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Kovács Beáta, CBA Nord Vest: “The franchised CBA partners mentain their managerial authority“

22/12/2014 21:58

The accelerated expasion of international retail chains, is practically applying a higher and higher pression upon the independent traders with each new store opened. Many have dropped the weapons, either getting for ever out of the business, or choosing to sublet their spaces implicitly changing their destination too. But is the modern retail so scarying? On a national market where the traditional trade still has a share of almost 50%, it is difficult to believe that there are no other solutions.

 

Dumped nearly in ridicule after the brutal failure of the Mic.ro format, the association model of the individual traders has slowly come back in foreground, being for almost three years  part of expansion strategy of a few international chains like Delhaize or Carrefour.  But at the same time, the emptyness left by the dissapearance of Mic.ro was quickly filled by the Metro’s format LaDoiPasi (n.a. TwoStepsAway), as an alternative offered to individual traders in their battle with large international chains. Yet, it is only for a few to know that for the Romanian market, the model of association of the individual traders is not at all a new one. On the contrary, it has old service duty, the first stores being opened since 2002 under CBA logo. A logo which not only withstanded time, but succeeded to consolidate its reputation, winning slowly but certainly market shares and, what it is the most important, the trust of the individual traders.

 

What is the today meaning of the CBA concept and which are its strong characteristics on Romanian market? These are just two of the many questions we asked Mrs.Kovacs Beata – Manager of Marketing and Communication Department  within CBA Nord Vest, in an exclusive interview, mark Brandprivat.ro

 

 

CBA opened for a first time a way on the Romanian market by the time when the expansion of the international retail chains was for many far from today aggression

The CBA franchise was launched in Romania in 2002 and is working to implementation of the Western European model, offering to the stores an alternative in retail, acquisitions, image and promotion in common. CBA Nord West started its activity into a warehouse of 2000 sq.m. Following the extention in 2010, the logistic warehouse moved into a new location of 6500 sq.m. having ultramodern storage space and with refrigerator warehouse of 1800 sq.m.

The PRIVAT network open in 2013 and it is the second brand of the company CBA Nord West designed to franchise the small format stores.

So, a logistic center of itsown, designed like a real bridgehead to sustain the entire structure of the two networks in all Transilvania area.

The logistic center is serving the clients directly with itsown car park, both in Satu Mare county as well as other 11 counties: Alba, Arad, Arges, Bihor, Caras-Severin, Cluj, Harghita, Maramures, Salaj, Timis and Suceava. CBA Nord West supply the affiliated stores in the area of these 12 counties, stores which are working as independent firms and also other 400 companies basis co-operation contracts.   

The number of the franchised stores CBA is 158, and of the stores Privat is 85. The CBA stores have a surface of 160 - 1000 sq.m. self-service trade format, and those Privat of 40 - 140 sq.m. trade format of self-service, semi-selfservice or assisted service.

 

Can the expansion of the modern retail regarded as a threat for CBA?

This expansion cannot be ignored but CBA stores are offering promotions to consumers, rich assortment, private label marks and, not the last - quality service, all these making more palpable our dayly message: “Your dayly solution”.

CBA Concept is designed as a viable alternative to the traditional retail by which the stores get a common image, but keep their managerial authority.

What do you practically mean when talk about keeping the managerial authority at level of your partner stores? Can they establish theirown business figures, number of personel, the assortment, working hours?

The franchised stores are located in different areas of the country, which affect the consume customs of the final consumer. By knowing such customs, the stores partner   themselves establish both working program and number of personal needed to serve the clients perfectly. As far as the assortment is concerned, the center establishes the minimum assortment for CBA and FirstPrice, pending the selling surface and turnover of the store. The remain of the assortment is established by the store pending the clients’ needs.

What do you offer in practise to the small traders upon entering CBA system?

Our offer can be divided in two large parties. The first, quite visible, is pending the size of the store.

  • unitary layout which consolidates the store identity according to CBA standard
  • large assortment of products theirown mark and also FirstPrice
  • periodical attractive promotions
  • monthly advertising magazine (totally financed by CBA center) distributed in those 12 counties and printed in 140,000 copies.
  • price labels and personalised bags, also instruments used when promoting the CBA brand.

The second category is designed to sustain the sellings, thus integrating it into the commercial CBA strategy by:

  • common acquisitions at national level
  • national common contracts
  • a vast assortment range in all categories of products, thus offering the possibility to reduce the number of suppliers for the store

In which way are the network level central acquisitions used to come in support of the small traders?

The signed franchise national commercial contracts support the small traders by prices and advantageous terms, conditions which are hardly to be achieved by individuals.

Can be the stores individually supplied from third part suppliers, or must they access the approved suppliers only?

The stores have full freedom concerning the supply, they purchase CBA and First Price products from the logistic center, and the rest of the assortment can be acquired from us, from partners contacted at national level, or from third parties.

Once included into CBA franchise system does the trader also benefits from the company know-how?

Besides consulting on dayly sellings, we afterwards offer to the franchised partners legal and financial-accounting assistance, marketing solutions. Our marketing and selling departments are periodically visiting the stores and offer them business and trade marketing consultance.

What do you think it should be added at advantages chapter, in a direct reference to the competing chains ?

  • No franchise fee  
  • The innitial investment on rebranding is minimal
  • Brand CBA is internationally acknowledged
  • Differentiation in relation with competing stores

Are you facing situations when the small traders are willing to register into CBA system by renouncing the possible existing partnerships?

Yes, there are many cases when the traders recognize the advantages of the CBA franchise, and so give up other existing partnerships.

Whenever we talk about private brand, the CBA is the best known brand by the    most consumers, it practically identifies itself with the brand of the company. But you also have news.

Along with CBA brand launched in 2002 on the Romanian market, CBA Nord West has launched the brand PRIVAT in 2013. In addition, CBA Nord West owns a wide range of food and non-food products called First Price products, which are traded by CBA Nord West only, but are not branded with CBA or PRIVAT labels.

At the moment of its appearance, the privat brand CBA was bazing its assortment on imports, many coming from Hungary. This was 12 years ago. What changed?

This is true. Most of the assortment of private brand was coming from import, but lately we have succeeded to enhance manufacturing in Romania of more products of own label, with both the producers in the area as well as the nationals. I can give you examples of the lines of production launched in categories like spices, canned merchandise, dairy or sausage.

How do you determine the development of some local privat brand projects, and which are the conditions to be fulfilled by both the supplier and the item.

The range of privat brand products traded by us is wide, but it does not yet cover all price levels, in all product categories. Consequently, the new privat brand products will fill in the present niches of our offer.

We analyze the local and international markets and also the consumer requirements,  and open new projects for privat brand, by enlarging the frigo, food and non-food range.

We pay a lot of attention to the quality of these products, to avoid endangering the image of an entire brand. We do not wish to launch products of inferior quality just to get a lower price.

Which are the present plans on private brands knowing that they can be the ace in the sleeve of any retailer whenever the diferentiation is implied but that it also involves the loyalty of some categories of consumers?

The increasing of the range of own-label products is a priority for us in co-operation with the domestic producers, this segment offering a possibility of real growth in future. It means that by co-operating with the Romanian producers to get private brands we help consolidate the national economy.

When you refer to consolidation of the national economy are you also having regards on exporting some of the privat brand products?

Absolutely, following the co-operation with Scandia Food Sibiu we succeeded to export in Hungary pate and cans under PRIVAT labels. It is a success for us and for the producing company knowing that Hungary is a pretentious market for food products.

In theory, the private brands CBA and PRIVAT can be found in affiliated stores only. Yet, there are cash&carry selling units within CBA too, through which these products can arrive in a much larger number of stores. How are they working?

There are franchised partners who also own such units. At the beginning of September 2013 CBA Nord West also opened their first store “Cash&Carry” type called “C+C” in Satu Mare, at no.400 on bd. Lucian Blaga. CBA offer to all traders loyalty cards and attractive promotions. The shelves of “C+C” store are offering a wide range of products at attractive prices for both traders and consumers.

Looking at the CBA turnover for the past years we would not say that you were passing a crisis, the evolution being a constant increase.

In 2010 our company had a so called “restart” due to a change in managerial policy. If the turnover in 2010 was 22.5 mil. lei, after successive yearly increases, we foresee closing of 2014 with a turnover of about 61 mil. lei, though there was not an important increase in number of the clients served, but of the number of the partners affiliated, areas of distribution and selling/store. These figures apply to CBA Nord West only, the stores partners have theirown administration and we just monitor them.

The commerce online is on the wave. Do you have a strategy in this respect?

Starting with 2013 we offer to our partners a site e-trade, where they can launch orders online, can get access to the stocks of the logistic warehouse, get informations on theirown balances and can check their orders history. It is a very practical form from many points of view, the number of clients using this opportunity growing significantly this year. As from the next year we intend to offer the access to an interface to enable the transformation of our invoices by a simple click into reception notes at the client, shortening a few hours work into seconds.

And a last question: which are your plans for the coming new year?

In 2015 we intend to develop the CBA and PRIVAT franchises in counties of Arad, Cluj and Timis and to open a new store “Cash&Carry” type in Arad city.

Thank you and I wish you good luck !

ec. Florin Frasineanu

 

 

 

 


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