Project Report-Children Books in Romania

8/14/2019 Project Report-Children Books in Romania

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(MANAGEMENT DEVELOPMENT INSTITUTE, GURGAON)

INTERNATIONAL BUSINESS (DEC2009)

FACULTY: PROF VEERESH SHARMA

Project on the marketing strategyIn the Romanian Market

For the Children Books

SUBMITTED BY:

SHYAM DOGRA

ROLL NO. ---55

BATCH: EMP-OCT08


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Executive Summary

In this report, Romania as a country for the marketing of children books is explored in details. It

deals with historical, Political, Economics, Social, legal aspects of the system. It goes deep into

the niche market of publishing business in the Romania, then studies the various marketing

aspects of the business like distribution channels, Supply chain factors, market facts & figures

for the publishing business, target area is children books. In view of the various business related

environment in Romania, it throws a light on the suitable marketing strategy to be adopted for

the children books. Project closes with conclusion & references.


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Table of ContentsEXECUTIVE SUMMARY .........................................................................................................................................2

ROMANIA: A COUNTRY AT A GLANCE.............................................................................................................4

HISTORY.....................................................................................................................................................................5

POLITICAL:- ..............................................................................................................................................................9

ECONOMIC:-............................................................................................................................................................10

SOCIAL: ....................................................................................................................................................................13

Languages..........................................................................................................................................................14Religion..............................................................................................................................................................14Culture ...............................................................................................................................................................15

MARKET ASPECTS:...............................................................................................................................................15

Market Challenges:............................................................................................................................................15 Market Opportunities:........................................................................................................................................16 Market Entry Strategy:.......................................................................................................................................16

INVESTMENT CLIMATE : ....................................................................................................................................16

BOOK MARKET: ROMANIA (MARKETING ASPECTS) ................................................................................17

Distribution........................................................................................................................................................17The Supply Chain...............................................................................................................................................17 Marketing & Selling Channels: .........................................................................................................................20 Book Titles by Category:....................................................................................................................................20Reading Attributes: ............................................................................................................................................21

CONCLUSION:.........................................................................................................................................................22

REFERENCES ..........................................................................................................................................................23


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Romania: A country at a Glance

Full name: Romania Population: 21.3 million (UN, 2009) Capital: Bucharest Area: 238,391 sq km (92,043 sq miles) Major language: Romanian Major religion: Christianity Life expectancy: 69 years (men), 76 years (women) (UN) Monetary unit: 1 new leu = 100 bani Main exports: Textiles and footwear, metal products, machinery, minerals GNI per capita: US $7,930 (World Bank, 2008) Internet domain: .ro International dialling code: +40


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HistorySince about 200 B.C., when it was settled by the Dacians, a Thracian tribe, Romania has been in

the path of a series of migrations and conquests. Under the emperor Trajan early in the second

century A.D., Dacia was incorporated into the Roman Empire, but was abandoned by a declining

Rome less than two centuries later. Romania disappeared from recorded history for hundreds of

years, to reemerge in the medieval period as the Principalities of Moldavia and Wallachia.

Heavily taxed and badly administered under the Ottoman Empire, the two Principalities were

unified under a single native prince in 1859, and had their full independence ratified in the 1878

Treaty of Berlin. A German prince, Carol of Hohenzollern-Sigmaringen, was crowned the first

King of Romania in 1881.

The new state, squeezed between the Ottoman, Austro-Hungarian, and Russian empires, looked

to the West, particularly France, for its cultural, educational, and administrative models.

Romania was an ally of the Entente and the U.S. in World War I, and was granted substantial

territories with Romanian populations, notably Transylvania, Bessarabia, and Bukovina, after the

war.

Most of Romania's pre-World War II governments maintained the forms, but not always the

substance, of a liberal constitutional monarchy. The fascist Iron Guard movement, exploiting a

quasi-mystical nationalism, fear of communism, and resentment of alleged foreign and Jewish

domination of the economy, was a key destabilizing factor, which led to the creation of a royaldictatorship in 1938 under King Carol II. In 1940, the authoritarian General Antonescu took

control. Romania entered World War II on the side of the Axis Powers in June 1941, invading

the Soviet Union to recover Bessarabia and Bukovina, which had been annexed in 1940.

In August 1944, a coup led by King Michael, with support from opposition politicians and the

army, deposed the Antonescu dictatorship and put Romania's battered armies on the side of the

Allies. Romania incurred additional heavy casualties fighting alongside the Soviet Union against

the Germans in Transylvania, Hungary, and Czechoslovakia.

According to the officially recognized 2004 Wiesel Commission report, Romanian authorities

were responsible for the death of between 280,000 and 380,000 Romanian and Ukrainian Jews in

the territories under Romanian jurisdiction (including Bessarabia, Bukovina, and Transnistria)

out of a population of approximately 760,000. In addition, 132,000 Romanian Jews were killed

by the pro-Nazi Hungarian authorities in Transylvania.


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A peace treaty, signed in Paris on February 10, 1947, confirmed the Soviet annexation of

Bessarabia and northern Bukovina, but restored the part of northern Transylvania granted to

Hungary in 1940 by Hitler. The treaty also required massive war reparations by Romania to the

Soviet Union, whose occupying forces left in 1958.

The Soviets pressed for inclusion of Romania's heretofore negligible Communist Party in the

post-war government, while non-communist political leaders were steadily eliminated from

political life. King Michael abdicated under pressure in December 1947, when the Romanian

People's Republic was declared, and went into exile.

By the late 1950s, Romania's communist government began to assert some independence from

the Soviet Union. Nicolae Ceausescu became head of the Communist Party in 1965 and head of

state in 1967. Ceausescu's denunciation of the 1968 Soviet invasion of Czechoslovakia and a

brief relaxation in internal repression helped give him a positive image both at home and in the

West. Seduced by Ceausescu's "independent" foreign policy, Western leaders were slow to turn

against a regime that, by the late 1970s, had become increasingly harsh, arbitrary, and capricious.

Rapid economic growth fueled by foreign credits gradually gave way to economic autarchy

accompanied by wrenching austerity and severe political repression.

After the collapse of communism in the rest of Eastern Europe in the late summer and fall of

1989, a mid-December protest in Timisoara against the forced relocation of an ethnic Hungarian

pastor grew into a country-wide protest against the Ceausescu regime, sweeping the dictator

from power. Ceausescu and his wife were executed on December 25, 1989, after a cursory

military trial. About 1,500 people were killed in confused street fighting. An impromptu

governing coalition, the National Salvation Front (FSN), installed itself and proclaimed the

restoration of democracy and freedom. The Communist Party was dissolved and its assets

transferred to the state. Ceausescu's most unpopular measures, such as bans on private

commercial entities and independent political activity, were repealed.

Ion Iliescu, a former Communist Party official demoted by Ceausescu in the 1970s, emerged as

the leader of the NSF. Presidential and parliamentary elections were held on May 20, 1990.

Running against representatives of the pre-war National Peasants' Party and National Liberal

Party, Iliescu won 85% of the vote. The NSF captured two-thirds of the seats in Parliament, and

named a university professor, Petre Roman, as Prime Minister. The new government began

cautious free market reforms such as opening the economy to consumer imports and establishing


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the independence of the National Bank. Romania has made great progress in institutionalizing

democratic principles, civil liberties, and respect for human rights since the revolution.

Nevertheless, the legacy of 44 years of communist rule cannot quickly be eliminated.

Membership in the Romanian Communist Party was usually the prerequisite for higher

education, foreign travel, or a good job, while the extensive internal security apparatus subverted

normal social and political relations. To the few active dissidents, who suffered gravely under

Ceausescu and his predecessors, many of those who came forward as politicians after the

revolution seemed tainted by association with the previous regime.

Over 200 new political parties sprang up after 1989, gravitating around personalities rather than

programs. All major parties espoused democracy and market reforms, but the governing National

Salvation Front proposed slower, more cautious economic reforms. In contrast, the opposition's

main parties, the National Liberal Party (PNL), and the National Peasant-Christian Democrat

Party (PNTCD) favored quick, sweeping reforms, immediate privatization, and reducing the role

of the ex-communist elite.

In the 1990 general elections, the FSN and its candidate for presidency, Ion Iliescu, won with a

large majority of the votes (66.31% and 85.07%, respectively). The strongest parties in

opposition were the Democratic Alliance of Hungarians in Romania (UDMR), with 7.23%, and

the PNL, with 6.41%.

Unhappy at the continued political and economic influence of members of the Ceausescu-era

elite, anti-communist protesters camped in University Square in April 1990. When miners from

the Jiu Valley descended on Bucharest two months later and brutally dispersed the remaining

"hooligans," President Iliescu expressed public thanks, thus convincing many that the

government had sponsored the miners' actions. The miners also attacked the headquarters and

houses of opposition leaders. The Roman government fell in late September 1991, when the

miners returned to Bucharest to demand higher salaries and better living conditions. Theodor

Stolojan was appointed to head an interim government until new elections could be held.

Parliament drafted a new democratic constitution, approved by popular referendum in December

1991. The FSN split into two groups, led by Ion Iliescu (FDSN) and Petre Roman (FSN) in

March 1992; Roman's party subsequently adopted the name Democratic Party (PD). National

elections in September 1992 returned President Iliescu by a clear majority, and gave his party,

the FDSN, a plurality. With parliamentary support from the nationalist PUNR and PRM parties,


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and the ex-communist PSM party, a technocratic government was formed in November 1992

under Prime Minister Nicolae Vacaroiu, an economist. The FDSN became the Party of Social

Democracy of Romania (PDSR) in July 1993. The Vacaroiu government ruled in coalition with

three smaller parties, all of which abandoned the coalition by the time of the November 1996

elections.

The 1992 elections revealed a continuing political cleavage between major urban centers and the

countryside. Rural voters, who were grateful for the restoration of most agricultural land to

farmers but fearful of change, strongly favored President Ion Iliescu and the FDSN, while the

urban electorate favored the CDR (a coalition made up by several parties -- among which the

PNTCD and the PNL were the strongest -- and civic organizations) and quicker reform. Iliescu

easily won reelection over a field of five other candidates. The FDSN won a plurality in both

chambers of Parliament. With the CDR, the second-largest parliamentary group, reluctant to take

part in a national unity coalition, the FDSN (now PDSR) formed a government under Prime

Minister Nicolae Vacaroiu, with parliamentary support from the PUNR, PRM, and PSM. PRM

and PSM left the government in October and December 1995, respectively.

The 1996 local elections demonstrated a major shift in the political orientation of the Romanian

electorate. Opposition parties swept Bucharest and many of the larger cities. This trend

continued in the national elections that same year, where the opposition dominated the cities and

made steep inroads into rural areas theretofore dominated by President Iliescu and the PDSR,

which lost many voters in their traditional strongholds outside Transylvania. The campaign of

the opposition hammered away on the twin themes of the need to squelch corruption and to

launch economic reform. The message resonated with the electorate, which swept Emil

Constantinescu and parties allied to him to power in free and fair presidential and parliamentary

elections. The coalition government formed in December 1996 took the historic step of inviting

the UDMR and its Hungarian ethnic backers into government.

The coalition government retained power for four years despite constant internal frictions and

three prime ministers, the last being the Governor of the National Bank, Mugur Isarescu.

In elections in November 2000, the electorate punished the coalition parties for their corruption

and failure to improve the standard of living. The PDSR (renamed PSD - Social Democratic

Party at June 16, 2001 Congress) came back into power, albeit as a minority government. In the


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concurrent presidential elections, former President Ion Iliescu decisively defeated the extreme

nationalist Greater Romania Party (PRM) leader Corneliu Vadim Tudor.

The PSD government, led by Prime Minister Adrian Nastase, forged a de facto governing

coalition with the ethnic Hungarian UDMR, ushering in four years of relatively stable

government. The PSD guided Romania toward greater macro-economic stability, although

endemic corruption remained a major problem. In September 2003, the center-right National

Liberal Party (PNL) and centrist Democratic Party (PD) formed an alliance at a national and

local level, in anticipation of 2004 local and national elections. Romania then moved closer

toward a political system dominated by two large political blocs.

In October 2003 citizens voted in favor of major amendments to the constitution in a nationwide

referendum to bring Romania's organic law into compliance with European Union standards.

On November 28, 2004, Romania again held parliamentary and the first round of presidential

elections. In the December 12 presidential run-off election, former Bucharest Mayor Traian

Basescu, representing the center-right PNL-PD alliance, delivered a surprise defeat to PSD

candidate Nastase. Basescu appointed PNL leader Calin Popescu-Tariceanu as Prime Minister,

whose government was approved by the Parliament on December 28, 2004.

This coalition unraveled due to enmity between the President and Prime Minister by April 2007.

From 2007 until December 2008, former Prime Minister Tariceanu's PNL party ran an ultra-

minority government in coalition with the UDMR and tacit support of the PSD. Following

parliamentary elections on November 30, 2008, in which the PD-L and PSD parties virtually

tied, a majority PD-L-PSD coalition led by PD-L Prime Minister Emil Boc has governed.

Political:-November 2008 elections resulted in a virtual tie between the center-right PD-L and the center-

left PSD parties, with each holding between 34%-37% of the seats in each chamber. The ruling

center-right PNL party finished a distant third, and PNL Prime Minister Calin Tariceanu

resigned. After intense negotiations among various configurations of the PD-L, PSD, and PNL, amajority PD-L-PSD coalition government was formed in December 2008 with Emil Boc as new

Prime Minister. Among the new governments top priorities is addressing the effects of global

economic turmoil on Romanias economic development, and coping with significant fiscal

challenges facing the Romanian Governments budget.


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Political parties represent a broad range of views and interests, and elected officials and other

public figures freely express their views. Civil society watchdog groups remain relatively small

but have grown in influence. The press is free and outspoken, although there have been incidents

of politically motivated intimidation and even violence against journalists and media

management, particularly prior to 2004 national elections. Independent radio networks have

proliferated, and several private television networks now operate nationwide. In addition, a large

number of local private television networks have emerged.

Through support of or participation in consecutive government coalitions, the UDMR has

ensured the continuing influence of the ethnic Hungarian minority in national government.

However, the UDMR is not a member of the current coalition government. Consecutive

governments have sought to improve the socio-economic situation of the Roma minority, which

continues to suffer from severe poverty in many areas and discrimination. Although according to

government statistics Roma officially represent 2.5% of the population, Romani organizations

claim the percentage is actually several percentage points higher.

The restitution of private and religious property seized under communism or during World War

II continues to move slowly. Particularly problematic is the return of Greek-Catholic churches,

which were given to the Romanian Orthodox Church by the communist regime. The Romanian

Orthodox Church thus far has turned over very few of these churches, many of which had

belonged to the Greek Catholic community for hundreds of years. Romania has repealed

communist-era legislation criminalizing homosexual acts and banned xenophobic and racist

groups and their activities. Romanian law does not prohibit women's participation in government

or politics, but societal attitudes remain a significant barrier. Women hold some high positions in

government and roughly 10% of the seats in each chamber in the Parliament.

Economic:-Romania is a country of considerable potential: rich agricultural lands; diverse energy sources

(coal, oil, natural gas, hydro, and nuclear); a substantial industrial base encompassing almost thefull range of manufacturing activities; an educated work force; and opportunities for expanded

development in tourism on the Black Sea and in the Carpathian mountains.

The Romanian Government borrowed heavily from the West in the 1970s to build a substantial

state-owned industrial base. Following the 1979 oil price shock and a debt rescheduling in 1981,

Ceausescu decreed that Romania would no longer be subject to foreign creditors. By the end of


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1989, Romania had paid off a foreign debt of about $10.5 billion through an unprecedented

effort that wreaked havoc on the economy and living standards. Vital imports were slashed and

food and fuel strictly rationed, while the government exported everything it could to earn hard

currency. With investment slashed, Romania's infrastructure fell behind its historically poorer

Balkan neighbors.

Since the fall of the Ceausescu regime in 1989, successive governments sought to build a

Western-style market economy. The pace of restructuring was slow, but by 1994 the legal basis

for a market economy was largely in place. After the 1996 elections, the coalition government

attempted to eliminate consumer subsidies, float prices, liberalize exchange rates, and put in

place a tight monetary policy. The Parliament enacted laws permitting foreign entities

incorporated in Romania to purchase land. Foreign capital investment in Romania has been

increasing rapidly, although it remains less in per capita terms than in some other countries of

East and Central Europe.

Romania was the largest U.S. trading partner in Eastern Europe until Ceausescu's 1988

renunciation of most favored nation (MFN or non-discriminatory) trading status resulted in high

U.S. tariffs on Romanian products. Congress approved restoration of MFN status effective

November 8, 1993, as part of a new Bilateral Trade Agreement. Tariffs on most Romanian

products dropped to zero in February 1994, with the inclusion of Romania in the Generalized

System of Preferences (GSP). Major Romanian exports to the U.S. include shoes, clothing, steel,

and chemicals. Romania signed an Association Agreement with the European Union (EU) in

1992 and a free trade agreement with the European Free Trade Association (EFTA) in 1993,

codifying Romania's access to European markets and creating the basic framework for further

economic integration.

At its Helsinki Summit in December 1999, the European Union invited Romania to formally

begin accession negotiations. In December 2004, the EU Commission concluded pre-accession

negotiations with Romania. In April 2005, the EU signed an accession treaty with Romania and

its neighbor, Bulgaria, and in January 2007, they were both welcomed as new EU members.

Privatization of industry was first pursued with the transfer in 1992 of 30% of the shares of some

6,000 state-owned enterprises to five private ownership funds, in which each adult citizen

received certificates of ownership. The remaining 70% ownership of the enterprises was

transferred to a state ownership fund. With the assistance of the World Bank, European Union,


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and International Monetary Fund (IMF), Romania succeeded in privatizing most industrial state-

owned enterprises, including some large state-owned energy companies. Romania completed the

privatization of the largest commercial bank (BCR) in 2006. The privatization of the last state-

owned bank--the National Savings Bank (CEC)--was stopped in 2006 and has been indefinitely

postponed. Four of the country's eight regional electricity distributors have now been privatized.

Privatization of natural gas distribution companies also progressed with the sale of Romania's

two regional gas distributors, Distrigaz Nord (to E.ON Ruhrgas of Germany) and Distrigaz Sud

(to Gaz de France). Further progress in energy sector privatization, however, has been delayed as

the government reconsiders its strategy on the Rovinari, Turceni, and Craiova energy complexes,

contemplating the creation of an integrated, state-owned energy producer. Romania has a nuclear

power plant at Cernavoda, with one nuclear reactor in operation since 1996 and a second one

commissioned in the fall of 2007.

The return of collectivized farmland to its cultivators, one of the first initiatives of the post-

December 1989 revolution government, resulted in a short-term decrease in agricultural

production. Some four million small parcels representing 80% of the arable surface were

returned to original owners or their heirs. Many of the recipients were elderly or city dwellers,

and the slow progress of granting formal land titles remains an obstacle to leasing or selling land

to active farmers.

Financial and technical assistance continues to flow from the U.S., European Union, other

industrial nations, and international financial institutions facilitating Romania's reintegration into

the world economy. The International Monetary Fund, World Bank (IBRD), and the European

Bank for Reconstruction and Development (EBRD) all have programs and resident

representatives in Romania. U.S. Agency for International Development (USAID) programs

were phased out completely in 2008. As of August 2007, Romania had attracted $21.8 billion in

foreign direct investment. Of this total, U.S. direct investment accounted for $915.7 million

(4.9%), ranking sixth among national investors but first among non-EU countries.

After years of IMF-guided economic reforms, Romania' stand-by agreement with the IMF

expired on July 7, 2006. Romania's inflation rate has steadily decreased, while growth rates have

been between 4% and 8% since 2001. However, the IMF has been critical of Romania's 2005

adoption of a 16% flat tax, pointing to the country's low rate of tax collection as a medium- to

long-term impediment to growth. The IMF has also criticized Romania's public sector wage


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policy as inflationary. Public sector wages increased 36% through 2006, and the Government of

Romania approved public sector wage increases of 14%-19% over three rounds in 2007.

Analysts have warned about increasing macroeconomic imbalances, such as the growing current

account deficit (10.3% of GDP in 2006 and possibly reaching 15% in 2007, the IMF estimated).

This along with deteriorating education and health services, aging and inadequate physical

infrastructure, and a looming real estate price bubble are all seen as threats to future growth. The

global financial crisis and economic downturn in 2008 placed additional strain on Romanias

economic growth by curtailing foreign investment and limiting access to credit.

Romania's budget deficits also dropped under IMF guidance, though the trend is reversing.

Actual deficits decreased from 4% of GDP in 1999 to only 0.8% in 2005 and 1.7% in 2006.

However, the 2007 deficit rose to 2.5% of GDP, and the 2008 deficit is projected to be 5%,

driven by rising spending on infrastructure, public sector wages, and pension increases. The IMF

had recommended that Romania strive to keep the 2007 deficit below 2%, dropping to 1% of

GDP in 2008. The IMF also advised that Romania is lacking a realistic fiscal policy framework

for the medium term. The country made progress in combating domestic tax arrears and

expanding the tax base in 2005, though Romania has one of the lowest collection rates in Europe,

at 31.0% of GDP in 2006.

Unemployment was officially 3.9% in August 2007, although these figures do not capture high

levels of temporary emigration, gray-market employment, or under-employment.

In the early 1990s, inflation was one of Romania's most serious economic problems. Inflation

rates have gradually declined, finally reaching single digits in 2004. Inflation in 2006 stood at a

historical low of 4.9%. The Central Bank set an ambitious annual target band of 4% plus/minus

1% for 2007, but outside analysts noted that inflationary pressures were growing and predicted

that the rate for the year would slightly exceed the top of this band.

Social:

According to the 2002 census, Romania has a population of 21,698,181 and, similarly to othercountries in the region, is expected to gently decline in the coming years as a result of sub-

replacement fertility rates. Romanians make up 89.5% of the population. The largest ethnic

minorities are Hungarians, who make up 6.6% of the population and Roma, or Gypsies, who

make up 2.46% of the population. By the official census 535,250 Roma live in Romania.[note

4][102] Hungarians, who are a sizeable minority in Transylvania, constitute a majority in the


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counties of Harghita and Covasna. Ukrainians, Germans, Lipovans, Turks, Tatars, Serbs,

Slovaks, Bulgarians, Croats, Greeks, Russians, Jews, Czechs, Poles, Italians, Armenians, as well

as other ethnic groups, account for the remaining 1.4% of the population.Of the 745,421

Germans in Romania in 1930,only about 60,000 remained In 1924, there were 796,056 Jews in

the Kingdom of Romania. The number of Romanians and individuals with ancestors born in

Romania living abroad is estimated at around 12 million.

Languages

The official language of Romania is Romanian, an Eastern Romance language related to Italian,

French, Spanish, Portuguese and Catalan. Romanian is spoken as a first language by 91% of the

population, with Hungarian and Rroma, being the most important minority languages, spoken by

6.7% and 1.1% of the population, respectively.Until the 1990s, there was also a substantial

number of German-speaking Transylvanian Saxons, even though many have since emigrated to

Germany, leaving only 45,000 native German speakers in Romania. In localities where a given

ethnic minority makes up more than 20% of the population, that minority's language can be used

in the public administration and justice system, while native-language education and signage is

also provided. English and French are the main foreign languages taught in schools. English is

spoken by 5 million Romanians, French is spoken by 45 million, and German, Italian and

Spanish are each spoken by 12 million people.Historically, French was the predominant foreign

language spoken in Romania, even though English has since superseded it. Consequently,

Romanian English-speakers tend to be younger than Romanian French-speakers. Romania is,

however, a full member of La Francophonie, and hosted the Francophonie Summit in 2006.

German has been taught predominantly in Transylvania, due to traditions tracing back to the

Austro-Hungarian rule in this province.

Religion

Romania is a secular state, thus having no national religion. The dominant religious body is the

Romanian Orthodox Church, an autocephalous church within the Eastern Orthodox communion;

its members make up 86.7% of the population according to the 2002 census. Other important

Christian denominations include Roman Catholicism (4.7%), Protestantism (3.7%),

Pentecostalism (1.5%) and the Romanian Greek-Catholic Church (0.9%).Romania also has a

Muslim minority concentrated in Dobrogea, mostly of Turkish ethnicity and numbering 67,500


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people.Based on the 2002 census data, there are also 6,179 Jews, 23,105 people who are of no

religion and/or atheist, and 11,734 who refused to answer. On December 27, 2006, a new Law on

Religion was approved under which religious denominations can only receive official

registration if they have at least 20,000 members, or about 0.1 percent of Romania's total

population.

Culture

Romania has its unique culture, which is the product of its geography and of its distinct historical

evolution. Like Romanians themselves, it is fundamentally defined as the meeting point of three

regions: Central Europe, Eastern Europe, and the Balkans, but cannot be truly included in any of

them.The Romanian identity formed on a substratum of mixed Roman and quite possibly Dacian

elements,with many other influences. During late Antiquity and the Middle Ages, the major

influences came from the Slavic peoples who migrated and settled in near Romania; from

medieval Greeks,and the Byzantine Empire;from a long domination by the Ottoman

Empire;from the Hungarians; and from the Germans living in Transylvania. Modern Romanian

culture emerged and developed over roughly the last 250 years under a strong influence from

Western culture, particularly French, and German culture.

Market Aspects:

Market Challenges:

The poor condition of Romanias physical infrastructure -- including roads, rail, airports, water

and wastewater systems affects business costs, productivity, public safety, and the countrys

success in attracting foreign investment. Poor traffic planning and management make it difficult

to predict delivery schedules or manage supply and distribution chains. The countrys

connections to the rest of the EUs transportation infrastructure are underdeveloped, keeping

Romania from realizing its potential for trade and tourism. The problem is not entirely one of

money. The EU has allocated billions of euros to Romania for infrastructure development. The

persistent challenge has been a lack of adequate administrative capacity and project management

skills to plan, budget, obligate and spend these funds in an efficient, transparent and effective

manner. Business operates as usual in Romania, but the relationship between government and

business is marred by bureaucratic inefficiency, a lack of transparency, and instances of


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corruption. The legal and judicial systems do not provide the same recourse and sanctions

against corruption as are found among older EU members. A new government was elected late

last year, and so the new prime minister inherits these problems amid slowing growth.

Market Opportunities:The strongest areas of opportunity for exports and investment potential include the following

sectors: infrastructure, building materials, energy, environmental technologies, IT&C, defense,

and packaging equipment. Romanias rate of economic growth in 2008 stood at an impressive

7.1%, but has decelerated and is now expected to remain at or below 1% in the year ahead. The

public sector plays a major role as purchaser and procurer of products and services, and projects

in areas such as ICT, infrastructure, water and wastewater treatment, energy, and agriculture are

supported by funds from external sources such as the EU or development banks such as the

European Bank for Reconstruction and Development (EBRD) or World Bank.

Market Entry Strategy:

A local business presence is essential to success in the Romanian market, and this can take the

form of a distributor agreement, subsidiary, joint venture or acquisition. Regardless of the form

of investment or entry strategy, Selling through a local Romanian partner is a standard element

of most entry strategies.

Investment Climate :Romania actively seeks direct foreign investment. The Agency for Foreign Investment (ARIS),

created in 2004, is designed to advertise the country as a good investment destination and to

improve aspects of the business climate. Romania's marketplace of 21.6 million consumers, a

well-educated workforce, geographic location, and abundant natural resources make it an

increasingly attractive destination for investment. Romania has taken steps to strengthen tax

administration, enhance transparency, and create legal means to resolve contract disputes

expeditiously. Mergers and acquisitions are subject to review by the Competition Council.Romania's accession to the European Union on January 1, 2007 has helped solidify institutional

reform. However, judicial and legislative unpredictability continues to affect the investment

climate.

Foreign investors may engage in business activities in Romania by any of the following

methods:


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Setting up new commercial companies, subsidiaries or branches, either wholly owned orin partnership with Romanian natural or legal persons;

Participating in the increase of capital of an existing company or the acquisition ofshares, bonds, or other securities of such companies;

Acquiring concessions, leases or agreements to manage economic activities, publicservices, or the production of subsidiaries belonging to commercial companies or state-

owned public corporations;

Acquiring ownership rights over non-residential real estate improvements, includingland, via establishment of a Romanian company;

Acquiring industrial or other intellectual property rights;

Concluding exploration and production-sharing agreements related to the development ofnatural resources.

Book Market: Romania (Marketing aspects)

Distribution

Logistics and distribution have become a matter of growing interest for the book trade.

Previously, distribution costs usually amounted to no more than 10-20% of the value of the

product. Today, if we take into consideration the costs of the whole distribution chain, this can

often amount to more than 50% of the value of the goods, especially if dealing with exports andimports. The concept of distribution has been widened; it is not only transportation and storage,

as often buying, payment and customer relations are now included; Demands on distribution are

growing: short delivery time, high quality of deliveries (no mistakes or damages), etc; New

methods of organization and cooperation exist and create further dependencies; New possibilities

for effective distribution are growing along with the risks.

The Supply Chain

The traditional way of looking at the supply chain is the following:


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The supply chain without using a wholesaler is also common. This is especially the case if bigger

quantities are bought, as the buying price to be paid by the bookshop might be lower when

buying directly from the publisher. On the other hand, one has to take into consideration the vast

number of deliveries, invoices and payments that have to be processed by the publisher and by

the bookshop when considering this supply chain.

Bookshops Buying Directly from Publishers: Nature of transactions

Bookshops buying directly from wholesalers: Nature of transactions

The difference between a wholesaler and a distributor is that a wholesaler buys the books and

sells them to the bookshop; in the case of a distributor the publisher has an agreement with the

distributor that it handles its stock. The distributor is responsible for handling the orders and


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delivering the goods, invoicing, etc, but the distributor does not own the books; they are still the

property of the publisher.

New technology has made it easier to produce a book and to distribute it. Thanks to the Print-on-

Demand technique, some authors publish their own books, market them on their own websites

and allow customers order their books by using the internet. However, the supply chain is not

only a question of transportation and stocking; it should be looked at as a value chain. We could

start with the needs of the customer and consider what services the different stages in the supply

chain could offer. capital (who is financing what); information (customers need information

about the book but it is often very important for the publisher to get information about what kind

of demands the customer has); time (most customers want to get the books immediately and for

bookshops, quick deliveries are essential especially to avoid excess stock or to avoid missed

sales opportunities); and the product and services connected with the book.


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Different elements on Value Chain:

Marketing & Selling Channels:

Bookshops are the most important selling channel, representing 37.5% of the total bookdistribution.

Romanian Distribution channels:

Book Titles by Category:


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For 2001, the turnover of book publishing industry exceeded 38,000,000. It represented 0.086%

of the NGP and 0.37% of industrial production.

Reading Attributes:

55% of the urban population aged between 18-40 years old buys books; this means 3,000,000readers, corresponding to 13% of the population of Romania. Only 20% of the urban population

(18-40 years old) frequently buys books (between 5-12 books/year).People who have not bought

any books during the past 12 months represent 45% of the urban population of 18-40 years olds,

of which 58% are less than 30 years old and 79% have graduated from high school or less than

44% are working as personnel in nonmanual positions, with no higher education.


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Conclusion:Romanian market is driven largely by the traditional channels of distribution channel viz.

bookshop. A market entry into Romania favours such approach where in there is already some

strong presence in the market. Children segment is a very small market consisting of only 6%, by

titles sold in the market.Further,it can be attributed to only 14% of the population in the below 14

years of age. Our strategy would entail about forming an alliance with the leading bookshop

chains in Romania, as this low penetration of children segment can be attributed to the

inefficiency inherent in the system. Greater use of information technology can be harnessed in

the later stage when the market becomes more familiar to the new entrants.


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References

www.pwc.com/ro http://www.infoplease.com/ipa/A0107905.htm http://www.buyusa.gov/romania/en/doing_business_in_romania.html http://www.ccir.ro/ http://www.state.gov/r/pa/ei/bgn/35722.htm#travel http://en.wikipedia.org/wiki/Politics_of_Romania http://www.publishers.org.uk/en/home/market_research_and_statistics/gpi/gpi_useful_lin

ks.cfm

http://www.booksineurope.org/files/10_SUMMARY_MCA_STUDY_ON_THE_BOOKMARKET.pdf

www.booksineurope.org

Documents

Project Report-Children Books in Romania