Essence, Role and Characteristics of the Product in the Enterprise’s Marketing Activities 

Bogdana Vyshnivska¹, Larysa Karpenko²

^1,2 Lecturers of Faculty of Agricultural Management, National University of Life and Environmental Sciences of Ukraine

ABSTRACT: The process of managing marketing activities at the enterprise is a complex process of planning and organizing the company’s marketing activities with the aim of meeting the needs of consumers of goods and services, as well as obtaining the greatest profit on this basis. The process of managing the marketing activities of a business entity can be defined as the analysis, planning, implementation and monitoring of the implementation of relevant marketing programs aimed at creating, maintaining and expanding profitable relations between the enterprise and its customers. The purpose of the research is to substantiate the theoretical and research practical aspects of managing the marketing activities of the enterprise in conditions of competition.

KEYWORDS: product portfolio, marketing activities, marketing expenses, competitors

 INTRODUCTION

In today’s competitive environment, a business entity must assess the level of its own competitiveness in order to function effectively and assess its prospects for the future. Having information about its own competitive position, the company gets the opportunity to determine the directions of development of existing advantages and develop its own strategy, adequate to the realities of modern market processes.

Marketing strategy is the basis of the company’s actions in specific market conditions, which determines how to use marketing to expand target markets and achieve effective results. The main goal of the marketing strategy is to align the company’s marketing goals with its capabilities, consumer requirements, using competitors’ weak positions and competitive advantages. Businesses that use strategic marketing effectively have great advantages in successfully adapting to the market. The study of ways to form effective marketing strategies for penetrating foreign markets in the new economic conditions of business and their improvement is quite relevant today.

The need to find new approaches to ensuring the competitive development of a modern enterprise causes an aggravation of the competitive environment. Unfortunately, the reason for the insufficient profitability of companies is often an ineffective marketing management system, therefore, in modern enterprises, one of the most effective tools for influencing the company’s results is the management of marketing activities. In this regard, the study of issues related to the improvement of the management of the marketing activities of enterprises and the development of the necessary methodological recommendations on this basis is quite relevant. And it is precisely on the effectiveness of the marketing activity of the enterprise that the volume of sales and profit depend.

RESEARCH METHODS

The methodological basis is general and special methods: the method of scientific abstraction – in order to generalize the conceptual foundations of the research; methods of analysis and synthesis – to study the structure of the system of analysis of the marketing activity of the enterprise; induction and deduction – to study approaches to determining the role of the product in the company’s activities; method of comparison – for the purpose of substantiating the costs of marketing and advertising at the enterprise; methods of grouping and systematization – in order to determine the role and characteristics of the product in the marketing activity of the enterprise; statistical methods – for the purpose of analyzing the company’s activity on the market of Ukraine.

DISCUSSION

The process of managing marketing activities at the enterprise is a complex process of planning and organizing the company’s marketing activities with the aim of meeting the needs of consumers of goods and services, as well as obtaining the greatest profit on this basis. The process of managing the marketing activities of a business entity can be defined as the analysis, planning, implementation and monitoring of the implementation of relevant marketing programs aimed at creating, maintaining and expanding profitable relations between the enterprise and its customers. (Karpenko L.F., Korotka A.A., 2021: 159-160)

The organization of the process of managing marketing activities at the enterprise has two main goals:

1. Fulfillment of tasks facing the enterprise;
2. Establishing and maintaining contact with consumers.

The main task of marketing management is to ensure the profitability of the business entity and achieve strong positions in the market among competitors. In other words, the tasks of managing marketing activities are reduced to ensuring a competent influence on the nature, level and time of demand in such a way that it contributes to the achievement of the company’s goals.

Management of marketing activities is carried out on two levels, which are inextricably linked to each other and are not used separately:

1. At the strategic level, the marketing strategy of the enterprise is determined, mediated by the long-term coordination of the organization’s capabilities with the market situation;
2. At the tactical level, marketing tactics are formed, focused on the formation of market demand for the company’s goods and services.

The main functions of managing the marketing activities of a business entity are strategic and tactical planning of marketing, its organization, as well as implementation of marketing control.

Organizations of other methods of evaluating marketing key performance indicators (KPI) or business metrics. Marketing Performance Measurement, Marketing Performance Management, Return on Investment (ROI), Return on Marketing Investment (ROMI), and Accountable Marketing (AM) are all metrics that a company offers to link marketing performance to an organization’s financial performance. (Vyshnivska B.V., 2021: 101-104)

By collecting and analyzing marketing metrics, brands can improve their marketing effectiveness in ways depicted in Figure 1.

(See in PDF File)

Fig. 1. Methods of increasing marketing efficiency

Despite the existence of various strategies for evaluating the effectiveness of marketing, there are some shortcomings in its planning and implementation, in particular: not realizing the expediency of systematic marketing research measures, the insufficient level of qualification of employees of the marketing department and conducting a purely formal analysis without using modern methods.

So by tracking and analyzing marketing performance metrics, brands can improve their competitiveness, assess their market strengths and weaknesses, and make calculated budget decisions within the marketing mix.

An example of a modern Ukrainian enterprise that can be used to analyze marketing activity is PrJSC “Obolon” – the leader and exporter №1 in the Ukrainian beer-non-alcoholic industry, a modern company that carries out production activities according to world business standards. Also, it is the flagship of the national economy (the company’s products are exported to 52 countries of the world), at the same time it is a socially responsible business that cares about consumers, its employees and the state as a whole.

The history of the corporation begins in 1974, when they began to choose a place for the construction of a brewery. The location of the brewery was determined by famous Czech brewers. The presence of large reserves of soft and crystal clear water became the main factor in choosing a place for construction. Today, water from the depths of the Jurassic horizon ensures the high quality of “Obolon” products. (https://obolon.ua)

Soon the company gave impetus to the creation of the largest corporation in Ukraine for the production of beer, low-alcohol and non-alcoholic drinks, and mineral water.

Only in 1986, the factory got its name in honor of one of the districts of Kyiv, and the word “obolon” itself comes from the times of Kyivan Rus – that was the name of the lowland meadows.

Built according to a Czech project, the brewery brewed beer that quickly gained wide popularity. After Ukraine gained independence, Obolon Corporation was the first to export hops to Europe and the USA. Beer under the trademark “Obolon” has become perceived as a traditional Ukrainian beer all over the world.

A quarter of a century later, “Obolon” became a world-famous brand.

Today, on five continents, people associate “Obolon” with Ukrainian beer №1.

Remaining a company exclusively with Ukrainian capital, “Obolon” established a new way of development of Ukrainian brewing. In 2017, the company changed its ownership form – previously it was an open joint-stock company, and now it is positioned as a private joint-stock company.

For 43 years, “Obolon” has been producing innovative, high-quality beverages, paying taxes honestly, supporting people in remote regions of the country, developing national culture and sports, and providing jobs for thousands of Ukrainians.

The strategy of PrJSC “Obolon” is aimed at meeting the requirements and expectations of customers in order to maintain a leading position in the market of beer and soft drinks. An integral part of this strategy is the correct forecasting of market development trends and constant improvement of the management system that meets the requirements of international standards.

In 1998, “Obolon”, the first in the Ukrainian food industry, received an ISO 9001 quality management system certificate and was the first to certify four management systems at once in 2008, which are still in effect today and are presented in Appendix A. Due to compliance with all requirements, the consumer can to be firmly confident in the quality and safety of the company’s products.

The company’s mission is to produce healthy and safe drinks for people with maximum efficiency, concern for society and responsibility for the environment. Sustainable development was and remains an integral part of the “Obolon” Corporation’s outlook, whose values are quality, professionalism, safety, efficiency and team spirit. Also, the company has a rather interesting and attractive philosophy of sustainable development – “GOOD DEEDS FOR LONG YEARS”, which provides for four main components of the sustainable development strategy of the “Obolon” corporation:

1. 1. Employees are the key asset of the corporation, which forms a special work culture of the company and distinguishes it from competitors.
2. 2. Ecology. Minimizing the impact of the company’s activities on the environment through the reuse of resources and energy-efficient technologies guarantees the eco-responsibility of every process of the corporation’s work.
3. 3. Local communitie Effective and mutually beneficial cooperation with communities in all territories of presence of the corporation’s enterprises is one of the key goals of the company “Obolon”.
4. 4. Culture and Social investment in the development of cultural and educational programs and sports, support of the originality of Ukrainian traditions is the social responsibility of the Obolon Corporation as the largest domestic producer of beverages.

Corporation “Obolon” always follows the principles of responsible and transparent business conduct. As an example of the openness and transparency of business conduct, they annually publish the News Bulletin of the Obolon Corporation. In the News Bulletin, you can see the map of the company’s product exports and the structure of the product portfolio, which is shown in Figure 2.

(See in PDF File)

Fig. 2. The structure of the product portfolio PrJSC “Obolon”

Despite the fact that beer production is the most priority area, the company plans to maintain its positions in all areas of activity.

In addition to beverages, “Obolon” produces industrial products – brewing malt, granulated beer grain and packaging tape from recycled PET containers.

Reading the Herald, you can also see that “Obolon” has 4 unique characteristics:

Uniqueness 1. The corporation works in the market in 5 areas at once:

1. 1. Beer market.
2. 2. Market of low-alcohol drin 3. Market of soft drinks.
3. 4. Mineral water market. 5. Cider m

Uniqueness 2. Prompt decision-making. Very quick management decision-making is a significant competitive advantage of the corporation. That is why it competes well with well-known multinational companies of the world.

Uniqueness 3. Availability of own experimental laboratory. The company has its own experimental laboratory, thanks to which a large number of samples of drinks for any taste are created. The development and adaptation of any recipe in a short period of time is a powerful intellectual resource, thanks to which thecorporation is a permanent participant in various international exhibitions, at which it presents its products with dignity. “Obolon” has received many awards and distinctions for its products.

Uniqueness 4. Presence of subsidiaries. Own production sites are subsidiaries that can solve current production issues by making balanced management decisions on the ground. This is how resources are optimized and the issue of product distribution across regions of the country is resolved.

PrJSC “Obolon” is one of the largest taxpayers in Ukraine. In general, the income of “Obolon” is 812 million dollars per year.

The scale of the company’s activities as the largest domestic producer of beverages and the largest Ukrainian exporter of beer covers the markets of different countries of the world with different cultural, political and economic conditions. Such conditions sometimes create barriers in the company’s work, but at the same time motivate to obtain the highest results.

All novelties successfully passed the market testing stage and were introduced into the regular assortment of the corporation, while the total market share of novelties in the main category of the company “Beer” was approximately 1.2% of the market share in 2021, which indicates the commercial success of innovations.

The concept of competitive advantages is understood as a system of success factors that provide the enterprise with sustainable development and a leading competitive position in the selected market segment. (Vynogradova O. V., 2019: 150-178)

Today, the maintenance of the company’s competitive advantages depends on a number of objective and subjective factors, namely: professional level and style of management, effective organizational structure and management of production quality. Obolon Corporation is a member of the Ukrainian Quality Association and a member of the Quality Leaders Club of Ukraine. “Obolon” created an integrated management system and certified four international standards.

We will analyze the competitiveness of “Obolon” according to Michael Porter’s classification.

The first competitive advantage of the corporation, based on the recognition of products and brands, is established, because for 42 years “Obolon” has been producing high-quality innovative drinks, employing thousands of Ukrainians, supporting people in remote regions and developing national culture and sports. The company is also included in the TOP-100 largest employers of Ukraine. The company hires workers directly in the cities and villages where its production facilities are based. In many regions, production structures of “Obolon” are budget-generating enterprises.

The second competitive advantage proves that “Obolon” has low production and sales costs, using the so-called “scale effect”. Obolon Corporation is the largest domestic producer of beverages. During 2021, more than 2 million liters of beverages were produced. If we take the Ukrainian beer market as 100%, then 28.6% (every 4th bottle) is the corporation’s products. The share of the corporation in export products is 78% (every 3rd bottle of export beer out of 4).

The third direction of achieving the company’s competitive advantages is also formed (combination of marketing advantages with cost reduction in a certain market segment), since the corporation’s production structure includes agricultural production, which is concentrated in the Khmelnytskyi region. The components of agricultural production are a research farm, a seed plant, an agricultural company and a malting plant with a capacity of 120,000 tons of malt per year, which allowed the corporation to provide itself with raw materials of the highest quality and supply them abroad. By independently growing ecologically clean raw materials for the production of products, the corporation has significant savings in production costs.

Marketing research shows that the main factor in choosing Obolon products is a low price, a wide range of products, and a wide selection of flavors. Most often, the place of purchase is small supermarkets and delicatessens. Sometimes customers shop in small local stores or small wholesale markets. The main consumer criteria are trust in the brand, which has been on the market for many years, quality, taste and the country in which the product is produced.

In general, the company’s marketing communications costs fluctuate every year, which can be seen in Figure 3, where the data for 2019-2021 are compared.

(See in PDF File)

Fig. 3. Advertising and marketing expenses of PrJSC “Obolon”

Low-alcohol drinks are alcoholic drinks with a volume content of ethyl alcohol from 2.8 to 9.5 percent. Low-alcohol beverages account for more than half of the global beverage market and have seen a steady upward trend over the past few years. Low-alcohol drinks are positioned and targeted at young people, because it is young people who respond quickly and actively to various innovations and novelties of the market, which allows novelties to penetrate the market. Low-alcohol beverages are gaining popularity around the world, but the market is dominated by the low-alcohol beer and cider category.

In the modern realities of the market of low-alcohol drinks for competitiveness is not enough simply to have a quality product in the assortment companies. The product may remain unnoticed by the end user under pressure various goods of the same quality. Manufacturers of alcoholic products began to carry out marketing activities to maintain them position in the market, as marketing communications intensify brand image and convince consumers to buy this product from a certain manufacturer.

Depending on the frequency of consumption of soft drinks, 4 groups of consumers are distinguished:

• active users – drink low-alcohol drinks (LAD) every day or several times a week;
• regular – drink LAD several times a month;
• episodic – drink LAD about once a month;
• casual consumers – drink LAD extremely rarely, perhaps a one-time consumption experie

In fact, the Ukrainian market of low-alcohol drinks appeared almost at the same time as the European one. For the Ukrainian market, it all started back in 1994, when Oleksandr Slobodian, the general director of the first Ukrainian joint-stock company “Obolon”, after one of his business trips abroad, tasted a cocktail in a bar and offered to prepare a ready-made version and sell it in bottles. At that time, it was still a completely unknown product for Ukraine.

The idea turned out to be successful, and a completely new market was created. So new that it did not fit into any of the classifications of the relevant state regulations. Until recently, this market was almost ignored by the relevant government services, so information about it was very scattered and unsystematized. Only when this market really interested the producers of strong alcoholic beverages, the state became interested in it.

Foreign companies successfully cooperate with us and willingly share the latest developments, as they consider the Ukrainian market in the field of low-alcohol beverages to be the most promising.

85% of LAD consumers are residents of large cities. LAD consumption in Ukraine is seasonal, with more sales occurring in spring and summer, mainly because most low-alcohol drinks are consumed on the street. In Ukraine, 10.2% of the population are regular consumers of low-alcohol drinks, most of them are women.

The Ukrainian market is represented by a wide variety of brands of low-alcohol drinks, but all of them are concentrated in the hands of three companies, which in physical terms own more than 90% of the entire market. The leaders among producers of low-alcohol drinks in Ukraine are PrJSC “Carlsberg Ukraine”, “Anheuser-Busch InBev Efes Ukraine”, PrJSC “Obolon”.

In order to assess the market situation for the Obolon Corporation, we developed a template for determining competitors, which clearly shows which companies are direct competitors, who are indirect competitors, who is a key player in the industry, and who is not (Table I).

Tab. I. A template for identifying competitors

Using the template, the following results were obtained (Figure 4):

1. “Anheuser-Busch InBev Efes Ukraine” and “Carlsberg Ukraine” turned out to be strong direct competitors.
2. “New products group” is a strong indirect competitor.
3. A weak direct competitor is “Persha privatna brovarnya”.
4. No weak indirect competitors were identified.

(See in PDF File)

Fig. 4. Template results to identify competitors

Today the popularity of low-alcohol cocktails is growing, which helps to reduce the demand for hard-alcohol beverages and reduce its consumption. The production of a microbrewerys isn’t a competitor or a counterbalance to large enterprises. Their comparison is simply incorrect. They have their own sector in the distribution business, ideal for small and medium production.

The war significantly changed the market. Among the reasons are the departure of a large number of the population outside of Ukraine, restrictions on the work of catering establishments and disruption of logistical flows.

From the end of February to the beginning of April, the sale of alcohol was prohibited. Due to hostilities, many productions stopped. The economic behaviour of Ukrainians has also changed. But sales of low-alcohol drinks suffered the least. First, weaker restrictions were imposed on low-alcohol drinks. Secondly, low-alcohol drinks become popular in the summer, and since May, the market has gradually begun to recover.

Despite all the difficulties, “Obolon” remains the indstry leader. Competitors of Carlsberg, the company “AB In Bev Efes Ukraine”, have not yet resumed the work of their breweries, because all factories of corporations are located in the cities closest to the front line.

Determination main vectors of enterprise development for improving its marketing activity of PrJSC “Obolon”

There are no clear marketing guidelines that should be followed to achieve the desired results. Most marketers are guided by intuition when making decisions or choosing tools to influence consumers.

Like any activity in the economy, marketing activity needs constant improvement. External market conditions, consumer preferences, production and communication technologies force us to systematically evaluate our actions, review marketing strategies and plans, and measure the results of our activities. Ignoring marketing principles in practical activities inevitably leads to the loss of the company’s competitive position and the loyalty of its consumers, and as a result – to a decrease in sales and profitability.

The company’s implementation of the marketing policy requires it to strictly adhere to the set goals, setting the limits of activity and defining the management’s behavior, directing the company’s activities in line with its marketing strategies.

An effective marketing policy allows companies to: self-regulate and control the external and internal situation; respond flexibly to changes in the internal and external environment; draw up a directive defining the boundaries of the company; supplement the marketing strategy, add the necessary flexibility and mobility to achieve the marketing strategic goal; to regulate the management activity and behavior of the company.

Universal for various types of enterprises, regardless of their forms of ownership and various factors affecting their activity, a scheme of actions for improving the marketing activities of enterprises is proposed, which includes the following stages:

1) focus on maximum satisfaction of consumer needs;

2) revision, clarification or definition of a new target consumer;

3) a deeper study of the consumer trend;

4) determination of specific marketing business processes in which a mistake was made, correction of this mistake and improvement of these business processes;

5) implementation of marketing innovations;

6) optimization of the communication process with the consumer;

7) creation of a more effective advertising campaign;

8) if the performed actions did not lead to the expected result, then it is necessary to develop a new marketing strategy.

Development of ways to improve marketing activity is an important factor for effective promotion of the company’s products on the market. Thanks to the use of unique production technologies and constant improvement of the assortment, the Obolon Corporation is today a widely popular producer of alcoholic and non-alcoholic beverages in Ukraine.

The main consumers of the enterprise are people under the age of 45. The place of residence does not affect consumption, the level of income is average. In general, soft drinks are consumed by young people aged 18 to 25, and alcoholic drinks are consumed by people aged 25 to 45.

Every year, the company’s marketers bring to the market new and high-quality products that are very popular among consumers. The plant’s marketers are not going to stop there. The analysis of the enterprise’s goals showed that the main areas of improvement of the enterprise’s marketing activities are: improvement of the product and price policy, increase in sales volumes, improvement of the promotion policy. (Darchuk V.G., 2019: 127-146)

Such an approach as improving the product involves improving the useful and quality characteristics of the product. It is possible to achieve this direction due to the introduction of new equipment, which will allow to process raw materials in a better quality and preserve their useful properties, which is quite realistic for “Obolon”. The quality of the beer is consistently high, because it is brewed from pure, high-quality water, which is obtained exclusively from a well.

CONCLUSION

Market success is the main criterion for evaluating the activities of domestic enterprises, and their market opportunities are determined by correctly developed and consistently implemented marketing activities. The main criterion for the effective use of marketing is the achievement of the goal set by the management.

Sales promotion makes it possible to improve the company’s image and increase profits. Thanks to this, a connection will be established with regular buyers of products, promotions and discounts will attract not only them, but also buyers of competitors.

The development and implementation of marketing policy is one of the most important and complex stages of the marketing process, which depends on the position of the enterprise in the target market, the dynamics of its own development, real personnel and production potential, existing and potential resources, production capabilities of the enterprise, as well as on market relations of behavior competitors, the specifics of products or services, etc., therefore, Obolon Corporation, despite strong competition, occupies a leading position in the market. Competently formed and implemented marketing policy allows you to increase sales efficiency, increase profits, and strengthen the company’s competitive position on the market.

The scale of PrJSC “Obolon” allows for charity events. This allows the company to attract influential partners and shareholders into the partnership. In addition, the company is socially responsible and cares about the environment, which is attractive to modern consumers.

The corporation is quite successful in the market, has quite highly qualified personnel. Since the company is at the stage of maturity and on the verge of starting to age. It is at this stage that it is important to introduce innovations, new products and expand market share to maintain the competitiveness of the corporation.

Constant communication with the outside world helps the corporation to see and understand modern world trends. This is a great opportunity to demonstrate to the world community that Ukraine also produces high-quality products that compete well with well-known brands on the world market.

Previously, would have suggested that “Obolon” try to take over the market of strong alcoholic beverages, but due to the russian-Ukrainian war, this will not be entirely appropriate at the moment, as people’s priorities have changed. It will take time for the market to recover and grow. For this, appropriate conditions must be created – the end of the war, the stabilization of the economy, the return of territories and people who temporarily left the country.

REFERENCES

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