International s.r.l.

Via F.lli Cervi, 36

Fraz.Cantalupo
20023 - Cerro Maggiore (MI) – Italia
Tel: +39.349.818.4792
Cell: +385.913.496.318
Company e-mail: pugnaleinternational@libero.it

Pugnale International s.r.l.

A Know-how Company
BROSHURE

June 2012

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 Contents

1. INTRODUCTION

1.1. Aims of a Know-how company

1.2. About Pugnale s.r.l.
1.3. Pugnale’s s.r.l. Product Lines
1.4. Product Innovation Proposals

2. MARKETING STATEMENTS

2.1. The New Marketing Philosophy

2.2. Pugnale International as a Know-how Company
2.3. The Competition Factors of our Company – The Seven Cs
2.4. Knowledge Diffusion
2.5. Contacts’ Network
2.6. How to Catch Ideas for New Businesses in the Network
2.7. Communication
2.8. Concreteness
2.9. Client’s Choice
2.10. The Culture of Competence
2.11. Reflections on Relationships
2.12. Social Responsibility
2.13. Developing and Pricing New Products
2.14. The Marketing Max
2.15. Company’s Planning and Policy
2.16. Market Statistics
2.17. Market Analysis
2.18. Robotics
2.19 Energy Trigeneration or District Energy Systems, Providence Up To 50% Greater
System Efficiency, and Fuel Savings over Typical Cogeneration

3. HUMAN RESOURCES STATEMENTS

4. TECHICAL STATEMENTS

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 INTRODUCTION

1.1. AIMS
This part of our business plan describes the Pugnale International a company having the scope of
keeping part of the staff, technology, the logo, and part of the line of Pugnale s.r.l. for moving
toward innovative and more global goals as Know-how Company.
In other words we have acquired from Pugnale s.r.l the technology of the whole freezing system,
improved the technology of medical sterilization, glass/PET phials, metal cans, glass/PET bottles,
and likewise, and added the technology of energy trigeneration, and robotized solutions.
While the freezing technology and related products are immediately available, the dry heat
sterilization technology need to be improved and updated adding the technology of irradiation, and
high pressure, and/or moist heat sterilization.
Dry heat can be used to sterilize items, but as the heat takes much longer to be transferred to the
organism, both the time and the temperature must usually be increased, unless forced ventilation of
the hot air is used. The standard setting for a hot air oven is at least two hours at 160 °C (320 °F). A
rapid method heats air to 190 °C (374 °F) for 6 minutes for unwrapped objects and 12 minutes for
wrapped objects. Dry heat has the advantage that it can be used on powder and other heat-stable
items, which are adversely affected by steam (for instance, it does not cause rusting of steel
objects).
Dry sterilization process (DSP) uses hydrogen peroxide at a concentration of 30-35% under low
pressure conditions. This process achieves bacterial reduction of 10−6...10−8. The complete process
cycle time is just 6 seconds, and the surface temperature is increased only 10-15 °C (18 to 27 °F).
Originally designed for the sterilization of plastic bottles in the beverage industry, because of the
high germ reduction and the slight temperature increase the dry sterilization process is also useful for
medical and pharmaceutical applications
Furtherly, Pugnale International has put together a series of very small technologic companies for
generating synergies able to reach and penetrate the most sophisticated markets.
In such a new version we can compete now on almost the most exigent markets.

1.2. ABOUT PGNUALE INTERNATIONAL s.r.l.

- ABOUT PUGNALE s.r.l.

Pugnale s.r.l. a company born some forty years ago from the geniality of its founder (Mr. Bruno
Pugnale), who invented a series of technologically advanced machineries and systems, were able to

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innovate the market of cooling/freezing, cooking, pasteurizing, and pollution protecting food and
beverages.
After a declining crisis, probably due to a lack of management and an excess of technology, the
company was acquired a couple of years ago through a management buy-out, who has tried to save
the company by its disastrous debit and lack of liquidity.

Pugnale s.r.l. was a company operating in the construction facilities of pharmaceutical, and food
industry, which operated in the market since 1982. It worked in the International market, directly or
through important companies as OEM or agents. It has installed plants around the world, exporting
approximately 70% of machineries manufactured in recent years, collecting everywhere consensus
for their high quality degree. It has made so far more than 600 facilities.
Its manufacturing plant of approximately 3,100 square meters is on a fenced ground of about 5.000
square meters. It has two patents still pending and has developed a wide range of innovative
installations with high technological contents.
It awarded a prize of 50.000€ by the Chamber of Commerce of Milan, for the “prize for technical
innovation in SMEs”.

Pugnale International Organizational Structure

The Pugnale International Company currently can rely on a total of 20 employees and it adopts an
organizational structure functional through its participated companies: a) Emergency Solutions; b)
MRInox; c) P&PItalia
Furthermore the company uses advice continuous trade flows, as well as advice staple such as
support, craftsmen, etc…

Areas of activity Number of employees

R&D 3
Marketing 2
Sales 3
Incoming inspection and outgoing quality 1
Purchasing and warehousing 1
Software applications 1
Electricians 1
Turner/rotation 4
Plumber 1
Joiner 1
Technical assistance 1
General workers 1
Total direct employees 20
Cleaning service 1
Technical consultants 1
Administrative advice 1
Total indirect employees 3
Agents 5

100

80

60 Direct
Indirect
40
Agents
20

0
1° Trim. 2° Trim. 3° Trim. 4° Trim.

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 Pugnale International s.r.l. Product Line
(a few sample pictures)

1.4 OUR PRODUCT LINES

The standard Systems can be highlighted in the following list:

A) Permaculture or Permanent Sustainable Cultures

B) Food Line Chain
C) Medical Emergency Solutions
D) Renewable Energy Chain
E) Robotics
F) Internal Transport
G) Packaging

All of them are included in the formula of turn-key manufacturing plants and solutions.

Freezing Cabinet APC Type

Armadi di surgelazione tipo APC

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 Freezing Cabinet APF Type
Armadi di surgelazione tipo APF

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7
8
● Spiral tunnel and coking vessel
Spirali e tunnel a vassoi di cottura

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 Fields of Application of our Products

- Freezing
- Slaughter of temperature
- Corner
- Pasteurization
- Leavening
- Protection from pollution
- Sterilization for food applications
- Sterilization for pharmaceutical applications.

Pugnale has the experience of drawing and manufacturing a wide range of facilities with few
technological limits, and it is certainly equipped better or likewise its competitors for a heritage
technically more evolved.

Global markets today require high specialization and a focus “manic” to customer needs; therefore
to Pugnale International strategy we have dedicated a careful analysis on what we think the core
business should be, in order to focus on it our attention..

Please considering that our strategy emerges from a thorough examination of the market to be
carried out together with the new members, with a thorough search of marketing and an in-depth
analysis of benchmarking the market global supply.

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PUGNALE PATENT CERTIFICATE

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 MARKETING STATEMENTS

2.1 THE NEW PHILOSOPHY OF OUR MARKETING

The start-up of Pugnale International is due to the will of the management to innovate the old
company, developing new products, a new corporate philosophy, and getting fresh money to
operate without the weight of the past debits.
This business plan forecasts this new corporate deal, moving from the following principles:
- keep the high technology of old products;
- combine them in new applications in order to construct turn-key systems;
- changing the corporate mentality into a know-how company.
The idea moves from the following concepts:
- being only a systems manufacturer, for selling products the company is largely dependent by
external events, which cannot be managed and steered by the company itself;
- being system manufacturer the company has to compete with international competitors who
can have lower costs due to their lower labour and overheads cost.

Therefore, becoming a know-how company, it can work its way up along the process of ideating
from scratch, and manufacturing turn-key plants, which move from gathering fresh food and
transform it into final consumer products.
The turn-key plant shall be cared from the starting idea up to the delivery of operating capacity of
its whole staff, passing through such following preliminary phases:
- leads identification
- prospects identification
- knowledge diffusion of corporate business amongst prospects
- generating a contact networking
- effective communication
- concretization
- customer identification and selection
- generating a culture competence
- strengthening relationships
- relationships management
- application of marketing max principles.

Once the company has a contact with a prospect, it will be transformed into a client through the
following steps:
- identification of the plant location
- preparation of a pre-study plan
- acquisition of administrative permissions
- preparation of a preliminary business plan for the client company
- definition of technical specifications
- definition of funding requirements
- definition of training requirements
- preparation of an executive business plan
- definition and signature of the final agreement with the client.

This radical innovation involves changing neither products nor technology, but just the
approach with prospects or clients.

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2.2. PUGNALE INTERNATIONAL AS KNOW-HOW COMPANY

This chapter concerns about how know-how companies operate. The first question therefore we
pose is what the meaning of know-how company is.
Karl Erik Sveiby (Sveiby and Lloyd, 1990), who has coined the term in the book
Kunskapsfoeretaeg, states that the main characteristics of such companies are:

- non standardization
- creativity
- deep individuality
- complex resolution of problems.

Now, not all know-how companies are exclusively dedicated to problem solving. Many of them
have clients which, further to a lack of know-how, need goods or services. In effect many
informatics company supply a combination of know-how (consulting), goods (hardware and
software), and services (installation, after sales service). Examples of other possible combinations
are several, and this is a reason for which it is difficult to define what effectively a know-how
company is, and what really it sales.
Many people have reacted negatively to the concept of Know-how Company just because the term
is not deeply defined. Others estimate it is a discriminatory concept in front of other companies, and
their objections sound more or less as follows: ‘Companies need know-how for managing any kind
of business. Why, then, a few companies should be defined as know-how companies, while other
should not?’
We can answer that certainly a good dose of know-how is needed for managing any kind of
business – an hotel, an air company, or a restaurant – for taking a few examples from the business
of services. Nevertheless it is not for a lack of know-how that clients of service companies, as those
aforementioned, goes to an hotel, buy air tickets or consume a nice dinner.

Know how is requested to both buyer and seller.

A know-how company is characterized by the fact that its clients address their attention to it just for
a lack of understanding (know-how) needed for solving their problems. That is the difference with a
service company, where clients need something different, i.e. transports, administrative assistance,
time saving, etc. To all whom do not like the terms ‘Know-how Company’ usually we say that what
we indicate is an appropriated marketing for companies selling complex goods and/or services, and
rich of intrinsic know-how. Typical of such companies is that much more know how is needed both
for selling/buying and exploit/use their offer, and that companies have a long lasting relation with
own clients.

2.3. THE COMPETITION FACTORS OF Pugnale International – THE SEVEN CS.

We are convinced that a know-how company is successful when managers can create trust in the
company’s ability to solve client’s problem. Therefore, product rich with know-how cannot be sold
as pure goods or services with the help of a traditional selling service, or a number of agents. On the
contrary, it is the responsibility of technicians themselves to demonstrate their competence and
generate confidence in their abilities.
For selling know-how you need to invert many traditional concepts in your Marketing Department,
and in this chapter we will indicate opposite ideas and methods.
The main consequence of this statement is that Marketing shall involve all employees. Certainly the
main tasks shall be responsibility of Management, technicians, and professionals of the company,
but all employees can be involved in the corporate business.
Therefore, the competition factors of a know-how company can be listed as follows:

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1) Knowledge diffusion
Since Know how company has clients up-to-dated and exigent who do not like to be influenced, the
company can acquire client’s confidence presenting itself as expert and innovative in its sector.

2) Contact network
Abstract products are bought on a reciprocal confidence basis, and often following a
recommendation of someone in whom client is trusted. Through an accurately selected contact
network the company can be recommended by sector opinion leaders.

3) Communication
A know-how company shall inform market about its business. Such external communication has as
starting point personal meetings more than mass initiatives.

4) Concreteness
Since the offer is abstract, company will give clients concrete connections which will help him to
convince himself about the capacity of the company to support him and how.

5) Client’s choice
The development of a know-how company is strictly connected with the type of client. For this
reason the company chooses its client, and does not wait to be chosen.

6) Clients’ knowledge
In order to create useful offer to a client, the company shall have a deep knowledge of both market
and single clients.

7) The culture of competence

Instead of entering the market, the company can attract its client. Competence can be compared to a
magnet, which attracts clients. A wise buyer personally visit most competent companies: the
company, therefore, should create a culture which tends toward a constant development of
competence. Now, someone could object that the first factor of competence is the one of developing
its own services with a high quality grade, and naturally that is so. These seven Cs are to help for
doing marketing and selling company know-how. As to do that it’s a further argument.

Now, in order to indicate traditional marketing opposite ideas and methods, we realize that the
seven Cs factors can be view as opposite methods to traditional marketing concepts.
Therefore, listing on the right traditional marketing, on the left we get the know-how factors:

Advertising → Knowledge diffusion

Public Relations → Contact network
Mass communications → Selective communications
Abstraction
Meta-product → Concreteness
Order receiving → Client choice
Quantitative Mtg. Research → Knowledge of clients
Product development → Culture of competence

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2.4. KNOWLEDGE DIFFUSION

To buy from a know-how company is more difficult than to buy blindly from a closed box.
Not only customer has to decide purchasing without having verified the content of the box, but
often he cannot even imagine what is enclosed in the box. In fact, even if the seller company opens
the box inside there is not too much to be examined. Service arises only after the client has decided
to buy it. For this reason client can never be sure about what he really has purchased.
Furtherly, he is less certain of what the final result of his acquisition will be. In order to help
its client to buy its services, a know-how company has to give knowledge. Customers shall receive
information on those business sectors, corporation and corporate employees in order to:
- understand the opportunities offered by the market
- choose the appropriate partner/supplier
- choose the most appropriate offer
- cooperate and contribute to worth the services
- assimilate the goals that service can get.

For these reasons the diffusion of knowledge is one of the basic concepts of marketing of a know-
how company, and competition of the company is strictly connected to its capacity of diffusing
knowledge both externally and internally.
In this chapter we analyze the importance of diffusing knowledge externally, and how to perform it.
Any know-how company has two fields on which to work in diffusing knowledge: the company
itself, and the field of activity.
Who does not diffuse information on its field of activity does not consider that before or after client
needs to have an opinion on the different opportunities he has received, before going searching
suppliers. One of Know-how Company’s dilemmas is just the fact that often they offer solutions
completely unknown to the surrounding world. The consequence is that market has not even the
competence needs to comprehend its own needs.
Diffusing information on its own business, the company can help client to understand his own need
and to desire to find out a solution. Only then the client can step on, i.e. to choose its supplier.
Furtherly, how can a client choose amongst different know-how companies? Now he needs
information on the different bidders, nevertheless the official information he can get does not help
him so much. He has no product to be confronted, and the size or the turnover of the know-how
company is not important. Nevertheless the opinion of the client about suppliers is extremely
important. Just moving from that, he can appraise the capacity of different bidders to supply the
service he needs. Therefore, diffusing well balanced information on what a know-how company
does and on its services, can help the client to have an opinion for choosing its supplier.
The opinion of a client on our company, i.e. the vision he has, is imagine of our company. Here we
are at a crossing point: in every know-how company a strong connection exists between imagine and
knowledge diffusion. In order to explain this tie we need to examine closer the concept of imagine,
which represents the opinion the external world has about our company. Imagine can be quantified,
and this is done reckoning two variables: knowledge and opinion. With the term knowledge we
intend the information about our company, while with the term opinion we intend its level of
appreciation. In every uncertain situation the sensation of already heard before gives confidence.
Every know-how company is by definition extremely dependent on the fact of just being identified
as a know-how company. In fact it has no concrete products to expose for attracting the surrounding
world.
The conclusion of this reasoning is that if our company increases the knowledge that the
surrounding world has about it, the automatic consequence is the formation of a positive opinion.
For our company this aspect is very practical. Considering our function of selling knowledge we
need to assume the must of diffusing knowledge about the company and its business sector. This is
a track more simple and trustworthy than the one of trying to influence the external world.

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A further difference with a traditional service company is that every client of a know-how company
has his own responsibility on the way with which our company develops its own services. Such a
responsibility concerns also the appraisal of need, i.e. part of the goal of the service.
In such a case the know-how company differs from goods manufacturers, which by norm assume a
global responsibility about the good functioning of their products. Sometime this responsibility lasts
for years after sale. As Know-how Company our company cannot assume the total responsibility,
but has to involve its client into the responsibility for an appropriate service issuing. In fact, what
outcome can have a training course if the client’s employees do not attend lessons? What outcome
can have an information system if the client does not learn its use?
For clients can assume responsibility, its needed he has enough knowledge that only our company,
as know-how company can give.

A salesman dreads while a teacher reassures.

Avoiding any sort of advice to salesmen on this strategic issue, we just want to emphasize the
importance of diffusing knowledge in a know-how company.
To get this goal our company shall appear expert in the whole business sector, shall offer
information and, instead of acting as a seller, shell act with pedagogic and didactic behaviour.
Our company needs to be part of the client’s project since the first phase of it. It is at that moment
that client prepares himself to get decisions. This is the crisscross point where we need to insert our
didactic role: in fact what does he do who diffuses information and knowledge? He acts as a
teacher. Every professional of the company shell never act as a classic salesman: the behaviour of a
teacher inspires respect and trust.

Let us create our imagine of expert

By means of knowledge diffusion our company shall generate the image of itself as expert in its
sector. Therefore we need to collect all the opportunities for demonstrating our competence.
The role of the expert is a role that inspires sympathy even among the so called opinion leaders,
such as for instance mass-media. Journalists are in a situation similar to that of a client: they too try
to have a global vision of the complex sectors which evolve rapidly, and the same happens to
politicians, general managers, researchers, corporate association, etc.
A company which is not mostly interested in sales, but to help journalists to understand the business
sector, and point out trends and appraise the news can become an important reference point for any
newspaper.

2.5. THE CONTACT NETWORK

Services cannot be measured and compared as common products, as for instance videotapes.
The more a service or an offer is abstract, the more we tend to rely, in case of a purchasing, on
personal recommendation.
If you want to by a videotape, for instance, you can read technical description and brochures,
comparing price and performances.
Certainly you can have brochure also from brokers and consulting companies, but they can tell you
noy too much, and rarely are they comparable.
In the case of purchasing a service we are rather insecure, and if we get an advice we accept it with
pleasure. If we have received a good advice from someone, rarely we look for further information.
The same is valid even in the opposite case: if someone suggest us not to contact a certain company,
it will be difficult that, notwithstanding the advice received, we address to that company our
attention.

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Furtherly, frankly speaking, we buy preferably services from whom who like them. What
importance do we give to the principal of a car selling firm when we buy a car? A completely
different matter is, on the contrary, when we ask for a lawyer or a broker. In this case we like to
look for someone whom we like, and to find someone with whom we feel comfortable, and have
our same considerations. In conclusion we can state we are strongly conditioned from what we can
define personal empathy, and the probability that it happens is very high if we have receive an
advice from a person that we appreciate.
What does it mean for a know-how company? Well, that simply means that the company itself
depends mostly from the contacts it has with many persons who speak well and recommend it.
We need, therefore, stimulate the wireless telegraph and perform the services we have promised in
a spick & span in order that users are enticed to recommend them to others.
On the opposite, it is moreover right that is someone speaks badly of a know-how company, the
damage is huge.
In the world in continuous evolution on which our company operates relationships constitute a
durable and consolidated element. While capital and information can freely vary, good relationships
can last forever.
A good contact network is essential and performs a series of functions for every know-how
company. It contributes to attract new clients, new co-operators, and gives worthy information
about the business environment.
The worth of business contacts is known by anyone. Successful entrepreneurs have ever be good to
cultivate and refresh their own contacts. They did it by means organizations such as the Rotary, and
Old Fellow, whose prime scope is that of creating contacts among people. Entrepreneurs who
operate in small towns usually have this entice in their blood. To them to know the right persons
can be a predominant factor in their business. Once upon a time it was enough that the General
Manager, or in larger companies a certain number of managers or agents, had the right contacts. By
means of their network they were able to bring home orders which generated work for the rest of
the organization.
In a know-how company this situation is rather different, because rarely it has agents or salesmen.
On the contrary, the professionals themselves make at the same time marketing, sales, and perform
services. That means the contact network in a know-how company shall be cared not only by
managers, but also by professionals who shall operate to create proficient personal relationships.
The increased interest for an effective contact network firstly depends by the fact, amongst the
other, that personal contacts are important for the business of many companies. A second reason is
due to the fact that market has got larger and larger size. A company that in the past had its market
in a small town now has to look to the whole country, and sometimes even abroad. A third reason is
given by the increase social, technical, and geographic mobility. What once was small, obvious, and
known now is large, in continuous expansion, and unknown. To create consciously personal
contacts is therefore indispensable to operate in the modern society.
Junior co-operators of a know-how company probably have a rather weak contact network when
they enter the company for the first time, and they senior colleagues probably are not ready to
introduce them into conference halls. Personal contacts often are something that we need to build by
ourselves, following our fantasy and ability. The rest is, usually, a matter of many years of work.
We can state that most business in a know-how company starts up because someone knew someone
else, i.e. by word of mouth.

Because services are sold following a recommendation, it is really important to be recommended.

The best aspect, obviously, is to be recommended from people who, within the sector are
considered authoritative: the so called opinion leaders can become excellent ambassadors of our
company. To speak personally of his own excellence is not so effective as when others speak about
you: an impartial recommendation is more credible.

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Opinion leaders in such a context are those who can influence company’s clients, are those who
create and communicate current opinions within the sector of competence of our company, i.e.
journalists, researchers, consultants. They are those persons who recently have had something to do
with our company. Its towards opinion leaders that we have forward our marketing.
Regis McKenna, marketing consultant, of Apple and Intel states that some 10% of people in a given
sector can be considered as key persons, and that on their turn they can influence the remaining
90%. He calls this 10% infrastructure, and states marketing consists basically in the capacity of
having such infrastructure on our part.

Infrastructure tends to have a particular signification overall inside sectors

in strong evolution with complicate products. In these sectors many things
happen, and it is difficult even for skilled people to keep into account all
details. To understand the meaning of new developments, people trust in
what they know from infrastructure.

Opinion leaders perform many important functions inside their sectors. One of those is usually to
collect and diffuse information. A know-how company has to help them to diffuse information.
Spreading out information to opinion leaders our company can acquire important ambassadors.
Furtherly this can avoid incorrect speaking circulate, because informed people rarely diffuse gossips
in a bad faith.
Of opinion leaders are also part all those who have the power of taking decisions and state about the
company, as for instance politicians and organizations. Even those need information, not to
recommend but to be able to understand and move on our corporate interests.
To care of opinion leaders is a longsighted for of marketing, which can give tangible results for
many years. If we neglect this work, our company can be damaged in the future, when consolidated
contact could have helped our company to expand, or noticed about conjuncture changes to afford,
or functioning as steady reference point for an uncertain client.
Naturally we can choose to avoid contacts with opinion leaders, but we always will have opinions
on our company, inside as outside our sector. What we mean is that it is much better to intervene
personally to direct such opinion more than live it to the case and common saying.
Speaking of opinion leaders it is very important to reckon the term reciprocity. Our company
searches to get ambassadors, and on the long run new clients, certainly. But the road in this
direction shall pass through the comprehension of what is useful to the counterpart, ant its offer. On
the long run, probably, we will have a return.

2.6. HOW TO CATCH IDEAS FOR NEW BUSINESSES IN THE NETWORK

To catch new clients by means of recommendations is only one of the outcomes of our contact
network. Of the same importance to catch information needed for corporate development is
business conceive.
Know-how Company lives in-and-of a market mutant and fickle. If the life-cycle of a product
diminishes, the knowledge of know-how and services can be borne and died in one night. A new
law, a technology innovation, a customary change, and the market can change, and we can have
new threats and opportunities. Who has eyes and ears open can get in due time those signals, and
prepare it just in time. The consequence is to keep one informed, and to have the ability to identify
the new coming opportunities.
Therefore, there are good reasons for which a company watches what is happening in the
surrounding world, and there are several ways to do that.

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To supply the maximum number of information to the company, the contact network shall be as
spread out as possible, and shall include people with different competences and ways of thinking.

For instance, a company, which works consciously with-and-through its contacts is Consensus
Försäkringsmäkleri (Insurance Brokers) Norway. The company is part of the consortium Infina,
which consists in some fifty companies.
Its managing director Edström is employed on it since the start-up, building the company with the
help of a systematic work of contacts. Contacts with brokers have been built from the inside, i.e.
from the company toward the outside. The beginning consisted in telling the closest environment
about their new business.
The secret is to begin from inside and to develop moving from contacts
already possessed. Internal market is extremely important. We started
anchoring our business to our parent companies in the consortium, and to
our suppliers, i.e. insurers. After this first step it was important to point on
the opinion leaders of the sector. On the bottom of our list, when we finished
the work inside, there arrived new clients.

Inside Consensus brokers split contacts among them. Everyone takes care of the information that has
to arrive to its contacts. They never do large advertising campaigns. On the contrary they send
personalized letters.
When Gunnar Edström needs to establish a new contact, often he starts writing a concise letter. That
is personalized to the forwarder, and contains a concrete proposal to which he can be interested.
After two or three days he phones for fixing an appointment.
Following Gunnar Edström, the work on the contact network has been very useful, and outcomes are
easily visible. One of those, naturally, is that company gets new clients; another one is that he can
get a lot of precious information from different sources. “Our knowledge of the market increases
creating new information from different sources. The contact network, for instance, is a way of
keeping an eye open on competition. In general our contacts become more and more important”.
The contact network is extremely important, and if its worth is not easily reckonable, clients and
relationships with clients are factors that should be analyzed even in a company acquisition.
Contact network has been studies even by the Konradgruppen, a group which works in the
elaboration of new auditing for know-how companies.
An important part of structural capital is constituted by the network contacts the every companies
have. In extreme cases it can happen that a company made by a sole person, with the help of his
contacts, has a field of action much larger, and a higher worth the a five people company.
In a know-how company contact network is so mutable that it can directly influence the return on
investment and the structure itself of business.
The contact network should be commented on the annual statement.

Of our worthy things we shall take care, and therefore we shall keep them carefully..
Who gets the contacts, and how are they managed?
Please, let me cite an anecdote.
The Agency PR was upon a time extremely famous as specialist in the field of entertainment. There
was no occasion that Agency Pr was not able to embellish: promotional advertising, presentation
meetings, fairs, jubilees… all of them were entertained by magicians, actors, musicians that Agency
PR sent on the place requested. The fact is, nevertheless, that it was not Agency PR to organize the
whole, but Andrew. Every order, even if got by someone else, passed through Andrew, who
immediately browsed his address files, picked up the phone, and soon acted. At a certain time
Andrew resigned, kept his things away, emptied his drawer and disappeared. Since that time
Agency PR stopped creating fantastic events.
In our company all contacts with prospects and clients shall be dealt by the whole management.

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Whether precious data are kept in paper files or computerized, we absolutely need they cannot
disappear. As that should happen shall be decided by appropriated rules issued by the general
management. The best thing to do is to state that all personal contacts are an asset and a common
property. In this case anyone can have part of colleagues’ contact, and diffuse them inside the
company, what thing decreases the probability they could go lost.
Considering contacts a common value, the company can appraise of its contacts. So, as we examine
all other assets in the final balance sheet, we can analyze our contact network, and answer the
following questions.
- IS IT LARGE ENOUGH?
- ARE IMPORTANT LINKS MISSING?
- WHAT NEW CONTACTS HAVE TO BE ESTABLISHED TO GET THE GOALS OF
THE COMING YEARS?
- WHERE ARE THE HOLES TO BE REPARED AFTER THE LOSS OF IMPORTANT
EMPLOYEES?

To answer those questions we need to have thought to what scopes we want to reach trough our
contact network, because for contacts are valid the same criteria that dominate the whole
company: contacts must be planned and built consciously to get good results.

In the market of clients and competences there shall be included all those of whom the company
lives, i.e. clients, prospects, future partners with whom we desire to cooperate, and employees.
Most companies have a record of clients, so their data are well known.
Personally we suggest including in those data also former clients. They are to be particularly
cared because they have a good knowledge of our company, and can work as ambassadors. If
they are unsatisfied we run the risk to diffuse negative opinions about our company.
In order to set up a good relationship with clients we want to have, the first step to move is to
clarify who they are.
Of the interest group are part all those who have a personal interest in the company. All of them
have betted something: carrier, time, money, or reputation. Among these persons there are the
most important ambassadors of the company. We can find them in the board of directors,
employees, co-operators, shareholders, in affiliated or parent companies, etc.
They can be:
- all employees with their home address
- the managing group
- the board of directors
- shareholders
- employees of affiliated or parent companies
- our partners
- former most important employees.
Once we have chosen our prospects, the following step is to get informed on the leading people
inside our prospects for taking the first approach. If their names are popular in the business
sector, the interest and perception of all our co-operators increase. This way it is easy to verify
when the person pointed out in the client company publishes articles on newspapers, or papers
in a conference. Because they are on the speakers’ list of that conference, we already know him;
therefore it is much simpler to contact them.
The same happens for future co-operators. If several persons in the company have clear in mind
what people are to be attracted in the company, than it is easier to take the opportunity of
starting a relationship, when any of them occur.

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 Market contacts, therefore, can be constituted by the following:
- current clients
- desired clients
- desired partners
- desired collaborators.

Company’s suppliers need to have a particular care. A supplier is a partner who activates and
facilitates our business, and someone who has the same interests of our company, i.e. to satisfy the
client final need.
Company and suppliers are reciprocally dependent, and the relationship with suppliers is one of the
most important aspects for the company.
A particular position belongs to whom we call co-supplier. They are those who appears with their
name to the final client. In our sector they are those who complete our plant with one of their
products. A supplier well informed is a good ambassador, because he is interested that our company
sell his products. Therefore, please, let us give suppliers a good portion of information.

Suppliers can be:

- banks
- auditors
- lawyers
- accounting companies
- host computers
- consultants
- hardware suppliers
- co-suppliers.

Furtherly, our opinion leaders can be:

- former clients
- former employees
- former suppliers
- corporate associations
- client’s company associations
- public authorities, or public officers
- mass-media, journalists
- competitors and colleagues
- politicians
- researchers
- schools
- unions

Do not forget the contact network is made also of friends. If a know-how company has thirty
employees and they have an average of thirty well informed friends each, that makes six hundred
people, which on their account have other twenty friends… and so on.

What to do with our contact list

When addresses have been collected and lists are ready, what can we do?
At first sight all those contacts seem impossible to be kept. Nevertheless, we do not need to do all at
once. Furtherly, we do not need to keep contacts for themselves. Once we are ready for a letter or
conversation in the network, it is opportune to keep clear in mind the final result we want to get.
This way it is easier to decide both in what occasion is better to have a contact and what
information supply or collect. In its easiest form the octopus model is used as a register of addresses

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or a memento list. It is enough to browse sometimes the list and phone or write somebody with
whom we do not talk since long time. If the company has a mailing list the contact network
constitutes the first mailing list. The most scrupulous browse the list once a month, and list people
who shall be contacted next month. Do not evidence more people of what you can contact. Our
company can also make a more accurate work on a monthly basis splitting the contact work among
several persons.
In a more advanced form names and addresses can be loaded in a computer. In this case the contact
work can be planned and it is possible to do notations on last contacts and the kind of material we
have delivered.
To choose people to be contacted in a so evident way, and supply them with information is not a
way of manipulating persons?
No, it is not. Most people like to be kept into consideration. Furtherly, the know-how company is in
a context of intelligent people, who depends from information.
Anyway, two ethics rules shall be kept in mind: relationships are established on a basis of reciprocal
utility, and shall need to develop both parties.

2.7. COMMUNICATION

No communication, no success.
If we look for a definition of communication – word now inflated and overused- on any dictionary,
we find explications such as: “passage of content through a vehicle” or “connection” or
“transport”. A further definition which can be adapted to this chapter is the one given by Lasswell
in 1967: “who says what, to whom, by means of what channel, and with what result”.
Please note that such definition is valid on both directions from and toward the company.
Communication has a central meaning in the marketing of a know-how company. It is not possible
to keep a contact network, diffuse knowledge, to be concrete, choosing clients, know them, or
develop a competence culture without communication.
For this reason this chapter is the longest and with particulars of this business plan. Here we will
give a series of concrete advices on how a know-how company’s communication can proceed.

Communication is one of the most important tools of a know-how company as far as marketing is
concerned, for a know-how company has an intense and interactive relationship with its clients.
A know-how company has an offer that you cannot see, and is not generated before the client has
get his decision. In that moment and only in that moment a cooperation with the client is generated.
Our company has live in symbiosis with the client in an interactive relationship where both parties
give and receive. The key-word in such relationship is communication which
- is needed to let the counterpart know that the company exists
- gives as return useful signs from clients to the company
- is the only thing that clients receive for a long time.

The first two reasons are evident, but is the third one right?
Let us try to think on it, and let us wear the habits of our clients: before taking his decision he has
no concrete product to look at. What does he understand before taking his decision? And when he
has decided probably he needs to wait for a long time before our service arrives. What does he
receive in the meanwhile? And when he has received our service, the output could arrive much later
on. Furtherly, often it is difficult, and sometimes impossible, to measure the result of what he has
bought.
The lack of a concrete product leaves our client in a sensorial void. He sees nothing, difficulty he
sees what he receives, and the final result is difficult to be appraised. Nevertheless he shall be

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satisfied of his choice and defend it in front of collaborators, bosses, board of directors, and his own
clients.
Apart from the fact of communicating that our company exists to attract new clients, one of the
main duties of communication is that of filling the void in which clients are, and make them trusty.
Communication keeps in life the mandate and relationship, and confirms to clients that in effect
they have bought something, and they have received something that fits good to their needs.
There are several ways to communicate, and in order to understand how communication shall work
in our company, and why it is so important, we need to step back for a while, and analyze why a
know-how company should be involved in marketing.
The scope of any kind of marketing is that of creating and maintaining good relationship with
clients. To get a new client is difficult and often expensive. Only when a client comes back for
buying, then the relationship becomes profitable. In applied studies, usually researchers indicate a
ratio of 1 on 5, which means that to have a new clients costs five times more than to get orders from
established clients.

Communication runs on an invisible red wire telegraph throughout the whole cycle of a
relationship. It is necessary:
- for attracting clients on the company and entice him to buy.. In this case even traditional
methods such as advertising and PR can work. But the red wire telegraph can be much more
important;
- in the buying process itself, where personal behaviour, conversation, paper mailing, etc have
a particular significance for the client’s decision to deepen the relationship;
- to strengthen the mandate and the relationship during which the service is created. In this
moment communication fills up the void in which the client lays before receiving any result
from his purchasing;
- for keeping and developing the relationship after service. In this phase we need to pay
attention to the client and we have to remember hum that our company is expert in the sector
and his fully available, so that he comes back and recommend our company to others.

This circle describes a cyclical process, which is individual for every client. For this reason personal
communication is so important. Only that, in fact, can keep into consideration the position of each
client inside the circle in the different phases of the relationship, while mass communication cannot.
In this sense, for instance, an unsatisfied client is not certainly happy of receiving advertising
material with mass forwarding, or reading expensive publications on newspapers. He prefers to
know from the person to whom he addressed whether the problem that annoys him is going to be
solved.
The effect of mass communication in the wrong moment can be exactly the opposite of what one
hopes.

Newsletters: a good way of diffusing knowledge.

A news letter can be really useful, and it ii appropriate to issue one. Usually it shall be fresh
merchandise and never as expensive as a brochure, which often is done for a long lasting.
The newsletter format has several advantages, and can:
- keep a continuous contact with persons who are part of our contact list;
- diffuse knowledge and inform about our news;
- contains interviews with people who attest the validity of our company and its services;
- create the sensation that around the company something always happens;
- to supply mass media with press flash and articles;
- diffuse information also inside;
- be relatively simple to be produced.

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Newsletters can be everything: a simple typewritten letter or an offset publication; for the size of
our company a letter can be enough.
Karl Mikael Cakste, executive manager tells:
“I am really surprised of how good this system works. With our pretty letter
we are often on the top of the pile of papers on the desktop of our
addressees five times in a year. We send our letter to prospects, and also to
people we know to be extremely active. Step after step our letter embeds our
name in the minds of addresses, and when they talk of sponsoring someone
often pose it our name out. How many contracts can a letter generate is
difficult to say, but effectively we can note both the positive effects after
each forwarding, and the ripple effect it generates.”

Diffusing knowledge by means of didactic tools

The didactics tools of a know-how company can be brochures, pamphlets, informatics programs and
all other tools that we can say substitute catalogues of commercial products.
The didactic tools of a know-how company form and inform about the business sector of the
company and its services. We deliberately use the term didactic tools because in effect the company
has to form its clients in order to help them understand the utility of its offers. As example of what a
didactic tool can be we can take the group AU-System, which is engaged in telecommunications.
Their offer is so complicated that they have chosen to dedicate the whole marketing budget to the
realization of didactic tools. Those instruments are like small pamphlets, one for each technical
sector on which AU-System operates, and in them AU-System describes the technologic
development of the sector. A question we should pose about didactic tools is whether it could be
worthy to give enticement to competence concerning didactics and pedagogy?

Direct advertising and telephone marketing

Direct advertising and telephone marketing are methods that are gaining more and more popularity
on the global market. Both of them can work, but a know how company should reflect before
pointing on these methods.
Direct advertising mainly consist in purchasing addresses of persons or companies inside a well
defined target with which we want to enter in touch and to whom we forward information. We prefer
to use the term direct distribution instead what of advertising, because a know-how company needs
to diffuse more knowledge than advertising. Notwithstanding all promises of those agencies that
supply addresses of ‘perfect files’, our experience states that we need to work on those addresses
much harder than we believed. Nothing bothers people more than to find errors in their names, or
titles on envelop. It is worst then, if the error is repeated in the starting phrase of a personalized letter
inside the envelope. Moreover, forwarding of this type needs a further work. To be effective it can
be useful to send a reminder. Naturally all those who answered refusing our offer at the first letter
shall be avoided, and the same shall be done with all who accepted. The addresses who are part of
the contact list shall receive the information with a personal letter.
Telephone marketing does not mean always what the term suggests, i.e. selling on the phone. Such a
form, in effect, does not fit well to a know-how company. In this phase, anyway, telephone market
can be used for making an inventory and to wake up an interest toward our company. Through
telephone marketing we can consult a larger number of clients and this way to choose those who
have interests compatible with those of our company.

Ten good rules for the marketing department in view of contacts with mass media
1. Reflect on the goals we want to reach by means of contacts with mass media. Give way to the
press specialized in the sector of our clients Think carefully to the reason for which the
company needs advertising and on what it would like to advertise. Do not forget that
advertising does not create a company, but reflects on it.

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 2. Establish personal contacts. Let us examine carefully newspapers media we want to choose.
3. Keep your contacts with regularity.
4. Give media interesting news.
5. Give journalists help to increase readers understanding on a complicate sector or a
particular development of the same.
6. Prepare opinion leaders
7. Offer suggestions
8. Be always ready to answer questions. If the matter is hot, look for having time for preparing
your answer. One of the best ways is to answer asking the journalist what he really wants to
know and proposing to call him back once you really have your appropriate answer.
9. Be always kind and sincere.
10. Ask for other information as counterpart. Do not consider all meetings or phone calls with
journalists as occasions where the company has to give information, but also as moments in
which the company can get information.

Communicating for selling.

Once a prospect is interested in our competence and is interested in buying, it is important to lessen,
lessen, and lessen again to him. Personal meetings are extremely important during the purchasing
process. Our prospect buys both our offer and our collaborators. This is a typical characteristic of
know-how companies.
Please, try to imagine to buy a product, for example a copier. In the firm which sells you the copier
you meet a vendor who is nasty to you. The copier, nevertheless is valid, and considering that the
deal happens in a unique meeting, you can overcome the antipathy of the vendor. In the future
probably you will meet no more.
In Know-how Company is exactly the opposite. In this case the meeting, in which the prospect
decides to buy, immediately transforms him into a client, who opens a long relationship with us in
which the counterparts will keep continuative relations. In a few cases collaborators of the know-
how company will work at the client’s for certain periods. A main characteristic therefore of Know-
how Company is that the client does not distinguish between service and service provider. He cannot
decide to buy without having at the same time the seller, the professional. Often he sees them as
indivisible elements.

2.8. CONCRETENESS

The most meaningful characteristic of services of a know-how company is the fact they are abstract.
Concreteness means to give market tangible connecting wires to let people understand what the
company does. To concretize means to help addressee to have an idea about the company and its
services. What the company should describe in many word scan be clear and comprehensible in a
while by means of concreteness. To explain what we mean, we give an example. Imagine a hotel,
and its services, as for instance cleaning. Cleaning is a part of the services of your hotel that you
cannot see, and about which you receive no particular information. But when you enter your room,
you discover soon it has been cleaned. How? Well, looking at the glosses protected in a poly bag in
the bathroom. These signals, naturally, are not essential to cleaning, but they tell you in a discrete,
clear and effective way, that your room has been cleaned before your arrival.
Concreteness, for several reasons is strictly connected with communication. Amongst other things,
all printed material represents a concrete expression of the company and its services.
Concreteness has most importance for those prospects that come to you for the first time.
Concreteness can indicate to the prospects what he is going to buy.

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Positioning is related to our consolidated knowledge.
Positioning is the way of finding himself in a certain position in the conscience of the addressee,
which is in relation with what he already knows.
Positioning can be used for products, services, proposals, and persons, in conclusion for all can be
promoted through marketing. That is not something, which you apply on a product, service, etc. It is
something that acts on the addressee, i.e. the way on which a product is positioned in his imaginary.
Such a process is based on two statements, which examine the way on which people in the
information society work.
Positioning means to look for an extremely simplified message, this corresponds to the imaginary of
our prospect.
Concreteness in all its forms has a sole common scope: the one of creating rapidly an impression
concerning our company, and show what it represents, and what utility can offer to market.
What it is concrete hits directly the senses of a person, so that we understand it more with our hearth
than with brains. Concrete symbols, therefore, have the advantage to communicate at the same time
both knowledge and impressions. Moreover, they can include much more information of what
words can do, and are easier to be remembered.
To concretize by mans of what we can see has given origin to the concept Design Management.
Boivie, and Wallerstedt (1988) have defined the concept as follows:
“Design management constitutes a part of the definition of a company. It is a strategic process that
has to move from the idea of business of the company. For transmitting outside this message the
company uses channels of identity. These channels shall be coordinated and guarded continuously
for getting a correspondence between corporate identity and its imagine”.
The authors identify four channels of identity:
- product/service
- environment
- graphic material
- person
They underline the fact that the first three channels can steer the last one.
A company whose environment is characterized by harmony and unity gives the impression of
order and efficiency, and people seem to adapt themselves to it.
Design is not like positioning something new or magic. Its concept has nevertheless brought design
up to the table of managing directors, because it underlines the importance of projecting with care
and manages consciously visual messages.

2.9. CLIENT’S CHOICE

This chapter analyzes what roads our company can choose for selecting prospects. The opposite of
prospect selection is a passive wait for orders, and no know-how company with a minimum of
respect for itself should do that.
To select prospects and charges is a highly individual process for any know-how company.
For every company clients are important for they are the main source for entries. But for a know-
how company they are important for other two reasons: a) they influence at a high level the imagine
of the company; b) they contribute to the development of co-operators’ competence.
A know-how company is connected with its clients. That depends, as many other reasons, by the
concreteness of its services, and by the difficulties for the surrounding world of having an opinion
about the company. All that is concrete, and can contribute to clarify how the structure of the
company influences its imagine. Clients are very concrete, and their judgement will certainly leave
a footstep on that of the company. Clients who can contribute to give a good imagine of the
company are very important, because they increase the confidence with our company, and

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recommend it to others in a discrete but efficient way. “If the company XYC has decided to work
with those consultants, they have to be really good”. Naturally it is right also the contrary. We need
to be careful to not be connected with bad clients. Clients who create a good imagine attract new
clients, and also new co-operators.
To have clients who can generate a good imagine shall be in the future an important arm in the
challenge for competent co-operators.
Clients are the greatest resource for the development of our company.
A know-how company does not receive only entries and imagine from its clients, but also a good
contribute for its development.
It is the duty of solving every single client’s problem that obliges co-operators to assume new
knowledge, and to increase their competence. This statement is so obvious that rarely a know-how
company has seriously reasoned about it.
How obvious and natural is to effectively choose our clients and charges from the point of view of
competence? Let us try for a while to observe our clients as an investment in the development of
competence. Which clients contribute to increase competence inside our company? Which of them
do not do that? Which clients develop on their turn themselves with a consequent transformation of
their needs that can be satisfied by our know-how company?
A third point of view is that of choosing clients which can be satisfied by our company services.
Anna Kahn, management consultant at Consultus works applying the following principle:
“I want to work with competent clients, who can cooperate so that my work gives good results.
Further to a good result, usually, the consequence is that a client recommends me to others”
Many times it is difficult to choose concretely clients that we want to contact. If so, our company
shall at least create possible goals as far as clients are concerned. A goal can be that of reaching a
certain number of large clients, or to have clients inside a certain business sector having certain
needs.
The first step in clients’ choice is market segmentation.
A segment is that part of the whole market to which our company decides to sell.
In order to poses goals in achieving clients, our company has to know what company it is and wants
to be. Goals shall be created moving from our business idea and corporate vision. They need to be
clear elaborating market segmentation and clients and charges’ choice.
But give for assumed that our business idea be clear, and that a certain corporate vision exists.
In this case the following questions can help the process, which leads to our mission statement and
to concrete final client’s choice:
- What and where we want to be in the next five years?
- What clients strengthen our business idea?
- What clients have imagine which can strengthen imagine?
- What clients and charges can increase our competence?
- Which clients can get more benefits from our services?
- Which clients give us other useful contacts?
- What clients we do not want to have?

Note that the concept of client network reappears also in this case, now as a criterion for clients’
choice. A way for contacting a desired client is that of entering in touch with him through
somebody else. A few clients have a client network extremely large, and to do business with their
clients can give good results by means of positive references we can diffuse inside the network.
We need to be careful with the question concerning what clients our company does not want to
have. A know how company is in the privileged position of who can choose both clients and non-
clients. A non-client of a know-how company is a client that deprives the corporate imagine, instead
of improving it. Non-clients slow down company’s development, instead of improving it.

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2.10. CLIENT’S KNOWLEDGE

Every know-how company should acquire a deep knowledge of its prospect and clients. Such
statement is so simple then it should be not even motivated.
Corporate service shall be adapted to clients and prospects needs, and they should contribute to
satisfy their business targets. An important part of corporate marketing of a know-how company is
therefore the one of understanding how a service for attracting prospects and clients should be.
To deeply know our client it is much more than to have information on him. It signifies to have
appropriate information and a high level of comprehension of the business and economic situation
of our clients. That is what we call client’s knowledge.
Client’s knowledge is constituted by three phases:
- to collect information;
- to transform information into knowledge;
- to infer conclusions.
The last phase comports that sales arguments have to be adapted to the client company and to
people who decide inside that company.
The development of client’s knowledge happens by means of an intuitive way, and only seldom is
planned by the professionals of the know-how company. They collect information which they can
acquire, and try to file and to understand them in the quickest way.
Client’s knowledge is a work that has to be done as systematically and methodically as work
contacts. For this reason we need to implement systems and procedures for collecting information
about sectors, companies, and persons, as well as other systems and procedures for documenting
oneself and to filing information.
No company has the power of obliging its collaborators to follow procedures and systems, but every
company can give its professionals the background for working in a more efficient way about
client’s knowledge.
What kind of information can a company collect about its clients? All it can find out.
Know-how company lives selling knowledge and it can never get too much of it, either about
knowledge of its own sector, or of the client, or the surrounding world.
Corporate professionals have a service to offer. This aspect can be interesting for a client only if
that service can satisfy its business targets. Therefore, to know clients’ schemes, business ideas,
targets, strategies and programs is fundamental. Nevertheless, we need to have also information on
the business sector of clients, and to know at least something about clients’ clients. It is necessary
understand something about how people who have the responsibility of buying work.
Below we report a few examples of general questions that can be useful for collecting information.
Many answers can be collected even when a client is still a prospect, or during the first introductive
phases.

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 About our client’s company or organization

 What business idea or function has it?

 What is its market and clients
 What does it produce and how?
 What is its aspect?
 What kind of people are in the Board of Directors and Managing Centres?
 What is its economic situation?
 What event of a certain importance happened in the last few years?

About our client’s business sector

 How the client’s business sector is?

 What tendencies can be pointed out?
 What actors manage the sector?
 What are the critical factors (capital, energy, new technology, law)?
 How is the sector influenced by the EU/local/international internal market?
 Who are our client’s competitors?
 How do they act?
About our client’s people

 What people influence a purchasing decision?

 What kind of competence has each of them?
 What are their targets?
 What are their personal motivations?

Most important is to start the work up, and assume as habitude the matter of beying prepared in
view of the first meeting with the prospect. Never forget to go on collecting systematically
information after the first meeting. This can be realized also with the client’s cooperation.

Carl’s story
Let us take into consideration Carl Eriksson’s story as an example of professionalism.
Carl is an insurance broker. At a conference organized by his company Carl met Per Jonsson,
Security Responsible of the Alfa Company, a rather large company. Alfa is part of the Beta Group,
which has many units both at home and abroad.
Per is interested in Carl, and proposes a meeting for the coming week. Per hesitates a little, but
gives Carl a one hour meeting.
Now Carl has five working days in front of him. Instead of deferring his thoughts on Alfa, and see
what will happen during the meeting, he immediately starts to prepare himself.
Carl has structured his research into three parts: the company, its sector, and people.
First he calls the central information office of his group. He discusses of the meeting appointed with
Per and requests to be prepared. Is it possible to have an information package about Beta Group?
Balance sheet, brochures, client house organ, etc?
The following phone call is forwarded to Per’s secretary, who promises to send immediately the
printed material of Alfa.
The following day Per refers during the company’s weekly meeting that he will meet Per at Alfa’s.
Does any staff know anything or someone about the company? He hears that Lena, who works as
receptionist has her husband working at Alfa. One of the brokers has had a short relationship with
one of Alfa’s management. Someone else recently has read a publication about Alfa. Carl invites all
the three to keep an eye open, and later on calls Lena’s husband.

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The following day he receives by mail a few big envelopes. The balance sheet is missing, but Carl
order it at a specialized agency. During lunch time he passes in front of Alfa’s offices. He looked at
the parking area, the building, and enters. He wants to taste the atmosphere and try to appraise
Alfa’s corporate culture. Is he welcome? Does burocracy dominate the company? To the girl of the
information desk he says of passing there just to verify the right way to go when he will come for
the meeting. Before leaving he looks at the information shelf and takes a few depliants. In the
afternoon he looks for Alfa’s economic press publication at a data bank. Unfortunately data are
scarce. He decides to examine specialized magazines, and goes to the public library, where he
founds what he needs. He makes a copy of everything and goes back to office. There is a
publication that makes him curious where Per has got an interview. Call phones the journalist who
has written the article and asks him whether he thinks to go on with such other articles about that
argument. The matter becomes a long phone call, which gives Carl many interesting information.
Carl’s story could go on longer enough. Anyway, we can guarantee you he shall be extremely
prepared for the meeting and will give an excellent impression of himself to Per, thanks to the
information he got about the company and his ad hoc proposal that fits so good to Alfa.

2.11. CULTURE OF COMPETENCE

What have competence and culture to do with marketing? Marketing usually consists in activities
forwarded to outside, things that one can see, that can wake up attention, and attract clients to the
company. To operate outside, nevertheless, is one of the ways to attract clients.
Corporate competence can be compared to a magnet, which attracts clients.
The higher the competence level, the stronger the attraction power on market, both on clients and
their partners.
Sinova’s management consultants, for instance, live coherently this ascertainment. They estimate
their most important target group as far as marketing is concerned is that of competence, i.e. current
and future collaborators. The idea that focuses on this reasoning is that good collaborators
automatically attract new clients.
There are other reasons, further to marketing, for which is useful to develop competence. A know-
how company lives of competence selling. Considering competence as a saleable product,
nevertheless it presents a series of characteristics which make it difficult to be treated: it is
immaterial and non appraisable. It is difficult to be possessed, stored, and protected. It risks
disappearing if important collaborators leave. It thins down little by little company sells. It ages
rapidly. A know-how company lives in other words of a raw material extremely delicate, transient,
unreliable. Then, there is only a way for surviving in the market, when one sells competence and it
is the one of having continuous new competence.

Competence is made both of skills and willingness.

Competence is the common result of skills and willingness of developing a charge or a business.
In skills we include knowledge, experience, judgment ability, readiness, and contacts needed for
developing a well determined charge or business. In willingness we comprehend self estimation,
engagement, and motivation. These terms can on their turn be defined and specified, but it is
important to understand that competence is much more than knowledge.
knowledge: to know also facts and methods
experience: to learn by errors and successes
judgment capacity: to understand and judge
readiness: to know what to do (write, introduce oneself, to speak foreign languages, to use
tools, computers, models, etc.)
contacts: to have a contact network, and be social

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 security of oneself: to believe in one’s capacity
engagement and motivation: to be willing, to have physical and psychical strength
Jörgen Hansson (1988) in his book Skapande personalarbete (Creative work on personnel)
states:
“Personal pride can generate problems in the sense of a double loyalty – towards company and
profession. Workers in the field of know how often privilege their own professionalism more
than company needs, and generally have a strong need of independence. Really they respect
only people with a higher culture, or those who by means of their work can facilitate or sustain
their professional contributions. Really it does not exist a true comprehension of corporate
formal organization and decisional hierarchy, and they do not care in the development of their
charges.”
Sometimes this threat is so tangible that all investments in competence seem money wasted to the
wind. Jan Engström had the following sensation stated in an article issued in 1988: “Who wants to
dedicate money to the development of information systems, relationship with clients, and marketing
of a brand name, without having control on results?
Jan Engström indicates the severe rules of sport, with their contracts and team changes, as a way of
protecting investments in competence.

What is the equilibrium between professionals and market needs?

The development of competence has its origin in the key terms “needs of collaborators”.
Professionals search companies to satisfy their own needs – if they had none they worked all in
their own. A know-how company must understand what those needs are, both for attracting
professionals, and keep them. The needs of professionals can be, for instance, the matter of being
part of companies that:
- help them to develop their own knowledge
- facilitate their business
- help them to publicize and sell their services
- give them the opportunity of influencing the corporate development
- give them a satisfying salary
- contribute with other values as synergism, social relationships, encouragements, imagine,
status, etc.

n the debate on how company should behave to keep its know-how capital –i.e. collaborators- one
proposes often the solution of involving them as partners. But such a solution satisfies only a few
points of the list reported above. To attract and keep specialists on the long run, company know-
how has to satisfy more than them.
The answer to collaborators’ need can be summarized under the form of “personnel persuasion”.
Karl Erik Sveiby states its personnel persuasion as follows:
“ Corporate personnel conceive can be described in a few words such as the opinion one has inside
a company about the type of personnel which has to be present in the organization, such as age,
preparation, etc., which people has to have. In this concept we need to enclose the vision of the
managing group about enrolment, personnel training and development, i.e. what in an industrial
company we commonly define as “personnel policy”.
Personnel conceive also answer the question on how companies satisfy collaborators’ needs (so as
business conceive answers the question on how business conceive responds on how to satisfy
market needs). To formulate a personnel conceive is difficult, but concentrating on competence it
becomes easier. Naturally a company does not exist only for professionals. Somewhere outside
there are also market, and clients, whose needs have to be satisfied by the company, which lives
with this.
It is a proficient management of a know-how company that of finding the equilibrium between
professional and market needs.

31
The competence development moves always from individuals. They decide what they need, and
shall assume the responsibility of their improvement. Competence development cannot come on
order.
But there is a lot of difference between to leave all responsibility to individual – we let them free to
organize them (free reins) and to create a conscious environment, which favours competence
development. Professionals rarely need advice on what and how to develop. They decide it alone,
but are grateful to who facilitates them.

Competence share
Professionals in a know-how company are conscious of their competence and value, and often
compete amongst them. For this reason frequently they keep their competence and knowledge for
themselves. The managing group shall never accept that. It must create a culture by which it is
obvious to share competence.
Stephan Tolstoy, executive director in Price Waterhouse, stated this concept in the following terms:
“Know-how company management consists in individuating those persons who reflect on their
experience, and get conclusions from that, and can transform it in concepts to be transmitted to the
organization”.
Following our experience, internal development by means of experience exchange often constitutes
a transient part in a know-how company. Notwithstanding the total amount of collaborators’
experience is high, and for many companies it is difficult to multiply and diffuse it. Competence
that can be diffused is from the one side the one connected with professionalism, and from the other
side what probably is not spontaneous to connect with collaborators’ charges.
A know-how company shall give collaborators the opportunity of transferring competence. The first
step is to invest money and time to this end by means of internal seminars. A very simple gimmick
to create such opportunity is that of transforming the weekly meeting from a discussion on what
each of us has done in one about what each of us has learned. Often we lose precious time when
professionals refer about the status and character of their charges. Let us ignore all that –if
somebody is interested, he can be informed by writing- and let us discuss about what colleagues
have learned forms their charges. What new conclusions have they inferred? What errors have been
made? How can those errors be eliminated?
A part of internal competence development is also control responsibility sharing on the surrounding
world. It is not necessary everybody participate to all conferences and read all books. Any
collaborator who reads a book or participates to a conference can do a summary of what he has
learned to be distributed to colleagues. Suddenly they decide whether to read that book or its
summary is enough. We need to do in the way for which our control on external world and external
participation be diffused, and who has responsibility of it refers to others.
Of internal development is also part the competence exchange with clients, suppliers, and all other
important persons of our contact network.

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2.12. REFLECTIONS ON RELATIONSHIPS

In a paradox way, considering for instance the rapid development of products, economic activities
in the world develop more and more rapidly through long running relationship between client and
seller. The following data on buying cycles of complex products are cited from the book Lysande
Marknadsföring (Briiliant Marketing) by Theodore Levitt (1984).

- Oil plants 15-20 years

- Chemical plants 10-15 years
- Informatics systems 5-10 years
- Important components for iron working 5-10 years
- Contracts for paper delivery 5 years

Consequence: companies must be skilled in creating long lasting relationships with clients and
suppliers
.
At the same time, educated people are less and less dependent from companies as employers. When
the most important resource is know-how and not financial capital, it is the company to depend
from personnel, not the contrary
Consequence: company shall be skilled in creating long-lasting relationships with employees.

Relationship management shall be the watchword in the global market

If the notion of service has been the watch-world of the 1980’s, our idea is that “relationship
management” shall be that of global market.
The terms relationship management indicate four basic categories of relationship a know-how
company has to keep:

- with environment
- with clients
- with suppliers
- with employees
- with funders or shareholders.

Sometimes long-lasting business relationships are similar to those in rules in a wedding. In a

relationship, for business or for marriage, both parties has something to gain by the fact of staying
together. Without this reciprocity the relationship does not resist.
Any relationship has a very special characteristic: it is a long-way to build, and it can be destroyed
in a while, for instance deluding the good faith, breaking a promise, or laying.
Frequent and long-lasting relationships ask for different things of those superficial and of short
term. Know-how Company’s clients become much more than simple clients. They become
collaborators and colleagues of our professionals, their funders, our product testers, their faithful
friends.
Because relationship between the company and its collaborators and between seller and client
become more and more complex, there are needed ethical rules to manage relationships.

The relationship client-company

 Both parties assume higher responsibility, both for service production, and for relationship.
 Our company shall develop better and better methods for diagnosing needs, and for
appraising results.
 Clients shall be more and more involved in our corporate development.

33
  Relationships with clients and related ethical rules shall be a hot argument. Next duty of our
general management shall be that of developing ethical rules of business.

The relationship supplier-company

 Our company shall grow by means of national and international networks.
 Suppliers shall be involved more and more in corporate development.

The relationship collaborator-company

 Collaborators, i.e. employees and professionals, will have a personnel policy.
 We will start to argument any kind of cooperation.
 We will never acquire other companies against the will of their co-operators. Our company
will look for other forms of proprietorship and partnership.

The relationship shareholders/funders-company

 Despite financial world is still based on capitalistic concepts, we will look for other forms of
funding, included all sharia-compliant practices.

The relationship environment-company

 Our best practices will be oriented to environment protection. In our case the term
environment shall include both natural and human environments.

2.13. SOCIAL RESPONSABILITY

The definition of Socially Responsible Investments (SRI) is not universally accepted, for social
responsibility in the field of investments has different cultural roots of religious, environment, and
rights protection, therefore to such a concept people associate scopes and ideas largely different,
which still generate debates and uncertainty. The European Social Investment Forum (Eurosif)
bases its assumption on Socially Responsible Investments, stating: ‘SRI market combines financial
targets of investors with their ideas on environment, social aspects and ethics’. In this definition
they emphasize, not only on a social, environmental, and ethic component, but also on financial
performances, following the triple bottom line, i.e.
the rule of the three Ps: people, planet, profit.
Basing the assumptions on these ideas, the reasons that are at the basis of our company’s
investments can be highlighted in two points:
a) it always exists a moral imperative on sustainability of resources exploitation: sustainable
development is not in contrast with the achievement of a positive return on own
investments;
b) socially responsible corporations’ investments have always an economic worth.
Corporations careful with environment, employees, governance, and future can develop
their potentialities on the long run, and are not subjects to the risk of corporate, environment
or employment scandals. The accent on long run performances tied to higher costs that
company could have on the short period for implementing its virtuous practices. Therefore,
such costs could have a negative impact on short run profitability, nevertheless certainly
recovered in the long run.

The following table shows the summary of our investment strategies, as per Eurosif definitions:

34
 Investment strategies
Strategy Definition
Ethical exclusion This strategy is based on the exclusion of every
and all non ethical investments.
Positive screening It consists in the search of ethical scopes, and
clients who engage themselves to promote
socially responsible businesses, or produce
goods and/or services having external positivity.
This strategy includes the ‘Best in class’ and
‘Pioneer screening’ strategies.
Best in class This is a strategy consisting in the individuation
of leading investments following the SEE1 in
every sector or business group.
Pioneer screening/Thematic investment Thematic investments based on ESG principles,
propositions such as sustainable development, and an
economy based on energy and other resources
saving.
Norms-based screening This strategy is based on negative criteria
dictated by the OECD, ILO, UN, UNICEF, and
other major world organizations.
Simple screen/Simple exclusions Strategy which from one side excludes items
such as drugs, firearms, and tobacco, and fro the
other side promotes the safeguard of human
rights. It includes the ‘Norm-based screening’
strategy.
Engagement This strategy has the scope of encouraging the
adoption of socially correct behaviours, and
strengthening profits connected with socially
responsible businesses. It is based on the
influence of investor both of our and our
cooperating (clients and suppliers) partners, and
overall on a continuous dialog between investors
and society concerning the problem with social
responsibility.
Integration This strategy is based on the explicit
acknowledgment of CG/SEE assets expressed in
the algorithms of the traditional analysis.

Summing all those strategies up, we can state the construction of our socially responsible portfolio
is rather complex and has several steps. To be included into our socially responsible investments
our engagements must respect the following criteria:
- act with practical behaviours in support of environment sustainability;
- develop positive relationship with social interest bearers;
- respect and support the respect of human rights;
- insure good standards as far as suppliers are concerned;
- fight bribery and corruption.

1
SEE is the acronym of Social Environmental, and Ethical, which marries with a further definition, associated with the
former, which includes concepts related with corporate governance. This way the acronym SEE is transformed into
ESG (Environmental, Social, and Governance). Source: Eurosif 2006.

35
2.14. DEVELOPING AND PRICING NEW PRODUCTS (KNOW-HOW)

Until the 1970s the matter of marketing was defined at Universities as distribution. This term
indicates the main aspect was to issue or distribute a product on the market. The idea of distribution
survives, and often is uttered in statements such as ‘We need to issue….. be on the market, and do
some marketing’. It is a classic the McCarthy’s set in the 1940s of competition factors composed of
the four Ps, where distribution (Place) represents one of the four Ps, while the others are Product,
Price, and Promotion, whose logic is the following. Product, Place, and Place constitute the offer to
the market. By means of Promotion market has to be convinced to accept our offer.
A know-how company can get no advantage from the four Ps theory since Product is very hard to
define, and is perfectly fitted to each client, Price cannot be defined before the client has made his
final choice, Promotion does not work with a client who has a serious problem for which he is
looking for a solution, while Place of distribution is meaningless considering that a know-how
company works at client’s plant.
Certainly a few know-how companies have intuited that classic marketing cannot be of help to their
business, and for that reason have eliminated all those activities that can be classified as advertising.
A Know-how company can get more advantages from the theories developed in the 1970s, which
can be grouped under the terms ‘industrial marketing’. This theory emphasizes the close
cooperation between seller and buyer and outlines the importance of long term relationships.
At the beginning of the 1980s sprang up at the attention the so called ‘service company’ and
consequently experts began to develop theories for such companies. They coined the concept of
Service Management, and a golden rule seems to be lasting: the major rule of a service company is
to produce the highest quality at the moment of delivering the service (the truth climax).
In the States, during the aforementioned period, experts add three more Ps for the exigencies of
service companies. The new three Ps are Process, People, and Physical Evidence.
What we will indicate in this chapter is a vision of marketing based and developed from those two
schools: industrial marketing and service management. But before doing that, we would like to
spend a few lines to the definition of marketing. Marketing is a set of activities to create and
maintain clients. Rolf Back (see Arndt and Friman, 1981) gave the concept a further definition:
Marketing is the comprehension of what market, as preconceived, needs, desires, wants to have,
and requires; the ability of getting competence and more generally resources which get possible to
offer what markets requires, is the ability of communicating to the preconceived market that we
possess such a competence.

Please read again carefully that statement. In the first sentence marketing is stated as the
comprehension of what preconceive market needs. This comports that marketing be not only a thing
to do, but also a matter of having intuition and ability of understanding what market needs.
Furtherly please note the term ‘preconceived’. That indicates marketing is the ability of choosing a
market, ie his own clients. In the following sentence we can read that marketing is the ability to get
competence, and the resources needed. That means marketing has to do also with competence
development, and more generally with the availability of needed resources. At least, market too
needs to know that the company offers such competence.
But what has all this to do with the seven competition factors of know how company? Well, know
how company gets the comprehension of what market needs through its contact network, and
clients’ knowledge. The preconceived market can be reached by means of an appropriate choice of
clients. The opportunity of acquiring competence can be got creating a culture of competence, and
the ability to communicate such a competence can be verified by means of our contacts network,
communication, and concreteness.

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2.15. THE MARKETING MAX

Sometime we ask ourselves which of competition seven factors is the most important, or can give
the most immediate market result. To such question we need to answer that all factors are equally
important. Even if some of them probably give more immediate effects than others give on the short
term, marketing of a know-how company shall be set on the long run. In order to have success on
the long run all competitive factors are equally necessary. Even if under certain situations it can be
useful to bet more on particular factors, we cannot reckon on the seven Cs as on the four Ps.
In the theory of Ps we can calculate initiatives, try a new repartition of resources, and verify the
result. This operation is defined ‘marketing mix’: ‘If we reduce selling price, and increase
advertising, than……If we increase quality, decrease the number of selling points, and …..’
Any company which lives on the sale of knowledge must substitute a with an i of the term mix: we
need the max, the ‘Marketing Max’.

TO BE REMEBERED
1) A know-how company can exist in several sectors. The main characteristic of it is due to the
fact that its clients approach the company because they have a lack of knowledge for solving
their problems.

2) A know-how company reach the success when its co-operators can generate confidence in
their capacity of solving customer problems.

3) Marketing is all those initiatives which aim to generate and keep a client.

4) Seven Cs govern the marketing of a know-how company. They are complementary and
inescapable. They can be neither interchangeable nor quantifiable as the four Ps of
traditional marketing.

5) Marketing is much more than going market, and tell people about himself. Most work shall
be done internally.

Marketing max does not mean to focus all initiatives on all competition factors. It means to be
conscious all seven competition factors are connected. Competition factors influence each other.
Knowledge diffusion has to do with contact network, communication, and competence culture.
Contact network has to do with knowledge diffusion, client knowledge, and communication, and so
on. Because competition factors are so connected, it is not so important to decide from where to
start, but the starting point shall be decided following the company’s situation, time availability of
collaborators.
A fresh born company shall be dedicated to the construction of a contact network, clients choice,
and knowledge diffusion, while our company with a set of well defined clients has to examine
quickly its contact network, and communication for focusing on competence culture for creating a
solid basis for the future.

Therefore, because we have a contact network, let us start to build from there, and afford all
other aspects when they come.

Intuition is the most important aspect.

To work on marketing deals more with intuition than with planning. Certainly we need to act
systematically to operate conscious client choices, but for all other methods it is possible to start

37
being conscious of what we do, and letting that initiatives flow suddenly to the right way. Using
intuition and consciousness they will come spontaneously.
With the intuition of the importance of knowledge diffusion it is easier to write a paper for a
seminar, when corporate business is taken into consideration by newspapers. It is also easier to
thing about an argument with which to intervene in a conference, or what to write in an
advertisement.
With the intuition of the importance of contact network it is easier to start new relationships, keep
them alive, and exploit them.
With the intuition of the importance of communication it is easier to keep better and more regular
contacts with clients and contact network.
With the intuition of the importance of concreteness it is easier to introduce our company and its
services.
With the intuition of the importance of client knowledge it is easier to keep ourselves informed and
updated for discovering what our clients need.
With the intuition of the importance of competence culture it is easier to decide what our company
has to focus on during the time we do not reserve to clients.

2.16. COMPANY PLANNING AND POLICY

If the managing group and its collaborators are conscious of what competitions means and sectors
we have to develop, our company will have higher success in each of them.
This process can be accelerated setting up plans and policies. A few completion means can be well
planned, while for others policies fit better, while most of them needs both of them. To do plans and
set up policies can seem bothering, but it is not necessary they are extremely complicated and
complex to prepare (the birth of an intuition can require more time). On the contrary, we would say
the simpler they are the better is.
A simple planning can have such target as: “Next year we will try to involve those three clients we
have chosen…. to generate contact with business groups, and organize two seminars….”
A simple policy can have rules such as: “In our company we get every opportunity for diffusing
knowledge. We keep our contact network informed by means of letters, phone calls, faxes, and we
try to keep us informed on what to our clients happens. We ask to all our collaborators the
responsibility of keeping under control the surrounding world and to let colleagues participate to all
they come to know”.

Naturally it is the managing group to assume the responsibility of marketing. In a know-how

company marketing is a strategic matter –client choice influence company development in a very
high way. Nevertheless, most of this strategic responsibility has to be delegated to collaborators.
We need, therefore, to create a faith connection, which shall form among people. At the end,
specialist themselves shall assume the responsibility of creating, keeping, and developing their
clients. The consequence is that the managing group has to stimulate interest for marketing, and to
improve knowledge by collaborators. Marketing in a know-how company is not a matter to be
charged to a marketing department –it is a common charge.

The corporate managing group

has the duty of doing in such way that company set up targets and generate policies, plans and
market strategies. Managers respond of competence development, and shall stimulate the interest to
increase marketing knowledge in the whole company. The managing group issue resources on the
form of time and money, administrative services, and concrete tools.

38
Time is the most expansive item of marketing for a know-how company and here we find the
hardest work to do.

The marketing responsible

Someone inside the company has to be chosen to marketing responsibility. This person has the
function of connecting all intuitions, ideas, and shall plan, support, and coordinate the work of all
sectors. Furtherly he has the responsibility of producing corporate information material, brochures,
and newsletters.

The professionals, i.e. specialists

Have the responsibility of the competition factors on which our company focuses his work, and
shall be applied on a daily basis. Diffusing knowledge, cultivating relationship, communicating in a
constant way, etc are not very difficult duties, but they require ideas, and overall time.

Marketing we describe mostly consists of a way of seeing matters toward marketing itself where the
core business is respect and competence toward clients.
This way of doing marketing shall permeate the whole company, and all collaborators have
therefore to learn to cooperate to marketing.

We conclude the description of our competition factors underlining once more as marketing in our
know-how company moves from individuals.
This statement runs a risk: marvellous plans and policies can fail clamorously if company’s
collaborators are not involved in this operation, or they do not understand the meaning of it.
Bat there is further a positive aspect: already since tomorrow everybody can take a moment for
trying any small initiative that can contribute to improve marketing and sell corporate services.
Really there is no good reason for waiting around.

2.17. MARKET ANALYSIS

Starting from home market we can say that the success of frozen foods is now a constant reality.
They are 20 years that the curve of consumption moves upwards, with expansion moving up to
190.000 in 2009.
This success marks closely the evolution of consumption and customized food in our country, so
the sector of frozen food is considered a guideline in the alimentary fields.
A more detailed analysis of I.I.A.S. indicates that customized frozen food is among the few true
players developments in the spending on food in the last 20 years, the expenditure which decreased
as a whole than the other voices, buy it is instead grew significantly for the kind of food. This
evolution is undoubtedly the result of the constant improvement of quality of products, due to a
selective search on the raw material, new technologies for freezing, to a rationalization of
distribution channel and to an innovation.
A trend in growth, that of all the target of consumption, as the predominant feature of frozen
products are the extreme diversity of supply and organic expertise at hand, made possible by stocks
in freezers, for which the products frozen rationalize the cart without penalizing the quality food.
Recently, the favourable preparation of the consumer in respect of these foods is further increate,
thanks to strong demand for products with a higher content of service. This has encouraged the
assertion of frozen food of the sector of the ingredients ever more evolved. In recent years is then
recorded by the main producers pay greater attention to the level of quality supply, certainly not a
secondary factor in support of the constant growth of the market. This provision has therefore be

39
interpreted to the best and, in some ways, advance the trend today of news: the eating well as
synonymous with quality of life.
The progress made in the technologies for freezing, for example the possibility of freezing
individually singular ingredients which are in the offered deli ( through the process known as IQF,
individually quick frozen ) allow for faster reactivation of the dishes, extolling the result organic
and the overall quality of the product offered. It is wished to highlight that fact because the Pugnale
Company, than the competition, produces plants of high quality. It is therefore not intention to
change strategy for this aspect.
At the level of general consumptions, the sector of frozen foods in Italy has a potential still not fully
expressed, so that for the future the results, in terms of sales, should further improve increasingly
closer to those even better register in most European countries in which, albeit in different
percentages, it was found in recent years a substantial, and almost widespread positive trend.
Alongside the reasons more times remember, that supporting the frozen foods, there are also the
renewed confidence that buyers have invested in production processes and for the conservation of
the sector, in the process – Distribution and logistics planting regulatory. On the legislation, in fact,
quick-frozen products are among the few foods to have uniform European legislation.
The importance of Organized Large Distribution further increases in consumption of frozen food is
crucial, provided that the large areas know to organize the exhibition spaces and the sale and to
guide the consumer in the choices. It is needed, in addition, appropriate interventions also in the
area of the exploitation of space fridge for greater visibility to the department as a whole. It must be
said, in fact, that Italy is still lagging behind the other European countries, not to mention the United
States, where it is dedicated to space frozen up to five times greater. Interesting signals come from
catering, which represents more than a third of the total consumption and it handles about 280
thousand tons. Also in catering, traders seek practicality use and a good product from the point of
view and gustatory organic and found in frozen a response more and more efficient.
The growth of foodservice offers new opportunities to those products that want to exploit new and
different business possibilities. This expansion seems geared toward sectors very precise clarified
that the market is in good health, and that the main companies of the sector play a driving force, an
interesting phenomenon is the affirmation of specialists. Those companies, i.e., which don’t throw a
full range, but only some specific references in defined segments, as a snacks, pizzas or traditional
recipes. The result will be a further reinforcement of the market and a guidance even greater high
quality, as it will rely on products excellence. In general, it is expected to focus on product
innovation, now a particular feature of the sector, will continue to be supported by the main
companies in the sector. It follows increate demand for plants.

New application fields

Thanks to continuous quality improvements and innovations to the manufacturing plant and
technology, our company proposes in the short term, further to the traditional range of equipment,
also new systems that can be used in the following fields, which are forecasted to have a rapid and
significant development in the medium term: new potential applications in the immediate future.
- Bread making
- Sterilization aseptic cans
- Freezing liquids
- Turn-key plants

40
2.18. ROBOTICS

41
Robotics represents a complex of new technologies, which allow Pugnale International to create
newer and newer applications able to satisfying the growing needs of profitable processes.

42
2.19 MEDICAL EMERGENCY SOLUTIONS

For further information please follow the link: http://www.emergencysolution.it

43
2.20. ENERGY TRIGENERATION OR DISTRICT ENERGY SYSTEMS, PROVIDENCE
UP TO 50% GREATER SYSTEM EFFICIENCY, AND FUEL SAVINGS OVER TYPICAL
COGENERATION

The major aim of this product proposal has been to analyze the opportunity of investing in new
technologies that can improve the total quality of our business and maximize profit of both clients
and our company.

The first aspect we were lost in has been the energy quantity and quality our current products
consume, the efficiency of energy exploitation, and the total savings our customer can get from
worthy innovations.

Furtherly we have analyzed the profitability of changing our marketing strategy, moving from a
vision ‘product oriented’ to a vision of ‘Know-how Company’ oriented.

The first aspect has been approached proposing energy trigeneration as the most efficient technique
for solving the problem of energy consumption and efficiency.

The second aspect has been approached proposing the new vision of working as Know-how
Company.

Both arguments are treated below with details and analyzed in both qualitative and quantitative
aspects.

Please, take into consideration that trigeneration can be applied using the following conventional
and/or innovative energy sources:

- Coal
- Liquefied coal
- Oil
- Gas
- Geothermic steam
- Biomasses or Biogas
- Solar
- Any combination of the aforementioned thermal sources.

"Trigeneration,” also referred to as "district energy," or "integrated energy systems," is dramatically

more efficient and environmentally friendly than "cogeneration."

A well-designed trigeneration plant will surpass the efficiency of a cogeneration plant by about 50%
and a utility power plant by 300%, of similar size.

A trigeneration plant, defined in non-engineering terminology, is most often described as a

cogeneration plant that has added absorption chillers - which takes the "waste heat" a cogeneration
plant would have "wasted," and converts this "free energy" that would have been wasted by
cogeneration, into useful energy in the form of chilled water.

The trigeneration power and energy process produces at least three different forms of energy from
the primary energy source, namely, hot water, chilled water (for air conditioning) and power
generation (electrical energy). Many times, steam is also produced from the trigeneration power
plant - especially at hospitals, which are an ideal location for trigeneration plants.

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Trigeneration has also been referred to as CHCP (combined heating, cooling and power generation),
this option allows having greater operational flexibility at sites with demand for energy in the form
of heating as well as cooling. This is particularly relevant in tropical countries where buildings need
to be air-conditioned and many industries require process cooling.

Example of a Gas Turbine Based Trigeneration Facility

Although cooling can be provided by conventional vapor compression chillers driven by electricity,
low quality heat (i.e. low temperature, low pressure) exhausted from the
cogeneration plant can drive the absorption chillers so that the overall primary energy consumption
is reduced. Absorption chillers have recently gained widespread acceptance due to their capability
of not only integrating with cogeneration systems but also because they can operate with industrial
waste heat streams. The benefit of power generation and absorption cooling can be realized through
the following example that compares it with a power generation system with conventional vapor
compression system.

Trigeneration or District Energy Systems,

Providence up to 50% Greater System Efficiency and Fuel Savings Over Typical
Cogeneration

"Trigeneration,” also referred to as "district energy," or "integrated energy systems," is dramatically

more efficient and environmentally friendly than "cogeneration."

A well-designed trigeneration plant will surpass the efficiency of a cogeneration plant by about 50%
and a utility power plant by 300%, of similar size.

A trigeneration plant, defined in non-engineering terminology, is most often described as a

cogeneration plant that has added absorption chillers - which takes the "waste heat" a cogeneration
plant would have "wasted," and converts this "free energy" that would have been wasted by
cogeneration, into useful energy in the form of chilled water.

The trigeneration power and energy process produces at least three different forms of energy from
the primary energy source, namely, hot water, chilled water (for air conditioning) and power
generation (electrical energy). Many times, steam is also produced from the trigeneration power
plant - especially at hospitals, which are an ideal location for trigeneration plants.

Trigeneration has also been referred to as CHCP (combined heating, cooling and power generation),
this option allows having greater operational flexibility at sites with demand for energy in the form
of heating as well as cooling. This is particularly relevant in tropical countries where buildings need
to be air-conditioned and many industries require process cooling.

Example of a Gas Turbine Based Trigeneration Facility

Although cooling can be provided by conventional vapor compression chillers driven by electricity,
low quality heat (i.e. low temperature, low pressure) exhausted from the
cogeneration plant can drive the absorption chillers so that the overall primary energy consumption
is reduced. Absorption chillers have recently gained widespread acceptance due to their capability
of not only integrating with cogeneration systems but also because they can operate with industrial

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waste heat streams. The benefit of power generation and absorption cooling can be realized through
the following example that compares it with a power generation system with conventional vapor
compression system.

Trigeneration Example by the numbers

A factory requires 1 MW of electricity and 500 refrigeration tons* (RT). The gas turbine generates
electricity required for the on-site energy processes as well as the conventional vapor compression
chiller.
Assuming an electricity demand of 0.65 kW/RT, the compression chiller needs 325 kW of
electricity to obtain 500 RT of cooling. Therefore, a total of 1325 kW of electricity must be
provided to this factory. If the gas turbine efficiency has an efficiency of 30 per cent, primary
energy consumption would be 4417 kW.

However, a cogeneration system with an absorption chiller (thereby making this a "trigeneration"
plant) can provide the same energy service (power and cooling) by consuming only 3,333 kW of
primary energy versus 4417 kW thereby saving nearly 25% in primary energy usage. This is why a
trigeneration plant is even more efficient than a cogeneration plant.
This example clearly points out the advantages of trigeneration over typical cogeneration plants. A
trigeneration plant (with an absorption chiller) can save about 24.5 per cent of primary energy in
comparison with a cogeneration plant and vapor compression chiller.

Additionally, a smaller prime mover leads to not only lower capital cost but also less standby
charge during the system breakdown because steam needed for the chiller can still be generated by
auxiliary firing of the waste heat boiler.

Since many industries and commercial buildings need combined power and heating and cooling,
trigeneration plants have very high potentials for industrial and commercial application - with the
associated energy and economic savings inherent with trigeneration.

* Note : A refrigeration ton (RT) is defined as the transfer of heat at the rate of 3.52 kW,
which is roughly the rate of cooling obtained by melting ice at the rate of one ton per day.

(This example and information courtesy of ASHRAE)

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Fig. 1 - Trigeneration Diagram

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 Fig. 2 - Trigeneration CHCP

Fig. 3 - Cogeneration/Trigeneration Feasibility study

Fig. 4 - Elements within a Tri-Generation Solution

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 Fig. 5 – The power of trigeneration

Fig. 6 – Electrical Generation Efficiency % LHV

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Fig. 7 – Trigeneration Process Outline

Fig. 8 – Micro turbines

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2.20 PHOTOVOLTAICS SPECIAL APPLICATIONS

Photovoltaic Shelter

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2.20. CUSTOMER LIST
The Pugnale s.r.l. has so far provided more than 500 machines for use in the fields of refrigeration,
freezing, sterilized protection and cooking, with excellent satisfaction of customer requests.

Please find below in the following next 5 pages a full Pugnale’s s.r.l. costumer list.

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Pugnale International s.r.l. has so far provided more than 100 machines for use in the fields of
chemical – pharmaceutical and sterilization, satisfying, even here, all customer requests. High
quality and reliability of the products have always proved their high standards.
Pugnale International may include in its direct customers almost all European firms that use oxygen
in the food sector and/or are users of sterilization tunnels:

Boehringer Istituto Militare Italiano: www.boehringer-ingelheim.com

Nestlé: www.nestlè.it
Takeda: www.takeda.com
Unilever: www.unilever.com
Italchimici: www.italchimici.net
Shimizu: www.shimz.co.jp
Novartis: www.novartis.com
Mutti: www.mutti-parma.com
Serac: www.serac-group.com

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2.23. SETTING GOALS AND FORMULATING STRATEGY

Premises
Our Investment Program in cutting off a branch of Pugnale s.r.l. gives us the opportunity of keeping
the technology, workmanship and clients of the former company and to innovate in marketing
philosophy, management skills and experience, and innovating a few strategic products in
sterilization.

The Purpose of our Program

“Give superior, innovative and unique growth opportunity to a glorious branded
technology in a global economic and political contest”.

The starting point in our effective management is setting goals, i.e. objectives that our business
hopes (and plans) to achieve.
Certainly deciding what we intend to do is only the first step for our organisation.
Decisions shall not be made on a problem-problem basis, or merely to meet needs as they arise, and
a broader program underlies those decisions. We have a strategy that we’ll try to summarize in this
chapter.

The Goals of our Program

Long-term goals: (5 years or more)

Set up in our market the culture of innovation and environment exploitation through
sustainable growth and businesses for running Advanced Study and Research programmes
which can lead to excellence and social context improvement.

Run Vocational Training (off-the-job, on-the-job, simulated, even on e-learning).

Give the best economic service to companies worldwide with our Technology Innovation
and socialization.

Serve the major Corporations worldwide.

Becoming partner of those corporations who like to be entrepreneurial in creating new real
wealth.

Intermediate goals (set for a period of 1 to 5 years)

 Increase the economic and social development of the food market worldwide even through
economic profitability.

 Improve both clients’ number and profitability.

 Minimize the unit cost of researching, engineering, and manufacturing

 Be assessed as one of the leading company in its field.

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Short-term goals (set up to 1 year)

 Specialize in Food Conservation Advanced Study and Research at least 10 students who will
suddenly be enrolled with our companies as employees’ teachers and/or tutors.

 Form a sufficient number of employees to perform the necessary tasks to manage our
companies.

 Construct a pilot team for the innovation of niche and large consume of food and medical
products conservation.

 Construct a pilot manufacturing plant in innovative tools sterilization.

 Train specialists on behalf of client companies.

 Reach the break-even point in two years.

3) Mission Statement

3.1 - To reach the short term goals we will cooperate with major Universities, Research Centres,
and Corporations in Europe, the States, Japan, Brazil, India, and China.
In this early stage we absolutely need, and we will, be supported by personal references and
contacts. At this purpose we can count on our membership and contacts with the National Sections
of the International Chamber of Commerce, as well as the introduction we have with major
Universities and Companies.
To be promoted we strongly believe in the “word of mouth” of Pugnale s.r.l. former clients as the
best and most efficient way of communication. Nevertheless we also need to promote our business
on international press and communication media too.
The relationships we have in Europe seem to be enough, at the moment, to fulfil our early targets,
and to reach the break-even point within the first two years. The relationship we will reach with the
banking world can be a definitive help.

3.2 – To reach the intermediate goals as far as new specialists, tutors and trainers will be available
seems to be comfortable, since such increase will come as a consequence of the effort we have done
for reaching our short-term goals.
As far as the number increase of client companies is concerned, we strongly believe that working in
close cooperation with the major International Organization -giving opinions, suggestions, and
overall being present and efficient at topic meetings- will certainly lead to new clients acquisition.
For this purpose we have already acquired contacts and relationship with all connections we need.
Furthermore, our partnership with professionals worldwide in the “World Business Network”, can
guarantee a continuous acquisition of new clients.

3.3 - Long-term goals could be reached also through a complete cooperation with major
corporations, which are interested in investing in our innovative products.

Certainly most research will be based on simulation, which shall be on-line or off-line (in both cases
supported by telematics), whilst Training on-the-job will merge with consulting and servicing.
As far as this statement is concerned, we are discussing with the International Chamber of
Commerce to set-up any effort to improve such solution in cooperation with major R&D
Companies.

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4) SWOT Analysis

4.1 – Strength
Our strength is our experience and skills in innovating in freezing and sterilisation, as well as giving
the most appropriate “customer oriented plans” we can apply nowadays to our clients for issuing
fast, reliable and profitable business worldwide.
Our experience and skills give us the opportunity of having ROI in some two years.
The construction of a World Business Network will generate a spread interest in our innovative
arguments.
Our ability in Technology Transfer and Business Intelligence will certainly foster any further
implementation of both domestic and international businesses.
Furthermore we are going to project our Network in a business, which could become the core of
future global business.

4.2 – Weakness
Our weakness is mostly based on the difficulty of letting prospects to understand what a Know-how
company is and how it operates. For instance, if to a painter you commit a painting, certainly you
cannot have a preview of its work. You need to accept his final work as it comes. If you do not trust
in that artist it should be better to look for a better one, if you can find any.

4.3 – Opportunities
Pugnale International has opportunities coming from the former clients of Pugnale, just awaiting for
their orders and selecting the most profitable of them. The only risk is to deeply analyze the most
proficient of them.

4.4 – Threats:
Our major risk is due to our small size and poor financial assets. In such a condition even small
errors could be mortal.
To partially avoid this risk we need to closely cooperate with all the financial organizations
involved in our start-up by means of periodic revision of our business plan in order to verify every
Delta in our forecast.

5) Marketing Consulting Staff

From our marketing consultants we point out the following names:

Industrial and Commercial Associations (amongst them)

 ASSONIME (Associazione Società per azione e a responsabilità limitata), Roma

 Confindustria, Roma
 Confcommercio, Roma
 Istituto Commercio Estero, Roma
 Nestlé, Basel
 Basf, Basel
 Philip Holzman, Frankfurt
 Mac Alpine, London
 Marangoni, Rovereto (TN)
 Freddi Dolciaria, Moncalieri (TO)
 Merloni, Fabriano (MC)

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 European Space Agency (Toulouse)

Universities

 Haute Ecole de Gestion Arc, Neuchatel – Delèmont

 Private Hochschule Wirtschaft, Bern
 Hochschule für Wirtschaft, Luzern
 SUPSI – Ticino
 Politecnico di Milano (Economia, Ingegneria, Giurisprudenza)
 Università Bocconi, Milano (Economia, Ingegneria, Giurisprudenza)
 Università di Parma (Faculty of Economics)
 Università di Firenze (Faculties of Economics and Law)
 Università La Sapienza, Roma (Faculties of Economics and Law)

Consulting Staff

For this project we have applied to the following consulting people and organisms:

1. Prof. Enrico Sciubba – Professor of Turbo-machinery & Energy Systems, Dept. of

Mechanical & Aeronautical Engineering – La Sapienza, Roma
2. Dr. Roberto Capata, Faculty of Mechanical Engineering, La Sapienza, Roma
3. Prof. Giuseppe Ardigò – Docente di Economia Aziendale – Università di Parma
4. Dr. Manlio Guido - Generale i.c. della Guardia di Finanza, Roma
5. Istituto di Ricerca in Agricoltura San Michele, Pavia
6. Faculty of Veterinary, University of Bologna
7. The Italian Section of the International Chamber of Commerce

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HUMAN RESOURCES STATEMENT

3.1. The Competences for a Know-how Company

In Chapter two we have posed a straight question: “What have competence and culture to do with
marketing?”
Now it is time to pose the same question for human resources.
Corporate competence can be compared to a magnet, which attracts clients.
The higher the competence level, the stronger the attraction power on market, both on clients and
their partners.
There are other reasons, further to marketing, for which it is useful to develop competence.
A know-how company lives of competence selling. Considering competence as a saleable product,
nevertheless it presents a series of characteristics which make it difficult to be treated: it is
immaterial, and non appraisable. It is difficult to be possessed, stored, and protected. It risks to
disappear if important collaborators leave. It thins down little by little company sells. It ages
rapidly. A know-how company lives in other words of a raw material extremely delicate, transient,
unreliable. Then, there is only a way for surviving in the market, when one sells competence, and it
is the one of have continuous new competence.
For these reasons we are searching the co-operation of research centres, graduate schools, and all
goodwill people who want to participate to our development.

Competence is made both of skills and willingness.

Competence is the common result of skills and willingness of developing a charge or a business.
In skills we include knowledge, experience, judgment ability, readiness, and contacts needed for
developing a well determined charge or business. In willingness we comprehend self estimation,
engagement, and motivation. These terms can on their turn be defined and specified, but it is
important to understand that competence is much more than knowledge.
knowledge: to know also facts and methods
experience: to learn by errors and successes
judgment capacity: to understand and judge
readiness: to know what to do (write, introduce oneself, to speak foreign languages, to use
tools, computers, models, etc.)
contacts: to have a contact network, and be social
security of oneself: to believe in one’s capacity
engagement and motivation: to be willing, to have physical and psychical strength
Our Human Resources Management is oriented to competence. We dedicate huge effort for forming
and keeping skilled and experienced people with us. We want a mutual help in our company.

No financial assets can assist a company if its human resources management is not oriented to
competence.

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R&D STATEMENTS

4.1. The Competences for a Know-how Company

In Paragraph 2.4 we have introduced the concept of “KNOWLEDGE DIFFUSION”, which is the
key of our vaults.

We previously said that to buy from a know-how company is more difficult than to buy
blindly from a closed box. Not only customers has to decide purchasing without having verified the
content of the box, but often he cannot even imagine what is enclosed in the box. In fact, even if the
seller company opens the box inside there is not too much to be examined. Service arises only after
the client has decided to buy it. For this reason a client can never be sure about what he really has
purchased. Therefore it’s our technicians and R&D people to steer customer requests toward the
right rail of problem solving.
Furtherly, a client is less certain of what the final result of his acquisition will be. In order to
help its client to buy its services, a know-how company has to give knowledge. Customers shall
receive information on both business sectors, corporation and corporate employees in order to:
- understand the opportunities offered by the market
- choose the appropriate partner/supplier
- choose the most appropriate offer
- cooperate and contribute to worth the services
- assimilate the goals the service can get.

For these reasons the diffusion of knowledge is one of the basic concept of marketing of a know-
how company, and competition of the company is strictly connected to its capacity of diffusing
knowledge both externally and internally. In this context the term marketing reaches its deepest
sense of “process fir maximizing profit” of both seller and buyer.
Therefore, R&D has the primary scope of analyzing and appraising the importance of diffusing
knowledge externally, and how to perform it.
Any know-how company has two field on which to work in diffusing knowledge: the company
itself, and the field of activity.
Who does not diffuse information on its field of activity does not consider that before or after client
needs to have an opinion on the different opportunities he has received, before going searching
suppliers. One of know-how company’s dilemma is just the fact that often they offer solutions
completely unknown to the surrounding world. The consequence is that market has not even the
competence needs to comprehend its own needs.
Diffusing information on its own business, the company can help client to understand his own need
and to desire to find out a solution. Only then the client can step on, i.e. to the choose its supplier.
Furtherly, how can a client choose amongst different know-how companies? Now he needs
information on the different bidders, nevertheless the official information he can get does not help
him so much. He has no product to be confronted, and the size or the turnover of the know-how
company is not important. Nevertheless the opinion of the client about suppliers is extremely
important. Just moving from that he can appraise the capacity of different bidders to supply the
service he needs. Therefore, diffusing well balanced information on what a know-how company
does and on its services, can help the client to have an opinion for choosing its supplier.

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The opinion of a client on our company, i.e. the vision he has, is the imagine of our company. Here
we are at a crossing point: in every know-how company it exists a strong connection between
imagine and knowledge diffusion. In order to explain this tie we need to examine closer the concept
of imagine, which represents the opinion the external world has about our company. Our imagine
can be quantified, and this is done reckoning two variables: knowledge and opinion. With the term
knowledge we intend the information about our company, while with the term opinion we intend its
level of appreciation. In every uncertain situation the sensation of already heard before gives
confidence. Every know-how company is by definition extremely dependent on the fact of just
being identified as a know-how company. In fact it has no concrete products to expose for attracting
the surrounding world.
The conclusion of this reasoning is that if our company increases the knowledge that the
surrounding world has about it, the automatic consequence is the formation of a positive opinion.
For our company this aspect is very practical. Considering our function of selling knowledge we
need to assume the must of diffusing knowledge about the company and its business sector. This is
a track more simple and trustworthy than the one of trying to influence the external world.
A further difference with a traditional service company is that every client of a know-how company
has his own responsibility on the way with which our company develops its own services. Such a
responsibility concerns also the appraisal of need, i.e. part of the goal of the service.
In such a case the know-how company differs from goods manufacturers, which by norm assume a
global responsibility about the good functioning of their products. Sometime this responsibility lasts
for years after sale. As know-how company our company cannot assume the total responsibility, but
has to involve its client into the responsibility for an appropriate service issuing. In fact, what
outcome can have a training course if the clients employees do not attend lessons? What outcome
can have an information system if the client does not learn its use?
For clients can assume responsibility, its needed he has enough knowledge that only our company,
as know-how company can give.
A salesman dreads while a teacher reassures.
Avoiding any sort of advice to salesmen on this strategic issue, we just want to emphasize the
importance of diffusing knowledge in a know-how company.
To get this goal our company shell appear expert in the whole business sector, shall offer
information and, instead of acting as a seller, shell act with pedagogic and didactic behaviour.
Our company needs to be part of the client’s project since the first phase of it. It is at that moment
that client prepares himself to get decisions. This is the crisscross point where we need to insert our
didactic role: in fact what does he do who diffuses information and knowledge? He acts as a
teacher. Every professional of the company shell never act as a classic salesman: the behaviour of a
teacher inspires respect and trust.
Let us create our imagine of expert
By means of knowledge diffusion our company shall generate the imagine of itself as expert in its
sector. Therefore we need to collect all the opportunities for demonstrating our competence.
The role of the expert is a role that inspires sympathy even among the so called opinion leaders,
such as for instance mass-media. Journalists are in a situation similar to that of a client: they too try
to have a global vision of the complex sectors which evolve rapidly, and the same happens to
politicians, general managers, researchers, corporate association, etc.
A company which is not mostly interested in sales, but to help journalists to understand the business
sector, and point out trends and appraise the news can become an important reference point for any
newspaper.

INNOVATE WITH SOCIAL RESPONSABILITY

The definition of Socially Responsible Investments (SRI) is not universally accepted, for social
responsibility in the field of investments has different cultural roots of religious, environment, and

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rights protection, therefore to such a concept people associate scopes and ideas largely different,
which still generate debates and uncertainty. The European Social Investment Forum (Eurosif)
bases its assumption on Socially Responsible Investments, stating: ‘SRI market combines financial
targets of investors with their ideas on environment, social aspects and ethics’. In this definition
they emphasize, not only on a social, environmental, and ethic component, but also on financial
performances, following the triple bottom line, i.e.
the rule of the three Ps: people, planet, profit.
Basing the assumptions on these ideas, the reasons that are at the basis of our company’s
investments can be highlighted in two points:
a) it always exists a moral imperative on sustainability of resources exploitation: sustainable
development is not in contrast with the achievement of a positive return on own
investments;
b) socially responsible corporations’ investments have always an economic worth.
Corporations careful with environment, employees, governance, and future can develop
their potentialities on the long run, and are not subjects to the risk of corporate, environment
or employment scandals. The accent on long run performances tied to higher costs that
company could have on the short period for implementing its virtuous practices. Therefore,
such costs could have a negative impact on short run profitability, nevertheless certainly
recovered in the long run.

E.F./gc June 2012

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