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Editors: Katalin SZENDRŐ Mihály SOÓS
Lector: Patrick ALEXANDER
Editorial office: Kaposvár University, Faculty of Economic Sciences H-7400 Kaposvár, Guba S. u. 40. H-7401 Kaposvár, P.O.Box 16. Tel.: 36-82-505-800, Tel./Fax: 36-82-526-593
Published and distributed by Kaposvár University, Faculty of Economic Sciences H-7400 Kaposvár, Guba S. u. 40. Printed by Central Press, 100 copies producted
May 2013 Kaposvár
SUSTAINABILITY AND SOCIAL MARKETING
EXPERIENCE IT MATH
SUSTAINABLE LOCAL DEVELOPMENT STRATEGIES IN RURAL AREAS
LOCAL ECONOMY – LOCAL CURRENCY / LOKALE WIRTSCHAFT – LOKALES GELD
PAPER SUBMISSION WITHOUT PARTICIPATION
SUSTINIABILITY AND SOCIAL MARKEITNG
Abstract Slovak food industry has an important place in providing nutrition of the population, and the activities of agro-food complex in Slovakia. Essential element in providing most of the raw materials is Slovak agriculture. The main outlets for the flow of the vast majority of primary agricultural products are Slovak food industry. The success or failures of the food industry in the market are reflected on the marketing of foodstuffs in the domestic and foreign market. The food industry will be successful in domestic and foreign markets as the control and use marketing communication to meet the needs and demands of their existing and potential customers better than its competitors. The results of the food markets directly or indirectly affect retailers and economic success of all manufacturers, involved in food production, including primary agricultural producers. Keywords: marketing, marketing mix, communications mix Introduction The restructuring of the food industry in the Slovak Republic accepts the objectives of industrial policy. This is particularly the reduction of excess capacity and increase competitiveness. The food industry is scattered on the amount of production branches and each of them are different conditions, needs a starting point. To determine those aspects is needed in terms of long term maintenance of the market, marketing departments use to select the correct tools of marketing communication. The most specifically are: the personal selling, sales promotion, public relations, advertising and direct marketing. The current Slovak food industry does not belong to the sectors which we call the "strength" of the economy. It creates a relatively small share of GDP (gross domestic product). Food is closely linked to agriculture. The agro performs important functions. It provides download, storage and processing of agricultural products, manufactured food products and take part in the food supply of the population. It produces around 7-8000 kinds of products for the market needs. Including weight and quality range is about 10,000 kinds of products. Departments of the food industry in Slovakia In the first half of the 21st century, Slovakia became a major producer of passenger cars. Car manufacturing sector is the most significant share of the foreign trade of the Republic. At the same time we are observing increasing food imports. The performance of the Slovak agro sector declined and the country has become an importer of food and other agricultural products. In Table 1 we mentioned fields of food industry. In this paper, we discussed one of the 15 branches food and beverage industries. Examining the situation, addressing current issues and proposals we have made in terms of an important malting company SLADOVŇA a.s., Michalovce.
Table 1 Departments of the food industry in Slovakia Departments of the food industry in Slovakia Meat Industry Industry milk and cheese production Milling and bakery industry Sugar industry distilled spirits industry
Brewing industry canning industry
Starch factory Pomology
Viniculture Poultry industry Confectionery
Freezers and fish processing Industry fats and edible oils Manufacture of soft drinks and mineral water bottling Source: Potravinársky priemysel. [online]. [citované 23. 3. 2013]. Dostupné z: [in Slovak]. Brewing Industry Brewing industry1 is providing in particular the production of beer and soft drinks. It processes and malting barley malt. Slovakia exports malt to 25 countries around the world. Slovak breweries and malt houses were in the second half of the 20th century built the world's production and technological level. Depending on the technology of production we recognize breweries classic barn, fully automatic with Saladin wardrobes and sliding piles. In several breweries were replaced outdated technology for fully mechanized, automated gradually. Important was the upgrading of sanitation facilities. SWOT analysis of the company SLADOVŇA a.s., Michalovce The production program2 is not stable. It varies depending on the market situation. Aggregation and disaggregation production are specific enough production plan, production schedule in shorter time periods. The main product of the company is manufacturing malt Czech (Pilsner) type, which is used to make light beer. Malt corresponds to STN 56 6610th It is made from purified and put out for malting barley soaking in of safe water, dipped barley germination and kilning3 at eradicating rootlets4. Strengths and weaknesses of SLADOVŇA a.s., Michalovce we stated in Table 2.
FELŠOCIOVÁ, E. 2011. Marketing malého podniku. Bakalárska práca. Košice: Podnikovhospodárska fakulta EU v Bratislave so sídlom v Košiciach. 2011. 60 s. E. č.: 24830000906. s. 38. 2 FELŠOCIOVÁ, E. 2011. Marketing malého podniku. Bakalárska práca. Košice: Podnikovohospodárska fakulta EU v Bratislave so sídlom v Košiciach. 2011. 60 s. E. č.: 24830000906. s. 30. 3 SLADOVŇA MICHALOVCE. Charakteristika sladu. [online]. [citované 23. 3. 2013]. Dostupné z: [in Slovak]. 4 FELŠOCIOVÁ, E. 2011. Marketing malého podniku. Bakalárska práca. Košice: Podnikovhospodárska fakulta EU v Bratislave so sídlom v Košiciach. 2011. 60 s. E. č.: 24830000906. s. 45, 46. [in Slovak].
Table 2. Variables SWOT analyses and company SLADOVŇA a.s., Michalovce INTERNAL STRATEGIC FACTORS WEIGHT [%] STRENGTH STRENGTHS 50-year tradition of manufacturing of malt 20 10 skilled workforce 20 10
VALUE 200 200
built sub-contracting production flexibility
quality certificate ISO 9001:2000, HACCP Certificate
TOTAL WEAKNESSES territorial distribution of sales energy
insufficient use of marketing communication tools
high dependence on weather conditions
TOTAL EXTERNAL STRATEGIC FACTORS OPPORTUNITIES
100 % WEIGHT [%]
advantageous geographic position
growth in beer consumption in Eastern Europe
expansion of business activities
opening up new markets
use of EU funds
intensity of own brewery small base of domestic customers
- 830 VALUE
THREATS exchange rate movements decline in beer consumption increasing the price of beer weather
5 20 20 20
5 8 9 10
25 240 180 200
competition policy increase in transport costs TOTAL
15 20 100 %
90 200 - 935
Source: own processing Calculation: Strengths + Weaknesses = 960-830 = 130 points Opportunities + Threats = 1070-935 = 135 points
On Figure 1 we have illustrated the strategy for the company on the basis of SWOT analysis. Opportunities 1070
- 935 Threats Figure 1. Graphical processing SWOT analysis of the company Sladovňa, a.s. Michalovce Source: own processing The results of SWOT analysis allow companies to adopt an aggressive strategy. Strengths outweigh weaknesses and opportunities prevail over the threats. Joint Stock Company SLADOVŇA a.s., Michalovce should maintain this position as long as possible, this means strengthening good relations with suppliers and customers, to innovate and expand its portfolio in such extent required by customers. Findings-marketing mix The company promotes the current dynamically changing domestic and international markets. In terms of examining the individual elements of the marketing mix, we found the following. The product and the raw material Brewing malt is one of the most important export commodities, the agro-food Slovakia and the quality is Archon to world leaders. The company SLADOVŇA a.s., Michalovce produces world class malt, competitive product. The basic raw material for the manufacture of malt are bred varieties of two-row spring barley Malz, Ebson, Sebastian and Prestige, which are listed in the European catalogue of varieties and seeds. The full use of processing capacity of company means 40 to 45,000 tons of excellent5 malting barley.6 Geographically, Slovakia is above-average assumptions for the production of agricultural commodities. In financial terms, this is also interesting for commodity producers. Thanks to many years of methodological and organizational approach of SLADOVŇA a.s., Michalovce towards farmers and financial support incumbent supplier is to cover the need of whole barley purchased from primary producers in the vicinity of the company. Reliable partners include the Hungarian barley
Charakteristika sladovníckeho jačmeňa. [online]. [citované 23. 3. 2013]. Dostupné na :
[in Slovak]. 6
FELŠOCIOVÁ, E. 2011. Marketing malého podniku. Bakalárska práca. Košice: Podnikovhospodárska fakulta EU v Bratislave so sídlom v Košiciach. 2011. 60 s. E.č.: 24830000906. s. 45, 46. [in Slovak].
growers. Bid, the quality of the products delivered and reputation among farmers decisive criterion for the selection of potential new supplier. Transportation ordered barley is implemented contractual carriers - freight forwarding companies from Slovakia. Quality of delivery is reviewed at each sampling in the corporate lab. In the case of deficiencies found are given raw complaint. The timing of orders and receive the amount is variable, varies depending on the volume of production. The issue of buying raw material for the production of malt - barley and the associated logistics is the responsibility of the sales department of the company. The basic contract price is also added by bonuses. There are 2 of them. First one is in the form of so-called loyalty and second quantitative bonus. Precondition for their return was the conclusion of contracts for the supply even in the period before harvest and the fulfillment of the contractual quantity. In this way, the company strives to maintain its suppliers to encourage them to barley in the region and to increase its growing areas. By-product Byproduct of SLADOVŇA a.s., Michalovce is organic matter, which is actually a waste arising during malting. This waste is granulated and sold to farms, hunting associations, fish farmers around Michalovce City as animal feed, animals and fish. Price Company SLADOVŇA a.s., Michalovce does not have a fixed price list. The price of malt is subject of negotiating with buyers negotiating Director Business Unit. Price by-products, animal feed, animals and fish are consistent and regularly updated by supply and demand in the market. In recent years, the company is primarily to support the cultivation of barley in our region, a new system of remuneration of its suppliers.
Figure 2. Foreign buyers malt from Michalovce Source: SLADOVNA MICHALOVCE. Odberatelia. [online]. Sales strategy of the company SLADOVŇA a.s., Michalovce is formulated for critical customers in different territories. Malt sales in 2012 were made in Poland, Hungary, Russia, and Romania. Smaller volumes are exported to Abkhazia, Moldova and Turkmenistan. Geographical distribution of sales of malt from Michalovce City abroad are illustrated in Figure 1.
Table 3. Rozdelenie exportu sladu spoločnosti SLADOVŇA podľa krajín Country Percentage of Sales Country Rumunsko 39 Turkménsko Poľsko 37 Moldavsko Rusko 9 Abcházsko Maďarsko 8 Source: SLADOVŇA a.s. Michalovce – Annual Report Year 2011.
Percentage of Sales 6