The role and function of commercial activities in the private business enterprise "Olymp"

                                      CONTENTS 

Introduction  
1. The role and function of commercial activities in the private  business enterprise        "Olymp"  
2. Organization of procurement processes for PP "Olymp"  
3. Organization of the sales process for PP "Olymp"  
4. Ways of improving commercial activities in PP "Olymp "  
Conclusions 
List of references  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

                                        INTRODUCTION 
 
          Today, trade is one of the main sectors of the economy of Ukraine. She first felt in a process of denationalization and privatization, which is an integral element of     a   problem of goods and services due to changes in the structure of market demand, its opportunistic fluctuations and the increasing intensification of competition. 
           The transition period, which is Ukraine's economy, characterized by a number of negative phenomena, such as recession, high inflation, shortage of domestic products, the ability to purchase low population. Under these conditions it is important to develop methods that affect the organization of markets, consumption of goods and services, and new approaches to management. 
In the years of independence Ukraine has entered a new period of development associated with the transition to market relations, improvement of legislation of Ukraine, empowerment economic activity of enterprises trading services.[3]  Legal economic enterprises, their freedom ECONOMIC as subjects of the market, providing a wide space ENTERPRISES. Commercial, self-dependence in decisions on commercial relations with, the use of financial-credit mechanism. 
The preconditions for the formation of regulation of this process is the transition from distribution of commodity resources to free their sale. Before the goods passes to the final consumer, is a commercial and manufacturing process: the supply of goods, organization and product range, sales promotion, sales service. These operations are interrelated and major in commercial paper trading company.Therefore, in my opinion, the above research issues are most important for commercial enterprises, and pay for my term paper topic is relevant. 
The aim of the course work is to deepen knowledge on the formation of variety of goods in the course of commercial activity, the development of promising ways of product business enterprises. The object of study is the business of the analyzed company. The object of study is selected PP "Olymp", Zhitomir.[1] 

     1.Role and functions of commercial activities in the PRIVATE business enterprise“Olymp”   
 
          To successfully orient production to market requirements, you must first of all, good to know. Information tools business - is, in fact, his primer, which must be mastered by every one who took up the matter. Market research - an important feature of commercial activity, as a result of which, selected potential buyers. The first step in this process - market segmentation, split it, which allows you to modify the qualitative characteristics of the goods in accordance with the needs of specific groups of potential users, provides a basis for strategy selection and allows more or less accurately determine the total market volume. Segmentation gives specific reasons for advertising and sales of the range defined by consumer characteristics. 
West German marketing GM-developed set of H.Lettau criteria for market segmentation, which is presented in Figure1.Among the criteria of the "A" example of geographic segmentation can be export to tropical countries, the Scandinavian market in EEC countries. Clearly, it is important to consider not only national traditions and preferences, but also features of the economic situation (financial status, taxes, forms of export controls, etc.), climate and other features. Among the wit-demographic characteristics of the special place occupied by industrial and economic characteristics of the enterprise, consumer, specificity of his belonging to a particular sector of the economy used form of management, tradition and image of the company. Industry segmentation market manufacturing enterprises expressed. [20 pg.416] 
 
 
 
 

Theoretical, methodological and practical basis of periodic publications served as the leading domestic and foreign economists and practitioners of commercial affairs, legislative and regulatory materials businesses, contracts, specifications, laws and decrees of the Government  Ukraine, statistically Reports Company "Olymp". "Olymp", aimed at fundamental changes in organization and management of  Market segments are targeted for sale to individual consumers (Group "B"), the most diverse. Among socio-demographic characteristics in accordance with, for example, the market for shaving supplies - information about the number of men and women who at 16, to determine the circulation of high school textbook - information about the number of student. 
        Social and economic segments of the market related to socio-demographic, but related to quality of life of specific social groups that own expensive durable items. 
        Segments that are targeted at consumer features, consider gourmet frozen food, radio fan who mostly buy individual parts for further assembly, housewives who buy products a week, etc. Segments that are focused on mass communication, actively used when planning advertising campaigns that take into account the target group of people who are watching certain TV shows or listen to radio, the usual time to read some newspapers, or discharged industry magazines and more. 
Segments that account for "life style", are formed on the basis of detection of differences in value orientations visionary people and their living habits. Psychology and "lifestyle" consumers are closely intertwined, but the ideological structure, beliefs of different groups of people. The limits of ideological segments often income prehensile, but require special sensitivity in an address to them. Here's an example of "setting" for a certain segment of ideological, among others, is very wide: "During the Olympic Games in Seoul, the technique of " Samsung "helped set people on the planet for a moment of peace, harmony”[17pg.144] 
             The criteria for market segmentation, pertaining to the group "B", that is derived from market strategy, taking into account its own production capability, technology. 
              Companies may be focused on selling goods to farmers, low-income consumers with cheap products, pursuant to orders by mail, etc. 
Market segments, isolated from a variety of reasons, inevitably. A classic example of this gives the company "Benetton": "We produce knitting products (separate segment of the product and its manufacturing technology) for the very young (socio-demographic segment) and trying to fashion (psychological segment) audiences and sells through retail (segment strategy and marketing)." 
Once done segmentation, capacity is defined potential market. It is defined as in-kind and in value terms. Accounting subject to annual sales of the product, possible changes, changes in market potential. To find out more specifically the share on the market, you must be familiar with their competitors, their strategy of behavior. 
Marketers should consider the status and trends in entrepreneurship and consumption in a particular country (region), the solvency of the population, inflation, the composition of consumption basket and its cost, income per capita (including by strata and groups), development of lending to industrial enterprises and etc. The value of the legal environment allows to have information about the level of legal, government and social regulation of business, competition, protection.[8pg.177-179] 
            Special place in the media must take data on population characteristics and trends. For effective business critical absolute size of the population, its geographic distribution, density, mobility, age and sex distribution, fertility and mortality, the number of marriages and divorces, racial, religious, ethnic structure. 
Among the trends identified demographic environment - increasing the proportion. 
The important place occupied estimates and trends in the geographical nature of development and population dynamics: the axes: "West-East", "North-South", a local movement from rural to urban, from city to suburban, moving for reasons of religious, ethnic, race, which in recent times increasingly facing our society and economy.

     Finally, very important information about the position of the buyer, the ability to enter into the marketing situation of the buyer, to evaluate his situation. 
          Trade - one of the first economic sectors from which began the process of monopolization of economy with gradual change of the administrative vertical management of horizontal links between market structure. A series of legislation was the impetus for the establishment of commercial enterprises of different ownership.[13pg.76] 
         Trading activity - this initiative, independent activity of legal entities and citizens for the purchase and sale of consumer goods for profit. In Ukraine, it is governed by the laws of Ukraine "On Entrepreneurship", "On Enterprises in Ukraine", "On consumer cooperatives", "Consumer Protection", "On Foreign Economic Activity", "On sanitary and epidemiological welfare of population" and other acts of legislation and the Cabinet of Ministers of Ukraine "Procedure class trading activities and the rules of commercial services," which defines the general conditions of employment in trading activities, the basic requirements to retail and commercial services to individuals who purchase goods for their own household needs in enterprises (their object associations), institutions and organizations regardless of ownership, citizens, entrepreneurs and foreign legal entities that carry out business activities in Ukraine in the sphere of trade. 
            Private Enterprise "Olymp" by nature of its activities are trading now, while the environment of its activities - the market of industrial goods.                             Operating in Ukraine since 1999 as a wholesale reseller. According to legal form and legal status analyzed enterprise is private enterprise - legal entity, pays income tax of 30% and a VAT payer. Consider the organizational structure of enterprises, "Olymp."Total number of employees is 35 persons, because PP  "Olymp" may be attributed to the category structures of small and medium businesses. 
    Overall company controlled by the Director General. In addition to its direct powers include: - To represent the interests of companies 
          -He is legally responsible for the activities of the enterprise     
Accordingly, the Director subject to all departments and managers of the analyzed company.[21.pg176] 
      Directly organizational structure of emergency "Olympic" is shown in Fig. 1.1.

                             Fig. 1.1 Organizational structure of the PP "Olymp" 

If we analyze the existing organizational structure of the enterprise, it becomes apparent lack of marketing services. Consequently, its function in part within its competence performs the sales department and supply. So to talk about the effective formation of the marketing mix for specific products such as capital goods is possible only after detailed analysis of the need for companies marketing "Olymp." 
The financial and economic condition of the enterprise "Olymp" for the period 2001 - three quarters of 2003 is characterized by the parameters listed in Table 1.1. The dynamics illustrated in Fig. 1.2. 
 

Indicators of the performance of PP "Olymp" for the      period 2008 – 3 quarters of 2010 

Fig. 1.2  Dynamics of sales and net profit private "Olymp" in 2008                           3  quarters of 2010

        The above dynamics of the financial and economic state of emergency "Olymp" shows that despite the relatively stable market development of products for these company observed a negative trend results.

       The reason for this may show a detailed analysis of the following factors: 
- Become a production 
- Become a wholesale 
- Become a distribution policy and promotion 
- Pricing policy 
           Draw a general analysis of economic activity PE "course."Balance sheet for the first half of 2003 is given in Appendix B. 
Calculate the basic indicators of financial and economic state. 
Will assess changes in the balance sheet for the analyzed period. Calculate the rate of growth of the balance sheet. It is defined as follows:

     In this case the growth rate of the balance sheet KB is 27.8%that positively characterizes the activities of the company during the reporting period and prior evidence of its solvency and increase production capabilities. 
In table 1.2 is presented a comparative analytical balance PP "Olymp" as of the first half of 2008.                                                                             Table 1.2

Comparative analytical balance PE "Olymp" as of the first half of  2008

     Data in Table 1.2, concerning the structure of the asset balance, indicate that the share of working capital was withdrawn from the production program. Increase the share of fixed assets suggests an increase in production scale. Analysis of the structure of liabilities balance shows a positive state of the financial sustainability of the enterprise, because the share of equity in the reporting period is 43.69%.  To work with suppliers and intermediaries PP "Olymp" uses e-business model of "business to business", major orders for Internet.   
   The advantages of the Internet for business is its versatility and interactivity. The user is interested in advertising, can at least click a mouse on the banner and go to a site that advertised. And if the site keeps on-line trading, and then immediately buy a product or service. Thus, Internet advertising through interactivity reduces the time between the receipt of consumer advertising and familiarity with the goods.[12pg.187] 
           Next advantage of the Internet in terms of its application for business - the possibility to study consumer reaction to advertising. It is easy software enables you to track the frequency of the taking into account the advertising time on site, the route to our site, that is, to study the interests of potential consumers. 
These three characteristics of the Internet indicate that using the Internet for economic activity can obtain significant benefits. 
But e-business has drawbacks. The first of them - the limited contingent of consumers who have access to the Internet.      However, the analyzed enterprise is not principally due to the specifics of the offered goods. 
The disadvantage is low speed and access to most Internet users.  
You can find other flaws. However, it is clear that they are associated with certain technological constraints that eventually removed very quickly. So, we have for the marketing department is one area of ​​work - use the Internet in economic activity. 
 

     2. ORGANIZATION OF PROCUREMENT IN PP "Olymp" 
 
         To work with suppliers and intermediaries PP "Olymp" uses e-business models such as "Business", major orders for products sent to suppliers via the Internet. Consider first the advantages and disadvantages of using the Internet in business.[14pg.182-190] 
          The advantages of the Internet for business is its versatility and interactivity. The user is interested in advertising, can at least click a mouse on the banner and go to a site that advertised. And if the site keeps on-line trading, and then immediately buy a product or service. Thus, Internet advertising through interactivity reduces the time between the receipt of consumer advertising and familiarity with the goods or services, as well as buying. 
Next advantage of the Internet in terms of its application for business - the possibility to study consumer reaction to advertising. It is easy software enables you to track the frequency of the taking into account the advertising time on site, the route to our site, that is, to study the interests of potential consumers. 
These three characteristics of the Internet indicate that using the Internet. 
You can find other flaws. However, it is clear that they are associated with certain technological constraints that eventually removed very quickly. So, we have for the marketing department is one area of ​​work - use the Internet in economic activity. 
But business has drawbacks. The first of them - the limited contingent of consumers who have access to the Internet. However, the analyzed enterprise is not principally due to the specifics of the offered goods. 
The disadvantage is low speed and access to most Internet users, which does not  
 
 

     3. Organization of  the sales process for  PP "Olymp" 
 
Activities PP "Olymp" in light of the proposed range given in Table 3.1. 
                                                                                                                     Table 3.1

Activities PP "Olymp" and the structure of the assortment of goods offered

              Visually this ratio is illustrated in Fig. 3.1  

                    Fig. 3.1 Structure of the range of private sale "Olymp" 

    Production of industrial purposes, which works PP "Olymp" has the following main features and specifications. 
Steel pipe is the foundation of all pipelines in residential construction, and only for     flexible to devices used polyethylene and copper alloys. Modern steel pipe manu-factured with a longitudinal suture that welded high frequency currents. 
Scope of products PP "Olymp": 
• hot and cold water; 
• heating system; 
• gas supply system. 
The advantages of steel pipes of the new generation: 
• low price; 
• application versatility. 
Disadvantages: 
• susceptibility to corrosion; 
• corrosion products degrade water quality and clog up the internal cavity tubes, reducing their capacity and worsening working valves and automatic control devices; 
• insufficient lifetime: 10-15 years; 
• complicated assembly technology that requires welding work; 
• appearance. 
Pre-insulated polyurethane foam pipe systems for district heating (DH), is a construction of "sandwich" consisting of the working tube made of low carbon steel, insulation layer - from polyurethane foam and the outer casing - with high-density polyethylene.[13 pg.76] 
Main technical characteristics of PP product range "Olympia" are given in Production of steel pipes in Ukraine and trade them in 2008 kept the overall positive trend.  The main producers of steel pipes (according to "Metallurhprom") produced in December 2008 about 176 thousand tons of products, and the whole production for twelve months of 2008 amounted to approximately 147% level of the corresponding period last year. 
Following 2008, all major Ukrainian manufacturer of steel pipes had positive dynamics of the average production compared to 2002 in five of the most dynamic companies included Mariupol MK them. Lenin and "Kominmet." Thus the largest contribution to the production of steel pipes made Nizhnedneprovskiy TPZ (37%), Khartsyzsk vehicle (16%), Nikopol YUTZ (15%), Dnepropetrovsk vehicle (11%) and Novomoskovsk vehicle (9%). 
       Although in 2008 the supply of Ukrainian steel pipes exports had a strong positive trend was observed in the IV quarter of the winter decline: from October to December delivery fell by about 50 tons on operational this, exports of steel pipes in 2008 was slightly more than 1.2 million tones worth about 517 million USD, and comparison with 2000 physical growth of exports was approximately 55% and foreign exchange earnings grew by 67%.[4pg.158-210] 
       Consider the pricing policies for products PP "Olymp." The main objective of marketing is the calculation of prices take into account the constraints, factors that reduce or extend the range of possible variations in prices for a given product. 
The value of factor prices - one of the main problems of business. This is due to several factors: price - the most important indicator for the company, since its main function is to provide income from selling goods, all firms except those that sell standard products on the market pure competition, forced to make decisions .Pricing often depends on the difficulties experienced by the firming the previous period and do not reflect changes that occurred during this time, in some areas (dominated by monopolies or there are such tendencies) pricing plays a crucial role in the overall marketing program and, in addition is the focus, and often direct influence legislation and public services. 
General factors are divided into internal and external. The main ones are listed in Table 3.2 
 

                                                                                                    Table 3.2

                                    Main factors of pricing.

     The main pricing factors are the magnitude and dynamics of supply and demand of products. Although the maximum price determines the demand for goods, and the minimum - costs a guide for setting the price of  compe-titive products in a given period is price competition. Therefore, the firm should be well aware of the prices and quality products of competitors. You can study their catalogs,lists, interview customers performcomparative procurement to obtain for themselves goods among. If the goods  firms like product main competitor, it will be forced to charge prices close to the price of this commodity. If the quality of its products are lower than the competition then the price should be lower and vice versa. Strategic decisions on the price level is very important in the process of pricing. There are two fundamentally different types of strategies on the price level: 
1) a strategy of high prices; 
2) a strategy of low prices. 
In determining the prices of goods produced PE "course" takes costly method of taking into account the prices of competitors, the essence of which is expressed by the formula 2.1. 
                                            S=V+ ; (3.1) 
Where 

V = variable costs per unit of output; 
F - fixed costs over a certain period of time; 
N - the volume of production. 
Algorithm based pricing method presented in spending table.2.3, is based  on financial and accounting department.[16.pg320] 
                                                                                                               Table 3.3

                  Initial data for calculating the "Pricing"

PP "Olymp" in determining prices for the products of other manufacturers, for whom it is only the sell erases the method of pricing the prices of competitors. For this purpose, to make timely decisions in pricing, you must have reliable information .[19pg.208] 
Knowledge about products and prices competitive  firm can use   as a starting point for personal need sprucing. If its product is similar to products main competitor, it will have to set the price close to the price of the goods of the competitor, otherwise it may lose sales. If the goods are lower in quality, the firm will not be able to invite him for the same price as a competitor. Invite more than a competitor, the firm is capable of when it is higher quality product. In fact, the firm uses the price to show their position relative to competitors' offers suggestions.[77pg.240-250]                                                                                                                       Here are  the key indicators needed to control prices of competitors: 
-sales growth in natural and cost indicators (Table3.4):

        Dynamics of total sales in the pipes in natural and cost meter

Analysis of the data show a steady development of the product market dynamics and stability of earnings. 
-Changes in prices of competitors in different product groups. 
Not carried out on PP "Olymp" competitive analysis positions in the following areas: 
- Sales at reduced prices: 
§ defined as a percentage of total sales 
§ defined as a percentage of sales for the full price. 
-Segment of consumers that receive the greatest benefit from lower prices.

-The dynamics of the cost of marketing research. 
- Position of potential buyers about the selling of goods. 
- Dissatisfaction with the proposed price: 
§ from consumers 
§ by sales staff. 
-Changes in the position of consumers on the enterprise and its competitor prices. 
- The number of lost customers from the previous period. 
          The main result of analysis of the pricing information received from various sources, should be reducing the number of contingencies in the pricing policies of competitors. 
             Along with the above, the company analyzed using the method  of pricing  

with regard to the conditions of competition, which is used for comparison of prices of goods to the firm commodity prices, which produce and offer the market the major competitors. Average prices of competitors within the product range PE "course" is characterized by the data presented in Table 3.6. It is these data operates  financial and economic department of the enterprise, identifying their own vacation price products. [15 pg.584]

                               Table 3.6

Average prices of competitors within the trade  range of PP "Olymp"

PP "Olymp" uses two main ways of wholesale sales: working order and operating in a free market. Work to order. With this method, the company is working on pre-known market. Output is subject to existing portfolio of orders, contracts, construction contracts and preliminary agreement on supplies made ​​products and services. Pre-negotiated terms, specifications of goods, the volume of deliveries of products The main customers are private goods "Olymp" and the structure of their orders in the range presented in Table 3.7 
 
 
 
 
 

Major Customers Production Company "Olymp" and the structure 

                                                           (in% of total) orders them to range

               Work on the free market. With this method, the company manufactures products in the free market without pre-established limits on the quantitative and qualitative characteristics of products. Objectives include the sale of goods find potential markets (because of their geographic location), the choice of specific forms of implementation, the definition of allowable prices. 
Mainly PE "course" focuses on trade in order .Who lesale binds virtually all sectors of the economy, all enterprises and organizations engaged in material production and commodity circulation. It includes the stage of moving goods from manufacturers to retailers. The following forms of wholesale trade: direct communication between manufacturers and buyers through intermediary organizations and enterprises, commercial contacts of market.[11 pg.176] 
Direct connections to commercial relations between the PP "Olymp" and buyers of goods practiced by supplying a large consignment of goods. 
Business contacts for the supply of products to be short, and long. Rapid change in product mix, high rates of recovery of its range, one-time consumption require short-term economic relations, but in most cases economically better long-term relationships. 
Organization of direct long-term economic ties allows you to: 
        •   dismiss the parties from compiling annual supply contract (the contract is made     years); 
        •periodically adjust the range and quarterly delivery time; 
        •work out the technology of production and thereby improve its quality; 
        •coordinate production schedules with interested companies; 
        •reduce the time representation of specifications; 
        •to reduce paperwork in the appeal. 
Wholesale trade through intermediary organizations and enterprises (shops and wholesale base, small wholesale and designer shops, etc..) Sense for buyers who acquire products in a single procedure or in amounts less than the transit rules. 
Operation of direct wholesale sales of goods PE "course" provides without  intermediaries. Direct sale of goods at present is very widespread. Direct form the sale of goods has several advantages. Firstly, in such form The manufacturer can better explore the market of their products, maintain close cooperation with key customers.  Second, conducting scientific research aimed at improving the quality of products. Thirdly, direct wholesale sales of products accelerates the implementation cycle and, therefore, capital turnover, thereby increasing the total amount of profit. [7 pg.140-144] 
           However, the direct form of goods increases expenses because it has to create expensive inventory, to ensure their preservation and sale of specific consumers. Therefore, only large enterprises competitive in strength to realize their own products. 
In the analyzed enterprise "Olymp" direct wholesale sales of products is conducted through the sales department and supply. 
      When the sale of goods expressly PP "Olymp" uses direct marketing (direct marketing) and telephone marketing. Direct Marketing - direct work with clients, regular contact companies manufacturers with their clientele. Telephone Marketing - Work with clients by phone. And on the phone can receive not only inquiries about products and services company, but the following services. 
           The enterprise "course" is used as a commercial form of wholesale sale of goods, which includes two ways of implementation: through independent wholesale organizations, through agents and brokers. 
Indirect form of wholesale products for PE "course" - selective (selective) distribution, which includes limiting the number of intermediaries, depending on the capabilities of maintenance, spare parts and a repair shop. Most often used for such sales of expensive, prestigious products. 
Major areas of PP "Course" in Ukraine: 
- Eastern Region (Donetsk, Kharkov, Dnepropetrovsk) 
- Kyiv 
- Kiev region 
Table 2.8 presents information on the private sales "Olymp" by regions and     structure of their orders on the range.