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Inspirion Romania - Annual Report


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Developing and Implementing Trading Systems
Macroeconomic overview
Principles of Trading System Design
The Global financial crisis
Banking and taxation - Types of banks
Inspirion Romania - Annual Report

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Inspirion Romania

Annual Report

Brief introduction

The present report is structured in three chapters:

I.          Sales: includes the results comparison between 2008 and 2007, short presentation of obstacles and opportunities that lead us to these results, plus main directions for next year.

II.       Marketing: you can find information about our strategy for 2008 and our plans for 2009. 

III.    Administrative: details about the changes ad problems we had this year.

I. Sales

I think is appropriate to start this chapter with a figures comparison between this year and last year. As you know, last year our turn over was around 3.700.000 RON and this year I think will be around 3.400.000 RON (at the end of November was approximately 3.200.000 RON). That means the sales level of this year decreased with almost 9% compared with last year instead of growing with 25% as Ciprian planned for this year at the beginning 2006. The only months when we managed to exceed last year’s results were October, 80%, and November, approximately 17%. For a much better understanding, at the end of September last year we had around 800.000 €, and this year same period bit more than 500.000 €.   I can’t provide you any exact information at this moment about the profit situation because some expenses are not known to us right now. An exact situation can be presented latest at the end of January 2009. But, as a rough calculation, I think the final result will be somewhere around break even point.

The main reasons for this lack of sales development are:

  1. Strong competition.
  2. Staff fluctuation
  3. General economical situation

1. Regarding first point, the main competitor for us was Macma. In the followings I will refer only to this company even though some problems we had also with Midocean. The pressure we felt from this supplier was not connected with prices only but also with delivery conditions (99 € regardless the qty.) and stock availability. So, better prices and very good delivery conditions for identical products with good quantities on stock.

We had these problems with around 15% of our products, but mainly top sellers.

I’ve started the discussion with Slawomir about this problem since May, but unfortunately a decision connected with price decreasing was taken in August with application starting with October.

Until this decision we’ve tried by ourselves through specific marketing activities, which will be described later on, to fight against this tough competition, but we can’t speak about a successful result.

This lack of success was generated mainly because of the huge price difference between our offer and our competitor’s offer. For many of these products their selling price was more or less the same with our buying price EXW Bremen. In such situation it’s easy to understand that we had not too many options.

Regardless this price difference we’ve decreased our prices for some categories of products for a certain period of time, but we couldn’t risk a very low margin because of two reasons:

* Exchange rate fluctuation – up to 3 - 5% in short periods of time.

* Transport cost – for cheap items and big volume items the transport cost is not 10%, but 12% to 15%. The high transport cost is connected also with increasing of fuel price.

So, considering that Macma had the price advantage, very good conditions for delivery (that stimulates cooperation with small and medium resellers) and reliable stock, our only advantage left was the payment conditions. But, since Macma started the partnership with Terranita the payment problem was solved for them. Terranita is offering for many Romanian resellers same prices as Macma. The partnership development between Macma and Teranita, best distributor of Midocean, was possible since Midocean opened the office in Hungary allowing all Romanian resellers to buy directly from them.

At the end of last year it was easy to understand that in 2008 will be extremely difficult to improve or to keep at the same level the turn over with big resellers like Dual, Total or La Strada, and because of this reason our main target for this year was to improve the relation with medium and small companies. As explained earlier, our mission was quite difficult to accomplish because Macma aimed the same target. But, if we look at the turn over difference between these two years, around 300.000 RON, and we compare it to the turn over decreasing from big companies, Dual – aprox. -450.000 RON, Total – aprox. -300.000 RON, La Strada – aprox. -150.000 RON, we easily can conclude that the results in this direction are not to be neglected.

Much easier to understand the situation of big customers; last year our best customer was Dual, who had a plus of aprox. 30% compared with Total who was on the second place, and this year our best customer is Total, who has with aprox. 50% less compared with last year.

Unfortunately, because of second SAP transfer we’ve lost the information connected with last year results (at the second transfer only the open invoices were kept into the system) and I can’t provide you the exact figures.

I want also to say that even after we decreased our prices with help from ING, still we couldn’t have better prices for almost 15% of the entire list of 334 products.  

2. Concerning the second point which affected our results, staff fluctuation, as you already know, this year we’ve changed entirely our sales team and we had to replace also our import manager. We’ve changed also one person in accounting department and lost one guy from the warehouse, but this things didn’t affected our sales activity, I mention it only to highlight the issue importance.

Except one person, Laura from the sales team, who anticipated some how my decision concerning her future among us, everybody left the company because they’ve received better offers, 30-50% higher.

The sales team left the company between March and April, when the activity is supposed to came to life. During this period we had also local elections, and as you can imagine we didn’t manage to make nice sales because of first reasons, competition, and because my colleagues were not so concentrated knowing that they will leave the company.

Only one of the two hired colleagues had sales experience, but not in our field, so we had to begin a training period starting from zero. Apart from the sales training we had

to start also SAP training, and after one month they could use the program without my permanent assistance and the sales activity a bit later.

Of course, their results were not to be seen during training period and a bit after, which meant automatically a loss for the company, and also my personal results in terms of sales were affected during interviews and training period.

As a conclusion, the first six months were week on sales also because of the relaxed attitude of my former colleagues and the lack of knowledge of my actual colleagues.

At the staff fluctuation I will come back later on in the Administrative chapter.

3. The third point, economical situation, affected us not only in terms of sales volume but also in terms of accumulated profit rate which will be discussed in the last chapter.

The biggest problem in Romania this year was the salaries growth, which affected all the companies, especially from Bucharest. During my frequent discussions with companies like Total or Divio, I found out that they are paying a sales representative with 800 – 1000 € and still have problems to find suitable persons for such jobs. You can imagine that with such problems they had two options to save some money, tough negotiation with suppliers or/and increasing of sales prices. The first option doesn’t affect the sales volume, so, it’s quite common to use it.

So, in some situation when the requested prices were too small for our possibilities we had to let go those orders. As I said before, our limits were set up by low level of sales and threats connected with exchange rate fluctuation and transport cost.

Concerning the end users, they had also two choices to decrease the expenses level, cut the budgets of marketing departments and to make pressure for lower prices from our customer, pressure that, of course, was transferred to us. As I told you in my last monthly report, companies like Coca-Cola or Selgros cut down the budgets for gifts at the end of the year, close to zero.

Just to understand how low the budgets are at the end of this year I have to tell you that from the total turn over made by my two colleagues from September till the end of November, 1.300.000 RON, only half represents the gift requested by different companies and the difference represents products requested for the election campaign.

Another example for this lack of orders is that our internal stock prepared for season time, writing instruments and wine sets, is almost intact. One item was sent back to Bremen completely, and from the rest of the products we didn’t sell even 15% from the entire quantities (as an average qty/model for writing sets, 1500 pcs, and for wine set 400 pcs, initial qty), although we sent emails to our customers almost every two weeks since we got them, we wrote about it in the mini brochure we’ve distributed at the fair, discussed about them on every meeting since September, decreased the prices… Last year in November from 5 stock products, 3 were completely sold out and 2 sold more than half.

The cost pressure came not only from salaries but also from increased rent price, fuel, electricity, exchange rate fluctuation…

It’s quite clear for me that next year will be a very difficult one and a turn over more than 1 million € is very challenging, but, considering the fact that our sales team is well structured now, they will be much more focused on professionally prepared meetings, we already have good relations for the future presidential election, It’s also clear for me that challenging means “very difficult” and not “impossible”.

In my opinion the main problem we’ll have next year is that a lot of medium and small end users will cancel entirely or reduce drastically the budgets for marketing departments. That means that a lot of small and medium resellers will disappear or reduce their activity in a very significant way. The only logical conclusion to this fact is that the interesting orders will came from big companies, reduced compared with last year and this year, through big resellers that are able to give very good conditions. Of course those resellers will have to work also with suppliers who are able to sustain their efforts.

The best signal for me that this will happen is that this week I was contacted by the assistant of Razvan Mironescu from Total Advertising, who wishes to establish a meeting at PSI fair. This thing never happens before, although I’ve insisted.

The main tasks for the sales force next year will be:

much more visits very well prepared

as we did it at this end of the year, carefully prepared offers

quicker responses to inquires because now we have the support of the third person

special attention to medium and big resellers

a special thing that I wish for couple of years, business attitude. I’m quite sure that I have my fault on this subject.

II. Marketing

General considerations

INSPIRION Romania’s marketing strategy for 2008 aimed to increase the sales volume generated by smaller resellers while keeping the big companies at least at the same level as previous year.

The marketing activities were focused mainly on offering sales support. We have limited the investments in advertising, have increased the budget for trade fairs and there was also an increase of the expenses for corporate identity materials.

During 2008 we had special offers sent by email that were meant to stimulate the sales for certain products.

Because of the strong competition generated by Macma we were obliged to change the price strategy for some items and of course communicate this by several actions to our clients.

The communication mix included Advertising, Direct Marketing, Public Relations, Trade Fairs, Sales Promotion, all these detailed in the following pages.



Time frequency


2/1 Advertisment Media & Advertising Annual Report


Direct Marketing

Catalogue mailing


Public Relations

  • Own magazine
  • Interviews

Trade Fairs

Advertising SHOW


Sales Promotion

Email campaigns


Corporate identity

  • Business cards
  • Envelopes
  • Email signatures
  • Company logo
  • Showroom


The email promotions were focused on the following main directions:

New catalogues

Products at special prices for specific campaigns

Price changes

Event announcements

During 2008 we have highlighted by special promotions 132 products.

We reduced considerably the price of 334 products and we had short periods of discounts for the whole category of Textile, Leisure, Office and Games.

Detailed marketing activities

We started the year with new email signatures, every year we introduce in our signature the new covers of our catalogues. In this way we make sure that the cover of the catalogues is well know about our clients. The promotion campaigns are focused on the catalogue or on the products, we don’t focus our campaigns on a general image about the INSPIRION brand.

By moving in the new office building we had to invest in some corporate identity materials like: a logo of the company at the reception and another one at the gate of the building, some materials for arranging the new showroom and business cards and envelopes with the new contact details.

In February there were sent by post catalogues to end-users and resellers from all over the country. We used for this imprinted envelopes with our new contact details and logo.

Also in this month we negotiated the contract for advertising in Media & Advertising Annual Report, published by Mediafax in March. This report is an annual publication with analysis of the following domains: marketing investments of major clients, advertising, outdoor/indoor, web/online advertising, mass media, public relations, video production, advertising production and print production. The report has beside market analysis, advertisements, interviews and lists of companies with contact details, descriptions of products and services and sales figures. The publication has 520 pages and 10.000 copies. It is distributed free of charge to marketing departments, advertising and PR agencies, mass media and public institutions.

For the Media & Advertising Annual Report we had a spread advertisement on two pages aiming to promote the new catalogue with its benefits while transmitting the message that INSPIRION works only for resellers and that they can be relaxed if they count on us for the promotional products.

Fig. 1 – advertisement in Media & Advertising Annual Report

At the end of February we had a special offer sent by email with gift items dedicated to women. The 1st and 8th of March are special days in Romania when women receive gifts.

In March with started with a greeting card whishing all the women a beautiful spring.

Also at the beginning of March we had a promotion for umbrellas by which we introduced to our customers some of the new special designed umbrellas.

The email campaigns were continued with a selection of gifts for Easter having special prices.

As we had local elections in spring we prepared a sales promotion with some items in the colors of the main parties. The products were cheap products existing in very big quantities on stock for which we also gave some discounts.

Considering the European Football Championship that had impact on most of the Romanian marketing campaigns this year we had a special promotion for football items.

This year we had strong signals that the prices were too high, so for the summer time we stimulated the sales by offering discounts on group of products for example we had a discount for the items included in the Textile and Leisure sections. All the special offers were limited in time.

In the same time we communicated to our clients the possibility of checking stocks and prices on the website by using the password.


In August we thought about the campaigns for returning to school so we promoted the products in the Office and Amusement categories. The offer was valid from August till October. In this way it could target the marketing campaigns for school and also for the business events that take place in September and October.


August was the month before Advertising Show Trade Fair so we announced also the Christmas Catalogue and we prepared several materials for the fair.

At the beginning of September we made a magazine that was distributed at the Fair. The Magazine called INSPIRATION featured articles like: 50% discount for some products; TOPICO exclusivity for Romania; New purchasing office in China; Election Campaign suggestions; Products to be delivered in 24 hours; New electronic items; New Christmas Catalogue.

For the Advertising Show Trade Fair this year we increased our budget for building the stand. The surface was the same as last year, 70 sqm, divided in two sections, one for all the new Christmas items and the second one for the regular items.

We gave our 3 catalogues and the INSPIRATION magazine in ecologic shopping bags related to the new Eco trend very visible on the Romanian market.



For this year we registered two products in the Gift contest, section Ecological Products and Football products. For the first category we were awarded with 3d prize and for the second one we were awarded with 2nd prize. The contest assured visibility for our products that were exhibited at the main entrance of the fairground.

We promoted our participation at the trade fair by sending electronic invitations to all our customers. After the fair all the visitors received Thank you messages and the new pricelists, together with information about the new Christmas Catalogue.


In September we prepared a new offer for the election campaign, this time the Parliament elections that took place at the end of November.


In the same month we had an email campaign to attract the attention of the customers on the price discounts made for 334 products that are in Macma’s catalogue as well. We gave reasons why clients should buy these products that were considered to be the best deal.

September was the month when we promoted some products that we brought on stock in bigger quantities. In October we resent the offer but with a 10% percent discount for the remaining quantities.


We also had some special offers for products on stock dedicated to children, suitable for the small gifts at the end of year.

Our last announcement was meant to remind the deadline of receiving orders this year and also the schedule for December and January.

The clients are going to receive also an invitation to visit our stand at PSI. At the end of the year they are going to receive greetings by email for the activity of this whole year.

Conclusions and next year proposals

The marketing activities in 2008 were focused mostly on sales promotion. These actions were determined by the market conditions, by the actions of our competitors that were pretty aggressive in terms of prices and delivery advantages.

The company already has a good image on the market but it needs to consolidate the relations with its clients. The change of the team at the beginning of this year affected this relation but the new team is on the right way of establishing a bond with the clients.

Considering the economic situation, the next year marketing activities should create an image of a company that has the possibility to sustain its clients by means of prices, stocks, payment conditions, delivery terms and also by people. The clients should trust the INSPIRION team and feel, as they are “friends”, as they can receive special attention and with all they need in terms of promotional products from the INSPIRION team.

In order to overcome these objectives with a low budget next year’s marketing activities will follow the directions listed below.

There is going to be no advertising in classic media.

We are going to reduce the budget for Trade Fairs.

We’ll recalculate the quantities of branded envelopes, business cards, and adhesive tape that are necessary.

We’ll use for our two direct mail campaigns with catalogues the Post services.

Monthly special offers we’ll be sent by email.

Also by email we’ll send suggestions of promotional products’ trends, products to be used for specific marketing campaigns (once a week) – Thursday newsletter

The Website shall be updated

We are going to consolidate our image and the relations with our clients by using our own promotional products as follows:

o       Gifts for each client visited by the sales agents – small, inexpensive new items

o       Gifts for major clients on special occasions – Woman’s day, Easter, National Day, Christmas

o       Rewarding gifts for the top 10 buyers

o       Branded KIT for sales team (diary, pens, document bag, etc.)

III. Administrative

1.Considering all the personnel changes we had so far, the company structure on departments looks as it follows:

Management: 2 persons, Ciprian and me.

Accounting: 2 persons, Mrs. Smaranda, part time, and Mrs. Marinescu, full time

Marketing: 1 person, Alexandra, part time.

Sales: 3 persons, Larisa, Adrian and Gabriela who is responsible for back office and acquisition.

General: 2 persons, Mrs. Malancea, part time cleaning, and Mrs. Enache, part time warehouse.

As already discussed, this year we had important staff fluctuation due to increasing of salaries on the market. The worst scenario was in Bucharest, high salaries and not enough people.

Because of salary issue we had to let go Valentin, sales, Andreea, acquisition, Mrs. Ariton, accounting, and Mr. Gruia, warehouse. Because of poor activity we had to change Laura, sales, and Aura, acquisition.

I recall a discussion we had in Bremen during spring period when I was complaining about salaries and personnel and you suggested to cut a part of the future profit we should have this year and to raise the wages.

Considering the fact that at that time our results were lower than last year, we already lost the first wave of elections which normally had to generate nice orders, the signals received from our customers were not that good, we’ve decided to keep the salaries at the same level and right now we feel the we’ve chose the correct path.

Definitely it was difficult to find good people at that salary, only 10 to 20% of the people who confirmed interview meetings came to our office, but looking at the results of our new colleagues and their general activity, I have no regrets.

Thinking of next year’s potential I believe we’ll not have reasons to increase the number of employees and hopefully we’ll not have reasons to change it.

As you could see in the company structure we have a missing person at the warehouse and probably here we have to do something because is very difficult to manage the entire warehouse activity only with one lady.

Considering the fact that in January we are planning to move the warehouse at the ground floor of our office, we are thinking to change the lady we have right now with a guy capable to do all the work. Mrs. Enache doesn’t seem too interested in working for us next year in case we move the warehouse because the new location will be too far from her house. She will have to spend every day around three/four hours on transport.

2. Because the rent we’ll pay for the new warehouse will be the same as in the old location, I think is a good choice. The most important thing is the time we can save for having the warehouse in the same place. The main problem for us this year was to

deliver the documents from our office to the warehouse for rush samples requests and small quantities from our internal stock. Each episode means around one hour or two hours time spent in traffic, depending on the moment of the day. You can imagine that this time can be used for visiting clients or preparing more carefully the offers.

You know that this year we were thinking to start for our stock a partnership with a warehousing company, but the project didn’t came to successful result because of the problems connected with the samples. It was almost impossible to keep the samples at their warehouse, of course with a decent cost. Apart from the cost, they were in no position to guarantee us that they can deliver the samples in 2 to 8 hours every time. Their standard time for preparing the orders, samples included, was 24 hours, which is ok for regular orders only.

3. In the beginning of my report I was speaking about the economical problems which affected also our profit rate. The main connection between these problems and our result is cash flow.

Considering the fact that we couldn’t do too much in terms of price level we had to be much more flexible for paying conditions. Only the lack of cash flow gave us a loss of aprox. 9000 €, amount that represents penalties from ING and authorities.

Another source for the lack of cash flow beside the customers is the bank we work with. Due to the general problems from the banking system some payments were delayed with 2 weeks up to one month. We had such situations for values between 3000 € and 15.000 €.

As a result of an ill economical situation we had this year significant euro fluctuation. From one month to another we had at least 2% difference, and only till now we have around 20.000 € losses because of this.

I’ve just heard these days that big companies, importers, are calculating the exchange rate for next year between 3.45 and 5.2. As you can see the difference is huge and I’m pretty sure that next year we’ll have much bigger problems in this field.

4. Another source of loss is represented by the transport problems we had because of poor communication between Bucharest and Bremen. Because of our need to save some money we asked more often to prepare the goods as good as possible and to receive reliable information when we search for a truck, I mean the pallets number. Exactly, we had situation when we received pallets at the height of 1 m or a bit higher with products that were not exposed to damage, or we’ve received the number of pallets with 30% higher than in reality. This difference regarding the number of pallets can mean a loss between 200 and 500 €/transport. It’s an important amount when you have weekly transports. Is my feeling that the warehouse personnel is not understanding that if they send me the number of pallets, X, and they manage to prepare everything in X-3 pallets, I will still pay for X pallets, because will be too late for my forwarder to fill the empty space left into the truck.

Most of the problems connected with transport were during season time when I receive information like, “George, we don’t have enough time to prepare the goods as

you want, we don’t have enough space, and you can’t load box by box”. All possible things according to our agreement.

I recall an episode when the goods were prepared on quite undersized pallets and because of this not all the pallets could fit into the truck. The solution for this problem was to load box by box couple of pallets but this solution was not approved by the

warehouse staff because the driver will keep the ramp busy for too long. Half an hour after my truck left with the goods that fit in, your warehouse agreed to let me load the difference box by box in the same day but with another car. The results, 600 € loss, because I had to take a van exclusively for 3 pallets in order to have the goods in time in Bucharest. It’s really difficult to understand why our solution wasn’t approved first time.

I know that our contact persons doesn’t prepare the goods, but I think accurate information should be provided to us and in some cases when we, according to our agreement, ask to have the goods prepared in a certain way, I think is not enough just to transmit a negative answer from the warehouse staff. I’m quite sure that for a regular customer ING doesn’t provide such answers.

5. SAP program functioned this year without any problems, and all our staff is able to use it as much as they should. I have to say that the changes made into the system in the second half of the year concerning placing the orders and reservations, helped us a lot during season time.

The most important thing is that all the accounting registration are made almost in real time and this help us to have whenever we want a closer look on companies figures and is a plus also for your accounting department because they can take the needed reports at the end of the month quite fast.

We still have to see if the annual reports we have to give to the authorities function not only in test versions. Hopefully they do.

As Ciprian already informed you, in the prospect of announced crisis of next year we are thinking if we can find a new formula to calculate the SAP tax in order to have a bit l

ower monthly payment. This month I was informed by my internet provider that for this special internet line we have I will not pay anymore in USD, 325, but in €, 250. They chose extremely well the moment of conversion. So, the SAP will cost us starting with January 850 €/month.

6. The most difficult target we have for next year is to keep to a low level the costs.

We already made some calculation and if we’ll manage to reduce some costs like expenses from currency fluctuation, penalties generated from lack of cash flow, PSI fair, Advertisng Show, phone, fuel, travel expenses, staff expenses (meal tickets), office maintenance, protocol, we’ll have a cost reduction of 3200 up to 5000 €. The interval is that big because of the penalties and euro fluctuation which are very difficult to prevent.

7.The Topico project still remains unclear for me, in terms of business development for next year, and as I told you in my last report, is extremely late. I still hope that at the last sales meeting a final decision will be taken.

This year we’ve manage to sell Topico products for approximately 7.000 € although all our active customers were informed about the catalogue via email and most of them also received it. I gave the catalogues also to big companies like Total, Simaco, Ranco, but I didn’t receive at least one question about these products. We had the few sales through Dual and another customer of mine Top Birotica, almost equal values.

Is my honest belief that no matter how will set up the future development for next year, will be extremely difficult to have nice results. In a year of cost pressure I’m afraid expensive products from a not tested catalogue will not be the most popular products on the market. This is why I think that a start with low investment and low costs during the year will be appropriate.

I close this report hopping that the final result of this year will be positive!

Thank you!


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