SUMMARY OF MARKETING MINOR

Submitted to: Mr. C van Leeuwen Submitted date: 8 April 2011 Submitted by: Chymo Meng (0815196) Alexandra Filatova (0842785) Evgeniya Nikolaeva (0841751) Zineb Slimani (0815520) Kimi Jin (0833225)

INTRODUCTION

The project group is set up by five international students, coming from China (2 members), Russia (2 members) and Morocco (1 member). Each member of the group has his individual tasks, which are equally important in this project and require high responsibility. Considering groups goals on marketing minor field, five industrial sectors have been researched, such as meat, furniture manufacturing, clothing, energy, and social tourism, which are based on 13 criteria. Then, these five sectors have been compared, considering all positive and negative issues that brought the group to choose one sector (Clothing Industrial Sector). The project group will find out the common problems of companies experience in this sector. Also, there is need to do a survey in-depth in this sector, by gathering all important information about companies difficulties. Then, all group members will have to start to conduct information through the use of surveys from 50 up to 100 companies that would help the group to understand the problems of businesses in clothing sector and to determine for which problems there is a solution. To have success with this project: The group will prepare questionnaires, then, will approach companies in different ways to get complete information and identify major problems of the enterprises and at the end, the group will work on finding a company to provide a consultancy service. SECTOR DESCRIPTION During the project each member of the group was aimed to choose an industrial sector for analyze. Such sectors as meat industry, furniture manufacturing, clothing industry, energy industry, and social tourism industry have been chosen and described with criteria. Meat industry The meat industry influences the environment, but most of the major countries and organizations in the world have ambitious plans to protect this environment. The animal industry consumes a huge amount of resources and produces massive amounts of waste. Furthermore, meat is the daily consumption good in Europe, so this is a need of European meat industry to become more sustainable. Sustainability is becoming more important issue in every sector of economy. In the European meat industry, the small and medium enterprises should know the importance of sustainability in their sector. In this sector, there are 310 thousand companies, which are existing, approximately 15 thousand of them were founded less than two years, and 36 are consulting companies in 16 countries: Austria, Belgium, Luxembourg, Denmark, Finland, France, Germany, Greece, Ireland, Italy, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and The United Kingdom. Between 2004 and 2009 the growth rate was 2.7%, the profitability reached more than 93.9 billion euro, and the annual turnover more than 900 billion. The total West European Processed Meat Market was worth 113.8 billion euro in 2009, the Top-10 West European companies supplied 29.2% of this market, but this total market is the forecast to decline at an average annual real -0.81% during the 2009 to 2012 period.

Increasingly people and experts are talking about reducing animal food consumption, also, the small and medium businesses in the European meat industry should have measure or actions related with it. Raising animals for food requires massive amounts of land, food, energy, and water, and contributes to animal suffering; the most serious environmental problems of our time are all directly linked to eating meat. Furniture manufacturing The furniture industry is essentially an assembling industry, which employs various raw materials to manufacture products, which range from wood and wood-based panels to metals, plastics, textile, leather, and glass. Nowadays, the European furniture industry has a high level of production quality in technical, aesthetic, design and fashion related terms and has a strong image worldwide. The European furniture sector comprises around 150 thousand companies and 30 000 manufacturers in Eastern Europe. There are approximately 49 thousand European organizations, which are existing less that 1-2 years. Also, there are 400 consultancy companies among the leader countries of furniture business in Europe. The European furniture sector generates turnover of almost 126 billion euro, an added value of 38 billion euro and employs around 1.4 million people. Its profitability is near seven billion euro. The main producers are: Italy and Germany followed by UK, France and Spain and, to a lesser extent, Poland. Sustainability in furniture manufacturing is rather high. Nowadays, European furniture manufacturers and suppliers start to establish and expand their environmental management system.Moreover, furniture manufacturers and suppliers start to practice sustainable business. For example, sustainable furniture: contains high percentage of post-industrial recycled material uses natural and rapidly renewable materials utilizes water-based, low-VOC adhesives, paints and coatings contains no added urea formaldehyde is packaged efficiently with reusable, recycled content and/or recyclable materials is modular and adaptable can be returned to the manufacturer for reuse and recycling after its useful life

All the information about companies and manufactures was found through the Internet, providing the contact information addresses of the organization. The level of internationalization is 8-12% in Europe, and average growth rate was 1.4% between 2005-2009 years. Its bankruptcy rate was 1,5% in the period since 2007 till 2009 year in Europe. European countries have the largest furniture market in the world. There are 27 furniture manufacturers of the European Union that produce 32% of global furniture industry. The average market share, among leading European furniture producers, is about 10%.

Clothing Industry

European Union is the largest world market for clothing products. The clothing sector is both a labour intensive, low wage industry and a dynamic, innovative sector. It is mainly an SME-based industry, where in this sector approximately 139 thousand enterprises that involve about 32 thousand companies, which are existing less than 1-2 years. In the European Union, there are the biggest producers in clothing industry, such as France, Germany, Italy, The Netherlands, Spain and the UK, accounting for about three quarters of EU-27s production of clothing. Companies' expectations of the Single European Market have brought a great number of international operations in Europe that is 24 %. Nevertheless, its growth rate is 6.3% and its market share is near 8%, although, its bankruptcy rate is 0,7%. In addition, its profitability is 88,083 million euro and its annual turnover is above 167 billion euro. Every year the number of enterprises of eco-friendly clothing is increasing. Nowadays, companies are working to find more sustainable raw materials, such as organic cotton, hemp and bamboo. The main reason, is to fulfill the demands of people, of eco-clothing. People have perceived the harmful effects of synthetically produced clothes, as well as the harm done to the environment during producing these clothes. The other benefits of going green are: -to reduce cost, -to improved image, -to have loyal customers. In apparel sector, there are working 2520 employees in 252 consulting companies. Generally, many enterprises in this industry have an international chain that affords them to be available to their customers. Also, lots of such enterprises have their own websites, where is aloud for their consumers to order products online. Today the competitive advantage of the European clothing sector lies in its focus on quality and design, innovation and technology, and high value-added products. The fast fashion concept streamlines all the production and distribution steps of the supply chain, enabling fast response to customer needs. Another example is the use of 3D body scanners and web-based data communication between retailer and manufacturer to produce individual made-to-measure garments at a price comparable to a mass product. The Leapfrog project that aims at measurable efficiency improvements 60% time gain through 3D virtual garment design, 80% reduction in machining times for complex garments, and reduction of quality faults and errors from 15-20% to zero. Also, such innovations as virtual design, advanced robots, optical and electronic fibers helped to keep European industry competitive. Thanks to innovation, a traditional European industry is entering a new phase. Energy industry The energy industry is developing faster, then a few years ago. There are more than 2500 small and medium enterprises in Europe, and 2137 of them exist less 1-2 years. Its annual turnover is 1.6 billion euro, and profitability is four million euro. This sector is quite international; the growth rate is 5% and its bankruptcy rate is 1.2% that is not very high. There are 34 consulting companies and there are three main markets in Europe, such as The Netherlands, Germany, and UK. The level of sustainability in this sector is rather high. The industry has always been committed to sustainable human development and green economy.

Rational use of energy is a big problem. To extend lamp life, reduce the chance of waste pollution, is good for the environment. Legislation on lighting systems could lead to up to 40% energy savings; "Low-carbon economy and "energy saving" are worlds future. Lamp bulb recycling and reducing the power page will be the future trend in development. In this sector there are lots of inventions, like both sound and light control light, LED light, U-type, and spiral light. Social tourism industry The last business sector is considered of social tourism. Its a special type of tourism for the youth, the old and the disabled according to their needs with affordable price, representing the concept of sustainability and development. Generally, tourism generates more than 5% GDP, with about 1.8 million enterprises employing around 5.2% of the total labor force within the EU. Tourism currently is in need of new strategies to expand the market both on destinations and ideas. From this comes social tourism, covering a set of specific measures, including the definition of social policies of tourism, the establishment of support systems for staff training and creation of infrastructures among others. It offers to people, with lower incomes, disabled and old people, a chance to enjoy a pleasant time. It helps to operators strive to make essential contributions to the improvement of human relations, through animation activities, and training. Social tourism also reflects human needs, as it addresses concerns for the availability and accessibility of vacations at reasonable, affordable prices. Thirdly, it focuses on destinations which are not so popular or well-developed; it aims at supporting local business and development. It encourages local shops and restaurants, as well as transportation services and hotel industries. According to all the above innovative ideas aspects on sustainability and possible marketing opportunity, social tourism has been considered as one of the final choices. SECTOR COMPARISON
Criteria Sector No SMEs No SMEs Less 1-2 years Meat industry 310 000 1463 Internatio Growth Consulting Bankruptc Profitability Turnover Market nalization rate companies y rate share (in billions)

4%

2.7%

36

1,4 %

93.9 billion euro 6,93 billion euro

900

29.2%

Furniture 150 000 manufactu ring Closing industry Energy saving light industry Social tourism industry 138 863

4875

8-12%

1,4 %

400

1,5 %

126

10 %

31 356

24 %

6.3%

252

0,7 %

88,083 mln euro

167

7,7 %

2500

2137

46 %

5%

34

1.2%

4053 million 1.6 euro

4%

1.8 million

133 The Asia oriented16 % Netherlands)

5%

Criteria Sector

Sustainability

Accessabilit y

Innovations

Meat industry -reduce greenhouse gas and improve websites the energy efficiency -requires a huge amount of land, food, energy, and water but also contributes to animal suffering

Raising animals for food requires massive amounts of land, food, energy, and water, and contributes to animal suffering.

Furniture - uses natural and rapidly renewable websites manufacturing materials - utilizes water-based, low-VOC adhesives, paints and coatings - meets one of three IAQ certification programs - is packaged efficiently with reusable, recycled content and/or recyclable materials -can be returned to the manufacturer for reuse and recycling after its useful life Clothing industry

-Compactness -Designs -Materials -Technologies -Processing technology

-to fulfill the demands of the people international -Fast fashion of eco-clothing chain; -3D body scanners -to reduce cost websites -Web-based data communication -to improved image -Leapfrog -to have loyal customers -Virtual design -Advanced robots -Optical and electronic fibers

Energy industry

-Legislation on lighting systems could lead to up to 40% energy savings -"low-carbon economy " and "energy saving"

websites

-Both sound and light control Light -LED light -U-type and spiral light

Social tourism -Care of human-nature industry -Support local area and culture -Local restaurant and transportation

Email, Phone, Backpackers, elder people and Company disabled people Visiting - Focusing on human-needs - With a comparably low price - Off-season period

These tables present all the data, which group has founded for each sector. All members of the group used tables to compare sectors and come up with the final decision. To start the comparison, the group saw that in social tourism sector there are smaller and medium enterprises than in other sectors. However, the closing industry has the biggest rate of small and medium enterprises, which were founded within the last two years. The highest bankruptcy rate is in the furniture manufacturing sector, which is 1.5%. The energy industry has the highest percentage of internationalization. The meat industry has the highest criterias, such as consulting companies, profitability, annual turnover, and market share. However, comparing other criteria, every industry has its own sustainability and innovations. In addition, the group has chosen the closing industry, because it has great sustainability and innovations.

CONCLUSION Clearly each sector has its strengths and weaknesses. The clothing industry has the largest number of new companies and its level of sustainability is quite high. In this sector there are companies, which easier to contact than in other sectors. The competition in this sector is rather high. It is the industry, which has the most potential need for consulting groups.