Description
The Romanian B2B services market tends to be more and more mature, as new players enter the country as a consequence of Romania's membership within the European Union. Therefore, it becomes more and more difficult for new and small businesses to be set up and become functional players on this market.
Management & Marketing (2009) Vol. 4, No.2, pp. 63-78.
START-UP MARKETING: HOW TO BECOME A PLAYER
ON THE B2B SERVICES MARKET IN ROMANIA
Nicoleta-Dorina RACOLTA-PAINA, Sorina-Diana MONE
Babes-Bolyai University, Cluj-Napoca
Abstract. The Romanian B2B services market tends to be more and more mature, as new
players enter the country as a consequence of Romania’s membership within the European
Union. Therefore, it becomes more and more difficult for new and small businesses to be set up
and become functional players on this market. In this context, it is worthwhile performing
marketing efforts from a special perspective that is a start-up marketing approach. The paper
presents an analysis of start-up marketing as a discipline and also as practice in the B2B
services market in Romania.
Keywords: start-up marketing, B2B services, Romania.
1. Introduction
There are many articles and studies regarding the concept of marketing and
therefore the way in which this approach can be adopted by companies. Among these
articles and studies there are several that come with important information about start-up
marketing. The aim of this article is to identify the situation of start-up marketing as a
particular discipline and as practice in the Romanian business environment. Our
question is if the Romanian entrepreneurs have access to information on start-up
marketing as an important resource in their efforts to set-up and develop a successful
business. We will refer to the B2B services market in Romania because we consider
this market to be among the most interesting and important ones.
2. Start-ups and entrepreneurship in Romania
2.1. The concept of start-up in Romania
Whenever conducting a research or developing an analysis, it is essential to
define the object of that research, especially when dealing with concepts that do not
comport with a widely known and accepted definition.
This is the case of the concept of start-up in Romania, where we found that
there is no unanimously accepted definition for it. The 31/1990 Law regarding the
commercial societies includes no information regarding the concept of start-up,
whereas the 346/2004 Law for stimulating the creation and development of the SMEs,
article six, paragraph three, refers to new-created enterprises stating that „in the case
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of a new-created enterprise, whose financial situations have not been approved, the
data regarding (…) are being determined during the financial exercise (…)”. This
means that a new created enterprise is an enterprise created during the year in cause,
as in Romania the financial year is the same with the calendar year.
When referring to start-ups in Romania, the most frequent aspect dealt with in
this context is the one regarding the sources of capital and the financing process. It is
not an unexpected situation, if we consider that the main obstacle when setting up a
business is the lack of capital.
Therefore, we found that the most common sources to define start-ups are
some financing programs that aim at supporting new businesses. In this context, we
can mention two programs financed by European funds. First, it’s the Sectorial
Operational Program Increase of Economic Competitiveness, with an operation called
„Support for innovative spin-offs and start-ups”, which defines a start-up as „a micro
or small enterprise (...) that has a history of maximum 3 years and maximum 20
employees”. Secondly, there is the National Program for Rural Development, which
defines start-up as a „microenterprise that was founded the year when submitting the
project or maximum three years before, but not having had any activity”. There is also
a governmental program called START, in which the start-up is considered to be a
new founded enterprise, with no further explanations.
Considering these findings, we came to the conclusion that there in no widely
accepted explanation for the concept of start-up in Romania and therefore, for
increased relevance and accuracy of our paper, we need to state our own definition of
the term in discussion. In this context, based on the fact that our paper is built on a
marketing approach, we considered it appropriate to define the start-up as the
enterprise that is new on the market and is trying to earn a position (not necessarily to
become a leader, but to become a functional player on its relevant market).
Although there are no statistics regarding start-ups in Romania (not existing a
general definition of the concept) and mainly from our perspective on the concept, we
consider it important to mention that there is a great number of new firms being
registered each year. For example, in the first semester of 2008, more that 76 thousand
firms were founded, among which more than 20 thousand with activities in commerce,
followed by constructions and technical and scientific activities (Romanian National
Trade Register Office, 2008). So, we can deduce that a great number of the new firms
conduct services activities, by comparison to production. A possible explanation could
be that to set up a business in production would necessitate a greater investment (in
technologies, equipment and so forth), whereas in services most often the main resource
is the human resource (the knowledge and competence to offer a particular service).
2.2. Romanian entrepreneurship in the 21
st
century
When we talk about small firms we talk about entrepreneurs, people who have
ideas, who are ready to take the necessary risks to get a firm off the ground and who
are willing to manage their company.
Start-up marketing: how to become a player on the B2B services market in Romania
65
In the case of the Romanian business environment, entrepreneurship (new
business formation) is quite a young concept, because before December 1989 the
private property in business was very limited. Therefore we talk about the first
entrepreneur in Romania, who is Dinu Patriciu (he opened the first private company
after the fall of the communist regime) (Money Express, 2008). In these days it is
quite easy to set up a company in Romania, as an entrepreneur. In fact, Romania is
ranked 47 out of 181 economies regarding the ease of doing business (World Bank,
2008). There are different ten components, named also as „stages of a business life”
that are measured in order to obtain this dimension named „ease of doing business”.
Among the components there is one under the heading of starting a business. Thus, to
start up a business in Romania requires “six procedures, takes 10 days and costs
3.57% GNI per capita” (World Bank, 2008). According to the same annual report, the
situation of our country is quite good by comparison to other countries from Central
and Eastern Europe (Hungary is ranked 27, Slovakia occupies the place 48, Bulgaria is
on the 81st place, the Czech Republic is ranked 89 and Poland as 145th).
According to the 1
st
Report on Entrepreneurial activities in Romania (Lafuente
and Driga, 2006), there are several facts regarding the entrepreneurs’ characteristics
and activities:
- The highest rate of new business creation is found for individuals between
26 and 40 years;
- It is important for entrepreneurs to come from a family with background in
entrepreneurship;
- The main motivations to be involved in entrepreneurial activities are very
diverse, such as: an option to take advantage of business opportunities, to improve the
quality of life and also social aspects.
There is an annual top of „100 start-ups” launched by one of the most well
known business newspapers on the Romanian market, Ziarul Financiar (first edition
October 2007). In fact, what is presented consists of 100 stories about Romanian
entrepreneurs that are successful business people, even if only some years before
having set up their company, they were students or employees.
We have analyzed these 100 starts-up (from both tops 2007 and 2008) and we
consider that the entrepreneurs can be classified in the following three main
categories:
1. „The young” – those who set up their company when they are young
(under 30 years) and their working experience is limited or does not even exist.
2. „The mature” – those who start their business after some years in a
company (5-7 years) and their working experience is good;
3. „The senior” – those who after a successful professional and managerial
career decided to start their own business.
We can also observe several reasons that influenced these entrepreneurs to set
up their business: an unsatisfied need (in fact the lack of supply on the Romanian
market for specific goods or services such as babies and children apparel and shoes;
personalized products; professional cleaning services and so on), poor quality services
on the part of the suppliers (in this case it was quite easy to become a supplier and to
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compete with them obtaining very good results), a great demand from the national
market for different foreign products (such as jewels, products for babies, quality
doors and so on), personal scientific knowledge (these entrepreneurs being former
employees of scientific research or engineering institutes), personal skills (such as
painting on glass), passion for different products or services or even hobbies
transformed into real businesses.
In 2007 Romania was one of the 42 countries that participated in the Global
Entrepreneurship Monitor (GEM) project (GEM, 2008). GEM is „a not-for-profit
academic research consortium that has as its goal making high quality international
research data on entrepreneurial activity readily available to as wide an audience as
possible” (http://www.gemconsortium.org). According to the report of GEM,
Romania was ranked 37 out of 42 countries regarding the established entrepreneurial
activity, for the year 2007! This low position defines the situation of entrepreneurship
in our country compared to others countries, situation that is not good at all. Thus, we
consider that any initiative aiming at sustaining entrepreneurship in Romania is
welcomed. Therefore, in 2008, Romania was one of the participants on the Global
Entrepreneurship Week, among other 77 countries. The Global Entrepreneurship
Week is a worldwide event that celebrates enterprises, the main aim being „to unleash
young people’s enterprising ideas and address some of society’s biggest issues, from
poverty reduction to climate change” (http://www.enterpriseweek.org.uk/about/
global_entrepreneurship_week). This event covers a wide range of activities, for
example: conferences, business contests, business project launches, round tables,
mentoring programs for entrepreneurs, workshops and so on. The results of this event
have not been published yet, but it is certain that this is a further step to improve the
environment for entrepreneurs.
So, we can conclude by stating that there are several signs that
entrepreneurship has started to gain ground in the Romanian environment.
3. Review on start-up marketing in Romania. A literature
and practice approach by comparison to Western markets
As there is no official and widely accepted definition for start-ups in Romania,
it is not an unexpected thing that marketing for start-ups is not considered to be a
particular type of marketing and therefore have its own instruments or resources.
Analyzing what we thought to be relevant resources, we found that neither are
start-up marketing practitioners (marketing firms or independent consultants), nor
start-up marketing literature (books, studies, articles). Still, there are resources (mainly
online) that can be useful for a start-up from a marketing point of view, even though it
rarely happens that these resources are organized in an integrated and consistent way,
so as to be a complete source of marketing know-how and information for a new
entrepreneur.
From our perspective, there are some websites that could be more than useful
for a business, mainly at its beginning, when all information is vital and when
accumulating knowledge from practice is more difficult than for an already functional
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67
business (because of the low activity and the lack of experience, contacts and so on).
We would mention in this context the following resources: www.startups.ro,
www.resurseimm.ro, www.esimplu.ro, www.focusimm.ro, www.basepoate.ro. For
example, esimplu.ro is an online portal for the SMEs communities (including start-ups)
that provides enterprises with very interesting facilities, including the possibility of
developing the firm’s own micro-portal or virtual shops within the website,
information on all important business events in the country and marketing instruments
(benchmarking tools, databases with firms to collaborate with).
Another aspect that we consider to be an important and really useful resource
for new businesses on the Romanian market consists of the ever growing sharing of
know-how and information coming from experienced practitioners, be it in marketing
activities (PR, advertising and so on), or in all kinds of businesses. In this context, it is
worthwhile mentioning blogs, which tend to be a more and more used platform by
practitioners for sharing knowledge. For example, Bogdan Nedelcu’s blog
(www.bogdannedelcu.com) is a very useful resource in what concerns online marketing
(search engine optimization for the start-up’s website, email marketing etc.). Also, there
is a very interesting e-group called „marketing lider” (http://groups.yahoo.com/group/
marketing_lider/) moderated by Drago? Dehelean, who also owns a website
(www.dragosdehelan.ro) in which he posts a great amount of his studies and articles.
What we consider to be important in this context is that these personal websites offer
the chance for new businesses (that more likely do not have the financial resources to
pay for these consultants’ services) to get in touch with some knowledge (although not
customized on their needs, but that is more than nothing, after all).
A totally different paradigm we could find on the Western markets (USA, UK
etc.), where start-up marketing is being individualized as a particular marketing branch,
in practice, as well as in literature. The most unusual resource we could find is a radio
called Startup Nation (available online on www.startupnation.com), where two brothers,
with years of entrepreneurship experience, moderate shows on start-up topics. Also, the
website has a marketing section with useful articles on start-up marketing.
Most important, we were able to identify start-up marketing firms, which offer
marketing services for new businesses, such as Startup Ramp and also consultants in
start-up marketing, such as Sean Ellis. A particular situation that can arise in the practice
of start-up marketing in Western countries is when a start-up engages the services of
consultants that are specialized in strategic planning for start-ups, who provide as
outputs a mission, a vision and a marketing plan and who often become eventually the
second chief executive officer of the firm (Chiagourins and Wansley, 2003).
Moreover, there is a significant amount of literature resources available on
this topic (books and articles) that provide the reader with useful insights on what
particular tools to implement and what aspects to follow in conducting marketing
activities when setting up his own business. Analyzing some of these resources, we
found that most of them are focused on really specific things that can be implemented
in practice by practically every business, as they refer to low-cost measures that
involve using at a maximum potential the existing resources available to the business.
A consistent part of these measures are related to the Internet and the online presence
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of the business (e-mail marketing, websites, online advertising, newsletters and so on)
which are affordable and can even be done with no financial resources allocation, if
the entrepreneur has some basic IT knowledge and the availability to do a deeper
research on that particular IT tool. Another important type of marketing advice for
start-ups that are available in foreign resources on this topic are connected to an
important process when setting up a business, process that in Romania is almost
nonexistent or is not considered important by early entrepreneurs. What we refer to is
the process of planning, which should be conducted before entering the market.
More exactly, the foreign resources we refer to insist on the importance of
thinking ahead aspects such as designing the offer, the pricing strategy, a networking
strategy and so forth, aspects that are vital for a successful business and that most
entrepreneurs fail to plan ahead and try to adapt after launching the business. So, it can
come to a situation in which the business becomes notorious on the market (having
invested in advertising, for example), but it does not have a vision of what it offers, how
it offers, which are the resources it can count on and, most important, which are the
objectives for each of it’s marketing actions. For example, when creating the website, do
you want it to be informative? Or do you want to sell by the means of it? You would like
to develop a newsletter, but how often would you consider delivering it? These are all
questions that need to be answered long before really performing the action.
Also, there are studies available in different sources (such as online
databases), that can be of great use for early entrepreneurs, as these studies are focused
on disseminating the results of different kinds of case studies. Consequently, the
papers present practical issues that have been noticed over time in the marketing
practice of start-ups and also general recommendations made on this basis. For
example, a study conducted during 24 months on start-up companies suggests eight
golden rules to lead the start-up marketing efforts: (1) Always begin with a vision, (2)
Design marketing plans to accommodate change, (3) Focus on your most valuable
asset-the brand name, (4) Learn to live with barriers, (5) Monitor, but don’t copy the
competition, (6) Outwardly focus the organization to stimulate innovation, (7) Vary
your marketing research program, (8) Hire the most well-rounded people with the
greatest sense of urgency (Chiagourins and Wansley, 2003).
So, we can conclude by mentioning that there still exists a significant gap
between start-up marketing practice and literature in Romania and the ones in Western
developed countries. And even though we can consider that, at a certain measure
(measure reduced by the lack of information, knowledge of a foreign language or
financial resources), Romanian entrepreneurs have access to foreign literature on start-
up marketing, in what concerns the access to start-up marketing practitioners, the
situation is even more problematic.
Our opinion is that Romanian marketing practitioners and editors should
consider highly on moving towards the development of start-up marketing as a
discipline and practice. We agree with the fact that each type of marketing knowledge
can be useful for a business at every stage of its existence (including the start-up stage)
because it’s more than nothing, but there are arguments to sustain the necessity of
start-up marketing as a particular branch of marketing, even in Romania. The
Start-up marketing: how to become a player on the B2B services market in Romania
69
Romanian markets tend to be more mature and it becomes more difficult to penetrate
them so a start-up must perform well planned and efficient marketing actions to
become functional. Therefore, it is obvious that the services of a marketing firm must
be customized for start-ups not only in terms of prices (which happens today, but as a
common sense approach, not as part of a structured service portfolio), but also in
terms of understanding their particular needs, resources, capabilities and fulfilling
them in an adequate way.
4. Case study
The case study of this paper is about start-ups in the B2B services sector on
the Romanian market. We chose this topic because we consider that both elements,
start-ups (as part of SMEs) and the services sector, are topics of great actuality at the
level of the EU 27 and therefore at the level of Romania.
It is well known that services are considered crucial to the European Internal
Market. This is due to their contribution to the economy, „between 60 and 70% of
economic activity in the European Union of 25 Member States, and a similar (and
rising) proportion of overall employment” (European Commission, 2008). If we
consider Romania, services occupy an increasingly important role even if there still is
a big gap between our country and EU 25 (or even EU 27). Thus, in Romania the
share of services in the labor force was 34.6 % in 2002 and 36.9% in 2005 compared
to 68.9% in 2002 and 70.2% in 2005 in the EU 25 (EC, 2008). We mention here that
in Romania, the services sector has gained a growing share within the gross domestic
product (GDP). Thus, the contribution of the services sector to Romanian GDP has
followed a positive trend, growing from in 32.3 % in 1990 to 56.85 % in 1999 and
61.11 % in 2007 (the other components of the GDP being agriculture, industry and
construction) (Romania-Central.com, 2008).
4.1. Start-ups in the services field
The concept of services has many and various definitions, in fact because of
its complexity „it is hard to come up with a comprehensive definition that captures the
diversity and attributes of all of them” (Cook et al., 1999 quoted by Hollye, 2007). As
a direct way to define services, it is said that „services are seen as intangible and
heterogeneous; production and consumption occurs simultaneously” (Hollye, 2007).
Analyzing the specialized literature regarding start-ups, we did not find a clear
distinction between start-ups in services and start-ups in the production sector.
Nevertheless, we consider that the differences between services and production
companies are valid from the very beginning (the setting up moment). We emphasize
here the main characteristics of services (Vorzsak, coord., 2006): intangibility,
inseparability, heterogeneity, perish ability and lack of property. Because of these
characteristics the activity of services companies is characterized by several specific
elements: due to the intangibility of their offer, trust plays an important role, in fact
the whole relationship between company and customers is very important (there is a
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70
long-term approach and a win-win situation); because of the inseparability, the human
resource has a crucial role (without the direct implication of the employees of the
company the services do not appear, of course with some exceptions: vending
machines and automatic sellers).
As we’ve mentioned before, there are several websites that contain basic
information on why and how to get a service business started. Here are some of the
most interesting ideas related to start-ups in the services fields:
? „Selling services knows no boundaries--anyone with a need or desire to
earn extra money, work from home, or start and operate a full-time business can sell a
service, regardless of age, business experience, education or current financial
resources” (Stephenson, 2008);
? „Though services margins are definitely lower than those of products, one
of the nice things about selling services is that it’s easier to manage head-count. For
example if you’re trying to figure out whether to hire/keep someone, trying to figure
out whether they’d be accretive is simpler to figure out in the services business. Not
easy (particularly in this economy), but easier” (Shah, 2008);
? There are „two of the basic issues in building your consulting practice: 1)
the business you are in and 2) your business goals” (http://www.morebusiness.com/
getting_ started/primer/v3n10.brc, 2007).
When we talk about start-ups in Romania, we should present here several
legislative initiatives that support them. So, there is the Governmental Decision (No
166/2003) regarding tax facilities for students who want to start their business
(reduction on fees and taxes for students to help them create a business) (EC, 2007).
In fact it was the first legislative act that encouraged young population to start up a
business. The results were quite weak, if we compare the number of registered
companies in the year 2006 (in conformity with this Governmental Decision) – 13735
(Romanian National Trade Register Office, 2006) and the number of students in
Romania – 241716 (supported by the State) (Ministry of Education, Research and
Youth, 2008).
Then, there is another law that encourages start-ups in Romania: Law no.
359/2004. It simplifies the procedure of registration and authorization of physical
entity, family associations and legal entity (EC, 2007).
There are also structural funds destined to support Romanian SMEs
(http://www.fonduri-structurale.ro/detaliu.aspx?eID=2606&t=Stiri). Only in 2008 five
programs were launched under the name: The program for development and
modernization of the activities of commercializing products and services on the
market, The program for supporting the development of small and medium sized
enterprises by funds in the limit of paid sums for the reinvested gross profit, The multi
annual program for the period 2008-2011 for supporting the businesses transfer, The
Program for organizing the Fair of Small and Medium Sized Enterprises –TIMM 2008
and the Program for organizing the National Co-operative Fair (Gagiu, 2008).
In the context of start-ups in the services field, our opinion is that there are
several particularities of this type of companies:
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71
? The start-up capital is smaller than in the case of production companies,
because it is not necessary to make great investments in technologies and other
expensive assets (such as land, warehouses and so on);
? The every day expenses of the company can be lower because most of the
expenses are related to overheads and not to raw materials;
? The number of necessary employees can be lower than in the case of
production companies because of the nature of work in the services field.
? Considering these findings, we came to the conclusion that there are
several specific elements at the level of start-ups in the services field. In the case of
Romania, there are legislative initiatives in order to encourage the start-ups.
4.2. Marketing approach within start-ups in B2B services
4.2.1. Strategic marketing approach
We consider that one of the golden rules of marketing is that „all
organizations need to have a longer-term (strategic) marketing view as well as a
short-term (tactical) marketing operation” (Mc Donald, 2008, p. 13). But, „many
companies operate without formal plans”, irrespective of the type of companies (large
and small, new and mature) (Armstrong and Kotler, 2001, p. 47). The same authors
mention an explanation for the lack of formal plans within many companies: „in new
companies, managers are sometimes so busy they have no time for planning” and „in
small companies, managers sometimes think that only large corporations need formal
planning”. We consider that nowadays companies cannot compete successfully on the
market without planning, irrespective of their types. In the case of start-ups from the
Romanian market, the corporate planning process and therefore the marketing
planning play an even more important role now that we have just started the third year
as a member of the European Union. In fact, the accession of Romania to the EU has
came with several new characteristics for the Romanian business environment, such
as: the entrance of new powerful foreign competitors, the adoption of several EU
directives, the migration of fully-qualified Romanian workforce to the EU countries,
the liberalization of different markets as automobile, natural gas and so on. The last
months of 2008 came with a severe financial crisis and hence the start of a worldwide
economic recession. Of course, this difficult situation has also affected our country
and therefore start-ups have been faced with more difficult business conditions.
Therefore, strategic planning has an even more important role in the case of start-ups
from Romania. Through strategic planning we understand „the process of developing
and maintaining a strategic fit between the organization’s goals and capabilities and
its changing environment and marketing opportunities” (Kotler, Armstrong, 2001, p.
47). According to the same authors, strategic planning relies on „defining a clear
company mission, setting supporting company objectives, designing a sound business
portfolio, and coordinating functional strategies (such as production, marketing and
so on)”. We consider that, there are several specific elements of strategic planning in
the case of start-ups in general and B2B services start-ups in particular.
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a) The company’s mission statement and the company’s objectives
After some primary research based on observation, we conclude that in most
start-ups from Romania, the company’s mission does not exist (formal or informal)
but the company’s objectives, especially the short-term ones, are well defined. Our
explanation is that the company’s mission, as „brief statements about the
organization’s role or contribution, business definition, distinctive competences, and
indications for the future (i.e. what the firm will do, might do, will never do)”
(McDonald, 2008, p. 30) is quite abstract and intangible for most of the entrepreneurs
or managers (those who should define the company mission). In contradiction, the
objectives, mostly expressed as financial ones, are tangible and therefore easily to
define. But, a company without the mission has no long-term identity and also has no
ground for corporate culture, which for a company is „what personality is for
individuals” (Schein, 2004, p. 8). It is important to remember that the mission-
statement should be market-oriented, thus it defines the business in terms of satisfying
customer needs (Armstrong and Kotler, 2001, p. 49). For example, in the case of a
B2B services start-up, a market-oriented mission as opposed to product-oriented
mission can be defined as: The mission of our company is to fulfill the customer’s need
with quality and a sense of reciprocal respect, warmth and long term relationships.
Therefore, our recommendation for B2B services start-ups is to carefully
define their mission, keeping in mind that the company’s mission is part of corporate
planning and therefore will be part of the company on the long-term. The mission
must truly represent the entrepreneurs and the employees, because if they do not
believe in it, the mission will be only a nice statement on an official document and
also on the main page of the company’s website.
b) The business portfolio
Usually, the business portfolio – the collection of services that are offered by
B2B services companies – is quite small-sized in the case of start-ups. Therefore, it is
important to remember „the best business portfolio is the one that best fits the
company’s strengths and weaknesses to opportunities in the environment” (Armstrong
and Kotler, 2001, p. 53). Thus, in defining the business portfolio entrepreneurs should
start with an internal analysis in order to identify company’s strengths and weaknesses
and with an external analysis to establish the opportunities in the environment. Here,
we talk about market research that is compulsory for start-ups from a marketing
perspective. Of course, the market research process in the case of start-ups is more
informal and less structured than in the case of mature companies. Moreover, there are
some specific methods and instruments that can be used by the managers of start-ups
in order to obtain good marketing information, such as: observation, collecting ads
from local media, routine visits to competitors, informal surveys or simple
experiments (Armstrong and Kotler, 2001, pp. 156-157). In the case of B2B service
start-ups we consider that the analysis of the web page of the main competitors is a
good way to start marketing research. Then, there are also different approaches, such
as: making phone-calls, sending e-mails to ask information or visiting the main
competitors as potential clients.
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c) Functional strategies
We consider that in the case of start-ups it is unrealistic to talk about
functional strategies. If a start-up has adopted a corporate strategy there are also
several strategic dimensions of all company’s departments, such as human resources,
marketing, finance and so on.
For many of the entrepreneurs, marketing approach means marketing plan,
which is not bad if they understand that the marketing plan is the result of marketing
planning, and it is „about marketing objectives (what you want to achieve) and
marketing strategies (how you plan to achieve your marketing objectives)”
(McDonald, 2008, p. 11). Moreover, the marketing plan is part of the corporate
strategic plan. But start-up marketing does not mean only marketing plans! Talking
about marketing services, the specialist remarks „they are less tangible than products
and more likely to vary in quality, depending on the particular person or people
providing them” (Keller, 2008, pp. 15-16).
We consider that there are several important marketing decisions that should be
made by the entrepreneurs or managers of start-ups, such as: choosing and developing
the name of the company, market segmentation, target market selection and positioning.
Of course, the list is not the final one, even the definition of the elements of marketing
mix, known as the 7 Ps: product, price, place, promotion, people, process and psychical
evidence completed by customer service (Christopher, Payne, Ballantyne, 2002, p. 11;
Br?tianu, 2006, p. 164) having also strategic dimensions.
1. The naming/branding
In the case of start-ups it is important to understand that one of the first and
main identification elements is the company’s name. In fact, through company’s name
we understand several elements as: name, letters design, size and color, symbol and
logo, all of these being seen as brand elements (Keller, 2008, p. 3). Therefore, one of
the long-term objectives of the entrepreneurs or managers of start-ups is to transform
these brand elements in a Brand, „a certain amount of awareness, reputation,
prominence, and so on in the marketplace” (Keller, 2008, p. 2). And since we talk
about B2B services start-ups, the importance of this long-term objective is much
greater because “business-to-business branding creates a positive image and
reputation for the company as a whole. (…) A strong business-to-business brand can
(…) provide a strong competitive advantage” (Keller, 2008, pp. 11-12.) On the other
hand, if we refer to service companies, there are some specific elements regarding the
branding of a service (Keller, 2008, p. 16):
branding is seen as a way to address intangibility and variability problems that
characterize service companies;
? brand symbols can help to make the abstract nature of services more
concrete;
? brands can help to identify and provide meaning to the different services
provided by a company.
For example, the name of a potential B2B service company that provides
management consulting services can be: KP Smart Management Consulting. First,
within the company’s web page and published materials there will be an explanation
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74
of the name: K from knowledge, P from providing, Smart – for intelligent and
Management consulting – the main domain of the company.
The right way to manage brands is to adopt a strategic brand management
process that has four main steps: identifying and establishing brand positioning,
planning and implementing brand marketing programs, measuring and interpreting
brand performance and growing and sustaining brand equity (Keller, 2008, 38). But in
the case of start-up marketing approach it is unrealistic to state that companies must
adopt this process. In fact, entrepreneurs or managers can adopt the first step because
the brand positioning is a projection of what and where that brand would like to be in
the following 3-5 years. It is of paramount importance to do this because „without
knowing your destination, no road will get you there”.
2. Segmentation – targeting – positioning
Talking about B2B services start-ups, there is a real need to segment the
market in order to choose the target market segments. Therefore, every company
should position itself, with the help of the marketing mix elements. For example, in
the case of a potential B2B services company that offers management consulting
services, the main segments of the market can be: non-governmental organizations,
small and medium enterprises, state institutions and organizations, multinational
companies. Hence, the company can target the first two market segments mentioned
first. The positioning of the company can have the following characteristics: a
specialized offer that is composed by management consulting services related to
management styles, managerial decision-making process and change management.
The tariffs for these services are defined after the first discussion with the potential
customer (the first half an hour discussion is free and for the following discussion
there is a standard fee). Regarding the offer, we consider that its dimensions must be
adapted to the size of the start-up; a large offer can be seen as unprofessional in the
case of a start-up with a small number of employees (as it happens usually). There are
also several elements that define the company’s positioning.
4.2.2. Operational marketing approach
After having designed the main marketing guidelines that form the strategic
marketing approach, it comes to implementing practical measures that constitute the
operational approach.
In this context, the first step would be that of creating a relevant visual identity
to communicate the differentiation, the mission, the vision and so on. In our view, a
minimum set of visual identity elements should include: a logo, visit cards, prints
(brochures, posters, roll ups or banners, depending on the target) and a website is a
must. If the marketing budget allows it, we would suggest also some physical
evidence, such as cups of coffee, pencils or a calendar with the firm’s logo that should
be placed in the office.
Another important aspect refers to a certain etiquette that should represent the
firm and its people and which should consist of some dressing and speaking patterns.
Start-up marketing: how to become a player on the B2B services market in Romania
75
As services involve working directly with clients, the looks and the approach are
important. That is why an adequate outfit should be a must when meeting clients or
when participating at conferences, round tables or other kinds of relevant events.
A significant amount of all start-up marketing efforts should be directed, from
our point of view, towards creating and maintaining a relevant and visible online
presence of the firm. A first step in this context would be that of creating a website
and continuously optimizing it in order to reach the target effectively. In the services
field, we believe that the purpose of the website should be that of presenting the firm,
meaning the team and its capabilities, experience and so on. Therefore, the website
should be really simple and human-oriented, meaning that we would expect to see
pictures of the people and a few words about and from each of the team members.
Besides the website, there should be an implication in what means relevant
online communities. A blog is a useful tool in this context. We would suggest a
thematic blog that has to do with the business itself, not a personal blog of a team
member because in the first case, the impact compared to the effort is more consistent
than in the case of a personal blog. Reading other relevant blogs and making
comments to the posts is also a useful action because it gives you the chance to get
known and to network within that particular business community. Forums are also
useful for this purpose and, moreover, they are a way of keeping in touch with relevant
news and also a source of knowledge. Online networking could also be done by the
means of professional platforms, such as facebook.com, but these are rather for
individuals that for businesses. Still, in the services fields, the social capital of each of
the team members can, in some cases, be decisive for the business, as a whole.
Although it rarely happens that a firm in services can gain costumers from the
Internet, a relevant online presence contributes significantly to the development and
consolidation of the brand notoriety. That is why we would also suggest subscribing
the firm within online business catalogues or other websites that advertise. Finally, the
online marketing actions should also consist of the creation and the delivery of a
newsletter with information from the business field and also regarding the firm itself.
The newsletter should be delivered to all important collaborators, clients, suppliers
and other entities with whom the firms interacts, as it is the most effective way of
maintain a constant relationship with all these entities.
All these potential online marketing actions have the advantage of being almost
completely with no financial efforts and can be done in-house, but performing them
involves a lot of time, that is why a careful analysis should be conducted before deciding
the online marketing mix in order to perform the best benefits versus efforts mix.
The core of all marketing efforts of a start-up in services is, from our
perspective, networking. Networking contributes to the purpose of becoming
notorious on the market and, most importantly, it’s the aspect that provides the
services firms with an important amount of their customers, mainly by the means of
recommendations. Although it might seem that making contacts is something that just
happens as the firms interacts with more and more entities, networking is something
that should be managed properly, we believe. In this sense, our opinion is that it
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76
should be developed a networking strategy that should include participating at all
relevant events, connecting with relevant people, sharing contact details and, most
vital, maintaining the relationship developed. For this, there should be a permanent
process of connecting and reconnecting with each of the relevant contacts, using the
telephone, the Internet, organizing events and inviting them, sending holiday cards,
delivering newsletters, keeping in touch with everything that occurs to them.
The operational marketing approach of a start-up should also include, in our
opinion, an internal dimension that should focus on setting up some processes and
instruments that are implemented internally, inside the organization, but which
contribute to the overall marketing efforts of the firm. In this context, we believe that a
competition database is of major importance in today’s competitive markets. This
database should include the major competitors and be updated with every relevant
thing that happens on the market and that can be associated with one of the
competitors. Also, a client database could be very useful in order to track the
relationship with each client from the first contact, to signing the contract and
delivering the service. Special fields that should appear in this database could be the
firm’s or the manager’s anniversary, major accomplishments of the client in its
activity etc. It’s important to react to these events, as they are good opportunities to
consolidate the relationship with the client because these details show him that he
matters in the context of his provider’s activity.
In the same context of organizing the internal procedures and instruments,
internal marketing should be a must in every firm, and even more in services, as
services involve people, before anything. In this sense, there should be a constant
focus on identifying and satisfying the needs of the employees and also on developing
capabilities that enable them to provide the services correspondingly to the clients’
needs. The internal marketing actions may vary depending on the dimension of the
start-up, the personality of the entrepreneur, the specific of the business or other
aspects, but some „golden rules” are, in our opinion, the followings: acknowledging
employees’ merits and giving rewards (verbal, promotions etc.), coaching them with
the purpose of facilitating their professional and personal development, investing in
training them and stimulating them by the means of interesting tasks and so on. It is
also essential to have some well planned procedures, such as weekly or daily to do’s
lists, scheduled meetings, a clear distribution of tasks and work packages etc., because
all these aspects are vital for an effective functioning of the team. And whether a
services firm is functional or not in the inside can be easily noticed by clients and that
can definitely have a marketing influence, contributing in a positive or, on the
contrary, negative way to the overall marketing efforts of the start-up. Moreover, it’s
important to focus on these aspects during the start-up stage of the business because
it’s more difficult to redesign an existing, but non-functional internal system, as that
implies imposing new procedures to people which, on one hand, can be difficult to
adapt to and, on the other hand, can induce a syncope in the firm’s activity.
Start-up marketing: how to become a player on the B2B services market in Romania
77
5. Conclusions and further research interests
The research we conducted led us to the conclusion that start-up marketing is
neither a particular discipline, nor practice in the Romanian business environment. The
situation is not surprising, if we take into account that it doesn’t even exist a widely
known and accepted Romanian definition of start-ups.
Yet, the new paradigm determined by the EU membership makes it more
difficult for start-ups, including those in the B2B services market, to earn a position on
their relevant market, the first steps and marketing efforts being decisive in setting up
the business. Therefore, a particular marketing approach for start-ups should exist, as
in the case of the Western countries.
Unfortunately, Romanian entrepreneurs have only two alternatives: resorting
to general marketing resources and practitioners they can find inside the country or
trying to reach foreign start-up marketing resources. But the last alternative is rather
difficult and, in what concerns start-up marketing practitioners, almost impossible.
Consequently, we believe that it exists a high interest in the development of
start-up marketing as a discipline and practice in Romania, but we acknowledge the
fact that, in order to do so, further research should be conducted among Romanian
entrepreneurs. We believe that the process of development should, therefore, begin
with greater efforts in the literature and research area, the findings being afterwards
susceptible to convince marketing practitioners to focus on beginning to develop and
to deliver marketing consultancy and other services for start-ups.
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doc_974987170.pdf
The Romanian B2B services market tends to be more and more mature, as new players enter the country as a consequence of Romania's membership within the European Union. Therefore, it becomes more and more difficult for new and small businesses to be set up and become functional players on this market.
Management & Marketing (2009) Vol. 4, No.2, pp. 63-78.
START-UP MARKETING: HOW TO BECOME A PLAYER
ON THE B2B SERVICES MARKET IN ROMANIA
Nicoleta-Dorina RACOLTA-PAINA, Sorina-Diana MONE
Babes-Bolyai University, Cluj-Napoca
Abstract. The Romanian B2B services market tends to be more and more mature, as new
players enter the country as a consequence of Romania’s membership within the European
Union. Therefore, it becomes more and more difficult for new and small businesses to be set up
and become functional players on this market. In this context, it is worthwhile performing
marketing efforts from a special perspective that is a start-up marketing approach. The paper
presents an analysis of start-up marketing as a discipline and also as practice in the B2B
services market in Romania.
Keywords: start-up marketing, B2B services, Romania.
1. Introduction
There are many articles and studies regarding the concept of marketing and
therefore the way in which this approach can be adopted by companies. Among these
articles and studies there are several that come with important information about start-up
marketing. The aim of this article is to identify the situation of start-up marketing as a
particular discipline and as practice in the Romanian business environment. Our
question is if the Romanian entrepreneurs have access to information on start-up
marketing as an important resource in their efforts to set-up and develop a successful
business. We will refer to the B2B services market in Romania because we consider
this market to be among the most interesting and important ones.
2. Start-ups and entrepreneurship in Romania
2.1. The concept of start-up in Romania
Whenever conducting a research or developing an analysis, it is essential to
define the object of that research, especially when dealing with concepts that do not
comport with a widely known and accepted definition.
This is the case of the concept of start-up in Romania, where we found that
there is no unanimously accepted definition for it. The 31/1990 Law regarding the
commercial societies includes no information regarding the concept of start-up,
whereas the 346/2004 Law for stimulating the creation and development of the SMEs,
article six, paragraph three, refers to new-created enterprises stating that „in the case
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of a new-created enterprise, whose financial situations have not been approved, the
data regarding (…) are being determined during the financial exercise (…)”. This
means that a new created enterprise is an enterprise created during the year in cause,
as in Romania the financial year is the same with the calendar year.
When referring to start-ups in Romania, the most frequent aspect dealt with in
this context is the one regarding the sources of capital and the financing process. It is
not an unexpected situation, if we consider that the main obstacle when setting up a
business is the lack of capital.
Therefore, we found that the most common sources to define start-ups are
some financing programs that aim at supporting new businesses. In this context, we
can mention two programs financed by European funds. First, it’s the Sectorial
Operational Program Increase of Economic Competitiveness, with an operation called
„Support for innovative spin-offs and start-ups”, which defines a start-up as „a micro
or small enterprise (...) that has a history of maximum 3 years and maximum 20
employees”. Secondly, there is the National Program for Rural Development, which
defines start-up as a „microenterprise that was founded the year when submitting the
project or maximum three years before, but not having had any activity”. There is also
a governmental program called START, in which the start-up is considered to be a
new founded enterprise, with no further explanations.
Considering these findings, we came to the conclusion that there in no widely
accepted explanation for the concept of start-up in Romania and therefore, for
increased relevance and accuracy of our paper, we need to state our own definition of
the term in discussion. In this context, based on the fact that our paper is built on a
marketing approach, we considered it appropriate to define the start-up as the
enterprise that is new on the market and is trying to earn a position (not necessarily to
become a leader, but to become a functional player on its relevant market).
Although there are no statistics regarding start-ups in Romania (not existing a
general definition of the concept) and mainly from our perspective on the concept, we
consider it important to mention that there is a great number of new firms being
registered each year. For example, in the first semester of 2008, more that 76 thousand
firms were founded, among which more than 20 thousand with activities in commerce,
followed by constructions and technical and scientific activities (Romanian National
Trade Register Office, 2008). So, we can deduce that a great number of the new firms
conduct services activities, by comparison to production. A possible explanation could
be that to set up a business in production would necessitate a greater investment (in
technologies, equipment and so forth), whereas in services most often the main resource
is the human resource (the knowledge and competence to offer a particular service).
2.2. Romanian entrepreneurship in the 21
st
century
When we talk about small firms we talk about entrepreneurs, people who have
ideas, who are ready to take the necessary risks to get a firm off the ground and who
are willing to manage their company.
Start-up marketing: how to become a player on the B2B services market in Romania
65
In the case of the Romanian business environment, entrepreneurship (new
business formation) is quite a young concept, because before December 1989 the
private property in business was very limited. Therefore we talk about the first
entrepreneur in Romania, who is Dinu Patriciu (he opened the first private company
after the fall of the communist regime) (Money Express, 2008). In these days it is
quite easy to set up a company in Romania, as an entrepreneur. In fact, Romania is
ranked 47 out of 181 economies regarding the ease of doing business (World Bank,
2008). There are different ten components, named also as „stages of a business life”
that are measured in order to obtain this dimension named „ease of doing business”.
Among the components there is one under the heading of starting a business. Thus, to
start up a business in Romania requires “six procedures, takes 10 days and costs
3.57% GNI per capita” (World Bank, 2008). According to the same annual report, the
situation of our country is quite good by comparison to other countries from Central
and Eastern Europe (Hungary is ranked 27, Slovakia occupies the place 48, Bulgaria is
on the 81st place, the Czech Republic is ranked 89 and Poland as 145th).
According to the 1
st
Report on Entrepreneurial activities in Romania (Lafuente
and Driga, 2006), there are several facts regarding the entrepreneurs’ characteristics
and activities:
- The highest rate of new business creation is found for individuals between
26 and 40 years;
- It is important for entrepreneurs to come from a family with background in
entrepreneurship;
- The main motivations to be involved in entrepreneurial activities are very
diverse, such as: an option to take advantage of business opportunities, to improve the
quality of life and also social aspects.
There is an annual top of „100 start-ups” launched by one of the most well
known business newspapers on the Romanian market, Ziarul Financiar (first edition
October 2007). In fact, what is presented consists of 100 stories about Romanian
entrepreneurs that are successful business people, even if only some years before
having set up their company, they were students or employees.
We have analyzed these 100 starts-up (from both tops 2007 and 2008) and we
consider that the entrepreneurs can be classified in the following three main
categories:
1. „The young” – those who set up their company when they are young
(under 30 years) and their working experience is limited or does not even exist.
2. „The mature” – those who start their business after some years in a
company (5-7 years) and their working experience is good;
3. „The senior” – those who after a successful professional and managerial
career decided to start their own business.
We can also observe several reasons that influenced these entrepreneurs to set
up their business: an unsatisfied need (in fact the lack of supply on the Romanian
market for specific goods or services such as babies and children apparel and shoes;
personalized products; professional cleaning services and so on), poor quality services
on the part of the suppliers (in this case it was quite easy to become a supplier and to
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66
compete with them obtaining very good results), a great demand from the national
market for different foreign products (such as jewels, products for babies, quality
doors and so on), personal scientific knowledge (these entrepreneurs being former
employees of scientific research or engineering institutes), personal skills (such as
painting on glass), passion for different products or services or even hobbies
transformed into real businesses.
In 2007 Romania was one of the 42 countries that participated in the Global
Entrepreneurship Monitor (GEM) project (GEM, 2008). GEM is „a not-for-profit
academic research consortium that has as its goal making high quality international
research data on entrepreneurial activity readily available to as wide an audience as
possible” (http://www.gemconsortium.org). According to the report of GEM,
Romania was ranked 37 out of 42 countries regarding the established entrepreneurial
activity, for the year 2007! This low position defines the situation of entrepreneurship
in our country compared to others countries, situation that is not good at all. Thus, we
consider that any initiative aiming at sustaining entrepreneurship in Romania is
welcomed. Therefore, in 2008, Romania was one of the participants on the Global
Entrepreneurship Week, among other 77 countries. The Global Entrepreneurship
Week is a worldwide event that celebrates enterprises, the main aim being „to unleash
young people’s enterprising ideas and address some of society’s biggest issues, from
poverty reduction to climate change” (http://www.enterpriseweek.org.uk/about/
global_entrepreneurship_week). This event covers a wide range of activities, for
example: conferences, business contests, business project launches, round tables,
mentoring programs for entrepreneurs, workshops and so on. The results of this event
have not been published yet, but it is certain that this is a further step to improve the
environment for entrepreneurs.
So, we can conclude by stating that there are several signs that
entrepreneurship has started to gain ground in the Romanian environment.
3. Review on start-up marketing in Romania. A literature
and practice approach by comparison to Western markets
As there is no official and widely accepted definition for start-ups in Romania,
it is not an unexpected thing that marketing for start-ups is not considered to be a
particular type of marketing and therefore have its own instruments or resources.
Analyzing what we thought to be relevant resources, we found that neither are
start-up marketing practitioners (marketing firms or independent consultants), nor
start-up marketing literature (books, studies, articles). Still, there are resources (mainly
online) that can be useful for a start-up from a marketing point of view, even though it
rarely happens that these resources are organized in an integrated and consistent way,
so as to be a complete source of marketing know-how and information for a new
entrepreneur.
From our perspective, there are some websites that could be more than useful
for a business, mainly at its beginning, when all information is vital and when
accumulating knowledge from practice is more difficult than for an already functional
Start-up marketing: how to become a player on the B2B services market in Romania
67
business (because of the low activity and the lack of experience, contacts and so on).
We would mention in this context the following resources: www.startups.ro,
www.resurseimm.ro, www.esimplu.ro, www.focusimm.ro, www.basepoate.ro. For
example, esimplu.ro is an online portal for the SMEs communities (including start-ups)
that provides enterprises with very interesting facilities, including the possibility of
developing the firm’s own micro-portal or virtual shops within the website,
information on all important business events in the country and marketing instruments
(benchmarking tools, databases with firms to collaborate with).
Another aspect that we consider to be an important and really useful resource
for new businesses on the Romanian market consists of the ever growing sharing of
know-how and information coming from experienced practitioners, be it in marketing
activities (PR, advertising and so on), or in all kinds of businesses. In this context, it is
worthwhile mentioning blogs, which tend to be a more and more used platform by
practitioners for sharing knowledge. For example, Bogdan Nedelcu’s blog
(www.bogdannedelcu.com) is a very useful resource in what concerns online marketing
(search engine optimization for the start-up’s website, email marketing etc.). Also, there
is a very interesting e-group called „marketing lider” (http://groups.yahoo.com/group/
marketing_lider/) moderated by Drago? Dehelean, who also owns a website
(www.dragosdehelan.ro) in which he posts a great amount of his studies and articles.
What we consider to be important in this context is that these personal websites offer
the chance for new businesses (that more likely do not have the financial resources to
pay for these consultants’ services) to get in touch with some knowledge (although not
customized on their needs, but that is more than nothing, after all).
A totally different paradigm we could find on the Western markets (USA, UK
etc.), where start-up marketing is being individualized as a particular marketing branch,
in practice, as well as in literature. The most unusual resource we could find is a radio
called Startup Nation (available online on www.startupnation.com), where two brothers,
with years of entrepreneurship experience, moderate shows on start-up topics. Also, the
website has a marketing section with useful articles on start-up marketing.
Most important, we were able to identify start-up marketing firms, which offer
marketing services for new businesses, such as Startup Ramp and also consultants in
start-up marketing, such as Sean Ellis. A particular situation that can arise in the practice
of start-up marketing in Western countries is when a start-up engages the services of
consultants that are specialized in strategic planning for start-ups, who provide as
outputs a mission, a vision and a marketing plan and who often become eventually the
second chief executive officer of the firm (Chiagourins and Wansley, 2003).
Moreover, there is a significant amount of literature resources available on
this topic (books and articles) that provide the reader with useful insights on what
particular tools to implement and what aspects to follow in conducting marketing
activities when setting up his own business. Analyzing some of these resources, we
found that most of them are focused on really specific things that can be implemented
in practice by practically every business, as they refer to low-cost measures that
involve using at a maximum potential the existing resources available to the business.
A consistent part of these measures are related to the Internet and the online presence
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68
of the business (e-mail marketing, websites, online advertising, newsletters and so on)
which are affordable and can even be done with no financial resources allocation, if
the entrepreneur has some basic IT knowledge and the availability to do a deeper
research on that particular IT tool. Another important type of marketing advice for
start-ups that are available in foreign resources on this topic are connected to an
important process when setting up a business, process that in Romania is almost
nonexistent or is not considered important by early entrepreneurs. What we refer to is
the process of planning, which should be conducted before entering the market.
More exactly, the foreign resources we refer to insist on the importance of
thinking ahead aspects such as designing the offer, the pricing strategy, a networking
strategy and so forth, aspects that are vital for a successful business and that most
entrepreneurs fail to plan ahead and try to adapt after launching the business. So, it can
come to a situation in which the business becomes notorious on the market (having
invested in advertising, for example), but it does not have a vision of what it offers, how
it offers, which are the resources it can count on and, most important, which are the
objectives for each of it’s marketing actions. For example, when creating the website, do
you want it to be informative? Or do you want to sell by the means of it? You would like
to develop a newsletter, but how often would you consider delivering it? These are all
questions that need to be answered long before really performing the action.
Also, there are studies available in different sources (such as online
databases), that can be of great use for early entrepreneurs, as these studies are focused
on disseminating the results of different kinds of case studies. Consequently, the
papers present practical issues that have been noticed over time in the marketing
practice of start-ups and also general recommendations made on this basis. For
example, a study conducted during 24 months on start-up companies suggests eight
golden rules to lead the start-up marketing efforts: (1) Always begin with a vision, (2)
Design marketing plans to accommodate change, (3) Focus on your most valuable
asset-the brand name, (4) Learn to live with barriers, (5) Monitor, but don’t copy the
competition, (6) Outwardly focus the organization to stimulate innovation, (7) Vary
your marketing research program, (8) Hire the most well-rounded people with the
greatest sense of urgency (Chiagourins and Wansley, 2003).
So, we can conclude by mentioning that there still exists a significant gap
between start-up marketing practice and literature in Romania and the ones in Western
developed countries. And even though we can consider that, at a certain measure
(measure reduced by the lack of information, knowledge of a foreign language or
financial resources), Romanian entrepreneurs have access to foreign literature on start-
up marketing, in what concerns the access to start-up marketing practitioners, the
situation is even more problematic.
Our opinion is that Romanian marketing practitioners and editors should
consider highly on moving towards the development of start-up marketing as a
discipline and practice. We agree with the fact that each type of marketing knowledge
can be useful for a business at every stage of its existence (including the start-up stage)
because it’s more than nothing, but there are arguments to sustain the necessity of
start-up marketing as a particular branch of marketing, even in Romania. The
Start-up marketing: how to become a player on the B2B services market in Romania
69
Romanian markets tend to be more mature and it becomes more difficult to penetrate
them so a start-up must perform well planned and efficient marketing actions to
become functional. Therefore, it is obvious that the services of a marketing firm must
be customized for start-ups not only in terms of prices (which happens today, but as a
common sense approach, not as part of a structured service portfolio), but also in
terms of understanding their particular needs, resources, capabilities and fulfilling
them in an adequate way.
4. Case study
The case study of this paper is about start-ups in the B2B services sector on
the Romanian market. We chose this topic because we consider that both elements,
start-ups (as part of SMEs) and the services sector, are topics of great actuality at the
level of the EU 27 and therefore at the level of Romania.
It is well known that services are considered crucial to the European Internal
Market. This is due to their contribution to the economy, „between 60 and 70% of
economic activity in the European Union of 25 Member States, and a similar (and
rising) proportion of overall employment” (European Commission, 2008). If we
consider Romania, services occupy an increasingly important role even if there still is
a big gap between our country and EU 25 (or even EU 27). Thus, in Romania the
share of services in the labor force was 34.6 % in 2002 and 36.9% in 2005 compared
to 68.9% in 2002 and 70.2% in 2005 in the EU 25 (EC, 2008). We mention here that
in Romania, the services sector has gained a growing share within the gross domestic
product (GDP). Thus, the contribution of the services sector to Romanian GDP has
followed a positive trend, growing from in 32.3 % in 1990 to 56.85 % in 1999 and
61.11 % in 2007 (the other components of the GDP being agriculture, industry and
construction) (Romania-Central.com, 2008).
4.1. Start-ups in the services field
The concept of services has many and various definitions, in fact because of
its complexity „it is hard to come up with a comprehensive definition that captures the
diversity and attributes of all of them” (Cook et al., 1999 quoted by Hollye, 2007). As
a direct way to define services, it is said that „services are seen as intangible and
heterogeneous; production and consumption occurs simultaneously” (Hollye, 2007).
Analyzing the specialized literature regarding start-ups, we did not find a clear
distinction between start-ups in services and start-ups in the production sector.
Nevertheless, we consider that the differences between services and production
companies are valid from the very beginning (the setting up moment). We emphasize
here the main characteristics of services (Vorzsak, coord., 2006): intangibility,
inseparability, heterogeneity, perish ability and lack of property. Because of these
characteristics the activity of services companies is characterized by several specific
elements: due to the intangibility of their offer, trust plays an important role, in fact
the whole relationship between company and customers is very important (there is a
Management & Marketing
70
long-term approach and a win-win situation); because of the inseparability, the human
resource has a crucial role (without the direct implication of the employees of the
company the services do not appear, of course with some exceptions: vending
machines and automatic sellers).
As we’ve mentioned before, there are several websites that contain basic
information on why and how to get a service business started. Here are some of the
most interesting ideas related to start-ups in the services fields:
? „Selling services knows no boundaries--anyone with a need or desire to
earn extra money, work from home, or start and operate a full-time business can sell a
service, regardless of age, business experience, education or current financial
resources” (Stephenson, 2008);
? „Though services margins are definitely lower than those of products, one
of the nice things about selling services is that it’s easier to manage head-count. For
example if you’re trying to figure out whether to hire/keep someone, trying to figure
out whether they’d be accretive is simpler to figure out in the services business. Not
easy (particularly in this economy), but easier” (Shah, 2008);
? There are „two of the basic issues in building your consulting practice: 1)
the business you are in and 2) your business goals” (http://www.morebusiness.com/
getting_ started/primer/v3n10.brc, 2007).
When we talk about start-ups in Romania, we should present here several
legislative initiatives that support them. So, there is the Governmental Decision (No
166/2003) regarding tax facilities for students who want to start their business
(reduction on fees and taxes for students to help them create a business) (EC, 2007).
In fact it was the first legislative act that encouraged young population to start up a
business. The results were quite weak, if we compare the number of registered
companies in the year 2006 (in conformity with this Governmental Decision) – 13735
(Romanian National Trade Register Office, 2006) and the number of students in
Romania – 241716 (supported by the State) (Ministry of Education, Research and
Youth, 2008).
Then, there is another law that encourages start-ups in Romania: Law no.
359/2004. It simplifies the procedure of registration and authorization of physical
entity, family associations and legal entity (EC, 2007).
There are also structural funds destined to support Romanian SMEs
(http://www.fonduri-structurale.ro/detaliu.aspx?eID=2606&t=Stiri). Only in 2008 five
programs were launched under the name: The program for development and
modernization of the activities of commercializing products and services on the
market, The program for supporting the development of small and medium sized
enterprises by funds in the limit of paid sums for the reinvested gross profit, The multi
annual program for the period 2008-2011 for supporting the businesses transfer, The
Program for organizing the Fair of Small and Medium Sized Enterprises –TIMM 2008
and the Program for organizing the National Co-operative Fair (Gagiu, 2008).
In the context of start-ups in the services field, our opinion is that there are
several particularities of this type of companies:
Start-up marketing: how to become a player on the B2B services market in Romania
71
? The start-up capital is smaller than in the case of production companies,
because it is not necessary to make great investments in technologies and other
expensive assets (such as land, warehouses and so on);
? The every day expenses of the company can be lower because most of the
expenses are related to overheads and not to raw materials;
? The number of necessary employees can be lower than in the case of
production companies because of the nature of work in the services field.
? Considering these findings, we came to the conclusion that there are
several specific elements at the level of start-ups in the services field. In the case of
Romania, there are legislative initiatives in order to encourage the start-ups.
4.2. Marketing approach within start-ups in B2B services
4.2.1. Strategic marketing approach
We consider that one of the golden rules of marketing is that „all
organizations need to have a longer-term (strategic) marketing view as well as a
short-term (tactical) marketing operation” (Mc Donald, 2008, p. 13). But, „many
companies operate without formal plans”, irrespective of the type of companies (large
and small, new and mature) (Armstrong and Kotler, 2001, p. 47). The same authors
mention an explanation for the lack of formal plans within many companies: „in new
companies, managers are sometimes so busy they have no time for planning” and „in
small companies, managers sometimes think that only large corporations need formal
planning”. We consider that nowadays companies cannot compete successfully on the
market without planning, irrespective of their types. In the case of start-ups from the
Romanian market, the corporate planning process and therefore the marketing
planning play an even more important role now that we have just started the third year
as a member of the European Union. In fact, the accession of Romania to the EU has
came with several new characteristics for the Romanian business environment, such
as: the entrance of new powerful foreign competitors, the adoption of several EU
directives, the migration of fully-qualified Romanian workforce to the EU countries,
the liberalization of different markets as automobile, natural gas and so on. The last
months of 2008 came with a severe financial crisis and hence the start of a worldwide
economic recession. Of course, this difficult situation has also affected our country
and therefore start-ups have been faced with more difficult business conditions.
Therefore, strategic planning has an even more important role in the case of start-ups
from Romania. Through strategic planning we understand „the process of developing
and maintaining a strategic fit between the organization’s goals and capabilities and
its changing environment and marketing opportunities” (Kotler, Armstrong, 2001, p.
47). According to the same authors, strategic planning relies on „defining a clear
company mission, setting supporting company objectives, designing a sound business
portfolio, and coordinating functional strategies (such as production, marketing and
so on)”. We consider that, there are several specific elements of strategic planning in
the case of start-ups in general and B2B services start-ups in particular.
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72
a) The company’s mission statement and the company’s objectives
After some primary research based on observation, we conclude that in most
start-ups from Romania, the company’s mission does not exist (formal or informal)
but the company’s objectives, especially the short-term ones, are well defined. Our
explanation is that the company’s mission, as „brief statements about the
organization’s role or contribution, business definition, distinctive competences, and
indications for the future (i.e. what the firm will do, might do, will never do)”
(McDonald, 2008, p. 30) is quite abstract and intangible for most of the entrepreneurs
or managers (those who should define the company mission). In contradiction, the
objectives, mostly expressed as financial ones, are tangible and therefore easily to
define. But, a company without the mission has no long-term identity and also has no
ground for corporate culture, which for a company is „what personality is for
individuals” (Schein, 2004, p. 8). It is important to remember that the mission-
statement should be market-oriented, thus it defines the business in terms of satisfying
customer needs (Armstrong and Kotler, 2001, p. 49). For example, in the case of a
B2B services start-up, a market-oriented mission as opposed to product-oriented
mission can be defined as: The mission of our company is to fulfill the customer’s need
with quality and a sense of reciprocal respect, warmth and long term relationships.
Therefore, our recommendation for B2B services start-ups is to carefully
define their mission, keeping in mind that the company’s mission is part of corporate
planning and therefore will be part of the company on the long-term. The mission
must truly represent the entrepreneurs and the employees, because if they do not
believe in it, the mission will be only a nice statement on an official document and
also on the main page of the company’s website.
b) The business portfolio
Usually, the business portfolio – the collection of services that are offered by
B2B services companies – is quite small-sized in the case of start-ups. Therefore, it is
important to remember „the best business portfolio is the one that best fits the
company’s strengths and weaknesses to opportunities in the environment” (Armstrong
and Kotler, 2001, p. 53). Thus, in defining the business portfolio entrepreneurs should
start with an internal analysis in order to identify company’s strengths and weaknesses
and with an external analysis to establish the opportunities in the environment. Here,
we talk about market research that is compulsory for start-ups from a marketing
perspective. Of course, the market research process in the case of start-ups is more
informal and less structured than in the case of mature companies. Moreover, there are
some specific methods and instruments that can be used by the managers of start-ups
in order to obtain good marketing information, such as: observation, collecting ads
from local media, routine visits to competitors, informal surveys or simple
experiments (Armstrong and Kotler, 2001, pp. 156-157). In the case of B2B service
start-ups we consider that the analysis of the web page of the main competitors is a
good way to start marketing research. Then, there are also different approaches, such
as: making phone-calls, sending e-mails to ask information or visiting the main
competitors as potential clients.
Start-up marketing: how to become a player on the B2B services market in Romania
73
c) Functional strategies
We consider that in the case of start-ups it is unrealistic to talk about
functional strategies. If a start-up has adopted a corporate strategy there are also
several strategic dimensions of all company’s departments, such as human resources,
marketing, finance and so on.
For many of the entrepreneurs, marketing approach means marketing plan,
which is not bad if they understand that the marketing plan is the result of marketing
planning, and it is „about marketing objectives (what you want to achieve) and
marketing strategies (how you plan to achieve your marketing objectives)”
(McDonald, 2008, p. 11). Moreover, the marketing plan is part of the corporate
strategic plan. But start-up marketing does not mean only marketing plans! Talking
about marketing services, the specialist remarks „they are less tangible than products
and more likely to vary in quality, depending on the particular person or people
providing them” (Keller, 2008, pp. 15-16).
We consider that there are several important marketing decisions that should be
made by the entrepreneurs or managers of start-ups, such as: choosing and developing
the name of the company, market segmentation, target market selection and positioning.
Of course, the list is not the final one, even the definition of the elements of marketing
mix, known as the 7 Ps: product, price, place, promotion, people, process and psychical
evidence completed by customer service (Christopher, Payne, Ballantyne, 2002, p. 11;
Br?tianu, 2006, p. 164) having also strategic dimensions.
1. The naming/branding
In the case of start-ups it is important to understand that one of the first and
main identification elements is the company’s name. In fact, through company’s name
we understand several elements as: name, letters design, size and color, symbol and
logo, all of these being seen as brand elements (Keller, 2008, p. 3). Therefore, one of
the long-term objectives of the entrepreneurs or managers of start-ups is to transform
these brand elements in a Brand, „a certain amount of awareness, reputation,
prominence, and so on in the marketplace” (Keller, 2008, p. 2). And since we talk
about B2B services start-ups, the importance of this long-term objective is much
greater because “business-to-business branding creates a positive image and
reputation for the company as a whole. (…) A strong business-to-business brand can
(…) provide a strong competitive advantage” (Keller, 2008, pp. 11-12.) On the other
hand, if we refer to service companies, there are some specific elements regarding the
branding of a service (Keller, 2008, p. 16):
branding is seen as a way to address intangibility and variability problems that
characterize service companies;
? brand symbols can help to make the abstract nature of services more
concrete;
? brands can help to identify and provide meaning to the different services
provided by a company.
For example, the name of a potential B2B service company that provides
management consulting services can be: KP Smart Management Consulting. First,
within the company’s web page and published materials there will be an explanation
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of the name: K from knowledge, P from providing, Smart – for intelligent and
Management consulting – the main domain of the company.
The right way to manage brands is to adopt a strategic brand management
process that has four main steps: identifying and establishing brand positioning,
planning and implementing brand marketing programs, measuring and interpreting
brand performance and growing and sustaining brand equity (Keller, 2008, 38). But in
the case of start-up marketing approach it is unrealistic to state that companies must
adopt this process. In fact, entrepreneurs or managers can adopt the first step because
the brand positioning is a projection of what and where that brand would like to be in
the following 3-5 years. It is of paramount importance to do this because „without
knowing your destination, no road will get you there”.
2. Segmentation – targeting – positioning
Talking about B2B services start-ups, there is a real need to segment the
market in order to choose the target market segments. Therefore, every company
should position itself, with the help of the marketing mix elements. For example, in
the case of a potential B2B services company that offers management consulting
services, the main segments of the market can be: non-governmental organizations,
small and medium enterprises, state institutions and organizations, multinational
companies. Hence, the company can target the first two market segments mentioned
first. The positioning of the company can have the following characteristics: a
specialized offer that is composed by management consulting services related to
management styles, managerial decision-making process and change management.
The tariffs for these services are defined after the first discussion with the potential
customer (the first half an hour discussion is free and for the following discussion
there is a standard fee). Regarding the offer, we consider that its dimensions must be
adapted to the size of the start-up; a large offer can be seen as unprofessional in the
case of a start-up with a small number of employees (as it happens usually). There are
also several elements that define the company’s positioning.
4.2.2. Operational marketing approach
After having designed the main marketing guidelines that form the strategic
marketing approach, it comes to implementing practical measures that constitute the
operational approach.
In this context, the first step would be that of creating a relevant visual identity
to communicate the differentiation, the mission, the vision and so on. In our view, a
minimum set of visual identity elements should include: a logo, visit cards, prints
(brochures, posters, roll ups or banners, depending on the target) and a website is a
must. If the marketing budget allows it, we would suggest also some physical
evidence, such as cups of coffee, pencils or a calendar with the firm’s logo that should
be placed in the office.
Another important aspect refers to a certain etiquette that should represent the
firm and its people and which should consist of some dressing and speaking patterns.
Start-up marketing: how to become a player on the B2B services market in Romania
75
As services involve working directly with clients, the looks and the approach are
important. That is why an adequate outfit should be a must when meeting clients or
when participating at conferences, round tables or other kinds of relevant events.
A significant amount of all start-up marketing efforts should be directed, from
our point of view, towards creating and maintaining a relevant and visible online
presence of the firm. A first step in this context would be that of creating a website
and continuously optimizing it in order to reach the target effectively. In the services
field, we believe that the purpose of the website should be that of presenting the firm,
meaning the team and its capabilities, experience and so on. Therefore, the website
should be really simple and human-oriented, meaning that we would expect to see
pictures of the people and a few words about and from each of the team members.
Besides the website, there should be an implication in what means relevant
online communities. A blog is a useful tool in this context. We would suggest a
thematic blog that has to do with the business itself, not a personal blog of a team
member because in the first case, the impact compared to the effort is more consistent
than in the case of a personal blog. Reading other relevant blogs and making
comments to the posts is also a useful action because it gives you the chance to get
known and to network within that particular business community. Forums are also
useful for this purpose and, moreover, they are a way of keeping in touch with relevant
news and also a source of knowledge. Online networking could also be done by the
means of professional platforms, such as facebook.com, but these are rather for
individuals that for businesses. Still, in the services fields, the social capital of each of
the team members can, in some cases, be decisive for the business, as a whole.
Although it rarely happens that a firm in services can gain costumers from the
Internet, a relevant online presence contributes significantly to the development and
consolidation of the brand notoriety. That is why we would also suggest subscribing
the firm within online business catalogues or other websites that advertise. Finally, the
online marketing actions should also consist of the creation and the delivery of a
newsletter with information from the business field and also regarding the firm itself.
The newsletter should be delivered to all important collaborators, clients, suppliers
and other entities with whom the firms interacts, as it is the most effective way of
maintain a constant relationship with all these entities.
All these potential online marketing actions have the advantage of being almost
completely with no financial efforts and can be done in-house, but performing them
involves a lot of time, that is why a careful analysis should be conducted before deciding
the online marketing mix in order to perform the best benefits versus efforts mix.
The core of all marketing efforts of a start-up in services is, from our
perspective, networking. Networking contributes to the purpose of becoming
notorious on the market and, most importantly, it’s the aspect that provides the
services firms with an important amount of their customers, mainly by the means of
recommendations. Although it might seem that making contacts is something that just
happens as the firms interacts with more and more entities, networking is something
that should be managed properly, we believe. In this sense, our opinion is that it
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76
should be developed a networking strategy that should include participating at all
relevant events, connecting with relevant people, sharing contact details and, most
vital, maintaining the relationship developed. For this, there should be a permanent
process of connecting and reconnecting with each of the relevant contacts, using the
telephone, the Internet, organizing events and inviting them, sending holiday cards,
delivering newsletters, keeping in touch with everything that occurs to them.
The operational marketing approach of a start-up should also include, in our
opinion, an internal dimension that should focus on setting up some processes and
instruments that are implemented internally, inside the organization, but which
contribute to the overall marketing efforts of the firm. In this context, we believe that a
competition database is of major importance in today’s competitive markets. This
database should include the major competitors and be updated with every relevant
thing that happens on the market and that can be associated with one of the
competitors. Also, a client database could be very useful in order to track the
relationship with each client from the first contact, to signing the contract and
delivering the service. Special fields that should appear in this database could be the
firm’s or the manager’s anniversary, major accomplishments of the client in its
activity etc. It’s important to react to these events, as they are good opportunities to
consolidate the relationship with the client because these details show him that he
matters in the context of his provider’s activity.
In the same context of organizing the internal procedures and instruments,
internal marketing should be a must in every firm, and even more in services, as
services involve people, before anything. In this sense, there should be a constant
focus on identifying and satisfying the needs of the employees and also on developing
capabilities that enable them to provide the services correspondingly to the clients’
needs. The internal marketing actions may vary depending on the dimension of the
start-up, the personality of the entrepreneur, the specific of the business or other
aspects, but some „golden rules” are, in our opinion, the followings: acknowledging
employees’ merits and giving rewards (verbal, promotions etc.), coaching them with
the purpose of facilitating their professional and personal development, investing in
training them and stimulating them by the means of interesting tasks and so on. It is
also essential to have some well planned procedures, such as weekly or daily to do’s
lists, scheduled meetings, a clear distribution of tasks and work packages etc., because
all these aspects are vital for an effective functioning of the team. And whether a
services firm is functional or not in the inside can be easily noticed by clients and that
can definitely have a marketing influence, contributing in a positive or, on the
contrary, negative way to the overall marketing efforts of the start-up. Moreover, it’s
important to focus on these aspects during the start-up stage of the business because
it’s more difficult to redesign an existing, but non-functional internal system, as that
implies imposing new procedures to people which, on one hand, can be difficult to
adapt to and, on the other hand, can induce a syncope in the firm’s activity.
Start-up marketing: how to become a player on the B2B services market in Romania
77
5. Conclusions and further research interests
The research we conducted led us to the conclusion that start-up marketing is
neither a particular discipline, nor practice in the Romanian business environment. The
situation is not surprising, if we take into account that it doesn’t even exist a widely
known and accepted Romanian definition of start-ups.
Yet, the new paradigm determined by the EU membership makes it more
difficult for start-ups, including those in the B2B services market, to earn a position on
their relevant market, the first steps and marketing efforts being decisive in setting up
the business. Therefore, a particular marketing approach for start-ups should exist, as
in the case of the Western countries.
Unfortunately, Romanian entrepreneurs have only two alternatives: resorting
to general marketing resources and practitioners they can find inside the country or
trying to reach foreign start-up marketing resources. But the last alternative is rather
difficult and, in what concerns start-up marketing practitioners, almost impossible.
Consequently, we believe that it exists a high interest in the development of
start-up marketing as a discipline and practice in Romania, but we acknowledge the
fact that, in order to do so, further research should be conducted among Romanian
entrepreneurs. We believe that the process of development should, therefore, begin
with greater efforts in the literature and research area, the findings being afterwards
susceptible to convince marketing practitioners to focus on beginning to develop and
to deliver marketing consultancy and other services for start-ups.
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