Romanias branding market advances by 1 million euro

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Romanian branding companies made up a market worth three million euros in 2007, one million more than in 2006.
The increase had been anticipated by most of the market players. For instance, founder and strategy director of Grapefruit branding firm Stefan Liute estimated early this year a growth of 25 – 30% for the entire year.
 
Most of the branding firms are counting on a rise in local brands on the branding market in 2008. „There will probably be projects with less visibility and less brilliance for the general public, but with real impact on the business they refer to,” Liute told Business Standard.
As far as the developments in the profit margins of the branding companies is concerned, Liute is expecting them to stand at 25-30%.
 
Among the difficulties facing the Romanian branding market, Liute mentioned the market context and extra-European competition, with the latter likely to pose a serious problem to the local brands.
„Suffice it to look at the factors that widened the current-account deficit in 2007 to see that the single market means merciless competition for some fields. We will have to do things better,” says Liute.
 
Creative Director and CEO of Branzas Design Bogdan Branzas says 2008 has so far been better in terms of the number of orders for branding and design projects than 2007. „The lack of optimism over the entire economic environment, most visible over the stock exchange and the property market, has determined a lack of optimism over private companies spending on branding projects. Paradoxically, the orders were more than in 2007, but funds were barely earmarked or not at all, with the companies preferring to wait or accept projects for smaller prices,” says Branzas.
 
Branzas says the projects that have been most visible in the branding business were the one commissioned by the Government, public bodies or public corporations. „Looking in retrospect at the state beneficiaries, we can safely say that the efforts deployed were mainly for face-lifting than for re-branding, and there were not notable success stories,” says Branzas.
 
Brand advisor with Chrysopeea Branding and Design company of Cluj-Napoca Calin Chiorean says re-branding, repositioning and face-lifting of existing brands, particularly in the highly dynamic province of fast-moving consumer goods (FMCG), where annual face-lifting is a tradition, will be the branding activities to record positive developments in 2008.
„The brand owners will likely develop their range of brand consultancy services, audit and evaluation, brand monitoring and management, brand engagement, etc.,” says Chiorean.
 
The Chrysopeea specialist mentions obtuse or obsolete vision of the management, market monopolies, costs and the time needed for a brand projects to be completed among the reasons for the sluggish development of the Romanian branding market.
The same trend is identified also by Bogdan Branzas, who remarks that although there is significant economic growth in Romania, according to reports by the Finance Ministry and the National Statistics Institute, the budgets of companies, which are the potential clients of branding firms, are rather allotted for expenses than for product and service development, which would also mean brand development.
 
„I believe the economy is still dependent on trade and speculative investments, rather than on productive and market development projects or business expansion abroad,” the Branzas Design official argues.
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