1.

Situation analysis Phoenix Y Company and Gusto rods story begins in 1992, when 2 students were looking for a way to start a business. First steps in entrepreneurship make them a deal with ice cream, which they developed for four years. Later, they decided to expand their business in the food industry in order to have continuity throughout the year. Phoenix y S.R.L is active in the food industry with a portfolio of products: rods, crackers, ice cream powder. The initial investment was $ 2,000 savings, which the two businessmen had managed to gather. They have never resorted to bank loans or other loans; all the investments they have made have been made only from their own funds and the reinvestment of profits earned each year. In the 90s, multinational companies had not yet appeared on the local market, therefore neither the standards, nor the policies imposed by them. But quality has become an eliminatory criterion, so that over time some small producers have left the market or they readjusted. Nowadays, they are dealing with a small number of local manufacturers, but with an educated consumer, with emphasis on taste, ingredients and product quality. The number of employees also increased with the business size. If the first four years of starting the business with ice cream, the team consisted of 25 employees, then came the need to build a factory and business diversification. Today, Phoenix has 320 employees and can be valued at tens of millions of Euros. When they launched in business with Gusto rods, in the market there were at least 3-4 local producers in every county, in an imperfect industry with disequilibrium between small demand and big supply of rods. Sales were small - between 3,000 to 5,000 bags per producer. In 2010 Gusto rods represented for the manufacturer a turnover of 80 million lei. The plant owned in Baicoi, Prahova County, has a production capacity of over 1 million bags per day, one of the largest in Europe. From the production unit of rods about 2 million goes to export each month. About 10% of production is for the international market, Gusto rods being marketed in countries like Spain, Italy, Germany, Greece, Bulgaria, Moldova, Sweden, Holland, Ireland, England and Belgium. The company holds a 70% market share, competitors including Star Snacks rods (PepsiCo), Pambac, Best Foods and Standard & Snacks.

Regarding the financial crisis on the industry in which it operates, the official of Phoenix said that the rods category was affected too, recording a contraction in 2010. According to them, many Romanians have redesigned daily consumption budgets in the economic downturn that has felt more acutely in 2010. He said that we are dealing with a much more rational public in terms of daily expenses.

This year, Phoenix representative estimated that the industry would continue to decline due to the limited budget and contraction of purchasing power. On the other hand, in his opinion, the recession has an educational effect by rationalizing each decision. In these times, in order to maintain the sales level at 1 million bags a day, Phoenix Y invested in promotion, doubled the number of distributors, at 200, and enlarged the export sector. As the company official said, they estimated they would finish with a 30% increase in turnover at the end of the year. According to the estimates published by the company, turnover could reach 25 million this year, of which 20 million Euros from the sale of rods, or around 55,000 Euros per day. A bag of Gusto rods costs 28 Bani at the factory door, while prices start from 50 Bani.

Due to significant decrease in purchasing power, large retail chains have begun to be increasingly more interested in developing their own brand product portfolio. Consumers, on the other hand, are also interested in the offers price as well. Thus, private label products have a strong contribution to the development of collaboration between manufacturers and retailers. In the salty snacks category Carrefour sells about 350 snacks, of which about 16% are own brand products. The range is very wide, from popcorn, rods, chips, to proposed new flavors from news providers. Also, Real Hypermarkets evolution of increasing sales of snacks recorded in 2011, compared to 2010, is preserved in 2012 too, and is generated mainly by improving its product portfolio brands, also as range, and number of items. The top products remain the rods, having success due to the fact that it is an authentic

Romanian product. Real Hypermarket works with both local suppliers, producers and with neighboring countries. Of those observed, we can say that the market in Romania has reached certain maturity. We are an European country and the market behaves as such, that's why the differences between domestic and European Union are not significant, tells the Phoenix Y manager. The company owns a portfolio of 15 types of products, distributed nationwide and internationally. Among these: Gusto salted rods (in two variants of weight), with cheese, pizza or peanut Gusto with Mega Surprise (two versions of weight) or Ciocoletii (rods wrapped in chocolate).

2. Marketing activities and objectives Through the figures, Gusto rods are the market leaders, but the product has never received a promotion campaign. Consumers didnt make a connection between product and brand, and Gusto was a great product, but without a definite brand, which was speculated by a number of competitors: while they began to attack the product making similar packaging, which began misleading the consumer. Nor in the corporate communications the company was visible, therefore both the product and company were just illustrious strangers. With increasing the market competition, and the emergence of economic crisis, a communication campaign designed to remove anonymity of Gusto rods has become extremely necessary. The core of this campaign already existed and was represented by an advertising campaign with two TV spots that ready to be broadcasted. They positioned Gusto within "indestructible optimism in any case" and the slogan Feed your optimism. Phoenix is the first company producing rods that runs a communication program for Romanian consumers. In June 2009, Phoenix began its first advertising campaign for the brand Gusto, brand positioning within the optimism inspired by the simplicity of the product, and the desire to make the Romanians pressed by worries and economic crisis, smile. Gusto rods campaign started with the mysterious appearance of three giant smiling faces in the fields of Baicoi. For one week, three drawings were the subject of discussion both in the press, and the most important blogs, and nobody made the connection with the Baicoi factory rods. Through these drawings Gusto rods attracted the peoples attention to start the campaign for optimism. Once aroused the interest, to bring smile on the faces of the Romanians, Gusto rods created TV ads in a humorous talk about the unbreakable optimism and started the Optimists League. All these actions were followed by social media campaigns, the launch of www.ligaoptimistilor.ro blog and Facebook page, of involvement in an very fresh

event- Optimism, organized in partnership with Evensys, an event that is already prepared fourth edition, a completely innovative project developed together with master caricaturist Stefan Popa's, which spread good will to consumers directly from the bag of the rods. The buzz was incredible, in just four months the campaign registered more than 300 articles in print media, to which were added about 50 minutes of exposure on TV and 20 minutes on radio. As for online, dozens of bloggers have written about the Gusto campaign voluntarily, adding to them more than 150 mentions on Twitter. Media exposure has made this campaign to have a total audience of over 15 million people. If we make a SWOT analysis we can say that the main strength that Gusto rods has is that they succeeded in branding their product and removed it from obscurity. They are the only rods manufacturers that have a TV advertising and a good communication with their customers through sponsoring different activities, making promotions, contests, the Optimists League and even the drawings from the rods bag. Also, the prices are very small and affordable compared with other salty snacks. They are trustful and 100% natural being a simple product made of corn, air and salt. They are expanded all over the country and in other foreign countries too. Their opportunity would be to expand much more internationally and to consolidate their existing markets. Considering the threats, new entrants and competition apply to them too.