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CRITERIA OF EFFECTIVE MARKETING

ANALYSIS OF CORPORATE MARKETING ACTIVITIES IN HUNGARY


Dr Szabolcs Nagy
Associate Professor
Faculty of Economics, University of Miskolc, Hungary
marvel@uni-miskolc.hu

Balance and Challenges 9th International Scientific Conference


15-16 October, 2015, Miskolc-Lillafred

Changing world, changing marketing


Rapid technological development ignited a paradigm shift in
marketing.

Digital became an increasingly important source of competitive

advantage. Leeflang, Verhoef, Dahlstrm, Freundt (2014)


The effect of user-generated content on shareholder value
(Tirunillai & Tellis, 2012)
How companies can analyze big data (Feit, Wang, Bradlow, & Fader,
2013).

Effectiveness is a buzzword.
There is a growing demand for quantifing business processes including
marketing activities.

Marketing metrics have been in the forefront of marketing renewal since


the Millennium (Paul W. Farris, Neil T. Bendle, Phillip E. Pfeifer, David J.
Reibstein, 2006).

Marketing in practice
While the theory of marketing is widely researched,
scientific papers on marketing in practice can rarely be
found in the literature.
Hungary
Although a conference dealing with new tendencies in
marketing in Hungary was organized in 2012, and the
conference proceedings was also published, but it contained
analyses from the academic point of view (Jzsa, 2012).

A strong need for an empirical investigation on


corporate marketing activities in Hungary to define the
criteria of effective marketing has been formulated by
the Hungarian Marketing Association (HMA).

Research methodology
Design and implementation of the survey research
by Marketing Institute, University of Miskolc.

In total

more than 1000 executives were approached.

Duration

between 1 and 29 October, 2014

Data cleaning

Respondents who did reply dont know to at least half of the questions in the
questionnaire have been excluded from further investigations.

Usable responses: 112


Response rate
rather low.

Although the sample is not representative in any respect, but it can be


used to explain tendencies.

Small enterprizes are dominant in the sample.

Type of the company


70,0%
62,3%
60,0%

50,0%

40,0%

30,0%

19,8%

20,0%

17,9%

10,0%

0,0%
Small Enterprises

Medium-sized enterprises

Large Enterprises

The distribution of firms by NUTS region is uneven with


companies operating in Central Hungary (69,7%)
overrepresented in the sample.
Distributions of firms by NUTS Regions
80,0%
69,7%

70,0%

60,0%

50,0%

40,0%

30,0%

20,0%

10,1%

9,2%

10,0%
3,7%

2,8%

1,8%

Southern Great Plain

Southern
Transdanubia

Northern Great Plain

2,8%

0,0%
Northern Hungary

Central Hungary

Central Transdanubia

Western
Transdanubia

4 of 5 firms have Hungarian owners, 20,6% of the companies is


owned by foreigners.
Ownership
90,0%
79,4%

80,0%
70,0%
60,0%
50,0%
40,0%
30,0%
20,6%
20,0%
10,0%
0,0%
Foreign

Hungarian

Most companies in the sample are independent.

Group membership status


80,0%
68,9%

70,0%

60,0%

50,0%

40,0%
31,1%
30,0%

20,0%

10,0%

0,0%
Part of a group

Independent

The revenue distribution is uneven.

Revenue
35,0%

30,0%

29,4%

28,4%

25,0%

20,0%
15,7%
15,0%
10,8%

9,8%

10,0%

5,9%
5,0%

0,0%
Less than 50M HUF

50-100 M HUF

100-250 M HUF

250-500 M HUF

500-1000 M HUF

More than 1000 M HUF

One of four companies has no formalized marketing activities in


house, which means they really do not care about marketing.
How are marketing activities organized in your firm?

There are no formalized marketing activities in house

25,9%

Only one or more persons are doing marketing, but not in an organized way

22,3%

Marketing is integrated into another corporate function (sales, communication,


trade)

17,9%

There is an independent marketing department, function or unit

33,9%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

Nearly one half of the companies considered marketing as an


important organizational function. 1 of 5 firms stated that
marketing is not really important.
How important is the marketing unit/department in your company?
not important
12%
extremly important
23%

low
10%

important
26%

average
29%

25% of the companies spend no money or a very low amount of


money on marketing.
How big is your marketing budget?

7%
7%

25%

34%
27%

zero or very low

lower than average

average

more than average

significant

Dominantly (typical of 18.2% of the firms) only one


percent of the total revenues was spent on marketing.
The average spending ratio is 6,8%.
How much percentage of your revenues do you spend on marketing?
20,0%
18,2%
18,0%
16,2%
16,0%
14,0%

13,1%

12,0%

11,1%
10,1%

10,0%
8,0%
6,0%
4,0%

4,0%

4,0%

4,0%

4,0%

4,0%

4,0%
2,0%

1,0%

1,0%

6%

7%

1,0%

1,0%

11%

12%

1,0%

1,0%

25%

28%

1,0%

0,0%
0%

1%

2%

3%

4%

5%

8%

10%

15%

20%

30%

60%

To what extent do the following activities belong to marketing?


(1 not at all ... 5 fully)
Production planning

2,5

Price management

3,28

Supporting R&D (product development)

3,28

Building CRM (Customer Relationship Management) system

3,36

CSR

3,41

Determining the product mix elements

3,42

Sales (trade)

3,47

Developing annual, operative marketing plans

3,51

Sponsorship

Online
marketing is
reported to be
the most
typical
marketing
activity.

3,75

Developing strategic market plans

3,76

Marketing-, market research, surveying

3,82

Relationship marketing

3,83

Sales Promotion

3,86

Segmentation & positioning

3,94

Launching new products and services

4,15

Collecting market data, analysis, database building

4,15

Managing events, fairs and trade-shows

4,33

Content marketing

4,69

Image building

4,72

Advertising

4,79

Brand building

4,87

Online marketing including managing the webpage of the

4,93

1,5

2,5

3,5

4,5

Providing the best possible products and services to customers


is the most typical marketing task in practice. Knowing and
understanding customer expectations and providing high
quality products/services are ranked as the Top 3 priorities.
How well do the following statements characterize your organization?
(1 not at all ... 5 a great deal)
2,8

Launching many new products and services

2,96

Working content-marketing strategy and program

3,05

Taking steps in the market to which the competitors are usually react
Concentrating on the marketing of current products to avoid high R&D costs

3,06

Measuring the value of each customer

3,07
3,12

Using information system to support marketing decisions

3,23

Analyzing market demand

3,26

Having significantly more customers than our competitors

3,54

Being able to predict changes in the relevant market(s)

3,7

Having products with significant competitive advantage

3,7

Measuring customer satisfaction


Having a flexible service system

3,96

Prompt reactions to customer demand

3,98
4,05

Keeping deadlines

4,09

High level of customer complaint management

4,16

Maintaining good customer relationships


Providing high quality products & services

4,33

Knowing and understanding customer expectations

4,35
4,54

Providing the best possible products & services to customers

1,5

2,5

3,5

4,5

The cooperation intensity of firms is found to be rather low.


Companies responded that they have the most intense
cooperation with customers.
How intense cooperation have you established with the following organizations ? 1= no or very low
intensity 5= very high intensity
1,86

Public or private research institutes

1,89

Organizations supporting innovation (innovation agencies, technology centres)

1,98

Territorial development organizations, local goverments


Central government entities, authorities, offices

2,31

Universities and high schools

2,32

Economic Development Organisation (chambers, business development foundations)

2,35

Competitors

2,35
2,6

Other companies within the group (if applicable)

2,92

Consulting service providers, advisers

2,95

Professional bodies, associations

3,65

Suppliers

Customers

1,5

2,5

3,5

4,5

Seven global vs local (Hungarian) trends in marketing


(global trends: dominant changes that affected 777 companies worldwide)
4,5

60%

strenght: 1= very weak ... 5=very strong

50%
3,5
3

40%

2,5
30%
2
1,5

20%

1
10%
0,5
0

0%

Increasing access to
data and insights

Greater ability to
reduce costs in
various business
processes thorough
technology

Emergence of new
business models
and new revenue
streams

Greater use of
analytical tools and
models in decision
making

3,55

3,45

3,44

3,34

2,94

25%

39%

25%

24%

24%

Ability to interact
with and/or serve
customers in a new
manner

Ability to reach
new customer
segments

Increasing pace of
change in the
marketplace

HU2014

4,12

3,71

GLOBAL2012

56%

30%

* Methodology and GLOBAL2012 data were adapted from Leeflang, Verhoef, Dahlstrm, Freundt (2014)

CSR is widely misunderstood by business people.

To what extent do you agree with this statement? "The main objective of CSR is to be responsible
for and to support..."
(1 not at all ... 5 a great deal)
5
4,5
4
3,5

3,26
3,07

2,99

2,86

2,86

suppliers

local communities and


settlements

2,5
2
1,5
1
customers

employees

the environment

The most significant correlation is between brand building and


revenues. Managing and participating in events, fairs and trade
show has also a significant positive impact on the revenues.
Significant correlations between marketing activities and the revenue
CSR

0,203

Sales-promotion

0,204

Marketing-research

0,245

Content marketing

0,249

Image building

0,31

Sponsorship

0,317

Advertising

0,327

Online marketing including managing the webpage of the company

0,343

Managing events, fairs and trade-shows

0,388

Brand-building (company & product)

0,403
0

0,05

0,1

0,15

0,2

0,25

0,3

0,35

0,4

0,45

There are significant correlations between revenues and other


marketing and demographics variables. As for demographics
variables, the type of the company (size of the firm) has the
highest impact on revenues.

Variable

Correlation strength

Flexible reaction to customer needs

0,317

Flexible services system

0,272

Good relationship with customers

0,242

Ability to forecast changes in the market

0,213

Type of the company

0,731

Ownership

-0,507

Group membership status

-0,432

Sales orientation

0,283

Conclusions
If marketing effectiveness is defined in terms of
financial results, effective companies in Hungary are
building strong brands,
frequent participants of fairs, commercial events & trade
shows
good at online marketing, advertising and sponsorship.

Image building, content marketing, extensive marketing


research, sales promotion and CSR are also typical
marketing activities of the best performers.
Marketing practice in Hungary shows a diverse picture.
There is still room for improvement for several
companies that are currently uninterested in
marketing.

Refrences
Feit, E. M., Wang, P., Bradlow, E. T., & Fader, P. S. (2013). Fusing aggregate and
disaggregate data with an application to multiplatform media consumption.
Journal of Marketing Research, 50(3), 348364.
Jzsa Lszl (ed.): A Marketing j tendencii - A Szchenyi Istvn Egyetem Kautz
Gyula Gazdasgtudomnyi Kar s a Regionlis- s Gazdasgtudomnyi Doktori
Iskola szervezsben megrendezsre kerl konferencia kiadvnya, Gyr, 2012,
Fszerkeszt: Prof. Dr. Jzsa Lszl. Szerkeszt: Konczosn Dr. Szombathelyi
Mrta s Dr. Huszka Pter, ISBN: 978-963-7175-75-6
Paul W. Farris, Neil T. Bendle, Phillip E. Pfeifer, David J. Reibstein: Marketing
Metrics: 50+ Metrics Every Executive Should Master, 2006, Wharton School
Publishing
Peter S.H. Leeflang , Peter C. Verhoef , Peter Dahlstrm , Tjark Freundt:
Challenges and solutions for marketing in a digital era, European Management
Journal, Volume 32, Issue 1, 2014, 1 - 12
Tirunillai, S., & Tellis, G. J. (2012). Does chatter really matter? Dynamics of
usergenerated content and stock performance. Marketing Science, 31(2), 198
215.

More info & other publications


LinkedIn
https://www.linkedin.com/pub/dr-szabolcs-nagyphd/33/91a/a26

Academia
https://uni-miskolc.academia.edu/SzabolcsNagyDrPhD

Researchgate
https://www.researchgate.net/profile/Szabolcs_Nagy3

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