The impact of financial crisis in Central and Eastern EuropeSales and Marketing strategies used in 2009Study CEE 2009: summary of results
LINEA DIRECTA COMMUNICATIONS
INTRODUCTORY REMARKS
Introductory remarks
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |2
In the third quarter of 2009, Linea Directa Communications - part of Studio Moderna Group, one of the biggest and fastest developing direct marketing and call center companies, conducted by phone a survey among 1200 Sales/ Marketing/ General Directors about economic crisis and its consequences for Central and Eastern Europe
Objective of the survey was to investigate industries pains, needs and challenges during financial crisis
The analysis included not only the kind of effects companies have experienced but also measures that have been taken or planned so far
The managers answered where did the companies cut the budgets and where did increase it comparing to 2008
Last part of the questionnarie is related to utilization of marketing and direct marketing channels. We will find if companies are interested to invest in sales and promotion activities during financial crisis and the evolution of budgets per each country
<
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14,4 8,7 7,7
18,5
3,6 3,112,8
1,54,6
15,4
9,7
10,5
8,4
1,0
5,2
10,5
11,0
17,3
0,5 12,0
23,6
35,2 5,7
6,6
16,4
14,8
9,04,9
7,4
40,5
4,812,3
2,8
10,3
2,4
3,2
7,5
3,6
12,7
2,5
7,56,7
1,71,7 8,3
5,84,2
16,7
1,7
43,3
3,8
7,66,7
14,3
9,0
10,0
18,6
2,4
14,8
1,4
11,4
9,9
11,38,5
5,611,3 14,1
1,4
19,7
1,416,9
Autom
otive
Finan
cial s
ervic
es
Pharm
a/ Heal
thca
re
FMCG
- consu
mer
produ
cts
Touris
m&
Trav
el
Retai
l
Whole
sale
Telec
omm
unicat
ions IT
Utilie
s(g
as, o
il,el
ectri
city)
Oth
er
Slovakia
Slovenia
Russia
Romania
Poland
Hungary
Czech
INTRODUCTORY REMARKS
Eleven countries in CEE were surveyed, covering 15 industries – Significant number of responses achieved in ten sectors
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |3
COMMENTS
©The study was conducted in eleven countries
©CEE was represented by Russia, Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia
©The main participants at survey was from industries
©such as: automotive, financial services, pharma/ helth care, FMCG, tourism/travel, retail, whosale, IT, telecommunications and utilities
9
32 33
187 1
12
38
22
1311
1
24
36
26
119
1525
2417
2828
16
7
16
2931
1710
18 33
30
416
4
7
Increased Remained the
same
Decreased 0-15% Decreased 15-
30%
Decreased 30-
50%
Decreased 50-
70%
Decreased above
70%
Slovakia
Slovenia
Russia
Romania
Poland
Hungary
Czech
SURVEY RESULTS
The impact of the financial crisis on sales in CEE
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |4
COMMENTS
©Only 4% of companies from Poland registered a drop in sales more than 30% in 2009, while Romania has the biggest percentage 26%, followed by Hungary with 14% and Russia with 12%
©Due to the economic crisis, the number of companies that reported an increase of sales is extremely low: 9% In Czech, 9% Romania and 10% in Slovakia. The most affected industries are automotive, constructions, real estate and retail.
Sales level in 2009 comparing to 2008
SURVEY RESULTS
Measures planning to overcome crisis- Product innovation, development of new services in accordance with real needs of existing clients is considered the key to overcome the financial crisis
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |5
On o scale from 1-4 (4 being the most important), from a list with measures planning to overcome crisis, companies take in consideration as key measure product innovation, new services development, customized products launch in accordance with actual needs of the existing clients - in Slovenia (3,60) and Hungary (3,53). The need to innovate to survive is often the mantra of those who are successful in business. This is because innovation by its very nature means doing things differently. Every company needs to innovate to maintain a competitive edge, which is all the more important in turbulent markets.
Companies from Romania relies on tapping into new customer segments, regional expansion (3,32). Entering new markets into which existing products can be sold – new industrial sectors or new geographical areas – offer opportunities to build cash flow, profits and market share.
in Poland respondents pay much attention for new sales and distribution channels (3,29).
Participants at survey don't take account on strategic partnerships during the crisis, although can bring long-term benefits. The focus is currently now placed on overcoming the economic crisis. In Russia the score is only 1,78 for companies using these kind of strategies.
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SURVEY RESULTS
Measures planning to overcome crisis- Cost reduction program, revised budgets and hiring freeze, working with new suppliers or renegotiating prices with older partners are the most used measure in the countries analyzed
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |6
Financial pressures force firms to cut costs on a wide range of investments, such as marketing, training and research&development. When the economy is in a downturn, many business expenditures such as promotional, sales and market research outlays are cut first because they do not show tangible and immediate results.
Moreover, reducing costs can be dangerously obvious to the market, producing a deterioration in customer service, an absence in sales reps, delayed delivery times or a lower quality product or service. In spite of tumultuous change, the customer's experience with the product must continue to live up to the promise of the brand, and management must not sacrifice its image and identity by cheapening its product.
Not surprisingly, the most common strategic responses involve cost reductions and product-related strategies (focusing on core products or services, the introduction of new products and the rationalization of product lines). The least common strategic responses to the recession are those that involve major structural changes to the organization, namely mergers, partnerships and acquisitions.
SURVEY RESULTS
Measures planning to overcome crisis- the main benefits of outsourcing
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |7
According to survey, companies started also to outsource operations that are not core activities. For example, there are many small companies which are using external providers for activities related to accounting, IT or distribution, often because they want to decrease costs and they do not have another solution.
On the contrary, the main factor for multinationals in the outsourcing decision process is represented mainly by the decision of keeping in house the added value processes, focusing their efforts on the main activity, and also on developing specific seasonal projects. Nevertheless reducing cost is playing, even if sometimes is not recognize as a decision factor, an important role. Several studies showed that outsourcing can help reducing cost up to 40%, for all typies of companies.
In the actual striving economical times, resizing cost is the main point of discussions between specialists in all companies. For various players that are developing internal operations like research, marketing, distribution or training, the high sales price of their products is often having the roots in the internal higher costs of producing that product. By outsourcing, some companies aim to resize their internal costs and so to create an important competitive advantage. Recruiting and training costs are in many cases high and companies are making real sacrifices in order to pay them, but often employees do not raise expectations and this cost in some cases is not worthy to be paid. Outsourcing the HR services can be the solution to address this situation.
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SURVEY RESULTS
Measures planning to overcome crisis- the main benefits of outsourcing
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |8
"How we treat our customers?" is a key question that must be answered carefully. Some Customer Care services are made better by outsourcing, because these type of companies are specialized in providing services on specific markets and their experience in the execution of these activites is proved.
In Central and Eastern Europe there is a number of companies that offer locally and international services. If you have small projects or simply you want to reduce stuff and infrastructure costs, the best solution is to use an external partner. In the light of experience gained, such a company can give you better results and more quickly.
Using outsourced services, companies can reduce the costs with 10% up to 40%. But they must not only think about the fact that outsourcing reduces the costs, because also these services help to increase also the revenue and the quality of services provided to customers.
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SURVEY RESULTS
The impact of the financial crisis on marketing and sales activities- companies with small marketing budgets dominated in 2009
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |9
COMMENTS
©the smallest budgets undering 250.000 € was reported especially in Hungary (89,4%), Russia (88,6%) and Romania (85,4%)
©The biggest budgets, above 1.000.000€ are meet in small percentages in Czech (5,4%), Slovakia (4,9%), Poland (4,5%) and Slovenia (4,3%)
Marketing budgets in 2009
66,9
89,479,5
85,4 88,6
72,2 70,5
21,7
7,5
14,810,2 8,6
15,024,6
6,0 8,6
4,3 4,91,01,1
1,3 2,93,44,51,95,4
Czech Hungary Poland Romania Russia Slovenia Slovakia
4. Above 1.000.000€
3. 500.000 € - 1.000.000€
2. 250.000 € - 500.000 €
1. Less than 250.000 €
SURVEY RESULTS
The impact of the financial crisis on marketing and sales activities- Marketing budgets suffered in 2009 a lot of modifications
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |10
COMMENTS
©In 2009 the biggest cuts in marketing budgets are made in Russia (28,6%) and Romania (22,7%), companies reducing budgets at least with 30%. Similar budgets as in 2008 are in big percentages in Hungary (44,4%), Slovenia (43,9%) and Poland (43,4%)
©On the other hand, there are also companies investing in marketing communications, countries such as Russia (19,6%), Poland (19,2%) or Slovenia (16,2%)
The evolution of marketing budgets in 2009
13,0
6,8
19,2
15,1
19,6
16,2
9,8
39,5
44,4
43,4
26,7
23,2
43,9
31,1
24,9
13,6
19,2
16,4
17,9
18,7
18,0
10,2
19,8
10,1
19,1
10,7
14,6
21,3
8,5
13,0
7,1
15,1
12,5
5,6
8,2
6,2
10,7
11,5
5,4
2,3
1,2
1,0
1,7
1,2
1,0
1,3
Czech
Hungary
Poland
Romania
Russia
Slovenia
Slovakia
Increased
Remained the same
Decreased 0-15%
Decreased 15-30%
Decreased 30-50%
Decreased 50-70%
Decreased above 70%
SURVEY RESULTS
The impact of the financial crisis on marketing and sales activities- Marketing budgets suffered in 2009 a lot of modifications
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |11
COMMENTS
©the biggest budgets are spent in mainly in events&fairs (Russia), internet promotion (Romania& Hungary) - using banners, blogs, social networks, etc, mass marketing in Slovenia (TV, newspapers, radio) and catalogues
©The smallest budgets (representing max 30% from marketing budgets) are allocated for sending SMS& Mobile Marketing (Russia), telemarketing (Slovenia, Slovakia), direct mailing (Russia), emailing and PR
Marketing budget distribution on each channel in 2009
Czech Hungary Poland Romania Russia Slovenia Slovakia
Direct mail
Telemarketing
E-mailing
Internet promotion
SMS or Mobile marketing
Catalogue
Mass marketing (TV, billboard,newspapers)Events&fairs
Public relations
SURVEY RESULTS
The impact of the financial crisis on marketing and sales activities- the most used channels of communication
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |12
COMMENTS
©the most used channels are internet (Slovenia), e-mailing (Russia), fairs&events (Slovenia), direct mailing (Romania) and catalogues (Poland)
©On the other hand, SMS& Mobile marketing, drop mail, telemarketing and mass marketing are considered less important channels, especially in Slovenia and Slovakia
Marketing channels used by companies in their communication with clients
Czech Hungary Poland Romania Russia Slovenia Slovakia
Direct mail - addressable
Direct mail - not addressed - drop mail
Telemarketing
E-mail marketing
Internet promotion (banners, Google adwords,bloging, social networking)SMS or Mobile marketing
Catalogue
Mass marketing (TV, billboard, newspapers)
Fair/events
Public relations
SURVEY RESULTS
The impact of the financial crisis on marketing and sales activities- the objectives followed in promotion campaigns
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |13
COMMENTS
©According to the study, companies organize marketing campaign in order especially to increase the number of clients, to improve customer retantion and loyalty and maximize the existing customers through additional sales.
©Companies pay less atention to develop accuarate databases (that can be used later in their communication campaign) or to create a better awarness and repositioning for brand/ products.
Czech Hungary Poland Romania Russia Slovenia Slovakia
Generate new leads / acquiring newconsumers
Additional sales to existing consumers
Better awareness of the brand / products
Repositioning of the brand / products
Build accurate database
Improve loyalty of customers
74,4
61,5
18,3
84,8
61,5
46,7
68,6
74,6
2,1 3,3 2,0
13,1
36,531,4
25,425,6
35,2 35,0
Czech Hungary Poland Romania Russia Slovenia Slovakia
1. Yes 2. No 3. Dont know/No answer
SURVEY RESULTS
The impact of the financial crisis on marketing and sales activities- direct marketing outsourcing
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |14
COMMENTS
In CEE region many are speaking now about outsourcing as a cost saving measure for the companies.
©In Czech is the biggest percentage of companies outsourcing direct marketing activities (74,4%), followed by Poland (61,5%) and Romania (36,5%).
©On the over hand, 84,8% of companies are not outsourcing in Hungary, 74,6% in Slovakia, 68,6% in Slovenia and 46,7% in Russia.
The percentage of companies outsourcing direct marketing activities at group level
The percentage of companies outsourcing direct marketing per countries
32%
6%
17%
21%
5%
15%
4%
Czech Hungary Poland Romania Russia Slovenia Slovakia
Czech Hungary Poland Romania Russia Slovenia Slovakia
Direct mail addressable
Direct mail not addressed - drop mail
Telemarketing
E-mail marketing
Internet promotion (banners, google
adwords, bloging, social networking)SMS or Mobile marketing
Catalogue
Mass marketing (TV, billboard,
newspapers)Fairs/Events
SURVEY RESULTS
The impact of the financial crisis on marketing and sales activities- direct marketing outsourcing
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |15
COMMENTS
©The most outsourced direct marketing activities are the newest channels of communication such as Internet promotion (banners, google adwords, bloging, social networking), fairs& events preparation, mass marketing (TV, billboard, newspapers)
©Less outsourced are telemarketing, emailing, drop mail and SMS or Mobile marketing
The most outsourced direct marketing activities in CEE
53
25
19
41
26
31
51
4
4
3
6
6
4
3
1
2
2
3
43
68
78
51
62
61
46
2
1
6
C zech
H ungary
Po land
R oman ia
R ussia
S lov en ia
S lov akia R e fuse to answ er
D on t use ca ll cen te r se rv ices
Bo th ( in house and ou tsou rced)
Ou tsourced ca ll cen tre
In house ca ll cen tre
SURVEY RESULTS
The impact of the financial crisis on marketing and sales activities- communication throug call center services
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |16
COMMENTS
©The biggest number of companies developing internal call center operations are in Czech (43%)
©The major companies outsourcing to a contact center are in Romania and Russia (6%)
©The majority of companies don’t use call center services - 78% in Poland, 68% Hungary, 62% Russia, 61% Slovenia
The percentage of companies using call center (inhouse/ outsourced)
3,2
4,0
3,5
2,12,3
3,02,7
2,5
Customer care/Help
desk
Infoline Inbound sales Outbound sales Lead Generation;
profiling & client
segmentation
Database
management
Market research Appointment setting
services
SURVEY RESULTS
The impact of the financial crisis on marketing and sales activities- typies of call center activities outsourced in 2009
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |17
COMMENTS
©On a scale from 1 to 4 (4 means that clients use very often a type of service) the most requested services are infoline, inbound sales (received calls from people who want to buy something), customer care& help desk and database management
©Last ones but not leas are market researchs services, appointment setting services, lead generation (profiling and client segmentation) and outbound sales (calls made to sell).
The main services provided by Contact Center
SURVEY RESULTS
The impact of the financial crisis on marketing and sales activities- call center activities: pros and cons
LINEA DIRECTA COMMUNICATIONS
CEE SURVEY 2009 |18
Companies use an internal call center department taking in consideration the customers and the quality of dialogues. On the opposite side, they pay less atention for the easier way to manage the overflow of calls provided by a contact center and they forget about costs efficiency.
The second category is represented by the companies outsourcing to a Contact Center, the main reasons being: the possibility manage a big overflow of calls, taking the advantages of an advanced technology for a fast implementation of projects, allowing in the same time to focus on their core activities that can generate profit directly. Other advantages offered by outsourcing and recognized by the companies, in order of priority, are the professionalism of a contact center, through specialized trainings on each developed project, reduced costs with staff, equipment, utilities and so on, share risks with a foreign partner, focus on core business and so on
These are also companies that are not outsourcing call center activities because they have internally resources to do these operations, or they can not afford it because they have low communication budgets or they don't have enough informations about the process of outsourcing, what is about and what kind of benefits brings.
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