Programs Improvement and Sales Stimulation at the Enterprise
The article deals with one of the most actual problem of management practice - the problem of marketing programs improvement and sales stimulation at the enterprise. The article is devoted to solving theoretical and practical issues of sales promotion at the enterprise. The management approaches to...
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irk-123456789-1234002017-09-04T03:03:02Z Programs Improvement and Sales Stimulation at the Enterprise Prischepa, N.P. Putintsev, A.V. Marketing The article deals with one of the most actual problem of management practice - the problem of marketing programs improvement and sales stimulation at the enterprise. The article is devoted to solving theoretical and practical issues of sales promotion at the enterprise. The management approaches to stimulate sales at the enterprise are determined. The organizational structures of sales promotion and sales stimulation methods used at the enterprise are considered. Recommendations concerning management approaches to stimulate sales at the enterprise are provided. Статтю присвячено одній з найбільш актуальних проблем управлінської практики - проблемі удосконалення маркетингових програм і стимулювання збуту на підприємстві. Особливу увагу приділено вирішенню теоретичних і практичних питань стимулювання збуту на підприємстві. Визначені управлінські підходи до стимулювання збуту на підприємстві. Розглядаються організаційні структури стимулювання збуту та методи стимулювання збуту, що використовуються на підприємстві. Надаються рекомендації, що стосуються управлінських підходів до стимулювання збуту на підприємстві. Статья посвящена одной из самых актуальных проблем практики управления - проблеме усовершенствования маркетинговых программ и стимулирования сбыта на предприятии. Особенное внимание уделено решению теоретических и практических проблем стимулирования сбыта на предприятии. Определены управленческие подходы к стимулированию сбыта на предприятии. Рассмотрены организационные структуры стимулирования сбыта и методы стимулирования сбыта, использующиеся на предприятии. Даны рекомендации по управленческим подходам к стимулированию сбыта на предприятии. 2013 Article Programs Improvement and Sales Stimulation at the Enterprise / N.P. Prischepa, A.V. Putintsev // Економічний вісник Донбасу. — 2013. — № 4 (34). — С. 140–145. — Бібліогр.: 9 назв. — англ. 1817-3772 http://dspace.nbuv.gov.ua/handle/123456789/123400 [658.8.011.1:334]-048.65 en Економічний вісник Донбасу Інститут економіки промисловості НАН України |
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Marketing Marketing Prischepa, N.P. Putintsev, A.V. Programs Improvement and Sales Stimulation at the Enterprise Економічний вісник Донбасу |
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The article deals with one of the most actual problem of management practice - the problem of marketing programs improvement and sales stimulation at the enterprise. The article is devoted to solving theoretical and practical issues of sales promotion at the enterprise. The management approaches to stimulate sales at the enterprise are determined. The organizational structures of sales promotion and sales stimulation methods used at the enterprise are considered. Recommendations concerning management approaches to stimulate sales at the enterprise are provided. |
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Prischepa, N.P. Putintsev, A.V. |
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Prischepa, N.P. Putintsev, A.V. |
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Prischepa, N.P. |
title |
Programs Improvement and Sales Stimulation at the Enterprise |
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Programs Improvement and Sales Stimulation at the Enterprise |
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Programs Improvement and Sales Stimulation at the Enterprise |
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Programs Improvement and Sales Stimulation at the Enterprise |
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Programs Improvement and Sales Stimulation at the Enterprise |
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programs improvement and sales stimulation at the enterprise |
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Інститут економіки промисловості НАН України |
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2013 |
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Marketing |
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Programs Improvement and Sales Stimulation at the Enterprise / N.P. Prischepa, A.V. Putintsev // Економічний вісник Донбасу. — 2013. — № 4 (34). — С. 140–145. — Бібліогр.: 9 назв. — англ. |
series |
Економічний вісник Донбасу |
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AT prischepanp programsimprovementandsalesstimulationattheenterprise AT putintsevav programsimprovementandsalesstimulationattheenterprise |
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2025-07-08T23:35:54Z |
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2025-07-08T23:35:54Z |
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140
Економічний вісник Донбасу № 4 (34), 2013
The problem of the marketing programs
improvement and sales stimulation at the enterprise is
very serious, especially in unpredictable Ukrainian
economy. Most industry players do not see clear
prospects for their activities, and certainly do not work
on sales promotion, maybe not because they do not want
to, but because they do not have the knowledge and skills
of the creation of incentive programs.
The efficiency of sales, overall development of the
enterprise, and initially its success are determined by the
correct management and marketing approaches to sales
stimulation.
The structure of sales promotion approaches must
be aimed at realization of company’s strategies, such as
gaining more customers, achieving new parts of market
etc.
The marketing programs improvement is important
for every organization. In conditions of market economy
and growing competitiveness the issue of sales stimulation
measures is greatly important.
In conditions of market economy enterprises and
organizations must promptly react to the changes of the
external environment and adapt their sales stimulation
measures for these changes. Therefore this topic is
developed in detail in special literature [1 – 9], where the
general description of sales stimulation, its types is
provided; much attention is paid to the new forms of
sales stimulation and their possible future implementation.
The aim of the research is to analyze management
approaches to sales stimulation at the enterprise and trace
the internal development of the organization in order to
improve its sales stimulation.
The article was written using the materials of the
Small Enterprise “AVK” (Enterprise). Enterprise analysis
that was conducted revealed some weaknesses in the
sales promotion which negatively affect the company.
Therefore, based on practical material for Enterprise
is it necessary to offer a program of measures for
improvement marketing activities.
Talking about ways of sales promotion improvement
at Enterprise, it is necessary to note that the fundamental
techniques that can be offered should be:
• Firstly, adapted to the plastics processing industry.
That is, offering to introduce sales promotion measures
which are rather effective, for example, in the food
industry, would be wrong.
• Secondly, the issue of incentives should be
considered by the fact that the financial resources of the
enterprise, which can be spent on these activities, are
rather limited, as it is small business.
• And, thirdly, it is necessary to offer a flexible
and long-term program that would be linked to the
strategic management of the company.
First of all, the head and management personnel of
Enterprise should accept the clear and unambiguous necessity
of sales promotion as a general phenomenon, and most
importantly – its importance for Enterprise activities.
These measures should contribute to the overall
understanding of problems in Enterprise on this issue
and contribute to the theoretical understanding of sales
promotion issues. Moreover, problems submission about
enterprise stimulation this way can be quite correct,
without making the head of the company think that his
subordinates have questioned his deeds.
Introduction of staff is important for formulating
correct attitude towards the use of sales promotion, i.e.
prevention of wrong perception of leadership. However,
the lectures should be held under certain conditions:
making lectures for managing personnel is possible
perhaps not more often than once in four months, and
also with the consent of the head. For general staff lectures
should be conducted only on a voluntary basis and at
least once every six months; because, otherwise, instead
of the desired positive effect, rejection and denial of
management personnel to implement programs of
stimulation can be obtained.
After the lectures, when the head in general
understands the subject and the problem of Enterprise
more thoroughly it is necessary to move on to the next,
more practical activities and develop a concrete program
of action.
The introduction of improvement methods should
be carried after deciding two issues: necessary time and
amount of budget incentives.
Binding to time will help to control the process of
implementing measures of sales promotion improvement
in the company and to check whether these improvements
are done according to plan.
MARKETING PROGRAMS IMPROVEMENT
AND SALES STIMULATION AT THE ENTERPRISE
UDC [658.8.011.1:334]-048.65
N. P. Prischepa,
PhD (Economics),
A. V. Putintsev,
PhD (Economics),
Luhansk Taras Shevchenko National University
N. P. Prischepa, A. V. Putintsev
141
Економічний вісник Донбасу № 4 (34), 2013
The tough question for the head of Enterprise is
budget management, i.e. how much money should be
allocated for the organization of sales stimulation activities.
In situation where it is impossible to say with
confidence which budget should be spent on activities to
incentives it is rather logical to use the following scheme: in
the first phase certain average number is allocated, for
example, seven or eight thousand UAH. This amount is the
so-called “seed money” for sales improvement measures.
In the second stage, after assessing the impact of improved
sales promotion, it is possible to use a certain interest rate.
For example 2 – 3% of revenue from each sold
product is allocated for sales promotion events.
This calculation method has several advantages:
increase of sold products results in an increase in the
budget for incentives, which in turn induces the manager
to the new activity. In addition, the cost of incentives
can be, to some extent, predicted and controlled in growth,
reduced or compensated.
After the introduction of incentives it would be more
appropriate to use budget methods of expenses calculation –
when in the beginning of the promotion campaign, its
goals, objectives and methods are discussed, and later
the required amount of funds for the proposed program
of sales promotion is set.
After deliberations on time and budget, it is advisable
to create an internal document (order), which would
clearly and unambiguously state basic principles of sales
stimulation programs improvement.
Estimated document structure should consist of a
statement whether sales promotion is needed or not –
increase in sales and profits, and the general manager's
activities in these issues.
Based on this document manager should write a
plan that includes existing and used measures and ways
of their improvement. Approximate plan of using the
incentives is designed in the Table 1.
For Enterprise, which already has some system of
incentives, destroying it and creating something new
would not be quite correct. This system works and global
changes would require considerable efforts and funds
which is not very effective in current conditions.
Therefore, it would be logical to pursue improvement
of sales promotion activities in two stages:
1. To optimize and improve existing incentive
measures and evaluate their impact after optimization.
2. To introduce new measures of stimulation and
evaluate the overall impact of all incentive improvements
on the activities of Enterprise.
Let’s consider the improvements that can be
implemented for existing incentive measures.
Discounts proposition is rather balanced so it is
particularly inappropriate to change them. Perhaps it
would be useful to introduce a more developed loyalty
program for existing customers, which will be based on
gradual accumulative decrease of price by a certain
percentage. For example, if the client has a good
reputation and cooperates with Enterprise more than three
years, then for each subsequent year, he may receive an
additional discount of 1% but not more than 3% overall.
Limit to 3% is introduced in order to avoid very large
discounts that can reduce the profitability of production.
These discounts are classified as so-called loyalty
programs to customers, purpose of which is encouraging
the client to ongoing cooperation with the Enterprise.
Commodity loan can be modified if it is possible to
reduce the number of days in it, but to introduce it to all
consumers using the rule of “matrix sales promotion”; in
other words to offer trade credit in a very rare occasion,
or to reduce the period of the loan by offering greater
percentage of discounts.
Further modifications of such incentive as test
samples may be: the creation of electronic and paper
presentations, promotional materials. Very effective
measure “virtual” test samples would be opening a
permanent Internet portal of the organization where it
would be comfortable to post pictures or images of
products that could be seen 24 hours a day from any
point of the globe. Creating a Web portal would
considerably speed up the products review by interested
consumers and would facilitate the discussion process
of orders, because both consumer and manager would
have an opportunity to look at the object of discussion.
Free shipping for customer means additional
spending for Enterprise because if the client is in Luhansk
and region or in neighboring regions (Donetsk, Kharkiv),
then a small amount of products would be more profitable
to deliver by own transport. In addition, it would
accelerate the delivery time. Therefore, purchasing
transport for the company usage may be called a
development of such incentive as free shipping.
Good evidence of Enterprise working on sales
improvement is decision to purchase small class
passenger van to transport small amounts of goods. This
measure may improve satisfaction of existing local
customers. This event was the first step in a program of
sales promotion improvement measures.
The program of replacing defected products does
not need any adjustments, but at the overall level of the
industry it is necessary to continue monitoring the quality
of products.
According to schedule these activities of sales
promotion improvement should be done in five or six
months.
Along with the improvement and upgrading of the
existing system of sales promotion, the company is also
N. P. Prischepa, A. V. Putintsev
142
Економічний вісник Донбасу № 4 (34), 2013
recommended to introduce some more means of
stimulation to strengthen competitive advantage.
First of all, after the improvement of existing
incentives, company should pay attention on stimulating
its own personnel.
This question is very important because, no matter
how effective the overall stimulation of the entire
distribution network is, without effective incentive of
own personnel company will never work in full force.
It is desirable to start personnel stimulation by
improving the reward system for commercial director
and sales manager. At the time of percentage payment,
management personnel, who are responsible for sales,
will be more interested to work with 100% efforts
because their wage will depend on the way they work.
Another way of sales promotion encouragement is paying
extra money, which will include bonuses for increase in
sales and additional bonuses for generating interesting
incentive ideas or rapid preparation of documents, and
so on. However, bonuses which may receive sales
manager should not be too high, as this may result in a
very active and aggressive business manner which the
Already in use Ways of improvement New Directed on who
Discounts - Encouraging more
regular customers
- Dynamic price
propositions
- Existing
customers
Commodity loan - Implementation to all
consumers - All customers
Samples - Creating electronic
presentations and the
Internet site of the
company
- Attracting new
customers
Free shipping - Purchase of own
vehicles - Existing
customers
Defect
replacement
- Further improvement
of the quality control
of products
- All customers
- -
- Implementation of
internal motivation
system
All personnel
- - - Presents All personnel
- -
- Commissions
from sales of
products
Management
personnel
- - - Participation in
exhibitions
Attracting new
customers
- - - Consecutive series
of incentives
Existing and
wholesale
customers
- -
- Extension of types
and channels of
promotion
All customers
- -
- Overall
optimization of all
incentives
All customers/
management
personnel / all
personnel
- -
- Creating
additional business
process
Environmental
safety of
consumers and
government
Table 1
Plan of sales promotion improvement in Enterprise
N. P. Prischepa, A. V. Putintsev
143
Економічний вісник Донбасу № 4 (34), 2013
client may not really like. Optimal bonus is 2 – 3% from
the additional sales.
But no matter how effective manager and commercial
director work, contribution to the increase in sales will
be small without encouragement of all staff. Therefore,
it is also advised to establish a general system of incentives
for sales personnel by the areas of work:
• Additional bonuses for good quality of products,
lead to decrease of percentage of defected products, and
strengthen Enterprise relationships with consumers who
will be satisfied with the quality of products;
• Presents in the end of year, which cost will
depend on results of sales promotion activities. For
example, if the production staff and management have
increased profits by additional measures, compared with
the same period of last year by 10 thousands UAH, it is
possible to introduce a gift for all employees by 10% of
the additional revenue that is 1000 UAH,
• Creation of personal incentive scheme for each
individual worker, which would be based on the individual
qualities of an employee. This system can be linked with
gift incentives, so each employee will get a gift of similar
cost based on his individual achievements.
All these measures should be aimed at making the
personnel believe that the quality of work of each
individual separately, firstly, leads to an increase in total
welfare of the enterprise, and secondly, some of well-
being of the company will be shared with him in the
form of prize or gift.
Also for boosting sales of industrial goods it would
be very helpful to take part in exhibitions and presentations
of goods. These measures are aimed primarily at attracting
new customers and improvement of awareness about the
company, the opportunity to establish new business
relationships and expand or strengthen old ones. In addition,
exhibitions and seminars are a good reason for free samples
and other promotional materials distribution to customers.
Also important issue for the improvement of sales
promotion is an optimization and improvement of
promotion process.
At the moment Enterprise consumer may make an
order in several ways:
• In person – in other words, client comes to the
office and discusses issues of lot size and delivery
methods.
• The same questions can be discussed through
the use of communications (phone).
• By fax – in other words, customer makes a
written request, which is transmitted by facsimile. After
receiving a request, manager communicates with the client
and specifies all the details.
These methods are highly effective, but in order to
implement a coherent and comprehensive system, it is
recommended to supplement them by two more:
• Order by e-mail – in other words, client places
an order using email at any convenient time.
• Order through the Internet site, which is
recommended to create. This way of ordering is very
convenient for the customer because it can be done in
minutes without leaving the office. It is advisable to open
the website of the online store or shop. This type of
communication is most convenient for the customer
because he can directly review the photos and technical
descriptions of products, order test samples and delivery
of chosen products in few minutes.
Implementation of all incentive programs with a
right start and in correct sequence is important for the
creation and improvement of sales promotion in the
company.
It is necessary to keep track of time and content
of all shares of sales promotion, especially when
it comes to short stocks. They must be used in a
strict sequence – one after another, because if the
company has several shares, the consumer may have
misunderstanding of terms and conditions for each, so
the overall effect of simultaneous use of all actions will
be decreased.
Implementation and improvement of incentives
should be conducted thoroughly and consistently, since
inconsistent activities can cause reduction of consumer
reaction to the product which is stimulated.
Thus, we can say that the introduction of additional
measures for stimulation will create a closed system of
marketing of the company (Fig. 1).
Fig. 1. Closed system of incentives at Enterprise
Stimulation of
own staff
Stimulation of all
consumers
New groups of consumers Wholesale consumers Retail consumers
Stimulation of
mediators
N. P. Prischepa, A. V. Putintsev
144
Економічний вісник Донбасу № 4 (34), 2013
The picture indicated measures that are already being
used; white labeled measures are recommended to use
for creation of integrated system.
As we can see, after building such system of
incentives, all categories of consumers can be encouraged
to purchase products at by least two kinds of incentives
for each. For example, new customers can be attracted
by presentations on the company Web-site and by taking
part in exhibitions.
An important advantage is also the integrity of the
system:
• Firstly, apart from the existing measures of
mainly short-term action, which are modified, long-term
incentives and loyalty programs that will keep customers
should be introduced;
• Secondly, this stimulation system involves all,
from management to production units, in incentive
measures.
For calculating the effectiveness of incentive
measures there are few methodic and all of them are
quite not perfect.
Typically, the effectiveness of implementation of
sales promotion improvement is measured in monetary
form and by terms of increasing profits.
Implementation of sales promotion improvement
should double this number at least twice since the program
provides a comprehensive approach. That is why
predicted income growth rates from implementing sale
promotion measures will reach to 120 – 150 thousand UAH
per year.
If the implementation starts in 2013 then this year
the cost of all the activities the company would wipe
25 – 26 thousand UAH. But since 2014, when the system
will work at its full “power”, company may get up to
170 thousand UAH of additional revenue per year, not
including the cost of the system. It should be noted
that the cost of sales promotion functioning will be
approximately 13 – 15 thousand UAH per year. So it is
possible to say that the implementation of the system of
sales promotion will bring company about 155 thousand
net income per year.
Before starting implementation of sales promotion
measures it is required to note necessity of following
certain requirements:
• Improvement of the following sales promotion
measures should be started in September 2013 and
implemented during 2014. The delay in time or delay of
implementation may modify the external environment that
will bring all the efforts to minimal effect or it will not
change anything at all;
• A program of sales promotion improvement, if
its implementation will be started, should operate until
2018 – that is four years. After this period it is necessary
to adjust the program according to the market situation
and general sales promotion situation for that period,
taking into consideration the factual data about expenses
and additional income from implementation of sales
promotion improvement program;
• It is important to have integrated approach during
implementation of incentive measures and control all
stages of implementation.
General improvements in incentive programs should
bring extra profits and attract new customers. These
improvements were designed taking into consideration
company’s specifics and its financial capabilities.
Implementation of such program will certainly
increase the competitiveness of the enterprise and improve
its profit.
However, if to try to create a coherent program of
incentives and sales promotion it becomes necessary to
introduce additional business process that can create a
closed set of incentives and sales promotion. The point
is to create a new unit that would be involved in the
processing of plastics waste not only for their own use,
but also for sale to external customers. Having examined
ways of incentives improvement for Enterprise, it should
be noted that the above measures are the so-called
“minimum program”, and in practice company should
adapt all the measures of improving sales activity with
the realities of the market environment; because in case
of straightforward implementation of these measures the
effect may even be negative. Therefore, measures of sales
promotion improvement should be implemented in such
a way that they will not damage the current activity and
reputation of the enterprise.
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process: A study of corporate planning and investment.
Boston: HBS Division of Research. 4. Davenport, T. H.,
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& Philips, Å. 1993. Organizational innovations in a long-
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term perspective: Legitimacy and souls-of-fire as critical
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Прищепа Н. П., Путінцев А. В. Удосконален-
ня маркетингових програм і стимулювання збуту
на підприємстві
Статтю присвячено одній з найбільш актуальних
проблем управлінської практики – проблемі удоско-
налення маркетингових програм і стимулювання збу-
ту на підприємстві. Особливу увагу приділено вирі-
шенню теоретичних і практичних питань стимулюван-
ня збуту на підприємстві. Визначені управлінські підхо-
ди до стимулювання збуту на підприємстві. Розгляда-
ються організаційні структури стимулювання збуту
та методи стимулювання збуту, що використовуються
на підприємстві. Надаються рекомендації, що стосу-
ються управлінських підходів до стимулювання збуту
на підприємстві.
Ключові слова: підприємство, бізнес, управ-
лінські рішення, маркетингові програми, методи сти-
мулювання збуту, стимулювання продажів.
Прищепа Н. П., Путинцев А. В. Совершен-
ствование маркетинговых программ и стимули-
рование сбыта на предприятии
Статья посвящена одной из самых актуальных
проблем практики управления – проблеме усовершен-
ствования маркетинговых программ и стимулирова-
ния сбыта на предприятии. Особенное внимание уде-
лено решению теоретических и практических проблем
стимулирования сбыта на предприятии. Определены
управленческие подходы к стимулированию сбыта на
предприятии. Рассмотрены организационные структу-
ры стимулирования сбыта и методы стимулирования
сбыта, использующиеся на предприятии. Даны реко-
мендации по управленческим подходам к стимулиро-
ванию сбыта на предприятии.
Ключевые слова: предприятие, бизнес, управлен-
ческие решения, маркетинговые программы, методы
стимулирования сбыта, стимулирование продаж.
Prischepa N. P., Putintsev A. V. Marketing
Programs Improvement and Sales Stimulation at the
Enterprise
The article deals with one of the most actual problem
of management practice – the problem of marketing
programs improvement and sales stimulation at the
enterprise. The article is devoted to solving theoretical
and practical issues of sales promotion at the enterprise.
The management approaches to stimulate sales at the
enterprise are determined. The organizational structures
of sales promotion and sales stimulation methods used at
the enterprise are considered. Recommendations
concerning management approaches to stimulate sales
at the enterprise are provided.
Key words: enterprise, business, management
decisions, marketing programs, sales stimulation methods,
sales promotion.
Received by the editors: 09.09.2013
and final form 04.12.2013
N. P. Prischepa, A. V. Putintsev
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