The application of the marketing concept in the croatian economy in transition

At the end of the second millennium Croatian society is troubled by substantial overall changes, which are, upon the conclusion of war and the devastation caused by it, oriented at creating qualitatively better social relations. In this context, the process of transition of Croatian enterprises faced by several obstacles of objective or subjective nature is taking place. This process of transition remains a difficult and challenging task. The application of marketing concept, which was proven elsewhere as an effective instrument of regulation of exchange relations, appears to be one way of overcoming particularly economic problems. Although the postulates of marketing concept had been gradually adopted in Croatian enterprises even before the transitional period it is only with greater liberalization of market relations that opportunities for its integrated application opened. The results of previously conducted research indicate that marketing concept in Croatia is not adequately affirmed. This research is directed at establishing the degree of marketing concept adoption and determining the factors of its adoption under the transitional conditions in Croatia on the sample of 120 most profitable Croatian enterprises which realize 51,43% of profit after tax, 46,97% of profit before tax and 22,04% of total revenue generated in the Croatian economy. Furthermore, they dispose of 49,90% of capital and reserves and employ 17,81% of total Croatian employees. Hypothesis of work states that enterprises realizing greater net profit tend to adopt marketing concept to greater extent since it is profit that serves as a measure of final result of delivering value to customer. The interpretation of research results is performed on the basis of 55% returned questionnaires, which were mailed out. In addition, the interpretation of research results includes 66 enterprises, which highly contribute to the Croatian economy according to all previously mentioned parameters. The analysis of marketing concept application in Croatian economy in transition combines two essential questions: determining the features of marketing concept application and determining factors that influence its adoption in Croatian transitional conditions. The results of empirical research essentially confirm the hypothesis of work, which states that more profitable enterprises tend to be more market oriented than the average of Croatian economy. The application of marketing concept is tested according to the features of its components: customer orientation, market focus, profitability and coordinated marketing. Functioning in the spirit of marketing concept sets decision making based on the relevant information about marketing environment as a priority precondition. According to the research results in 58% of all enterprises the basis for making important decisions is current, complete and precise market information, which is obtained in 66% of enterprises via focused market studies. Although structured and analytically processed system of information about marketing environment exists in only 18% of enterprises, it is believed that marketing function relatively successfully fulfills its role in knowing market events (32% of surveyed population) and that it successfully provides the decision makers by the necessary information. (48% of surveyed population) Critical strategic choice is the orientation towards those market segments whose requests are compatible with the resources available to the enterprise. In this context, 94% of enterprises distinguishes between major market segments by either experience-based method or by use of methodology procedure of market segmentation. These methods are most certainly found in 10% of enterprises that use the services of external consultants and 65% of them assesses and carefully picks target markets. The customer orientation, based on the established target market, is marked by a continuous innovation of offer consistent with the market demands, which is found at 67% of enterprises. The achievement of marketing goals includes completeness and consistency of the total effort. With respect to this, an opinion prevails by the (59%) of surveyed population that marketing activities tend to be only partially harmonized. Generally, the difficulties are result of turbulent environment, which makes it more difficult to set a strategic market determination. The implementation of integrated marketing includes appropriate coordination and cooperation with other functional areas. This implementation is assessed as mainly successful. The final goal of marketing concept implementation in an enterprise: the overall interdepartmental awareness that customer satisfaction needs to be set as a priority is present, according to the assessment of the surveyed population, in 82% of enterprises. After examining the sources of profit generation it was determined that majority of researched enterprises offers value to their customers, given that they are in 68% of cases achieved customer satisfaction and offer of good quality. However, they are considered innovative in only 23% of enterprises. Finally, marketing concept can be really applied or adopted only on the conceptual level. Finding that in as many as 59% of enterprises there is a marketing department, points to a conclusion that the researched enterprises have, at least formally, to a larger extent adopted marketing concept. This statement is consistent with the assessment of surveyed population that in 46% if enterprises marketing concept is adopted in full or to a greater extent. We believe this to be objective. Several external or internal factors may affect the degree of market orientation of enterprise. The following are considered to be the major external preventing factors of the market orientation of enterprise: economic conditions (77% of surveyed population), legal environment (68% of surveyed population) and the sources of capital (65% of surveyed population). On the other hand, technological development, if it is possible for an enterprise to keep pace with it, is considered to be a positive factor of market orientation of enterprise. Despite the unfavorable business conditions the real market orientation of an enterprise is contingent upon the attitudes and behavior of employees of the enterprise. Thereby, top management, interdepartmental dynamics and organizational system are considered to be the relevant groups of internal factors of marketing concept adoption. The research has shown that in 47% of enterprises top managers consider customer satisfaction to be the major objective of doing business. Furthermore, 38% of enterprises have the spirit of market orientation built into their mission statements and in 56% of surveyed enterprises top management clearly communicates the idea of market orientation. In 73% of enterprises top management is receptive of innovation, which is a precondition for the adjustment of offer to market demands. Croatian managers are aware of the role top management plays in the adoption of marketing concepts. Although there is no doubt that top manager´s contribution to the adoption of marketing concepts is significant it is still deemed inadequate. Given that they affect the flow of information, the group of formal and informal relationships between the organizational departments, which may be characterized by the conflict or cooperation, have extraordinary importance in implementation of market orientation. According to the research results in 45% of enterprises there are no tensions between individual departments, i.e. in 52% of enterprises organizational units are well connected via direct contacts. As far as the conflict within the marketing function itself is concerned, the finding about present organizational establishment (marketing function is unified in only 24% of enterprises) shows that market orientation of enterprise is still not adequately implemented in formal organization of marketing. Competency of marketing department has a significant impact on market orientation of enterprise. In this context, 50% of enterprises expressed satisfaction with the contribution of marketing function toward the achievement of their business goals. In 67% of enterprises marketing manager enjoys confidence of managers from other business functions. In addition, in 41% of enterprises the view prevails that marketing function, compared to its potential benefits, does not require excessively high investments. The research of interdepartmental dynamics suggests that Croatian enterprises should better organizationally establish marketing function, improve the relations between organizational departments and invest more resources in building marketing information system. With respect to the organizational system, it has been determined that in 41% of enterprises predominates centralized way of decision-making, which is suitable to the business conditions of economies in transition. Although this system has a negative effect on flow of information it contributes more to the flexibility and market prosperity even in the context of larger business systems. The employee motivation is greatly dependent upon the reward system. Only in 6% of enterprises, reward system is based on the achieved customer satisfaction. Based on the above stated results there appears to be a need for decentralizing those decisions which stimulate internal entrepreneurship and for the adoption of such reward system which will be based on long-term market performance criteria

Topic: Regional Development and Management Studies
Subfield: Economics and Econometrics
Field: Economics, Econometrics and Finance
Domain: Social Sciences