recognized by us, the economists". Two
forces have brought economic system in hazardous areas, in his opinion: the public opinion (often
manipulated) and the "natural" tendency towards populism of the politicians, to which we could add
the profit pursuit of economic agents, the pursuit for easy gains of employees (supported by trade
unions), for a rapid and excessive consumption, for increased material benefits for some. (Malita, M.,
Georgescu, C., 2010)
In my opinion there are the same causes that led to the disappearance of great empires, great
civilizations, causes that are reduced ultimately to what great con Wiel noted.

3. The current global crisis and international tourism
The crisis has reached clearly all the sectors of the society. Tourism, especially cultural
tourism, which is considered by UNESCO capable to solve many problems in developing countries
and not only, was also affected.
383

According to WTO data, the number of international arrivals grew from 435 million in 1990
to 675 in 2000 and 940 in 2010. Growth was stronger for emerging and developing countries, from
31% in 1990 to 47% in 2010.

Table 1: International tourist arrivals

International tourist arrivals
(million)
Shares of the market
(%)
Variation
(%)
2008 2009 2010* 2008 2009 2010 09/08 10*/09
Worldwide 917 882 940 100 100 100 -3.8 6.6
Advanced
economies
1
495 474 498 54.0 53.7 53.0 -4.3 5.1
Emerging
economies
1
421 408 442 46.0 46.3 47.0 -3.2 8.3
Source: (Data compiled by the author based on UNWTO, Tourism Highlights, 2011 Edition) * OMT June
2011
1
IMF classification

At the level of world tourism it is noted that the economic crisis made its presence felt in
2009. That year, the number of international tourist arrivals fell by 35 million from the previous year,
and in 2010 grew by 58 million, reaching 940 million, with 23 million more than the year before the
crisis.
According to the data on advanced economies, arrivals follow a similar trend, there is a
decrease of 21 million arrivals in 2009 compared to 2008, while growth in 2010 was 24 million
compared to 2009 and only 3 million compared to pre-crisis.
Emerging economies are experiencing a decline of 13 million arrivals in 2009 compared to
2008, 2010 registered a significant increase of 21 million compared to pre-crisis and 34 million
compared to 2009.
This is reflected also in the shares of the world market held by these economies. The
advanced economies are experiencing a constant loss of share of the world market since 2008 and the
shares of the emerging economies are growing constantly. (table no.1)
The 54% of the market held by advanced economies in 2008 (the year before the crisis) is
reduced to 53.7% in 2009 (the crisis year) and to 53.0% in 2010 (considered the year of recovery from
crisis). For emerging economies, the 46% percent in 2008 increases to 46.3% in 2009 and continues to
grow in 2010, reaching 47.0%.
This trend proves that emerging economies, although the number of arrivals decreased (13
million) in 2009 they have won slightly in market share (0.3%), this increase is maintained in 2010
(0.7% compared to 2009 and 1% compared with 2008). Overall losses were lower for emerging
economies compared to the advanced economies. Possible reasons can be the decrease in purchasing
power in advanced economies, that made the consumer of tourism products and services to focus
toward emerging markets because of lower tariffs. Also, this can represent an additional argument in
support for the opinion of different world organizations (UNWTO, World Bank, UNESCO, European
Commission) that tourism can be an engine of sustainable development, especially for emerging
countries. (table no 1)

Table 2: International tourism receipts

International tourism
receipts (billion)
Prices variation
constant (%)
2007 2008 2009 2010* 08/07 09/08 10*/09
Local currency
1.7 -5.6 4.7
384

Dollars 857 939 851 919 5.7 -9.1 6.2
Euro 626 639 610 693 -1.0 -4.8 11.8
Source: (UNWTO, Tourism Highlights, 2011 Edition) * OMT June 2011

In absolute numbers, receipts from international tourism emphasizes the crisis events because
we can see a decrease in revenue worth 851 US $ (610 euro) in comparison with the year previous to
the crisis - US $ 939 (639 euro) and in 2010there is an increase in revenues - US $ 919 (693 EUR).
(table no. 2)

Figure 1 : Inbound tourism 2008-2010*

Source: (UNWTO, Tourism Highlights, 2011 Edition)

In real terms, the decline in international tourism receipts was 5.6% in 2009 compared to
2008 and the increase in 2010 compared to 2009 was 4.7%, in 2008 the receipts were 1.7% compared
to 2007. (Figure 1)
The crisis effects on cultural tourism could be devastating. In Vilinius, the Capital of Culture
in 2009, the turnover for the sector was expected to increase by 15%, but the Lithuania deep recession
lowered this figure by 15%. However, the title of Cultural Capital allowed the Linz city to be the only
Austrian city that recorded that year a growth with 11.4 for the number of overnight stays. (Peter
Inkei, 2010)
According to a Eurobarometer survey, culture/religion is easily less-preferred as reason for
travel in the analyzed period (2008-2010).

Table 3: The major motivation for going on holiday in 2010
(%)
2008 2009 2010
Rest/recreation 36 37 36
Sun/beach 20 19 18
Vissting friends relatives 16 17 17
City trips 7 7 8
Culture/religion 7 6 8
Nature 6 6 7
Sports related 3 4 3
Wellness health treatment 3 3 3
DK/NA 1 1 1
Source: (Flash Eurobarometer, May 2011)

The data presented shows that a percentage of 7% of reasons to travel were cultural / religious
in 2008, in 2009 the percentage declined to 6%, in 2010 will increase to 8%.
In the motivations ranking, with 36% in 2008, is situated rest and recreation reason,
growing to 37% in 2009, and returning in 2010 to 36%. Among the travel reasons that grew in 2009
there were Visits to friends - 17% in 2009, compared to 16% in 2008 and Sports - 4% in 2009
compared to 3% in 2008. (table no. 3)

Arrivals(million)
International Tourism
Receipts(US$billion)
385

Figure 2 The major motivation for going on holiday in 2010 (%)

Source: (Flash Eurobarometer, May 2011)

Figure 2 shows that three motivations for travelling have increased in percentage in 2009 -
rest/recreation (37% in 2009 versus 36% in 2008), visiting friends (16% in 2008 to 17% in 2009),
sports-related (3% in 2008 and 4% in 2009). Other three motivations recorded in 2009 the same
percentage as previous year - city trips (7% in 2008 and still 7% in 2009, increasing to 8% in 2010),
nature (6% in 2008, 6% in 2009 increasing with one percent in 2010), wellness health treatment (3%
in all three years analyzed), the remaining two reasons dropped in percent in 2009 increasing slightly
in 2010.
In conclusion, the analysis of motivations for going in holiday is not relevant for studying the
evolution of the crisis. (Figure 2)

4. Analysis of tourism behaviour and its dimensions
By using the statistical analysis of population income and expenditure indicators, the
expenditures components relevant for tourism, and also tourism indicators we aim to identify those
changes in tourist behavior that occurred along with the emergence of the global economic crisis.
The comparative study between the evolution of indicators average gross nominal monthly
earnings and total household expenditure in the analyzed period show us the remarkable low
growth rate starting 2009, and continuing throughout the 2009 to 2011.
Average gross nominal monthly earnings growth has suffered a significant reduction in the
period 2009 - 2011 compared to the period 2001 - 2008, from an average of 22% to an average of
4.6% over the past three years, as can be observed in table no. 4. In 2009, 2010 and 2011 the average
gross nominal monthly earnings increased by only 4.77, 3.08 and 5.94 percentage points compared to
previous years.

Table 4: Average gross nominal monthly earnings, Romania (lei/ employee)
Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Average
gross
nominal
monthly
earnings
(lei/employee)
422 532 664 818 968 1146 1396 1761 1845 1902 2015
Growth rate
(%)
- 26.06 24.81 23.19 18.33 18.38 21.81 26.14 4.77 3.08 5.94
Source: (National Institute of Statistics, http://www.insse.ro/cms/files/statistici/comunicate/abf)
2010
2009
2008
386

Total expenditure of households have experienced a similar evolution: between 2001 - 2008
an average increase of 20.8 percentage points (with a minimum growth rate in 2005 - 9.5%), and a
significantly reduced growth rate in 2008 2011 period (with a minimum growth rate in 2010 of only
0.8%). (table no. 5)

Table 5: Total expenditure of household, Romania (lei/ employee)
Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total
expenditure
of household
(lei/employee)
516.5 651.7 781.5 1050 1150 1304.7 1542 1915.3 2047.3 2063 2184
Growth rate
(%)
- 26.2 20 34.4 9.5 13.5 18.2 24.2 6.9 0.8 5.9
Source: (National Institute of Statistics, http://www.insse.ro/cms/files/statistici/comunicate/abf)

In Figure 3 we can see the similar evolution of the two indicators analyzed - with lower
growth in 2005 and a low growth rate during 2009 to 2011. Year 2010 is characterized in both cases
by the lowest growth rate (3.08%, 0.8%).

Figure 3: The comparative evolution of the two indicators , 2001 - 2011

Source: (Data from the National Institute of Statistics, http://www.insse.ro/cms/files/statistici/comunicate/abf)

The population expenses that are found in "Hotels and restaurants" category have known
during 2004 - 2008 a high growth rate, with an annual average of approximately 29%. In 2008 we
observe a significant decrease in the annual growth rate, which is only 10%, so that in 2009 to fall by
22.6 percentage points, reaching a value slightly higher than that of 2006. (table no. 6)

Table 6: Structure of total consumption expenditure of households Hotels and restaurants, Romania
Year 2002 2003 2004 2005 2006 2007 2008 2009
Final consumption expenditure
of households (euro per
inhabitant)
1500 1600 1900 2500 3100 3800 4100 3300
Hotels and restaurants (%) 4.3 3.9 4 5.2 5.2 5.1 5.2 5
Hotels and restaurants (euro) 64.5 62.4 76 130 161.2 193.8 213.2 165
Growth rate (%) - - 3.26 21.8 71 24 20.2 10 - 22.6
Source: (Eurostat, http://epp.eurostat.ec.europa.eu)

Recreation and culture expenditures decrease slightly in 2003 (- 2%), to grow from 2003 to
2008 and reached a peak in 2008, of 209.1 euro per inhabitant. In 2009 there is a similar situation to
the Hotels and restaurants indicator, when the expenditure volume decreased by 22.7 percentage
points and reached a value of 161.7 euro spent per inhabitant (table no. 7)

0
500
1000
1500
2000
2500
2001 2003 2005 2007 2009 2011
Average gross nominal monthly
earnings
Total expenditure of household
387

Table 7: Structure of total consumption expenditure of households Recreation and culture, Romania
Anul 2002 2003 2004 2005 2006 2007 2008 2009
Final consumption expenditure
of households (euro per
inhabitant)
1500 1600 1900 2500 3100 3800 4100 3300
Recreation and culture (%) 4.9 4.5 4.3 3.9 4.7 4.9 5.1 4.9
Recreation and culture (euro) 73.5 72 81.7 97.5 145.7 186.2 209.1 161.7
Growth rate (%) - - 2 13.5 19.3 49.4 27.8 12.3 - 22.7

In Figure 4 we can see the evolution of the two categories of expenditure analyzed. If in the
2002 2004 period expenditure on recreation and culture overcame those generated by hotels and
restaurants, 2005 brings a change in the hierarchy. During 2005 - 2011 spending for hotels and
restaurants will be higher than those generated by recreation and culture. Year 2009 brings for both
expenditure categories a sharp decline (by 22.6% and 22.7 %).

Figure 4: Structure of total consumption expenditure of households, 2002-2009 (euro/inhabitant)


If in Romania, 2009 was the year of decline for tourists expenditures, for the two categories of
consumption (Restaurants & Hotels and Recreation & Culture), 2008 is the beginning of the decrease
for EU. If in 2003 - 2007 values keep rising, with insignificant fluctuations of 0.1 or 0.2 percentage
point, in 2008, these values decrease, reaching minimum levels in 2009, increasing slightly in 2010.
(table no. 8)

Table 8: Household consumption by consumption categories for European Union (27 countries)
Year 2002 2003 2004 2005 2006 2007 2008 2009 2010
Final
consumption
expenditure of
households
(euro/inhabitant)
11700 11800 12300 12800 13400 14000 14000 13300 13900
Restaurants and
hotels (%)
9.5 9.4 9.5 9.3 9.3 9.3 9.1 9.0 8.9
Recreation and
Culture (%)
8.8 8.7 8.7 8.7 8.7 8.8 8.6 8.5 8.5
Restaurants and
hotels
(euro/inhabitant)
1111.5 1109.2 1168.5 1190.4 1246.2 1302 1274 1197 1237.1
Recreation and
Culture
(euro/inhabitant)
1029.6 1026.6 1070.1 1113.6 1165.8 1232 1204 1130.5 1181.5
Source: (Eurostat 2011, http://epp.eurostat.ec.europa.eu)
0
50
100
150
200
250
2002 2003 2004 2005 2006 2007 2008 2009
Hotels and restaurant
Recreation and
culture
388

In Figure 5 we can see the similar evolution of the two categories of consumption.

Figure 5: Evolution of Restaurants & Hotels and Recreation & Culture consumption categories, EU,
2002 2010
Source: (Eurostat 2011, http://epp.eurostat.ec.europa.eu)

For both arrivals and night spent in collective accommodation establishments 2009 was a year
of decline.
Tourist arrivals has an increasing evolution in 2004 - 2008, with a peak of 7.125 million
people in 2008, to fall by 13.8 percentage points in 2009. The decrease in the number of arrivals
continues in 2010, reaching 6 million tourists.
The night spent indicator experience a similar evolution: an increase during 2004 - 2008, in
2009 is decreasing to 17.325 million tourists, to reach 16 million tourists in 2010, the minimum figure
registered throughout the period analyzed.
For both indicators we can observe the decreasing evolution in 2008 - 2010, 2009
representing the first year of decline, year associated with the beginning of economic crisis in our
country. (table no 9).

Table 9: Tourist arrivals, nights spent in collective accommodation establishments and average length of
holiday, 2004 - 2010
Year 2004 2005 2006 2007 2008 2009 2010
Arrivals
(million
tourists)
5.639 5.805 6.216 6.972 7.125 6.141 6.072
Nights spent
(million)
18.501 18.373 18.992 20.593 20.725 17.325 16.051
Average
length of
holiday
(day/tourist)
3.28 3.16 3.05 2.95 2.9 2.82 2.64
Source: (National Institute of Statistics, https://statistici.insse.ro)

The average length of holiday is a very important indicator for tourism activity, calculated
using tourist arrivals and nights spent indicators. In Romania, the average length of holiday in 2004 -
2010 has been continuously decreasing from 3.28 days / tourist in 2004 to 2.64 days / tourist in 2010.
(Figure no. 6).
The decrease in the average length of holiday may very well be an effect of the economic
crisis, tourists opting for shorter vacations.

0
200
400
600
800
1000
1200
1400
2002 2003 2004 2005 2006 2007 2008 2009 2010
Restaurants & Hotels
Recreation & Culture
389

Figure 6: Evolution of the average length of holiday in 2004 - 2010
Source: (Calculations according to data released by the National Institute of Statistics,
https://statistici.insse.ro)

The tourism intensity evolution for Romania is similar to the one of other indicators
analyzed an increase from 2005 to 2008, to decrease in 2009 by 16.3 percentage points.
Year 2010 brings a drop of 7.2%. For European Union, tourism intensity decreases starting
2008, from 4671 to 4691 nights/1000 inhabitants to reach 4470 nopti/1000 inhabitants in
2009. (table no 10)

Table 10.:Tourism intensity ( total number of nights spent per 1000 inhabitants)
Year 2004 2005 2006 2007 2008 2009 2010
European
Union ( 27
countries)
4398 4579 4672 4671 4619 4470 -
Romania 852 848 879 955 963 806 748
Source: (Eurostat, http://epp.eurostat.ec.europa.eu/portal/page/portal/tourism/data/database)

5. Conclusions
Consumer behavior is a component of the economic behavior of people, which is a
manifestation of human behavior in general. It reflects human behavior when purchasing and
consumption of material goods and services. (Catoiu, Teodorescu, 2004). In an attempt to define the
behavior of tourism products and services consumer, we can say that it represents all acts, attitudes
and decisions the consumer make regarding the use of his income to buy travel products and services.
In analyzing how the global economic crisis has affected the tourism industry in general, and
Romanian tourism, in particular, studying the changes occurred in the behavior of the tourist is of
great importance to specialists in the field. Such a study can highlight the needs and desires of today's
tourists and can draw lines for implementing programs and projects that can be the solution to the
current situation of tourism.
Even if fulfilling basic needs has priority, in periods of economic crisis people continue to
travel, but the consumer behavior is different from periods of economic abundance. Due to the
recession, people will be using limited income to satisfy basic needs firstly and will use the surplus to
cover more elevated needs, like traveling, and for saving.
In the UNWTO, Tourism Highlights, 2011 Edition it is mentioned the fact that the recovery in
international receipts lags that of international arrivals. This is typical in periods of recovery when,
following major shocks, volume (arrivals) tends to recover faster than income (receipts), as
competition is tougher and suppliers make serious efforts to contain prices, with tourists also tending
to travel closer to home and for shorter periods of time.
Therefore, as a conclusion of the analysis performed, there are a few features of the tourist
during economic crisis times that can be traced:
- Tourists are taking fewer vacations, shorter and closer to home;
- They are more sensitive to prices offered by travel agencies and other travel service
0
0.5
1
1.5
2
2.5
3
3.5
2004 2005 2006 2007 2008 2009 2010
Average length of holiday
390

providers;
- They are much more attentive when they spend money on vacations;
- The amount spent per person on vacation is lower;
- Giving up two holidays per year (one summer and one winter) in favor of only one vacation;
- The average length of holiday is shorter;
- Opting for packages such as city-breaks, of 2-3 days, including weekends;
- Destinations that offer a good quality price ratio and favorable exchange rates have an
advantage since the price is a critical decision factor;
- The decrease in the number of holiday days and the receipts will be more pronounced than the
decrease in the number of arrivals;
Our recommendations to stimulate tourism demand are adopting strategies to increase,
diversify and personalize the offer. In this sense it can be made an in-depth research into studies and
surveys conducted by institutions with financial power such as Flash Eurobarometer.
Widening the circle of customers is an essential condition for a global market and an
intensifying competition, especially in periods of recession.
The promotion of products, in parallel with research and analysis of consumer preferences is
often vital. In this sense one could give an example of Romania where the promotion of agricultural
and natural food and agro-tourist pensions have not received a specific promotion and their number
decreased according to statistics. Knowing that their financial strength is small we can create a
promotion program conducted by institutions and government agencies by maybe charging a modest
fee, if the program is successful and their business turnover increases.
In this sens, Tigu G. says: Romania has a huge tourism potential, but the promoting
campaigns never produced the desired effects and they lacked coherence and continuity.

6. References
- Catoiu, I.; Teodorescu, N. (2004), Comportamentul consumatorului, Editura Uranus,
Bucuresti
- Constantin, D. (16 septembrie 2005), Secretul lui Anghel Rugina, Saptamana Financiara
online, http://www.sfin.ro/articol_2543/secretul_lui_anghel_rugina.html
- Dinu, C. (15 decembrie 2008), A murit celebrul economist Anghel Rugina, HotNews.ro,
http://www.hotnews.ro/stiri-esential-5256278-murit-celebrul-economist-anghel-rugina.htm
- Inkei, P. (2010), Efectele crizei economice in cultura, Confrence 2010 CultureWatchEurope,
http://www.coe.int/t/dg4/cultureheritage/cwe/Effets_Inkei_FR.pdf
- Malia, M., Georgescu, C., coord. (2010), Romnia dup criz: reprofesionalizarea, ed.
Compania, Bucureti
- Morris, R., Charles (2010), Criza economic i profeii ei, trad. Graal Soft., Litera
Internaional, Bucureti
- Gabriela Tigu (2012), New Challenges for Tourism Destination Management in Romania,
Strategies for Tourism Industry - Micro and Macro Perspectives, Dr. Murat Kasimoglu (Ed.),
ISBN:978-953-51-0566-4, InTech, Available from:
http://www.intechopen.com/books/strategies-for-tourism-industry-micro-and-macro-
perspectives/new-challenges-for-tourism-destination-management-in-romania
- UNWTO, Tourism Highlights, 2011 Edition
Available at: http://mkt.unwto.org/sites/all/files/docpdf/unwtohighlights11enhr_3.pdf
- National Institute of Statistics, http://www.insse.ro/cms/files/statistici/comunicate/abf
- National Institute of Statistics, https://statistici.insse.ro
- Eurostat, http://epp.eurostat.ec.europa.eu
- Flash Eurobarometer (13 may 2011),
- Available at: http://ec.europa.eu/public_opinion/flash/fl_328_en.pdf
- VerticalNews (12 ian. 2012), Cei mai mari escroci din istorie, , http://verticalnews.ro/cei-
mai-mari-escroci-din-istorie/
391

THE ECONOMIC AND SOCIAL IMPACT OF TOURISM

MI LEA Oana Maria
Lecturer, Ph.D,.Faculty of Tourism and Commercial Management, Dimitrie Cantemir Christian University,
Bucharest, Romania, oanamaria_rezeanu@yahoo.com,

NEDEA Petronela-Sonia
Lecturer, Ph.D, Faculty of Tourism and Commercial Management, Dimitrie Cantemir Christian University,
Bucharest, Romania, petronela844@mail.com,

PASCU Emilia
Lecturer, Ph.D, Faculty of Tourism and Commercial Management, Dimitrie Cantemir Christian University,
Bucharest, Romania, pascu.emilia@ucdc.ro

Abstract: Tourism is an economic activity which has highly developed nowadays. Its spectacular
dynamics represents a characteristic feature, especially in the last decades economic and social impact.
This development has determined various economical effects as a result of a high volume of investments
used for creating the specific material base and for developing an important sector of complementary services.
From a psychological and social point of view, thanks to the solutions it offers when it comes to free time
spending, it maintains the modern human beings biological and physiological balance, the development of his
personality and creativity.

Key words: economic impact, social impact, tourism, economic growth

JEL classification: E

1. Introduction
The economic efficiency expresses the quality of the economical activity when it comes to
using the enterprise production factors in a rational manner, being a fundamental request which has to
permanently adjust the economical and financial decisions and the actions of economic agents.
Therefore, any economic activity is based on three economic principles: the principle of rationality,
the efficiency and optimization principle and the ecological principle. The most important principle is
the rationality principle and it implies the fact that economic agents should reach their goal with a
minimum of effort. Realizing a rational economic activity is constricted because of the fact that
resources are limited in comparison to unlimited needs. This is the reason why rationality in the
domain of economical activities takes the shape of economical efficiency: minimum effort,
maximum of effectiveness. Under these circumstances, in order to develop and compete under
competition circumstances, economical agents must develop a rentable activity which would bring
favorable economical results.

2. The Economical Impact of Tourism
The priority of its efficiency is due to the economic agents double preoccupation: that of facing
the increasing individual and collective needs of ameliorating the life standards and that of facing in
optimal conditions the imperfect competition, under its various forms, intensity levels and
development tools, both internally and international (Ciucur D., Gavril I., Popescu C., 2001).
According to production factors which determine various effects, economic efficiency is
composed by: work productivity, capital productivity, soil productivity etc.
Employees productivity is a very important component of efficiency of any services supply
firm and it is measured by means of the services realized by an employee. Keeping constant all the
other elements, a company which has a high employees productivity would normally have an
advantage thanks to the production cost. An important issue in this case is identifying the alternatives
used in order to increase productivity, hence the companys economic efficiency.
Under the circumstances in which resources are limited in comparison to unlimited needs, the
methods used by an organization to reduce costs, to increase productivity factors or to improve the
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quality of services represent actual ways of increasing economic efficiency. Therefore, efficiency
equals a rational management of raw materials, energy, workforce, capital etc. in order to increase
services production.
The efficiency of economic agents is given by the method of providing the offer on the market
and it depends on the relationship between market requests and offers.
However, in order to ameliorate the efficiency and obtain performance, at the same time, the
methods which are more likely to be used are those which obtain and offer a variety of qualitatively
superior services, permanently renew the services offer and are interested in the clients needs
(Zaharia M., 2005).
Quality products are those products which respond in a very good manner to the need that they
have been created for, corresponding to the specifications on which they have been constructed. The
impact of superior quality of products over the competitive advantage is huge: on the one hand, thanks
to their superior quality, products become more valuable in the consumers eyes, allowing the
companies which provide them to increase the price and, on the other hand, it leads to a high
efficiency combined with low costs per product.
A qualitatively superior product is a way of assuring profitability, as it guarantees a higher
stability when it comes to prices under the circumstances of a growing competition. At the same time,
a quality service represents a source of satisfaction as it builds a culture in that company (Andras D.
M., 2005).
Services efficiency is materialized in a series of effects which can be synthesized in the
following manner (Zaharia M., 2005):
Direct effects which are associated to each of the activitys features or production factor;
Indirect effects which determine the positive or negative influence of the economic activity;
Mediate effects which are determined by consumers contribution and involvement.
Although it is hard to assess the efficiency of services providing activity because of the
immaterial features of services, all microeconomic and macroeconomic decisions must be funded on
the analysis of the registered results.
The last two decades spectacular evolution of tourism transformed it into an inherent
dimension of nowadays life (Ionescu I., 2003), being considered the most dynamic and complex
phenomenon of our era. This fact is due to the variety of effects generated by tourism, from
stimulating the economic growth to ameliorating the social structure, or from valorizing the material
and natural resources in a superior manner to improving life conditions (Minciu R., 2004).
According to the studies made by the World Tourism Organization, the effects of tourism can
be categorized in the following manner (Minciu R., 2004):
The effects on the global development strategy belonging to a country (region) or global
effects;
Partial effects on national economy, or on agents, sectors, variables and fundamental
macro-dimensions of economy;
External effects in the social-cultural, physical and human resources domain, with indirect
economic results.

2.1. The Importance of Tourism in the Growth of the Gross Domestic Product
Because its specific features, tourism is based on combining a variety of actions which are
used for satisfying different needs manifested in the course of the sojourn. As a result, the touristic
sojourn is based on requesting and consuming specific goods and services: from informing and
trading the product to assuring its transportation, the accommodation and alimentation, reaching those
elements destined to respond the basic motivation of the sojourn: recreation, balneary treatment,
congress or conferences participation etc.
The diversity of the activities incorporated in the content of the tourism product, as well as the
presence of some of them in the structures of other national economys branches are based on the
direct or indirect/permanent or periodical implication of all national economys components in its
development.
Consequently, the development of the tourism product is based on the collaboration of a large
number of economic agents coming from various activity fields. When perceived through the lenses
393

of its content and in correlation to the assembly of national economy, tourism acts as a stimulator of
the entire global economic system and it can be considered as a motor of economic growth.
Therefore, the arrangements of general and tourism infrastructure (road network, airports,
railways, the network of water supply units, electric energy supply units, thermal energy supply units,
territorial arrangement works, balneary treatment units etc.), also implies the construction materials
industry, the construction industry, wood and furniture industry, glass and ceramics industry,
chemical industry, clothing industry etc. as well as those elements which sponsor them: banks,
financial corporations. At the same time, another important role is played by the development of
agriculture and alimentary industry which provide agro-alimentary products, beverages, the
development of industrial fields which produce the products requested by tourists: light industry and
adjacent branches, as well as the trade field: the development of the trade and alimentation units
network which want to satisfy the clients requests for merchandise, and the development of the
cultural-artistic fields (cinemas, theatres and other art institutions: museums, exhibits) and of those
which organize sports events popular among tourists.
As a result, this implies the incorporation in the content of the tourism product/tourism service
providing/tourism industry of a multitude of activities, some of them present in the structure of other
branches of economy. This phenomenon gives tourism the character of an interference and synthesis
branch, and the tourism product is the combined result of other branches belonging to national
economy (Istrate I., Bran F., Rosu A.G., 1995). This determines the magnitude and complexity of the
relationships between tourism and other branches of economy. These relationships manifest
themselves directly or indirectly, on a permanent or periodical basis, horizontally or vertically.
The stimulating and effects of tourism inside the national economy are materialized in the form
of a significant production efficiency which is a result of both the tourism industrys production and
that of the branches which directly or indirectly contribute to the development of the tourism product.
These effects illustrate the importance that the internal and international tourism has in creating
the world gross product.

2.2. Tourism Multiplying Effect
Given the existing interactions at the level of economy, between tourism and the other branches
which participate directly or indirectly to the creation of the tourism product, the analysts in this field
have underlined the fact that when measuring the total economic impact of a volume determined by
tourism costs, there are three elements which contribute to this phenomenon (Snak O, Baron P.,
Neacu N., 2001):
The direct impact which measure the effects of the first round of the monetary circuit
coming from the tourist, as well as the expenses made by tourists in order to purchase goods
and services in hotels, restaurants, stores etc.
The indirect impact which measures the derived effects of the additional rounds caused by
the recirculation of the tourists initial monetary unit. These are the results of successive
transactions, determined by direct tourism expenses, which are the result of the interaction
between economic agents and tourism services providers: hotels, restaurants, stores, in
order to develop a specific activity; for instance, for buying goods and services by
companies belonging to other sectors which contributed to providing raw materials to that
specific restaurant, in order to satisfy the clients necessities and answer his requests.
The induced impact (stimulated impact) measures the derived effects caused by the
expenses made by tourism companies employees; they use a part of their salary to purchase
goods from other activity fields: for example, purchasing clothing or alimentary products
from the local trade network. In their turn, those trade units owners and employees spend a
part of their salary in order to buy other goods and services in the region in which they live
and work.
In this case, the total economic impact equals the effects of the direct impact + the indirect
impact + the stimulated impact of the tourists expenses.
From a methodological point of view, the assessment of the multiplying effect represents a
synthesis of evaluating the economical impact of tourism development which can be realized at a
national, regional or local level (Neacu N., 1999).
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The economic utility of this analysis tool comes from the fact that the size of the multiplier
reflects the impact of various successive rounds of circulation of new monetary units until this
monetary unit would reach other economic fields and then disappear completely from the circulation
of that area.
After analyzing tourisms positive economic effect on the national or regional economic
development we notice the fact that it manifests under multiple forms. The consequence is the
acknowledgement of at least three important multiplying effects (Neagu V., 2000):
The multiplying effect of tourism
The multiplying effect of tourism investment
The multiplying effect of external trade
In what regards the multiplying effect of tourism, it can be said that it states: the incidence of a
monetary expense unit of the tourist from the perspective of creating new incomes.
From the point of view of economy, the tourist is a consumer of goods and services. In order to
purchase them, the tourist spends money. The amount of money paid by tourists for accommodation,
alimentation, transport etc. can be perceived, in fact, as incomes of those companies or specialized
units which provided the services and there are used as it follows: a part is used in order to satisfy the
requirements of services providers alimentary and non-alimentary products, energy, various
services, another part is directed towards the state or local budget in order to pay the debts (Value
Added Tax, other taxes) and the third part is represented by profits and monetary funds used to pay
workers and share holders, for new investments etc.
Consequently, tourism multiplier underlines the fact that an initial cost undertaken by the tourist
at the place of his destination/vacation stimulates the regional economy, not only once, but repeatedly.
Therefore, the higher the number of hands holding these amounts of money, the more favorable the
repercussions on the gross national product.

3. Social Implications of Tourism Services Quality
The services system is above the production system, because services are based on technical
and human features, the latter being more difficult to quantify or measure. The control of the services
quality is much more difficult to realize than that of products because of some major differences
between the quality features which are assessed and measured (Bloiu, V., Dobnd, E., Snak,
O.,2003).
In the case of services, quantifying the social efficiency is a much more complex process than
in the case of material goods, as this type of efficiency is perceived at the level of the provided service
quality. The consumers assess not only the product, as a result of a productive activity, but the entire
process of which are an important part themselves, in a higher or lower degree. In the case of
services, the process of assessing the efficiency implies analyzing the manner in which the company
develops its activity, the productivity of the production factors. The process implies an internal
efficiency assessment of the company (Cetin, I., Brandabur, R., Constantinescu, M.,, 2006).
Besides its economical effects, tourism offers at a social dimension access to the societys
spiritual patrimony, enabling the exchange of ideas and contributing to the individuals intellectual
development. Moreover, tourism development has important effects on urbanization, constructions,
roads, public services (Geamnu, C., 2004).
Tourism amplifies the social changes which are the result of economic and communication
development. Tourism personalizes, materializes, and assures the presence of culture and society by
means of its image.
Tourism revalorizes local cultural elements like dance, music, monuments, landscapes,
gastronomy etc.
From a social point of view, tourism has both positive and negative effects.
The positive effects of tourism activity regard: the differentiation of the social structure by
means of: moving work from the agricultural domain to the services industry; developing artisanal
production; modernizing the family; enlarging the tourists perspective, living as a tourist; travelling
is a cultural form of its own, and it belongs to the globalization phenomenon. The tourism journey can
contain an element on mental hygiene: the one who travels takes his problem with him, but he gets the
chance to forget them for a period of time (Ionescu, I., 2003).
395

Among the negative effects of tourism activity we notice: the unequal growth of incomes, high
profit opportunities without perfecting the activity; social pathology phenomena (prostitution, drugs,
delinquency etc.)
The social impact manifests according to the influence that tourism has on the traditional way
of living in a specific area and on enlarging the spiritual and professional horizon. In a moment when
the social-economic way of life tends to get generalized and uniformed and preserving national
authentic elements will be an important process of the settlements located in tourism areas.
When perceived from a social point of view, the process of valorizing a tourism areas natural
and cultural patrimony has both positive and negative effects:
The positive impact is exemplified by the following aspects:
The growth of social and professional opportunities by means of creation new workplaces in
tourism services and general infrastructure;
Creating new seasonal workplaces especially for youth (pupils, students etc.) and women;
Assuring and developing the social progress, then the processes of cleaning and hygiene, or
the general comfort in tourism locations;
Decreasing the differences of social-professional categories in what regards the incomes;
Developing understanding and tolerance systems, because the intercultural exchanges
between tourists and hosts facilitate the disappearance of linguistic, social, racial, religious or
cultural boundaries.
The negative impact can be materialized by means of:
Perturbing and gradually destroying the traditional way of life inside social structures;
Local populations accept of negative influences on a social scale;
For rural population, the development in time and space of tourism activities can lead to
ignoring the traditional way of life or occupations (pastoral, forestry, handicraft and light
industry etc.) in favor of other tourism activities and services which bring higher incomes.
The commensuration and analysis of tourisms social efficiency are based on two premises:
defining the assessment criteria and establishing the system of social efficiency indicators.
The criteria used in order to assess tourisms social efficiency is represented by the tourists
personal satisfaction, the contribution to health care and recreating the workforce, increasing the level
of professionalism, environment protection etc. and it had been mentioned in the scientific literature
(Neagu, V., 2000). These criteria combine general and individual interests.
It is difficult to realize the second premise because of the preponderance of the qualitative
element. The assessment of tourisms social effects can be realized by means of surveys or
questionnaires, but the answers are subjective.
The social effects of services materialize in the degree of satisfying the consumers needs, in
the qualitative level that they can assure and which is an important factor of economic development,
progress and civilization.
The level of serving the tourists is a complex parameter. In order to analyze it, we should take
into account a series of aspects regarding: the ambience in alimentation, accommodation, recreation
and treatment units, the tourism personnels attitude, the possibilities of purchasing the products
required by tourists, the diversification of tourism services etc.
The relationship between the services efficiency and quality is to be mentioned in the context
of approaching a series of particular characteristics of efficiency in this domain. As the optimization
of the relationship between quality and efficiency in the services domain guarantees the development
of an activity in accordance to consumers exigencies and markets requests, it represents the key
element of success in the case of services enterprises.
The optimization of the quality-efficiency relationship is important because of the following
aspects:
The activities which support the quality of services are advantageous for services companies
because they generate lower costs of production and a higher market share, which can be
noticed in an increase of sales. This is due to the fact that clients perceive a higher quality of
the provided services.
The reputation given by providing high quality services creates a positive image of the
company, which therefore benefits of various advantages: the opportunity of employing
396

valuable people, increasing the number of activities they usually provide, gaining credibility
in front of financial institutions etc.
A short analysis of the relationship between quality improvement and the results obtained by a
services company leads to the following conclusion: internally, a higher quality determines the
increase of productivity and the decrease of production costs and externally, it increases the clients
satisfaction and provides the opportunity of increasing the prices, leading to a growth in what regards
the market share and, eventually, quality improvement leads to higher profits (Cetin, I., Brandabur,
R., Constantinescu, M.,, 2006).
Starting from the premise that most models of evaluating social efficiency in the services
domain are based on assessing the quality or on comparing the requested service and the received one,
we can say that the clients satisfaction level regarding the service will represent a highly important
component of measuring social efficiency. It can be established a reciprocal interdependency
relationship between the two notions: the clients satisfaction level is the result of the provided
services quality and a high quality is reflected in consumers satisfaction.
If we consider quality to be the ability of a company to satisfy the clients exigencies, then we
could say that the qualitative level of services equals the level perceived by the final consumer. The
clients satisfaction degree, on the one hand, and the quality of the service, on the other hand, could be
determined as a relationship between the requested level of quality and the one received. Therefore,
any value which is lower than 100% equals a low satisfaction degree.
It becomes obvious the fact that achieving the requested satisfaction level mainly depends on
knowing the clients needs and expectations. It is a known fact that a need appears when there exists a
difference between the real state and the desired one. In order to identify the clients needs, it is
necessary for the services provider to communicate with the clients, to put himself in the position of a
client, to actively study the market as the majority of clients (85% of them) do not communicate their
entire opinion, to analyze the causes which could lead to the negative process of losing clients.
Moreover, the supplier must assess the service from his point of view, as well as from the clients
perspective and he must take into account the general interest (Minciu, R., 2004).
According to the differences between the clients expectations and the opinions of services
providers, the following measures would be taken: maintain the standards (when the differences are
unimportant), immediate corrections, the intensification of researches in order to clarify a certain
situation (for example, an apparent lack of satisfaction in the case of the consumer).

4. References
- Andras D. M.,( 2005), The Management of Total Quality in Tourism Services , Mirton
Publishing House, Timioara;
- Bloiu, V., Dobnd, E., Snak, O., ( 2003), Tourism Products and Services Quality
Management, Orizonturi Universitare Publishing House, Timioara;
- Cetin, I., Brandabur, R., Constantinescu, M., ( 2006), Services Marketing, Uranus
- Ciucur D., Gavril I., Popescu C., ( 2001), Economy, second edition, Economical Publishing
House, Bucharest;
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- Minciu R., ( 2004), Tourism Economy, third edition, Uranus Publishing House, Bucharest;
- Neacu N., ( 1999), Tourism and Durable Development, Expert Publishing House,
Bucharest;
- Neagu V., ( 2000), Services and Tourism, Expert Publishing House, Bucharest;
- Snak O, Baron P., Neacu N., ( 2001), Tourism Economy, Expert Publishing House,
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- Zaharia M., ( 2005), Services Economy, the University Publishing House, Bucharest.
397

CONSUMER BEHAVIOUR: DOES HISTORY MATTER?

MORARU Andreea Daniela
Teaching Assistant / Ph.D., Faculty of Economic Sciences, "Ovidius" University of Constanta, Romania,
amoraru@univ-ovidius.ro

J UGANARU I on-Danut
Associate Professor / Ph.D., Faculty of Economic Sciences, "Ovidius" University of Constanta, Romania,
juganarudan@yahoo.ro

Abstract: The economic crisis and its obvious effects are moulding consumer behaviour and offer the
framework for reshaping consumption patterns. However, confronted with budget changes it is natural to
assume that consumers might be reluctant to immediately recast their consumption patterns. Their reluctance
can be related to the notion of hysteresis which is used by economists to describe the persistent influence of past
economic events. The paper aims at presenting the notion of hysteresis, briefly reviewing its application to
economics and especially consumer behaviour, given the vast possibilities for empirical testing offered by the
present context.

Key words: consumer behaviour, hysteresis, persistence, habits

JEL classification: A12, D11

1. Introduction
The world economy is affected by the global crisis which has left its mark on the lives of
consumers almost in all markets of the world. The obvious effects and their constant mediatisation
emphasize the impact of the crisis and add to the already installed state of uncertainty. The current
context shaped by the economic crisis is remodelling mentalities and re-lays the foundation for a new
conceptual model of determinants of consumer behaviour- more conscious, more rational, and more
attentive. However, it seems rather improbable for consumers to abandon their consumption patterns
immediately once confronted with budgetary restrictions. In other words, it is only natural to assume
that the consumers would try to stick to their consumption patterns, following a budget decrease. This
influence of the past on present behaviour relates to the notion of hysteresis, which originated in the
field of ferromagnetism where it was employed to describe the persistence of a temporary influence in
a particular system. Subsequently, the term hysteresis was applied to a variety of domains,
including economics.
In economics, the term is used to describe the persistent influence of past economic events
and the reference to the influence of memory effects on the functioning of economic system is
considered to represent a significant advance in economic thought. Moreover, it is credited with
potential to narrow the gap between economic modelling and economic reality (Cross, 2009).
The paper is therefore an attempt to revisit the notion of hysteresis and to briefly review its
application to the field of economics and especially to the theory of consumer behaviour, bearing in
mind the very generous terrain offered by the current context of the economic crisis for empirical
testing of hysteresis effects.

2. Brief account on Hysteresis in the Field of Economics
The term hysteresis derived from the Greek word hysterein meaning that which comes
later and was used for the first time by the physicist James Alfred Ewing (Ewing, 1881) in the 19
th

century to describe the persistent effects of the temporary exposure of ferric metals to magnetic fields.
The irreversibility coined as hysteresis can be explained as follows if the initially unmagnetized
probe is magnetized until it reaches saturation and then the magnetic field is dropped to zero, the
ferromagnetic material retains magnetization. Therefore the ferromagnetic materials is of history
dependent nature - once the material has reached the saturation point due to the magnetizing field
applied, the magnetizing field can be reduced to zero and the material will retain an important degree
398

of magnetization. In other words, the hysteresis loop shows that the ferromagnetic material
remembers its past. In order to drive the magnetization to zero again, the magnetic field must be
reversed and increased. It then reaches the saturation point in opposite direction.
Easy to assimilate at an intuitive level, the persistent influence of past events in different areas
of economy was noticed and rather extensively discussed in the dedicated literature.
But although the notion was certainly present previously, the term hysteresis per se was
only seldom used in economic literature before the 1980s (Cross, 1993).
Nicholas Georgescu-Roegen has used the term consistently since 1950 (Georgescu-Roegen,
1950) in the field of consumer behaviour, and subsequently in his work from 1971, The Entropy Law
and the Economic Process provided the economic literature with a general framework for the
application of hysteresis to social sciences. Although he did not offer a formal definition, his work
had a great impact on the application of hysteresis to economics.
The term was used in the 1960s by Paul Samuelson and in the 1980s was extensively used in
unemployment and international trade with Edmund Phelps using it to describe the dependence on
history in the former domain, while Murray Kemp and Henry Wan used it in the latter (Cross, 1993).
In international trade hysteresis refers to the persistent influences of temporary factors such as
exchange rates variations and their impact on prices and quantities. The application of hysteresis is
mainly exemplified by the fact that foreign firms can enter a domestic market only by incurring once-
for-all sunk costs; a temporary but sufficiently large rise of the exchange rate would induce permanent
entries by foreign firms. Therefore, even when the exchange rate returns to its previous level, the
firms will find profitable their stay in the domestic markets (Franz, 1990).
In unemployment, in the mid 1980s, it was empirically proved that following the
implementation of the disinflationist strategies unemployment did not go back to the natural or
equilibrium level in most European countries, but remained high and even continued to rise. This was
the moment when the economists started to develop other explanations for the persistence of
unemployment, based on the accumulation of the consequences of the most important previous shocks
experienced by the economy, thus introducing hysteresis (Lang, 2009).
Hysteresis, referring to the persistent effects of temporary influences, was considered for
application also in the field of foreign investment, capital formation or marketing.
However, although hysteresis has been invested with relevance to economic systems, it has
not been formally incorporated into mainstream economic models (Cross et al., 2010).

3. Consumer Behaviour and Hysteresis A Historical Overview
In Duesenberrys relative income consumption function (Duesenberry, 1948) and in the work
of Franco Modigliani (Modigliani, 1949) it is shown that households tend to maintain the level of
consumption, in the case of income reduction, the consumption patterns being subject to habit. Or in
other words the highest level of past disposable income remains imprinted in consumers memory
thus determining their present consumption patterns.
The notion was also explored by Nicholas Georgescu-Roegen (Georgescu-Roegen, 1950),
who raised the question whether the mapping of the indifference varieties does in fact depend on the
economic experience of the individual that is whether the indifference varieties of the same individual
could be perceived as an invariant element by the static theory. The evidence brought to sustain that
they are not invariant refers to is that temporary experiences of an individual such as income or price
changes leave noticeable traces when the previous conditions are restored.
The tests conducted by Brown revealed that in both cases of increase and decrease of income,
consumer expenditure lagged behind inducing the idea that consumer demand was related to income
or other cyclical variable. Brown explains that due to some inertia in their actions consumers fail to
react promptly to income changes and referring also to the previous research conducted by
Duesenberry and Modigliani actually uses the term hysteresis, asserting that the habits, customs,
standards and levels associated with real consumption previously enjoyed become impressed on the
human physiological and psychological systems and this produces an inertia or hysteresis in
consumer behaviour (Brown, 1952). Furthermore, Brown replaces the level of past disposable
income present as variable in the work of Duesenberry and Modigliani with the previous real
consumption actually experienced.
399

The notion (although not the actual term hysteresis) may also be found in several other works
related to consumer behaviour theory, such as those of Haavelmo and von Weizscker, with
Haavelmo resuming the problem by stating that past consumption should enter in the utility function
(Elster, 1976).
Nicholas Georgescu-Roegen popularized the term hysteresis and presented an application to
consumer behaviour in his work, The Entropy Law and the Economic Process, of 1971.
Acknowledging that physical behaviour sometimes depends on past experience, Nicholas Georgescu-
Roegen referred to the most widely known example of magnetic hysteresis to emphasize the
important difference between physical hysteresis and history in the field of social sciences. One may
find a great enough number of unmagnetized ferric metals in order to experimentally prove that
elements sharing an identical past behave identically, but in order to formulate a law of magnetic
hysteresis one should have also the opportunity to experiment with cases where there is no past
history. But reaching the zero level of history in the case of social sciences proves impossible.
Moreover, in the case of metals the traces of their past may be erased by demagnetization, while in
other fields such concepts would raise impossible questions. In the case of consumer behaviour for
instance the question is whether one may erase part of the human recent hysteresis, as with metals, in
order to teach the individual to behave in a certain manner. The difficulties in assessing the hysteresis
in human behaviour are easily illustrated by the individual consumer hysteresis. The continuous
adaptation of individuals to fluctuating prices and incomes which alters consumer preferences is a
generally accepted fact. The difficulties refer to the impossibility to know the effect of the last
experience on consumer behaviour until it actually takes place that is when one observes the very
thing intended to be predicted (Georgescu-Roegen, 1996).

4. Consumer Behaviour: The Impact of the Crisis
The financial crisis has impacted consumer behaviour determining consumers to become
more economical, more attentive, and to weigh more carefully their options. The crisis is providing
the frame for the emergence and development of a new type of consumers, more considered and more
rational. The level of anxiety perceived by consumers has known considerable augmentation, leading
to a reconsideration of their priorities concretized in the general reduction of spending, the
postponement of high value purchases or the decrease in consumption of leisure and entertainment
goods, and the decrease of impulse and indulgence purchases.
The situation is reflected by the results of the Nielsen Global Online Consumer Confidence
Survey (2011), with the Global Confidence Index declined in the second quarter of 2011 to 89, the
lowest level in six quarters. The data for the second quarter of 2011 revealed that consumers have
returned to a recessionary mindset, after a year of improving though still cautious spending. The
spending intentions declined as well, only 27% (compared to 35% twelve months before) considered
the present time as appropriate to buy the things wanted and needed.
Other studies (Euro RSCG Worldwide, 2010) proclaim the advent of a new type of consumers
who perceive the recession as an opportunity to chase away their former consumption patterns and
embrace instead a more considered approach. As the economic situation becomes more uncertain, it is
only natural for consumers to become more rational. The new consumer turned away from
overconsumption and mindless excess in order to take a more considered stance to spending.
Moreover, a vast majority of respondents claim they would not go back to their previous consumption
patterns should the economy recover.
Therefore, taking into account the phenomenon of hysteresis and considering its application to
the issues raised in this paper, one may resume that in case the budget - restrained by the economic
crisis - returns to the previous level the consumption patterns might not do the same or at least not at
the same pace. The changes in consumption patterns caused by the budget limitations may be
persistent, the restraints imposed by the economic crisis leaving visible traces. And it would be only
rational to assume that to some degree the crisis has determined structural changes in consumer
behaviour, given the unprecedented magnitude of the crisis.
In our opinion the external impact of the global economic crisis has indeed determine
structural changes in the consumption patterns in almost all markets of the world its magnitude and
its already prolonged duration come to support this assertion. Furthermore, the vast mediatisation of
its effects and of the ubiquitous fear of a relapse adds to the already installed state of uncertainty,
400

advising for caution and making rather improbable a sudden return to the old consumption patterns in
the event of a return to the previous budgetary conditions.

5. Conclusions
We all noticed the changes occurred in consumer behaviour; they are obvious and undeniable
natural consequences of an unfriendly economic environment, dominated by uncertainty. The research
conducted in this field has revealed that the crisis has determined the emergence of a new type of
consumer, more attentive, more rational, and less prone to impulse behaviour; a consumer looking for
substance, for meaning and purpose and determined to change their buying ways.
The concept of hysteresis has been successfully used to explain the behaviour of various
economic systems and has been repeatedly recalled as far as consumer behaviour is concerned. It
represents a memory effect, or in other words it induces the easy to relate to idea that previous
experiences are persistent, impacting present consumption. This paper attempted at describing the
concept of hysteresis, at presenting a list of its most consequential applications to economics and at
evoking its actuality in the field of consumer behaviour given the current economic context. Natural
to relate to at an intuitive level, the phenomenon of hysteresis can hardly be contested. Furthermore,
the global crisis provides a generous ground for empirical testing which will, in our opinion, further
the study and application of hysteresis to economic systems and especially to consumer behaviour.

Acknowledgements

This work was supported by the project "Post-Doctoral Studies in Economics: training program for
elite researchers - SPODE" co-funded from the European Social Fund through the Development of
Human Resources Operational Programme 2007-2013, contract no. POSDRU/89/1.5/S/61755.

6. References
- Brown, T.M. (1952) Habit Persistence and Lags in Consumer Behaviour, Econometrica,
Volume 20, Number 3, July 1952, pp.355-371.
- Cross, R. (1993) On the foundations of hysteresis in economic systems, Economics and
Philosophy, 9, p.53-74.
- Cross, R.; Grinfeld, M.; Lamba, H. (2009) Hysteresis and Economics- Taking the economic
past into account, IEEE Control Systems Magazine, 29 (1).
- Cross, R.; McNamara, H.; Pokrovskii, A.; Kalachev, L. (2010) Hysteresis in the
Fundamentals of Macroeconomics, University of Strathclyde, Department of Economics,
Working Papers 10-08, Available at http://ideas.repec.org.
- Duesenberry, J. (1948) Income-Consumption Relations and their Implications in Lloyd
Metzler et al., Income, Employment and Public Policy, W.W.Norton & Company, Inc.
- Elster, J. (1976) A Note on Hysteresis in the Social Sciences, Synthese 33:371-391.
- Ewing, J.A. (1881) On the production of Transient Electric Currents in Iron and Steel
Conductors by Twisting them when Magnetised or by Magnetising them when Twisted,
Proceedings of the Royal Society of London 33.
- Franz, W. (1990) Hysteresis in economic relationships: an overview, Empirical Economics,
15, pp.109-125.
- Georgescu-Roegen, N. (1950) The Theory of Choice and the Constancy of Economic Laws,
The Quarterly Journal of Economics, Vol.64, No.1, p.125-138.
- Georgescu-Roegen, N. (1996) Legea entropiei si procesul economic, 2
nd
edition, Bucharest,
pp.127-130.
- Lang, D. (2009) Involuntary Unemployment in a Path-Dependent System: The Case of Strong
Hysteresis, in Philip Arestis and Malcolm Sawyer (editors), Path Dependency and
Macroeconomics, International Papers in Political Economy, Palgrave Macmillan, pp.80-118.
401

- Modigliani, F. (1949) Fluctuations in the Saving-Income Ratio: A Problem in Economic
Forecasting, Studies in Income and Wealth (Conference on Research in Income and Wealth),
Vol. 11, New York: National Bureau of Economic Research, pp. 371-438.
- Euro RSCG Worldwide (2010), The New Consumer in the Era of Mindful Spending,
Prosumer Report, volume 8.
- Nielsen Report (2011), Global Online Consumer Confidence, Concerns and Spending
Intentions, 2
nd
Quarter, 2011.

402

A CRITICAL ANALISYS OF BRAND EQUITY EVALUATION METHODS

Ph.D. student, Faculty of Marketing/Department of Marketing, "The Bucharest University of Economic
Studies", Romania, munteanu.katalyn@yahoo.com

Ph.D. student, Faculty of Marketing/Department of Marketing, "The Bucharest University of Economic
Studies", Romania, floreadorian@yahoo.com

Abstract: Evaluating brand equity can be a difficult and complicated task in practice because it is
almost impossible to capture the impact of all "brand-building blocks" and their impact on brand equity on a
multidimensional level. Not only the brand itself determines its brand equity, but marketplace multipliers and
consumer mindset also hold a significant importance in the process of evaluating brand equity. The aims of this
paper are to highlight the applications and main critiques for each method and to suggest an approach that
minimizes these drawbacks in order to propose a better method for evaluating brand equity.

Key words: brand equity, brand value, comparative methods, holistic methods, brand evaluation

JEL classification: M31 (Marketing)

1. Introduction
Both marketing scholars and practitioners around the world agree on the fact that a brand can
be one of the most important assets of a company. Strong brands can have a leading advantage over
weaker brands because consumers are more likely to make a positive evaluation of certain brand and
branding aspects based on the information they have access to (Hoeffler, Keller; 2003). Building a
strong brand can provide substantial benefits to companies both in the form of financial rewards and
in the form of competitive advantage. From this point of view a key question arises:"what makes a
brand strong?". The way in which consumers evaluate related marketing information regarding a
brand and the brand itself depends on both direct and indirect mechanisms. For example, a consumer
may choose a strong brand over a weaker brand because of the existence of a strong loss aversion
determined by the perceived risks of making a wrong decision when buying a product, or just based
on their evaluation and interpretation of certain brand characteristics, such as the high quality of the
branded product. The power of a brand can be determined by analyzing its brand equity and the
different sources that have a significant influence over it. By understanding these core issues,
companies may start to create and sustain a strong competitive advantage. In this circumstances,
evaluating brand equity is a key aspect in the process of creating a strong brand.
It is important for brand managers to have an unhindered understanding of the equity in their
brands in order to facilitate a proper brand management. In order to study brand equity, academics
have proposed three distinct perspectives (Keller and Lehmann 2006): brand equity can be the result
of a customer based evaluation process (Keller, 2001), a company based evaluation process (Kapferer,
2008) or a financial based evaluation process (Bahadir, Bharadwaj and Srivastava 2008; Mizik,
Jacobson 2008).
According to a customer-based brand equity model, customers can develop over time a
stronger or weaker attraction and attachment to a certain brand as a result of their past experiences
with the value proposition represented by the brand itself. Because brands create value to customers
through a complex and unique chain of events (Keller, 2003), it is important for brand managers to
fully understand this process in order to evaluate brand equity. Basically, the brand value chain starts
with the firm's marketing activity that influences the consumer mindset, which in turn affects the
overall brand performance and the shareholder value of the brand. The consumer mindset represents
everything that customers think or feel about a specific brand and is the result of a holistic evaluation
process of the brand. This process is based on costumers' past negative or positive experiences with
the brand. Thus, by understanding how customers experience a brand, companies can develop strong
403

marketing strategies for their products and services. Brand experiences may differ from consumer to
consumer and can arise in a variety of settings. Brakus, Schmitt and Zarantonello (2009) suggest that
consumers' brand experiences can be broken down into four dimensions (affective, intellectual,
sensory, behavioural). Each of these dimensions is differently evoked by every brand and differently
perceived by every costumer. Therefore, the true strength of a brand resides on how good a brand is at
"winning the heart and mind of consumers". It can be concluded that brand equity is the result of how
consumers think as individuals, feel and act regarding a specific brand.
On the other hand, from a company perspective, brand equity represents no more than the
additional cash-flow generated by the presence of the brand name in comparison with the situation
when the same product or service is sold without the presence of the brand name (Kapferer, 2008).
Because brand value is viewed in terms of potential profits of various brand assets mediated by the
brand market strength, both of this dimensions needs to be properly measured or estimated. Also, it
has to be taken into account that between brand assets and brand strength there is no direct
consequence established, but a conditional one. For example, Nike can charge premium prices (brand
strength) for its sneakers as a consequence of a high brand preference or attachment. Thus, evaluating
brand equity requires a model for assessing brand and attribute effects on consumer mindset and their
responses to the brand. This model must measure and highlight, in financial terms, the relationship
between specific components of brand equity and sales.
According to a financial-based brand equity model, the value of a brand is given by the stock
price the brand brings or could bring on the financial market. This perspective is based on the
presumption that the value of the brand on the financial market can reflect investor expectations
regarding the future-cash flow generated by the brand. As Bahadir, Bharadwaj and Srivastava (2008)
suggest, companies with strong marketing capabilities can negotiate higher prices for their brands,
because these capabilities are a strong assurance for future performance of brand portfolios. This kind
of approach creates the necessity of a model that predicts the evolution of brand value on a
macroeconomic scale and focuses on the importance of the brand as a signal to the investment
community.
In accordance with the three distinct perspectives described above, in practice various
instruments and methods are used to evaluate brands and to measure brand equity. Our primary
interest is to highlight the applications and main critiques of each method and to suggest an approach that
minimizes the specific drawbacks for each method with the goal to serve as support for creating a better method
that can be used for evaluating brand equity.

2. Comparative methods for evaluating brand equity
For measuring specific benefits arising from a strong brand equity and capturing the
consumer mindset, marketers can use comparative methods. These methods are based on research
studies that examine in detail consumer behaviour and attitudes towards a specific brand. This
category includes marketing-based comparative approaches, brand-based comparative approaches and
conjoint analysis that combine the first two methods (Keller, 2007).

2.1. Brand - based and Marketing - based comparative approaches
Consumer attitudes towards a specific brand are the result of two important and distinct
factors: the brand itself and the associated marketing program for the brand. Keller (1993) suggests
that measuring the effects of the brand itself on brand equity requires experiments in which one group
of consumers responds to an element of the marketing program when it is attributed to the brand,
while another group responds to the same element when it is attributed to an unnamed brand.
Afterwards, consumer responses from both groups need to be quantified and compared. By holding
the marketing program "fix" and examining consumer behaviour to the brand itself, marketers can
isolate the effects that the brand exerts on consumer behaviour. This method is vastly used in practice
in the form of so called "blind tests", in which a heterogeneous group of consumers use or evaluate a
product with or without knowing the brand. In these tests, consumers may make inferences in terms of
prior brand associations based on their past experiences with the product category of which the tested
product belongs to. This inferences will most likely refer to a brand that consumers' feel is
representative for the product category (Thompson, Rindfleisch and Arsel, 2006). A brand that has a
high brand equity is expected to have a particularly strong mitigating effect on consumer perception
404

regarding brand attributes for a distinctive product category. As a result, strong brands that posses
desirable brand attributes can be used as benchmarks in this kind of studies.
Also marketing program changes may trigger various consumer responses. By holding the
brand "fix" and examining consumers' response to the marketing program, it enables marketers to
determine financial returns generated as a result of brand investments in a marketing program. The
purpose of this approach is to isolate the increase in sales or marginal revenue generated by different
marketing activities used during a past period of time. In practice, this method is used for examining
price premiums and price elasticity, for assessing customer response to different advertising
strategies or to explore potential brand extensions. Also using a marketing-based comparative
approach can provide valuable information regarding the clarity, relevance, consistency or
distinctiveness of the program. The ease of usage and implementation of this method is somewhat
negated by the difficulty of discerning if consumers response to changes in the marketing program are
the result of brand specific effects or more generic class category effects.
Brand choice is the result of both a stimulus-based (as a result of external factors such as
components of a marketing program) and memory-based (as a result of prior judgements or
knowledge about the brand) complex process that is built on the fluency that arises from costumers
negative or positive experiences with the brand (Lee, 2002). Therefore, a solid brand equity has a
significant influence on brand knowledge structures and strongly affects the way consumers interpret
and evaluate brands. By combining both brand-based and marketing-based comparative approaches
for evaluating brand equity, researchers and marketers can gain a deeper understanding on how brands
affect consumer behaviour and choice.

2.2. Comparative approaches based on conjoint analysis
By using conjoint analysis, marketers can make a profile of the consumer decision process
regarding specific brands. By asking consumers to arrange in order of importance specific brand
attributes, marketers can determinate the relative importance of each attribute for an individual
consumer. This type of analyses allow studying different aspects of the company marketing program
(e.g."pricing") or different brands simultaneously. Also, they can provide valuable means of
assessing advertising effectiveness, the impact of different brand attributes on prices or brand image.
Furthermore, a conjoint analysis can be used to measure both consumer-level brand equity and firm-
level brand equity at the same time. Ferjani, Jedidi and Jagpal (2009) suggest that consumer-level
brand equity is the sum of incremental WTP (the price at which a consumer is indifferent between
buying and not buying the product) due to the main effect of the brand, the incremental WTP due to
an enhanced attribute perception of the brand and the differences in price sensitivity for a branded and
the hypothetical situation of the same non-branded product. The proposed and tested model is based
on conjoint analysis and can also be used for estimating firm-level brand equity as the incremental
profit a company would earn in any market conditions by using the brand name for its products
compared with the hypothetical situation of selling non-branded products.
The main advantage of a conjoint-analysis comparative approach is that it provides an
objective financial-metric for measuring firm-level and consumer-level brand equity at the same time.
Also, it can provide valuable data regarding the tradeoffs consumers are making when evaluating
specific brand attributes. Some major limits have to be taken into account when using a conjoint
analysis as a brand equity evaluation method. First, consumers make errors when evaluating
hypothetical scenarios regarding brands because they are having real difficulties when appraising
unrealistic brands or undesirable brand attributes (Keller, 2007). On a second note, important brand-
building blocks, such as brand resonance, can be completely missed when conducting such an
analysis. For a large array of products, the risk of leverage and competitive overlap of brand
associations affecting some brand attributes is also very high when using this method.

3. Holistic methods for evaluating brand equity
Brand equity can be viewed as a result of a conjugated action that involves a multitude of
various factors. Generally value is dependent on the evaluation goals. Therefore, the brand may
contain not one unique and aggregated value, but many. Building a strong brand begins when firms
invest in a marketing program targeting customers (Keller, 2003). In these circumstances, the utility
of such an investment needs to be properly quantified. If comparative approaches can be used to
405

determinate specific benefits of core dimensions of brand equity, holistic methods evaluate in
concrete financial terms or abstract utility terms the importance of each brand-building block. Holistic
methods attempt to measure the impact of different factors on the overall market strength of a brand in
order to predict future market performance. These methods are based on complex studies that are
often conducted by large companies specialised in brand evaluation and strategic brand management.
The usage of holistic methods for evaluating brand equity is a relatively new practice. Various
models that attempt to quantify and provide a meaning for different dimensions of brand equity in
terms of utility have emerged. But many researchers and marketers feel that a magic formula that tries
to convert the multiple dimensions of brand equity into one meaningful number is arbitrary because it
is based on invalid assumptions. This is mainly due to the fact that holistic methods ignore future
investments in marketing programs, tend to contain too much subjectivity and may confound brand
strength with company strength or intangible assets with brand equity (Keller, 2007).

3.1. The Young&Rubicam brand asset valuator model ( Y&R BAV)
In response to the growing need of marketers to better evaluate the value drivers of their
brands, Young and Rubicam (Y&R), one of the leading advertising companies in the world, proposed
in 1990 a model for evaluating brand equity named Brand Assets Valuator (BAV). This model is built
on the premise that customers' perception measurements regarding universal brand characteristics can
be used to determinate brand value. The vastly accepted Y&R BAV model is used by Aaker (1996) to
sustain "the brand equity ten", one of the most popular academic approaches regarding brand equity
building-blocks. A short summarize of the BAV model is presented in Table 1.
Table 1: Y&R BAV model for measuring brand equity
Y&R BAV
pillar
Fundamental
perceptual
metric
Scale
used
BAV Data Significance and role of the pillar
Differentiation
Unique
Distinctive
Yes/No
Yes/No
% responding Yes
% responding Yes
Indicates the perceived distinctiveness
of the brand and its ability to
differentiate from competitors
Relevance Relevant to me 1-7 scale Average score
Reflects the brand market power by
measuring perceived importance and
personal relevance of the brand
Esteem
Personal regard
Leader
High quality
Reliable
1-7 scale
Yes/No
Yes/No
Yes/No
Average score
% responding Yes
% responding Yes
% responding Yes
Reflects how well the brand can fulfil
its promises by measuring the level of
regard consumers hold for the brand
and the valence of consumer attitudes
Knowledge Brand familiarity 1-7 scale Average score
Measures consumers' awareness and
understanding of brand identity
Energy
Innovative
Dynamic
Yes/No
Yes/No
% responding Yes
% responding Yes
Indicates future orientation and
capabilities of the brand to meet and
adapt consumers' needs
Source: (Mizik and Jacobson, 2008)

The main advantage of the Y&R BAV model is that it is easy to understand and use by any
brand manager and it can be applied to almost any type of brand or product. Also, the Y&R brand
pillars provide solid incremental information to accounting measures in predicting and explaining
company stock market performance and can be combined with specific financial and accounting
methods for measuring ROI of future marketing programs.
The main disadvantage of Y&R BAV model is that it focuses only on costumer-based brand
equity and tries to link it with actual and future stock performance, totally ignoring firm-level brand
equity. As Kothari (2001) suggests, anticipated and unanticipated measures of accounting
performance, especially current revenue and future earnings have a very strong impact on stock
market performance. Practically, stock market participants will evaluate a company based on both
current term accounting performance (brand profitability), but also on information relevant to future
market performance ( customer based brand equity). A strong brand contributes to current and future
value of a company. Even if, Y&R makes a clear statement that BAV pillars such as Differentiation,
Relevance or Energy may account up for 66% of future growth value of a brand and BAV pillars such
406

as Esteem and Knowledge represent 33% of current operating brand value, in the future Y&R must
integrate current and future brand accounting performance in the BAV model for a better evaluation
of brand equity.

3.2. The Interbrand brand valuation model
Probably the most complex brand evaluation model on the market, Interbrand's model is
based on the assumption that today's brand value is determined by the incremental earnings the brand
is expected to generate in the future (Interbrand, 1997). The main difference from the Y&R BAV
model is that Interbrand's model follows a financial-based brand equity perspective.
According to VanAuken (2000), brand essence can be defined as a short description of the
core brand value that resumes in a few words the heart and soul of the brand. Because this kind of
approach on brand essence cannot lead to a fair evaluation of brands in concrete financial terms,
brands are viewed as being an essence rather than having an essence. This is based on the premise
suggested by Barnham (2009) that brand essence can be considered as unchanging in time because it
emanates from the brand's values. In accordance with this perspective, Interbrand uses a methodology
for measuring brand value based on an income approach.
In order to capture the complex process of value creation for a brand, Interbrand uses a five-
step evaluation method (Interbrand, 1997). First, a solid market segmentation is done, for a better
emphasis on the value creation process specific to each market segment composed of a homogenous
group of consumers. For each distinct segment, a financial analysis is performed, consisting of a
revenue forecast (the economic profit generated by the brand). Also, for each segment a role of
branding index (RBI) is calculated based on the various drivers of market demand and the relative
influence of the brand exerted on these drivers. In order to reveal the strengths and weaknesses of the
brand and the brand risk profile, a competitive benchmarking for the brand is performed. Finally, the
brand value is calculated as the sum of the net present value (moderated by RBI) of the forecasted
brand earnings for each segment and discounted by the brand discount rate (reflected by the brand
risk profile)
Because Interbrand's model can be easy to generalize, any type of brand or product can be the
subject of such evaluation. But marketers and researchers need to take into account all of the general
critiques regarding holistic methods when using them to evaluate brand equity. As a holistic method
for evaluating brand equity, Interbrand's model has some inconveniences, but maybe the most
noticeable drawback is the complete ignorance of consumer mindset from the brand equity evaluation
methodology. Even if The RBI is based on specific costumer related indicators such as awareness,
loyalty or satisfaction, the complex causal relations between the consumer mindset and brand equity
are not explained by Interbrand's model.

4. A new perspective on evaluating brand equity
Brands are valuable assets for any company because they possess a high value-creating
potential based on their brand equity. Brands will fail to achieve their entire value-creating potential
where brand managers pursue strategies that are not orientated to maximizing the shareholder value
(Doyle, 2001). Thus, brand equity must always be viewed from a financial perspective. But, brands
are something more than high value company assets or mere value identifiers for consumers. They
provide a unique and distinct experience for each individual consumer. The high value-creating
potential of a brand resides in the power of the brand to evoke and create such experiences. For
example, a high brand awareness may not necessarily translate into sales for the brand or a high
loyalty rate does not translates into high revenue margins for the brand owner. Brand equity must not
be understood as the incremental value a brand name can grant to a product or service, but as a
positive behavioural response evoked by brand-related aspects. As a result, evaluating brand equity
must not focus on measuring the incremental value generated by a brand but on the strength and
intensity of behavioural responses triggered by consumers' brand experiences.
In quantum mechanics, it is impossible to both measure the momentum and the position of a
particle at the same time. This is called the Heisenberg uncertainty principle. Basically, the act of
measurement of the momentum of any given particle, will produce errors when determining the
position of that particle and vice versa. This basic physics concept, can be extrapolated in regards to
branding and evaluating brand equity. The act of observing consumer relationship with a brand
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changes their behaviour and their reactions to the brand, thus altering the consumer mindset.
Furthermore, because brand experiences are subjective internal consumer responses (Brakus, Schmitt
and Zarantonello 2009) that can vary in strength and intensity on an individual basis, the act of
measurement this responses provides a lot of information about what individual consumers feel or
think about a brand, but little to no information about what consumers will actually do. Therefore, it is
not only important how we measure brand equity, but is of more importance what we chose to
measure regarding brand equity. Often, brand managers and researchers will only pay attention to
brand aspects that are easily measurable. By doing this, a lot of precious information will be missed.
Ailawadi, Lehmann and Neslin (2003) suggest that brand equity can be measured directly
using market-level data. Other researchers propose that in order to estimate brand equity, market-level
data should be combined with primary data that was used to measure consumer-based brand equity
(Srinivasan, Park and Chang 2005). Regardless of the approach on evaluating brand equity,
behavioural responses evoked by brand-related aspects also need to be measured in order to evaluate
properly brand equity and to obtain a holistic picture of brand value. The major difficulty is
combining financial, attitudinal and behavioural data in one model for evaluating brand equity. So far,
researchers failed to provide a clear solution to this problem, but some key features of a different
perspective on evaluating brand equity are emerging from this study.
Firstly, the causal relation between different brand-building blocks needs to be properly
highlighted. A larger emphasis on key-factors that affect the consumer mind-set, the brand market
performance, and consumer behaviour is needed. Not all dimensions of brand equity have a similar
impact on brand choice or effects on consumer behaviour. For example, brand awareness, a core
dimension of many brand equity evaluation models is a good indicator of customers' attitudes, but
fails to describe their behaviour. In order to purchase a specific brand, a customer must first
acknowledge its existence, but knowing about a brand is not a guarantee that one will actually buy it
or even consider buying it when faced with the purchase decision. Traditionally brand awareness was
described as the ability to recognize a brand (Keller, 1993). In this case, a shift from brand awareness
towards brand salience is much needed, because brand salience is a solid indicator of the likelihood
that a brand will be a part of customers consideration set when faced with the purchase decision. Also,
the relative impact on brand equity of different brand equity dimensions on an individual basis needs
to be quantified.
Secondly, not only what consumers receive, but how they receive it is very important. Brand
choice is affected by a multitude of factors that are moderated by subjective consumer perceptions.
These brand feelings and attitudes are stirred by brand functional advantages that need to be properly
emphasized and quantified in a model for assessing brand equity. Because of the nature of the
variables that are required to be measured, abstract utility terms are to be used over concrete financial
terms. These abstract utility terms must describe each brand-building block in relation with the core
brand attributes, consequences and values perceived by customers.
Thirdly, some of the key aspects of brand equity require qualitative understanding, because
they are impossible to capture by structured procedures (e.g. conjoint analysis). For example,
customers interactions or experiences with a brand are subjective and to some extent arbitrary but they
are decisive on how consumers evaluate brands. Another example regards different consumer
responses to sensorial aspects of a brand. As Lee and Labroo suggest (2004), perceptual and
conceptual fluency affect not only consumers judgments and feelings, but also affect the holistic
evaluation of a brand. Determining the quantitative impact on brand evaluation of these two key
aspects and their correlation to specific brand equity building-blocks is necessary for a better brand
equity evaluation method.
Finally, it must be clear that it is impossible to create a perfect method for assessing brand
equity due to the complexity of different qualitative and quantitative aspects involved. In order to
overcome this situation a complex approach that combines both qualitative and quantitative aspects is
needed. Also, this approach must lead to the creation of a brand equity evaluation method that is
applicable to all products and services regardless of the influence of cultural factors. For example,
brand positioning maps or brand mental maps can be combined with conjoint analysis or holistic
models for obtaining a clear and better picture on brand equity and its effects on firm value, sales and
consumer behaviour.

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5. Conclusions
One of the top questions regarding brands is "Where does the power of the brand reside?".
For a proper brand management, marketers should gain a clear understanding of what makes their
brands strong and how much they worth. It has a significant importance how we measure the strength
and value of the brand. Even if, brand evaluation is a relatively new concept, researchers and
marketers made a notable progress regarding this area in the last two decades. Because there are many
sources of brand equity, and many possible outcomes of brand equity related to consumer behaviour,
an integrated model for evaluating brand equity that captures and quantifies all dimensions and
outcomes of brand equity has not yet been created.
At the moment, the usage of comparative methods or holistic methods are the two possible
solutions for the problem of evaluating brand equity. Each of this specific methods has one or several
applications and some inconveniences. Comparative methods are easy to use and can provide a deep
understanding on how the brand affects consumer behaviour and choice, but may fail to quantify the
impact of key brand-building blocks or fully miss some important dimensions of brand equity. On the
other hand, holistic methods try to capture and quantify all key factors related to brand equity, but
they tend to contain too much subjectivity and may ignore future investments in brand related
marketing programs. Therefore, the need for a better brand equity evaluation method that minimizes
the disadvantages of the current methods used in practice and is applicable to all products and service
is more promiscuous than ever. Upon reflection, it may seem that issues related to current brand
equity evaluation methods are not that significant, but the need for a integrated model for measuring
and capturing all aspects and dimensions of brand equity is frequently raised by practitioners. Future
methods for evaluating brand equity must focus on causal relations between different brand-building
blocks and brand market performance and measure the influence of these relations in abstract utility
terms. Also, they must determinate the quantitative impact of perceptual and conceptual fluency of
different qualitative aspects of brand equity and combine structured procedures with qualitative
techniques for capturing the impact of all dimensions of brand equity.

6. References
- Aacker D.A. (1996) Building Strong Brands, New York: The Free Press
- Ailawadi K.L.; Lehman D.R.; Neslin S.A. (2003), Revenue Premium as an Outcome Measure
of Brand Equity, Journal of Marketing, vol. 67 (5), p. 1-17
- Bahadir S.C.; Bharadwaj S.G.; Srivastava R.K. (2008), Financial Value of Brands in Merges
and Acquisitions: Is Value in the Eye of the Beholder?, Journal of Marketing, vol. 72 (5), p.
49-64
- Barnham C. (2009) Essence - The Structure and Dynamics of the Brand, International Journal
of Market Research, vol. 51 (5), p. 593-610
- Brakus J.J.; Schmitt B.H.; Zarantonello L. (2009), Brand Experience: What Is it? How Is it
Measured? Does it Affect Loyalty?
- Dillon W.R.; Madden T.J.; Kirmani A.; Mukherjee S. (2001), Understanding What's in a
Brand Rating: A Model for Assesing Brand and Attributes Effects and their Relationship to
Brand Equity, Journal of Marketing Research, vol. XXXVIII (4), p. 415-429
- Doyle P. (2001) Building Value-Based Branding Strategies, Journal of Strategic Marketing,
vol.9 (3), p. 255-268
- Ferjani, M.; Jedidi, K.; Jagpal, S. (2009) A Conjoint Approach for Consumer and Firm-Level
Brand Evaluation, Journal of Marketing Research, vol. XLVI (6), p. 846-862
- Hoeffler S.; Keller, K.L. (2003), The Marketing Advantage of Strong Brands, Journal of
Brand Management, vol. 10 (6), p. 421-445
- Interbrand (1997) Brand Valuation, Premier Books, London U.K.
- Kapferer J.N. (2008), The New Strategic Brand Management, Kogan-Page, London, United
Kingdom
- Keller K.L. (1993), Conceptualizing, Measuring and Managing Customer Based Brand
Equity, Journal of Marketing, vol.57 (1), p. 1-22
- Keller K.L.; Lehmann D.R. (2003), How Do Brands Create Value? Value Emerges from an
Unique Chain of Events, Marketing Management, vol. 12 (3), p. 26-31
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- Keller, K.L. (2007) Strategic Brand Management - Building, Measuring and Managing
Brand Equity, New Jersey: Pearson Education, Inc.
- Keller, K.L.; Lehmann D.R. (2006), Brands and Branding: Research Findings and Future
Priorities, Marketing Science, vol. 25 (6), p. 740-759
- Kothari S.P. (2001) Capital Market Research in Accounting, Journal of Accounting and
Economics, vol. 31 (5), p. 105-231
- Lee A. Y. (2002) Effects of Implicit Memory on Memory-Base Versus Stimuli-Based Brand
Choice, Journal of Marketing Research, vol. XXXIX (4), p. 440-454
- Mizik N.; Jacobson R. (2008), The Financial Value Impact of Perceptual Brand Attributes,
Journal of Marketing Research, vol. XLV (1), p. 15-32
- Srinivasan V.; Park C.S.; Chang D.R. (2005), An approach to the Measurement, Analysis and
Prediction of Brand Equity and its Sources, Marketing Science, vol. 51 (9), p. 1433-1448
- Thompson C.J.; Rindfleisch A.; Arsel Z. (2006) Emotional Branding and the Strategic Value
of the Dopelgnger Brand Image, Journal of Marketing, vol. 70 (1), p. 50-64
- VanAuken B. (2000) Developing the Brand Building Organization, Journal of Brand
Management, vol. 7 (4), p. 281-290

410

PRICE STRATEGY IN THE INTERNATIONAL MARKETING

MUETESCU Adina
Senior Lecturer PhD., Faculty of I nternational Business and Economics
Christian University Dimitrie Cantemir, Bucharest, Romania, adinamusetescu@gmail.com

Abstract: Due to the present economic crises, the companies price strategy has gained even a larger
importance, being linked to its survival on the market. Companies have a wide range of possibilities regarding
price strategies and each of them has to choose the most appropriate in terms of long term objectives (mainly
the profit). Prices can be influenced by: restrictions due to the political environment, technology, distributors,
consumer price sensibility, the introduction of the euro currency on the European Market and others brand
consolidation, building a competitive advantage, the value for the consumer.

Key words: price strategy, profit, competitive advantage, consumer.


1. Introduction
A successful price strategy is a key element of the marketing mix strategy. This is linked to
the surviving of the company itself. The multinational companies are facing a lot of specific problems,
unlike other companies that have a strictly domestic approach.
The multinational companys objective is not only to obtain profit in each country that is
activating in, but also the transfer prices, meaning the prices between different components of the
companies (such as subsidiaries).

2. Sections
The presence of companies on the international market calls for a decision about the price
strategy followed by the company. There are numerous marketing analysts who are arguing that the
decision about the price is the most difficult.
1. A company can choose from the following generic price strategies ( Muhlbacher, 2006):

1.1. Standard pricing:
In the case of this strategy, the company perceives the same price on each market that is
hosting its products. This way, the producer is establishing a unique price, that he is offering its
products to the distributors on different markets. The final consumer is the one that is paying all the
supplementary cost generated by the journey of the product on the distribution channel. As longer as
this is, the more will escalade the costs.
This type of strategy is easy to be taken care of by the company (there are no concerns about
the existing differences on each market), but also it represents the strategy that is list considering the
differences between national markets regarding the summations of the consumption.

1.2. Standard formula pricing:
In the case of this strategy, the company is not using the same absolute price level, but a
standard formula to calculate the price on each market. Next to the cost elements that are arising in the
case of standard pricing strategy (the international price is cumulated with taxes, transport costs and
insurance and other from the local market), other cost elements that are specific to each country are
brought together. In these way, the cost elements that appear in the case of standard pricing (at the
international price are added taxes, transport and insurance costs and other on the local market), other
cost elements that are specific to each national market are added (such as specific promotional costs to
the strategy of the company on each market). In the end, the price on each market can experience
some variations.

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1.3. Price adaptation strategy:
In the case that the company is deciding to choose this strategy, it is granting the local
managers a larger autonomy in establishing the prices on each market.
Such a strategy is considered to be very successful in terms of relating to the customers need
and taking into consideration the specific of the local market. Considering the segmentation realized
for each national market (meaning the criteria for the segmentation on the markets) the local prices
can have important variations.
A common phenomenon associated to the price adaptation strategy consists in parallel
imports or interbrand competition. In the moment in which the price differences for the same
product between two local markets become too large, some distributors from the low prices market
will begin to export the product on the higher prices market. Also, the consumers will begin to buy the
product from the market that has the lowest price. Such a process is significant in the context of
European integration and relationships between the producer and the distribution channels.

1.4. Strategic pricing:
In this case, the company is making the decision of establishing the price level on each market
by taking into consideration its competitive position within the market and also its strategic
objectives. On a certain market in which the company has a small market share, the price can be lower
than on the market in which the company possesses a lieder position. In the same time, establishing
the price on each market can rapport to the level prices of the competitors. The strategic positioning of
the company on different markets can determine significant differences among absolute prices.

1.5. Internal pricing strategy:
The strategy of internal pricing consist in transferring different resources between the
companies subsidiaries from foreign markets, taking into consideration the specific legislation
regarding taxation, profitability and others. The company decides the prices among its subsidiaries
that have to be subordinated to internal objectives, such as profit transfers and minimizing taxes paid
by it.

2. The strategy of the multinational companies and the fiscal policy

The fiscal policy is the main tool that is used by the authorities to influence the national
companys behavior in the national economy in general or in a certain industry, in particular.
A multinational company has obviously a different perspective and several times other
interests then a national/local company. The most important arise from the fact that the first ones are
activating in more countries, meaning different jurisdictions and have a global perspective and
constitute a powerful impulse for optimization the global results and to benefit from the existing
differences between the existing differences between commercial and fiscal policies among foreign
countries.

2.1. Global profit
Considering the main interest of the managers of any company, local or multinational, the
global profit is their most important objective. As long as a company is activating in a country that has
a week development of the financial market, so long it will use the transfer forms between
subsidiaries in order to obtain a larger profit. In the case of regular transfer of the financial result, due
to the exchange risk, the profits could be lower than the first case.
A company that has global operations will have as primary interest profit maximization
obtained on an international scale. Although there are situations when the companies management has
as priority profit maximization in a different region (the country where the company has the main
headquarter), the common objective is to increase the absolute size of the total profit of the entire
companies.
A company that has activities on a global scale will normally have as main objective
obtaining the highest profit as possible. Although there are situations when the companies
management has as priority maximizing the profit of one particular region (the provenience country in
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most cases), the main reason of operations internationalization is to obtain a large profit of the entire
multinational companies.
The size of the companys profit depends on three elements, that been: total income, the total
expenses and also the taxes played to the fiscal authorities of each country. The companies are very
well informed about the fiscal policy of each state in which the companies is activating.
Multinational companies are facing the decision of investing in a production facility of a
country with permissible fiscal policy. The fiscal policy can be considered in general a source of
competitive advantage. There are a lot of controversies in the specialty literature about the concept of
fiscal competition, taking into consideration that a lot of states are trying through a relaxed fiscal
policy to attract investors despite other countries, especially in certain areas that the government is
especially interested in. Changing the structure and location of the production actives of global
companies is implicating a higher cost and a larger period of time then the transfer of funds from one
subsidiary to another, no matter the adopted form of transfers (financing, research & development
expenses and others). Also, changing the promotion strategies of some of the companys products
involves a certain period of time until these expenses will transform into incomes.
It can be accepted that the companies decision about the structure and the location of the
productive assets involves taking into consideration certain factors that are linked to the absolute
advantage (the physical distribution of the production factors, as well as the consumers), in compares
with certain physic locations, the national economies for example.
The idea is that although the taxes amount is a very important element in taking the decision to
activate on a certain market, it is not always the most decisive one (for instance the Cayman Islands
will never be the highest steel producer or have the best airplane industry due to the low taxes).
The strategy of a global company that has subsidiaries all over the world is to maximize the
total profits. The transfer prices are helping the companies to achieve this goal. If we take into
consideration a multinational company that has two subsidiaries in different states that have specific
tax levels for profit (in the A state is a high fiscal policy and in the B state a low fiscal policy). In this
case the company will try to maximize the global profit by reducing its exposure in the state that has
high profit taxation and to transfer its incomes to the state that has low profit taxation. These means
that in the transaction between the companys subsidiaries, for the one in the A state, services will be
underestimated and for the one in the B country will be overestimated. The result is compared to the
price of the companys product if there would have been no fiscal difference between the two states.
The multinational companies are entitling to make such funds transfers inter-subsidiaries that
are perfectly legal and to establish the prices for these transactions.
There is a discussion among the financial community regarding classifying these artificial
profit transfer within a group as fiscal evasion, taking into consideration that the affected state (A in
our case), can see these transfers as artificial reductions of the financial brut results, meaning the
taxation base. The fiscal evasion is assuming breaking the accounting and taxation legislation.
If practicing transfer prices is not forbidden by the A state (there is no specific legislation
about the inter-subsidiaries transactions), they cannot be considered illegal. This is obvious in the case
that the multinational company can experience real difficulties in establishing an objective value of
the transactions between its entities, especially when their objects are unique activities.

2.2. Restrictions due to the political environment
The government can have a direct or indirect influence on the prices. Along measures
referring to fees and taxes, it can impose in a direct way the maximum price level. The main reason
for this measure is the inflation control.
A multinational company that is under price control has to face a very difficult situation due
to the fact that in order to raise the prices it has to wait for a general 30 45 days period of time. The
company has to justify in writing the fact that is no longer obtaining profit and it is in danger to close
the operations in the resp ective country. That was the explanation of the pharmaceutical
companies that are activating in the Chinese market (Wang, Y., Song, J., 1999).
Another case is represented by Coca-Cola that has withdrawn its products from the shelves
until it obtain an approval for raising the prices in Mexico. Glaxo Wellcome had revised their decision
to enter on the Pakistanis market due to the price control.
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Problems are arising because on this market of countries that are establishing a maximum
value for the prices, in general also is fixed a minimum value for wages that companies have to pay to
their employees and the business becomes unprofitable. The state is the one that is losing due to a
very small number of companies that manage to survive in such a market.

3. The implications of adopting the unique currency euro on the marketing strategy of the
companies.

In January 1999, the euro currency was launched by the European Union. At 1 January 2002,
it became the single currency used on the territory of 12 European Unions member states. Its
existence has as a main implication eliminating barriers, which means that is very easy to use by the
multinational companies that are activating in the countries that are using euro (it is no longer
necessary the money exchange).
According as the internet has seen an impressive evolution it is very easy for the consumers to
order the product that is evaluated in euro, from any European Unions country. The consumers can
easily choose high quality products at the lowest prices.

4. Forces with a powerful impact on the prices:

There is a general impression about the prices, that there tendency is to diminish, because the
company is forced to commercialize its products at prices as much competitive as possible (
Dickinson, H., 2005). The general forces with an impact on the prices are the following:

4.1. Technology
a) In owner days the technologies are rapidly changing, forcing the companies to
continuously invest large amounts of money to always keep up with the new ones. Also, selling the
old technologies (old models of telephones, televisions and others) are made at lower prices due to the
scale economies, but especially to the consumers availability to new technologies.
b) Ever larger internet use represents a threat to the companies with a classical distribution,
because new competitors are arising, with the capability of practicing low pricing by using the
internet distribution.

4.2. Business internationalization
As the companies are entering on the international market, they are facing an intensified
competition, so maintaining a reasonable price level is a necessity in order to survey on global scale.
The consumers are better informed and they are also ready to cross borders for purchasing goods at a
better price.

4.3. Distributors
For the moment a large number of companies have aroused, that are internationally
recognized for their low prices. Some examples would be: Easy Jet, Ryanair, Wal-Mart, some food
stores, like Aldi, Lidl and others. These companies have in common the strategy of diminishing as
much as possible the costs, especially for distribution and they are also using economy of scale.

4.4. Consumer price sensibility
After the last recession, the consumers are no longer willing to spend large amount of money
for expensive products, preferring only high quality at low prices. Also, a lot of consumer are buying
only when the products are on price reductions periods.

4.5. Brand consolidation:
Any promotional activity for the companies brand is equivalent with very high costs, but this
are money well spend because it is an investment in differentiating in compares with the company's
competitors. It is very difficult to achieve a brand that is recognized a leader in technology due the
short period of time that a product can be considered innovative.

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5. Methods of establishing the price level:

In general, the main method in establishing prices is the costs level. However, in most cases,
it be considered a simple method, because the main objective of any company is represented by
obtaining profit.

5.1. Building a competitive advantage:
There are situation when the company is having a hard time differentiating its products in
compares with the competitors. It can be said that these process is vital for the company.
Some examples of such products can be: sugar, salt, steel, coffee and others. In the case of the coffee
there are specific aromas that can be obtained and a good promotion is placing the products in the
consumers mind as a premium one. Respecting the deadlines from the contract in an industry that
many competitors are not serious, can become a competitive advantage (in constructions for example
is very hard to build a reliable name). Also if a certain company is ready to offer discounts if it is not
respecting the deadlines, it can be also perceived as a competitive advantage.

5.2. An often encounter practice in forming the price is represented by auctions. A standard
document has to be fulfilled with all the products specifications and is offered at the disposition of
anyone interested. Then the bidding process can begin. After receiving all the offers in a certain
amount of time, the winner will be selected, meaning the company that made the best offer.
Auctions are used also in the case of selecting the suppliers, when the respective company is
trying to obtain the lowest prices for raw materials.

5.3. Prices for new launched products
The main decision about the prices that the management has to decide about is
commercializing products at low or high prices. In order to make a good decision about establishing
the right price, the company is taking into consideration the following elements:

5.3.1. The strategic position of the company
The strategic position of the company refers to establishing the target segment of consumers
and trying to create a competitive advantage. When computers were created for the first time, three
target segments were taken into consideration, considering the value that each of them was attributing
to it. The first segment was represented by engineers and scientist that were attributing the higher
value to the computers by the possibility of making easy their duties on the workplace. The second
segment was composed from the book - keepers and banks, that were granting a high value to the
computers, but lower than the first segment. The third segment was represented by a large public that
attribute only a small value to the benefits of the computers. Slowly, it becomes an accessible product
for all segments of consumers, at reasonable prices.
The strategic positioning is influencing the price because the product can be commercialized
to the most interested customer at higher prices, but as the desire to buy of some segment of the
market is descending, the prices will follow this tendency.

5.3.2. Launching the products:
In the case of launching a product, the price must take into consideration all the other
marketing mix elements. The price must be correlated with all the other marketing mix elements. In
the case of linking the product strategy with the promotional one, two strategies can be identified:
cream strategy and enter strategy ( Jobber, D., 2007.)
a) A combination between a high price and an intense promotional effort is developing a rapid
creaming strategy. Examples of companies that are using this type of strategy are: Nike, Coca-Cola,
BMW and others.
b) A combination between a high price level and a slow promotion is leading to a slow
creaming strategy. Some examples of companies are: Rolls - Royce, Bosch and other, in other words
famous companies that can afford to establish from the beginning a high price for their products and
do not need an intense promotion.
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c) A rapid entrance on the market is obtained by a powerful promotion and small prices. The
main goal is to earn rapidly market share. For example, Easy Jet used that strategy to convince British
Airways clients to switch their preference to them. Other companies with fast entrance on the market
are Tesco, Volkswagen Polo and others.
d) Difficult entrance on a market can be seen as a result of a low price combined with a slow
promotion. For instance, the store food chain Aldi is using these strategy in order to cut all
unnecessary costs.

5.3.3. Market characteristics that are allowing launching products at a high price:
- The existence of an important competitive advantage (a last minute technology, such as
companies from the aeronautic sector, computers industry, mobile phones and others),
- in some markets, the consumer is not the one paying the products (for instance air transport
companies are raising the price in the case of acquiring the ticket with more than seven days before
the flight and if the day of Saturday is not included, because it is taken into consideration the profile
of a businessman and the companies that are sending their employees to business trips poses enough
capital in compares with a simple tourist that is flying to reach a vacation destination);
- If the company has a monopolistic position (if it is the only or the dominant company that is
making an offer on the market);
- Excessive demand (for example when the request for diamantes is higher than the offer, then
the prices are rising);
- in the case there is a pressure (especially of time) in buying a certain product (for example a
company that has a major demand in acquiring as fast as possible the necessary raw materials and it is
willing to pay a higher price for them to the company that can make the delivery).

5.3.4. Conditions that are allowing establishing a low price :
- A low price is the only alternative of the company to enter on a market (the product has no
competitive advantage, the market has a multitude of competitors and others);
- By commercializing products at a low price the company is trying to attract a large number
of clients, being able to benefit from scale economies;
- A product can be commercialized at a low price but the company can charge its clients for
very expensive after sale services;
- A low price can act as an entrance barrier for others competitors (the company is satisfied
with small profits to discourage a new competitor that cannot benefit of scale economies and it is
practicing higher prices);
- by using predatory pricing, that are referring to practicing very low prices a period of time,
until their main competitors are eliminated (even with the risk of experiencing some loses), followed
by high prices due to the subsequent monopolistic position. This behavior is restricted by the
competitive legislation of the European Union, under condition that the companys actions can be
proved to produce damages to the consumers.

5.4. The value for the consumer
In establishing certain prices the main element that has to be taken into consideration is the value for
the consumer. A particular person can be willing to pay a higher amount for some products.
The companies have to be ready to take advantage of this opportunity, especially
being able to customize products (this means considering specific customers needs and preferences).
For example, in the moment of purchasing an automobile there is the possibility to select a certain
color, tapestry and others, this offer being very attractive to the customers.
b) Another case reminded previously is the one of creating a competitive advantage due to an
innovative technology. The purchase of a phone that is last generation brings a lot of satisfaction to
its owner (it has an element of prestige that can be useful in the workplace).
c) Another important element constitutes the implication - of the company that is
commercializing the respective product - in activities of socially responsible marketing. This element
is making the product to have higher prices (due to the constant preoccupation of the company to offer
healthier products that are respecting the environment and others). The consumer is not only ready to
pay a higher price, but to enjoy participating to accomplishing a good deed (after someone is being a
416

certain type of diapers, the producing company is donating a vaccine to the children from Africa and
other similar examples).
d) The general tendency is that most of the times an expensive product is perceived as
qualitative superior, sometimes the company exploiting these prejudice by establishing a higher price
than its competitors similar products (for example a company that is commercializing flower
fertilizer has recorded a larger sales increase, because the consumers have perceived these product as
being higher qualitative, although it had the same composition with similar products that had lower
prices).

3. Conclusions:
In business there is a large variety of options with a vital impact on the companies, but is the
management responsibility to make the best choices regarding the price strategy. We can even talk
about a post-recession consumer, that is not willing to spend all its money, that has experienced
sudden job losses and for that reason is very prudent and well informed. In order to convince
customers in buy, the company has to use all the marketing tools and also have a profound respect for
the consumer, by offering high quality and even have socially responsible actions if possible.

4. References:
- Dickinson, H. - Price Cutters Will Soon Count the Cost, Marketing, October, 2005.
- Jobber, D. - Principles and Practice of Marketing, 5th Edition, McGraw-Hill Education, 2007.
- Muhlbacher, H., Leihs, H. i Lee D. International Marketing: A Global Perspective. 3rd
Edition, Thomson Learning, 2006;
- Wang, Y., Song, J. - China: A future star for foreign Pharma Companies, Pharmaceutical
Executive, August 1999.

417

ROMANIAN WINES PROMOTION STRATEGY DEVELOPMENT AND HEALTHCARE
IMPLICATIONS

NEACSU Onia (Bleaj)
PhD Student, Faculty of Environment Economy and Agriculture, Academy of Economic Studies, Bucharest,
Romania, oana_neacsu@yahoo.com

BOBEIC Ana Maria
PhD Student, Faculty of Marketing, Academy of Economic Studies, Bucharest, Romania
a_bobeica@yahoo.com

Abstract: The occupation of the Romanian wines of some important positions in the EU market and
third country market is one of the objectives of Romanian wine producers presented in the wine sector
development strategy. The promotion is an essential component of the marketing-mix strategy for the wine
industry. For a wine producer using the correct techniques for promovation, eases the way on the market,
resulting to an optimal product recovery and some excellent company financial data. Therefore using various
means to promote Romanian wines, is a way of achieving those important objectives.
Meanwhile the healthcare sector and the European Legislation had important changes related to the
wine promotion and consumption and therefore Romania made also important changes to legislation and
programs in order to reduce the morbidity and consumption of alcohol in general population and especially in
the young category with direct impact in the promotion strategy development of alcohol and wine.

Key words: promotion, wine strategy, marketing mix, healthcare

JEL Classification: Q13, M37, M31, I15

1. Introduction
One could say in case of wine production, what a particular client buys is a certain
satisfaction that meets a particular requirement, a certain motivation. Most times, buying a wine is
judged subjectively.
The product availability, the manner of presentation, the price, the appearance, and the
promovation are taken into account when deciding the purchase of a certain wine. As such, what a
customer buys is not just a wine - product, but a coherent marketing mix which includes price and
circuit distribution and promotion.
The marketing mix is the essence of marketing in any modern organization, one of the
cornerstones of marketing theory and contains the following elements: product or service, price or
price range, distribution and promotional activities. The fourth element of the marketing mix,
promotion, defines the actions related to the companys communications on promoting its product on
target market.
In order to develop a development strategy based on organic viticulture, firstly its necessary
to determine the definition of strategies. An acceptable definition is that: business strategy is a set of
policy objectives that the business owner wants to achieve, setting goals based on studies, research
and forecasts, actions taken on different time horizons and allocation of resources in order to maintain
competitiveness and future development. Another useful definition is that strategy defines all major
organization objectives on the long term, the main ways of achieving those objectives with the
available resources in order to achieve competitive advantage according to the organization's mission.
Authors like Nicolescu and Verboncu highlight the contextual determinants of strategy
including the existence of an ecological determinant, along with the economic, technological, political
one etc.
This manifest has influences on the ecological organization, according to the authors, on two main
plans.
First, major parts of the strategy are the ecological resources.
The second major influence refers to restrictions imposed by environmental protection over
activities. From this dual action it is shown a clear and significant impact of this ecological
determinant of the development strategy.
418

Viticulture is practiced in our country since ancient times, with the production of wine grapes
and thus representing one of the biggest Romania's riches for centuries.
Quality Romanian wines have placed our country along with France, Spain, Italy, Germany,
Portugal among the largest manufacturers and exporters of wine, so that Romania ranks six in Europe
grape and wine production.
In Romania, wine production is a basic occupation, about 300,000 families are involved in
this area, which means that approximately 1 million persons secures their existence of the practice of
wine and wine activities.
Official data on agriculture have been updated using the results of agricultural census and will
be released in 2012.
The main varieties of wine grown in Romania are Noble varieties of white wines: Feteasca
Royal Feteasca white, Italian Riesling, Aligote, Pinot Gris, Muscat Ottonel, Tamaioasa Romanian,
Cotnari Gras, Chardonnay, Sauvignon, Traminer and pink to red wines: Merlot, Feteasca black, black
Babeasca, Cabernet Sauvignon, Pinot noir, Cadarca, Burgundy.

2. Types and categories of wines produced

In our country we can produce the following types and categories of wine:
current white wines produced from varieties: yellow Odobesti, Crmpoie,
Gordan, Create, Jordan, Majarc, mustache, Aligot the following vineyards:
Odobesti, Panciu Cotesti, Husi, Dealu-Mare, Dragasani, Teremia-Tomnatic,
Pncota.
the superior white wine sheath made from varieties: Riesling Italian, Feteasca
white royal Feteasca, Pinot Gris, Sauvignon, Furmint, Traminer pink Romanian
Oily in vineyards: Trnave, Alba-Iulia, Cotnari Tometi, Odobesti, Cotesti,
Pietroasele, Drgani , etc. Segarcea.
white dessert wines that fall:
Aromatic wines: Muscat Ottonel (Cotesti, Panciu Crciunel, Iasi) and Romanian Tamaioasa
(Pietroasele, Dragasani, Segarcea).
Cotnari wine is obtained from varieties: Oily, Feteasca white Frncu, Tamaioasa
Romanian.
Murfatlar wine is obtained from varieties: Chardonnay, Pinot Gris, Italian Riesling,
Sauvignon.
Pietroasele wines made from Romanian Oily variety.
Trnave wines and Alba Iulia Feteasca use white, royal Feteasca, Italian Riesling, Pinot Gris,
Sauvignon and Traminer pink.
Wines Aiud Lechina, sheath made from varieties: Italian Riesling, Neuburger, Feteasca
royal and white Feteasca.
current red wines made from varieties: Soft Black, Black Wash, Cabernet
Franc, Alicante Bouschet, etc
superior red wines: Babeasca (Nicoresti), Feteasca black (Cotesti), Cabernet
Sauvignon, Pinot Noir, Merlot (Valley Calugareasca, cried, Tohani, Dragasani,
mbureti, Segarcea, Corcova, Turnu-Severin, Hill Peony), Cadarca (Minis).
rose wines are made from varieties: Braghin, rudd, Babeasca, Steinschiller pink
Baetica in vineyards: Teremia, Dbuleni, Sarica-Niculiel.
raw material for distilled wine is obtained from varieties: Must for Mader,
Jordan, Plvaie etc. in all vineyards.
raw material for sparkling wines are produced from varieties: Italian Riesling,
Pinot Gris, Feteasca white, royal Feteasca, Sauvignon wine from the tanks:
Panciu Cotesti, Peony Hill, Alba-Iulia, Trnveni, etc. Odobesti.

419

3. The promotion of Romanian wines - A key component of Romanias wine sector
development strategy
Developing a strategy requires the formulation of objectives, options and priorities, while
establishing how to achieve them, needs different kinds of resources and allocations.
In April 2012 the Romanian government had taken into discussion a presentation note for the
Agricultural Development Strategy, a medium and long term public policy that settled out the
guidelines on agriculture for the next 8 years.

Table 1 - main wine grapes grown in Romania

Source: PNVV

Figure 1 - The main wine grape varieties grown in Romania

Variety Area (ha) %
Royal Feteasc 12972.56 7.13
White Feteasc 12,850.58 7.07
Merlot 11,407.38 6.27
Riesling 6,567.80 3.61
Aligote 6,333.12 3.48
Sauvignon 4,973.38 2.73
Cabernet Sauvignon 4,832.71 2.66
Muscat Ottonel 3,987.15 2.19
Black Bbeasc 2,876.13 1.58
Roioara 2,770.97 1.52
Black Feteasc 2,348.91 1.29
Other 109,849.05 60.47
TOTAL 181,769.74 100
420

Table 2 - Noble wineproduction by color in the year 2011-hl-

Wine Region Total White wine
Rose
wine Red wine
Wine region of Transylvania plateau 163,536 159,643.00 228.00 3,665.00
Hills wine region of Moldova 846,094.74 729,158.70 558.38 116,377.66
Hills wine region of Oltenia and Wallachia 732,254.49 356,002.13 10263.38 365,988.98
Hills wine region of Banat 48,771.00 29,658.00 1532.00 17,581.00
Hills wine region of Crisana and Maramures 42,914.00 31,130.20 199.30 11,584.50
Hills wine region of Dobrogea 322,573.00 183,443.00 122.00 139,008.00
Wine region of the Danube terraces 6,886.68 3,450.48 0.00 3,436.20
Sands and aa wine region other land in the south 3,020.00 1,898.00 0.00 1,122.00
TOTAL 2,166,050 1,494,383.51 12903.06 658,763.34
Source: PNVV

Figure 2 - Noble wine production regions by color in the year 2011

The strategy relies on a high natural agro potential that Romania has and requires a strategic
vision so that by 2020, Romania becomes one of the main exporters of agricultural products in the
EU, holding a highly competitive agriculture and very sustainable.
The strategy aims to strengthen the agricultural sector as an important factor for the economic
and social stability of Romania by helping producers to increase the infrastructure investments in
White wine
Rose wine
Red wine
421

order to create conditions to increase the agricultural production. The adoption of this strategy is
important to ensure a coherent and unified approach and a clear and realistic target, specific to public
policy development in the food and agriculture sector.
For viticulture, given its specific objectives, the development strategy is set on a medium and
long term basis. It is taken into account the cultivated area, the grape production, the growth of
opportunities by investing in this sector, the necessary resources in terms of quantity, quality, all this
important in order to achieve the set objectives.
In order to increase the sales volume we need an efficient promotional policy, a good
communication relation with the consumers, the markets and the external environment.
The undertaken promotional activities aim to maintain the current markets trends. For the
future, an offensive action is needed in order to conquer new markets for the existing products and to
develop new markets for other wine products that are available after restructuring of the unit, for the
purpose of diversifying production and increasing its integration.

The promotional activities that Romanian wines producers practiced are based on:
Promotion as advertising, free advertising using mass media: press, radio, TV, promotional
posters;
promotion at point of sale;
participation in conferences, fairs, exhibitions, wine festivals;
promoting the markets of third countries by producers or producer organizations wines with
denomination of origin (DOC) and wines with geographical indication (GI) receiving financial
support under this MAPDR Order no. 218/2009;
Internet usage and the development of online trade. This form is highly developed, all major
producers having their own websites which are known in the world and where they present the
entire range of products.
Examples:
- www.tohani-dealumare.ro/
- www.murfatlar.com/
- www.corcova.ro/
- www.zoresti.ro/
- www.cotnari.ro/
- www.cotnari.ro
- www.jidvei.ro/
- www.domeniile-urlati.ro/
- www.abvwine.com/ etc.

In recent decades the electronic commerce has developed rapidly, the flow of information is
done quickly because of the worldwide Internet connection.
A company that wants to be famous, to promote its products and to present them worldwide
has to choose a network segment, so that it can create its own pages or website. Using such an
electronic environment, the company will launch into a total open worldwide market.
In Romania, the wine producers use the Internet to make themselves known, to present their
products, as well as to increase their online sales.

4. The Wine and the Healthcare Sector
In most countries some special taxes and other taxes are imposed on beer, wine and spirits.
Both the tax base and tax rates usually vary across products and across countries.
Excessive alcohol consumption involves external costs, including road accidents, violence
and crime, and extra healthcare costs, and also a part of the loss of lower labor remuneration.
Recognizing that alcohol is responsible for at least 9% of the total annual burden of disease-
related health and premature death in Europe, the third most important risk factor after smoking and
hypertension and a net figure, WHO (World Health Organization) has developed a set of 10
principles applicable at the European level.

422

4.1. World Health Organization European Charta on Alcohol
Research and successful examples from different countries show that health and economic
benefits for the European Region can be obtained if these ten strategies for healthcare promotion and
actions on alcohol industry are implemented to enable the fulfillment of ethical principles and goals in
accordance with different cultures and backgrounds in each Member State.

1. Informing the public society about the healthcare consequences of alcohol consumption and the
effective measures that can be taken to prevent or minimize the impact and the design of educational
programs that need to be implemented in peoples life since childhood.

2. Promoting in public and private media any professional accidents and violence and other negative
consequences of alcohol consumption.

3. The establishment and promulgation of laws that effectively discourage drunk driving.

4. To promote healthcare programs on young adults for controlling the existence and influence of the
price of alcohol, for example through taxation.

5. To implement control programs, to recognize the existing limitations and banned regulation in
some countries, the direct or indirect advertising of alcoholic beverages and to ensure that no form of
advertising is specifically addressed to young people by alcohol-related examples of sports activities.

6. To provide access to effective treatment and rehabilitation services, with trained personnel, for
people affected by hazardous or harmful alcohol consumption and their family members.

7. To raise awareness of ethical and legal responsibilities of those involved in selling or serving
alcoholic beverages, to ensure strict control of product safety and to implement appropriate measures
against illicit production and sale.

8. The increase of the capacity of society to deal with problems related to alcohol by training
specialists from various sectors such as healthcare, social welfare, education and justice and at the
same time to strengthen the community development and management.

9. To strengthen the nongovernmental support organizations and movements of reliance on forces
those promote healthy lifestyles, especially those in order to prevent or reduce damages caused by
alcohol.

10. The implementing and formulation of extensive programs in the Member States, taking into
account the presence in the European Charta Alcohol, that specifies clear targets and outcome
indicators, monitoring progress, and ensure regular update program after evaluation.

The WHO warns of the growing trend of alcohol consumption in adolescents and young
people around the world. In a study for adolescents with respondents in 73 countries, after a
monitoring period of 5 years (2001-2005) the results were:

71% upward trend;
4% downward adjustment;
8% stable;
16% inconclusive.

423

According the same source, about 9 million children live in families affected by alcohol.

4.2. Consumer preferences for alcoholic beverages
Consumer preferences for alcoholic beverages include : a)wine, as the preferred alcoholic
drink in European countries and South America (Argentina and Chile, the wine-producing countries),
b) beer, consumed 36% of drinkers, is preferred in the Western Hemisphere, most of Northern
Europe, many African countries and Australia. In sub-Saharan African region, where consumption
levels are low, beer and spirits are consumed in equal proportions Relationship, spirits, representing
over 45% of total recorded alcohol consumption.

4.3. Alcohol Consumption and Healthcare in Romania
The data available in Romania for monitoring of the alcohol consumption is extremely poor
and discontinuous. One of the latest dates back from 1997. (Romanian Ministry of Health)
The only studies that were conducted in Romania in the last 10 years have been international
studies made by ESPAD ("European schools survey on consumer alcohol and other drugs") and
HBSC ("health-related behaviors in school children")
In the "Report on the European Alcohol Consumption and Healthcare in 2010" Romania has a
country profile. According to this report, between 2003 and 2005, the recorded alcohol consumption
in adults (persons 15 years +) was about 11.3 liters of pure alcohol per capita per year and had a stable
trend during the study, but has doubled over the last three decades. At this consumption rate plus the
unrecorded alcohol consumption, approximately 4 liters of pure alcohol per capita per year, leads to a
total consumption of 15.3 liters of pure alcohol. In the European countries during the reference period
the total alcohol consumption was 12.2 liters of pure alcohol per inhabitant 15 years + per year.
More than half of the consumers of "light" alcohol (57%), 64% of consumers of "medium"
alcohol and 68% of the "hard" category appreciate their health as "good" and / or "pretty good. If we
introduce the criteria of age, it is found that for the 30-39 years category, consumers of 'hard 'alcohol
category, present severe symptoms like chest pain, back problems, nervous diseases etc.

71% upward trend;
4% downward
adjustment;
8% stable;
16% inconclusive.
Figure 3- General Trend on Alcohol Consumption on
Young adults

424

Figure 4 Alcohol consumption worldwide (2005)

Source: http://www.who.int/substance_abuse/publications/global_alcohol_report/msbgsruprofiles.pdf, pag 16

4.4. Morbidity caused by alcohol consumption in Romania
According to the newly estimates of the Ministry of Health " in Romania over 17,000 people
die annually due to alcohol consumption, and over half of them die during their working life (between
20 and 64). In Romania the mortality in adulthood (20-64 years), attributable to alcohol consumption
is three times higher in men and 1.5 times that in women, compared to EU 15 (Member States by
2004).
Among the causes of mortality attributable to alcohol consumption includes accidents (mortality rate
three times above the EU 15), cardiovascular disease (mortality twice the EU10 average 13 - Member
States in November - and eight times the EU15 average) and liver cirrhosis (mortality over twice the
EU15 countries) ".

5. Conclusions
With the modernization of production and increasing quantities of noble wine quality,
Romanian wine producers aim to increase sales volume, to attract new customers, use their loyalty
and conquest new markets. These major objectives can be achieved through an efficient promotion
strategy by implementing of strategies to differentiate products and to stimulate demand from
consumers.

The manufacturer must use:
Consumer information by sending a message consisting of words, images and symbols to express
the symbolic concept of quality and affordability.
Awareness of message reception completed by the action of purchasing
Pleasure completed by the desire to return and buy again
Preference of products that will be selected from the entire range available
Satisfaction demonstrated by generating a favorable response from consumers that can be
evaluated

Lately, the wine producers add value to their products by including them in the tourist
itineraries. In this way, both the consumer and producer are satisfied, the consumer may buy directly
425

from the source and the producer, as sales increases, he may develop other related activities like
tourism (accommodation, meals), raising the profit considerably.
The promotion of agro-tourism within viticulture has yet to be done with an ecological vision,
in a sustainable environment, for the economic development to not act negatively on the
environment, the unique framework of humanity, the psychological and spiritual support of our
lives".

Healthcare implications of wine consumption are multiple and affect all the population. The
presence of the European Union legislation had decrease consumption and reduced morbidity in the
risk categories but many healthcare measures still need to be done.

6. References:
-
Bran Florina (2002) Economy-environment relationship in the third millennium,
ASE, Bucharest
-
Burja Camelia (2005) Restructuring and economic performance in viticulture and
winemaking, Ceres Publishing House
-
Iacob Catoiu & Sanda Pantazi, (2007) "Semnificatii ale comportamentului
consumatorului in elaborarea strategiei de promovare a unei marci," , Revista de Marketing Online,
Academy of Economic Studies, School of Marketing, vol. 1(1), pages 2-5
-
Voicu R., Dobre Iuliana (2003) Agricultural organization and strategy development
units", ASE Publishing House, Bucharest
-
Manole V., Stoian Mirela (2001) Agromarketing, ASE Publishing House, Bucharest
-
Rzvan Zaharia (coordonator) - Marketing strategic. Suport de curs, Editura
ASE, Bucureti, 2000, ISBN 973-8127-91-2, 176 pag.
-
***Studiu: Ministerul Sanatatii, July 2011, Luna Nationala a Informarii despre
edectele consumului de alcool
-
***Comunicat de pres, Ministerul Sntii, Bucureti 2.06.2006,
http://www.ms.gov.ro/?pag=62&id=6258&pg=1
-
***Global status report on alcohol and health 2011, WHO, 2011, pg. 5,
http://www.who.int/substance_abuse/publications/global_alcohol_report/msbgsruprofiles.pdf
-
***Note on the problems of alcohol as a risk factor to health: current situation and
objectives, Ministry of Health. Department of Public Health and Public Health Control, Cabinet
Minister, 21 March 2011
-
*** www.eurostat
-
*** www.fao.org
-
*** http://www.pnvv.ro/
-
*** www.oniv.ro/

426

COMMUNICATION PARTICULARITIES SPECIFIC TO RELATIONSHIP MARKETING
CASE STUDY: INTERACTIVE COMMUNICATION AND EMOTIONAL COMMITMENT
BASED ON AGE GROUP OF CLIENTS

NEAGOE Cristina
Teaching assistant PhD, Faculty of Management Marketing, Romanian American University,
Bucharest, Romania, cristina_neagoe2004@yahoo.com

Teaching assistant PhD. Student, Faculty of Management Marketing, Romanian American
University, Bucharest, Romania, emanuela.maria@yahoo.it

Abstract:This scientific research bases on easily identifiable grounds both in the communication
theory specific to relationship marketing and in the organizational practice. In order to help the managers of
the modern organizations, the present study aims at obtaining relevant results regarding the way of designing
the strategic plan of communication as well as finding which are the fundamental elements of the emotional
commitment in a close relation with the segments designated by the clients from the organizations portfolio
determined by the following criterion the age of the clients.

Key words: interactive communication, emotional commitment, relationship marketing, client
segments


1. Introduction
The competitive environment leads to perspectives sensitively distinct as regards client
approach, elaborating thus a series of activities aimed at creating, developing and maintaining client
relations. The behaviour of the company oriented towards achieving profitability and value on the
long term, from the mutual interactions and exchanges between the participants, appears nowadays
extremely fascinating, stimulating and exciting. On the competitive markets, where marketing exists
nowadays, all the organizations (small and medium-sized enterprises, governmental, commercial,
educational or other types) can and must communicate in a personal manner with the clients.
For establishing the partnership relations it is necessary the adaptation of communication
according to the target specificity towards which communicational messages are sent (Popescu I. C.
2003, p. 61). In this context, this research bases on easily identifiable grounds both in the
communication theory specific to relationship marketing and in the organizational practice. Various
authors have clearly delimitated the subjects discussed based on the specificity of the target public.
There is a dominant aspect that stands out, i.e. the particularization of the young generation which is
largely made of persons that belong to the internet era.
All these considerations lead to the conclusion that currently there is a need for investigating
the way in which the organizations strategic plan of communication displays different forms
according to a series of characteristics of the client segments. In order to help the managers during
this stage we aim at obtaining relevant results regarding the way of designing the strategic plan of
communication in a close relation with the segments designated by the clients from the organizations
portfolio determined by the following criterion the age of the clients.

2. Methodology
The methodological corpus sustaining the correct and coherent progress of this scientific
research is presented in stages. Moreover, the presentation and interpretation of the obtained results
are dedicated a distinct chapter. We mention that the study has developed on the Romanian insurance
market, and the general objective of the quantitative research is to determine the way in which the
preferences of the policyholders regarding communication and emotional commitment gain different
nuances in relation to the age group they belong to.
427

2.1. Research objectives & hypotheses

The objectives of the quantitative research are formulated so as to provide clear courses of
action that will permit the attainment of the general purpose. The following aspects are considered to
have a great importance:
- Determining the way in which the organizations communication plan has to differ in
relation to the age of the target clients;
- Determining the factors that lead to the clients emotional commitment in relation to the
age group they belong to;
Closely related to the purpose and objectives of the study, a series of hypotheses have been
stated for testing. For ensuring the correctness of the formulation of hypotheses, the corpus of
secondary data which provided the researcher with information of interest has been also taken into
account. The hypotheses regarding the variation of the variables communication and commitment
in relation to the age of the clients are the following:
Policyholders preferences regarding the communication mechanism depend on the
age of the respondents;
Clients belonging to the 18-26 age group prefer interactive communication
(especially online);
Clients belonging to the 46-55 age group prefer traditional communication;
Clients emotional commitment differs in relation to the age group they belong to;

2.2. Data collection

The research tested clients of the Romanian insurance market. By establishing the sample size
and the sampling method I have sought to cover the analysed issue by means of ensuring the
representation of each possible case.
In accordance with the results of the first stage of information analysis (respondents
classification), there is an equally distributed frequency based on age groups. Therefore,
representation is guaranteed, and every model resulted can be considered valid in the light of this
criterion.
The period of collecting data from the respondents who formed the researched collectivity
was of approximately 5 months.

3. Findings and interpretation of results
The results of the descriptive econometric analyses show significant fluctuation of the
variables describing communication in relation to the age group of the clients tested. Under these
circumstances we can affirm that the purpose of the research is justified and the managerial
implications of these results reveal the following certitude: the strategic plan of communication must
be designed closely connected to the age segment. Therefore, during each stage of designing the
communication mechanism, the marketer has to manage carefully: the flow, frequency, direction and
its development modality as well as the task of correctly identifying the mix of communication tools
which can affect clients satisfaction of the segment in question.
In order to provide concreteness and an overview of the elaborated study, I have decided that
the presentation of the results should be accompanied by the questions formulated in the investigation
instrument used for collecting data.

~ Regarding the respondents attitude towards communication in relation to the age group
they belong to, the following results have been obtained:

428

Table 1: The attitude of the respondents regarding communication based on age

Interactive communication
Please specify the age group you belong to
under 26
years
26 35
years
36 45
years
46 55
years
over 55
years
Media Media Media Media Media
(A) (B) (C) (D) (E)
1. There is a mutual exchange of information
between the clients and the insurance company
6.63

7.19

7.81 A
7.9
3
A
7.1
7

2. Information exchange is frequent 5.65

6.63

7.10 A
7.3
8
A
6.3
3

3. There is direct and interactive (phone, face-
to-face, etc.) communication between the
insurance company and the clients
7.28

7.95

7.71

8.1
1
6.6
7

4. The information exchange between the
company and the clients is transparent (no
hidden intentions)
7.17

7.07

7.89

7.8
2
7.3
3

4. The more the insurance company solicits
client feedback, the better the client
satisfaction
8.40

8.72

9.10

8.5
2
8.1
7

5. Most often insurance company inform about
the new and more profitable offers
7.80

8.60

8.73 A
8.1
8
7.8
3

Source: Personal investigation supported by the statistical software SPSS 19

It must be underlined that there are significant differences among groups 3 and 4 (C and D)
and the first two (A and B). The statistical analysis reveals a significantly higher mean recorded for
age groups 34-45 years and 46-55 years compared with that of the 26-35 years and 46-55 years
groups. At the same time only three of the criteria defining interactive communication can be
considered relevant for this study. Thus, the investigated subjects, with ages between 36-55 years (C
and D) are more aware than those with ages between 18-35 years (A and B) of the mutual information
exchange between the policyholders and the insurance, affirming also that this is more frequent.
The interpretation of information offers us the framework for the argumentation of the
following convictions:
Policyholders aged under 36 years need greater mutuality when collaborating with
the insurance agent;
Policyholders aged under 36 years need a significant increase in the communication
frequency (information exchange is not frequent enough);
Policyholders aged under 36 years have to be informed more often about the new
offers that might suit them.
All these may be due to the lack of experience of the young insurance agents in the extremely
complex field of insurance. The increasingly prominent necessity for information intervenes almost
naturally as compared to other age groups. Consequently, organizations have to devote more attention
to planning the marketing communication in relation to this characteristic of the target. At the same
time, it must be specified that the strategic dimensions base on mutuality, frequency and
communicational message.

429

~ Regarding the respondents attitude towards commitment in relation to the age group
they belong to, the following results have been obtained:

Table 2: Emotional commitment of respondents based on age
Emotional commitment
Please specify the age group you belong to
under 26
years
26 35
years 36 45 years 46 55 years over 55 years
Media Media Media Media Media
(A) (B) (C) (D) (E)
1. When choosing the insurance
company quality is the most
important factor
8.13

8.21

8.98

8.39

9.17

2. I trust the products and/or
services offered by the insurance
company
7.88

8.19

8.64

8.57

8.33

3. Purchasing insurance policies
has always been a transparent
process
7.85

7.05

8.31 B 8.18

8.00

4. The insurance company has a
favourable reputation on the
market
7.85

8.49

9.03 A 8.84 A 8.67

5. The insurance company is
willing to solve my problems
7.41

8.07

8.27

8.33

8.33

6. Solving damages optimally is
essential for renewing the
insurance policy with the same
insurance company
8.42

8.42

8.56

8.66

8.83

7. Competing insurance
companies are not considered
more efficient
7.38

6.93

8.34 B 8.74 AB 7.50


Similar to the communication case, differences at the level of the four age groups that make
up the global sample are observed. The means of the age groups C and D (34-45 years and 46-55
years) are significantly higher than those recorded for age groups A and B (under 26 years and 26-35
years). Moreover, not all the items considered in the elaboration of the independent variable are
representative for the analysis results. Therefore, only criteria 3, 4 and 7 are representative.
Information reveals the following:
Policyholders from age groups 36-45 (C) years and 46-55 (D) years are more
convinced that the insurance company has a favourable reputation on the market
than those with ages between 18-35 years (A and B);
Policyholders aged between 36-45 (C) years do no perceive the competing insurance
companies as being more efficient and they also consider the activity transparent as
compared with the age group 26-35 years (B) which has obtained uncommonly low
means for this criterion;
Policy holders aged between 46-55 years (D) do not perceive other competing
companies as being more efficient than the one contracted by them as compared to
those from the first two age groups (A and B) who have scored lower means for this
criterion.
Considering that a high weighting of those aged over 35 years represents policyholders who
have collaborated for a long time with an insurance company, their answers are justified. The
persistence of the relationship leads to emotional commitment among clients. Repeated satisfaction
offers more security to policyholders while transparency, reputation and performance become
differentiation criteria between the insurance companies contracted by the subjects and the other
existing on the market.
430

4. Conclusions and managerial implications
For an increased efficiency in underlining the main conclusion I have opted for a three-level
presentation:
1) One of the most important results of these analyses is the significantly different perception
of the respondents regarding the interactive communication in relation to the age groups
they belong to;
Thus, those aged under 35 years indicate an insufficiency of the mutual information
exchange, of the messages regarding the offer and they do not consider the current interaction
frequent enough. These considerations oppose those specific to the respondents aged over 36 years.
As regards the communication strategy planning in relation to the target segment considered
(mainly defined by the age of the clients) has to differ in terms of the three criteria (mutuality,
message, frequency). Therefore, promotion campaigns aimed at the youth under 35 years must be
designed so as to ensure:
Increased perception upon the mutuality in the collaboration with the insurance agent;
Increased frequency of the information exchange;
The communicational message is to contain more information about the new offers (less about
the price);
2) Another valuable result refers to emotional commitment. Thus, at least at the level of the
three considered criteria (transparency, reputation, performance), the respondents aged over
36 years manifest a more prominent emotional commitment than those belonging to inferior
age groups (up to 35 years).
Emotional commitment is a relatively new concept. At the moment, organisations do not have
answers regarding the way in which this mechanism functions. Consequently, these results may have
important managerial implications given the following assertion: emotional commitment is more
pronounced among clients aged over 36 years. In consequence, the organizational efforts can be
oriented towards promoting the emotional commitment among the youth aged under 35 years.

5. References:
- Finne A., Grnroos Ch., (2009), Rethinking marketing communication: From integrated
marketing communication to relationship communication, Journal of marketing
communications, Vol. 15, Nos 2-3, pp. 179-195
- Grnroos Ch., (2004), The relationship marketing process: communication, interaction,
dialogue, value, Journal of Business and Industrial Marketing, Vol. 19, pp. 99-113
- Gummesson E., (1987), The new marketingDeveloping long-term interactive
relationships, Long Range Planning, Volume 20, Issue 4, pp. 10-20
- Gustafsson A., Johnson D., Roos I., (2005), The effects of customer satisfaction,
relationship commitment dimensions, and triggers on customer retention, Journal of
Marketing, Vol. 69, pp.210-218
- Kimmel A., (2005), Marketing communication: New approaches, tehnologies and styles,
Ed. Oxford University Press
- Kitchen Ph., Don Shultz, (2009), IMC: New horizon/false dawn for a marketplace in
turmoil, Journal of marketing communications, Vol. 15, Nos. 2-3, pp. 197-204
- Menon K., OConnor A., Building customers affective commitment towards retail banks:
The role of CRM in each moment of truth, Journal of Financial Services Marketing Vol.
12, pp.157-168
- Popescu I.C., (2003), Comunicarea n marketing, Ediia a II-a revizuit i adaugit, Ed.
Uranus

431

THE PREFERENCES OF CLIENTS REGARDING INTERACTIVE AND
UNIDIRECTIONAL COMMUNICATION ON THE ROMANIAN INSURANCE MARKET

NEAGOE Cristina
Teaching assistant PhD, Faculty of Management Marketing, Romanian American University,
Bucharest, Romania, cristina_neagoe2004@yahoo.com

Abstract: In a direct relation with the role of the marketing activity in the insurance field appears the
necessity of analysing intensively the issue of the typology, techniques and tools of the marketing
communication. In order to meet the requirements of this research I have included as variables with a potential
effect on the clients satisfaction both the interactive communication (interactive communication tools) and the
unidirectional communication (communication techniques and tools specific to the transactional marketing).
The mix of the communication tools preferred by the respondents is very important, and this will outline the way
in which a complete harmony between unidirectional and interactive communication can be ensured.

Key words: unidirectional communication, interactive communication, communication tools,
relationship marketing;


1. Introduction
Due to the characteristics of the human life, outlined by a series of uncertainties, anyone can
be affected in a lesser or greater extent. Integrity, physical and mental health, the inability to conduct
routine activities and so on are elements that can cause distress to people and, more specifically, can
account for the lack of income of the individual or even of his whole family. Therefore, the action of
mitigating the repercussions of such circumstances finds its answer in purchasing insurance policies.
Over a lifetime, people can acquire many goods, more or less valuable, which are always
subject to risk. The factors that threaten their existence such as fires, earthquakes and floods do not
know limitations and they can be only partially foreseen while most of the time they remain totally
unexpected. In these conditions, and knowing that almost anything can be insured, unfortunate events
can be overcome without too much difficulty.
All considerations mentioned underline the role and position of the insurance field in
economic and non-economic activities. But even in these conditions, the economic actors of this
specific market face several challenges, especially in developing countries where a unitary perception
is not yet clearly formulated on the implications of this type of activity. Insurance is a very complex
financial product and therefore the operating mechanism is complicated. In essence, the following
situation must be managed appropriately: customers must pay before knowing what they have
acquired, hoping that they will never need what they have bought.
The particularities of the insurance field imprint the marketing activity with different nuances
that seem to be closely connected with both the characteristics of the insurance products and with the
clients perceptions of the progress of such an activity. In a direct relation with the role of the
marketing activity in the insurance field, a subject greatly debated in the international and Romanian
specialized literature, appears the necessity of analysing intensively the issue of the typology,
techniques and tools of the marketing communication. This approach involves accountability, rigour,
coherence, consistency and building a logical research structure.

2. Theoretical aspects underlying the research

2.1. Conceptual delimitations regarding insurance
In specialized literature concepts are well defined. However, definitions of concepts that are
unanimously accepted are not found because each author has a significantly different view.
In the process of defining the notions characterizing the insurance field, we primarily point
out the difference in meaning between the terms "insurance" and "insurance activity". The report
432

progresses from particular to general, where insurance is just one of the many elements that make up
the work done in this area.
The insurance has an important role in the contemporary economy. The distinct position in
this field is due to the significant number of considerations and among these we specify the universal
need for protection and the fact that anyone may be subject to governing.
In his book "Dicionarul de asigurri" Constantinescu D. A. points out that "insurance is a
system of economic social relations, an objective process necessary for the economic and social
development that has sprung from the action of objective economic laws which consists in the joint
creation, by individuals or legal entities, of a damage compensation fund and other economic
financial requirements that are probable and unpredictable" (Tnsescu P., erbnescu C., Ionescu R.,
Popa M., Novac E. L, 2007, p.11). As follows from this definition, the main purpose of insurance is to
protect individuals or legal entities against financial loss by creating a fund that is meant to cover
damages and not to increase company profits by imposing a higher value insurance (illegal practice).
According to the essentials of marketing, a predominantly economic view can be maintained
if the detailed presentation of the technical elements of insurance bears no binding character.

2.2. Interactive communication and unidirectional communication
Interactive communication and unidirectional communication are often considered in an
antithetical manner. The former is specific to the new marketing adopted by organizations which aim
to treat each client differently, personally.
In relationship marketing, a major role in the process of earning the loyalty of the client is
occupied by dialogue. In this context, organizations use an appropriate conduct by assigning a
significant percentage of the whole communicational process to interactive media. The same principle
applies to the techniques and tools of communication. Interactivity, as a success factor of the
marketing activity is underlined by T. A. Shimp, a highly esteemed specialist in marketing
communication, according to whom success consists in building relationships between the brand and
the client, and communication is a strong bond between the organization and customers. In addition,
"communication is a central element leading to customer retention and focuses on building
relationships by providing a high interest to dialogue" (Gronroos Ch. 1994, p. 8).
Transforming markets by changing the balance of power, from the sovereignty of the bidders
to the power of the customers, causes organizations to offer goods and services of a largely
homogenous quality. Under these circumstances, "communication between the company and the
client becomes an element of decisive differentiation, observing thus that the centre of gravity of
traditional communication is moving towards dialogue (Bruhn 2001, p. 240). "The old paradigm a
system of mass production and advertising is substituted by a new paradigm one to one economic
system, products adapted to the particular needs of the individual, personalized promotion tailored to
each consumers specification. (Kitchen Ph., Don Shultz, 2009, p. 198).
The theoretical framework of the current marketing context is emphasised by the customer-
oriented policy. As regards the trends in communication they are the following: Communication is
designed to inform, persuade and remind consumers, directly or indirectly, about the marketed
products and brands; it represents <<the voice>> of the company and the means by which dialogue
can be established with customers and also by which an appropriate collaborative environment can be
created" (Keller K. L., 2009, p. 141).
In contrast there is the unidirectional communication. This type of communication is specific
to transactional marketing and the process is characterized by a messaging flow mainly unidirectional
from the company to customers. The techniques used by the organizations that adopt this method of
promotion are essentially those that enable mass communication (Ex. TV advertising, radio, printing).
"Advertising is a paid and indirect form of communication made by an identifiable source in order to
convince the receiver to act in one way or another, now or in the future" (Shimp T., 2007, p. 240). The
main objectives of carrying out a publicity campaign are: "building brand images, informing
consumers, persuading, supporting other marketing communication efforts, stimulating the action of
buying (Clow K., Baack D., 2010, p. 156).
To summarize, direct and interactive communication is proposed by most specialists as a key
to achieve the ambitious goals of relationship marketing. In these conditions the mainly used
433

multimedia supports are those with the capacity to ensure a high degree of interactivity. The most
used are: Internet, mobile phones and interactive TV.
However, we have the conviction that in order to meet the requirements of this research it is
necessary to provide a complex vision upon the communication plan that may be adopted by an
organization in close relation with the customers opinion (policyholders physical persons). In this
context, the research model has been designed using two variables with a potential effect upon clients
satisfaction, i.e. both the interactive communication (interactive communication tools) and the
unidirectional communication (communication techniques and tools specific to transactional
marketing). The typology of the communication tools preferred by the respondents is important, and
this is emphasised by presenting the way in which a complete harmony between the unidirectional and
interactive communication can be ensured.

3. Methodology
In this part, the stages that make up the methodological structure of the quantitative research
as well as the main results of it are presented. The study carried out among the clients of the
Romanian insurance market (policyholders, physical persons) aims at determining the opinion of the
policyholders on the communication tools used by the insurance companies and at obtaining the
necessary information for designing an optimal communication (built by means of a mix of elements
specific to both the interactive and unidirectional communication) from the respondents' point of
view.

3.1. Research objectives & hypotheses
The objectives of the research are descriptive in nature and aim at obtaining some directions
that can be used as a managerial support for the optimization of specific strategies. Once the decision
making issue is identified, extra hours are needed.
The objectives of the research are closely connected to the analysis of the current knowledge
degree in the reference field. In order to ensure the relevance of the entire research, from the
standpoint of the information volume that can be obtained, the following objectives were considered
relevant:
- Knowing the preferences of the policyholders regarding the communication tools that can
be used by the insurance companies;
- Knowing the opinions of the policyholders on interactive communication;
- Knowing the opinions of the policyholders on unidirectional communication;
In order to complete the courses of action, a series of hypotheses has been identified, which
have been formulated in close relation with the specific theoretic corpus as well as with a series of
empirical investigations. It is important to stress the following aspects:
Face-to-face communication is one of the most preferred modes of communication among
the clients of the insurance market (due to the particularities of the insurance market);
The preferences of the policyholders are mostly oriented towards interactive
communication tools (e-mail, website, face-to-face, etc.);
Policyholders have a positive attitude towards interactive communication, because it is
perceived to have a high degree of transparency and an increased potential for personalizing
products;
Policyholders have a positive attitude towards unidirectional communication given the
perception of a high financial power of the insurance company;

3.2. Data collection
The method used for this quantitative research bases on a questionnaire investigation. For an
adequate design of the questionnaire, the general purpose and the formulated objectives and
hypotheses have been taken into account. A five-item scale (where 1 the least efficient and 5 the
most efficient) has been used to measure the efficiency perceived by the clients (policyholders
physical persons) regarding the communication tools adopted by the insurance companies. The aim of
another stage of the research was the identification of the clients' preferences in terms of one or
another type of communication (interactive and unidirectional) in a close relation with a series of
434

organizational objectives possible to achieve (the perception of a high financial power, orientation
towards innovation, etc.)
The quantitative approach permitted collecting data from a significant number of subjects,
ensuring thus the representation at the level of the analysed population (in the insurance field). The
process of data collection lasted for almost 5 months, the research took place in Romania and the
policyholders (clients, physical persons) represented the collectivity involved in the development of
the approach.

3.3. Findings
The findings of this research, upon which descriptive econometric analyses were realized,
have the purpose to confirm (or infirm) some of the theoretical aspects regarding the utility of both
interactive and unidirectional communication in relation with the clients. Under these circumstances,
by formulating specific questions, the validation of some hypotheses referring to the policyholders
preferences regarding the communication tools used by the insurance companies as well as the
identification of the optimal communication typology were taken into account. In what follows, both
the questions, as they are listed in the investigation instruments and the main results of this research
are presented.

+ How do you evaluate the following communication methods used by an insurance company
with its clients?
This question has the purpose to classify the communication tools used by an organization
according to the preferences of the clients. In order to ensure the research accurateness, eight
communication tools were stated while maintaining a balance between those that permit a high degree
of interactivity and those that function mostly unidirectionally. The distribution of preferences is
presented in the following graphic:

Figure 1: Respondents preferences regarding communication tools


In this situation, most of the subjects show a positive attitude regarding face-to-face
communication, approximately 55% (mean 4.24) consider it the most efficient method. However,
there is a significant mean of 3.65 in favour of the organizational website, a mean of 3.43 for mobile
phones and a mean of 3.38 for e-mail among the preferences of the policyholders.
The respondents questioned about these problems situate on the first 4 positions the
communication tools which are considered in the specialized literature to be indispensable for
3.65
3.02
2.88
3.38
2.74
3.43
2.55
4.24
1.00
2.00
3.00
4.00
5.00
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Foarte eficient
Eficient
Aa i aa
Putin eficient
Deloc eficient
Mean
High efficiency
Efficient
Medium efficiency
Low efficiency
435

building an interactive communication plan. Even though many authors, who have discussed the
specificity of communication in relational context, have pointed out the necessity of giving
precedence to the website as a tool for targeting the market in the insurance field, face-to-face
communication has the greatest importance from the clients' point of view. If these two were to be
combined successfully, then direct chatting could constitute a useful tool in the light of the reduction
of the face-to-face communication costs and, at the same time, of the capacity to meet the criteria of
this type of communication.
+ How do you evaluate the following statements in relation with the communication type
Interactive communication (Phone, E-mail) Vs. Unidirectional communication (TV, Radio,
etc.)?

The results of the study are presented in the next graphic:

Figure 2: Respondents' preferences regarding the communication type according to a series of
criteria


Provided that it is demonstrated by both theory and organizational practice that strategic
planning of communication depends mostly on the established objectives, the research has been
designed so as to obtain a volume of information as edifying as possible. Consequently, a series of
hypothetical objectives was formulated such as transparency, personalizing, financial power, etc. in
order to identify the optimal communication version directly related to the insurance companys
proposed strategic objective at a certain point in time.
The findings of the analysis emphasize a clear preference of the subjects for interactive
communication. This information shows that regardless of the considered criterion, the policyholders
prefer an interactive approach from the organization. A firm percentage has been recorded in the case
of the subjects who have affirmed that they perceive the insurance companies that use interactive
communication as being more modern (76.5%), more transparent (75.4%) as well as more reliable
(75.4%). Given the fact that transparency is one of the decisive factors for obtaining satisfaction on
the insurance market, the role of the interactive planning of communication in organizational practice
is thus underlined.
By correlating these results with those of the previous analysis we can certainly affirm that
the approach methods of the mentioned market have a great importance for satisfying policyholders,
and these are the following: face-to-face communication, website, mobile phones and e-mail. These
prove their utility in any context - the perception of a high degree of transparency, of personalizing,
modernizing, etc.

75.4%
63.7%
76.5%
66.5%
75.4%
24.6%
36.3%
23.5%
33.5%
24.6%
0% 20% 40% 60% 80% 100%
Un grad ridicat de transparen n
colaborarea cu o companie de asigurri
este dat de
Ajut la personalizarea
produselor/serviciilor oferite de o
companie de asigurri
Sunt mai moderne companiile de
asigurri care abordeaz clienii prin
Percep ca fiind mai puternice
companiile de asigurri care folosesc
.Am mai mult ncredere n companiile
de asigurri care utilizeaz
Comunicare interactiv
Comunicare unidirecionat
A high degree of transparency in
collaborating with the insurance
company is given by

Helps personalizing the
products/services offered by an
insurance company

Insurance companies are more
modern if they approach clients
through

Insurance companies are perceived
to be more powerful if they use

Insurance companies are more
reliable if they use

Interactive communication
Unidirectional communication
436

4. Conclusions and managerial implications
In terms of relationship marketing, the study has a series of significant implications upon the
progress of the communication activity and upon the realization of the adequate marketing strategies.
The transition to relationship marketing is an extremely difficult process and Romanian organizations
face major challenges in this context. The undertaken research aims at presenting the strategy
structure that has to be considered in order to increase the chances of maintaining and developing
client relations.
Descriptive studies complete the strategic picture of the communication mechanism used by
the insurance companies by offering a real support at the tactical level. The following aspects are
pointed out:
The preferences of the policyholders regarding the communication methods with the
insurance agent; the hierarchy is as follows:
1) Face-to-face;
2) Mobile phone;
3) Organization website;
4) E-mail.
As a consequence, we consider useful the following proposal which refers to the realization of
the communication strategy that could prove its efficiency both in increasing satisfaction and in
developing relationships: the installation of secured systems for computer mediated communication,
i.e. direct and interactive (online chat). The costs involved by face-to-face communication would be
considerably reduced and at the same time the communication effects through chat could be similar to
those generated by face-to-face interaction.
The preferences of the policyholders regarding Interactive vs. Unidirectional
communication;
The study confirms the aspects demonstrated in the causality analyses. Interactive
communication is more likely to achieve clients satisfaction. The drawn conclusions ensure managers
that the organizations using interactive communication will be perceived by the clients as being:
More transparent;
More likely to personalize their products and services;
More modern;
More powerful;
More reliable.
Companies should involve actively in developing the adequate communication mechanism.
Its efficient design increases the chances of the organization to maximize the opportunities offered by
a positive perception from the market.

5. References:
- Bruhn M.(2001), Orientarea spre clieni, Ed. Economic, Bucureti
- Clow K., Baack D., (2010) Integrated advertising, promotion, and marketing
communications, ediia a IVa, Ed. Pearson
- Egan J., (2007), Marketing communications, Ed. Thompson
- Grnroos Ch., (1994), From marketing mix to relationship marketing, towards a paradigm
shift in marketing, Management Decision, Vol. 32, Nr. 2, pp. 4-20
- Keller K. L., (2009), Building strong brands in a modern marketing communications
environment, Journal of marketing communications, Vol. 15, Nos. 2-3, pp. 139-155
- Kitchen Ph., Don Shultz, (2009), IMC: New horizon/false dawn for a marketplace in
turmoil, Journal of marketing communications, Vol. 15, Nos. 2-3, pp. 197-204
- Pop N. Al., Neagoe C., Vldoi A.-D., (2010), "Integrated Communication in Internal
Marketing. Case Study for SMEs", Proceedings of the 5th International Conference on
Business Excellence, Brasov, Romania, in Bratianu, C., Lixandroiu, D., Pop, N. Al.:
Business Excellence, Vol. II, pp. 89-92, Ed. INFOMARKET, ISBN: 978-973-1747-24-8,
15-16 October
- Shimp T., (2007), Integrated marketing communications in advertising and promotion,
Ediia a VIIa, Ed. Thomson South Western
437

- Tnsescu P., erbnescu C., Ionescu R., Popa M., Novac E. L., (2007), Asigurri
comerciale moderne, Ed. C. H. Beck

438

E-COMMERCE - A VIABLE PART OF WINEMAKERS STRATEGY: STUDY ON THE
CONTENT OF ROMANIAN WEBSITES

NI STORESCU Tudor
Professor/ Ph.D., Faculty of Economics and Business Administration/Department of Management
Marketing - Business Administration, University of Craiova, Craiova, Romania,
tudor.nistorescu@yahoo.com

PAVEL Silvia-Mihaela
Assistant Professor / Ph.D. student, Faculty of Economics and Business Administration/Department of
Management Marketing - Business Administration, University of Craiova, Craiova, Romania,
silvia.pavel@ymail.com

CONSTANTI NESCU Adina
Assistant Professor/ Ph.D. student, Faculty of Economics and Business Administration/Department of
Management Marketing - Business Administration, University of Craiova, Craiova, Romania,
adina_con@yahoo.com

Abstract: The deepening economic crisis has not left the wine industry unshaken, businesses
stringency strongly emphasizing the need for effective websites for winemakers. The purpose of this research is
twofold. From the managerial perspective, the main goal is to develop a website assessment model useful to
wine industry actors. From the academic perspective, the purpose is to identify the correlation between the 2.0
instrument structure and size and organizational structure coordinates. Winemaking companies in Romania
were examined. Websites were grouped based on similarity in the constructs. Some major points of
differentiation were identified between clusters labeled as wine oriented and marketing oriented websites.

Key words: winery website, e-commerce, web 2.0 instrument, construct, evaluation model

JEL classification: M11, M15, N50, O13, 014, 031, 032, 033, Q14

1. Introduction
For any passionate of wine and travelling, wine tasting at the winery has a special flavor, that
of the story of the place and people. But the wine no longer whispers its secrets only among nicely
appointed barrels and smell of fermenting, but invites us to explore its lands also through virtual
reality.
Consumers today expect to find virtually any information online before a visit to the
winery or online purchases. Internet sales, following an ascending path, for traditional players is
not the solution to the crisis, but a new opportunity, extremely important to generate visibility and
get the brand noticed, but also to get sales as a result of the past.
Most wine producers in Romania live in the past, since they take no advantage of new
opportunities offered by the Internet to improve their businesses, such as using social networks and
other tools such as online video streaming, blogs, Facebook, Twitter, Foursquare, etc. Today,
technology is vital for professional development, and the Internet is an important instrument that
winemakers must use to interact with customers and capture new markets. Moreover, the website
allows small producers to compete in a market dominated by giants of contemporary inland wine
industry, and their product to reach the final consumer.
Wine estates should lead the public to visiting the places managed, and not wait for an
importer or distributor to make their wines known. The website needs to speak to consumers in any
part of the world, who know nothing about these wines, not very well handle surfing the internet or
have a faulty internet connection. The page must be easily understood, quickly run through and focus
to capture a new ordinary consumer, not a wine critic.
At a minimum, most winemakers websites include information regarding the wine
philosophy and style, in an attempt to create a need among consumers, to make them wanting to taste.
439

The experience is very different from a shopping trip to the supermarket, where the consumer loses
himself in the overwhelming multitude of references, and where he can only find basic information on
the vineyard that supplied the terroir, grape variety, vine variety, technology and skills of viticulturist
and oenologists who contributed to the completion of the bottled poetry of their hands.
2. Background
A recent study reveals that about 50% of vineyards and wineries around the world have
websites. It is a surprisingly low percentage, given that wine producers who have websites see
websites as a vital and essential promotional tool. Websites are often the key element in the marketing
strategy of a wine producing company. Many companies that do not have websites, have no e-mail
neither.
Information provided by ozwinetours.com (Australian Wineries) which collects data on each
producer in Australia, shows that only 1590 (53%) of the 3009 producers surveyed have websites. A
review of the wine producers in other countries, listed on uncorked.biz reveals similar results. Table 1
contains the percentage of winemaking companies that own websites, of all those included in the
survey, for the most important wine-producing countries worldwide:

Table 1: Website uptake rates for various countries
Country Percentage of wineries that have websites N
o
of wineries surveyed
France 44% 1464
Italy 14% 3110
USA 62% 3843
Canada 58% 320
New Zealand 46% 565
South Africa 51% 414
Australia 53% 3009
Source: Websites for Wineries, http://www.websitesforwineries.com/winewweb.html

The literature on winemakers websites reflects a lack of uniformity regarding the main
purpose of studying the content of websites. It is definitely understood that the website has become an
important part of the marketing strategy of a wine producer, helping to build customer loyalty, to
develop the brand, to increase traffic to the wine cellar and tasting room and encouraging direct
purchasing. But the website has also become an important channel for online purchase. Thus, the two
main goals of a website are transactional and informational (Bruwer and Wood, 2005).
Most of the winemakers websites researches focused on studying online purchase from
multiple perspectives. Alpine (1999) notes that although wine is one of the categories of products that
best fit internet purchase, it can affect established, traditional producer-distributor relationships. Major
(2000) argues in favor of websites, showing that they reflect the adoption of Internet experience, a
high degree of website complexity matching with high value for the company. Goodman (2000)
argues that the Internet allows small and medium wine-producers to expand to global outlets, crossing
barriers to export, but draws attention to the fact that the aspect of the website quality should not be
overlooked as a measure of effectiveness in a business, extremely important for small producers who
lack sufficient resources to engage professional expertise. Sticker et al (2001) manages a typology of
websites, noting that there are websites focused on the sale of wine and websites focused on providing
information.
Gebauer and Ginsburg (2003) have attempted to develop online business models in the wine
industry. Bernet and Stricker (2003) evaluated the websites of two regions in Germany, establishing a
methodology they called web-rapid appraisal. Website quality assessment was driven in terms of
usability attributes, grouped in three categories: technical, design and content, some of which are
difficult to see without significant programming skills.
Bruwer and Wood (2005) studied the motivations and behavior of online wine buyers. But
websites do not speak only for wine buyers. Four distinct types of visitors can be defined: buyers,
browsers, the trade, and the media.
440

Bressolles and Durrieu (2010) have provided a comparison of traditional and electronic
service quality. The authors suggest that given the crucial role of the consumer in the evaluation of
services, an important aspect is to identify dimensions of service quality perceptions.
Electronic commerce has the potential to improve efficiency and productivity in many sectors
of the economy, therefore it was given increased attention in researches in many countries. However,
there were some doubts on the relevance of e-commerce for developing countries, such as Romania.
To address the gap in the literature, this study aims to evaluate e-commerce adoption in the wine
industry in Romania, gaining relevance by analyzing the wine producers website content.

3. Purpose
The purpose of this research is twofold. From the managerial perspective, the main goal is to
develop a website assessment model useful to wine actors. From the academic perspective, the
purpose is to identify the correlation between the 2.0 instrument structure and size and organizational
structure coordinates.
This research is designed to help winemakers have more effective websites in terms of visits,
which means that visitors reach their targets and remain with a positive impression. These two
elements lead to the continuous interaction between visitors and wine producers, which, properly
managed, lead to sales.

4. Research Design

4.1. Sample
The study was conducted on the winemaker market in Romania. Grape vine cultivation and
winemaking on the Romanian territory have a multi-millenary tradition. Grape vine cultivation is
attested archaeologically since Neolithic (3000 years BC), the god Dionysus himself originated in the
Thracian space, which was called Sabazius. With such experience, it is not surprising that there are
over 100 old autochthon varieties, some of which having a definite value both in terms of quality of
wine resulted and their typicity. With an area of 190,000 hectares planted with vines (representing
1.5% of agricultural area and 2.6% of arable land), Romania ranks 5th in Europe - after Spain, France,
Italy and Portugal. Annual production is on average 5 million hectoliters. (Cotea, 2008, p.11) The
sampling was composed of the 358 companies producing wine, according to the official list provided
by the Vine and Wine National Employers Association (PNVV), therefore the entire geographic area
(all 38 vineyards in the eight viticultural regions) was covered, ensuring the representativeness
regardless of the winemakers size. The final sample revealed the websites of 66 wine producers,
representing the target of our prospecting.

4.2. Evaluators
Two of the three researchers have served as evaluators of websites. Evaluation of websites
was a relevant mission to these Internet users, accustomed to technology. Both evaluators have an
educational background in marketing, one showing interest in wine industry research and the other in
e-commerce.
Each evaluator-researcher worked independently, researching the online presence of 179 wine
producers each. The inter-assessment reliability reached 100%, since both assessments beneficiated
from objective characteristics and compatible evaluations validated by the supervisor-researcher.

4.3. Procedures
The two evaluators-researchers analysed a database of wine producers in Romania, 358 in
number, available on the official site of the the Vine and Wine National Employers Association
(PNVV), institution of the civil society grouping some of the leading wine producers in Romania,
forming, along with the Government and industry unions, the framework for the social partnership in
the wine sector (http://www.pnvv.ro/). The evaluation took place in a controlled research setting
(university computer lab) under the supervisor-researchers monitoring, who was always present to
441

answer evaluators questions and to ensure that the research procedures have been correctly followed.
The evaluation session involved, for each winemakers listed officially on the PNVV database, two
search stages:
- Stage 1) - Collecting information about the company from the database with public
information about companies in Romania - www.firme.info (wine producers appear under
the Caen Code: 1102 - Production of wine from grapes); the latest financial information
found was dated 2010.
- Stage 2) - Examining the websites found or marking the online absence.
To avoid duplication or inclusion in the analysis of producers who have suspended their
activity, we avoided the inclusion in the sample of wine producers who had listed several work sites,
as online presence is would be confirmed by the existence of a single website, or manufacturers about
which we have found information that would follow an insolvency procedure or about which we have
not found any information in the search engine, to avoid loading the balance sheet with unverified
data, which would lead to an overinflated and unrealistic gap between the online absence statistics and
the website existence statistics.

4.4. Research Design Model
Figure 1: Research design procedure

5. Method

5.1. Standard Technology Adoption Model
We launched our investigation based on a model proposed by McKay and Marshall (2004),
which shows e-Business Stages of Growth, as illustrated in Figure 2. This model restates e-commerce
benefits for companies, no matter the area of activity. E-commerce is not only limited to buying and
selling over the Internet, but it is also concerned with transferring or exchanging products/services
and/or information via computer networks, including the Internet, Extranet and Intranet (Turban et al.
2006). It includes activities such as servicing customer online, collaborating with business partners
and exchanging business documents within an organization over the Internet or other private
networks. Bearing in mind this standard model, we reviewed the originality of the wine industry,
concluding that, like its products, we can not judge its specificity, but we can only appreciate its
interesting flavors, i.e. the level of sophistication requires a broader range of manufacturers website
www.google.com
Supervisor
Evaluator 1 Evaluator 2
179
winemakers
179
winemakers
66 websites
www.firme.info
website
assessment configuration
442

maturity stages. The last two stages (internal and external integration) are not subject of our study
because we lean only on strategies to attract consumers.

Figure 2: E-business Stages of Growth

Source: McKay, Judy; Marshall, Peter (2004) Strategic Management of e-Business, Wiley, p. 11.

5.2. Winery Website Assessment Instrument
One of the main objectives of the project was to develop an assessment instrument with
specific focus on developing objective criteria for evaluating websites of wine producers. Initially, a
list of evaluation criteria was created by the supervisor-researcher. Then, before starting the analysis,
the two evaluators-researchers have completed the initial list of criteria for a website of a wine
producer. Criteria, together with their individualizing attributes, were revised to eliminate duplication
and then were smoothed by the research team. It is important to emphasize that the instrument
included only objective assessment criteria, which required a yes or no response, depending on
the presence or absence of a particular attribute (yes = present, coded as 1, no = not present, coded
as 0).

6. Measurement and Data Analysis
The final instrument of analysis of the level of adoption of web 2.0 tools in the wine industry
in Romania included 13 evaluation criteria, according to Table 2.

Level of sophistication, potential benefits
I nvestment requirement
High
High
Low
No
presence
Static online
presence
Interactive
online
presence
Electronic
commerce
Internal
integration
External
integration
443

Table 2: Structure of the final winery website analysis
Criteria Attributes
N
o

w
e
b
s
i
t
e
No presence 1 No e-mail, No website
Email only
business
communication
2 Only e-mail

W
i
n
e
-
o
r
i
e
n
t
e
d

w
e
b
s
i
t
e

Static online
presence
3 Contact & Info
e-mail address
mailing address
4 About us
history / story about...
wine estate
region
family succession
wine business ownership
profile of winemaker
5 Facilities description
information on wine production facilities
gift shop
6 Product information
description of wines
price of wine
7 Operational information
hours of operation
tour of winery
M
a
r
k
e
t
i
n
g
-
o
r
i
e
n
t
e
d

w
e
b
s
i
t
e

Interactive
online
8 Public relations
media updates
latest news
9 Partnerships
links to local lodging
links to local restaurants
links to local attractions
contact/links to distributors
links to groups companies
10 Interactive functions
online sign-up for wine club
e-mail newsletters
links to winemakers social media pages
(Facebook, Twitter, or Blogs)
11 Customer feedback
clients opinions
quality rating on a Likert scale
Cultural-
educational
integration
12
Educational
opportunities
recipes on food pairing with the winerys wine
tips on wine tasting
restaurant etiquette
winemaking culture
terminological glossary
Electronic
commerce
13 E-commerce
virtual winery online shopping
cart, method of
payment, delivery
terms
wine accessories shop
Source: Researchers original contribution

Constructs 1 and 2 define subjects without online presence, namely stage zero in the
implementation of new technologies. In this statement we start from the premise that companies that
do not have websites, have no e-mail neither. Constructs 3-13 are those that have allowed the
development and standardization of a website assessment model useful for the winegrowing actors. In
a first phase, we used the normal factor analysis (R method), finding correlations between constructs
(criteria) among winemakers sample which allowed us to situate websites in two categories: (1)
wine-oriented websites and (2) marketing-oriented websites. In the second phase, the construct matrix
was transposed in order to apply the Q methodology, that is, we sought for correlations between
subjects having in common the same set of criteria. Thus, we could define six stages of website
content maturity in the wine industry:
1) No presence
2) Email only business communication
3) Static online presence
444

4) Interactive online
5) Cultural-educational integration
6) Electronic commerce
No online presence (no website, no email) indicates that the respective wine producer has not
adopted any web 2.0 technology, so its business is managed traditionally, using only physical
distribution and communication channels.
Email only business communication stage, unlike the stage zero in the implementation of web
2.0 technologies, represents an improvement in information sharing and communication within the
company, between companies, between customers and the winemaker, with the use of email.
As the initial step, many winemakers begin with a static online presence, used only to
disseminate information to the public. Thus, there is only one-way communication and typical
information included is contact details, wine estate and winemaker descriptions, product descriptions
and information about oenological tourism, if available.
Moving up one step to interactive online presence, the website structure may dispose of three
one-way communication criteria (public relations, partnerships, interactive functions), and a two-way
communications criteria, offering customers the possibility to transmit their opinions about the wines
and to appreciate their quality on a scale. The number of companies in this stage reflects the Business-
to-Consumer (B2C) e-commerce development.
Cultural-educational integration stages purpose is to promote the brands wines through
artifices for passionate of wines (, winemaking, tips on wine tasting) and lifestyle (restaurant
etiquette), but also for niches of potential buyers, such as women (recipes on food pairing with the
winerys wine).
Electronic commerce stage eliminates the drawbacks of the traditional trade, mastering
efficiency and productivity gain by reducing or eliminating human intervention in various business
operations, for example when automatic identification technologies such as barcode and radio
frequency identification are involved.
On this six stages, we overlapped the two website clusters (wine-oriented and marketing-
oriented), resulting in a complex model for assessing websites maturity and level of adoption, but
also for serving as pattern for designing high-quality and complete websites.

7. Results and Discussion
The model of assessment of the winemakers website content demonstrates a stage of
implementation of web 2.0 technologies in Romania far from the recommended maturity. The model
is based on 11 constructs composed from a series of attributes, whose analysis revealed the
segmentation in winemakers with wine-oriented websites, putting in the foreground the winegrowing
estate and wine products, and producers with marketing-oriented websites, focusing more on the
market (online shopping, social media, wine clubs).
The availability of online shopping in the marketing-oriented websites is the most important
point of differentiation between the two groups. The wine industry is an established market for
traditional sales channels, whose benefits and marketing and in-store merchandising practices are
thoroughly discussed and accused: from direct sales at the vineyards winery, which are laid the
charge of displaying unfairly low shelf prices, to networks of retail stores bearing the winemakers
brand, to drink divisions in large self-service stores. Wine tasting is responsible for tripling sales in
the first two categories, although large self-service stores remain the superstar retailers, strongly
promotions and cross-merchandising oriented. A shopper is much quicker to choose a wine after
tasting it from reading about it (Wilson, 1995) on the label. But the future of trade and merchandising
in the wine industry is electronic. Lockshin (2000) states that wine is the perfect product for Internet
retailing due to the combined benefits of education in the art of wine tasting and the easy price-
comparing. Bernet and Stricker (2003) make two other arguments in favor of wine e-commerce:
strong product differentiation and pronounced fragmentation of the industry. Some marketing experts
believe that it is only a matter of time before purchasing from the home computer becomes a routine.
They envisage a quest system like a touch-screen arrangement by which customers can order wines
they do not find in stores (Wilson, 1995).
445

Links to winemakers social media pages (Facebook, Twitter, Blogs) is another attribute
found in marketing-oriented websites and absent in the wine-oriented ones. The website remains the
main means of online communication for a brand, but disadvantaged by one-way flow of information
- the wine brand to the consumer. Through social media pages, the transition from one-way to two-
way communication was made, the winemaker being able to create relationships with existing and
potential customers through incidental exposure.
Wine clubs, another point of differentiation, are designed to continually seek new members -
virtual version of face-to-face opportunities to attract wine enthusiasts. Teaff, Thach and Olsen (2005)
believe that the main objective of any wine producer is not securing one-time transaction, but
pursuing repeat business, i.e. developing long-term relationships with customers. These transitions are
the two sides of same coin that can be measured by tracking orders from repeat customers. Repeat
business is where the online investment becomes truly viable, but without new customers the
winemaker will never reach his full potential online (Griffith, 2012).

Figure 3: Results and illustration of the research

Most wineries set up a website to assist with sales in some way. If those sales do not occur
online, they must occur through more traditional means, such as direct purchases at the winery or
through a distributor. There are several constructs that can be implemented on a website to assist with
this. The level of detail of website constructs examined provides some insight into how wineries have
been using websites as an adjunct to their normal business.
After prospecting the database of Romanian wine producers (Figure 3), 227 producers without
online presence resulted, 11 producers benefit from email only communication, and 66 winemakers
1 2 3 4 5 6 7 8 9 10 11 12 13
227 11 66 61 40 53 27 33 24 25 24 24 22
63.4
%

3.07
%

21.71% 92.42
%
60.6
%
80.3
%
40.90
%
50% 36.36
%
37.
87
%
36.36
%
36.36
%
33.33
%
84.9% 7.23
%

446

take advantage of the website. The remaining 54 entries were removed from the sample list, for the
reasons already stated.
The comparison of the large number of producers completely absent in the virtual world with
the standard, uniform nature of the website content structure is the basis through which we affirm that
websites have matured over the years.
Static online presence stage includes the kind of information that does not need a frequent
update, and is within reach of any producer. Therefore, all 66 websites (that is 21.71% of the sample)
provide important contact information such as physical location, email address, telephone.
61 wine producers (92.42% of the websites) offer information about the business important
for brand building. In the same vein, websites offer information about activities and attractions in the
region to attract additional visitors to the cellar. This is consistent with providing information and
educating consumers in the art of winemaking. Wine tourism information has become an important
attribute for winemakers to be added on the website, providing even location maps to simplify the
customers process of visiting the wine cellar (27 websites).
Perhaps the most important attribute characterizing wine-oriented websites is the provision of
information on products, 53 of the 66 websites (but only 17.43 of the overall producers validated in
the sample) using complete description of the characteristics of wines, varieties of grapes used to
produce the wines, winemaking technology, conditioning and packaging as a tool to promote the
brands sold.
Marketing-oriented websites develop the interactive online stage to get to the final consumer.
24 wineries see benefits through promoting the local region (cluster) done in partnership with other
entrepreneurs in the region: local lodging, restaurants, and local attractions, neither forgetting the
national or international network of winemakers or distributors.
Only 25 wineries offer membership to online communities, such as clubs, or publish regular
newsletters to keep enthusiasts informed about the latest developments in aspects of their business,
from crop reports to news of recent release, in an attempt to involve wine drinkers in the winery
community.
A common theme emerged for the motivation behind the implementation of the website was
to provide information designed to educate customers about the products: 24 winemakers (36.36% of
the websites analysed that is 7.89% of the sample) are in the 5th stage of adoption of IT technologies,
the cultural-educational integration.
Only 22 producers, i.e. 7.23% of the sample, offer customers the chance to buy products
online, using an interactive function. It remains the field of major producers, and not of small ones.
Small winery websites seem unique compared to those of small businesses in general, in terms of
wine industry specific constructs, but also in terms of the product sold - the wine - which lends itself
to transactions by electronic media, due to a very low risk in the acquisition by a regular client. The
rate of adoption of websites by Romanian wine producers is much lower than that of SMEs. Small
wine producers offer in a lesser extent online ordering and payment facilities. However, small
winemakers, once they overcome the hurdle of the website design, they are more likely to adopt
online ordering and sales than their counterparts in sectors.
After analyzing our sample, refer to a lack of maturity developing in the websites. Climbing
the ladder of the model we developed, we note that very few winemakers have the defined constructs.
Small winemakers should offer e-commerce on their websites in an endeavor to take advantage of
web 2.0 technology. The reword is that there is a possibility of enhancing customer loyalty by
providing added value for members.
Our conjecture is that this research should improve understanding of how the websites can
enhance winemakers business.

8. Conclusion
This project aimed to extend website assessment models developed by previous researches, by
defining objective criteria for evaluating winemakers websites. In addition, the study identified a
structuring of the complex set of constructs in the assessment instrument. For the wine industry, the
results of this study can serve as a template for creating effective websites. From an academic
perspective, this research indicates the need of a deeper exploration of the notion of effectiveness of
the website of a vineyards and winery estate. Overall, the results of the investigation should be
447

regarded as an action floor for those with ambition to work in the wine industry, an industry that
defies the economic crisis, but is in constant struggle with the overproduction crisis.

9. References
- Alpin, J. (1999) E-commerce in Wine: Benefits and Barriers, Australian Wine Industry
Journal, 14 (6): ppp. 87-91.
- Bernet, A.; Stricker, S. (2003), German wineries on the web: A survey of web sites of
Mosel-Saar-Ruwer and Pfalz wineries, Paper presented at the Wine Marketing Colloquium,
July 26-27, Adelaide, Australia.
- Bressolles, G.; Durrieu, F. (2010), A typology of online buyers for French wine Websites
based on electronic service quality dimensions, International Journal of Wine Business
Research, Vol.22 No. 4, pp. 335 - 348.
- Bruwer, J. and Wood, G. (2005), The Australian online wine-buying consumer: Motivational
and behavioural perspectives, Journal of Wine Research, Vol.16 No. 3, pp. 193-211.
- Cotea, Valeriu V. (2008) Romnia - ara vinului, Ad Libri, Bucureti, 2008, pp. 7-11.
- Gebauer, J.; Ginsburg, M. (2003), The US wine industry and the Internet: An analysis of
success factors for online business models, Electronic Markets, Vol.13 No. 1, pp. 59-66.
- Goodman, S. (2000) Online to go Global: South Australian SME Wineries, Exporting and the
Internet, Australian Wine Industry Journal (Marketing Supplement), 15 (6): pp. 3-10.
- Griffith, Ian (2012) Key Transitions in the Growth of a Wine Store Website, artcile from
January 17, 2012 posted on http://www.bevsites.com/index.php/2012/01/key-transitions-in-
the-growth-of-a-wine-store-website/
- Lockshin, L. (2000), Wine marketing in the new millennium, Australian & New Zealand
Wine Industry Journal, Vol.15 No. 1, pp. 89-90.
- Major, M. (2000) E-business Opportunities for Wine Producers, Australian and New Zealand
Wine Industry Journal, 15 (6): pp. 89-95.
- McKay, Judy; Marshall, Peter (2004) Strategic Management of e-Business, Wiley.
- Stan, Alina (2011) Harta celor mai importanti producatori de vinuri din Romania
[INFOGRAFIC], August 23
rd
, 2011, exclusive on http://www.wall-
street.ro/articol/Companii/108189/Harta-celor-mai-importanti-producatori-de-vinuri-din-
Romania-INFOGRAFIC.html
- Sticker, S.; Mueller, R. A. E.; Summer, D. (2001) Wine on the Web: Rapid Appraisal of
Websites by Wineries and Wine Merchants from Australia, California and Germany,
Proceedings of the 75th Seminar of the European Association of Agricultural Economists
(EAAE). E-Commerce and Electronic Markets in Agribusiness and Supply Chains. February
14-16, 2001. Bonn, Germany. Universitt Bonn-ILB, Bonn (Rheinische Friedrich-Wilhelms-
Universitt, Bonn, Institut fr Landwirtschaftliche Betriebslehre). pp. 193-204.
- Teaff, B.; Thach, E. C.; Olsen, J. E. (2005), Designing effective wine clubs: An analysis of
the components of the winery wine club, Journal of Wine Research, Vol.16 No. 1, pp. 33-54.
- Turban, E. et al. (2006) Electronic Commerce: A Managerial Perspective, Prentice Hall
- Wilson, Daniel (1995) In-store merchandising and the winery, August, 1995 issue of Wines
& Vines, FindArticles.com.
- http://www.decanter.com
- www.winerywebsitereport.com
- http://www.websitesforwineries.com/winewweb.html
- http://www.wall-street.ro/articol/Companii/108189/Harta-celor-mai-importanti-producatori-
de-vinuri-din-Romania-INFOGRAFIC.html

448

ASPECTS CONCERNING THE HOTEL MARKET WORLDWIDE, EUROPE AND
ROMANIA

OLTEAN Flavia Dana,
J unior Teaching Assistant Ph.D, Faculty Economic sciences, legal and administrative, Department
Management, Petru Maior University, Targu-Mures, Romania, flaviaoltean@yahoo.com

Abstract: In the past years, the hotel market has developed a great deal, and within it, the hotel market
has registered the fastest growth rates. Therefore, the hotel market has gained a very strong consolidation
worldwide, the hotel chains having the highest magnitude through franchise. The paper shows the analysis of
current trends concerning the hotel market in Europe and worldwide, as well as the analysis of the hotel sector
in Romania. The current trends of the Romanian hotel market emphasize attractiveness of the Romanian hotel
market, but even so this domain requires recovery and modernization.

Key words: hotel market, Romania, hotel chains, Europe

JEL classification: L10, l83, O10

1. Introduction
Concerning the role of tourism within economy, representing a key component and the fact
that Romania has lots and various tourist resources, resulting a high availability of our country for
tourism, and their efficient exploitation can represent a real opportunity for development. Considering
this aspect, tourist units in Romania should approach their business professionally, as there is a series
of factors that lead to this situation: political factors, economic and financial situation, concerns
regarding total quality, quality of services supplied by competing countries in the field of tourism,
promotional activities of competing countries, development of major hotel chains, managerial
strategies used in order to get the competitive advantage.
The goal and objectives of this paper consist in emphasizing, reasoning and analysing the
significance of the hotel sector, in presenting the biggest hotel chains in the world and in Europe as
well as in emphasizing the development of the hotel sector in Romania. Therefore, following the
analysis of the hotel sector in Romania, one may notice that it requires development and
improvement, as the strong competition developed on the foreign market requires that.

2. Short history concerning the development of hotel sector
Hotel is the most common way of accommodation, having the highest weight in total
accommodation units. In order to emphasize the features and development of the world hotel market,
we shall present a short history first. The development of accommodation activity is shown by the
history of the accommodation unit, the hotel history, as a reference unit, that has always provided and
provides the traveller the optimum opportunity at the destination place or at the place where he stays
temporarily. The antiquity had the affluence of travellers that were travelling to the shores of the
Mediterranean Sea, the Aegean islands, the famous Alexandria, with its bath installations, located on
the sea coast and with an abundant fair where goods from Arabia and China, Canape (Abukir) were
sold, with luxurious mansions and hotels, Smima with theatres, temples and baths; arks were sailing
regularly between Ostia and Alexandria. The Roman civilization, has holiday homes and inns, the
Roman emperor Tiberius house on the Capri island being well-known in this respect. (Stavrositu,
2008, p.606)
The inns, stop places, shelters developed continously as they were protecting people and
animals within yards sorrounded by walls and gates. In the East, they were called "caravana
serai"(caravanserai), and in the Medieval Europe, within inns and stop places travellers were
welcomed. Hospes and hospita, meant in Latin, the notions of host, and the term "hospitale" meant
the guest chamber. The term hotel appeared in France, during the Middle Age, being derived from the
word hospitale and represented the house of nobels in town. The name of hotel, as an accommodation
449

place, has been given in the past centuries to houses, buildings that provided a place to stay and eat to
travellers.
In the early XXth century, the first chain hotel was established, and was named after its
owner, Cezar Ritz, who was nicknamed the founder of the hotel field. The basic principle was to
provide a comfort and high quality services. The second chain hotel was established in USA, in 1919
Hilton. At present, there are two hotel groups named Hilton: the American group - Hilton Hotels,
and the British group Hilton International Standard. The novelty of this hotel as regards
management is represented by standardization of services. (Cojocariu, 2010, p.20,21) Most hotel
companies are overseas and are under American control. It is also estimated that (Lupu, 2003, p.165)
over 25% of rooms in hotels and similar units existing worldwide are in the United States, and the
first ten hotel groups have over 4.1 million rooms, compared to 2.7 million rooms in 1997. (Lupu,
2010, p.302)

3. Current trends concerning the hotel market in Europe and worldwide
MKG Hospitality company has carried-out in the past years, studies concerning the
worldwide market and the European market of the major hotel groups. Therefore, the following table
(table 1), shows the most important hotel groups in the world:

Table 1. Top of the first 10 world hotel groups, based on the number of rooms, at the beginning of the
years 2010 and 2011
Position Hotel group No. of hotels Evol.
hotels
No. of rooms Evol.
rooms
(%)
2011 2010 2011 2010 - 2011 2010 -
1 1 IHG
(INTERCONTINEN-TAL
HOTEL GROUP)
4437 4432 5 647161 643787 0,5
2 3 HILTON WORLDWIDE 3689 3526 163 605938 587813 3,1
3 2 WYNDHAM
WORLDWIDE
7152 7112 40 605713 597674 1,3
4 4 MARRIOTT
INTERNATIONAL
3446 3329 117 602056 580876 3,6
5 5 ACCOR 4229 4111 118 507306 492675 3,0
6 6 CHOICE HOTELS 6142 6021 121 495145 487410 1,6
7 8 STARWOOD
HOTELS&RESORT
1041 979 62 308700 291638 5,9
8 7 BEST WESTERN 4015 4048 -33 307155 308477 -0,4
9 9 CARLSON
HOSPITALITY
1078 1059 19 165061 159756 3,3
10 10 HYATT
CORPORATION
423 399 24 120806 120031 0,6
(Source: MKG HOSPITALITY, March 2011, http://www.hospitalitynet.org)

Therefore, one may notice a prevailance of American groups, these having a very important
percent in the supply of this sector. Exception is the hotel group Intercontinental Hotel Group with
headquarters in Great Britain and the French group Accor. Leader in this top is Intercontinental Hotel
Group, having 4 437 hotels and 647 161 rooms in the early 2011, and registering a slight increase
compared to 2010. Many of these hotel groups, appeared on the Romanian market after the '90s,
namely: Intercontinental Hotel Group, Wyndham Worldwide, Marriott International, Hilton Hotels,
Accor, Best Western, Carlson Hospitality, this thing outlining the attractiveness and profitability of
the Romanian hotel market.
As regards the European market of hotel chains, the accommodation capacity of hotel chains,
on categories of comfort, is shown in the following table (table 2):

450

Table 2. Accommodation capacity of hotel chains, on categories of comfort, in Europe, on the first of
January 2011
Categories
of comfort
Number of
properties
Number of rooms Development
of properties
Development
of rooms
Development
of (%) total
2011 2010 2011 2010
0*/1* 1323 1303 99224 95306 20 3918 4,1%
2* 3126 3071 247409 2398653 55 7756 3,2%
3* 4174 4152 468650 463277 22 5373 1,2%
4* 3380 3355 614917 608824 25 6093 1,0%
Total 12003 11881 1430200 1407060 122 23140 1,6%
(Source: adaptation after MKG HOSPITALITY, March 2011, http://www.hospitalitynet.org)

We may notice that, in Europe, most properties are within category 3 and 4 stars, registering
a rise of 22 units in 2011 compared to 2010, for the 3-star category and 25 units in 2011 compared to
2010, for the 4 star category. Even so, the highest increase of hotel units has been registered by the
2-star category of comfort, 55 units, respectively, the same situation being as regards the number of
rooms, 7756 rooms respectively.

Concerning the European market, the top of the first ten hotel groups is shown in the
following table (table 3):

Table 3.Top of the first 10 hotel groups in Europe, based on the number of rooms, at the beginning of
years 2010 and 2011
Position Hotel group No. of hotels Evol.. No. of rooms Evol.
(%)
2011 2010 2011 2010 - 2011 2010 -
1 1 ACCOR 2272 2231 41 246665 242288 1,8
2 2 BEST WESTERN 1309 1289 20 89092 87017 2,4
3 3 INTERCONTINENT
AL HOTEL GROUP
545 548 -3 84653 84522 0,2
4 4 GROUPE DU
LOUVRE
942 995 -53 66705 71544 -6,8
5 5 NH HOTELS 354 352 2 51121 50502 1,2
6 7 CARLSON
EUROPE/REZIDOR
247 228 19 49237 44471 10,7
7 6 SOL MEDIA 204 203 1 44531 45960 -3,1
8 8 TUI 164 158 6 41639 39914 4,3
9 9 HILTON
INTERNATIONAL
177 163 14 41214 39713 3,8
10 10 WHITBREAD 588 579 9 40975 39142 4,7
(Source: MKG HOSPITALITY, March 2011, accessed on-line on 30 June 2011, http://www.hospitalitynet.org)

The first place in the top is occupied by the French group Accor, having 2 272 hotels and 246
665 rooms in the early 2011, on the increase by 41 properties, compared to 2010 and 1.8% as regards
the number of rooms. The gaps in the top, in the surveyed period, 2010-2011, are very small, the
Carlson Europe/Rezidor Group registering the highest rise, 19 new properties, respectively and 10.7
% as regards the number of rooms, occupying position number 6 in 2011, and position 7 in 2010.
Also, analysing the data in the table, we may notice that the number of properties and number of
rooms increased in 2011 compared to 2010, by 56 properties and over 10 000 rooms. Of the ten hotel
groups, five are shown in Romania, according to table 4:
451

Table 4. Presence of the most important hotel groups on the Romanian market
Hotel group No. of hotels on
the Romanian
market
Location
ACCOR 6 hotels - Pullman Bucharest World Trade Center,
Novotel and two Ibis hotels ( Bucharest),
- Ibis Constanta,
- Ibis Sibiu.

INTERCONTINENT
AL HOTEL GROUP
(IHG)
2 hotels - Intercontinetal and Crowne Plaza Hotel
(Bucharest)
BEST WESTERN 12 hotels - Best Western Central Hotel (Arad),
- Best Western Hotel Eurohotel (Baia Mare),
- Best Western Stil Hotel, Best Western Plus
Mari Vila Hotel Bucharest (Bucureti),
- Best Western Plus Fusion Hotel (Cluj-
Napoca),
- Best Western Hotel Rusca (Hunedoara),
- Best Western Bucovina-Club de Munte
(Gura Humorului),
- Best Western Hotel Astoria (Iasi),
- Best Western Rogge Hotel (Resita),
- Best Western Ambassador Hotel (Timioara),
- Best Western Messes Hotel (Zalu)

NH HOTELS 2 hotels - NH BUCURESTI
- NH SIBIU

HILTON 2 hotels - Athene Palace Hilton Bucharest hotel
- Hilton Sibiu
(Source: information processed by the author based on information supplied on official sites of companies)

Concerning the operation forms of hotel units, worldwide, three basic operation forms of
hotels have been identified, by the World Tourism Organization, thus:
individual operation,
association (voluntary hotel chains),
companies or groups (integrated chain hotels).
The main features of hotel association and integration forms are shown in the following table:

Table 5. Main features of exploitation forms of hotels
Operation form If has financial-legal self-
sufficiency
If promotes a brand
Hotel type individual operation YES NO
Hotel affiliated to a voluntary chain YES YES
Hotel affiliated to an integrated chain:
property of a consolidated
company
management or franchise contract

NO

YES

YES

YES
(Source: Lupu, 2010:294)

Under these circumstances, we should mention that a voluntary hotel chain is a voluntary
union of independent hotel-keepers that - providing a hotel product relatively homogenous as regards
comfort and service, though differentiated related to architecture and furnishing promotes and
452

develops a unique and collective brand. (Lupu, 2010, p.86) In case of integrated hotel chains it is
about a parent company having control over daughter companies.
Hotels that are not part of hotel chains, belong to hotels type individual operation, being also
named hotels type entrepreneurial operation. These provide a higher feeling of warmth and distinction
than hotel chains.
But hotels type individual operation face problems. Thus, the most important threats are
seasonality of tourist movement and strong competition of hotel chains. Therefore, many independent
hotel-keepers need to affiliate to a voluntary hotel chain or to conclude a management contract or a
franchise management with an integrated hotel chain. A recent study (Tajeddini, 2010, p. 221)
emphasize that as a result of steady changes and rise of competitive pressures in the nowadays hotel
sector, hotel-keepers strive a lot for maximizing their results. As a result, they confront with the
existence of some increasingly demanding clients, with existence of some new regulations,
globalization, as well as with the destabilizing effects of techological progress. All this critical factors,
result in significant changes in the hotel sector and lead to introduction of some new challenges,
generating new requirements to hotel-keepers.
On the other hand, the scope of franchise is generally to provide an owner the commercial
advantages of an important hotel chain, while they continue to have property and management
control. Within the franchise system, a hotel owner gets the right to use the name and to affiliate to a
national or international hotel chain, known as franchiser. The hotel owner, franchisate, agree on the
application of management policies of hotel chain and to pay the franchisor the payment related to
acquiring the franchise right, to which is added a percent of actual gross sales.
The hotel chains in USA, have invested a great deal in the franchise system, and the following
table, shows the top ten hotel companies that use franchise.

Table 6. Top 10 hotel companies using franchise, based on the amount of sales, worldwide, in 2010
2010
Rank
2009
Rank
Franchise Company Sales
(mil. $)
Total
hotels
Franchise units

home abroad
Franchise
percent
10 10 Marriott Hotels
Resorts&Suites
Marriott
International
7600 545 353 192 41%
13 11 Hilton R&S Hilton
Worldwide
6600 532 257 275 44%
18 15 Holiday Inn
R&S
InterContinental
Hotels Group
4760 1319 884 435 100%
20 16 Sheraton Starwoods
Hotel&Resort
Worldwide Inc.
4500 394 195 199 51%
24 25 Hampton
Inn&Suites
Hilton Hotel
Corporation
4200 1744 1698 46 98%
27 24 Holiday Inn
Express
InterContinental
Hotels Group
3800 2069 1846 223 100%
30 30 Courtyard Marriott
International
3300 858 768 90 62%
36 41 Westin Starwoods
Hotel&Resort
Worldwide Inc
2600 170 116 54 43%
39 33 Radison Hotels Carlson Hotels
Worldwide
2490 429 131 298 94%
40 37 Crowne Plaza
Hotels&Resort
InterContinental
Hotels Group
2400 366 202 164 100%
(Source: processed by author based on information in Franchise Times, Top 200, 2010,
http://www.franchisetimes.com)

As it can be seen in the top carried out by Franchise Times in 2010, USA is the country where
this program has developed most, most hotels being built in franchise system. This system has
developed in Europe as well, but results cannot be compared with those obtained by the USA market.
453

In 2010, the front-rank places in the top of hotel companies that use franchise are Marriott
International with Marriott Hotels Resorts & Suites and Hilton Hotel Corporation with Hilton,
positions 10 and 13 respectively, though brands are operated in this system in a proportion of 41%
and 44%. InterContinental Hotels Group has 3 of the first 10 franchised chains, Holiday Inn Resorts
& Suites, Holiday Inn Express and Crowne Plaza Hotels & Resort respectively, brands being operated
in franchise system in a proportion of 100%. We may notice that in case of Hampton Inn &Suites and
Holiday Inn Express chains, a very high number of units are opened across the country, and Hilton
Resorts&Suites, Sheraton and Radison Hotels chains have several units abroad. Related to the top 10
hotel companies, according to the number of franchised units, situation is the following:

Table 7. Top 10 hotel chains, based on the number of franchised hotels, worldwide, in 2010
Position Position in
general top
Franchise Company Number of hotels
1 38 Comfort Inn & Comfort
Suites
Choice hotel
International
2,603
2 44 Holiday Inn Express IHG 2,069
3 49 Days Inn Wyndham 1,858
4 51 Hampton Inn
& Hampton Inn & Suites
Hilton 1,744
5 64 Quality Inn and Quality
Suites
Choice Hotel
International
1354
6 65 Holiday Inn Hotels &
Resorts
IHG 1,319
7 74 Motel 6 ACCOR 998
8 80 Ramada Wyndham 910
9 83 Courtyard Marriott 858
10 98 Fairfield Inn Marriott 629
(Source: processed by author based on information in Franchise Times, Top 200, 2010,
http://www.franchisetimes.com)

As we can notice from the table data, hotel chains are not in the top 10 hotel chains based on
the number of units held, that operate franchise worldwide. The hotel chain Choice Hotel
International, is on position 38 in the top of franchises with 2603 units, being followed by Holiday Inn
Express, with 2969 units and position 44 in the general top.
As regards Romania, the hotel sector is developing and is increasingly tempting for major
hotel chains. In this respect, examples are Intecontinental chains, that concluded a franchise contract
with the Romanian state in 1967, Best Western with 13 franchises, Golden Tulip with 7 franchises,
Ibis with 3 franchises. Another example is represented by the Hilton hotel chain, that is willing to
open 25 hotels in the next five years, by management contract or franchise contract. The cities that are
interesting are Cluj, Timioara, Braov, Iai, Craiova and Arad. Rob Palleschi, manager of one of the
Hilton brands, states in an interview that the Hilton brand to be used in the construction of these hotels
will be set in line with the developers financial strength, market and location, and hotels will have
four or five stars.
The Hilton representative also mentioned that the brand Doubletree by Hilton is planning to extend
the network from 225 hotels to 350 hotels, until 2013.
The management contract or mandat de gestion in French, is concluded between the hotels
owner and a management firm that is independent from the owner. The mangement firm only acts as
the hotel administrator, on behalf of its owner, for which it receives a benefit whose size is set,
according to the acquired results, as follows (Stnciulescu, 2003, p.319):
As a percent share of total income (for instance, 5%),
As a percent share of gross operation profit (for instance, 20%),
As a combination of the two types (for instance, 3% of income and 10% of gross operation
profit)
454

For hotel companies, the management contracts provide a viable expansion version with
minimum or zero investments. The top of the biggest hotel companies, carried-out by the Lodging
Hospitality magazine in USA, operating this system are the following:
Table 8. Top 10 companies that concluded a hotel management contract in USA, in line with the number
of managed rooms, in 2010
Position Company name Properties held and
managed individually
Properties managed
for other owners
Total number
of rooms
rooms properties rooms properties
1 INTERSTATE
HOTELS&RESORTS
1921 6 54562 311 56483
2 WHITE LODGING
SERVICES
3596 13 19612 142 23208
3 GF MANAGEMENT 2811 14 16079 107 18890
4 TPG HOSPITALITY 0 0 16823 63 16823
5 PYRAMID HOTEL
GROUP
317 2 15374 48 15691
6 AIMBRIDGE
HOSPITALITY
0 0 14932 72 14932
7 SAGE HOSPITALITY 13672
8 CRESCENT
HOTELS&RESORTS
1870 11 11772 54 13642
9 DAVIDSON HOTEL
COMPANY
0 0 13333 47 13333
10 REMINGTON 198 1 13061 66 13255
(Source: Lodging Hospitality, June 2011 http://lhonline.com/)

As we can notice, the Interstate Hotels & Resorts company is on the first position in the top
of companies in USA, companies running this system. Properties managed individually are just 6,
and those managed by other owners are 311, in countries such as Canada, Mexico, England, Irland,
Belgium, Russia, India and China. (http://www.ihrco.com) The companies TPG Hospitality,
Aimbridge Hospitality and Davidson Hotel Company, do not manage any property individually, all
being managed by other owners.

4. Development of the hotel sector in Romania in 2003-2010
Concerning the hotel market in Romania, according to the National Development Plan in
2007-2013, development of the main tourist and hotel indicators reveal the transit of two periods of
time with various characteristics, thus:
1990-2000 was characterized by a low intensity of the privatization process (only 55.3% of
accommodation units were private property), and development of tourism was mainly based
on the profit from other businesses reinvested in tourism. Tourism also confronted with the
lack of facilities and governmental subsidies required to sustain the development as well as
undersizing of funds alloted to tourist promotion. Therefore, the Romanian tourist market
was characterized by major weaknesses, such as: a low exploitation and promotion of natural
and anthropic tourist resources, low weight in GDP , persistence of low quality tourist
services, the loss of some tourist foreign market shares from the former communist states as
well as of some major foreign tour-operators, diminishing of the domestic market weight
including as a result of changes occurred in the structure of family income and a poor tourist
promotion.
After 2001. After the year 2001, Romanian tourism entered an upward period of time, thanks
to the almost complete privatization (around 92% of accommodation structures in the state
patrimony were privatized) and increase the volume of modernization investments related to
the tourist structures of reception and nourishment. As a result, the completion of
privatization in tourism has resulted in raising the turnover in tourism.
The entry of major hotel chains on the tourist market in Romania, such as Marriott, Hilton,
Best Western, Howard Johnson, Golden Tulip, Accor, Cendant, IBIS, Ramada, Sofitel, Hunguest,
455

etc., reveals the growth of number of hotels and places in higher category hotels, (tables 9 and 10) that
resulted in the consolidation of the development phenomenon of Romanian tourism but also the
increase of quality related to tourist services.

Table 9. Development concerning the number of hotels in Romania, on categories of comfort
between 2003 and 2010
Category
of comfort
2003 2004 2005 2006 2007 2008 2009 2010
(%)

(%)
5 stars 7 8 8 8 10 16 16 19 115,33 15,33
4 stars 33 47 67 82 89 99 122 156 124,84 24,84
3 stars 151 197 260 308 345 355 399 448 116,80 16,80
2 stars 428 435 446 462 447 453 456 444 100,53 0,53
1 star 224 203 188 180 171 171 161 151 94,53 -5,47
Unclassified 43 38 24 26 19 17 16 15 86,03 -13,97
Total 886 928 993 1066 1081 1111 1170 1233 104,83 4,83
(Source: Calculated based on the Statistical Yearbook of Romania, 2010, 2011)

Table 10. Development concerning the number of places in hotels in Romania, on categories of comfort,
between 2003 and 2009
Category
of comfort
2003 2004 2005 2006 2007 2008 2009
(%)

(%)
5 stars 2230 2434 2518 2656 3312 3828 5008 114,43 14,43
4 stars 4411 6497 9082 12290 13557 19442 21585 130,29 30,29
3 stars 23319 27844 31528 35531 40539 385668 40538 109,66 9,66
2 stars 91457 91889 92932 90784 87418 88645 88449 99,45 -0,55
1 star 32914 27715 24630 23492 21469 22354 21397 93,07 -6,93
Unclassified 4445 3991 2879 3018 2562 2536 2502 90,86 -9,14
Total 158776 160370 163596 167771 168857 175573 179479 102,07 2,07
(Source: Calculated based on the Statistical Yearbook of Romania, 2010)

As it can be noticed, in the analyzed period, we can notice the following:
for higher category hotels, 4 and 5 stars, the rise of number of hotels and places in hotels,
with an average annual growth rate of +15,3 % , +24,84 and +14,43%, +30,29 respectively.
This increase is explained by the entry of major hotel chains on the market, by constructing
new accommodation spaces for higher categories but through the modernization of the
existing spaces.
for the 3 star-hotels, the rise of number of hotels and places in hotels, with an annual growth
rate of +16,80%, +9.66% respectively, this category being dedicated especially to the
business tourism.
as regards the 1-star hotels, we can notice significant declines of places in hotels, -5.47% and
-6.93%, respectively, in the surveyed period of time. For unclassified hotels, the decline is
higher by around -13.97%, as regards the number of hotels, and -9.14% concerning the
number of places. This decline of unclassified hotels outline our countrys concern for
classification and assignment of classification categories related to hotels.
Nevertherless, at present, the share covered by the low category hotels, one and two stars in
total hotels, is very high, approximatively 60%, as it can be noticed in the following table:

Table 11. Distribution of hotels in Romania on categories of comfort in 2010
Category of comfort Accommodation units-
hotels
%
in total
Accommodation
capacity in operation -
%
in total
456

(number) hotels (,000 places days)
5 stars 19 1,6 1931 4,6
4 stars 156 12,70 8325 19,60
3 stars 448 36,40 13162 31,00
2 stars 444 36,00 16231 38,20
1 stars 151 12,30 2520 6,0
Unclassified 15 1,30 382 0,9
TOTAL 1233 - 42551 -
(Source: Calculated based on the Statistical Yearbook of Romania, 2010)
We shall present further the development of the main indicators in the hotel sector for 2003-
2010 in the following table, table 12:

Table 12. Development of main indicators in hotel sector, between 2003 and 2010
Indicator 2003 2004 2005 2006 2007 2008 2009 2010
(%)

(%)
Tourist
ccommodation
capacity divided
on type of
property (places):
Total, of which:
-state
-private

273614
67550
206064

275941
71004
204937

282661
69418
213243

287158
57703
229455

283701
55041
228660

294210
58836
235374

303486
43525
259961

*

101,14
84,78
110,83

1,14
-15,22
10,83
Accommodation
capacity in hotels
(places):

164571

1663362

169755

173495

174471

181512

185315

185099

101,69

1,69
Arrivals of
tourists in hotels
(,000):
Total, of which:
-foreigners
-Romanians

4185
1015
3170

4584
1242
3342

4720
1301
3419

4985
1250
3735

5513
1404
4109

5523
1314
4209

4750
1155
3595

4585
1208
3377

101,31
102,52
100,91

1,31
2,52
0,91
Overnight
accommodation
of tourists in
hotels (,000):
Total, of which:
- foreigners
- Romanians

15197
2524
12673

15533
2997
12536

15596
3123
12473

15864
2892
12972

17066
3180
13886

16867
2937
13930

13970
2334
11640

12732
2389
10353

97,50
99,22
97,15

-2,5
-0,78
- 2,85
Indices of net
using the touristic
accommodation
capacity in
operation (%):
Total, of which:
-hotels

34,6
41,1

34,3
40,8

33,4
40,3

33,6
40,2

36,0
42,4

35,0
40,4

28,4
32,9

25,2
29,9

95,58
95,56

-4,42
-4,44
*unavailable data (Source: Calculated based on the Statistical Yearbook of Romania, 2010)

Reviewing data in the above table, during the nine years, we can state that the main indicators
in the Romanian hotel sector are characterized by the following aspects:
Increase of accommodation capacity with an average annual rate of +1.14%, that we can
reason by opening new accommodation units. A spectacular growth rate concerning the
tourist accommodation places is registered by private properties. Hiring by the State
Ownership Fund, based on contract, of hotels did not stimulate the managers to take loans in
457

order to modernize and improve the technico-material base, or at least to provide a part of the
profit to diversify and improve the tourist services. Therefore, the managers have aimed to get
some high profits, waiting the privatization of hotels. Privatization took place, raising the
tourist accommodation places in private properties with an average annual rate of +10.83%.
The privatization process represented a very important step in the development of this sector,
requiring very important changes as regards strategies used by the hotel-keepers.
Increase of accommodation capacity concerning hotels with an average annual growth rate of
+1.69%, and a significant increase of the number of foreign tourists accommodated in hotels.
Obviously, increasing the number of foreign tourists arrived, resulted in the construction of
new hotels, and entry of the major hotel groups on the Romanian hotel market, as well as
improvement of activity, the managers finding new ways to decline the seasonality of tourist
activity through the organization of conferences, team-buildings etc.
Another indicator of the accommodation sector is represented by the net usage of
accommodation capacity, calculated as a ratio between the number of overnight
accommodation and tourist accommodation capacity in operation. (Bordean, 2010, p.151)
Data in table reveals a steady development of this indicator, around 34-35%, and for hotels
around 30-40%. The seasonal character of tourist activity in Romania where a significant
number of hotels run, influences very much the net usage ratios related to accommodation
capacity. We can add the rise of accommodation rates, therefore the rates used in countries
such as Bulgaria, Turkey, Greece, for tourist packages are much lower than the rates used by
Romanian hotel-keepers for similar tourist packages.

5. Conclusions:
As a result of the above mentioned, we can state the following:
In the course of time, hotel companies have invested a lot and have developed a great deal,
searching permanently new locations to secure them a strategic advantage and free access to
the market;
An increasingly complicated competitive environment wherein operate hotel units, impose
them to be particularly concerned on setting, accomplishing, protecting and maintaining the
competitive advantage.
Following the fierce competition on the hotel market, the expansion of this sector on the
hotel market, creation of strategies is required for Romanian hotel-keepers, thus it is
required to develop and improve the tourist services, these representing a competitive
advantage they can have in relation to competition.

6. References:
- Bordean, O.,(2010), Managerial strategies of tourism enterprises, Risoprint Publishing
House, Cluj-Napoca.
- Cojocariu, S., (2010), Strategies in tourism and services, Universitar Publishing House,
Bucharest.
- Lupu, N., (2003), Hotel- Economics and management, C.H. Bech Publishing House,
Bucharest.
- Lupu, N., (2010), Hotel- Economics and management, C.H. Bech Publishing House,
Bucharest.
- MKG Hospitality, March 2011, http://www.hospitalitynet.org
- National Development Plan 2007-2013.
- Statistical Yearbook of Romania, 2010.
- Stavrositu,S.,(2008), Art services in restaurants and bars culinary technology, hotel
services, Foundation" Art services in tourism Prof. Stere Stavrositu", Bucharest.
- Stnciulescu, G.,(2003), Management of tourism operation, All Bech Publishing House,
Bucharest.
458

- Tajeddini, K., (2010), Effect of customer orientation and entrepreneurial orientation on
innovativeness: Evidence from the hotel industry in Switzerland, Tourism Management,
31, p.221-231.
- http://www.ihrco.com

459

AN EMPIRICAL MODEL OF ONLINE BUYING CONTINUANCE INTENTION

ORZAN Gheorghe
Professor PhD, The Bucharest University of Economic Studies, Bucharest, Romania
orzang@ase.ro

I CONARU Claudia
claudiaiconaru@ase.ro

MACOVEI Octav-I onut
octav.macovei@mk.ase.ro

Abstract: The aim of this paper is to propose, test and validate a model of consumers continuance
intention to buy online as a main function of affective attitude towards using the Internet for purchasing goods
and services and the overall satisfaction towards the decision of buying online. The confirmation of initial
expectations regarding online buying is the main predictor of online consumers satisfaction and online
consumers perceived usefulness of online buying. Affective attitude is mediating the influence of perceived
usefulness of online buying on consumers intention to buy online. Four items were employed for each construct
on a 5 point Likert Scale. Reliability and internal consistency analysis was preformed. The models
relationships are tested using least squares regression analysis.

Key words: online buying, attitude, satisfaction, expectations, perceived usefulness

JEL classification: M31, L81

1. Introduction
Online consumer behaviour is an interdisciplinary research field, extensively studied in the
last decade. Early studies attempting to explain and predict online consumer behaviour have been
published in the late 90s (Li and Huang, 2009), covering research areas such as information
technology (IT), information systems (IS), psychology and marketing (Efthymios, 2004).
From an IS theories perspective, online consumer behaviour was highly associated with the
behaviour of the IS user. Buying online often implies the use of online vendors e-commerce
websites. Due to the fact that both the implementation and use of an e-commerce website strongly
depends on IT knowledge, skills and capabilities, researchers regarded the e-commerce website as
another type of information system (Chen et al, 2002).
Therefore, a large body of knowledge in online consumer behaviour rely on IS related
theories to explain and predict consumers behaviour in the adoption of e-commerce phase, namely
Davis Technology Acceptance Model (Davis, 1989), often augmented with variables from Azjens
Theory of Planned Behaviour (Ajzen, 1991) and Rogers Diffusion of Innovation Theory (Rogers,
1995) and post-adoption of e-commerce phase, namely Bhattacherjees Expectation-Confirmation
Model of continued IT usage (Bhattacherjee, 2001).
Technology Acceptance Model (TAM) postulates that consumers intention to adopt an
information system is a function of perceived usefulness and attitude towards the information system
(Davis, 1989). Perceived usefulness is defined as being the individuals belief that the use of the
information system is beneficial. Perceived usefulness together with perceived ease of use of the
information systems are main predictors of attitude. TAM also postulates a significant influence of
perceived ease of use on perceived usefulness.
Various studies have incorporated TAMs relationships in order to explain and predict online
consumers intention to buy online or consumers actual use of e-commerce websites in order to buy
goods and services for private use (Said, 2011), (Shang et al, 2005), (Ahn et al, 2004), (Shih, 2004),
(Liu and Wei, 2003), (Yoon, 2009), (OCass and Fenech, 2003), (Lui and Jamieson, 2003), (Shin,
460

2008). Due to previous testing and validation, TAM has proven to be a solid and robust model of
explaining consumers behaviour in the adoption phase.
However, solely TAM or different versions of augmented TAM cannot offer a complete
picture of online buying behaviour since behaviour goes beyond the adoption phase. According to
Rogers premise, the adoption decision can be followed by either a continuance decision or
discontinuance decision (Rogers, 1995). This means that the mere adoption of the decision to buy
online goods and services is not capable of guarantying continuance. A consumer can still switch
channels with either little or no effort.
A large body of research tried to explain online consumers behaviour in post-adoption phase
by elaborating models of e-repurchase intentions (Tsai and Huang, 2007; Atchariyachanvanich et al,
2006; Chen et al, 2010; Jiang and Rosenbloom, 2004; Lee, 2010; Liao et al, 2011; Liao et al, 2010;
Kim et al, 2003; Lin et al, 2010; Wang et al, 2010; Kang et al, 2008; Wen et al, 2011). An overview
of such models is presented in the next section of this paper.
However, it is important to note that most of post-adoption studies are based on the
expectation-confirmation paradigm, a popularly used framework for explaining consumers
satisfaction and re-purchase decisions in wide variety of contexts (Hong et al, 2006). The paradigm
states that before buying a certain product or service, consumers form initial expectations regarding its
performance or benefits. Initial expectation can be either confirmed (the product or service
performance rose to consumers initial expectations), disconfirmed (the product or service didnt meet
consumers initial expectations) or positively disconfirmed (the product or service exceeded
consumers initial expectations). A confirmation of initial expectations or a positively disconfirmation
leads to increased satisfaction which in turn determines repurchase intentions (Hong et al, 2006).
Bhattacherjee adapted the expectation-confirmation parading to IT usage obtaining the
Expectation-Confirmation Model of continued IT usage (ECM-IT). ECT-IT differs from the
expectation-confirmation paradigm because Bhattacherjee uses post-adoption expectations
represented by perceived usefulness (Hong et al, 2006). In Bhattacherjee model, both satisfaction and
perceived usefulness leads to the continued intention to use IT (Bhattacherjee, 2001).
It is important to note that prior research have concentrated either on adoption or post-
adoption behaviour. In adoption phase, online purchase intentions were explained merely as a
function of attitude and initial perceived usefulness of online buying. But perceptions about online
buying usefulness change in time as consumers get to make more online purchases. Thus, we consider
following Bhattacherjee approach in considering post-adoption perceived usefulness of online buying.
Unlike most of post adoption studies that did not include attitude in modelling post adoption
online consumers behaviour, we do include it in our model and validate its mediating effect between
perceived usefulness and continuance intention. Even though satisfaction is considered to be a quasi-
attitudinal variable (Bagozzi and Gopinath, 1999) and treated as an attitude (Fournier and Mick,
1999), we strongly believe that including the overall attitude towards online buying, as a function of
post adoption perceived usefulness and satisfaction, will increase the models predictive power.
These being said we have outlined the main differences between previous studies and current
study that integrates theories from both adoption and post-adoption behaviour in an attempt of gaining
a joint perspective on online consumer behaviour.

2. Literature Review
Various authors have employed ECT-IT framework as a base for studying continuance
intention. There are however various approaches to continuance intention: some papers studied
consumers intention to continue using the Internet to purchase (Atchariyachanvanich et al, 2006; Tsai
and Huang, 2007; Chen et al, 2010; Jiang and Rosenbloom, 2004; Lee, 2010), while others are more
particular studies concentrated on consumers intention to continue using a certain website to
purchase (Liao et al, 2011; Liao et al, 2010; Kim et al, 2003; Lin et al, 2010; Wang et al, 2010) or the
continuance intention to buy from a specific online vendor (Kang et al, 2008).
Atchariyachanvanich et al employ ECT-IT framework and find a moderate influence of
overall satisfaction with Internet purchasing on continuance intention. However, the relationships
between expectations confirmation and perceived usefulness and expectations confirmations and
satisfaction are validated. Satisfaction has a strong impact on customer loyalty although loyalty to the
channel has a small impact on repurchase intention (Atchariyachanvanich et al, 2006).
461

In accordance with Atchariyachanvanich et al, several other studied reported a lower
influence of satisfaction on continuance intention and a higher influence of perceived usefulness on
continuance intention (Chen et al, 2010; Liao et al, 2010; Wen et al, 2011).
But generally, authors report a high influence of satisfaction on e-repurchase intentions (Tsai
and Huang, 2007; Jiang and Rosenbloom, 2005; Chen and Cheng, 2004; Lee, 2010; Kim et al, 2003;
Lin et al, 2010; Kang et al, 2008; Wang et al, 2010).
ECT-IT framework is often augmented with other variables in an attempt to enlarge the body
of knowledge. For example Liao et al inserts the concept of regret when modelling online consumers
intention to continue using a particular website. The authors are using Yi and Baumgartners
definition of regret as a negative emotion related to post-purchase related situations, when a consumer
thinks that he took the wrong alternative to an existing alternative that turns out to be or is imagined to
be a better choice (Yi and Baumgartner, 2004). Liao et al reported a strong influence of regret both on
satisfaction but also on the intention to reuse a certain website for buying goods and services (Liao et
al, 2011).
Jiang and Rosenbloom report a significant influence of perceived price on repurchase intention (Jiang
and Rosenbloom, 2005).
Some models employ various satisfaction predictors. For example, in Liao et al model,
satisfaction with a certain website is determined by the disconfirmation of information quality
expectations, system quality expectation and service quality expectation. All these variables have a
moderate impact on satisfaction towards using a certain website for buying online (Liao et al, 2011).
Chen and Cheng position a direct effect of information quality disconfirmation, system quality
disconfirmation and service quality disconfirmation on repurchase intention and also an indirect effect
through satisfaction (Chen and Cheng, 2004). Kang et al also proposes website information quality,
system quality and overall service quality as main predictors of e-satisfaction, but unlike the other two
models, information and system quality has both a direct and indirect effect on satisfaction, through
the mediating variable service quality (Kang et al, 2008).
The consumer is approached as an end-user of an information system, characterized by both
information consumption and direct user interaction (Doll and Torkzadeh, 1988). Before making a
purchase the consumer engage in a research process for gathering information about products and
service. Thus quality of the information is supposed to ponder even more in the pre-purchase phase of
the buying process (Lin et al, 2010). Qualitative information is up-to-date, detailed, exact, and
trustful. Qualitative information is also communicated in a proper format (Ahn et al, 2004).
Consumers not only rely upon the quality of information displayed within the website but also on the
quality of the website (Wolfinbarger and Gilly, 2001). A qualitative website is easy to use, having a
proper navigation structure and search facilities (Fog et al, 2002) and reliable, capable of generating a
rapid and flawless order and payment (Lin et al, 2010). As regards to service quality, many authors
employ DeLone and McLeans five variables for measure the quality of website service: tangibility,
reliability, responsiveness, assurance and empathy (Chen and Cheng, 2004; Liao et al, 2011). In Wang
et al model, emotional value is the single predictor of consumer satisfaction and emotional value is
represent by a function of information quality value, system quality value, social value and perceived
sacrifice. Emotional value is a strong satisfaction predictor (Wang et al, 2010). Lin et al employ two
variables, namely concentration and enjoyment as customers satisfaction predictors. Concentration
refers to the degree to which the consumer is absorbed in the process of buying. The authors found a
significant of both satisfaction predictors (Lin et al, 2010).
Some models differentiate between different types of satisfaction. For example, Jiang and
Rosenbloom differentiate between at check-out satisfaction and after-delivery satisfaction. At
check-out satisfaction relies heavily upon the information quality and system quality since ease of
finding and evaluating products through better search facilities and a proper navigation structure or
faster checkout are positively related to perceived convenience of online buying (Jiang and
Rosenbloom, 2005). After-delivery satisfaction is associated with delivery time, delivering the right
product and after sale customer relationship (Jiang and Rosenbloom, 2005). An important finding of
Jiang and Rosenbloom is that at check-out satisfaction doesnt have a significant influence on
repurchase intentions, meaning that consumers make most of the evaluations after the product is
delivered and its performance is asserted.
462

Liao et al differentiate between satisfaction with ordering process and satisfaction with fulfilment
process. The authors think that is appropriate to decompose the online buying process since ordering
related activities (information seeking, product evaluation and actual ordering) are different from
fulfilment related activities (delivery, gratification, post-sales customer support) (Liao et al, 2010).
The decomposition of satisfaction led to lower influence of the two variables on continuance
intention.
Other authors have studied moderating variables influences within an adapted ECT-IT
framework. For example, Chen et al found a significant moderating effect of perceived Internet self-
efficiency on expectations confirmation. Internet self-efficiency was regarded as consumer perceived
capabilities of performing specific online tasks (Chen et al, 2010). Kang et al studied the moderating
effect on computer anxiety on information quality and e-satisfaction relationship and also on system
quality and e-satisfaction relationship and validated a moderating effect only on the first relationship
(Kang et al, 2008)
The effect of satisfaction on repeat purchase intention has even been mediated by other
variables such as habit in Chiu et al model. This model explains online buying behaviours in specific
context when the buying is habitual and it doesnt assume much cognitive planning (Chiu et al, 2010).
Habit turns out to be a strong predictor of repeat purchase intention.

3. Research Framework
Employing the Model of Technology Acceptance (Davis, 1989) and the Expectation-
Confirmation Theory of IT usage (Bhattacherjee, 2001), we state the following hypothesis:
Hypothesis 1: Satisfaction felt after making a significant number of online purchases will
positively influence consumers continued intention to buy online
Hypothesis 2: Affective attitude towards online buying will positively influence consumers
continued intention to buy online
Hypothesis 3: Post-purchase perceived usefulness of buying online will positively influence
consumers attitude towards buying online
Hypothesis 4: Consumers initial expectations towards online buying will positively influence
consumers post-purchase perceived usefulness
Hypothesis 5: Consumers initial expectations towards online buying will positively influence
consumers satisfaction towards online buying
Hypothesis 6: Satisfaction felt after making a significant number of online purchases will
positively influence consumers affective attitude towards online buying

Figure 1 Research framework of Online Buying Continuance Intention

4. Methodology

In order to test and validate our conceptual framework, primary data was collected using a
paper-based questionnaire. The first part of the questionnaire was designed to gather general data
about online purchase and online payment. The second part contained 4 questionnaire items for each
construct, cumulating 25 questionnaire items. The items were measured on a five point Likert scale
from 1 strongly disagree to 5 strongly agree. The last part of the questionnaire collected
demographic data from respondents, such as age, income, education and sex. All questions were
translated back and forth from English to Romanian by an authorized translator. Data was collected
using university teachers and students, both college, master and Ph.D. students, as respondents. Paper-
questionnaires were personally handed by authors after or before class.
Expectation
Confirmation [EC]
[PU]
Satisfaction [S]
Continued Intention
[CI]
Attitude [A]
H1
H5
H3
H6
H4
H2
463

Scale measurements are drawn from existing literature (Davis, 1989; Bhattacherjee, 2001)
and adapted to the purpose of current study. The latent variables were analysed using Consistency
Reliability Analysis (See section 5 of this paper for further clarification).
Least Square regression analysis was performed for testing the relationship between the variables.
5. Data analysis and results
First, the database was examined in IBM SPSS Statistics Package for missing values and
duplicate answers. No case of duplicate answers was found, but there were 14 cases of missing values
which have been removed from the database, remaining 234 valid cases for further analysis.
After the preliminary tests, the internal consistency and reliability of the latent variables items
was checked, using the Reliability Analysis option in SPSS. This analysis computes the Cronbachs
Alpha coefficient for each construct or latent variable measuring the internal consistency among the
items and their reliability. Alpha must be greater than 0.7 in order for the items to offer a strong
explanation of the latent variable, even if higher values of 0.8 or 0.9 would be much better for the
constructs accuracy.
The reliability analysis in SPSS for a variables items consists in a succession of tables, from
which only the two most important will be presented next: The Reliability Statistics table and Item
Total Statistics table. First shows the construct variables Cronbachs Alpha coefficient which varies
from 0 to 1, being the ratio of two variances, even if sometimes has negative values, which dont
make any sense. and require a value over 0.7 (Nunnally, 1978, p. 245-246). The next coefficient in
this table is the Cronbachs Alpha based on Standardized Items, which computes the Cronbachs
Alpha assuming that all the items in the construct have nearly the same variance. If the variances are
similar, than the two alpha coefficients will have almost equal values. The second table, Item Total
Statistics, has two important columns which will be presented, Corrected Item-Total Correlation,
which shows the correlation between an item and a composite score of all the other items in the
construct, and Cronbachs Alpha if Item Deleted, that indicates which item should be removed if the
value from the table is greater than the value from the Reliability Statistics table.
Table 1 Perceived usefulness [PU] Table 2 Attitude [A]

The Reliability Statistics (Table 1) for Perceived usefulness [PU] construct variable shows a
Cronbachs Alpha value of 0.860, which is very good, and the Item Total Statistics (Table 1) show
that by removing item no 3 Buying online goods saves money, the accuracy of the construct will be
increased to 0.878, which is the associated row Cronbachs Alpha if Item deleted value for this item.
The Corrected Item Total Correlation coefficient for item no. 3 is the lowest from the column,
suggesting the same removal conclusion.
Table 2 indicates a Cronbachs Alpha value for the Attitude [A] construct variable of 0.797,
which is over 0.7, and the possibility to increase it by removing item number 1 Using Internet to buy
goods and services is a wise idea, that has a Cronbachs Alpha if Item Deleted value of 0.818 and a
low Corrected Item-Total Correlation of 0.446, the lowest of all items. The Cronbach's Alpha Based
on Standardized Items and the normal Alpha values are very similar in Table 1, 0.861 and 0.860 for
Reliability Statistics [PU]
Cronbach's Alpha Cronbach's Alpha
Based on
Standardized Items
N of Items
.860 .861 4
Item Total Statistics [PU]
Corrected
Item-Total
Correlation
Cronbach's
Alpha if Item
Deleted
Buying online goods and
services is convenient
.768 .796
services saves time
.716 .818
services saves money
.567 .878
services is fun
.788 .789
Reliability Statistics [A]
Cronbach's Alpha Cronbach's Alpha
Based on
Standardized Items
N of Items
.797 .797 4
Item-Total Statistics [A]
Corrected
Item-Total
Correlation
Cronbach's
Alpha if Item
Deleted
Using Internet to buy goods
and services is a wise idea
.446 .818
Using Internet to buy goods
and services is a good idea
.609 .748
I like the idea of buying
online goods and services
.669 .716
I think highly of using the
Internet for buying goods and
services
.729 .689
464

Alpha, and identical in Table 2, 0.797, resulting that all the items in the two constructs have nearly the
same variance.
The Inter-Item Correlation Matrices for the two variables were also computed for a better
understanding of the used scale. All the values of the two matrices were over 0.3, the minimum
Pearson R correlation coefficient value agreed for a good correlation, except the R between Item 1
and Item 2 from Table 2, which was 0.277. Item 1 was removed earlier from the construct, thus all the
values being good.
The next three construct variable: Satisfaction [S], Intention [I] and Expectation Confirmation
[EC] will be further analyzed in the same way for reliability and internal consistency.

Table 3 Satisfaction [S] Table 4 Continued Intention
[CI]

Table 5 Expectation Confirmation [EC]

Satisfaction [S] variable (Table 3) has an excellent Cronbachs Alpha value of 0.920 and all
the items of the construct are reliable and have internal consistency, none being removed because they
have lower Cronbachs Alpha if Item Deleted values than 0.920.
Table 4 also show a very good Alpha value for Continued Intention [CI] variable of 0.846,
and from the Item Total Statistics segment of the table resulted that all the items describe accurately
the construct, having good values and none needing to be removed.
In table 5, the Cronbachs Alpha value for Expectation Confirmation [EC] variable is 0.781,
over 0.7, but will be improved if Item 4 I had fun buying online goods and services is removed from
Reliability Statistics [S]
Cronbach's Alpha Cronbach's Alpha Based
on Standardized Items
N of Items
.920 .921 4
Item Total Statistics [S]
Corrected
Item-Total
Correlation
Cronbach's
Alpha if Item
Deleted
I am pleased with my
decision to buy online goods
.854 .883
I am happy with my decision
to buy online goods
.813 .897
I am content with my
.825 .895
I am satisfied with my
.779 .908
Reliability Statistics [CI]
Cronbach's Alpha Cronbach's Alpha Based
on Standardized Items
N of
Items
.846 .848 4
Item-Total Statistics [CI]
Corrected
Item-Total
Correlation
Alpha if
Item
Deleted
I anticipate to continue to use the
Internet for buying goods
.622 .831
Its likely that I will continue to use
the Internet for buying goods
.689 .804
Its probable that I will continue to
use the Internet for buying goods
.647 .822
I intend to continue to use the
Internet for buying goods
.788 .759
Reliability Statistics [EC]
Cronbach's Alpha Cronbach's Alpha Based on Standardized Items N of Items
.781 .780 4
Item Total Statistics [EC]
Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted
The information I gathered through the Internet
helped me make the best buying decision
.608 .721
I found and bought products and services at lower
prices using the Internet
.724 .652
I saved time buying online goods and services
.682 .682
I had fun buying online goods and services
.365 .824
465

the construct, because of the very small Corrected Item-Total Correlation value of 0.365, thus
resulting a final improved Alpha value for [EC] of 0.824.
The Cronbachs Alpha Based on Standardized Items values for the three variables are almost
equal to the normal Alpha values, showing a similar variance for all the items in the construct. The
Inter-Item Correlation Matrices computed showed good Pearson R correlation values, over 0.3, except
Item 4 from [EC] which was removed from the construct.
After removing the three unreliable and inconsistent items, the variables of the model were
physical built using the Mean function in SPSS for the remaining items corresponding to each
construct.
Next, the structural equations model was analyzed using a series of simple and multiple linear
regression in order to compute the Beta Standardized Coefficients, named also the path coefficients,
which describes the strength of the relationship between variables needed for hypotheses validation.
The regressions were built using the method Enter in SPSS and the Least Squares technique.
The Pearson Correlation Matrix was first analyzed to see all the correlations between the
variable of the proposed model. The correlation is significant if the Sig. value or probability value is
under 0.05 for a 95% confidence interval. As we can see from the table, all the correlations are
significant and with values over 0.3, but for a good correlation R should be greater than 0.5.
This matrix is useful in evaluating the mediator effect of the models variables.
In the next step the Model Summary tables of the models dependent variables will be
analyzed in order to see the value of the Pearson R correlation coefficient, Pearson R Square
coefficient of Determination and Durbin Watson statistic value.

Table 6 Pearson Correlations Matrix

Table 7 Model Summary
Continued Intention [CI] .878
a
.771 .769 .25404 2.062
a. Predictors: (Constant), Satisfaction [S], Attitude [A]
Attitude [A] .766
a
.586 .583 .32465 1.971
a. Predictors: (Constant), Satisfaction [S], Perceived usefulness[PU]
Satisfaction [S] .674
a
.454 .452 .46728 2.182
Perceived usefulness[PU] .457
a
.209 .205 .56705 2.208

The Model Summary (Table 7) shows a Pearson R coefficient value for [CI] as dependent
variable and [A] and [S] as predictors of 0.878, which is very high, and a Pearson R square of 0.771,
which shows the strength of the multiple regression model meaning that the predictors or independent
variables can explain in a 77.1% the dependant, outcome or result variable. The R for [A] as
[PU] [A] [CI] [S] [EC]
[PU] Pearson R 1 .532
**
.334
**
.308
**
.457
**

Sig. .000 .000 .000 .000
[A] Pearson R .532
**
1 .786
**
.688
**
.633
**

Sig. .000 .000 .000 .000
[CI] Pearson R .334
**
.786
**
1 .825
**
.661
**

Sig. .000 .000 .000 .000
[S] Pearson R .308
**
.688
**
.825
**
1 .674
**

Sig. .000 .000 .000 .000
[EC] Pearson R .457
**
.633
**
.661
**
.674
**
1
Sig. .000 .000 .000 .000
**. Correlation is significant at the 0.01 level (2-tailed).
466

dependent variable and [PU] as predictor is 0.532, which is over 0.5, thus resulting a good simple
regression model, and for [S] as dependant and [EC] as predictor, the R is 0.674, very good for a
simple regression.
The lowest correlation is between [PU] as outcome variable and [EC] as predictor, with an R
of 0.457, under 0.5, but regarding the nature of the Likert variables, some authors accept 0.3 as a
lower limit, thus the model being valid.
The Durbin-Watson statistic values are all in the recommended interval between 1.5 and 2.5,
resulting no serial autocorrelation in the residuals and validating the independence of the errors
regression assumption.
Next, the Standardized Beta Coefficients Table 8 will compute the required path coefficients
for models hypotheses validation and their Significance Levels.

Table 8 Standardized Beta Coefficients

The Beta or path coefficients are all significant, with a probability under 0.001 and with
values over 0.3, resulting that all the hypotheses are validated, each associated influence or correlation
being strong. The Attitude [A] variable has a mediating effect between [PU] and [CI], having a path
coefficient of 0.355 and a Pearson R correlation coefficient of 0.532 between [PU] and [A], and the
beta value of 0.415 between [A] and [CI].
For each regression the Anova analysis was also performed, all having good values,
explaining well the cumulative effect of all predictors on the outcome variable.
The lack of multicolinearity assumption for linear regression was validated in all the cases,
the Tolerance coefficients being all over 0.5, and the Variance Inflation Factor (VIF) values under 5.
The Colinearity Diagnostics table confirmed this assumption too, the Condition index being under 17
for the simple regression, and 25.7 for the multiple regression with [CI] as outcome, showing in this
case a moderated risk of colinearity, the value being between 15 and 30, bur regarding the ordinal
nature of the Likert variables, this is normal and accepted.
The last important assumption, the normality of residuals, was verified using the Histogram of
Standardized Residuals (Figure 2) and the P-P Plot.

Figure 2 The Histogram of Standardized Residuals

The normality assumption is validated too, all the regression residuals histogram showing a
normal distribution. The P-P plots also showed the standardized residuals can be estimated with a
regression line.
Next, the corresponding hypotheses path coefficients of the Online Continuance Intention
Buying structural equation model are put on the graph, and the Chi Square of the model will be
computed.

Dependent: [CI] Dependent: [A] Dependent: [S] Dependent: [PU]
Predic
tors
Standardized
Coefficients
Sig. Predic
tors
Standardized
Coefficients
Sig. Predic
tors
Std.
Coeff.
Sig. Predictors Std.
Coeff.
Sig.
Beta Beta Beta Beta
[A] .415 .000 [S] .579 .000 [EC] .674 .000 [EC] .457 .000
[S] .539 .000 [PU] .355 .000
467

Figure 3 Online Continuance Intention Buying Model

The model was also analyzed with SPSS Amos, and was once again validated, all path
coefficients computed with the Maximum Likelihood technique being identical to the beta
coefficients computed with SPSS Statistics Regression Analysis.
The Model Fit indices have good values, Chi Square being 13.589 for a p<0.005 and 4 degrees
of freedom, resulting a /df under 5, which is good, and the CFI is 0.983, close to 1, and RMSEA
under 0.1, all indicating a strong model fit, thus the model being validated.

6. Conclusions
Model of Technology Acceptance and Expectation-Confirmation Theory of IT usage were
both employed in order to explain consumers continued intention of online buying. By adding the
attitude variable for mediating the effect of perceived usefulness on continuance intention, we have
increased the predictive power of ECT-IT initial framework.
Thus, consumers are willing to further buy online if two conditions are met. First of all,
consumers continue to buy online if they are satisfied with their prior decision of making an online
purchase. Consumers are satisfied when their initial expectations are confirmed.
Consumers expect that the quality of information available on the Internet would help them
compare and select the best product or service. Consumers also expect to save time and money when
buying online. Saving time is given by the e-commerce website quality which is capable of rapid
order and payment processing. Saving money is given by the fact that online vendors often offer
lower prices and bargains in order to promote online buying or the fact that an increased online
competition often results in price battles.
When expectations are confirmed, consumers are satisfied with their decision of buying
online and they perceive a higher degree of usefulness of online buying. This means that post-
purchase perceived usefulness relates to initial expectations confirmation. Pre-purchase perceived
usefulness is mainly based on social influence. Before making an actual online purchase a consumer
cannot either state if online buying is productive, efficient or convenient.
Second of all, consumers continue to buy online when they have a favourable attitude toward
online buying. Affective attitude towards online buying is a function of post-purchase perceived
usefulness and satisfaction. A positive attitude leads to a manifested online buying continuance
intention.
The main finding of our research is that satisfaction and attitude are main predictors of
consumers intention to continue buying online goods and services. Confirmation of expectations and
perceived usefulness of online buying have an indirect influence on continuance intention through the
mediating effect of satisfaction, and attitude respectively.
Thus, keeping online consumers satisfied represents the pillar of sustainable e-commerce.

7. Acknowledgements
This article is a result of the project POSDRU/88/1.5./S/55287 Doctoral Programme in
Economics at European Knowledge Standards (DOESEC) . This project is co-funded by the European
Social Fund through The Sectoral Operational Programme for Human Resources Development 2007-
Expectation
Confirmation [EC]
[PU]
Satisfaction [S]
Continuance
Intention [CI]
Attitude [A]
R=0.209
R=0.586
R=0.771
R=0.454
H1
H5
H2
H3
.54
.67
.42
.36
.46
=13.589 (df=4, p<.005)
RMSEA=.086
CFI=.983
H6
H4
.58
468

2013, coordinated by The Bucharest Academy of Economic Studies in partnership with West
University of Timisoara.

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470

ANALYSIS OF STUDENT PERCEPTIONS ON THE QUALITY OF
HIGHER EDUCATION IN ROMANIA

PARI ZA-MANEA Natalia
Ph.D. student, Faculty of Marketing/Department of Marketing, The Bucharest University of Economic
Studies, Bucharest, Romania, e-mail: nataliamanea@yahoo.com

CETI NA I uliana
Professor, Faculty of Marketing/Department of Marketing, The Bucharest University of Economic Studies,
Bucharest, Romania, e-mail: cetina.iuliana@gmail.com

Abstract: This article aims to identify and analyze the perception of students, beneficiaries of
educational services in the state and private systems on the quality of higher education services, by using
specific tools of marketing research. The perception is a psychological variable influencing consumer behavior.
It is important in the educational services, given the present state of Romanian education, where the educational
offer is not correlated with the labor market demand, which can lead to major imbalances in the educational
market.
The quality of the educational services is a social desirable objective, and its contribution to
increased economic efficiency is decisive.

Key words: perception, quality, students, higher education


1. Introduction
The Bologna system introduced in Romania in 2005, has sparked some controversy. The
existence of large number of students which became graduates, led to the growth of overqualified
labor markets, and the compromises made in favor of quantity led to lower quality of university
training. Assuming that performance can be made only if we give and receive quality services, in
academia it is best perceived through direct beneficiaries, ie students. The analysis of service quality
perception of higher education in the national context can be done and in terms of teachers, employers
and other social groups (civil society, government, trade unions), but we only analyze students'
perception of the license cycle.

2. The research methodology
In this research we aimed to analyze the perception of students on Romanian university
education, using, in addition to secondary research, investigation, and as a tool, written questionnaire,
structured on a nationally representative sample of 182 students from state and private universities.
The research was conducted online during January and February 2012 and all 15 questions of the
questionnaire were closed, dichotomous, trichotomous and multichotomous and covered all existing
possibilities.

3. The research results
This research resulted in identification of Romanian students perception from license cycle on
service quality on higher education in Romania. Respondent's situation is as follows: from the 182
students, 121 are students at state universities, that is 66.48%, and 61 are at private universities in
Romania (33.52%). From these, most of them are in the economic field, 118 (64.84%), followed by
technical field, 19 (10.44%), socio-human, 28 (15.38%), and a number of 17 (9.34 %) are from other
areas. From these, a percentage of 40.80%, (meaning 87) students pay their studies and the rest of 95,
i.e. 59.20%, study with funding from the state budget.
In Table 1 it can be observed the perception of respondents on learning environment offered
by the universities where they study. The following aspects were taken into account: equipment in the
classrooms, seminar and laboratory, the site of university, the library, the accommodation capacity
and conditions in student hostels, the computer networks and the general opinion which they have
471

about the learning environment offered. These issues were appreciated with grades from 1-5, 5 being
the highest. Results are expressed as number of students and also as percentage from the total
respondents (in parenthesis).
The observed results have identified a problem concerning the accommodation capacity and
conditions in student hostels, a percentage of 3.85% gave grade 1 to this aspect.

Table 1: The learning environment
The learning environment 1 2 3 4 5
equipment in the
classrooms, seminar and
laboratory
0 7
(3.85%)
20
(10.98%)
67
(36.81%)
88
(48.36%)
the site of university 0 0 11
(6.04%)
67
(36.81%)
104
(57.15%)
the library 0 0 13
(7.14%)
40
(21.97%)
128
(70.37%)
the accommodation capacity
and conditions in student
hostels
7
(3.85%)
20
(10.98%)
42
(23.07%)
61
(33.53%)
52
(28.57%)
the computer networks 0 15
(8.25%)
40
(21.98%)
67
(36.81%)
60
(32.96%)
general opinion which they
have about the learning
environment offered
0 7
(3.85%)
13
(7.14%)
27
(14.84%)
135
(74.17%)

Table 2 presents the respondents' perception on didactic activity carried out in Romanian
universities. The aspects which were taken into account are: the clarity of aims courses /seminars, the
clarification of the theoretical concepts from courses by examples, the existence of professor student
dialogue, degree of applicability in practice of the studied problems, and honesty of evaluation, and
were appreciated with grades from 1-5, 5 being the highest. The results are also expressed as number
of students and as percentage from the total respondents (in parenthesis).

Table 2: The didactic activity
The didactic activity 1 2 3 4 5
the aims of courses / seminars are clear 0 0 27
(14.84%)
67
(36.81%)
88
(48.35%)
the examples clarify the theoretical
concepts
7
(3.85%)
7
(3.85)
20
(10.99%)
54
(29.67%)
94
(51.65%)
during the courses is a professor student
dialogue
13
(7.14%)
25
(13.74%)
42
(23.08%)
35
(19.23%)
67
(36.81%)
the applications from courses are
connected with practice (labor market
requirements)
13
(7.14%)
7
(3.85%)
27
(14.84%)
68
(37.36%)
67
(36.81%)
the evaluation is correct 11
(6.04%)
7
(3.85%)
34
(18.67%)
56
(30.79%)
74
(40.65%)

Unlike the learning environment, where the perception of the students was generally positive,
we have identified some negative aspects concerning the didactic activity. One of them is the absence
of professor student dialogue, a percentage of 7.41% gave grade 1 to this aspect and 13.74% gave 2.
Regarding the connection between the studied applications and labor market requirements, 7.14% of
the students gave 1, while 3.85% gave 2. Also, the honesty of evaluation was appreciated with grade 1
by 6.04% students, while 3.85% gave 2.

Table 3 presents the respondents' perception on the university curricula. The aspects which
were taken into account are: the adaptability to the market needs, the inclusion of general
competences (communication, teamwork), and whether is carried out in partnership with local
companies. The results are presented as percentage from the total respondents.

472

Table 3: The university curricula
The university curricula 1 2 3 4 5
is adapted to market needs 3.85% 10.45% 15.93% 25.82% 43.95%
include general competences
(communication, teamwork)
0 10.45% 14.84% 62.63% 12.08%
is carried out in partnership with local
companies
18.68% 10.45% 18.68% 13.73% 38.46%

As it can be observed in Table 3, 43.95% students gave maximum grade to the statement that
the curricula is adapted to market needs, 62.63% gave 4 to the fact that curricula include general
competences, and 38.46% gave 5 to the fact that the study programs are conducted in partnership
with local companies.
In Table 4 is presented the perception of respondents concerning the university administrative
staff activity. The aspects which were taken into account are: interest of administrative staff to help
students, providing correct, appropriate information and prompt services. As it can be seen,
respondents perceive a positive relationship with the administrative staff of the university, except the
promptitude of services, a percentage of 3.84% giving grade 1 to this aspect.

Table 4: The university administrative staff activity
Administrative staff of the university 1 2 3 4 5
Show a sincere interest in helping 0 11.53% 33.51% 18.68% 36.28%
Provides accurate and appropriate information 0 3.84% 29.68% 18.13% 48.35%
Provides prompt service 3.84% 11.53% 38.46% 11.53% 34.64%

Some questions with only one possible answer were also given.
To the question, "The granting of scholarships in your university is transparent?", a
percentage of 21.98% students favourably responded, while 19.23% responded that there is no
transparency. The remaining 58.79% were pronounced with "I dont know."
To the second one, Do you have a scholarship?, 10.98% said that they have received
scholarship, 7.14% have social scholarship, and the remaining 81.88% did not have any scholarship
when questioning.
To the question "Is there career counselling office in your university?", a percentage of
19.78% responded with "yes", 7.14% said "no", and the remaining 73.08% said "I don't know" about
existence of such office.
To the question "Would you recommend to others the university where you study?" a
percentage of 78.57% students have answered "yes", 8.24% said "no", while 13.19% said "I not
know".
When asked "What are your future plans?" the responses were: 40.66% said that want to
continue their studies (master, PhD), 33.52% will continue their studies while searching for a job,
while 25.82% will not continue their studies.
Regarding the sex of respondents: a total of 69 students, meaning 37.91% are male, the
remaining 112, i.e. 62.09% are women.
As can be seen from Table 5, most students are aged between 18 and 22 years, but there is a
percentage of 26.38% with more than 27 years old, which means that these people are continuing their
studies, even if they are older, perhaps along with a job.

Table 5: Age of respondents
Age Number of students (Percentage)
18-22 107 (58.79%)
23-26 27 (14.83%)
27 or more 48 (26.38%)

Concerning the monthly family income of the respondents students (Table 6), a fairly large
percentage of respondents have monthly family income between 1000-2500 ron, but we can not
appreciate if it is big or small because we don't know anything about how large the family is.

473

Table 6: The monthly family income of the students
The monthly family income (ron) Number of students (Percentage)
less than 1000 17 (9.34%)
1000-2500 111 (60.89%)
more than 2500 54 29.77)

4. Conclusions
From this study we can conclude that the Romanian students have a more favorable
perception than unfavorable on quality higher education system.
They appreciate that in the educational process is important both equipment from the
classrooms, seminar and laboratory and libraries, and aspects relating to didactic activity,
relationships with professors and administrative staff of the university. The existence of a well
established site of the university, with all updated information is perceived positively by the students.
Most of them positively appreciate the dialogue with professors. A small percentage indicates
dissatisfied students concerning the evaluation. Even if the percentage is insignificant, this leaves a
question mark.
Less than half of respondents appreciate with maximum the adaptability of curricula to the
market needs. A weakness is the lack of career counseling offices or the lack of information about the
existence of such offices. Also, a weakness is the lack of transparency concerning the granting of
scholarships. Many students don't know about these scholarships or obtaining conditions of them. A
percentage of 78.57% respondents would recommend others university where they studied, and most
of them would continue their master or PhD studies, while looking for a job. In the division by gender
of respondents it can be seen clearly that the largest percentage, i.e. 62.09%, is held by female. May
be noticed an increase of the people age which become students, so 26.38% of the respondents have
more than 27 years old.
This research is a starting point for further research regarding the perception of students from
other university cycles, masters and PhD, on the quality of educational services.

5. References
- Ctoiu, I., Teodorescu N. (2004) Comportamentul Consumatorului. Editia a II-a, revzut i
adugit, Bucureti: Editura Uranus.
- Catoiu I. (coordonator) (2009) Cercetari de Marketing. Tratat. Bucuresti: Editura Uranus.
- Cetina, I. (2009) (coordonator) Marketingul Serviciilor. Fundamente si Domenii de
Specializare, Bucuresti: Editura Uranus.
- Dumitrescu, L.N, Apostu, C. (2009) Marketingul si Calitatea Serviciilor. Bucuresti: Editura
Expert.
- Gronroos, Ch. (2004) Service Management and Marketing: a Customer Relationship
Management Aproach, 2nd edition, John Wiley & Sons Ltd.
- Lovelock, Ch., Wirtz J. (2007) Services marketing. People, tehnology, strategy, 6-th
Ed., New Jersey: Pearson Pretince Hall.
- Olteanu, V. (2002) Marketingul serviciilor. Teorie i practica. Bucureti: Editura Uranus.

474

EVALUATING THE EFFICACY OF MARKETING ACTIVITY IN THE FOOTWEAR
INDUSTRY AND THE NECESSARY MEASURES TO ENDURE THE CRISIS

PATIU Carmen Adina
Assistant professor/ Ph.D., Faculty of Science/Department of Economics and Business
Administration, 1Decembrie 1918 University of Alba Iulia, Alba Iulia, Romania,
carmenpastiu@yahoo.com

Abstract: This research analyzed the efficacy of marketing activity and tried to capture the idea of
acceding to or distancing from "excellence" in the marketing activity of surveyed companies. In order to attain
success, to win and consolidate a favorable position and to endure in this time of crisis, improving marketing
activity becomes an essential requirement especially for the light industry sector which is already very
vulnerable.

Key words: efficacy, efficiency, footwear industry, crisis measures

JEL classification: M21, M31,M39

1. Introduction
The efficacy of marketing activity is not necessarily highlighted by the current volume of
sales or by profit performances. The achievements may sooner be the result of the fact that a certain
activity domain was in the right place at the right time, rather than because it benefited from an
efficient marketing management.
The improvements brought to the marketing activity in that particular sector could cause the
results to turn from good to excellent. It may also be the case that another sector registers poor results
in spite of having an excellent marketing planning. If this is the case, replacing the marketing
managers can only make things worse.
One of the strategic control instruments, known as the appreciation of the efficacy of
marketing activity, achieves a characteristic of global marketing activity efficacy in terms of client
relations philosophy, organizing marketing activity, marketing information, strategic and operational
efficiency planning. Each of these characteristics can be measured.
Kotler, Ph.(1997, pg.967)

suggested a grid to assess the efficacy in marketing activity. This grid was
used over the years by many researchers in the country and abroad. Bacali L. (1999) applies such an
adapted grid to a study on a sample of 30 companies from Cluj-Napoca between 1995-1997.
A survey conducted in nineteen Korean companies (Sung-Joon Yoon, 1999) to revise Ph.
Kotler's marketing effectiveness model to diagnose and offer managerial implications for Korean
marketing practices. Korean firms, divided into ten manufacturing and nine service sectors, were
examined to assess their level of marketing effectiveness. The five marketing effectiveness attributes
strategy, organization, operations, personnel, and information system along with accompanying
factor components were incorporated into the measurement of the marketing effectiveness. The
findings showed that manufacturing sector firms were less effective in marketing operations than the
service sector firms. In both sectors, relative to the predetermined factor importance weights, the
Korean firms were found to underperform in planning and controlling functions. Managerial
implications regarding the underperforming marketing functions and future recommendations are
offered (Sung-Joon Yoon .1999)

2. Efficacy assessment
2.1 Research Methodology
The research in question was the result of a qualitative analysis conducted in companies from
light industry. After the research was carried out, a few aspects were identified regarding the
application of marketing in management practice of companies from the Romanian light industry and
the necessity of a quantitative research had been therefore outlined.
475

The overall aim of the research - Evaluating the efficacy of marketing activity in the footwear
industry
Specific aims:
O1 - assessing the efficacy at company level
O2 - assessing the efficacy at module level

The instrument used is the assessment grid of marketing activity efficacy suggested by Kotler,
Ph. (2008)

structured as a questionnaire.
Several mail and e-mail applied interviews represented the means of communication with the
researched organization, and the technique used was the interview conducted on the basis of a
questionnaire. The space coordinates, where the research was conducted, targeted footwear industry
companies from all over the country: a statistical sample of 60 units.
Each question is assigned with a mark between 0 and two, therefore for the first answer
variant 0 is assigned, for the second 1 and for the third 2.
The questionnaire is divided into the five parts suggested by Kotler and the evaluation of each chapter
is given by the summing of the points.

The interpretation of results will take into account the following scale:
- 0 - nonexistent efficacy;
- 1 - very low efficacy;
- 2 - low efficacy;
- 3 - average efficacy;
- 4 - good efficacy;
- 5 - very good efficacy;
- 6 - excellent efficacy.
The assessment at company level will be done taking into account the following scale:
- 0-5 - non-efficacy;
- 6-10 - low efficacy;
- 11-15 - satisfactory efficacy;
- 16-20 - good efficacy;
- 21-25 - very good efficacy;
- 26-30 - excellent efficacy.
The question grid is structured into five modules as follows:
Module I - corresponding to the characteristic - organizing marketing activity
Module II - corresponding to the characteristic - market analysis
Module III - corresponding to the characteristic - information analysis
Module VI - corresponding to the characteristic - strategic planning Module V - corresponding to the
characteristic - operational marketing
Interpreting the results of these tables it can be determined that the efficacy of the marketing
activity in the surveyed companies ranges from non-efficacy to excellent efficacy as shown below
(Table 1):
Table 1 The centralized situation of companies
Points Type Number of companies Percent
0-5 non-efficacy 2 0.033333
6-10 low efficacy 3 0.05
11-15 satisfactory efficacy 8 0.133333
16-20 good efficacy 25 0.416667
21-25 very good efficacy 22 0.366667
26-30 excellent efficacy 0 0
Total 60 1
Source : own survey

One can observe that 42% of the surveyed companies have good efficacy and 36% have very
good efficacy.
476

The five companies enclosed in the range of non-efficacy and low efficacy are companies that
do not have marketing department (4 of them do not have) and amongst the marketing activities, the
managers mention: tracking sales and establishing connections with the suppliers. These managers are
not interested in the marketing activity. For these companies all the production is contracted to a
single client, for whom they work in a complete outsourcing system
A 13% have satisfactory efficacy and own a specialized marketing department. Marketing in these
companies is characterized by activities of sales and tracking invoices from suppliers and customers.
In these companies 3 to 5 employees are engaged in marketing activities.
In Table 2 you can see the centralized results in modules.

Table 2 Summary on modules and questions
Module Organizing Market analisys Information Strategic
planning
Operational
marketing
Points 316 (28%) <0.87> 267 (23% ),
<0.24>
126 (11%)
< 0.35>
282 (25%)
< 0.78>
129 (12%)
< 0.36>
Question
points
98

113 105 94 65 108 68 30 28 108 80 94 29 50 50

Source: own survey

The total of points is 1120. The maximum score for each module is 360 points.

Figure 1: The centralized situation on modules

- It is noted that most attention is paid to the organization of marketing activity and its
characteristic elements
- Out of the analyzed modules, the organization of marketing activity has the best efficacy.
The efficacy of the marketing activity is not necessarily highlighted by the current volume of
sales or profit performance. Good results could sooner be due to the fact that a certain activity
sector was in the right place at the right time, rather than because it benefited from an
effective marketing management. In the new context, marketing should be perceived not as a
separate function of the company but as a philosophy to be acquired by the whole
organization.

Figure 2 provides an image regarding the process of acceding to / distancing from "excellence" in
marketing activity of the surveyed companies. The ideal situation would arise in the context of 100%
coverage, by the scores achieved, of the surface in the pentagon entitled "ideal marketing efficacy".
Consequently, an indicator in this respect could be the ratio between the two surfaces. In this case the
ratio is 0.62 (62%), a situation which reflects the need for serious improvement of the marketing
activity in the companies from the surveyed sample.

0
50
100
150
200
250
300
350
Modul I Modul II Modul III Modul IV Modul V
316
267
126
282
129
477

Figure 2: Acceding to / distancing from excellence in marketing

3. Conclusions
Although the approach is somewhat sectorial, I believe that many of the research results are
valid for the whole Romanian economy, as some represent a priority for this sector. All these
problems imperatively require the reassessment of the way in which the companies develop their
marketing activity as well as a reevaluation of the procedures through which marketing can be
introduced and accepted as a philosophy in business.
I feel that it is still important to make a distinction between the changes that occur in the practical
function of marketing and the changes related to the conceptual and strategic role of marketing within
a company.
As companies become increasingly global, the efficacy of conducting marketing operations is
progressively questioned. In achieving operational marketing there are three trends, namely:
- resuming the effort to collect, analyze and use marketing information
- assessing and monitoring the performance in company activity;
- teaching and training the staff dealing with this activity
Improving the marketing activity in companies operating in the leather and footwear sector
constitutes a sure way to attain success, to win and consolidate a favorable position. In the new
conditions of increasing competitiveness and through the opportunities offered by European markets,
companies are in need of updated concepts, on the level at which they are required to organize their
marketing in order to successfully adapt to the changes in the business environment. Recent studies
have shown that the essential success factor for a company lies within knowing and meeting the
requirements of their potential clients at higher levels, through a superior offer, and marketing is a
business function that defines these categories of consumers and identifies the best approach in order
to satisfy their needs and preferences at a competitive and profitable level.

4. References
- Aaker, D.A., (1984) Strategic marketing management, Wiley, Chichester,
- Andrews, K., (1984) Corporate Strategy: the essential intangibles, Mc. Kinsey Quarterly
- Arinze, B., (1991) A contingency model of DSS development methodology ,Journal of
Management Information Systems Vol. 8, Nr.1 pag. 149 166
- Bacali, L., (1999) Promovarea marketingului n managementul romnesc, Editura
Economic,
- Bansal, A., Kauffman, R., Weitz, R., (1993) Comparing the Modelling Performance of
Regression and Neural Networks as Data Quality Varies: A Business Value Approach,
Journal of Management Information Systems Vol.10, Nr.1, pag. 11 32
Modul I
Modul II
100%
Modul III
100%
Modul IV
100%
Modul V
100%
0.87
0.74
0.35
0.78
0.36
Modul I
Modul II
100%
Modul III
100%
Modul IV
100%
Modul V
100%
0.87
0.74
0.35
0.78
0.36

478

- Barney, J.B., (1991) Firm resources and sustained competitive advantage. Journal of
Management Nr.17, pag. 99-120
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Industry, Luxembourg
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and Planning, Vol. 19, Nr.1, pag. 6-11
- Hamel, G, Prahalad, G.K.(1994), Competing For The Future, Harvard Business School Press,
Boston, MA,
- Hill, J., McGowan, P., (1999) A qualitative approach to developing small firm marketing
planning competencies, Qualitative Market Research: An International Journal Vol.2, Nr. 3 ,
pag. 167-175
- Kotler , Ph., (2008) Managementul marketingului , Editura Teora,
- Nordas, H.K. (2005), The Global Textile and Clothing Industry post the Agreement on
Textiles and Clothing, WTO Discussion paper no.5;
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Bucureti,
- Porter, M.E., (1980) Competitive strategy techniques for analysing industries and
competitors , the Free Press , NY,
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Effectiveness of Korean Firms, Asia Pacific Journal of Management,nr 2 vol 16

479

THE IMPACT OF WINE TOURISM (OENOTOURISM) WITHIN SUSTAINABLE
DEVELOPMENT

PDURARU Ctlin
PH.D. student, Faculty of Horticulture, Agricultural Science and Vetenary Medicine University;
Bucharest; Romania; catalinvin@yahoo.com

GLBEAZ Alexandra
PH.D. student, Faculty of Agri-food and Environmental Economics, Bucharest Academy of Economic
Studies; Bucharest; Romania; alexandra.galbeaza@gmail.com

Abstract: Sustainable tourism was first developed in order to offer a clear message of progress in
terms of ecological activities so as to reduce the human negative impact upon environment and assure a
sustainable development within an economic growth. Nowadays, wine tourism has become one of the most
recent forms of what sustainable tourism means. The article aims to emphasize the European situation
regarding this sector. Therefore, the paper will present how the wine producing countries practice this type of
tourism as a strategic tool as well as its impact upon the development of the countries. It is a fact that more and
more countries started to pay attention to changes existent with the new environmental and economic priorities.
Wine tourism within Romania requires a deep research so as to know the real situation and what it may happen
in the near future. The conclusion drawn is that recent statistics revealed a hard path that Romania has been
trying to pass lately regarding sustainability requirements.

Key words: oenotourism, sustainability, economic growth, impact

JEL classification: Q - Agricultural and Natural Resource Economics; Environmental and Ecological
Economics

Introduction
It is well known that sustainable development has become a necessity determined by both
high level of development that some countries have reached to and the economic backwardness of
many other states. That is why, this concept managed to interfere within many fields such as:
sustainable agriculture, sustainable tourism. After a deep research of World Tourism Organization, it
may be stated that this kind of tourism represents a real development, no matter its type, that
succeeds to harmonize its specific activities with the touristic management and marketing in order to
respect the natural, social and economic integrity of the environment as well as assuring the natural
resources for the next generations to come. At the very beginning, sustainable development was first
supposed to be the solution to the ecological crisis.
Currently, this issue expanded upon life quality from economically and socially point of view.
That is why, wine tourism seems to be a new concept in terms of what sustainability means. It all
started some years ago when some wine areas needed to be preserved. Passing time, it gained more
and more followers, becoming a trend among the most developed countries. Witnesses may be the
beautiful vineyards from France (Bourgogne, Bordeaux, Provence), followed immediately by those
from the old Italy, Spain, Portugal and Austria.

1. The concept of wine tourism (oenotourism)
When we refer to wine tourism, we mean mainly to tourists, leisure and spare time activities
that point out the fine pleasure of the vine, wine and its soil. Thus, in terms of ecological requirements
within globalization, three pillars are taken into consideration for the present analyses, as it follows:

480

Figure 1: The pillars of wine tourism

Authenticity Sustainability

Competetiveness
Source: European Enotourism HANDBOOK

Wine-wellness, walk tours along a wine route or visits to wine fairs are also some activities
that belong to wine tourism as well as the visit of a certain wine area. According to Donatella di
Gregorio, there are three types of tourists taking into account the importance by which wine
contributes to their travel reasons: the occasional wine tourist, the ordinary wine one and the talent
scout.

Table 1: The tourist profile regarding wine tourism
Occasional tourists Wine tourists Talent scout
Sensitive to Nature and traditions Fame and prestige of the
cellar

Wine growing and
innovative enology
They buy Loose wine Precious wines Rarities only
Different range

Important
elements
Genuine traditions
Affordable prices
Quality
Reputation
Rarities
Qualitative
Excellence

What they
wish to find
Superficial vacations
Restaurants
Entertainment
Guided tours
Meet the producer
See productive stages
Test the product
See a different enology
Meet the workers
Wine tasting
Type of stay Shorts, group visits Mid term, individuals Deep and Individual

Source: RURAL DEVELOPMENT AND WINE TOURISM IN SOUTHERN ITALY

As it can be seen in the table above, there is a clear image regarding the type of wine
tourists. Thus, while the occasional tourist represents the person that travels in short group visits and
spends most of his vacation in restaurants, buying wines at affordable prices, the talent scout is the
person that prefers to visit by himself the wine areas, paying attention to the local background. He
would buy exquisite wine, rarities only. Nevertheless, there is a fine line between the two ones
represented by the ordinary wine tourist.
On the one hand, there has been a close connection between wine and tourism for ages.
Still, it was recognized as a part of an important economic industry by authorities and the professional
researchers only in the 90. After a deep research upon the special literature, it seems that the first

Wine
tourism
481

definition regarding wine tourism was mentioned in 2000 (M. Hall 2000). According to Hall, visiting
the vineyards, wineries and the wine fairs are the main characteristics of a grape wine region that
stand as a first choice for visitors. On the other hand, wine tourism can also be associated not only to a
niche marketing development, but also to a great opportunity for increasing the sales as far as the
wine industry is concerned. As a consequence, three characters are involved in the scenery: the wine
producers, the wine regions and above all, the consumers.

2. Global wine tourism situation
Wine tourism is an industry that is expanding quickly, especially in the New World wine
countries. Thus, it has become an essential source of income for United States, Australia, Chile and
South Africa.

Table 2: Development of total areas under vines in vineyards in the New World
(Unit: mha)
Year 2007 2008 2009 2010
USA 397 398 398 398
Argentina 226 226 228 228
Chile 196 198 199 200
Brazil 86 92 92 92
South Africa 133 132 132 131
Australia 174 173 176 170
New Zealand 30 35 37 37
Other African
countries
248 246 243 243
Total outside the
EU
1490 1300 1505 1499
Source: OIV world vitiviniculture data March 2011

As it can be seen in the table above, USA is in the top of the list regarding the final area under
vines in the vineyards, followed immediately by Argentina with a total surface of 228 mha in 2010.
On the bottom there is New Zeeland that has no more than 30 mha registered in 2009. Overall, the
vineyard in the New World would reach 1499 mha in 2010 which is a surface almost to that of 2009
and 2008. Anyway, this trend has already been noticed within European Union. Hungary opened its
first wine road in 1995 so as to attract tourists in Baranya County. Nevertheless, Portugal promotes
the same idea as a modality of a rural development.
Taking all these into consideration, national and international institutions are being organized
simultaneously with the growth of the wine sector, on a higher level, that would be The European
Council of Wine Regions that counts sixty European wine regions. Even if France represents the
oldest wine producing country, it has focused recently on the idea of cultural heritage, customs, and
wine based on tourism.

3. The wine demand versus wine consumption within European Union
Understanding the links that lead to the wine industry and the tourism is a complex task. In
order to emphasize the importance of tourism it is imperative to increase the demand and supply for
the new wine markets. The table below illustrates a whole picture regarding wine consumption within
the first wine-producing countries in EU. As far as the 2010 production is concerned, a growth was
seen in Portugal in terms of their production level. Unfortunately, on the other countries, the 2010
production could not align to the 2009 level.

482

Table 3: Developments in EU wine production (excluding juice and musts)
(Unit: mhl)
Germany Austria Greece Spain France Italy Portugal
2009
Provisional
production

9139

2352

3366

35166

46361

47450

5868
2010
Provisional
production

7185

1737

3100

33999

44963

44840

6760
Difference 2010
2009

-1954

-615

-266

-1167

-1398

-2610

892
Source: Source: OIV world vitiviniculture data March 2011

What is most interesting is the highlighted trend concerning the wine consumption. Thus, it
can be easily observed that the traditional wine-producing countries still remain on the top when it
comes to wine consumption. Far above other states, France, the country where most wine is consumed
and the most famous wine repository is located, stands out immediately. However, Spain shows a
great consumption rate of wine, but it is decreasing significantly. This issue has become lately an
important concern for this industry representatives and authorities.
Table 4: Developments in EU wine consumption
(Unit: mhl)
Germany Austria Greece Spain France Italy Portugal
2009
Provisional
20250 2400 3029

11271

29304

24600

4515
2010

20205 2400 2955 10600 29438

24500 4447

Difference
2010 / 2009
-45

0

-74 -671 134 -100 -68

4. Wine tourism in Romania
Romania represents an important European wine producing country providing a great
historical past and fine customs, most of them directly related to wine, often called as a magic potion.
Due to many uncertainty factors, Romania has to pass through a period of changes, trying to
harmonize its national politics with those of EU. Further, more actions are developed so as to become
a valued member within international wine community. Romanian vineyards are at the stage of
potential. There was a tourism initiative launched in the early 2000s for a wine route but it advanced
slowly and without any visible results taking into account the existent vineyards and wineries dating
from the interwar period. It is high time we knew that Romania is on the sixth place of the largest
wine producers in Europe and the tenth one worldwide. Thus, the Romanian wines and wineries could
be perceived as quite interesting products in comparison with other famous countries.
The tourist becomes a witness at the cellar, as a part of the entire wine process, starting from
the grapes picked up within vineyards, ending by their bottling. Romania could take a great advantage
of this type of tourism in terms of promoting a better international image as well as producing
additional revenues. This may be revealed by having an obvious comparison between the two well-
483

known wine centers in Romania. Thus, at Urleanu cellar (Dealu Mare) the total number of tourists
per year reaches to 3000 (the season is from April to October). On regards of Rhein and Azuga
cellars, the season is all time throughout the year, the number reaching to almost 10000 tourists per
year. Here, some hostels have been built in order to offer tourists the possibility to see the entire
process of making the sparkling wine. The process follows strictly the traditional method that the
champagne producers use in Champagne (France).
Romania is a wine country and it has been a member even since 1928 of the International
Wine and Wine Organization. Our country has been exporting traditional wines recognized and
appreciated worldwide for years. Seven vineyards were identified (as it can be seen in the figure
below), nearly 40 wineries and 160 vineyards, places where there is a full range of wines starting
with wines dedicated to the ordinary people and the flavoured ones associated to those who
appreciate an exquisite taste. It is important to mention that 242900 ha are covered by vineyards,
almost 2% of the total Romanian agricultural surface 14800700 hectares.

Figure 2: Romanian wine regions

Source: www.wineromania.com
Wine culture is important both for national traditions and for the economic growth. The
presence of vineyards within hills and coast shows nothing else but the specific elements that define
the customs maintained ever since the Dacian times. However, over time, it seems that the quality of
vineyards has decreased in terms of hybrids and grafted vines: almost half of the total vineyards
surface is represented by hybrids as this may be revealed on the situation that follows.

484

Table 5: Developments in EU wine production (excluding juice and musts)
(Unit: mhl)
Hungary Romania Bulgaria
2009 Provisional
production
3198 6703 1397
2010 Provisional
production
2500

4957

1426

Difference 2010
2009
-698

-1746

29

On the one hand, Romania in comparison with Hungary and Bulgaria is the first country that
has a great wine production both in 2009 and 2010. Unfortunately, after an analyze, it can easily be
observed that a decrease has been recorded regarding the difference 2010 2009 not only in Romania,
but also in Hungary. On the over hand, Bulgaria is the leader as its wine production reached to 1426
mhl in 2010, a 29 mhl difference from 1397 mhl in 2009.

4. Conclusions
Taking as an example the success of many wine areas around the world it may be stated that
wine tourism is considered a value chain. It can bring precious contribution to the economic growth as
well. It is the perfect modality to create jobs, stimulate cooperation among different countries with
different cultures, cooperation within professional authorities, national and international
organizations, developing wine tourism at a high level a true tourism. Wine associated to tourism
has led the rural regions and their traditions to a new era, valuing their landscape, culture and
civilization. However, one thing is certain. Without a well thought national strategy concerning an
authentic promotion and with all problems that wine producers need to handle after the financial
crisis, wine tourism may remain a long time for now just at the niche business level.
Last but not least, sustainable tourism is a matter of a real concern as tours, fairs of wine
tasting may create a mass wine tourism. As a consequence, the current situation may be also a
challenge for a wide debate and for a real action with stakeholders in order to assure a successful wine
development within globalization.

5. References
- Boerescu,D.S.,Paduraru,C. (2009) Ghidul vinurilor 2009. Bucharest: Trei Publisher.
- Donatella, G. et al. (2006) Rural development and Wine in Southern Italy, 46th Congress
of European Regional Science Association. Available at http://www-sre.wu-
wien.ac.at/ersa/ersaconfs/ersa06/papers/626.pdf.
- Hall, C. & al. (2000) Wine Tourism around the World. Oxford: Elsevier Butterworth
Heinemann.
- Gheorghe L. (September 2011) Drumul Vinului" prin podgoriile romneti. Available at
http://www.forbes.ro/Drumul-vinului-prin-podgoriile-romanesti_0_2063.html
- Manole,V., Boboc, D. (2005) Filiere agroalimentare. Bucharest: ASE Publisher.
- OIV (2011) 9th General Assembly of the OIV Porto 2011. Available at
http://www.oiv.int/oiv/info/enstatistiquessecteurvitivinicole#bilan
- OIV (2011) State of the vitiviniculture world market March 2011.
- European Enotourism HANDBOOK Project: VINTUR. Available at
http://www.recevin.net/userfiles/file/VADEMECUM_ENOTURISMO_EN.pdf
485

- UNWTO (2008) Summary June 2008, Climate Change and Tourism Responding to
Global Challenges. Available at
http://www.onecaribbean.org/content/files/unwtoclimatechangereport.pdf

486

DRINK WATER, WASTEWATER CUSTOMERS AWARENESS AND ATTITUDE

PETRESCU Dacinia Crina
Associate professor/Ph.D., Faculty of Business/Department of Business Administration in Hospitality
Services, "Babes-Bolyai" University, Cluj-Napoca, Romania, crina.petrescu@tbs.ubbcluj.ro

TUTUNEA Mihaela
Assistant professor/Ph.D., Faculty of Business/Department of Business Administration in Hospitality
Services, "Babes-Bolyai" University, Cluj-Napoca, Romania, mihaela.tutunea@tbs.ubbcluj.ro

Abstract: The objective of the study is to establish behavioural patterns related to drink water and
beliefs on water and on the water company. Four main issues are analysed: the awareness on the services
delivered by the water company, the use of drink water from the tap, the evaluation of general quality of the
water and the cause of dissatisfaction with the water quality. The results show good awareness on drink water
transportation, medium for raw water treatment, low for wastewater collection and treatment. Use of tap water
as drink water and positive appreciation of drink water are relatively high.

Key words: drink water, wastewater, awareness, customers

JEL classification: D12, M31, Q25, Q56

1. Introduction
The issues discussed in this paper are part of a broader study on the beliefs, opinions, actions
of the customers of a regional water company (SC Compania de Apa Somes SA CASSA) related to
water, to environment, in general, to the water company (as a part of the ISPA measure ISPA
2000/RO/16/P/PE/008 Rehabilitation and Modernization of the Water and Sewerage Infrastructure for
the Area of Cluj). The general objective of the research was to obtain information that would be used
to improve the water services. The objective of the study presented in the paper was to establish
behavioural patterns related to drink water and beliefs on water and on the water company.
Freshwater and wastewater are related to almost any production and consumption activity. As
a consequence, the consumer has a direct impact on countless activities in the production-
consumption-disposal chain of activities and also an indirect impact on others through his influence:
the consumer can sanction companies who damage the environment, can choose the products based
on environmental criteria etc. Therefore, the studies about the beliefs, attitudes, concerns etc related to
fresh water use, wastewater impact and others are necessary in the path of creating more sustainable
water behaviour of the population (Petrescu, 2011, p. 131).
A simple random survey was implemented. The margin of error of the survey was 5% and
confidence level was 95%. The total number of valid questionnaires completed was 384. From a
geographical point of view, the research included the municipal area of Cluj-Napoca. All the
inhabitants of Cluj-Napoca are customers of the water company. Consequently, by investigating
customers attitude, the entire population in the targeted area it was studied.

2. Water services, drink water use, drink water quality
Four main issues are discussed further: the awareness on the services delivered by the water
company, the use of drink water from the tap, the evaluation of general quality of the water and the
cause of dissatisfaction with the water quality. The questions/requests used are: Mention the services
delivered by CASSA; Do you drink water from the tap?; How is the quality of your tap water?; What
are the causes of the poor quality of the tap water?.
In the first place, the awareness on the water company services was tested (see Fig. 1) in order
to determine some components of the company image and customers concern for health,
environment aspects.

487

Figure 1: Awareness on the services delivered by the water company

Source: Report of the Research
Legend:
1 it treats the raw water
2 it transports/delivers the drink water
3 it collects the waste waters
4 it treats the waste waters

70% of the subjects are aware that the water company delivers the drink water. Taking into
account that there is only one water company in the city, it delivers water to all the inhabitants and it
exists for a long time (it was founded in 1892), the availability of the information on the existence of
such service is maxim. Under these circumstances, a 70% percentage can be considered
unsatisfactory.
41% of the sample easily recalls the water company collects the waste water. This indicates
for more than half 69% of the subjects either a possible lack of knowledge on the destination of
wastewater, in general, or a poor information on this service of CASSA. This misconception is the
most damaging as the water company complies with the water law, including European Water
Directive which establishes a legal framework for the protection and management of water
resources throughout the EU; water law is the law that does or might affect water resources and, in the
European Union, water legislation is one of the first sectors that was covered by environmental policy
and it comprises more than 25 water-related directives and decisions (Petrescu-Mag, Petrescu, 2010,
p. 18)
The fact that only 4.2% of the customers questioned are aware that the water company treats
the wastewaters strengthens the previously mentioned ideas. The danger of such unsustainable attitude
is increased by the continuously raising human pressure on water through consumption and pollution
(worldwide and locally) only 2.8% of the total water on Earth is fresh water and most of it (82%) is
frozen in polar ice caps, icebergs and glaciers and point source and non-point source pollution become
more and more severe (Viman et al, 2010, passim).
The raw water purification collects the weakest percentage: only 2.3% of the sample
mentioned this service. This is due either to a lack of knowledge on the fact that the raw water is
treated by the company in order to become drinkable or to a difficulty in recalling this service due to a
poor to medium concern for the tap water quality, which doesnt place it as the top-of-the-mind
service or close to it.
It must be mentioned that unaided awareness was used in the question. Additional
information from the research indicate that total awareness on the four services (aided and unaided) is
higher than the levels discussed previously. Studies also support this idea, as they demonstrate that
recognition is a far easier task that recalling (Hauser, 2011, p. 398; Hellebusch, 2006, p. 26).
Acceptance of the tap water as drink water is an important indicator of the confidence in the
water quality. It was tested in the survey (see Fig. 2).
2.3
69.8
41.2
4.2
0
10
20
30
40
50
60
70
80
1 2 3 4
488

Figure 2: Use of drink water from the tap

Legend:
0 no
1 yes

68% of the people declare they drink water from the tap and 32% declare they do not drink it.
Tap water consumption can be achieved by three ways: willingly, unwillingly, neutral. While the first
case is desirable for the customers and for the water company, the last two are damaging for both
categories. Chemical analyses of the water samples at deliverance point demonstrate compliance with
legal standards and high quality of the network drink water (Rosu et al, 2008, p. 425; ***, 2012,
Buletin de analiza a apei). Consequently, the percentage of those who drink it (due to positive
appreciation) can be increased through improved awareness on the good quality of the water and
through improvement of the private water networks.
The evaluation of the tap water general quality is an indicator of the image of the tap water in
consumers mind (see Fig. 3).

Figure 3: Evaluation of the tap water quality

Legend:
489

0 poor
1 good

60% are satisfied (at least) with the quality of their tap water. This is a desirable situation, a
strong point for CASAA, in the general market context, with increasingly informed, educated and
demanding customers. However, taking into account that the real (not perceived) quality of the drink
water delivered by CASSA is indeed excellent (as the periodical analyses show it), the percentage
should be increased: through improved awareness on the good quality of the water (through company
efforts), through improvement of the private water networks (through consumers efforts, but
stimulation through information from the company might help).
The causes of the 40% negative evaluation of water quality were further investigated in order
to determine possible means of improving the image of the tap water (see Fig. 4).

Figure 4: Evaluation of the causes of the poor quality of the tap water

Legend:
1 it is not treated properly by CASSA
2 the city pipe network is in poor state
3 the block/house pipe network is in poor state
4 I dont know

30 % of the subjects believe that the cause of the poor quality of the drink water is CASSA:
either because the company doesnt treat it properly (15% of the total sample) or because they
consider the city pipes network (again associated to the company) is in poor state (15%). Only 6.5%
recognize themselves as altering factor and other 6% do not know the causes. Information actions
could, at least, improve the awareness on the real causes that decrease the water quality and to some
degree could impulse the consumers to modernize their private networks.

3. Conclusions
The issues of water services and water quality have three directional implications: on the
company image, because they affect its image; on individual level, because public water system
consumer is affected by water characteristics; on society level because all citizens are customers of
CASSA. Awareness on drink water transportation has a good level, but on the raw water treatment,
wastewater collection and treatment improvements should be achieved. Use of tap water as drink
water is relatively high (68%) and supported by a similar percentage of customers that appreciate the
water quality positively (60%). The main causes that alter the drink water quality are perceived to be
related to the water company, which, in most cases, is not correct, so this perception must be changed.

4. References
- Hauser, J. (2011), A marketing science perspective on recognition-based heuristics (and the
fast-and-frugal paradigm), Judgment and Decision Making, Vol. 6, No. 5, July 2011, pp. 396
408.
15.0
15.3
6.5
6.2
0
2
4
6
8
10
12
14
16
18
1 2 3 4
490

- Hellebusch, S. J. (2006) By the Numbers: Total unaided awareness?, Quirks Marketing
Research Review, April 2006, pp. 26-28.
- Petrescu, D. C. (2011), Water related beliefs of consumers as an indicator for environment
concern, Environmental Issues in the Context of Sustainable Development, Gembloux: Les
Presses Agronomiques de Gembloux, Cluj-Napoca: Bioflux, pp. 129-140.
- Petrescu-Mag, R., M., Petrescu, D. C. (2010), Legal and Economic Key Points Regarding
Sustainable Use of Water Resources, AACL Bioflux 3(1), pp. 17-21, Cluj-Napoca: Ed.
Bioflux.
- Rosu, C., Vlaic, A., Boita, S. (2008), Apa minerala, apa plata sau apa de izvor ?, Environment
& Progress, No. 12/2008, pp. 421-426.
- Viman O., Oroian I., Fleeriu A. (2010) Types of water pollution: point source and non-point
source. AACL Bioflux, No 3(5), pp. 393-397.
- ***, 2010, Report of the Research Project Survey on the Customers of SC Compania de Ap
Some SA: Opinions, Experiences, Awareness.
- ***, 2012, Buletin de analiza a apei, SC Compania de Apa Somes SA.

491

TOURISM SEEN THROUGH THE EYES OF ROMANIAN CUSTOMERS THE 21
ST

CENTURY ECONOMIC PERSPECTIVE

POPESCU Veronica Adriana
Associate professor Ph.D., Faculty of Accounting and Management I nformation, Academy of Economic
Studies, Bucharest, Romania, e-mail popescu_va@yahoo.com

POPESCU N. Gheorghe
Professor Ph.D., Faculty of Accounting and Management I nformation, Academy of Economic Studies,
Bucharest, Romania, e-mail popescu_gh_cafr@yahoo.com

POPESCU Cristina Raluca
Lecturer Ph.D., Faculty of Business and Administration, University of Bucharest, Bucharest, Romania, e-
mail, popescu_cr@yahoo.com

Abstract: Our research study emphasises the role of Romanian tourists on the Romanian tourism
market place in an economic society governed by continuous change, which should always be opened to novelty
and improvement. The paper aims to present in a concrete case study made on a number of eighty Romanian
individuals over the year 2011, the way tourism can be seen through the eyes of Romanian customers, in
turbulent times such as the ones we are living nowadays. The major outcomes show that the Romanian tourism
market place has a lot to improve in the near future, but due to sustained efforts, it is a constantly growing and
developing market place.

Key words: tourism, economic crisis, economy, change, new economic perspectives

JEL classification: E2; E29

1. Introduction
Our research study aims to focus on tourism seen through the eyes of Romanian customers,
due to the turbulent times that our society, in continuous motion and in permanent change, is facing.
Moreover, tourism is considered to be one of the most important activities at the global level.
As research economists, we have concentrated on this topic due to the fact that we strongly
believe that Romania has a great unexploited potential in terms of its tourism marketplace. Moreover,
we strongly believe that even though our paper mainly addresses to the academic and research fields,
it can always be an inspiration for tourism agencies managers or business entrepreneurs, and it can
constitute the beginning point for furthermore research investigations.
The paper has a complex structure and presents the topic of tourism through the eyes of
Romanian customers by emphasising the results that we have gathered during the year 2011 in a very
well organized research process that was based on two specific stages: firstly, during the months of
April till July we have gathered our data, in the month of August we have processed our data and the
month of September we have checked the validity of our data, in a second stage. The paper starts with
a short introduction in which we have explained the necessity of our study in the Romanian research
and academic world, continues with a literature review part, in which we have presented what tourism
represents according to representative sources and the way it was seen in research and academic
papers, expresses the methods used by us in the research and methodology section, and mainly
focuses on tourism in Romania a case study on the 21
st
century economic perspective. The
conclusion section highlights the main outcomes of our study, proving once more the need of further
developing and further exploiting this subject in research and academic papers.

According to the World Tourism Organization (World Tourism Organization,
http://torc.linkbc.ca/torc/downs1/WTOdefinitiontourism.pdf) by tourism are generally meant the
activities of persons traveling to and staying in places outside their usual environment for not more
than one consecutive year for leisure, business and other purposes not related to the exercise of an
activity remunerated from within the place visited.
492

According to Eurostat Pocketbooks, Tourism Statistics (2008 edition), Romania is an
emerging country of destination and origin of tourism. The data provided by the European
Commission in the Eurostat Pocketbooks showed the following (Eurostat Pocketbooks, Tourism
Statistics (2008 edition)):
a) Hotel accommodation supply expanded steadily between 2000 and 2006; the number of
hotels grew by +8.5% on average each year (from 2 533 to 4 125) and the number of bed
places by +2.1% (from 199 333 to 226 383); the average size of hotels declined from 79 bed
places in 2000 to 55 bed places in 2006.
b) In terms of demand, all tourists spent about 19 million nights in Romania in 2006, against
17.6 million in 2000 (+1.2% on average each year). Over the same period, domestic nights
representing about 83% of total nights were more or less stable (+0.3% on average each
year), while international tourism increased steadily (+7.1% on average each year, from 2.1 to
3.2 million nights). Germany, Italy and France were the main countries of origin of
international tourism in the country, accounting for about 36% of total international nights in
2006. The ratio of tourists to residents in internal tourism (domestic + inbound) was 0.9 in
2006.
c) In terms of national tourism (domestic + outbound), the number of total holiday trips plunged
by a third from about 10.4 million in 2004 to about 6.9 million trips in 2006 (-33.6%). Both a
dramatic reduction in short trips (1-3 nights, -42,8% from 2004 to 2006) and a fairly sizeable
decrease in long trips (4+ nights, -21.7% from 2004 to 2006) caused this crash. In 2006, about
93% of total trips were in the country (6.4 million). Of the remaining trips abroad (451 000),
91% were long trips. Italy, Greece and Spain were the main countries of destination,
accounting for about 51% of total 4+ night trips abroad in 2006. Tourism expenditure and
receipts were almost equal in 2006.

3. Research and methodology
In terms of research methodology we have done a study on 80 adult Romanian individuals,
and we have selected from the beginning 20 adult Romanian individuals between 25 and 35 years old,
20 adult Romanian individuals between 35 and 45 years old, 20 adult Romanian individuals between
45 and 55 years old and 20 adult Romanian individuals between 55 and 65 years old, so we had
exactly 25% of each age category that we decided to put an emphasize on.
In order to avoid bias information, we have decided to use the interview method, with both
structured and unstructured questions. We have prepared a questioner with six questions, and after we
have interviewed each individual once and we processed our data, we have fixed another interview
session with the same 80 people that we have interviewed in our attempt to make sure that we
understood right the answer that were given to us. Also, while interviewing each of the 80 individuals
we made sure that each time there at least two interviews present in the room, which immediately
after the interview session confronted the notes taken.
The data were collected in one session, between April and July 2011, were processed in
August 2011 and were furthermore checked for validity in a second session in September 2011.
Moreover, the data collected were processed using Excel and SPSS and, in addition, we have
generated as well representative figures.

4. Tourism in Romania a case study on the 21
st
century economic perspective
In order to explain the importance of tourism as seen through the eyes of Romanian
individuals, we have presented in the rows bellow a case study that we have done in the year 2011,
during April, May, June and July, on a total of 80 adult Romanian individuals. The data collected
were processed in August 2011 and at the end of our study we met again with the same 80 adult
Romanian individuals, on a second session, in the months September and October 2011 to show them
the data that we gathered and to make sure that what we wrote down at our first session was correct.
In terms of research methodology we have done a study on 80 adult Romanian individuals,
and we have selected from the beginning 20 adult Romanian individuals between 25 and 35 years old,
20 adult Romanian individuals between 35 and 45 years old, 20 adult Romanian individuals between
45 and 55 years old and 20 adult Romanian individuals between 55 and 65 years old, so we had
exactly 25% of each age category that we decided to put an emphasize on.
493

In order to avoid bias information, we have decided to use the interview method, with both
structured and unstructured questions. We have prepared a questioner with six questions, and after we
have interviewed each individual once and we processed our data, we have fixed another interview
session with the same 80 people that we have interviewed in our attempt to make sure that we
understood right the answer that were given to us. Also, while interviewing each of the 80 individuals
we made sure that each time there at least two interviews present in the room, which immediately
after the interview session confronted the notes taken.
Moreover, the data collected were processed using Excel and SPSS and, in addition, we have
generated as well representative figures.
The results of our interview session are presented in the table below in a synthetically manner
(see, in this matter, Table 1: Tourism in Romania case study on eighty Romanian adult individuals
(year 2011)), with the specification that we have centralized only the first five questions out of six,
leaving the centralization for question number six for Figure 4: Factors of influence when choosing a
vacation place, according to the age value (%) question no. 6.

Table 1: Tourism in Romania case study on eighty Romanian adult individuals (year 2011)
Questions Age: 25 - 35 Age: 35 - 45 Age: 45 - 55 Age: 55 - 65
No. 1: Indicate, with
approximation, the
wage that you
normally get per
month.
Between 250 and 350
euros/month
Between 250 and 500
euros/month
Between 350 and 500
euros/month

Between 350 and 1000
euros/month
No. 2: How often do
you go on vacation in
one year?
70% of the
respondents go
twice a year on
vacation;
20% of the
respondents go
three times a year
on vacation;
10% of the
respondents go
more than three
times a year on
vacation.
80% of the
respondents go
twice a year on
vacation;
10% of the
respondents go
three times a year
on vacation;
10% of the
respondents go
more than three
times a year on
vacation.
70% of the
respondents go
twice a year on
vacation;
25% of the
respondents go
three times a year
on vacation;
5% of the
respondents go
more than three
times a year on
vacation.
75% of the
respondents go
once a year on
vacation;
20% of the
respondents go
twice times a year
on vacation;
5% of the
respondents go
three times or more
than three times a
year on vacation.
No. 3: What is the
most often reason for
your vacation:
business or pleasure?
65% of the
respondents go on
vacation for
pleasure;
30% of the
respondents go on
vacation for
business reasons;
5% of the
respondents go on
vacation both for
business and
pleasure.
60% of the
respondents go on
vacation for
pleasure;
30% of the
respondents go on
vacation for
business reasons;
10% of the
respondents go on
vacation both for
business and
pleasure.
70% of the
respondents go on
vacation for
pleasure;
20% of the
respondents go on
vacation for
business reasons;
10% of the
respondents go on
vacation both for
business and
pleasure.
80% of the
respondents go on
vacation for
pleasure;
10% of the
respondents go on
vacation for
business reasons;
10% of the
respondents go on
vacation both for
business and
pleasure.
No. 4: Do you prefer
to spend your
vacations in Romania
or abroad?
75% of the
respondents prefer
to spend their
vacations abroad;
25% of the
respondents prefer
to spend their
vacations in
Romania.
65% of the
respondents prefer
to spend their
vacations abroad;
35% of the
respondents prefer
to spend their
vacations in
Romania.
55% of the
respondents prefer
to spend their
vacations abroad;
45% of the
respondents prefer
to spend their
vacations in
Romania.
48% of the
respondents prefer
to spend their
vacations abroad;
52% of the
respondents prefer
to spend their
vacations in
Romania.
No. 5: Do you go on 80% of the 70% of the 60% of the 20% of the
494

vacation through a
tourism agency or by
using your own
information?
respondents go on
vacation based on
their own
information;
20% of the
respondents go on
vacation through a
travel agency.
respondents go on
vacation based on
their own
information;
30% of the
respondents go on
vacation through a
travel agency.
respondents go on
vacation based on
their own
information;
40% of the
respondents go on
vacation through a
travel agency.
respondents go on
vacation based on
their own
information;
80% of the
respondents go on
vacation through a
travel agency.
Source: the authors own data analysis

As seen in the table above, individuals having between 25 and 35 years old, and earning
between 250 and 350 euros per month, prefer to go on vacation in a proportion of 70% twice a year,
while 20% of the respondents go three times a year on vacation and only 10% of the respondents go
more than three times a year on vacation. Furthermore, individuals having between 35 and 45 years
old, and earning between 250 and 500 euros per month, prefer to go on vacation in a proportion of
80% twice a year, while 10% of the respondents go three times a year on vacation and 10% of the
respondents go more than three times a year on vacation. In addition, individuals having between 45
and 55 years old, and earning between 350 and 500 euros per month, prefer to go on vacation in a
proportion of 70% twice a year, while 25% of the respondents go three times a year on vacation and
5% of the respondents go more than three times a year on vacation. A possible explanation could be
here that after a certain age, due to a better wage and a better position at work, people tend to go twice
or even three times per year in vacation. It is also a time when people have not so many
responsibilities in terms of small children, for example. Moreover, individuals having between 55 and
65 years old, and earning between 350 and 1000 euros per month, prefer to go on vacation in a
proportion of 75% twice a year, while 20% of the respondents go three times a year on vacation and
only 5% of the respondents go more than three times a year on vacation.
Question number three referred to the reason why individuals usually go on vacation, and the
possible answers that we have offered them in advance were: a) business, b) pleasure or c) both,
business and pleasure.

Figure 1: Reasons for people spending their vacations, according to the age value (%) question no. 3

Source: the authors own data calculation

The data presented in the table above (see, in this matter, Figure 1: Reasons for people
spending their vacations, according to the age value (%) question no. 3) has shown us that
Romanian adults individuals that we have selected for our research analysis prefer, no matter the age
or the wage per month, to go on vacation for pleasure. According to the figure presented above, 65%
of the Romanian adults having between 25 and 35 years old prefer to go on vacation for pleasure,
60% of the respondents having between 35 and 45 years old prefer to go on vacation for pleasure go
495

on vacation for pleasure, 70% of the respondents having between 45 and 55 years old prefer to go on
vacation for pleasure, 80% of the respondents having between 55 and 65 years old prefer to go on
vacation for pleasure. Furthermore, according to the figure presented above, 30% of the Romanian
adults having between 25 and 35 years old prefer to go on vacation for business, 30% of the
respondents having between 35 and 45 years old prefer to go on vacation for business, 20% of the
respondents having between 45 and 55 years old prefer to go on vacation for business, 10% of the
respondents having between 55 and 65 years old prefer to go on vacation for business. Moreover,
according to the figure presented above, 5% of the Romanian adults having between 25 and 35 years
old prefer to go on vacation for business and pleasure, 10% of the respondents having between 35 and
45 years old prefer to go on vacation for business and pleasure, 10% of the respondents having
between 45 and 55 years old prefer to go on vacation for business and pleasure, 10% of the
respondents having between 55 and 65 years old prefer to go on vacation for business and pleasure.
As a conclusion for the results obtained from analysing the data corresponding to question number
three, we can state the fact that in most cases that we have met in our research process, the Romanian
individuals prefer going on vacation for pleasure, and only a small part of them prefer going on
vacation for business. The less encountered situation in our research analysis is the one in which
Romanian individuals have preferred vacations both for business and for pleasure.
Another aspect that we were interested in was the location of the vacation, by this
understanding weather the interviewee preferred to go usually abroad or in Romania in vacation. The
data gathered was synthetically presented in the figure bellow (see, in this matter, Figure 2: People
spending their vacations abroad versus in Romania, according to the age value (%) question no. 4).

Figure 2: People spending their vacations abroad versus in Romania, according to the
age value (%) question no. 4

Legend: Series 1 - abroad; Series 2 in Romania

The figure above presents in a compressed manner the data gathered from our 80 Romanian
adult respondents in order to find out whether they prefer to spend their vacation abroad or in
Romania. As a general conclusion, we can state that generally individuals having between 25 and 55
years old prefer to go in vacation abroad, while individuals between 55 and 65 years old generally
prefer to spend their vacation in Romania. At the end of this question, we have asked our respondents
to state the reasons why they prefer to go on vacation abroad or in Romania, and the most encountered
answers for going a) abroad were: 1) high quality services for the same price or for less money, 2)
better way of treating customers, 3) novelty, the possibility to see new places and learn more about
other cultures, 4) visiting relatives abroad; and for b) staying in Romania were: 1) out of convenience
- well known places, 2) the advantage of knowing the language and the customs, 3) the possibility to
be closer to the train station/bus station, 4) visiting relatives in Romania.
496

Analysing the figure above we can stress the following aspects: from the Romanian
individuals having between 25 and 35 years old, 75% of the respondents prefer to spend their
vacations abroad and 25% of the respondents prefer to spend their vacations in Romania; from the
Romanian individuals having between 35 and 45 years old, 65% of the respondents prefer to spend
their vacations abroad and 35% of the respondents prefer to spend their vacations in Romania; from
the Romanian individuals having between 45 and 55 years old, 55% of the respondents prefer to
spend their vacations abroad and 45% of the respondents prefer to spend their vacations in Romania;
from the Romanian individuals having between 55 and 65 years old, 48% of the respondents prefer to
spend their vacations abroad and 52% of the respondents prefer to spend their vacations in Romania.
The fifth question that we have asked our respondents referred to weather they prefer to go on
vacation through a tourism agency or through their own information. In addition, we have asked our
respondents to indicate four major reasons that determined them to choose a tourism agency or their
own information, and also what sources of information do they use, if they chose this as an answer.
The data gathered for question number five were analysed in Excel and SPSS and the figure
bellow was generated by Excel (see, in this matter, Figure 3: People going on vacation through a
tourism agency or by using their own information, according to the age value (%) question no. 5).

Figure 3: People going on vacation through a tourism agency or by using their own information,
according to the age value (%) question no. 5

Legend: Series 1 own information; Series 2 tourism agency

According to the data presented in the picture above, a general idea can be made concerning
Romanian individuals preferences towards going on vacation through the help of travel agencies or by
using their own information: firstly, individuals between 25 and 55 years old tend to choose a
vacation package by using mainly their own information, meanwhile individual between 55 and 65
years old prefer going in vacation through a tourism agency; secondly, by analysing the figure above,
it can be seen that as they grow older and older, individuals tend to seek help at a travel agency and
prefer an organized vacation, rather than going on their own; thirdly, individuals between 55 and 65
years old tend to prefer comfort and a secure, quite location for spending their vacation.
In general lines, we can state the following aspects that the figure above generates: from the
Romanian individuals having between 25 and 35 years old, 80% of the respondents go on vacation
based on their own information and 20% of the respondents go on vacation through a travel agency;
from the Romanian individuals having between 35 and 45 years old, 70% of the respondents go on
vacation based on their own information and 30% of the respondents go on vacation through a travel
agency; from the Romanian individuals having between 45 and 55 years old, 60% of the respondents
go on vacation based on their own information and 40% of the respondents go on vacation through a
497

travel agency; from the Romanian individuals having between 55 and 65 years old, 20% of the
respondents go on vacation based on their own information and 80% of the respondents go on
vacation through a travel agency.
Moreover, due to the fact that we have asked our respondents to indicate four major reasons
that determined them to choose a tourism agency or their own information, and also what sources of
information do they use, if they chose this as an answer, we have managed to synthetize the data
gathered bellow as well in Figure 4: Four major reasons that determined them to choose a tourism agency,
Figure 5: Four major reasons that determined them to choose on their own information the vacation
package and Figure 6: Sources of information that individuals use when choosing the vacation
package.

498

Figure 4: Four major reasons that determined Romanian individuals to choose a tourism agency

Source: the authors

Figure 5: Four major reasons that determined Romanian individuals to choose on their own information
the vacation package

Source: the authors

The four reasons that have determined Romanian individuals in our case study to choose
according to their own information the vacation package are, in the order of the importance shown by
the respondents: 1) flexibility in terms of money (chosen by 35% of the respondents); 2) flexibility in
terms of time (chosen by 30% of the respondents); 3) flexibility in terms of location, travel facilities,
hotel (chosen also by 25% of the respondents) and 4) common misunderstanding that by asking an
agencys help prices have to be bigger than normal (chosen also by 10% of the respondents).
499

Figure 6: Sources of information that Romanian individuals use when choosing the vacation package

Source: the authors

According to question number six belonging to our questioner, individuals were asked to put
in the right order the following information, from the most important one to the less important one in
order to choose the right vacation place for you: a) own previous experience; b) friends/relatives
previous experience; c) location; d) novelty; e) hotel location; f) meals included; g) car parking place;
h) hotel facilities; i) other factors. If there were other additional information that they usually take into
account, they were also asked to mention that as well.

Figure 7: Factors of influence when choosing a vacation place, according to the age value (%) question
no. 6


The figure above (see, in this matter, Figure 7: Factors of influence when choosing a
vacation place, according to the age value (%) question no. 6) synthetises the aspects that influence
the most the Romanian individuals present in our case study. According to the data provided by this
figure, the first place is occupied, in the case of individuals belonging to the age section 25 35, by
location, and the second place is occupied by hotel facilities and money; in the case of individuals
500

belonging to the age section 35 45, the first place is occupied by location, followed on the second
place by money, and on the third place by both novelty and hotel location; in the case of individuals
belonging to the age section 45 55, the first place is occupied by hotel location, followed on the
second place by both car parking place and hotel facilities, and additionally on the third place by
location; in the case of individuals belonging to the age section 55 65, the first place is occupied by
hotel location, followed on the second place by car parking place, hotel facilities and meals included,
and on the third place friend/relatives previous experiences. In the section other factors the
individuals in our study group indicated factors such as: time period, weather conditions, crime level,
shopping centres, supermarkets, and places for children.

5. Conclusions
In terms of conclusions, we can state the following aspects:
A. Individuals having between 25 and 35 years old, and earning between 250 and 350 euros per
month, prefer to go on vacation in a proportion of 70% twice a year, while 20% of the
respondents go three times a year on vacation and only 10% of the respondents go more than
three times a year on vacation. Furthermore, individuals having between 35 and 45 years old,
and earning between 250 and 500 euros per month, prefer to go on vacation in a proportion
of 80% twice a year, while 10% of the respondents go three times a year on vacation and
10% of the respondents go more than three times a year on vacation. In addition, individuals
having between 45 and 55 years old, and earning between 350 and 500 euros per month,
prefer to go on vacation in a proportion of 70% twice a year, while 25% of the respondents
go three times a year on vacation and 5% of the respondents go more than three times a year
on vacation. Moreover, individuals having between 55 and 65 years old, and earning between
350 and 1000 euros per month, prefer to go on vacation in a proportion of 75% twice a year,
while 20% of the respondents go three times a year on vacation and only 5% of the
respondents go more than three times a year on vacation.
B. According to our data, 65% of the Romanian adults having between 25 and 35 years old
prefer to go on vacation for pleasure, 60% of the respondents having between 35 and 45
years old prefer to go on vacation for pleasure go on vacation for pleasure, 70% of the
respondents having between 45 and 55 years old prefer to go on vacation for pleasure, 80%
of the respondents having between 55 and 65 years old prefer to go on vacation for pleasure.
Furthermore, according to the figure presented above, 30% of the Romanian adults having
between 25 and 35 years old prefer to go on vacation for business, 30% of the respondents
having between 35 and 45 years old prefer to go on vacation for business, 20% of the
respondents having between 45 and 55 years old prefer to go on vacation for business, 10%
of the respondents having between 55 and 65 years old prefer to go on vacation for business.
Moreover, according to the figure presented above, 5% of the Romanian adults having
between 25 and 35 years old prefer to go on vacation for business and pleasure, 10% of the
respondents having between 35 and 45 years old prefer to go on vacation for business and
pleasure, 10% of the respondents having between 45 and 55 years old prefer to go on
vacation for business and pleasure, 10% of the respondents having between 55 and 65 years
old prefer to go on vacation for business and pleasure.
C. From the Romanian individuals having between 25 and 35 years old, 75% of the respondents
prefer to spend their vacations abroad and 25% of the respondents prefer to spend their
vacations in Romania; from the Romanian individuals having between 35 and 45 years old,
65% of the respondents prefer to spend their vacations abroad and 35% of the respondents
prefer to spend their vacations in Romania; from the Romanian individuals having between
45 and 55 years old, 55% of the respondents prefer to spend their vacations abroad and 45%
of the respondents prefer to spend their vacations in Romania; from the Romanian
individuals having between 55 and 65 years old, 48% of the respondents prefer to spend their
vacations abroad and 52% of the respondents prefer to spend their vacations in Romania.
D. Also, from the Romanian individuals having between 25 and 35 years old, 80% of the
respondents go on vacation based on their own information and 20% of the respondents go
on vacation through a travel agency; from the Romanian individuals having between 35 and
45 years old, 70% of the respondents go on vacation based on their own information and
501

30% of the respondents go on vacation through a travel agency; from the Romanian
individuals having between 45 and 55 years old, 60% of the respondents go on vacation
based on their own information and 40% of the respondents go on vacation through a travel
agency; from the Romanian individuals having between 55 and 65 years old, 20% of the
respondents go on vacation based on their own information and 80% of the respondents go
on vacation through a travel agency.
E. According to the data provided by our study, the factors of influence when choosing a
vacation place, according to the age value are: the first place is occupied, in the case of
individuals belonging to the age section 25 35, by location, and the second place is
occupied by hotel facilities and money; in the case of individuals belonging to the age
section 35 45, the first place is occupied by location, followed on the second place by
money, and on the third place by both novelty and hotel location; in the case of individuals
belonging to the age section 45 55, the first place is occupied by hotel location, followed
on the second place by both car parking place and hotel facilities, and additionally on the
third place by location; in the case of individuals belonging to the age section 55 65, the
first place is occupied by hotel location, followed on the second place by car parking place,
hotel facilities and meals included, and on the third place friend/relatives previous
experiences.

6. References
- Eurostat Pocketbooks, Tourism Statistics (2008 edition), ISSN 1831-1865, internet link
(retrieved in April 2012): http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-DS-08-
001/EN/KS-DS-08-001-EN.PDF
- World Tourism Organization (www.world-tourism.org), OMT WTO BTO, internet link
(retrieved in April 2012): http://torc.linkbc.ca/torc/downs1/WTOdefinitiontourism.pdf

502

THE LEGAL FRAMEWORK OF CORPORATE SOCIAL RESPONSIBILITY

POINCU (MUREAN) Laura
Postdoctoral Researcher, Faculty of Economic Sciences and Business Administration /
Department of Economic Sciences and Business Administration, "Transilvania" University, Brasov,
Romania, laurapotincu@unitbv.ro laurapotincu@yahoo.ro

VOI CULESCU Maria I uliana
Ph.D. student, I nstitute for Doctoral Studies, Economy I I , Academy of Economic Studies,
Bucharest, Romania, voiculescuiulia@yahoo.com

Abstract: According to the normative provisions which constitute the legal framework of CSR,
corporate social responsibility actions develop and have a unified applicability in economic practice. In this
context we believe that European regulations provisions and those adopted in Romania should be considered,
even if they don't contain mandatory rules for companies in Romania who want to carry out the commercial
activity by applying the principles of corporate social responsibility.

Key words: corporate social responsibility, normative acts, commercial companies, marketing
research.

JEL classification: A13, K22, M31, Q56.

1. The concept of social responsibility and the importance given to it by the citizens of
Braov
It is considered that the social responsibility can also be regarded as a fundamental ethical
principle which expresses towards whom and for what a commercial company is responsible, in
the light of the ethical system accepted and promoted by it. In this view, the social responsibility
implies: the compliance with the laws, with the contractual provisions starting from the premise that
the contract is the law of the parties which obliges them to comply with it , honesty, but also the
consideration of desiderates of several groups interested in the existence and operation of a
commercial company. [Schreiner, C., Ciobanu, R. C., Huu, C. A. (2002)].
In order for the commercial companies to adopt the requirements of the corporate social
responsibility, it is considered [Filali Meknassi, R. (2008)], that these possess the necessary means in
order to comply with the human rights and that they want to participate in the social progress.
The social responsibility of the commercial companies is a moral, voluntary responsibility of
the respective commercial companies regarding the interaction of their own company with the:
clients/consumers, own employees and community in its whole. The interests of the community also
imply, besides other social aspects, the protection of the natural environment.
The social responsibility can also be characterized as being the firm obligation of a
commercial company to act beyond the legal obligations or those imposed by economic restrictions,
and to pursue long-term objectives to the use of the community. The respective commercial company
is considered responsible not only towards their owners (shareholders) but also towards clients,
providers, employees, governmental organisms, creditors, local communities, public opinion.
In the developed European Union states, the corporate social responsibility has become a term
frequently used in the business world. Many of the large commercial companies elaborate their own
business strategies according to this type of responsibility. [Gago, F. (2005)]
At present, the social responsibility of the commercial companies must be regarded from a
complex perspective. We consider [Poincu, L. (2012)] that the social responsibility of the
commercial companies is what the community expects from a commercial company ecologically,
economically, legally, ethically and philanthropically. In our opinion,

[Poincu, L. (2012)] the social
responsibility includes all these types of responsibilities: ecological responsibility, economic
responsibility, legal responsibility and philanthropic responsibility.
503

Within the quantitative marketing research called Attitudes and opinions of the Braov
citizens regarding the promotion of the social responsibility by the companies operating in Romania,
[Murean (Poincu) L. (2010)] the opinion of the citizens living in Braov municipality regarding the
requirement for a socially responsible attitude from the commercial companies has been analyzed.
The quantity marketing research regarding the promotion of the social responsibility by the
Romanian commercial companies evaluates the citizens opinion. This marketing research has
analyzed the answers of 398 persons, with age over 18, from Braov municipality in Romania. This
survey has a random error of 4.91%. Taking into account the fact that the size of the survey has been
established according to a simple random probabilistic method, considering a level of admitted error
of 5%, and a trust level of 95%, the results of the research can be considered representative for the
entire adult population of Braov municipality, and also these could apply to other Romanian
municipalities with a similar population size.

Table 1: Is the requirement for a socially responsible attitude
from the commercial companies important?
Frequency Percentage Valid Percentage
Valid No 30 7.5 7.5
Yes 368 92.5 92.5
Total 398 100.0 100.0

To the question related to the importance of promoting, by the commercial companies, of a
socially responsible attitude, the questioned subjects, 92.5%, consider that there should be such a
requirement. This result highlights the reality that, to a very great extent, the Brasov citizens consider
that the commercial companies must promote and develop a socially responsible attitude. The data
included in the table below indicates the mentioned situation:

Table 2: The requirement for a socially responsible attitude from
the commercial companies is important? * Gender Crosstabulation
Gender
Female Male Total
The requirement
for a socially
responsible
attitude from the
commercial
companies is
important?
No Count 9 21 30
% within Gender 4,7% 10,1% 7,5%
% of Total 2,3% 5,3% 7,5%
Yes Count 181 187 368
% within Gender 95,3% 89,9% 92,5%
% of Total 45,5% 47,0% 92,5%
Total Count 190 208 398
% within Gender 100,0% 100,0% 100,0%
% of Total 47,7% 52,3% 100,0%

Analysing the connection between the answers of the respondents on this issue and the gender
of questioned respondents, it has been noticed that the percentage of the subjects considering that the
requirement for a socially responsible attitude from the commercial companies is important is higher
in women as compared to men. This aspect leads to the conclusion that the female individuals pay
particular attention to the assertion of the requirements of the social responsibility at the level of the
commercial companies.

Table 3: The requirement for a socially responsible attitude from the commercial companies
is important? * The latest graduated school Crosstabulation
504

The requirement for
a socially responsible
attitude from the
commercial companies
is important?
The latest graduated school
Secondary
school

Vocational
school

High
School

Postgraduate
school

Faculty

Post university
studies: masters
degree, doctors
degree, etc.
88

Total

No Count 8 10 7 2 3 0 0 30
% within
The latest
graduated
school
47,1% 14,1% 5,0% 6,7% 2,5% 0,0% 0,0% 7,5%
% of Total 2,0% 2,5% 1,8% 0,5% 0,8% 0,0% 0,0% 7,5%
Yes Count 9 61 133 28 115 20 2 368
% within
The latest
graduated
school
52,9% 85,9% 95,0% 93,3% 97,5% 100,0%
100,0
%
92,5
%
% of Total
2,3% 15,3% 33,4% 7,0% 28,9% 5,0% 0,5%
92,5
%
Total Count 17 71 140 30 118 20 2 398
% within
The latest
graduated
school
100,0% 100,0% 100,0% 100,0% 100,0% 100,0%
100,0
%
100,0
%
% of Total
4,3% 17,8% 35,2% 7,5% 29,6% 5,0% 0,5%
100,0
%

To the analysis of the connection between the answers of the respondents on this issue and
their level of education, it has been further noted that the percentage of the subjects considering the
requirement for a socially responsible attitude from the commercial companies to be important is
higher in the persons having a higher level of education. This leads to the following conclusion: the
more educated and better informed the consumers are, the more obvious becomes the importance
given to the integration of the social responsibility into the activity developed by the commercial
companies.
The average evaluation regarding the importance given by the Brasov citizens to the
consistent promotion of the need to comply with the requirements of the social responsibility by the
commercial companies performing their activity on the Romanian market indicates the high
importance level.

2. Juridical regulations regarding the commercial companies social responsibility on
European community level
The compliance with the principles of ethics in the development of the commercial activities
has become a major preoccupation for the European Union member states.
In the field of corporate social responsibility, several normative documents have been adopted
at community level:
A. Green Paper on promoting a European framework for Corporate Social Responsibility
was adopted by Commission at 18th July 2001. European approach to corporate social responsibility
must reflect and be integrated in the broader context of various international initiatives.
The Green Paper aims to launch a wide debate and seek views on corporate social
responsibility at national, European and international level. The Commission hopes that the outcome
of this initiative will be a new framework for the promotion of corporate social responsibility.
Corporate social responsibility has important implications for all economic and social actors
as well as for the public authorities, who should take them into account in determining their own
actions.
Corporate social responsibility extends beyond the doors of the company into the local
community and involves a wide range of stakeholders in addition to employees and shareholders:
505

business partners and suppliers, customers, public authorities and NGOs representing local
communities, as well as the environment.
Many multinational companies are now issuing social responsibility reports. While
environmental, health, and safety reports are common, reports tackling issues such as human rights
and child labor are not. Moreover companies approaches to social reporting are as varied as their
approaches to corporate social responsibility. In order for these reports to be useful, a global
consensus needs to evolve on the type of information to be disclosed, the reporting format to be used,
and the reliability of the evaluation and audit procedure.
B. Council Resolution on the Green Card with a view to the corporate social responsibility
2002/C 86/03. [Gateway to the European Union] The Council Resolution regarding the Green Card
with a view to the social responsibility wishes to constructively contribute to the implementation of
the Lisbon strategy to encourage the discussions regarding corporate social responsibility at national,
European, and international level. It is intended to involve all those interested by the activity of the
commercial companies in the detailed debate of the Green Card, regarding the contribution of the
traders and community in general, and social partners in particular. Moreover, this community
document pursues the integration of business in connection to the volunteering, as an initiative of the
commercial companies, regarding the integration of the social issues and natural environment, caused
by the development of business in the commercial operations of the commercial companies and their
relation to the interest groups.
The social responsibility can contribute not only to the encouragement of a high level of
social cohesion, environmental protection and respect for the fundamental rights, but also to the
improvement of competitiveness in all business categories and activity fields.
The social responsibility of the commercial companies can complete and promote the
application of the rules and normative documents in the field of social rights and environmental
standards. The behavior codes, in particular, can promote international labor standards, and encourage
a responsible attitude for those who comply with them.
Although the social responsibility is an issue arising during the business development, all
stakeholders can play a decisive part in encouraging the adoption of the socially responsible practices
in the business development.
Being compatible and consistent with the European Community and international rules, the
corporate social responsibility must be understood as an addition of the rules and legislation regarding
the social rules and environmental norms, which it can however not substitute.
C. Council Resolution on corporate social responsibility 2003/C 39/02 (of 6 February 2003)
[Gateway to the European Union] stipulates promotion strategies for the social responsibility of the
commercial companies. According to this Council resolution, the promoting strategies of the
corporate social responsibility must be based on:
- acknowledging the voluntary nature of corporate social responsibility;
- the need for credibility and transparency of CSR practices;
- the focus on activities where Community involvement may add value;
- balanced and broad approach of CSR including economic, social, environmental issues, as
well as consumer interests;
- attention to the specific needs and characteristics of small and medium enterprises, as well as
- support of, and compatibility with, existing internationally agreed agreements.
This community normative document supports the interest of the European Commission in
focusing its strategy towards the directions to be enumerated below.
It is important to increase knowledge regarding the positive impact of the social responsibility
of the commercial companies in the European and world business and community, especially in the
developing countries. The focus shall be on the development of the expertise and good practice
exchange in the field of social responsibility of the commercial companies; promotion of the
development of the managerial skills in the social responsibility of the commercial companies;
facilitation of the convergence and transparency of the policies and instruments of the social
responsibility of the commercial companies, as well as the integration of the social responsibility of
the commercial companies in the community policies.
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Council Resolution 2003/C 39/02 imposes certain obligations at the charge of the Member
States of the European Union.
This community document intends to have the EU member states promote the social
responsibility of the commercial companies at national level, in parallel with the development of a
strategy at community level, especially by making the commercial companies aware of the benefits,
and by highlighting the potential results of a constructive cooperation between governments, business
and other sectors of the community.
It is intended to have the EU member states continue the promotion of the dialogue with the
social partners and the civil dialogue; promotion of transparency of the practices and instruments of
the social responsibility used by the commercial companies, information and expertise exchange
regarding the social responsibility polities of the commercial companies.
The EU member states are directed towards achieving the integration of the social
responsibility of the commercial companies in the national policies but also the integration of the
social responsibility of the commercial companies in their management.
D. In the Europe 2020 Strategy, the Commission made a commitment to renew the EU
strategy to promote Corporate Social Responsibility. By renewing efforts to promote CSR now, the
Commission aims to create conditions favorable to sustainable growth, responsible business behavior
and durable employment generation in the medium and long term. On the 25th of October 2011 was
adopted the Renewed EU strategy 2011-2014 for Corporate Social Responsibility, by the
Commission to the European Parliament, the Council, the European Economic and Social Committee
and the Committee of the Regions.
The European Commission has previously defined Corporate Social Responsibility (CSR) as
a concept whereby companies integrate social and environmental concerns in their business
operations and in their interaction with their stakeholders on a voluntary basis. In European Union
strategy 2011-2014 for Corporate Social Responsibility the Commission puts forward a new
definition of CSR as the responsibility of enterprises for their impacts on society. Respect for
applicable legislation, and for collective agreements between social partners, is a prerequisite for
meeting that responsibility. To fully meet their corporate social responsibility, enterprises should have
in place a process to integrate social, environmental, ethical, human rights and consumer concerns
into their business operations and core strategy in close collaboration with their stakeholders, with the
aim of: maximizing the creation of shared value for their owners/shareholders and for their other
stakeholders and society at large; and identifying, preventing and mitigating their possible adverse
impacts.
CSR at least covers human rights, labor and employment practices (such as training, diversity,
gender equality and employee health and well-being), environmental issues (such as biodiversity,
climate change, resource efficiency, life-cycle assessment and pollution prevention), and combating
bribery and corruption.
The Commission has identified a number of factors that will help to further increase the
impact of its CSR policy, including:
- the need for a balanced multi stakeholder approach that takes account of the views of
enterprises, non-business stakeholders and Member States;
- the need to better clarify what is expected of enterprises, and to make the EU definition of
CSR consistent with new and updated international principles and guidelines;
- the need to promote market reward for responsible business conduct, including through
investment policy and public procurement;
- the need to consider self- and co-regulation schemes, which are an important means by which
enterprises seek to meet their social responsibility;
- the need to address company transparency on social and environmental issues from the point
of view of all stakeholders, including enterprises themselves;
- the need to give greater attention to human rights, which have become a significantly more
prominent aspect of CSR;
- the need to acknowledge the role that complementary regulation plays in creating an
environment more conducive to enterprises voluntarily meeting their social responsibility.
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The policy identified 8 priority areas for EU action: awareness-raising and best practice
exchange; support to multi stakeholder initiatives; cooperation with Member States; consumer
information and transparency; research; education; small and medium-sized enterprises; and the
international dimension of CSR.
For most small and medium-sized enterprises, especially microenterprises, the CSR process is
likely to remain informal and intuitive. To maximize the creation of shared value, enterprises are
encouraged to adopt a long-term, strategic approach to CSR, and to explore the opportunities for
developing innovative products, services and business models that contribute to societal wellbeing
and lead to higher quality and more productive jobs.
To identify, prevent and mitigate their possible adverse impacts, large enterprises, and
enterprises at particular risk of having such impacts, are encouraged to carry out risk-based due
diligence, including through their supply chains.
Certain types of enterprise, such as cooperatives, mutuals, and family-owned businesses, have
ownership and governance structures that can be especially conducive to responsible business
conduct.
The Commission intends to:
a) Create in 2013 multi stakeholder CSR platforms in a number of relevant industrial sectors, for
enterprises, their workers and other stakeholders to make public commitments on the CSR
issues relevant to each sector and jointly monitor progress.
b) Launch from 2012 onwards a European award scheme for CSR partnerships between
enterprises and other stakeholders.
c) Address the issue of misleading marketing related to the environmental impacts of products
(so-called "green-washing") in the context of the report on the application of the Unfair
Commercial Practices Directive foreseen for 2012, and consider the need for possible specific
measures on this issue.
d) Initiate an open debate with citizens, enterprises and other stakeholders on the role and
potential of business in the 21st century, with the aim of encouraging common understanding
and expectations, and carry out periodic surveys of citizen trust in business and attitudes
towards CSR.
e) Launch a process in 2012 with enterprises and other stakeholders to develop a code of good
practice for self- and co-regulation exercises, which should improve the effectiveness of the
CSR process.
f) Facilitate the better integration of social and environmental considerations into public
procurement as part of the 2011 review of the Public Procurement Directives, without
introducing additional administrative burdens for contracting authorities or enterprises, and
without undermining the principle of awarding contracts to the most economically
advantageous tender.
g) Consider a requirement on all investment funds and financial institutions to inform all their
clients (citizens, enterprises, public authorities etc.) about any ethical or responsible
investment criteria they apply or any standards and codes to which they adhere.
h) Provide further financial support for education and training projects on CSR under the EU
Lifelong Learning and Youth in Action Programs, and launch an action in 2012 to raise the
awareness of education professionals and enterprises on the importance of cooperation on
CSR.
i) Create with Member States in 2012 a peer review mechanism for national CSR policies.
j) Monitor the commitments made by European enterprises with more than 1.000 employees to
take account of internationally recognized CSR principles and guidelines, and take account of
the ISO 26000 Guidance Standard on Social Responsibility in its own operations.
k) Work with enterprises and stakeholders in 2012 to develop human rights guidance for a limited
number of relevant industrial sectors, as well as guidance for small and medium-sized
enterprises, based on the UN Guiding Principles.
l) Publish by the end of 2012 a report on EU priorities in the implementation of the UN Guiding
Principles, and thereafter to issue periodic progress reports.
m) Identify ways to promote responsible business conduct in its future policy initiatives towards
more inclusive and sustainable recovery and growth in third countries.
508

3. Juridical regulations regarding the commercial companies social responsibility on
national level
In the area of the corporate social responsibility in Romania, no internal compulsory
regulations have been implemented to date.
At national level there was adopted a law that has an informational purpose, of
recommendation: National strategy for promoting social responsibility 2011-2016.
This document claims that "performances and approaches of social responsibility within
companies and other organizations can influence key issues: reputation, ability to attract and retain
staff, members, customers or users, the competitive advantage of the company / organization,
perceptions of investors, shareholders, sponsors or financiers, relationships with companies, public
institutions, media, suppliers, contractors, customers and community.
National strategy for promoting social responsibility 2011-2016 claims that responsibility
towards the community and society can be an important differentiating factor between companies, as
consumers and other relevant actors become more receptive to the ways in which companies
contribute or not to sustainable development of society. More consumers think that a company should
be involved in solving social problems of the communities they serve, while some consumers have
begun to consider ecological issues when buying a product.
Within this strategy, principles, objectives and measures for an active and coherent policy
which promotes the application of the concept of social responsibility in companies, organizations and
public authorities in Romania to be implemented in 2011-2016 are presented.
Regarding transparency, it is argued that companies' opening regarding the decisions and
activities which could affect society, economy and natural environment and to communicate these
matters in a clear, actual, fast, honest and complete manner is important.
The main purpose of the strategy is to raise awareness about the importance and benefits of
applying social responsibility and to increase public sector involvement, Romanian companies
involvement, multinational companies involvement and of civil society in applying social
responsibility in Romania.
The ultimate goal of organizations targeted through social responsibility is represented by
practicing the maximization of their contribution to sustainable development. This approach involves
applying a set of principles in organizations activity: the principle of responsibility, the principle of
ethical behavior, transparency principle, the principle of respect for interested parties, the principle of
respect for the state of law, the principle of cooperation and consistency managerial performance
principle, the principle of predictability, principle of respect for human rights and other international
norms and standards.
The responsibility of companies' towards people, society and environment that are or may be
affected by their activities represents the fundament of the concept of social responsibility.
Underlying social responsibility is the responsibility of companies' towards people, society and
environment that are or may be affected by their activities.
It may be noted that this normative act transposes European regulations in social
responsibility area.

4. Conclusions and proposals for implementation of European stipulations regarding
corporate social responsibility
The ethical nature of the involvement of commercial companies in the community life, a part
of the commercial companies managers consider that it is enough to promote the social projects
within the respective commercial company and business partners. We consider [Murzea, C., Murean
(Poincu) L. (2009)] that the involvement of the socially responsible commercial companies must be
known because the advertising of the philanthropic activities included in the social responsibility
strategies can set examples for other commercial companies operating in the same field. In this way,
the expertise and good practice exchange can be achieved in the social responsibility field of the
commercial companies, stipulated in the Council Resolution 2003/C 39/02.
In promoting and acknowledging the corporate social responsibility in Romania, an economic
and legal instrument can also be used: the social responsibility trademark. In this way, the provisions
of the Council Resolution 2003/C 39/02 intending to have the EU member states promote the social
509

responsibility of the commercial companies at national level has also been applied in Romania, in
parallel with the development of a strategy at community level, especially by making the commercial
companies aware of the benefits. This instrument can also be used in promoting the transparency of
the social responsibility practices integrated by the Romanian commercial companies.
The EU member states are directed towards achieving the integration of the social
responsibility of the commercial companies in the national policies but also the integration of the
social responsibility of the commercial companies in their management.
But the Resolution of the European Union Council 2003/C 39/02 stipulates the fact that the
promotion strategies of the social responsibility of the commercial companies must be based on
focusing attention on the specific requirements and features of the small and medium commercial
companies.
The justification of this legal community stipulation is found in the financial power of the
large commercial companies which have thus the possibility to invest in expensive philanthropic
actions.
As compared to these, the small and medium commercial companies do not have the financial
possibility to develop expensive philanthropic actions, but for a socially responsible attitude, the
philanthropic component is not essential.
The small and medium commercial companies must be stimulated by the European Union
member states, which Romania is part of, to adopt a socially responsible attitude. These commercial
companies must comply with several categories of responsibilities, components of CSR.
For this category of commercial companies, it is important to use the human and time
resources for several philanthropic actions. These philanthropic actions can have an echo inside the
commercial company, but also outside it. For instance, under the circumstances of the current
economic crisis, a mid-size commercial company, instead of releasing a few employees from service,
who can no longer be involved in the commercial activity, can decide to keep them by involving them
in other activities up to the moment until they would still be needed in the production activity. These
employees can attend certain minimal training courses, and can be used as care-takers for the children
of the other employees of the commercial company. The commercial company puts at the disposal of
the re-orientated employees a room which is not used in the production activity, and thus it would
determine a serious economy for the parents-employees who would save the money allocated monthly
to the kindergarten taxes.
Thus, the employees who, because of the lack of orders, can no longer temporarily be used in
production, and are materially helped by the other parents-employees, are kept.
This is only an example [Murean (Poincu), L., Poincu, C. (2011)] by means of which, by
implementing socially responsible actions based on the imagination of the managers of the small and
medium commercial companies, this category of stakeholders own employees can be helped
without an expensive material investment.
The transparency of the commercial activity performed by the small and medium commercial
companies is beneficial to all the categories of stakeholders; we could state [Murean (Poincu), L.,
Poincu, C. (2011)] that it could become a modern method of business development. The annual
reports related to the socially responsible activity, which several commercial companies in the world
and also in Romania expose annually to the public, are a proof that the transparency of the
commercial activity performed by the commercial companies is a normal attitude.
Extending the results of the performed marketing results, we consider that this requirement of
a socially responsible attitude is requested by the Brasov stakeholders [Murean (Poincu), L. (2010)]
but it is also acknowledged in order to be observed by the managers of the commercial companies
from Brasov, Romania, even if it is not included in an ethical code.
Also, the transparency of the activity performed by the commercial companies in Romania is
required by the stakeholders from Braov,

[Murean (Poincu), L. (2010)] but it is also acknowledged
by the managers of the commercial companies, either large, or small and medium companies.
As outlined above, the legal provisions - even if the normative documents they contain them
have only an information role, of recommendation - are important. Based on these normative acts the
corporate social responsibility actions develop and have a unified applicability in economic practice.

510

ACKNOWLEDGEMENT: This paper is supported by Sectoral Operational Programme
Human Resources Development (SOP HRD), financed from European Social Fund and by the
Romanian Government under the project number POSDRU/89/1.5/S/59323.

5. References
- Filali Meknassi, R. (2008) Quel avenir pour la responsabilit sociale des entreprises au
Maroc? (Which is the future for the corporate social responsibility in Morocco?) in Sedjari,
A.: Droits de lHomme et dveloppement durable. Quelle articulation. (Human rights and
sustainable development. What is the link) Edition lHarmattan-GRET, Imprimerie El Marif
Al Jadida Rabat, p. 190.
- Gago, F. (2005) Administracion dela Responsabilidad Social Corporativa. (Management of
Corporate Social Responsibility) International Thomson Editores Spain Parainfo, Madrid. p.
1.
- Murean (Poincu), L., Poincu, C. (2011) The Trademark of Social Responsibility, an
Instrument to Implement a Socially Responsible Attitude to Small and Medium Companies in
Romania. in Proceedings of the WSEAS International Conference on Intellectual Property
and Information Management (IPM '11) Faculty of Law, Transilvania University of Brasov,
Romania, April 7-9, 2011, pp. 258-263.
- Murean (Poincu), L. (2010) Etic i responsabilitate social n domeniul marketingului.
(Ethics and Social Responsibility in the Marketing Domain) PhD Thesis, Transilvania
University of Brasov, Faculty of Economic Sciences, Marketing.
- Murzea, C., Murean (Poincu), L. (2009) The Trademark of the Corporate Social
Responsibility, Identity Element also for the Romanian Commercial Companies. The 2th
WSEAS International Conference on Environmental and Geological Science and Engineering
(EG'09) Braov, Romania, September 24-26, pp. 193-196.
- Poincu (Murean), L.: Ethics and Social Responsibility in the Marketing Domain. Economic
and Juridical Analysis on Romania, Member State of European Union. Lap Lambert
Academic Publishing, Saarbrcken. Germany, 2012, pp. 91-99.
- Poincu, C., Murean (Poincu), L. (2010) Negative Advertising in the Romanian Electoral
Campaigns. The WSEAS International Conference on Risk Management, Assessment and
Mitigation (RIMA '10) Bucureti, Romnia, April 20-22, 2010, pp. 312-317.
- Schreiner, C., Ciobanu, R. C., Huu, C. A. (2002) Etica tehnic i a afacerilor. (Technical
Ethics of Business) Editura G. Asachi, Iai. pp. 145-147.
- Gateway to the European Union: www.europa.eu

511

LEGAL AND ECONOMIC ASPECTS OF COMMERCIAL AND
ELECTORAL ADVERTISING IN ROMANIA

POINCU Cristian
Lecturer PhD, Faculty of Economic Sciences and Business Administration /
Department of Economic Sciences and Business Administration, "Transilvania" University, Brasov,
Romania, cristipotincu@unitbv.ro cristipotincu@yahoo.com

VOI CULESCU Nicolae
Professor PhD, Faculty of Law/Department of Public Law, "Titu Maiorescu" University, Bucharest,
Romania, nicuvoiculescu@yahoo.com

Abstract: Also in the social-political marketing there should be clear regulations. Thus, the legal
definitions of advertising and deceiving advertising could be extended also in this non-commercial domain. We
believe that a more responsible attitude would be beneficial in terms of electoral promise and also applying it.

Key words: normative acts, commercial advertising, electoral advertising, marketing research.

JEL classification: D72, K19, M31.

1. Legal aspects regarding commercial and electoral advertising
Law no. 158 of 2008 regarding deceiving advertising and comparative advertising regulates
the content of advertising materials and messages, irrespective of the means of communication which
makes the information transfer possible.
Law no. 158/2008 legally defines the terms of advertising and deceiving advertising.
Advertising is any form of presenting a commercial, industrial, or liberal activity, with the purpose of
selling assets or services, including immobile assets, rights and obligations. Deceiving advertising is
the advertising which, in any way, including through the presentation manner, misleads or can
mislead the persons to which it is addressed, or come into contact with it and which, because of its
deceiving nature, can affect their economic behavior, or which, for this reason, prejudices or can
prejudice an opponent.
It can be noticed that these legal provisions regard advertising as an element of the
promotional mix in the commercial marketing. We consider that also in the social-political marketing
there should be clear regulations. Thus, the legal definitions of advertising and deceiving advertising
could be extended also in this non-commercial domain. This way, we can easily notice that the
deceiving electoral advertising can be included in the broader category of deceiving advertising
because it is that advertising which, in any way, including through its presentation manner, misleads
or can mislead the electorate (citizens to which it addresses and come into contact with it) and which,
because of its deceiving nature, can affect the voting behavior or which, for this reason, prejudices or
can prejudice a competing political actor.
Relating to the increasing scope of the deceiving advertising regarding the political
marketing, we consider it necessary to create a legal framework for forbidding this type of
advertising, considering the fact that its effect is no longer to inform the electorate but as the
definition of the deceiving advertising shows, it misleads the electors. The deceiving electoral
advertising causes serious problems to the communication process between the political actors and the
electors.
After all, the activities considered deceiving electoral advertising affect the values stipulated
at art. 6 of Law no.148 of 26 July 2000 regarding advertising. More exactly, we refer to letter g).
Legally protected value breached by the deceiving electoral advertising through exploitation of
superstitions, credulity or fear of the electors.
A certain control regarding the exertion of the electoral advertising is encountered only in the
media promotion environment. This field is regulated and controlled by the National Audiovisual
512

Council (NAC). According to art. 2 of Law no. 158/2008 regarding the deceiving advertising and
comparative advertising, the commercial audiovisual communications issued within the audiovisual
programs services are subject to not only the provisions of this law but also the provisions of the
Audiovisual Law no. 504/ 2002. Even though the law refers to the commercial advertising, the
Audiovisual Law also regulates the field of political promotion.
Through art. 17 alignment 1, letter d) of the Audiovisual Law no. 504 of 11 July 2002,
modified through the Government Emergency Ordinance no. 181/2008, it is also established among
the NAC attributions the issuance of decisions acting as regulation norms in order to perform their
attributions expressly provided by the law, and especially regarding the principles and rules for the
development of electoral campaigns and referendums, in the audiovisual program services.
We consider [Poincu, C., Murean, L. (2010)] that, regarding the advertising field, the legal
provisions prior to the modification through the Government Emergency Ordinance no. 181/2008,
were much clearer, stipulating the issuance of certain decisions acting as regulation norms, in order to
fulfill their attributions expressly provided by the law, and in particular, regarding advertising,
including electoral advertising.
Art. 42 completes this article, establishing that in order to encourage and facilitate the
pluralist expression of opinions, the broadcasters have the obligation to reflect the electoral campaigns
in an equitable, balanced and impartial manner. In the correct application of this provision, the
Council shall issue mandatory norms, shall control the compliance of the legal provisions and issued
norms, and shall sanction their infringement.
In applying this Law, the National Audiovisual Council has issued a series of decisions. The
latest decision is decision no. 210 of 28 January 2010 regarding principles and rules related to the
development of the electoral campaign for the partial parliament elections, through the agency of the
audiovisual program services. This NAC decision establishes that it is the task of the broadcasters to
provide, within the electoral promotion shows, as well as in the content of the videos and other
audiovisual materials put at their disposal by the candidates, the compliance with certain conditions
which eliminate the possibility of using the deceiving electoral advertising.
We consider it necessary, for the fight against deceiving advertising, the legal regulation or
extension of the existing legal regulation in the field of commercial marketing regarding the fight
against disloyal competition. Law no. 11 of 29 January 1991 related to the fight against disloyal
competition establishes in its first article the obligation of the traders to exert their activity in good
will and according to honest customs. We cannot see any reason why the political actors cannot exert
their electoral promotion activity in good will and according to honest customs. We cannot see any
reason why the provisions of this law cannot be extended to the political marketing field, in the sense
of sanctioning the political actors if they perform actions of communication or spreading untrue
statements about an electoral competitor or programs supported by this competitor, statements which
could damage the development of the electoral campaign.

2. Opinions of the citizens of Brasov on commercial and electoral advertising
Within the quantitative marketing research called Attitudes and opinions of the Braov
citizens regarding the promotion of the social responsibility by the companies operating in Romania,
[Murean, L. (2010)] the opinion of the citizens living in Braov municipality regarding the
advertising promoted by the commercial companies, which activate on the Romanian market has been
analyzed.
The Brasov consumers have expressed their opinion
[
Murean, L. (2010)] related to the
statement advertising mostly intends to manipulate consumers. The results have been the following:
513

- 53.1% of the answers have indicated the agreement of the respondents to the mentioned
statement;
- 35.7% of the respondents have expressed their complete agreement.
The general percentage is very high: 88.8%. The distribution of the frequencies indicates a
strong focus of the answers in the positive part of the scale, which means an agreement attitude to the
statement advertising mostly intends to manipulate consumers. I can thus state that nine out of ten
Brasov consumers consider that, most of the times, the purpose of advertising is to manipulate the
consumers.
Only 10.9% (one of ten consumers) and 0.3% have expressed a disagreement attitude, and
complete disagreement respectively, to the statement that, most of the times, the purpose of
advertising is to manipulate the consumers. This means that only 11.2% of the questioned Brasov
citizens consider that the advertising promoted by the commercial companies has a genuine
informative nature.

Figure no. 1: Most of the times, the advertising promoted by
the commercial companies is dishonest and deceiving

Complete
disagreement
Disagreement Agreement Complete
agreement

Source: Murean Laura: Ethics and Social Responsibility in the Marketing Domain.
PhD Thesis, Transilvania University of Brasov, Faculty of Economic Sciences,
Marketing, 2010.

The distribution of the frequencies indicates a strong focus of the answers in the positive part
of the scale which represents an agreement attitude to the statement that the most of the times, the
advertising promoted by the commercial companies is dishonest and deceiving. 53.1% of the answers
have indicated the agreement of the respondents to the mentioned statement. 35.7% of the respondents
have expressed their complete agreement, while 10.9% and 0.3% have expressed a disagreement
attitude, and complete disagreement respectively.

514

Table no. 1: Most of the times, the advertising promoted by
the commercial companies is dishonest and deceiving
Valid Complete disagreement
1 0,3 0,3
Disagreement 40 10,1 10,9
Agreement 195 49,0 53,1
Complete agreement 131 32,9 35,7
Strongly disagreement 367 92,2 100,0
Missing 88 1 0,3
99 30 7,5
Total 31 7,8
Total 398 100,0
Source: Murean Laura: Ethics and Social Responsibility in the Marketing Domain. PhD Thesis,
Transilvania University of Brasov, Faculty of Economic Sciences, Marketing, 2010.

Both the median line and the modal value have value 1 which represents the agreement
answer variant. The average score, with the value 1.13, is also situated at the agreement level of the
scale. This average score is not the arithmetic mean of the variable, because the mean cannot be
calculated in the case of the ordinal scale.
Within the quantitative marketing research called Opinions, attitudes and behaviours of the
Braov citizens regarding the promotional techniques used in Romanian political marketing,
[Poincu, C. (2010)] the opinion of the citizens living in Braov municipality regarding political
publicity in Romania has been analyzed.
As for the opinion of the questioned respondents [Poincu, C. (2010)] regarding the promotion
of the political actors by means of publicity, the obtained distribution of the frequencies indicates a
strong focus of the responses in the positive part of the scale, which shows an agreement attitude
towards the statement according to which, most of the times, the political publicity intents to
manipulate the voters. The obtained distribution of the frequencies is presented in figure 2.

515

Figure no. 2: The perception of the voters manipulation
by means of the political publicity

Complete
disagreement
Disagreement Neither
disagreement
nor
agreement
Agreement Complete
agreement

Source: Poincu Cristian: Promotion techniques in the Romanian political marketing.
PhD Thesis, Transilvania University of Brasov, Faculty of Economic Sciences,
Marketing, 2010.

Further to the analysis, it has been noticed that 45.6% of the valid responses have indicated
the agreement of the respondents towards the mentioned statement, while 28.7% of the respondents
have expressed their total agreement to this statement. Only a percentage of 7% and 1.7% respectively
have expressed a disagreement attitude, and their total disagreement respectively, towards the
statement according to which, most of the times, the political publicity aims at manipulating the
voters.

Table no. 2: Most of the times, the political publicity aims
is to manipulate the voters
N Valid 401
Missing 1
Mean 0,93
Median 1,00
Mode 1
Source: Poincu Cristian: Promotion techniques in the Romanian political marketing. PhD Thesis,
Transilvania University of Brasov, Faculty of Economic Sciences, Marketing, 2010.

In the case of this question, both the median line and the modal value have the value 1, a
value which represents the agreement response variant. The average calculated scoring in the case
of this ordinal scale has the value 0.93; it is also situated at the agreement level of the scale.
516

Table no. 3: Most of the times, the political publicity aims is to manipulate the voters

Frequency Percent Valid Percent Cumulative Percent
Valid Complete disagreement 7 1,7 1,7 1,7
Disagreement 28 7,0 7,0 8,7
Neither disagreement nor
agreement
68 16,9 17,0 25,7
Agreement 183 45,5 45,6 71,3
Complete agreement 115 28,6 28,7 100,0
Total 401 99,8 100,0
Missing 88 1 0,2
Total 402 100,0
Source: Poincu Cristian: Promotion techniques in the Romanian political marketing. PhD Thesis, Transilvania
University of Brasov, Faculty of Economic Sciences, Marketing, 2010.

In conclusion, 74.3% of the questioned Braov citizens consider that publicity, component of
the political promotional mix, aims at manipulating the voters. This means that the main purpose of
the publicity as the total amount of political promotional techniques is to obtain the electors vote.
Less than 10% of the Braov citizens consider that the political publicity mainly has an informative
role for the electors. Most of the Braov citizens are aware of the selfish purpose for which the
promotional techniques belonging to the political publicity from Romania are generally used, and of
their deceiving nature. What this result, of the quantitative research, can transmit to the political actors
and to those involved in the electoral campaign is that they should rethink all these promotional
techniques in the sense that the information they transmit would be more realistic and possible as
implementation; further to the achievement of their political offer, the confidence of the citizens in the
political publicity would increase.
In order to test whether there are significant differences depending on the training level between
the opinions of the questioned persons, the Kolmogorov-Smirnov statistics test has been used, a non-
parametric test used for testing the differences between two independent samples. Further to the
analysis, it has been found that there are no significant differences between the opinions of the persons
with pre-university training and the persons with university training related to the statement regarding
the manipulation of the voters by means of the political publicity. This means that the mistrusting
attitude of the Braov citizens towards the political publicity as the total amount of the political
promotional techniques is not differentiated depending on the training level of the respondents. Thus,
if the information to be sent in the future by the political publicity is more realistic and possible for
implementation, and the offer of the political actors is effectively achieved, the citizens confidence will
increase, irrespective of their training level, on this background of political promotional techniques.

3. Conclusions
Given that the electoral advertising legislation is poor, two possibilities could be taken into
consideration.
A first possibility would be to adopt a code of ethics by most political actors on the political
scene from Romania. This code of ethics may develop different provisions on the quality of electoral
advertising.
A second possibility consists in active involvement of civil society in rejecting misleading
electoral advertising. Public reaction to such practices may correct the behavior of political actors.
We consider that also in the social-political marketing there should be clear regulations. Thus,
the legal definitions of advertising and deceiving advertising could be extended also in this non-
commercial domain.
But, even for the developing of the legislation in political marketing domain we can notice a
problem. In the case of products offered by companies, advertising compliance with the marketed
products can be easily observed. But, for the electoral products, the electoral promises electoral
offer to the voters are not enforced, most of the times. The meaning of this aspect is more important:
what voters buy trough their vote, which represents the price paid, it is not delivered to them. In
517

these circumstances the product "purchased" by the citizens following the electoral campaign, does
not have "the features" promised by electoral advertising or, in quite many cases, the political service
promised is not achieved.
In this context, most of the Braov citizens are aware of the deceiving purpose for which the
promotional techniques belonging to the political publicity from Romania are generally used.
We believe that a more responsible attitude would be beneficial in terms of electoral promise
which is the product sold to voters and also applying it which is the delivery of the
electoral product to the citizens buyers which paid by their vote. Political actors would have
very much to gain through responsible behavior, especially in conditions of absenteeism, which is
more pronounced, to voting. Absenteeism from voting of voters indicates a refusal to "buy" fictional
products or "inconsistent" with those presented in deceptive electoral advertising.

4. References
- Poincu, C., Murean, L. (2010) Negative Advertising in the Romanian Electoral Campaigns.
The WSEAS International Conference on Risk Management, Assessment and Mitigation
(RIMA '10) Bucharest, Romania, April 20-22, 2010, pp. 312-317.
- Murean, L. (2010) Ethics and Social Responsibility in the Marketing Domain. PhD Thesis,
Transilvania University of Brasov, Faculty of Economic Sciences, Marketing.
- Poincu, C. (2010) Promotion techniques in the Romanian political marketing. PhD Thesis,
Transilvania University of Brasov, Faculty of Economic Sciences, Marketing.
- Voiculescu, N. (2011) European Labour Law Guide for Social Partners. Perfect Publishing
House, Bucharest.
- Voiculescu, N. (2009) Labour Community Law. Wolters Kluwer Publishing House,
Bucharest.
- Voiculescu, N. (2007) Labour Law. Internal and Community Regulations. Wolters Kluwer
Publishing House, Bucharest.

518

ROMANIAS STRUCTURAL COMPETITIVNESS IN THE EUCONTEXT - A REVEALED
COMPARATIVE ADVANTAGE APPROACH

POPA Angela Cristina
Ph.D. Student, Faculty of I nternational Business and Economics, Academy of Economic Studies, Bucharest,
Romania, popacristina85@yahoo.com

Abstract: World economy currently offers a diverse array of competitiveness due to different levels of
economic and technological developments, or action of some social, demographic, and cultural factors.This
paper aims to examine Romanias relative competitiveness and compare the structure of specialization in trade
vis--vis the EU. The empirical analysis of the present paper is based on revealed comparative advantage
(RCA). The present study tries to underline the competitiveness of Romania within a European context by
calculating alternative measures of RCA.

Key words: Revealed Comparative Advantage, competitiveness, specialization

JEL classification: F10, F14, F15

Acknowledgements: This work was cofinanced from the European Social Fund through Sectoral
Operational Programme Human Resources Development 2007 2013, project number
POSDRU/107/1.5/S/77213 Ph.D. for a career in interdisciplinary economic research at the European
standards.

1. Introduction
World economy currently offers a diverse array of competitiveness due to different levels of
economic and technological developments, or action of some social, demographic, and cultural
factors.
At the macroeconomic level, the competitiveness of a nation can be regarded as the country's ability
to achieve long term growth in such a way that economic structure adapts effectively to global
economic development, seen as the evolution of world trade.
This paper aims to examine Romanias relative competitiveness and compare the structure of
specialization in trade vis--vis the EU-27. The empirical analysis of the present paper is based on
revealed comparative advantage (RCA). Although the concept of RCA represents a subject of wide
debate, it is still very often used in analyzing trade data. The analyzed studies showed that Romania
had several competitive advantages before the accession to the EU, but after 2007 it has lost some
benefits and regained others.
Romanias goal in the present is the accession to the Euro Zone, but the crisis in the periphery
of Eurozone led the Eastern European countries to delay joining the Eurozone, reconsidering the
balance between costs and benefits. Although Euro Currency and the Euro Area mean new
opportunities in the global economy, making the euro area an attractive business to third countries,
thus promoting trade and investment, it is still a difficult decision for the countries facing problems of
budget deficit and public debt. Membership in the Eurozone offers several advantages, like
currency stability, confidence in the size and strength of the euro area economy and integration in
international terms, there are also disadvantages related to the loss of monetary policy instruments. In
this case, the burden of adjustment moves into the labor market, which must be flexible to support an
adjustment related to: reducing income in nominal terms, accepting a higher unemployment rate and
lower wages in order to regain competitiveness.
In this sense, I will try to present, by underlying the sectors with Revealed Comparative
Advantage, the degree of integration of Romania in terms of international trade.
The plan of the paper is as follows. The following section reviews the empirical literature on
the comparative advantage and the competitiveness of Romania with respect to the EU, in a global
context, section 2 presents the alternative measures of RCA indices, and last section reports empirical
results.

519

2. Literature review on Revealed Comparative Advantage and Romanias
competitiveness
In the theories of international trade, comparative advantage is an important concept for
explaining pattern of trade. David Ricardo (1817) firstly introduces the concept of comparative
advantage with very strict assumptions. It is then well recognized as the Ricardian model. In the
modern theories of international trade such strict assumptions are replaced with the more realistic
ones. Heckscher (1919) and Ohlin (1933) examine the effect of different factor endowments on
international trade. Their model, which is well known as the Heckscher-Ohlin (HO) model, concludes
that a country will export commodity uses the abundant factor of production, while it will import
commodity uses the scarce factor of production. Some economists argue that a countrys comparative
advantage is dynamic, instead of static. So far, the dynamic theory of comparative advantage has put
greater attention on the changes in supply (production) side. This is related to how specific
determinants affect the output (economic) growth and, in turn, comparative advantage. Redding
(2004) finds that comparative advantage is endogenously determined by the past technological
changes and innovation.
The dynamics of comparative advantage might be also caused by the role of input trade
(Jones, 2000), the friction in international trade and investment flows due to geography, institutions,
transport, and information cost (Venables, 2001), the transmission of knowledge across borders
(Grossman and Helpman, 1991), the technological differences across border (Trefler, 1995), and the
monopolistic competition in differentiated products with increasing return to scale (Krugman, 1979).
Indeed, many applied economists, e.g. Liesner (1958), Kanamori (1964), Balassa (1965), Donges and
Riedel (1977), Bowen (1983), Vollrath (1991), Dalum et al. (1998) and Laursen (1998), among
others, have tried to make various empirical measures to reveal countries comparative advantage.
The Balassa index has been subject to several critiques, leading some authors to propose
several modified versions. For instance, Laursen (1998) suggests a transformation that produces a
symmetric outcome, ranging from -1 to 1 and with a threshold of 0; Proudman and Redding (1997,
2000) suggest a transformation that results in a constant mean across the different sectors for a given
country. Nevertheless, the popularity of the original index remains in place and the traditional Balassa
index has been used extensively in the literature. As in the Proudman and Redding (1997, 2000)
contribution, the product specialization index suggested here has a clear and well-defined link with
the original Balassa index. Laursen (2000), Proudman and Redding (1998), Sapir (1996) studied
whether and how the economic integration of EU Member States confirm the predictions of economic
geography models: a decrease in transport costs will generate a non-monotonous tendency of
agglomeration and specialization. In his study, entitled Convergence of the Export Structure of
Romania, Croatia, Serbia and Bosnia-Herzegovina to the Structure of Import Demand in Developed
Countries (2010), Goran Nikoli is analyzing the export structures of observed transitional countries
(Romania, Croatia, Serbia and Bosnia-Herzegovina) with the import structure of developed
economies (EU) to examine if there is convergence, and the level of that convergence since 2000. The
methodology of this study uses cosine theorem to determine the similarities (differences) of two
structures that are classified under the same classification SITC (Standard International Trade
Classification) Rev. 3, Finger Index and Krenin Index (FIKS) to estimate the export similarity by
calculating the relative importance of different categories of goods in the export structure of pairs of
countries, then applying a filtering technique. In this sense, the author uses the normalized Manhattan
distance with Bray-Curtis formula. Study results show that, in terms of increasing similarities of
export structures of developing countries taken into consideration and import demand in developed
countries, the hypothesis is confirmed. In Romania, since 2000 and by 2009, there was a similarity
coefficient in a continuous growth. In 2000, as in previous years, poor convergence, but significant,
was recorded due to a proportion of 20.1% of goods belonging to sections 0- Food and live animals
and 6-Manufactured Foods Classified by Material (especially the early stage of processing of goods,
especially products), in total exports. In Romania, the proportion of sections 7-Machinery, Transport
Equipment and 5-Chemical Products was a high one, of 47,9% mainly due to numerous subdivisions
78-Road Vehicles and 77-Electrical Machinery, which includes the production of motor vehicles and
electrical machines, intensified after 2000 along with increasing of foreign direct investment flows.
So, the biggest difference between the export structures of developing countries considered and trade
structures of the EU27 refers to sections 5 and 7, which are technology intensive products.
520

Development of sections 7 and 5 should be a priority in the economic transformation of the countries
converging to Euro Zone. The development of industry, specifically those products belonging to
sections 7 and 5 (and other sections, such as 87- Professional, Scientific, Controlling Material or 88-
Photographic Apparatus, Optical Goods, Clocks) will lead to an increase in export of technology
intensive goods and also to a decrease in imports of these goods. The relationship between the
structure of exports and growth is set out in a study belonging to Daniel Lederman and William F.
Maloney (2009). Cahn-Hyun Sohn and Lee Hongshik (2003) show that growth can be explained by
trade structure variables. Some economists argue that nations can not compete by themselves, but
only in certain sectors, industries or even goods, Switzerland beeing a good example in this case.
Endowed with natural and a spectacular mountain landscape, it continues to dominate the watch
industry and obtain a huge profit for almost 100 years. This contradicts the theory of free trade, which
states that free trade automatically diverts the nations towards the industries in which they are best
prepared.
In the short run, macroeconomic competitiveness of a country depends largely on its relative
price evolution compared to its main competitors prices. From a sectoral/micro point of view, in the
long run, structural competitiveness of a country is measured by the structure of specialization and
structural resilience to the international demand.
Some economists argue that the nature of international trade is in a continuous change
(Grossman and Rossi-Hansberg 2006, 2008, Blinder 2006, 2009, Hanson, Mataloni and Slaughter
2005). Instead of simply creating more trade in goods, global integration is increasingly marked by
trade in tasks ( Grossman and Rossi-Hansberg 2006), meaning more trade of intermediate goods
and services due to the widespread emergence of offshoring. Other economists bring into discussion
the public choice theory. Oates and Schwab (1988) stated that governments can set weak or
strong standards and by employing public choice theory, government officials may want to impose
weak environmental standards in order to attract capital investment.

3. Methodology Revealed Comparative Advantage
A way to highlight a country's degree of specialization in a particular product or industry, it is
the determination of comparative advantage index (CAI). CAI compares the share of production /
exports of a country for a specific product / industry in its total production / export with its share in
production / world exports (or a group of countries) of that product / industry. Before Balassa
introduced his famous index of comparative advantage in 1965, Liesner (1958) was the one who
contributed to the empirical literature of AC. In this sense, Liesner (1958) developed the first
empirical study in the area of CA. The simple measure proposed by Liesner for calculating CA was:
(1),
where x represents exports, i is a country, j is a commodity ( or industry), and n is a set of countries
(e.g. the EU). An advanced formula of the CA was later presented by Balassa (1965). This formula is
different from the initial one and is widely accepted in the literature:
(2) ,
where x represents exports, i is a country, j is a commodity (or industry), t is a set of commodities (or
industries) and n is a set of countries.
measures a countrys exports of a commodity (or

industry) relative to its total exports and to the corresponding exports of a set of countries, e.g. the
EU. Comparative advantage is "revealed" if
> 1. If
is less than unity, it is said that the

country has a comparative disadvantage in that good / industry. The index has a lower limit
= 0, in the extreme situation in which the country does not export product j (xij = 0). In the
oposite situation, where i is the only country exporting to sector, or asset j (international monopoly)
= 1, the nature of Balassa index implies that
, therefore, depends on the relative

size of the country i.
Considering the fact that
and
are generally variable in time, the situation is not only

changing between countries, but changes in time too. It is argued that the
index is biased
because of the omission of imports especially when country size is considered to be important
(Greenaway and Milner, 1993). Vollrath (1991) gave three alternative ways of measuring a country's
521

RCA. These alternative specifications are called RCA's relative trade advantage (RTA), relative
export advantage logarithm (ln RXA), and revealed competitiveness (RC). In this study, to be
systematic, we will call them
, respectively
. The advantage of the last two indices,

is that they became symmetric through origin. Positive values of the three alternative measures of
comparative advantage indicates a comparative / competitive advantage, while negative values
indicate a comparative / competitive disadvantage. However, a problem of implementation of these
indices of RCA is that the observed trade models may be distorted by government intervention,
causing such false statements in terms of comparative advantage. Knowing the that the import
restrictions, export subsidies and other protectionist policies pursued by governments, to some extent,
may distort RCA indices, represents a real concern. Fert and Hubbard (2003), uses nominal
assistance coefficients (NAC), estimated by the OECD by countries and goods, to filter the effects of
possible distortions in measuring RCA's agri-food sector in Hungary with respect to the EU.
Greenaway and Milner (1993), on the other hand, suggests the inclusion of a price-based measures of
RCA called "implicit revealed comparative advantage" (IRCA), to get rid of the distortion caused by
post-policy intervention. Vollrath (1991) suggests that the RC index (
in this paper), is
preferable, as long as supply and demand balance are included in the index. Evaluating the
deficiencies of the Vollrath's three indices, acknowledges that RXA index (relative export advantage)
which reduces the distortion is more commonly used in practice. It is important to emphasize that both
Vollrath and Balassa indices are based on different concepts and therefore not strictly comparable.
Relative trade advantage (RTA) (here
) is calculated as the difference between relative export

advantage (RXA), which is equivalent to the original Balassa index
and its counterpart, relative

import advantage (RMA). It is important to note that the main difference between RXA Vollrath's
Index and
original Balassa's Index is that prevents from double counting. In this paper, indices
are hybrids, meaning that the set of countries (n) is limited to the EU, while the set of goods (t) refers
to all all trade. Although double counting is not completly eliminated, this is not a problem because
we used the Standard International Trade Classification, Rev.3, with a low level commodity
aggregation of 63 product groups.
= RTA = RXA - RMA

Unde RXA =
si
RMA =
, where M represents the imports. Therefore,
= RTA = RXA - RMA =
(3)
The second measure is the logarithm of RCA Vollrath relative export advantage (here
):
= lnRXA = ln
(4)
The third measure of Vollrath competitiveness (RC) (here
), is expressed as:
= RC = lnRXA - lnRMA (5)

4. Data and Empirical Findings
To analyze the Revealed Comparative Advantage for Romania using Balassas and Vollraths
measurement of RCA, I calculated the alternative measures of RCA presented in the earlier section
with respect to the EU as the comparator on global level. In the present study I tried to underline the
competitiveness of Romania within an European context by calculating
and
. In the sense of global competitiveness of Romania with respect to the EU, I used annual two-
digit SITC Rev.4 data (9 main groups) covering Romanias exports and imports on the world level for
the period 2006-2009 from the Romanian National Institute of Statistics and also annual two-digit
SITC Rev.4 data (9 main groups) covering Extra-EU exports and imports on the world level for the
same period of 2006-2009 from the EUROSTAT. Goods which are subject to international exchanges
are classified according to Standard International Trade Classification (SITC, Rev. 4).
The followings are the basic points and outcomes on our alternative RCA calculations (see
Appendix Table 2). The following classifications are based on the common characteristics of
commodity groups, and are taken into account all indices.
522

Table 1: Outcomes based on the common characteristics of commodity groups
SITC
Divisions
Sectors with RCA in all (four) indices SITC
Divisions
Sectors with RCD in all (four) indices
22 oil seeds and oleaginous fruits 01 meat and meat preparations
24 cork and wood 02 dairy products and birds eggs
28 metalliferrous ores and metal scrap 03 fish (not marine mammals), crustaceans,
mollusks and aquatic invertebrates, and
preparations thereof
33 petroleum, petroleum products and related
materials
05 vegetables and fruit
34 gas, natural and manufactured 06 sugars, sugar preparations and honey
35 electricity 07 coffee, tea, cocoa, spices, and manufactures
thereof
42 fixed vegetables fats and oils, crude, refined or
fractionated
08 feeding stuff for animals (not including unmilled
cereals
56 mineral or chemical fertilizers 09 miscellaneous edible products and preparations
62 rubber manufactures 11 beverages
63 wood manufactures 12 tobacco and tobacco manufactures
77 electric machinery, apparatus and appliances
and parts thereof (including non-electric
counterparts of electric household equipment)
23 crude rubber (including synthetic and reclaimed)
82 furniture and parts thereof 25 pulp and waste paper
84 articles of apparel and clothing accessories 26 textile fibres (other than wool tops and other
combed wool) and their wastes (not manufactured
into yarn or fabric)
85 footwear 27 crude fertilizers, other than those of Division 56,
and crude minerals (excluding coal, petroleum and
precious stones)

Sectors which losing their RCA in time
period and has RCD at present (RCARCD)
(year-by-year observation)
Romania vis--vis the EU in the world market
29 crude animal and vegetable materials
32 coal, coke and briquettes
62 rubber manufactures 53 dyeing, tanning and coloring materials
Sectors which have RCA at present and has
RCD at past (RCDRCA) (year-by-year
observation)
54 medicinal and pharmaceutical products
523

33 petroleum, petroleum products and related
materials
55 essential oils and resinoids and perfume
materials; toilet, polishing and cleansing
preparations
56 fertilizers (other than those of group 272) 58 plastics in non-primary forms
84 articles of apparel and clothing accessories 59 chemical materials and products
85 footwear 64 paper, paperboard and articles of paper pulp, of
paper or of paperboard
Sectors with increasing RCA in time period
(year-by-year)
66 non-metallic mineral manufactures
00 live animals other than animals of division 03 71 power-generating machinery and equipment
52 inorganic chemicals 72 machinery specialized for particular industries
Sectors with decreasing RCA in time period
year-by-year observation
73 metalworking machinery
12 tobacco and tobacco manufactures 74 general industrial machinery and equipment and
machine parts
76 telecommunications and sound-recording and
reproducing apparatus and equipment
87 professional, scientific and controlling
instruments and apparatus
79

other transport equipment

88 photographic apparatus, equipment and supplies
and optical goods, watches and clocks
89 miscellaneous manufactured articles

5. Conclusions
The calculations performed in this study show that commodity groups that held continuous
revealed comparative advantage over 2007 and 2009 are: Crude materials, inedible, except fuels,
Mineral fuels, Lubricants and related materials, Animal and vegetable oils, fats and waxes,
Chemicals and related products, Manufactured goods classified mainly by the raw material, and
Miscellaneous manufactured articles. In 2009, in terms of orientation of the foreign investors
towards the economic sectors, according to NACE Rev. 2 Classification, the direct foreign
investments were directed mainly to Manufactured goods (31,1% of total), within its best represented
branches: oil, chemicals, rubber and plastic processing (6,3% of total), metallurgy (5,2%), transport
industry (4,7%), food, beverage and tobacco industry (4,1%) and cement, glass, ceramic (3,3%).
There are areas with a low weight to the potential, such as textiles, clothing and leather (1.4%),
decreasing their attractiveness due to non-tradable goods price convergence to the Eurozone prices,
according to the Balassa-Samuelosn effect. This evolution is associated with the convergence of the
emerging economies towards the developed ones and is driven by international competition, the
infusion of capital and modern technology made by foreign investment in industries characterized by
a high ratio between the contribution of capital and labor to achieve production. The increase in salary
costs, the gradual re-evaluation of tangible and intangible assets, the depreciation of the exchange rate
524

of the national currency, had a significant influence on industrial production prices and also on trade,
transferring revealed comparative advantage in other sectors, or causing its loose for others. In 2009,
among the industries that have been affected by the crisis, most important were the industrial
activities which had as a specific goal the production destined for export. This is explained by
restricting of foreign markets due to economic crisis in Romania's main partner countries, restricting
loans to economic agents by commercial banks and not least, the reduction in construction activity,
leading to production declines in related industrial activities.

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http://ideas.repec.org/a/aic/revebs/y2009i4widodot.html
525

Index

SITC Sections and
Divisions
2006 2007 2008 2009 2006 2007 2008 2009 2006 2007 2008 2009 2006 2007 2008 2009
0-9 Total
0 Food and live animals 0.63 0.64 0.98 1.10 -0.34 -0.69 -0.24 -0.27 -0.46 -0.44 -0.02 0.10 -0.43 -0.76 -0.22 -0.22
00 Live animals 6.48 6.84 6.14 5.37 4.40 3.29 -1.62 -7.00 1.87 1.92 1.82 1.68 1.13 -0.59 -0.23 -0.84
01 Meat and meat preparations 0.40 0.53 0.58 0.85 -3.16 -3.39 -3.18 -3.23 -0.92 -0.64 -0.54 -0.16 -2.19 -2.05 -1.87 -1.57
02 Dairy products and eggs 0.14 0.14 0.15 0.20 -2.37 -7.04 -7.83 -10.80 -1.99 -1.99 -1.88 -1.63 -2.91 -4.39 -3.95 -4.03
03 Fish, crustaceans, mollusks 0.05 0.06 0.05 0.10 -0.13 -0.15 -0.17 -0.15 -2.90 -2.75 -2.91 -2.27 -1.20 -1.36 -1.40 -0.88
04 Cereals and cereal
Preparations 1.32 1.17 2.64 3.13 -0.50 -1.85 0.23 -0.91 0.28 0.16 0.97 1.14 -0.32 -1.24 0.09 -0.26
05 Vegetables and fruit 0.61 0.61 0.45 0.52 -0.02 -0.32 -0.30 -0.18 -0.50 -0.49 -0.79 -0.64 -0.04 -0.14 -0.50 -0.29
06 Sugar, sugar preparations
and honey 0.56 0.63 1.07 1.65 -2.27 -1.95 -1.65 -1.84 -0.57 -0.46 0.07 0.50 -1.61 -1.71 -0.93 -0.75
07 Coffee, tea, cocoa, spices,
and preparations 0.23 0.17 0.27 0.32 -0.42 -0.58 -0.36 -0.32 -1.47 -1.75 -1.31 -1.15 -1.04 -1.29 -0.86 -0.70
08 Feeding stuff for animals 0.00
(not including unmilled cereals) 0.37 0.66 0.96 0.83 -0.22 -0.14 0.25 -0.20 -0.99 -0.42 -0.04 -0.19 -0.46 -0.45 0.30 -0.22
09 Miscellaneous edible
products and preparations 0.13 0.18 0.26 0.32 -2.92 -4.03 -3.44 -3.25 -2.00 -1.71 -1.35 -1.13 -3.12 -2.99 -2.66 -2.41
1 Beverages and tobacco 0.11 0.41 0.66 0.87 -1.81 -1.21 -0.95 -0.62 -2.21 -0.88 -0.42 -0.13 -2.86 -1.29 -0.89 -0.54
11 Beverages 0.10 0.13 0.16 0.14 -0.70 -1.05 -1.07 -0.78 -2.32 -2.02 -1.83 -1.97 -2.09 -1.94 -2.04 -1.89
12 Tobacco and tobacco manufactures 0.19 2.46 3.76 4.76 -4.03 -0.14 1.26 2.14 -1.66 0.90 1.32 1.56 -1.66 -0.06 0.41 0.60
2 Crude materials, inedible,
except fuels 2.50 2.34 2.54 2.41 1.92 1.63 1.91 1.76 0.91 0.85 0.93 0.88 1.47 1.27 1.40 1.30
21 Hides, skins and raw fur
skins 0.70 1.08 0.71 0.38 0.20 0.80 0.36 0.04 -0.35 0.07 -0.35 -0.97 0.33 1.15 0.70 0.10
22 Oil seeds and oleaginous fruit 25.22 18.44 34.54 40.71 24.88 17.90 33.99 40.08 3.23 2.91 3.54 3.71 4.31 3.39 4.13 4.18
23 Raw rubber (including synthetic
and reclaimed) 0.06 0.03 0.07 0.07 -0.60 -0.84 -0.67 -0.94 -2.88 -3.65 -2.72 -2.66 -2.46 -3.66 -2.42 -2.67
24 Cork and wood 5.74 5.22 4.81 5.36 5.49 4.92 4.46 4.90 1.75 1.65 1.57 1.68 3.14 2.43 2.62 2.46
25 Pulp and waste paper 0.05 0.07 0.05 0.07 -0.02 -0.05 -0.05 -0.19 -3.10 -2.61 -3.07 -2.65 -0.43 -1.27 -0.72 -1.30
26 Textile fibres (other than wool

tops and wool combed) and their

wastes (not manufactured

into yarn or fabric) 0.45 0.70 0.76 0.72 -1.90 -1.83 -1.37 -2.10 -0.79 -0.35 -0.27 -0.33 -1.64 -1.39 -1.03 -1.37
27 Crude fertilizers and minerals

(excluding coal, petroleum

and precious stones) 0.42 0.41 0.51 0.43 -0.21 -0.48 -0.33 -0.56 -0.88 -0.88 -0.68 -0.83 -0.40 -0.88 -0.51 -0.83
28 Metalliferrous ores and
metal scrap 3.54 3.06 3.10 2.83 3.01 2.40 2.56 2.50 1.27 1.12 1.13 1.04 1.89 2.22 1.75 2.14
29 Crude animal and vegetable
materials not elsewhere specified 0.20 0.15 0.20 0.18 -0.69 -1.04 -0.99 -1.05 -1.63 -1.91 -1.61 -1.70 -1.51 -2.11 -1.79 -1.91
3 Mineral fuels, lubricants
526

and related materials 1.94 1.41 1.40 1.12 1.41 0.85 0.98 0.74 0.67 0.35 0.34 0.11 1.30 1.31 1.21 1.08
32 Coal, coke and briquettes 0.26 0.61 0.26 0.14 -0.63 -0.58 -0.50 -0.28 -1.37 -0.50 -1.34 -2.00 -1.24 0.38 -1.07 -1.11
33 Petroleum, petroleum products
and related materials 1.91 1.37 1.32 1.04 1.43 0.85 0.92 0.61 0.65 0.31 0.28 0.04 1.39 1.16 1.20 0.88
34 Gas, natural and
manufactured 1.96 1.76 1.72 2.70 1.04 0.96 1.18 2.46 0.67 0.57 0.54 0.99 0.76 1.97 1.15 2.40
35 Electricity 3.44 2.52 3.62 2.35 3.09 1.80 3.32 2.10 1.24 0.92 1.29 0.85 2.28 2.31 2.49 2.24
4 Animal and vegetable
oils, fats and waxes 0.96 1.03 1.20 1.13 0.43 0.15 0.43 0.24 -0.04 0.03 0.19 0.12 0.60 0.15 0.44 0.24
41 Animal oils and fats 0.73 - - - -2.59 -2.50 -3.13 -3.33 -0.32 - - - -1.51 -1.20 - -
42 Fixed vegetables fats and oils,

crude, refined or fractionated 1.12 1.26 1.56 1.43 0.75 0.55 0.92 0.74 0.11 0.23 0.44 0.36 1.11 0.61 0.89 0.74
43 Animal or vegetable fats and

oils, processed; waxes of animal

or vegetable origin; inedible

mixtures or preparations

of animal or vegetable

fats and oils, not elsewhere
specified
0.00 0.29 0.00 0.00 -0.99 -4.88 -2.95 -4.45 0.00 -1.23 0.00 0.00 0.01 -2.72 - -
5 Chemicals and related
products, n.e.s. 0.37 0.35 0.39 0.28 -1.00 -1.14 -0.94 -1.19 -1.00 -1.04 -0.93 -1.28 -1.32 -1.42 -1.22 -1.66
51 Organic chemicals 0.37 0.28 0.22 0.09 0.01 -0.18 -0.22 -0.51 -0.99 -1.26 -1.52 -2.38 0.02 -0.75 -0.70 -1.87
52 Inorganic chemicals 1.05 0.86 0.97 0.57 0.36 0.43 0.56 0.17 0.05 -0.15 -0.03 -0.56 0.41 0.76 0.85 0.35
53 Dyeing, tanning and coloring
materials 0.11 0.13 0.17 0.13 -2.76 -3.12 -2.84 -3.38 -2.18 -2.02 -1.80 -2.05 -3.23 -3.28 -2.90 -3.30
54 Medical and pharmaceutical
products 0.07 0.05 0.09 0.17 -1.34 -1.38 -1.21 -1.17 -2.64 -3.01 -2.46 -1.76 -2.98 -3.31 -2.72 -2.05
55 Essential oils and resinoids

and perfume materials; toilet,

polishing and cleaningsing

preparations 0.25 0.33 0.34 0.38 -2.97 -3.40 -3.06 -3.14 -1.40 -1.12 -1.07 -0.97 -2.57 -2.37 -2.30 -2.23
56 Mineral or chemical fertilizers 8.92 7.65 7.86 4.90 7.98 6.48 6.94 3.60 2.19 2.03 2.06 1.59 2.26 1.77 2.14 1.32
57 Plastics in primary forms 0.95 1.05 1.06 0.67 -1.31 -1.49 -1.04 -1.89 -0.05 0.05 0.06 -0.41 -0.87 -0.89 -0.68 -1.34
58 Plastics in non-primary forms 0.42 0.39 0.44 0.42 -3.81 -4.48 -3.62 -3.45 -0.87 -0.94 -0.82 -0.86 -2.31 -2.29 -2.22 -2.21
59 Chemical materials and products
not elsewhere specified 0.05 0.06 0.07 0.07 -1.30 -1.81 -1.47 -1.67 -3.02 -2.80 -2.65 -2.60 -3.32 -3.36 -3.08 -3.15
6 Manufactured goods classified
mainly by the raw material 1.40 1.52 1.40 1.21 -0.53 -0.65 -0.49 -0.99 0.34 0.42 0.34 0.19 -0.32 -0.37 -0.30 -0.60
61 Leather, leather manufactures, not
elsewhere specified and dressed fur
skins
0.90 0.95 1.07 1.08 -6.00 -5.69 -4.22 -6.31 -0.11 -0.05 0.07 0.08 -2.04 -2.05 -1.60 -1.92
62 Rubber manufactures 2.93 3.75 4.11 4.60 0.36 0.86 1.79 1.89 1.07 1.32 1.41 1.53 0.13 0.32 0.57 0.53
63 Wood manufactures
(excluding furniture) 3.40 3.40 3.27 3.67 1.25 0.46 0.77 1.36 1.22 1.22 1.18 1.30 0.46 0.39 0.27 0.46
64 Paper, paperboard and articles
527

of paper pulp, of paper

or of paperboard 0.25 0.32 0.25 0.27 -2.75 -2.85 -2.53 -2.75 -1.37 -1.15 -1.37 -1.29 -2.47 -2.26 -2.39 -2.40
65 Textile yarn, fabrics, made-up

articles, not elsewhere specified and

related products 1.72 1.73 1.65 1.78 -2.83 -3.04 -1.84 -1.84 0.54 0.55 0.50 0.57 -0.97 -0.74 -0.75 -0.71
66 Non-metallic mineral manufactures 0.30 0.28 0.23 0.22 -0.69 -0.95 -0.95 -0.82 -1.21 -1.26 -1.47 -1.50 -1.20 -1.31 -1.63 -1.55
67 Iron and steel 2.53 2.62 2.22 1.47 0.65 0.45 0.21 -1.13 0.93 0.97 0.80 0.38 0.29 0.01 0.10 -0.57
68 Non-ferrous metals 1.65 1.68 1.32 0.97 1.17 1.07 0.72 0.19 0.50 0.52 0.28 -0.03 1.24 0.77 0.79 0.22
69 Manufactures of metals 0.97 1.11 1.07 0.95 -1.31 -1.56 -1.10 -1.34 -0.03 0.11 0.07 -0.05 -0.85 -0.72 -0.71 -0.88
7 Machinery and
transport equipment 0.68 0.77 0.81 1.01 -0.49 -0.85 -0.51 -0.16 -0.39 -0.27 -0.20 0.01 -0.54 -0.42 -0.49 -0.14
71 Power generating machinery
and equipment 0.52 0.52 0.43 0.40 -0.14 -0.37 -0.18 -0.54 -0.65 -0.65 -0.84 -0.92 -0.24 -0.59 -0.35 -0.86
72 Machinery specialized for
particular industries 0.25 0.22 0.26 0.27 -2.53 -3.09 -2.55 -2.68 -1.38 -1.50 -1.34 -1.31 -2.40 -2.59 -2.37 -2.39
73 Metal working
machinery 0.63 0.58 0.55 0.42 -1.14 -1.72 -1.23 -1.98 -0.46 -0.54 -0.59 -0.87 -1.03 -1.41 -1.17 -1.74
74 General industrial machinery
and equipment

and machine parts 0.57 0.69 0.65 0.62 -1.48 -1.83 -1.32 -1.36 -0.56 -0.37 -0.43 -0.47 -1.28 -1.06 -1.11 -1.16
75 Office machines and automatic

data processing machines 0.45 0.42 0.51 0.40 0.01 -0.11 0.09 0.07 -0.80 -0.86 -0.67 -0.92 0.02 0.24 0.20 0.18
76 Telecommunications and sound
recording and reproducing

apparatus and equipment 0.26 0.33 1.02 2.18 -0.26 0.25 0.21 1.13 -1.36 -1.12 0.02 0.78 -0.70 -1.17 0.22 0.73
77 Electric machinery, apparatus
and appliances and parts thereof

(including non-electric counterparts

of electric household equipment) 1.47 1.63 1.67 1.71 0.23 0.04 0.40 0.35 0.39 0.49 0.51 0.54 0.17 0.18 0.27 0.23
78 Road vehicles (including
air-cushion vehicles) 0.64 0.86 0.87 1.55 -1.93 -2.94 -2.21 -0.33 -0.45 -0.16 -0.14 0.44 -1.39 -0.79 -1.26 -0.19
79 Other transport equipment 0.93 0.96 0.96 1.04 0.61 0.52 0.61 0.81 -0.07 -0.04 -0.04 0.04 1.06 1.41 1.01 1.49
8 Miscellaneous manufactured
articles
2.26 2.05 1.76 1.65 1.63 1.23 1.05 1.01 0.82 0.72 0.56 0.50 1.28 1.16 0.91 0.95
81 Prefabricated parts; sanitary
plumbing, heating and

lighting fixtures and

fittings 1.40 1.15 1.17 1.27 -1.49 -1.94 -1.60 -0.76 0.33 0.14 0.16 0.24 -0.72 -0.57 -0.86 -0.47
82 Furniture and parts thereof 4.04 3.95 3.52 3.86 3.19 2.85 2.47 3.02 1.40 1.37 1.26 1.35 1.56 1.54 1.22 1.52
83 Travel goods, handbags and similar 1.11 0.94 0.77 0.74 0.92 0.60 0.44 0.42 0.10 -0.06 -0.26 -0.31 1.78 1.10 0.85 0.86
84 Articles of apparel and clothing
accessories 9.34 7.35 5.75 5.34 9.00 6.93 5.37 4.99 2.23 1.99 1.75 1.68 3.33 3.04 2.71 2.72
85 Footwear 11.27 9.66 8.02 7.75 10.21 8.35 6.95 6.74 2.42 2.27 2.08 2.05 2.37 2.26 2.02 2.04
87 Professional, scientific and
528

controlling

instruments and apparatus 0.19 0.23 0.28 0.33 -0.48 -0.60 -0.41 -0.24 -1.68 -1.48 -1.26 -1.11 -1.28 -0.93 -0.89 -0.55
88 Photographic apparatus, equipment
and supplies and optical goods;
watches and clocks 0.08 0.12 0.09 0.08 -0.19 -0.28 -0.22 -0.26 -2.48 -2.16 -2.36 -2.54 -1.18 -1.07 -1.20 -1.45
Miscellaneous manufactured
89 articles not elsewhere specified 0.33 0.40 0.44 0.44 -0.40 -0.58 -0.41 -0.42 -1.12 -0.92 -0.83 -0.81 -0.79 -0.78 -0.66 -0.66
9 Goods and transactions
not elsewhere classified in SITC 0.02 0.02 0.02 0.03 0.01 0.01 0.01 0.03 -3.95 -4.16 -4.14 -3.36 1.03 0.68 1.03 1.48
Source: Authors calculations based on SITC Rev. 4 data

529

530

STUDY REGARDING THE IMAGE OF SUPERMARKETS KAUFLAND, PENNY, PROFI IN
THE CITY OF ALBA IULIA

RADOVI CI U Ruxandra
J unior teaching assistant Ph.D Student, Faculty of Sciences, Department of Economics and Business
Administration, University 1 Decembrie 1918 of Alba Iulia, Romania, ruxandra_rdvc@yahoo.com

STREMAN Filimon
Professor Ph.D., Faculty of Sciences, Department of Economics and Business Administration, University 1
Decembrie 1918 of Alba Iulia, Romania, filimon_stremtan@yahoo.com

CUCEA Ramona
Economist, Ph.D. Student Colegiul Economic Dionisie Pop Martian Alba Iulia, ramona.cucea@yahoo.com

Abstract: The paper presents a comparative study about the image of three supermarkets in the city of Alba
Iulia (Kaufland, Penny, Profi) with the use of a questionnaire designed for this purpose. The main topics identified
in the study were: products offered and assortment diversity; the quality of the offered services; prices;
communication with the market and promotion efforts, those were the main categories applied.

Key words: supermarket, image, questionnaire,

JEL classification: M31;

Introduction
The continuous change in the economy and in the competition forms raises more difficulties for
the survival of supermarkets on the market. They must find out new ways to extend their services,
products and image on the market. Generally the consumers see the supermarkets as modern places where
they can find a wide range of products positioned in safe and pleasant conditions and with affordable
prices. Also the ambience of the supermarkets is considered as being pleasant, close to customers with
tempting offers.

Research methodology
We choose these supermarkets to be analyzed because they are the most important supermarkets
in Alba Iulia. Therefore we wanted to see the image of these supermarkets in the customers mind. In
order to establish the image of the supermarkets (Kaufland, Penny, Profi) in the mind of the customers
from the city of Alba Iulia, we designed and used questionnaire. The objectives of the questionnaire were
formed as following: products offered and assortment diversity; the quality of the offered services; prices;
communication with the market and promotion efforts conducted by the researched supermarkets.
The questionnaire was based on the following objectives:
1. Diversity assortment of products offered has a positive connotation to the supermarkets image on
the target market.
2. The quality of the services provided by the supermarkets influences positively their image on the
market.
3. Practiced prices create the potential to maintain a favorable image among consumers
supermarket.
4. Continuously communication with the customers strengthens the image of the supermarket on the
market.
5. Continuously promotion has a positive impact on the image of the supermarket on the market.
6. The customers opinion is important when wanting to know an image of a supermarket on the
market
7. We wanted to see which one of the supermarkets has the most important image on the market
8. The clients can provide important information about the safety of the parking spaces
9. The clients can identify the main problems that cause dissatisfaction about the supermarkets that
were analyzed.
10. The clients can give us positive feedback on how to improve the image on the supermarkets on
the market of Alba Iulia.
531

The questionnaire is divided in two parts having the following structure: the first part contains personally
data about the respondents (genders, nationality, status, monthly income, age) and the second part
referrers to the searched items structured as following: products offered and assortment diversity; the
quality of the offered services; prices; communication with the market and promotion efforts, those were
the main categories applied. Each category contains a number of questions, considered as target for
obtaining the needed answers.
- first category products offered and assortment diversity contains a number of four
questions with the following content: 1. Products offered by this store are top quality; 2. I usually do my
shopping in this store because they offer me a wide range of products; 3. Brands offered by this store are
new and in trend with the market; 4. I never found expired products;
- second category the quality of the offered services contains a number of eleven
questions with the following content: 1. I always find a parking space; 2. Parking is monitored by video
surveillance; 3. The store staff is providing me with the necessary information about certain products; 4.
The staff in this store is very friendly; 5. Store employees are professionally competent; 6. The goods are
arranged in such a way so I can easily find the needed product; 7. Store offers sufficient guarantee for
electrical products; 8. If I dont feel satisfied with a purchased product, I can return it; 9. I am informed in
time an completely about the risks imposed by the misusage of the domestically appliances; 10. Im
always informed about the conditions that might cause me to lose the manufacturer's warranty; 11. In this
store there is special place where are tested the domestic appliances.
- third category prices contains a number of five questions with the following content: 1.
In this store, prices are excellent; 2. Whatever the price, I shop in this store because they offer me a wide
range of products; 3. The store practices the best market price; 4. The prices are reduced periodically; 5.
Promotional prices are attractive to customers in this store.
- fourth category communication with the market contains a number of four questions
with the following content: 1. This store periodically informs me about the new products; 2. Store slogan
is "Our customer is our master!"; 3. I regularly get information about products that have lower prices by
mail; 4. I can easily arrive to shop in this store by using public transportation.
- fifth category promotion contains a number of six questions with the following content:
1. Advertising conducted by the store reflects reality; 2. This shop does not need advertising; 3. Store web
site gives me the needed information; 4. I would probably make my shopping in this store if my friends
would recommend it to me; 5. This shop has special offers for loyal customers; 6. I recently read articles
about this store.
The questioned persons used the following scale for expressing their opinion on the researched
supermarkets.

Total agreement Partially
agreement
Indifferent Partially
disagreement
Total disagreement
1 2 3 4 5

The target segment is formed by the customers localized in the city of Alba Iulia age between 18
and 25.
The questionnaire was applied to a number of 55 persons having the following attributes: 35
female, 20 male; 54 respondents were Romanian and one was from the Republic of Moldavia. Regarding
the studies 30 respondents graduated high school, 17 respondents graduated university studies, 4
respondents graduated master, 1 respondent finished post graduate and 3 respondents graduated Phd.
studies. 41 respondents are students, 2 respondents are retired and 12 respondents are employed. The
respondents have the following monthly income: 29 have between 0 and 500 lei, 14 have between 501
and 1000 lei,7 have between 1001 and 2000 lei, 3 have between 2001and 3000 lei, 2 above 3001 lei. The
age of our respondents have the following structure: 39 age between 18 and 25, 6 age between 26 and 30,
4 age between 31 and 40, 3 age between 41 and 50, 3 over 50 years.
The results on each category and questions regarding the image of those three supermarkets in the
mind of the target consumers from the city of Alba Iulia were the following:

532

First category products offered and assortment diversity

1. Products offered by this store are top quality;

Table 1. Products offered

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
KAUFLAND 28 20 2 4 1
PENNY 4 29 14 6 2
PROFI 5 21 15 10 4
Source: (created from the data obtained by the questionnaires)

The data analysis shows that Kaufland has the best quality of products offered on the market. An
important number of respondent consider that all supermarkets can improve the quality of the offered
products. 10 respondents consider that the products offered by Profi supermarket should be improved
significantly

2. I usually do my shopping in this store because they offer me a wide range of products;

Table 2. Range of offered products

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
KAUFLAND 46 2 4 1 2
PENNY 5 21 12 11 6
PROFI 2 16 22 9 6

A large number of respondents consider that Kaufland has the widest range of offered products.
The other two supermarkets analyzed should revise the range of offered products.

3. Brands offered by this store are new and in trend with the market;

Table 3. Brands offered

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
PENNY 8 21 17 5 4
PROFI 6 18 19 5 7

The data analysis shows that the brands offered by Kaufland are the ones considered by the
respondents as being in trend with their needs.

4. I never found expired products;
Table 4. Product safety

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
KAUFLAND 35 6 3 8 3
PENNY 25 9 10 9 2
PROFI 25 8 11 7 4
533

A large number of respondent sustain the fact that the products offered by the supermarkets are
offered in safe condition and are not expired. We can say that all supermarkets make efforts to maintain
the products in good condition in respect for the customers.

Second category the quality of the offered services

1. I always find a parking space;

Table 5. Parking space

Total
agreement
Partially
agreement
Indiffere
nt
Partially
disagreement
Total
disagreement

1 2 3 4 5
PENNY 24 14 8 5 4
PROFI 24 9 11 8 3

A large number of respondents consider that all the supermarkets offer a sufficient number of
parking spaces.

2. Parking is monitored by video surveillance;

Table 6. Video surveillance

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
KAUFLAND 16 5 18 5 11
PENNY 10 5 22 5 13
PROFI 10 3 24 5 13

An important number of respondents consider that all supermarkets should consider improving
the surveillance of their parking space.

3. The store staff is providing me with the necessary information about certain products;

Table 7. Information provided by the personnel

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
PENNY 10 22 9 8 6
PROFI 11 16 11 11 6
From the analysis of the data we can see that an important number of respondents consider that
the information provided by the staff need to be improved. We suggest training sessions, seminaries,
motivation from the supermarkets managers to encourage the staff to be constantly informed about the
products that they sell.

534

4. The staff in this store is very friendly;

Table 8. The amability of the staff

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
PENNY 11 25 11 4 4
PROFI 11 23 9 6 6

From the data analysis we can see that the respondents are partially agreed with how much the
staff is friendly. The managers of the supermarkets should consider to monitorize more carefully the
personnel and to find methods to motivate them.

5. Store employees are professionally competent;

Table 9. The employees are competent

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
KAUFLAND 13 22 14 5 1
PENNY 6 21 18 8 2
PROFI 8 21 18 6 2

13 questioned people say that the employees of Kaufland are competent while an important
number of respondents consider that the competence of the employees of all supermarkets can be
improved.

6. The products are arranged in such a way so I can easily find the needed product;

Table 10. The arrangement of the products

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
PENNY 15 24 9 7 0
PROFI 18 22 9 6 0

The data shows that Kaufland has the most well arranged products in the shelf, followed by Profi
and on the last place we can find Penny Market. The supermarkets on the second and third place should
conduct a study in order to find out the clients opinion about the arrangements of the products in the
supermarket.

535

7. Store offers sufficient warranty for electrical products;

Table 11. The warranty of electrical products

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
PENNY 12 12 15 10 6
PROFI 11 12 15 12 5

23 of the questioned persons totally agree with the warranty offered by Kaufland for the electrical
products, while 13 partially agree, 8 are indifferent, 8 partial disagree and 3 respondents totally disagree.
For Penny we can find equal answers (12 answers) for total agreement and partial agreement. 15
respondents are indifferent, 10 partially disagree and 6 totals disagree.
For Profi 11 answers were for total agreement, an equal for partially agreement and partially
disagreement, 15 for indifferent and 5 for total disagreement.

8. If I dont feel satisfied with a purchased product, I can return it;

Table 12. The possibility of returning the products

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
PENNY 9 11 15 9 11
PROFI 7 9 18 9 12
From the data analysis we can observe that an important number of respondents consider that
Kaufland has the best policy when it comes to the return of the products bought. Also an important
number of respondents say that they totally disagree with the policy provided by Penny and Profi of
returning the products bought from them.

9. I am informed in time an completely about the risks imposed by the misusage of the
domestically appliances;

Table 13. Information about the risks of misusage of the domestically appliances

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
KAUFLAND 6 20 12 6 11
PENNY 5 15 15 10 10
PROFI 3 14 13 15 10

From the data analysis we can observe that all supermarkets should provide more information
about the misusage of the domestic appliances. The customers can be informed by the employees or the
supermarkets can place the information by using posters or place a television that shows how to safely use
the products on the part of the supermarkets where the appliances are sold.

536

10. Im always informed about the conditions that might cause me to lose the manufacturer's
warranty;

Table 13. The conditions that might cause the loss of the warranty

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
KAUFLAND 15 11 12 5 12
PENNY 9 14 10 8 14
PROFI 8 12 14 7 14

The data shows that all supermarkets should pay attention in informing the customers about the
misusages that can cause the loss of the warranty of the bought goods. This information can be given at
the warranty desk when the warranty papers are being filled in.

11. In this store there is special place where are tested the domestic appliances.

Table 14. A place for testing domestic appliance

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
KAUFLAND 19 10 14 4 8
PENNY 9 11 13 10 12
PROFI 11 8 14 11 11

All supermarkets should consider revising the place for testing the domestic appliances.

Third category prices

1. In this store, prices are excellent;

Table 14. The prices are excellent

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
PENNY 16 26 5 8 0
PROFI 10 28 10 5 2

From the data analysis we can observe that most of the answers reflect partial agreement from the
respondents. This means that the supermarkets have good prices, but they should consider making small
changes to improve the prices of the goods sold in the supermarket.

2. Whatever the price, I shop in this store because they offer me a wide range of products;

537

Table 15. The store offers me a wide range of products

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
KAUFLAND 29 9 7 8 2
PENNY 7 19 14 12 3
PROFI 5 16 17 13 4
29 of the respondents say that the reason that they go to Kaufland is that they can find a wide
range of products that they need. 19 respondents are pleased with the range of products offered by Penny
and 16 respondents are pleased by the products offered by Profi.

3. The store practices the best market price;

Table 16. Best prices

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
PENNY 10 21 13 8 3
PROFI 9 23 11 10 2

All supermarkets should consider making small changes in the prices of the products offered on
the market.

4. The prices are reduced periodically;

Table 17. Best prices

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
PENNY 17 21 11 5 1
PROFI 17 15 16 5 2

From the data analysis we can observe that the best policy of reducing the prices is being
conducted by Kaufland. Supermarkets Penny and Profi should revise the policy of reducing the price.
They could reduce the time period set for reducing the prices or make special cutbacks in special
occasions.

5. Promotional prices are attractive to customers in this store.

Table 18. Promotional prices

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
PENNY 22 18 8 4 3
PROFI 16 20 12 5 2

538

From the data analysis we can say that all supermarkets have an excellent policy when it comes to
promotional prices.

Fourth category communication with the market

1. This store periodically informs me about the new products;

Table 19. Communication with the market

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
KAUFLAND 35 9 4 3 4
PENNY 18 15 7 7 8
PROFI 13 12 16 6 8

All supermarkets provide excellent information about their products to the market. On the first
place we can find Kaufland, they inform the market by using papers delivered directly to the post box.
Next we can find Penny and on the third place we have Profi. Supermarkets Penny and Profi should
consider revising the time period in which they inform the market about their new products.

2. Store slogan is "Our customer is our master!";

Table 20. "Our customer is our master!"

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
KAUFLAND 19 15 10 6 5
PENNY 14 17 11 6 7
PROFI 13 18 14 5 5

All supermarkets should consider revising this slogan by adding more importance to the
information about the supermarket offered by the customers. Also they should apply the important
suggestions given by the customers.

3. I regularly get information about products that have lower prices by mail;

Table 21. Information by mail

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
KAUFLAND 32 4 7 3 9
PENNY 15 12 7 6 15
PROFI 14 9 8 8 16

From the data analysis we can observe that all supermarkets provide the information by mail about the
products that have the lowest prices. But 15(for Penny) and 16(for Profi) respondents do not consider the
information given by mail as sufficient or reliable.

4. I can easily arrive to shop in this store by using public transportation.

539

Table 22. Arriving at the store by using public transportation

Total agreement Partially agreement Indifferent Partially
disagreement
Total disagreement

1 2 3 4 5
PENNY 26 13 7 5 4
PROFI 20 16 10 4 5

From the data we can observe that the customers are satisfied by the schedule of public transportation.

Fifth category promotion

1. Advertising conducted by the store reflects reality;

Table 23. Advertising

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
PENNY 14 23 11 4 3
PROFI 16 13 21 4 1

27 respondents total agree and 17 partial agree that the advertising conducted by Kaufland
reflects reality.
14 respondents total agree and 23 partial agree that the advertising conducted by Penny reflects
reality.
16 respondents total agree and 13 respondents partial agree that the advertising conducted by
Profi reflects reality.
In conclusion we can say that all supermarkets do their best to correctly inform the customers
about their products, services and quality.

2. This shop does not need advertising;

Table 24. The need for advertising

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
KAUFLAND 13 17 4 8 13
PENNY 8 19 5 11 12
PROFI 10 13 9 10 13

All supermarkets should conduct constantly advertising campaigns in order to be constantly in the
mind of the customers, to form an important image on the market, to inform the customers about their
products or promotions.

540

3. Store web site gives me the needed information;

Table 25. Information given by web sites

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
PENNY 7 7 22 9 10
PROFI 4 8 22 10 11

All supermarkets should improve their communication through the web sites. Internet is the most
accessible method of information preferred by clients.

4. I would probably make my shopping in this store if my friends would recommend it to me;

Table 26. Recommendation given by friends

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
KAUFLAND 12 6 15 7 15
PENNY 6 9 18 8 14
PROFI 8 7 18 8 14

From the data analysis we can see that the recommendation given by friend is not a reliable
source of information to be taken into consideration when choosing a supermarket.

5. This shop has special offers for loyal customers;

Table 27. Special offers for loyal customers

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
KAUFLAND 10 9 10 10 16
PENNY 8 8 10 13 16
PROFI 2 9 13 14 17

All supermarkets should revise their offers to the loyal customers in order to improve their image
on the market and convince the customers to remain loyal.

6. I recently read articles about this store.

Table 27. Articles about the store

Total
agreement
Partially
agreement
disagreement
Total
disagreement

1 2 3 4 5
KAUFLAND 21 10 11 5 8
PENNY 9 13 14 9 10
PROFI 10 10 13 11 11
541

From the data analysis we can see that all supermarkets make efforts to improve their image by
appearing in articles.

Conclusions:

Supermarkets Penny and Profi should improve their products quality and their product range.
None of the investigated supermarkets have expired products offered to sale.
All supermarkets have sufficient parking spaces and should consider to video monitor them.
All supermarkets should consider performing training courses for their personnel.
All supermarkets should perform small changes in arrangement of the products.
A large number of our respondents dont rely on their friends when choosing a supermarket.
All supermarkets should improve their localization policy by adding special offers, fidelity
bonuses and fidelity cards.

References:
- Balaure Virgil (coord), Marketing, Uranus Publishing House, Bucharest 2002;
- Cetin Iuliana, Brandabur R; Constantinescu M; Services marketing, Uranus Publishing House,
Bucharest 2006;
- Kotler Philip, Keller Kevin, The management of marketing, Teora Publishing House, Bucharest
2008;
- Kotler Philip, Armstrong Gary, The principles of marketing, Teora Publishing House, Bucharest
2008;
- Lapert Denis, Marketing des services, Dunod Publishing House, Paris 2005;
- Lovelock Chistopher, Wirtz Jochen, Lapert Denis, Marketing des services, Pearson Education
Publishing House, Paris 2004;
- Valeric Olteanu, Marketing of services a managerial approach, Ecomar Publishing House,
Bucharest 2003;

542

THEORETICAL AND APPLIED ASPECTS OF EVALUATION THROUGH STATISTICAL
QUESTIONAIRE

SI MI ON Doina Maria
Professor PhD., Lucian Blaga University of Sibiu
Faculty of Economic Sciences, e-mail: simiondm@yahoo.com

Abstract: This paper contains a review of the practice and theory of statistical questionnaires. It points out
the increasing distance between the theory of selective research and the practice of using surveys. This distance is
being amplified nowadays by the economical and social changes in general and those of the academic environment
in particular. In addition, the paper points out the danger of diminishing the scientific reputation of these statistical
methods and tools through the excessive contact of individuals with different types of questionnaires suggests that
the usage of these tools should be adapted correctly by considering the peculiarities of all the field.

Key words: evaluation, questionnaire, model, context, diversity, immediacy.

JEL classification: C18

Introduction
The institutional analysis is a type of research of social and economical sciences which aims at
revealing the effect of policies, norms and interpretations associated to practices of a given field on the
institutions of the field. The most common technique in this sort of analysis is selective research based on
questionnaires. Because of the dynamical economical and social life and because of the variation and
diversity in the economical and social structures as well as the trend in human behaviour, one has to be
particularly careful in using techniques and research tools which evolved in time within (theoretical and
applied) known scientific systems
The technique of survey based research used in the evaluation of the quality of academic activity
requires extra care for the current context of the educational system in general and for the field of higher
education in particular.

1. The questionnaires on socio-economic investigations.
Regardless of the investigated domain, the statistical questionnaire is one of the widest used
techniques when it comes to socio-economical investigations. People around the world have become
familiar with this research instrument by using it or by being included in the studied sample. It is being
estimated that in many countries one out of ten people was considered as sample. The common use of
questionnaires led to a widening of research topics.
The use of questionnaires has its own place in the sociological literature (Chelcea, 2004). On a
worldwide scale, old noteworthy research questionnaires are the one initiated by Charles Letourneau in
1882 (military field), the one from 1898 by J.W. Powel (ethnologist) and in 1903 one by A.G. Keller
(sociologist, teacher) and Alfred Binet (physician).
In Romania the use of questionnaires began with Bogdan Petriceicu Hasdeu. In 1878 he used a
questionnaire consisting of 400 questions aiming at juridical habits of Romanian people and their social
life. In 1886 he builds another questionnaire of 206 questions regarding linguistic and mythological
issues. The collected data was used in the works Juridical habits of Romanian people and
Etimologicum Magnum Romaniae. Later, in 1900, G. Cobuc, A. Demetrescu, O. Densuianu and C.
Rdulescu Motru initiate the first investigation based on questionnaires published in the press of that time
New Romanian Journal (nr.12). In 1927 Romulus Vuia uses questionnaires to study the Christmas and
New Years traditions of the Romanian people.
The academician Sextil Pucariu expressed (in 1933) his appreciation for these first
questionnaires saying they were most gratifying and as encouragement and reward the people involved
in these projects received award in the form of money and books.
Research by means of questionnaires was done primarily by ethnologists, sociologists, historians,
and physicians. The refinement of the questionnaire as an inquiry tool resulted from the subsequent
collaboration between the initiators and other categories of specialists. Nowadays, the frequent use of the
543

questionnaire for studies or just for collecting data has a negative side to it which is mentioned by
Septimiu Chelcea in Sociological research methodology. Quantitative and qualitative methods. The
author notes that, because the population got used to the different types of questionnaires, this instrument
of research lost its scientific importance becoming a games of the society. This phenomenon increased
after 1989 and led to the vulgarization of this precious method for collecting informations. The author
pleads for the discouragement of published surveys without endorsement from a specialized institution or
a specialist in the field.
As a solution for this problem, Ctlin Zamfir, sociologist and associated member of the
Romanian Academy, presents (Zamfir, 2007) in 2007 the criteria to evaluate sociological production.
These can be extended to surveys. For example the criterion of social relevance and the criterion of
epistemological relevance of studies based on questionnaires
Concerning the social relevance the author asks: Does the survey based research contribute to a
better understanding of economic and social aspects, does it cover a white, unexplored spot leading to
an increase of knowledge? In other words,
- Is there an increase of empirical data, new and interesting data?
- Does it create a spark of new, explanatory theory?
- Does it address an unexplored social or economic phenomenon or process?
Concerning the epistemological relevance one asks: Does survey based research develop a theory of
universal character?
It is a well known fact that in science there are trends. A new subject explodes and seizes the
interest of the academic community. After an accumulating number of results the productivity decreases
and epigonism starts to take place. This phenomenon has to be discouraged and one has to be open and
encouraged towards new problems of interest to scientific understanding. The following questions appear:
Does survey based research contribute in an essential way to the enlargement or modification of
the paradigms in the scientific community?
Does survey based research fit in the local scientific trend?
Does survey based research answer only to one immediate, contextual question of the researcher
(economist, sociologist, ...)?
For the two criteria, social relevance and epistemological relevance is indicated to establish
minimum thresholds for research through questionnaires to support significant managerial act.

2. Research by questionnaires - towards the limits of scientific severity
In the academic community, like in the entire economic and social world, there is a trend or
maybe a specific need to measure the quality of activities. An important item in the analysis of
universities is the evaluation of teachers. Their training, presence, preoccupation and involvement
contributes to the overall performance of the educational sector. Until recently, in a communist system, it
was enough to have a professional training verified by studies, diplomas, certificates and a number of
scientific products developed in time. Today, in a free, democratic society of importance is also the
appreciation the beneficiary of the educational system, the student has for the teacher. Therefore science,
through its areas such as sociology and psychology, is compelled to make room for subjectivities and
interpretations on its grandiose and elaborate models of the human universe.
In the multitude of models for evaluating teaching and teachers compliance with the principle of
contextuality is of great importance. Many authors in the field approach and emphasize contextuality in
evaluation (B.J. Fraser 1986), which considers the concrete situation in which evaluation takes place.
The importance of contextuality in evaluation is indicated by two coordinates, the psycho-pedagogical
climate and the contextual variables. The latter containing features of the taught discipline, characteristics
of the teacher, of the student and of the way evaluation is conducted.
Of equal importance for an evaluation model is the axiological model. This determines both the
quality of the didactic product (knowledge, skills, attitude at courses and seminars) and the quality of the
methods used (tools, strategies), as well as teaching in its whole, values, beliefs, views of the teacher.
Here one can ask, doesn't the measuring together with quantification reduce quality to quantity? Aren't we
shifting from a judgement of value to one of quantity?
Last but not least one has to consider and develop the structural aspect of the evaluation model,
which defines defines the basic components, the aim and the object to be evaluated, sources and means of
evaluation as well as the beneficiaries. All these components are actually answers to the questions By
whom? What? Who? How? And For whom? Do we evaluate the teacher, the college or the university.
544

All these theoretical aspects of the scientific approach to evaluation of teaching and teachers in
higher education has to be followe de, respected, and has to be part of the investigation, the statistical
questionnaire being the most common used investigation method.
Before constructing the questionnaire for evaluation one has to clarify the aim of the evaluation:
do we want an evaluation of teaching in order to restructure the curricula? Or do we want to stimulate and
promote teachers? Or just a plain report on the current state of matters concerning teachers and the
management of universities? Since nowadays the entire human activity is marked by immediacy the
scientific tools used to find complete, consistent, opportune and relevant answers to the above questions
have to be subject to scientific rigour whether it is part of sociological, marketing, psychological or
statistical research.
The methodology of economical, sociological, psychological or any other research area offers a
wide range of rules, techniques for building a questionnaire and for formulating questions. For instance
the funnelling technique passes from general aspects to particularities of the problem while the reversed
funnelling technique goes in the other direction. Another technique is given by the helo effect (Leon
Festinger 1957) which considers the contagion of answers by induced feelings. This procedure explains
the tendency of the respondent to reduce the dissonance, to eliminate contradictions in the formulation of
answers. Research theory offers rules regarding the length of the questionnaire and its design and layout
of the questions (Werner Henning 1971).
There is a large range of rules regarding the formulation of questions. The technique of selective
research, with its clear theoretical definition, asks first of all for the operationalisation of the concepts.
This is followed by fixing a set of indicators which materialize as questions in the questionnaire. Of
course, not all questions represents an indicator (introductory questions, transitional questions). For some
research topics there is no need for operationalisation of concepts or there are no difficulties in
formulating the questions. For example: if we want to find out the number of students who use the tram
we don't need to define what a tram is and we don't need a special way of formulating the question.
For each question in the questionnaire one has to specify: are there difficulties in understanding
the language, is the formulation too abstract or is it not appropriate for the respondent, does it rely on too
complex observations to be answered, is it tiring does it overburden the thinking process or is it boring,
does it generate fear or prestige, is the fear too intimate or does it generate conflicts with personal ideals,
and other such questions (Elisabeth Noelle 1963). Other authors (Stanley L. Payne 1951) find dozens
of principles to formulate questions. This being given, one has to be careful with the fact that the answer
has to be analysed in terms of the questions and that different formulations can lead to different answers.
In the literature one finds rules which assure that all particular cases are covered. We mention
only some of them: the placebo technique is used to remove reactions of confusion and faade reactions,
(questions about something false in the given problem), care for the self-conceit of the questioned persons
can be achieved by using the optative mood (would you like to ...), the residue (the ones who refuse to
answer, the ones who are not well informed, the ones with no opinion) the non-answers can also be
interpreted as a dissonance phenomenon or as neutrality in opinion. Careful studies show that certain
words used in the formulation of questions have strong emotional resonance and that these kind of words
should be avoided (communism, liberalism, terrorism, radicalism, ...). It was observed that most of the
words ending in ism have an undesired influence. There are published lists of such words which
influence answers through triggered feelings: demagogue, dictatorship, foreigner etc. (Institute for
Propaganda Analysis, New York). Not only the emotional load of words has to be considered but also the
positioning of the term, at the beginning or end of the sentence.
The large number of rules which were formulated during time in the field of selective research
based on questionnaires brought the practice in a difficult situation. The problem that has to be faced now
is that of the opportunity of the results in selective research, as such, the problem of scaling the allowance
in the discussed norms arises. In this context I bring into discussion the fact that the specificity of our
time pushes to a compromise when it comes to compliance with the scientific rules of survey based
research. The speed at which the economical and social phenomena take place, in this case the academic
ones, the quickly need for information in decision making and the change of human behaviour under the
influence of the ideologies of various parties lead to a selective use of the theory. No doubt, the extent of
democracy with its influence on human behaviour changes, renews and develops in a significantly social
and economical theories. Nowadays there is a considerable gap between the theory of selective research
and the practice of survey based research generated by the haste of the economic and social life, the need
of opportunity in decision, modifications in human behaviour, the peculiarity of the place and time of
research, the institutional diversity and uncertain(vague) benchmarks.
545

Selective research theory

Survey based research practice

3. Peculiarities of survey based investigations in academic evaluation.
Keeping in mind the above considerations, trying to place myself halfway between the theory and
practice of survey based research (which are continuously drifting apart in the current situation of
universities) and taking into account the evaluation available so far in the Romanian academic system, I
will reformulate the question that follows from the structural component of an evaluation model.
Why do we evaluate? The purpose of a survey based study is to inform, to describe (to outline a
picture, a portrait sketch) the didactic activity and the educational process for each teacher or for each
faculty/university in the way this results from the opinion, attitude and feeling of those who evaluate.
Equally, questionnaire based evaluation allows for descriptions of types of values, benchmarks, which are
needed in the continuity of the evaluation process and for the basis of decision making. They allow for the
determination of qualitative relations between the different components of the Romanian academic
system and the relations with other European systems. Finally, the academic evaluation allows us to
identify performance as well as problems and critical segments of the educational system.
What do we evaluate? The academic evaluation aims at didactic and educational aspects and
also at institutional aspects. The educational aspect aims at evaluating the teaching activity, knowledge
assessment, communication with students and the received feedback, the academic support offered by the
teacher, students access to learning resources, the management of the educational process and other
qualitative aspects of the teaching process. The institutional aspect is concerned with the used materials,
finished research projects, the acquired trust and reputation, including the effects of the teaching
component.
For whom do we evaluate? The results of such a process can profit the teacher and the student of
an evaluated institution, its leadership and interested social institutions: the state, government (Ministry of
Education),associated councils (ARCIS,CNCSIS), European organisations, as well as the common citizen
who wants to follow higher education.
The importance of survey based investigation and evaluation, for teachers, follows from the
gained knowledge of how students perceive the disciplines of the curricula, the content and the methods
of presentation; how students see, receive and appreciate teaching; how they appreciate the teacher from
a professional and/or personal point of view; his presence at the department. A warning: if the mirror is
Dynamics of university life.

Oportunity in decision making.

Peculiarities of human behavior.

Peculiarities of place and time of research.

Optimizing the relation: research result cost

Institutional diversity

Vague benchmarks

546

crooked, dusty or broken this will have consequences on the image of the teacher and its activities. The
generations of students vary from one year to the next, and within them the structuring of specializations
also varies. The teacher him/her-self modifies or only adjusts the content of the subject, the methods of
teaching and examination and its behaviour during teaching according to the received feedback. I mention
here the need of continuous, periodical evaluation through questionnaires, thinking about the following
aspect: bending contemplatively over a riverside, at each moment we mirror ourselves in a different water
surface; bending over his activity the teacher mirrors him/her-self each semester or academic year in a
different generation of students.
The importance of survey based evaluation for the leadership consists in the knowledge of how
students perceive teaching in the framework the educational process; the quality of the teaching staff from
the point of view of the student; the knowledge of the students perspective in his/her judgement or
appreciation of a course, seminar or teacher; to infer indirectly on the quality of students; in order to
observe the evolution of these coordinates or in order to improve the curricula.
The importance of survey based evaluation for students consists in the dimensioning or re-
dimensioning of their own appreciation regarding a course, a seminar or a teacher in a general context; in
a revision and the objectivity of understanding and judging teaching in universities; in the establishment
of an appropriate climate for expressing opinions, manifesting attitudes and behaviour among students.
The usefulness of survey based investigation and evaluation for interested social institutions
comprises the elaboration and analysis of performance indicators used in the construction of reference
points (benchmarks). For example indicator of standards afferent to the institutional capacity, indicators
of standards for efficiency in education and indicators of standards for quality management. Also, from a
survey based analysis one can build classifications and hierarchy, one can elaborate legislation
concerning the quality of higher education and one can deduce measures to motivate institutions.
How do we evaluate? Evaluation is by means of questionnaires and the outcome is both
subjective data (perceptions and representations of students, teachers and employers regarding the
activities and results of the higher education system) and objective data about the input, process and
results of the educational system. The sensitive issue which causes difficulties and vulnerabilities in this
evaluation process is the institutional diversity (ARACIS).
In the context of a growing higher education system, the institutional diversity is a topical subject
at European level, concerning the how higher educational institutions answer the needs of students and of
other interested parties (business, social institutions, etc.) It is accepted that a higher education system
with diversified institutions is capable of satisfying the various needs of the potential beneficiaries and
increase the social competitiveness of a nation. This is why higher education is aiming at institutional
diversity a key factor in determining the performance of the system. In short, institutional diversity is the
variety of entities which compose the field of higher education. It should not be confused with
institutional differentiation a process by which new units emerge in higher education (van Vught, F.A.,
2007, Diversity and Differentiation in Higher Education Systems.Challenges for the Knowledge Society,
quoted in the bibliography 1)
Relevant forms of institutional diversity defined during the last years in the literature, which
allow a better understanding of the dynamics of higher education, are mainly the following:
systematic/systemic diversity (differences between the type of the institution and its dimension);
structural diversity (differences between universities, which result from the legal framework of operation,
traditions and internal organisation); diversity of programs ( defined by the types of cycles of academic
studies, fields of studies, the peculiarities of programs of studies in the sense of specializations etc.);
procedural diversity ( differences between universities form the point of view of teaching methods,
research methods and the way other such services are offered); diversity in reputation ( differences
between prestige and status of universities); components diversity (differences regarding students and
other groups which compose the universities); diversity of values (differences in the values promoted by
the universities). Other authors mention the diversity of financial sources and organisational diversity
(Reichhart 2009, cited in bibliography 1) or internal and external diversity and vertical and horizontal
diversity (Huisman and Teichler, cited in bibliography 1).
Because of the complexity of the above classification of institutional diversity one can ask if the
evaluation of the institution and of the teaching activity within the institution is relevant, if the evaluating
through questionnaires are homogeneous and ensure comparability. Of course, one may say that, since the
evaluation process is at its beginnings, the mimicry and isomorphism phenomena could solve the above
problem. Since the basis of the process is the statistical questionnaire another question arises, namely the
disparity of the used samples, does it allow for generalisation? The items in the questionnaires,
547

formulated through questions and representing indicators for quality evaluation, are they homogeneous
enough to allow for aggregation and sufficiently differentiated to ensure completeness?

4. Conclusion.
The evaluation of the quality of the academic activity is a relatively new process in the Romanian
society. It is being influenced and amplified by other social and economical processes specific for this
period. This is why it is important that the used evaluation tools are being correctly adapted to the
diversity of the field and that it is used in the spirit of its defining theoretical norms.

5. References:
- ARACIS Barometrul Calitii 2010 Starea calitii n nvmntul superior din Romania
(www.aracis.ro)
- Ctoiu I., - Tratat de Cercetri de Marketing, Ed. Uranus, Bucureti, 2009.
- Chelcea S., Metodologia cercetrii sociologice Metode cantitative i calitative,
Ed. Economic, Bucureti, 2004.
- Dorofte I., - Analiza i predicia performanelor umane, Ed. tiinific i Enciclopedic,
Bucureti, 1981.
- Le Bon, G., - Psihologia mulimilor, Ed. Anima, Bucureti, 1991.
- Simion D.M., - Activitatea profesorului din perspectiva studentului, Studiu de caz, 2004
- Zamfir C., Vlsceanu L. - Dicionar de sociologie, Ed. Babel, Bucureti, 1998.
- Zamfir C., Sociologia ntre universal i contextual. Criterii de evaluare a produciei sociologice.

548

RESEARCH FOR EVALUATING CUSTOMER SATISFACTION WITH THE QUALITY OF
AGRO-TOURISTIC SERVICES IN ROMANIA

Lecturer/Ph.D., Faculty of Touristic and Commercial Management, Dimitrie Cantemir Christian University,
Bucharest, Romania, degan_daniela@yahoo.com

ARON Georgiana
Assistant professor/Ph.D. student, Faculty of Touristic and Commercial Management, Dimitrie Cantemir
Christian University, Bucharest, Romania, georgiana_anghel1983@yahoo.com

Abstract: By the article named Research for evaluating customer satisfaction with the quality of agro-
touristic services in Romania we intended to bring to the readers attention the real solution to the current rural
tourism economy, subject to continuous transformation and challenged to live up to the demands of the modern
(agro-) tourist. The proposed solution presumes implementing two elements as a distinctive key algorithm of
obtaining competitive advantage, namely QUALITY by IDENTITY PRESERVATION. The main scope of the article
is to highlight the necessity of this algorithm for the Romanian agro-tourism, who finds itself in ceaseless self-
exploration and readjustment to the demands of the national and particularly of the European market. A necessity
deriving from the results of the research comprised in the hereby article.

Key words: quality, identity, competitive advantage, research, Qualitool.


1. Introduction
The article named Research for evaluating customer satisfaction with the quality of agro-
touristic services in Romania is structured in two main parts, as follows: 1. Summary regarding
respondents opinions and research results; 2. Qualitool - European skill development tool for quality in
agr-touristic services. The alternative presented to the Romanian agro-tourism, by comparison to the
existing recipes, is underpinned by a research (presented in the hereby article) evaluating customer
satisfaction with the quality of the agro-touristic services in Romania, having the North-Western part of
the Buzau County as investigation circumscription. The results of this research stood at the basis of
creating a strategic model of service quality in the Romanian agro-tourism, having as main strategic
objectives increasing the quality of agro-touristic services and expanding the identity elements
nationwide and across Europe.
1. Summary regarding respondents opinions and research results
The research is part of the European study called Rural Tourism Quality Survey, carried out
during 2009-2010, inside the QUALITOOL project (Transfer of Quality Ensurance Tools for European
Rural Tourism Sector, 2008-1-LV-LEO05-00125) and was performed on the North-Western part of the
Buzau County.
There have been 124 respondents to the questionnaire. The answers have been analysed
considering an age criterion, thus the next age groups have been identified and analysed: under 20,
21 to 30, 31 to 40, 41 to 50 and 51 to 65.
While analysing answers variation, as well as interpreting fluctuation in providing ratings by age
of respondents, Ive come to a set of conclusions, notes and also trends of the analysed domain.
For the first question How often do you choose agro-touristic guest houses for
accommodation? the next issues have been outlined:
- the older the respondent, the less are the stays in rural areas, in favour of extending the
duration of their stays;
- the younger the respondent, the more often are the rural holidays, but they are shorter than with
the older age groups;

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For the second question What is the reason of your trip? the most notable differences are:
the older the respondent, the more likely the trip is for rest and relaxation;
the younger the respondent, the more likely the trips tend to be associated with active holidays
thus the reasons of choosing rural tourism are fun and entertainment;
the average number of answers received from an age group is inversely proportional to their
age (the higher the respondents age, the less the number of associations and reversely).
The third question is How do you usually make bookings? I mention that irrespective of
the age group, respondents have proved to have preference for contacting the owner directly, with no
intermediates, this way of booking offering a better reliability compared to the proposed alternatives.
Other conclusions:
o the second most popular option, the Internet booking, is most popular with the 31-40 age group,
while its ratings depreciate with the respondents age exceeding this category;
o the other booking methods by ANTREC network, by visitor information centres, by travel
agencies and even holidays with no prior booking at all scored better as the respondents age increases.
Question no. 4 comes to fill up the third Which is your information source when choosing
a agro-touristic guest house in the North-West of Buzau County?. Here, Ive noticed a multitude of
trends among the options distribution:
the ratings obtained by the three basic sources of information the Internet, colleagues/friends
recommendations and personal experiences reach maximal values with the 21-30 age group, after which
they decrease gradually with the increase in the respondents age;
for 21-30, 31-40 and 41-50 age groups, Ive noticed a dominance of the information
sources mentioned above, sources that obtain marks over 4, while the rest of information sources are
behind the first options at differences between 0.5-1;
dividing the information sources into two distinct groups: the main 3 the Internet,
colleagues/friends recommendations and personal experiences constituting a group and the rest of the
sources constituting a second group this separation becomes less obvious with the increase in the
respondents age;
the ratings granted to the tourist guides increase directly proportional to the respondents age;
the first two age groups the young ones evaluate information sources similarly;
older respondents are more reserved in giving a positive evaluation to the informal and
possibly less impartial sources, most of them preferring to analyse themselves information gathered from
varied sources (from here also emerges the relative balance on the entire range of information sources).
The young seem to use printed materials or official sources (travel agencies, ANTREC network, visitor
information centres) in a much lower extent, preferring faster and more accessible information sources:
the Internet or recommendations. Youngsters do not prefer looking for information the traditional way,
such as visiting tourism information centres as long as they have an Internet connected device;
perspectives: the importance of the printed material will decrease, while the Internet, mouth-
to-mouth endorsement and first impression will be the relevance gaining factors;
another interesting aspect is that with the increase in age, the ratings granted to both personal
experiences and third party references become less important.
Questions 5 and 6 have been analysed altogether opinions received from respondents were
similar: they use their personal means of transport, with discontent to the road infrastructure of the area
(especially the road Ptrlagele Coli).
For question no. 7 When choosing a agro-touristic guest house in Buzau County, which
of the following aspects are relevant for making a decision? we can identify a pattern in the received
answers: unlike the young people, the elderly rely on and grant higher grades to concrete, measurable
options, which officially certify the qualitative classification of an accommodation unit (diverse
certifications such as eco, affiliation to a brand), while the subjectivity related to
references/recommendations of other customers makes this latter method lose importance in the eyes of
the elderly.
For question no. 9 When planning your holidays, how important are the following aspects
in choosing an agro-touristic guest house? the surroundings/attractive natural environment has been
ranked the most important by all age groups.
It is obvious that for question no. 8 Generally speaking, what makes you consider an
agro-touristic guest house to be reasonable as far as the price to quality ratio is concerned? the tourists
turn their attention mainly to an attractive natural environment, while the room and its equipment, as well
as easy booking, are considered to be relevant only by a part of the potential customers.
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For question no. 10 Upon arrival, what is important for defining a first impression? a
warm welcome stands for a positive first impression, out of the 9 available options. The next alternatives
are: truthfulness of the information about the agro-touristic guest house and proper maintenance of the
agr-touristic guest house and its equipment receive similar ratings, which show that the majority of the
age groups appreciate relevant and honestly conveyed information.
The significant elements that lead to a successful holiday for the tourists are still those
related to the human factor security and reliable staff. Obviously, for young people its very important
that the accommodation unit is close to the touristic sights and to the places where different recreational
activities take place, but this aspect loses importance as the tourists age increases. Once again it is proven
that the dimensions and the quality of the rooms are not essential components of a rural holiday:
hospitality, authenticity, gastronomy of the local area, contact with residents and life in the rural
environment, represent decisive aspects of an agro-tourism offer in general and of the agro-tourism of
Buzau County, in particular.
Upon return from their holidays, all age groups grant good ratings to pleasant memories factor.
It is possible that their second and third options are connected to these memories: the desire to come
back and the possibility to share pleasant experiences with friends. The average rating of the factor
sharing local happenings with friends is inversely proportional to the respondents age: the young
tourists will focus on keeping themselves updated the possibility of subscribing to an online means of
information about the guest house and about the surroundings which is unimportant for the elderly.

2. Qualitool European skill development tool for quality in rural tourism services
Qualitool is an online information and tuition tool for rural tourism operators, developed by the
European organisation Eurogites and represents a strategic option to be taken into consideration by the
Romanian rural tourism operators as a way of accomplishing the strategic objective of increasing the
quality in the rural tourism services. The implementation of this tool implies:
- developing an online application for monitoring the rural guest houses observance of the
Eurogites minimal quality standards: this application allows comparisons between the assessed guest
house and the Eurogites minimal international quality standards for rural accommodation. The standard
criteria are structured in 5 parts, which stand for: equipment 19 criteria; surroundings 9 criteria;
nearby accommodation services 9 criteria; intangible aspects (customer care, privacy or ambience) 7
criteria; security 9 criteria;
- creating an inspection handbook: this implies creating a pdf document which explains the
approach for assimilating and applying the standard criteria. The rural tourism operators will use it for
guidance, while the quality control agents will use it as reference during their onsite visits;
- creating the virtual tuition module: developing an online application which explains the
standard criteria by means of examples, comments and pictures of rural accommodation units.

3. Conclusions
Having in mind a saying expressed by UNWTO representatives at the first Rural Tourism
Congress held in 2011 at Alba-Iulia There cant be sustainability without quality and taking into
consideration that the rural tourism is listed among current MDTR concerns, as one of the six competitive
products of the Romanian tourism an option also expressed and assumed by the new country brand we
still have this authenticity, we do not show fake smiles, we offer authentic warmth and sincere
hospitality...its all about the tranquillity of the countryside life, I consider that this research and
consequently its communication reached their goal, revealing results that emphasize the need for
implementing the QUALITY by IDENTITY PRESERVATION algorithm or how can competitive
advantage be achieved in the Romanian rural tourism.

4. References
- Alecu, I.N.; Constantin, M. (2006) Agroturism i marketing agroturistic, CERES Publishing
House, Bucharest.
- Anghelache C. (2009) Romnia 2009 - Starea economic n profunzime, Economica Publishing
House, Bucharest.
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- Bcanu B. (2009) Managementul strategic n turism: concepte i studii de caz, Polirom
Publishing House, Iai.
- Nistoreanu, P.; Ghere, M. coordinators (2010) Turismul rural. Tratat, C.H.Beck Publishing
House, Bucharest.
- Nistoreanu, P.; Nistoreanu, V. (2006 ) Calitate competitivitate: competitivitatea prin calitate, in
the Amfiteatru Economic Magazine, 8
th
year, no. 20, pg.101-11.
- Stancu, D.G. (2009) Perspectives of the European Romanian village Methodological Model, in
the Metalurgia International Magazine (cod CNCSIS 480, ISSN 1582-2214), volume XIV, No. 8,
special issue.
- *** www.eurogites.org

552

RELATIONSHIP MARKETING, USEFUL IN INSURANCE SALES

STOFOR Ovidiu-I lie
Ph.D., Faculty of Economics and Business Administration, "Alexandru I oan Cuza" University, Iai, Romnia,
ovidiu.stofor@yahoo.com

Abstract: Insurance system in Romania is carried out with a constant natural activity, evolving quite
honorably these times. This is largely due to the difficulty with which insurance is sold in normal economic
conditions when it comes to prosperity. In other words, many Romanians see insurance as a product that "is not up
their alley" including it in the luxury category. Furthermore, the media shows, sometimes amplify certain cases of
doubt in relations between insurance company - customer. Appropriate marketing, allied with the information
technology can improve the complete relationship between the two entities - the offeror and the consumer.

Key words: life insurance, relationship marketing, consumer behavior, cognitive dissonance

JEL classification: M 31

1. Introduction
Current economic conditions and climate, urges caution on most fields, especially in terms of
individual properties, including, how somewhat forced, life and physical integrity which are still
considered property, if this aspect is not debated in terms of Christian or other religious dogma.
After the revolution, Romanians temptation was to invest money in securities that provide income
right away, so many were fooled and instead of earning profits, lost, perhaps their entire lifetime savings.
It is known that the Caritas era, but also the FNIs, brought people in a position to sell their homes or cars
to have the money invested. And these companies are just two examples of the temptations of quick
profit Romanians faced. And even if we have a proverb the saying that who burns himself with hot soup,
later blows into yogurt the desire for a rapid profit, it would determine Romanian, in a case of a new
emergence of such business, to stand in line again, again. An analogy can be the televised bingo games,
which have had great success in the late '90s; two years ago they have resumed such games, it is true, far
fewer followers.
Insurance, as savings instruments, implies the deposit of money involved, in reasonable amounts
over a long period of time, not for huge gains, but rather for safety. Almost every person I contacted,
when asked if they would choose between high gain and uncertainty, or win small but certain, chose the
second option; so they accept the concept of life insurance until they to hear the word insurance. Then
inexplicably, they step back.
Romanian mentality is hard to change, so hard work is needed from professional insurance agents
to make better understood the usefulness of these financial products.

2. Insurance usefulness
Life insurance plays a key role in managing risks in modern societies. It can provide income to
beneficiaries on an income earner's untimely death or loss of ability to work (SwissRe, 2012a, p. 31). The
immense destruction that fire (Realitatea.net, 2012) has caused to a local shopping center on small
business, caused the small business owners to directly or indirectly realize, how good it would have been
if they would have gotten insurance for their business. Their last tardy remark how they couldn't have
afforded to buy insurance has no foundation when they watched helplessly as what constituted their daily
livelihood was destroyed by a huge fire. Certainly, little effort (but still an effort) that they would have
made by insuring their business would been offset by the beneficial effects of compensation. That is why
once again, it justifies the claim that people purchase insurance for a future that due to unpredictability
generates uncertainty. There is that saying as we are too poor to afford us cheap stuff. As for many years
insurance was seen as a luxury item, which is not exactly true, this daring to afford a small luxury
would have provided a substantial financial reserve.

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3. Some aspects of the current situation
Worldwide, after a temporarry set-back in 2011, life insurance premiums will resume their
upward trend in 2012. Swiss Re (2012b) notes the defining elements of 2011 and outlook for 2012.

Table 1: A glance back and a look ahead at insurance in Eastern Europe
Performance 2011 Outlook 2012
Life - Premium growth slowed or even contracted in some
markets as their economic recovery lost momentum
towards the second half of 2011.
- Growth of premiums, however, remained strong in
Poland and Russia. In Russia, growth of consumer
credit probably supported related life insurance
products.
- Life business continued to derive support from
demand for short-term deposit-type and unit-linked
investment products.
- The Euro debt crisis and slowing economic
growth will limit life insurance premium growth
in the near term.
- Recent changes to the pension systems in Poland
and Hungary, where contributions to private
pensions have been cut or nationalized, should
help to raise awareness for private life insurance
savings instruments and protection.
- Low interest rates will continue to depress
investment income.
Non-
life
- Weakening economic growth and softening prices
took a toll on non-life premium growth in most
regional markets, with the exception of Poland and
Russia. Both markets had stronger domestic demand
for non-life business.
- Elsewhere, premiums remained weak or declined in
the first half of 2011.
- Underwriting profitability in the main markets
improved thanks to fewer natural catastrophe losses
(floods and droughts) and improved motor and
property
- Slowing economic growth will be the biggest
hurdle to non-life business growth in 2012.
- Premium growth in key markets, including
Poland and Russia, will likely slow. Elsewhere,
competition is expected to remain very strong.
Source: Extract from SwissRe (2012b, p. 34)

Interestingly, during the recession, people spend more time analyzing a decision about costs.
Among the things that help them decide and trust are fundamental processes of a company (Bate, 2008,
p. 81). The current crisis and potential future crises can cause humans to think about translating some of
the current financial situation, small but still existing, in the future it is likely to be even more difficult.
Irritating to a crisis is that, as highlighted by Keynes (1970, p. 320), replacing an upward trend with a
decreasing trend often occurs suddenly and violently, while replacing a downward trend of an upward
trend is marked, usually by sudden curve. This aspect is fully felt, currently.

4. Some considerations relating to insurance marketing
The market of insurance products has become such a big segment, that insurance marketing is
now a separate type of marketing with its own rules, targets, and strategies. The specific feature of
insurance marketing is that the insurance marketing products are very diverse, and each type needs
special approaches and marketing strategies to be used, suggests the site insurancemarketing123.org. The
insurance marketing strategies that are used for advertising insurance products are various, but all of them
prove to be effective, especially when used in combination. Apart from modern online strategies, there
exist more conventional ways like TV, radio, and print advertising, which are always effective, but at the
same time quite expensive.
Some experts (Desmeules, 2002) even talk about a "tyranny" of marketing and choice: the choice
increases, especially the options offered by game marketing strategies, the stress increases and consumers
and their satisfaction could decrease.

4.1. Relationship marketing in insurance sales
In insurance, the first component of the marketing mix decisions imposes requirements regarding
the products to be offered, services for these products, how to best present them (Constantinescu, 2004,
p. 489). It is envisaged that features related to insurance marketing services, in terms of product, a relative
separation of the delivery service (even more, if the insured risk does not occur, the performance does not
takes place, generating the so called insurance paradox, explained below). Thus, the definition of
insurance is based on the consumer and not by means of the insurer.
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Price, in insurance, the second component of the marketing mix, makes references to the basic
price of the product and price changes. The price the customer pays to take over its risks by an insurance
company is called premium.
Placing insurance products involves the client getting to the insurance company or consultants to
prospect client, thru the classic or technical means - the Internet. When it comes to choosing marketing
strategies for your business, the possibilities offered by the Internet can not be neglected, and insurance
marketing is not an exception (insurancemarketing123.org). Actual distribution methods which can be
chosen by a provider are direct sales and / or selling through intermediaries (Zai, 2004, p. 57).
Most marketing efforts of most insurance companies are focused on promoting component.
Promoting insurance products is through personal presentations, special promotional activities,
advertising and public relations. Promoting insurance is sometimes tricky, since it involves the
particularity of these products which is substantial amounts of money that the individual invests and
whose effects may not be seen, as sometimes the insured risk does not happen, such as the non-life
products. Moreover, in this area we find the so-called paradox of insurance: that person enjoys losing
some money, in that, if the insured risk does not happen, the money paid does not come back in any form
to the client; any monies that the customer could benefit from it would be for not so pleasant situations. If
almost all economic areas used classic marketing as method of approach, emphasizing the need for the
company to earn, more and more companies from different industries are moving towards marketing
based on customer relationship; it is almost always used in the insurance industry. In the table below it is
shown a parallel between the two types of marketing, in terms of customer relationships.

Table 2 Parallel between transactional and relationship marketing
Transactional Marketing Relationship Marketing
The goal: to get a sale The goal: to get a customer
Emphasis is placed on a single transaction The focus is on ensuring a good relationship and
retention of buyers
The sale represents the final point in the relationship
with a client
Thesale marks the beginning of the relationship with a
client
Focus on achieving a certain level of sales Focus on repeat sales
Short-term thinking and action Long-term thinking and action
Focus on product features Orientation to the benefits of a product
Products and resources determine the marketing
activities
Relations determine marketing activities
Emphasis on persuasion to buy Focus on creating a positive customer relationship
Moderate contact with clients Maximum contact with clients
Anonymous client Familiar customer: name, address, lifestyle, product life
cycle
Unilateral communication Bilateral communication
Buyers and sellers are independent of each other Buyers and sellers are dependent on each other
Anonymous clients, won through a carefully planned
environment
Familiar clients
Customer buys values Customer creates values
Implementation tasks: product (mass production) Task to execute: service (mass "customerization")
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Transactional Marketing Relationship Marketing
Self oriented attitude Orientation type "us"
The need to win, trying to handle customer Providing extra services, reliability
Cost + profit = price Price - profit = cost
Stress and conflict in obtaining a transaction Partnership, collaboration to minimize grievances and
building long term relationships.
Company resource exploration with a market
orientation
Company resource exploration with a customer
orientation
Undifferentiated marketing Personalized marketing
Source: Processing by Zai, Anton, Olaru (2006, p. 26); Mitu (2006, p. 231); Wehrli (1994) cited in
Zollondz (2007, p.83)

Policy of insurance companies operate, in a rational mode, by the principle of understand and
respond rule that currently is good for other many companies with other business objects, where long has
prevailed the paradigm manufacture and sell - estimating market demand, production planning and
building stocks to ensure a balance between supply and demand. So, according to Kotler, Jain and
Maesincee (2009, pp. 22-23), which invites customers to define the general needs and even choose the
exact attributes of the goods they want, some activities conducted in response to commands received and
use digital technology to quickly meet your order. The same authors consider that those companies which
apply the "understand and answer" are superior to the other, with a number of advantages (Tapscot, Lowy
and Ticoll, eds., 1998; Bradley and Nolan, 1998 cited in Kotler, Jain and Maesincee, 2009, p 23):
- stimulates more original products,
- technically superior products out faster
- organize their activity more according to the customer and meet customer needs more closely,
- have a higher profitability.
The relationship with the customer generated by insurance marketing approach, involves other
components of marketing: direct marketing advertising perceived as any activity that creates and uses a
direct relationship between the seller and the actual or virtual client as an individual (Bird, 2007, p. 36).
Marketing is not the art of selling. It is not simply to convince someone to buy. The art of
creating conditions in which the buyer is self convinced (Mackay, 2001, p. 38). Persuasion is important to
realize that.

4.2. Aspects of professional selling
Schiffman (2011, p. 36) remarks that any sale may be divided into four stages: prospecting,
interview, presentation and selling. According to relationship marketing concept, we can talk about a fifth
step: service. The interview involves, initially, a free discussion small talk to make the transfer of trust
and enthusiasm of consultant to potential clients and identify needs vital sales process.
Prospecting, building a contact list or, as Romanians like to call it, a database (in plain language,
a simple table is already elevated to the level of a database, it is certainly not wrong, but seems too
pretentious phrase for it), is the most valuable step in achieving professional sales. No matter how good
the vendor, if no appropriate market or, worse, if there is no one to sell to, he won't last too long in this
field. Therefore, the collection of names, and also their association with other aspects that define a person,
can provide a solid foundation for success in sales. It is better to allocate enough time for it. In fact,
Gitomer (2006a, pp.174-175)

argues that the time one must dedicate to establish contact network should
be directly proportional to the number of relationships that he seeks to increase and the number of clients
with whom, he wants to build friendly relationships. He emphasizes that contact network results do not
happen very soon. The best results will appear after a constant is established and he will provide value.
The collection of potential customers is not confined simply to note it somewhere, but to interact even
with many of them, even before it comes to approaching them. A solid record all the details you provide
an efficient solution approach.
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Identification of a potential customer's needs will help the consultant to formulate an effective
offer, bringing it in an ideal situation to talk only about the features and benefits that may interest the
customer (Denny, 2002, p. 87).
Assuming that the one who asks is the one who leads the discussion, we can say that questions
are part of the most powerful tools of language (Klein and Kolb, 2009, p. 45), causing the discussion
partner to react to impulses transmitted by us. The right questions can cause him to rethink his views.
How to address the question is very important, both to obtain information necessary shaping a solution,
but also to easier make the buyer aware of the importance of that aspect. Striking example is given by Zig
Ziglar (2010, p.80), was the famous Henry Ford who purchased a huge insurance policy. A close friend of
him who worked in the insurance industry, was very upset that he did not buy from him. When asked,
Ford simply answered: you did not ask me to.
During an interaction with a client, using a support of retention of certain important aspects
(desirable is that this support is a piece of paper, other means of recording audio and video could create
discomfort) increase the chances of achieving a professional discussion.
Schiffman (2011, pp. 36-37) suggests that taking notes helps sales consultant to retain the
potential customer needs and to improve presentation. Even claims that having always a pad and pen,
these tools helps to build the solid professional relationship. Furthermore, he seems upset by the fact that
many sellers fail to use this basic tool - notes.
It combines the information written in this way with the information about potential customer,
already existent in electronic format; it would be nice for this information to be stored electronically,
human memory is volatile, sheets can be easily lost, but the computer offers the possibility that
information stored can be easily analyzed. This will get as accurate profile of that person, learning as
many details as possible. The film about wealthy Greek, Aristotle Onassis, the main character, when
asked who would be the secret of his success, said he had a notebook in which he writes every detail. In
fact, in everyday life, we often use the phrase: who owns the information, controls the situation. So the
database is, after the fashionable phrase, a must have of every sales person and making it easer in
processing it in electronic format, and obtaining useful information.
Presentation of solutions determines the sales specialist to try to provoke a cognitive response, an
emotional or behavioral one (Kotler, 2005, p. 751), trying to penetrate the consumer's mind slowly, to
change consumer attitudes, respectively, to induce the consumer to take action. An overview of
hierarchical models of reaction for the reaction process steps taken by the consumer is presented in the
following figure.

Figure 1: Hierarchical models of reaction

Source: Kotler and Keller, 2006, p. 540

AIDA model (Brassington; Pettitt, 2006, p. 643) presented in 1925 in Journal of Applied
Psychology, by E.K Strong, is the most popular in insurance sales. A person's interest can be generated
557

if he is offered something new and unusual (Carnegie, 2007, p. 164) from what was known to him at that
time.
To say Yes, to express consent in making or buying something, means for a client, in a way, a
denial that opposes to his psychological substance (cvasigenetic) (Py, 2004, p. 16); because he was
brought up in the idea of refusal, retention, restriction, as though his desires are very limited. Sale
professional will increase the desires by highlighting the needs that the customer has.
Referring to what Bill Quain said, that sales through recommendation may be considered the
strongest form of advertising, without spending money on expensive advertising posters and expensive
commercials, we conclude that a satisfied client recommends another client to the consultant (Quain,
2002, p. 13).
Studies (Levinson, 2006, p. 55) have shown that a satisfied customer will tell only to a single
person what a wonderful job the seller did, while each time, when a customer is dissatisfied will
complain, on average to nine other people.
Extremely important is the last stage of a full cycle of sale: service - one that will help maintain
customer relationships. It is very easy to lose a customer and keeping him is pretty hard. It is
recommended to make at least quarterly meetings to learn how customer expectations are met, and
weekly communication with them, not about vendor-customer relationship issues, but about different
issues that could sediment a relationship. Gitomer (2006a, p.175) believes rightly that once a client is lost,
the cost to regain him is much higher than the investment to keep him. Therefore, the cost of keeping the
client is small to that of finding a new one, so that, as understood by Jay Conrad Levinson (2006, p. 53),
father of guerrilla marketing concept, good customer service can be considered as an investment.

4.3. Sales and sellers
Selling is a difficult process of communication that appeals to many psychological mechanisms,
technical, relational, economic (Corcos, 2008, p. 10). The sale involves creating a set of solutions to meet
the needs and desires of people, because human behavior is dictated by the conscious mind's side (Hogan,
2006, p. 244).
A professional seller does not give anyone the impression that he is pushing, simply because he
never really does use pressure (Hopkins, 2005, p. 73). As remarked by Frank Bettger (2003, p. 152), one
of the most famous agents, according to a survey, one of the reasons why salespeople lose sales is that
they talk too much. Hopkins (2005, p 66) states that although insurance, one of the fantastic services that
can be sold, are useful, after the advertising of this product made in the last century, it is amazing that the
average person doesn't knows that he needs insurance. The main reason he does not know is that he has
never met a professional insurance vendor. So to the professionalism of the insurance consultant depends
the need for financial protection, regarded as a latent need, to become a obvious need; or if we were to
talk almost pleonastic, to talk about life insurance as a necessary need.
It's good to remember that, in general, because customers buy due to the person who sells
(Gitomer, 2006b, p. 57), a rapid professionalization will not generate customer losses in the first few
meetings. The extras offered by information can raise him to such a status, especially because, as Brian
Tracy (2008b, p. 74) says, people are hypersensitive in the first days and weeks in a new job and they are
very receptive to constructive influences.

4.4. Need - essential component of insurance customer's motivation
Any company, regardless of size, is to gain understanding how and why consumers decide to buy.
Misunderstanding motivations, needs and preferences of customers can have serious repercussions.
Customer needs are of two types (Kotler, Jain and Maesincee, 2009, p. 57) - existing needs and
latent needs. Existing needs are those that currently customers have and they can express. Latent needs
are those that customers can not express or the ones they think can not be satisfied. Latent needs are the
category the insurance often falls into, especially life insurance.
When the customer agrees to purchase a product or service they actually expresses confidence
that we will provide solutions that will meet their needs (Carnegie, 2008, p. 250).
Insurance companies are responding to particular needs of the consumer, since the customer of an
insurance company is not just looking at a payment amount (premium) but also more favorable terms, the
guarantee of compensation, promptness in case of an accident. These additional attribute are often more
important than basic service and are essential for differentiation of an offer (Zai, 2004, p. 162).
Although most insurance agents focus only on the logical benefit or business benefit, however,
emotional or personal benefit can be and often is more powerful and more convincing (Harvey, 2007,
558

p. 33). Even we can say with confidence that people seldomly buy based on logic (Hopkins, 2005, p. 87).
In any kind of shopping experience is possible to identify two components: a technical performance
related to itself and a relational component consisting of human report (directly or indirectly, temporarily
or long term) which is installed between buyer and seller (Trevisani, 2007, p. 246).
Figure 2: Consonances and dissonances of the product

Source: Trevisani, 2007, p. 147

4.5. Insurance consumer behavior
Customers today are different from each other more special, more discerning and demanding than
before (Fisk, 2008, p. 178). It is becoming increasingly difficult to characterize and structure types of
behavior from individual consumers, complex and hard to please. And yet, there are two major trends:
cautious behavior and "wasteful" conduct (Corcos, 2008, p. 14). Obviously, the second is easier to
determine to invest in insurance, the first category are specific rational customers, too attentive to their
budget, counting for them is the relationship between quality and price.
The definition of a good potential customer is: a person who can buy and pay in a reasonable
amount of time, and will do so (Tracy, 2008a, p. 113).
Currently, there is no comprehensive understanding of consumer behavior and motivations,
especially real consumer adoption of certain practices, although in this area, many years of studies have
already accumulated, observations and methodical research (Sima, 2009, p. 129).
To quote Philip Kotler (2005, p. 233), to understand consumer behavior and to know your
customer is never easy. There are clients that say one and do another. There are customers who do not
know their deep motivations that are influenced and change their minds at the last minute. However,
quoting Peter Drucker, successful sales slogan is being together with the customer (Zollondz, 2007,
p. 81).
Often, people do something, if they notice that others have done it. Nothing is more convincing
than the evidence that others want the same thing.
The principle of social proof (Cialdini, 2004, pp. 149-151) argues that one of the means which
can be used to determine what is correct is to find out what other people think it's fair. The principle
applies especially telling how that behavior is correct. Man perceives a behavior as correct in a given
situation as far as he sees others that progress the same way. Salespeople are taught to press presentations
with many stories of people who have already bought the product. Cavett Robert, sales consultant and
motivation problems, says even that, because 95% of people are imitators and only 5% innovators, people
are easily convinced by the actions of others than by any other evidence that we can offer (Cialdini, 2004,
p. 151).
The principle of social proof can generate pluralistic ignorance (Cialdini, 2004, pp. 164, 169):
group reaction ignoring what they feel. Based on the principle of social proof and pluralistic ignorance,
the marketing term copycat marketing (Hedges, 2007, p. 21), which states that the people copy each other
or duplicate each other, assuming that they imitate those we have the correct answer.
Selective distortion (Kotler and Armstrong, 2008, p. 203) refers to the tendency for people to
interpret information received, in a way to confirm what they already believe. So, sometimes differences
between the data and discussion of the contract of sale appear, resulting from incorrect or distorted
presentation of policy conditions determining the customers to be feeling like stated by the proverb: I
painted the outside fence, inside is the leopard.
Value occurs near the increased appreciation, positive affect and even identification with the
product. With increasing distance value disinterest phenomenon first appears, then contempt, to actively
boycott products in terms of their political and cultural significance.
Cognitive dissonance that comes from a defense mechanism of the individual (Zai, 2004, p. 43),
forcing him to only accept services or ideas that come in line with his past opinions and behavior. It is
therefore important to maintain as close of a relationship with the client, to argue when it comes to
customer's question Have I made a good deal? for the cognitive dissonance is installed at the
acquisition of product/service. The main point of acquisition related to consumer satisfaction is
559

characterized by post-purchase behavior. It is more known for a vendor that provides expensive or risky
products to experience a post-sale dissatisfaction (Hatton, 2008, p. 210). This is very likely to occur if he
is selling a new idea or selling of a change strategy. This is the dissatisfaction that occurs when the buyer
has enough time to reflect the decision.
Before carrying out a purchase, it is necessary that the product/service which is the object of his
desire to be perceived as positive psychological horizon of the client. Daniele Trevisani (2007, p. 38)
revealed three distinct properties that emerged from research, summarized as follows:
- product has the ability to prevent problems that are already subject to confront,
- product helps to maintain positive cases.
- product exerts its actions to annihilate a potential threat, to deterring or preventing it.

5. The Internet as insurance sales support
Returning to the Internet, particularly for general insurance products, online insurance begins to
gain ground. Distribution of insurance products has evolved significantly. Technological developments,
the Internet and mobile phones have opened new distribution tap for insurers developing multi-channel
strategy (Comit Europen des Assurances Insurers of Europe, 2009, p. 12). Adaptation stages and sale,
of course difficult to accurately achieve, can increase the chances of efficient distribution.
Prediction made in December 1995 by Robert Metcalfe, Ethernet inventor, that the Internet will
grow dramatically as a supernova and in 1996 will catastrophically collapse was not achieved either in
1996, nor today , and is very unlikely that they will do in the near future (Anastasiei, 2006, p. 51).
Although, when considering the warnings cautions in working with the Internet, given even by those from
the FBI (Capital.ro).
If warnings or prophecies more or less apocalyptic will happen, remains to be seen; until then, the
Internet has a major role in peoples lives, more important than hardware and software on which they are
based. Rumbauskas Jr. (2012, p. 95) is convincing when he says the Internet is both extremely powerful
sales tool and a generator of advertising, noting that one of the biggest mistakes made by sales people is a
failure to accept the Internet and recognize and use its enormous capacity to identify potential customers. He
recommended (Rumbauskas Jr., 2012, p. 97) each salesperson to make a site for two purposes, in regards to
the visit of a customer on his website:
- providing information to the customer, to design and consolidate credibility;
- retaining the name and email address of potential client.
Electronic communications allow the Internet to build relationships personally with potential clients
and the real ones and the guidance of messages to individual users based on information on geographical
features, content, buying behaviors and demographic or firmographic characteristics (Stone and Jacobs,
2004, p. 275).
Making of orders and purchases via the Internet is becoming more attractive as consumers can be
offered significant advantages due (Militaru, 2004, p. 197) to: lower prices, showing the range of
goods/service, convenience, entertainment.
E-mail has developed a reputation as less formal than other written communication in business and
the level of formality continues to decline. In fact, it even became a substitute for speech (Sherman, 2005,
p. 151). People seem to no longer worry about spelling, thus abbreviations abound. Grammar is also
affected, not to mention capitalization. We can consider that e-mail is somewhere between a substitute for
speech and a substitute composition of letters. It's important to remember that e-mails without grammar or
spelling mistakes are easier to read and allow quick understanding. Good writing depends on four factors
(Grisham and Lee, 2000, p. 61): thinking (that aims to write), legibility (clarity of writing), accuracy
(spelling and grammar) and tone (how to choose the writing style, adapting it to the person to whom we are
writing).
Prospecting using e-mail offers certain advantages: low cost, no shipping delays, the ability to
track messages (whether or not read), provides extensive creative possibilities (Aguilar, 2008, p. 74).
Some people see in this modern technology, one of the greatest inventions of man but also one of the
biggest sources of wasted time, if not used rationally. Richard Denny (2002, p. 56), one of the experts in
sales, explained the situation to a customer who returned from vacation a week, 468 messages found for
reading that, it took 22 hours, after which he realized that only three have been helpful. Another
disadvantage of email is that companies without a good security policy, without judicious planning of its
use has generated lawsuits challenging the discrimination to sexual abuse of trust, e-mail can even be
easily faked or forged (Lilley, 2008, p. 126).
560

Information technology supports all types of organizations to increase efficiency and
effectiveness of business processes, performance in making decisions and cooperation in working groups,
resulting in strengthening their competitive position in a highly volatile market (Hurbean, 2008, p. 11).
Computers help insurers to calculate insurance prices rapidly, to fill in agreements and insurance
policies, to highlight data, to confirm the insurance agreements validity. Besides, computers hold book
keeping and technical-operative accounts. The consequences can only be benefic: efficiency in data
gathering, complex documentation database, on-line intercommunication system, web site insurance
offers, the possibility of an on-line insurance and documentation via Internet.

6. Conclusions
Insurance sales are a daily challenge for those working in this field both in terms of their financial
advantages, especially in terms of utility they have on customers. Romanian mentality is hard to change,
so hard work is needed from professional insurance agents to make better understood the usefulness of
these financial products. In the insurance sales work, very important is to establish a network of
knowledge (developing relationship with other people). Relational marketing plans to develop and
strengthen relationships with existing customers, but also with potential customers
Information technologies are more than necessary, although many consultants are still old
school based strictly on their flair. However using modern technology increases efficiency, especially in
the early career of consultant time, the difficulty of this activity, leads many to step back. Customer is
given the feeling of greater certainty in regards to his investment, with real-time access to information.

7. Acknowledgements
This paper appeared with the financial support under the project POSDRU/89/1.5/S/49944
Dezvoltarea capacitii de inovare i creterea impactului cercetrii prin programe post-doctorale
(Developing the Innovation Capacity and Improving the Impact of Research through Post-doctoral
Programmes), funded through Programul Operaional Sectorial Dezvoltarea Resurselor Umane (Human
Resources Development Operational Programme), in affiliation with Alexandru Ioan Cuza University of
Iai.

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563

TOURISM MARKETING
KEY CONCEPT OF TOURISM IN A WORLD OF GLOBALIZATION

STOI CA Ana-Maria
Ph.D. student, The Faculty of Marketing, Academy of Economic Studies, Bucharest, Romania,
anasta84@yahoo.com

CREOIU Raluca Ionela
Ph.D. student, The Faculty of Marketing and I nternational Economic Business, "Spiru Haret." University,
Bucharest, Romania, raluca.cretoiu@yahoo.com

Abstract: The latest trends in tourism emphasize the power of the globalized tourist-consumer, in the
context of mondialisation of the market and of the diversity of tourism services, the tourism organizations must
answer to a range of different tourism motivations meant to meet the needs and wishes of the tourism consumers
over the period they travel for.
Tourism marketing is a result of globalization, since, just like the globalization process, it creates links
between the states of the world, the authorized touristic organizations making efforts to provide maximum
satisfaction to the tourists and implicitly, to maximize their profit.

Key words: consumer, globalization, marketing, tourism

JEL classification: M39, F00, M31, Z19

1. Introduction
During the last decades, tourism has become an important branch of national and global
economies; this fact has led to a significant expansion of the touristic market, translated into an increase
of touristic consumption and production. This phenomenon named globalization means the process of
extending and deepening the interhuman relationships among the states of the world, eliminating the
borders of commerce, in the information and technology exchange; its result is the globalized individual,
concentrating on consumption and production. Moreover, there are countries in the world, such as Egypt,
Turkey, Greece, etc., where tourism has known a spectacular growth, making a substantial contribution to
the GNP of the countries concerned. It is obvious that the features of the tourism industry are specific to
the countries there being a time and space distance between the participants to the sale process, as they
have a local character, whose identification and emphasis is conditions by the given location. In this
context, marketing becomes integrated into the touristic activities, by adjusting the instruments to the
specific activities deployed, and by understanding the importance of marketing as a science and art of
respectful and advantageous relationships in the touristic field. The application of marketing in the
tourism industry is marked by a more and more fierce competition, as well as by the specificities of the
services provided. Nowadays, due to its evolution over time, tourism marketing is considered one of the
most dynamic and innovative fields.

2. Marketing vs Globalization
Knowing and applying the basic theoretical concepts of tourism marketing is justified, on the one
hand, by the important role that tourism marketing plays in the economic growth of the countries, and, on
the other hand, by the distinctive features that this sector presents, as compared to the tertiary and the
secondary sectors of economy.
Tourism marketing is a result of globalization, since, just like the globalization process, it creates
links between the states of the world, the authorized touristic organizations making efforts to provide
maximum satisfaction to the tourists and implicitly, to maximize their profit. The cultural effects of
globalization have a positive impact upon tourism marketing, since culture helps people get to know one
another better, be united and sympathize with one another.
Globalization has reduced the sense of isolation felt in much of the developing world and has
given many people in the developing countries access to knowledge well beyond the reach of even the
wealthiest in any country a century ago. ( Stiglitz E. Joseph, 2003, p. 31)
564

The free movement of people meaning that tourism in itself, as well as the development of the
commerce, i.e. the exchange of products has been one of the basic pillars of globalization.
Globalization has turned tourism from a seasonal activity into an activity based on needs.
Through the range of supply, the tourism market has become a purchasers market. The latest trends in
tourism emphasize the power of the globalized tourist-consumer, in the context of mundialization of the
market and of the diversity of tourism services, the tourism organizations must answer to a range of
different tourism motivations meant to meet the needs and wishes of the tourism consumers over the
period they travel for. The service providers in the field of tourism are focused on the continuous
improvement of the quality level of services and the development of niche tourism. The latter offers a set
of unique experiences for the globalized tourist willing to discover, explore the world and get to know
new cultures. As an individual, their mind is in constant action, in a process of continuous innovation,
constantly adapting and finding ways to solve practical problems in the area. Due to the complexity of the
supply, the purchaser is made to choose the way which is compliance most both to the personal needs and
the financial resources they hold and warrant for a five-star stay. In this context, it is necessary for the
potential customers to be bombarded with more and more information in order to have a final decision.
An important contribution to the tourism activity has the individual, starting with the quality of
providers and going to their quality of beneficiary. In this context, between the two situations there is a
reciprocal conditional relation, on the one hand there is the wish to maximize the profit offering quality
services with the view to meeting the customers needs and to keep a competitive markets and, on the
other hand, the consumer feels the need for a high standard of product quality for the best price.
Within the purchase and sale process, the tourism services may be rendered directly, necessarily
achieved at the point of interaction between the supplier provider customer or indirectly, through
creating and effectively trading, by means of travel agencies, customized tourism services packages to
match the interest of the consumer-tourist and their objects, upon their request, in other words, tourism
services are specific at the level of groups of tourists or at the level of each tourist.
If, at present, the tourism marketing had as object the discovery of potential customers, from now
on, they emphasize the education of already existing customers. Pursuant to the globalization, both
though the easy access to information and the improvement of the communication process, the tourism
marketing becomes global, adjusting to the needs of each customer separately. Nowadays, the originality
is more and more emphasized, as well as the need to discover and less on the research of the essence in
itself. At the same time, there is a trend to the development of the human relations and the return to
culture, and to the village life where there is still interest for folklore, customs, traditions, reason why the
tourism marketing has the chance to develop and evolve in time. The conclusion resulting from this
assertion would be that tourism plays an important part both in maintaining the originality of the tourist
and in maintaining authenticity and tradition. Among the features of tourism globalization, we can name
the following:
- areas with tourism potential cannot become tourism destinations but with the help of specialized
bodies promoting such areas, to be modernized and meet the requirements of the European
Union;
- global tourism is the product of developed countries, most tourists coming from such areas
- tourism at the global level tends to an accelerated level of growth as compared to the traditional
one
- the number of tourists is ever growing, which is why the supply is more and more diverse and the
tourism destinations prepared to meet them
In a world of continuous change, the globalized consumer has a series of traits distinguishing the
traditional consumer :
- the modern consumer of the present times is much more open to the new and very careful to the
features of tourism products and services, especially; an important and special impact has the
large volume of information which may be accessed, having the possibility of selecting services
meeting their needs and wishes.
- the consumer, before purchasing a product or a service, is already aware of it, thus avoiding the
unpleasant experience in contacting the product. An important role as far as the relationship
between the consumer and the supplier holds their direct communication. Insufficient
communication may have negative repercussions on the organization, since the consumer will
search for information from different sources, information which may be twisted, so the image of
the organization is affected. (Geangu I.P., Creoiu R., Grdan D.A., 2011, p. 74-75)
565

- pursuant to the market surveys, the consumer has their own contribution to the design of a new
product or service, becoming thus a loyal customer.
- he globalized consumer is actually the one holding an average income or even superior one, is
open to new and does not have enough time. He does not care about the price of the product or
the service but for its quality, which weighs the most in fixing the price.
The topic regarding travelling services revealed a pretty similar opinion young users spend a lot
of time searching proper touristic offers over the internet and dont mind at all if a certain travel agency
sends them constant messages with latest offers and promotional holiday packages. Also due to the latest
explosion of multiple applications that combine GPS tracking with internet touristic databases and user
control interface similar to mail accounts, many of the young consumers are using this type of
applications not only to search touristical informations but to share travel experiences and places
descriptions with friends. There was a single romanian travel agency that have had a mobile marketing
specific effort: Para lela 45. For now only some agencies send newsletters that can be read with mobile
devices and only one Romanian travel agency is positioned on the market being especially online based
ticketing - VelTravel. (Grdan D. A., Geangu I.P., Rou A.M., 2011, p. 231)
The main activities carried within a tourism company are influenced by the variable importance
on the market which must be emphasized, i.e. the capacity to communicate both with the internal
environment and the external environment of the market. The achievement of an efficient communication
at the level of the tourism markets results in the consolidation of trust, the provision of a sustainable,
intense and interactive relation of the public, between the consumer and the company and its public.
Regarded from a comprehensive point of view, the marketing communication is a basic component of
success and of the development of the activity of the tourism company, by means of which the consumer
and the public receive and send complete, clear and comprehensive information on the features of the
products and services, on the events the company is involved in, trade mark, etc. It characterizes the
tourism product as a trustworthy product. Hence, a tourism product orbits around the success if not
forgotten by the consumer and, particularly, if they send information among the people they know.
When all the members making up the tourism market are aware of the market and the product,
loyalty is attempted at. In the area of tourism, there is the invisible character of the tourism product
which cannot be experimented and that is why the consumers attempt to return to purchase more and
remain loyal to the brands they know offering trust, in order to avoid any risk as far as the quality of the
tourism services.
When deciding between different alternatives offered on the market, the consumers will choose
the best drawn image on the market, forming in the mind of the potential consumer with the help of
information provided in the market, by the providers of tourism services, because a little bit of image is
worth (adeseori-n.n.) a ton of performing qualities (Bucur-Sabo, 2006, p. 11), but it all makes sense in
the context of dismantling and of the last obstacle, the need for maximum satisfaction. The decision
making process in case of the consumption of tourism products is presented as an indirect ratio especially
based on the image given by the bearers of the tourism offers, the direct contact with the tourism offer
takes place upon the consumption. The purchase of a tourism product is based on rational and emotional
arguments at the level of thinking of each consumer, considering the image and the total knowledge
acquired from personal experience. Thus, the consumer may decide independently from the purchasers
decision to by a tourism product. In the mentality of the consumers of tourism products, an essential role
is played by the tourism offer perceived as a series of positive or negative images similar to a table
containing information received directly or indirectly from the market. In other words, the decision of
tourism consumption may be passed in relation to the created image.
Thus, on the route of promotional actions, from the product to the consumer through the
tourism market, it is necessary to build a relationship focused on the formation and development of the
communication capacity. Thus, due to the complex character of the marketing communication activity, in
its development, an important part is played by the attraction of new customers and the retention of the
existing ones through sending a continuous message for the information of the potential customers, to the
target public and the tourism operators as far as the detail knowledge of the characteristics of the
marketed products, with the view to creating and maintaining a favourable image on the market for the
company and its products. In other words, a favourable attitude from the company activity results in the
reflection of its image, thus causing a series of modifications in the tourists purchase mentality and
traditions.
566

In the tourism industry, the marketing of the tourism product is based o the image formed in the
mind of the consumer with the help of information provided on the market by the tourism services
providers through brochures, catalogues, leaflets, online offers, video recordings, albums, etc. In
principle, it is considered that the mage includes the quality of the offered products and services, the
accuracy, the promptness and the elegance, not deviating from common sense, taste and respect for what
it seen, outlining the teamwork and respect for beauty and tradition.

3. Conclusions
The contour of notions and of the main components related to the tourism industry, i.e. tourism
marketing at the national level, on the conditions of the development and of the modernization of a
sustainable market economy and the evolution of the tourism. In an information-based company, the
globalization of the economy and the scientific research in the field of tourism must make an important
approach towards the comprehension of the message sent on the market where the image is the
communication vector allowing for the generation of knowledge on the technological innovation and
development.

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- Nita, I.; Nita, C. (2008) Piaa turistic a Romniei. Realiti. Mecanisme. Tendine, ediia a II-a,
Editura Economic, Bucureti.
- Stiglitz E. ; Joseph, (2003) Globalizarea. Sperane i deziluzii, Editura Economic, Bucureti,
p.31.

567

NEW TECHNOLOGIES SHAPING THE E-COMMERCE ENVIRONMENT

STOI CA Eduard
Teaching Assistant / Ph.D. student, Faculty of Economic Sciences,
"Lucian Blaga" University of Sibiu, Romania, e-mail: eduard.stoica@ulbsibiu.ro

BROTE I oan Victor
Ph.D. student, Faculty of Engineering/Department of Computer and Electrical Engineering,
Lucian Blaga University, Sibiu, Romania, e-mail: victor.brote@ulbsibiu.ro

Abstract: The rapid growth of new technologies brings forth advances in speeds and the capabilities of
both wireless devices and networks, determines continuous increase in customer expectations and forces e-
Commerce companies to acknowledge customers as their most important asset. User-customization is increasingly
common in electronic commerce while future speculation of mobile commerce benefits could generate more revenue
to a wide range of industries.

Key words: broadband, e-commerce, enterprise, mobile, technology

JEL classification: O33, L81

1. Introduction
Customer Lifetime Value (CLV) models are usually used in the field of conventional marketing
to evaluate the lifetime value of customers in conventional businesses, but new adaptive models could
provide online marketing the necessary and unique methods for maximizing revenue in e-Commerce
sites. However the model is designed and whatever the methods, customer behavior and customer value
prediction techniques are highly relevant.
As a low-cost and flexible technology, web services present significant potential for the online
industry by enabling, in the long term, development of on-demand business processes that may
revolutionize e-commerce. Madhusudan (2005). The highly dynamic nature and the openness of the
environment, while imposing major requirements on a web service, determines an increasing demand for
web applications and sustains a continuous growth in worldwide adoption of commercial applications. E-
Commerce companies must realize the importance of being able to measure the value of their web
customers; the ability to accurately predict the value of a companys customers has a large impact on the
ability to intelligently influence business process policies and IT related decisions and might prove a
decisive advantage in achieving competitive gains over other market players. Etzion, Fisher, Wasserkrug
(2005)

2. Online ordering
It is of the utmost importance for enterprises to be visible on the Internet. In 2011, seven out of
ten enterprises in the EU27 had a Website or a Homepage, but only two of which had one that allowed
online ordering, reservation or booking options available. The highest percentage of enterprises offering
"shopping cart" functionality and software on an online shop was for enterprises in "Travel agency, tour
operator reservation service and related activities" (58%), followed by enterprises in the
"Accommodation, food and beverage service activities" (35%), while 12% of all enterprises in the EU27
conducted sales via a website. Giannkouris, Smihily, Eurostat, Statistics in Focus 65/2011 (2011)

Table 1: Percentage of enterprises having a web site or homepage (all enterprises, without financial
sector 10 employees or more)
GEO/TIME 2009 2010 2011
European Union (27 countries)
/
67 69
Romania 35 34
Source: Eurostat, Statistics in Focus 65/2011

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The Eurostat News Release (2011) stated that less than 20% of EU enterprises have a website
offering online ordering. According to the Eurostat surveys, in January 2011, 69% of enterprises in the
EU27 had a website, while17 of them made available to the users an online ordering, booking or
reservation options and forms. Giannkouris, Smihily, Eurostat News Release 185/2011 (2011)

Table 2: Percentage of enterprises where the website provided online ordering or reservation or booking, e.g.
shopping cart (all enterprises, without financial sector 10 employees or more)
GEO/TIME 2009 2010 2011
European Union (27 countries)
/
16 17
Romania 11 10
Source: Eurostat, Statistics in Focus 65/2011

The number of enterprises offering services online via a website varies significantly between E.U.
states. In January 2011, 93% of all enterprises registered in the Nordic Member States Finland had a
website, those in Denmark and Sweden both had 89% website coverage, while the lowest percentages
were encountered in Romania (34%) and Bulgaria (45%). At the same time, online ordering and booking
services facilities availability ranged between 9% in Cyprus and Portugal and 33% in the Czech Republic.
Giannkouris, Smihily, Eurostat News Release 185/2011 (2011)

Figure 1: Enterprise turnover on e-commerce
Source of Data: Eurostat, Code: tin00110

2.1. Self-serving customers
Online customers are not only online viewers of digital content but active suppliers of labor and
knowledge to the service creation and production process. Customer participation is the degree of
consumers effort, mental and physical, necessary to participate in production and delivery of service
Silpakit, Fiskin (1985). Self-service involves the discovery by customers of their own needs, thus
benefiting by getting exactly what they want in a process under their control that improves the likelihood
of actual purchase. Kamis, Stern, Ladik (2010)

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2.2. Information Privacy
Since the dawn of the new millennia, information privacy has been recognized as an important
concern no matter the discipline be it computer science, management, law, or consumer behavior. 87%
of Internet users admitted, for a 1999 survey, their concern with threats to their privacy while using the
Internet; Culnan, Armstrong (1999). Similar results have been presented by other credible studies. As the
process of digitalization of personally identifying information continues the dissatisfaction with the
privacy and security status quo is likely to increase while the costs of acquiring, storing and transferring
such information will decline. Thus, some organizations are now taking privacy into consideration in the
early stages of the product design process while balancing the advantages and disadvantages between
maximizing the benefits from collecting customer information and implementing user privacy
preferences. Poindexter, Earp, Baumer (2006)

Figure 2: Individuals using mobile phones to access the Internet

2.3. Traffic, Performance and Efficiency
Due to the booming Internet usage for commercial endeavors, E-commerce has become a
significant element of todays economy, considering that online shops constantly offer state of the art
information about products and services, both to users and businesses, ranging from personalized
shopping to automated interaction between corporations. In spite of increasing power of e-commerce web
servers, online shops have been unable to e-commerce sites have been unable to improve their level of
service provided to the users. This is why focusing on server performance has become both desirable and
necessary. Vallamsetty, Kant, Mohapatra (2003)
As the number of Internet users and online shoppers increases network traffic is dramatically
spiking, leading to a delay of service in e-commerce systems highly probable due to the inefficient use of
system resources, repeated requests for the same object and a large segment of bandwidth being occupied,
resulting in decreasing customer satisfaction. For an overall improvement in e-commerce system data
flow efficiency it is recommended a network traffic distribution between users, as opposed to high
investments in improving individual system performance., by making available a user-centered interface
capable of providing real-time, adaptive product information. Ko, Leem (2004)
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2.4. Adaptive software
Regardless of application domain, user-adaptive software systems have already proved to be
highly effective. Although ample evidence of personalization going mainstream in e-commerce,
personalized systems that include customer relationship management are poorly represented.
Personalization, in general, has been reported to provide benefits throughout the customer life
cycle by drawing new visitors, turning visitors into buyers, increasing revenues, increasing advertising
efficiency, and improving customer retention rate and brand loyalty. Fink, Kobsa (2000)

3. New technology
Market competition, typically responsible for service diversity, and technology competition,
which sustains evolution of advanced services, influence each other and make enterprise decisions even
harder. As new technologies, products, and services take hold of our daily life, it is possible to have
billions of dollars revenue impact for a single company.
The telecommunication industry is a fast-paced and constantly innovating environment that is
undergoing serious changes due to regular technology substitution and technology usage trends, while the
potential to gain revenue from new products becomes clearer and crucial to companies. The constant
growth of online retail businesses has become a challenge; according to Forrest Group, US online retail
sales reached 175 billion dollars in 2007 and were projected to grow to 335 billion by 2012. Au, Duan,
Jiang (2012)

3.1. IT payoff
E-business technologies are in their inception, representing investments in innovative and state of
the art information systems. These investments have many potential uses, such as enhancing customer
marketing and sales relationships or facilitating the acquisition of the input goods to production.
Evaluating the return on investment for IT systems has always been a difficult task, even when
the evaluation concerned the domain of only one firm. The dynamic nature of todays e-business
technologies may emphasize the unavoidable issues regarding IT payoff investment. Added to the already
difficult equation, the less quantifiable variables of trust, loyalty make it almost impossible to establish a
specific payoff from technology investments in e-business.
One pertinent question arises, one that expects a certain answer: Does technology make the e-
business, or does technology follow the e-business organizational and information needs? Strassmann
states that There is no relationship between expenses for computers and business profitability,
Strassmann (1990), thus suggesting a lack of connection between money spent and performance of
information systems, while using his own developed algorithm that calculates IT as a function of firm
revenue, generating IT expenditure data but also causing validity questions for his IT payback
conclusions. Strassmann (1998)
No one is able to determine for sure if IT payoff is dependent or not upon technology investments
or innovations, but the answer to the evaluation of this e-business problem is bound to be found, due to
the increasing number of e-business platforms that make use of cross-functional tools and inter-
organizational e-business networks. Kleist (2003)

4. Mobile broadband
Enterprises use the internet for a wide spectrum of purposes, which includes the presentation of
information on a website, offers and online sales or shopping facilities to users and interactions with
public authorities. By January 2011, 95% of EU27 enterprises had access to the internet, while 87% of
them had a fixed broadband connection for internet access, a 3% increase compared to the year 2010.
However, a significant increase in mobile broadband usage by EU27 enterprises, between 2010 and 2011,
has been observed, from an average of 27% to 47%.
The highest shares of enterprises with mobile broadband access in 2011 were found in Finland
(77%), Sweden (67%) and Austria (65%), and the lowest in Romania (15%), Latvia (23%) and Poland
(24%). More than 90% of all enterprises in Slovakia (94%), Lithuania and Finland (both 92%) and
Sweden (91%) reported that they used the internet to obtain information from public authorities' websites
in 2010, while it was less than half of enterprises in Romania (47%) and the Netherlands (48%).
Giannkouris, Smihily, Eurostat News Release 185/2011 (2011)
Table 3: Internet access, fixed and mobile broadband connections by enterprises, January 2011
571

(% of enterprises)
Internet Connection Fixed broadband connection Mobile broadband connection
2010 2011
EU27 95 87 27 47
Romania 79 54 8 15

4.1. Mobile Technology
Multitasking has become the daily skill necessary for any modern enterprise to survive in the
business environment. By converging the Internet and mobile technology, two of the most heterogeneous
technological forces in modern ICT, into a ubiquitous mobile Internet service, our daily routines and
business methods will forever change.
The two most distinctive attributes of mobile Internet technology are mobility enabling
communication, financial transactions and entertainment, on the move, via wireless Internet access - and
personalization a mobile device stores confidential data regarding personal identity, conferring mobile
devices and their applications distinctive value, compared to desktop and wired devices, both for work or
leisure time.
Due to the omnipresent characteristic of mobile devices mobile users are able to access any
service, at any time, from any place as long as a quality and constant Internet connection is available.
Mobile value can be summed up by three properties: ubiquity, real time services and accessibility.
These unique features offer service providers and e-commerce entrepreneurs the opportunity to
benefit and generate revenue by implementing new technologies and online services and enable mobile
users to enjoy a variety of new and upgraded multimedia mobile services. Mobile devices are personal
items, containing personal information and preferences, making it easy to approach a potential customer
or suggest possible acquisitions. Location discovery is also essential; by carrying user identity and
allowing device tracking, it proves useful when providing a mobile user with information regarding sales,
promotional offers or retail locations based on the users geographic position. Kim, Hwang (2010)
Figure 3: Individuals using mobile phones to access the Internet via 3G

572

4.2. M-commerce
An increasing number of mobile devices and dedicated applications are being deployed via fast,
cheap broadband networks, due to the fast pace of developing wireless and mobile technologies. As a
direct consequence, the new trend of mobile applications usage is quickly catching on and attracting users
into areas such as m-shopping and m-payment, among others.
The market opportunities are obvious and expectations for mobile commerce are quite high. This
is why organizations that have yet to implement m-commerce as a distribution channel for financial
operations and customer satisfaction through the modern infrastructure will do so in the near future.
Innovations in the field of mobile technology have determined complex global business systems.
As a recent developed field, m-commerce business models are different and difficult to manage; this is
why organizing these new technologies and services into a viable and balanced business model is an
intricate task, one of an important nature for both organizations and researchers. The future directions of
m-commerce development depend on understanding its key components and their potential to generate
revenue.
The rise of m-commerce and the wireless Internet are considered to be the new wave in the
communications industry. m-commerce can be defined as any transaction with a monetary valueeither
direct or indirectthat is conducted over a wireless telecommunication network Ngai, Gunasekaran
(2007). Some researchers claim that m-commerce is an extension to e-commerce; others oppose this
terminology and refer to m-commerce as a completely different field with significant potential and unique
capabilities. Due to the unique characteristics possessed by mobile commerce, business models which
have proved viable for e-commerce, not necessarily fit for mobile commerce Wong, Hiew (2005).
Furthermore, the m-commerce user plays a threefold role i.e. of a technology user, a network member, as
well as a consumer, therefore to fully understand the user adoption of mobile commerce all the three
perspectives have to be integrated.
As a quick path towards m-commerce success, organizations tend to choose innovative,
interesting, attractive applications or, quicker still, to modify and adapt an existing e-commerce
application for the mobile environment. There is no doubt, m-commerce cannot and should not be taken
into consideration as a new e-commerce channel or as a substitute to online shopping via desktop
computers. Organizations must take m-commerce to the next level by avoiding existing models and by
researching towards the ideal m-commerce model. Sharma, Gutirrez (2010)

5. Conclusions
The last decade has brought forth an exponential increase in use and development of new
technologies. From digital audio players, data compression, data storage hardware or software tools to
portable media players, smartphones and Tablet PCs all of which have played an important part for
information society and human society, in general human imagination has been driven by necessity and
desire to improve and ease access to knowledge. In the 21
st
century, information available free of charge
and restrictions is the same as being able to access the Internet. Due to the dynamic rhythm of day-to-day
activities and business transactions, mobility, personalization and interactivity have become vital
attributes to any endeavor, be it personal or enterprise, and the key directions and purpose for any new
model or technology meant to innovate the way we think about our lives.
M-commerce is a promising and relatively new field resulted due to technological developments
in wireless communication and mobile computing. There are numerous advantages, applications and
success factors suggesting a wide adoption of mobile devices adoption, even though some of those
implementations are bringing uncertainty to the game, but without an in-depth analysis over the
possibility of developing sustainable m-commerce business models and a profound understanding of
probable effects of mobility upon e-business there can be no advances towards developing dedicated and
adaptive business models. This is why success depends on business model innovation and adoption of
innovating and new technologies or services.
No matter what, m-commerce will continue to influence the conventional methods of doing
business, telecommunication and mobile technologies will keep emerging to handle more and enhanced
features and services, the demand for accessing the Internet on an anywhere will keep flooding the market
with high computing powers and display provisions leading to increased business capabilities through
mobile phones.

573

6. References
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Springer-Verlag, ISeB 3: 243263, DOI 10.1007/s10257-005-0020-7.
- Etzion, O., Fisher, A., Wasserkrug, S. (2005) e-CLV: A Modeling Approach for Customer
Lifetime Evaluation in e-Commerce Domains, with an Application and Case Study for Online
Auction. Springer Science + Business Media, Inc., Information Systems Frontiers 7:4/5, 421434.
- Kamis, A., Stern, T., Ladik, D.M. (2010) A flow-based model of web site intentions when users
customize products in business-to-consumer. Information Systems Frontiers 12:157168, DOI
10.1007/s10796-008-9135-y.
- Poindexter, J.C, Earp, J.B., Baumer, D.L. (2006) An experimental economics approach toward
quantifying online privacy choices. Springer Science + Business Media, Information Systems
Frontiers 8:363374, DOI 10.1007/s10796-006-9013-4.
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Kluwer Academic Publishers , Electronic Commerce Research 3:167192.
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Systems. Kluwer Academic Publishers, Information Systems Frontiers 6:4, 313323.
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Personalization on the World Wide Web. Kluwer Academic Publishers, User Modeling and User-
Adapted Interaction 10: 209-249.
- Au, S.T., Duan, R., Jiang, W. (2012) A data mining framework for product and service migration
analysis. Ann Oper Res, 192:105121, DOI 10.1007/s10479-011-0904-5.
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Academic Publishers, Information Systems Frontiers 5:3, 249263.
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users utilitarian and hedonic value tendency perspectives. Springer Science + Business Media,
Information Systems Frontiers, DOI 10.1007/s10796-010-9267-8.
- Sharma, S., Gutirrez, J.A. (2010) An evaluation framework for viable business models for m-
commerce in the information technology sector. Institute of Information Management, University
of St. Gallen, Electron Markets 20:3352, DOI 10.1007/s12525-010-0028-9.
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Eurostat News Release 185/2011 - 13 December 2011 / http://ec.europa.eu/eurostat
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65/2011, ISSN 1977-0316, KS-SF-11-065-EN-N, European Union.
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Impersonal Trust: An Empirical Investigation. Organization Science, Volume 10, Number 1, pp.
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framework. Services marketing in a changing environment. Eds., Chicago, American Marketing
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CT: The New Information Economics Press.
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Published in Cutter IT Journal.
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Applications. Decision Support Systems (43), pp. 3-15.
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the IEEE 4th International conference on Mobile Business, Sydney, Australia.

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IMPLICATIONS AND OPPORTUNITIES OF ONLINE ADVERTISING FOR INCREASING
THE ROMANIAN MARKETING WORK MARKET.
CASE STUDY: ONLINE ADVERTISING REGARDING JOB MARKETING PROMOTION

STOI CA I vona
Assistant Professor/ Ph.D., Faculty of Management-Marketing/Department of Management-Marketing,
Romanian American University, Bucharest, Romania, stoica.ivona@profesor.rau.ro

DUMI TRU Nicoleta Rossela
Associate Professor/ Ph.D., Faculty of Management-Marketing/Department of Management-Marketing,
Romanian American University, Bucharest, Romania, nicoletad01@yahoo.com

MUNTHI U Maria-Cristiana
Teaching Assistant/Ph.D. student, Faculty of Marketing/ Department of Marketing, Bucharest Academy of
Economic Studies, Bucharest, Romania, cristiana.munthiu@gmail.com

Abstract: The upward trend of online advertising has been driven by the increasing number of Internet
users, but also communicators need to get out of the mix of traditional media. Exploratory research was carried out
aiming to study secondary sources of information on labor supply specialized in marketing at the national level in
the context of skilled labor market in economics. It was also developed a quantitative research instrument which has
an online survey completed by respondents aged between 18 and 55 years. The data collected were interpreted
using descriptive analysis; chi square test was used in order to observe dependence between variables.

Key words: online advertising, job marketing, exploratory research, quantitative research

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

1. Introduction
Nowadays, marketers have more experience and are more "educated" in the Internet: most people
who have used these tools to promote the results have been very good and equally well aware that can
reach the target audience on the Internet.
The main bound to the global media industry in 2012 aimed at reducing opportunities for
domestic consumption of energy in electronic devices, development of complementary relationship
between traditional television and Internet television, online piracy and increased reduction of counterfeit
media products, diversification of cinemas. Online advertising will grow to nearly $ 2012 to 30 billion
Barcly's Capital as a prediction made in 2010. Online advertising will face many challenges this year
because of adversity expressed by consumers and regulatory rules. As regards Romania, the evolution is
in some way aligned with the international trend, but there are many aspects that are even more optimistic
outlook than the global average, at least in terms of growth rate, if not necessarily net values. Thus, in
terms of Internet advertising, store trend that online advertising will increase in 2012. Digital television
has already been made in Romanian homes and at least one major operator of cable television introduced
IP. Regarding piracy, we probably still class from the global average, despite the fact that the Romanian
legislation is more aggressive in this area. Trend of print media to online migration, can be found here,
but now in Romania online publications are either directly initiated projects online or printed publications
mirror.
Figure 1: Online Ad Spending in the US, 2010-2014 (in Billions)
Source: http://www.emarketer.com/
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In 2011 we celebrate 18 years since the emergence of online advertising. Since he sold the first
banner and so far, online advertising industry reached 25.2 billion USD figure (eMarketer). However,
online advertising has faced many hurdles in 2011, says the study. One of these obstacles is the increasing
public demand for online advertising adversity; the second increase could be the opposition to monitor
online behavior. Online advertising will have to communicate, such as free information, quid pro quo
advertising on the Internet for end users. Advertising industry must carefully monitor compliance issues.
The success of online advertising grows, the number will increase and regulatory controls. In 2012, online
advertising will have to face fierce competition coming from traditional media formats.
Online advertising market in Romania in 2012 is estimated around 10 million euros, a figure that
cannot be ignored when one considers the advertising and online advertising growth in Romania, well
above the global trend achieved so far.
Television via Internet. Also, according to estimates made by specialists, television industry will
get a good year overall. Internet Television will contribute most likely to profit traditional television. This
may seem paradoxical, particularly because Internet television was perceived by some commentators as
the main competitor of the major traditional television. Internet Television is another medium, quality, set
of content formats and audience completely different from those of traditional television.
In Romania, the traditional television is not threatened by the impact has the Internet, even
globally, because ultimately the Internet is not merely to change the content distribution method, which
ultimately is all a product of television "traditional". Of course, there are important opportunities such as
increased interactivity opportunities and these opportunities will change the way we perceive and interact
with "TV", but these arguments will be available for television as a service to the consumer. Destruction
of online piracy on its own does not mean the end of counterfeit products. The significant increase in the
number of broadband connections has attracted worldwide growth of online piracy itself. Increase speed
broadband connections made it possible piracy of movies, television and software. In 2012, fighting
digital piracy could be gained by fighting concentrated, taken with the education and sanctions such as
denial of access to broadband, etc fine. In 2012, won a battle against piracy, but the entire war against
piracy is foreseen to be extremely violent. It is possible that the media industry to try to look for new
ways to increase security level media products. Shown encouraging prospects, growth rate is estimated in
the tens. The evolution of cinema can be the best time to try reinventing the format on which there were
too many changes in recent years. Major changes to the transition to digital format will not affect too
much film studios. In 2011, properly equipped theaters could project including major events, from
sporting events and concerts ending with. Major sporting events and concerts have been important so far
as the public not to choose the cinema.

The Internet is growing at a much faster rate than ever recorded television or radio and probably
will not weaken the pace for another two decades. Moreover, the Internet has become a means of
communication very needful, accessible and available, in which more and more people are discovering
the multitude and variety of methods of use of this global network. Therefore, the future of advertising is
the advertising on the Internet, a form of promotion to increase international market and the local.
Nevertheless, in Romania there are several hundred annual online advertising campaigns, to the few
thousands or tens of thousands of campaigns in Western Europe. The upward trend of online advertising
has been driven by the increasing number of Internet users, but also communicators need to get out of the
mix of traditional media. Today, marketers have more experience and are more "educated" in the Internet:
most people who have used these tools to promote the results have been very good and equally well
aware that can reach the target audience on the Internet. The Internet is becoming more visible in the mix
of marketing and communication, and for certain types of brand will become the main channel of
communication even values that define it. Also, the Internet is no longer a hobby, now at least 5 million
online users in the field. Ro, and the best way to reach them is advertising on the Internet. Although
highly dependent on the product category to which we refer, for most categories, online advertising is a
means of further differentiation and major phenomenon is the inclusion of advertising in the media mix
for a number of increasingly large brands and products. To a large extent, the increase or decrease the
importance of on lines success depends on having succeeded or not it has first campaign. Also two years
we have campaigns that are conducted exclusively online. In fact, there are three types of campaigns:
those that include all media (TV, print, radio, Internet) those that usually include a mix of Internet and
other media (usually print and radio) and campaigns taking place only Internet because interactivity that
allows the environment. Unfortunately, currently exclusive online campaigns only play a complementary
576

role in their advertising campaigns carried out according to the objectives and how communication is
declining communication concept and execution. Online advertising is currently used more for branding
process and to achieve greater awareness both in the narrow sense (for targets that use the Internet is
significant and comparable with other media, business) and in the broad sense to achieve synergy with
other media (in large promotions). Also, online ads are used for transmission - the click-through - of more
comprehensive details on the brand / product / service that is advertised. As the largest investors in online
advertising, now they come in telecommunications, banking and automotive. However, an online
advertising campaign can be very specific objectives. With them, you can get famous (for a brand,
product, supply, service, etc.), customer relationship (for example, you may be offered a free online
service to develop a long term relationship with the target audience) sales leads (through which the user
can be brought to the point of sale offline or online, the product is sold through an online store), you can
collect data about users and to obtain a consumer-generated content. Regarding the effectiveness of the
strategy website that was sent to the user by pressing the banner, can make various conversions,
depending on objectives. In this way, how many users can continue browsing the site by clicking the
banner versus how close the site immediately, how many of those who have reached the site of the banner
using the options offered on the site for interaction (information about the details, send a friend print info,
post online content, subscription to an online service), how to take a decision to purchase (online
contacting of a seller / dealer or online purchase). Even if Internet has many measuring tools such as
television, radio or print media, there are tools to measure effectiveness of advertising campaigns
conducted over the internet. In other words, although we have no studies to say the campaign generated a
sales increase x by y percent, we have customers who measure the results, which is satisfied and get their
Internet budgets increase. The reason is very simple, online advertising has unique advantages. For those
who know how to use the Internet, this means of communication unexpected advantages. Of these,
interactivity is the most obvious, the Internet is also the only channel that allows this mode of
communication. The cost of a campaign on the Internet is much lower than for other means of
advertising. Internet is mainly a complementary array of value-added media campaigns conducted on
traditional media. It also provides communication medium expanded creative possibilities, measurability,
exposure, high affinity for targets young and modern media production costs and extremely low
compared to traditional media, visitors can test reactions to various messages and executions at various
times of day, different points of contact. On the other hand, companies who advertise their ability to
receive instant feedback based on which the marketing people can build interesting projects. In addition,
the method is fast targeting and online advertising campaign can reach the public, including during the
service option is not available to other media. But perhaps most important is that when you are on the
computer and surf the Internet, the consumer has a different behavior. His attention is much larger,
otherwise distributed, because he is there with some definite purpose.

3. Research Methodology. Exploratory Research
Exploratory research was carried out aiming to study secondary sources of information on labor
supply specialized in marketing at the national level in the context of skilled labor market in economics.
Authors have developed a quantitative research instrument which has a questionnaire completed by
respondents aged between 18 and 55 years. The results were combined and are presented below. It is
important to know if brokers and websites online jobs mastered enough of marketing channels to
promote. It must be observed both on the job application marketing but equally important is the existing
offer. It is necessary that marketing graduates or even students who wish to embark on a post-graduation
in the field to take advantage of features in easy search and retrieval of appropriate information in the
online environment, since most young people and adults see the virtual environment. It is important to
know the sites that are promoted in the marketing jobs or are criteria which must have the employee
profile marketing and coordinated according to the identification to make an online promotion and that
combined with proper several online marketing tools to reach prospective employees in marketing
directly.

577

Source: SPSS output view

3.1. Media and presentation tools of labor supply in the National Marketing
Bringing young students or recent graduates on the labor market who have completed a college
education with economic or social sciences, is done by newspapers as "The Financial Newspaper", "The
Economist", "Exchange" magazine "Career" and very important with to the social and economic
dynamism through the digital environment using sites like E-JOBS, MY JOB, FIND JOB, Save to,
Locuridemunca.ro, hipo.ro, NETJOBS, www.ofertelocuridemunca.ro, www.cariereonline.ro. Websites
that are posted job sites where companies recruit their future employees mediate the relationship between
employers and candidates for posted jobs. Classification of Occupations in Romania in the field of
marketing
1233 Code leaders in sales and marketing activity; Head of Department Marketing 123 301; 123
302 Head office marketing; Marketing Manager 123 307 (tariffs, contracts, procurement); 241 508 Bank
Officer (credit, marketing, products and banking services); Marketing Specialist 241 921; 244 104 trade
economist and marketing adviser; 244,104 in trade and marketing expert economist; 244 104 trade and
marketing economist Inspector; 244,104 trade and Marketing Specialist Economist; Referee 244,703
marketing specialist; Manufacturer 245 527 delegate marketing events; Marketing 258 109 Research
Economists; 258 110 Research Assistant Economist in Marketing.
341,404 domestic tourism transport travel agent / International / ticketing / reservations /
accommodation / advertising / marketing / tourist assistance / external departures (outgoing) / foreign
arrivals (incoming) / tourism business.
Specialist capabilities in marketing
Director of Marketing deals primarily with business analysis, planning, marketing and
departmental management, integrated marketing campaigns, organizing, coordinating the implementation
of strategies and marketing campaigns, control of the technical and economic implementation of
marketing, negotiating and concluding contracts marketing, tracking resolving complaints, promoting the
image of the organization, as well as organizing the subordinate departments.
Account Manager (Client Manager) deals mainly with establishing and maintaining relationships
with customers subordinated, advertising strategy and tools for running their files, assessing the quality
and accuracy of advertising proposals, managing client advertising budgets, and development and internal
ordering (briefs).
Men
Men
Women

Other
High school

Graduate
Other
Figure 2: Frequency distribution for gender, age, study level and income
578

Receptionist deals mainly with the performance of specific operations to customers and visitors
reception, insurance payments, providing information to customers and visitors, re-routing and scheduling
various resolving customer complaints or visitors, promoting the image of the organization, the
organization framework of openness and closing reception point work and paperwork filing and reporting
activities.
Head of Marketing - The heads of sales and marketing activity, led by Directors and in
collaboration with other heads of departments and services, plans and coordinates the internal or external
trade and marketing of the enterprise or institution, programs based on sales of goods account the results
of market studies; established scales and commercial discount prices, delivery terms and methods of sale;
supervise the rational use of human, material and financial, recruitment and training of staff, is the self in
relation to other sectors of organization and with third parties. Educational: - (not defined, but not
necessarily higher).
Bank Officer - specialists in banking policy applied in promoting and selling bank products and
banking services (bank customer credit administration in lei and foreign currency accounts of individuals
and legal entities, the operations executed in their order, carrying out operations of receipts and payments
in lei and Monitoring of operations, etc.), making the customer interface, manages customer management
activities by maintaining and developing partnerships with customers of the bank, evaluate assets and
loans made to the guarantee of feasibility studies, carries out settlement between banking units ordered by
the natural or legal persons and the bank's own etc..
Marketing Specialist - Specialists in commercial and administrative functions not found in
previous group activities is devoted to analyzing and determining the volume of sales of products or
services and changes in demand perspective, organizes and coordinates advertising campaigns. Study and
approves the problems raised by the creation and management of an enterprise in financial and legal,
organizational and commercial law, advising on patent issues, examining the application, compiles
reports and motivates granting / not granting patents. Higher education level training.
Trade economist and marketing adviser - Economists working on national markets for goods,
services and labor and solve economic problems targeting production, its cost, human activity and social
environment and make available to decision makers advice in this regard. Level of education - higher
education. Public Relations Specialist - public relations specialists create and manage the public image of
institutions, companies, political parties and organizations, NGOs, etc.., Mediate conflicts and
negotiations advises, manages relations with the media organization as a carrier The official word, the
press office, prepare written and audiovisual messages, organize media events (press conferences,
exhibitions, launches, etc. goods and services.
The advertisers are looking for employees for the position of: Junior Media Planner, Senior
Media Planner, Account Manager, Senior Account Manager, Account Executive Manager, Copywriter,
DTP, Art Director, Creative Director, Project Manager Online Customer Service etc.. Example. Case
Study - Marketing Analyst
To obtain a marketing analyst job requires an analytical mind combined with creativity, a brand
manager. One sector is developing in marketing research and marketing analyst job has become a strong
point of a career.
A marketing analyst is more than a "data collection".
A marketing analyst must:
analyze consumer trends;
identify new markets;
use information from the field to achieve profitable growth in the company bidding the job.
Career issues relevant to the marketing analyst job:
Bachelors degree in one of the following disciplines: marketing, anthropology, communication,
political science;
Very good communication skills written and oral, and a good networking capacity;
Statistical and mathematical skills;
Interest in social forms of behavior;
Organizational skills and focus on solving problems.
Selection criteria for marketing analyst job
1. Bachelor's degree should be completed some courses that include elements of statistics and
mathematics and business courses.
579

2. For those who are beginning careers in marketing and believes that inexperience is one minus
the CV, it is advisable to do an internship that will help develop skills in data collection and analysis,
interviewing and editing.
3. Should be taken into account and obtain a masters degree in marketing, statistics and
psychology. Marketing research is a competitive field and increasingly more employers differentiate
between candidates to interview with the master and those without. As a marketing analyst, M.Sc. is an
advantage in addition to job and salary.
4. A first job in marketing research can be the assistant of a senior marketing analyst. It starts
with just the entry level for later, as the employee has learned the "tricks of the trade" will make it easier
to climb the corporate ladder.
5. Search for jobs and employers will be in areas such as consulting, nonprofit organizations and
software companies, where the employee will be able to highlight the potential in a post marketing
analyst.
6. Choosing a consulting contract. in some smaller businesses, employers prefer to offer
marketing analyst job with such a contract than to hire an entire marketing department.
Advantage, countries who want to get a job in marketing
Bachelor degree can bring into the field as a marketing specialist, but master's degree in finance,
statistics or advertising causes employers to choose from the many CV applications;
Extra-specialization in specific fields (biology, history, etc.);
To become professional in the marketing research is needed as more knowledge on market
trends, such as supply-demand ratio for certain sectors. There are many current researches on areas such
as trade or investment that can be converted into real assets or job interview. Most companies employing
marketing specialist they want their employees to be educated preferably in economics and social
sciences, a minimum experience of 2 to 3 years, the skills developed ICT, communication, negotiation,
fluency in speaking the language English, team work, stress resistance, ambitious, tenacious, full of
initiative, flexible with a great capacity to adapt and not necessarily driving license category B.
Info-presentation intermediaries labor supply
Bestjobs.ro - Bucharest - an impressive offering of approximately 2,500 active jobs, LinkedIn is
currently the most important site of "bank of resumes."
County Agency for Employment proposes about 1,500 jobs in various fields.
Ejobs.ro - Bucharest - eJobs also contains an impressive offer over 1000 ads.
Job.ro - Bucharest - less important than the other bank of resumes, but not negligible. As the
only major site that offers free posting of job ads on Job.ro the general public other than those published
announcements or eJobs LinkedIn.

4. Conclusions
Careers magazine appear in five jobs in marketing conditions are the main higher education,
experience and skills of computer and English. Marketing Jobs prevailed which means that firms we are
to develop marketing activities; of course, claims are raised regarding the training and experience.
Supplement Professions also make a realistic X-ray of what is happening on the labor market in Romania,
what happens to employers and employees in this period of economic crisis.
In Supplement profession is reminiscent of jobs in the field of marketing and website marketing
www.profesiionline.ro section does not appear to post any job, but the sections such as communication,
journalism, PR, etc..
The Economist newspaper this month were not job ads, but the comment about the MyJob (5th
page) as "one of the most popular sites, online recruitment, who recently Play Video Play Video service
launched by the candidates have guaranteed access to over 100 companies in the preferred, and employers
get free resumes from those interested in their company. Play Video Play Video the companies are
specialists willing to work in their team can build a solid database for future recruitment companies, for a
more efficient selection. The new service starts with 120 companies registered, and another 10 people
daily on average, are part of this service. According to the company, in this way, candidates receive
maximum exposure, even to those companies that are not public jobs available or not yet carried out an
act of recruitment, which increases the chances people wishing to find a suitable job. "In Bursa, the job
offers were found, but not under a name that lead to job is marketing the following: 4 channels - adding
machine operator and 3 positions - operator input, validation and data processing. The requests were for
the Marketing field, the most common being for education.
580

Application job in marketing is virtually non-existent in Romania. There is no education in this
sense is not used to ask young people working and to appear as if they present a product to be purchased
from the diversity of market competitors. Mentality of young marketers in Romania is confined, no
attitude and expression that comes from upbringing reminiscences, no encouraging expressing their views
and opinions, especially suppression of lack of self-confidence. From this resulted a licensed youth lacks
personality, unusual in expressing creativity, thematic and ignorant opinions when needed by highlighting
the qualities and skills available. "Open-minded" and "creativity" are terms that fit any runner who wants
to have a job in marketing, which can make a career if you know how to better target market.
Another disadvantage is noted that it creates confusion between marketing and sales for some
employers and employees these two are synonymous. It is a fatal mistake of becoming a clich
increasingly adopted the area and alter the true meaning of what Marketing Science. Thus some online
brokers have associated section marketing jobs in sales and marketing-specific jobs were introduced in
section Journalism / Communication / Advertising Supplement as those of ZF, professions where they are
reminded of jobs in the field of marketing and website marketing www.profesiionline.ro section are not
posted on the marketing job they recovered to fields like sales, communication, journalism, PR. Another
negative aspect is the considerable differences in the amount of bids compared Bucharest marketing
offers companies in other cities.
Also note and seriousness, careful expression in Romanian / English and Information fluid offers
made by firms in Bucharest, unlike offers short, lack of information and dominated by superficiality made
by companies in other cities. For example, www.findjob.ro site were found on the 1003 Marketing places
in Bucharest, as opposed to 154 in Cluj, Timisoara 73, 44 - Dublin, 59 Science, 123 Brasov, Constanta
72, 35 Braila. Experience is a very desirable criterion by employing companies and marketers a
disincentive for enthusiasts, with potential but no experience. The conditions required for a job in
marketing is knowledge PC, SPSS, language fluency, masks the specialty marketing / communication,
minimum 3 years experience and personal qualities of each individual as well as flexibility, ease of
communication, team work, adapting high resistance to stress, a positive attitude. For the site in eJobs the
most sought after jobs Marketing Assistant Marketing Specialist was marketing. For MYJOB site, since
many of the specific jobs Marketing (306 jobs Marketing / Market Research) are posted by employers in
the area of Customer Service (565-http://www.myjob.ro/locuri job - work / any / service% 20clienti / any
/ any / any / any / any. html) above were presented and statistics for the sector. Per general, the number of
applications in the field of customer service is number 2 after the sales, and marketing is the place 4 / 5,
ranging from one month to another, depending on the number of existing jobs on site in different periods.
For eJobs website on marketing and market research 207 jobs were found and a number of 658 posts
(http://www.ejobs.ro/user/searchjobs) sales - 352 jobs and 1118 jobs and customer service - 32 jobs and
102 jobs (http://www.ejobs.ro/user/searchjobs). On 1st eJobs in the sales department has followed, and
here there is a change from the previous rankings from MYJOB, being the place in the field of Marketing
and Customer Service then those. Advertising must sell whatever media where promoted. Online site but
cannot reach the maximum rate of promotion, and that's that trust that is given is quite limited so far.
However, opportunities exist. Online site will work primarily with complementary role and then
substitute the traditional media to media. The local advertising industry media budgets will be spent
mostly on the radio or TV, I think the impact will occur but the consumer will be more informed and thus
hard to believe without arguments.

Acknowledgements
This work was cofinaced from the European Social Fund through Sectoral
Operational Programme Human Resources Development 2007-2013, project
number POSDRU/107/1.5/S/77213 Ph.D. for a career in interdisciplinary
economic research at the European standards.

5. References
- Balaure V. (coordinator)-(2002) Marketing, Second Edition, Publisher Uranus, Bucharest;
- Ctoiu, I., (coordinator)- (2009) Marketing research-Tratat Publisher Uranus, Bucharest;
- Cohen, J., (2006) Unusually Useful Web Book, New Riders Publishing, USA;
- Epuran, Gh., (1999), Cybermarketing. Advertising and efficiency on the Internet, Plumb
Publisher, Bacu;
- Epure, M., (2007), Techniques and methods used in online marketing research, articol;
581

- Harris, Lisa,
www.biblioteca.ase.ro/catalog/rezultate.php?c=2&q=&st=s&tp1=1&tp2=1&tp3=1&tp4;
- Dennis, Charles, (2002), Marketing the e-business, Routledge;
- Jefkins, F., (2000), How to manage advertising up to perfection? The 4
th
edition, edited by Daniel
Ydin, Rentrop & Straton, Bucharest;
- Orzan, G., http://www.biblioteca.ase.ro/catalog/rezultate.php?c=2&q=&st=s&tp1=1&tp2=1&tp3
- Marketing Informatic Systems, Uranus, 2001;
- Orzan, G., Orzan, M., (2007), Cybermarketing, Uranus, Bucharest;
- Popescu, I. C., (2002) Marketing Communication, Uranus, Bucharest;
- O'Guinn, Thomas, Allen, Chris, Semenik, Richard, (2003), Advertising and Integrated Brand
Promotion, South-Western College Publishing;
- www.netview.ro;
- http://www.netview.ro/publicitatea-pe-internet/despre-publicitatea-pe-internet/,/publicitatea-pe-
internet/scurt-istoric-al-internetului/,/publicitatea-pe-internet/publicitatea-pe-web/,/publicitatea-pe-
internet/reclama-prin-intermediul-banner-ului/;
- http://media-institute.blogspot.com/;
- http://www.ethos.ro/articole;
- http://deandonaldson.files.wordpress.com/2007/12/atat.jpg;
- www.iaa.ro;
- www.internetics.ro;
- www.vodanet.ro;
- www.e-marketer.com;
- http://www.iab.net/resources/glossary.asp, http://galide.jazar.co.uk/images/banner_hot_wired.jpg;
- http://dictionarurban.ro/expresion/846_broadband.aspx, /expresion/2034_internaut.aspx;
- http://www.webopedia.com/TERM/b/blog.html;
- www.instapundit.com, www.dailykos.com, cf. Paul A. Argenti, op. cit., p. 125;
- http://www.articlealley.com/article_130077_80.html,
http://www.articlealley.com/article_85378_7.html;
- http://www.gabrielboaca.ro/wp-content/uploads/2007/11/top_agentii.jpg;
- www.ofertelocuridemunca.ro;
- www.cariereonline.ro;
- http://www.rubinian.com/;
- grey_worldwide_romania_cauta_art_director.html,
- http://www.iqads.ro/
AdJob_read_9972/news_outdoor_romania_is_looking_for_an_account_manager, /AdJob_read_10034/;
- www.myjob.ro, www.findjob.ro, www.bestjobs.ro.

582

YOUNG CONSUMERS ATTITUDE TOWARD THE PRODUCTS THAT REPRESENT THE
MAIN OBJECT OF CAUSE RELATED MARKETING CAMPAIGNS

STREMAN Filimon
Ph.D. Professor, Faculty of Sciences, Department of Economics and Business Administration,
1 Decembrie 1918 University of Alba Iulia, Romania, filimon_stremtan@yahoo.com

MI HALACHE Silvia tefania
J unior Teaching Assistant, Ph.D. Student, Faculty of Sciences, Department of Economics and Business
Administration, 1 Decembrie 1918 University of Alba Iulia, Romania, sylvia_mihalache@yahoo.com

Abstract: the present paper presents a short research regarding the attitude of young students toward the
products and companies that implement Cause Related Marketing activities. The main objectives of the present
research were to observe the way in which the cause related marketing actions can influence the consumers
behavior determining him to change or not, in compliance with the perception of the companys adopted strategy. In
the same time, we wanted to confirm or rejecting the hypothesis according to which Cause Related Marketing
represents an instrument used by the companies in order to change consumers behavior.

Key words: Cause Related Marketing, consumer behaviour, consumer loyalty

JEL Classification: M 31, M 14

1. Introduction
Currently, consumer as the goods demand carrier has become a real market partner whose
occupied positions within it are improving accompanying the development of the society. The consumers
purchasing behavior is becoming even more important for the businesses, organizations, bodies and
institutions; this being the reason why the consumer is paying increasing attention to it.
A dilemma occurring lately is whether consumers are willing to reward good corporate
behavior through their consumption decisions. Thus, it can be considered that one of the ways through
which socially responsible behavior and consumption can be put together is Cause Related Marketing. In
the case of CRM campaigns, the companies self oblige to donate a certain amount of money for a
humanitarian cause.
Two of the most important authors that wrote about CRM were Kotler i Lee (2005). They
believe that CRM represents the commitment of a company to donate an amount of money for a certain
humanitarian cause. The amount represents a percentage of the products price, although there are many
other types of donations, as we will see further on in this paper. This kind of campaign is generally
implemented in a previously determined period of time and its most important objective is represented by
selling products of the company. A certain percentage of the products price is donated to a
nongovernmental organization or to several other kinds of partners who have legitimacy in the chosen
cause and the ability to manage the money. Usually the partnership between a company and a nonprofit
organization appears when the cause related marketing activities imply a significant effort of the
company: time, logistics, money management, human resources. In a partnership, this effort is split
between the two partners, as well as the benefits gained after implementing cause related marketing
activities.
Other authors take cause related marketing as being a strategy whose main goal is to achieve the
marketing objectives through the support of social causes (Barone et all., 2000). Others consider that in
most cases, the decision to adopt such strategies is based on a direct bound between product sales and
company cause related marketing activities. Therefore, it might be concluded that the success of cause
related marketing campaigns reflects, at least partial, the appreciation response of the consumer
materialized in choosing the companys products and services by that consumer and, in the end, the
increase of the profit that will determine the company to implement other cause related marketing
activities.
Thus, in this paper, the authors want to confirm some hypotheses regarding the way in which
cause related marketing actions influence consumer behavior, determining him to change/ or not change
his consumption behavior based on the perception of the strategy adopted by the company. Depending on
583

how the consumer perceives the campaigns and the objectives of the campaigns run by the company, he
may choose to buy products and/ or services of a company, can maintain or improve his loyalty towards a
brand or on the contrary, he may be indifferent to the companys efforts to support a fundraising
campaign for a cause.
Cause related marketing is defined by Adkins (1999) as being a business that implies a
partnership between a company and a nonprofit organization in order to achieve mutual benefits. But
from our point of view, this authors definition limits the activities of cause related marketing only to
donating money, if this is so, then the definition is not complete. Donating goods like: food, computers,
cycles, etc., are also activities that cause related marketing programmes can imply. A relevant example
for that is the one of Sealy company that donated beds for the children from the NASCAR Victory
Junction Ganc Camp during a cause related marketing campaign.
There are some people who argue that CRM does not represent the best way to support a social
cause, because it must use an intermediary (a company or a nonprofit organization) in order to make
donations, to do good. Others argue that if it was not for these CRM campaigns, many causes would
remain anonymous although the donation mechanism is very simple implying zero effort for the client (he
does not feel the effort of the donated amount of money). This is one of the hypotheses we intend to
verify by analyzing the data resulted from the application of a questionnaire among students.
In order to observe the extent to which young people between 18 and 30 years believe that CRM
is a tool successfully used to improve brand loyalty, a questionnaire was applied to a total of 129 students
in the final years from 1 Decembrie 1989 University of Alba Iulia and pupils of the economic profiles
from Dionisie Pop Maian High School. Thus, their purchase and consumption behaviour, their
perceptions towards CSR and CRM activities carried out by companies and, not least, the confirmation or
repudiation of the hypothesis that CRM is a tool for maintaining or improving consumer loyalty was
studied.

The scope of the present research is represented by the trying to know the young consumers
behavior toward the products that represent the main object of cause-related campaigns and also the
impact that these kinds of campaigns have on the brand loyalty of the young students from the economic
profiles of the 1 Decembrie 1918 University of Alba Iulia.
The objectives of the research:
Establishing the objectives of the research has a direct impact on the research methodology and
on the costs implied. Every scope has at least one objective. They express the scope of the research in
measurable terms and define exactly the information the research wants to obtain. The objectives of the
present research are:
1. Observing the way in which the cause related marketing actions influence the consumers
behavior determining him to change or not, in compliance with the perception of the companys
adopted strategy. According to the way in which the consumer perceives the objectives and the
campaigns implemented by the companies, he can choose to buy the products and/or the services
of one company, he can maintain or improve his loyalty toward the brand, or, on the contrary, to
remain indifferent to the efforts the company does in order to gather fund to o humanitarian
cause.
2. Confirming or rejecting the hypothesis according to which Cause Related Marketing represents
an instrument used by the companies in order to change consumers behavior.

In order to better manage the research, we have established the next Hypothesis:
1. The companies CRM activities can raise the consumers loyalty toward the brand.
2. The affinity of a client toward the cause supported by a company can raise his positive attitude
toward that company.
3. The level of a persons income can influence his attitude toward the companies that implement
cause related marketing activities.
4. Female are more inclined to donate than male.
Establishing the population, the sample and the sampling method of the research:
The research was conducted in urban environment, among the students from the economic
profiles of 1 Decembrie 1918 University of Alba Iulia. The sample was determined for a 95%
guaranteed possibility of the results and for an error margin of +/-5%. The method used was the random
method including 129 persons.
584

Gathering data:
Gathering the data was possible with the help of GoogleDocs Programme. Information was
obtained through the intercepted survey method; the directed and structured instrument used was the
questionnaire. The latter was designed in a relevant, concise and precise way, with closed questions with
fixed response or forced-choice. The management of the process was conducted exclusively online.
Results interpretation and conclusion drawing:
At this phase, based on the information derived from statistical processing of data, a number of
trends, relationships and correlations have emerged, the hypothesis of research were confirmed or refused
and all have been interpreted in order to characterize and understand the marketing phenomenon
regarding the students behavior towards the products covered by the campaigns related to humanitarian
causes.
Using the method of the analysis of a nominal variable we obtained the following results:
Gender

Cumulative
Percent
Valid female 102 79.1 79.1 79.1
male 27 20.9 20.9 100.0
Total 129 100.0 100.0
The number of the respondents to the present question is 129. Of these, 102 are female, and the
other 27 are male. From the second column, representing the relative frequencies expressed in
percentages, we can see that 79.1% of respondents are female and the remaining 20.9% are male.
Have you ever done a donation?

Cumulative
Percent
Valid NO 46 35.7 39.0 39.0
YES 72 55.8 61.0 100.0
Total 118 91.5 100.0
Missing System 11 8.5
Total 129 100.0
To the question meant to ascertain whether the respondents have ever made any donation, we
obtained the following results: from the total of 129 respondents, 11 refused to answer to this question, 46
of them, representing 35.66%, responded that they have never made a donation and the rest, 72 people,
representing 55.81%, claimed to have made donations. Unfortunately, the number of the ones who have
never donated is quite high in our sample.
Age

Cumulative
Percent
Valid under 20 50 38.8 38.8 38.8
20 - 25 76 58.9 58.9 97.7
over 25 3 2.3 2.3 100.0
Total 129 100.0 100.0
As for the respondents' age, 38.76% of them said that they were having between 18 to 20 years,
58.91% were aged between 20 and 25 years, while only 2.33% were over the age of 25. If we pay
attention to the results in terms of quantity, than we can mention that 50 of the respondents are aged less
than 20 years, 76 of the respondents are aged between 20 and 25 years and only three people are aged
over 25 years.

585

In order to obtain these results we used the method of the analysis of a ordinal variable.
What is your opinion about the companies that develop fundraising campaigns
for various humanitarian causes?

Cumulative
Percent
Valid indifferent 4 3.1 3.1 3.1
good 59 45.7 45.7 48.8
very good 66 51.2 51.2 100.0
Total 129 100.0 100.0
Using the same analysis method we obtained the upper table from which we can conclude that:
3.10% of the respondents said they feel a sense of indifference toward the companies that run fundraising
campaigns for various humanitarian causes, while 45.74% said it is a good thing for companies to
conduct fundraising campaigns, and the rest, representing 51.16% and the larger part of them, seemed to
have a very good opinion of the companies that run fundraising campaigns for humanitarian causes. In
other words, four people remain indifferent to the efforts of the firms to engage in fundraising campaigns
while 59 of respondents say it is a good thing, and 66 people think this is very good.
Does it worth buying from a particular company because of the
humanitarian campaign it helds?

Cumulative
Percent
Valid NO 19 14.7 14.7 14.7
YES 110 85.3 85.3 100.0
Total 129 100.0 100.0
To the question designed to explore the attitudes of the young consumers towards their intention
to buy from a particular company as a reward of the campaigning which it carries, 85.27% of the
respondents (110 persons) said that they feel stimulated to buy products of a certain company that carries
humanitarian campaigns, while 14.73% (19 persons) of the respondents disagree with this.
Another opinion that this questionnaire wanted to obtain was to find the attitude toward the
products that are subjected to fundraising campaigns. The majority of the respondents (58.14%) say they
have a good opinion, while others (37.98%) claim to have a very good opinion of these products, and
3.88% of the respondents express their indifference to such products.
The fact that a company implements fundraising campaigns for humanitarian
reasons can determine you to buy a product that it promotes?

Cumulative
Percent
Valid NO 22 17.1 17.1 17.1
YES 107 82.9 82.9 100.0
Total 129 100.0 100.0
As it can be observed from the above table, the fact that the company conducted fundraising
campaigns for humanitarian causes might cause most of the respondents (82.95%) to buy products from
that certain company. The rest of the respondents (17.05%) think that products should not be bought from
a company just because it runs a humanitarian fundraising campaign.
In the same time, the fact that a product is introduced by a company in a humanitarian campaign
seems to yield the most respondents (79.07% - 102 persons) to buy again and again the same product,
which means that consumers loyalty to that product is maintained or even improved. A number of
respondents (20.93% - 27 persons) are however convinced that placing a product in a humanitarian
campaign does not necessarily seems to maintain its loyalty.
And yet, in terms of young consumer preferences, only a share of 67.44% of them prefer to buy
products that are subject to the campaigning, leaving the remaining share of 32.56% them to look
indifferent or not to prefer the products that are subject to campaigning.
586

From the students surveyed, 90.7%, representing 117 persons, said they would buy a product both
for the quality and the supported cause, while 9.3%, 12 persons, would not do so.

Are you ready to remain loyal to a brand that promotes a social cause?

Cumulative
Percent
Valid NO 26 20.2 20.2 20.2
YES 103 79.8 79.8 100.0
Total 129 100.0 100.0
While 79.84% of the students respond positively to the question that refers to the remaining
faithful to a brand that would support a humanitarian cause, the other 20.16% are not willing to remain
loyal to that brand.
Are you ready to change your consumption habits in order to positively
contribute to a social cause?

Cumulative
Percent
Valid NO 48 37.2 37.2 37.2
YES 81 62.8 62.8 100.0
Total 129 100.0 100.0
It is very interesting the fact that only 68.2% of the respondents are ready to change their
consumer behavior in order to positively contribute to a social cause, the others 37.2% are not ready to
change their behavior, although 99.2% of those questioned consider that companies implication in social
responsible activities is a good thing.
At the question: Do you believe that the social campaigns of the companies have the purpose of
raising the sales, 55% said yes, 28.7% said no, while 16,3% believe these campaigns are meant not only
to improve the companys image, but also to raise the total sales and through that to help several socially
disadvantaged categories of people.
Do you believe that through the Doneaza o felie de paine campaign,
VelPitar intends ti improve its image?

Cumulative
Percent
Valid NO 68 52.7 52.7 52.7
YES 61 47.3 47.3 100.0
Total 129 100.0 100.0
In order to actually see if the respondents consider that a company uses social campaigns for
improving their own image, we addressed the students the following question: Do you believe that
through its campaign Donate a slice of bread VelPitar intends to improve its image? 48.1% of the
respondents gave an affirmative answer, while the others 51.9% gave a negative one.
Do you consider that the brands involved in fundraising campaigns for
humanitarian causes have social value?

Cumulative
Percent
Valid NO 14 10.9 10.9 10.9
YES 115 89.1 89.1 100.0
Total 129 100.0 100.0
As for perceiving some brands that are implied in humanitarian campaigns as having social value,
89.1% of the young people said yes, while 10.9% said no.

587

Income

Cumulative
Percent
Valid less than 500 101 78.3 78.3 78.3
501 - 800 17 13.2 13.2 91.5
801 - 1200 7 5.4 5.4 96.9
over 1200 4 3.1 3.1 100.0
Total 129 100.0 100.0

As expected, because most of the respondents were students and had no job, they have quite low
incomes. According to the applied questionnaire, 78.3% of the respondents have incomes below 500
RON a month; mostly they represent incomes from study or merit scholarships or money from their
parents. The monthly incomes of others (13.2%) are between 501 and 800 RON, while 5.4% have an
income between 801 and 1200 RON, and only 3.1% of them over 1200 RON.

Have you ever done a donation? * Gender Crosstabulation
Gender
Total female male
Have you ever done a donation? NO Count 34 12 46
% within Gender 36.6% 48.0% 39.0%
YES Count 59 13 72
% within Gender 63.4% 52.0% 61.0%
% within Gender 100.0% 100.0% 100.0%

From the above table it can be noted that from118 respondents to the question that searches to
find if they ever made any donations answered 93 female individuals, representing 78.8% of the total
number of respondents, and 25 male individuals, representing 21.2 % of the respondents. It is quite
obvious that the percentage of female individuals who made donations is higher than that of the male
individuals who ever made donations. Thus, 59 persons, representing 63.4%% of female respondents,
said they had made donations, while those of the male only rate of 52.0% say this. One can therefore
conclude that female people are more likely than male individuals to donate, at least for young students of
the University "1 December 1918" Alba Iulia.
Analysis of association between two variables - the first step involves verification that the
relationship between the two variables using 2 test, and then the contingency coefficient interpretation
in order to analyze the association degree between the two variables. From the Analyze Menu -
Descriptive Statistics Crosstabs, the two variables are chosen and from the Statistics window select the
desired parameters.
Chi-Square Tests

Value df
Asymp. Sig. (2-
sided)
Exact Sig. (2-
sided)
Exact Sig. (1-
sided)
Pearson Chi-Square 1.084
a
1 .298
Continuity Correction
b
.657 1 .418
Likelihood Ratio 1.068 1 .301
Fisher's Exact Test .358 .208
Linear-by-Linear
Association
1.075 1 .300

N of Valid Cases 118
588

a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 9.75.
b. Computed only for a 2x2 table

Symmetric Measures

Value
Asymp. Std.
Error
a
Approx. T
b
Approx. Sig.
Nominal by Nominal Contingency Coefficient .095 .298
Interval by Interval Pearson's R -.096 .094 -1.037 .302
c

Ordinal by Ordinal Spearman Correlation -.096 .094 -1.037 .302
c

a. Not assuming the null hypothesis.
b. Using the asymptotic standard error assuming the null hypothesis.
c. Based on normal approximation.
Formulating the null hypothesis: there is no association between the two variables, with the
alternative that there is. We can say with a 95% approximation (Sig.> 0.05) that the two variables are
related. Asymp. Sig. (Two-sided) is 0.298 and is therefore greater than the threshold of 0.05 that we set.
The contingency coefficient is 0.095, being different from 0, so the relationship between variables exists,
but is mild.
In conclusion, the null hypothesis is not supported and can be stated that between a person's
gender and its propensity for donating is a connection, being able to say with a very small probability
that, in this case, feminine people seem to have a greater predisposition to donation than male.
AGE? * Have you ever done a donation? Crosstabulation
Have you ever done a donation?
Total NO YES
AGE? under 20 Count 20 27 47
% within Have you ever
done a donation?
43.5% 37.5% 39.8%
20 - 25 Count 25 43 68
done a donation?
54.3% 59.7% 57.6%
over 25 Count 1 2 3
done a donation?
2.2% 2.8% 2.5%
done a donation?
100.0% 100.0% 100.0%
From the above table it can be noted that from all the students (118) from the ones which gave a
negative answer to the question whether they have made donations (46 people), 43.5% were younger than
20 years, 54.3% are 20 to 25 years and 2.2% are over 25 years. Conversely, those who answer
affirmatively to the question about donations (72 persons), 37.5% were younger than 20 years, 59.9% are
aged between 20 and 25 years, while 2.8% were over 25 years.
Chi-Square Tests

Value df
Asymp. Sig. (2-
sided)
Pearson Chi-Square .433
a
2 .805
Likelihood Ratio .432 2 .806
Linear-by-Linear Association .424 1 .515
a. 2 cells (33.3%) have expected count less than 5. The minimum expected
count is 1.17.

589

Symmetric Measures

Value
Asymp. Std.
Error
a
Approx. T
b
Approx. Sig.
Nominal by Nominal Contingency Coefficient .060 .805
Interval by Interval Pearson's R .060 .092 .649 .518
c

Ordinal by Ordinal Spearman Correlation .061 .092 .653 .515
c

a. Not assuming the null hypothesis.
b. Using the asymptotic standard error assuming the null hypothesis.
c. Based on normal approximation.
We formulate the hypothesis that there is no association between the two variables, with the
alternative that there is. As we can see from the above, we are able to say with a 95% approximation
(Sig.> 0.05) that the two variables are not related. Asymp. Sig. (Two-sided) is 0.805 and is therefore
greater than the threshold of 0.05 we set. The contingency coefficient is 0.060, being different from 0, so
the relationship between variables is mild. In conclusion, the null hypothesis is accepted and we can
mention that between the ages of people and their penchant for donating is no important link.
Next we want to see the relationship between the three variables, namely age, gender and
predisposition to donation, and also connection between age, gender and income.

It can be seen from the chart above that from the students falling in the category "under 20" years
and who have not made donations (20 people), 75% are female gender (15 people), and 25% are male (5
persons). Of the same age, and who answer affirmative to the question regarding donations (27 people),
81.48% are female (22 persons), and the remaining 18.52% are male (5 persons).
At "20-25" years age category (25 people who have not made donations) we have 72% female
person (18 people) have never been donations and 28% male persons (7 persons) also have never made
donations. At the same age category, of those who have made donations (43 people), 81.40% are female
(35 persons), while 18.60% are male (8 people).
590

For the "over 25" years age category, the respondents are all female persons (3 persons), which is
the reason why for the negative responses (1 person) and also for the positive (2 persons) regarding the
donations, the percentage for female persons is 100%.
Among those females who are under 20 years (40 people), 87.50% (35 persons) have the income
below 500 RON, 10% (4 persons) have income between 501 and 800 ron, and only 2.5% (1 person) have
incomes between 801 and 1,200 ron. In the same age, 90% of the males (9 persons) have income below
500 ron and 10% (1 person) have income between 501 and 800 ron.
In the 20-25 years age group are a number of 76 people, of which 59 are female and 17 male. For
those of females (59) 72.88% (43 persons) have income below 500ron, 16.95% (10 persons) have income
between 501 and 800 ron, 8.48% (5 persons) income between 801 and 1200 ron and only 1.69% (1
person) have income over 1200 ron. At the same age, male individuals are divided according to income,
as follows: 76.47% (13 people) have income less than 500ron, 11.76% (2 persons) have income between
501 and 800 ron, 5.89% (1 person) have income between 801 and 1200 ron, and 5.88% (1 person) have
income over 1200ron.
The last category, that of people over 25 years is represented only by female persons (3 persons)
of which 33.33%, representing one person has income below 500ron, while 66.67% (2 persons) have
income over 1200 ron.
Next, we want to check if the proportion of the ones that do not consider it worth buying from a
company because of the humanitarian campaign it carries is significantly different from 0.35%.
Null hypothesis is formulated:
H0: p = 35%
H1: p 35%
The proportion of those who consider it worth buying from a company because of the campaigns
it carries is 35%, with the alternative that it differs from 35%.
Descriptive Statistics
N Mean Std. Deviation Minimum Maximum
Does it worth buying from a
particular company because
of the humanitarian
campaign it helds?
129 .85 .356 0 1

Binomial Test

Category N Observed Prop. Test Prop.
Asymp. Sig. (1-
tailed)
Does it worth
buying from a
particular company
because of the
humanitarian
campaign it helds?
Group 1 YES 110 .85 .35 .000
a

Group 2 NO 19 .15
Total

129 1.00

a. Based on Z Approximation.
From the above table we can see that the probability of accepting the null hypothesis (Asymp.Sig.
(One-tailed)) is 0.000, so the probability of accepting the null hypothesis is below the threshold of 0.05,
and therefore the hypothesis is rejected and, therefore, the alternative will be accepted. One can therefore
conclude that the proportion of those who consider it worth to buy from one company because of the
humanitarian campaign which it carries is 35%, but the observed ratio is 85% as measured by the present
hypothesis variable.

3. Conclusions
Currently, consumer as the goods demand carrier has become a real market partner whose
occupied positions within it are improving accompanying the development of the society. The consumers
purchasing behavior is becoming even more important for the businesses, organizations, bodies and
institutions; this being the reason why the consumer is paying increasing attention to it.
The results that we obtained at the end of the study analysis confirm the hypothesis that we
advanced at the beginning of the research. This means that through cause related marketing campaigns, a
company can improve its image. A more positive image for a company means a larger profit. This can be
591

a reason for lately authors writing more and more about social responsibility as being a marketing tool,
although some authors believe these kinds of activities have a certain immorality. Although, if we think
about the fact that corporate social responsibility, precisely cause-related marketing is an instrument used
in a win-win-win strategy, we might stop thinking about the companys profit means and appreciate their
effort for a better society.
The study also points out that by using specific methods for cause related marketing, the
company can influence the young people consumption behavior. By offering the consumer the
opportunity to make a good thing for a humanitarian cause with zero effort, the company not only helps
the consumer but it also improves its image, raises its profit and can make the consumer became loyal to a
certain brand.
The attitude of the investigated group towards humanitarian campaigns carried out by companies
is mainly positive. Most of the questioned students are ready to pay more for products that are the subject
to cause related campaigns, and they argue that their brand loyalty can be determined or maintained by
such actions. In the same time, we can observe from the data obtained in the research that some young
people still look at the quality of a product, and they believe that a product, in order to be bought by them
must also be a quality product and not only a product subjected to a cause related campaign.
As for the young people predisposition for donation, it can be mentioned that female young
people seem to be more prone to donation than male individuals. This is also specified in other expert
studies conducted by researchers worldwide. Another factor that seems to have a direct influence on the
young student predisposition toward donation is their income. Thus, it played out that the higher personal
income is, the higher increases their propensity to donation.
The main limitations of the research concern, on the one hand, that it relies solely on the creation
of a hypothetical situation for the respondents to be able to answer the questions, and on the other hand,
there is the possibility for errors to appear during the online application of the questionnaire. We know
that managing its completion on this path is more difficult for the researcher.

3. References:
- Adkins, S. (1999): Cause Related Marketing. Who Cares Wins. Oxford (UK): Butterworth-
Heinemann.
- Alcaniz, E. B., Caceres, R. C., Perez, R. C., (2010), Alliances Between Brands and Social
Causes: The Influence of Company Credibility on Social Responsibility Image, in Journal of
Business Ethics, 96: pp. 169-186;
- Andreasen, A.R. (1996b): Profits for Nonprofits: Find a Corporate Partner. Harvard Business
Review, 74 (6). pp. 47-59.
- Anghel, D.L., Grigore, G.F., Roca, M., (2011), Marketingul legat de o cauz, parte a
responsabilitii sociale corporatiste i influena sa asupra consumatorilor, in Amfiteatrul
economic, Vol. XIII Nr. 29, pp. 73-86;
- Barone, M.J., Miyazaki, A.D., Taylor, K.A., (2000), The Influence of Cause-Related Marketing
on Consumer Choice: Does One Good Turn Deserve Another? Journal of the Academy of
Marketing Science,Volume 28, No. 2, pp. 248-262.
- Business in the Community (1998): Cause Related Marketing Guidelines: Towards Excellence.
London: BITC.
- Business in the Community (October 2004): Booklet - Brand Benefits of Cause Related
Marketing, available online at: http://www.bitc.org.uk/resources/publications/brand_benefits.html
- Dahan, N. M., Doh, J. P., Oetzel, J. i Yaziji, M., 2009. Corporate-NGO Collaboration:
Cocreating New Business Models for Developing Markets, Long Range Planning, 43(2-3), pp.
326-342;
- Hayes, P. (1997): Cause Related Marketing and Consumer Loyalty. What Are Companies Doing
and How Does It Work? Paris: Esomar.
- Kotler, P. , Lee, N., (2005), Corporate social responsibility: doing the most good for your
company and your cause. Hoboken, N.J.: John Wiley and Sons.
- Kotler, P., Keller, K.L., (2006), Managementul Marketingului, Teora, Bucuresti, pp. 1046.
- Liu, G., Ko, W-W., (2010), An Analysis of Cause-Related Marketing Implementation Strategies
Through Social Alliance: Partnership Conditions and Strategic Objectives, in Journal of Business
Ethics, DOI 10.1007/s10551-010-0679-7
592

- Pringle, H. and Thompson, M. (1999): Brand Spirit. How Cause Related Marketing Builds
Brands. Chichester (UK): John Wiley.
- Recio, M. and Ortiz, A. (2000): Marketing Con Causa. Harvard Deusto Marketing & Ventas, 36,
pp. 26-33.
- Sorribas, C, (2007), Historic Evolution of Cause-Related Marketing Programmes. Does A
Perfect CRM Programme Exist?, International Review on Public and Non Profit Marketing,
vol. 4, n 1/2, pp. 149-158.
- erban, C., (2011), Parteneriatul n programele de marketing social. Implicarea organizaiilor
nonprofit i a companiilor bazate pe responsabilitate social n rezolvarea problemelor
societii, in Amfiteatrul economic, Vol. XIII Nr. 29, pp. 104-116;
- Toma, S.G., (2008) Social Responsibility and Corporate Citizenship in the 21st Century, in
Amfiteatru Economic, X(23), pp.80-85.
- Wall, W.L. (1984). Companies Change the Ways They Make Charitable Donations, Wall Street
Journal (June 21), 1, 19.

593

GLOBAL HOTEL INDUSTRY- CHARACTERISTICS AND INTERNATIONAL TOURISM:
AN ECLECTIC PARADIGM

TERENTE Anca-Simona
Ph.D. Candidate, Economy and foreign affairs, Academy of I nternational Studies, Bucharest, Romania,
simona_terente@yahoo.com

Abstract: Tourism is nowadays the most globalized industry. Despite the attention the business displays to
MNEs earnings generated from strong expansion, a prior concern to these should be on last years tourism
performances and hotel transactions. This paper conveys to the idea that a full explanation of transnational
activities needs to first draw upon several stands of economic theory in conceptual frame of the eclectic paradigm.
The article analyzes the international tourism inbounds in relation with GDP and it brings evidence over worldwide
dispersion of FDI.
The results provide a consistent insight for dynamic decision-making processes and trends in hotel
investments.

Key words: Capital flows, international tourism, foreign direct investment (FDI), hotel transactions

JEL classification: F18, F23, F36, G30

1. Introduction
The economic recession significantly affected how hospitality companies around the globe make
capital decisions. Globally, it has been stated an unprecedented drop in value for hotels, leaving no
region unscathed. Underperformed economic outputs and decreased hotel valuations are evidenced within
the last five years. While supply continues to grow, tourism inbounds reconfigures each year both
internationally and regionally.
This article provides with limited economic models to state the international framework.
Moreover, this paper evidences with consistent access data by appealing to different levels of the
economic theory for a global insight of the hotel industry in order to identify new trends of investment
and tourism development during times of social-economic transformation, tourism inbounds movement
and reconfiguration of capital flows.
This article uses John Dunnings Ownership, Location and Internalization (OLI) framework to
investigate the effect of multinational and ownership structure on performance, or the "what", the
"where", and the "how" of the internationalization for the hotel industry. Using the above propositions
one can explain not only the scope and geography of international value added activities tourism
generates, but it shows the performance of MNEs (multinational enterprises) activities as well. However
it has been accepted that precisely of its generality, the eclectic paradigm has only limited power to
explain or predict particular kinds of international production in hotel industry, and even less the behavior
of individual enterprises.
Archer (1995), Dristakis (2004), Durbarry (2002), Sinclair (1999) and West (1993) have
evidenced the benefits generated from international tourism development over the tax revenues, the
increased employment, and the additional sources of income. Hence, a strong association between
international tourism development and economic performance is evidenced and it has been generally
assumed.
The basic assumption of the eclectic paradigm is that the returns to FDI, hence the FDI itself.
This can be explained by a set of three factors: the ownership advantages of firms O, indicating who is
going to produce abroad and for that matter, other forms of international activity (Dunning, 1993 :142);
by location factors L influencing the where to produce (Dunning, 1993 :143) and by the internalization
factor I that addresses the question of why firms engage in FDI rather than license foreign firms to use
their proprietary assets (Dunning, 1993 :145). This article examines the location factor L from the
view of last years international tourism development and further it investigates the causal relation
between gross domestic national product (GDP) and revenue growth. Second section of this paper brings
evidence from the sectorial profile and worldwide dispersion of the FDIs including the share of hotels and
restaurants in total FDI stocks to assert the international production prior the global recession.
594

The ownership advantages of firms O are examined from hotel transactions and portfolio assets
perspective over the world regions. The results conclude with trends for hotel investment opportunities.

2. Tourism development and GDP
In 2010 world tourism has returned stronger than was expected in the specialized studies of
UNWTO, after the suffered shocks over 2008 and 2009 from the financial crisis and economic recession.
International arrivals worldwide reached 940 million tourists in 2010, up 6.6% from 2009. Further, the
worldwide growth continued throughout 2011 with 4.4% increase in tourism receipts over 2010. The vast
majority of destinations reporting positive growth and often the two figures, enough to offset losses or to
bring them closer to that goal.
Global tourism recovery continues to strengthen, despite the impact of recent developments in the Middle
East and North Africa. Due to social and political developments and changes, Syria and Egypt reported
over the year 2011 decreases of -41% and -32%, Tunis -31% and Lebanon -24%, as well as Japan -28 %
due to the natural disaster in March 2011. In America, international tourist arrivals increased by 5%,
driven by strong results in South America, which contrasted with a smaller increase than the average of
destinations in North and Central America. However, some destinations in the Middle East have shown
very positive results, such as Saudi Arabia and Dubai (UAE), demonstrating the dynamism of this sector
in the region. In Africa, growth in tourism arrivals is below the 2% average, and the arrivals are outlined
by the Sub-Saharan Africa with average increases of 8%. Leader of tourism growth in 2010, Europe
surpassed expectations through a 6% increase and posted the highest growth in first half of 2011.
Reflecting economic conditions, the recovery was particularly strong in emerging economies with
increases in arrivals of 8% average and a lower in growth for developed economies to 5% by average.
The causal relationship between tourism and revenue growth has been investigated by Balaguer and
Cantavella-Jorda (2002) to test the hypothesis that led growth of tourism in Spain. Co-integration test
results indicated a link between long-term tourism revenue to gross domestic product (GDP). Further, it
founded a causal relationship in one direction from an increase in tourism receipts and GDP growth.
These results imply that tourism expansion can cause growth and thus it supports the hypothesis of
tourism-led growth. Same direction of causality in one direction, the expansion of tourism and economic
development is also found in Nicaragua by Croes and Vanegas (2008), in Turkey by Gunduz and Hatem
J. (2005) and in some African countries by Fayissa et al. (2008). However, Oh (2005) argued that tourism
growth has been led in Spain as it had already been one of the top destinations worldwide in international
tourism. In comparison, Dritsakis (2004) and Kim et al. (2006) showed that the causal relationship
between tourism expansion and economic growth is in two-ways, not in one direction.
This implies that the two variables that share tourism and the national GDP can reinforce each other.
Recent studies (UNWTO, 2010) shows the contribution of global tourism related to gross domestic
product (GDP) is at five percent (5%), based on fragmented information and results from over a hundred
countries within world-wide regions. Contribution of tourism to employment tends to be slightly larger
and is estimated at the order of six to seven percent (6-7%) of total global employment both directly and
indirectly considering the associated industries.
To state the references above, this paper analyzes in Table 1 the contribution of tourism receipts over
the GDP in 26 countries within the last years. However, the lack of homogeneity for data of 2009 and
2010 it is a reason to further include more countries from the emerging and underdeveloped countries in
the spectrum, and further investigate over the next sections the FDI development and hotel transactions.
The analyzed period starts with 2007, the prior year for the installation of global economic recession
within worldwide regions.
For the advanced economies, diversified tourism contribution to GDP ranges from 0.5% to 2% for
countries where tourism is a small and medium sector, to almost reach 10% for countries where tourism is
an important pillar for the economy. For small islands and developing countries, or regional and local
destinations where tourism is a key economic sector, the importance of tourism tends to be even higher.
Top countries with significant tourism share of in their economy are represented by Croatia, a top
European destination promoted in the early 2000s until present, Jordan, with the highest rate recorded in
the 2007, with an increase of 30% from 1998 in the tourism contribution to GDP.
Ranked third, Bulgaria show a trend of steady growth to an 8% average of the total tourism contribution
to GDP, while in same geographical region Romania states a rate of less than 1 percent, declined by 0.7%
over the GDP since 1998.

595

Table 1: International tourism receipts -percentage (%) of Gross Domestic Product (GDP)

Country 2007 2008 2009
U.S.A. 0.69 0.77 0.67
France 2.09 1.99 1.86
Spain 4.00 3.87 3.63
Italy 2.02 1.99 1.91
Croatia 15.60 15.6 14.0
Bulgaria 8.43 8.11 7.65
Jordan 13.59 12.9 11.6
Thailand 6.75 6.67 6.03
Hong Kong 6.64 7.11 7.87
Singapore 5.11 5.66 5.01
Austria 5.02 5.22 5.09
Greece 4.99 4.94 4.44
Portugal 4.39 4.35 4.13
New Zeeland 4.14 3.87 3.79
Australia 2.34 2.39 2.63
Hungary 3.43 3.81 4.37
Philippines 3.42 1.49 1.45
South Africa 3.06 2.87 2.65
Turkey 2.85 3.00 3.45
U.A.E. 2.35 2.27 2.72
Argentina 1.64 1.41 1.27
United Kingdom 1.37 1.36 1.38
Canada 1.09 1.05 1.02
China Mainland 1.07 0.90 0.80
Russia 0.74 0.70 0.75
Brazil 0.36 0.35 0.33
Source: IMD World Competitiveness Yearbook (Updated: May 2011).

While Hong Kong strongly increased the share of tourism in its economy with a consistent grow
to reach 8% in 2010, Thailand and Philippines register a descendant trend for the overall tourism
contribution and tourism receipts from 2007 until 2009. With a steady growth in spite of economic
recession, Australia reaches 2.63% tourism share of GDP in 2009.
The top ten tourist destinations in 2010 according to international arrivals and tourism receipts
show China had reinforced its position. In arrivals, China has surpassed Spain and ranks third. France
continues to lead the rankings of major tourist destinations in the world in terms of arrivals, while U.S.
tourism ranks first in revenue and the second in arrivals.

3. FDI worldwide dispersion and hotels share
Direct foreign investments (FDIs) represent the gateway through which many developing
countries continue to drive tourism. Empirical evidence by international organisations and researchers
confirm the increasing worldwide dispersion of economic activity as a critical dimension of the
globalisation process. The fact that global FDI flows are running in real terms at more than five and half
times the average prevailing in the first half of the 1980s and that trade in intermediates accounts for an
increasingly large proportion of total trade gives an idea of the dynamics of the internationalisation of the
structures of firms production activity (Commission of the European, 2005, p. 96).
Related to the dynamic sector and its implications, there is relatively little empirical information
to evidence the extent of tourism-related FDI over the global economy and its impact. Tourism is an
industry that must be managed carefully, with special challenges and concerns while the structure of this
industry includes a wide diversity of players, ranging from global TNCs (transnational companies) to
small and medium sized companies (SMEs). This allows the participation in the industry to have a
different number of scales and levels in the market.
596

However, stated relocation is limited in services industry, still in hotels and restaurants sector
over 2006, but with increasing importance in developing economies as Table 2 shows.

Table 2: Sectorial Profile of FDI
SECTORS
World % share of sector in
Total
Developing economies % share of
sector in World sector
(Inward stocks) 1990 2002 1990 2002
Finance 40 29 24 23
Trade 25 18 10 23
Business activities 13 26 7 39
Transports, storage
and communications
3 11 43 29
Hotels and
restaurants
3 2 13 29
Total 100 100 17 28
Source: UNCTAD, 2006.

At the end of 2004, FDI in hotels and hospitality sector reached 819.4 EUR million, and
comparatively analyzing the same reported value of 2002 that only represents 2% of the world Sector, of
which 29% is held within the developing economies.
In order to be able to compete in a foreign location and tackle the disadvantages generated by
operating in a foreign environment, a firm must possess certain ownership advantagessometimes called
competitive or monopolistic advantages - that can compensate for the additional costs associated with
setting up and operating abroad, costs which are not faced by domestic producers or potential producers
(Dunning, 1988). His paper defines three different types of ownership advantages: the ones that stem
from the exclusive possession or access to a particular asset able to generate income such as trademarks,
patents; those associated normally with a branch plant rather than a de novo firm, and those that are a
result of geographical diversification or multinational setup. Second condition of international production
is that the company must be better-off transferring its ownership advantages within the firm across
borders, rather than selling them to a third party via licensing or franchising, for example. This second
factor is the internalization and has been further defined by Dunning (1993) as a choice between investing
abroad or not. The third condition of the eclectic paradigm is concerned with the where of production.
MNEs will chose to produce abroad whenever it is in their best interests to combine intermediate products
produced in their home country which are spatially transferable with at least some immobile factors or
intermediate products specific to the foreign country (Dunning, 1988).
Some of the location advantages include factors endowment and availability, geographical factors
or public intervention in the allocation of resources as reflected by legislation towards the production and
licensing of technology, patent system, tax and exchange rate policies which a multinational would like
either to avoid or to exploit (Dunning, 1977). In this paper the part of the eclectic paradigm is bind to
bring evidence on the tourism development and global allocation of capital flows by comparing
homogenous results of world-wide distributions of direct investments in relevance to the hotel industry, to
assert the international framework prior the global recession.
The FDI in tourism has doubled or tripled for developed countries within 1990 and 2004, even
though inward stocks still constitute less than 2 per cent and for most are less than 1.5 per cent of total
FDI inwards, which states the fact that tourism is a relatively an un-globalized activity (UNCTAD,
2007).
As with the evidence on outward stocks, inward FDI stocks are concentrated primarily in hotels
and restaurants, although both France and the United States host some inward FDI in air and water
transport.
Top five countries in Inward tourism-related FDI stocks or host countries, are Canada with 1.4%
share of tourism, United States, United Kingdom with above 1%, Hong Kong and France, holding
similarly the same positions in terms of outward FDI stocks. However, the bulk of FDI stock in hotels and
restaurants by major home countries is allocated in other developed countries, in particular the United
States, followed by the United Kingdom, Canada, Australia and Germany. Countries where inward FDI
stocks exceed outward stocks are stated by UNCTAD (2007) in the order of magnitude as: Australia,
Germany, Portugal and Austria. Of the outward FDI stocks in hotels and restaurants from the European
Union (EU), between 80 and 85 per cent are invested in other EU countries and the United States, while
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the US outward stocks until 2002 in hotels and restaurants had two thirds allocated in the developed
countries.
For the United Kingdom, the worlds largest source country of outward tourism related, FDI
stocks in hotels and restaurants located in developing countries appear to have trebled in value from 1995
to 2003 to amount the least of 2,013 million in 2004 or around 6 per cent of the outwards stocks
(UNCTAD).
FDI in tourism on transnational companys activity is limited, but from the outward data from
source countries it appears that the distribution among regions is rather uneven as for example both
British and French outward FDI stock in tourism is concentrated in Latin America and the Caribbean and
Asia, with virtually no stocks held in Africa. UNCTAD survey (2007) of hotel transnational companies
evidenced that up to 2004, the largest proportion of the 1,350 hotels in developing countries was located
in Latin America (23 per cent of the total), South-East Asia, while transition economies in Europe and
North Africa had between 13 and 15 per cent each, in terms of hotel share. France fourth source FDI in
hotels and restaurants has been worth $ 99.4 million at the end of 2004, down from 2003, when stocks
were some $ 215.9 million.
Table 3 illustrates the importance of tourism development in the economies of 21 countries
between 2000 and 2006, excluding the main sources and receiving countries stated (USA, Canada, United
Kingdom, Austria, Germany, France and Belgium).

Table 3: International distribution of Total FDI (Inward stocks) and share of hotels % in Total FDI by
country
Stocks
Total Inward FDI stock
($million)
Share % of Hotels and
restaurants in total Inward FDI
stock
By Country 2002 2004 2002 2004
Brazil
103014.5 - 0.3 -
Bulgaria
3672.6 8404.5 2.0 1.6
Cambodia
1782.1 2010.4 16.1 15.1
Croatia
- 10285.2 - 3.3
Czech Republic
38962.5 57258.9 1.2 0.9
Hong Kong
336278.3 453060.0 1.6 1
Hungary
36223.9 62687.5 1.0 0.7
Macao (China)
3253.0 3984.3 4.2 4.5
Madagascar
165.5 939.9 0.2 0.1
Philippines
15099.2 - 0.0002 -
Poland
34227.0 - 0.5 -
Peru
13388.7 13891.9 0.4 0.4
Republic of Korea
44337.8 55949.5 4.2 3.2
Saudi Arabia
17577.0 - 0.6 -
Singapore
135390.4 166561.5 1 0.9
Slovenia
4114.0 7600.0 0.4 0.3
Thailand
29708.0 44636.0 0.7 0.6
Turkey
16259.0 29510.0 0.8 0.7
Ukraine
5530.3 9606.0 3 -
Myanmar
7501 7750 14.1 13.7
Taiwan Province of
China
52967 60494 0.3 2.8
Source: UNCTAD (2007a)

In the represented study the largest stock of FDI in hotels and restaurants are owned by Hong
Kong (China), Singapore, Korea, Hungary, Thailand, Saudi Arabia, Turkey and Thailand, but almost all
countries for which data are available have experienced very rapid growth in value of FDI in recent years.
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For example, in the period 1995-2004, growth was eight times states in Korea during 1985-2002 and six
times in the Czech Republic over 2000-2003.
Other countries as Hungary or Bulgaria have seen growth rates almost double. In general, the
stock of FDI in hotels and restaurants was a small percentage of the total stock of FDI, and in many
countries was less than 2 percent. But there are exceptions and it is important to note for the countries for
which tourism accounted for more than 10 percent of total FDI. In order of the contributions over the
investments in hotels and restaurants, these countries are: Dominican Republic, Cambodia and Vietnam.
Since the transition economies have attracted considerable foreign direct investment in tourism during the
1990s to 2000, a percentage of 10 to 12 of the stock of FDI in hotels and restaurants worldwide are
estimated to be held in the emerging countries (UNCTAD, 2007).
However along with the last years liberalization of FDI policies and intense competition for FDI,
circumstances have changed in terms of MNEs presence. Many countries seek not only the presence of
international hotel chains, but also capital investment by them. As a result, in a more liberal investment
climate, companies have a greater choice for the modes of entry on the international tourism markets.

4. Market trends - reconfiguration and capital flows
The investment market for hotels has changed dramatically since 2007. Prior to that market peak,
access to capital was relatively easy and highly leveraged financing for transactions was common place,
but now investment capital is much harder to find. In recent years, capital flows exacerbated cash buyer's
depressing and optimistic about the future of hotel industry and still is likely to be dominated by the
influence, beyond the installation of the economic downturn over the worldwide capital markets.
The global economic recession contributed to huge erosion on the operating profit of hotels, so
the hotel owners faced declines in property value by 40 percent to 60 percent in many parts of the United
States (HVS, 2010). In a year without major economic fluctuations, 400-500 hotels transactions take
place over the U.S. market. This volume of transactions is significantly higher than any other region of
the world, so it should consider a reference point in further trends analysis of trading and capital
allocations for global hotel market. As Table 4 evidences, 2005 and 2006 were peaks with 534 and 494
hotels traded on the North American market. The volume of transactions decreased slightly in 2007 to
467. During these years the top feature of trading was the available funding to value-for-loan, which
allowed a frenzy of buyers. This has created strong interest in purchasing an exorbitant valuation and
capitalization rates plunged, leading to the decrease at about a quarter in 2009 transactions compared to
2005.

Table 4: Hotel transactions in United States of America: 2005 2009

Year
Total of US hotels and
portfolio transactions
per each year
2005 534
2006 494
2007 467
2008 268
2009 138
Source: HVS (2009)

Although the US lodging market has begun to show some positive signs of recovery since 2010,
serious challenges remain for equity investors. Along with the limited supply of high-quality asset
offerings, equity investors have had to broaden their horizons when considering how to invest their
capital.
Transactions and portfolio hotel assets in the period 2000-2009 reviewed on over 25 United
States hotel markets showed that over 75% are classified as major transactions, with values of $ 10
million or above, while only 42% of transactions reflects prices outside the major markets (HVS, 2010).
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Stating US hotel trends was possible with the use of capitalization rate indicator to indicate the overall
property value over the net income of last fiscal year. Capitalization rate average for all trading operations
in the U.S. hotel dropped to about 9.75% from January 1, 2000, at just over 8.0% from January 1, 2010.
Lower costs of capital and wider acceptance of hotels as investment properties characterized middle years
in the mentioned period. Previous cycles from hotel studies and literature revealed that Europe is about a
year behind the United States, indicating that recent progress in the work should become a signal
consolidation for hotels transaction volume. Total transaction volume on the hotel market in Europe was
about 6.5 billion euro in 2010, an increase of almost 110% from the low level of 3.1 billion traded in
2009. However, the total remains well below its peak in 2006, and a trading volume of 20 billion euro,
and also the media in the last ten years from 2001, EUR 10 billion. The volume of hotel sales in Europe
further increased in 2011 by nine per cent, to a total investment of about 7.1 billion euro compared to 6.5
billion in 2010. Investors appetites were constrained by a lack of debt finance in particular, while the
conversion of non-hotel properties remains an attractive option for European investors.
Despite some European markets recovering from the recession quicker than expected over 2011,
while other showed a more steady performance, the increase in available debt did not materialize and
continued the macroeconomic uncertainty prevailed. HVS (2012) brings evidence that sixteen hotel
European markets are forecast to achieve values above their previous peaks by 2016, hence assumed
some will only achieve below inflationary growth.
Overall growth in hotels value and number of transactions are expected to be more prominent in
2013 than 2012 and 2011, while the impact of the currency fluctuations or the impact of the exchange rate
remain a constant issue to influence investment decisions. In terms of value per room of 2011 Europe
hotels transactions, first positions are held by: Paris, London, Zurich, Geneva, Rome, Istanbul, Moscow,
Amsterdam, Milan, Sankt Petersburg, Munich, Stockholm and Barcelona.
While global economies have stepped cautiously on the road to economic and financial recovery
since the second half of 2010, unrest prevails in some parts of the Middle East due to North Africa
tensions, while the jump in oil prices help create new challenges of the future performance of hotels in
many parts of this region. Recent studies of 352 hotels with 93,500 hotel rooms across 55 cities of Middle
East evidenced average growth of hotel revenues and higher average hotel performance rates for 2011 and
2010 (HVS). Expansion strategy in the Middle East is defined through the conversion processes and
acquisition of international brands to represent the main strands for new operators, especially in those
markets that offer less opportunity for new developments in the climate of current investments.
Dubai continues to reach new heights of growth for the following years, while Saudi Arabia
attracted more than half of total FDI in the Middle East in 2009 and even more in 2010. Saudi Arabia,
UAE and Qatar continue to remain at the forefront of development and investment attraction and
hospitable hotel in the region. Tourist arrivals in the Middle East registered an increase of 14% over 2010
to a total of 56.6 million tourists, with prospects of positive trends for the next three years.
South America comprises 13 countries and represents about 5, 55% of world GDP, of which
Brazil holds the largest share, followed by Argentina, Venezuela, Colombia, Chile and Peru, and the rest
countries with 4.19% percentage of the GDP in the region. While most countries should continue to enjoy
favourable trading conditions in Latin America, the more financially integrated economies could face
additional challenges to the simple conditions for different ways to external financing. After five years of
stability in the existing hotel offer, an expected increase is signified to reach of 25.3% in hotel supply
over the next years in the region (STR, 2010).This aspect should stimulate intraregional rapid demand
growth and economic development, while in other cases various constraints could refrain investments and
economic growth due to inflationary pressures. Asian countries had several years of economic progress at
regional and international level since 2007 with growing influx of passengers which consistently
contributed to the financial performance of hotels, registering an unprecedented level of growth in
valuation until 2009. Main key cities in the size and capitalization transactions were: Tokyo, Hong Kong,
Singapore, Shanghai, Seoul, Beijing, Bangkok, Phuket, Taipei, Bali, Kuala Lumpur, Jakarta and Manila.
China and India, although possessed a public, independent and private economic sector, seem to have also
suffered in 2009 and 2010 due to their significant ties with Western economies, and especially due to
natural disasters in Japan. India has made in the last quarter of 2009 and during 2010 some positive signs
of recovery in the hotel industry, which generated a return in hotel evaluation and the transactions (HVS).
Recovery is expected to take place over 2012 with positive prospects for investments over the next years.

600

5. Conclusions
Emerging markets remain a catalyst for growth for the tourism and hospitality industry and are
expected to be a primary target for investments.
An array of growth opportunities arising from multiple world-stage events in the coming decade,
along with increasing domestic disposable income, has garnered extensive global attention for these
nations, though the degree depends on the particular segment and region attractiveness. Regions reported
overall tourism fastest growth over the last two years for Saudi Arabia, Bhutan, Georgia, Sri Lanka,
Palau, Myanmar, Macedonia, Azerbaijan, Uruguay, Thailand, Vietnam, Republic of Moldova, Maldives,
Estonia, Alger, Madagascar, New Caledonia, Singapore and little for Romania and Finland.
Although operating performance has begun to recover, operators, investors, owners, developers,
managers and advisors are approaching their segments with a new air of caution and fresh ideas.
Executives of many of the largest global hospitality companies focuses are on strategic framework for
preserving, optimizing, raising, investing and enabling capital. In addition, with many new government
regulations and reporting guidelines already in place or on the horizon, market participants will be
required to modify a number of practices in the coming months and years. While financing for the
hospitality industry had slow returns over 2010 and 2011, it primarily remains available for top assets in
the most attractive markets. With a large amount of capital focused on the sector and increased prices on
assets anticipated in the future, transaction activity is expected to intensify as fundamentals strengthen
and consensus on valuation grows. In the BRIC countries (Brazil, Russia, India and China), a new middle
class that is eager and able to travel is developing. This segment is driven by greater availability of credit
and higher levels of wealth and disposable income, which have a close correlation with tourists inbounds
both domestic and internationally to support a robust performance in this sector.
Evidenced by recent studies, two billion people could join the middle class by 2030, and the
BRIC economies and N11 (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines,
South Korea, Turkey, Vietnam) can represent up to 60% of the global GDP by 2050, highlighting there
are significant investment opportunities (Goldman Sachs, 2010).
World sporting events can serve as important catalysts for rapid substantial investment of public
and private markets. Currently, Brazil, Russia and Qatar are scheduled to host the FIFA Soccer World
Cup in 2014, 2018 and 2022 and meanwhile Great Britain, Russia and Brazil will host the 2012
Olympics, 2014 and respectively 2016. All these events should result in billions of dollars for financing
and investments in the economies of these countries. In Brazil, for example, the World Cup is expected to
generate an estimated U.S. $ 7.7 billion in investment to develop or renovate stadiums, hotels and airports
and urban development projects. Based on offers from Russia and Qatar to host the soccer event, it is
obvious that several billion will be spent on infrastructure development in these two countries in future
years. Nevertheless, the developed economies should continue to play an important role in developing
tourism sector in the next decade. Global tourist consumption is about to double in the next decade,
Europe and North America are responsible for generating about half, with more than 60.0% of overnight
visitors arrivals. But emerging markets are set to take part in increasingly large and may be responsible
for 42.0% in total arrivals worldwide by 2020.
By using the conceptual framework of the eclectic paradigm, this article evidences the emerging
and developed countries that considered tourism in their national top priority agenda in the relation with
GDP, over the past years. Continued with an extensive study of FDI and related tourism activities,
emerging and developed economies are stated for the share of hotels they possess over the FDI flows to
evidence the worldwide dispersion of this industry. The purpose of this paper is to play a more timely and
reliable basis in the research infrastructure for hotel investors depending on the particular markets and
stated trends. As most academic models refers to the overall tourism industry or to the study for particular
economies and financial aspects of MNEs, the current findings introduce new variables for viable
macroeconomic assessment and the internationalization of capital flows in the hotel industry.
601

6. References :
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UNCTAD/DITE/IIA/2007/5 New York, Geneva -2007, United Nations Publication.
- Bader E., Geieregger E., Balekjian C.(2008) European hotel industry performance 2007, Journal
of Retail and Leisure Property, Vol. 7 No.3, pp.179-85.
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expansion: the link between multinationality and performance in the service sector. Journal of
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evidence from international acquisitions. Journal of Finance 43, 11611175.
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search for an eclectic approach, British Library ISBN- 0-415-08534-9 (Vol1)
- Dunning, J. H. (2001) The eclectic (OLI). paradigm of international production: Past, present and
future. International Journal of the Economics of Business,8, p.173-190.
- Dunning, J. H. (1988) Explaining International Production, London, 10 Journal of International
Business Studies
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internationalization: implications for MNE performance, .Strategic Management Journal, 10
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- HVS (2011) Middle East Hotel Survey Shifting Sands..
- HVS (2011) South America Hotel MarketOverview
- HVS (2012) 2012 European Hotel Valuation Index
- HVS (2010) Comparative Capitalization Rate Study
- IMD World Competitiveness Yearbook 2011
- Johnson C., Vanetti M. (2005) Market developments in the Hotel Sector in Eastern Central
Europe, Advances in Hospitality and Leisure, Volume 1
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OECD Conference on Innovation and Growth in Tourism Lugano, Switzerland.
- Kim, K-H. and Olsen, M.D., (1999). Determinants of successful acquisition processes in the US
lodging industry. International Journal of Hospitality Management 18, pp. 285307
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versus Europe; International Journal of Hospitality Management 27 (2008) 657664
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International Journal of Contemporary Hospitality Management, 9, 187-192.
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Hotel and Motel Management, 210, 11-13.
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Cornell Hotel and Restaurant Administration Quarterly; Dec 1997; 38, 6;
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April 2010.
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June 2011.
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UNWTO Highlights (2011)
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UNWTO Highlights (2012)

602

REFOCUSING MARKETING TO REFLECT SOCIAL RESPONSABILITY

TRIC Gelu
Ph.D. student, Faculty of Economics and Business Administration/Department of Marketing, West University of
Timioara, Timioara, Romnia, e-mail:gelutrisca@yahoo.com

CI ORTUZ Adela
Ph.D. student, Faculty of Psychology and Sociology/Department of Sociology, West University of Timioara,
Timioara, Romnia, e-mail: adaciortuz@ymail.com

Abstract: As traditional marketing statements are inherently in conflict with the social
responsibilities of companies to customers, the concept of corporate social responsibility is a dead end.
In this paper, based on assumptions of the Service Dominant logic and Service science, we conceptualize
a marketing framework in which social priorities are consistently integrated into the company's
operational considerations. The implications are manifold. Academic researchers can adopt a new
research perspective, useful to investigate various relationships between individual and social value.
Business practitioners will receive theoretical support for the development of strong and honest
marketing practices that reflect social responsibility.

Key words: corporate social responsibility, Service Dominant logic, Service science, service systems.

JEL classification: M31.

1. Introduction
Social effects of marketing activities were a central concern of early marketing thought
(Witkowski, 2005). Marketing was first described by scholars as an institution and a social process (Ivey,
1921; Pyle, 1931; Stewart, Dewhurst and Field, 1939; Duddy and Revzan, 1947; Vaile, Grether and Cox,
1952; Alderson, 1957; Drucker, 1958), as "an economic tool used to achieve indispensable social
outcomes" (Breyer, 1934, p.31).
Based on understanding the need for social legitimacy, marketing philosophy has always been
well-intentioned. It was recognized that marketing should serve not only business but also the needs of
society, that it must act in accordance with public interest wildly sharing social goals and that its
responsibilities extend well beyond the profit motive (Breyer, 1934; Lazer, 1969; Kotler, 1975;
McKitterick, 1976; Dixon, 1982; Fisk 1999; Lusch, 2007).
Unfortunately the traditional logic which has guided the marketing activities so far prevented business
practice to substantially and consistently achieve these goals (Lush, 2007). The concept of social
responsibility came in the academic discourse in the second half of the twentieth century as a possible
solution. In the last decades formal writing on the subject has shifted to the "corporate social
responsibility" concept which remained largely ineffective (Carroll, 1999).
Marketing practice is still criticized for lack of ethics and social responsibility (Hastings and Haywood,
1994; Smith, 1995). Marketing is blamed for focusing on transactions and profit, promoting materialism,
negative influence of cultural values, intrusion into people's private matters, manipulative nature, pressing
sales tactics, environmental destruction, waste of resources, establishing opportunistic prices, labor
exploitation, spread of greed and consumerism, commoddifying human relations (Reuter and Zitzewitz,
2006, Nicholls and Cullen,2006; Kotler, 2006, Sheth and Sisodia, 2006; Lusch, 2007; Hackley, 2009).
Therefore, the need to identify effective ways to integrate ethical and societal dimensions in marketing
activities is even more acute. Responding to this need, in this paper we have two objectives. On the one
hand we emphasize the inherent contradiction between the traditional marketing logic and the desire for
social responsibility. On the other hand, we conceptualize a framework for understanding the business
that covers the gap between social aspirations of the marketing philosophy and business practice. The
conceptual foundation is based on the premises and assumptions of emerging marketing paradigms
Service Dominant logic and Service science. The managerial and academic research implications of this
new approach are also discussed.

603

2. Corporate social responsibility - An antagonist perspective
The concept of Corporate Social Responsibility (CSR) rooted in the traditional marketing logic is
a dead end. As the sponsorship by the Cosa Nostra of a center against drug addiction is no evidence of
social responsibility on its part, inherently opportunistic way in which profit is pursued by the companies
following the traditional marketing logic cannot be reconcile by the corporate social programs.
The marketing logic represents the mental model or the framework of thought through which managers
perceive and understand the business reality (Lusch and Vargo, 2006). Traditional marketing orientation
was called "manufacturing logic" (Norman, 2001), "old enterprise logic" (Zuboff and Maxim, 2002) or
"goods dominant logic" (Vargo and Lusch, 2004). According to this paradigm, "marketing is a
combination of activities designed to produce profits by providing, creating, stimulating and satisfying
the needs and/or desires of a selected market segment" (Eldrige, 1970, p.7). Satisfying the needs, means
in this context reaching business objectives related to profit and not involving the protection of
customers welfare (Bell and Emory, 1971). Customers are perceived as exogenous means for achieving
organizational ends (Hackley, 2009). To expect that a company operating in this logic puts social
priorities and values before the companys operational considerations is unreasonable (McGee and Spiro,
1988).
The CSR concept has had a long and complex history, which led to the accumulation of a
substantial body of literature (Carroll, 1999). However, what are the specific responsibilities to society
which firms should assume remain unclear. In their broadest meaning, these responsibilities are defined
as the economic, legal, ethical, and discretionary expectations that society has of organizations at a given
point in time (Carroll, 1999, p.283). They are circumscribed to "serious attempt to solve social problems
caused wholly or in part by the corporation (Fitch, 1976, p 38). In practice, these concerns remain at best
complementary to current activities of the company, not incorporated effectively into business logic by
which profit is pursued and achieved. Abela and Murphy (2008) reveal a clear separation between
business theory and ethical theory, ethical recommendations appearing as a distinct stage in the marketing
activities and can be easily overlooked by practitioners. Because of this separation, companies get to
pursue additional benefits in exchange for the social responsibility shown, justifying some social
programs and socially responsible business decisions by a reasoning which focus on long-term economic
gains (Davis, 1960; Johnson, 1971). Common are situations where corporate social responsibility has
become a philanthropic palliative for the lack of social responsibility in which the business is actually
conducted.
The debate on CSR remains largely sterile as it addresses social responsibility in contrasts with
companys reason of being. The contradiction between the notion of social responsibility and marketing
traditional logic does not derive from economic function performed by the company. In a competitive
environment, obtaining profit is the basic condition for the survival of the firm (Webster, 1994). Pursuit
of profit is one of the manifestations of social responsibility as the economic viability of the company is
vital to society (Carroll, 1999).
Apparent incompatibility between the notions of profit and social responsibility masks the real
reason of firms inability to fully assume their social responsibilities. What makes impossible for
companies to fully and consistently assume their social responsibilities is the conceptual framework
within which they operate. Much of the social effects generated by firms are outside the prescriptions of
this frame of reference, outside the logic that guides the present practice of marketing. Inherently
conflicting relationship between traditional marketing statements and the concept of CSR can be
discussed around three antagonisms: individual value vs. social value, the role of client vs. the role of
citizen and the company vs. the client.

2.1. Individual value vs. social value
Traditional marketing focuses on transactions, singular or repeated, customers practices being
ignored. The goal of marketing is the production and selling as many units of output as possible (Kotler,
1972; Vargo and Lusch, 2008). Social effects of production and consumption are put by companies on the
customers shoulders. After all, companies are doing nothing more than to satisfy customers needs. What
is valuable for the customer is created and offered by companies according to individual needs. The
customer has the right to accept or reject the companies offer. Based on this right, the customer often
ends up being burdened with many social responsibilities that belong to the company. In addition,
companies conceptualize customer needs outside their social context which creates a perceptual gap
between individual and social interests, between what is valuable for the individual and social values. The
604

concern for mass customization emphasizes this trend. In social responsibility discourse, this becomes
more an ordinal problem, seeking to justify the primacy of one set of values over the others (Carroll,
1999). Traditional marketing logic lacks the appropriate explanation framework to cover this gap.
Traditional marketing reaches out to exploit and increase the antagonism between individual and social
value. How value creation is conceptualized in this logic provides no means by which the individual value
could be established in social values or social value could be derived from the individual value. The
antagonism between the two types of values cannot be reconciled, although they should be seen as facets
of the same coin, because are mutually dependent.
2.2. The role of customer vs. the role of citizen
The gap between individual and social value is based on the lack of congruence of the two roles
fulfilled by any individual in society: the customer and the citizen. Traditional marketing logic offers no
solution to harmonize this duality which becomes antagonistic in the context of consumption. According
to traditional logic companies address the customers not the citizens. The company aims to consistently
meet customer needs (Kotler, 1972), lacking the means by which these needs can be aligned with the
aspirations and needs of citizens. For this reason, only the customers are expected to be socially
responsible. If individuals would not be characterized by customer/citizen antagonistic duality, traditional
marketing statement that it fulfills customers' wishes would be sufficient to perceive a default assumption
of social responsibilities by companies. In the context of this duality, however, the notion of corporate
social responsibility is a dead end because it does not change the way in which the client it is perceived
by the company nor does it empower the customer to be able to take up real social responsibilities. New
business logic is needed to show how to obtain a value configuration that meets the balanced individual
and the social needs.
2.3. The company vs. the client
The lack of harmony between the individual and social value, between the role of customer and
citizen derives from antagonistic position assumed by the companies and customers from the traditional
marketing logic perspective. While companies are seen as creators of the value offered on the market,
customers hold the opposing position of destroyers (consumers) of value (Morgan and Strong, 1998;
Vargo and Lusch, 2004). Traditional logic does not provide a framework able to give relevant explanation
by which value could result from a collaborative process between company and customer. Only in such
process social responsibility could be mutually assumed. Traditional marketing focuses on efficiency by
insulating the market actors and processes (Vargo and Lusch, 2004). Communication is typically
unidirectional; customers are marketed and "penetrate" without a true dialogue (Lusch et al., 2006). The
notion of social responsibility makes no attempt nor can solve this problem.
Customizing social responsibility by identifying social stakeholders in that company should take
responsibility (Ansoff, 1965; Freeman, 1984) does not cancel nor change traditional marketing logic
antagonisms. The individual value-social value dichotomy exists among all stakeholders, with the
prevailing of individual value. The only stakeholders for which social value is paramount are future
generations. As represented in absentia interests of this group are suffering the most. Information
asymmetries, imbalances of power between stakeholders and the dominance of large companies make
illusory the harmonization of all these interests (Sheth and Sisodia, 2006). Business companies are social
agents far more active and stronger than most other social stakeholders. To be productive, the discussion
on social stakeholders has to be translated in a marketing logic that allows the mediation of the roles and
responsibilities of market actors in creating value.
The poorest and yet the most cited argument for the notion of corporate social responsibility is
assumption that managers will refrain from participating in markets where long-term effects on
consumers are negative because they know that at some point consumers will punish these markets and
companies (McGee and Spiro, 1988). From this perspective, CSR is seen as a cost that is desirable only
when long term profit is pursued. The relationship between social responsibility shown by companies and
their financial performance is however unclear. The studies conducted by Pava and Krausz (1996) and
Sen and Bhattacharya (2001) show not only the effect of assumed social responsibility on companies
financial performance is often elusive but can be negative. Not surprising when one considers that
marketing trivialities created spoiled and shallow customers led mainly by emotion and the principle of
pleasure. While companies perceive social responsibility as a cost, customers come to perceive it as a
burden which lowers their personal pleasure. The model of rational customer on which companies can lay
the social responsibilities associated with the consumption on behalf of meeting individual needs is false
and should be abandoned. The idea of social responsibility should be firmly anchored in a market logic
that enables it to truly guide marketing practices.
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3. The Service perspective on value creation
The traditional model of linear value chain in which the company is the creator of value and
customer the consumer of value was increasingly challenged in the marketing literature of the last two
decades (Normann and Ramirez, 1993; Holbrook, 1994; Ravald and Gronroos, 1996; Vandermerwe,
1996; Wikstrom, 1996, Woodruff and Gardial, 1996; Normann, 2001; Vargo and Lusch, 2004; 2006;
Gronroos, 2006). These authors have shown that customer value cannot be perceived as something given
by the firms but as the result of customers value generating processes.
Summarizing the traditional marketing logic assumptions, Vargo and Lusch (2004) have proposed a new
paradigm to guide theory and business practice called Service Dominant logic (S-D logic). S-D logic
proposes a collaborative and systemic vision on value creation, which includes customers and other
market players (Vargo and Lusch, 2004, 2008; Vargo, Maglio and Akaka, 2008). From this perspective,
business companies cannot create and deliver value; they can only make value proposals and provide
services as inputs to achieve it. Perceived in terms of provided benefits and not of fungible out-puts
(Vargo and Lusch, 2004, 2008), service is the support of value, being performed by entities acting on
each other. The value is created in the customers context as value in use, through integration and
interaction with resources provided by organizations, applying its resources as well (Gronroos, 2008,
Vargo, 2008).
S-D logic is seen as a potential philosophical foundation for Service science (Vargo and Akaka,
2009). Service science describes participants as service systems (Normann, 2001). Service systems are
conceptualized as configurations for value co-creation and include people, technology, value proposition
(connecting internal and external service systems) and shared information (Maglio and Spohrer, 2008).
Services systems are holders and integrators of resources (Vargo and Akaka, 2009) creating value by
integrating resources (Lusch and Vargo, 2006; Arnould, Price and Malshe, 2006). Service systems can
vary in size from individuals to companies, organizations, nations and the global economy (Vargo and
Akaka, 2009).

4. The conceptual model of Service Systems Social Responsibility
Collaborative vision on value creation and the perception of market actors as service systems that
create value through integration of resources open the opportunity for conceptualizing a framework in
which social responsibility can be equitably shared between all stakeholders. In this, the balance between
individual value and the social can be achieved. The conceptual model we propose is canceling the
traditional marketing logic inherent antagonisms and establishes theoretical premises to mediate a socially
responsible behavior by all social actors.
Defining organizations and individuals as service systems, Normann (2001), shows that each
service system acts on the market both as a supplier and as a customer. Not just companies, but
individuals or other organizations can be suppliers at one time. Not just individuals, but companies or
other organizations can be customers at one time. As service systems may have only these two states
constantly alternating, we summarize the discussion of social responsibility around them, referring to
social responsibility of the service supplier and service customer. S-D logics collaborative perspective on
value creation makes these two states of a service system (supplier and customer) not antagonistic but
complementary.
4.1. The social responsibility of the supplier
Responsible resource integration for the value facilitating proposal
From the S-D logic perspective the supplier does not create value, but can only make value propositions
(Vargo and Lusch, 2004; 2008). Value is always co-created through the collaborative process between
supplier and customer. Service science conceptualizes value proposals as links between service systems.
Each service system is connected via value propositions in value chains, value networks or systems of
value creation (Normann, 2001).
Gronroos (2000) argues however, that value is created within the customers everyday practices,
through their processes of value generation belonging to them. Accordingly, Vargo and Lusch (2008)
conceptualize value as value in use, determined, always uniquely and phenomenological, by the
beneficiary. As a result, in creating value for customer the supplier fulfills rather a role of value
facilitator. The supplier cannot make value propositions but proposals to facilitate the value in use for the
customer. These value facilitating proposals have exchange value and form the connections between
service systems.
Since customer value is determined only by the customer, to prepare a value facilitating proposal
which will be validated in consume not only accepted at the point of exchange, the supplier must
606

understand and know the value creation processes belonging to the customer. Value is created through the
integration of resources (Lusch and Vargo, 2006; Arnould, Price and Malshe, 2006). The supplier must
know and understand how the customer integrates the resources available to him. Available resources
mean that customers can access also resources belonging to other service systems (Gronroos, 2008,
Vargo, 2008). The only credible way for the supplier to ensure that its value facilitating proposal will be
validated in use (in consumption) is the transformation of customers in active participants in preparing the
proposal. This means empowering customers and seeing them as operant resources generating effects, and
not passive recipients of the outcome of a linear value chain (Vargo and Lusch, 2004). By definition,
customers have a certain degree of knowledge or skills that can contribute to service processes (Vargo
and Lusch, 2004, Gronroos, 2008).
S-D logic distinguishes between two types of resources: operand and operant (Vargo and Lusch,
2004; 2008). Operand resources (natural resources, goods and money) are resources that are acted upon to
produce an effect. Operant resources (skills, knowledge) are employed to act on other operand or operant
resources. Service is the application of specialized competences for the benefit of another or the entity
itself (Vargo and Lusch, 2004; p.2). To provide the service, the supplier also integrates resources and
applies his skills (Vargo and Lusch, 2004, Vargo and Akaka, 2009). The empowerment of the customers
allows them to know and understand how the supplier in turn integrates resources which are available to
him. Social responsibility of the supplier becomes a matter of responsible integration of operand and
operant resources. By empowering the customers this responsibility is shared across all service systems.
Seeing value as a result of resources integration belonging to a vast network of service systems, the
ontological distinction between individual and social value disappears. The customer value comes to
signify an integrated marketing value.

4.2. The social responsibility of the customer
Responsible resource integration for the value actualization process
Vargo and Lusch (2008) argue that value is determined uniquely and phenomenological by the customer,
it is idiosyncratic, experiential, contextual and full of meanings. Accordingly, value is not static but has
rather dynamic, fluid meanings, varying in time depending on the situations and customers
characteristics. Conceptualization of service systems as dynamic configuration of resources (Sphorer et
al., 2007) emphasizes the dynamism of perceived value. Therefore it is fairer to understand value as
something actualized not as something created. Value is actualized by the same system every time
differently, even if identical facilitating proposals are used as input. Similarly, under the same conditions,
the actualized value by two service systems is different (Frondizi, 1971).
Value itself is neither good nor bad but how it is actualized by a service system influence the
value actualized by other systems. The customer social responsibility in the process of value actualization
reflects the preoccupation of service systems not to adversely affect the value actualization for other
systems, present or upcoming. Interactive processes between service systems in which resources are
integrated and the value is actualized are conducted not only by reason (Holbrook and Hirschman, 1982).
At the highest level of abstraction service systems can be seen as individuals or groups of individuals.
Interactive processes involving human beings include the integration of stimuli (Lee and Shafer, 2002;
Oliver, 1993). Therefore affect and emotions influence interactions between service systems and hence
how the value is facilitated and actualized over services networks. Affect is an important catalyst of the
interactions between service systems.
The value actualized by the customers is a marketing integrated value. The conceptualization of
the actualized value as marketing integrated value balances the individual and the social interest. The
distinction between individual and social value loses its relevance since it recognizes that the marketing
integrated value is facilitated by all partners of the value network (Lusch, 2007). It is recognized that no
service system (provider or customer) have adequate resources to obtain value independently. In this
context, discussions on social responsibility of the market actors will focus on the effects of how value
actualization of a service system will have on value actualization of other systems and on how resources
are integrated throughout the network services. The value facilitating networks should be understood as
ecosystems (Vargo and Lusch, 2009). How value is facilitated and actualized by a system affects the
whole ecosystem.

607

5. Discussions
When the facilitation of the integrated value becomes a marketing objective a more
comprehensive jurisdiction of value creation is established. This allows companies to analyze the social
responsibility of their actions in the broader context of the ecosystem they belong. Under the pressure of
globalization, leading to the internationalization of these ecosystems, business companies are forced to
broaden their perspective on the social effects that they and their network partners generate. Marketing
traditional logic focused on the linear value chain is unable to guide responsible marketing practices in
the context of increasingly complex value facilitating networks.
Service as a business logic allows companies to more clearly define their own social
responsibilities and those of other service systems with which interact. Decoding interactions between
service systems at the resource integration level highlights with greater precision the social implications
of marketing practices. Companies are service systems that contribute substantially to the value
actualization for most other service systems. The way in which companies understand their social
responsibilities is vital to society.
Understanding the service as the exchange denominator (Vargo and Lusch, 2004) creates a more
democratic premises on the market actors relationships. Since each service systems from the value
facilitating network is alternately both supplier and customer, power imbalances can be reconciled at least
at the ontological level. The practical consequence will be the openness of businesses to customers and
expanding businesses concerns beyond the moment of transaction towards the customer value
actualization processes. The companies constant concern for how other service systems integrate the
resources to prepare facilitation proposals and to actualize value makes social responsibility defaulted.
From an academic perspective, the conceptual model leads to many research questions. Both as a
customer and as a supplier, service systems integrate a variety of resources, some of their own, some from
other systems, so as to design facilitating proposals or to actualize value. We have to find out how
different configurations of resources are designed in order to facilitate or to actualize value. When a
certain resource configuration is optimal? Which are the service systems that through their way of
integrating resources significantly influences social effects generated by the activity of the business
company?
Interactions between provider and customer generate effects across service systems networks.
What are and how can these effects be managed? How does profit influence the configuration of value
facilitating proposals made between service systems?
Globalization has accelerated the market processes and decreased the timeframe in which both
individuals and companies think their activities. Instant gratification, immediate individual gain and
short-term profit are pursued. Companies, like people, believe their only social responsibility is to pay
taxes in full and on time. The proposed conceptual model allows widening the horizon for all service
systems of the value facilitating network. Finding the normative prescriptions of the model and the
concrete ways in which can be operationalized needs further research.

6. Conclusions
Marketing traditional logic in which marketing activities have been conducted so far prevented
the business practice to take substantial and consistent social responsibilities (Lusch, 2008). The
separation of the business from ethics theory makes ethical recommendations appear as a distinct stage in
the marketing activities, a step that can be easily missed by practitioners (Abela and Murphy, 2008). The
focus on transactions and profit and operating with a linear value model in which the company is the
creator of value and the customer its consumer, generates market antagonisms that cannot be reconciled
with by the Corporate Social Responsibility concept.
Collaborative vision on value creation and perception of market actors as service systems that
create value through resource integration, allows conceptualization of a marketing framework in which
social responsibility can be equitably shared between all stakeholders and balance between individual and
social value can be achieved. The conceptual model we propose is based on those two states in which
each any service system exists alternatively on the market: supplier and customer. S-D logics
collaborative perspective on value creation means that these two states of service systems are not
antagonistic but complementary. The social responsibility of the supplier becomes a matter of responsible
integration of operand and operant resources. The expression of social responsibility in value
actualization for the customer is concern not to jeopardize the value actualization for other present or
future service systems. By empowering customers these responsibilities are shared across all systems that
form a service ecosystem.
608

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MODEL BASED ON KEY PERFORMANCE INDICATORS FOR ASSESSING THE MARKET
POSITION OF A COMPANY. CASE STUDY IN A CAR RENTAL COMPANY

URSACESCU Minodora
Professor PhD., Faculty of Management/Department Management, The Bucharest Academy of Economic
Studies, Romania, minoursa@ase.ro

CI OC Mihai
Professor PhD., Faculty of Management/Department Management, The Bucharest Academy of Economic
Studies, Romania, mihaicioc@gmail.com

Abstract: The present paper is the result of a research approach realized on the Romanian car rental
services market. Beginning from the characteristics of this economic sector and from the activitys specificities of
the car rental companies, the present study intends to develop an evaluation model of the position on the competitive
market of a Romanian company in the car rental industry, based on Key Performance Indicators and Balanced
Scorecard. The researchs objectives reside in defining an indicators set depending on their importance and on the
impacts dimension over the organizations competitive maturity level. The studys result is the creation of an
objective assessment instrument of the companys rating on the car rental market.

Key words : Key Performance Indicators; Balanced Scorecard; Car Rental Industry; Business Trip Index.


1. Introduction
A series of conjuncture factors, arising especially from the deep transformations generated by the
globalization phenomenon, lead in the last decades to an important extension of the services sector, the
car rental one having an important share. Nowadays we are witnessing substantial modifications in the
geographical repartition of the production and of its control manner, in the liberalization of the products,
services, capital and work forces exchanges. In these conditions, the car rental services has known an
important development, enabling the apparition at national level of some new companies, which
alongside with the ones established in the domain (Avis, Europcar, Hertz etc.) cover a significant market
share and accede to a great part of the request. The car rental service is increasingly more imposed at
worldwide level as an alternative to the transport with own vehicles. One of the particularities of the car
rental activity resides in the fact that due to the economic ensemble development, at national and
international level, this service type is no longer mainly addressed only to the tourists category who
request a car in their vacation periods, but it intends to accede to the request coming from the business
people category, whose mobility manifests during the entire year. A second significant aspect
characterizing in entirely the car rental service refers to the great feedback on it of each deep change in
the structure and functioning of the competitive market. Thus, the apparition of the new economic agents
in the industry, commerce, transport sphere, the accentuation of the competition between them, the
rapidity of the sale processes, represent a great part of the factors which determine the companies to adapt
and to revise their strategic options. In this measure, one of the success keys is determined by the
insurance capacity of the employees, commercial representatives mobility, who by the nature of their
tasks are dependent on possessing a transport means that seldom is their own.
The car rental also became in the post-communist Romania a growing business, many of the
companies in this sector resorting to rigorous practices, methods and instruments in the domain of the
management, marketing or informatic and communication technologies. During the beginning of the car
rental market the most aimed target group were the tourists, but their percentage in the total of the car
rental demand was relatively low, Romania being a country with a still relatively low exploited touristic
potential. Towards the end of the 90s, once with the increasing volume of the foreign investments in
Romania, a well defined clients category begins to be formed, consisting of the companies staff which
opened in Romania business representations, commercial banks etc. It should be noted that, for this
clients category, the car rental companies began to offer services associated to the main one, in this case,
renting office logistics, as well as travel logistics necessary for a business man, passenger in town.
612

Taking into account the car rental market dynamic on worldwide level, but also the youth of
this market at Romanias level, it becomes important for the top management of the companies activating
in this sector to have an instrument by means of which it can rigorously and realistically assess its market
rating. The acceding to such a managerial request is motivated both by strategic considerations and by the
fact that on a developing profile market, gaining the leader position and imposing the own brand
represents a real success.
In this context, the purpose of this paper consists in developing a model to assess the position on
the competitive market of a Romanian company in the car rental industry, based on Key Performance
Indicators (KPI). In fact, a companys competitive maturity level represents a measure of its performance,
which might be quantified through a relevant organizational benchmarks number, reflected in KPI. There
have been taken into account in elaborating the model, different importance levels of the defined KPI set,
as well as their alignment to a strategic development instrument, materialized in the Balanced Scorecard
matrix.

2. General considerations regarding the car rental market and the car rental services
The car rental market was hard hit during the recent economic recession largely due to overall
decline in spending, and reduced travel, among other factors. According to Euromonitor International
(2010) small and medium car rental companies in Romania have perished under the pressure of the
financial crisis, while the large players were faced with a very volatile consolidating market. Highly
dependent on the corporate sector, and affected by the declining numbers of incoming tourists, car rental
companies have not had their best period in Romania since the onset of the recession. However, revival in
economic conditions at global level, restored the consumer needs and confidence which reflected in
improved car rental market. As there are expectations of continued economic revival, the travel related
activities will also increase, further driving the growth of car rental market.
The last years edition of the Research and Markets (2011) report provides an analysis of the
global car rental industry, with focus on various geographic regions. The car rental market is well
organized in developed nations and further growing. The United States accounts for the majority share in
the global car rental industry, followed by Europe and other developed nations. The competition on the
car rental market is intense and primarily based on price, service, and reliability. Hertz, Enterprise, Avis
Budget, and Dollar Thrifty are the four key players in the global car rental market (tabel 1). This industry
has the roots in a constantly growing in emerging economies like India, China, and Brazil, among others.

Tabel 1 United States Car Rental market Fleet, Locations and Revenues . RA
Company U.S Cars in
service (Avg.
2011)

U.S Locations
2011 U.S
Revenue est.
(in millions)
2010 U.S
Revenue (in
million)
Enterprise Holding 920.861 6.187 $ 11.100 $ 9.800
Hertz 320.000 2.500 $ 4.241 $ 4.081
Avis Budget 285.000 2.300 $ 4.110 $ 3.900
Dollar Thrifty 118.000 445 $ 1.645 $ 1.628
Source: (Auto Rental News Magazine, March/April 2012)

The performance of the car rental services is the resultant of some quite heterogeneous factors
arising from the vehicle fleet potential managed by the company, but also from its marketing strategy,
managerial competences, the exploiting capacity of the new informatic and communication technology,
the ability of monitoring the competitive environment. There are many key success factors that drive
profitability in the car rental industry (Monestime, 2012). The efficient use of the vehicle fleet is one of
the factors that determine success in the car rental sector. Because rental companies experience loss of
revenue when there are either too few or too many cars sitting in their lots, it is of paramount importance
to efficiently manage the fleets. This success factor represents a big strength for the industry since it
lowers if not completely eliminates the possibility of running short on rental cars. Another key success
factor that is common among competing firms is the integration of technology in their business processes.
Through technology, for instance, the car rental companies create ways to meet consumer demand by
making renting a car a very agreeable deal by adding the convenience of online rental among other
alternatives. Furthermore, companies have integrated navigation systems along with roadside assistance
to offer customers the piece of mind when renting cars.
613

In Romania, the car rental market is relatively new and less known from the point of view of its
potential, importance and advantages. Moreover, its development and consolidation is beyond the
technical and economic development factors a matter linked to the clients mentality and behavior vis--
vis the presence of such a service at the level of the competitive market in Romania.

2.1 Why do people appeal to car rental services?
The rental business is a service industry. According to Van Looy (2003) services have the
characteristics that they are intangible, perisable, and that theier production and their consumption are not
separable. This also applies to car rental services because they are not tangible product and they have to
be produced and consumed at the same time as well as in the same place. The argument for supplying the
car rental service by the profile companies reside in satisfying the mobility need of some client categories
with different particularities and requests. This services utility is however reflected by other
characteristics, like:
- It is a practical service. No matter whether is addresses to the tourist or to the business man, the car
rental on short or medium term is a practical alternative to traveling with the own vehicle. The car
rental companies are preoccupied to provide through their offer a wide range of cars (different type ans
size), at accessible prices, allowing the customer to dispose of a vehicle adapted to his needs, when and
where he desires. The car rental locations are usually in airports or train stations, as these are
considered to be the most important places in which such a service is requested.
- It is an economic service. Such a particularity is appreciated from two different perspectives: the one of
the tourists and the one of the business men. In the first categorys case, statistics show the preference
of the clients who travel with a touristic purpose, for renting a car especially when the destinations are
multiple and need a combination of transport means (airplane, car, ship, train). In the second categorys
case, it is revealed that for a person who travels for business (within and especially outside the country)
it is more efficient from the perspective of the transport expenses to rent a car during his stay (there are
taken into account only the rental costs and the ones for purchasing the fuel). Moreover, the great
majority of the car rental services developed various client loyalty programs, as well as partnerships
with the airlines or the railways, by means of which they can offer preferential taxes, discounts or
attractive prices.
- It is a service adapted to the sustainable development principles. A current practice of the car rental
companies is the maintenance of a cars fleet with a medium age of 12 months, comparatively with
personal vehicles (approx. 5-7 years). This aspect is determined by the fact that a rented car is in
circulation between 60% and 90% of the time, in consequence the physical wear rate being much
higher than in the case o the personal vehicles. In these conditions, the renewal rate of the vehicle fleet
is high, which makes a car rental company to permanently dispose of vehicles with advanced technical
characteristics (low gas emissions, low degree of noise pollution, modern and adequate design etc.). It
should be remarked that the maintenance of an obsolete vehicle fleet is not only against the sustainable
development principles, but it constitutes an essential excluding reason from the market of the
respective company in time. The most important long term trends in the car rental industry today are
technological innovation through the adoption of green cars, navigation systems and other
technological features.
- It is a substitution service that can be appealed in case the personal vehicle is temporary unavailable,
or in case a company cannot use its own cars for some justified reasons.

2.2 Characteristics of the Romanian car rental market
The car rental market in Romania consists essentially in two company categories:
a) International Rent a Car companies represented by Avis, Hertz, Europcar etc. These ones are
organizations with tradition in the domain, which operate in most states of the world, either
directly or through the agents belonging to the respective brand. The clients they address to are
usually physical persons or multinational companies.
b) National Rent a Car companies of small and medium dimensions, serving the local market and
which identified certain market niches within it, a reason why they are not competing and are
not strongly competed, by the international companies.
It must be mentioned that a car rental company might offer besides the short term renting services
( short term rental ) the one for longer periods of time ( long term rental ). The second renting
version is preferred by the big companies, within the project management. The most significant example
614

is represented by the case of a foreign company which desires to realize a feasibility study in Romania
regarding the beginning of a investment. Therefore, the company has to provide to the project team the
necessary infrastructure, including the transport one. The use of the own vehicles is not justified for a
period of about 8 months, sometimes this being absolutely impossible if we take into account a company
with its headquarters on the American or Asian continent. The most efficient solution is externalizing the
transport expenses, by renting cars from the car rental companies in the long term rental system. The
rental rate includes in this case all afferent costs (road taxes, insurance taxes, maintenance etc.), these
ones representing fiscal deductible expenses for the services beneficiary. A concise analysis of the car
rental market in Romania highlighted some specific aspects regarding:
Clients, target market, market segmentation. The following main segments might be identified
within the market, to which a car rental company addresses:
Occasional tourists and clients it is about individuals who appeals to the car rental service for a
few days depending on their necessities. Usually, a significant raise of the sales volume arising from this
clients category is registered in the holiday periods.
The insurance companies these ones provide a car in the conditions in which the own car of the
ensured person has been stolen or seriously damaged. The current practice consists in signing a
partnership between the insurance company and the car rental one.
The commercial companies in the private sector these ones rent on short term one or more cars
for their employees, who travel for business within or outside the country. In the situations in which the
traveling is for longer periods of time, the company prefers the services formula of long term rental type,
which is more efficient from the expenses point of view.
Acquisition and management of the auto fleet. There are many possibilities for a car rental
company to make and develop its vehicle fleet:
Purchase from the car dealers (internal or external) through the classic sales and purchase
agreement. Taking into account that the financial effort is considerable especially in the initial moment of
the business onset, few companies appeal to this solution.
Purchase in leasing system from the specialized companies. It is the most often used solution,
both among the national companies of small and middle dimensions, but also at the big companies level,
due to the possibility to space out the capital expenses during the leasing period.
Getting an Auto Loan it is an option rarely used by the car rental companies, due to the
difficulties raised by the bank norms, but it can be used for purchasing a very small number of vehicles.
The big companies accumulate hundreds to thousands of vehicles, therefore fleet management is
becoming increasingly complex. The company decides on the fleet size and fleet structure. Ordinary,
these decisions were made by the company with very limited use of mathematical models. While in the
past fleet planning could be performed manually, the new size of the planning problem necessitates the
use of advanced planning tools. Papier (2007) develops an analytical model for fleet size optimization,
that take the stochastic nature of the car rental business into acount. He shows how the optimal fleet size
can be computed under stationary and under non-stationary demand.
The investment process for starting the car rental service. Generally, the investments volume
and their directions for use are a problem linked to the companys financial availability, the development
strategy, the particularities of the market and to a series of objective and subjective factors. When a car
rental company starts her business the investments involved are pretty high. There are some marketing
steps which are very important for starting a car rental business:
Find a Mentor - find someone who has experience in this field and ask for their advice.
Keep the vehicles in good working condition - always should keep the vehicles in top condition.
Nobody wants a car to break down on them in the middle of a highway. The cars number varying from
30-200 pieces for the small enterprises to more than 1000 for the big companies. The auto fleet structure
and size depends on the target group best represented on the market, for which the company considers
that it can reach a satisfying level of its turnover.
Develop an informatic and communication infrastructure it should include executive
information systems for managing the processes or digital scoreboard for the managers or
communication technologies such as Customer Relationship Management, Call Center.
Find a qualified staff, for the pick-up and drop-off service, the vehicles maintenance, or the
administrative tasks.
Although it is a relatively new market in Romania and the development perspectives are positive,
it must be remarked that the demand for car rentals is mainly driven by increase in air travel, increase in
615

hotel occupancy rates and implementation of appropriate distribution and logistics strategy by the
companies operating in the car rental market.
3. Study regarding the positions assessment of a car rental company on the profile market, by
means of a Key Performance Indicators set

3.1 The researchs objective
The present research is oriented to the development of an innovative assessment model of a car
rental companys position on the profile market in Romania, using the processes assessment technique
through Key Performance Indicators (KPI). In essence, such a model is useful for determining the
companys rating on the market, depending on which it might control or redefine its strategic options.
With the purpose of defining more rigorously the KPI set, the information selection of quantitative or
qualitative nature was based on the data sources provided by the company during the research, derived
from: the monthly sales history; the companys marketing strategy; the staffs structure; the evolution of
the marketing expenses; the ongoing projects; the internal and external audit reports for management; the
market studies regarding the consumers satisfaction; the annual activity reports.

3.2 The researchs methodology
For an objective studys approach, the research intended to define the Key Performance
Indicators in the form of organizational benchmarks. The concrete defining of these indicators resulted
from analyzing the statistical data series, realized both in the companys internal plan and in the external
environment at national level. The KPI set included in the structure of the assessment model proposed as
a researchs objective exclusively covers conformity indicators (Ic), by means of which the effective
registered levels are being reported for each KPI, at the levels appreciated by the research team as being
optimal, in terms of the best practices in the domain. In order to realize a more realistic companys market
rating at the level of the car rental services in Romania, the conformity indicators have been established
on a [1,3] scale, depending on each KPIs importance and its impacts dimension over the companys
sales volume. Thus, the maximum value of the conformity indicators (Ic=3) represents the companys
advanced maturity level on the competitive market, appreciated through the KPIs optimal values. At the
same time, depending on the conformity level, there has been established a proportion of each KPI within
the assessment model, using the following coefficients: 0,99 for KPI belonging to the maximum
conformity level (Ic=3); 0,66 for KPI belonging to the medium conformity level (Ic=2); 0,33 for KPI
belonging to the minimal conformity level (Ic=1). Beginning from these specifications, the research was
developed on the following levels:
Level 1. Defining the Key Performance Indicators set. The companys internal environment
analysis, correlated with the external environments research (economical, technological, socio-political
and contextual) leaded to the definition of the following KPI, considered to be representative for
determining the rating on the Romanian car rental market:
1. The increase index of the medium annual price for car rental service describes the increase
services rental price, established depending on the demands elasticity on different market
segments, as well as on the often subjective perception of the clients. Generally, there is
appreciated in the car rental sector that a raise with 1% of the rental price contributes to a raise
with 8% of the profit, in the hypothetical conditions of ensuring a constant demand (Hong, 2007).
2. Medium index of the vehicle fleet renewal influences the companys capacity to honor the
demand on the market and to insure a wider covering of it. A representative indicator used in the
specialty literature is RPU (Revenue Per Unit), which indicates the annual medium profit
obtained by using an unit in the own vehicle park (Boeffgen & Kartach, 2008).
3. The medium index for assigning the publicity budget on different channels is an indicator with a
direct influence on the companys sales volume, as well as on its image in the competitive
environment. It is determined by reporting the publicity budget for a certain channel to the total
budget assigned for the publicity.
4. Business Trip Index - is the most used indicator worldwide, for appreciating the business tourism
evolution, representing the main evaluation and comparative analysis means of the degree in
which the big cities might represent destinations for business trips. According to EIU (2008) the
Business Trip Index (BTI) is calculated by taking into account a number of 31 assessment criteria,
grouped in five categories: the civic safety level, the medical assistance services, the culture and
the environment, the infrastructure for land, road or air transport, the medium cost of a voyage
(accommodation, food, rent a car).
616

5. The general index of the new established economic agents at national level it determines an
important weight of the business trips volume and results from reporting the number of new
entry economic agents on the market to the total number of existing companies.
6. The increase index of the worldwide petrols price the fuels increase generates negative effects
over the car rental companies by discouraging the clients to rent a car (Avis Budget Group,
2006). Being given that this market is one in which the price represents the main competition
criteria, it is very difficult to transfer to the customers the supplementary costs generated by the
fuels increase.
7. The requests index of cars taken over in airports is an extremely relevant indicator for the
companys activity, the weight of the demands for car rental with taking over or with destination
in airport being usually between 70% and 90% of the total rental requests (Avis Budget Group,
2006). It is determined by reporting the number of cars rented from the companys office situated
in the airport to the total number of rented cars.
8. The companys position on the search browsers (Google) represents one of the most relevant
performance indicators, by means of which the companys position on the competitive market
might be appreciated. In the digital economy, the organizations rank in the cyberspace is
appreciated by means of a specific indicator named Search Engine Result Page - SERP (Bozzon,
2011).
9. The online visibility index of the slightly negative articles is an important indicator for the
companys image on the world wide web, through which there are quantified the slightly negative
online publications regarding the companys services. It results from reporting the slightly
negative articles number to the articles number published on the first page of the search engines.
10. The realization degree of the objectives assumed through the Management Plan is an indicator
of the managerial effectiveness, resulting from reporting the number of objectives planned for the
current year to the number of the realized ones.
11. The interests coverage rate a financial indicator resulting from reporting the gross profit to the
interest expenses.
12. The debt rate is the result of reporting the companys total debts level to the total value of its
assets.
13. The conformity rate of the operational procedures results from reporting the number of
procedures complying with the legal standards to the total number of the companys operational
procedures.
Table 2 includes the Key Performance Indicators set considered to be significant for elaborating
the assessment model of the analyzed companys rating on the car rental market. After a detailed analysis
of the KPI set, through the evolution in time of the data series characterizing them, the conformity
indicator has been determined, as well as the proportion of each KPI within the respective model.

Table 2 KPI used for evaluating the company on the car rental market
Item.
no.
KPI
Code
KPI Name Conformity
Indicator (Ic)
Proportion
within the model
1 MAP The increase index of the medium annual
price for car rental service
2 0,66
2 MFR Medium index of the vehicle fleet
renewal
3 0,99
3 MPB The medium index for assigning the
publicity budget on different channels
3 0,99
4 BTI Business Trip Index 1 0,33
5 NEA The general index of the new established
economic agents at national level
1 0,33
6 WPP The increase index of the worldwide
petrols price
1 0,33
7 RCA The requests index of cars taken over in
airports
3 0,99
8 SERP The companys position on the search
browsers (SERP)
3 0,99
9 OLNA The online visibility index of the slightly
negative articles
2 0,66
617

10 MPD The realization degree of the objectives
assumed through the Management Plan
2 0,66
11 ICR The interests coverage rate 2 0,66
12 DRA The debt rate 3 0,99
13 CROP The conformity rate of the operational
procedures
3 0,99
Source: Authors

Level 2. Aligning the KPI to the Balanced Scorecard perspectives. In order to assess the
services performance offered by the company included in the study, we have chosen to include the Key
Performance Indicators set defined in the previous stage, in the Balanced Scorecard Matrix which
constitutes an important strategic development instrument. Introduced as a concept by Kaplan & Norton
(2001) Balanced Scorecard (BSC) is a reporting tool that shows the financial and non-financial indicators
of a company, grouped in four perspectives, disposed as a matrix: Internal Processes, Finance, Customer
and Learning and Development. There is presented in table 3 the distribution of the Key Performance
Indicators, which compose the analyzed companys market rating within the BSC matrix.

Table 3 The modeling of the companys market rating evaluation system
by means of the Balanced Scorecard
Learning and development perspective

Applicable KPI:
- Business Trip Index
- The general index of the new established
economic agents at national level
- The realization degree of the objectives
assumed through the Management Plan
Financial perspective

Applicable KPI:
- The increase index of the worldwide
- petrols price
- The interests coverage rate
- The debt rate

Internal processes perspective
Applicable KPI:
- The increase index of the medium annual
price for car rental service
- Medium index of the vehicle fleet
renewal
- The conformity rate of the operational
procedures

Customer perspective
Applicable KPI:
- The medium index for assigning the
publicity budget on different channels
- The requests index of cars taken over in
airports
- The companys position on the search
browsers
- The online visibility index of the slightly
negative articles

Source: Authors

Level 3. Determining the companys marketing rating. From the qualitative point of view,
respectively from the one of distributing the proportion associated to the KPI in the calculation formula of
the companys market rating, it might be observed that the importance order of the four perspectives is
the following:: Learning & Development (1,32), Finance (1,98), Internal Processes (2,64,), Customer
(3,63) (figure 1) :

618

Figure 1 The distribution of the proportion associated to the KPI in the BSC perspectives

Source:Authors

Furthermore, by taking successively into account the four perspectives of the BSC matrix, it will
be remarked that the medium percentage (P
Avg
) assigned to each KPI are ranked as it follows:
- Customer perspective: P
Avg
= 3,63 / (4 KPI) = 0,907/KPI.
- Internal processes perspective : P
Avg
= 2,64 / (3 KPI) = 0,880/KPI;
- Financial perspective: P
Avg
= 1,98 / (3 KPI) = 0,660/KPI;
- Learning and development perspective: P
Avg
= 1,32 / (3 KPI) = 0,440/KPI;
This distribution reveals the fact that the gravity center of the model proposed for the companys
market rating evaluation is focused on the Customer component, considered to be the main strategic pillar
of the companys marketing strategy included in the study. In the context of the previous defined
proportion, the companys market rating is determined according to the formula:

R = [MAP] * 0,66 + [MFR] *0,99 + [MPB] * 0,99 + [BTI] * 0,33 + [NEA] * 0,33 + [WPP] * 0,33 + [RCA] *0,99
+ [SERP] * 0,99 + [OLNA] * 0,66 + [MPD] *0,66 + [ICR] * 0,66 + [DRA] * 0,99 + [CROP] * 0,99

The positioning of the companys market rating within the interval [0,1] expresses the maturity
level of the company in the competitive environment The definition and characterization of the maturity
level will be the subject of some future researches, based on the experimenting the proposed assessment
model at the level of a representative companies in Romania.

4. Conclusions
Although it cannot be discussed about a tradition of the Romania car rental market similar to the
ones in the United States or Europe, in the last decades the competitive mechanisms determined a
rigorous selection of the economic agents in this domain. The economic environments dynamic and
incertitude raises new challenges for the actors operating on a still forming market, these ones resorting
increasingly more to techniques and instruments useful in practicing a strategic performance
management. From this perspective, the research we have realized intended to elaborate an instrument
useful for the car rental companies in assessing the competitive maturity level. Conceived as an
assessment system of the market rating by means of a Key Performance Indicators set, the proposed
model is a innovative measure for the management practice and the companies management in the car
rental industry for at least two reasons: firstly, due to the methodology included by the respective model,
based on using the Key Performance Indicators and Balance Scorecard concepts with the purpose of
appreciating the companys position on the national car rental market; secondly, through the fact that the
proposed model is not limited only on financial aspects, but it also take into consideration other
perspectives linked to customers, organizational processes or economic development.
We appreciate that the present research offers through its results a strategic marketing tool useful
for the economic agents in the car rental industry and in the same time a management practice capable to
consolidate their competitive advantage.

619

5. References
- Auto Rental News Magazine (2012) Market Data U.S Car Rental Market. Available at
http://www.autorentalnews.com/Content/Research-Statistics.aspx
- Avis Budget Group (2006) Annual Report. Available at http://www.wikinvest.com
- Boeffgen, B.; Kartach, K. (2008) Realising Profit Potentials in the Car Rental Industry, Simon
Knucher&Partners.
- Bozzon A. et al. (2011) A Constraint Programming Approach to Automatic Layout Definition
for Search Result. Lecture Notes in Computer Science, 6757, p. 371-374.
- Economist Intelligence Unit (EIU) (2008), Business Trip Index Methodology. Available at
http://www.economist.com/media/pdf/BUSINESS_TRIP_INDEX.pdf
- Euromonitor International (2010) Country Report - Car rental in Romania. Available at
http://www.euromonitor.com/car-rental-in-romania/report
- Hong, W. (2007) Composite of Support Vector Regression and Evolutionary Algorithms in Car-
Rental Revenue Forecasting, IEEE Congress of Evolutionary Computation.
- Kaplan, R.S; Norton, D.P (2001) The strategy focused organization: how Balanced Scorecard
companies thrive in the new business environment. Harvard Business School Publishing
Corporation.
- Monestime, R. (2012) The Car Rental Industry. Available at http://EzineArticles.com/491218
- Papier F. (2007) Optimization of Rental Systems. Klner Wissenschaftsverlag, Kln.
- Research and Markets (2011) Global Car Rental Market Report. Available at
http://www.researchandmarkets.com/reports/1933512/
- Van Looy B. et al. (2003) Services Management. An Integrated Approach. Pearson Education.

620

BUSINESS DEVELOPMENT THROUGH INNOVATION AND RESEARCH

VASI LE Adrian
Ph.D. Student, The Bucharest University of Economic Studies, Business Administration,
adrian_vasile0505@yahoo.com

VI CI U Tania Georgia
Ph.D. Student, The Bucharest University of Economic Studies, Business Administration,
viciu_tania@yahoo.com

COSTEA Carmen Eugenia
Ph.D. The Bucharest University of Economic Studies, Department of BCSMQ,
cecostea@yahoo.com

Abstract: As the contemporary economic situation and its current trends suggest, the way to achieving
further sustainable business growth requires a rethinking and reevaluation of previous methods and processes,
ultimately leading towards new solutions. Technological change and the process of innovation have always played a
crucial role in stimulating society and the business environment in particular. However, the extents to which such
factors have had a serious impact on the performance of economic activities have widely varied between regions
and individual countries.

Key words: business development, knowledge spillovers, research and development, foreign trade.

JEL classification: M21, N70, O32, O33,

1. Introduction
Business activities have always been influenced by the technologies and knowledge available at
any given time, and the economies of all nations have evolved and diversified through the innovative
results generated by research and development. Throughout the modern history, the paths for recovery
after serious economic and political crisis have been associated with the implementation of new ideas and
technological breakthroughs.
Progress and, in particular, the recognition of its potential utility, do not merely represent one
choice for development, but rather the only comprehensive solution for surpassing the Malthusian trap
(Malthus, 1826) imposed by the reduction of available resources and the ever increasing demand of
society.
The activities corresponding to research and development can be quantified by using a variety of
indicators such as the number of people employed in this domain, the percentage of GDP allocated to
these activities, the percentage of companies actively engaged in this field or the number of new patents
registered in an economy.
In the current undertaking, the latter indicator is considered as having the most credibility, as it
portrays the actual results of research and innovation, as they are perceived by the authorities that provide
the official recognition.

From an historical point of view, world economic and business growth and consequently the
disparities that exist between various regions or particular nations have followed two significantly
different strands (Klenow and Rodriguez-Clare, 1997, p. 599). On the one hand there are those studies
that emphasize capital accumulation in supporting economic growth rates (Lucas, 1988; Stokey, 1991),
while, on the other hand, significant interest has been placed into the sustainability of economic
development through the buildup of technological innovations and knowledge (Romer, 1986; Romer,
1990; Grossman and Helpman, 1991; Aghion and Howitt, 1992).
However, modern economic endogenous growth and business output has been shown to depend
predominantly on sustained technological improvements rather than capital amassing (Solow, 1957, 320;
Kuznets, 1966). The developed economies have managed to retain a competitive edge in international
affairs, even when confronted with partners that present significant advantages in available resources and
production facilities.
621

Knowledge spillovers have had an overwhelming impact on the development of nations. Through
material or immaterial mediums, technology and know-how have been transferred from one civilization
to another in the form of positive externalities.
Some of the most comprehensive and decisive examples of economic growth and catching-up
processes can be recognized in the scenarios experienced by South Korea and Taiwan after the Second
World War. By means of implementing technologies and business practices modeled initially on those of
the United States and later on those originating in Japan, these two economies have managed to change in
the course of a single generation from imitation to innovation (Hu and Jaffe, 2003, p. 850). Another
important characteristic of these two economies comes from the fact that they exhibit rapid obsolescence,
implying that they adopt only recent technologies and business practices and tend to disregard those that
are not currently viable (Hu and Jaffe, 2003, p. 878). Throughout a history of business development, the
inclinations for innovation and new economic practices have represented a strong force for growth in
developing regions.
Previous research has identified a complex relation taking place between the knowledge
spillovers and the entrepreneurial activities of particular regions. Entrepreneurial activities were found,
not to simply benefit from existing opportunities in the economy, but also create them through the process
of adopting new technologies derived from spillovers (Acs, et al. 2009, p. 28).
The innovativeness of a nation can be assessed by looking at the number of new patents officially
registered by the state (Jung and Imm, 2002). However, the degree in which innovation is incorporated
into new business developments and the speed in which the process takes shape varies from one nation to
another, depending on many internal and external forces.
The competitiveness of an economy can be linked to effort placed in processes of innovation and
also to other market forces that can sometimes distort the open market principles and hinder the
development of businesses (Vasile, et al. 2012).

3. Discussions
The extent to which innovation takes place in any economy ultimately impacts the
competitiveness of companies on the market, as the new technology is rapidly incorporated into new
products and services. Thus, the efforts directed to research and development should be mirrored in the
results in future trade and revenue from exports.
The number of new patents registered should be correlated with the future value of exports,
considering that the newly acquired know-how proves directly productive and can be implemented into
realistic development strategies.
The discussion takes into consideration data registered for Romania and Germany in the period
consisting from 1963 to 2011, and assesses the relation between the number of patents and the export
values. The exports are brought into the analysis with different lags, as the time required for the new
technologies to be incorporated in business practice can vary from 1 to 10 years or more.

Figure no. 1. The evolution of the correlation coefficient between number of patents and the values of
exports by using different lags

Source: Data provided by the WTO, http://stat.wto.org/StatisticalProgram/WSDBStat ProgramHome.aspx
and the U.S. Patent and trademark office http://www.uspto.gov/web/offices/ac/ido/oeip/taf/cst_utlh.htm.

-0.4
-0.2
0
0.2
0.4
0.6
0.8
1
0 years 3 years 5 years 10 years
Correlation for Germany
Correlation for Romania
622

Figure no. 1 portrays the different correlation coefficients, depending on time lag, in the case of
Romania and Germany. As in other Western European countries, in the case of Germany, this correlation
is significant and more crucially, it reaches the highest value after a lag of 5 years. Thus the
implementation of new technologies comes into its own after such a period. This pattern can be seen as
repeating in other European developed economies.
Furthermore, the results indicate a vastly different situation in the case of Romania. The
correlation between the two sets of data declines consistently over time, starting with very low, yet
positive values and ultimately decreasing at approximately -0.17.

Figure no. 2. Plot chart and trend between the export values and number of patents in Germany 1963-2011


The plot chart illustrated in Figure no. 2 points to the existent of a strong dependency between the
number of patents and the future export values for Germany. The trend line and the spread of the values
in its proximity suggest to a form of linear relation.

Table no. 1. Regression output between the number of patents registered and the exports for Germany 1963-
2011
Multiple R 0.913986
R Square 0.835371
Adjusted R
Square
0.831451
Standard Error 1.68E+11
Observations 44
df SS MS F Significance F
Regression 1 6.02E+24 6.02E+24 213.119 4.69E-18
Residual 42 1.19E+24 2.83E+22
Total 43 7.21E+24
Coefficients Standard Error t Stat P-value Lower 95% Upper 95%
Intercept -6.3E+11 7.86E+10 -8.02581 5.15E-10 -7.9E+11 -4.7E+11
X Variable 1 1.62E+08 11094352 14.5986 4.69E-18 1.4E+08 1.84E+08

The determination coefficient for the case of Germany is approximately 0.83 suggesting that if
such a function is constructed, 83% of the variation of exports over 5 years can be attributed to the
variation in number of patents officially registered (see Table no. 1).
-400000000000
-200000000000
0
200000000000
400000000000
600000000000
800000000000
1000000000000
1200000000000
1400000000000
1600000000000
0 2000 4000 6000 8000 10000 12000 14000
623

The results for Romania over an identical period point to a totally different outcome. The simple
plot chart indicates a high scattering of the values and a trend line which is inconsistent with the overall
shape of the chart (see Figure no.3).

Figure no. 3. Plot chart and trend between the export values and number of patents in Romania 1963-2011


The determination coefficient for the Romanian case is approximately 0.009, while the data
suggests an inconsistent and regression function with very limited significance (see Table no. 2).

Table no. 2. Regression output between the number of patents registered and the exports for Romania 1963-
2011
Multiple R 0.09767
R Square 0.009539
Adjusted R
Square
-0.01404
Standard Error 1.44E+10
Observations 44
df SS MS F Significance F
Regression 1 8.39E+19 8.39E+19 0.404511 0.52822
Residual 42 8.71E+21 2.07E+20
Total 43 8.8E+21
Coefficients Standard
Error
t Stat P-value Lower 95% Upper
95%
Intercept
15052079796 2951461673 5.09987 7.69297E-06
9.1E+09 2.1E+10
X Variable 1
-136098376.4 213987195 -0.636011 0.528219556
-5.7E+08 2.96E+08

4. Conclusions
Innovation and scientific research represent the powerhouse of human development. Efforts and
materials placed into the process of developing new ideas and technologies ultimately can be seen in the
long term growth of a society.
Nevertheless, the link between the economic growth or business performance and the process of
innovation is not necessarily evident and consistent throughout the world. The current discussions portray
a situation in which, for the case of Germany there is a very strong connection between the two, while for
the case of Romania, the results are inconsistent and the correlation very weak.
0
10000000000
20000000000
30000000000
40000000000
50000000000
60000000000
70000000000
0 5 10 15 20 25 30 35 40
624

One possible explanation for the Romanian results can be the fact that the exports, through which
the competitiveness of the business environment in a country was measured, are to some extent composed
by low technology products that seldom incorporate new ideas and patents.
Another explanation can be summed up around the notion that the patents registered in Romania
are awarded to inventions and ideas with relatively little or no immediate practical utility, and thus, their
appearance does not influence the short to medium term evolution of competitiveness.
This paper provides a tentative insight into this matter and can be extended to other sets of data
from different countries in order to grasp the possible reasons behind the phenomena. Future research
could prove useful in determining whether the Romanian results represent an exception or a general rule
for countries in the phase of transition and development.

5. Acknowledgement
Viciu Tania Georgia and Costea Carmen Eugenia: Work conducted under the COST MP0801
Project- The Physics of Competition and Conflicts.
Vasile Adrian: This work was co-financed from the European Social Fund through Sectoral
Operational Programme Human Resources Development 2007-2013; project number
POSDRU/107/1.5/S/77213 Ph.D. for a career in interdisciplinary economic research at the European
standards.

6. References
- Acs, Z.J., Audretsch, D.B., Feldman, M.P. (1992), Real Effects of Academic Research:
Comment, The American Economic Review, Vol. 82, p. 363-367.
- Aghion, P. and Howitt, P. (1992), A model of growth through creative destruction, Econometrica
Vol. 60, p. 323-351.
- Grossman, G.M. and Helpman, E. (1991), Innovation and Growth in the Global Economy, MIT
Press: Cambridge.
- Hu, A.G.Z. and Jaffe, A.B. (2003), Patent citations and international knowledge flow: the cases of
Korea and Taiwan, International Journal of Industrial Organization, Vol. 21, p. 849-880.
- Jung, S., and Imm, K.Y. (2002), The patent activities of Korea and Taiwan: a comparative case
study of patent statistics, World Patent Information, Vol. 24, p. 303-311.
- Klenow, P.J. and Rodriguez-Clare, A. (1997), Economic growth: A review essay, Journal of
Monetary Economics, Vol. 40, p. 597-617.
- Kuznets, S. (1966), Modern Economic Growth: rate, structure, and spread, Yale University
Press: London.
- Lucas, R.E. (1988), On the mechanics of economic development, Journal of Monetary
Economics, Vol. 22, p. 3-42.
- Malthus, T.R. (1826) An Essay on the Principle of Population, John Murray Publishing: London.
- Romer, P.M. (1986), Increasing returns and long-run growth, Journal of Political Economy, Vol.
94, p. 1002-1037.
- Romer, P.M. (1990), Endogenous technological change, Journal of Political Economy, Vol. 98,
p. 71-102.
- Solow, R.M. (1957), Technical Change and the Aggregate Production Function, The Review of
Economics and Statistics, Vol. 39, p. 312-320.
- Stokey, N.L. (1991), Human capital, product quality, and growth, Quarterly Journal of
Economics, Vol. 106, p. 587-617.
- Vasile, A., Costea, C.E., Viciu, T.G. (2012), An evolutionary game theory approach to market
competition and cooperation, Advances in Complex Systems, (accepted for publication March
2012), DOI No: 10.1142/S0219525912500440.

625

A MARKETING REVIEW OVER THE CONTENT OF THE CONSUMERS PRIVATE SPACE

VEGHE Clin,
Associate professor Ph.D., Faculty of Marketing, Academy of Economic Studies in Bucharest, Romania, c_
veghes@yahoo.com

ACATRI NEI Carmen,
Assistant professor Ph.D., Faculty of Business Administration in Foreign Languages, Academy of Economic
Studies in Bucharest, Romania, carmen.acatrinei@gmail.com

DUGULAN Diana,
Assistant professor Ph.D. student, Faculty of Marketing, Academy of Economic Studies in Bucharest, Romania,
diana.dugulan@yahoo.com

Abstract: The increased employment of the direct communication media, and the extended processing of
the personal data has intensified the discussions about how approaching the consumers private space and
protecting his or her privacy. The unclear and general definition of the personal data content and protection leaves
room for an inappropriate employment of this data affecting the direct marketing industry.
Paper examines the evolution of the consumers private space content and dynamic based on the results
provided by the research waves conducted in 2010 and 2012 using an identical methodology employed at the level
of two similar samples of Romanian consumers.

Key words: privacy, consumers private space, direct marketing


1. Introduction
The historical roots of the debates regarding the privacy are to be found in the conclusion issued,
at the end of the 19
th
century, by the Pacific Railway Commission (1887), on the essential, for the
citizens peace and happiness, right of personal security (Langenderfer and Cook, 2007), and the
individuals right to be left alone, approached and explained by Louis Brandies in 1890 (Wirtz, Lwin,
and Williams, 2007). Since then, many definitions have been given aiming to explain the content of
privacy from different angles but all these attempts were rather difficult due to the wide number of related
interests such as the personal information control, reproductive autonomy, access to places and bodies,
secrecy, and personal development (Kemp and Moore, 2007), and succeeded to clarify things only
partially, due to the various angles considered, such as the right to be let alone, limited access to the self,
secrecy, control of personal information, personhood and intimacy (Solove, 2002). The information age
has made even more difficult not only the definition of privacy, but its defense in front of the many
invading ways, based mainly on the internet employment (Pan and Zinkhan, 2006). Frauds, identity thefts
and deceptive consumer surveys made consumers more discrete and sensitive to the need of protecting
their privacy (Pitta, Franzak, and Laric, 2003).
From a marketing perspective, the definition of privacy should focus on the personal data
regarding the consumers. In this respect, privacy has been defined as the claim of individuals, groups or
institutions to determine for themselves when, how, and to what extent information about them is
communicated to others (Westin, 1968). Definition proposed by Schoeman in 1984 adapted the content of
privacy at individual level presenting it as a claim, entitlement or right of an individual to determine what
information about himself (or herself) may be communicated to others; the measure of control an
individual has over information about himself, intimacies of personal identity, or who has sensory access
to him; and a state or condition of limited access to a person, information about him, intimacies of
personal identity (Jri, 2007). In this context, the privacy should be considered in connection with its
particular area of application the consumers private space described by the amount of information
regarding the demographics, psychographics, and behavioral characteristics of the individuals, and the
rights they should have to disclose or not their personal data, and to have this data protected through the
appropriate laws and means (Veghes, 2009).
Analyzing the evolution of the definitions given to the personal data in the 1998-2008 decade,
626

Grant (2009) has concluded that the content of the personal data, representing the central issue in the data
protection, is still under debate, and the need for identification and definition of this data is strong.
Bergkamp (2002) has observed that solving the privacy issue may imply a classical choice of political
philosophy the option between relying on the market (providing flexibility and ability to accommodate
the diverging demands), respectively on the government (imposing one-fits-all merely formal solutions).
Although most of the consumers have realized that participating in direct marketing is a necessary part of
being in a consumer society, they are concerned about the unauthorized use or the misuse of their
personal data and information, mainly in the forms of sale of their data without permission, unsolicited
contact by businesses, the feeling that businesses know too much about their personal information, and
the accuracy of data retained in databases (Pope and Lowen, 2009).

2. Methodological Notes
Data regarding the content of the consumer private space, defined through the personal
information the consumers would be open to disclose to different data processors, have been obtained,
both in 2010 and 2012, through the similar research approaches aiming an significantly extended overall
scope: to assess the exposure, attitude, current and future behavior of the consumers in connection with
the direct marketing efforts of the organizations, respectively to measure the attitude and behavior of the
consumers in terms of the protection of their personal data.
The identification and assessment of the consumers private space content has considered, both in
2010 and 2012, a set of 27 research variables grouped in four categories of data demographics,
psychographics, identity, and relational:
- demographics: gender, age, profession, occupation, level of education, income, and personal and
family wealth of the respondents;
- psychographics: political preferences, religious options, sexual orientations, visited websites,
household access to different goods, household access to different services, and hobbies and
interests of the respondents;
- identity: first and last name, place of work, content of the e-mail correspondence, personal Id
number, ID serial number, health status, legal status and biometrics data of the respondents; and
- relational: mailing address, phone number, mobile phone number, e-mail address, and personal
web address of the respondents.
Data have been collected, in January 2010, at a level of a sample including 78 Romanian
consumers living in Bucharest and other cities, aged 18 to 30, with higher education, respectively, in
January 2012, at a level of a sample including 153 Romanian living in Bucharest, aged 23 to 34, with
higher education, and holding a professional status of full-time employees, freelancers, entrepreneurs,
managers, and students. The respondents have been asked about the personal information, corresponding
to their demographics, psychographics, identity, and relational characteristics, they would prefer to have
protected.
Based on the provided responses, a structure of the consumers private space has been built, in
terms of the above-mentioned four categories of data, and defined according to the frequencies associated
to each research variable (in fact, personal information) the respondents would prefer to have protected:
- personal data (associated with frequencies of 75 % and more, corresponding to a primary or a
core area of the consumers private space);
- rather personal data (associated with frequencies between 50 and 74.9 %, and corresponding to a
secondary area of the consumers private space);
- rather not personal data (associated with frequencies between 25 and 49.9 %, and corresponding
to a tertiary area of the consumers private space); and, finally,
- not personal data (associated with frequencies less than 25 %, and corresponding to a peripheral
area of the consumers private space).
The particular objectives and hypotheses of the research approach described in this paper are:
O1. The comparative (2012 versus 2010) assessment of the personal data importance in terms of the
consumers willingness to have this data protected
H1. Both in 2010 and 2012, consumers attribute a different importance to the protection of the different
demographics, psychographics, identity, and relational data.
O2. The comparative (2012 versus 2010) assessment of the content of the consumers private space
defined using the demographics, psychographics, identity, and relational data
H2. There are not significant differences, in 2012 versus 2010, in terms of the structure and content of the
627

consumers private space defined using the demographics, psychographics, identity, and relational data.

3. Main Findings
The definition of the consumer private space should begin with the identification of the
consumers personal data they would prefer to not have disclosed, to have protected instead or, generally,
to exert a certain form of control over the related processes of collection, processing, management, and
further employment.
The frequencies associated to the personal data the respondents would prefer to have protected
have illustrated (Veghes, Pantea, and Balan, 2010), the significant differences (assessed using the Chi-
square test, at a 0.05 level of statistical significance), on the one hand, between the four categories of
personal data (Pearson Chi-square
2
= 24.73, theoretical Chi-square
2
= 12.59), and, on the other hand,
inside three out of four of these categories demographics (Pearson Chi-square
2
= 149.08, theoretical
Chi-square
2
= 12.59), identity (Pearson Chi-square
2
2
= 12.59), and
relational (Pearson Chi-square
2
2
= 12.59), the exception being
represented by the psychographics (Pearson Chi-square
2
2
= 12.59). The
consumers concern for the protection of these data varied from a category to another, and, inside each
category, from a type of data to another. Empirically, the protection of the personal data should be
differentiated: there are some data deserving to be protected, or, at least, better protected, by comparison
to other data, both being personal to the same extent.
Two years later, the frequencies associated to the personal data the respondents would prefer to
have protected illustrate the significant differences (assessed using the Chi-square test, at a 0.05 level of
statistical significance), on the one hand, between the four categories of personal data (Pearson Chi-
square
2
2
= 12.59), and, on the other hand, all of these categories
demographics (Pearson Chi-square
2
2
= 12.59), psychographics
(Pearson Chi-square
2
2
= 12.59), identity (Pearson Chi-square
2
=
33.39, theoretical Chi-square
2
= 12.59), and relational (Pearson Chi-square
2
= 23.32, theoretical Chi-
square
2
= 12.59). The results obtained in 2012 confirm the consumers concern for a differentiated
protection of these data from a category to another, and, inside each category, from a type of data to
another. The results also suggest an improvement of the consumers understanding of the content of the
personal data in connection with the desired level of their protection.
The comparative analysis of the dynamics of preferences regarding the personal data protection
reveals the significant changes produced between 2010 and 2012: the consumers prefer to have their
personal data protected to a larger extent (Pearson Chi-square
2
2
=
12.59), with a particular concern for their psychographics (Pearson Chi-square
2
= 100.47, theoretical
Chi-square
2
= 12.59), demographics (Pearson Chi-square
2
2
= 12.59),
and relational data (Pearson Chi-square
2
2
= 12.59). The identity has
represented and continues to represent a very important category of data in terms of the protection to be
provided: that is why the consumers concern for their protection did not change significantly (Pearson
Chi-square
2
2
= 12.59) remaining high.

Table 1: Consumer preferences in terms of their personal data protection
Demo
graphics
% Psycho
graphics
%
Identity
%
Relational
%
2010 2012 2010 2012 2010 2012 2010 2012
Gender 7.7 21.6
Political
preferences
24.4 32.7
First and
last name
61.5 63.4
Mailing
address
62.8 71.2
Age 9.0 28.8
Religious
options
21.8 30.7
Place of
work
51.3 64.1
Phone
number
67.9 66.0
Profession 37.2 45.8
Sexual
orientations
23.1 34.0
Personal
Id number
96.2 90.8
Cell phone
number
84.6 85.0
Occupation 38.5 45.8
Visited
websites
17.9 48.4
ID serial
number
91.0 92.2
E-mail
address
50.0 62.1
Education 16.7 20.9
Home access
to goods
20.5 43.1
Electronic
correspondence
49.2 62.1
Personal
web address
15.4 32.7
Income 84.6 75.8
Home access
to services
17.9 30.7
Health
status
37.2 43.8
Personal/
Family wealth
74.4 76.5
Hobbies &
interests
10.3 15.7 Legal status 41.0 46.4
Biometrics 62.8 65.4
628

data

The most sensitive personal data are those referring to the consumers identity and their
relational ports the communication channels allowing the consumers direct, interactive, and
personalized approach while the demographics and psychographics appear to be less important in terms
of the protection that should be provided for. The results also denote a rather defensive attitude of the
consumers: for 24 out of 27 research variables, the percentages are higher in 2012, by comparison to
those of 2010, the lower (but not necessarily significantly lower) values being registered for income,
personal Id number, and the phone number. If two years ago, the consumers were apparently happy to
reasonably protect their personal data, with a focus on identity and relational data, now they would desire
an extensive protection also covering their psychographics and demographics.

Table 2: Personal data and the private space of the consumer
Areas of the
Consumer's
Private Space
Years
Types of personal data
Demographics Psychographics Identity Relational
Primary area
(75 %
and more)
2010 Income
Personal Id number,
ID serial number
Cell phone number
2012
Personal/family
wealth, Income

ID serial number,
Personal Id number
Cell phone number
Secondary
area
(5074.9 %)
2010
Personal/family
wealth

Biometrics, First and
last name, Place of
work
Phone number,
Mailing address, E-
mail address
2012
Biometrics data,
Place of work, First
and last name,
Electronic
correspondence
Mailing address,
Phone number, E-
mail address
Tertiary area
(2549.9 %)
2010
Occupation,
Profession

Electronic
correspondence,
Legal status, Health
status

2012
Occupation,
Profession
Visited websites,
Home access to
goods, Political
preferences,
Sexual
orientations,
Religious options,
Home access to
services
Legal status, Health
status
Personal
web address
Peripheral
area (less
than 25%)
2010
Education, Age,
Gender
Political
preferences,
Sexual
orientations,
Religious options,
Home access to
goods, Visited
websites, Home
access to services,
Hobbies &
interests

Personal
web address
2012 Age, Gender,
Education
Hobbies &
interests

The content of the consumers private space did not change significantly in the last two years, the
distribution of the personal data within the framework of the four specific categories remaining, basically
the same in 2012 as in 2010:
- the primary (core) area of the consumers private space include a combination of identity,
relational data, and demographics: the personal identification number, the serial number of the
629

identification documents, the cell phone number, and the personal income were and, together
with the personal and/or family wealth (as the 2012 results reveal) are perceived by the
respondents as having the most personal nature (although, at least for the first two, the concrete
risks related to their collection, processing, management, and further employment are rather low);
- the secondary area of the consumers private space include a set of identity and relational data:
biometrics, place of work, the place of work, and as the 2012 results denote the content of the
electronic correspondence are the identity data with a relatively high personal nature, while the
mailing address, the phone number, and the e-mail address are the most personal relational data.
The results provided by the research waves of 2010 and 2012 support the conclusion stating that
the consumers prefer to be hardly reachable (through direct, interactive, and personalized
communication channels), and anonymous in terms of financial status and identity;
- the tertiary area of the consumers private space include a combination of demographics,
psychographics, identity, and relational data: the occupation and profession, the visited websites,
household access to different goods, political preferences, sexual orientations, religious options,
and household access to different services, legal and health status, respectively the personal web
address of the consumers describe its content. The presence of the above-mentioned
psychographics in the tertiary area of the private space expresses the stronger concern of the
consumers for the appropriate protection of their privacy, as well as the increasing complexity of
the definition given to the consumers private space;
- finally, the peripheral area of the consumer private space includes the age, gender, and level of
education, as well as, the hobbies and interests of the consumers, all registering higher
percentages in 2012, by comparison to the 2010 research wave. The most significant change
occurred in this area in the last two years is represented by the shift of the psychographics (with
the exception of the consumers hobbies and interests) to the tertiary level.
The structure of the consumers private space and its recent dynamic suggest that consumers tend
to seek an increased protection of their personal data, with a particular concern for the relational and
identity data. The relative openness to disclose some of their demographics and psychographics, as it has
been denoted by the results of the 2010 wave, has slightly decreased: the consumers appear to be willing
to disclose without too many reserves only the data about their age, gender, education, hobbies, and
interests (coincidentally or not, quite the information that are the most provided across the social
networks such as Facebook or LinkedIn). The organizations aiming to approach the consumers in a direct,
interactive, and personal manner should consider and overcome the expected difficulties derived from the
limits in collection, processing, management, and further employment of the consumers personal data.
Maintaining the anonymity and restricting the access to the relational ports appear to be the consumers
strategies aiming to keep a safe distance from the different providers of goods and services in order
defend their private space and privacy.

4. Limits of the research
Both the research waves of 2010 and 2012 have been conducted under the context created by the
following limits:
- the variables used to define the private space of the consumers: further improvements should be
made mainly in terms of adding more personal data inside of each of the demographics,
psychographics, identity and relational data;
- the scale used to measure the extent to which data related to the consumers demographic,
psychographic, identity or relational features can be assessed as personal, rather (not)
personal, respectively not personal: further improvements should consider a more appropriate
delimitation of the primary (core) areas boundaries of the consumers private space, and the
employment of other scaling methods able to provide a more detailed measurement of the
personal nature of the data regarding the consumer;
- sample and the sampling procedure used: further improvements should facilitate the consideration
of supplementary sampling criteria, mainly related to the extension of the sample coverage to the
national level.

5. Conclusions and main implications
Findings of the research waves conducted in 2010 and 2012 show that consumers are not so
willing to disclose their personal, mostly the identity and relational data, striving to maintain their
630

anonymity and restrict the access to the relational ports in order to keep a safe distance from the
different providers of goods and services and to defend their private space and privacy.
The major implications of the appropriate definition of the consumer's private space, as were
observed based on the results provided by the 2010 research wave, are validated by the results of the 2012
research wave, and refer to:
1) a better understanding, a more adequate assessment, and a more effective capitalization of the
personal data regarding the consumers: knowing with an improved precision what is personal (in
fact, sensitive) and what is not for the consumer, what data is the consumer disposed to disclose
about his or her demographics, psychographics, identity and relational ports, it will become easier
to create a friendly and facilitating environment for building and development of the long-term
profitable relationships with customers and prospects;
2) a better legal environment concerning the collection, processing, management and further
employment of the personal data: a clearer identification and definition of the personal data will
lead to a clear of the delimitation of the consumers private space, decreasing the related risks and
preventing the potential abuses of the companies, government institutions, and other public
authorities and private bodies in relationship with the consumers and/or the citizens;
3) a more effective consumers control over the personal data and, consequently, over his or her
private space: implementation of a specific mechanism of control, based on the already existing
rights (to be informed and to object against the data processing, to have access and to intervene
upon the data, to no be the subject of an individual decision, and to refer to a court of law), or to
be granted in the near future (the right to be forgotten), could allow consumers an effective
participation and control in the collection, processing, management and employment of their
personal data.

6. References
- Bergkamp, L. (2002) EU Data Protection Policy. The Privacy Fallacy: Adverse Effects of
Europes Data Protection Policy In An Information-Driven Economy, Computer Law&Security
Report, 18 (1), p. 31-47.
- Grant, H. (2009) Data Protection 1998-2008, Computer Law & Security Review, 25, p. 44-50.
- Jri, A. (2007) Data Protection Law An Introduction. Available from
http://www.dataprotection.eu/pmwiki/pmwiki.php?n=Main.Privacy.
- Kemp, R.; Moore, A. D. (2007) Privacy, Library Hi Tech, 25 (1), p. 58-78.
- Langenderfer, J.; Cook, D. L. (2004) Oh, What A Tangled Web We Weave: The State Of Privacy
Protection In The Information Economy And Recommendations For Governance, Journal of
Business Research, 57, p. 734-747.
- Pan, Y.; Zinkhan, G. M. (2006) Exploring the Impact of Online Privacy Disclosures on Consumer
Trust, Journal of Retailing, 82 (4), p. 331-338.
- Pitta, D. A.; Franzak, F.; Laric, M. (2003) Privacy and One-To-One Marketing: Resolving The
Conflict, Journal of Consumer Marketing, 20 (7), p. 616-628.
- Pope, J. A.; Lowen, A. M. (2009) Marketing implications of privacy concerns in the US and
Canada, Direct Marketing: An International Journal, 3 (4), p. 301-326.
- Solove, D.J. (2002) Conceptualizing Privacy, California Law Review, 90 (4), p. 1087-1155.
- Veghes, C. (2009) The Consumer Private Space: What Is And How It Can Be Approached
Without Affecting The Consumers Privacy, Proceedings of the World Academy of Science,
Engineering and Technology Conference in Paris, 54 (3), p. 583-586.
- Veghes, C.; Pantea, C.; Balan, D. (2010) A Marketing View Over The Consumer Private Space,
Proceedings of the 17th International Economic Conference IECS 2010 on The Economic
World Destiny: Crisis And Globalization?, Sibiu, Romnia, 13-14 mai 2010.
- Westin, A. (1968) Privacy and Freedom. New York: Atheneum.
- Wirtz, J.; Lwin, M. O.; Williams, J. D. (2007) Causes and Consequences of Consumer Online
Privacy Concern, International Journal of Service Industry Management, 18 (4), p. 326-348.

Acknowledgement
The authors of this paper would like to thank the UEFISCDI (Executive Unit for Financing Higher
Education, Research, Development, and Innovation) for the support provided in conducting this research
and the dissemination of its results.
631

THE ECOAGROCLUSTER
AN ANSWER TO GLOBAL CHALLENGES, FOCUS ON SUSTAINABLE DEVELOPMENT

ZECA Ecaterina Daniela
Lecturer Ph.D., Faculty of Engineering Braila./Department SI M, "Dunarea de J os" University, Galati,
Romania, Daniela.Zeca@ugal.ro

Abstract: For many years, even when the global economic outlook was much more positive than today,
UNCTAD stressed the need for systemic coherence. It has regularly highlighted the shortcomings of the internatio
nal economic system and has defied mainstream economic theory .
The philosophy of the EcoAgroCluster project can be defined as the organization of an
research/educational, social, financial, business, technological, administrative, legal and operational infrastructure
based on a network of entities involved, one way or another, within the framework of ecoagrarian activity.
The aim of the EcoAgroCluster is to promote existing native competencies in the area of food production,
technologies and marketing and to enable networking among industry participants.

Key words: Sustainable Development, Reinforce and dignity, Agricultural businessmen, Cooperatives,
Marketing, EcoAgroCluster

JEL classification: M31, Q13

1. Introduction
The crisis could be ascribed to the persistence of large global imbalances, which where the
outcome of long periods of excessively loose monetary policy, especially in the advanced economies
during the last decade. Global imbalances have been manifested through a substantial increase in
consumption in the US, which is the cause of the current deficit. On the other hand, a substantial surplus
in Asia, particularly in China and in oil exporting countries in the Middle East and Russia caused global
imbalance which was the major underlying cause of the crisis (Mohan, 2010). The causes of recent crises
can be seen as follows:

- The bursting of the housing bubble causing a reallocation of capital and a loss of household
wealth and drop in consumption.
- A sharp rise in the equity risk premium (the risk premium of equities over bonds) causing the
cost of capital to rise, private investment to fall and demand for durable goods to collapse.
- A reappraisal of risk by households, thereby causing them to discount their future labour income,
increases their savings and decrease consumption (Mckibbin and Stoeckel, 2009).

2. Implications of the persistence of the global economic crisis
For many years, even when the global economic outlook was much more positive than today,
UNCTAD stressed the need for systemic coherence. It has regularly highlighted the shortcomings of the
international economic system and has defied mainstream economic theory in its justification of financial
liberalization without a clear global regulatory framework. UNCTAD has drawn attention to the fact that
the world economy was overshadowed by serious trade imbalances and has questioned how they could be
corrected without disrupting development.
In recent years, UNCTAD noted the growing risk that the real economy could become hostage to
the whims and volatility of financial markets.
Maybe we should look towards the functions of money (via the exchange, measure of prices,
active reserve, means of payment in economic relations based on credit, a means to achieve unilateral
transactions, means of influencing economic activity, a symbol of wealth and power economic) and to see
that perhaps some of them are consistently met.

632

Table 1: Detailed map of sovereign debt issues and the EU
Country

GDP
(2010)
bill euro
Percentage of
national GDP of EU
GDP
Government
debt in GDP
Government
deficit bill euro
Inflation
(Aug
2011)
Austria 284 2.30% 72.00% 205 3.70%
Belgium 353 2.90% 97.00% 341 3.40%
Bulgaria 36 0.30% 16.00% 6 3.10%
Czech
Republic
145 1.20% 39.00% 56
2.10%
Cyprus 17 0.10% 61.00% 10 2.30%
Estonia 14 0.10% 7.00% 1 5.60%
Denmark 234 1.90% 44.00% 102 2.40%
Finland 180 1.50% 48.00% 87 3.50%
France 1,933 15.80% 82.00% 1,592 2.40%
Germany 2,450 20.20% 83.00% 2,062 2.50%
Greece 230 1.90% 143.00% 329 1.40%
Ireland 154 1.30% 96.00% 144 1.00%
Italy 1,549 12.70% 119.00% 1,843 2.30%
Latvia 18 0.10% 45.00% 8 4.60%
Lithuania 27 0.20% 48.00% 10 4.40%
Luxembourg 41 0.30% 18.00% 8 3.70%
Malta 6 0.10% 68.00% 4 2.30%
United
Kingdom
1,696 13.90% 80.00% 1,353
4.50%
Netherlands 591 4.80% 63.00% 670 2.80%
Poland 354 2.90% 55.00% 196 4.00%
Portugal 173 1.40% 93.00% 161 2.80%
Romania 122 1.00% 31.00% 37 4.30%
Slovakia 66 0.50% 41.00% 27 4.10%
Slovenia 36 0.30% 38.00% 14 1.20%
Spain 1,062 8.70% 60.00% 641 2.70%
Sweden 346 2.80% 40.00% 146 1.60%
Hungary 98 0.80% 80.00% 78 3.50%
Note: The limit set by the Treaty of Maastricht government debt of EU countries is 60%

Figure 1: GDP
(2010) billion

GDP (2010) bill euro
Austria
Belgium
Bulgaria
Czech Republic
Cyprus
Estonia
Denmark
Finland
France
Germany
Greece
Ireland
Italy
Latvia
Lithuania
Luxembourg
Malta
United Kingdom
Netherlands
Poland
633

Source: eurostat.ec.europa.eu/statistics
3. Agriculture in time of crisis
WEST LAFAYETTE, Ind. While the uncertainty on Wall Street directly affects the financial
sector, a Purdue Extension agricultural economist says it's the indirect consequences coupled with
weather concerns that has the agriculture industry on edge.
Agriculture, with the exception of livestock, has been more resistant to recession, said Mike
Boehlje.
While farmers should not ignore the capital markets, Boehlje said the current financial turmoil's
effects are more indirect and focus mostly on demand adjustments.
"When there is long-term instability there tends to be a flight to real assets," Boehlje said:
"People move away from financial assets. Agriculture is a real asset industry, so that does offer some
protection."
Even if the sector contributes only 2.5% of the EUs GDP, agriculture is inescapably a strategic
factor in the sustainable development of societies. Food supply, security, the quality and diversity of
produce, town and country planning (80% of the Unions territory is rural and here farmers are the
principal actors), the environment, the dynamism of rural areas: the CAP is closely involved in all these
questions. Action is needed in many of these areas, and a common project allows collective responses.
Undermining the CAP by giving way to the siren calls of economic modernism would neglect these
questions. The Union must bring a response to these questions of economics, health, society, planning
and the environment; issues which were once settled naturally by a myriad of small landholdings, but
which today risk being ignored in a context of more rarefied agriculture.
After half a century the CAP still adheres to objectives set out in the Treaty of Rome. Adaptations
and reforms have made the policy particularly complex and unclear.
To make the CAP coherent are necessary, at least, the following:

a. To ensure the continued existence of European agriculture which is productive,
competitive and diverse, while maintaining both market-regulation instruments as
security nets and standards in safety and quality.
b. To promote agriculture which respects the environment.
c. To guarantee economic and social development in rural areas, by financing different
rural actors including those not directly related to farming.

4. Area under agro-environmental commitment
In 2009 almost one-quarter of the EU's total utilised agricultural area was enrolled in agri-
environmental measures.
In EU-27, 24.7 % of the UAA were in 2009 under agri-environmental commitment.
A group of four countries (LU, FI, SE and AT) was far ahead of the others. In these countries, more than
two third of their UAA were under agri-environmental commitment (between 69.2 % and 91.7 %).
In 6 EU countries, the ratio was below 10% (BG, RO, LT, MT, CY, PT).
Between 2005 and 2009 the share of agricultural area occupied by organic farming in the EU
increased considerably
Organic farming in the EU increased by almost one third between 2005 and 2009.
The share of organic farming in utilised agricultural area (UAA) in the EU increased from 3.6 %
to 4.7 % between 2005 and 2009. This increase is also reflected in the number of organic producers in the
EU, which rose by 9.5 % between 2007 and 2008.

Figure 2: Area under agri-environmental commitment, by country (% of total utilised agricultural area) -
Source: European Commission, Directorate-General for Agriculture and Rural Development

634

4.1. Organic farming
At the level of Member States, the largest increases between 2005 and 2009 were in Malta (400
%), Poland (130 %), Spain (126 %) and Lithuania (109 %). Austria still held the largest share of organic
farming in utilised agricultural area, with 18.5 % in 2009, followed by Sweden (12.8 %), Estonia (11 %)
and the Czech Republic (10.6 %). The smallest share of organic farming could be found in 2009 in
Bulgaria (0.2 %) and Malta (0.5 %). Overall, the organic farming sector grew during this period in all
Member States, with the exception of Portugal, Bulgaria and France.

Figure 3: Average anual organic-farming growth rate


The indicator is defined as the share of total utilised agricultural area (UAA) occupied by organic
farming (existing organically-farmed areas and areas in process of conversion).
Organic farming is a method of production, which puts the highest emphasis on environmental
protection and, with regard to livestock production, animal welfare considerations.
It avoids or largely reduces the use of synthetic chemical inputs such as fertilisers, pesticides,
additives and medical products. Farming is only considered to be organic at the EU level if it complies
with Council Regulation (EC) No 834/2007, which has set up a comprehensive framework for the organic
production of crops and livestock and for the labelling, processing and marketing of organic products,
while also governing imports of organic products into the EU. The detailed rules for the implementation
of this Regulation are laid down in Commission Regulation (EC) No 889/2008.
Table 2: Organisations and sites with EMAS registration - number
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Italy 6.7 8.0 7.6 7.0 6.4 7.3 7.9s 7.9 7.5 8.1s
Cyprus : : : : 0.6 1.0 1.2 1.5 1.6s 1.9s
Latvia : : : : 1.6 6.8 9.4 8.1 8.9 8.7
Lithuania : : : : 1.4 2.3 3.5 4.5 4.6 4.8
Luxembourg 0.8 1.6 2.2 2.3 2.5 2.4s 2.4s 2.6 2.7 2.7s
Hungary : : 1.6 2.0 2.3 2.2 2.1 1.8 2.1 2.4
635

Malta : : : : 0.0 0.1 0.2 0.3s 0.4s 0.5s
Netherlands 1.6 1.9 2.2 2.2 2.5 2.5 2.5 2.5 2.6 2.6
Austria 13.8 14 14.5 15.5 16 16.7 16.7 17.1 17.5 18.5
Poland : : : 0.2 0.5 1.0 1.0 1.8 2.0 2.3
Portugal 1.2 2.0 2.1 3.2 5.6 6.2 7.2 6.3 5.6 5.7s
Romania : : : : : 0.7s 0.8 1.0 1.0 1.2
Slovenia : : : : 4.6 4.6 5.5 5.9 6.1 6.3
Slovakia : : : 2.2 2.6 4.6 6.2 6.1 7.3 7.5
Finland 6.7 6.7 7.6s 7.1 7.2 6.5 6.3 6.6 6.5 7.2
Sweden 5.9 6.6 6.8 7.2 7.0 7.0 7.2 9.9 10.9 12.8
United
Kingdom
3.7s 4.3s 4.7s 4.2 4.3s 3.8s 3.8s 4.1 4.8 4.1
Norway 2.0 2.6 3.1 3.7 3.9 4.2 4.3 4.7 5.1 5.5s
Switzerland : : : : : 11 : : : :

As eurostat informs us, this indicator is defined as the number of EMAS-registered organisations
and sites. The EMAS (Eco-Management and Audit Scheme) is a voluntary environmental management
system implemented by companies and other organisations from all sectors of economic activity
including local authorities, to evaluate, report on and improve their environmental performance.
The scheme integrates ISO 14001, International Standard for Environmental Management
System, as its environmental management system element. Since April 2001, corporate registrations are
possible, wherein organisations gather all their sites under one registration number.
The European Commission started to collect numbers of sites in addition to number of
organisations in March 2004 to give a more accurate picture of EMAS development.

5. EcoAgroCluster and Sustainable Development

5.1. Ecosanogenesis
Ecosanogenesis concept, revolves around human actions and how their refractory multiple
environments: nature and society, material and spiritual culture, all about being in an all relational.
Overall objective of this paper is to identify, now in the twenty-first century, practical and achievable
ways of ensuring the food resources of mankind, respecting the principles of Bio, of sanogenesis and
ecoeconomics, that wise man to become a partner in his triple hypostasis by the manufacturer, regulator
and consumer in intensive agroecosystems.
System of crop cultivation that uses biological methods of fertilization and pest control as
substitutes for chemical fertilizers and pesticides, which are regarded by supporters of organic methods as
harmful to health and the environment and unnecessary for successful cultivation. It was initiated as a
conscious rejection of modern agri-chemical techniques in the 1930s by the British agronomist Sir Albert
Howard. Miscellaneous organic materials, including animal manure, compost, grass turf, straw, and other
crop residues, are applied to fields to improve both soil structure and moisture-holding capacity and to
nourish soil life, which in turn nourishes plants. Chemical fertilizers, by contrast, feed plants
directly.Biological pest control is achieved through preventive methods, including diversified farming,
crop rotation, the planting of pest-deterrent species, and the use of integrated pest management
techniques. Bioengineered strains are avoided. Since organic farming is time-consuming, organically
grown produce tends to be expensive. Organic produce formerly accounted for a minuscule portion of
total Romanian farm output, in recent years.

5.2. The philosophy of the EcoAgroCluster
The philosophy of the EcoAgroCluster project can be defined as the organization of an
research/educational, social, financial, business, technological, administrative, legal and operational
infrastructure based on a network of entities involved, one way or another, within the framework of
ecoagrarian activity.
All this must be put on the basis of the following priority aims:
636

-Establish an agro-industrial and food infrastructure to promote socio-economic development and
enhancement of the territories, revitalizing the action groups, creating synergies among the entities
involved.
-Modernize and promote the change of cities operational paradigm to reinforce and dignify the role of
agricultural businessmen, more precisely, of the business entities, work cooperatives and other entities of
transformation, marketing and distribution of agricultural productions.
-Promote the integrated production mechanisms of agricultural activity on the basis of the maximum use
of resources and natural production elements to guarantee, in the long term, a sustainable agriculture.
-Foster technological enhancement and qualitative and quantitative generation change in the food and
agriculture industry.
-Incorporate procedures, knowledges, instruments, tools and casuistry of agricultural best practices in the
whole process and productive stages, incorporate research work in the EcoAgroCluster as a main actor.
-Promote educational processes to develop and consolidate those actions to favour the creation of new
agricultural companies integrated into the EcoAgroCluster, particularly focusing on professional
reinsertion of those manufacturing sectors underprivileged by restructuring processes of the job market
and/or the crisis of the traditional cultivation system to the detriment of other uses of land.
-Design an architecture of measures, actions, and informations for an integral development of sustainable
agriculture, first in the SE Romania, where I am studing the tendence of cosumers about ecoagrofood.
The architecture will be under the following basics: ecofood quality and security; sustainability and
efficiency of the resources put into practice in the production process (water, energy, human capital);
promotion of multi-functionality in the agriculture sector as a source of resources, wealth, development,
environmental and landscaping and, consequently, as a relevant functional and cultural sustenance in the
Romanian territories, but not only.
The EcoAgroCluster must implemented in the territories a series of actions covering the scope of
creation of a network and coagulation of all elements and actors (public and private) as an integral part of
it.
Its essential target will be to foster and manage all inherent activities to clusterization
(association of the local agriculture productive chain) of civil service, enterprises, professionals, financial
entities, associations, cooperatives and private individuals connected somehow with agriculture activity.

5.3. EcoAgroCluster Strategy, Objectives, Activity
So, the aim of the EcoAgroCluster is to promote existing native competencies in the area of
agrofood production, technologies and marketing and to enable networking among research center,
agricultural producer, industry participants, and not least, consumers.
Strategy is to promote research, sustainable development, innovation and technology for ecosanogenetic
agroproduct. But results of research is dedicate to develope of new production and conservation
procedures, to valorise all agroproducts, entrepreneurship, development of new business models, training
and to informe about the latest results of reserch, qualification in spririt of ecosanogenetic product.
Objectives are the following:
- In a such cooperative, EcoAgroCluster, must establish strong relationship between research,
ecoproduction territory, raw agroproducts delivery finished products specificity and consumers;
- Must be valorization and integration of the residues by-products;
- Strong link with research must allow introduction of new technologies in food conservation to
maintain its natural organoleptic characteristics;
The target groups of the Cluster include food industry operations across the entire value chain:
- Agricultural research
- Agricultural production
- Food processing trade and industry
- Food retail and wholesale
- Manufacturers of machines and equipment for food
- Processing, cleaning supplies, pest control, packaging
- R&D, laboratories, consultants and more
Activity
The EcoAgroCluster bases its activities on valorise the results of the research in the network
ecovegetable and animal farms, ecoagroindustrial sector, focusing on ecoagricultural products: ecofruit
and ecovegetables processing, ecoanimal and vegetable fats, alcohol-free beverages.
637

The EcoAgroCluster covers the entire chain, from agricultural production to the final packaging,
including marketing and management soft.
The EcoAgroCluster must promotes the organization of workshops focused on the companies
needs, about:
- the CAP alterations effects until 2020 to sectors of ecofruits, ecotomato;
- warehouse management;
- food preservation and conservation processes;
- packaging and materials in food contact;
- use and recovery of by-products of agricultural and agro-industrial;
- antiseptics processes and quality certification systems between industry and agricultural;
- eco clients management and marketing.

6. Conclusions
Ecoeconomics is a concept proposed by Lester Brown referring to an economy can develop
without affecting their long term support system, environment. to meet needs for food, energy, water
To eliminate waste, increase of breeding population will be solved scientific problems insoluble
today, then will be put in place technologies and efficient logistics systems industrially applicable
financially and socially acceptable . But must consider the fact that while growth is quantitative change,
qualitative development requires changes in a synchronous approach to the requirements of time, to meet
present generations, but does not hinder future generations!
I see research as an end in itself and represents but it is how to provide a clear benefit triad-
produced human nature. The positive effect of this point of view is in the fact that the implications that
can generate ecosanogen making a product and by stimulating demand of the market, no longer a problem
to interest a small group, the researchers, but is a concern society in a globalized.
Inputs for production and circulation of goods and services related to nutrition are multiple
economic data from law, engineering, management, ethics and not to ignore, to the marketing.
To design policies that have a chance of effectively helping the rural is now a very important thing.
In the EcoAgroCluster is vitaly to identify and loyalty consumers of such products, clean, but
more expensive to put a link between the EcoAgroCluster and clients.
Imposing ecosanogeneza concept is not easy, especially in times of crisis and now on the brink of
predicted food crisis when almost exclusively interested in the quantity that carry a particular product.
But we have to gather strategies designed to help:
A. Penetration sanogeneza ecological information related to the general public from
professionals, information leading ultimately to educate people in the spirit of quality and demand for
goods which have not been produced at the expense of the environment;

B. Awareness of stakeholders to support environmental, economic and health policies;

C. Development infologistic system scientifically effective, practicable in terms of financial and
socially acceptable;

D. Ecoagroclusters will allow, in addition to cooperation in upstream and downstream product
chain, cooperation with research institutions, with local organizations and resources by providing
marketing management and valuing these ecoproducts for informed and loyal customer for these
products.
There can be no doubt that, apart from the need to strengthen financial regulation at the national
level, the current problems of the global agroeconomy require global and local solutions.We, researcher,
must play a central role in this process, but not only us, or not only institution which has the universality
of membership and credibility to ensure the legitimacy and viability of a reformed governance system
but also it is very important to involve every stakeholder in building architecture EcoAgroCluster .

7. References
- Alter, S. Information Systems, 4th Edition, Prentice Hall, Upper Saddle River, New Jersey, 2002,
p. 191.
- Chopra, S.; Meindl, P. Supply Chain Management. Strategy, Planning and Operation,
638

Second Edition, Pearson Education, Inc., Upper Saddle River, New Jersey, 2004, p. 515.
- Danciu, V. (2005) Marketing ecologic. Etica verde a produciei i consumului, Bucureti, ISBN
973-709-254-6, Editura Economica.
- Pecican, E. (2009) Econometria pentru... economiti. Econometrie. Teorie i aplicai, Bucureti,
editia a III-a, ISBN 978-973-709-340-0, Editura Economica.
- Mccarty, J. A., Shrum, L.J., (2000) The Measurement Of Personal Values In Survey
Research. A Test Of Alternative Rating Procedures in Public Opinion Quarterly, American
Association for Public Opinion Research.
- Svoiu Ghe. ;Grigorescu R. ;Asandei M.;Manole S, (2005) Cercetri i modelri de marketing -
Metode cantitative n cercetarea pieei Bucureti, ISBN 973-7787-51X, Editura Universitara.
INTERNET.
- Boehlje M,,765-4.
- Stewart J. 765-494-6682, jsstewar@purdue.edu
- http://economie.hotnews.ro/
- http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Sustainable_development_-
_Consumption_and_production.
- http://www.madr.ro/pages/l52/ORDIN_nr_688_din_2007.html.
- http://www.madr.ro/pages/page.php?self=01&sub=0107&tz=010705.
- http://www.madr.ro/pages/page.php?self=01&sub=0107&tz=010714.
- http://www.momagri.org/UK.

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3

, where z is a known tabular value

measures a countrys exports of a commodity (or

is less than unity, it is said that the

= 1, the nature of Balassa index implies that

, therefore, depends on the relative

are generally variable in time, the situation is not only

. The advantage of the last two indices,

) is calculated as the difference between relative export

and its counterpart, relative

= RTA = RXA - RMA

, where M represents the imports. Therefore,

= RTA = RXA - RMA =

= RC = lnRXA - lnRMA (5)

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