Even though Romania still has a long way to go before getting close to the success of other markets in terms of local brands, there are a number of entrepreneurs who had the courage to launch their own products and get into the still uneven fight with the major international manufacturers or retailers.
Some were later acquired by international groups but are still trying to preserve their national identity while others are still standing on their own. All of them agree it is not an easy road, regardless of the path one takes but insist that when the brand comes from passion, it is not a matter of mere financial calculations.
“A brand means money, figures, hours of work. We tend to look at a brand with only our heart, but there is money behind it. Give me a million euros and I will build you a brand in six months,” said Feliciu Paraschiv, chief executive and founder of Paco Supermarkets.
He was one of the speakers the ZF Branduri Romanesti (ZF Romanian Brands) conference organized by Ziarul Financiar in partnership with MedLife, Albalact, Kandia-Rom, Domeniile Samburesti and Aqua Carpatica.
“A brand is about a product and a story. There is no brand without a story,” he added.
Marketing budgets vary from brand to brand quite a lot, from several thousand euros invested in attending events to several hundred thousand, in Tudor Tailor brand’s case or millions of euros allocated a year – Kandia’s ROM chocolate and Albalact dairy. Beyond the amount, what matters is the relevance of the message and communication channel chosen, which can make a difference between success and failure of a promotional campaign.
“The biggest challenge is to be relevant for the young generations. ROM is really hipsterish now. You have to know your consumers very well to know who to convey certain messages,” explains Gabriela Munteanu, marketing director with Kandia, whose brands include Rom and Magura.
The company is now looking for solutions to export Magura products and that includes a new name because Magura, as written with special characters in Romanian is difficult to pronounce for a foreigner.
The attention to the young generation and the need to reinvent, reposition, are visible in the strategy of many local companies that have been on the market for a long time and need to attract new types of consumers.
The strategy does not necessary entail a more modern look for the brand, a decision that may backfire, when consumers are accustomed to seeing a certain image and tradition.
“The Albalact butter has been on sale in Romania since 1971 and the packaging of the stick of butter does not meet all the current packaging standards. It is the best seller, though. We tried to change the design a bit but the consumers did not react well to this, they thought we changed the recipe. So, we reverted to the old design,” says Cristina Miclea, marketing manager of Albalact.
Strategies and budgets aside, there comes a time in the life of every manufacturer when they must decide if they stay local or expand to other markets, and Romanians are lagging far behind other countries even behind those in the region. Most often Romanian companies choose to stay within the national borders considering export entails much higher promotional costs. Romania still has much fewer brands available abroad than other countries in the region and they are most often found in small shops of Romanians living abroad.
“The first impression foreigners get of us is that there are no Romanian brands. People abroad don’t trust us for partnerships because they don’t know whether we can take something international, deliver quality on a day to day basis. We have no handicap, though, we must not be embarrassed about being Romanians,” says Marius Dan, founder of Tudor Tailor, a company that started in an apartment seven years ago.
The 5-to-go (fixed price coffee shop) network, too, had its share of unpleasant surprises when trying to expand aboard, and things turned to be more difficult than its owners had anticipated. The reasons are the different mentality, legislation and the need for much higher budgets.
“They suggested to us in Poland to get a local partner, because they are quite nationalistic, they don’t like foreign brands that much. We want to go to other counties, we’re getting offers for that every month, but I still don’t think we should,” said Radu Savopol, co-founder and general manager of 5-to-go.
Another reason why local brands cannot expand abroad is the lack of involvement on the part of the government, while other European countries have made it their policy to protect local products.
There are, however, success stories of Romanian brands abroad and one of them is the Heidi chocolate, which many consumers have no idea it is made in Romania.
“The brand was not initially built to conquer the world but now exports generate 60% of our sales. Coming from Eastern Europe, you have to prove you can supply constant quality, but we are doing well in the neighboring countries we can get to in two days. We are present on 45 markets,” says Daniela Dumitrascu, marketing director of Heidi Chocolat.
(English version by Loredana Fratila-Cristescu)