Editorial Board of “Holistic Marketing Management” (A refereed journal published four times annualy by the School of Management-Marketing of the Romanian-American University) Editor -in-Chief Theodor Valentin PURC!REA Editorial Board Managing Director EuroHandels Institute Retail, Germany; President of EuCVoT; President of European Retail Academy; Member of the Astana Bernd HALLIER
Economic Scientists Club; Chairman of the Advisory Board of EuroShop, Chairman of the Board of the Orgainvent, Trustee of EHI Retail Institute at GLOBALG.A.P Chairperson of Global Divisions, Association of Management and International Association of Management, USA and Editor-in-Chief of the
John SAEE
Journal of Management Systems, USA; Australian Graduate School of Entrepreneurship, the Faculty of Business and Enterprise, Swinburne University of Technology; Member of
France’s National Academy of
Scientific Research (CNRS) Erivan K. Haub School of Business, Saint Joseph’s University Philadelphia, John L. STANTON
USA, Founding Editor of the Journal of Food Products Marketing and Editor of the Journal of International Food and Agribusiness Marketing
Léon F. WEGNEZ Dana ZADRAZILOVA Riccardo BELTRAMO Sinisa ZARIC Gabriela SAB!U Hélène NIKOLOPOULOU Vasa LÁSZLÓ Peter STARCHON John MURRAY Kamil PÍCHA Constantin RO"CA Irena JINDRICHOVSKA Dumitru MIRON
Secretary General of the International Association of the Distributive Trade, AIDA Brussels; Member of France’s Academy of Commercial Sciences Dean of Faculty of International Economic Relations, University of Economics, Prague, Czech Republic University of Turin, Italy University of Belgrade, Yugoslavia Memorial University, Grenfell Campus, Corner Brook, Canada University of Lille 3, France Szent Istvan University, Hungary Comenius University in Bratislava, Slovakia Faculty of Business, Dublin Institute of Technology, Ireland
Faculty of Economics,University of South Bohemia in Ceske Budejovice President of Romanian Scientific Society of Management- SSMAR
Deputy Head of Department of Business Economics, University of Economics and Management, Prague, Czech Republic Academy of Economic Studies in Bucharest
Holistic Marketing Management
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Valeriu IOAN-FRANC
National Institute for Economic Research, Romanian Academy; Romanian Marketing Association
Iacob C!TOIU
Academy of Economic Studies in Bucharest
Virgil BALAURE
Academy of Economic Studies in Bucharest
Gheorghe ORZAN
Academy of Economic Studies in Bucharest
Luigi DUMITRESCU
Marius D. Pop
Lucian Blaga University of Sibiu Babes-Bolyai University, Cluj-Napoca Technical University of Cluj-Napoca, Management and Economic
Ion VOICU SUCALA
Engineering Department; University of Glasgow, UK, College of Social Sciences, School of Social & Political Sciences; Managing Editor, Review of Management and Economic Engineering
Virgil POPA
Valahia University of Tﾃ｢rgovi"te
Ana-Maria PREDA
Romanian-American University
Ileana PONORAN
Romanian-American University
Ovidiu FOLCU#
Romanian-American University
Doini$a CIOCﾃ山LAN
Romanian-American University
Marius Dan DALOT!
Romanian-American University
Mihai PAPUC
Romanian-American University
Gheorghe ILIESCU
Romanian-American University
Alexandru IONESCU
Romanian-American University
Olga POTECEA
Romanian-American University
Oana PREDA
Romanian-American University
Nicoleta DUMITRU
Romanian-American University
Monica Paula RA#IU
Romanian-American University
Costel NEGRICEA
Romanian-American University
Associate Editors Cristina NEAGOE Dan SMEDESCU Art Designer Director Alexandru BEJAN
Holistic Marketing Management
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CONTENT
Theodor Valentin PURC!REA
Editorial: Designing a holistic marketing management framework for application.................................................. 3
Marius Dan DALOT!
Increasing Productivity by Total Quality Management and Constraint Management............................................
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Nicoleta Rossela DUMITRU Customer Relationship Management, a major element of Ivona STOICA the company's business strategy......................................... 15 Costel Iliu#$ NEGRICEA
Costel Iliu#$ NEGRICEA Tudor EDU Emanuela AVRAM
The Particularities of Academic Marketing in the
Cristina NEAGOE
Relationship Marketing Communication. Case study:
knowledge-based society....................................................
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Strengthening relations with shareholders through marketing communication.................................................. Mariana ENU%I
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Considerations regarding Competence Management and the Competence Management Information Systems of the
Gabriela VĂ‚LCEANU
Small and Medium Enterprises..........................................
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Corporate social initiatives, another face for companies..
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The responsibility for the content of the scientific and the authenticity of the published materials and opinions expressed rests with the author.
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Editorial: Designing a holistic marketing management framework for application When we talk about „HOLISTIC MARKETING MANAGEMENT”, we assume that it relates to something going beyond just the aggregation of the three components: to their real convergence… so beyond what it appears to us at a first glance as being „reality” (the outcome of our intuitions), due to our mental models. Holistic marketing management framework is designed to answer to the challenge of establishing the right goals, and of making the right decisions and monitoring on the way of identifying new opportunities of creating more promising new values offering, of using capabilities and infrastructure to deliver the new offerings more efficiently (within the value chain, by proving the commitment in value exploration, creation and delivery), while considering the whole and the beginning of understanding that: anything in life is interconnected; it is necessary to find alternatives to the current bureaucratic and disempowering management practices, and to adequately managing the probability to capitalize on the opportunity to satisfy the customers and transforming them in team members. Situating ourselves in full „consumption” of the crisis, there are two aspects that cannot be missed: - we are participants and spectators of the experience marketing (integrating the brand or the messages
of the product in the lives of the consumers taking the shape of interactive
experiences, rather than supplying them via traditional passive media, such as printed or tv) versus experience branding (in the benefit of a product/service in somebody’s mind by focusing on the whole experience rather than focusing on characteristics, attributes or product benefits); - as during this „consumption” of the crisis a close contact with customers is essential, a rigurous analysis of instruments that cost less represents the basis (not necessarily the suppression of tools that are most expensive), the effectiveness (degree of achievement of an objective) and efficiency (input/output ratio) of the instruments used should be analyzed, not keeping the instruments that are less expensive, but the ones that bring the most. In our first editorial we emphasized that we have to consider the importance of the quality of team relations, as well as the quality of the network in initiating partnerships, along with establishing a fluid and flexible process for planning sequential stages, of a supportive organizational culture, developing a high research potential via learning experiences based on Holistic Marketing Management
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projects and workshops conducted by excellent managers who aim high but at the same time pay a lot of attention to details. Consistent in this approach we hope to soon confirm that we can use the civilization’s achievments in empowering us to be smarter in our interaction and action, by the instrumentality of „SANABUNA International 2011” (the second significant step after the first „SANABUNA” Conference, which took place on April 9, 2009, held at the University of Medicine and Pharmacy „Carol Davila”, Bucharest, which approached the imperative of reflection and responsible action on the issue „health-food-welfare”; it is well known that the event's interdisciplinary character allowed covering certain new aspects, starting from the harmonization of the preoccupations related to building a truly better life, in the context of the pressure of the awareness concerning the connections between health, food and the different aspects of businesses and the imperative of identifying the right answers in the confrontation with the welfare reform, reconfiguring consistent ways with fundamental values, education being in the center of the adaptation, and solidarity could not be neglected). As it is known, of part of the Scientific Committee of this prestigious international multi, inter and transdisciplinary research event are also the distinguished members of the Editorial Board of our „Holistic Marketing Management” Journal, Professor Ovidiu Folcu! and Professor Dumitru Miron. Probably the statement of intent which is expected to occur after this „turning point”, as we like to believe, will represent an additional stimulus to our strong commitment to build a new road while going down the road.
Theodor Valentin Purc"rea Editor - in - Chief
Holistic Marketing Management
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INCREASING PRODUCTIVITY BY TOTAL QUALITY MANAGEMENT AND CONSTRAINT MANAGEMENT Prof. Marius-Dan DALOT!, Ph.D. Romanian-American University 1B, Expozi&iei Avenue, Sector 1, Bucharest dalota.marius.dan@profesor.rau.ro
Abstract: The paper argues that the total quality management concept and its implementation is the critical need for the survival of industries. In the meantime, lean manufacturing and constraint management could work together to improve productivity, efficiency and quality. The article discusses the environment in which businesses are operating, the effect of the total quality management on productivity and presents some of the benefits that were realized by implementing total quality management. Direct benefits from combining the concepts of lean manufacturing and constrained management during the productivity improvement process by using automation reduce production cycle times by more effectively designing and scheduling the movement of robots. The ultimate goal is to satisfy customers’ demand. The paper discusses how constrained management substantially increases production. Keywords: Productivity; Performance management; Total quality management; Constraint management; Lean production. JEL Classification: M10 1.
Introduction
Intense global competition and diminishing trade barriers are making it more and more difficult for companies to maintain their market share. Competition from companies operating in different markets has increased as advancements in telecommunications and information technology have broken down traditional barriers to entry. In a competitive environment, a business must persuade a customer to buy its products rather than those of competitors at a price that is more than its cost of production. A rational customer, however, would like to maximize value for his money. Therefore, a successful producer must enhance the total value of his products so that the price is acceptable to the customer while his own costs are low enough to allow him to make a profit. Total quality management (TQM) is all about fostering a culture that is continuously oriented towards increasing customer satisfaction while minimizing the real cost of production. Increasing competition in the global market necessitates that productivity should not be considered as an indicator of efficiency only; it must also measure effectiveness. Yet the distinction between the two is often overlooked. For example, a company that produces
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according to process specifications may be using its resources efficiently, but unless it is producing what its customers want it may not be using them effectively. To be profitable, a company must judge productivity and value from the perspective of the customer, not from the engineer. Older manufacturing facilities are often faced with productivity challenges due to their inflexible designs. The application of some of the principles of lean manufacturing is more restricted in such a setting. Today, ``lean'' may no longer be fashionable but its core principles flow, value, pull, minimizing waste etc.) have become the paradigm for many manufacturing (and service) operations. In order to provide a platform for establishing the long-term competitive impact of the lean production model, the paper then develops a theoretical construct explaining the mechanisms that underpin sustainable competitive advantage. 2.
Total Quality Management model and productivity
A simple model for TQM is depicted in Figure 1. The model consists of two main components: • TQM philosophy; • TQM systems and tools. TQM cannot exist without a complete acceptance of its philosophy by at least the top management. Once the basic TQM philosophy is accepted by the top management then different systems and tools can be initiated to propagate and facilitate a culture based on such a philosophy. TQM philosophy consists of four basic beliefs, which are as follows: • absolute customer focus; • employee empowerment, involvement and ownership; • continuous improvement; • the use of systematic approaches to management.
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In 1984, Garvin has proposed the following five approaches to defining quality: • The transcendent approach is the philosophic concept of ``innate excellence'', which is both absolute and universally recognized through experience. • The product-based approach focuses on the quantity of some ingredient or attribute possessed by a product. Like the amount of cream in ice cream, it can be assessed objectively and is based on more than preferences alone. • The user-based approach begins with the premise that quality ``lies in the eyes of the beholder''. It is subjective and motivated and rooted in consumer preferences. • The manufacturing-based approach focuses on engineering and manufacturing practices. It identifies quality as ``conformance to requirements'', and it is equated with meeting specifications or making a product right the first time. • The value-based approach defines quality in terms of costs and prices. Quality provides performance at an acceptable price. The phrase ``affordable excellence'' summarizes the dilemma. This particular definition of quality is also presented in the pictorial form in Figure 2.
Fig. 2: Five approaches to defining quality The TQM philosophy ensures “effective efficiency” by encouraging companies to plan products and develop systems that deliver products only according to the expectations of the customer. Companies that adopt TQM achieve greater effective productivity, profitability and market share for most kinds of products and market situations. Delighted customers are the prime determinant of sustainable competitive advantage for any organization. To retain customers and entice new ones a company needs
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to focus on providing value to the customer and that too in a manner that is more effective than that of its competitors. The ever-changing tastes of customers and pressure from competitors induce firms to adopt proactive strategies to retain and/or gain market share. Continuous improvement is essential for the very survival of a company. Both incremental and breakthrough improvements enhance productivity by decreasing costs and/or improving performance. Performance is enhanced through greater responsiveness, shorter cycle times for new products or services, better products, shorter throughput time and unique marketing, engineering or production strategies. Costs decline by reducing errors, defects and wastage. Total Quality Management (TQM) improves the performance of organizations. The implementing an effective TQM would: • improve the profitability of the firm; • increase revenues; • reduce costs. We consider productivity enhancement as a process to achieve higher levels of output while consuming same or lesser amounts of input resources. If the same output level is reached in a shorter time period, it indicates improved productivity. It is in this respect, that projects designed to improve productivity must also consider time as a key resource. Total quality management (TQM) is about leadership, planning and improvement and it is defined as “managing the entire organization so that it excels on all dimensions of products and services that are important to the customer”. An integral part of a TQM system is continuous improvement through a philosophy of product and process improvement as a never-ending journey. Increased levels of productivity result from improvement. The possible critical factors that can cause the failure of productivity improvement programs are the following: • Lack of incentives or appropriate regards (or disincentives). • Insufficient capital for improvement plant and equipment. • Poor employee relations. • Poor relationship with union leaders. • Insufficient awareness by engineering of the manufacturing implications of product and process designs. • Insufficient investment in workforce training. • Poor financial controls and/or information systems. • Weak middle managers. • Decline of the work ethic. • Weakness in industrial and manufacturing engineering. • Weak first-line supervision. • Poor communication organization-wide. • A piecemeal, unplanned approach to improving productivity. • Inadequate/ineffective coordination among departments or functional areas (excessive functional of departmental autonomy). • Uncooperative union leadership. • Poorly trained supervisory personnel in the area of productivity related problems. • Programs that just cannot be implemented.
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Insufficient investment in management and supervisor training and development. • Lukewarm commitment and involvement by top management. • Lack of loyal, skilled workforce. A TQM program when properly implemented in an organization can direct the productivity projects towards achieving the competitive strategies of higher customer service and better quality in both product and process. It directs the objectives away from the conventional focus of cost cutting and directs the efforts toward efficient use of resources (materials, equipment, manpower, facilities). Given that TQM stresses continuous improvement, creativity and innovation are not lost. Therefore, a productivity improvement program that flows from a continuous improvement environment will emphasize creative ways of improving the use of resources. The lack of top management support, coordination among functions, and organizational communications in combination with project planning, training and employee relationships, form a framework that discourage success in productivity projects at all levels of the organization. High productivity effects are impossible to sustain without a quality-based process-oriented environment which emanates from the support of employees, upper management, and the organization. This support comes first from an organizational atmosphere of quality excellence. The second component is a clearly communicated and well understood set of organizational performance goals focusing on the total organization. The management support flows from a cohesive organizational climate that promotes creativity and innovation through well trained employees. This may require a matrix type of project management approach to improving productivity. The quality is the determinant of successful productivity improvements. The “fatal factors” of productivity improvement can be prevented by a pre-established quality program. A TQM program and its promotion of total employee involvement and commitment to continuous improvement is definitely a key to successful productivity improvement programs. Businesses facing complex productivity programs should establish a sound TQM program first, and then embark on the journey to improve productivity. If such an approach is adopted, the businesses will have minimal productivity problems. •
3.
Constraint management, Lean production and the competitive advantage relationships
Constraints management is a process of continuous improvement at the system level. It improves overall productivity by focusing efforts on improving operations at bottleneck resources. Productivity is a measure of how effectively resources are used to produce various goods or services. Productivity is increased by producing more with the same amount of resources or by producing the same amount with fewer resources. Bottleneck is a resource that limits or constraints the capacity or maximum output of the process. If you work on improving productivity on operations other than the bottlenecks, the only result you would get is frustration. The goal is to increase productivity by eliminating bottlenecks. We can't completely eliminate bottlenecks. When specialists eliminate one, and as the process speeds up in response, another operation or resource functions as a new bottleneck. The bottleneck reduces productivity and creates both blockage and starvation in the productive system. The blockage or excess inventory occurs at resources prior to the bottleneck, and the starvation occurs at operations after the bottleneck.
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The constraint management views organization as a chain of dependent activities/functions and includes the following items: • Finding constraints and collecting data. • Reducing volume losses. • Reducing wastes. • Having a clear goal. • Reducing volume variation. The process is also represented in the flow chart in Figure 3.
Fig. 3: Constraint management (Source: Shahram Taj, Lismar Berro, op.cit.) The first step is to set the goal. The goal is to safely build the maximum number of good parts each hour, at minimum cost. Setting the goal involves the six steps below: 1. Define the system. 2. Identify the system's constraint. 3. Decide how to exploit the system's constraint. 4. Subordinate everything else to the decisions made in Step 3. 5. Elevate the system's constraint. The term “lean manufacturing” or “lean production” were first used by Womack in 1990 in their historical book The Machine That Changed the World. The lean manufacturing describes the profound revolution that was initiated by the Toyota production system against mass production system.
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Lean means “manufacturing without waste.” Waste is anything other than minimum amount of equipment, materials, parts, and working time that are absolutely essential to production. The lean approach is focused on systematically reducing waste in the value stream. The waste concept includes all possible defective work/activities, not only defective products. Waste can be classified in eight categories: 1. Motion: movement of people that does not add value. 2. Waiting: idle time created when material, information, people or equipment is not ready. 3. Correction: work that contains defects, errors, rework mistakes or lacks something necessary. 4. Over-processing: effort that adds no value from the customer's viewpoint. 5. Over-production: producing more than the customer needs right now. 6. Transportation: movement of product that does not add value. 7. Inventory: more materials, parts or products on hand than the customer needs. 8. Knowledge: people doing the work are not confident about the best way to perform tasks. Most companies waste 70 percent-90 percent of their available resources. Even the best lean manufacturers probably waste 30 percent. Interestingly, every company has to find its own way to implement the lean method: there is no universal way that will apply to all. Despite the wide knowledge and available resources, many companies are struggling to stay “lean.” Competitive advantage can be defined as the result of a business being either a particularly able player in its market (i.e. being better, which could mean being lower cost or more lean) and/or, being differentiated in what it offers. In order to build a useful construct to explain how competitive advantage is created and sustained, and in order to build directly upon the previous discussion of lean production, another input (resources), transformation (process) and outcome (competitive advantage) model will provide the basic structure of our discussions. Figure 2 presents this model in more detail, illustrating how resources are deployed in business processes to create competitive advantage. Although both the lean production and sustainable competitive advantage models are illustrated using basic transformation representations there are some key distinctions between them. In exploring these distinctions we will develop the secondary set of research propositions that will guide the empirical work. Sustainable competitive advantage, lean production and the competitive environment (Figure 4) illustrates how sustainable competitive advantage comes into being through the dynamic interplay between a firm and its external environment. Certain resources can be strategic, but only if they cannot be copied or replaced by external rivals. Equally, firms need not directly own strategic resources (i.e. when developing manufacturing processes, resources that have competitive significance are often ”owned” by suppliers). Similarly, all critical value creating processes stretch beyond the boundaries of the firm, involving actual and potential customers, and successful outcomes are only meaningful if they make the firm better and/or different. Although the lean production model also stresses the generic importance of customers and suppliers, the attempt to create a series of ``operating principles'' has required advocates to downplay the significance of the interaction between specific internal and environmental contexts. It is important to relate all lean production/sustainable competitive advantage findings to the specific external context of the firm. The success of lean production in delivering
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sustainable competitive advantage will be contingent upon the external context of the firm (see P3). Contextual factors might include: type of market (competitor activity, different demand profiles); dominant technology in sector; supply chain structure etc. The sustainable competitive advantage model argues that resources (skilled staff, market information, technological data etc.) create value when enacted in processes. In turn, these processes allow the organization to learn and thereby create new (or reinforce/extend existing) resources. When allied to the concepts of customer value stream and market pull, lean production suggests a very neat model of information and material flow. If the firm's competitive environment remains stable and modifies only slowly over time, then sustainable competitive advantage should be delivered through such adaptation. The final research proposition will explore the relationship between learning and lean production. The more successfully any firm applies lean production principles, the less it will engage in general innovative activity (see P4). The firm will focus instead upon continuously improving existing processes and adopting incremental changes. Unfortunately, more and more markets are changing rapidly and the lean production view of continuous improvement might be trading short-term performance advantage for longterm viability.
Fig. 4: Sustainable competitive advantage, lean production and the competitive environment relationships (Source: Michael A. Lewis, op.cit.)
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Constrained management and lean manufacturing and are complementary to each other, generating a great synergy when implemented together. They have played an essential role in improving productivity and competitive positioning in recent years. The first one is designed to improve system's throughput. The second methodology improves the manufacturing processes through the elimination of waste and continuous improvement. This requires a total cultural change towards lean thinking, identification and quantification of non-value and value added activities. The transformation requires everyone's participation and training. While both initiatives are very effective, it is the clear understanding of their complementary interaction that fosters the synergy between them, avoids rework and ultimately gets both initiatives working in conjunction towards common objectives. Many companies have attempted one of these improvement strategies, some companies have tried both, but few have integrated the two practices into a single approach for achieving continual improvement. Managing constraints are extremely critical in a lean or cellular environment due to very small or no buffering in the process. Constrained management has been traditionally applied in a batch and queue type operations, but not in a lean manufacturing environment. In a lean environment, all operations are running at the same takt time with no or very small buffering among them. This creates a very low margin for errors; therefore as soon as a resource becomes bottleneck, it immediately reduces the throughput. 4. Conclusions Considering the current state of global competition, it is imperative for companies to develop a customer-focused culture as soon as possible. This would ensure that their resources are efficiently and effectively utilized to produce only those products and services which the customer wants and is willing to pay a premium price for. Before any of this can be achieved, the management of organizations will have to fully understand and believe in the total quality philosophy without which achievement of maximum benefits would not be possible no matter how many material resources are invested. The systems and tools cannot promise significant or sustainable results without the visible commitment of the top management to the TQM philosophy. Looking at the experience of companies both local and international, which have implemented TQM successfully, there is little doubt that the Total Quality culture if applied correctly yields significantly better results in all the performance categories of financial results, customer satisfaction, and employee satisfaction. TQM also provides a long term sustainable competitive advantage in an increasingly competitive global market. TQM is a paradigm shift from a reactive culture to a proactive one with the overriding emphasis on delighting the customer. Involvement and empowerment of every single employee within the organization - from the most humble to the most powerful is essential in order to develop ownership of the culture and to stem conflict of interest. As the scope is company wide, everyone is responsible for ensuring quality. In this paper we also discussed how lean manufacturing and constraint management could work together to improve productivity, efficiency and quality. With the best practice guidelines being applied in manufacturing companies, the following benefits are possible: • Reducing production inventory and improve supplier performance: with pull-based tracking and replenishment.
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Increase yield and reduce scrap: by having operators use the most current work instructions, and ensuring they are cross-trained and certified. • Enabling continuous process improvement: with a structured approach to identifying, tracking, resolving, and measuring issues and incidents. • Speeding decision making and problem resolution: with real-time process control, analytics and event management. • Driving business change through metrics: to measure and eliminate nonvalue-add, and to validate continuous process improvements. It is important that lean improvement principles and tools that focus on waste elimination and process speed; constrained management that focuses on increasing throughput, plus a financial screening rigor for projects; and productivity improvement in the organization's cultural focus and creation of accountability, energy, and ownership through a new structure and set of principles. The ultimate goal is to satisfy customer demand. •
Bibliography: [1.] Dalot$ Marius-Dan, “Small and medium enterprise’s growth and new technologies implementation”, Romanian Economic and Business Review, Vol.7, no.2, 2011 [2.] Khan Jamshed H., “Impact of total quality management on productivity”, The TQM Magazine, Volume 15 Number 6, 2003 pp. 374-380 [3.] Juran, J.M. “Juran’s New Quality Roadmap”, Free Press, New York, 1988 [4.] Hoffman Joyce M., Mehra Satish, “Operationalizing productivity improvement programs through total quality management”, International Journal of Quality & Reliability Management, Volume 16 Number 1 1999 pp. 72-84 [5.] Gunasekaran A., Goyal S. K., Martikainen T., Yli-Olli P., “Total quality management: a new perspective for improving quality and productivity”, International Journal of Quality & Reliability Management, Vol. 15 No. 8/9, 1998, pp. 947-968. [6.] Taj Shahram, Berro Lismar, “Application of constrained management and lean manufacturing in developing best practices for productivity improvement in an auto-assembly plant”, International Journal of Productivity and Performance Management, Vol. 55 No. 3/4, 2006, pp. 332-345 [7.] Womack, J., Jones, D. Ross, D., “The Machine that Changed the World”, Edit. Rawson Associates, New York, 1990 [8.] Michael A. Lewis, “Lean production and sustainable competitive advantage”, International Journal of Operations & Production Management, Vol. 20 No. 8, 2000, pp. 959-978
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CUSTOMER RELATIONSHIP MANAGEMENT - A MAJOR ELEMENT OF THE COMPANY’S BUSINESS STRATEGY Associate Professor Nicoleta Rossela Dumitru, Ph.D Romanian American University 1B, Ezpozi#iei Avenue, Sector 1, Bucharest nicoletad01@yahoo.com
Assistant Lecturer Ivona Stoica, Ph.D Candidate, Romanian American University 1B, Ezpozi#iei Avenue, Sector 1, Bucharest Ivona.stoica@rau.ro
Lecturer Costel Negricea Ph.D Romanian American University 1B, Ezpozi#iei Avenue, Sector 1, Bucharest negricea@yahoo.com
Abstract: Customer oriented relationship marketing requires continuous and comprehensive identification and analysis of customer expectations, their translation into delivery of the products and services, and conduct of interaction with customers, in order to develop and maintain long term and economically advantageous relationships. Market orientation envisages not only the current business customers, but also all market participants getting into relationship with the enterprise; on the other hand, customer orientation is aimed primarily at meeting their needs and expectations, while the creation of a competitive advantage on the market moves in the background. Keywords: relationship marketing, customer orientation, CRM, customer value, customer satisfaction, customer behavior. JEL Classification: M 31
1.
Introduction
Relationship marketing is defined as a marketing strategy whose objectives are the establishment and maintenance of profitable and lasting customers relationships, relationships that extends long after the initial contact. Relationship marketing has evolved from the direct response marketing ; it focuses more on customer retention and satisfaction of their needs, and less on selling. In recent years, the organizations, especially the financial institutions, increasingly focus on relationship marketing, which includes three key concepts: • Attract new customers;
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• •
Maintain existing customers; Regain lost customers. The main problem that occurs is the extent to which the company should focus on each of these three concepts. The answer to this problem is not exact, but we can say that the organization must invest the necessary resources to attract new customers or retain the existing ones according to the situation of the market, the organization or the products / services promoted. Thus, during the life cycle of a product or company, customer attraction and / or retention, acquires a greater or lesser importance as compared one against the other; therefore, a different volume of resources will be invested, according to the stage of evolution of these elements. In order to monitor this phenomenon, we will take into consideration the product adoption curve: • innovators are customers who adopt the new product / service the earliest ; • early buyers are customers who, despite the slow start, decide to adopt the new product and are opinion makers through "word of mouth", ultimately helping to increase sales generated by the early majority who buy the product before the sale reach its peak; • late majority is represented by skeptical customers who adopt the new technology after its market value has been confirmed and it has been adopted by the majority; • late buyers are customers who purchase the product later, in the end of its lifecycle; meanwhile, the innovators or early buyers shift to more efficient technologies. Customer Relationship Management, part of the relationship marketing, is a vital tool that cannot be ignored by modern companies. It involves a number of techniques, including: • Proper design of customer contact; • customer reward ; • Customer excitement; • Real-Time Marketing. Customers are people or organizations that benefit from the services or products of other person or organization. Revenue of the latter is based almost exclusively on the existence of customers, therefore it is very important to focus on maintaining relationships with customers and ensuring their satisfaction, for the long term survival of the company. The focus on customer, his satisfaction and his evolving demands is the main component of customer relationship management, because companies can obtain significant advantages over the competitors, provided that the company succeeds in correctly identifying the customers needs, and implementing the necessary changes as efficiently as possible. A key element in the customer relationship management process is an effective marketing mix, which involves a unitary combination of its components: product, price, promotion, placement in the distribution chain, staffing and physical records. Due to the fact that the services are intangible, the customers look for "evidence" which can help them get familiar with the service. These features result in including additional variables for an effective communication with the customers, for example a bank's environment and the staff behavior. The service providing staff, the set of activities or processes involving serice provision and the physical records are decisive factors in meeting customer satisfaction. Sale of a financial service is characterized by high customer involvement, and sales staff is forced to spend a significant part of time to reduce uncertainty felt by the consumer. The company must ensure that sales staff initiates and develops good relations with consumers. At the same time, the company must offer training and development programs to the employees, and it also has tp provide the motivation necessary for them to perform excellently. Finally, the personnel involved in a sale transaction should behave so
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that the consumer's purchase decision should seem a natural process and should require the minimum effort. As a conclusion, the provider, and especially front line staff is important because: • are associated with the services purchased, in most cases ; • Represent the company in relationship with the consumer; • are selling / promoting the services. Advantages of relationship marketing for an efficient work of the organization Essentially, the ultimate objective of marketing is obtaining profit for the organization by optimizing its resources in order to satisfy the most demanding customer requirements. Nowadays, Romanian companies have realized that the success recipe and one of the solutions to maintain the market share and the steady growth is knowing the customers, retention of existing customers, and business relationship with them, the customer relationship management and relationship marketing representing the relationship keywords arsenal. This approach (costumer-centric) is increasingly used in conditions in which Romania is no longer in the transition period, after the accession to the European Union, and the customers are even more demanding, forcing companies to change their orientation from product to customer. The "Costumer-Centric" approach requires certain tools to be implemented; these are after-sales customer support tools that involve first of all a database where information is stocked concerning the customer, customer interactions, and also the necessary knowhow to manage relationships and use information effectively. In order to achieve customer loyalty and thus avoid the client to leave the competition, two basic rules have been stated: personalized approach and quick resolution of problems that can occur. Based on information recorded in the database, the company must be proactive, visionary, to ensure continuity in the relationship with the client. Customer segmentation is also necessary in order to obtain homogeneous groups of customers, based on which the company can apply certain marketing strategies (avoiding the utopian concept of "one to one", unenforceable even if the company has very few customers). Groups of customers can be made using several criteria such as type of products / services requested by the client, age, sex, customer profitability, behavioral data (regarding interaction history). By using multiple channels, the risk of contact depersonalization may occur, therefore the company must pay due attention to personalization of customer contact (based on the data stored), the result will be that the customer will always feel listened to, respected and recognized and risk that he will be won by the competition to the detriment of the company will remain low. General considerations concerning the importance of a Call Center for the relationship marketing of an organization - the transition from the 4P to the 3 C (customer value, customer satisfaction, customer behavior) Currently, many companies realize that the classical marketing approach, focused on the 4P's marketing mix - product, price, promotion and placement is not sufficient. It is indeed very important to have a clear product policy, but customer orientation has become a crucial element for the success of a medium to large sized companies. In order to bring
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profit to the company, performance factors for gaining or retaining a customer must be capitalized. The performance factors are: • Customer Relationship Value - the need to maximize customer profitability is the key to success because large number of customers must be profitable, compared to the non-profitable, and the company must know the precise methods to balance the scales in favor of profit; indices to be measured are profit per customer and customer value over the life; • Customer behavior - customer value is largely determined by its behavior, as measured in income (in money or goods and services required in a specific period of time), the relationship life time representing the period when the client does business with the company, and market share / customer, which means the extent to which the customer needs are met by products and services of the company; • Customer satisfaction - satisfied customers behave in a positive, profitable way for the company, buying more products for a long time; their satisfaction is the result of product quality and reliability, and also the fruitful relationship with the firm; The key element to support all these three basic factors for a bank, in addition to quality products and services tailored to customer requirements, is maintaining a good customer relationship , and keeping a record of interactions with him; to this purpose, the best solution is the establishment of a Call Center. National Call Center market is growing (estimated at a value of over 110 million in 2011 ), which is currently the most popular tool for frequent flyer and maintaining contact between the firm and its clients. The companies operating in Romania who gave importance to this segment are functioning in finance and banking, telecommunications, healthcare, retail, IT and government. In Romania there are over 400 Call Centers providing outbound and inbound customer service to domestic and foreign firms; the main competitors are Accenture, CGS, Wipro, Teleperformance, XL World and Genpact. A Call Center can be in-house (company implemented and managed by itself with the resources available to that company) or outsourced (outsourcing firm specializing in customer relations and efficient management of resources used to attain the objectives set by companies applicant). If Call Center is coming from outsourcing, it is very important that all employees of service providing company should identify with the customer - company, know its objectives, its values and adhere to its values and get involved in their implementation because only by knowing the respective company one can offer the highest quality services to the customers . Outsourced Call Centers in Romania segment consist mainly of companies that provide services for companies based abroad, which prefer Romania due to the ability to communicate in several international languages and also better use of computer applications and information; human resource is the main factor in this area. The long term potential of this market is very high, because most large companies realize that the best opportunity for customers interactions is to establish a specialized call center. Also, many companies adopt the concept of "Contact Center" because it encompasses all modes of customer communication (phone, e-mail and in some cases, web and image), and offers a complete experience, personalized and focused on the customer needs.
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2.
Case Study: Aspects of gaining customer loyalty through BCR Client Service
The activity of customer service department within BCR is divided into several projects, each of these projects having a specific well defined role, according to type of customer requests. Thus, BCR Contact Center deals with the following projects / services: • Cards Assistance- service that provides emergency assistance for BCR cardholders, such as blocking or activation cards, take and record complaints about incidents of BCR ATMs, or provide information on transactions, or procedures in different cases; • InfoBCR - basically the same service that was established in 2004 - internal BCR The BCR Info calling customers have access to general business information about all BCR products and services, they can find out the exchange rate of the day, or may lodge a complaint; • Alo 24 Banking - included in the Service of making transactions through BCR alternative channels - on the internet, CLICK 24 Banking, or by phoning to this department. Thus customers have easier access to their account without having to go to a BCR branch to make a BCR transfer or to request a statement of account; they can get all the statement information from the Internet or by telephone, all at reduced costs; • Technical Support (Helpdesk) - This service provides customers with assistance in using CLICK 24 Banking service, if a customer wants to know how to use application CLICK 24 Banking, or has difficulty logging into the application, he will need to use this service; • Sales Department - is an outbound service (call initiated) to inform customers or people who are BCR registered in the database about the latest offers or campaigns of the Romanian Commercial Bank. Aims to bringing new customers or retaining the existing customers; Conclusions Relationship marketing refers to attracting, developing and maintaining customer relationships, attracting and keeping the customers; it includes activities that lead to certain profit. As they constantly expand their shopping, the customers enlarge their area and transmit favorable information about the company. Thus, relational marketing leads to a stable partnership between organization and customers, with benefits on both sides, a customized approach between the parties and the positive results in terms of material and functional aspects. Bibliography: [1.] C$p$#ân$ Al., Managementul rela!iilor cu clien!ii, Suport Curs IDD, Universitatea Dun$rea de Jos, Gala#i [2.] Egan J., Relationship marketing : exploring relational strategies in marketing, Editura Prentice Hall, Englewood Cliffs, 2004; [3.] Grosseck H. – Marketing #i comunicare pe Internet, Editura Lumen, Iasi 2006; [4.] Hawkins D., Best R., Coney K., Consumer Behavior: building marketing strategy, Editura McGraw-Hill, Boston 2010; [5.] Kotler Ph., Managementul Marketingului, Editura Teora, Bucure"ti, 2008;
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[6.] Kotler Ph., Armstrong G., Sanders J., Wong V., Principiile Marketingului, Editura Teora, Bucure'ti, 2008; [7.] Odobescu E., Poanta D., Rela$iile b"ncilor cu clien$ii : elemente de marketing, Editura Sigma, Bucure"ti, 2003; [8.] M. Williams – Interactive marketing : Building loyality one to one, Editura Prentice Hall, Englewood Cliffs 1997; *** http://www.edumark.ase.ro/RePEc/rmko/4/5.pdf; *** http://www.bnro.ro/Buletinul-lunar-BCE---iulie-2009-4471.aspx; *** http://www.bnro.ro/Publicatii-periodice-204.aspx
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THE PARTICULARITIES OF ACADEMIC MARKETING IN THE KNOWLEDGE – BASED SOCIETY Lecturer Costel Negricea Ph.D Romanian-American University 1B, Expozi&iei Avenue, Sector 1, Bucharest negricea@yahoo.com
Lecturer Tudor EDU, Ph.D Romanian –American University 1B, Expozi#iei Avenue, Sector 1, Bucharest tudoredu@yahoo.com
Assistant Lecturer Emanuela Maria AVRAM, PhD Candidate Romanian –American University 1B, Expozi#iei Avenue, Sector 1, Bucharest emanuela.maria@yahoo.it
Abstract: The present research paper points out the major role that Academic Marketing plays in attracting students to universities focusing on quality and satisfaction, a role based on research development, on offering educational services at high standards of performance and thorough knowledge. In the knowledge-based society, Academic Marketing is becoming more and more important because “higher education guarantees the one who has benefited from it a higher salary, a long activity on the labour market, an increased carrier mobility and a high quality of life. (Demetris Vrontis, Alkis Thrassou, Yioula Melanthiou , 2007, p. 980) Keywords: academic marketing, knowledge-based society, quality, satisfaction Jel Classification: I21, I23 Introduction: A knowledge-based economy can be defined as “an economy in which the production, distribution and utilization of knowledge represents the main engine of economic growth and of guaranteeing the necessary labour force in all fields of activity”. (Andrews, 2004, p. 4, op. cit. Heather Davis, Terry Evans and Christopher Hickey, 2006, p. 231), and “adapting to such a society supposes a change of thinking at governmental, academic, corporative but also at personal level.” (Heather Davis, Terry Evans and Christopher Hickey, 2006, p. 231) The impact of globalization on higher education offers new perspectives as regards the enhancement of the importance of knowledge in
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developing the intellectual capacities of the individuals, and Salmi (2002) affirmed that “higher education must play a central role in preparing the societies for the new times.” 1.
Specific characteristics of the knowledge-based society from a Marketing perspective
Defining marketing as “a process of creating, promoting and distributing goods and services to consumers and enterprises” (Kotler, 2003, p. 5) reflects the concept of knowledge-based society, since in the course of its development, Marketing has progressed in a manner specific to its field of activity. Therefore, its coverage area has been continuously improving, explaining thus its development as science. „Viewed from the perspective of the evolution of marketing, on a world scale, the new economy has its origins in the second half of the last century, the period when the concept of marketing came into being”, (Olteanu V. 2006, p. 28) and the evolution of the knowledge-based society, which occurred in the second half of the last century, left its mark in a significant way on Marketing, which also developed as science in that period of time. The cornerstone of a knowledge-based society is knowledge, but also the new information acquired in the education system. Hence, knowledge involves several aspects: - Know-what – refers to acquiring some knowledge about facts, but nowadays its relevance is diminished. - Know-why – comprises knowledge about the natural world, society and human mind. - Know-who – comprises knowledge regarding the social world, relationships in the society, knowledge about who is able to do something and what can that person do, knowledge about some key-characters, because knowledge has often proved to be more important than innovation. - Know-where – knowledge about a certain place. - Know-when – knowledge about a certain period of time – this is becoming more and more important in a flexible and dynamic economy. - Know-how – comprises knowledge about skills – the ability of doing something concretely. (The Knowledge Economy - a submission to the New Zealand Government by the Minister for Information TechnologyÕs IT Advisory Group, August 1999, p.5) However, one can wonder, how it is possible for an economy or a society to base on something so volatile like knowledge? Nowadays, knowledge has become the main resource of any human activity in the same way the land represents the main resource in agriculture or the coal or the labour force represented the primary resources in the industrial age. Knowledge is considered to be the most important resource, capable of moulding inter-human relations and of ensuring economic prosperity, but at the same time it is a product that can be commercialized. It is precisely the intensive use of knowledge that makes the difference between present economies and past economies. (Marcel Hoogenboom, Willem Trommel, Duco Bannink, 2008, p. 359) We are witnessing an extremely accelerated rhythm of knowledge production which gives the knowledge-based society certain specific characteristics: ! Building high-performance organizations ! Markets functioning in high-efficiency conditions ! Improving social welfare ! Guaranteeing people a better life ! Increasing labour productivity ! Information and communication technologies enable market globalization
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!
An unprecedented increase in the number of people that have higher education studies ! An outburst of scientific and specialized publications ! An increase in the number of the firms that offer legal, economic, technological, marketing and other types of counselling ! Developing the sources used for disseminating information, such as virtual libraries, on-line books, specialized websites and information stored on electronic devices ! Developing the concept of lifelong learning The knowledge-based society places the learning process on a different level. Thus, acquiring knowledge does not exclusively pertain to the education institutions, but also to the companies or organizations that have employees, because these also offer specialized trainings for ensuring the acquirement of new knowledge that is useful for the production process. “Marketing has the ability to promote itself to the public so that people can know and understand who it is as science and what it does.” (Maringe, Felix, 2006, p. 136) In the knowledge-based society, the universities include the established marketing practices, by focusing, however, on certain marketing dimensions that are specific to their mission, due to the fact that the higher education institutions play a major role in producing and transmitting knowledge – knowledge being the main product of the university. Knowledge is seen as a process that supposes both the creation and the transmission of it to the students – the main stakeholders of the higher education institution, but also of other categories of consumers. “Knowledge in itself also appears as main product for other groups of stakeholders, such as the local communities and the business world which often depend on its orientation towards the business world, but also towards the social science.” (Steven A. Taylor, 1996, p. 207) Therefore, Academic Marketing meets this desideratum of transmitting knowledge by focusing on the consumer behavior of higher education, on his/her needs, aspirations and desires in order to generate him/her maximum satisfaction in the higher education process. For a better understanding of the consumer behavior of higher education, each university establishes marketing strategies according to its mission and objectives, by taking into account the fact that „the consumer’s decision-making process includes small steps, both at mental and physical level, until exactly outlining the desired characteristics of a product and identifying the satisfaction produced by its consumption,” ,” (Demetris Vrontis, Alkis Thrassou, Yioula Melanthiou , 2007, p. 982) In Figure No. 1 below we can observe the consumer’s decision-making chain, a chain that underlies the consumer’s decision to invest in his/her own higher education and which, for universities, represents the key to understanding the consumer behavior of higher education.
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Fig. 1: The consumer’s decision making process (Source: Blackwell et al., 2001, op. cit - Demetris Vrontis, Alkis Thrassou, Yioula Melanthiou , 2007, p. 983) As Figure No. 1 describes, the consumer’s satisfaction or dissatisfaction decisively depend on the stages of the decision-making process, stages towards which any university should direct its attention in order to attract a large number of students eager to assimilate the knowledge transmitted in the higher education process. Numerous economic, social and psychological factors can lead to the emergence of certain needs of the individuals which evolve in time, change according to the acquired knowledge and the comprehended information. The marketing sources represent an optimal way of satisfying the need for information as regards the individual’s decision to invest in his/her personal higher education, these sources being able to generate positive effects on the act of purchasing. The knowledge-based society focuses especially on information technology and new technologies, and in this context, the internet is no longer a trend but rather a necessity that has radically changed the way in which people work, develop relationships, keep informed, communicate and develop socially and professionally. At the same time, the internet has considerably improved its instruments and this has led to its continuous evolution. Given the fact that the number of users is permanently increasing, the higher education institutions massively use the internet to communicate with the main stakeholders. As a result, a university’s success highly depends on its presentation website,
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on using a successful web design, a large database, and that is because the internet represents a strategic marketing tool through which on-line communication is achieved. These days a large number of users have access to the internet, and due to the accuracy of the transmitted information over the internet, the consumer behavior of higher education has been affected. 2.
Academic Marketing – a new perspective on the academic field
In the post-modern society Academic Marketing has a great importance for ensuring the survival of the universities in a highly competitive environment. Therefore, the substantiation of the marketing actions in the academic field must start from the following premises: the entire activity and personnel must be orientated towards satisfying the needs of the current and potential consumers of higher education, by making the student the centre of the institution’s preoccupations; the concrete strategies, tactics and tools through which the global marketing policy is realized must be unitarily coordinated, because the academic actions must be based on a good knowledge of the “clients”, of their demands and preferences, of the labour market and the business environment challenges, with a view to achieving an optimal adaptation to the evolution of the external environment. “Universities, like any other organisation, exist to satisfy the needs of their “clients”, and their main objective is to guarantee satisfaction to the clients by providing them specific higher education products and services.” (Maringe, Felix, 2006, p. 130) The necessity of approaching higher education activity from a marketing angle is determined by the similarities which this has with the economic activities in the field of service provision: the product is intangible, but supported by other commercial products, such as course support materials, books, scientific papers, specialized magazines, various publications; the product is inseparable from the provider, because it is the teaching staff’s duty to provide information for the student; the product cannot be standardized, because each student comprehends differently the transmitted information depending on the extent of his/her participation in the education process and on the knowledge accumulated until that moment; the product can be continuously modified and improved – the information transmitted to the students must be permanently updated. The target public is made of those categories of individuals that are holders of a Baccalaureate Diploma and that willingly choose to continue their studies for deepening their knowledge in their personal area of interest at a certain moment. The high quality of the provided educational services is another feature of Academic Marketing, because the purpose of any university is to serve the society’s existing knowledge needs by preparing high qualified specialists that can match the continuously evolving demands of the labour market. Consequently, Academic Marketing comprises the established Marketing practices, as we can see in Figure No. 2 below, but it pays a great deal of attention to the elements of the marketing mix, to the consumer behavior of higher education, to creativity, interactivity, innovation – introducing new methods of transmitting information in accordance with the latest scientific and technical advances represents the main preoccupation of a higher education institution. Another very important element of Academic Marketing is the university’s reputation in its area of activity, in other words receiving brand recognition. Academic Marketing concentrates a lot on the quality and accuracy of the transmitted information, on the student’s satisfaction, due to the fact that this will lead to the student’s attachment and loyalty to the university.
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Fig. 2: Academic Marketing ~ Marketing in the knowledge-based society (Source: Adapted after – Wierenga Berend (2002) – On Academic Marketing Knowledge and Marketing Knowledge that Marketing managers use for decision-making, Vol. 2(4), p.355362, p. 357) Frederick Wirt and Michael Krist (1989) consider that academic marketing „is meant to establish a sound working relationship between the higher education institution and the community in which this develops its activity, with the purpose of increasing quality and performance. The essence of this relationship lies basically in the exchange of values and services between the “school” and the community”. Nowadays, when knowledge is expanding in an extraordinary way in all fields of activity, higher education institutions not only are considered to be the creators of knowledge, but also the transmitters of it. Consequently, in the knowledge-based society, universities confront themselves with several challenges: " Increasing the demand for higher education " Education and research internalization " Developing an efficient collaboration between universities and the business environment " Creating research departments for knowledge production " Knowledge reorganization " Increasing the external relations of the universities for enhancing international attractiveness " Excellence consolidation in academic research and teaching, especially by means of modern networks " Ensuring at academic level the necessary resources for the good and efficient development of the activity (European Commission, Directorate General Education and Culture – Projects in “ECONOMICS OF EDUCATION”, December 2004, vol 1, p.15) For a higher education institution the students are the most important clients. In this context, the global competition among higher education institutions not only has determined universities to make efforts to attract and enrol them but also to maintain their
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students throughout the entire cycle of academic studies. (Kotler & Fox, 1995; Elliot & Healy, 2001) The marketing strategies used by universities, in the knowledge-based society, do not encompass only those activities which aim to attract students and which concentrate on a detailed and thorough knowledge about the consumer behavior of higher education services, but also many other activities that have in view the assurance of the continuity of the higher education institution, which can be achieved by obtaining additional funds from commercial counselling, attracting research projects, sponsorships, merchandising academic research, organizing scientific conferences and training courses, facilitating a better access to libraries for those who are not enrolled in any academic programmes, as well as other activities that can guarantee it a competitive future on the market. By promoting in the academic field the dynamism of the technological advance by means of using on a large-scale the computer and the information technology specific to the knowledge-based society, knowledge and information are generated, and these will positively affect the region to which the higher education institution belongs to, and this will play a vital role in the establishment of a successful relation with the stakeholders with whom it interacts. Conclusions: As time passes the face of the world will surprisingly change. The changes of the global economy brought by the transition towards the knowledge-based society require an alignment of all countries of the world to the highest standards of knowledge, because this is a mirror of the welfare prestige and represents an essential criterion for increasing the wealth of every nation. In such a society the key of competitiveness will belong to the human factor because it represents the core of the knowledge production, and thus the investments in human capital will gradually grow. From this point of view, academic marketing has an extraordinary importance for any higher education institution, importance especially determined by the necessity of preparing the labour force so that it will be able to ensure a general “health status� in the society by making use of some innovative instruments of communicating the knowledge resources, through creativity and by satisfying the needs of the consumers at the highest standards of quality, leading thus to satisfaction and good reputation. Bibliography: [1.] Andrews, K. (2004). Attachment A: A review of selected knowledge focussed literature. In Working and learning in vocational education and training in the knowledge era: Professional Development for the Future Project, ANTA. Retrieved September 15, 2005, from http:// www.flexiblelearning.net.au/projects/resources/PDFutureA.pdf [2.] Blackwell RJ, Miniard PW, Engel JF. (2001) Consumer behavior. 9th edition. South-Western; [3.] Demetris Vrontis ., Alkis Thrassou, Yioula Melanthiou (2007) - A contemporary higher education student-choice model for developed countries, Journal of Business Research 60 (2007) 979–989, www.sciencedirect.com, p. 980
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[4.] Elliot, K. M., & Healy, M. A. (2001). Key factors influencing student satisfaction relate to recruitment and retention. Journal of Marketing for Higher Education, 10(4), 1–11. [5.] European Commission (2004) , Directorate General Education and Culture – Projects in “ECONOMICS OF EDUCATION”, December 2004, vol 1, p.15 [6.] Heather Davis, Terry Evans and Christopher Hickey (2006) - A knowledge-based economy landscape: Implications for tertiary education and research training in Australia, Journal of Higher Education Policy and Management, Vol. 28, No. 3, November 2006, pp. 231–244, ISSN 1360-080X (print)/ISSN 1469-9508 (online)/06/030231-14, p.231 [7.] Kotler, P., & Fox, K. F. A. (1995). Strategic marketing for educational institutions (2nd ). Englewood Cliffs, NJ: Prentice Hall. [8.] Marcel Hoogenboom, Willem Trommel, Duco Bannink (2008) - European Knowledge Societies (plural) The Rise of New Knowledge Types and the Division of Labour in the EU, DOI: 10.1007/s10272-008-0269-4, Intereconomics, November/December 2008, p. 359-370. [9.] Maringe, Felix (2006) - University Marketing: Perceptions, Practices and Prospects in the Less Developed World, Journal of Marketing For Higher Education, 15: 2, 129 — 153, p. 130 [10.] Olteanu V. (2006) – Tendin!e în dezvoltarea Marketingului în conextul economiei bazate pe cuno%tiin!e, Revista Management&Marketing, nr.1/ 2006, Ed. Economica, ISSN 1842-0206, , p. 27-34 [11.] Salmi, J. (2002). Constructing knowledge societies: New challenges for tertiary education. Washington, DC: World Bank. Retrieved July 1, 2003, from http://wwwds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2002/11/01/0 00094946_02102204203142/Rendered/PDF/multi0page.pdf [12.] Steven A. Taylor (1996) – Consumer satisfaction with Marketing Education: extending services theory to academic practice, Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behavior, Vol. 9, 1996, p. 207-220 [13.] The Knowledge Economy - a submission to the New Zealand Government by the Minister for Information TechnologyÕs IT Advisory Group, August (1999), p.5 [14.] Wierenga Berend (2002) – On Academic Marketing Knowledge and Marketing Knowledge that Marketing managers use for decision-making, Vol. 2(4), p.355362 [15.] Wirt, Frederick, Krist, Michael (1989) – The Politics of Education: Schools in Conflict, Berkeley, CA: McCutchan,
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RELATIONSHIP MARKETING COMMUNICATION CASE STUDY: STRENGTHENING OF THE RELATIONS WITH THE SHAREHOLDERS THROUGH MAFRKETING COMMUNICATION Assistant Lecturer Cristina NEAGOE, Ph.D Candidate Romanian-American University 1B, Expozi&iei Avenue, Sector 1, Bucharest cristina_neagoe2004@yahoo.com
Abstract: Following the development of theoretical and practical aspects of great importance for the scientific approach of relation marketing, it is required to switch to a higher level by means of the intensive development of techniques and tactics of the communication with shareholders. In literature, namely the relation marketing communication, there is a shortage of articles, studies and research that address this issue systematically. The focus on the features of the communication imprinted by the target’s specificity is deemed pragmatic in the context. Given the multiple possibilities of approach, it seems necessary to identify a marketing formula which should essentially mediate the strengthening of the relations between managers and shareholders. Keywords: relation marketing, marketing communication, target specific communication, shareholders JEL Classification: M31 1.
Introduction
Following the development of theoretical and practical aspects of great importance for the scientific approach of relation marketing, it is required to switch to a higher level by means of the intensive development of techniques and tactics of the communication with shareholders. In literature, namely the relation marketing communication, there is a shortage of articles, studies and research that address this issue systematically. The focus on the features of the communication imprinted by the target’s specificity is deemed pragmatic in the context. Such complex relations as those between managers and shareholders are debated by authors both from the juridical field and the economic one, mainly with a focus on topics from: the commercial law, management, financial management, business ethics, business communication, etc. A diverse form of shareholders' rights to information is the subject of jurisprudence. Out of the many ways of approach, there is the need to identify a marketing formula, which should essentially mediate the strengthening of the relations between managers and shareholders.
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2.
Literature review
Closely related to granting the right to exercise control over the company by shareholders Law no. 31 has been in force since 1990. It supports specific financial groups through a series of regulations on the shareholders' right to information. The proper functioning of economic activity would not be possible without the investors to be in possession of the necessary information. The most valuable desideratum pursued by the implementation of these laws is dissolving information asymmetry and increasing transparency in the economic circuit. Similar with building relations with the market, in this case, the cornerstone of the partnership’s development is ensuring a trustworthy environment. The threat to the manager-shareholder relation by often divergent interests of the two parties can be avoided by taking advantage of the opportunities offered by choosing the most effective means of communication. "The information environment plays a critical role both in determining the extent to which these conflicts may arise and in the design of mechanisms to mitigate these conflicts." (Armstrong Ch., Guay W., Weber J., 2010, p. 179). Du#escu C, a prominent lawyer in our country, treats at length in his work, "Shareholders rights", the issues on the right of shareholders to information. Considering this research, their presentation becomes highly useful. The first point regarding the development and implementation of the strategy of communication with shareholders is the legal knowledge and compliance with the rules governing the rights to information of these special groups. Only after a strict implementation of the legislation in force, one can talk about additional actions of communicate with major implications for improving relations between shareholders and managers. Presenting the information environment from a legal perspective has a special significance in the contemporary process of developing relations with all categories of stakeholders. A special group of people in view of researchers in the field of reference or a category equal in rights and obligations to the other, shareholders require special attention in terms of marketing approach. Given the origins of the shareholders theory, part of the financial environment, they have a number of peculiarities. From this perspective, we can say, without the possibility of committing an error that shareholders make subject to special categories of stakeholders. The distinctive note is given precisely by the role played by shareholders in the company’s management. The separation of power requires the implementation of legal regulations able to regulate the relation between the management and such groups of direct interest on the corporations’ activity. The communication is strongly influenced by the juridical environment and by the mandatory nature enforced by the law as regards the information to be communicated to the public. The intensive development of the communication context in terms of the relationship marketing, through the implementation of the requirements necessary to strengthen the relation with the shareholders, transforms this rigid juridical framework into the partnership’s cornerstone. The continuous expansion of the field in which marketing activities are carried out grants relevance to the constant steps, aimed to identify the levers by means of which communication helps the perenniality of the relations between management and shareholders.
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3.
Case study: Strengthening the relation with the shareholders through marketing communication
Shareholders, depending on their financial strength and the degree of interest in the organization, can be classified into different categories: small or large, active or passive, known or anonymous, etc. Different nature of communication leads to specific communication tactics, but the main goal of grounding strategy is to establish the best environment for long-term cooperation. The technique known as the most useful in maintaining the bonds with shareholders is the technique of public relations. The organization's PR department has the following duties regarding the issue’s specificity: to prepare annual and interim financial reports, to deal with the organization of general assemblies and to provide advice and answer to the shareholders’ inquiries and complaints (%erb$nic$, 2003, p. 28). The challenge faced by organizations in achieving this objective is given by the following belief: "Shareholders have been characterized, for ages, in terms of their changing nature due to the increased interest over speculation ... they do not take any volitional effort to develop the organization on long-term and are not emotionally attached to its products or services "(Gummesson, 2008, p. 104). Thus, the information about the trading company relates to its financial performance. Maintaining and developing a sustainable relation over time, with this type of public, involves developing a communication strategy based, essentially, on sending financial messages. The unidirectional flow of information <organization - shareholders> has been mandatory since the promulgation of the law governing the shareholders’ right to information (Law 31/1990). The recognition of interactivity as a decisive factor for creating, maintaining and developing relations and to seize the opportunities of this partnership is necessary that the shareholders should be encouraged to participate in an open and transparent dialogue. All this is translated through a transparent, coherent and consistent communication policy. Collaboration occurs when there is a strong moral core of people involved. "Transparency requires a certain type of mentality and education of managers based on sincerity and a specific logistics; if these elements lack, transparency becomes a disadvantage rather than an advantage" (Onofrei M., 2007). In fact, the evolution of the economic environment has led to some factors contributing to the degradation of these principles, which require for decisions to be made accordingly. "Due to some reasons, transparency in the corporations’ information environment has decreased or is deemed to have decreased over time, pushing companies towards the decision of hiring managers from outside the company to monitor and participate actively in the decrease of the information asymmetry "(Armstrong C., Guay W, Weber J., 2010, p. 186). In a highly competitive environment because of the globalization of markets and deregulation of industries, contemporary organizations may gain a significant competitive advantage following the excellent relations with shareholders. “Making them loyal is indispensable nowadays when there are some many negative factors threatening the organizations’ capital” (Popescu I. C., 2003, p. 64). In our approach, marketing communication plays a decisive role. The process must ground on the following considerations which enclose both the ethic and the informational (useful) natures: o The access to information should be equally enabled for all the members of this category of public (small or large, passive or active, known or anonymous shareholders); o The immediate availability of necessary information by developing electronic platforms;
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o o
4.
Observance of terms for sending financial information (publication of results); Information on the other activities carried out by the company in order to significantly reduce the information asymmetry (production, prices, sale, promotion, etc); Conclusions:
The partnership between the management of trading companies and shareholders is improved by means of communication and is grounded on two essential principles: 1. The principle regarding the full compliance with the regulations regarding the right of shareholders to information, stipulated in Law no. 31/1990; 2. The principle regarding the improvement of legal norms by developing proper conditions of communication between the parties. This study approaches a bidirectional communication mechanism, grounded on the two principles, considering it has increased chances as regards the strengthening of the relations with shareholders.
Access to infor MANAGERS P1: Compliance with regulation
Compliance of th finan
Bidirectional communicatio n mechanism
Creating elect accesibility
P2: Improve communication SHAREHOLDERS
Information on oth inform
Fig. 1: Bidirectional communication mechansim for strengthening relations with the shareholders The second principle requires the adoption of a conduct that reflects the marketing ethics and the implementation of mechanisms of communication which facilitate the
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interactivity within the relation network. Collaboration is defined by the partners’ common objective, the company's economic efficiency, which reality will significantly contribute to mutually beneficial outcomes for partners. It is widely accepted that marketing communication activities, by developing suitable strategies to harness the opportunities in the environment has a decisive impact on drawing a proper collaboration environment.
Bibliography: [1]. Armstrong Ch., Guay W., Weber J., The role of information and financial reporting in corporate governance and debt contracting, Journal of Accounting and Economics, Nr. 50, pp. 179-234, 2010 [2]. Fill Ch. –Marketing Communications: interactivity, communities and content, edi&ia a Va Ed. Prentice Hall, 2009 [3]. Grönroos Ch., Relationship Marketing: Challenges for the Organization, Journal of Business Research 46, 327–335, 1999 [4]. Gummesson E. – Total relationship marketing: Marketing Management, Relationship strategy and CRM approaches for the network economy, Edi&ia a IIIa, Ed. Elsevier, 2008 [5]. Onofrei M., Management financiar, Edi#ia II-a, Ed. C. H. Beck, 2007 [6]. Pop N. Al., Relationship marketing – dimensions and prspectives in the company activity, International Conference on Business Excellence, pp. 364-369, 2006 [7]. Popescu I.C., Comunicarea în marketing, Edi$ia a II-a revizuit" #i adaugit", Ed. Uranus, 2003 [8]. %erb$nic$ D., Rela!ii publice, Ed. ASE, Bucure'ti, 2003
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CONSIDERATIONS REGARDING COMPETENCE MANAGEMENT AND THE COMPETENCE MANAGEMENT INFORMATION SYSTEMS OF THE SMALL AND MEDIUM ENTERPRISES Junior Assistant Mariana ENU%I, PhD Candidate, Romanian-American University 1B, Expozi&iei Avenue, Sector 1, Bucharest enusi.mariana@profesor.rau.ro
Abstract: As firms evolve in an ever-changing environment, new perspectives are needed to explain management practices and the competence management that involves several heavy processes. We have categorised them in four classes: competence identification, competence assessment, competence acquisition and competence usage. Partnership is a relationship that emphasises equality, shared responsibility, co-operation, individual competence and competence management information systems that are defined by the concept of internal networking (which characterises an organisational structure that is catalysed by, and embedded in partnership relations), form the central theme of this paper in examining the success of the Small and Medium Entreprises, deploying the partnership concept, the paper also questions the importance of contextual factors in corporate management. Keywords: Competence Management, Competence Management Information Systems, Competency Resource Aspect Individual Model for Small and Medium Enterprises. JEL Classification: A1 - General Economics 1.
Introduction
With ongoing globalisation, organisations are increasingly confronted with worldwide competition. In order to build and sustain their competitive advantage, the competence management and expertise of an organisation's staff needs to be seen as a critical strategic resource. We present a general overview of competence management and the transfer of competence management information systems and expertise throughout organisations operating on a global scale. A particular emphasis is placed on the importance of global assignments in transferring knowledge and furthermore on the implications for practices to ensure the successful and effective retention of expertise.
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Broadly speaking, competence management is the way in which organizations manage the competencies of the corporation, the groups and the individuals. It has the primary objective to define, and continuously maintain competencies, according to the objectives of the Small and Medium Enterprises. A competency is a way to put in practice some knowledge, know-how, know-whom and also attitudes, inside a specific context. Competence management is becoming more and more important: competence has been well recognized as extremely important for the achievement of company goals, complimentary to, for instance, core business processes, customer relationships, financial issues and so on.Our current thinking is that competence management can be organized according to four kinds of process (inside each one, several processes may run). Competence identification, when and how to identify and to define competencies required (in the present or in the future) to carry out tasks, missions, strategies; how competence is represented is included here. Competence assessment, (i) when and how to identify and to define competence acquired by individuals and/or (ii) when and how the Small or Medium Enterprises can decide that an employee (or an individual) has acquired specific competencies; how the relationships between individuals and required competencies are represented is included here. Competence acquisition, how the Small and Medium Enterprises can decide about how to acquire some competencies in a planned way and when; Competence usage, how to use the information or knowledge about the competencies produced and transformed by identification, assessment and acquisition processes; for instance, how to identify gaps between required and acquired competencies, who should attend required training, how to find key employees (holding key competencies) and so on. Most of the reviewed knowledge techniques seem to be useful for improving heavy tasks (such as to find the competencies, required or acquired) in the various competence management processes and for integrating much better the supporting information system (reducing the need to perform several times the same or similar tasks). Therefore, knowledge techniques are generally useful for improving the performance of competence management processes (as any tool for supporting the the Small and Medium Enterprises activities). Knowledge techniques for competence identification The CRAI model suggests that there are two main elements for modelling required competencies: the enterprise model, which provides the reason to require a competence and the definition of the competence itself. The definition of the required competence can be approached by using ontologies, by introducing an explicit competence ontology of the required competencies. This competence ontology can further be composed of a specific ontology and a reference ontology (for instance). To define the required competencies various ways can be used. The most practical is related to the use of Interview (structured or unstructured, automatically collected). However, especially whenever new required competencies are unknown, a goal-oriented modelling may be envisioned. Goal oriented modelling focuses on the reasons of a competence (in this context, why a competence is required): this aspect characterises the required competences according to the mission or to the objective to be achieved. Ontology is often represented in some description logics even in the context of competence modelling. This logic representation enables the usage of competencies and provides a support to competence evolution through, for instance,
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automatic classification mechanism. Description logics can also be suitable for modelling incomplete definition of competencies. Knowledge techniques for competence acquisition One of the main way in which competencies can be acquired is through learning processes. Therefore, because we are analysing the knowledge techniques for competence management, advanced e-learning systems (for instance) are relevant to our study. Over an e-learning system, two scenarios should be implemented in a competence management information system: • A competence management system should help the Small and Medium Enterprises to decide and to plan the overall trainings, given a set of possible learning resources; • A competence management system should help employees to decide and to plan his/her own learning, given a set of possible learning resources. The consequence is that a competence management information system can be integrated (or coupled) with an e-learning system. This e-learning system provides fully the definition of learning resources and their relationships with the required competencies. Under the competence acquisition umbrella, we found relevant techniques that can be useful for recruiting the personnel. As an example, agent-based systems such as recommender systems, seeking relevant individuals over a set of interrelated archives (including databases, files and documents). Knowledge techniques for competence assessment According to the Introduction, Competence Assessment concerns the acquired competencies. We are currently thinking that these processes concern both employees and candidates. We carefully distinguish between identification of competence acquired and its evaluation: the first one is about when and how to identify individual potentially related (with an "high score") to some competencies; the second one is about how to perform direct evaluation of individuals. Under this kind of processes, we found very useful the definition of a competence management ontology (distinct from the competence ontology) for identifying and updating the acquired competencies. This competence management ontology can be related to • E-learning systems, if available, that store the learning history of employees (or candidates, if an interoperability scenario is put in place), • Some enterprise (real) data (for instance, documents or traces describing performed activities) • Some "expert rules" as in, (an example of "rule" is "if an individual has participated to several projects dealing with Java, then this individual can be considered competent on Java"). Whenever real data (data produced and transformed by the enterprise activities) are used, the semantic annotation techniques for documents. Moreover, some information retrieval techniques can be applied for establishing the relevance of the documents in relationship with some individuals. Because both the identification and evaluation of acquired competences are very heavy tasks, some techniques envision the usage of the "interests" of employees through a recommender system. These "interests" are close to the domains of competence than to the concept of competence itself. Some other proposals envision a guided self-assessment through a competence reference ontology.
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Knowledge techniques for competence usage The competence usage processes are all the processes which are not specific to the previous three ones. They are tightened on specific objectives to be achieved. For instance, we are using the competencies for re-organising the enterprises or we are using the competencies to find relevant individual for a specific task (taking into account time and location constraints) and so on. The usage of competencies is closely related to the possibility to inquiry the acquired and required competencies. It may concern simple and quantitative queries, or semantic queries. In the second case, the logic approach seems to be the most suitable for that. The specific feature that has to be integrated is a similarity measure between competencies or approximate search because finding exact matches seems to be too much restricted. Therefore, semantic matchmaking is a valuable contribution to the competence usage processes. Conclusions In the literature, many research works have interested on applying knowledge techniques to competence management. These works concerns the various processes of competence management. They often use a formal language to define a competence ontology and to reason on it. To simplify competence assessment, they use methods to extract acquired competencies from documents related to individuals, their interests or the tasks they perform. Finally, to retrieve a semantic correspondence between required and acquired profiles, they propose algorithms based on semantic distances. However, they prioritise one kind of processes among, identification, assessment and acquisition. They are sometimes poorly modular with respect to the competence modelling; for instance, they do not distinguish between competencies and qualification, or availability and competencies; they poorly distinguish between required and acquired competencies. As a main conclusion, based on the performed classification and analysis of the existing works, it seems interesting to us to provide an unified representation of a conceptual architecture supporting the various competence management processes. This architecture integrates both the reviewed literature (competence reference ontology, competence management ontology, e-learning system, etc.) and the CRAI model (the relationships between competence, individual, competence resource and the Small and Medium Enterprises aspects). Bibliography: 1. [Amalbert 05], Amalbert Marie Noelle, Jean Barreau.: ”Economie d’entreprise” Edition Sirey, France (1986); 2. [Fenstermacher 05] Fenstermacher, K. D.: "Revealed Processes in Knowledge Management"; Proc. KMDAP 05 at the WM 05, Kaiserslautern, Germany (2005); 3. [Leonard 05] Leonard, D.: „Innovation and Knowledge Management, Institute for Knowledge Management”, Williamsburg, UK (1999); 4. [Riss 05] Riss, U. V.: "Knowledge, Action, and Context: Impact on Knowledge Management"; Lecture Notes in Artificial Intelligence, vol. 3782 (2005); 5. [Weber and Wild 05] Weber, B.; Wild, W.: "Towards the Agile Management of Business Processes"; Proc. KMDAP 05 at the WM 05, Kaiserslautern, Germany (2005);
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6. [Wright 05] Wright, K.:"Personal knowledge management: supporting individual knowledge worker performance"; Knowledge Management Research & Practice 3 (2005);
CORPORATE SOCIAL INITIATIVES, ANOTHER FACE FOR COMPANIES Junior Assistant Gabriela VĂ&#x201A;LCEANU, PhD Candidate Romanian-American University 1B, Expozi&iei Avenue, Sector 1, Bucharest gabrielavalceanu@yahoo.com Abstract: For many years, community development goals were philanthropic activities that were seen as separate from business objectives, not fundamental to them; doing well and doing good were seen as separate pursuits. Causes most often supported through these initiatives are those that contribute to community health (i.e., AIDS prevention, early detection for breast cancer, timely immunizations), safety (designated driver programs, crime prevention, use of car safety restraints), education (literacy, computers for schools, special needs education), and employment (job training, hiring practices, plant locations); the environment (recycling, elimination of the use of harmful chemicals, reduced packaging); community and economic development (low-interest housing loans); and other basic human needs and desires (hunger, homelessness, animal rights, voting privileges, antidiscrimination efforts). Support from corporations may take many forms, including cash contributions, grants, paid advertising, publicity, promotional sponsorships, technical expertise, in-kind contributions (i.e., donations of products such as computer equipment or services such as printing), employee volunteers, and access to distribution channels. Cash contributions may come directly through a corporation or indirectly through a foundation it has established to focus on corporate giving on behalf of the corporation Keywords: Corporate social initiatives, examples, a cause promotion campaign plan JEL classification: M31, M37, M39
Introduction: Corporate social initiatives is a major activities undertaken by a corporation to support social causes and to fulfill commitments to corporate social responsibility. It has been identified six major initiatives under which most social responsibility. The six social initiatives explored are as follows:
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1. Cause Promotions: A corporation provides funds, in-kind contributions, or other corporate resources to increase awareness and concern about a social cause or to support fundraising, participation, or volunteer recruitment for a cause. The corporation may initiate and manage the promotion on its own (i.e., The Body Shop promoting a ban on the use of animals to test cosmetics); it may be a major partner in an effort (Aleve sponsoring the Arthritis Foundation's fundraising walk); or it may be one of several sponsors. 2. Cause-Related Marketing: A corporation commits to making a contribution or donating a percentage of revenues to a specific cause based on product sales. Most commonly this offer is for an announced period of time, for a specific product, and for a specified charity. In this scenario, a corporation is most often partnered with a nonprofit organization, creating a mutually beneficial relationship designed to increase sales of a particular product and to generate financial support for the charity (for example, Comcast donates $4.95 of installation fees for its high-speed Internet service to Ronald McDonald House Charities through the end of a given month). Many think of this as a win-win-win, as it provides consumers an opportunity to contribute for free to their favorite charities as well. 3. Corporate Social Marketing: A corporation supports the development and/or implementation of a behavior change campaign intended to improve public health, safety, the environment, or community well-being. The distinguishing feature is the behavior change focus, which differentiates it from cause promotions that focus on supporting awareness, fundraising, and volunteer recruitment for a cause. A corporation may develop and implement a behavior change campaign on its own (i.e., Philip Morris encouraging parents to talk with their kids about tobacco use), but more often it involves partners in public sector agencies (Home Depot and a utility promoting water conservation tips) and/or nonprofit organizations (Pampers and the SIDS Foundation encouraging caretakers to put infants on their backs to sleep). 4. Corporate Philanthropy: A corporation makes a direct contribution to a charity or cause, most often in the form of cash grants, donations, and/or inkind services. This initiative is perhaps the most traditional of all corporate social initiatives and for many decades was approached in a responsive, even ad hoc manner. More corporations are now experiencing pressures, both internally and externally, to move to a more strategic approach, choosing a focus and tying philanthropic activities to the company's business goals and objectives. 5. Community Volunteering: A corporation supports and encourages employees, retail partners, and/or franchise members to volunteer their time to support local community organizations and causes. This activity may be a stand-alone effort (i.e., employees of a high tech company tutoring youth in middle schools on computer skills) or it may be done in partnership with a nonprofit organization (Shell employees working with The Ocean Conservancy on a beach cleanup). Volunteer activities may be organized by the corporation, or employees may choose their own activities and receive support from the company through such means as paid time off and volunteer database matching programs.
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6. Socially Responsible Business Practices: A corporation adopts and conducts discretionary business practices and investments that support social causes to improve community well-being and protect the environment. Initiatives may be conceived of and implemented by the organization (i.e., Kraft deciding to eliminate all in-school marketing) or they may be in partnership with others (Starbucks working with Conservation International to support farmers to minimize impact on their local environments). Here is an exemple with the McDonald s company: Social Marketing: Immunize for Healthy Lives Vaccine-preventable diseases like measles, chicken pox, polio, and hepatitis B are still a threat to children, according to the American Academy of Pediatrics (AAP), so it's important to immunize children on time. To help children and families, Ronald McDonald House Charities has teamed up with the AAP and health care providers around the United States on "Immunize for Healthy Lives," an immunization education program in existence since 1994. August is the back-to-school vaccination time period, when most parents take their schoolaged children to be immunized before returning to the classroom. But health professionals also recommend that vaccinations begin at infancy to protect against meningitis and pneumonia. By age two, children can be protected from more than 11 preventable diseases. Ronald McDonald House Charities is committed to the health and well being of children and families. By working with health care providers around the country, the "Immunize for Healthy Lives" program educates parents on the importance of timely immunizations so they can help their children stay healthy. Local communities around the United States have taken on special activities to promote the "Immunize for Healthy Lives" campaign: • In North Carolina, immunization schedules are distributed through nearly 300 McDonald's restaurants throughout the state, with the campaign reaching up to 13 million customers in a month. • In Harrisburg, Pennsylvania, Health Department nurses visit participating McDonald's restaurants to review children's immunization records. Nurses also give free McDonald's coupons for ice cream to parents asking, "Do my kids need shots?" Corporate Philanthropy: Ronald McDonald House Charities The relationship between McDonald's Corporation and Ronald McDonald House Charities and its programs dates back to the inception of the charitable organization. Today, one can find support and participation from McDonald's Corporation, its franchisees, crew members, suppliers, and business partners at every level of the charity's activity— United States, international, corporate, regional, and local. Members of the McDonald's family serve as volunteers on the boards and committees of the local chapters, working alongside other members of their community. Together they tackle the challenges of operating a public charity—raising necessary funds and awareness and delivering program services to children and their families. Ronald McDonald House Charities creates, finds, and supports programs that directly improve the health and well-being of children worldwide. It is a nonprofit organization with more than 181 local chapters currently operating in 48 countries. Each local Ronald McDonald House Charities chapter is a separate public charity, operated by a local board of directors. The cornerstone of Ronald McDonald House Charities is the Ronald McDonald House program, which provides a home away from home for families of seriously ill
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children undergoing treatment at hospitals far from their own homes. The first Ronald McDonald tablished in Philadelphia in 1974. Today, there are more than 235 Ronald McDonald Houses in more than 25 countries. In addition to its cornerstone program, Ronald McDonald House Charities supports a variety of other programs, which include Ronald McDonald Family Rooms, Ronald McDonald Care Mobiles, and scholarships. The charity also awards grants to other organizations that directly improve the health and well-being of children. To date, Ronald McDonald House Charities' national body and global network of local chapters have awarded more than $400 million in grants to children's programs worldwide. Community Volunteering: Disaster Relief McDonald's, working through owner/operators, employees, and suppliers, has a longtime record of helping communities hit by tornadoes, hurricanes, floods, earthquakes, riots, or other disasters. McDonald's has partnered with American Red Cross and its International Red Cross network to provide food and other support to disaster victims, meals for the professionals and volunteers on the scene to aid them, and a haven of safety for others in the community. On 9/11 and in the weeks that followed, McDonald's provided more than 750,000 free meals around the clock at McDonald's mobile restaurants set up near the disaster sites in New York City, at the Pentagon, and in Pennsylvania. At each location, 45-foot-long portable units served McDonald's Quarter Pounders, Chicken McNuggets, bottled water, and soft drinks to feed recovery workforces. Socially Responsible Business Practices: Recycling Several activities represent a commitment to progress in reducing packaging volume and adding recycled content: • In the early 1990s, in most parts of the world, McDonald's changed its carryout bags from bleached, 100 percent virgin paper fiber to unbleached, recycled content. During that same period, McDonald's purchased more than $4 billion worth of products made from recycled materials for use in the construction and operation of restaurants worldwide. McDonald's USA recently switched to a 40 percent recycled-content white bag, while making other packaging changes to offset the increased environmental impact. • In 2010, McDonald's purchased more than $460 million in recycled packaging materials and reduced its packaging materials by an additional 35 million pounds. Although a process is in place to work with suppliers to find ways to streamline packaging and minimize use of resources, broad-based solutions are challenged by differences around the world in safe food requirements, local supplier availability, cultural differences, waste management practices, and infrastructure. To support McDonald's goal of sustainability, a Global Environmental Council (GEC) was formed in 2002 to identify global priorities, initiatives, and projects. It reports to the Social Responsibility Steering Committee established by the board of directors. In the following example, the corporation benefits from a creative and natural donation of abundant resources—its store space—and the appeal of abandoned and homeless pets. Example: PETsMART and Pet Adoption PETsMART Charities creates and supports programs that save the lives of homeless pets. They have a vision of "a lifelong, loving home for EVERY pet." Several initiatives support this goal, including in-store adoption centers, in-store campaigns to encourage customer donations, and online fundraising.
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With more than four million homeless pets euthanized every year, PETsMART, Inc. made the conscious decision not to sell cats and dogs. Instead, the company created their in-store PETs-MART Charities Adoption Centers, donating space to local animal welfare organizations so they can make homeless pets more visible and accessible to potential families. PETsMART, Inc. donates more than $5 million annually in space and supplies for the adoption centers, and the charity works with more than 2,700 animal welfare organizations across North America. These organizations keep 100 percent of their adoption fees and there is no cost to them to use the in-store Centers. The store and the PETsMART Charities also work together to implement a biannual "Just A Buck, Change Their Luck" fundraising campaign to help homeless pets. This event is held for three weeks in the spring and again in the fall. Customers are asked if they'd like to donate "just a buck" (or more) when they make a purchase. Customers who donate $10 or more receive a commemorative T-shirt. Those who donate $15 or more receive a limited edition tote bag. All of the more than 650 stores nationwide and in Canada participate in the campaign. Donations can also be made online, where the Tshirts and tote bags are also offered for donations of $15 and $20 respectively. Between 1994 and 2010, this program has saved the lives of more than 2.5 million homeless pets through the in-store adoption areas alone, and continues to save lives today. Consider as well the benefit to PETsMART in terms of the thousands, if not millions, of customers exposed to the effort, and, for those adopting a pet, their likelihood of returning to a PETsMART store for food, needed supplies, and grooming services. Most corporate social initiatives under the corporate social responsibility umbrella fall within one of the following distinct categories: cause promotions, cause-related marketing, corporate social marketing, corporate philanthropy, community volunteering, and socially responsible business practices. Though there are commonalities among these initiatives (i.e., similar causes they are supporting, partnerships that are formed, and communication channels that are used), each has a characteristic that makes it distinct. Cause promotions are distinguished by the fact that they are supporting a cause by increasing community awareness and contributions to the cause. Cause-related marketing is unique in that donations to a cause are tied to the corporation's product sales volume. Corporate social marketing is always focused on a goal of influencing a behavior change. Community volunteering involves employee and related franchise and retail partners' donation of their time in support of a local cause. Corporate philanthropy entails writing a check or making a direct, in-kind contribution of corporate services and resources. And corporate socially responsible business practices, as implied, relate to the adoption of discretionary business practices and investments that then contribute to improved environmental and community well-being. Why is it important to develop these distinctions? As with most disciplines, awareness and familiarity with tools in the toolbox increases the chances they will be considered and then used. Traditional corporate giving and citizenship focused primarily on one of these initiatives, philanthropy. As we have seen in the examples presented in this chapter, a more strategic and disciplined approach involves selecting an issue for focus and then considering each of the six potential options for contributing to the cause. It is more common for a corporation to have several themes, and for themes to be reflected by only a few initiatives. Examples presented for McDonald's covered several themes: children's health, children and families with special needs, disaster relief, and environmental stewardship. Finally, it is useful to note other terms that are used to label these initiatives, to underscore the distinctions. Cause promotions may be most similar to programs sometimes
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described as cause marketing, cause sponsorships, cause advertising, co-branding, or corporate sponsorships. Cause-related marketing is included by some when describing cause marketing or co-branding programs. Corporate social marketing may be considered a subset of cause marketing. Corporate philanthropy may be expressed as corporate giving, community giving, community development, community involvement, corporate social investing, or community outreach. Community volunteering is often covered when referring to community service, community development, community relations, community involvement, community outreach, community partnerships, and corporate citizenship programs. And the term socially responsible business practices is for some synonymous with corporate social responsibility, corporate citizenship, and corporate commitment. As noted earlier, the delineation of these distinct subcategories may help increase consideration of these initiatives and may make understanding and application of the keys to success for a particular initiative more likely. DEVELOPING A CAUSE PROMOTION CAMPAIGN PLAN Perhaps the most important decision to be made once a social issue has been identified and a cause promotion initiative has been selected is to confirm whether the campaign will include partners and, if so, to identify them. Campaign plans should then be developed together, up-front, as they will include critical decisions on target audiences, key messages, campaign elements, and key media channels. One of the most effective ways to make these decisions is to develop a document that will provide direction for developing messages, designing campaign elements, and selecting media channels. A useful tool is a creative brief, typically one to two pages in length. It will help ensure that all team members, including external partners, are in agreement on target audiences, communication objectives, and key assumptions, prior to the more costly development and production of communication materials. Typically, a creative brief to support the development of a promotional campaign includes the following six sections: 1. Target audience. This section includes a brief description of the target audience, including estimated size, demographics, geographics, psychographics, and behavior variables. 2. Communication objectives. This is a statement of what we want our target audience to know (facts, information), believe (feel), and perhaps do (e.g., donate or volunteer for a cause), based on exposure to our communications. 3. What benefits to promise. This is the identification of key factors that will motivate target audiences to participate in volunteer efforts or to make donationsâ&#x20AC;&#x201D;in other words, benefits they will experience by taking these steps. 4. Openings. Michael Siegel and Lynne Doner describe openings as "the times, places, and situations when the audience will be most attentive to, and able to act on, the message." This information will be key for determining media channels. 5. Positioning and requirements. This section describes the overall desired tone for the campaign (e.g., serious versus lighthearted), as well as requirements such as the use of corporate logos. 6. Campaign goals. This is an important section to consider in selecting media channels, as it outlines quantifiable goals for the campaign. These may include process goals (e.g., desired reach and frequency goals) or actual outcome goals (e.g., number of people to sign up for the race).
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This document will then lead to development of campaign elements including slogans, headlines, and copy; graphic images; materials; selection of media channels; evaluation plans; budgets; and implementation plans, including responsibilities and target dates for campaign activities. A corporate social initiative is categorized as a cause promotion when the core element of the effort is promotional in nature. Primary strategies utilized are persuasive communications. Communication objectives focus on building awareness and concern; persuading people to find out more; persuading people to donate their time, money, or nonmonetary resources to a cause; and/or persuading people to participate in events to benefit a cause. Most commonly, corporations partner with nonprofit organizations and special interest groups, although a few initiate and implement campaigns on their own. In many cases, the corporation is given visibility on promotional materials and in the media in exchange for its support. Most corporate benefits are marketing related, with advocates asserting that a cause promotion can strengthen brand positioning, create brand preference, increase traffic, and build customer loyalty. Many corporations experience additional benefits, noting increased employee satisfaction and the development of new and strong partners in the community. Several potential downsides for the corporation are inherent in these promotional campaigns: Visibility for the corporation can get lost; most promotional materials are not sustainable; tracking investments and return on promotional investments is difficult; this endeavor, because of its visibility, may generate too many additional requests for support from other organizations connected to the cause; this approach requires more time and involvement than writing a check; and promotions are often easy to replicate, potentially removing any desired competitive advantages. Keys to success include recommendations to carefully select an issue (up-front) that can be tied to your products and your company values. It should be a cause that management can commit to long-term, that is a concern for your customers and target markets, motivates your employees, and has the most chance for media exposure. When developing cause promotion plans, take care to connect the campaign to your products, develop partnerships, incorporate and ensure visibility for your brand, and figure out a way to measure and track results. This initiative should be given serious consideration when a company has easy access to a large potential target audience; when the cause can be connected and sustained by the company's products; when opportunities exist to contribute to the campaign using inkind services; when employees can get excited about the effort; when it's desirable to limit the company's involvement and commitment to just raising awareness and concern about an issue; and when there is a co-branding opportunity, versus being one of many sponsors. Steps in developing a plan begin with decisions regarding partnerships. Then, working together, planning teams identify target audiences and develop key messages, campaign elements, media channels, evaluation plans, budgets, and implementation plans. Corporate Social Responsibility (CSR) continues to be a relatively new for companies in Romania. The establishment of Corporate Social Responsibility Department in the Ministry of Labour, Family and Equal Opportunities, European directive answers to corporate social responsibility. Corporate Social Responsibility also encourages the voluntary inclusion of social and environmental concerns in the strategy and policies of a company.
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CSR has a direct impact on enterprises of great, but can be a strategic tool to increase SME competitiveness. Raiffeisen Bank has a program, without any connection with their banking activities, namely "Raiffeisen Communities Grants Program." It is a funding program for local projects small and medium (from 3,000 up to 22,000 RON) Raiffeisen Bank in the communities where it operates. Organizations may apply for funding neguvermentale for eligible projects. After projects are evaluated and considered eligible will be subject to public vote on the site. Top rated projects will be financed by Raiffeisen Bank, within the available budget. Another example is the case in Romania company GlaxoSmithKline (GSK) - one of the largest pharmaceutical companies in the world - is the constant partner of local communities who need help. Moreover, everywhere in the world, including Romania, GSK encourages employees to get involved in causes they support and commitment of local communities through various internal programs dedicated to volunteering.
Amid the common interests of GlaxoSmithKline and its employees volunteer began in 2009, Orange Day program - GSK's annual event dedicated to volunteering, implemented both globally and in Romania. On this occasion, GSK employees group, both of the Pharma and of Consumer Healthcare is voluntarily involved in supporting local communities they belong and they need help. Orange Day is a day the company paid for volunteering, but has no meaning without the individual contribution of each of the employees. This year - the third edition of the Orange Day in Romania - in the period June 27 to July 8, GSK volunteers spent a day with children from disadvantaged backgrounds in Bucharest and the country, in kindergartens and educational centers of Save the Children Romania. Also, GSK employees have refurbished playground at the Institute for Mother and Child, Bucharest, and two social service centers in Cluj-Napoca, Romania with United Way. Partnership with two NGOs - Save the Children Romania and United Way Romania - Romania has strong roots in GSK. An important direction of the company - both in world
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and in Romania - the mother and child health and, in line with this concern, one of the key projects is "Every Child Matters", a comprehensive program to reduce mortality among children under 5 years conducted in 2010, Save the Children Romania in partnership with GSK Romania and supported by the Ministry of Health. Meanwhile, GSK employees constantly contribute to fundraising campaigns for United Way of Romania, where thousands of Romans - children, elderly, homeless or disabled - are helping to lead a better life. The preparation of the project by identifying the needs of local communities, began a few weeks before the start of actions and conducted by GSK employees across the country and along with partners Save the Children Romania and United Way Romania. GSK employees in the country were involved in finding the most appropriate cases, in the direction of health and education of children, folded on the assumed objective - is to put smiles on the faces of children. Target audience: External: • Children from poor families who do not attend kindergarten • Children and their parents in hospitals Internal: • Employees GSK Romania Channels of communication used: Internal: • Intranet (connectGSK) • E-mail to employees • Posters at GSK headquarters External: • Press Releases Implementation: The activities of the Orange Day 2011 took place in Bucharest and in 17 localities in the country - in Bacau, Braila, Buzau, Brasov, Cluj-Napoca, Craiova, Constanta, Galati, Iasi, Piatra Neamt, Pitesti, Slatina, Ploiesti, Sibiu , Suceava, Targu-Mures and Timisoara and were coordinated by local team leaders, volunteers from among employees of GSK. In total, GSK employees were involved in volunteering in 23 educational centers in the country. GSK volunteers have conducted educational activities in kindergartens summer of Save the Children, the purpose of these centers is to prepare children starting school for the disadvantaged. The beneficiaries of this project were the children of poor families, who had no chance to go to kindergarten and will start school this fall. In these centers, little has been supported to acquire basic skills and knowledge to help them overcome the gap between them and the children were in kindergarten before going to school. Through GSK prepared by volunteers with Save the Children educators, kids have been helped to understand the importance of hygiene, read, learned colors and parts of the body. Also, GSK employees have visited with the children, the goals of the city, went together to the movies, library, theater or the zoo, places some of the children they had seen before. Volunteer activities were performed in centers of "after-school" of Save the Children Romania, aimed at preventing school dropout, beneficiaries are all children from poor families. GSK employees helped the small school and do their homework to better prepare for school and they played together.
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Another activity, part of this year's Orange Day, held in the capital, where more than 80 employees participated in rehabilitation GSK the playground of the Institute for Mother and Child here being admitted daily, a total of about 200 children. Along with United Way organizations and Innocent Foundation, volunteers have cleaned and sanitized GSK park, dug weeds and planted a hedge, banks have repaired and painted, and the fence surrounding the park swings. Also, garbage cans were installed and new furniture and, in turn, were removed tree trunks and concrete driveway, and many other materials that were dangerous for children. And to prevent accidents at play, the land around the park equipment was covered with a rubber mat especially for children to play safely. In Cluj, all with United Way Romania, GSK employees were involved for 2 days, charity, renovating a day center in charge of recovery and education of 23 children with neuro-motor disabilities and autism and talking with parents about child care in single parent families. Results At Orange Day, over 200 employees GSK Romania were involved in volunteering were able to put smiles on the faces of nearly 400 children from 23 kindergartens and educational centers in the country. Also, the approximately 200 children admitted daily at the Institute for Mother and Child, Bucharest (IOMC) can now spend time in a safe and friendly playground in the hospital courtyard. In the 2010 edition of the Orange Day, GSK employees have refurbished 10 hectares of garden Hospital of Orthopaedics, Trauma and Recovery in Eforie Sud, where they are treated over 6,000 patients annually. Also in 2010, GSK factory in Brasov employees were involved in blood donation activities, but also in administrative actions at Hospice House of Hope in Brasov, the center always needs funds for care of patients with terminal illnesses and children with hope limited life. And the previous edition in 2009, the Orange Day, GSK employees were involved in various administrative activities for Hope House Hospice center of Brasov and also helped to clean green four areas of Brasov. In my opinion, CSR is in its infancy in Romania and this is more attributable to multifunctional companies. If helping foreign companies operating in the social community has become so banal in 2011 no longer uses the term "social" in our country the word "voluntary" or "probation" is not well seen by the citizens of this country. Both voluntary and civic sense is gone after 1989. To plant a tree to help people with problems, essentially to help the community you live is a gesture rarely seen in our laws can and because Romania does not give tax advantages of companies or companies with Romanian capital to go on the idea profit without giving anything back to the community which helped fund its profit and turnover do you have. From my point of view I think it would be better to take the example of companies that engage in the community once the community is doing better and prosperous companies, these two components are closely linked. It is good to give back to the community some of the contributions made to companies by buying products or services. Bibliography: [1.] Corporate Social Responsibility- Philip Kotler and Nancy Lee( 5th edition)
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[2.] .http://raiffeisencomunitati.ro/invitatul-lunii/ce-inseamna-un-comportamentresponsabil/ [3.] http://www.csr-romania.ro/ [4.] http://rsc.comunicare.ro/index.php?option=com_content&view=article&id=69&Itemi d=84 [5.] http://www.bazaarvoice.com/blog/2010/11/22/2011-the-end-of %E2%80%9Csocial% E2%80%9D-marketing/
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