The strategies of foreign market's penetration used by Romanian enterprises from Western Five Region.

Harangus, Daniela ; Duda-Daianu, Dana-Codruta

1. INTRODUCTION

1.1 The objectives of the research

For realise the analyse of Romanian enterprises' strategies for entry on the foreign markets was necessary an exploratory marketing research on a sample composed of 20 companies exporting Romanian Western Region 5 acting on different external markets, the main objective was to identify the type of strategy for market penetration by using the same model used for studying foreign investors in Romania.

From the functional point of view, this research group is part of exploratory research, that aime at identifying the coordinates of the investigated marketing phenomenon, the definition of variables and assumptions to be investigated in a future research. After the type of generated information, the developed research is quantitative. After the place, it is a field research.

Research objectives was established in connection with the main aim and are as follows:

* To identify Romanian exporting company profile;

* Highlight the organization way for marketing activity of exporting enterprises;

* Identify the area of activity for exporting enterprises;

* Identify the main export markets of the Romanian export;

* Identify international experience of the Romanian exporting enterprises;

* Identify the type of strategy used for entry into foreign markets by exporting Romanian enterprises and testing the model for grouping strategies on foreign markets penetration proposed

2. METHODOLOGY OF THE RESEARCH

2.1 Research hypotheses.

As hypotheses were set as follows (Basaraba, 2008):

* There is a disparity of businesses according to turnover, on the market position held, number of employees or innovation capacity;

* The most part of Romanian exporting enterprises do not have an organizational marketing structure appropriate to activities on foreign markets;

* Romanian exporting companies act regionally or internationally;

* The vast majority of exporting firms from Romania operating in Europe;

* Most of the Romanian exporters have no particular experience in dealing with foreign markets;

* Strategies used by Romanian exporting companies involves mostly, reduced risks and lower costs for entering foreign markets, involving the participation of intermediaries.

2.2 The observation unit

Is represented by business unit, sampling unit is the manager of marketing department or the person responsible for marketing activities, in case of a lack of marketing structure. In some cases, questionnaires were completed by a representative of the marketing or sales departments.

2.3 Method of collecting information

Retrieving information from the respondents was done by structured forms of communication (through interview based on a questionnaire with preset questions, which was administered by interview operators).

2.4 Sample size

The sample consists of 20 exporting firms from Romanian Region 5 West, and fulfilling the objectives of the research.

2.5 Sampling scheme

In order to complement the sample volume was used the simple random sampling scheme. This sampling method provides to all components of investigated community the same probability of being selected and included in the composition of the sample survey.

2.6 Data for the research

The information was collected in June-July 2008. Processing, analysis and data interpretation was conducted in January-February 2009.

3. RESULTS OF THE RESEARCH

Analysing the sample of companies, observed that a significant share holding companies for which marketing activity is considered less important, at least through the analysis of how the organization's activities. Developping strategies and action programs of the concerned organizations represents the responsability of marketing structure, of a specialized structure in foreign trade (55%), namely: import-export direction (5%), import-export service (25%), import-export office (25%), or a person responsible for this effect (35%) (Harangus & Duda Daianu, 2008).

The main export markets of investigated companies are those of the EU (over 88% of exports in 2007 were directed to markets in the EU). Most targeted foreign markets are Italy (17.5%), Germany (16.96%), France (7.74%), Hungary (5.58%), Bulgaria (3.23%), Austria (2, 57%), USA (2.01), being grouped as seen in Figure 1.

[FIGURE 1 OMITTED]

The forms of penetration on foreign markets used by Romanian exporters are characterized by focusing exclusively on a single form, resoectively exports. None of the analysed enterprise from Western 5 Region did not use the forms direct sales, contractual arrangements, strategic alliances or direct investment, the main explanation of the use of a strategy involving a low investment risk and diminished the possibilities are limited (40% of surveyed firms had in 2007 a turnover of less than 50 billion USD), an insufficiently developed structure of marketing (45% of companies studied) or limited experience on foreign markets (only 32.5% of enterprises have accumulated an experience of over 5 years on foreign markets). Among the charged export forms, approximately 49% of enterprises use indirect exports, which indicates an orientation through the strategy that does not involve in particular the potential and business skills.

The following figure represents the main strategy of entering foreign markets used by exporters from the Western 5 Region: Fig. 3 Strategy of entering foreign markets used by exporters in Western 5 Region, http://ww.adr5vest.ro Strategy of entering foreign markets used by exporters in Western 5 Region Representative office 10% Direct export 45% Foreign importer 35% Romanian commercial factor 10% Note: Table made from pie chart.

4. CONCLUSION

* Main achieved correlations indicate the following aspects: approximately 60% of companies with high turnover (over 51 billion lei have used forms of direct export or have representation abroad, while 50% of businesses with turnover less than 50 billion lei preferred cooperation with a foreign intermediary for their products to penetrate the foreign markets;

* Entry for Romanian exporters in the developed markets of the EU or U.S. most common strategy was the development of direct exports, while the emerging markets of Central and Eastern Europe or Asia have been approached cautiously, through a local intermediary, in most situations;

* Use a form that requires the involvement of the firm--direct exports and creating a representation was made especially for enterprises for which internationalization was a process conducted over time, accumulation of experience beeing necessary (70.5% of enterprises that were established at least 5 years ago have chosen this option); however it can be seen an dependency on intermediary Romanian agents of enterprises that have penetrated the foreign market before 1989, and an orientation through the abroad intermediaries of exporters which were established after 1999 (about 59% of enterprises with this characteristics have chosen this feature version of the internationalization);

* Penetration by methods involving the company is conditined by the existence of a proper marketing structure, as demonstrated by the fact that 56% of businesses that have used direct exports have such an organization of marketing activities, while 59% of entreprises that not have an minimal marketing organization of marketing activities have been forced to use foreign intermediaries, for some substantial fees, which reduces profits for foreign market penetration.

If we were to extrapolate the results of research realised at the regional level, could be said that Romanian exporters are yet at a stage of testing the external market, which explains the evolution of Romania's exports, which, although it has made substantial progress in the last years, fails eliminate the trade deficit of our country (at the end of 2007 Romania's trade deficit reached a value of USD 29,681.48 million, exports reached only USD 40,264.72 million compared with total imports 69,964.20 milioane USD). Switching to a higher stage, the effort to determine the increased level of profitability and long term control on foreign markets, it will be possible under conditions which will realize the importance of marketing and international marketing of default of the company.

5. REFERENCES

Basaraba, A. (2008). Reginal Policy, Eurobit Publisher, ISBN 978-973-620-382- 4, Timisoara, Romania

Harangus, D. & Duda Daianu, D.C. (2008). Aspects Regarding the Romania's Position in the Global Competition of Knowledge-Based Economy, pp.0589-0590, Annals of DAAAM for 2008 & Proceedings of the 19th International DAAAM Symposium, Katalinic, B. (Ed.), ISBN 978-3-901509-68-1, Published by DAAAM International, Vienna

*** (2008) http://www.insse.ro--The National Statistics Institute, Statistics Year Book, Accesed on: 2009-06-27

*** (2009) http://www.adr5vest.ro--Agency for Regional Development, Accesed on: 2009-06-15

*** (2009) http://www.dce.gov.ro--Department of Foreign Trade, Accesed on: 2009-06-17

*** (2009) http://tpb.traderom.ro--Trade Point Bucharest, Accesed on: 2009-05-26 Fig. 2. Grouping firms according to business division of import-export-marketing, http://www.dce.gov.ro Grouping firms according to business division of import-export-marketing Import-export/marketing direction 5% Marketing department 25% Marketing office 25% Person with marketing Attributions 35% Without specialized structure 10% Note: Table made from pie chart.