Evaluating the Relative Efficacy of the Marketing Function in the Construction Complex of Ukraine

Article excerpt

Abstract

The break up of the USSR pushed 15 constituent states into a transition phase from a regulated economy to a free market style one. Partially, this involved the wholesale importation of a variety of theories, strategies, and operational plans. This paper seeks to examine the efficiency of the use of the marketing communications mix in medium and large firms in the Ukraine's construction complex during the transition period to a market oriented economy. In order to do so, a survey of the most significant, privately owned firms in the industry was conducted. A variety of quantitative measures were employed, including econometric estimates and certain elasticity coefficients that allowed us to asses existing tendencies in the industry, identify problems, and to make tentative recommendations. (JEL C50, F20, L10)

Introduction

When democratic and economic freedom came to the forefront of Russia and its once buffer states of Central and Eastern Europe the collapse of Communism set in motion the most significant peacetime event of the 20th century [Kim DeDee and Frederikson, 2004; Peng, 2001]. The 1991 break up of the USSR pushed 15 constituent states into a sudden transition phase from a regulated economy to a free market style one. Transition from Communist-based economic planning to a market economy still entails restructuring at all levels [De La Camara, 1997; Newman, 2000; Kim DeDee and Frederikson, 2004]. In part, this involved the wholesale importation of a variety of theories, strategies, and operational plans, including newly minted marketing divisions.

Ukraine, as the second largest country in Europe after Russia, with its consumer market of slightly less than 50 million people and its opportune geographic location, benefits from many competitive strengths as compared to its Commonwealth of Independent States (CIS) neighbors [Baker and McKenzie, 2003]. During the past several years the liberalization of Ukraine's foreign trade rules has been an important component of the country's overall economic reform program [Baker and McKenzie, 2003]. In 2003, Ukrainian economy demonstrated one of the highest growth rates in the region [Segura et al., 2003]. Ukraine's substantial progress in tax reform and the WTO accession process coupled with a generally optimistic macroeconomic climate is sending positive signals to the international investment community [Segura et al. SigmaBleyzer, 2003]. Dr Daniel Thorniley, Senior Vice President, of Economist Corporate Network calls Ukraine, "one of the next carriages on the train of business development." [Brown, 2004]. For such reasons from all the countries of CIS block, which are presently going through the transition to a market oriented economy, we selected Ukraine for our research.

Business Development Trends

During the ongoing transition period to a market economy, the Ukraine is continuously attempting to create favorable conditions for the development of privately owned businesses. Presently, industrial manufacturing is concentrated in big monopolies, as a result of past government practices. Small and medium sized businesses are underdeveloped and manufacture an insignificant amount of industrial produce. With the new democratic government, the development of local product manufacturing and provision of services has become a primary focus. Firms seek investments for the development of a basic manufacturing capability to satisfy the continuously growing domestic demand and, then, to subsequently expand to other emerging markets in Eastern and Central Europe. It is at this stage that the firms recognize the significant role that marketing can play in reaching their goals of maximizing profits, as well as expanding their markets. It is here that they begin to actively use marketing tools in their strategies.

Marketing Research Methods Overview

Marketing research has a significant role to play in these processes aimed to determine the demand and create conditions to satisfy it. …