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International s.r.l.

Via F.lli Cervi, 36

Fraz.Cantalupo

20023 - Cerro Maggiore (MI) – Italia

Tel: +39.349.818.4792

Cell: +385.913.496.318

Company e-mail: pugnaleinternational@libero.it

Pugnale International s.r.l.

A Know-how Company

BROSHURE

June 2012

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Contents

1. INTRODUCTION

1.1. Aims of a Know-how company

1.2. About Pugnale s.r.l.

1.3. Pugnale’s s.r.l. Product Lines

1.4. Product Innovation Proposals

2. MARKETING STATEMENTS

2.1. The New Marketing Philosophy

2.2. Pugnale International as a Know-how Company

2.3. The Competition Factors of our Company – The Seven Cs

2.4. Knowledge Diffusion

2.5. Contacts’ Network

2.6. How to Catch Ideas for New Businesses in the Network

2.7. Communication

2.8. Concreteness

2.9. Client’s Choice

2.10. The Culture of Competence

2.11. Reflections on Relationships

2.12. Social Responsibility

2.13. Developing and Pricing New Products

2.14. The Marketing Max

2.15. Company’s Planning and Policy

2.16. Market Statistics

2.17. Market Analysis

2.18. Robotics

2.19 Energy Trigeneration or District Energy Systems, Providence Up To 50% Greater

System Efficiency, and Fuel Savings over Typical Cogeneration

3. HUMAN RESOURCES STATEMENTS

4. TECHICAL STATEMENTS

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INTRODUCTION

1.1. AIMS

This part of our business plan describes the Pugnale International a company having the scope of

keeping part of the staff, technology, the logo, and part of the line of Pugnale s.r.l. for moving

toward innovative and more global goals as Know-how Company.

In other words we have acquired from Pugnale s.r.l the technology of the whole freezing system,

improved the technology of medical sterilization, glass/PET phials, metal cans, glass/PET bottles,

and likewise, and added the technology of energy trigeneration, and robotized solutions.

While the freezing technology and related products are immediately available, the dry heat

sterilization technology need to be improved and updated adding the technology of irradiation, and

high pressure, and/or moist heat sterilization.

Dry heat can be used to sterilize items, but as the heat takes much longer to be transferred to the

organism, both the time and the temperature must usually be increased, unless forced ventilation of

the hot air is used. The standard setting for a hot air oven is at least two hours at 160 °C (320 °F). A

rapid method heats air to 190 °C (374 °F) for 6 minutes for unwrapped objects and 12 minutes for

wrapped objects. Dry heat has the advantage that it can be used on powder and other heat-stable

items, which are adversely affected by steam (for instance, it does not cause rusting of steel

objects).

Dry sterilization process (DSP) uses hydrogen peroxide at a concentration of 30-35% under low

pressure conditions. This process achieves bacterial reduction of 10−6

...10−8

. The complete process

cycle time is just 6 seconds, and the surface temperature is increased only 10-15 °C (18 to 27 °F).

Originally designed for the sterilization of plastic bottles in the beverage industry, because of the

high germ reduction and the slight temperature increase the dry sterilization process is also useful for

medical and pharmaceutical applications

Furtherly, Pugnale International has put together a series of very small technologic companies for

generating synergies able to reach and penetrate the most sophisticated markets.

In such a new version we can compete now on almost the most exigent markets.

1.2. ABOUT PGNUALE INTERNATIONAL s.r.l.

- ABOUT PUGNALE s.r.l.

Pugnale s.r.l. a company born some forty years ago from the geniality of its founder (Mr. Bruno

Pugnale), who invented a series of technologically advanced machineries and systems, were able to

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innovate the market of cooling/freezing, cooking, pasteurizing, and pollution protecting food and

beverages.

After a declining crisis, probably due to a lack of management and an excess of technology, the

company was acquired a couple of years ago through a management buy-out, who has tried to save

the company by its disastrous debit and lack of liquidity.

Pugnale s.r.l. was a company operating in the construction facilities of pharmaceutical, and food

industry, which operated in the market since 1982. It worked in the International market, directly or

through important companies as OEM or agents. It has installed plants around the world, exporting

approximately 70% of machineries manufactured in recent years, collecting everywhere consensus

for their high quality degree. It has made so far more than 600 facilities.

Its manufacturing plant of approximately 3,100 square meters is on a fenced ground of about 5.000

square meters. It has two patents still pending and has developed a wide range of innovative

installations with high technological contents.

It awarded a prize of 50.000€ by the Chamber of Commerce of Milan, for the “prize for technical

innovation in SMEs”.

Pugnale International Organizational Structure The Pugnale International Company currently can rely on a total of 20 employees and it adopts an

organizational structure functional through its participated companies: a) Emergency Solutions; b)

MRInox; c) P&PItalia

Furthermore the company uses advice continuous trade flows, as well as advice staple such as

support, craftsmen, etc…

Areas of activity Number of employees

R&D

Marketing

Sales

Incoming inspection and outgoing quality

Purchasing and warehousing

Software applications

Electricians

Turner/rotation

Plumber

Joiner

Technical assistance

General workers

3

2

3

1

1

1

1

4

1

1

1

1

Total direct employees 20

Cleaning service

Technical consultants

Administrative advice

Total indirect employees 3

1

1

1

Agents 5

0

20

40

60

80

100

1° Trim. 2° Trim. 3° Trim. 4° Trim.

Direct

Indirect

Agents

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Pugnale International s.r.l. Product Line

(a few sample pictures)

1.4 OUR PRODUCT LINES

The standard Systems can be highlighted in the following list:

A) Permaculture or Permanent Sustainable Cultures

B) Food Line Chain

C) Medical Emergency Solutions

D) Renewable Energy Chain

E) Robotics

F) Internal Transport

G) Packaging

All of them are included in the formula of turn-key manufacturing plants and solutions.

Freezing Cabinet APC Type

Armadi di surgelazione tipo APC

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Freezing Cabinet APF Type Armadi di surgelazione tipo APF

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8

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● Spiral tunnel and coking vessel Spirali e tunnel a vassoi di cottura

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Fields of Application of our Products

- Freezing

- Slaughter of temperature

- Corner

- Pasteurization

- Leavening

- Protection from pollution

- Sterilization for food applications

- Sterilization for pharmaceutical applications.

Pugnale has the experience of drawing and manufacturing a wide range of facilities with few

technological limits, and it is certainly equipped better or likewise its competitors for a heritage

technically more evolved.

Global markets today require high specialization and a focus “manic” to customer needs; therefore

to Pugnale International strategy we have dedicated a careful analysis on what we think the core

business should be, in order to focus on it our attention..

Please considering that our strategy emerges from a thorough examination of the market to be

carried out together with the new members, with a thorough search of marketing and an in-depth

analysis of benchmarking the market global supply.

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PUGNALE PATENT CERTIFICATE

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MARKETING STATEMENTS

2.1 THE NEW PHILOSOPHY OF OUR MARKETING

The start-up of Pugnale International is due to the will of the management to innovate the old

company, developing new products, a new corporate philosophy, and getting fresh money to

operate without the weight of the past debits.

This business plan forecasts this new corporate deal, moving from the following principles:

- keep the high technology of old products;

- combine them in new applications in order to construct turn-key systems;

- changing the corporate mentality into a know-how company.

The idea moves from the following concepts:

- being only a systems manufacturer, for selling products the company is largely dependent by

external events, which cannot be managed and steered by the company itself;

- being system manufacturer the company has to compete with international competitors who

can have lower costs due to their lower labour and overheads cost.

Therefore, becoming a know-how company, it can work its way up along the process of ideating

from scratch, and manufacturing turn-key plants, which move from gathering fresh food and

transform it into final consumer products.

The turn-key plant shall be cared from the starting idea up to the delivery of operating capacity of

its whole staff, passing through such following preliminary phases:

- leads identification

- prospects identification

- knowledge diffusion of corporate business amongst prospects

- generating a contact networking

- effective communication

- concretization

- customer identification and selection

- generating a culture competence

- strengthening relationships

- relationships management

- application of marketing max principles.

Once the company has a contact with a prospect, it will be transformed into a client through the

following steps:

- identification of the plant location

- preparation of a pre-study plan

- acquisition of administrative permissions

- preparation of a preliminary business plan for the client company

- definition of technical specifications

- definition of funding requirements

- definition of training requirements

- preparation of an executive business plan

- definition and signature of the final agreement with the client.

This radical innovation involves changing neither products nor technology, but just the

approach with prospects or clients.

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2.2. PUGNALE INTERNATIONAL AS KNOW-HOW COMPANY

This chapter concerns about how know-how companies operate. The first question therefore we

pose is what the meaning of know-how company is.

Karl Erik Sveiby (Sveiby and Lloyd, 1990), who has coined the term in the book

Kunskapsfoeretaeg, states that the main characteristics of such companies are:

- non standardization

- creativity

- deep individuality

- complex resolution of problems.

Now, not all know-how companies are exclusively dedicated to problem solving. Many of them

have clients which, further to a lack of know-how, need goods or services. In effect many

informatics company supply a combination of know-how (consulting), goods (hardware and

software), and services (installation, after sales service). Examples of other possible combinations

are several, and this is a reason for which it is difficult to define what effectively a know-how

company is, and what really it sales.

Many people have reacted negatively to the concept of Know-how Company just because the term

is not deeply defined. Others estimate it is a discriminatory concept in front of other companies, and

their objections sound more or less as follows: ‘Companies need know-how for managing any kind

of business. Why, then, a few companies should be defined as know-how companies, while other

should not?’

We can answer that certainly a good dose of know-how is needed for managing any kind of

business – an hotel, an air company, or a restaurant – for taking a few examples from the business

of services. Nevertheless it is not for a lack of know-how that clients of service companies, as those

aforementioned, goes to an hotel, buy air tickets or consume a nice dinner.

Know how is requested to both buyer and seller.

A know-how company is characterized by the fact that its clients address their attention to it just for

a lack of understanding (know-how) needed for solving their problems. That is the difference with a

service company, where clients need something different, i.e. transports, administrative assistance,

time saving, etc. To all whom do not like the terms ‘Know-how Company’ usually we say that what

we indicate is an appropriated marketing for companies selling complex goods and/or services, and

rich of intrinsic know-how. Typical of such companies is that much more know how is needed both

for selling/buying and exploit/use their offer, and that companies have a long lasting relation with

own clients.

2.3. THE COMPETITION FACTORS OF Pugnale International – THE SEVEN CS. We are convinced that a know-how company is successful when managers can create trust in the

company’s ability to solve client’s problem. Therefore, product rich with know-how cannot be sold

as pure goods or services with the help of a traditional selling service, or a number of agents. On the

contrary, it is the responsibility of technicians themselves to demonstrate their competence and

generate confidence in their abilities.

For selling know-how you need to invert many traditional concepts in your Marketing Department,

and in this chapter we will indicate opposite ideas and methods.

The main consequence of this statement is that Marketing shall involve all employees. Certainly the

main tasks shall be responsibility of Management, technicians, and professionals of the company,

but all employees can be involved in the corporate business.

Therefore, the competition factors of a know-how company can be listed as follows:

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1) Knowledge diffusion

Since Know how company has clients up-to-dated and exigent who do not like to be influenced, the

company can acquire client’s confidence presenting itself as expert and innovative in its sector.

2) Contact network

Abstract products are bought on a reciprocal confidence basis, and often following a

recommendation of someone in whom client is trusted. Through an accurately selected contact

network the company can be recommended by sector opinion leaders.

3) Communication

A know-how company shall inform market about its business. Such external communication has as

starting point personal meetings more than mass initiatives.

4) Concreteness

Since the offer is abstract, company will give clients concrete connections which will help him to

convince himself about the capacity of the company to support him and how.

5) Client’s choice

The development of a know-how company is strictly connected with the type of client. For this

reason the company chooses its client, and does not wait to be chosen.

6) Clients’ knowledge

In order to create useful offer to a client, the company shall have a deep knowledge of both market

and single clients.

7) The culture of competence

Instead of entering the market, the company can attract its client. Competence can be compared to a

magnet, which attracts clients. A wise buyer personally visit most competent companies: the

company, therefore, should create a culture which tends toward a constant development of

competence. Now, someone could object that the first factor of competence is the one of developing

its own services with a high quality grade, and naturally that is so. These seven Cs are to help for

doing marketing and selling company know-how. As to do that it’s a further argument.

Now, in order to indicate traditional marketing opposite ideas and methods, we realize that the

seven Cs factors can be view as opposite methods to traditional marketing concepts.

Therefore, listing on the right traditional marketing, on the left we get the know-how factors:

Advertising → Knowledge diffusion

Public Relations → Contact network

Mass communications → Selective communications

Abstraction

Meta-product → Concreteness

Order receiving → Client choice

Quantitative Mtg. Research → Knowledge of clients

Product development → Culture of competence

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2.4. KNOWLEDGE DIFFUSION

To buy from a know-how company is more difficult than to buy blindly from a closed box.

Not only customer has to decide purchasing without having verified the content of the box, but

often he cannot even imagine what is enclosed in the box. In fact, even if the seller company opens

the box inside there is not too much to be examined. Service arises only after the client has decided

to buy it. For this reason client can never be sure about what he really has purchased.

Furtherly, he is less certain of what the final result of his acquisition will be. In order to help

its client to buy its services, a know-how company has to give knowledge. Customers shall receive

information on those business sectors, corporation and corporate employees in order to:

- understand the opportunities offered by the market

- choose the appropriate partner/supplier

- choose the most appropriate offer

- cooperate and contribute to worth the services

- assimilate the goals that service can get.

For these reasons the diffusion of knowledge is one of the basic concepts of marketing of a know-

how company, and competition of the company is strictly connected to its capacity of diffusing

knowledge both externally and internally.

In this chapter we analyze the importance of diffusing knowledge externally, and how to perform it.

Any know-how company has two fields on which to work in diffusing knowledge: the company

itself, and the field of activity.

Who does not diffuse information on its field of activity does not consider that before or after client

needs to have an opinion on the different opportunities he has received, before going searching

suppliers. One of Know-how Company’s dilemmas is just the fact that often they offer solutions

completely unknown to the surrounding world. The consequence is that market has not even the

competence needs to comprehend its own needs.

Diffusing information on its own business, the company can help client to understand his own need

and to desire to find out a solution. Only then the client can step on, i.e. to choose its supplier.

Furtherly, how can a client choose amongst different know-how companies? Now he needs

information on the different bidders, nevertheless the official information he can get does not help

him so much. He has no product to be confronted, and the size or the turnover of the know-how

company is not important. Nevertheless the opinion of the client about suppliers is extremely

important. Just moving from that, he can appraise the capacity of different bidders to supply the

service he needs. Therefore, diffusing well balanced information on what a know-how company

does and on its services, can help the client to have an opinion for choosing its supplier.

The opinion of a client on our company, i.e. the vision he has, is imagine of our company. Here we

are at a crossing point: in every know-how company a strong connection exists between imagine and

knowledge diffusion. In order to explain this tie we need to examine closer the concept of imagine,

which represents the opinion the external world has about our company. Imagine can be quantified,

and this is done reckoning two variables: knowledge and opinion. With the term knowledge we

intend the information about our company, while with the term opinion we intend its level of

appreciation. In every uncertain situation the sensation of already heard before gives confidence.

Every know-how company is by definition extremely dependent on the fact of just being identified

as a know-how company. In fact it has no concrete products to expose for attracting the surrounding

world.

The conclusion of this reasoning is that if our company increases the knowledge that the

surrounding world has about it, the automatic consequence is the formation of a positive opinion.

For our company this aspect is very practical. Considering our function of selling knowledge we

need to assume the must of diffusing knowledge about the company and its business sector. This is

a track more simple and trustworthy than the one of trying to influence the external world.

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A further difference with a traditional service company is that every client of a know-how company

has his own responsibility on the way with which our company develops its own services. Such a

responsibility concerns also the appraisal of need, i.e. part of the goal of the service.

In such a case the know-how company differs from goods manufacturers, which by norm assume a

global responsibility about the good functioning of their products. Sometime this responsibility lasts

for years after sale. As Know-how Company our company cannot assume the total responsibility,

but has to involve its client into the responsibility for an appropriate service issuing. In fact, what

outcome can have a training course if the client’s employees do not attend lessons? What outcome

can have an information system if the client does not learn its use?

For clients can assume responsibility, its needed he has enough knowledge that only our company,

as know-how company can give.

A salesman dreads while a teacher reassures.

Avoiding any sort of advice to salesmen on this strategic issue, we just want to emphasize the

importance of diffusing knowledge in a know-how company.

To get this goal our company shall appear expert in the whole business sector, shall offer

information and, instead of acting as a seller, shell act with pedagogic and didactic behaviour.

Our company needs to be part of the client’s project since the first phase of it. It is at that moment

that client prepares himself to get decisions. This is the crisscross point where we need to insert our

didactic role: in fact what does he do who diffuses information and knowledge? He acts as a

teacher. Every professional of the company shell never act as a classic salesman: the behaviour of a

teacher inspires respect and trust.

Let us create our imagine of expert

By means of knowledge diffusion our company shall generate the image of itself as expert in its

sector. Therefore we need to collect all the opportunities for demonstrating our competence.

The role of the expert is a role that inspires sympathy even among the so called opinion leaders,

such as for instance mass-media. Journalists are in a situation similar to that of a client: they too try

to have a global vision of the complex sectors which evolve rapidly, and the same happens to

politicians, general managers, researchers, corporate association, etc.

A company which is not mostly interested in sales, but to help journalists to understand the business

sector, and point out trends and appraise the news can become an important reference point for any

newspaper.

2.5. THE CONTACT NETWORK

Services cannot be measured and compared as common products, as for instance videotapes.

The more a service or an offer is abstract, the more we tend to rely, in case of a purchasing, on

personal recommendation.

If you want to by a videotape, for instance, you can read technical description and brochures,

comparing price and performances.

Certainly you can have brochure also from brokers and consulting companies, but they can tell you

noy too much, and rarely are they comparable.

In the case of purchasing a service we are rather insecure, and if we get an advice we accept it with

pleasure. If we have received a good advice from someone, rarely we look for further information.

The same is valid even in the opposite case: if someone suggest us not to contact a certain company,

it will be difficult that, notwithstanding the advice received, we address to that company our

attention.

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Furtherly, frankly speaking, we buy preferably services from whom who like them. What

importance do we give to the principal of a car selling firm when we buy a car? A completely

different matter is, on the contrary, when we ask for a lawyer or a broker. In this case we like to

look for someone whom we like, and to find someone with whom we feel comfortable, and have

our same considerations. In conclusion we can state we are strongly conditioned from what we can

define personal empathy, and the probability that it happens is very high if we have receive an

advice from a person that we appreciate.

What does it mean for a know-how company? Well, that simply means that the company itself

depends mostly from the contacts it has with many persons who speak well and recommend it.

We need, therefore, stimulate the wireless telegraph and perform the services we have promised in

a spick & span in order that users are enticed to recommend them to others.

On the opposite, it is moreover right that is someone speaks badly of a know-how company, the

damage is huge.

In the world in continuous evolution on which our company operates relationships constitute a

durable and consolidated element. While capital and information can freely vary, good relationships

can last forever.

A good contact network is essential and performs a series of functions for every know-how

company. It contributes to attract new clients, new co-operators, and gives worthy information

about the business environment.

The worth of business contacts is known by anyone. Successful entrepreneurs have ever be good to

cultivate and refresh their own contacts. They did it by means organizations such as the Rotary, and

Old Fellow, whose prime scope is that of creating contacts among people. Entrepreneurs who

operate in small towns usually have this entice in their blood. To them to know the right persons

can be a predominant factor in their business. Once upon a time it was enough that the General

Manager, or in larger companies a certain number of managers or agents, had the right contacts. By

means of their network they were able to bring home orders which generated work for the rest of

the organization.

In a know-how company this situation is rather different, because rarely it has agents or salesmen.

On the contrary, the professionals themselves make at the same time marketing, sales, and perform

services. That means the contact network in a know-how company shall be cared not only by

managers, but also by professionals who shall operate to create proficient personal relationships.

The increased interest for an effective contact network firstly depends by the fact, amongst the

other, that personal contacts are important for the business of many companies. A second reason is

due to the fact that market has got larger and larger size. A company that in the past had its market

in a small town now has to look to the whole country, and sometimes even abroad. A third reason is

given by the increase social, technical, and geographic mobility. What once was small, obvious, and

known now is large, in continuous expansion, and unknown. To create consciously personal

contacts is therefore indispensable to operate in the modern society.

Junior co-operators of a know-how company probably have a rather weak contact network when

they enter the company for the first time, and they senior colleagues probably are not ready to

introduce them into conference halls. Personal contacts often are something that we need to build by

ourselves, following our fantasy and ability. The rest is, usually, a matter of many years of work.

We can state that most business in a know-how company starts up because someone knew someone

else, i.e. by word of mouth.

Because services are sold following a recommendation, it is really important to be recommended.

The best aspect, obviously, is to be recommended from people who, within the sector are

considered authoritative: the so called opinion leaders can become excellent ambassadors of our

company. To speak personally of his own excellence is not so effective as when others speak about

you: an impartial recommendation is more credible.

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Opinion leaders in such a context are those who can influence company’s clients, are those who

create and communicate current opinions within the sector of competence of our company, i.e.

journalists, researchers, consultants. They are those persons who recently have had something to do

with our company. Its towards opinion leaders that we have forward our marketing.

Regis McKenna, marketing consultant, of Apple and Intel states that some 10% of people in a given

sector can be considered as key persons, and that on their turn they can influence the remaining

90%. He calls this 10% infrastructure, and states marketing consists basically in the capacity of

having such infrastructure on our part.

Infrastructure tends to have a particular signification overall inside sectors

in strong evolution with complicate products. In these sectors many things

happen, and it is difficult even for skilled people to keep into account all

details. To understand the meaning of new developments, people trust in

what they know from infrastructure.

Opinion leaders perform many important functions inside their sectors. One of those is usually to

collect and diffuse information. A know-how company has to help them to diffuse information.

Spreading out information to opinion leaders our company can acquire important ambassadors.

Furtherly this can avoid incorrect speaking circulate, because informed people rarely diffuse gossips

in a bad faith.

Of opinion leaders are also part all those who have the power of taking decisions and state about the

company, as for instance politicians and organizations. Even those need information, not to

recommend but to be able to understand and move on our corporate interests.

To care of opinion leaders is a longsighted for of marketing, which can give tangible results for

many years. If we neglect this work, our company can be damaged in the future, when consolidated

contact could have helped our company to expand, or noticed about conjuncture changes to afford,

or functioning as steady reference point for an uncertain client.

Naturally we can choose to avoid contacts with opinion leaders, but we always will have opinions

on our company, inside as outside our sector. What we mean is that it is much better to intervene

personally to direct such opinion more than live it to the case and common saying.

Speaking of opinion leaders it is very important to reckon the term reciprocity. Our company

searches to get ambassadors, and on the long run new clients, certainly. But the road in this

direction shall pass through the comprehension of what is useful to the counterpart, ant its offer. On

the long run, probably, we will have a return.

2.6. HOW TO CATCH IDEAS FOR NEW BUSINESSES IN THE NETWORK

To catch new clients by means of recommendations is only one of the outcomes of our contact

network. Of the same importance to catch information needed for corporate development is

business conceive.

Know-how Company lives in-and-of a market mutant and fickle. If the life-cycle of a product

diminishes, the knowledge of know-how and services can be borne and died in one night. A new

law, a technology innovation, a customary change, and the market can change, and we can have

new threats and opportunities. Who has eyes and ears open can get in due time those signals, and

prepare it just in time. The consequence is to keep one informed, and to have the ability to identify

the new coming opportunities.

Therefore, there are good reasons for which a company watches what is happening in the

surrounding world, and there are several ways to do that.

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To supply the maximum number of information to the company, the contact network shall be as

spread out as possible, and shall include people with different competences and ways of thinking.

For instance, a company, which works consciously with-and-through its contacts is Consensus

Försäkringsmäkleri (Insurance Brokers) Norway. The company is part of the consortium Infina,

which consists in some fifty companies.

Its managing director Edström is employed on it since the start-up, building the company with the

help of a systematic work of contacts. Contacts with brokers have been built from the inside, i.e.

from the company toward the outside. The beginning consisted in telling the closest environment

about their new business.

The secret is to begin from inside and to develop moving from contacts

already possessed. Internal market is extremely important. We started

anchoring our business to our parent companies in the consortium, and to

our suppliers, i.e. insurers. After this first step it was important to point on

the opinion leaders of the sector. On the bottom of our list, when we finished

the work inside, there arrived new clients.

Inside Consensus brokers split contacts among them. Everyone takes care of the information that has

to arrive to its contacts. They never do large advertising campaigns. On the contrary they send

personalized letters.

When Gunnar Edström needs to establish a new contact, often he starts writing a concise letter. That

is personalized to the forwarder, and contains a concrete proposal to which he can be interested.

After two or three days he phones for fixing an appointment.

Following Gunnar Edström, the work on the contact network has been very useful, and outcomes are

easily visible. One of those, naturally, is that company gets new clients; another one is that he can

get a lot of precious information from different sources. “Our knowledge of the market increases

creating new information from different sources. The contact network, for instance, is a way of

keeping an eye open on competition. In general our contacts become more and more important”.

The contact network is extremely important, and if its worth is not easily reckonable, clients and

relationships with clients are factors that should be analyzed even in a company acquisition.

Contact network has been studies even by the Konradgruppen, a group which works in the

elaboration of new auditing for know-how companies.

An important part of structural capital is constituted by the network contacts the every companies

have. In extreme cases it can happen that a company made by a sole person, with the help of his

contacts, has a field of action much larger, and a higher worth the a five people company.

In a know-how company contact network is so mutable that it can directly influence the return on

investment and the structure itself of business.

The contact network should be commented on the annual statement.

Of our worthy things we shall take care, and therefore we shall keep them carefully..

Who gets the contacts, and how are they managed?

Please, let me cite an anecdote.

The Agency PR was upon a time extremely famous as specialist in the field of entertainment. There

was no occasion that Agency Pr was not able to embellish: promotional advertising, presentation

meetings, fairs, jubilees… all of them were entertained by magicians, actors, musicians that Agency

PR sent on the place requested. The fact is, nevertheless, that it was not Agency PR to organize the

whole, but Andrew. Every order, even if got by someone else, passed through Andrew, who

immediately browsed his address files, picked up the phone, and soon acted. At a certain time

Andrew resigned, kept his things away, emptied his drawer and disappeared. Since that time

Agency PR stopped creating fantastic events.

In our company all contacts with prospects and clients shall be dealt by the whole management.

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Whether precious data are kept in paper files or computerized, we absolutely need they cannot

disappear. As that should happen shall be decided by appropriated rules issued by the general

management. The best thing to do is to state that all personal contacts are an asset and a common

property. In this case anyone can have part of colleagues’ contact, and diffuse them inside the

company, what thing decreases the probability they could go lost.

Considering contacts a common value, the company can appraise of its contacts. So, as we examine

all other assets in the final balance sheet, we can analyze our contact network, and answer the

following questions.

- IS IT LARGE ENOUGH?

- ARE IMPORTANT LINKS MISSING?

- WHAT NEW CONTACTS HAVE TO BE ESTABLISHED TO GET THE GOALS OF

THE COMING YEARS?

- WHERE ARE THE HOLES TO BE REPARED AFTER THE LOSS OF IMPORTANT

EMPLOYEES?

To answer those questions we need to have thought to what scopes we want to reach trough our

contact network, because for contacts are valid the same criteria that dominate the whole

company: contacts must be planned and built consciously to get good results.

In the market of clients and competences there shall be included all those of whom the company

lives, i.e. clients, prospects, future partners with whom we desire to cooperate, and employees.

Most companies have a record of clients, so their data are well known.

Personally we suggest including in those data also former clients. They are to be particularly

cared because they have a good knowledge of our company, and can work as ambassadors. If

they are unsatisfied we run the risk to diffuse negative opinions about our company.

In order to set up a good relationship with clients we want to have, the first step to move is to

clarify who they are.

Of the interest group are part all those who have a personal interest in the company. All of them

have betted something: carrier, time, money, or reputation. Among these persons there are the

most important ambassadors of the company. We can find them in the board of directors,

employees, co-operators, shareholders, in affiliated or parent companies, etc.

They can be:

- all employees with their home address

- the managing group

- the board of directors

- shareholders

- employees of affiliated or parent companies

- our partners

- former most important employees.

Once we have chosen our prospects, the following step is to get informed on the leading people

inside our prospects for taking the first approach. If their names are popular in the business

sector, the interest and perception of all our co-operators increase. This way it is easy to verify

when the person pointed out in the client company publishes articles on newspapers, or papers

in a conference. Because they are on the speakers’ list of that conference, we already know him;

therefore it is much simpler to contact them.

The same happens for future co-operators. If several persons in the company have clear in mind

what people are to be attracted in the company, than it is easier to take the opportunity of

starting a relationship, when any of them occur.

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Market contacts, therefore, can be constituted by the following:

- current clients

- desired clients

- desired partners

- desired collaborators.

Company’s suppliers need to have a particular care. A supplier is a partner who activates and

facilitates our business, and someone who has the same interests of our company, i.e. to satisfy the

client final need.

Company and suppliers are reciprocally dependent, and the relationship with suppliers is one of the

most important aspects for the company.

A particular position belongs to whom we call co-supplier. They are those who appears with their

name to the final client. In our sector they are those who complete our plant with one of their

products. A supplier well informed is a good ambassador, because he is interested that our company

sell his products. Therefore, please, let us give suppliers a good portion of information.

Suppliers can be:

- banks

- auditors

- lawyers

- accounting companies

- host computers

- consultants

- hardware suppliers

- co-suppliers.

Furtherly, our opinion leaders can be:

- former clients

- former employees

- former suppliers

- corporate associations

- client’s company associations

- public authorities, or public officers

- mass-media, journalists

- competitors and colleagues

- politicians

- researchers

- schools

- unions

Do not forget the contact network is made also of friends. If a know-how company has thirty

employees and they have an average of thirty well informed friends each, that makes six hundred

people, which on their account have other twenty friends… and so on.

What to do with our contact list

When addresses have been collected and lists are ready, what can we do?

At first sight all those contacts seem impossible to be kept. Nevertheless, we do not need to do all at

once. Furtherly, we do not need to keep contacts for themselves. Once we are ready for a letter or

conversation in the network, it is opportune to keep clear in mind the final result we want to get.

This way it is easier to decide both in what occasion is better to have a contact and what

information supply or collect. In its easiest form the octopus model is used as a register of addresses

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or a memento list. It is enough to browse sometimes the list and phone or write somebody with

whom we do not talk since long time. If the company has a mailing list the contact network

constitutes the first mailing list. The most scrupulous browse the list once a month, and list people

who shall be contacted next month. Do not evidence more people of what you can contact. Our

company can also make a more accurate work on a monthly basis splitting the contact work among

several persons.

In a more advanced form names and addresses can be loaded in a computer. In this case the contact

work can be planned and it is possible to do notations on last contacts and the kind of material we

have delivered.

To choose people to be contacted in a so evident way, and supply them with information is not a

way of manipulating persons?

No, it is not. Most people like to be kept into consideration. Furtherly, the know-how company is in

a context of intelligent people, who depends from information.

Anyway, two ethics rules shall be kept in mind: relationships are established on a basis of reciprocal

utility, and shall need to develop both parties.

2.7. COMMUNICATION

No communication, no success.

If we look for a definition of communication – word now inflated and overused- on any dictionary,

we find explications such as: “passage of content through a vehicle” or “connection” or

“transport”. A further definition which can be adapted to this chapter is the one given by Lasswell

in 1967: “who says what, to whom, by means of what channel, and with what result”.

Please note that such definition is valid on both directions from and toward the company.

Communication has a central meaning in the marketing of a know-how company. It is not possible

to keep a contact network, diffuse knowledge, to be concrete, choosing clients, know them, or

develop a competence culture without communication.

For this reason this chapter is the longest and with particulars of this business plan. Here we will

give a series of concrete advices on how a know-how company’s communication can proceed.

Communication is one of the most important tools of a know-how company as far as marketing is

concerned, for a know-how company has an intense and interactive relationship with its clients.

A know-how company has an offer that you cannot see, and is not generated before the client has

get his decision. In that moment and only in that moment a cooperation with the client is generated.

Our company has live in symbiosis with the client in an interactive relationship where both parties

give and receive. The key-word in such relationship is communication which

- is needed to let the counterpart know that the company exists

- gives as return useful signs from clients to the company

- is the only thing that clients receive for a long time.

The first two reasons are evident, but is the third one right?

Let us try to think on it, and let us wear the habits of our clients: before taking his decision he has

no concrete product to look at. What does he understand before taking his decision? And when he

has decided probably he needs to wait for a long time before our service arrives. What does he

receive in the meanwhile? And when he has received our service, the output could arrive much later

on. Furtherly, often it is difficult, and sometimes impossible, to measure the result of what he has

bought.

The lack of a concrete product leaves our client in a sensorial void. He sees nothing, difficulty he

sees what he receives, and the final result is difficult to be appraised. Nevertheless he shall be

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satisfied of his choice and defend it in front of collaborators, bosses, board of directors, and his own

clients.

Apart from the fact of communicating that our company exists to attract new clients, one of the

main duties of communication is that of filling the void in which clients are, and make them trusty.

Communication keeps in life the mandate and relationship, and confirms to clients that in effect

they have bought something, and they have received something that fits good to their needs.

There are several ways to communicate, and in order to understand how communication shall work

in our company, and why it is so important, we need to step back for a while, and analyze why a

know-how company should be involved in marketing.

The scope of any kind of marketing is that of creating and maintaining good relationship with

clients. To get a new client is difficult and often expensive. Only when a client comes back for

buying, then the relationship becomes profitable. In applied studies, usually researchers indicate a

ratio of 1 on 5, which means that to have a new clients costs five times more than to get orders from

established clients.

Communication runs on an invisible red wire telegraph throughout the whole cycle of a

relationship. It is necessary:

- for attracting clients on the company and entice him to buy.. In this case even traditional

methods such as advertising and PR can work. But the red wire telegraph can be much more

important;

- in the buying process itself, where personal behaviour, conversation, paper mailing, etc have

a particular significance for the client’s decision to deepen the relationship;

- to strengthen the mandate and the relationship during which the service is created. In this

moment communication fills up the void in which the client lays before receiving any result

from his purchasing;

- for keeping and developing the relationship after service. In this phase we need to pay

attention to the client and we have to remember hum that our company is expert in the sector

and his fully available, so that he comes back and recommend our company to others.

This circle describes a cyclical process, which is individual for every client. For this reason personal

communication is so important. Only that, in fact, can keep into consideration the position of each

client inside the circle in the different phases of the relationship, while mass communication cannot.

In this sense, for instance, an unsatisfied client is not certainly happy of receiving advertising

material with mass forwarding, or reading expensive publications on newspapers. He prefers to

know from the person to whom he addressed whether the problem that annoys him is going to be

solved.

The effect of mass communication in the wrong moment can be exactly the opposite of what one

hopes.

Newsletters: a good way of diffusing knowledge.

A news letter can be really useful, and it ii appropriate to issue one. Usually it shall be fresh

merchandise and never as expensive as a brochure, which often is done for a long lasting.

The newsletter format has several advantages, and can:

- keep a continuous contact with persons who are part of our contact list;

- diffuse knowledge and inform about our news;

- contains interviews with people who attest the validity of our company and its services;

- create the sensation that around the company something always happens;

- to supply mass media with press flash and articles;

- diffuse information also inside;

- be relatively simple to be produced.

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Newsletters can be everything: a simple typewritten letter or an offset publication; for the size of

our company a letter can be enough.

Karl Mikael Cakste, executive manager tells:

“I am really surprised of how good this system works. With our pretty letter

we are often on the top of the pile of papers on the desktop of our

addressees five times in a year. We send our letter to prospects, and also to

people we know to be extremely active. Step after step our letter embeds our

name in the minds of addresses, and when they talk of sponsoring someone

often pose it our name out. How many contracts can a letter generate is

difficult to say, but effectively we can note both the positive effects after

each forwarding, and the ripple effect it generates.”

Diffusing knowledge by means of didactic tools

The didactics tools of a know-how company can be brochures, pamphlets, informatics programs and

all other tools that we can say substitute catalogues of commercial products.

The didactic tools of a know-how company form and inform about the business sector of the

company and its services. We deliberately use the term didactic tools because in effect the company

has to form its clients in order to help them understand the utility of its offers. As example of what a

didactic tool can be we can take the group AU-System, which is engaged in telecommunications.

Their offer is so complicated that they have chosen to dedicate the whole marketing budget to the

realization of didactic tools. Those instruments are like small pamphlets, one for each technical

sector on which AU-System operates, and in them AU-System describes the technologic

development of the sector. A question we should pose about didactic tools is whether it could be

worthy to give enticement to competence concerning didactics and pedagogy?

Direct advertising and telephone marketing

Direct advertising and telephone marketing are methods that are gaining more and more popularity

on the global market. Both of them can work, but a know how company should reflect before

pointing on these methods.

Direct advertising mainly consist in purchasing addresses of persons or companies inside a well

defined target with which we want to enter in touch and to whom we forward information. We prefer

to use the term direct distribution instead what of advertising, because a know-how company needs

to diffuse more knowledge than advertising. Notwithstanding all promises of those agencies that

supply addresses of ‘perfect files’, our experience states that we need to work on those addresses

much harder than we believed. Nothing bothers people more than to find errors in their names, or

titles on envelop. It is worst then, if the error is repeated in the starting phrase of a personalized letter

inside the envelope. Moreover, forwarding of this type needs a further work. To be effective it can

be useful to send a reminder. Naturally all those who answered refusing our offer at the first letter

shall be avoided, and the same shall be done with all who accepted. The addresses who are part of

the contact list shall receive the information with a personal letter.

Telephone marketing does not mean always what the term suggests, i.e. selling on the phone. Such a

form, in effect, does not fit well to a know-how company. In this phase, anyway, telephone market

can be used for making an inventory and to wake up an interest toward our company. Through

telephone marketing we can consult a larger number of clients and this way to choose those who

have interests compatible with those of our company.

Ten good rules for the marketing department in view of contacts with mass media

1. Reflect on the goals we want to reach by means of contacts with mass media. Give way to the

press specialized in the sector of our clients Think carefully to the reason for which the

company needs advertising and on what it would like to advertise. Do not forget that

advertising does not create a company, but reflects on it.

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2. Establish personal contacts. Let us examine carefully newspapers media we want to choose.

3. Keep your contacts with regularity.

4. Give media interesting news.

5. Give journalists help to increase readers understanding on a complicate sector or a

particular development of the same.

6. Prepare opinion leaders

7. Offer suggestions

8. Be always ready to answer questions. If the matter is hot, look for having time for preparing

your answer. One of the best ways is to answer asking the journalist what he really wants to

know and proposing to call him back once you really have your appropriate answer.

9. Be always kind and sincere.

10. Ask for other information as counterpart. Do not consider all meetings or phone calls with

journalists as occasions where the company has to give information, but also as moments in

which the company can get information.

Communicating for selling.

Once a prospect is interested in our competence and is interested in buying, it is important to lessen,

lessen, and lessen again to him. Personal meetings are extremely important during the purchasing

process. Our prospect buys both our offer and our collaborators. This is a typical characteristic of

know-how companies.

Please, try to imagine to buy a product, for example a copier. In the firm which sells you the copier

you meet a vendor who is nasty to you. The copier, nevertheless is valid, and considering that the

deal happens in a unique meeting, you can overcome the antipathy of the vendor. In the future

probably you will meet no more.

In Know-how Company is exactly the opposite. In this case the meeting, in which the prospect

decides to buy, immediately transforms him into a client, who opens a long relationship with us in

which the counterparts will keep continuative relations. In a few cases collaborators of the know-

how company will work at the client’s for certain periods. A main characteristic therefore of Know-

how Company is that the client does not distinguish between service and service provider. He cannot

decide to buy without having at the same time the seller, the professional. Often he sees them as

indivisible elements.

2.8. CONCRETENESS

The most meaningful characteristic of services of a know-how company is the fact they are abstract.

Concreteness means to give market tangible connecting wires to let people understand what the

company does. To concretize means to help addressee to have an idea about the company and its

services. What the company should describe in many word scan be clear and comprehensible in a

while by means of concreteness. To explain what we mean, we give an example. Imagine a hotel,

and its services, as for instance cleaning. Cleaning is a part of the services of your hotel that you

cannot see, and about which you receive no particular information. But when you enter your room,

you discover soon it has been cleaned. How? Well, looking at the glosses protected in a poly bag in

the bathroom. These signals, naturally, are not essential to cleaning, but they tell you in a discrete,

clear and effective way, that your room has been cleaned before your arrival.

Concreteness, for several reasons is strictly connected with communication. Amongst other things,

all printed material represents a concrete expression of the company and its services.

Concreteness has most importance for those prospects that come to you for the first time.

Concreteness can indicate to the prospects what he is going to buy.

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Positioning is related to our consolidated knowledge.

Positioning is the way of finding himself in a certain position in the conscience of the addressee,

which is in relation with what he already knows.

Positioning can be used for products, services, proposals, and persons, in conclusion for all can be

promoted through marketing. That is not something, which you apply on a product, service, etc. It is

something that acts on the addressee, i.e. the way on which a product is positioned in his imaginary.

Such a process is based on two statements, which examine the way on which people in the

information society work.

Positioning means to look for an extremely simplified message, this corresponds to the imaginary of

our prospect.

Concreteness in all its forms has a sole common scope: the one of creating rapidly an impression

concerning our company, and show what it represents, and what utility can offer to market.

What it is concrete hits directly the senses of a person, so that we understand it more with our hearth

than with brains. Concrete symbols, therefore, have the advantage to communicate at the same time

both knowledge and impressions. Moreover, they can include much more information of what

words can do, and are easier to be remembered.

To concretize by mans of what we can see has given origin to the concept Design Management.

Boivie, and Wallerstedt (1988) have defined the concept as follows:

“Design management constitutes a part of the definition of a company. It is a strategic process that

has to move from the idea of business of the company. For transmitting outside this message the

company uses channels of identity. These channels shall be coordinated and guarded continuously

for getting a correspondence between corporate identity and its imagine”.

The authors identify four channels of identity:

- product/service

- environment

- graphic material

- person

They underline the fact that the first three channels can steer the last one.

A company whose environment is characterized by harmony and unity gives the impression of

order and efficiency, and people seem to adapt themselves to it.

Design is not like positioning something new or magic. Its concept has nevertheless brought design

up to the table of managing directors, because it underlines the importance of projecting with care

and manages consciously visual messages.

2.9. CLIENT’S CHOICE

This chapter analyzes what roads our company can choose for selecting prospects. The opposite of

prospect selection is a passive wait for orders, and no know-how company with a minimum of

respect for itself should do that.

To select prospects and charges is a highly individual process for any know-how company.

For every company clients are important for they are the main source for entries. But for a know-

how company they are important for other two reasons: a) they influence at a high level the imagine

of the company; b) they contribute to the development of co-operators’ competence.

A know-how company is connected with its clients. That depends, as many other reasons, by the

concreteness of its services, and by the difficulties for the surrounding world of having an opinion

about the company. All that is concrete, and can contribute to clarify how the structure of the

company influences its imagine. Clients are very concrete, and their judgement will certainly leave

a footstep on that of the company. Clients who can contribute to give a good imagine of the

company are very important, because they increase the confidence with our company, and

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recommend it to others in a discrete but efficient way. “If the company XYC has decided to work

with those consultants, they have to be really good”. Naturally it is right also the contrary. We need

to be careful to not be connected with bad clients. Clients who create a good imagine attract new

clients, and also new co-operators.

To have clients who can generate a good imagine shall be in the future an important arm in the

challenge for competent co-operators.

Clients are the greatest resource for the development of our company.

A know-how company does not receive only entries and imagine from its clients, but also a good

contribute for its development.

It is the duty of solving every single client’s problem that obliges co-operators to assume new

knowledge, and to increase their competence. This statement is so obvious that rarely a know-how

company has seriously reasoned about it.

How obvious and natural is to effectively choose our clients and charges from the point of view of

competence? Let us try for a while to observe our clients as an investment in the development of

competence. Which clients contribute to increase competence inside our company? Which of them

do not do that? Which clients develop on their turn themselves with a consequent transformation of

their needs that can be satisfied by our know-how company?

A third point of view is that of choosing clients which can be satisfied by our company services.

Anna Kahn, management consultant at Consultus works applying the following principle:

“I want to work with competent clients, who can cooperate so that my work gives good results.

Further to a good result, usually, the consequence is that a client recommends me to others”

Many times it is difficult to choose concretely clients that we want to contact. If so, our company

shall at least create possible goals as far as clients are concerned. A goal can be that of reaching a

certain number of large clients, or to have clients inside a certain business sector having certain

needs.

The first step in clients’ choice is market segmentation.

A segment is that part of the whole market to which our company decides to sell.

In order to poses goals in achieving clients, our company has to know what company it is and wants

to be. Goals shall be created moving from our business idea and corporate vision. They need to be

clear elaborating market segmentation and clients and charges’ choice.

But give for assumed that our business idea be clear, and that a certain corporate vision exists.

In this case the following questions can help the process, which leads to our mission statement and

to concrete final client’s choice:

- What and where we want to be in the next five years?

- What clients strengthen our business idea?

- What clients have imagine which can strengthen imagine?

- What clients and charges can increase our competence?

- Which clients can get more benefits from our services?

- Which clients give us other useful contacts?

- What clients we do not want to have?

Note that the concept of client network reappears also in this case, now as a criterion for clients’

choice. A way for contacting a desired client is that of entering in touch with him through

somebody else. A few clients have a client network extremely large, and to do business with their

clients can give good results by means of positive references we can diffuse inside the network.

We need to be careful with the question concerning what clients our company does not want to

have. A know how company is in the privileged position of who can choose both clients and non-

clients. A non-client of a know-how company is a client that deprives the corporate imagine, instead

of improving it. Non-clients slow down company’s development, instead of improving it.

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2.10. CLIENT’S KNOWLEDGE

Every know-how company should acquire a deep knowledge of its prospect and clients. Such

statement is so simple then it should be not even motivated.

Corporate service shall be adapted to clients and prospects needs, and they should contribute to

satisfy their business targets. An important part of corporate marketing of a know-how company is

therefore the one of understanding how a service for attracting prospects and clients should be.

To deeply know our client it is much more than to have information on him. It signifies to have

appropriate information and a high level of comprehension of the business and economic situation

of our clients. That is what we call client’s knowledge.

Client’s knowledge is constituted by three phases:

- to collect information;

- to transform information into knowledge;

- to infer conclusions.

The last phase comports that sales arguments have to be adapted to the client company and to

people who decide inside that company.

The development of client’s knowledge happens by means of an intuitive way, and only seldom is

planned by the professionals of the know-how company. They collect information which they can

acquire, and try to file and to understand them in the quickest way.

Client’s knowledge is a work that has to be done as systematically and methodically as work

contacts. For this reason we need to implement systems and procedures for collecting information

about sectors, companies, and persons, as well as other systems and procedures for documenting

oneself and to filing information.

No company has the power of obliging its collaborators to follow procedures and systems, but every

company can give its professionals the background for working in a more efficient way about

client’s knowledge.

What kind of information can a company collect about its clients? All it can find out.

Know-how company lives selling knowledge and it can never get too much of it, either about

knowledge of its own sector, or of the client, or the surrounding world.

Corporate professionals have a service to offer. This aspect can be interesting for a client only if

that service can satisfy its business targets. Therefore, to know clients’ schemes, business ideas,

targets, strategies and programs is fundamental. Nevertheless, we need to have also information on

the business sector of clients, and to know at least something about clients’ clients. It is necessary

understand something about how people who have the responsibility of buying work.

Below we report a few examples of general questions that can be useful for collecting information.

Many answers can be collected even when a client is still a prospect, or during the first introductive

phases.

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About our client’s company or organization

What business idea or function has it?

What is its market and clients

What does it produce and how?

What is its aspect?

What kind of people are in the Board of Directors and Managing Centres?

What is its economic situation?

What event of a certain importance happened in the last few years?

About our client’s business sector

How the client’s business sector is?

What tendencies can be pointed out?

What actors manage the sector?

What are the critical factors (capital, energy, new technology, law)?

How is the sector influenced by the EU/local/international internal market?

Who are our client’s competitors?

How do they act?

About our client’s people

What people influence a purchasing decision?

What kind of competence has each of them?

What are their targets?

What are their personal motivations?

Most important is to start the work up, and assume as habitude the matter of beying prepared in

view of the first meeting with the prospect. Never forget to go on collecting systematically

information after the first meeting. This can be realized also with the client’s cooperation.

Carl’s story

Let us take into consideration Carl Eriksson’s story as an example of professionalism.

Carl is an insurance broker. At a conference organized by his company Carl met Per Jonsson,

Security Responsible of the Alfa Company, a rather large company. Alfa is part of the Beta Group,

which has many units both at home and abroad.

Per is interested in Carl, and proposes a meeting for the coming week. Per hesitates a little, but

gives Carl a one hour meeting.

Now Carl has five working days in front of him. Instead of deferring his thoughts on Alfa, and see

what will happen during the meeting, he immediately starts to prepare himself.

Carl has structured his research into three parts: the company, its sector, and people.

First he calls the central information office of his group. He discusses of the meeting appointed with

Per and requests to be prepared. Is it possible to have an information package about Beta Group?

Balance sheet, brochures, client house organ, etc?

The following phone call is forwarded to Per’s secretary, who promises to send immediately the

printed material of Alfa.

The following day Per refers during the company’s weekly meeting that he will meet Per at Alfa’s.

Does any staff know anything or someone about the company? He hears that Lena, who works as

receptionist has her husband working at Alfa. One of the brokers has had a short relationship with

one of Alfa’s management. Someone else recently has read a publication about Alfa. Carl invites all

the three to keep an eye open, and later on calls Lena’s husband.

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The following day he receives by mail a few big envelopes. The balance sheet is missing, but Carl

order it at a specialized agency. During lunch time he passes in front of Alfa’s offices. He looked at

the parking area, the building, and enters. He wants to taste the atmosphere and try to appraise

Alfa’s corporate culture. Is he welcome? Does burocracy dominate the company? To the girl of the

information desk he says of passing there just to verify the right way to go when he will come for

the meeting. Before leaving he looks at the information shelf and takes a few depliants. In the

afternoon he looks for Alfa’s economic press publication at a data bank. Unfortunately data are

scarce. He decides to examine specialized magazines, and goes to the public library, where he

founds what he needs. He makes a copy of everything and goes back to office. There is a

publication that makes him curious where Per has got an interview. Call phones the journalist who

has written the article and asks him whether he thinks to go on with such other articles about that

argument. The matter becomes a long phone call, which gives Carl many interesting information.

Carl’s story could go on longer enough. Anyway, we can guarantee you he shall be extremely

prepared for the meeting and will give an excellent impression of himself to Per, thanks to the

information he got about the company and his ad hoc proposal that fits so good to Alfa.

2.11. CULTURE OF COMPETENCE

What have competence and culture to do with marketing? Marketing usually consists in activities

forwarded to outside, things that one can see, that can wake up attention, and attract clients to the

company. To operate outside, nevertheless, is one of the ways to attract clients.

Corporate competence can be compared to a magnet, which attracts clients.

The higher the competence level, the stronger the attraction power on market, both on clients and

their partners.

Sinova’s management consultants, for instance, live coherently this ascertainment. They estimate

their most important target group as far as marketing is concerned is that of competence, i.e. current

and future collaborators. The idea that focuses on this reasoning is that good collaborators

automatically attract new clients.

There are other reasons, further to marketing, for which is useful to develop competence. A know-

how company lives of competence selling. Considering competence as a saleable product,

nevertheless it presents a series of characteristics which make it difficult to be treated: it is

immaterial and non appraisable. It is difficult to be possessed, stored, and protected. It risks

disappearing if important collaborators leave. It thins down little by little company sells. It ages

rapidly. A know-how company lives in other words of a raw material extremely delicate, transient,

unreliable. Then, there is only a way for surviving in the market, when one sells competence and it

is the one of having continuous new competence.

Competence is made both of skills and willingness.

Competence is the common result of skills and willingness of developing a charge or a business.

In skills we include knowledge, experience, judgment ability, readiness, and contacts needed for

developing a well determined charge or business. In willingness we comprehend self estimation,

engagement, and motivation. These terms can on their turn be defined and specified, but it is

important to understand that competence is much more than knowledge.

knowledge: to know also facts and methods

experience: to learn by errors and successes

judgment capacity: to understand and judge

readiness: to know what to do (write, introduce oneself, to speak foreign languages, to use

tools, computers, models, etc.)

contacts: to have a contact network, and be social

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security of oneself: to believe in one’s capacity

engagement and motivation: to be willing, to have physical and psychical strength

Jörgen Hansson (1988) in his book Skapande personalarbete (Creative work on personnel)

states:

“Personal pride can generate problems in the sense of a double loyalty – towards company and

profession. Workers in the field of know how often privilege their own professionalism more

than company needs, and generally have a strong need of independence. Really they respect

only people with a higher culture, or those who by means of their work can facilitate or sustain

their professional contributions. Really it does not exist a true comprehension of corporate

formal organization and decisional hierarchy, and they do not care in the development of their

charges.”

Sometimes this threat is so tangible that all investments in competence seem money wasted to the

wind. Jan Engström had the following sensation stated in an article issued in 1988: “Who wants to

dedicate money to the development of information systems, relationship with clients, and marketing

of a brand name, without having control on results?

Jan Engström indicates the severe rules of sport, with their contracts and team changes, as a way of

protecting investments in competence.

What is the equilibrium between professionals and market needs?

The development of competence has its origin in the key terms “needs of collaborators”.

Professionals search companies to satisfy their own needs – if they had none they worked all in

their own. A know-how company must understand what those needs are, both for attracting

professionals, and keep them. The needs of professionals can be, for instance, the matter of being

part of companies that:

- help them to develop their own knowledge

- facilitate their business

- help them to publicize and sell their services

- give them the opportunity of influencing the corporate development

- give them a satisfying salary

- contribute with other values as synergism, social relationships, encouragements, imagine,

status, etc.

n the debate on how company should behave to keep its know-how capital –i.e. collaborators- one

proposes often the solution of involving them as partners. But such a solution satisfies only a few

points of the list reported above. To attract and keep specialists on the long run, company know-

how has to satisfy more than them.

The answer to collaborators’ need can be summarized under the form of “personnel persuasion”.

Karl Erik Sveiby states its personnel persuasion as follows:

“ Corporate personnel conceive can be described in a few words such as the opinion one has inside

a company about the type of personnel which has to be present in the organization, such as age,

preparation, etc., which people has to have. In this concept we need to enclose the vision of the

managing group about enrolment, personnel training and development, i.e. what in an industrial

company we commonly define as “personnel policy”.

Personnel conceive also answer the question on how companies satisfy collaborators’ needs (so as

business conceive answers the question on how business conceive responds on how to satisfy

market needs). To formulate a personnel conceive is difficult, but concentrating on competence it

becomes easier. Naturally a company does not exist only for professionals. Somewhere outside

there are also market, and clients, whose needs have to be satisfied by the company, which lives

with this.

It is a proficient management of a know-how company that of finding the equilibrium between

professional and market needs.

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The competence development moves always from individuals. They decide what they need, and

shall assume the responsibility of their improvement. Competence development cannot come on

order.

But there is a lot of difference between to leave all responsibility to individual – we let them free to

organize them (free reins) and to create a conscious environment, which favours competence

development. Professionals rarely need advice on what and how to develop. They decide it alone,

but are grateful to who facilitates them.

Competence share

Professionals in a know-how company are conscious of their competence and value, and often

compete amongst them. For this reason frequently they keep their competence and knowledge for

themselves. The managing group shall never accept that. It must create a culture by which it is

obvious to share competence.

Stephan Tolstoy, executive director in Price Waterhouse, stated this concept in the following terms:

“Know-how company management consists in individuating those persons who reflect on their

experience, and get conclusions from that, and can transform it in concepts to be transmitted to the

organization”.

Following our experience, internal development by means of experience exchange often constitutes

a transient part in a know-how company. Notwithstanding the total amount of collaborators’

experience is high, and for many companies it is difficult to multiply and diffuse it. Competence

that can be diffused is from the one side the one connected with professionalism, and from the other

side what probably is not spontaneous to connect with collaborators’ charges.

A know-how company shall give collaborators the opportunity of transferring competence. The first

step is to invest money and time to this end by means of internal seminars. A very simple gimmick

to create such opportunity is that of transforming the weekly meeting from a discussion on what

each of us has done in one about what each of us has learned. Often we lose precious time when

professionals refer about the status and character of their charges. Let us ignore all that –if

somebody is interested, he can be informed by writing- and let us discuss about what colleagues

have learned forms their charges. What new conclusions have they inferred? What errors have been

made? How can those errors be eliminated?

A part of internal competence development is also control responsibility sharing on the surrounding

world. It is not necessary everybody participate to all conferences and read all books. Any

collaborator who reads a book or participates to a conference can do a summary of what he has

learned to be distributed to colleagues. Suddenly they decide whether to read that book or its

summary is enough. We need to do in the way for which our control on external world and external

participation be diffused, and who has responsibility of it refers to others.

Of internal development is also part the competence exchange with clients, suppliers, and all other

important persons of our contact network.

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2.12. REFLECTIONS ON RELATIONSHIPS

In a paradox way, considering for instance the rapid development of products, economic activities

in the world develop more and more rapidly through long running relationship between client and

seller. The following data on buying cycles of complex products are cited from the book Lysande

Marknadsföring (Briiliant Marketing) by Theodore Levitt (1984).

- Oil plants 15-20 years

- Chemical plants 10-15 years

- Informatics systems 5-10 years

- Important components for iron working 5-10 years

- Contracts for paper delivery 5 years

Consequence: companies must be skilled in creating long lasting relationships with clients and

suppliers

.

At the same time, educated people are less and less dependent from companies as employers. When

the most important resource is know-how and not financial capital, it is the company to depend

from personnel, not the contrary

Consequence: company shall be skilled in creating long-lasting relationships with employees.

Relationship management shall be the watchword in the global market

If the notion of service has been the watch-world of the 1980’s, our idea is that “relationship

management” shall be that of global market.

The terms relationship management indicate four basic categories of relationship a know-how

company has to keep:

- with environment

- with clients

- with suppliers

- with employees

- with funders or shareholders.

Sometimes long-lasting business relationships are similar to those in rules in a wedding. In a

relationship, for business or for marriage, both parties has something to gain by the fact of staying

together. Without this reciprocity the relationship does not resist.

Any relationship has a very special characteristic: it is a long-way to build, and it can be destroyed

in a while, for instance deluding the good faith, breaking a promise, or laying.

Frequent and long-lasting relationships ask for different things of those superficial and of short

term. Know-how Company’s clients become much more than simple clients. They become

collaborators and colleagues of our professionals, their funders, our product testers, their faithful

friends.

Because relationship between the company and its collaborators and between seller and client

become more and more complex, there are needed ethical rules to manage relationships.

The relationship client-company

Both parties assume higher responsibility, both for service production, and for relationship.

Our company shall develop better and better methods for diagnosing needs, and for

appraising results.

Clients shall be more and more involved in our corporate development.

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Relationships with clients and related ethical rules shall be a hot argument. Next duty of our

general management shall be that of developing ethical rules of business.

The relationship supplier-company

Our company shall grow by means of national and international networks.

Suppliers shall be involved more and more in corporate development.

The relationship collaborator-company

Collaborators, i.e. employees and professionals, will have a personnel policy.

We will start to argument any kind of cooperation.

We will never acquire other companies against the will of their co-operators. Our company

will look for other forms of proprietorship and partnership.

The relationship shareholders/funders-company

Despite financial world is still based on capitalistic concepts, we will look for other forms of

funding, included all sharia-compliant practices.

The relationship environment-company

Our best practices will be oriented to environment protection. In our case the term

environment shall include both natural and human environments.

2.13. SOCIAL RESPONSABILITY

The definition of Socially Responsible Investments (SRI) is not universally accepted, for social

responsibility in the field of investments has different cultural roots of religious, environment, and

rights protection, therefore to such a concept people associate scopes and ideas largely different,

which still generate debates and uncertainty. The European Social Investment Forum (Eurosif)

bases its assumption on Socially Responsible Investments, stating: ‘SRI market combines financial

targets of investors with their ideas on environment, social aspects and ethics’. In this definition

they emphasize, not only on a social, environmental, and ethic component, but also on financial

performances, following the triple bottom line, i.e.

the rule of the three Ps: people, planet, profit.

Basing the assumptions on these ideas, the reasons that are at the basis of our company’s

investments can be highlighted in two points:

a) it always exists a moral imperative on sustainability of resources exploitation: sustainable

development is not in contrast with the achievement of a positive return on own

investments;

b) socially responsible corporations’ investments have always an economic worth.

Corporations careful with environment, employees, governance, and future can develop

their potentialities on the long run, and are not subjects to the risk of corporate, environment

or employment scandals. The accent on long run performances tied to higher costs that

company could have on the short period for implementing its virtuous practices. Therefore,

such costs could have a negative impact on short run profitability, nevertheless certainly

recovered in the long run.

The following table shows the summary of our investment strategies, as per Eurosif definitions:

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Investment strategies

Strategy Definition

Ethical exclusion This strategy is based on the exclusion of every

and all non ethical investments.

Positive screening It consists in the search of ethical scopes, and

clients who engage themselves to promote

socially responsible businesses, or produce

goods and/or services having external positivity.

This strategy includes the ‘Best in class’ and

‘Pioneer screening’ strategies.

Best in class This is a strategy consisting in the individuation

of leading investments following the SEE1 in

every sector or business group.

Pioneer screening/Thematic investment

propositions

Thematic investments based on ESG principles,

such as sustainable development, and an

economy based on energy and other resources

saving.

Norms-based screening This strategy is based on negative criteria

dictated by the OECD, ILO, UN, UNICEF, and

other major world organizations.

Simple screen/Simple exclusions Strategy which from one side excludes items

such as drugs, firearms, and tobacco, and fro the

other side promotes the safeguard of human

rights. It includes the ‘Norm-based screening’

strategy.

Engagement This strategy has the scope of encouraging the

adoption of socially correct behaviours, and

strengthening profits connected with socially

responsible businesses. It is based on the

influence of investor both of our and our

cooperating (clients and suppliers) partners, and

overall on a continuous dialog between investors

and society concerning the problem with social

responsibility.

Integration This strategy is based on the explicit

acknowledgment of CG/SEE assets expressed in

the algorithms of the traditional analysis.

Summing all those strategies up, we can state the construction of our socially responsible portfolio

is rather complex and has several steps. To be included into our socially responsible investments

our engagements must respect the following criteria:

- act with practical behaviours in support of environment sustainability;

- develop positive relationship with social interest bearers;

- respect and support the respect of human rights;

- insure good standards as far as suppliers are concerned;

- fight bribery and corruption.

1 SEE is the acronym of Social Environmental, and Ethical, which marries with a further definition, associated with the

former, which includes concepts related with corporate governance. This way the acronym SEE is transformed into

ESG (Environmental, Social, and Governance). Source: Eurosif 2006.

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2.14. DEVELOPING AND PRICING NEW PRODUCTS (KNOW-HOW)

Until the 1970s the matter of marketing was defined at Universities as distribution. This term

indicates the main aspect was to issue or distribute a product on the market. The idea of distribution

survives, and often is uttered in statements such as ‘We need to issue….. be on the market, and do

some marketing’. It is a classic the McCarthy’s set in the 1940s of competition factors composed of

the four Ps, where distribution (Place) represents one of the four Ps, while the others are Product,

Price, and Promotion, whose logic is the following. Product, Place, and Place constitute the offer to

the market. By means of Promotion market has to be convinced to accept our offer.

A know-how company can get no advantage from the four Ps theory since Product is very hard to

define, and is perfectly fitted to each client, Price cannot be defined before the client has made his

final choice, Promotion does not work with a client who has a serious problem for which he is

looking for a solution, while Place of distribution is meaningless considering that a know-how

company works at client’s plant.

Certainly a few know-how companies have intuited that classic marketing cannot be of help to their

business, and for that reason have eliminated all those activities that can be classified as advertising.

A Know-how company can get more advantages from the theories developed in the 1970s, which

can be grouped under the terms ‘industrial marketing’. This theory emphasizes the close

cooperation between seller and buyer and outlines the importance of long term relationships.

At the beginning of the 1980s sprang up at the attention the so called ‘service company’ and

consequently experts began to develop theories for such companies. They coined the concept of

Service Management, and a golden rule seems to be lasting: the major rule of a service company is

to produce the highest quality at the moment of delivering the service (the truth climax).

In the States, during the aforementioned period, experts add three more Ps for the exigencies of

service companies. The new three Ps are Process, People, and Physical Evidence.

What we will indicate in this chapter is a vision of marketing based and developed from those two

schools: industrial marketing and service management. But before doing that, we would like to

spend a few lines to the definition of marketing. Marketing is a set of activities to create and

maintain clients. Rolf Back (see Arndt and Friman, 1981) gave the concept a further definition:

Marketing is the comprehension of what market, as preconceived, needs, desires, wants to have,

and requires; the ability of getting competence and more generally resources which get possible to

offer what markets requires, is the ability of communicating to the preconceived market that we

possess such a competence.

Please read again carefully that statement. In the first sentence marketing is stated as the

comprehension of what preconceive market needs. This comports that marketing be not only a thing

to do, but also a matter of having intuition and ability of understanding what market needs.

Furtherly please note the term ‘preconceived’. That indicates marketing is the ability of choosing a

market, ie his own clients. In the following sentence we can read that marketing is the ability to get

competence, and the resources needed. That means marketing has to do also with competence

development, and more generally with the availability of needed resources. At least, market too

needs to know that the company offers such competence.

But what has all this to do with the seven competition factors of know how company? Well, know

how company gets the comprehension of what market needs through its contact network, and

clients’ knowledge. The preconceived market can be reached by means of an appropriate choice of

clients. The opportunity of acquiring competence can be got creating a culture of competence, and

the ability to communicate such a competence can be verified by means of our contacts network,

communication, and concreteness.

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2.15. THE MARKETING MAX

Sometime we ask ourselves which of competition seven factors is the most important, or can give

the most immediate market result. To such question we need to answer that all factors are equally

important. Even if some of them probably give more immediate effects than others give on the short

term, marketing of a know-how company shall be set on the long run. In order to have success on

the long run all competitive factors are equally necessary. Even if under certain situations it can be

useful to bet more on particular factors, we cannot reckon on the seven Cs as on the four Ps.

In the theory of Ps we can calculate initiatives, try a new repartition of resources, and verify the

result. This operation is defined ‘marketing mix’: ‘If we reduce selling price, and increase

advertising, than……If we increase quality, decrease the number of selling points, and …..’

Any company which lives on the sale of knowledge must substitute a with an i of the term mix: we

need the max, the ‘Marketing Max’.

TO BE REMEBERED

1) A know-how company can exist in several sectors. The main characteristic of it is due to the

fact that its clients approach the company because they have a lack of knowledge for solving

their problems.

2) A know-how company reach the success when its co-operators can generate confidence in

their capacity of solving customer problems.

3) Marketing is all those initiatives which aim to generate and keep a client.

4) Seven Cs govern the marketing of a know-how company. They are complementary and

inescapable. They can be neither interchangeable nor quantifiable as the four Ps of

traditional marketing.

5) Marketing is much more than going market, and tell people about himself. Most work shall

be done internally.

Marketing max does not mean to focus all initiatives on all competition factors. It means to be

conscious all seven competition factors are connected. Competition factors influence each other.

Knowledge diffusion has to do with contact network, communication, and competence culture.

Contact network has to do with knowledge diffusion, client knowledge, and communication, and so

on. Because competition factors are so connected, it is not so important to decide from where to

start, but the starting point shall be decided following the company’s situation, time availability of

collaborators.

A fresh born company shall be dedicated to the construction of a contact network, clients choice,

and knowledge diffusion, while our company with a set of well defined clients has to examine

quickly its contact network, and communication for focusing on competence culture for creating a

solid basis for the future.

Therefore, because we have a contact network, let us start to build from there, and afford all

other aspects when they come.

Intuition is the most important aspect.

To work on marketing deals more with intuition than with planning. Certainly we need to act

systematically to operate conscious client choices, but for all other methods it is possible to start

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being conscious of what we do, and letting that initiatives flow suddenly to the right way. Using

intuition and consciousness they will come spontaneously.

With the intuition of the importance of knowledge diffusion it is easier to write a paper for a

seminar, when corporate business is taken into consideration by newspapers. It is also easier to

thing about an argument with which to intervene in a conference, or what to write in an

advertisement.

With the intuition of the importance of contact network it is easier to start new relationships, keep

them alive, and exploit them.

With the intuition of the importance of communication it is easier to keep better and more regular

contacts with clients and contact network.

With the intuition of the importance of concreteness it is easier to introduce our company and its

services.

With the intuition of the importance of client knowledge it is easier to keep ourselves informed and

updated for discovering what our clients need.

With the intuition of the importance of competence culture it is easier to decide what our company

has to focus on during the time we do not reserve to clients.

2.16. COMPANY PLANNING AND POLICY

If the managing group and its collaborators are conscious of what competitions means and sectors

we have to develop, our company will have higher success in each of them.

This process can be accelerated setting up plans and policies. A few completion means can be well

planned, while for others policies fit better, while most of them needs both of them. To do plans and

set up policies can seem bothering, but it is not necessary they are extremely complicated and

complex to prepare (the birth of an intuition can require more time). On the contrary, we would say

the simpler they are the better is.

A simple planning can have such target as: “Next year we will try to involve those three clients we

have chosen…. to generate contact with business groups, and organize two seminars….”

A simple policy can have rules such as: “In our company we get every opportunity for diffusing

knowledge. We keep our contact network informed by means of letters, phone calls, faxes, and we

try to keep us informed on what to our clients happens. We ask to all our collaborators the

responsibility of keeping under control the surrounding world and to let colleagues participate to all

they come to know”.

Naturally it is the managing group to assume the responsibility of marketing. In a know-how

company marketing is a strategic matter –client choice influence company development in a very

high way. Nevertheless, most of this strategic responsibility has to be delegated to collaborators.

We need, therefore, to create a faith connection, which shall form among people. At the end,

specialist themselves shall assume the responsibility of creating, keeping, and developing their

clients. The consequence is that the managing group has to stimulate interest for marketing, and to

improve knowledge by collaborators. Marketing in a know-how company is not a matter to be

charged to a marketing department –it is a common charge.

The corporate managing group

has the duty of doing in such way that company set up targets and generate policies, plans and

market strategies. Managers respond of competence development, and shall stimulate the interest to

increase marketing knowledge in the whole company. The managing group issue resources on the

form of time and money, administrative services, and concrete tools.

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Time is the most expansive item of marketing for a know-how company and here we find the

hardest work to do.

The marketing responsible

Someone inside the company has to be chosen to marketing responsibility. This person has the

function of connecting all intuitions, ideas, and shall plan, support, and coordinate the work of all

sectors. Furtherly he has the responsibility of producing corporate information material, brochures,

and newsletters.

The professionals, i.e. specialists

Have the responsibility of the competition factors on which our company focuses his work, and

shall be applied on a daily basis. Diffusing knowledge, cultivating relationship, communicating in a

constant way, etc are not very difficult duties, but they require ideas, and overall time.

Marketing we describe mostly consists of a way of seeing matters toward marketing itself where the

core business is respect and competence toward clients.

This way of doing marketing shall permeate the whole company, and all collaborators have

therefore to learn to cooperate to marketing.

We conclude the description of our competition factors underlining once more as marketing in our

know-how company moves from individuals.

This statement runs a risk: marvellous plans and policies can fail clamorously if company’s

collaborators are not involved in this operation, or they do not understand the meaning of it.

Bat there is further a positive aspect: already since tomorrow everybody can take a moment for

trying any small initiative that can contribute to improve marketing and sell corporate services.

Really there is no good reason for waiting around.

2.17. MARKET ANALYSIS

Starting from home market we can say that the success of frozen foods is now a constant reality.

They are 20 years that the curve of consumption moves upwards, with expansion moving up to

190.000 in 2009.

This success marks closely the evolution of consumption and customized food in our country, so

the sector of frozen food is considered a guideline in the alimentary fields.

A more detailed analysis of I.I.A.S. indicates that customized frozen food is among the few true

players developments in the spending on food in the last 20 years, the expenditure which decreased

as a whole than the other voices, buy it is instead grew significantly for the kind of food. This

evolution is undoubtedly the result of the constant improvement of quality of products, due to a

selective search on the raw material, new technologies for freezing, to a rationalization of

distribution channel and to an innovation.

A trend in growth, that of all the target of consumption, as the predominant feature of frozen

products are the extreme diversity of supply and organic expertise at hand, made possible by stocks

in freezers, for which the products frozen rationalize the cart without penalizing the quality food.

Recently, the favourable preparation of the consumer in respect of these foods is further increate,

thanks to strong demand for products with a higher content of service. This has encouraged the

assertion of frozen food of the sector of the ingredients ever more evolved. In recent years is then

recorded by the main producers pay greater attention to the level of quality supply, certainly not a

secondary factor in support of the constant growth of the market. This provision has therefore be

40

interpreted to the best and, in some ways, advance the trend today of news: the eating well as

synonymous with quality of life.

The progress made in the technologies for freezing, for example the possibility of freezing

individually singular ingredients which are in the offered deli ( through the process known as IQF,

individually quick frozen ) allow for faster reactivation of the dishes, extolling the result organic

and the overall quality of the product offered. It is wished to highlight that fact because the Pugnale

Company, than the competition, produces plants of high quality. It is therefore not intention to

change strategy for this aspect.

At the level of general consumptions, the sector of frozen foods in Italy has a potential still not fully

expressed, so that for the future the results, in terms of sales, should further improve increasingly

closer to those even better register in most European countries in which, albeit in different

percentages, it was found in recent years a substantial, and almost widespread positive trend.

Alongside the reasons more times remember, that supporting the frozen foods, there are also the

renewed confidence that buyers have invested in production processes and for the conservation of

the sector, in the process – Distribution and logistics planting regulatory. On the legislation, in fact,

quick-frozen products are among the few foods to have uniform European legislation.

The importance of Organized Large Distribution further increases in consumption of frozen food is

crucial, provided that the large areas know to organize the exhibition spaces and the sale and to

guide the consumer in the choices. It is needed, in addition, appropriate interventions also in the

area of the exploitation of space fridge for greater visibility to the department as a whole. It must be

said, in fact, that Italy is still lagging behind the other European countries, not to mention the United

States, where it is dedicated to space frozen up to five times greater. Interesting signals come from

catering, which represents more than a third of the total consumption and it handles about 280

thousand tons. Also in catering, traders seek practicality use and a good product from the point of

view and gustatory organic and found in frozen a response more and more efficient.

The growth of foodservice offers new opportunities to those products that want to exploit new and

different business possibilities. This expansion seems geared toward sectors very precise clarified

that the market is in good health, and that the main companies of the sector play a driving force, an

interesting phenomenon is the affirmation of specialists. Those companies, i.e., which don’t throw a

full range, but only some specific references in defined segments, as a snacks, pizzas or traditional

recipes. The result will be a further reinforcement of the market and a guidance even greater high

quality, as it will rely on products excellence. In general, it is expected to focus on product

innovation, now a particular feature of the sector, will continue to be supported by the main

companies in the sector. It follows increate demand for plants.

New application fields

Thanks to continuous quality improvements and innovations to the manufacturing plant and

technology, our company proposes in the short term, further to the traditional range of equipment,

also new systems that can be used in the following fields, which are forecasted to have a rapid and

significant development in the medium term: new potential applications in the immediate future.

- Bread making

- Sterilization aseptic cans

- Freezing liquids

- Turn-key plants

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2.18. ROBOTICS

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Robotics represents a complex of new technologies, which allow Pugnale International to create

newer and newer applications able to satisfying the growing needs of profitable processes.

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2.19 MEDICAL EMERGENCY SOLUTIONS

For further information please follow the link: http://www.emergencysolution.it

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2.20. ENERGY TRIGENERATION OR DISTRICT ENERGY SYSTEMS, PROVIDENCE

UP TO 50% GREATER SYSTEM EFFICIENCY, AND FUEL SAVINGS OVER TYPICAL

COGENERATION

The major aim of this product proposal has been to analyze the opportunity of investing in new

technologies that can improve the total quality of our business and maximize profit of both clients

and our company.

The first aspect we were lost in has been the energy quantity and quality our current products

consume, the efficiency of energy exploitation, and the total savings our customer can get from

worthy innovations.

Furtherly we have analyzed the profitability of changing our marketing strategy, moving from a

vision ‘product oriented’ to a vision of ‘Know-how Company’ oriented.

The first aspect has been approached proposing energy trigeneration as the most efficient technique

for solving the problem of energy consumption and efficiency.

The second aspect has been approached proposing the new vision of working as Know-how

Company.

Both arguments are treated below with details and analyzed in both qualitative and quantitative

aspects.

Please, take into consideration that trigeneration can be applied using the following conventional

and/or innovative energy sources:

- Coal

- Liquefied coal

- Oil

- Gas

- Geothermic steam

- Biomasses or Biogas

- Solar

- Any combination of the aforementioned thermal sources.

"Trigeneration,” also referred to as "district energy," or "integrated energy systems," is dramatically

more efficient and environmentally friendly than "cogeneration."

A well-designed trigeneration plant will surpass the efficiency of a cogeneration plant by about 50%

and a utility power plant by 300%, of similar size.

A trigeneration plant, defined in non-engineering terminology, is most often described as a

cogeneration plant that has added absorption chillers - which takes the "waste heat" a cogeneration

plant would have "wasted," and converts this "free energy" that would have been wasted by

cogeneration, into useful energy in the form of chilled water.

The trigeneration power and energy process produces at least three different forms of energy from

the primary energy source, namely, hot water, chilled water (for air conditioning) and power

generation (electrical energy). Many times, steam is also produced from the trigeneration power

plant - especially at hospitals, which are an ideal location for trigeneration plants.

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Trigeneration has also been referred to as CHCP (combined heating, cooling and power generation),

this option allows having greater operational flexibility at sites with demand for energy in the form

of heating as well as cooling. This is particularly relevant in tropical countries where buildings need

to be air-conditioned and many industries require process cooling.

Example of a Gas Turbine Based Trigeneration Facility

Although cooling can be provided by conventional vapor compression chillers driven by electricity,

low quality heat (i.e. low temperature, low pressure) exhausted from the

cogeneration plant can drive the absorption chillers so that the overall primary energy consumption

is reduced. Absorption chillers have recently gained widespread acceptance due to their capability

of not only integrating with cogeneration systems but also because they can operate with industrial

waste heat streams. The benefit of power generation and absorption cooling can be realized through

the following example that compares it with a power generation system with conventional vapor

compression system.

Trigeneration or District Energy Systems,

Providence up to 50% Greater System Efficiency and Fuel Savings Over Typical

Cogeneration

"Trigeneration,” also referred to as "district energy," or "integrated energy systems," is dramatically

more efficient and environmentally friendly than "cogeneration."

A well-designed trigeneration plant will surpass the efficiency of a cogeneration plant by about 50%

and a utility power plant by 300%, of similar size.

A trigeneration plant, defined in non-engineering terminology, is most often described as a

cogeneration plant that has added absorption chillers - which takes the "waste heat" a cogeneration

plant would have "wasted," and converts this "free energy" that would have been wasted by

cogeneration, into useful energy in the form of chilled water.

The trigeneration power and energy process produces at least three different forms of energy from

the primary energy source, namely, hot water, chilled water (for air conditioning) and power

generation (electrical energy). Many times, steam is also produced from the trigeneration power

plant - especially at hospitals, which are an ideal location for trigeneration plants.

Trigeneration has also been referred to as CHCP (combined heating, cooling and power generation),

this option allows having greater operational flexibility at sites with demand for energy in the form

of heating as well as cooling. This is particularly relevant in tropical countries where buildings need

to be air-conditioned and many industries require process cooling.

Example of a Gas Turbine Based Trigeneration Facility

Although cooling can be provided by conventional vapor compression chillers driven by electricity,

low quality heat (i.e. low temperature, low pressure) exhausted from the

cogeneration plant can drive the absorption chillers so that the overall primary energy consumption

is reduced. Absorption chillers have recently gained widespread acceptance due to their capability

of not only integrating with cogeneration systems but also because they can operate with industrial

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waste heat streams. The benefit of power generation and absorption cooling can be realized through

the following example that compares it with a power generation system with conventional vapor

compression system.

Trigeneration Example by the numbers

A factory requires 1 MW of electricity and 500 refrigeration tons* (RT). The gas turbine generates

electricity required for the on-site energy processes as well as the conventional vapor compression

chiller.

Assuming an electricity demand of 0.65 kW/RT, the compression chiller needs 325 kW of

electricity to obtain 500 RT of cooling. Therefore, a total of 1325 kW of electricity must be

provided to this factory. If the gas turbine efficiency has an efficiency of 30 per cent, primary

energy consumption would be 4417 kW.

However, a cogeneration system with an absorption chiller (thereby making this a "trigeneration"

plant) can provide the same energy service (power and cooling) by consuming only 3,333 kW of

primary energy versus 4417 kW thereby saving nearly 25% in primary energy usage. This is why a

trigeneration plant is even more efficient than a cogeneration plant.

This example clearly points out the advantages of trigeneration over typical cogeneration plants. A

trigeneration plant (with an absorption chiller) can save about 24.5 per cent of primary energy in

comparison with a cogeneration plant and vapor compression chiller.

Additionally, a smaller prime mover leads to not only lower capital cost but also less standby

charge during the system breakdown because steam needed for the chiller can still be generated by

auxiliary firing of the waste heat boiler.

Since many industries and commercial buildings need combined power and heating and cooling,

trigeneration plants have very high potentials for industrial and commercial application - with the

associated energy and economic savings inherent with trigeneration.

* Note : A refrigeration ton (RT) is defined as the transfer of heat at the rate of 3.52 kW,

which is roughly the rate of cooling obtained by melting ice at the rate of one ton per day.

(This example and information courtesy of ASHRAE)

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Fig. 1 - Trigeneration Diagram

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Fig. 2 - Trigeneration CHCP

Fig. 3 - Cogeneration/Trigeneration Feasibility study

Fig. 4 - Elements within a Tri-Generation Solution

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Fig. 5 – The power of trigeneration

Fig. 6 – Electrical Generation Efficiency % LHV

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Fig. 7 – Trigeneration Process Outline

Fig. 8 – Micro turbines

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2.20 PHOTOVOLTAICS SPECIAL APPLICATIONS

Photovoltaic Shelter

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2.20. CUSTOMER LIST

The Pugnale s.r.l. has so far provided more than 500 machines for use in the fields of refrigeration,

freezing, sterilized protection and cooking, with excellent satisfaction of customer requests.

Please find below in the following next 5 pages a full Pugnale’s s.r.l. costumer list.

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Pugnale International s.r.l. has so far provided more than 100 machines for use in the fields of

chemical – pharmaceutical and sterilization, satisfying, even here, all customer requests. High

quality and reliability of the products have always proved their high standards.

Pugnale International may include in its direct customers almost all European firms that use oxygen

in the food sector and/or are users of sterilization tunnels:

Boehringer Istituto Militare Italiano: www.boehringer-ingelheim.com

Nestlé: www.nestlè.it

Takeda: www.takeda.com

Unilever: www.unilever.com

Italchimici: www.italchimici.net

Shimizu: www.shimz.co.jp

Novartis: www.novartis.com

Mutti: www.mutti-parma.com

Serac: www.serac-group.com

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2.23. SETTING GOALS AND FORMULATING STRATEGY

Premises

Our Investment Program in cutting off a branch of Pugnale s.r.l. gives us the opportunity of keeping

the technology, workmanship and clients of the former company and to innovate in marketing

philosophy, management skills and experience, and innovating a few strategic products in

sterilization.

The Purpose of our Program

“Give superior, innovative and unique growth opportunity to a glorious branded

technology in a global economic and political contest”.

The starting point in our effective management is setting goals, i.e. objectives that our business

hopes (and plans) to achieve.

Certainly deciding what we intend to do is only the first step for our organisation.

Decisions shall not be made on a problem-problem basis, or merely to meet needs as they arise, and

a broader program underlies those decisions. We have a strategy that we’ll try to summarize in this

chapter.

The Goals of our Program

Long-term goals: (5 years or more)

Set up in our market the culture of innovation and environment exploitation through

sustainable growth and businesses for running Advanced Study and Research programmes

which can lead to excellence and social context improvement.

Run Vocational Training (off-the-job, on-the-job, simulated, even on e-learning).

Give the best economic service to companies worldwide with our Technology Innovation

and socialization.

Serve the major Corporations worldwide.

Becoming partner of those corporations who like to be entrepreneurial in creating new real

wealth.

Intermediate goals (set for a period of 1 to 5 years)

Increase the economic and social development of the food market worldwide even through

economic profitability.

Improve both clients’ number and profitability.

Minimize the unit cost of researching, engineering, and manufacturing

Be assessed as one of the leading company in its field.

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Short-term goals (set up to 1 year)

Specialize in Food Conservation Advanced Study and Research at least 10 students who will

suddenly be enrolled with our companies as employees’ teachers and/or tutors.

Form a sufficient number of employees to perform the necessary tasks to manage our

companies.

Construct a pilot team for the innovation of niche and large consume of food and medical

products conservation.

Construct a pilot manufacturing plant in innovative tools sterilization.

Train specialists on behalf of client companies.

Reach the break-even point in two years.

3) Mission Statement

3.1 - To reach the short term goals we will cooperate with major Universities, Research Centres,

and Corporations in Europe, the States, Japan, Brazil, India, and China.

In this early stage we absolutely need, and we will, be supported by personal references and

contacts. At this purpose we can count on our membership and contacts with the National Sections

of the International Chamber of Commerce, as well as the introduction we have with major

Universities and Companies.

To be promoted we strongly believe in the “word of mouth” of Pugnale s.r.l. former clients as the

best and most efficient way of communication. Nevertheless we also need to promote our business

on international press and communication media too.

The relationships we have in Europe seem to be enough, at the moment, to fulfil our early targets,

and to reach the break-even point within the first two years. The relationship we will reach with the

banking world can be a definitive help.

3.2 – To reach the intermediate goals as far as new specialists, tutors and trainers will be available

seems to be comfortable, since such increase will come as a consequence of the effort we have done

for reaching our short-term goals.

As far as the number increase of client companies is concerned, we strongly believe that working in

close cooperation with the major International Organization -giving opinions, suggestions, and

overall being present and efficient at topic meetings- will certainly lead to new clients acquisition.

For this purpose we have already acquired contacts and relationship with all connections we need.

Furthermore, our partnership with professionals worldwide in the “World Business Network”, can

guarantee a continuous acquisition of new clients.

3.3 - Long-term goals could be reached also through a complete cooperation with major

corporations, which are interested in investing in our innovative products.

Certainly most research will be based on simulation, which shall be on-line or off-line (in both cases

supported by telematics), whilst Training on-the-job will merge with consulting and servicing.

As far as this statement is concerned, we are discussing with the International Chamber of

Commerce to set-up any effort to improve such solution in cooperation with major R&D

Companies.

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4) SWOT Analysis

4.1 – Strength

Our strength is our experience and skills in innovating in freezing and sterilisation, as well as giving

the most appropriate “customer oriented plans” we can apply nowadays to our clients for issuing

fast, reliable and profitable business worldwide.

Our experience and skills give us the opportunity of having ROI in some two years.

The construction of a World Business Network will generate a spread interest in our innovative

arguments.

Our ability in Technology Transfer and Business Intelligence will certainly foster any further

implementation of both domestic and international businesses.

Furthermore we are going to project our Network in a business, which could become the core of

future global business.

4.2 – Weakness

Our weakness is mostly based on the difficulty of letting prospects to understand what a Know-how

company is and how it operates. For instance, if to a painter you commit a painting, certainly you

cannot have a preview of its work. You need to accept his final work as it comes. If you do not trust

in that artist it should be better to look for a better one, if you can find any.

4.3 – Opportunities

Pugnale International has opportunities coming from the former clients of Pugnale, just awaiting for

their orders and selecting the most profitable of them. The only risk is to deeply analyze the most

proficient of them.

4.4 – Threats:

Our major risk is due to our small size and poor financial assets. In such a condition even small

errors could be mortal.

To partially avoid this risk we need to closely cooperate with all the financial organizations

involved in our start-up by means of periodic revision of our business plan in order to verify every

Delta in our forecast.

5) Marketing Consulting Staff

From our marketing consultants we point out the following names:

Industrial and Commercial Associations (amongst them)

ASSONIME (Associazione Società per azione e a responsabilità limitata), Roma

Confindustria, Roma

Confcommercio, Roma

Istituto Commercio Estero, Roma

Nestlé, Basel

Basf, Basel

Philip Holzman, Frankfurt

Mac Alpine, London

Marangoni, Rovereto (TN)

Freddi Dolciaria, Moncalieri (TO)

Merloni, Fabriano (MC)

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European Space Agency (Toulouse)

Universities

Haute Ecole de Gestion Arc, Neuchatel – Delèmont

Private Hochschule Wirtschaft, Bern

Hochschule für Wirtschaft, Luzern

SUPSI – Ticino

Politecnico di Milano (Economia, Ingegneria, Giurisprudenza)

Università Bocconi, Milano (Economia, Ingegneria, Giurisprudenza)

Università di Parma (Faculty of Economics)

Università di Firenze (Faculties of Economics and Law)

Università La Sapienza, Roma (Faculties of Economics and Law)

Consulting Staff

For this project we have applied to the following consulting people and organisms:

1. Prof. Enrico Sciubba – Professor of Turbo-machinery & Energy Systems, Dept. of

Mechanical & Aeronautical Engineering – La Sapienza, Roma

2. Dr. Roberto Capata, Faculty of Mechanical Engineering, La Sapienza, Roma

3. Prof. Giuseppe Ardigò – Docente di Economia Aziendale – Università di Parma

4. Dr. Manlio Guido - Generale i.c. della Guardia di Finanza, Roma

5. Istituto di Ricerca in Agricoltura San Michele, Pavia

6. Faculty of Veterinary, University of Bologna

7. The Italian Section of the International Chamber of Commerce

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HUMAN RESOURCES STATEMENT

3.1. The Competences for a Know-how Company

In Chapter two we have posed a straight question: “What have competence and culture to do with

marketing?”

Now it is time to pose the same question for human resources.

Corporate competence can be compared to a magnet, which attracts clients.

The higher the competence level, the stronger the attraction power on market, both on clients and

their partners.

There are other reasons, further to marketing, for which it is useful to develop competence.

A know-how company lives of competence selling. Considering competence as a saleable product,

nevertheless it presents a series of characteristics which make it difficult to be treated: it is

immaterial, and non appraisable. It is difficult to be possessed, stored, and protected. It risks to

disappear if important collaborators leave. It thins down little by little company sells. It ages

rapidly. A know-how company lives in other words of a raw material extremely delicate, transient,

unreliable. Then, there is only a way for surviving in the market, when one sells competence, and it

is the one of have continuous new competence.

For these reasons we are searching the co-operation of research centres, graduate schools, and all

goodwill people who want to participate to our development.

Competence is made both of skills and willingness.

Competence is the common result of skills and willingness of developing a charge or a business.

In skills we include knowledge, experience, judgment ability, readiness, and contacts needed for

developing a well determined charge or business. In willingness we comprehend self estimation,

engagement, and motivation. These terms can on their turn be defined and specified, but it is

important to understand that competence is much more than knowledge.

knowledge: to know also facts and methods

experience: to learn by errors and successes

judgment capacity: to understand and judge

readiness: to know what to do (write, introduce oneself, to speak foreign languages, to use

tools, computers, models, etc.)

contacts: to have a contact network, and be social

security of oneself: to believe in one’s capacity

engagement and motivation: to be willing, to have physical and psychical strength

Our Human Resources Management is oriented to competence. We dedicate huge effort for forming

and keeping skilled and experienced people with us. We want a mutual help in our company.

No financial assets can assist a company if its human resources management is not oriented to

competence.

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R&D STATEMENTS

4.1. The Competences for a Know-how Company

In Paragraph 2.4 we have introduced the concept of “KNOWLEDGE DIFFUSION”, which is the

key of our vaults.

We previously said that to buy from a know-how company is more difficult than to buy

blindly from a closed box. Not only customers has to decide purchasing without having verified the

content of the box, but often he cannot even imagine what is enclosed in the box. In fact, even if the

seller company opens the box inside there is not too much to be examined. Service arises only after

the client has decided to buy it. For this reason a client can never be sure about what he really has

purchased. Therefore it’s our technicians and R&D people to steer customer requests toward the

right rail of problem solving.

Furtherly, a client is less certain of what the final result of his acquisition will be. In order to

help its client to buy its services, a know-how company has to give knowledge. Customers shall

receive information on both business sectors, corporation and corporate employees in order to:

- understand the opportunities offered by the market

- choose the appropriate partner/supplier

- choose the most appropriate offer

- cooperate and contribute to worth the services

- assimilate the goals the service can get.

For these reasons the diffusion of knowledge is one of the basic concept of marketing of a know-

how company, and competition of the company is strictly connected to its capacity of diffusing

knowledge both externally and internally. In this context the term marketing reaches its deepest

sense of “process fir maximizing profit” of both seller and buyer.

Therefore, R&D has the primary scope of analyzing and appraising the importance of diffusing

knowledge externally, and how to perform it.

Any know-how company has two field on which to work in diffusing knowledge: the company

itself, and the field of activity.

Who does not diffuse information on its field of activity does not consider that before or after client

needs to have an opinion on the different opportunities he has received, before going searching

suppliers. One of know-how company’s dilemma is just the fact that often they offer solutions

completely unknown to the surrounding world. The consequence is that market has not even the

competence needs to comprehend its own needs.

Diffusing information on its own business, the company can help client to understand his own need

and to desire to find out a solution. Only then the client can step on, i.e. to the choose its supplier.

Furtherly, how can a client choose amongst different know-how companies? Now he needs

information on the different bidders, nevertheless the official information he can get does not help

him so much. He has no product to be confronted, and the size or the turnover of the know-how

company is not important. Nevertheless the opinion of the client about suppliers is extremely

important. Just moving from that he can appraise the capacity of different bidders to supply the

service he needs. Therefore, diffusing well balanced information on what a know-how company

does and on its services, can help the client to have an opinion for choosing its supplier.

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The opinion of a client on our company, i.e. the vision he has, is the imagine of our company. Here

we are at a crossing point: in every know-how company it exists a strong connection between

imagine and knowledge diffusion. In order to explain this tie we need to examine closer the concept

of imagine, which represents the opinion the external world has about our company. Our imagine

can be quantified, and this is done reckoning two variables: knowledge and opinion. With the term

knowledge we intend the information about our company, while with the term opinion we intend its

level of appreciation. In every uncertain situation the sensation of already heard before gives

confidence. Every know-how company is by definition extremely dependent on the fact of just

being identified as a know-how company. In fact it has no concrete products to expose for attracting

the surrounding world.

The conclusion of this reasoning is that if our company increases the knowledge that the

surrounding world has about it, the automatic consequence is the formation of a positive opinion.

For our company this aspect is very practical. Considering our function of selling knowledge we

need to assume the must of diffusing knowledge about the company and its business sector. This is

a track more simple and trustworthy than the one of trying to influence the external world.

A further difference with a traditional service company is that every client of a know-how company

has his own responsibility on the way with which our company develops its own services. Such a

responsibility concerns also the appraisal of need, i.e. part of the goal of the service.

In such a case the know-how company differs from goods manufacturers, which by norm assume a

global responsibility about the good functioning of their products. Sometime this responsibility lasts

for years after sale. As know-how company our company cannot assume the total responsibility, but

has to involve its client into the responsibility for an appropriate service issuing. In fact, what

outcome can have a training course if the clients employees do not attend lessons? What outcome

can have an information system if the client does not learn its use?

For clients can assume responsibility, its needed he has enough knowledge that only our company,

as know-how company can give.

A salesman dreads while a teacher reassures.

Avoiding any sort of advice to salesmen on this strategic issue, we just want to emphasize the

importance of diffusing knowledge in a know-how company.

To get this goal our company shell appear expert in the whole business sector, shall offer

information and, instead of acting as a seller, shell act with pedagogic and didactic behaviour.

Our company needs to be part of the client’s project since the first phase of it. It is at that moment

that client prepares himself to get decisions. This is the crisscross point where we need to insert our

didactic role: in fact what does he do who diffuses information and knowledge? He acts as a

teacher. Every professional of the company shell never act as a classic salesman: the behaviour of a

teacher inspires respect and trust.

Let us create our imagine of expert

By means of knowledge diffusion our company shall generate the imagine of itself as expert in its

sector. Therefore we need to collect all the opportunities for demonstrating our competence.

The role of the expert is a role that inspires sympathy even among the so called opinion leaders,

such as for instance mass-media. Journalists are in a situation similar to that of a client: they too try

to have a global vision of the complex sectors which evolve rapidly, and the same happens to

politicians, general managers, researchers, corporate association, etc.

A company which is not mostly interested in sales, but to help journalists to understand the business

sector, and point out trends and appraise the news can become an important reference point for any

newspaper.

INNOVATE WITH SOCIAL RESPONSABILITY

The definition of Socially Responsible Investments (SRI) is not universally accepted, for social

responsibility in the field of investments has different cultural roots of religious, environment, and

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rights protection, therefore to such a concept people associate scopes and ideas largely different,

which still generate debates and uncertainty. The European Social Investment Forum (Eurosif)

bases its assumption on Socially Responsible Investments, stating: ‘SRI market combines financial

targets of investors with their ideas on environment, social aspects and ethics’. In this definition

they emphasize, not only on a social, environmental, and ethic component, but also on financial

performances, following the triple bottom line, i.e.

the rule of the three Ps: people, planet, profit.

Basing the assumptions on these ideas, the reasons that are at the basis of our company’s

investments can be highlighted in two points:

a) it always exists a moral imperative on sustainability of resources exploitation: sustainable

development is not in contrast with the achievement of a positive return on own

investments;

b) socially responsible corporations’ investments have always an economic worth.

Corporations careful with environment, employees, governance, and future can develop

their potentialities on the long run, and are not subjects to the risk of corporate, environment

or employment scandals. The accent on long run performances tied to higher costs that

company could have on the short period for implementing its virtuous practices. Therefore,

such costs could have a negative impact on short run profitability, nevertheless certainly

recovered in the long run.

E.F./gc June 2012