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Impact of Integrated Communication on Entrepreneurial Companies’ Financial Performance in a Developing Economy

This study explores the influence of integrated communication on the financial success of entrepreneurial companies in a developing economy, focusing on the Republic of Macedonia. Through a mix of quantitative and qualitative methods, it analyzes the relationship between communication practices and profitability.

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Impact of Integrated Communication on Entrepreneurial Companies’ Financial Performance in a Developing Economy

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  1. PhD Tamara Jovanov Marjanova, University “Goce Delcev - Shtip”, Republic of Macedonia IMPACT OF INTEGRATED COMMUNICATION ON ENTREPRENEURIAL COMPANIES’ FINANCIAL PERFORMANCE: A DEVELOPING ECONOMY PhD TAMARA JOVANOV MARJANOVA PhD ELENICA SOFIJANOVA PhD LJUPCO DAVCEV PhD RISTE TEMJANOVSKI Faculty of Economics, University “Goce Delcev”, Republic of Macedonia Istanbul, May 2015

  2. PhD Tamara Jovanov Marjanova, University “Goce Delcev - Shtip”, Republic of Macedonia • Inspiration: • Entrepreneurialcompaniesare the basisfornational and globaleconomicgrowth and, itisnecessaryto identify the factors of influenceontheirfinancialsuccess; • Distorted marketing and management practices of companies that operate in a transitional economy, specifically Republic of Macedonia. • Two main objectives: • To present the currentsituation, i.e. state of the art in the communicationprocesses of entrepreneurialcompaniesin emergingeconomy, • Show the relationship and impact of integratedcommunicationsonfinancialsuccess, specificallyprofitability. IMPACT OF INTEGRATED COMMUNICATION ON ENTREPRENEURIAL COMPANIES’ FINANCIAL PERFORMANCE: A DEVELOPING ECONOMY

  3. PhD Tamara Jovanov Marjanova, University “Goce Delcev - Shtip”, Republic of Macedonia INTRODUCTION IMPACT OF INTEGRATED COMMUNICATION ON ENTREPRENEURIAL COMPANIES’ FINANCIAL PERFORMANCE: A DEVELOPING ECONOMY

  4. PhD Tamara Jovanov Marjanova, University “Goce Delcev - Shtip”, Republic of Macedonia INTRODUCTION IMPACT OF INTEGRATED COMMUNICATION ON ENTREPRENEURIAL COMPANIES’ FINANCIAL PERFORMANCE: A DEVELOPING ECONOMY

  5. PhD Tamara Jovanov Marjanova, University “Goce Delcev - Shtip”, Republic of Macedonia LITERATURE REVIEW (Importance of MC) • Marketingcommunicationis"a processthatincludesall the informationthatistransferredbetweenpartieswhowant to engage in mutuallyadvantageousexchangeortransaction / relationship" (Yudelson, 1999, p.66). • The promotional messagecan have different, butalso complementarygoals: differentiate; remind and reassure; informoreducate; encourage to purchase(Kotler and Keller, 2009). • Thepositivelong-termeffect of promotionondifferentindicators of performance of enterprises is confirmed by many authors: • Positiveinfluenceonincreasingmarketsharein longterm(Srinivasanet.al., 2000). • Increased sale of productcategory(Nijset.al, 2001). • Directrelationbetween the level of promotion and level of profitmargins and revenues(Srinivasanet.al., 2004). • Theperceivedvalue and the sale of the brandis in a positive and directcorrelationwith, and it dependsonpromotion (Sriramet.al, 2007). IMPACT OF INTEGRATED COMMUNICATION ON ENTREPRENEURIAL COMPANIES’ FINANCIAL PERFORMANCE: A DEVELOPING ECONOMY

  6. PhD Tamara Jovanov Marjanova, University “Goce Delcev - Shtip”, Republic of Macedonia METHODOLOGY • This research is a part of an ongoing project, entitled “Strengthening the businesscapacity of womenentrepreneurs in Republic of Macedonia, as a developingcountry”. • Quantitative and qualitative methods. • Primary data: structured questionnaires about attitudes and current practices of marketing management (parametric statistics - nominal and interval scale), and a follow-up, semi-structured interview; • The analysisisbasedonparametric statistics and, theresponsesweremeasuredon a nominal and interval(Likert) scale. • Purposeful statistical sample of 38% (19) of the registered companies in the confectionery industry in Macedonia. • Data was analyzed with IBM SPSS19. • The conclusions are given on the base of descriptive and deductive statistics. • Profitability was measuredon a subjectivescale.  IMPACT OF INTEGRATED COMMUNICATION ON ENTREPRENEURIAL COMPANIES’ FINANCIAL PERFORMANCE: A DEVELOPING ECONOMY

  7. PhD Tamara Jovanov Marjanova, University “Goce Delcev - Shtip”, Republic of Macedonia HYPOTHESES • Entrepreneurial companies operating in a developing economy haveintensiveexternalcommunicationwithconsumers. • The mostpopularelement of promotionis economicpropaganda. • Themostpopularmedium of communicationis the television. • Implementation of combinedmethod of communication(integratedcommunication) directlyaffectsprofitability. • Usage ofcombination of differentmediaof communicationdirectlyaffectsprofitability. IMPACT OF INTEGRATED COMMUNICATION ON ENTREPRENEURIAL COMPANIES’ FINANCIAL PERFORMANCE: A DEVELOPING ECONOMY

  8. PhD Tamara Jovanov Marjanova, University “Goce Delcev - Shtip”, Republic of Macedonia RESULTS • Descriptive statistics • Thestatisticalsampleconsist of nearlyequalrepresentation of small (31.6%), medium (36.8%) and large (31.6%) companies(by number of employees); • The profitabilityof companies is rather poor, with most of the companies reporting profits that are poor (15,8%) to moderately poor (26,3%) (42.1% cumulatively); • In terms of budgetfor promotion,most of the companies (80%) allocatelessthan 5% of the revenuefromsale (annualamountfrom500 to 700 eurosforallmarketingactivities); • Mostof the entrepreneursdidnotdistinguishmarketingfrompromotionalstrategy. IMPACT OF INTEGRATED COMMUNICATION ON ENTREPRENEURIAL COMPANIES’ FINANCIAL PERFORMANCE: A DEVELOPING ECONOMY

  9. PhD Tamara Jovanov Marjanova, University “Goce Delcev - Shtip”, Republic of Macedonia • In terms of implementation of different elements of promotion, the analysis indicates that: • The companies mainly/often use sales promotion (4.58) and economic propaganda (3.37), or a combination of several elements of promotion(3.58) IMPACT OF INTEGRATED COMMUNICATION ON ENTREPRENEURIAL COMPANIES’ FINANCIAL PERFORMANCE: A DEVELOPING ECONOMY

  10. PhD Tamara Jovanov Marjanova, University “Goce Delcev - Shtip”, Republic of Macedonia • Aproposthe choice of mediaused forpromotion, wecansaythat: • There is prevalentuse of traditionalmassmedia; • The majority of companies (80%) advertiseonlocaltelevision; • Advertisingin print is used by 20% of the companies; • Around 20%have a proactivecommunicationthroughsocialnetworks; • About50% of themhavecreateda webpage; • Outdooradvertising (billboards) are used by 50% of the surveyedcompanies; • Othersources (posters, brochures, flyers)are rarelyusedornotused at all. IMPACT OF INTEGRATED COMMUNICATION ON ENTREPRENEURIAL COMPANIES’ FINANCIAL PERFORMANCE: A DEVELOPING ECONOMY

  11. PhD Tamara Jovanov Marjanova, University “Goce Delcev - Shtip”, Republic of Macedonia • Deductive statistics • Connection between different elements of promotion and profitability **. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed). IMPACT OF INTEGRATED COMMUNICATION ON ENTREPRENEURIAL COMPANIES’ FINANCIAL PERFORMANCE: A DEVELOPING ECONOMY

  12. PhD Tamara Jovanov Marjanova, University “Goce Delcev - Shtip”, Republic of Macedonia • Deductive statistics • Connection between different media for promotion and profitability **. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed). IMPACT OF INTEGRATED COMMUNICATION ON ENTREPRENEURIAL COMPANIES’ FINANCIAL PERFORMANCE: A DEVELOPING ECONOMY

  13. PhD Tamara Jovanov Marjanova, University “Goce Delcev - Shtip”, Republic of Macedonia • Regressionestimates Notes: R Square: 0.477, Adjusted R Square: 0.446, F=15.488, Sig. F=0.001, N = 19, *significant at 5%, * dependent variable: profitability Notes: R Square: 0.622, Adjusted R Square: 0.600, F=28.032, Sig. F=0.000,N=19, *significant at 5%, * dependent variable: profitability IMPACT OF INTEGRATED COMMUNICATION ON ENTREPRENEURIAL COMPANIES’ FINANCIAL PERFORMANCE: A DEVELOPING ECONOMY

  14. PhD Tamara Jovanov Marjanova, University “Goce Delcev - Shtip”, Republic of Macedonia CONCLUSION • In the case of transitional economy and the food industry within, theresearchhas confirmedthe directimpact of integratedcommunicationsoncompanies’ profitability. • Recommendedstepsto overcome the identifiedweaknesses: • Thegoals of a company,exceptsales,shouldalso be:communication, indication of market position; awareness; product trials; corporateimage. • Addressmore than one keytargetgroup. • Make a difference betweenfundsforpromotionalstrategy and overallmarketingactivities. • Use a combination of elements in the promotionalmix. Salespromotion and economicpropagandashouldhaveonlyoccasionaluse. • Besides traditionalnon-personalmedia (audiovisualmedia),companiesshouldalso includeinteractivemedia - socialnetworks and,use the websitefordirectcontact. IMPACT OF INTEGRATED COMMUNICATION ON ENTREPRENEURIAL COMPANIES’ FINANCIAL PERFORMANCE: A DEVELOPING ECONOMY

  15. PhD Tamara Jovanov Marjanova, University “Goce Delcev - Shtip”, Republic of Macedonia Thank you! Istanbul, May 2015

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