Training on Advanced Marketing Sivas March 18 th to 21 st 2013 delivered by

1. “Promoting competitiveness of Sivas entrepreneurial community through innovative sustainable development”

2. Training on Advanced Marketing Sivas March 18th to 21st 2013 delivered by Formaper Expert Michele Lenoci

3. ENTERPRISE AND MARKET The business idea is the one from which the subject (the entrepreneur) is to develop part of an initiative aimed at making a profit through the production and exchange of goods and / or services on the market.

4. MARKETING & SELL CONSUMER  PRODUCTION ENTERPRISE AND MARKET PRODUCT ORIENTATION The entrepreneur thinks that buyers will buy a product or service only because it is available. The only relevant factor is the price.

5.  PRODUCTION ENTERPRISE AND MARKET R&D MKTG CONSUMER MARKETING & SELL MARKET ORIENTATION The entrepreneur believes that products and services should be designed according to the needs of potential customers (market). The focus is on the ability to anticipate and meet customer needs. The success depends on the ability to understand the level, timing and characteristics of demand

6. Not always the innovative product works, even only 10% of new products introduced into the market survive Palm Newton by Apple Michelin Run Flat WARNING: HIGH TECHNOLOGY AND INNOVATION DOES NOT GUARANTEE SUCCESS

7. 38% of manufacturing enterprises with more than 10 employees introduce technologically new and/or improved products or processes INNOVATIVE ENTERPRISES

8. WHAT’S STRATEGY? It’s see so far… ... but knowing where are you!

9. MARKETING Are the set of activities by which an organization seeks to meet the needs of persons or other organizations making them available products or services or promoting ideas or affirming values

11. Evergreen (long-seller) mania Product’s lifecycle Fashion …flop PRODUCT’S LIFECYCLE The design management project the life of the product (if possible)

12. THE ENTERPRISES IN ITALY • Micro-enterprises: employ fewer than 10 persons; • Small enterprises: employ fewer than 50 persons and have either an annual turnover not exceeding 7 million EUR, or an annual balance-sheet total not exceeding 5 million EUR; • Medium-sized enterprises: employ fewer than 250 persons and have either an annual turnover not exceeding 40 million EUR, or an annual balance-sheet total not exceeding 27 million EUR

13. THE ENTERPRISES IN EUROPE SMEs represent 99% of SME across Europe and similar figures around the world. Only 8% of total EU27 SMEs are involved in exports (in Italy 4%).

14. Projects don’t exist (no business plan, marketing plan, financial planning, etc.). They live every day in continuous emergency. Often they participate in promotion programs but very rarely they carry them until the end of the activities, overwhelmed by “day to day” that removes the awareness of these support measures. • The entrepreneur focuses on himself all business functions: no export office, marketing manager, area manager, etc. The delegation is only formal, not substantive. • The search for new customers, both domestic and foreign, is left to chance and circumstances that happen from time to time (it is a consequence of point 1). • Promotional activities are chosen solely on the basis of lowest cost, not on the basis of the potential outcome. Participation in trade fairs or other events are made at the last moment (and therefore paying full price for stands, hotels, flights, etc.). THE WORLD OF THEMICRO-ENTERPRISES

15. Everything revolves around the products. They are often of excellent quality, handmade in the vast majority. Therefore, they don’t undergo changes or developments over the life of the company (no life cycle of the product). It is assumed that the product will sell "itself” because it is thought to be good. Do not accept the idea that perhaps the product does not meet the needs of consumers, or that there are other competitive products. • As a result of the preceding paragraph, the services that revolve around the product (marketing, promotion, communication, etc.) are considered unnecessary or, at best, to spend as little as possible because of the costs. Training is just a cost even if it is free (if the entrepreneur is in the classroom, the company is closed). • If the companies do not have export experience, they believe that as soon as they introduce their products abroad they will be purchased immediately because the consumers were waiting with open arms. THE WORLD OF THEMICRO-ENTERPRISES

16. The concept of the market, both domestic and foreign, is very general. The information and data is not monitored and studied. The sources are often only the media and the decisions are made on the basis of information not controlled ("they told me ..." "I heard ..."), or based on the "entrepreneurial flair and instinct". • The micro-enterprise has a single motto: find out who wants to buy his product (no investments in commercial companies, Joint Ventures, etc.). And pay in advance (poor use of letters of credit, insurance payments, etc...). THE WORLD OF THEMICRO-ENTERPRISES

17. Food Electric equipments number of firms Billion of Euro number of firms Billion of Euro FRAGMENTATION ITALIAN EXPORTS Mechanics equipments Means of carriage number of firms Billion of Euro number of firms Billion of Euro

18. ITALIAN INDUSTRIAL SPECIALIZATION

19. THE ITALIAN DISTRICTS • The industrial district is an industrial local system characterized by: • a main industrial activity composed of small independent but integrated enterprises, specialized in different phases of the same productive process; • good business performances thanks to production specialization and close network of entrepreneurial relations, factors that balance the diseconomies of scale; • The inter-relations among SMEs stimulating innovation activities due to: • easy access to information on the evolution of markets and technology; • opportunities to obtain a wide range of semi-manufactured components and customized machinery; • easy access to highly skilled human resources

20. THE ITALIAN DISTRICTS: production specialisation

21. THE ITALIAN DISTRICTS Food Paper Plastic/rubbers Mechanics Jewellery, Toys Leather, shoes Ceramic, furniture Textile, clothing

22. Croatian factories The assembly of the shoe and the sole are completed in the mother house in Italy, in Croazie or Slovakia near specialized factories that entirely use material sent from Italy. Holland pasture The skin that forms the upper is obtained from the calves raised in Holland and in the north of France. The tanning of the raw skins is worked in the Tuscan district of Santa Croce. GLOBALISATION’S EXAMPLE The perforated sole The perforated sole in true rubber is produced in the district of Civitanova Marche The American membrane The transpiration system of GEOX has been invented in Italy in the GEOX research laboratories of Montebeluna. The impermeable membrane is produced in USA and then predisposed for the insertion in the sole. This last phase is realized in the automated factory in Romania. Rumanian laboratories The thread braid in English cotton is used to seam the moccasin. This workmanship is effected in the Rumanian and Slovak laboratories.

23. THE GLOBAL ECONOMICS AREAS • Asian Pacific Economic Cooperation (members since 1989: Australia, Brunei Darussalam, Canada, Corea, Japan, Indonesia, Malesia, Filipines, New Zeland, Singapore, Thailand, USA; members since 1991: China, Hong Kong (China), Taipei (China); since 1993: Mexico, Papua Nuova Guinea; since1994: Chile; since1998: Perù, Rusia and Vietnam). • Association of South-east Asian Nations. The AFTA was born at the IV Summit of the ASEAN countries in 1992 (members since: Filipines, Indonesia, Malasia, Singapore and Thailand; since 1984: Brunei Darussalam; since 1995: Vietnam; since 1997: Laos and Myanmar; since 1999: Cambogia).

24. Expenses of middle-class world, quote % per area GLOBALISATION’S STATISTICS

25. FACTORS FOR EXPORT BUSINESS POLICIES CHARACTERISTICS OF THE PRODUCT ENTERPRISE FORCE AND COMPETITIVE POSITION INTERNAL FACTORS CHOICES TO ENTRANCE IN THE MARKETS EXPORT INVESTMENT INDIRECT DIRECT GOVERNMENT POLICIES MARKET OPPORTUNITY EXTERNAL FACTORS COMPARATIVE COST OF THE COUNTRY ECONOMIC DEVELOPMENT CULTURAL ENVIROMENT POLITIC ENVIROMENT

26. PRESSING FACTORS AND TEMPTING FACTORS IN THE INTERNATIONAL DEVELOPMENT Pressing factors Tempting factors PRO-ACTIVITY (aggressive behaviour): The firm uses the the market’s opportunity REACTIVITY: The firm responds passively under inside or outside pressures

27. WHEN IS THE MOMENT FOR THE FOREIGN INVESTMENT? LIFE CYCLE OF A COMPANY BEGIN DEVELOPMENT MATURITY DECLINE

28. HOW TO FIND THE DISTRIBUTION CHANNELS OPTIONS Studying (Making a Market research) Attemps (Participation in Fairs, trade missions, trips, etc.)

29. Sell Strategic METHODS TO APPROACH THE MARKET PERIOD Short term Long term TARGET MARKET Not selected Selected TARGET Immediate sales Permanent position in the market RESOURCES Necessary to increase sales Necessary to increase the market position METHOD OF ENTRY Non-systematic Systematic DEVELOPMENT OF NEW PRODUCTS The same for domestic markets Develop new products DISTRIBUTION CHANNELS Uncontrolled Controlled PRICE Production cost + margin Relative to competitors PROMOTION Sellers Advertising and sell promotions

30. IMPORTANCE OF THE COLORS IN THE WORLD

31. COUNTRY ANALYSIS: VARIABLES

32. FORMS OF EXPORT "COMMITMENT & CONTROL" COMMITMENT MINIMUM MAXIMUM BUY-SELL (market transactions) BUYERS MINIMUM COMMERCIAL TRADERS NON-STABLE AGREEMENT PIGGY-BACK AGENT FRANCHISING STABLE AGREEMENT CONTROL LICENSING EXPORT CONSORTIUM JOINT VENTURE LONG STABLE AGREEMENT REPRESENTATIVE MAXIMUM MAKE DIRECT SALES BRANCH SALE DIRECT INVESTMENT

33. THE ADVANTAGES OF THE EXPORT • The market may be much larger: no longer regional or national, but international. • The ability to broaden its target market provides a more stable production, especially at companies that sell seasonal goods. • By expanding into new markets, you can prolong the life of the product. • The geographical distribution of sales and increased market involves a reduction in business risk (diversification "portfolio areas"). • The sale abroad can help to overcome the difficulties of surviving and / or expansion of the company in case of serious domestic economic crisis or its own internal market saturation. • Contact with the international competition that has been enriched by new players, is a very strong incentive to improve production techniques and marketing of the product.

34. EXPORT RISK • High costs. • Revocation of orders. • Do not collect the goods. • Missed or late payment. • Difficulties in recovering debts. • Burden of litigation costs in case of disputes. • Unfavorable exchange rate fluctuation. • Misunderstandings due to the different meaning of the terms of commercial use. • Continuous changes in regulations and procedures. • Formalities and documents for import and / or export. • Import bans to import and / or export.

35. RISKS: FALSIFICATION THE ORIGINAL THE ORIGINAL THE DIFFERENCE IS IN THE SPACE! THE ORIGINAL THE COPY THE COPY THE COPY

36. RISKS: FALSIFICATION A "false" Copy of a gas valve of a major Italian company, after catching fire, in the U.S. has caused serious burns to the hands of a worker

37. RISKS: FALSIFICATION

38. WHAT SHOULD A COMPANY DO TO EXPORT UNDERSTANDING THE COUNTRY IN WHICH TO GO HOW TO ENTER INTO THE MARKET CAPTURING THE ORDERS PROTECTION ORDERS ENSURE AFTER SALES SERVICE

39. ELEMENTS FOR ACTIVE EXPORT • Enterprise Check-up, to evaluate the decision to operate on foreign markets • The choice and selection of the foreign market • Research opportunities, market analysis and competitors • Methods and alternative solutions for presence and sales markets • Search and selection of foreign partners • Product’s policies • Prices’s and payment’s policies • Distribution’s policies • Tools of advertising and promotion on markets

40. FACTORS FOR COMPETITIVE ADVANTAGE

41. POLICIES TO SUPPORT THE INTERNATIONALISATION OF SMEs Programs to support SME internationalization have traditionally been focused on promoting greater exports and usually developed independently from other policies. In fact, approximately 70% of all of them are focused exclusively on supporting exports. For these programs it is estimated that 1 € of support produces a 40 € return in terms of increased exports which proves their high value in terms of return for investment. Studies have shown that government support measures based on building capacities and supported by consultants produce a high level of “additionality”: an important number of SMEs in these programs wouldn’t have internationalized without the Government support.

42. POLICIES TO SUPPORT THE INTERNATIONALISATION OF SMEs • For increased effectiveness each country will have to build its own set of policies based on “on the ground” experience and focused around the actual SMEs they are trying to support. • Internationalization is a moving target. The level of internationalization of the SME is related to its size and resources. The problems and the corresponding support measures required will have to change as the company evolves and grows.

43. POLICIES TO SUPPORT THE INTERNATIONALISATION OF SMEs • One of the main reasons for non utilization of support is that enterprises lack awareness. In general smallest SMEs do not have the desirable knowledge about the support measures due to the lack of resources devoted to internationalization. • Effective support to SMEs must consider the variables that influence the process of internationalization: available financial and human resources, company size and stage of internationalization, sector, geographical location, target markets, etc. All this strongly supports an approach based on individualized support to each SME and the implicit recognition that internationalization goes well beyond the international department of the company.

44. EXAMPLE OF ITALIAN PROGRAM ASSISTANCE TO HELP THE SME’s EXPORTS Training course to 15 entrepreneurs (12 days) and 15 young graduates (40 days) After the course the young graduates do a stage into the companies of the entrepreneurs (6 months). In the first 3 months a Senior Export consultant do an export assistance together with the young graduate and makes an export marketing plan. In this document is identified a target country that may be interesting for the company. The young graduate go to the selected country for 1 month to search commercial partners for his company.

45. WEB MARKETING • Feature of the Internet is the ability to have a lot of information on a particular topic, in a few passages through the link. • Each site so it must be easy to use. • First problem: the web address (URL – Universe Resource Locator). • The visibility and attractiveness of a website depends on the technology used by the user. When building a website, the user should bear in mind: • Which kind of computer use (PC, Mac, tablet, etc.). • Which browser navigates (Explorer, Opera, Firefox, etc.) • Which operating system is equipped (Windows, OS, Linux, etc.). • Preferences (text size, language, etc.)

46. INTERNET COMMUNICATION When you open the home page, the eyes are now on the top left, then down and at the end at the top right. What an eye catcher is the text titles, the first ones in the upper left, then the top right. The photos are not only the entry point, but we focus very little. On average, before proceeding to a subsequent page, you read five titles per page, regardless of the number of titles on the page. A title, then you really only read the first two or three words.

47. INTERNET COMMUNICATION The image highlights with vibrant colors displayed the human eye while browsing, showing that the major portion is constituted by textual content consists of links and paragraphs.

48. E-MAIL COMMUNICATION • A good e-mail message must be clear, not too long and at the same time set well graphically and possibly divided into paragraphs. Here are some points: • Interesting object: the text should be short and to the point: the object is the first thing you see in the e-mail and the recipient object can already see if the content of the e-mail address is interesting or not, so if you read it or delete it; • The text must be as short as possible so as not to bore the reader. It would also be good to divide the text into three, at most four paragraphs to make it more schematic possible, remembering to wrap at the end of each line so that the recipient of vs. message is in the text written on a single line; • The initial greeting is to be friendly and reliable, my advice is to give you the to involve the reader, then it depends on what kind of audience we write