1893 Ginevicius Disertacija WEB

VILNIUS GEDIMINAS TECHNICAL UNIVERSITY
Adomas GINEVIČIUS
INCREASING ECONOMIC
EFFECTIVENESS
OF MARKETING
DOCTORAL DISSERTATION
SOCIAL SCIENCES,
ECONOMICS (04S)
Vilnius 2011
Doctoral dissertation was prepared at Vilnius Gediminas Technical University in
2007–2011.
Scientific Supervisor
Prof Dr Habil Aleksandras Vytautas RUTKAUSKAS
(Vilnius Gediminas Technical University,
Social Sciences, Economics – 04S).
VGTU leidyklos TECHNIKA 1893-M mokslo literatūros knyga

http://leidykla.vgtu.lt
ISBN 978-9955-28-891-6
© VGTU leidykla TECHNIKA, 2011

© Adomas Ginevičius, 2011
Adomas888@gmail.com
VILNIAUS GEDIMINO TECHNIKOS UNIVERSITETAS
Adomas GINEVIČIUS
RINKODAROS EKONOMINIO
EFEKTYVUMO DIDINIMAS
DAKTARO DISERTACIJA
SOCIALINIAI MOKSLAI,
EKONOMIKA (04S)
Vilnius 2011
Disertacija rengta 2007–2011 metais Vilniaus Gedimino technikos universitete.
Mokslinis vadovas
Prof. habil. dr. Aleksandras Vytautas RUTKAUSKAS
(Vilniaus Gedimino technikos universitetas, socialiniai mokslai,
ekonomika – 04S).
Abstract
The dissertation investigates the issues of increasing economic effective-
ness of marketing by using quantitative multicriteria methods of evaluation,
marketing portfolio management theory and integrated marketing risk and effi-
ciency management theory.
The main goal of the thesis is to provide a model (frame) of integrating the
main factors determining the capability of marketing, whose sustainable devel-
opment and management can considerably increase economic effectiveness of
marketing.
The present research was aimed at comprehensive analysis of the newest
literature for answering the question about the state of the problems making the
aim of the thesis, their solutions and the adequacy of the methods and ap-
proaches used for the solutions of these problems. When the level of the problem
solution is determined and the adequacy of the applied methods is checked, the
tasks of the present work may be formulated as follows: to suggest a priority
scheme of investigating the interaction between the marketing and other busi-
ness departments, realizing it till pragmatic (practical) statements are provided;
to adapt the methods of expert evaluation to the solution of marketing problems,
supplementing them with new and modified commonly used methods, to achie-
ve the aims stated in the thesis; to provide a novel formulation of the marketing
portfolio concept, which could embrace both the concept of marketing assets and
the requirement for defining the metrics of adequate measuring of marketing and
cost efficiency; to develop a scheme of marketing risk analysis and management,
allowing for objective determination of the need for financial expenses to de-
crease various types of risks and for solving the problem of optimal distribution
of the available financial resources among various risks so that avoided loss
would be the highest.
The dissertation consists of an introduction, four chapters, conclusions and
suggestions, and list of references.
The general attributes are presented in the introduction: the investigated
problem, importance of the thesis, the goal and tasks of the thesis, importance of
scientific novelty, practical significance of achieved results.
The first chapter analyzes content and functions of marketing, history, the-
ory and definitions of marketing, as well as the origin and evolution of the mar-
keting mix (4P), criticisms towards traditional marketing mix and suggested
alternatives, interaction between marketing and sales and other departments. The
first chapter ends with topics of marketing department’s influence on company’s
performance and optimal marketing structure’s influence on costs’ effectiveness
and competitiveness of an enterprise.
V
In the second chapter in order to solve the problems concerned with im-
provement of firm’s marketing activities, expert and multicriteria evaluation
methods are used. A hierarchical structure of the criteria describing enterprise
marketing system is shaped and presented. After performing expert evaluation
and quantitative multicriteria assessment, the results of expert valuations of the
effect obtained by unitary capital investment in the analyzed marketing complex
are presented.
In the third chapter author analyzes marketing as a medium, in which inte-
grated analysis of marketing assets can be accomplished by evaluating its’ inter-
action between each other as well as interaction with external environment. A
concept of marketing portfolio is chosen as a core of systematic marketing
analysis.
The fourth chapter analyzes integrated management of marketing risk and
efficiency. A portfolio of risks is taken as the main systematic tool of marketing
risk management.
Author has published 14 scientific articles on the topic of the dissertation: 1
in the reviewed scientific periodical publications included in Web of Science
data base; 4 in the reviewed scientific periodical publications; 2 in publications
of international conferences, included in ISI Proceedings data base; 7 in the re-
viewed scientific periodical publications of international conferences.
VI
Reziumė
Disertacijoje nagrinėjama rinkodaros efektyvumo didinimo problema, pasi-
telkiant daugiakriterinius kiekybinius vertinimo metodus, rinkodaros portfelio
valdymo teoriją bei integruoto rinkodaros rizikos ir efektyvumo valdymo teoriją.
Pagrindinis disertacinio darbo tikslas – parengti modelį (angl. frame), su-
jungsiantį pagrindinius rinkodaros galią nulemiančius veiksnius, kurių suderinta
plėtra ir valdymas ženkliai padidintų rinkodarinės veiklos efektyvumą.
Šiuo tyrimu buvo siekiama visapusiškai išnagrinėti naujausią mokslinę
literatūrą ir atsakyti į klausimą, kokioje pažinimo būsenoje yra darbo tikslą su-
darančių problemų sprendiniai ir kiek adekvatūs yra šias problemas sprendžian-
tys metodai bei priemonės. Atskleidus problemų išsprendimo lygį ir patikrinus
naudojamų metodų tinkamumą, tiriamojo darbo uždavinius galima įvardinti taip:
pasiūlyti sąveikos tarp rinkodaros ir kitų verslo departamentų prioritetinio paži-
nimo schemą, realizuojant ją iki pragmatinių nuostatų parengimo; adaptuoti
ekspertinio vertinimo metodiką rinkodaros problemoms spręsti, papildant ją nau-
jais metodais ar naudojamų metodų modifikacijomis tam, kad pasiekti suformu-
luotus darbo tikslus; inovatyviai suformuluoti rinkodaros portfelio sampratą,
kurioje įsitvirtintų tiek rinkodaros aktyvų suvokimas, tiek ir būtinumas suformu-
luoti adekvačias rinkodaros rezultatyvumo matavimo bei sąnaudų efektyvumo
nustatymo metrikas; suformuluoti rinkodaros rizikos analizės ir valdymo
schemą, leidžiančią objektyviai pamatuoti finansinių sąnaudų poreikį skirtingų
atmainų rizikoms mažinti ir kartu spręsti optimizacinį turimų finansinių išteklių
paskirstymo tarp atskirų rizikų uždavinį, siekiant, kad išvengtos netekties mastai
būtų didžiausi.
Darbą sudaro įvadas, keturi skyriai, išvados ir pasiūlymai, literatūros sąra-
šas.
Įvadas pateikia bendrus disertacijos bruožus – tai tiriamojo darbo aktualu-
mas, tyrimo tikslai ir uždaviniai, naudoti tyrimo metodai, mokslinis darbo nau-
jumas, praktinė vertė.
Pirmojoje daktaro disertacijos dalyje analizuojamas rinkodaros turinys ir
funkcijos. Atlikęs rinkodaros funkcijų apžvalgą, autorius analizuoja rinkodaros
komplekso atsiradimo ir raidos istoriją, paplitimą. Taip pat šioje dalyje apžvel-
giami literatūroje minimi 4P – arba „tradicinio“ – komplekso trūkumai, netin-
kamumas tam tikrose situacijose bei literatūroje siūlomos rinkodaros komplekso
alternatyvos. Toliau autorius nagrinėja rinkodaros ir kitų padalinių sąveiką, o
daugiausiai – rinkodaros ir pardavimų bei produktų vystymo departamentų. Pir-
moji darbo dalis baigiama rinkodaros įtakos bendrovės rezultatams bei efekty-
vios rinkodaros kaštų struktūros įtakos konkurencingumui temomis.
VII
Antrojoje dalyje problemoms, susijusioms su įmonės rinkodarinės veiklos
gerinimu, spręsti pritaikomi ekspertiniai ir daugiakriterinio vertinimo metodai.
Suformuojama įmonės rinkodarinės veiklos hierarchinė rodiklių sistema ir, atli-
kus ekspertines apklausas bei daugiakriterinį kiekybinį vertinimą, gaunamas
procentinis lėšų, skirtų įmonės rinkodarinei veiklai gerinti, paskirstymas tarp
keturių jos komponentų.
Trečiojoje dalyje autorius analizuoja rinkodarą kaip mediją, kurioje galima
vykdyti integruotą rinkodaros aktyvų (angl. assets) analizę, įvertinant jų tar-
pusavio sąveiką, o taip pat sąveiką su išorine aplinka. Rinkodaros sisteminės
analizės šerdimi pasirenkama rinkodaros portfelio koncepcija kaip portfelio
teorinių universalių teiginių ir praktinio kryptingumo visuma. Parodoma, kaip
galima, nuosekliai pasinaudojant Modernaus portfelio teorijos ir jos modifikaci-
jos – adekvataus portfelio – galimybėmis, sukurti įrankį rinkodarai aktualioms
problemoms ir situacijoms nagrinėti. Pasinaudojus adekvataus portfelio tech-
nikos teikiamomis galimybėmis, sprendinys nusakomas trimis parametrais:
galimybės pelningumo dydžiu, tolydžio garantija ir rizikos klase, kuriai pri-
klauso ši galimybė.
Ketvirtojoje dalyje kaip rinkodaros rizikos sprendinių loginė diagrama pa-
rinkta M. H. Green‘o 1969 metais Harvard Business Review atspausdinta sche-
ma. Tai didžiulę įtaką rinkodaros rizikos valdymo sprendimų tobulinimui turėjęs
darbas ir dabar vėl tapęs ypatingai populiarus bei atitinkantis šiandienos kelia-
mus reikalavimus rizikai valdyti. Atsižvelgiant į rinkodaros rizikų įvairovę ir
rizikos priežasčių bei jos pasekmių recipientų nesutapimą, disertacijoje pasi-
renkama sava rinkodaros rizikos valdymo centro schemą. Pagrindiniu rinkodaros
rizikų valdymo sisteminiu įrankiu imamas rizikų portfelis. Juo remiantis rizikai
valdyti numatyti ištekliai skirstomi siekiant išvengti tikėtinų netekčių dėl visų į
rizikų portfelį įtrauktų rizikų sumos maksimumo, kuomet netektis yra matuo-
jama atsižvelgiant į netekties dydį, garantiją ir riziką.
Disertacijos tema paskelbta 14 mokslinių publikacijų: 1 straipsnis periodi-
niuose recenzuojamuose moksliniuose leidiniuose, įtrauktuose į Web of Science
duomenų bazę; 4 straipsniai periodiniuose recenzuojamuose moksliniuose lei-
diniuose; 2 straipsniai tarptautinių konferencijų leidiniuose, įtrauktuose į ISI
Proceedings duomenų bazę; 7 Straipsniai tarptautinių konferencijų recenzuoja-
muose leidiniuose.
VIII
Contents
INTRODUCTION ........................................................................................................... 1
The Investigated Problem........................................................................................... 1
Importance of the Thesis ............................................................................................ 2
The Goal of the Thesis ............................................................................................... 4
The Tasks of the Thesis.............................................................................................. 4
Research Methodology............................................................................................... 5
Importance of Scientific Novelty ............................................................................... 5
Practical Significance of Achieved Results................................................................ 6
Approval of the Results.............................................................................................. 6
Structure of the Dissertation....................................................................................... 6
1. OPTIMIZATION OF MARKETING STRUCTURE – A MEASURE OF
INCREASING COMPETITIVENESS OF ENTERPRISES...................................... 7
1.1. Dialectics of marketing potential and business needs ........................................ 7
1.1.1. Content and functions of marketing ......................................................... 7
1.1.2. Interaction between marketing and sales and product development
departments...................................................................................................... 17
1.2. New enterpreneurship challenges for marketing. Optimal marketing
structure – postulate of marketing costs’ effectiveness and competitiveness .. 29
1.2.1. Marketing department’s influence on company’s performance ............ 29
1.2.2. Optimal marketing structure – postulate of marketing costs’
effectiveness and competitiveness ................................................................... 32
IX
2. QUANTITATIVE EVALUATION OF ENTERPRISE MARKETING.................. 45
2.1. The main tasks and objectives of enterprise marketing evaluation ................. 45
2.2. Methods and ways of quantitative evaluation of enterprise marketing
strategies based on 4P model ........................................................................... 47
2.3. Quantitative multicriteria evaluation of enterprise marketing ......................... 48
2.3.1. Developing a set of criteria describing enterprise marketing................ 48
2.3.2. Multicriteria evaluation of enterprise marketing activities .................... 52
2.4. Determining the influence of enterprise marketing efficiency on
the results of its commercial activities ............................................................. 74
3. MARKETING PORTFOLIO MANAGEMENT AS CORE STRATEGY FOR
MARKETING RETURNS OPTIMIZATION ......................................................... 79
3.1. Marketing portfolio as a media for marketing assets interaction to
optimize marketing efficiency measured with adequate metric ....................... 80
3.2. Straight forward application of Modern Portfolio Theory ............................... 84
3.3. Adequate portfolio versus modern (Markowitz) investment portfolio............. 91
3.3.1. Adequate portfolio intended for the integration of profitability,
risk and reliability ............................................................................................ 91
3.3.2. The need to evaluate the reliability of possibilities................................ 93
3.3.3. The concept of iso-guarantee ................................................................. 93
3.3.4. Practical application of utility function to the set of possibilities
to find an optimal solution ............................................................................... 96
3.3.5. On the same problem with different view.............................................. 98
3.4. Optimization of the structure of marketing mix costs.................................... 100
3.4.1. The general concept of the problem..................................................... 100
3.4.2. Experimental exploitation of adequate portfolio.................................. 100
3.5. Marketing portfolio integrating different classes‘ marketing assets
return possibilities to maximize holder‘s utility............................................. 104
4. INTEGRATED MANAGEMENT OF MARKETING RISK AND
EFFICIENCY......................................................................................................... 107
4.1. Introduction.................................................................................................... 107
4.2. Marketing risk – where did it come from?..................................................... 108
4.3. A scheme of identification of marketing risk criteria, quantitative risk
evaluation and economic assessment ............................................................. 110
4.3.1. Marketing risks identification and management peculiarities............. 110
4.3.2. Marketing risks portfolio management ................................................ 113
4.4. Efficiency against or with risk ....................................................................... 118
Conclusions and Suggestions....................................................................................... 127
References.................................................................................................................... 131
The List of Scientific Author's Publications on the Subject of the Dissertation .......... 143
X
Turinys
ĮŽANGA .......................................................................................................................... 1
Tiriamoji problema..................................................................................................... 1
Darbo aktualumas....................................................................................................... 2
Darbo tikslas............................................................................................................... 4
Darbo uždaviniai ........................................................................................................ 4
Tyrimų metodika ........................................................................................................ 5
Darbo mokslinis naujumas ......................................................................................... 5
Darbo rezultatų praktinė reikšmė ............................................................................... 6
Darbo rezultatų aprobavimas...................................................................................... 6
Darbo struktūra........................................................................................................... 6
1. RINKODAROS STRUKTŪROS OPTIMIZAVIMAS – VERSLO
KONKURENCINGUMO DIDINIMO PRIEMONĖ ................................................. 7
1.1. Rinkodaros potencialo ir verslo poreikių dialektika .......................................... 7
1.1.1. Rinkodaros turinys ir funkcijos................................................................ 7
1.1.2. Rinkodaros ir pardavimų bei gamybos departamentų sąveika ............... 17
1.2. Nauji verslininkystės iššūkiai rinkodarai. Optimali rinkodaros struktūra –
rinkodaros sąnaudų efektyvumo ir konkurencingumo postulatas .................... 28
1.2.1. Rinkodaros departamento įtaka bendrovės rezultatams ......................... 28
1.2.2. Optimali rinkodaros struktūra – rinkodaros sąnaudų efektyvumo ir
konkurencingumo postulatas ........................................................................... 31
2. ĮMONĖS RINKODARINĖS VEIKLOS KIEKYBINIS VERTINIMAS................. 45

2.1. Pagrindiniai įmonių rinkodarinės veiklos kiekybinio vertinimo
tikslai ir uždaviniai........................................................................................... 45
2.2. Įmonių rinkodarinės veiklos kiekybinio įvertinimo galimybės ir
būdai remiantis 4P modeliu ............................................................................. 47
2.3. Daugiakriterinis įmonių rinkodarinės veiklos kiekybinis vertinimas............... 48
XI
2.3.1. Įmonės rinkodarinės veiklos rodiklių sistemos formavimas .................. 48
2.3.2. Įmonių rinkodarinės veiklos daugiakriterinis vertinimas ....................... 52
2.4. Įmonės rinkodarinės veiklos poveikio masto komerciniams rezultatams
nustatymas ....................................................................................................... 74
3. RINKODAROS PORTFELIO VALDYMAS KAIP PAGRINDINĖ
RINKODAROS PELNINGUMO OPTIMIZAVIMO STRATEGIJA .................... 79
3.1. Rinkodaros portfelis kaip rinkodaros aktyvų sąveikos priemonė, siekiant
optimizuoti rinkodaros efektyvumą, matuojant adekvačia metrika ................. 80
3.2. Paprastas moderniojo portfelio teorijos pritaikymas........................................ 84
3.3. Adekvatusis portfelis prieš modernųjį (Markowitzo) investavimo portfelį ..... 91
3.3.1. Adekvatusis portfelis, skirtas pelningumui, rizikai ir patikimumui
integruoti.......................................................................................................... 91
3.3.2. Poreikis įvertinti galimybių patikimumą................................................ 93
3.3.3. Izogarantės koncepcija........................................................................... 93
3.3.4. Praktinis naudingumo funkcijos pritaikymas galimybių rinkiniui,
siekiant optimalaus sprendimo........................................................................ 96
3.3.5. Apie tą pačią problemą kitu požiūriu ..................................................... 98
3.4. Rinkodaros komplekso sąnaudų struktūros optimizavimas ........................... 100
3.4.1. Bendras problemos suvokimas............................................................. 100
3.4.2. Eksperimentinis adekvačiojo portfelio panaudojimas.......................... 100
3.5. Rinkodaros portfelio, apjungiančio skirtingų klasių rinkodaros aktyvus,
grąžos galimybės maksimizuojant savininko naudą ...................................... 104
4. INTEGRUOTAS RINKODAROS RIZIKOS IR EFEKTYVUMO VALDYMAS 107
4.1. Įžanga............................................................................................................. 107
4.2. Rinkodaros rizika – iš kur ji atsirado? ........................................................... 108
4.3. Rinkodaros rizikos kriterijų, kiekybinio ir ekonominio rizikos
įvertinimo schema ......................................................................................... 110
4.3.1. Rinkodaros rizikos identifikavimo ir valdymo ypatumai..................... 110
4.3.2. Rinkodaros rizikos portfelio valdymas ................................................ 113
4.4. Efektyvumas – prieš ar kartu su rizika? ......................................................... 118
Išvados ir pasiūlymai ................................................................................................... 127
Literatūros sąrašas........................................................................................................ 131
Mokslinių publikacijų disertacijos tema sąrašas .......................................................... 143
XII
Introduction
The Investigated Problem

Marketing which is often entitled as the wings of business, reacts to globaliza-
tion and processes of comprehensive progress of science and technology sensi-
tively. The potential provided by these processes is not easily achievable though.
On the other hand the potential which becomes available to a specific business is
also accessible to competitors. And the competition becomes more universal and
fierce. Analogical products or substitutes of products and services emerge which
are being produces with lower costs.
When analyzing the necessity to take globalization and progress of science
and technology into account, it has to be stated that marketing itself not only has
to become global and filled with elements of scientific advance but also to take
the standard of economically effective activity. The goals and tasks of disserta-
tion address this issue.
1
2 INTRODUCTION
Importance of the Thesis

Usually a business company can remain competitive in a market only by assur-
ing effectiveness of all usable resources and singleness of efforts. This primarily
involves activities of marketing as it demands more and more resources and di-
verse character efforts.
The importance of marketing in terms of company’s competitiveness has
been unquestionable for many years. There are numerous articles, books, inter-
net sites, blogs saying about how important marketing is in order to be success-
ful. There are also many practical cases that indicate this opinion. However,
despite this commonly spread opinion, chief executives and their CFOs want
every investment dollar/euro to go toward growth – and they should be. Market-
ing is no exception. As global competition intensifies, marketing becomes one of
the few factors that distinguishes products or services from competitors’, thus
marketers are willing to increase spending on marketing. On the other hand,
chief executives are far less tolerant on spending that is hard to quantify. In fact,
CEOs are now acutely aware that their marketing investments are perhaps the
last significant elements appearing on financial statements that lack clear links to
revenues and profits. CFOs are in lockstep with CEOs, calling for results from
the last few quarters’ investments and limiting future spending if they do not like
what they see. Actually, it is common for most C-suite executives to view mar-
keting as a sinkhole full of investments with undocumented returns.
Marketers are in no position to argue. They do not deny that competitive
pressures are more intense and profit margins remain vulnerable. Yet they are
compelled to support faster and more frequent new product introductions – an-
other outcome of fierce global competition. They have to do so with hands tied
behind their backs, because they lack the revenue of investment data to make a
compelling case for suitable budgets. And today, the corporate marketing de-
partment no longer has the influence it once enjoyed (Michael D’Esopo, Eric
Almquist, 2007).
Financial pressures, a shift in channel power, and marketing’s inability to
document its contribution to business results have led to reductions in marketing
spending and influence, and transfer of funds and responsibilities to the field
sales organization. The dangers in the disintegration of the marketing function –
a short-term focus that hurts product innovation, weakens brands, and impairs
companies’ abilities to identify and reach future customers and markets (Web-
ster et al., 2005).
Leading companies are beginning to see what they are getting for their
marketing dollars/euros. However, marketers face an uphill struggle. The extent
INTRODUCTION 3
of the struggle can be seen in various surveys. According to the 2005 Marketing
ROI and Measurement Benchmark (Lenskold, 2005), only one in five marketers
uses marketing ROI, net present value, or another profitability measure for at
least some of their marketing work. More than half admit that their ability to
measure financial returns is “a long way from where it could be”. The situation
hasn’t changed much during the last half of a decade.
The need of measuring ROI of marketing is constantly growing. Especially
nowadays, as entrepreneurs become more comfortable with including social
networks and blogs as part of their integrated marketing communications, they
have naturally turned their attention to questions regarding the return on invest-
ment of social media. Internet marketing and online retailing conferences now
devote attention to ROI issues, and managers are asking themselves every day,
“What’s the ROI of [substitute social media application here]?” Blog posts,
white papers and case studies prepared by social media gurus, consultants and
industry analysts abound, yet the answer remains largely unsatisfying. That is
not good, especially when the CEO and CFO are demanding evidence of poten-
tial ROI before allocating dollars to marketing efforts (Hoffman and Fodor,
2010).
There is no shortage of opinions about how to determine marketing ROI.
First, there is the question of which ROI numbers to use. For example, one poll
found that marketers have almost 30 ways to define leads. There are few com-
pany-wide standards, let alone industry standards. It is not likely that any metrics
that marketing may possess will be in line with the CEO’s agenda. At the same
time, the proliferation of customer ‘‘touch points’’ increases the number of data
elements that must be monitored. In turn, the more data that is collected, the
greater are management’s expectations of being able to derive value from it.
There is also a tendency to track data only by individual product lines or across a
function, but not across several functions in the company.
There is also the perennial mismatch between long-term marketing goals
and shareholders’ short-term payback targets. It is very typical for the marketing
programs whose returns are more easily quantified to enter into a vicious cycle
of ever-increasing funding, regardless of their business impact. Recently,
though, some companies have found ways to isolate and quantify the factors that
influence customer behavior. They are deploying new marketing science tech-
niques to yield fact-based analyses that make it easier for managers to decide
where to invest.
These techniques fit into a hierarchical framework where the top levels fo-
cus on how well marketing investments stack up against other business invest-
ments. The next level down allows marketers to gauge one marketing investment
against another within well-defined categories. For example, they might com-
pare the ROI of direct mail versus telemarketing, or a corporate brand-building
4 INTRODUCTION
campaign versus several regional product advertisements. The levels enable

crisp decisions about specific program trade-offs: a 60-second ad spot on local
radio versus a 30-second one, for instance.
Keeping in mind what is mentioned above, it is clear that marketing activity
has to solve many extremely complicated problems varying from innovative
strategies of marketing departments’ activities and interaction with other de-
partments of the specific business, to valid methodology of measuring marketing
results. The complexity of these problems is being increased by progress of sci-
ence (especially in the field of IT), achievements of practice and processes of
globalization, which adjust the concept of space and time when organizing busi-
ness and spreading it’s results. On the other hand, this also provides high poten-
tial and possibilities.
However, the use of the suggested possibilities demands exceptional effec-
tiveness of marketing. This involves all aspects of marketing and the biggest
load falls on marketing science. Among the above mentioned problems the ne-
cessity of expert evaluation in order to provide the required information stands
out. Unlike other elements of business which possess the information regarding
evaluation of costs and results’ interplay, provided by financial and management
accounting, marketing needs to invoke expert evaluation in order to set devel-
opment priorities and even principles. When using methods of processing the
expert information, the latter one can serve historical experience and results gen-
erated by special scientific research.
The Goal of the Thesis

The main aim of the thesis is to provide a model (frame) of integrating the main
factors determining the capability of marketing, whose sustainable development
and management can considerably increase economic effectiveness of market-
ing.
The Tasks of the Thesis

The present research was aimed at comprehensive analysis of the newest litera-
ture for answering the question about the state of the problems making the aim
of the thesis, their solutions and the adequacy of the methods and approaches
used for the solutions of these problems. When the level of the problem solution
is determined and the adequacy of the applied methods is checked, the tasks of
the present work may be formulated as follows:
INTRODUCTION 5
− to suggest a priority scheme of investigating the interaction between the

marketing and other business departments, realizing it till pragmatic
(practical) statements are provided;
− to adapt the methods of expert evaluation to the solution of marketing
problems, supplementing them with new and modified commonly used
methods, to achieve the aims stated in the thesis;
− to provide a novel formulation of the marketing portfolio concept, which
could embrace both the concept of marketing assets and the requirement
for defining the metrics of adequate measuring of marketing and cost ef-
ficiency;
− to develop a scheme of marketing risk analysis and management, allow-
ing for objective determination of the need for financial expenses to de-
crease various types of risks and for solving the problem of optimal
distribution of the available financial resources among various risks so
that avoided loss would be the highest.
Research Methodology
The methods of mathematical statistics, multicriteria and expert evaluation, sta-
tistical modeling and other are used in the dissertation.
Importance of Scientific Novelty

The scientific novelty of the dissertation can be clearly observed if the results
obtained in the research are considered from the perspective of the new system
of developing marketing capabilities suggested in the work. This system consists
of the following components suggested and realized in the dissertation:
− a schematic presentation of the conceptual and functional interaction be-
tween the marketing and other business departments, taking into account
rapidly changing environment;
− identification of the metrics of the effectiveness of marketing and re-
sources;
− the development of the attributes of the system character of marketing
by choosing the concepts of an innovative marketing portfolio and mar-
keting assets, and making and implementing the decisions, assuming
that the considered events and processes are of the stochastic nature.
6 INTRODUCTION
The principles suggested in the thesis, which underlie the realization of the
above-mentioned system, may be considered the examples of the scientific no-
velty of the work. They allow the author:
− to adapt and suggest innovative methods of generating expert data while
determining the priorities of marketing activities and storing the required
data for making and implementing marketing decisions, strategy;
− to apply the concept and technique of a novel and adequate portfolio to
the analysis and management of complicated marketing situations;
− to develop and implement the methods and techniques required for ma-
naging marketing risks portfolio.
Practical Significance of Achieved Results

The aims and tasks stated in the thesis make the solution of the top priority prob-
lems described in the literature on the theoretical and practical topics, which
require special attention. The formulation of these problems as the tasks of the
thesis and their realization by selecting or creating the required theoretical data
and methods of practical solutions allows us to think that the value of the thesis
will be observed both in the area of the suggested theoretical solutions and in the
obtained practical results. The latter include: a fruitful concept of a marketing
portfolio suggested and used in the thesis, expert estimates oriented to the solu-
tion of marketing problems, principles of marketing risk management, etc.
Approval of the Results

Author has published 14 scientific articles on the topic of the dissertation: 1 in
the reviewed scientific periodical publications included in Web of Science data
base; 4 in the reviewed scientific periodical publications; 2 in publications of
international conferences, included in ISI Proceedings data base; 7 in the re-
viewed scientific periodical publications of international conferences.
Structure of the Dissertation

The dissertation consists of an introduction, four chapters, conclusions and sug-
gestions, and list of references. The total scope of dissertation is 158 pages,
29 figures, 23 tables, 32 numbered formulas and 161 references.
1
Optimization of Marketing Structure –
A Measure of Increasing
Competitiveness of Enterprises
1.1. Dialectics of marketing potential and business

needs
1.1.1. Content and functions of marketing

Developments on the commercial landscape and changes in consumer and or-
ganizational attitudes over the last five decades, have frequently encouraged
marketing thinkers to explore new theoretical approaches addressing specific
marketing problems and expanding the scope of the marketing management the-
ory. The most important landmarks of the evolution of the marketing manage-
ment theory include “the broadening of the marketing concept during the 70’s,
the emphasis on the exchange transaction in the 80’s, the development of the
Relationship Marketing and Total Quality Management in the 90’s” (Yudelson,
1999) and last but not least the emergence of Information and Communication
Technologies as major actors of the 21st century Marketing (Möller, 2006).
7
8 1. OPTIMIZATION OF MARKETING STRUCTURE ...
Looking broadly at the marketing literature and practice, it appears that dur-
ing the last several decades there has been a movement toward thinking of mar-
keting less as a function and more as a set of value and processes that all
functions participate in implementing. In this view, marketing becomes every-
body’s job, which potentially diffuses the marketing function’s role but in-
creases marketing’s influence (Greyser, 1997). The empirical literature on
market orientation is the most profound indication of this change in perspective.
This change is also reflected in mutating of definitions of marketing from time
to time. So, what is marketing, its content and functions?
There are thousands of definitions of marketing. The most accepted is the
one that adopted by the American Marketing Association (n.d.): “Marketing is
the activity, set of institutions, and processes for creating, communicating, deliv-
ering, and exchanging offerings that have value for customers, clients, partners,
and society at large” (Approved October 2007). In accordance with its bylaws,
American Marketing Association has established a policy for a periodic review
of the definition of marketing and update the Associations view of its field. Pre-
vious definition (est. in 2004): “Marketing is an organizational function and a set
of processes for creating, communicating, and delivering value to customers and
for managing customer relationships in ways that benefit the organization and its
stakeholders”.
The new definition takes into account input from a broad cross-section of
the Association membership. As we can see, marketing now is described as an
'activity' and no longer regarded as a 'function'. The definition positions market-
ing as a broader activity in a company/organization, and not just a department.
The new definition also positions marketing as providing long term value rather
than narrowly as an exchange of money (short-term) for the benefit of the share-
holder/organization.
The Chartered Institute of Marketing (n.d.) defines marketing as "the man-
agement process responsible for identifying, anticipating and satisfying cus-
tomer requirements profitably". A different concept is the value-based marketing
which states the role of marketing to contribute to increasing shareholder value.
In this context, marketing is defined as "the management process that seeks to
maximize returns to shareholders by developing relationships with valued cus-
tomers and creating a competitive advantage" (Paliwoda, Ryans, 2008).
Philip Kotler gives another definition of marketing: “Marketing is a social
and managerial process by which individuals and groups obtain what they need
and want through creating and exchanging products and value with others”
(P.Kotler et al., 2008). A previous definition the Kotler gave (1980): “Marketing
is the human activity directed at satisfying human needs and wants through an
exchange process”.
1. OPTIMIZATION OF MARKETING STRUCTURE ... 9
Long ago Peter Drucker, the father of business consulting and marketing
guru, made a very profound observation that reveals importance and meaning of
marketing: “Because the purpose of business is to create a customer, the busi-
ness enterprise has two – and only two – basic functions: marketing and innova-
tion. Marketing and innovation produce results; all the rest are costs. Marketing
is the distinguishing, unique function of the business” (J.Trout, 2006). He also
noted: “The aim of marketing is to know and understand the customer so well
the product or service fits him and sells itself”; “The aim of marketing is to
make selling unnecessary”.
There are hundreds of other definitions of marketing and all of them are
true in a certain way. Here are just some of them:
− “Marketing is the process of planning and executing the conception,
pricing, promotion, and distribution of ideas, goods, and services to cre-
ate exchanges that satisfy individual and organizational goals” (previous
definition adopted by the American Marketing Association, n.d.).
− “The right product, in the right place, at the right time, and at the right
price”. “Marketing is the study of exchange processes especially those
associated with the provision of goods and services” (D.Adcock, 2001).
− “Marketing is essentially about marshalling the resources of an organi-
zation so that they meet the changing needs of the customer on whom
the organization depends” (Palmer, 2000).
− “Marketing is the process whereby society, to supply its consumption
needs, evolves distributive systems composed of participants, who, in-
teracting under constraints – technical (economic) and ethical (social) –
create the transactions or flows which resolve market separations and re-
sult in exchange and consumption” (R. Bartels, 1968).
− “Marketing is not only much broader than selling, it is not a specialized
activity at all It encompasses the entire business. It is the whole business
seen from the point of view of the final result, that is, from the cus-
tomer’s point of view. Concern and responsibility for marketing must
therefore permeate all areas of the enterprise” (Drucker, 1954).
− “The achievement of corporate goals through meeting and exceeding
customer needs better than the competition” (D. Jobber, 2010).
− “The process of developing, promoting and distributing products in or-
der to satisfy customer needs/wants” (R. Johnston, 2011).
After reading at least a hundred of various marketing definitions author of

this paper came to a conclusion that there are at least two things (or main func-
tions of marketing) that all of them have in common:
− satisfying customer needs;

− satisfying organizational goals (usually – maximizing returns to share-
holders).
These two functions are, actually, the primary objectives of any business
company. Thus, looking broadly and philosophically, in author’s opinion, mar-
keting can be described as some kind of substance that “lives” within a com-
pany, is penetrated throughout the functions and departments, and seeks to reach
the paramount goals of organization.
Answering a question what mission of marketing is, P. Kotler stated (Kotler
marketing group, 2010) that at least three different answers have been given to
this question. The earliest answer was that the mission of marketing is to sell
any and all of the company’s products to anyone and everyone. A second, more
sophisticated answer is that the mission of marketing is to create products that
satisfy the unmet needs of target markets. A third, more philosophical answer, is
that the mission of marketing is to raise the material standard of living through-
out the world and the quality of life. Marketing’s role is to sense the unfulfilled
needs of people and create new and attractive solutions.
From a narrower, primitive perspective different sources give different
number of marketing functions, usually they are (Mccormack, n.d.; Kintu A.B.,
2007; business-understood.com, n.d.):
− product/service management – the process of maintaining and building a
product/service for the consumer and these decisions are based on mar-
ket research and economic conditions;
− buying – people have the opportunity to buy products that they want;
− selling – producers function within a free market to sell products to con-
sumers;
− pricing – setting the price of the products, services;
− promotion/advertising – this function is crucial to a product's success in
the market. Efforts to try and convince consumers through communica-
tion to buy the product are generally called promotions;
− distribution – products must be physically relocated to the locations
where consumers can buy them. This is a very important function.
Transportation includes rail road, ship, airplane, truck, and telecommu-
nications for non-tangible products such as market information;
− planning – after objectively determining the marketing objectives, the
important function of the marketing management is to plan how to
achieve those objectives. This includes sales forecast, marketing pro-
grammes formulation, marketing strategies;
− financing – banks and other financial institutions provide money for the
production and marketing of products;
− risk taking – insurance companies provide coverage to protect producers
and marketers from loss due to fire, theft, or natural disasters;
− storage – products must be stored and protect ed until they are needed.
This function is especially important for perishable products such as
fruits and vegetables;
− processing – processing involves turning a raw product, like wheat, into
something the consumer can use –for example, bread
− research (marketing information management) – information from
around the world about market conditions, weather, price movements,
and political changes, can affect the marketing process. Market informa-
tion is provided by all forms of telecommunication, such as television,
the internet, and phone.
The marketing mix

The marketing mix is probably the most famous marketing term. Its ele-
ments are the basic, tactical components of a marketing plan. Also known as the
Four P's (4Ps), the marketing mix elements are:
− Product – what you are selling;
− Price – how much you are charging for your product/service;
− Promotion – how you tell people about your offer i.e. your product/
service and price;
− Place – how and where people can buy your product.
Marketing decisions generally fall into these four controllable categories.

These four P‘s are the parameters that the marketing manager can control, sub-
ject to the internal and external constraints of the marketing environment. The
goal is to make decisions that centre the four P‘s on the customers in the target
market in order to create perceived value and generate a positive response. The
idea of the marketing mix is the same idea as when mixing a cake. A baker will
alter the proportions of ingredients in a cake depending on the type of cake we
wishes to bake. The proportions in the marketing mix can be altered in the same
way and differ from the product to product (Hodder Education, n.d).
The term "marketing mix" was first used in 1953 by Neil Borden in his
American Marketing Association presidential address. Neil Borden (1964) iden-
tified twelve controllable marketing elements which, properly managed, would
result in a “profitable business operation”. However, this was actually a refor-
mulation of an earlier idea by his associate, James Culliton, who in 1948 de-
scribed the role of the marketing manager as a "mixer of ingredients", who
sometimes follows recipes prepared by others, sometimes prepares his own rec-
ipe as he goes along, sometimes adapts a recipe from immediately available in-
gredients, and at other times invents new ingredients no one else has tried
(Wikipedia, n.d.). Jerome McCarthy (1964) reduced Borden’s factors to a simple
four-element framework: Product, Price, Promotion and Place. Practitioners and
academics alike promptly embraced the marketing mix paradigm that soon be-
came the prevalent and indispensable element of marketing theory and opera-
tional marketing management (Möller, 2006).
The marketing mix was designed as a simple way to focus on the main ele-
ments of marketing and to create a marketing strategy either at business, product
or campaign level. One wants to sell the right product (that customers want) at
the right price (which customers can afford and are willing to pay) at a conven-
ient place using effective promotions. Each element of the marketing mix should
be consistent, fit together and reinforce the other elements.
Möller (2006) notes, that the wide appreciation of the marketing mix among
field marketers is the result of their profound exposure to this concept during the
years of studies, since most introductory marketing manuals define it as “the
heart of their structure” (Cowell, 1984) and identify the 4Ps as the controllable
parameters likely to influence the consumer’s buying process and decisions
(Kotler, 2003; Brassington and Pettitt, 2003). He also points, that another sig-
nificant asset of the mix is the fact that it is a concept easy to memorise and ap-
ply. David Jobber (2001) noted: “The strength of the 4Ps approach is that it
represents a memorable and practical framework for marketing decision-making
and has proved useful for case study analysis in business schools for many
years”. Enjoying large-scale appreciation, it is not surprising that the 4Ps be-
came even synonymous to the very term Marketing, as this was formulated by
the American Marketing Association (Bennet, 1995).
Grönroos (1994) notes, that the main reasons the marketing mix is a power-
ful concept are: it makes marketing seem easy to handle, allows the separation of
marketing from other activities of the firm and the delegation of marketing tasks
to specialists; and – the components of the marketing mix can change a firm’s
competitive position.
The marketing mix management paradigm has dominated marketing
thought, practice and research (Grönroos, 1994) and has been a mainstay of
teaching marketing to students and professionals for almost fifty years. Al-
though, like any well established idea, it is also criticized, academics have at
times expressed doubts and objections to the value and the future of the market-
ing mix, proposing alternatives that range from minor modifications to total re-
jection (Möller, 2006). Analysis of the academic literature and marketing
textbooks on the shortcomings of marketing shows that the mix is often consid-
ered by many researchers and writers as inadequate to address specific market-
ing situations like the marketing of services, the management of relationships or
the marketing of industrial products (Möller, 2006). A number of critics even go
as far as rejecting the 4Ps altogether, proposing their own alternative frame-
works.
Development of marketing mix has received considerable academic and in-
dustry attention. Numerous modifications to the 4Ps framework have been pro-
posed, the most concerted criticism has come from the services marketing area
(Rafiq and Ahmed, 1995). A study by Rafiq and Ahmed (1995) suggested that
there is a high degree of dissatisfaction with the 4Ps framework. These results
provide fairly strong support to Booms and Bitner’s (1981) suggestion that 7P
framework should be used instead of McCarthy’s 4Ps framework as the generic
marketing mix. They added three more Ps to the marketing mix: People, Process
and Physical Evidence. This marketing mix is known as Extended Marketing
Mix or Service Marketing Mix:
− People: all people involved with consumption of a service are important.
For example workers, management, consumers etc
− Process: procedure, mechanism and flow of activities by which services
are used.
− Physical evidence: The environment in which the service or product is
delivered, tangible are the one which helps to communicate and intangi-
ble is the knowledge of the people around us.
The concept of 4Ps has also been criticized as being a production-oriented

definition of marketing, and not a customer-oriented (Popovic, 2006). It’s re-
ferred to as a marketing management perspective. Lauterborn (1990) claims that
each of these variables should also be seen from a consumer’s perspective. This
transformation is accomplished by converting product into customer solution,
price into cost to the customer, place into convenience, and promotion into
communication, or the 4C’s (Chai Lee Goi, 2009). The “four Cs” mnemonic was
first offered by Robins (1991) as an alternative to the marketing mix: customers,
who buy goods and/or services in the market place; competitors, who provide
the choice of alternative sources of supply; capabilities and company, both of
which refer to the organization which has the ability to satisfy customer needs.
Such a list embraces Kotler’s classification, except for the macro-environmental
issues and brings together internal and external factors, although not in any
strongly cohesive way. On a similar theme, Ohmae (1982) talks of a “three C”
model in the shape of a strategic triangle of customers, competitors and corpora-
tion, pointing the interactive and strategic relationship between these three com-
ponents. Building on the interactive nature of the model, Grönroos (1984) pro-
poses the concept of interactive marketing, where interface between the em-
ployee and the customer is a key factor in successful market making. This
approach goes in line with Kotler’s (1991) suggestions, who argues that the em-
ployee-customer relationship is an important factor in the success of the mar-
ketmaking process. In authors opinion, it can enable the marketing planner to
develop a sharper understanding of how and why buyers buy, and ultimately to a
more individually tailored strategic customer focus.
Anthony R. Bennett (1997) notes, that all the models, suggested by various
authors, for the most part begin from a premise “that buyers can be regarded as a
collective – a group of people (or organizations) who demonstrate common buy-
ing behavior. Organizations target customers. Resources and capabilities are
organized in a way that satisfies the needs of the customer”. He also debates,
whether the potential customer views the situation in the same way prior to mak-
ing a reasoned and rational choice about the benefits of a particular product or
service. Bennett analyses targeting and marketing process from the buyer’s per-
spective and suggests five dimensions (criteria) that buyer disposition has: value,
viability, volume, variety and virtue, – or the 5Vs. He also creates a two-
dimensional matrix, which indicates an integrated approach to marketing and a
direct relationship between the disposition of a buyer towards a product or ser-
vice, the five Vs, and the marketing mix, the four Ps.
Möller (2006) reviewed consumer marketing theory, relationship market-
ing, services marketing, retail marketing and industrial marketing literature and
highlighted quite a few criticisms against the Marketing Mix framework:
− Internal Orientation – a frequent criticism of the 4Ps model is the lack
of customer orientation.
− Product Orientation rather than customer orientation and focus – the ex-
plicit focus of the mix on internal processes undermines the elements of
customer feedback and interaction as a basis for building up relation-
ships and retention e.g. in the context of relationship building the 4Ps
model fails to address individual customer needs.
− The ‘Offensive’ Orientation – the 4Ps framework is perceived as having
a product push nature rather than ‘collaborative’ character.
− One-way Orientation – given the mass marketing character of the 4Ps,
no interactivity and personalised communication is supported.
− Absence of the Human Element – a key factor distinguishing the services
marketing of physical products is the human element – the human factor
underlines the personal nature of services marketing; service providers
play a double role in the marketing process as service delivery factors;
personnel are a powerful element in customer persuasion and a major
parameter affecting the customer’s perception of the delivered service

quality.
− Lack of Consumer Interactivity – the 4Ps model ignores the evolving na-
ture of the consumer who demands not only higher value but also more
control on the communication and transaction process.
− Absence of Interaction – interaction and quality are often identified as
two issues missing in the 4P framework, yet requiring special attention
in services marketing – moreover, the personal character of services
makes the quality standardisation a difficult and challenging task.
− Absence of Personalisation – one-to-one communication and relation-
ship building are also fundamental elements of services marketing not
adequately addressed in the 4Ps.
− Absence of Collaboration – the emphasis of industrial marketing on col-
laboration and personalised approach is in stark contrast with imper-
sonal, mass-oriented and acquisition oriented character of the 4Ps
approach. Mutual dependence and close relationships between industrial
sellers and buyers are important aspects of industrial marketing. Per-
sonal selling rather than mass communication and promotion has been
the prime industrial marketing instrument. Perceived personality simi-
larities and trust are the core elements of the industrial commercial in-
teraction.
− Absence of Relationship – building successful industrial relationships
requires creating value for the customer, something depending on under-
standing and delivering value. The long-term character of buyer-seller
relationships underline two more weaknesses of the marketing mix as an
industrial marketing tool, namely: operational orientation and the lack of
strategic components.
− Lack of Strategic Elements – a major deficiency of the 4Ps framework is
the lack of strategic content, making it unfit in an environment where
external and uncontrollable factors define the firm’s strategic opportuni-
ties and threats.
Another article, “Revision: Reviewing the Marketing Mix” (Fakeideas,

2008), indicates these shortcomings of the marketing mix:
− “The mix does not take into consideration the unique elements of ser-
vices marketing.
− Product is stated in the singular but most companies do not sell a prod-
uct in isolation. Marketers sell product lines, or brands, all intercon-
nected in the mind of the consumer
− The mix does not mention relationship building which has become a ma-
jor marketing focus, or the experiences that consumers buy.
− The conceptualisation of the mix has implied marketers are the central
element. This is not the case. Marketing is meant to be ‘customer-
focused management”.
Morris (2002) criticized traditional marketing on “[…] an over-reliance on

established rules of thumb, encouragement of formula-based thinking, lack of
accountability for marketing expenditures, an emphasis on the promotion ele-
ments of the marketing mix, focus on superficial and transitory whims of cus-
tomers, the tendencies to imitate instead of innovate and serve existing markets
instead of creating new ones, a concentration on short-term, low-risk payoffs,
and marketing as a silo with static and reactive approaches”. He also noted, that
even the American Marketing Association’s endorsed definition of marketing, it
ignores issues central to entrepreneurship: innovation, risk-taking, and proac-
tiveness. McKenna (1991) noted that adherence to the four P’s misses the “fun-
damental point of marketing – adaptability, flexibility and responsiveness”,
while Carson (1993) stated that “both wasteful and inappropriate, and conse-
quently is not seen to function effectively”.
Diane M. Martin (2009) identifies and examines a divergence of philoso-
phies and practice between corporate/traditional marketing and entrepreneurial
marketing in her research. She notes that “marketing scholars and practitioners
have long depended on the same basic elements for success” (4Ps), but “while it
may seem appropriate to take the tradition of the four P’s as gospel, doing so
would blind one to important differences at the heart of entrepreneurial experi-
ence”. Her analysis shows a strong preference for relationship marketing de-
scribed by Zontanos and Anderson (2004) as the new four Ps (practices,
purpose, person, and process) at the heart of the entrepreneurial marketing para-
digm over the traditional four Ps that constitute traditional marketing theory.
While the traditional four P’s (product, price, promotion, and place) still lie at
the heart of traditional marketing theory, education, and practice, entrepreneurs
are advised to consider their communication competency in light the new four Ps
(i.e. person, process, purpose, and practices; Zontanos and Anderson, 2004).
P. Simister (2009) suggests that marketing mix is missing 4 more Ps: pur-
pose (normally profit), purchaser, push/pull and personal relationships. He also
counted all the Ps suggested by different authors and got an impressive result of
almost 30.
So, the question that arises is how many and what Ps there are/should be in
a marketing mix? Or is there a finite marketing mix? Predictably, there’s no one
answer. Goi (2009) states that marketing mix used by a particular firm has to
vary according to its resources, market conditions and changing needs of clients.
He also notes, that despite the number of criticisms on 4Ps, it, however, has been
extremely influential in informing the development of both marketing theory and
practice, and today the marketing mix most commonly remains based on the 4
P’s. Möller (2006) notes, that “a clear and undisputed answer to the question
whether the mix will survive as the marketing tool of the 21st century requires
further research and debate”.
Author of this paper believes that 4Ps still covers the biggest part of new
entrepreneurial challenges. However, this does not mean the criticisms of the
traditional marketing mix should be ignored. Contrary, shortcomings of 4Ps,
proposals of new Ps and Cs should be taken into account when forming com-
pany’s marketing strategy and, if necessary, used as suppletory elements of the
marketing mix. Author of this paper has also performed an analysis and discov-
ered that most of Eastern and Central European companies (even the most suc-
cessful ones) are still using the traditional marketing mix of 4Ps. That is why the
marketing mix consisting of product, price, place and promotion will be ana-
lyzed further in the paper. Nevertheless, research results and findings can also be
applied to a marketing mix consisting of different elements or number of ele-
ments.
1.1.2. Interaction between marketing and sales and product

development departments
Marketing and Sales (M&S) and Product Development (PD) departments are
organizational units that communicate with external customers and partners and
hereby try to understand and thereafter satisfy emerging expectations concerning
new products and services. Their agility to capture and interpret signals from the
external environment affects short and long run organizational performance di-
rectly and therefore shapes the future of an organization. In this thread of
thoughts, the role of integration and speed with which information is transferred
between the M&S and PD departments to ensure high quality of performed work
becomes apparent.
In a turbulent environment and fierce competition the key factors to sur-
vival and growth lies in companies' ability to recognize environmental changes
and share ideas, which are crucial success factors in the new product develop-
ment process (Awad & Ghaziri, 2004). Owing to the fact that the product devel-
opment is a cross-functional activity, the need for integration between the
departments involved in the process is recognized. Marketing and sales and
Product development departments play the most important role in understanding
and realizing the desirable customer focus in new products. As a result these
departments need to be integrated to the highest possible degree, to improve the
internal service quality, and hence maximize the internal customer satisfaction.
This is crucial, since the delivered functions throughout the organization can
predetermine company’s successes in terms of performance and satisfaction of
customers.
Poor quality of the internal business processes of a company can lead to
various difficulties, such as: unmet customer requirements, additional costs re-
lated to change, rework, delays, longer lead times and long time-to-market. This
is the reason companies need to optimize their processes performed locally by
organizational functions and at the same time ensure good cross-functional con-
nections between the different departments (Bergman & Klefsjö, 2007). There-
fore, companies recognize the need to invest into IS/IT that will maintain and
develop the integration by not only supporting existing communication channels,
but also create new connections between employees, especially in the most re-
mote and dispersed departments of an organization. Thus, enabling sharing of
information in a timely manner and uniform format in order to assist decision
making by all employees connected through the computerized IS.
Investments in IS/IT infrastructure, however, very often are unable to de-
liver expected value to the business by failing to reach intended level of interac-
tion with users or not meeting stakeholders' expectations (Yeo, 2002). There are
many theories concerning the reasons of such frequent failures of Information
Systems. Firstly, there is a disproportion between investments made into infra-
structure designated to run the business and investments designated to facilitate
creation of the environment in which a change is possible. The figures by
KPMG estimate imbalance equal to 70–90 percent in favor of investments to run
the business (Information Age, 2008). Another reason is inability of manage-
ment to identify and evaluate the business requirements that the system must
meet and then fit in the currently owned IT infrastructure and application portfo-
lio. The main factor of success is alignment of the investment along three di-
mensions: business strategy, organizational strategy and information strategy
(Pearlson & Saunders, 2010). As a result, this requires a careful process of plan-
ning, evaluation, and assessment of the present situation, and later, based on it,
develop business requirements for the IS/IT.
A Product development department is an organizational function where
new products or product improvements are designed. It is done based on the
information delivered by other functions, such as: Marketing and Sales, Produc-
tion, Technology development and other. Together all of these functions deter-
mine the success of a product development process in terms of performance
dimensions – product cost and quality; development time, cost; capability (Ul-
rich & Eppinger, 2008). Therefore, the integration between these functions ap-
pears to be one of the most fundamental factors for success of New Product
Development (NPD) process (Kahn, 1996; Maltz et al., 2001). In addition,
Bergman and Klefsjö (2007) emphasize the importance of quality of communi-
cation channels that supply PD department with critical information, as a valu-

able prerequisite for high level of cross-functional integration. Consequently, the
improved information exchange between the previously mentioned departments
is able to support the decisions made in the Product development department
concerning the development of future products (Bergman & Klefsjö, 2007).
Marketing function in the context of product development

Analysis of marketing function’s involvement within product development
process firsly requires a brief overview of the cross-functional approach of the
product development process. Figure 1.1 illustrates graphically the integration of
the processes needed for development of a new product. The area marked with a
dashed line represents the interface between the Marketing and sales and Prod-
uct development departments. What is more, this figure has 6 stages based on
the investigated theory in the field of Product Development Management, New
Product Development process, also the main tasks that need to be accomplished
in each of the stages.
Fig 1.1. Integrated product development process

(Based on Bergman & Klefsjö, 2007, p. 108).
These 6 iterative stages incorporated into a new product developement

process allow transferring of the technical and marketing input into the new
products. This process implies reduction of various types of information uncer-
tainties such as newly developed technical solutions, unmet customers’ require-
ments, competitors’ activities and products, available resources (Bergman &
Klefsjö, 2007). Moenaert et al. (1994) state that the success of a new product
depends highly on effectiveness of which market and technical uncertainties are
reduced. Hart et al. (1999) is in line with this statement and support that a major-
ity of uncertainties is related to customers’ needs and expectations.
Managing development of new products requires the company to investi-
gate several strategic questions (Tang, 2010), most of which cover the elements
of marketing mix:
1. When should the new products be launched?
2. What is the expected performance of the product within dynamic mar-
ket?
3. How should the introduction of new products to the market be managed?
4. What is the appropriate price for the new product?
5. What are the channels for selling the new product?
The main concern of the Marketing and sales department is reduction of

market uncertainties by informing all organizational processes about superior
values for the customer (Ulrich & Eppinger, 2008). Hereby market intelligence
should be present in each function concerned with the New product development
process. Gupta et al. (1985) refer to this concept as market orientation. Market
intelligence is information associated with the company’s market. This informa-
tion is gathered and analyzed in order to make decisions concerning the market
opportunities, market development metrics, etc. Hart et al. (1999) point the fact
that market orientation addresses dispersal and utilization of marketing informa-
tion. Marketing information is “information concerning the marketing activities
of the firm, their impact on and interaction with the market and their effective-
ness in achieving marketing objectives”, as well as “information including the
dominant economic characteristics of an industry, factors determining competi-
tive success, industry prospects for profitability etc” (Hart et al., 1999). Simi-
larly, Tang (2010) notes that the marketing is a function that is focused
externally and is primarily responsible for what kind of products an organization
should develop, for which location and what should be the pricing. Hereby, it
can be concluded that the marketing function monitors the market conditions
and on basis of collected data develops a marketing plan, which aims at increas-
ing companies’ market share and performance.
An analysis of literature in the field of Product Development Management
reveals that Bergman and Klefsjö (2007), Ulrich and Eppinger (2008) and Gupta
et al. (1985) agree on the number of product development phases (6) and their
sequence during the process of product development. The above mentioned au-
thors have the same perception of the content of the product development proc-
ess in terms of tasks and responsibilities of the studied functions. Nevertheless,
the authors differ in some aspects, such as: the way in which the phases are
named and the way in which the content of each phase is organized. In order to
simplify and reduce the confusion concerning the names of phases, their organi-
zation and content, Gupta’s et al. (1985) explanation of the product development
process will be used since it is on a more general level, and thus is perceived as a
mix of categorizations developed by Bergman and Klefsjö (2007) and Ulrich
and Eppinger (2008).
During the planning phase the marketing function is used for setting the
goals of product development project, while the product development function
has a valuable contribution to defining future marketing goals. The product de-
velopment input comprises information which articulate newly developed tech-
nologies or new applications of existing technologies (Gupta et al., 1985). Gupta
et al. (1985), Ulrich and Eppinger (2008), Bergman and Klefsjö (2007) stress on
early involvement of the M&S department into the new product development
process. The authors emphasize the fact that product opportunities need to be
identified not only by the product development department, but also by the mar-
keting and sales department. Marketing function plays an important role in de-
fining new product opportunities by investigating customers’ complains,
customers’ suggestions, lead users’ desires, as well as study of competitors in
certain markets (Table 1.1). The above mentioned academics realize the need for
development of a database by the marketing function that incorporates all prom-
ising ideas. Gupta et al. (1986) argue that the right product launch and resource
allocation is a result of combined efforts of both marketing and product devel-
opment functions which are characterized with opposite perspectives for the
product development time.
During the idea generation phase a high extent of marketing and product
development functions’ integration contributes to identification the most impor-
tant needs and also the needs that are not apparent to the customer (Gupta et al.,
1986; Ulrich & Eppinger, 2008).
During the idea screening phase inputs of marketing and product develop-
ment functions are required since the product under development is primarily
evaluated on the basis of two factors: the technical and market feasibility.
Evaluation of the market feasibility requires information about the market size
and growth, product risk analysis and product fit with existing regulations
(Gupta et al., 1986; Ulrich & Eppinger, 2008) (Table 1.1). During this phase the
most promising ideas are assessed. Further, the marketing function is responsible
for identifying the benefits for the customers regarding the new product idea
(Ulrich & Eppinger, 2008).
The physical product development phase requires information by the mar-
keting function which is mainly concerned with the price range, marketing per-
ception of the product quality, beneficial product features for the customer,
usage and disposal of the product by the customer, product safety. Therefore, the
need of benchmarking company’s competitors by the marketing and sales
22
Table 1.1. Responsibilities of the Marketing function within PD (Based on: Ulrich & Eppinger, 2008)
1. OPTIMIZATION OF MARKETING STRUCTURE ...
department is clear. Generally, it can be observed that the Marketing and sales
department’s responsibilities include defining the most desired and valuable
product attributes for the customer, while the responsibilities of the Product de-
velopment department comprise making decisions concerning the best technical
solutions to meet specified customer requirements (Gupta et al., 1986). During
this phase the marketing function is involved in development of the product con-
cept. This phase implies identification and afterwards communication of cus-
tomer needs to the other functions involved in the process of product
development. In addition, the marketing function is primary concerned with set-
ting the target product specifications (Table 1.1). Moreover, the marketing func-
tion helps in identifying the most promising concepts and identifying
weaknesses in various newly developed concepts (Ulrich & Eppinger, 2008).
The marketing function is also involved in making decisions concerning the
product functions. Bergman and Klefsjö (2007) add that after the decision re-
garding the product concept is made, the marketing function starts with prepara-
tion of the marketing campaign for the new product.
During the tests and product commercialization phase the product develop-
ment function supplies the marketing function with information concerning prod-
uct specifications, product attributes, product usage and disposal. Accordingly, the
marketing function uses this information to promote the unique features of the
new product (Gupta et al., 1986). Maltz et al. (2001) states, that high level of inte-
gration between Marketing and sales and Product development departments can
be achieved when representatives from both functions visit customers to obtain
insights about customers’ reactions to the newly developed product.
During the test and product commercialization phase Gupta et al. (1985)
recommend involvement of the product development function in the marketing
campaign. This involvement is beneficial if it is greatly involved in preparation
of marketing materials, technical manuals, and to a less involved in consultation,
advertising and sales promotions. The Marketing and sales department, in turn,
renders the information about how customers evaluate the product. Post com-
mercialization phase requires analysis of the product development results. The
analysis is addresses the following issues (Gupta et al., 1985):
− the level of satisfaction by achieved market share and profit targets;
− the extent to which the product is used in a way that it was intended;
− how customer suggestions can be incorporated into new products;
− how competitors react to the new product;
− the extent to which customers’ complains are communicated to the
Product development department;
− the extent to which the customer has been delivered with the right in-
formation about the product features.
Checklist outlining areas for the product development and marketing inte-
gration in the New product defelopment process is presented in the Table 1.2.
This table was developed on the basis of the available literature in the field of
Product development management.
Table 1.2. Areas of the marketing and product development function integration during
the Product development process (Source: Gupta et al., 1985, p. 293)
Areas for integration

A) The marketing function is involved with the product development function in
1. Setting new product goals and prioritize
2. Preparing PD’ budget proposals
3. Establishing PD schedules
4. Generating new product ideas
5. Screening new product ideas
6. Finding commercial applications of PD’s new product ideas/technologies
B) The marketing function provides information to the product development
function on
7. Customer requirements of new products
8. Regulatory and legal restrictions on product performance and design
9. Test- marketing results
10. Feedback from the customers regarding product performance on a regular basis
11. Competitors’ strategy
C) The product development function is involved with the marketing function in
12. Preparing marketing’s budget proposal
13. Screening new product ideas
14. Modifying product according to the marketing recommendations
15. Developing new product according to the market needs
16. Designing communication strategies for the customers of new products
17. Designing users and service manuals
18. Training users of new products
19. Analyzing customer need
Taxonomies of marketing information in the product

development context
Conceptualization of the marketing information plays a substantial role in
understanding the best model of integration between the Marketing and sales
and Product development departments. Taxonomy is a proper way for outlining
different types of marketing information used as an input during different phases
of the New product development process. The taxonomy the marketing informa-
tion is presented in Table 1.3, which helps to understand what can and what can-
not be achieved by using the marketing information. In addition, this taxonomy

underlines the main types of information that contributes to development of cus-
tomer related products. It is necessary to consider the fact that sources of the
marketing information are not exclusively external for the company, but also
internal including information gathered across all organizational departments
(Hart et al., 1999).
Table 1.3. Types of marketing information (Source: Hart et al., 1999)
Customer segment Customer purchase

Macro data Industry information
information information
Number of buy- Product usage
Competitive forces Buyer behaviour
ers in market Rates
Demographic Customer Satisfac-
Rivals’ strength Usage rates
changes tion levels
Dominant economic Benefits sought
Interest rates Demographic data
characteristics from purchase
Technology Nature of competition
Innovativeness –
trajectory (price/non-price)
Prospects for Profit- Psychographic and
– –
ability lifestyle data
The factor of product newness determines the utility of the marketing in-
formation in reduction of uncertainties within the New product development
process. It is important to include the experience obtained from the previous
projects in the “knowledge memory” of an organization. The organizational
knowledge is developed over time and it concerns the rules of acquisition, dis-
semination and interpretation of the market information that are created by the
company. It is a recognized connection between the newness of a product and
the possibility to use organizational experience (successive generations of prod-
ucts) (Hart et al., 1999; Turban et al., 2008).
Important factors for cross-functional integration

The extent of integration between the Marketing and sales and Product de-
velopment departments plays a crucial role for a technical and commercial suc-
cess of new products. Coupling Marketing and sales and Product development
departments’ efforts on the basis of nineteen areas outlined in Table 1.2 has po-
tential to secure competitive advantages of a company (Gupta et al., 1985). In
addition, Moenaert et al. (1994) states that a high level of integration is related
to effective labour division, information exchange, and information use.
The cross-functional integration has a multidisciplinary character as it in-

volves two basic elements: interaction and collaboration. The first basic ele-
ment – interaction – is associated with structured and formally coordinated
cross-functional activities, such as routine meetings, conference calls, documen-
tation flows, committees, electronic mails, standard forms, memoranda and re-
ports. The second basic element of the cross-functional integration –
collaboration – focuses on strategic alignment of interdependent departments by
”affective, volitional, mutual/shared process where two or more departments
work together, have mutual understanding, have a common vision, share re-
sources, and achieve collective goals” (Kahn, 1996). Informal structure is used
to manage the relations. Interaction activities can be quantified and controlled,
while collaboration activities are intangible and therefore difficult to regulate
(Gupta et al., 1985). Leenders and Wierenga (2001) are in line with the above
mentioned arguments and suggest that interaction between functions is an indis-
pensible part of the integration, but collaboration is determinant of the product
development process success. In this relation it is important to mention that
cross-functional communication is a mechanism for achievement of both basic
elements for integration – interaction and collaboration (Gupta et al., 1985).
In addition, factors which positively or negatively influence cross-
functional integration are grouped in several categories in accordance to their
pertinency to the above mentioned basic elements – interaction and collabora-
tion. These categories are often interdependent (Morelli et al., 1995).
The first group of factors is related to one of the elements of integration –
interaction. These factors play a crucial role in realization of high level of inter-
action and thus foster environment in which a high level of integration between
the Marketing and sales and Product development departments can be achieved.
These factors are coordination, cross-functional working relationships, func-
tional conflicts, understanding and knowledge of the priorities of the peer man-
agers’ issues.
The second group of factors is related to the second element of integration –
collaboration. This group consists of these factors: mutual understanding and
recognition, mutual objectives and harmonious organizational climate.
Gupta et al. (1986), Moenaert et al. (1996), Kahn (1996), Maltz et al.
(2001) argue that increasing cooperation is a factor that is highly associated to
the cross-functional collaboration. Companies are required to put a lot of efforts
in realizing high levels of cooperation between the Marketing and sales and
Product development departments which will lead to increased usage of infor-
mation transferred within the studied interface.
Cross-functional communication
The cross-functional communication can be discussed as an important and
indispensible mechanism for realization of the above mentioned factors and thus
realize the two basic elements of the integration: interaction and collaboration.
The cross-functional communication favours mechanisms of integration, such
as: establishing meetings on a regular basis and developing of information net-
works for routing the standardized documentation. The primary objective is
creation of an environment which fosters information transactions between de-
partments and overcomes barriers related to physical distance (Kahn, 1996).
Further, communication as a substantial element of the integration between the
studied departments helps to achieve market orientation in each function con-
cerned with the new product development process (Gupta et al., 1985; Hart et
al., 1999; Parry & Song, 1993). That is why this mechanism is a fundamential
determinant that can assure that employees of product development have pro-
found understanding and expertise in technical issues and can “excel in translat-
ing market needs into valuable products and gearing for anticipated needs”
(Gupta et al., 1985). Keeping this in mind, it can be concluded that communica-
tion is a prerequisite for achievement of coordination and cooperation (Maltz et
al., 2001; Porras & Robertson, 1992).
In addition, communication can be characterized with three dimensions:
communication frequency, bidirectional communication and quality of commu-
nication.
For successful New product development process not only internal commu-
nication is an important factor, but also how the studied functions manage the
communication with external customers. One of the most critical factors is col-
laboration between the product development function and the marketing func-
tion. Employees from the Product development department together with
marketing and sales employees visit potential customers and try to understand to
what extent customers are satisfied with existing products; how a product can be
modified to better meet customer requirements; are there any additional needs
that customers want to be addressed (Horovitz & Jurgens-Panak, 1994).
Discussion concerning the cross-functional integration

The interaction-based integration is characterized with competitive envi-
ronment since it considers integration when certain information is exchanged
between independent departments. That is why the selected departmental repre-
sentatives and the information to be provided during the meetings are carefully
chosen (Kahn, 1996). It is necessary to have a certain level of interaction but too
much of it leads to excess of meetings and overload with information (Leenders
& Wierenga, 2001). Contrary, collaboration-based integration stresses continu-
ous relations and not just transactions between departments. Thus the internal
environment is cooperation, not competition. Collaboration requires change in
the organizational climate and culture (Gupta et al., 1985).
Gupta et al. (1985) emphasizes the importance of collaboration–based inte-
gration. Top management should promote and encourage programs that help to
achieve understanding, informal relations, ascribe to the same vision and share
ideas/resources. These activities are strategic in nature, and thus any developed
program should include both: modifications of a company’s strategic planning
process and the company’s strategic planning implementation process. It is im-
portant to understand the collaboration issue when crossfunctional teams are
established. However, the existence of a network does not mean all the product
development problems are solved. One possible reason is that cross-functional
teams are temporary. That is why there is a need for initiatives that encourage
not only team collaboration, but also cross-functional collaboration (Hart et al.,
1999). Maltz et al. (2001) argue that some elements of interaction such as meet-
ings and reports have positive effects, but the managers do not have to increase
the number of meeting and the flow of reports for the sake of improving per-
formance. It is suggested that the managers can use interaction to establish con-
tact and familiarity between the departments and then use collaboration to drive
the interaction process.
To conclude it can be said that creating conditions which enable informa-
tion exchange between the studied departments do not guarantee usage of the
marketing information for the decision making purposes within the actual prod-
uct development process. The reasons are associated with the inter-functional
rivalry which hinders the work within the studied interface. This is because of
the fact that the level of rivalry has inverse correlation to the level of trust and
the quality of perceived information. From these considerations it is easy to ob-
serve the dependency between the level of rivalry and the number of innovations
introduced into a company.
In addition, by creating work environment where the information exchange
and use is enhanced, the quality of the internal customer service will increase.
Moreover, as a result of increased quality of internal service the quality of per-
formed work will be better. This is due to the fact that employees’ needs for
information will be recognized and satisfied, as well as the working condition
will be better. Thus, the employees will make the right decisions in a timely
manner. The authors state that by increasing the quality of performed work the
internal customer satisfaction will be greater.
1.2. New enterpreneurship challenges for marketing.

Optimal marketing structure – postulate of marketing
costs’ effectiveness and competitiveness
1.2.1. Marketing department’s influence on company’s

performance
Before analyzing the optimization of marketing structure topic, one question has
to be answered – is marketing actually beneficial to firm’s performance, does it
have a significant influence on company’s competitiveness? If it is not, all the
effort should be addressed elsewhere. If marketing, however, influences finan-
cial results of a business unit, the question arises how to use marketing money in
the most effective way and measure it’s ROI.
During the last decade marketing’s role within business companies has re-
ceived much attention in the academic literature and popular press. The general
conclusion has been that in many firms, the marketing function is in steep de-
cline (Leeflang, 2004; Webster et al, 2005). This proposition is not really new;
for example, Nath and Mahajan (2008) second the claim, saying that “over the
past three decades, marketing academics have raised their concern with market-
ing’s decreasing influence at the level of corporate strategy.” However, the de-
cline of marketing touches on more than just marketing’s influence on corporate
strategy. A number of articles, studies, seminars, and discussions recently have
touched on the lack of respect marketing receives in organizations (Schultz
2003). On the basis of existing discussions and publications Verhoef and Leef-
lang (2009) conclude that “marketing is in deep trouble”. Schultz (2005) claims
that “marketing died, was declared impotent, or most likely just became irrele-
vant to many senior managers”. Ex-LEGO chief Christian Majgaard noted that
marketing has lost its strategic role and that few marketers remain involved in
rolling out strategies (Murphy, 2005). The diminished role and influence of
marketing emerges in a roundtable discussion published in Journal of Marketing
(Brown et al., 2005) and in some publications by Sheth and Sisodia (2002).
However, academics also have investigated and elaborated on the role of
marketing in empirical studies. For example, Homburg et al. (1999) examine
marketing’s influence within the firm and, in a survey of U.S. and German com-
panies, find that marketing had substantial influence – at least a decade ago. In
addition, Moorman and Rust (1999) demonstrate that the marketing function
contributes to perceptions of the firm’s financial performance, customer rela-
tionship performance and new product performance beyond just the firm’s mar-
ket orientation. They conclude that to be profitable, firms must not only be
market oriented but also have a strong and influential marketing department.
Triggered by the ongoing discussion of the declining role of the marketing

function within firms, Verhoef P.C and Leeflang P.S.H. (2009) investigated the
marketing department’s influence. Their results indicate that the actual decision
influence of marketing departments is limited to advertising, relationship man-
agement (including satisfaction measurement and improvement) and segmenta-
tion, targeting, positioning. Decision areas that originally were dominated by
marketing, at least according to most marketing textbooks, such as pricing and
distribution, are now covered by other departments, such as sales and finance.
Overall, their findings support claims in the popular and scientific press that
marketing is losing ground within firms. Their model outcomes show that mar-
keting department characteristics mainly explain the marketing department’s
influence. This result emphasizes the important role of marketing department
capabilities, but also implies that the marketing department can gain influence,
despite negative institutional and contingency factors, such as short-term orien-
tation and increased channel power.
Verhoef P.C and Leeflang P.S.H. (2009) show that there was no direct rela-
tionship between marketing influence and business performance. At least in their
sample. Market orientation mediates this link. This contrasts with Moorman and
Rust’s (1999) research. However, several factors can explain this: their study
was executed approximately ten years after Moorman and Rust’s. During this
time, firms may have become more market oriented, creating a less strong need
for an influential marketing department. Another explanation – their study dif-
fers in terms of sample (Dutch firms vs. Moorman and Rust’s U.S. firms). Prior
research in market orientation has shown that the effects of market orientation
on performance studies in European countries tend to show more significant
relationships between market orientation and business performance than studies
executed in the United States (Langerak, 2003). The third explanation – they
used a reduced set of items to measure market orientation, while Moorman and
Rust used extended market orientation scales. Items of this shortened version
tend to focus more on customer orientation. The mere focus on the customer
orientation part of market orientation may take some explanatory power away
from the marketing department influence measures (Ellis, 2006). Verhoef and
Leeflang state that wide adoption of the marketing concept within firms across
multiple departments may be the best explanation for this finding. Because of
this wide adoption, the incremental value for performance of a strong marketing
department is less clear.
The next relevant question that Verhoef and Leeflang try to answer is
whether firms need a strong marketing department. Their initial answer to this
question is yes. Firms with a strong marketing department are more market ori-
ented, and subsequently these market oriented firms have better performance.
They also discovered that market orientation and the marketing department’s
influence simultaneously influence each other. Market-oriented firms tend to

have stronger marketing departments, and influential marketing departments
induce a stronger market orientation. This result highlights the importance of a
dual culture. Note that our previous statements are based on (dual) associations
and not on empirically validated causal relationships.
Their research shows a weakened position of the marketing department.
The results do not clearly suggest that firms should have strong marketing de-
partments, because there is no strong link between the marketing department’s
influence and performance. However, because the marketing department’s influ-
ence is related to market orientation, which is related to performance, an influen-
tial marketing department is still beneficial. Verhoef and Leeflang believe that
marketing departments should aim to regain their influence and suggest that
marketing departments should become more accountable for the link between
marketing actions and policies and financial results, and marketing departments
should become more innovative by increasing their share in new product/service
concepts, which implies a greater contribution of marketing to organic growth.
Another research, made by Auh and Merlo (2009), suggests that a powerful
marketing function still makes an important contribution to a firm’s financial per-
formance. Thus, the alleged decline of the marketing subunit is a trend that should
be monitored carefully. Their findings suggest that weakening the marketing func-
tion can have negative effects on the size of a firm’s cash flow, it can make a firm’s
cash flow more volatile, and it can harm profitability. They also stress that market-
ing function continues to play an important role within the firm, even in strongly
market oriented firms. Their findings provide support for the position that “market-
ing specialists are needed” (Webster, 1997). And not only are marketing specialists
still needed, but when they are allowed to become a powerful force within the or-
ganization, they can make a crucial contribution to financial performance.
The findings of the research also suggest that the contribution of a strong
marketing function is all the more important for organizations competing in
highly turbulent and competitive markets. When market conditions are particu-
larly turbulent and competitive (as they are, for example, in the current eco-
nomic environment), organizations may wish to leverage rather than
indiscriminately scale back their marketing function. Maintaining marketing
resources and budgets at current levels, or even increasing them, can represent
an opportunity to maintain or improve profitability when market conditions are
unstable. An aggressive business that nurtures the power of its marketing func-
tion may even take advantage of a downturn to become more profitable than a
more conservative and complacent competitor that downsizes or curtails the
power of its marketing function. For example, the marketing function may be
instrumental in understanding how customers’ needs are changing, adjust seg-
mentation strategies accordingly, and adapt product and pricing strategies.
In conclusion, the following should be said: First, marketing subunits

should continue to play a crucial role in contemporary organizations, despite the
recent trend towards dispersing marketing activities. Second, a powerful market-
ing function is associated with improved financial performance above and be-
yond the impact of marketing within the firm as a culture or orientation. Third,
the marketing function becomes especially instrumental and should be empow-
ered in particular under conditions of heightened competitive intensity, market
turbulence, and market potential. Collectively, these findings suggest that the
erosion of the power of the marketing function, if indeed real, is a worrisome
trend that should be monitored very closely. And this is even more of a concern
for companies facing unstable and cutthroat markets. Of course, establishing a
link between marketing and financial performance is only part of the challenge.
What remains to be done is convincing other organizational functions and key
decision makers of the benefits of maintaining or even strengthening the power
of the marketing function within the firm.
1.2.2. Optimal marketing structure – postulate of marketing

costs’ effectiveness and competitiveness
Marketing system as means of presenting information about entrepreneurship or
other activity’s results to costumers should be extra flexible and universal. This
requires a large variety of entrepreneurship, very different groups of costumers,
growing risk of entrepreneurship and risk management methods, which are be-
coming more complicated. However, the most important reason of marketing
system development is that marketing as market making force requires more and
more input and management intelligence.
Meanwhile marketing studies in many cases argue about lack of theoretical
and practical researches for modern marketing:
− optimization of marketing mix, interdependence and interaction of sin-
gle components, also about behavior of structure in the conditions of
globalization development and risks probabilities increase;
− effects of marketing input and every single marketing mix component’s
input to marketing effectiveness have not been quantitative systemati-
cally investigated;
− it is not formatted standardized the accounting system of marketing in-
put and effects, thus it is impossible to prepare marketing budget;
− it is not formatted marketing risk management system.
Further in the paper marketing management system is presented, which is
based on analytical researches and expert valuations. This allows:
− to estimate stochastic dependencies between marketing input and ef-

fects;
− to estimate marketing mix components behavior interdependences;
− to format marketing mix optimization problem as task of stochastic op-
timization;
− to apply adequate portfolio of investments management estimating op-
timal marketing mix.
Marketing mix structuring throughout marketing cost

optimization
While developing the entrepreneurship very often the dilemma comes de-
ciding to which analysis of the chosen entrepreneurship to give the priority – the
full-scale products or behavior engineering or to the related marketing? If we
want to search for the most suitable markets when we find out the most possible
levels of product or service quantity or volume; or to plan the entrepreneurship
according to the analysis of the demand of the certain products (their functions).
Of course, this is a problem of the entrepreneurship developing which results are
oriented to the market, but in the future there may be some lack of the final the-
sis for the mentioned priorities.
There is a necessity for the marketing and for the other entrepreneurship
components to form costs and revenue budget and to search for the methods and
ways how to optimize it. It is a complicated task because there are a lot of prob-
lems in marketing, which show how to measure the efficiency of the separate
means of marketing (Show, Merriek, 2005). That is related with the main ele-
ments of the marketing mix structure – product, price, place, promotion (4P).
The quantitative evaluation of the efficiency of the marketing mix (4Ps) and the
optimal capital distribution should become the strategic rule in the marketing
efficiency training (Ward, 2004). But the principals of the optimal distribution
remain the same and the rise of the additional requirements is related to the rise
of the steps of desegregation.
The complex of the operational marketing means – the effective and con-
structive mean of entrepreneurship development and marketing strategies reali-
zation. Entrepreneurship development and related marketing interaction and
especially the quantity evaluation of the feedback becomes the most important
problem while we are planning rational marketing and entrepreneurship devel-
opment budgets (McDonald, 1997; Naresh et al., 2006). The formulation, analy-
sis and decisions of this problem usually are managed on the basis of entrepre-
neurship development and marketing projects. Of course, this circumstance
reduces the concreteness and the reliability of the results in this research situa-
tion but taking it into consideration that the most nowadays entrepreneurship and
marketing projects become adequate entrepreneurship and marketing managing
models for long term existential. That is almost the only one possibility to inves-
tigate the interaction of the entrepreneurship projecting and marketing normally.
Whatever the chosen entrepreneurship development strategies and that
caused marketing strategies are, the means of operational marketing mix remain
one of the most important instruments which helps to influence the formation of
the strategies and, on the other hand, to estimate the costs needed to the realiza-
tion of those means. Furthermore, some objects of the influence and research of
these means (product, price) are just entrepreneurship development or economi-
cal relations objects and this may be informative during the benefit-cost analysis.
In the future text we will offer the idea of the algorithm of the rational mar-
keting mix means structure requested by adequate inventive portfolio conception
and the idea of the decision (Rutkauskas, Stankeviciene 2003) and together in
response to the benefit (effect) and costs of the marketing (see Table 1.4).
The combination of the marketing mix must be determined by the custom-
ers and the end users and, of course, by the distribution channels. Product, price,
promotion, place (4P) as the components of the marketing mix have to be inves-
tigated as the related marketing means which have to be optimally matched in
order to achieve marketing purposes. For the determination of the structure of
the marketing mix it is very important to understand the connection existing in
each market between the participants of the market (customers, competitors,
sellers). When we project the structure of the costs of the marketing mix it is
very important to estimate the competitive environment and other possible re-
flected actions of the customers and competitors. The optimal combination of
the expenses or the structure of the costs of the marketing mix will be deter-
mined by the characteristics of the market or the selected marketing strategy.
Probably, the structure of the marketing mix in the price leader strategy will
differ from the structure of the complex in the differentiation strategy, which has
to be selected totally different for the same market, price, product quality, super-
vision service, time for the realization of the order.
In this paper we will try to characterize the separate elements of the mix ac-
cording to their possibilities to increase the volume of the market (in this case –
to increase the total received profit) if the certain sum of money is given to that
element. Of course, this is a stochastic measure, i.e. indicators that define the
possibilities and probabilities of the effect (see Table 1.4). Also, in the table
there are defined detailed elements of the marketing mix. Here we need to give
the attention to the fact that the distribution of the effectiveness of marketing
means possibilities and probabilities defined by the experts has the same direc-
tion growth of the effectiveness and risk.
Marketing Mix Optimization Problems’ Experimental Solution

Preparation and realization of experimental situation are improved from
Ginevicius R. and Ginevicius A. (2008). Optimal solution is seeking under these
presumptions:
1. Let us take 4 P (product, price, promotion, place) marketing mix (i = 1,
2, 3, 4)
2. Let us analyze three (j = 1, 2, 3) states of saturation of marketing input:
1 – not saturated, 2 – optimal, 3 – saturated
3. Let us take a presumption that marginal probability distribution of every
single unit’s input effect – e2 (i = 1, 2, 3, 4) of 4 P means is fully defined
by two parameters: ai – average, si – standard deviation:
e1(a1, s1), e2(a2, s2), e3(a3, s3), e4(a4, s4) (1.1)
4. Let us to regard to objective existing statistical dependencies between
effects and costs:
C = (Cij) i, j = 1,4 (1.2)
where Cij – correlation between i and j effects
5. Effectiveness of solution let us estimate by investors’ (owner) utility
function – U (e, g, r), which depends on e – effect, g – guaranty of ef-
fect, r – riskiness of effect:
e α1 ⋅ g α 2
U (e, g, r) = α o (1.3)
r α3
or
lnU(e, g, r) = lnαo + α1lne + α1lng – α3lnr (1.4)
where αo, α1, α2, α3 – parameters of utility function.
The numerical characteristics of the effect of separate marketing means

N (a; σ) are given in the Table 1.4. Their content we can interpret as the mar-
ginal effect of the use of financial recourses N (a; σ) achieving the marketing
purposes and it is measured as the growth of total profit. As it was emphasized,
the indexes of the profit growth possibilities are the stochastic indexes and here
are estimated as normal accidental measure N (a; σ) with parameters – average a
and standard deflection σ. Of course, there are complicated correlation connec-
tions between the separate marketing means effectiveness possibilities, which
influence the management of profit possibilities and risk. It is obvious, given
parameters a and σ are the most important parameters characterized the effect of
the use of marginal resources: a is the average of the total profit marginal growth
possibilities which is the most probable value in this case and σ is the standard
deflection of total profit marginal growth possibilities which is the whole possi-
bilities risk (inconstancy) measure.
Table 1.4. The means of aggregated and disaggregated marketing mix 4 P and their
financial effects
The increase of total profit

when the expenses for
Means
the mean are increased by
one conditional unit
1 Product N1(1,032; 0,04)
1.1 Product universality N11(1,01; 0,02)
1.2 Product quality and design N12 (1,02; 0,03)
1.3 Product service N13(1,04; 0,05)
1.4 Guarantee service and returning possibility N14(1,06; 0,06)
2 Price N2(1,11; 0,94)
2.1 Price positioning and discounts N21(1,09; 0,07)
2.2 Payment conditions N22(1,11; 0,08)
2.3 Financing conditions N23(1,13; 0,13)
3 Promotion N3(1,17; 0,2)
3.1 Advertisement and public relations N31(1,14; 0,16)
3.2 Personal sales and sales support N32(1,16; 0,19)
3.3 Trade mark policy N33(1,19; 0,24)
4 Place N4(1,22; 0,28)
4.1 Distribution channels and density N41(1,21; 0,25)
4.2 Order cycle. Reserves, transportation N42(1,23; 0,31 )
In this situation the natural task is to choose such structure of marginal fi-
nancial means distribution between separate marketing means, which guarantee
the most useful result of total profit growth according to the possibilities of the
effect and their guarantees and subject’s (investor) beneficial function. The most
suitable mean for the decision of such task is imitation technologies (Rut-
kauskas, 2006; Rutkauskas, 2003; Stankevičiene, 2007, Ginevičius et al., 2007;
Zavadskas, 2008), which allow solve that difficult stochastic programming task
in needed precision.
Fig. 1.2. Scheme of Marketing Mix Optimization Parameters’ Expert Valuation and
Tasks’ Analytical Solution
Together with four marketing mix elements (product, price, promotion, and
place), there are analyzed the elements which detail them and show total profit
marginal growth possibilities probability distribution. The parameters of aggre-
gated marketing elements effectiveness possibilities probability distribution ex-
pressed by the total profit growth are the average meanings of part
(disaggregated) elements possibilities probability distribution, and it is the in-
formation that disaggregated marketing mix elements are independent accidental

measure. That technically makes the decision-making more ordinal but we need
to watch properly the impact of that presumption when the real statistic depend-
ency exists. (Fig. 1.2)
In spite of this the practical decisions (Fig. 1.2) show that if there are the
same purposes and limitations of the tasks and no very big dependence between
disaggregated main marketing mix components and the decisions almost will not
change entering that dependency (Rutkauskas, Stankeviciene 2007).
Now we will analyze the case while we use only four main marketing
means (4P). Having each of four means distribution of the possibilities effec-
tiveness N (a1, σ1), N (a2, σ2), N (a3, σ3), N (a4, σ4) and, using the possibility of
imitational modeling, we generate 32.000 possible structures (portfolio) of mar-
ginal recourses distribution and together the possible meanings of those portfo-
lios in “profit (x) – risk (y)” set. In picture 6 in b section we see the set of
discreet portfolio meanings, which cover the solid set of portfolio possibilities, if
each change of the elements of the structure is even (Rutkauskas 2006, Rut-
kauskas 2003).
The adequate portfolio formation for Marketing Mix under Risk

and Uncertainty
Using the modern portfolio ideology it is possible to do the researches of
average and standard deflection (risk) of marketing outlay marginal efficiency,
and using the adequate portfolio ideology (the adequate portfolio of marketing
outlay marginal efficiency for stochastic nature (Fabozzi et al. 2002, Rutkauskas
2006, Rutkauskas, Stankeviciene 2006) the set of those possibilities, its risk and
the reliability of each are investigated.
So, from the two dimension set – risk (standard deviation) – average effi-
ciency (average distribution) is transformed to three dimension set (see Fig. 1.3),
where the possibilities of marketing marginal effect are investigated according to
the efficiency possibilities measure (ordinate), possibilities risk set (abscise) and
the reliability or guarantee of each of possibilities (aplikate).
In picture 1.3b section we can see how the izoguarantees (Rutkauskas 2006)
arrange in the projection risk-efficiency set, i.e. lines, which link the points of
effective zone with the same reliability. The projections of certain izoguarantees
are certain level of quintiles while the standard deflection is changing. We can
see this in “5 quintiles” projection. There are chosen 1% and 99% minimum and
maximum level percent lines. To compare, we can analyze previous discussed
effective zone on basis of four main marketing mix means (4P) with 12 means
(see Table 1.4; Fig. 1.4).
Fig 1.3. Is analyzed the effective surface of main marketing means (4P) marginal effect
possibilities (a); the projection of effective surface in possibilities-risk set (b);
the effective “5 quantiles” zone set (c)
Fig. 1.4. The views of marketing mix 12 disaggregated means effective surface (a),
efficiency zones (b) and the "5 quantiles" set views (c)
It is difficult to separate the difference between the effective surfaces visu-

ally, but if we analyze the projections of these surfaces to the “profit-risk” set
effective zones and, especially, to “5 quintiles” projections (compare Fig. 1.3c
and Fig. 1.4c sections), so we will see that for portfolios from 12 disaggregated
marketing structure means keep close profit possibilities to the first case, but it is
natural that the risk of all possibility set grows. Also, the guarantees of separate
possibilities change going from four means case to 12 mean case.
Usually, when we give (project) finance to the marketing, the start structure
evaluation is done in the main marketing means – 4P set. For that reason, it is
interesting what the portfolio decisions logic would do if we accepted condition
that the disaggregated price making elements get the freedom to change, but the
structure of given finance according to the main marketing means is fixed (Rut-
kauskas and Stankevičienė, 2006).
Fig. 1.5 shows how significant the view of “5 quintiles” projection set
changes when we pass from 12 disaggregated means marginal costs effect
evaluation to 12 disaggregated main means elements evaluation, when we do a
presumption that for each aggregated complex we give the same part of marginal
costs (compare Fig. 1.4a and Fig. 1.4b sections).
No doubt, when we form the task there are a great number of difficult ques-
tions. First group of questions is related with the selection of criteria’s, which
will dictate the choice of certain structure (portfolio). How should we make the
structure of the historical data, which will let to evaluate the processes and de-
pendences analyzed in entrepreneurship project and marketing strategies? How
the chosen optimization criteria will match to general entrepreneurship and mar-
keting management purposes and principles? Those problems could be solved,
but in most cases we need significant efforts.
Now we will try to check our analyzed version while we use a great amount
of historical information and experts, ant get Table 1.4 data. On that date basis
were created the effective surfaces, which give the information for the subject
about the all efficiency possibility set of marginal costs, its risk and each of pos-
sibility reliability. In optimization theory it is common that the decision-making
criteria depend on those variable measures, which include the formation of the
task limitations. In this case the adequate criteria should be three-dimension sub-
ject’s utility function (profit quantity, risk, reliability), which, of course, depends
on all mentioned parameters.
In Fig. 1.6 we have the geometrical view about the possible use of effective
surface and utility function for potential optimization. In the point (or points)
where the utility function touch the effective surface, there should be the mean-
ings of u2 < u1 portfolio (structure) which gives the biggest utility for the subject.
Of course, it is necessary to define the structure of the marginal costs between
the divided marketing mix elements.
Fig. 1.5. The projection of the 12 disaggregated marketing mix means “5 quantile” in
profit-risk set: a) when the distribution of marginal costs is not limited,
b) when the distribution is limited
In picture 1.6a section there is given the effective surface of marketing mix
marginal costs profit possibilities. The essence of the surface efficiency is such
that in that part of the sphere the projections of izoguarantee are effective lines
and for the effective surface points are characteristic the optimal Paret condi-
tions (Fabozzi and Markowitz 2002). In picture 1.6b section there is given the
effective surface of marginal profit of concrete marketing mix means 4P. Here
are given 4 points – A1, A2, A3, A4, which can be the optimal decisions accord-
ing certain criteria’s (target functions).
Each of them has these coordinates and generates such 4 structures (see Ta-
ble 1.5).
Fig. 1.6. The moment of decision making: a) the total view which illustrate the effective
surface and utility function touch point finding process, b) Optimal decisions meanings –
A1, A2, A3, A4 in marketing mix 4P elements effective surface
Structures (portfolios), which give those decisions, are: S1, S2, S3, S4.
The result S3 = S1, o S4 = S2 is natural because points A1, A3 A2, A4 are the
quantiles of the same survival functions shown in trust levels.
Table 1.5. Optimal portfolios’ structures and characteristics

A1 (0,05; 1,03694; 0,75) S1 (0,6667; 0,1111; 0,2037; 0,0185)
A2 (0,1; 1,08328; 0,25) S2 (0,0741; 0,3519; 0,3333; 0,2407)
A3 (0,05; 1,10762; 0,75) S 3 = S1
A4 (0,1; 1,21899; 0,25) S 4 = S2
The situation analysis reveals the possibilities how to create dependences

between the marketing marginal costs and the total profitableness growth of the
project and how to create the presumptions for marketing mix (costs) structure
(portfolio) managing, and it shows the possibilities how to choose such market-
ing development strategies which will guarantee the wanted input of marketing
means with certain resources to the growth of total profit with wanted (chosen)
guarantee. That is the necessary presumption for projecting and realization of
sustained entrepreneurship development strategies.
Also, as emphasized in the article mentioned literature that there is the pos-
sibility (Show and Merriek, 2005) to reveal the quantitative dependences be-
tween marketing costs and it’s created effect. Here are needed modern
experimental systems, which could homogenize the profitableness, riskiness and
reliability in concrete situations.
To sum up, such conclusions regarding this research can be made:
1. Entrepreneurship marketing management involves almost all existing
marketing problems. The most important of them could be classified as
marketing mix decisions making under risk and uncertainty, when such
criteria as profitability possibilities of marketing instruments, guaranty
of possibilities and riskiness are taken into consideration.
2. The management of marketing mix means marginal costs stochastic
gives a presumption to project entrepreneurship development according
to the growth scale, its riskiness and reliability.
3. The idea of adequate investment portfolio is applied directly to the op-
timization of the marketing mix structure. The imitational technologies
give possibilities to solve the difficult stochastic programming tasks in
real time and wanted precision.
4. To concrete the entrepreneurship development and sustained market
processes interaction and quantitative dependency are needed up-to-date
expert systems, which allows make a like-minded the indexes of effi-
ciency, riskiness and reliability.
5. It is purposive to create the informative systems established by the con-
ceptual researches about the marketing costs and entrepreneurship re-
sults dependency addresses and forms which allows to find out the
accountability and calculation elements which together with generated
information about the apriori expected regularities allows to reveal the
totality of complicated connections between entrepreneurship develop-
ment and marketing means costs.
6. Entrepreneurship and marketing projects should be analyzed together,
reflecting all previous mentioned and other main entrepreneurship for-
mation and marketing possibilities interaction moments.
7. Entrepreneurship and marketing projects should be prepared so that they
become a mean of real management of projected entrepreneurship and it ac-
companied marketing system. It is necessary to realize the task “projects for
all entrepreneurship and marketing life period” as full as it is possible.
2
Quantitative Evaluation of Enterprise
Marketing
2.1. The main tasks and objectives of enterprise

marketing evaluation
Enterprise marketing may be referred to socio-economic systems because it pos-
sesses their main features. Generally speaking, marketing is a system of activi-
ties. This is because, first, marketing consists of a number of elements,
performing some specific functions in it. Second, the specific functions of these
elements allow them to make sets of elements or system’s subsystems. Third,
each of these elements has a feature which allows it directly or through its func-
tioning in a set to contribute to achieving of a general aim of the system. This
would not be possible if the elements were not interconnected. The interaction of
the elements is based both on the specific and general features of the elements.
This interaction is purposeful, i.e. aimed at achieving a general aim of the sys-
tem. However, this may be ensured only if the relationships between the ele-
ments and their sets are appropriately arranged, i.e. structured (Ginevičius,
2009a,b).
45
46 2. QUANTITATIVE EVALUATION OF ENTERPRISE MARKETING
Second, enterprise marketing is a social system, integrating a particular

amount of materials, equipment, information and other material resources.
The aim of investigating socio-economic systems is the search for possibili-
ties of changing their state as desired, i.e. the search for possibilities to control
them (Ginevičius, 2009b). The control or management of a system may be
achieved only if its state (or performance) is evaluated. So far, systems have
been described quantitatively. For this purpose, the criteria describing their ef-
fectiveness were sought and efforts were made to determine the aims, quality of
performance, etc., of the enterprises analysed.
It is stated that to manage, organize or control the system, which could pur-
sue its aim successfully, it is necessary ‘to study the systems, their parts and
their interaction’ (Jasinevičius, 1981). It is hard to believe that this system‘s
analysis may help to create the required conditions for its effective management.
If the quality of the effectively operating system is slightly improved, we will
get an effectively performing enterprise, but we will not be able to compare the
costs of the enterprise performance improvement with the scope of the im-
provement attained. To achieve this aim, the state of the system should be evalu-
ated quantitatively. It has been proved that the introduction of a quantitative
measure allows us to investigate a research object more accurately and from
more perspectives than could be achieved by any quantitative description
(Перегудов, Тарасенко, 1989).
A possibility to quantitatively evaluate the performance of a socio-
economic system means that this system should be adequately described (Gi-
nevičius, 2009a,b). Systems‘ classifications, i.e. their subdivision into groups
based on their common qualities allows us to reflect the state of the systems.
The above classifications play an important role in the description of the
systems. The analysis of the literature on the problem shows that there is a great
number of various classifications. This may be accounted for by the fact that
each classification is based on some specific quality of the system. The classifi-
cations may be based on the nature of the system, the methods of management
(Перегудов, Тарасенко 1989), the nature and qualities of the constituent ele-
ments and their relationships or general system‘s qualities (Zakarevičius, 2002;
Kučinskas, Kučinskienė, 2002; Mann, 2000; Stoškus, Beržinskienė, 2005). They
may also be base don the principle of system‘s formation, its aim, complexity,
the ability to change and the relations with the environment (Stoškus,
Beržinskienė, 2005), as well as on the mathematical model used to describe a
system, physical properties and application peculiarities, the level of its organi-
zation and on the qualities of seven sets describing a system (Jasinavičius,
1981). It is clear that each author suggests a different classification, which is
based on the quality chosen by him/her. The question arises if a uniform com-
prehensive widely accepted classification should be sought or the present situa-
2. QUANTITATIVE EVALUATION OF ENTERPRISE MARKETING 47
tion with the existence of many different classifications makes sense? To answer
this question, the aim of systems’ classification should be determined first. Sys-
tems’ analysis is aimed at obtaining deep knowledge about them for the purpose
of creating the effective system management. Systems are large, complex struc-
tures. Researchers have not developed yet the methods of their comprehensive
analysis, therefore, some investigators select and try to classify systems accord-
ing to one particular aspect which is relevant to them, e.g. size, aim, relationship
with the environment, etc. In this case, classifications based on various qualities
allow us to select one of them, which is most suitable for the analysis of a par-
ticular problem.
From the perspective of the analysis presented in this work, the classifica-
tion of the systems into real (material) and theoretical (abstract) ones seems to be
most relevant. The systems of the first group include the inorganic (i.e. physical,
chemical, etc.) objects and organic or animated nature (e.g. biological, social,
economic, etc.) systems.
Theoretical (abstract) systems are hypotheses, theories, formalized models,
etc. (Lydeka 1998). In other words, they represent our knowledge about the state
of the real (material) systems. This division is relevant for evaluating the state of
these systems. It becomes clear when the interrelationships between the real
(material) and theoretical (abstract) systems are investigated. In fact, the systems
of the second group are deducted from the systems of the first group, i.e. the aim
of the theoretical (abstract) systems is to reflect the real (material) systems.
Therefore, the statement that theoretical (abstract) systems are formalized mod-
els makes sense. It should only be added that these are the formalized models of
the real (material) systems.
The abstract theoretical model reflecting the considered enterprise market-
ing as a real (material) system is the 4P model.
2.2. Methods and ways of quantitative evaluation of

enterprise marketing strategies based on 4P model
Socio-economic systems are large complicated systems. The researchers discuss
the problem of the ways and methods of describing the state of a socio-economic
system at a particular moment of time. Some of them think that this may be
achieved by using a single quality or criterion. For example, the economic and
social development of the states and their regions is often evaluated based on
Gross Domestic Product (GDP) per capita. It is believed that this criterion inte-
grates all aspects of the development. It is true that this criterion reflects a gen-
eral state of development, however, it hardly reflects ecological, social and other
aspects of socio-economic development. The development of a region does not
mean only the growth of its economic level. There may be a region with a highly
developed industry, though with high environmental pollution. In this case, it
can hardly be considered a highly developed region. Therefore, the cases, when
one criterion adequately reflects the aim of the system, make an exception
(Перегудов, Тарасенко, 1989). In real life, large systems are multifaceted, i.e.
have many various aspects and subaspects, which are oriented to the achieve-
ment of a general aim of the system. These aspects and subaspects are described
by various criteria. This is the basis of quantitative multicriteria evaluation of the
state of the considered systems. Multicriteria evaluation is considered to be a
universal method of quantitative evaluation of social-economic systems. How-
ever, many problems arise in its practical research implementation. First, the
number of criteria, describing the research object and its various aspects, or a
socio-economic system and its aspects, may be very large, and the problem of
the accuracy of evaluation arises. Second, the criteria describing various aspects
of the research objects (RO) may be of various dimensions, i.e. they can hardly
be compared. In this case, a problem of their integration into a single generaliz-
ing criterion arises. Third, the directions of their effect may be different, e.g.
when the increase of the value of one criterion means that the situation is getting
better, while the same growth of another criterion’s value shows a worsening
situation. However, the currently used multicriteria evaluation methods allow us
to eliminate all these difficulties, and, therefore, they are successfully used for
solving various problems (Figueira et al., 2005).
2.3. Quantitative multicriteria evaluation of enterprise

marketing
2.3.1. Developing a set of criteria describing enterprise

marketing
Irrespective of the problem considered, multicriteria evaluation is implemented
in several steps (or stages), including the statement of the problem, definition of
a research object and the tasks and, finally, the determination of the quantity to
be used for describing the state of the research object and measures to be taken
to improve the situation (Ginevičius, Podvezko, 2005; Podvezko, 2008).
Multicriteria evaluation is based on the formation of a set of criteria, based
on a list of the available criteria. The evaluation will be adequate if all quantities
reflecting the essential aspects of the considered research object are included in
the set. However, the main factors, limiting the number of criteria to be used in
the analysis, should be taken into account (Ginevičius, 2007).
The main idea of multicriteria evaluation is the integration of the criteria

describing the research object (RO) into one generalizing criterion. prior to this
integration, the effect of each of the criteria on the RO, i.e. its weight, should be
determined by experts. This operation raises the main problem in multicriteria
evaluation because any research object may be described by a few or by a doz-
ens and more criteria (a region is a good example). Therefore, experts are faced
with a very difficult problem – to determine accurately the significance (weight)
of a great number of criteria in respect of the research object. The experience
shows that this task can be successfully performed if the number of the criteria
used in the evaluation does not exceed ten or twelve (Ginevičius, 2006a). The
solution to this problem is often sought in simplification of the operation. First,
all the criteria are ranked according to their significance, ten their weights are
found by the formula (Ginevičius, Podvezko, 2004):
, (2.1)
ri
ωi =
m
∑ ri
i =1
where wi is the j-th criterion weight; r is the mean rank of the j-th criterion, as-
signed by all experts, m is the number of criteria.
As shown by formula (2.1), the highest rank is assigned to the most signifi-
cant criterion, while the lowest rank is given to the least significant one.
It can be stated that the considered approach is worthless because it does
not provide a possibility even to approach the desired accuracy of the criteria
weights. First, it is difficult to determine, for example, the appropriate ranks of
dozens of the considered criteria. Second, the weights of all less significant crite-
ria obtained from formula (2.1) are so small that they can hardly have any effect
on the result of multicriteria evaluation. However, when the number of the
evaluation criteria is so large, any expert evaluation method will yield similar
results because the determination of the criteria weights by expert obeys the fol-
∑ ωi = 1,0 (Hwang, Yoon, 1981; Ginevičius, Podvezko, 2009).

m
lowing rule:
i=1
It follows that the number of the evaluation criteria should be decreased.
This may be achieved in several ways (Ginevičius, Podvezko, 2005).
One of this methods is the reduction of the number of criteria by choosing
the most significant criteria excluding a part of them from analysis. This may be
achieved by consulting with experts or by using mathematical statistics methods
(Ginevičius, Podvezko, 2005).
However, there is a doubt that the reduction of the number of the criteria
describing the research object to that which the experts can handle is not the
right way to obtaining the objective results of its multicriteria evaluation, be-
cause it may decrease the evaluation accuracy.
The solution to the problem is to analyze more thoroughly the nature and
the interaction of the considered criteria. The smaller the number of the criteria
used to describe the research object, which, according to its nature, is a complex
system, the wider aspects they reflect. This means that each criterion left in the
set integrates the effect produced by other less significant criteria on the research
object. Thus, the reduction of the number of criteria poses another problem asso-
ciated with the determination of their weight – an expert should accurately de-
termine the weight of the criteria integrating the weight of a number of less
important criteria (subcriteria).
It is clear that, in this case, the evaluation accuracy will be lower and it may
be inadequate to the actual situation.
The qualities of any considered phenomenon, which are described by a
number of criteria, are associated with the RO as a whole. The analysis has
shown that, in this case, all the criteria are interrelated as the elements of a sys-
tem (Saaty, 1980; Ginevičius, 2006a,b). A currently widely used approach to
these criteria as unrelated issues emerged because the methods of simultaneous
evaluation of a number of criteria were not known.
The interrelationship between the criteria means their interaction. In some
cases, this means the coordination of the actions aimed at achieving a common
aim, while, in other cases, it implies subordination (Ginevičius, 2007). The sub-
ordination relationships suggested the ways for reducing the number of the con-
sidered criteria.
If there is a subordination relationship between two criteria of the set, they
differently affect the considered object. The criterion affecting by some other
criterion is more significant with respect to the research object. The subordinate
criterion affects the research object indirectly, i.e. through the criterion to which
it is subject to, and, therefore, its significance to the considered object is smaller.
When the criteria of a set are arranged according to the principle of subor-
dination, their hierarchical structure is obtained. The criterion position at a par-
ticular level of this structure depends on how many less significant criteria it
integrated (Ginevičius, 2007).
The above structure shows either all or only the most essential qualities of
the considered object, while a particular criterion of the set cannot do it, i.e. it
cannot describe a particular aspect or the whole research object. Therefore,
grouping of the criteria describing the research object into sets is a very impor-
tant operation in developing the structure of the criteria (Ginevičius, 2007).
When this is made according to the suggested methods, the hierarchical structure
of the criteria describing enterprise marketing, which is shown in Fig. 2.1, is
obtained.
Fig 2.1. The hierarchical structure of the criteria describing enterprise marketing system
2.3.2. Multicriteria evaluation of enterprise marketing activities
2.3.2.1. The aims of quantitative evaluation of enterprise

marketing and normalization of the criteria values
In recent years multicriteria evaluation methods (MEM) have been extensively
used both in analytical studies and in solving practical problems. This may be
accounted for by their applicability to solving the problems of quantitative
evaluation of any complex systems (objects), described by a number of criteria.
Their another advantage is flexibility, because both minimizing and maximizing
criteria expressed in various dimensions may be integrated into a single general-
izing criterion. The considered criteria are characterized by the following prop-
erty; when their values are increasing, the situation may improve in some cases
and worsen in other cases. The integration is possible due to normalization, al-
lowing for making all the criteria dimensionless, i.e. comparable.
However, the currently used methods of multicriteria evaluation have some
drawbacks, limiting the scope of their application. These drawbacks do not af-
fect the calculations only if multicriteria evaluation aims to arrange the alterna-
tives of the considered phenomenon in order of preferences. The methods of
multidimensional criteria normalization are used for this purpose, when the val-
ues normalized by using these methods, are obtained by dividing, for example,
the value of the j-th criterion by the sum of all its values in all considered alter-
natives. In this case, a normalized value of the j-th criterion of a particular alter-
native depends on the context, i.e. the values of this criterion found in other
alternatives affect the considered value. However, we often need to know the
value of multicriteria evaluation of a particular alternative of the considered
phenomenon or object. The alternatives may be represented, for instance, by
social-economical development of the state regions as a research object and its
level in particular regions, as well as the development of higher schools as a
research object and its level at a particular school, the efficiency of enterprise
performance as a research object and the situation at some particular enterprises
in this respect, etc. This could allow us to analyse the influence of various fac-
tors on these criteria and to assess the state of a particular research object from
various perspectives, not considering its relationships with the alternatives. This
would be a new area of both theoretical and practical studies.
Now, a great number of various qualitative and quantitative methods of
multicriteria evaluation, differing in their complexity, are used (Figueira et al.,
2005; Завадскас, 1987, 1991; Ustinovičius, 2001; Ustinovičius, Zavadskas,
2004; Hwang, Yoon, 1981; Saaty, 1980, 2005; Beuthe, Scannella, 2001). Quali-
tative methods based on expert judgements are used to determine one or several
best alternatives (Hokkannen, Salminen, 1997; Ginevičius, Podvezko, 2001,
2003, 2007; Ginevičius et al., 2005; Бешелев, Гурвич, 1974; Yevlanov, 1984;
Yevlanov, Kutuzov, 1978; Fan, Ma, Tian, 1997; Завадскас, 1991; Ustinovičius,
2001; Hwang, Yoon, 1981; Saaty, 1980; Brans, Vincke, Mareschal, 1986; Brans,
Mareschal, 2005; Opricovič, Tzeng, 2004; Roy, 1996; Zavadskas, Kaklauskas,
1996; Zavadskas et al., 2001; Kaklauskas, et al. 2006; 2007, 2008; Larichev,
Moshkovich, 1977; Liaudanskienė et al., 2009; Mickaitytė et al., 2008; Šlio-
gerienė et al., 2009). Quantitative methods can evaluate quantitatively every
alternative and determine the differences in the obtained values among the alter-
natives being evaluated. The meaning of multicriteria evaluation methods is de-
fined by the so-called method SAW (Simple Additive Weighting):
S j = ∑ ωi rij ,
m
(2.2)
i =1
where Sj is the value of multicriteria evaluation of j-th alternative, wi is the

weight of the i-th criterion, ~
rij is a normalized value of i-th criterion for j-th al-
ternative.
As can be seen from formula (2.2), to find the value of multicriteria evalua-
tion, we need to have normalized criteria values. Normalization depends on the
method of multicriteria evaluation used. Calculation based on the method SAW
is performed by using the following formula:
(2.3)
rij
rij =
∑ rij
n
,
j =1
where rij is the value of i-th criterion for j-th alternative.
The method SAW also provides for the following type of maximizing crite-
ria normalization (Завадскас, 1991; Ustinovičius, 2001; Hwang, Yoon, 1981):
(2.4)
rij
rij = ,
max rij
j
where max rij is the largest value of the considered criterion.

j
Multicriteria evaluation by a complex proportional methods (COPRAS) is
based on the use of the formula (Kazlauskas et al., 2006; Zavadskas et al., 2007)
as follows:
S – min ∑ S – j
n
(2.5)
j =1
K j = S+ j +
S – j ∑ – min
n
S
,
j =1
S– j
where Kj is the value of j-th alternative obtained by the evaluation by COPRAS;
∑ r+ij
m
S+ j = is the sum of the weighted values r+ ij of all maximizing criteria
i =1
∑ r−ij
m
(whose best value is the largest value) of j-th alternative; S− j = is the
i =1
same for all minimizing j-th alternative‘s criteria (whose best value is the small-
est value).
Data normalization in calculating by COPRAS is as follows:
. (2.6)
rij wi
rij = n
∑ ijr
j =1
Multicriteria evaluation method TOPSIS (Technique for Order Preference

by Similarity to an Ideal Solution) is base don the criterion C *j (Hwang., Yoon
1981; Opricovič,Tzeng 2004):
D−j
C ∗j = ( j = 1, …, n ) , (2.7)
D∗j + D−j
where C ∗j is the evaluation value of j-th alternative by TOPSIS; D −j is the dis-

tance of j-th alternative from the worst solutions; D∗j is the same from the best
solutions.
TOPSIS is based on vector data normalization:
r ij
r~ij = (i = 1, …, m; j = 1, … , n). (2.8)
n
∑ rij2
j =1
In fact, normalization by TOPSIS (Hwang, Yoon, 1981; Opricovič, Tzeng,

2004) is as follows:
(2.9)
ωi rij
ωi rij =
∑ rij2
n
.
j =1
As shown by formulas (2.3, 2.4, 2.6, 2.8, 2.9), in all cases, the normalized
value of i-th criterion’s j-th alternative is obtained from i-th criterion values of
all other alternatives. Therefore, the above normalization logic is suitable when
multicriteria evaluation is aimed at ranking the alternatives of the research ob-
ject. However, it does not fit, when the aim of evaluation is to assess a particular
alternative, based on a number of criteria, because, in this case, each criterion
value should be converted into a dimensionless quantity.
Such a problem would be rather complicated and it has not been completely
solved yet, except for one solution suggested in (Ginevičius, 2008) because the
criteria are expressed in various dimensions. In our case, the values relating to
four marketing subsystems and their components are expressed in the same
unit – percent. Moreover, the research object is only one, therefore, we have
only one alternative.
2.3.2.2. Determining the significance of enterprise marketing

As mentioned in Section 3.3.2.1, the weights of the criteria are assigned by ex-
perts. The results of their evaluation are presented as a matrix E = eik
(i = 1,..., m; k = 1,..., r ) , where m is the number of the criteria considered and r is
the number of experts. At the initial stage, the experts rank the criteria, assigning
the rank equal to unity (one) to the most significant criterion, two – to the second
most significant criterion, etc., while the least significant criterion is assigned the
rank m. Here, m is the number of the criteria compared. The equivalent criteria
are given the same rank, i.e. the arithmetic mean of the respective ranks.
The estimates assigned by various experts are usually different, therefore, a
generalized evaluation result may be used in research if it is proved that the es-
timates elicited from the experts are consistent, i.e. they are in agreement from
the statistical perspective.
To determine the consistency of experts’ estimates, the so-called concor-
dance coefficient W is used. The coefficient is calculated based on the data pre-
sented in the matrix of the criterion ranking E .
The concordance coefficient was defined by M. Kendall (1970). Taking
into account the judgements of all experts, we calculate the sum ei of the i-th
criterion ranks
∑ eik
r
ei = (i = 1,..., m) , (2.10)
k =1
the mean value e
∑ ei ∑∑ eik
m m r
e= i =1
= i =1 k =1
, (2.11)
m m
and the square sum S of the deviation of the values ei from the mean value e :
∑ ( ei − e )
m
. (2.12)
2
S=
i =1
The concordance coefficient W is calculated by the formula (Kendall 1970;

Podvezko 2005, 2007):
12 S
, (2.13)
( )
W=
r m m2 − 1
2
where m is the number of the criteria compared, r is the number of experts.

If the experts’ estimates are consistent, the value of the concordance coeffi-
cient W is about unity, but if the estimates differ considerably the value of W is
about zero.
The concordance coefficient can be practically used if its limiting value, in-
dicating that the estimates provided by the experts may be still considered con-
sistent, is determined. M.Kendall proved (Kendall, 1970) that when the number
of the objects is m > 7 , the significance of the concordance coefficient could be
determined, using χ 2 criteria. The random value
12 S
χ 2 = Wr ( m − 1) = , (2.14)
rm ( m + 1)
is distributed according to the distribution χ 2 with the degree of freedom

v = m − 1 . According to the chosen significance level α (which is usually equal
to 0.05 or 0.01) we can find the critical value χ kr
2
from the table of χ 2 distribu-
tion with the degree of freedom v = m − 1 (Čekanavičius, Murauskas, 2000). If
the value of χ 2 obtained by formula (2.6) is larger than χ kr
2
, the estimates of the
experts are considered to be consistent.
Eleven highly qualified experts evaluated the significance of subcriteria de-

scribing the activities associated with each component of the enterprise market-
ing system (i.e. product, price, promotion, place). Each criterion was assigned
the rank which could range from one (if the criterion was important) to m, if the
considered criterion was least important (with m denoting the number of the cri-
teria considered). The results of the evaluation of subcriteria describing product
are given in Table 2.1.
Table 2.1. The results obtained in ranking subcriteria describing product
Expert
assigned
1 2 3 4 5 6 7 8 9 10 11
Sum of
ranks
Place
Criterion
Range of goods
1 8 1 1 1 5 1 8 5 5 8 4 47 4
(products)
2 Product design 3 7 5 7 6 4 4 4 3 3 6 52 5
3 Innovations 5 4 2 3 3 3 3 2 1 2 1 29 2
4 Quality 1 2 3 2 2 2 2 1 2 1 3 21 1
Brand / trade-
5 2 3 4 4 1 5 1 3 4 4 2 33 3
mark
Packing (form,
6 4 8 6 8 8 7 7 7 7 5 7 74 7
size, etc.)
7 Extra services 6 5 7 6 7 6 5 6 6 6 5 65 6
8 Warranties 7 6 8 5 4 8 6 8 8 7 8 75 8
Based on the data presented in Table 2.1, the square sum S = 3008 of the
deviations from the mean value, as well as the concordance coefficient
W = 0.592 , and chi square value χ 2 = 45.58 were calculated by the formulas
(2.10–2.14), while the critical value χ kr
2
, taken from the distribution table with
the degree of freedom v = 8 − 1 = 7 and the significance level α = 0.05 , was
equal to 14.07. The obtained χ 2 value is considerably larger than the critical
value, therefore, the estimates of experts are considered to be consistent.
The subcriteria describing the second main component of the marketing
model price were ranked in a similar way, and the consistency of experts’ esti-
mates was determined. The results obtained in the evaluation of subcriteria de-
scribing price are presented in Table 2.2.
Table 2.2. The results obtained in ranking subcriteria describing price
Expert
assigned
1 2 3 4 5 6 7 8 9 10 11
Sum of
ranks
Place
Criterion
1 Initial price 1 2 1 1 3 3 1 2 1 1 2 18 1
Special offers /
2 6 1 2 2 1 4 2 1 3 2 1 24 2
discounts
3 Terms of payment 4 6 6 6 7 7 5 6 4 6 5 62 7
4 Responsibilities 7 4 5 3 2 6 3 5 2 3 4 44 3
Price differentia-
5 3 5 4 4 5 1 6 4 7 4 6 49 5
tion
6 Pricing strategies 6 3 3 5 6 2 4 3 6 5 3 46 4
Crediting, payment
7 2 6 7 7 4 5 7 7 5 7 7 64 6
conditions
Based on the data presented in Table 2.2, the square sum S = 1828.9 of the
2
the degree of freedom v = 7 − 1 = 6 and the significance level α = 0.05 , was
The estimates of the experts referring to subcriteria describing the third
main component of the marketing system, promotion, are given in Table 2.3.
2
, as mentioned above, was equal to
12.59. The obtained χ 2 value is considerably larger than the critical value, there-
fore, the estimates of experts are considered to be consistent.
The results of the expert evaluation of subcriteria describing the fourth main
component of the marketing system, place, are given in Table 2.4.
Table 2.3. The results obtained in ranking subcriteria describing promotion
Expert
assigned
1 2 3 4 5 6 7 8 9 10 11
Sum of
ranks
Place
Criterion
1 Advertising 2 2 3 1 1 2 2 2 1 1 2 19 1
Increase of sales,
2 1 3 2 2 4 3 1 1 1 2 1 21 2
promotion
Planning and organi-
3 sation of business 3 1 1 4 6 1 3 3 4 5 3 34 3
communication
Personal communica-
4 6 4 5 3 2 5 5 4 6 4 4 48 4–5
tion (relationships)
Brand (trademark)
5 5 5 4 6 3 4 4 5 3 3 6 48 4–5
management
6 Corporate identity 4 7 6 7 5 7 7 6 7 6 7 69 7
Information and com-
7 munication with the 7 6 7 5 7 6 6 7 5 7 5 68 6
public
Table 2.4. The results obtained in ranking subcriteria describing place
Expert
assigned
1 2 3 4 5 6 7 8 9 10 11
Sum of
ranks
Place
Criterion
1 Place of sales 2 3 1 3 2 1 1 2 1 2 1 19 1
2 Direct sales 1 2 4 1 1 2 2 1 3 1 2 20 2
3 Indirect sales 4 1 3 2 4 6 4 3 4 3 5 39 4
4 Sales online 5 6 5 4 5 3 5 5 5 5 4 52 5
Channels of sales /
5 3 5 2 5 3 4 3 4 2 4 3 38 3
distribution, mediators
Storing of products
6 6 4 6 6 6 5 6 6 6 6 6 63 6
and equipment
2
the degree of freedom v = 6 − 1 = 5 and the significance level α = 0.05 was

When the consistency of expert estimates is proved, it is possible to under-
take the task of the second stage of evaluation, i.e. to determine the weights (sig-
nificance) of the criteria. Experts evaluated the significances (weights) of the
four main components (criteria) of the marketing system including the product,
price, promotion and place, as well their subcriteria. The indeterminate character
of the evaluation values is clearly demonstrated when the range of the assigned
values is determined, i.e. the k-th expert predicts the least possible i-th criterion
value eik (min) and its largest value eik (max) . The mean values
( )
eik = eik (min) + eik (max) / 2 of evaluation intervals ( eik (min) , eik (max) ) correspond to
expert evaluation in points. In this case, quantitative evaluation (weight) of i-th
 m 
criterion significance ωi is obtained by the formula  ∑ ωi = 1 :
 
 i=1 
∑ eik
r
ωi = k =1 , (2.15)
∑∑ eik
m r
i =1 k =1
The significance of the four main components (criteria) of the marketing

system expressed in per cent, as well as the limits of variation of the estimates
provided by eight experts, their mean values and weights calculated by formula
(2.15) are presented in Table 2.5.
The calculations show that the experts estimate the first criterion (product)
as most significant, while the significances (weights) of the three other criteria
(price, promotion, place) do not differ considerably.
In a similar way, the values of the estimates’ variation, their limits and
weights were calculated by formula (2.15) for all subcriteria describing the mar-
keting system. The estimates of eight experts assigned to subcriteria describing
the product and the calculation results are given in Table 2.6.
The experts ranked quality (as the subcriterion of the product) the highest,
assigning the second place to the brand/trademark of the product, and the third
place – to warranties.
weights were calculated by formula (2.15) for the second main component of the
marketing model, price. The estimates of eight experts assigned to subcriteria
describing price and the calculation results are given in Table 2.7.
Table 2.5. The estimates of the significance of the main marketing criteria
The
Expert Mean r
values of sum ∑ eik
1 2 3 4 5 6 7 8 k =1
evaluation
Criterion and
intervals
weights ωi
Product (P1) 40;60 50;70 100;100 20;80 50;70 40;100 50;100 50;80 50.0;82.5 530
1
Mean value e1k 50 60 100 50 60 70 75 65 66.3 0.282
Price (P2) 20;30 50;70 100;100 50;50 25;40 30;90 20;100 50;80 43.1;70.0 452.5
2 Mean value e 2 k 25 60 100 50 32.5 60 60 65 56.6 0.240
Promotion (P3) 10;20 40;50 100;100 50;50 30;50 30;80 30;100 40;60 41.3;63.8 420
3 Mean value e3k 15 45 100 50 40 55 65 50 52.5 0.223
Place (P4) 40;60 40;50 100;100 50;50 30;50 30;100 40;100 40;80 46.3;73.8 480
4 Mean value e 4 k 50 45 100 50 40 65 70 60 60 0.255
2. QUANTITATIVE EVALUATION OF ENTERPRISE MARKETING
61
62
Table 2.6. The estimates of the significance of subcriteria describing product
Mean r
Expert
values of The sum k∑=1eik
1 2 3 4 5 6 7 8
i
evaluation and weights ω
Criterion intervals
Range of goods
10;20 30;50 20;30 20;80 15;30 30;100 20;50 30;90 21.9;56.3 312.5
1 (products)
15 40 25 50 22.5 65 35 60 39.1 0.110
Mean value
Product design 10;20 30;50 10;30 50;50 5;25 20;100 20;100 20;100 20.6;59.4 320
2
Mean value 15 40 20 50 15 60 60 60 40.0 0.113
Innovations 20;40 30;50 10;25 10;90 15;30 40;100 30;100 40;100 24.4;66.9 365
3
Mean value 30 40 17.5 50 22.5 70 65 70 45.6 0.128
100;
Quality 30;50 90;100 0;100 50;80 60;100 40;100 50;90 52.5;90.0 570
4 100
Mean value 40 95 50 65 80 70 70 71.3 0.200
100
Brand / trademark 10;30 50;70 30;70 50;50 5;25 60;80 40;100 60;80 40.6;71.3 405
5
Mean value 20 60 50 50 15 70 70 70 60.6 0.142
Packing (form,
5;10 30;50 20;40 50;50 0;15 20;50 10;30 20;50 19.4;36.9 225
6 size, etc.)
7.5 40 30 50 7.5 35 20 35 28.1 0.079
Mean value
Extra services 5;5 0;10 10;25 20;8 25;30 40;90 10;40 40;90 18.8;46.3 260
7
Mean value 5 5 17.5 50 27.5 65 25 65 32.5 0.091
Warranties 10;20 90;100 20;40 10;90 20;40 30;100 5;70 30;100 26.9;70.0 387.5
8
Mean value 15 95 30 50 30 65 37.5 65 48.4 0.136
Table 2.7. The estimates of the significance of subcriteria describing price
Mean r
Expert The sum ∑ eik
values of k =1
1 2 3 4 5 6 7 8
evaluation and weights ωi
Criterion intervals
Initial price 40;80 50;70 30;70 20;80 30;50 60;80 60;90 35;50 40.6;71.3 447.5
1
Mean value 60 60 50 50 40 70 75 42.5 55.9 0.187
Special offers /
40;60 50;70 20;50 50;50 50;80 30;50 40;100 50;85 41.3;68.1 437.5
2 discounts
50 60 35 50 65 40 70 67.5 54.7 0.182
Mean value
Terms of pay-
20;40 10;30 10;30 50;50 30;50 10;30 5;40 30;50 20.6;40.0 242.5
3 ment Mean
30 20 20 50 40 20 22.5 40 30.3 0.101
value
Responsibilities 20;40 50;70 25;40 20;80 30;50 40;80 30;65 30;50 30.6;59.4 360
4
Mean value 30 60 32.5 50 40 60 47.5 40 45.0 0.150
Price differentia-
10;20 50;70 30;60 50;50 25;40 40;70 10;40 20;40 29.4;48.8 312.5
5 tion
15 60 45 50 32.5 55 25 30 39.1 0.130
Mean value
Pricing strategies 10;20 50;70 10;40 50;50 10;30 30;70 20;60 10;30 23.8;46.3 280
6
Mean value 15 60 25 50 20 50 40 20 35.0 0.117
Crediting, pay-
20;40 30;50 20;50 50;50 15;50 50;100 10;50 10;40 25.6;53.8 317.5
7 ment conditions
30 40 35 50 32.5 75 30 25 39.7 0.132
Mean value
63
64
Table 2.8. The estimates of the significance of subcriteria describing promotion
Mean r
Expert The sum ∑ eik
values of k =1
1 2 3 4 5 6 7 8
i
evaluation and weights ω
Criterion intervals
Advertising 40;60 30;50 30;60 10;90 25;60 20;60 30;100 30;55 26.9;66.9 375
1
Mean Value 50 40 45 50 42.5 40 65 42.5 46.9 0.178
Increase of sales,
40;60 30;50 10;20 10;90 25;80 30;70 40;90 20;50 25.6;63.8 357.5
2 promotion
50 40 15 50 52.5 50 65 35 44.7 0.169
Mean Value
Planning and
organisation of
20;25 30;50 5;15 20;80 20;40 20;80 20;40 30;50 20.6;47.5 272.5
3 business commu-
nication 22.5 40 10 50 30 50 30 40 34.1 0.129
Mean Value
Personal commu-
10;15 50;70 5;15 20;80 40;80 10;60 20;40 50;70 25.6;53.8 317.5
4 nication
12.5 60 10 50 60 35 30 60 39.7 0.150
Mean Value
Brand (trademark)
5;10 30;50 10;20 20;80 15;50 30;100 20;35 30;50 20.0;49.4 277.5
5 management
7.5 40 15 50 32.5 65 27.5 40 34.7 0.129
Mean Value
Corporate identity 5;10 30;50 20;50 20;80 25;50 30;80 5;30 30;50 20.6;50.0 282.5
6
Mean Value 7.5 40 35 50 37.5 55 17.5 40 35.3 0.134
Information and
communication 5;10 10;30 15;30 50;50 20;50 20;100 15;35 10;20 18.1;40.6 235
7
with the public 7.5 20 22.5 50 35 60 25 15 29.4 0.111
Mean Value
Table 2.9 The estimates of the significance of subcriteria describing place
Mean The
Expert r
values of sum ∑ eik and
1 2 3 4 5 6 7 8
evaluation k =1
Criterion intervals weights ωi
Place of sales 20;40 10;30 20;40 50;50 10;30 40;100 40;100 20;65 26.3;56.9 332.5
1
Mean value 30 20 30 50 20 70 70 42.5 41.6 0.233
Direct sales 30;50 10;30 20;30 10;90 30;60 20;80 50;80 30;50 27.5;58.8 335
2
Mean value 40 20 25 50 45 50 65 40 41.9 0.234
Indirect sales 5;5 0;10 10;15 10;90 40;80 10;40 50;80 10;20 16.9;42.5 237.5
3
Mean value 5 5 12.5 50 60 25 65 15 29.7 0.166
Sales online 10;20 10;20 3;10 50;50 10;50 20;80 5;25 10;20 14.8;34.4 196.5
4
Mean value 15 15 6.5 50 30 50 15 15 24.6 0.138
Sales / distribution
30;50 10;20 30;60 40;60 5;20 20;80 40;100 30;60 25.6;56.3 327.5
5 channels, mediators
40 15 45 50 12.5 50 70 45 40.9 0.229
Mean value
65
66
Table 2.10. The estimates of the significance of the main marketing criteria in the enterprise in 2010
Expert The weights

1 2 3 4 5 6 7 8 9 ωi and mean
Criterion values ei
1 Product (P1)
70;90 75;85 60;90 10;90 80;100 70;90 30;60 90;100 60;80 0.282
Mean value
e1k 80 80 75 50 90 80 45 95 70 73.9
2 Price (P2)
70;90 70;80 80;100 20;80 75;95 50;70 30;60 80;90 60;90 0.240
Mean value
e2k 80 75 90 50 85 60 45 85 75 71.7
3 Promotion
(P3) 60;90 75;85 50;80 20;80 85;95 70;90 20;60 80;90 70;90 0.223
Mean value 75 80 65 50 90 80 40 85 80 71.7
e3k
4 Place (P4)
70;90 70;80 60;80 20;80 55;75 80;100 20;40 90;100 70;90 0.255
Mean value
e4k 80 75 70 50 65 90 30 95 80 70.6
The experts ranked the highest two out seven subcriteria describing price,
i.e. the initial price and special offers/discounts. They were followed by respon-
sibilities as the next most important subcriterion.
weights were calculated by formula (2.15) for the third main component of the
marketing model, promotion. The estimates of eight experts assigned to subcrite-
ria describing promotion and the calculation results are given in Table 2.8.
The experts ranked advertising and increase of sales, promotion as most
significant out of seven subcriteria describing promotion. They were followed by
the subcriterion personal communication (relationships).
weights were calculated by formula (2.15) for the fourth main component of the
marketing model, place. The estimates of eight experts assigned to subcriteria
describing place and the calculation results are given in Table 2.9.
The experts ranked advertising and direct sales, place of sales and sales /
distribution channels, mediators, as most significant out of five subcriteria de-
scribing place. They were followed by other two less significant subcriteria.
When all calculations were performed, the weights of the components of
the marketing systems were obtained (see Fig. 2.2).
Given the weights of the criteria, describing the enterprise marketing sys-
tem, the quantitative evaluation of the state of this system may be continued at
some other levels, including the determination of the criteria weights. Then, the
appropriate multicriteria evaluation method may be chosen for the final evalua-
tion of the system.
Given the weights of the criteria describing enterprise marketing, we may un-
dertake the evaluation of its state at other stages, i.e. to determine the values of the
criteria and then to perform the evaluation by the selected multicriteria methods.
2.3.2.3. The results obtained in multicriteria evaluation of

enterprise marketing
Multicriteria evaluation of enterprise marketing requires not only the weights of
the criteria describing it, but their values as well. Looking at Fig. 2.1, we can
state that the values of the above criteria can be obtained only from a survey of
experts because these values are difficult to normalize, implying that they cannot
be expressed in the units of measurement (e.g. monetary or weight units, etc.).
All values of the criteria, describing marketing activities of an enterprise, which
were elected from the experts, are given in the Tables 2.1–2.9.
As can be seen, the experts provided the minimum and maximum values,
i.e. intervals of all the criteria. Given these values, it is possible to determine the
most probable value and the evaluation risk by using mathematical statistics
methods, etc.
Fig. 2.2. Weights of the components of enterprise marketing

system described by the hierarchical set of criteria
Enterprise marketing criteria values were obtained for two purposes. First,
it was necessary to perform multicriteria evaluation based only on the data of the
first level, i.e. 4P (product, price, promotion and place) values and weights. Sec-
ond, the same evaluation had to be performed, based on the hierarchical struc-
ture of the criteria (Fig. 2.2). This was necessary for us to be able to answer the
question how much the evaluation results, obtained in two cases, differ. The
latter, in turn, could confirm that multicriteria evaluation, based on the hierarchi-
cal structure of the criteria, really makes sense.
The initial data of one level of multicriteria evaluation are given in Table 2.10.
The calculation performed based on SAW yielded the following results:
4
M 2010 = ∑ ωi ei = 72.04. (2.16)
i =1
where M 2010 is the criterion used in multicriteria evaluation of the considered

enterprise marketing activities based only on the values and weights of the mar-
keting subsystems (base don 4Ps).
Complex evaluation of marketing based on the hierarchical structure of cri-
teria commences from quantitative evaluation of the marketing subsystems
(based on 4Ps). The initial data for multicriteria evaluation of the marketing sub-
system of Product are given in Table 2.11.
The following results were obtained in calculating the performance of the
enterprise in 2010 by the method SAW:
8
P2010 = ∑ ωi ei = 61.73. (2.17)
i =1
The value obtained in multicriteria evaluation based on the unstructured set
of criteria is equal to 73,9% (see Table 2.9). This means that the evaluation dif-
ference makes above 12%.
The initial data for multicriteria evaluation of the marketing activities of the
subsystem Price are given in Table 2.12.
The calculation results of the enterprise activities in 2010 based on the use
of the method SAW are as follows:
7
K 2010 = ∑ ωi ei = 64.58. (2.18)
i =1
The value obtained in multicriteria evaluation of this marketing subsystem
based on the unstructured set of criteria is equal to 71,7% (see Table 2.9). This
means that the evaluation difference makes about 7%.
The initial data for multicriteria evaluation of the marketing subsystem
Promotion are given in Table 2.13.
70
Table 2.11. The estimates of the significance of subcriteria describing Product in the enterprise in 2010
Expert The weights

1 2 3 4 5 6 7 8 9 ωi and mean
Criterion values ei
Range of goods (products) 80;90 70;80 10;30 10;90 60;80 90;95 80;100 80;90 70;80 0.110
1 Mean value 85 75 20 50 70 92.5 60 85 75 71.4
Product design 80;90 80;90 20;50 20;80 40;80 40;50 40;60 40;70 40;70 0.113
2 Mean value 85 85 35 50 60 45 50 55 55 57.8
Innovations 70;80 80;90 10;20 20;80 40;70 70;80 40;60 80;90 40;80 0.128
3 Mean value 75 85 15 50 55 75 50 85 60 61.1
Quality 60;90 –;– 20;50 10;90 70;100 70;90 20;40 50;80 20;70 0.200
4 Mean value 75 – 35 50 55 80 30 65 45 51.8
Brand / trademark 80;90 90;95 40;70 0;100 60;70 40;60 60;80 80;90 50;80 0.142
5
Mean value 85 92.5 55 50 65 50 70 85 65 68.6
Packing (form, size, etc.) 80;90 90;95 30;60 20;80 20;60 40;60 40;40 40;60 60;80 0.079
6 Mean value 85 92.5 45 50 40 50 40 50 70 58.8
Extra services 70;90 80;85 40;70 10;90 10;30 50;70 20;40 50;50 60;80 0.091
7 Mean value 80 82.5 55 50 20 60 30 50 70 55.3
Warranties 80;90 85;95 70;100 10;90 40;60 70;80 20;40 30;50 50;70 0.136
8 Mean value 85 90 85 50 50 75 30 40 60 62.8
Table 2.12. The estimates of the significance of subcriteria describing Price in the enterprise in 2010
Expert The weights

ωi
1 2 3 4 5 6 7 8 9
Criterion and mean
values ei
Initial price 70;80 70;75 10;30 10;90 30;80 10;40 60;80 50;50 50;100 0.187
1
Mean value 75 72.5 20 50 55 25 70 50 75 54.7
Special offers /
80;90 80;90 40;70 0;100 40;70 80;100 80;100 80;90 80;100 0.182
2 discounts
85 85 55 50 55 90 60 85 60 76.1
Mean value
Terms of payment 90;90 80;90 30;60 20;80 20;60 80;100 40;80 80;90 70;90 0.101
3
Mean value 90 85 45 50 40 90 60 85 80 69.4
Responsibilities 70;80 85;95 30;60 20;80 80;100 70;90 60;80 80;90 70;90 0.150
4
Mean value 75 90 45 50 90 80 70 85 80 73.9
Price differentiation 70;80 50;60 20;50 20;80 30;60 70;90 60;80 20;50 60;80 0.130
5
Mean value 75 55 35 50 45 80 70 35 70 57.2

Pricing strategies 70;80 80;90 10;40 20;80 50;80 70;90 60;70 60;70 60;90 0.117
6
Mean value 75 85 25 50 65 80 65 65 75 65.0
Crediting, payment 80;90 50;60 10;30 20;80 60;80 70;90 20;40 40;60 50;75 0.132
7 conditions
Mean value 85 55 20 50 70 80 30 50 62.5 55.8
71
72
Table 2.13. The estimates of the significance of subcriteria describing Promotion in the enterprise in 2010
Expert The weights

ωi and
1 2 3 4 5 6 7 8 9
Criterion mean values
ei
Advertising 70;90 70;80 40;70 20;80 60;80 70;90 60;80 70;80 60;100 0.178
1
Mean Value 80 75 55 50 70 80 70 75 80 70.6
Increase of sales, 60;90 80;85 50;80 20;80 60;70 80;100 60;80 80;90 60;80 0.169
2 promotion
Mean Value 75 82.5 65 50 65 90 70 85 70 72.5
Planning and organi-
sation of business 70;80 70;80 30;60 20;80 30;60 40;60 20;40 80;90 60;80 0.129
3
communication
Mean Value 75 75 45 50 45 50 30 85 70 58.3
Personal communica- 70;90 65;75 20;50 20;80 40;100 30;50 30;40 20;40 40;60 0.150
4 tion
Mean Value 80 70 35 50 70 40 35 30 50 51.1
Brand (trademark) 80;90 80;85 20;40 20;80 60;70 40;60 30;40 80;90 40;50 0.129
5 management
Mean Value 85 82.5 30 50 65 50 35 85 45 58.6
Corporate identity 80;100 80;90 60;80 10;90 80;80 60;80 20;20 80;90 40;70 0.134
6
Mean Value 90 85 70 50 80 70 20 85 55 67.2
Information and
80;100 85;95 60;80 20;80 30;80 50;70 20;20 80;90 50;70 0.111
communication with
7
the public
90 90 70 50 55 60 20 85 60 64.4
Mean Value
Table 2.14 The estimates of the significance of subcriteria describing place in the enterprise in 2010
Expert The weights

ωi
1 2 3 4 5 6 7 8 9
Criterion and mean
values ei
1 Place of sales 70;80 80;90 40;70 10;90 50;80 80;95 20;40 70;90 70;90 0.233
Mean value 75 85 55 50 65 87.5 30 80 80 67.5
2 Direct sales 70;90 80;90 30;65 0;100 80;100 80;90 60;80 80;90 70;90 0.234
Mean value 80 85 47.5 50 90 85 70 85 80 74.7
3 Indirect sales 70;80 75;85 20;30 20;80 40;80 80;90 60;80 65;85 60;90 0.166
Mean value 75 80 25 50 60 85 70 75 75 66.1
4 Sales online 60;70 0;0 10;15 20;80 30;80 10;20 20;30 50;50 30;50 0.138
Mean value 65 0 12.5 50 55 15 25 50 40 34.7
5 Sales / distribution 50;50 30;40 50;80 20;80 20;40 30;50 10;20 80;90 30;60 0.229
channels, mediators
Mean value 50 35 65 50 30 40 15 85 45 46.1

73
The results given below were obtained in calculating the considered enter-
prise activities in 2010 by using the method SAW:
7
R2010 = ∑ ωi ei = 63.72. (2.19)
i =1
The value obtained in multicriteria evaluation of this marketing subsystem

based on the unstructured set of criteria is equal to 71,7% (see Table 2.9). This
means that the difference in estimates is equal to 8%.
The initial data for multicriteria evaluation of the marketing subsystem
Place of Sale (Channels/Distribution) are given in Table 2.14.
The data obtained in multicriteria evaluation of the enterprise performance
in 2010 by the method SAW are as follows:
5
KA2010 = ∑ ωi ei = 59.53. (2.20)
i =1
The value obtained in multicriteria evaluation of this subsystem, based on

the unstructured set of criteria, is equal to 70,6% (see Table 2.9). This means
that the difference in the estimates makes above 11%.
Given the results of multicriteria evaluation of all marketing subsystems,
making the system of marketing, a general level of enterprise marketing effi-
ciency may be determined as follows:
M 2010 = ω1P2010 + ω2 K 2010 + ω 3 R2010 + ω4 KA2010 = 62.3. (2.21)
Now, we can compare the results of multicriteria evaluation, obtained based
on one level and on the hierarchically structured set of criteria. Earlier calculated
(by formula (2.16)) M2010 = 72.04 allows us to see that the difference in the es-
timates makes about 10%. Base don the fact that a possibility to handle a larger
amount of criteria, provided by the use of an hierarchically structured set of cri-
teria ensures more accurate description of the state of the research object, it may
be stated that complex quantitative evaluation of a multifaceted object, base don
the described system, makes sense and yields more accurate results.
2.4. Determining the influence of enterprise

marketing efficiency on the results of its commercial
activities
Any enterprise, planning to improve its performance, outlines measures to be
taken for improving its marketing strategies. This involves some additional ex-
penses. However, if the investments are made appropriately, the results of the
commercial activities of an enterprise are better.
In this case, the enterprise managers should know what the effect of the in-
vested money is. If it exceeds the expenses, it means that the measures taken to
improve enterprise marketing are effective. In the opposite case, the structure of
costs of marketing activities improvement should be improved. The whole proc-
ess may be graphically shown as follows (See Fig. 2.3):
Fig. 2.3. The dependence of the efficiency of enterprise performance on the costs of
measures and means used for marketing improvement
To determine Ikr (the limit of marketing improvement costs) and εkr (the
limit when investment into the improvement of marketing activities is still rea-
sonable), both IM and εe should be measured. Given these values, we can quanti-
tatively evaluate the effect of expenses on improving marketing activities on the
results of enterprise commercial activities by using the correlation-regression
analysis.
Taking into account that marketing activities may be divided into four sub-
systems (product, price, promotion and place of sale), their economic effect
largely depends on the distribution (proportions) of the total costs of marketing
improvement among these subsystems.
To answer the question about costs distribution, the economic effect from
cost per unit input into a particular marketing component should be determined.
This may be done only by highly qualified specialists, having the experi-
ence in the problems of enterprise marketing improvement.
Such a problem was presented to experts. Trying to evaluate the uncer-
tainty, they specified the variation intervals, i.e. the expected minimum and
maximum values. In further calculations, the average value of these estimates
was used (Table 2.15).
76
Table 2.15. The cost effect (in percents) of unitary capital invested in the main marketing criteria
Expert Mean
1 2 3 4 5 6 7 8 9
Criterion values
1 Product (P1) 30;50 20;40 20;80 20;50 30;72 15;60 20;55 30;50 20;40 22,8;55,2
Mean value e1k 40 30 50 35 51 37,5 37,5 40 30 39,0
2 Price (P2)
Mean value 10;30 15;50 50;50 15;30 26;48 20;45 10;35 10;30 15;50 19,0;40,9
20 32,5 50 22,5 37 32,5 22,5 20 32,5 29,9
e2k
3 Promotion (P3) 20;30 15;30 20;80 10;20 16;63 15;40 20;55 10;30 15;30 15,7;42,0
Mean value e3k 25 22,5 50 15 39,5 27,5 37,5 20 22,5 28,8
4 Place (P4)
Mean value 30;50 10;25 50;50 5;20 14;37 5;25 5;30 30;50 10;25 17,7;34,7
40 17,5 50 12,5 25,5 15 17,5 40 17,5 26,2
e4k
The experts determined that cost per unit input (e.g. litas) into Product (P1)
gives from 0,228 to 0,552 units (litas), the mean value – 0,390; into Price (P2) –
from 0,190 to 0,409 units, the mean value – 0,229; into Promotion (P3) – from
0,157 to 0,420 units, the mean value – 0,288; into Place (Channels/Distribution)
(P4) – from 0,177 to 0,347 units, the mean value – 0,262. Cost per unit input
into all main marketing components – Product (P1), Price (P2), Promotion (P3)
and Place (Channels/Distribution) (P4) gives from 0,752 to 1,728 units, the
mean value – 1,239 units.
The normalized values of the main marketing criteria multicriteria evalua-
tion (the total is 123,9%) shows how cost per unit input should be distributed
among the main four components. The calculation results are presented in Ta-
ble 2.16.
Table 2.16 The results of expert valuations of the effect obtained by unitary capital in-
vestment in the analyzed marketing complex
The name of marketing The value of the effect obtained due to costs of
complex, which is assigned per unit input into the analyzed marketing
a unit of costs complex
Product (P1) 0.31
Price (P2) 0.24
Promotion (P3) 0.23
Place (P4) 0.21
As shown in Table 2.16, to increase the efficiency of marketing, 31 per cent

of all available funds should be invested into Product, 24 per cent – into the im-
provement of pricing strategies, 23 per cent – into Promotion and 21 per cent –
into the improvement of Place of sales (Channels).
3
Marketing Portfolio Management as
Core Strategy for Marketing Returns
Optimization
The third part is intended for applying the developed methodology of marketing
portfolio for solving the problem of marketing returns optimization. This will be
done in the following sequence. The chapter 3.1 will present the origins of port-
folio conception and will provide a thorough discussion on what kinds of assets
can compose the portfolio. Then, in chapter 3.2 the perception of investment
portfolio will be disclosed, along with that the transition from modern (Marko-
witz) portfolio to adequate portfolio in three-dimensional space will be pre-
sented. And, finally, in chapter 3.3 problem of marketing complex costs
optimization will be solved applying the described methods of portfolio man-
agement. The solution of the original situation considering the taken part in the
market is presented.
79
80 3. MARKETING PORTFOLIO MANAGEMENT AS CORE STRATEGY…
3.1. Marketing portfolio as a media for marketing

assets interaction to optimize marketing efficiency
measured with adequate metric
Portfolio (from Wikipedia) literary means “a case for carrying loose papers”
(from Latin, the imperative of portare “to carry” and the plural of folium, mean-
ing “a sheet for writing upon”).
From about 1930 it has also come to mean a “collection of securities or re-
sponsibilities held by an individual” so may refer to:
− A type of briefcase;
− Portfolio (government), the post and responsibilities of a head of a gov-
ernment department;
− Portfolio (finance), a collection of investments held by an institution or a
private individual;
− Career portfolio, an organized presentation of an individual’s education,
work samples, and skills;
− Portfolio career, a philosophy of working for several diverse projects di-
rectly rather than earning a salary from a regular employer;
− Artist’s portfolio, a sample of an artist’s work or a case used to display
artwork, photographs etc.;
− Electronic portfolio, a collection of electronic documents;
− Patent portfolio, a collection of patents owned by a single entity;
− Product portfolio (business administration), 2D separation of products
by their market share and profits or growth rates;
− IT Portfolio, in IT portfolio management, the portfolio of large classes of
items of enterprise Information Technology (IT);
− Project Portfolio, in Project portfolio management, the portfolio of pro-
jects in an organization;
− Portfolio: An Intercontinental Quarterly, a cross-disciplinary literary
journal published between 1945 and 1947;
− Atari Portfolio, a palmtop computer;
− Extensis Portfolio, a digital asset manager;
− Portfolio.com, a business magazine;
− Electronic portfolio, a portfolio that has been prepared for distribution
online;
3. MARKETING PORTFOLIO MANAGEMENT AS CORE STRATEGY… 81
− Portfolio (Grace Jones album);

− Portfolio (Yolandita Monge album);
− Minister without portfolio.
Further we will be in rely with investment portfolio definition as a “Pool of

different investments by which an investor bets to make a profit (or income)
while aiming to preserve the invested (principal) amount. These investments are
chosen generally on the basis of different risk-reward combinations: from “low
risk, low yield” (gilt edged) to “high risk, high yield” (junk bonds) ones; or
different types of income streams: steady but fixed, or variable but with a po-
tential for growth” but also try to tend to concept that “investment portfolio is a
media for investment assets interaction to optimize investment effect measured
with adequate metric”.
For investment portfolio effect mainly is treated as portfolio return. “There
are many different methods for calculating portfolio returns. A traditional
method has been using quarterly or monthly money-weighted returns. A
money-weighted return calculated over a period such as a month or a quarter
assumes that the rate of return over that period is constant. As portfolio returns
actually fluctuate daily, money-weighted returns may only provide an approxi-
mation to a portfolio’s actual return. These errors happen because of cashflows
during the measurement period. The size of the errors depends on three vari-
ables: the size of the cashflows, the timing of the cashflows within the meas-
urement period, and the volatility of the portfolio.
A more accurate method for calculating portfolio returns is to use the true
time-weighted method. This entails revaluing the portfolio on every date where
a cashflow takes place (perhaps even every day), and then compounding to-
gether the sub-period returns”. For marketing portfolio effect ought to be seen
as corresponding business efficiency. Investment portfolio management “Port-
folio management involves deciding what assets to include in the portfolio,
given the goals and risk tolerance of the portfolio owner. Selection involves
deciding which assets to acquire/divest, how many to acquire/divest, and when
to acquire/divest them. These decisions always involve some sort of perform-
ance measurement, most typically the expected return on the portfolio, and the
risk associated with this return (e.g., the expected standard deviation of the ex-
pected return). However, due to the almost-complete uncertainty of future val-
ues, this performance measurement is often done on a casual qualitative basis,
rather than a precise quantitative basis (which would give a false sense of preci-
sion). Typically the expected returns from portfolios of different asset bundles
are compared.
The unique goals and circumstances of the investor must also be consid-
ered. Some investors are more risk averse than others.
Mutual funds have developed particular techniques to optimize their port-

folio holdings”.
Marketing portfolio management concept must sound a bit different than
for Investment portfolio and we will present it later.
The keystone element of financial and investment portfolio, which creates
portfolio value is asset. “In financial accounting, assets are economic resources.
Anything tangible or intangible that is capable of being owned or controlled to
produce value and that is held to have positive economic value is considered an
asset. Simply stated, assets represent ownership of value that can be converted
into cash (although cash itself is also considered an asset).
The balance sheet of a firm records the monetary value of the assets owned
by the firm. It is money and other valuables belonging to an individual or busi-
ness. Two major asset classes are tangible assets and intangible assets. Tangible
assets contain various subclasses, including current assets and fixed assets. Cur-
rent assets include inventory, while fixed assets include such items as buildings
and equipment.
Intangible assets are nonphysical resources and rights that have a value to
the firm because they give the firm some kind of advantage in the market place.
Examples of intangible assets are goodwill, copyrights, trademarks, patents and
computer programs, and financial assets, including such items as accounts re-
ceivable, bonds and stocks”.
As for investment asset one could use understanding that “Any item of
economic value owned by an individual or corporation, especially that which
could be converted to cash. Examples are cash, securities, accounts receivable,
inventory, office equipment, real estate, a car, and other property. On a balance
sheet, assets are equal to the sum of liabilities, common stock, preferred stock,
and retained earnings. From an accounting perspective, assets are divided into
the following categories: current assets (cash and other liquid items), long-term
assets (real estate, plant, equipment), prepaid and deferred assets (expenditures
for future costs such as insurance, rent, interest), and intangible assets
(trademarks, patents, copyrights, goodwill).“
When we talk about marketing assets everything is more complicated, be-
cause marketing is a means for product or service to reach the consumer there-
fore marketing assets often accept the elementary marketing means –
advertisement stands, massage texts and other; marketing MIX – as the contact
points of marketing and business; consumer – as final user of business results;
marketing media – as means to unfold the marketing information.
At the approach of marketing spend optimization

Considering the fact, that marketing activity results are not the object of
official accountability (Rust, Lemon and Zeithaml, 2001), as there are not
enough analytical research to reveal how the influence of marketing creates

shareholder value (Dobbs 2005; Doyle 2000; Lukas, Whitwell and Doyle 2005)
the role of marketing assets goes to different changes of business income
caused by the efforts of marketing activity therein the efforts of risk manage-
ment. Therefore in literature continuously proceed the discussions – could MPT
be analysed to marketing (Cardozo, Smith 1985) and especially for risk impact
assessment.
Financial portfolios use Modern Portfolio Theory (MPT), which deals with
problems of risk and return, to make investment allocation decisions. The im-
pact of MPT on business decision-making has been substantial; major capital
spending projects, for example, are now routinely assessed for risk as well as
return. This message has not yet been taken up by marketing. If marketing calcu-
lations take no account of risk, decisions about resources and how to prioritise
marketing spending may be sub-optimal (Dhar and Glazer, 2003).
So, can MPT be applied to marketing? Marketing spend allocation deci-
sions can be viewed as portfolio investment decisions (Anderson, 1981), whether
the portfolio is considered in terms of customers or customer segments (Rust,
Lemon and Zeithaml, 2001; Libai, Narayandas and Humby, 2002; Dhar and
Glazer, 2003), products (Bordley, 2003) or brands (Petromilli, Morrison, and
Million 2002), However, as Devinney, Stewart and Shocker (1985) point out,
unlike financial portfolios, investment marketing assets is expected to affect the
returns from those assets. Thus, MPT would need modification before it could be
applied to marketing (Cardozo and Smith, 1985).
Despite ongoing interest in the notion of marketing portfolios and the emer-
gence of portfolio management tools such as the Boston Matrix, Directional Policy
Matrix, and StratPort, risk and return has received relatively little consideration in
the marketing literature. Previous discussion of the management of marketing
portfolios has tended to focus either on profit maximisation (Larrcche and
Sruuvasan 1981, 1982) or on customer lifetime value maximisation (Lemon, Rust
and Zeithaml 2001). An early exception is Kotler (1971), who uses variance of
returns as a proxy for risk. However, MPT views risk as depending in large meas-
ure on the covariance of its component investments (Anderson 1981); in other
words, diversification reduces portfolio risk. More recently, Srtvastava and Reib-
stein (2004) consider risk in terms of volatility of cash flows, and Dhar and Glazer
(2003) have revived the argument for using financial portfolio theory to address
marketing portfolios, stressing the importance of understanding risk.
In the Ryals L. etc. (2007) the application of MPT to marketing through a
model that takes into account risk and return is demonstrated. First, MPT is
applied to marketing portfolio made up of customer segments. However, MPT
does not apply literary to marketing portfolios since returns on financial portfo-
lios are generally considered to be determined by the market and therefore in-
dependent of spend allocation, which is not the case in marketing. Therefore in

Ryals L. etc. (2007) MPT is applied to a particular conditions in marketing, in
which returns are affected by the allocation of marketing spend and allows to
optimize risk and returns.
3.2. Straight forward application of Modern Portfolio

Theory
In this chapter we will analyse the earlier mentioned marketing portfolio (see
Ryals etc., 2007) where marketing consumer segments are initiated as market-
ing assets and which will be approached as direct appliance of MPT.
Analysing the basics of MPT we should note that our proposed portfolio
concept – portfolio is a media for the assets interaction to realize holders’ inter-
ests measured with adequate metric and supply information for behaviour
strategies – become universal to different portfolios.
The authors applying MPT to marketing suggests that optimal marketing port-
folios are those marketing portfolios for which:
1. No other combination of customer segments will yield higher returns
with the same level of risk; or
2. No other combination of customer segments will yield the same returns
with lower risk
Realistically, many combinations of customer segments (portfolios) are

possible and their risk/return positions can be plotted. Those that satisfy the
conditions of optimality will lie on what is known as the efficient frontier (Sharpe,
1981).
MPT was developed in the 1950s throughout the early 1970s and was con-
sidered an important advance in the mathematical modelling of finance. Of course
since then, many theoretical and practical criticism have been levelled against it.
The main features and possibilities of MPT could be understood throughout
understanding the concept and main mathematical relations of MPT.
The fundamental concept behind MPT is that the assets in an investment
portfolio should not be selected individually, each on their own merits. Rather,
it is important to consider how each asset changes in price relative to how every
other asset in the portfolio changes in price.
Investing is a tradeoff between risk and expected return. In general, assets
with higher expected returns are riskier. For a given amount of risk, MPT de-
scribes how to select a portfolio with the highest possible expected return. Or,
for a given expected return, MPT explains how to select a portfolio with the
lowest possible risk (the targeted expected return cannot be more than the high-
est-returning available security, of course, unless negative holdings of assets are
possible.)
MPT is therefore a form of diversification. Under certain assumptions and
for specific quantitative definitions of risk and return, MPT explains how to
find the best possible diversification strategy.
Further there would be presented main mathematical equations of “classic”

MPT model.
MPT assumes that investors are risk averse, meaning that given two port-
folios that offer the same expected return, investors will prefer the less risky
one. Thus, an investor will take on increased risk only if compensated by higher
expected returns. Conversely, an investor who wants higher expected returns
must accept more risk. The exact trade-off will be the same for all investors, but
different investors will evaluate the trade-off differently based on individual
risk aversion characteristics. The implication is that a rational investor will not
invest in a portfolio if a second portfolio exists with a more favorable risk-
expected return profile – i.e., if for that level of risk an alternative portfolio
exists which has better expected returns.
Note that the theory uses standard deviation of return as a proxy for risk,
which is valid if asset returns are jointly normally distributed or otherwise ellip-
tically distributed. There are problems with this, however;
Under the model:

− Portfolio return is the proportion-weighted combination of the constitu-
ent assets' returns.
− Portfolio volatility is a function of the correlations ρij of the component
assets, for all asset pairs (i, j).
In general:
− Expected return:
E ( R p ) = ∑ wi E(Ri ) ,
i
where Rp is the return on the portfolio, Ri is the return on asset i and wi

is the weighting of component asset i (that is, the share of asset i in the
portfolio).
− Portfolio return variance:
σ 2p = ∑ wi2 σi2 + ∑∑ wi w j σi σ j ρij ,

i i j ≠i
where ρij is the correlation coefficient between the returns on assets i

and j. Alternatively the expression can be written as:
σ 2p = ∑∑ wi w j σi σ j ρij ,
i j
where ρij = 1 for i = j.

− Portfolio return volatility (standard deviation):
σ p = σ 2p .
For a two asset portfolio:

− Portfolio return:
E ( R p ) = wA E ( RA ) + wB E ( RB ) = wA E ( RA ) + (1 − wA ) E ( RB ).
− Portfolio variance:
σ 2p = w2Aσ 2A + wB2 σ 2B + 2 wA wB σ Aσ B ρ AB .
For a three asset portfolio:

− Portfolio return:
wA E ( RA ) + wB E ( RB ) + wC E ( RC ) .
− Portfolio variance:
σ 2p = wA2 σ 2A + wB2 σ 2B + wC2 σC2 + 2 wA wB σ Aσ B ρ AB +
2 wA wC σ AσC ρ AC + 2wB wC σ B σC ρ BC .
Diversification. An investor can reduce portfolio risk simply by holding
combinations of instruments which are not perfectly positively correlated (cor-
relation coefficient −1 ≤ ρij < 1 )). In other words, investors can reduce their
exposure to individual asset risk by holding a diversified portfolio of assets.
Diversification may allow for the same portfolio expected return with reduced
risk.
If all the asset pairs have correlations of 0 – they are perfectly uncorre-
lated – the portfolio's return variance is the sum over all assets of the square of
the fraction held in the asset times the asset's return variance (and the portfolio
standard deviation is the square root of this sum).
Fig. 3.1. The efficient frontier with no risk-free asset
Efficient Frontier. The hyperbola is sometimes referred to as the 'Marko-

witz Bullet', and is the efficient frontier if no risk-free asset is available. With a
risk-free asset, the straight line is the efficient frontier.
As shown in this graph, every possible combination of the risky assets,
without including any holdings of the risk-free asset, can be plotted in risk-
expected return space, and the collection of all such possible portfolios defines
a region in this space. The left boundary of this region is a hyperbola, and the
upper edge of this region is the efficient frontier in the absence of a risk-free
asset (sometimes called "the Markowitz bullet"). Combinations along this upper
edge represent portfolios (including no holdings of the risk-free asset) for which
there is lowest risk for a given level of expected return. Equivalently, a portfo-
lio lying on the efficient frontier represents the combination offering the best
possible expected return for given risk level.
Matrices are preferred for calculations of the efficient frontier. In matrix
form, for a given “risk tolerance” q ∈ [0, ∞) , the efficient frontier is found by
minimizing the following expression:
wTΣw − q * RTw,
where
− w is a vector of portfolio weights and
∑ wi = 1.
i
− (The weights can be negative, which means investors can short a secu-
rity);
− Σ is the covariance matrix for the returns on the assets in the portfolio;
− q ≥ 0 is a "risk tolerance" factor, where 0 results in the portfolio with

minimal risk and ∞ results in the portfolio infinitely far out on the
frontier with both expected return and risk unbounded; and
− R is a vector of expected returns.
− wTΣw is the variance of portfolio return.
− RTw is the expected return on the portfolio.
The above optimization finds the point on the frontier at which the inverse
of the slope of the frontier would be q if portfolio return variance instead of
standard deviation were plotted horizontally. The frontier in its entirety is pa-
rametric on q.
Many software packages, including Microsoft Excel, MATLAB, Mathe-
matica and R, provide optimization routines suitable for the above problem.
An alternative approach to specifying the efficient frontier is to do so pa-
rametrically on expected portfolio return RTw. This version of the problem re-
quires that we minimize
wTΣw
subject to
RTw = µ
for parameter µ. This problem is easily solved using a Lagrange multiplier.
Empirical testing of proposed marketing portfolio

Diversification and a simple two-segment portfolio
The principle of diversification in the marketing portfolio is demonstrated
in Figure 3.2 (see Table 3.1 for the data used to construct Figure 1). In a simple
marketing portfolio consisting of two segments, if the returns from each seg-
ment are perfectly correlated (i.e. correlation coefficient = +1), the risk-return
trade off is as shown by the lower line. In practice, however, this will rarely be
the case. As the correlation of returns, between segments decreases, more fa-
vourable risk-return trade offs can be achieved, as shown by the upper line.
The risk-return combinations along the upper hue are more favourable
from the marketer’s point of view because they yield higher returns for all lev-
els of risk. As the correlation of returns between segments A and B decreases,
the upper line stretches farther towards the top left comet, and portfolios that,
yield higher returns for given levels of rids can be found. The upper (concave)
line is the efficient frontier. It represents the highest portfolio return achievable
for a given level of risk for segments A and B when they are not perfectly cor-
related.
Fig. 3.2. Diversification and the efficient frontier
Simple case: the two-segment marketing portfolio

Table 3.1 shows a simple world in which only two customer segments, A
and B, are available to the marketing manager. The data are based on realistic
examples from the scorecard database of a large food retailer. The properties of
A, in terms of risk and returns, are very different to the properties of B. Seg-
ment A has returns of 8% and risk (standard deviation) of 3%. This segment is
representative of customers buying an average range of goods on a predictable
basis and is typical of lower income families. Segment B enjoys higher returns
(14%) but also has greater associated risk (7%). This segment typifies custom-
ers buying higher mark-up goods on an occasional basis, such as affluent sin-
gles or young professional couples.
Using assumption 2 (concerning the proportion of marketing spend), a set
of portfolios comprising different proportions of A and B is available to the
marketing manager (Table 3.1, columns 1 and 2). Two scenarios are demon-
strated: A and B. are perfectly correlated (columns 3 to 5); and A and B are not
perfectly correlated (columns 6 to 8). The latter situation describes the actual
case for the data we are using; the former scenario has been constructed using
the same data to illustrate the principal of diversification. We assume a risk-free
rate of 4% to calculate the Sharpe ratios (columns 5 and 8) for 11 different mar-
keting portfolios and to demonstrate the impact of diversification on risk-
adjusted returns (Table 3.1).
As expected, the risk-adjusted returns are higher for portfolios where the
correlation of returns between the two segments is lower. The highest Sharpe
ratio where the two segments are perfectly correlated is 1.429 (column 5); if the
two segments have a correlation of 0.6 the Sharpe ratio could be as high as
1.546 (column 8). Where the segments are perfectly correlated, the highest
Sharpe ratio is where 100% of marketing spend is concentrated on Segment B.
In the case where the segment returns have a correlation of 0.6, the highest risk-
adjusted returns are obtained by investing 60% of marketing spend in Segment
A and 40% in Segment B.
Table 3.1. The impact of diversification on risk-adjusted returns
Theoretical approach to developed case (8,3) (14,7)

3.3. Adequate portfolio versus modern (Markowitz)

investment portfolio
3.3.1. Adequate portfolio intended for the integration of

profitability, risk and reliability
Function of fundamental modern (Markowitz) portfolio and its further amplifi-
cations (Fabozzi, Markowitz, 2002; Reilly, Brown, 2003) is an intention to
commensurate investment profitability and risk objectively and to give an op-
portunity to select a portfolio taking into consideration investor‘s indifference
curve. Efficiency line of portfolio values is fundamental mean of such choice
and optimization (Sharpe, 1964). However, evaluation of the aimed profitabil-
ity‘s reliability and along with general commensuration of profitability, risk,
and reliability levels, the essence of which discloses analytically through de-
signing an effective surface in three-dimensional – profitability, risk, reliabil-
ity – space is of premium and natural importance for today‘s investor. Effective
surface, which is formed as an intersection of survival functions of portfolio
possibilities values and iso-guaranties, not only contributes for such a commen-
suration, but also becomes a set of constraints searching for the possibility of
the highest profitability for an investor, in other words a criteria invoking his
utility function, that depends on profitability, risk, and reliability. Here the word
risk is distinguished in order to stress the principal difference between the risk-
ness of investment possibilities’ and investor‘s risk, which depends also on in-
dividual features of an investor.
In order to reveal in details the contents and mechanism of portfolio in-
vestment decisions’ reliability concept, we will briefly take a look over ade-
quate for investment decisions reliability assessment portfolio anatomy.
Fig. 3.3 presents adequate portfolio for investment decisions reliability as-
sessment, formed for a case of statistically independent assets. “Mean – standard
deviation” portfolio (modern, or Markowitz portfolio (Markowitz, 1952)) is shown
in Fig. 3.3 section a. Next, a bunch of the possible values of all possible “quintiles –
standard deviation” portfolios (Fig. 3.3, section b) is formed. More precisely speak-
ing, not all the quintiles were used for this bunch here, but all percentiles. Thus, the
bunch consists of 100 layers of possibilities’ set, each representing different reli-
ability level. On the basis of the set of formed portfolio values and on the analogy
of the efficiency line of modern portfolio, a set of all efficiency lines is composed,
which is the framework for efficient surface formation. The efficient surface is pre-
sented in Fig. 3.3, section c for the three selected assets, the possibilities of which
here are defined by the Normal probability distributions:
N1(a1 = 0.12, σ1 = 0.03), N2(a2 = 0.07, σ2 = 0.02), N3(a3 = 0.06, σ3 = 0.02).
Fig. 3.3. Succession of adequate portfolio formation
There is no doubt that investor is interested not only in quantitative indica-

tors of investment profitability possibilities, but also in the guarantee of each
possibility – i.e. the probability that investment profitability (return) will not
drop below the certain level. In case of modern stock portfolio, the guarantees
of investment profitability possibilities are usually not discussed, although in
case when portfolio return possibilities’ probability distribution is a Normal
one, there is a direct possibility to evaluate these guarantees, if mean value and
standard deviation are known (Rutkauskas, 2000). Moreover, if the probability
distribution of return possibilities is not Normal and possesses a substantial
enough amount of skewness, then guarantee as a third indicator for possible
value description gains even bigger importance as only in such a manner the
expected value of return can be fully perceived and thoroughly quantitatively
described. Raising every efficiency line from the Fig. 3.3 section b by the level
of its guarantee or reliability, the three-dimensional view (profitability, risk-
ness, reliability) of the investment portfolio is formed (Fig. 3.3 section c). The
precise description of the process of adequate portolio formation and its geo-
metrical view development can be found in (Rutkauskas 2000, 2006; Rut-

kauskas, Stasytytė 2010). In Fig. 3.3 section d we have the three-dimensional
view of utility function, but it will be discussed in details in next chapter.
3.3.2. The need to evaluate the reliability of possibilities

Evaluation of solutions reliability or guarantee is the urgent decision manage-
ment (decisions selection and implementation) problem, that differentiates and
at the same time associates logics and methods of solutions, gained under the
terms of determinated relation, and solutions, gained under the terms of uncer-
tainty and risk. Reliability of solutions, under the terms of determinated rela-
tion, associates with the accuracy of relation measurement and the propriety of
decision methods, while evaluation of reliability, under the terms of uncertainty
and risk, assumes to be entirely distinctive problem. In the work I will use the
portfolio, adequate to the evaluation of investment possibilities reliability, or
simply adequate portfolio, which appears to be not only an innovative approach
to investment decisions management, but also an effective mean to analyze
possibilities and project sustainable development of sophisticated systems
(Rutkauskas, Stasytytė 2010). Analyzing stochastic (probabilistic) values or
processes, reliability of possibility will be measured as reliability or survival
function S(x) = 1– F(x), here F(x) = P{ξ<x} is accumulated distribution func-
tion of investment possibilities.
It is important to notice that in literature for decisions reasoning often prof-
itability and risk concepts are proposed to use, and even more precisely – the
interaction of processes described by these concepts. However, according to the
proposed logics, risk is intended for reflection of not only investor’s possible
losses due to investment possibilities riskness, but also investor’s ability (or
inability) to manage the consequences of this riskness.
3.3.3. The concept of iso-guarantee

In order to approach the evaluation of investment utility for investor according
effectiveness of possibility, possibilities’ riskness and reliability of every possi-
bility, a concept of iso-guarantee is used and applied, which was proposed by
A.V.Rutkauskas (2003). Here and further in the paper investment portfolio and
every asset effectiveness will be perceived as portfolio profitability.
Q-level isoguarantee of investment portfolio is an efficiency line of „q-
level quintile – risk“ portfolio possibilities, which is raised to q level on z axis
(applicate axis) and connecting possibility set values of the same guarantee
under changing risk conditions.
In probability theory and mathematical statistics terminology, iso-

guarantee should indicate a line, connecting q-level quintiles
({ } )
ξ qs : P ξ s ≥ ξ qs = q in a set of portfolio profitability possibilities when portfo-
lio riskness (s – standard deviation) changes (grows).
In general (Markowitz) case, efficiency line of modern portfolio is not iso-
guarantee. If portfolio profitability possibilities mean value equals median for
each risk level, then efficiency line becomes the iso-guarantee of 0,5 level.
According efficient frontier generation logics, if all the possible quintiles
(here – percentiles) become profitability resultant, then structural formation of
the set of iso-guarantees is presented in Figs 3.4 and 3.5. Here, as it was as-
sumed earlier, the selected assets are independent random values N(0.12; 0.03),
N(0.07; 0.02), N(0.06; 0.02).
Fig. 3.4. The origin of iso-guarantee
After plotting all efficiency lines of selected step between neighbouring

quintiles, a set of efficiency lines will be formed (Fig. 3.5), constructing the
base for efficient surface formation. If all iso-guarantees from “risk-
profitability” plane could be lifted into “risk-profitability-reliability (guaran-
tee)” space according to their reliability level, the surface of all possibilities of
investment portfolio would be depicted as in Fig. 3.6. This surface in the paper,
according the analogy of modern portfolio efficiency line title, is named the
efficient surface.
Fig. 3.5. Projection of efficiency lines and iso-guarantees in risk-profitability plane
Fig. 3.6. A scheme of efficient surface (Rutkauskas, Stasytytė 2010)

Fig. 3.6 presents an adequate portfolio efficiency zone (surface). Efficient

surface is a network of intersecting survival functions and iso-guarantees.
While analysing investment portfolio efficiency lines in two-dimensional
plane, we determine possible values of optimal portfolio, and, in turn, propose
the selection of optimal portfolio, when its utility is measured according utility
function depending on profitability and riskness in “risk-profitability plane”.
This line, which in fact is indifference curve, is presented in Fig. 3.7.
Fig. 3.7. The intersection (point E) of indifference curve family and efficiency
line – the optimal portfolio for the investor in “profitability-risk” plane
(Rutkauskas, Stasytytė, 2010)
On the efficient surface, i.e. in three-dimensional space, the role of effi-

ciency lines is assigned to iso-guarantees. Here it is possible to analyse the se-
lection of utility possibilities measured in three parameters: profitability,
reliability of profitability and risk with the help of three-dimensional utility
function.
3.3.4. Practical application of utility function to the set of

possibilities to find an optimal solution
The configurations of possibilities’ set (efficiency zone) and utility (objective)
function and their inter-position, as well as analytical expression of our applied
utility function points out that the magnitude of the possibility, as well as the
increase of reliability of possibility both positively influence the growth of util-
ity. However, the analytical expression of the utility function being used pro-
vides that the increase of risk negatively influences the growth of utility:
 p
U = exp   ⋅ g , (3.1)
r
where U is the utility level of possibility, p denotes profitability, r is the risk
and g – the guarantee.
Such specification of utility function and decision-making procedure is

analytically meaningful, because it allows to solve a complex stochastic pro-
gramming task with the help of imitative technologies and graphical decision-
making methods.
Fig. 3.8 exhibits the mutual position of efficiency zone of the possibilities’
set and utility function under certain (according selected utility function) utility
level. Fig. 3.8a discloses that this is the position of intersection of two almost
continuous and convex with regard to each other surfaces. After dividing both
three-dimensional surfaces into separate sections according certain risk level,
one can watch the process of optimal decision formation. Fig. 3.8b shows the
moment of decision fixing.
Fig. 3.8. The process of optimal decision formation
Indeed, when utility degree of utility function is decreasing, one of the sec-
tions of efficient surface, perpendicular to the abscissa axis OX and, passing
through certain survival function, is first to touch the utility function itself,
along with that touching one of iso-guarantees, while the respective sections of
the higher or lower risk levels do not reach their survival functions.
3.3.5. On the same problem with different view

In paragraph 3.2 “Straight forward application of Modern Portfolio Theory”
was analysed the situation how should be allocated sales between two consumer
segments A and B, when sold unit profit possibilities obeyed the normal distri-
butions NA(0,08; 0,03) and NB(0,14; 0,07), respectively.
Received set of solutions is presented in figure 3.1 of the indicated para-
graph. Herewith Table 3.1 presents values of the investment structure and re-
ceivable profitability and risk acquiring different values of Sharpe ratio.
The most favourable (optimal) solution, probably, would be the one with
the highest Sharpe ratio i.e. the possibility given by the 100% (total) sales in
segment B at the case of absolute dependence and by the ratio of 60:40 between
A and B when the correlation coefficient is 0,6.
Now let’s look at the situation through the eyes of the adequate portfolio.
First of all, lets repeat (see Figure 3.9) MPT result when alongside the absolute
dependence, correlation – 0,6 is also statistically independent case – the upper
maximum line, which apparently has its highest value of Sharpe ratio.
However, we wonder how would look the search of the best possibility
with the contribution of adequate portfolio. Fig. 3.9 presents almost traditional
quartet: effective surface in section a., utility surface in section b., the common
view of the effective and utility surfaces – section c. and their intersection
point – section d.
We see, that the highest utility point, when utility – u is measured by the
utility function
Achieved U=exp g
When e = , g =, and r = and selecting the ratio of % between A and B seg-
ments. Note that there was the case when the profit possibilities in A and B
segments were statistically independent.
a. section
b. section
Fig. 3.9. Two sights on profit maximization: a. section – throughout MPT

(mean value – standard deviation); b. section – throughout adequate portfolio concept
3.4. Optimization of the structure of marketing mix

costs
3.4.1. The general concept of the problem

The main goal of this chapter is to explore the management opportunities of the
main operating marketing mix costs. The opportunities are investigated under
preparing the business project considering that management costs, as well as
the efficiency of total marketing budget, is necessary for business success (see
Show, Merriek, 2005; Ward, 2004). Marketing decisions as well as the all other
decisions related with the managing of the future possibilities are described by
stochastic values and dependences. This helps to evaluate the risk and reliabil-
ity of the investigated subjects quantitatively. The high requirements for deci-
sion methods and especially for optimization methods develop along. The tasks
of the stochastic programming are very complicated as the methods of decision
making, but the existing methods of the decision making are not adapted to
process exceptionally huge amount of information. Every stochastic value,
process or system solution is differently useful or acceptable for various sub-
jects.
3.4.2. Experimental exploitation of adequate portfolio

The adequate portfolio to analyse the chosen situation was already used in the 1
chapter of the dissertation. There was also mentioned that the more detailed
explanation how to use the portfolio will presented in chapter 3, i.e. here. In
fact practically Table 1.4 is the only thing that we should remember. In the Ta-
ble 1.4 there are given the numerical characteristics of the effect of separate
marketing means N (a; s). Their content we can interpret as the measured in
profit marginal effect of the use of unit of financial recourses. As it was empha-
sized, the indexes of the profit growth possibilities are the stochastic indexes
and here are estimated as normal random variable N (a; s) with parameters –
average a and standard deflection s. Of course, there are complicated correla-
tion connections between the separate marketing means effectiveness possibili-
ties, which influence the management of profit possibilities and risk. It is
obvious, given parameters a and s are the most important parameters character-
ized the effect of the use of marginal resources: a is the average of the total
profit marginal growth possibilities which is the most probable value in this
case and s is the standard deflection of total profit marginal growth possibilities
which is the whole possibilities risk (inconstancy) measure.
In this situation the natural task is to choose such structure of marginal fi-
nancial means distribution between separate marketing means, which guarantee
the most useful result of total profit growth according to the possibilities of the
effect and their guarantees and subject’s (investor) beneficial function. The
most suitable mean for the decision of such task is imitation technologies,
which allow solve that difficult stochastic programming task in needed preci-
sion.
In Table 1.4 we see that together with four marketing mix elements (prod-
uct, price, promotion, and place) there are given the elements which detail them
and show total profit marginal growth possibilities probability distribution. We
need to give the attention to the fact that the parameters of aggregated market-
ing elements effectiveness possibilities probability distribution expressed by the
total profit growth are the average meanings of part (disaggregated) elements
possibilities probability distribution, and it is the information that disaggregated
marketing mix elements are independent accidental measure. That technically
makes the decision-making more ordinal but we need to watch properly the
impact of that presumption when the real statistic dependency exists. In spite of
this the practical decisions show that if there are the same purposes and limita-
tions of the tasks and no very big dependence between disaggregated main
marketing mix components and the decisions almost will not change entering
that dependency (see Rutkauskas, 2006).
Now we will analyze the case while we use only four main marketing
means (4P). Having each of four means distribution of the possibilities effec-
tiveness N(a1,s1), N(a2,s2), N(a3,s3), N(a4,s4) and, using the possibility of imita-
tional modeling, we generate 32.000 possible structures (portfolio) of marginal
recourses distribution and together the possible meanings of those portfolios in
“profit (x) – risk (y)” set. In Fig. 3.10 in b section we see the set of discreet
portfolio meanings, which cover the solid set of portfolio possibilities, if each
change of the elements of the structure is even (see Rutkauskas A. V., 2000;
Rutkauskas A. V., Rutkauskas V., 2000).
We can find the sufficient precise and the nearest meaning of criterion an-
swer in Fig. 3.10 where is given the set of discreet possibilities portfolio mean-
ings in b. section. According to the modern and Markowitz theory, the rational
subject searches the best answers in the effective line AB. It is necessary to
remind that in Fig. 3.10 in section a. we have the discreet for marketing set of
the expenses structure, in section b. we have the set of profit possibilities prob-
ability distribution portfolio meanings corresponding to these structures and
given means, and in section c. we have the effective line where all the optimal
(according Paret) answers are (see Fabozzi, Markowitz, 2002).
Using the same principle and Table 1.4 from paragraph 1.2.2 in Fig. 3.10
we have optimal investment distribution between four earlier mentioned assets:
N1(α1=1.032; S1=0.04), N2(α2=1.11; S2=0.09), N3(α3=1.17; S3=0.2),
N4(α4=1.22; S4=0.28)
a. The set of used possible marketing mix structures (portfolio)
w1 w2 w3 w4
0,0 0,0 0,0 1
0,0 0,0 0,0001 0,9999
0,0 0,0001 0,0001 0,9998
-------------------- ----------------- ------------------------ ------------------------
0,9999 0,0001 0,0 0,0
1 0 0 0
b. The set of portfolio means (structures) “risk-profit” in the plane
c. Effective line
Fig. 3.10. The set of discreet marketing structures (portfolios), which are possible for
marginal expenses unit (a. section) and the set of possible portfolio means in double
dimension plane (b. section) and maximum and effective line of set means portfolios
(c. section)
No doubt, when we form the task there are a great number of difficult
questions. First group of questions is related with the selection of criteria’s,
which will dictate the choice of certain structure (portfolio). How should we
make the structure of the historical data, which will let to evaluate the processes
and dependences analyzed in business project and marketing strategies? How
the chosen optimization criteria will match to general business and marketing
management purposes and principles? Those problems are not such which
could not be solved (see Behrens, Hawranek, 1991), but in most cases we need
significant efforts.
Additionally notice, that we have analysed the situation which practically
coincides with the one from the part 1.2.2, only here we accepted the additional
condition that portfolio profitability increase when increases the market share
and all other circumstances are the same.
Fig. 3.11. Investment efficiency maximization case: a. section – considering the market
share, b. section – do not taking into account the market share
Each of them has these coordinates and them generate such 4 structures:
A1 (0,05; 1,03694; 0,75) S1 (0,6667; 0,1111; 0,2037; 0,0185)
A2 (0,1; 1,08328; 0,25) S2 (0,0741; 0,3519; 0,3333; 0,2407)
A3 (0,05; 1,10762; 0,75) S3 = S1
A4 (0,1; 1,21899; 0,25) S4 = S2
Structures (portfolios), which give those decisions, are: S1, S2, S3, S4.
The result S3 = S1, o S4 = S2 is natural because points A1, A3 A2, A4 are the
quantiles of the same survival functions shown in trust levels.
Resuming observation. The situation analysis reveals the possibilities how
to create dependences between the marketing marginal costs and the total prof-
itableness growth of the project and how to create the presumptions for market-
ing mix (costs) structure (portfolio) managing, and it shows the possibilities
how to choose such marketing development strategies which will guarantee the
wanted input of marketing means with certain resources to the growth of total
profit with wanted (chosen) guarantee. That is the necessary presumption for
projecting and realization of sustained business development strategies.
Also, (see 1st example) as emphasized in the article mentioned literature
that there is the possibility (see Show, Merriek, 1991) to reveal the quantitative
dependences between marketing costs and it’s created effect. Here are needed
modern experimental systems, which could homogenize the profitableness,
riskiness and reliability in concrete situations.
3.5. Marketing portfolio integrating different classes‘

marketing assets return possibilities to maximize
holder‘s utility
Marketing portfolio integrating profitability opportunities of marketing actives
from different classes is used to maximize the utility created to portfolio holder
by marketing.
In this chapter we will integrate the issues covered in chapters 3.2 and 3.3.
In chapter 3.3, we analysed the issue how to divide the marginal investment
unit between the different elements of the marketing structure – P1, P2, P3, P4
that, designed total return amount would be the most effective, following the
estimates provided by the experts, that an additional return from unitary in-
vestment can be described by Normal probability distributions: N1(1,032; 0,04),
N2(1,11; 0,09), N3(1,17; 0,2), N4(1,22;0,28).
Meanwhile, in chapter 3.2 was solved the problem how to distribute sales
volume between A and B customers’ segments hoping to get the most effective
according to the return rate and risk return possibility, when the profitability
possibility in segment A is described by the Normal distribution – NA (m = 8%,
σ = 4%) and in segment B by Normal distribution – NB (m = 14%, σ = 8%).
Now we understand the task tackled in presented situation the following
way: how to distribute invested marginal unit between the elements of market-
ing structure and resulted additional product’s realization between segments A
and B to distribute the way to get the maximum utility measured by the ade-
e× g
quate utility function. Frequently is used function U = , where u – the
r
extent of utility, and e – level of profitability, g – guarantee of profitability and
r – possible risk, can be understood as improved Sharp ratio.
We have chosen an adequate portfolio optimization as decision methodol-
ogy, which is described in detail in chapter 3.3 and which here can be explained
as follows:
1. Four ways of investing – P1, P2, P3, P4, and two received additional
product’s realization segments A and B define eight “investment and
realization” ways, covering all possibilities of situation: P1∩A, P2∩A,
P3∩A, P4∩A, P1∩B, P2∩B, P3∩B, P4∩B.
The return possibilities of each invested unit for every mentioned way
can be described with random variable – Nj(ai, σi)*Nj(aj, σj), I = 1.2.3.4;
j = A, B.
2. Selecting all additionally invested capital division proportions between
“investment and realization” opportunities Wk>0:W1+W2+W3+W4+
W5+W6+W7+W8 = 1 we obtain effective surface of additionally in-
vested capital earned profitability, where each possibility is set out by
return rate, the guarantee of this rate and the risk linked to such possi-
bility.
3. According to the utility functions of the portfolio owner we determine,
∑ i Wi = 1
8
which possibility is the most effective and what Wi ≥ 0;
configuration ensures such possibility.
The graphical illustration of decision finding process is in Figure 3.12; in
section a we have 100 random units, additionally invested in the elements of
marketing structure – P1, P2, P3 Pn additionally created production which would
be realized in one or another segment of customers, effective surface of profit-
ability possibilities, where each possibility is described with its rate, the guaran-
tee and the risk group linked to such possibility.
Fig. 3.12. Anatomy of optimal portfolio investment decision
e× g
In Figure 3.12 section b section, we have utility function U = , where
r
u – the extent of utility, e – level of profitability, g – guarantee of profitability
and r – risk group that has such possibility.
In section c, we have a general geometric picture of effective surface of
profitability possibilities and general picture of utility surface.
Finally, using the characteristics and dynamics of possibilities effective
surface and utility function can be found that the optimal portfolio structure is
∑ i wi = 1 , utility U= 2,457, which is
8
w1=, w2=, w3=, w4=, w5=, w6=, w7=, w7=;
determined by e = profitability of possibilities, g = guarantee of possibilities
and risk r.
In Figure 3.12 we have a situation when is considered the fact that the lar-
ger market guarantees a certain increase in profitability.
4
Integrated Management of Marketing
Risk and Efficiency
4.1. Introduction
Every marketing professional or expert knows from his/her experience that
marketing is an ocean of various risks and swimming in this ocean is extremely
dangerous without having a universal theoretical approach to risk management
as well as proper risk identification, quantitative evaluation and economic as-
sessment technique (Suhobokov 2007; Vlasenko, Kozlov 2009). If it is true that
achieved the lowest risk management level helps to save useful resources by
10–15 percent in any kind of activities, then, these figures for marketing,
searching for ways of promoting goods and services, should be at least doubled.
However, there is the reverse of the medal, implying that the research into
marketing risk management requires high competence and vast expenses (Gi-
nevičius, Ginevičius 2008). There are many problems in marketing, which in
other areas of activity are addressed with standard methods, and in marketing
they require new theoretical approaches (Pennings 2004; Tikkanen et al. 2007;
Martinez-Lopez, Casillas 2009; Morgan et al. 2009; Sharma et al. 2009; Wat-
kins, Hill 2009; Corsaro, Snehota 2010). Management of marketing risk and
efficiency can also be treated as a multi-criteria problem and the methodology
of solving such problems in various related areas of economic research is prop-
107
108 4. INTEGRATED MANAGEMENT OF MARKETING RISK AND EFFICIENCY
erly presented in Ginevičius, Podvezko (2008) and Ginevičius, Zubrecovas

(2009).
In fact, the problems of marketing risk management, which are as old as
marketing itself, are not thoroughly analyzed and described in the literature.
Even in the most recent databases in the Internet many scientific papers are
presented only for limited use.
4.2. Marketing risk – where did it come from?

Marketing risk identification is probably derived from the identification of mar-
ket risks in general and designing of their management schemes. The papers of
Mark R. Greene (1969) and Donald R. Tull (1967), where marketing risks are
separated from the problems associated with common market risks and their
study, deserve special attention in this respect. Marketing risk researches are
practically not separable from the researches on international business risk.
Therefore, the framework for integrated risk management in international busi-
ness’ suggested by Kent D. Miller (1992), is considered by many to be a move
towards crystallizing market risks out of common entirety of risks, including
transnational business risks. In Table 4.1 (which is based on the work of Zhang
et al., 2008a), the crystallized types of marketing risks and a set of factors in-
fluencing them are presented for a retail trade company together with layers for
evaluation of risk index.
Table 4.1. Environmental risk types and factors influencing their occurrence in retail
enterprise transnational marketing (Zhang et al., 2008a)
Risk types Risks factors Project layer

Polity certainties in host countries;
strike; economic crisis; force of The certainty of policy
religion and nationalism; threaten-
Macro environmental risks
Polity risks Attitude to foreign in-

ing local retailers; inharmonious
vestors
relationship with communities and
residents in host countries The certainty of econ-
omy
Strict market entering policy; retail
The certainty of cur-
control; change of exchange rate;
rency/exchange rate
Economic deterioration of international bal-
Social environment and
risks ance of payments in host countries;
ideological system
inflation; foreign exchange control;
economic policy change
4. INTEGRATED MANAGEMENT OF MARKETING RISK AND EFFICIENCY 109
Continue of Table 4.1
Risk types Risks factors Project layer

Cultural difference between the
host country and home country;
Cultural
nationalism tendency in the host
risks
country; retailers being unfamiliar
with culture in the host country, etc
Business recession in local retail
industry; incorrect commodities
Market risks
sale; wrong market forecast; lack of
price competitiveness, etc
Environmental industry risks
Intense competition between local

retail enterprises; the entering of
Competition Degree of retail industry
transnational retail groups; intense
risks boom
competition on domestic market
Degree of retail industry
and so on
competition
Credit situation of suppliers or
partners; relative by big conflict
Supply chain with local suppliers; lack of infor-
risks mation communication of supply
chain; lacking localization purchas-
ing and so on
Capital chain break caused by ex-
panding; risks of development pri-
Expanding The rate of sales profit
vate brand; excessive investment;
risks Market share
insufficient revolving fund; interest
increase Price sensitivity
Internal risks of enter-
Internal risks of enterprise
Poor quality of sold goods; poor

prise Price competitive-
Credit stand- image of origin; environmental
ness
ing risks pollution resulting from commodity
production Evaluation of promotion
effect
Inaccurate management culture
The proportion of sales
Internal comprehending; high frequency
cost
management changes of managers or brain drain;
risks inefficient communication and co- Degree of customer
operation between employees, etc satisfaction
Degree of customer
Unreasonable retail marketing mix;
Promotion loyalty
frequent promotion; potential risks
risks
caused by promotion, etc
However this work, like many other studies of marketing risks, is restricted
to ranking various types of risk (possible harm made) according to certain
points (Zhang et al., 2008b; Zhou et al., 2006, Wang 2009, Wen-Fei, 2004).
Though for risk management decision-making usually a universal quantitative
evaluation is needed, allowing in parallel to determine the possible harm made
to recipients.
The paper of Greene (1969) ’How to rationalize your marketing risk’ con-
siders a hypothesis that ‘managers who estimate possible losses and honestly
evaluate the risk involved can vastly improve their marketing decisions’.
The paper also provides a logic flow chart for marketing risk decisions,
where 5 steps present marketing risks collectively, outlining major problems of
marketing risk analysis aimed at collecting the information required for making
risk management decisions (see Fig. 4.1). In fact, a profound risk concept is
described in this five- step analysis, and decision-making logic based on com-
bining risk and confidence is suggested.
Step 2 defining the extent of maximum loss and its probability which may
be used for integral evaluation of possibility and its confidence deserves special
attention. However we think that step 3, presenting risk (possible loss) as a
negative consequence of riskiness of a particular process (object) and the inter-
action of loss possibilities and abilities of a recipient (subject) is also very im-
portant. It may be stated that most of recent publications lack such profound
risk concepts.
It should also be noted that the authors do not just play with such impres-
sive terms as macroeconomic and microeconomic risk, currency exchange rate
risk, etc., which being powerful in expressing risk probability are still closely
related to the particular criteria describing marketing, as far as their possible
effects are concerned.
4.3. A scheme of identification of marketing risk

criteria, quantitative risk evaluation and economic
assessment
4.3.1. Marketing risks identification and management

peculiarities
Today, any kind of activities is exposed to various types of risks closely associ-
ated with the process of globalization (Mačerinskas et al., 2003). This primarily
applies to marketing which, making usable a part of international business, on
the one hand, and being the investment activities, on the other, is exposed to a
great variety of risks (Sabonienė, 2009). Taking it not seriously, we may say
that it is much easier to name risks that do not concern marketing than list all of
them.
Fig. 4.1. Logic flow chart for marketing risk decisions (Greene 1969)
Some of the risks in international business are strategic risk, operational

risk, political risk, country risk, technological risk, environmental risk, eco-
nomic risk, financial risk, terrorism risk.
Types of investment risks are as follows: inflation risk, interest rate risk,
business risk, financial risk, tax risk, event risk, liquidity risk and etc.
One can see that the above risks directly concern marketing, however,
separate analysis of marketing risks, even the most important ones, along with
that seeking to develop management models, is hardly possible in practice and
not acceptable from the theoretical point of view.
It may be stated that the methods of comprehensive marketing risk analy-
sis, allowing the dangers of risks to be associated with expenses required to
avoid losses, have not been developed yet. Development of such methodology
or marketing risk management scheme is the primary objective and means of
marketing cost efficiency increasing.
It is expected that marketing risk pools could become a tool of marketing
risk analysis and help generate information required for decision making. On
the one hand, they could evaluate risks for major marketing activities, while, on
the other hand, they could stimulate centres of marketing risk costs to achieve
the goal described above (see Fig. 4.2)
What items could become risk pools or structures fixing natural results of
risk effects and allowing the demand for risk expenses to be quantitatively
evaluated? It seems that it would be difficult to suggest an alternative to ideol-
ogy generally dominating in business, according to which centres integrating
results of all the activities could serve as the centres of expenses. On the one
hand, the effect of all risks to which a particular activity is subject to is accumu-
lated in these total items. On the other hand, the dynamics of these items re-
veals the need for risk management and possibilities of the latter.
Structural elements of marketing, denoted as 4P, 7P or other P number,
which can be used as the centres of risk costs, offer exceptional possibilities to
this activity. At the same time, they are the centres of direct marketing expenses
and investments (see Fig. 4.2).
However, assessing the effect or effectiveness of marketing (Valančienė,
Gimžauskienė, 2009) and each structural element in particular, the problems
associated with the ambiguity and even lack of the account data arise. Never-
theless, theoretical and practical works emphasize the importance and urgency
of these problems. In marketing, whose aims and goals are directed towards the
near or distant future, possibilities are usually considered to be stochastic values
or processes. This provides the necessity that, assessing a possibility, its size,
confidence and risk, considered to be the riskiness of a set of possibilities and
ability of a recipient of risk consequences to deal with risk, should be defined.
Fig. 4.2. A scheme of marketing risk management pool
Thus, three-dimensional presentation of a set of possibilities requires ade-

quate methods of determining their significance to various recipients (Rut-
kauskas, 2006; Rutkauskas et al., 2008a, 2008b; Rutkauskas, Ginevičius, 2010),
which are commonly based on the use of a three-dimensional utility function u:
U = u (e, g, r), (4.1)
where e is the guarantee of effectiveness (effect) indicator, g is possibility’s
guarantee and r is possibility’s risk.
4.3.2. Marketing risks portfolio management

Further, general marketing risk as a portfolio of risk components’ structure
management possibilities will be analysed.
The value at risk determination of various risk types is thoroughly ana-

lysed in literature. However, the answer to the reverse problem of risk-
influencing parameters change in order to alter the value at risk in the desired
direction is not obvious and cannot be described quantitatively. Along with that,
management of the general risk as an entirely accumulating all the types of risk
requires certain resources distribution among separate risk types in order to get
the highest effect. In other words, resources used for risk management should
allow to maximally reduce the expected losses concerning risk.
Of course, for solution of this type of problem an analysis of the particular
activity processes is necessary. First of all, an analysis of risks contents and
factors influencing value at risk should be performed. Further, factors of influ-
encing the means of value at risk management, as well as their interdependen-
cies, behaving in the same direction, should be inventoried. There is no doubt
that for every type of risk there exists a complex of means allowing the reduc-
tion of value at risk to the desired extent.
Also, while selecting complexes of means for value at risk reduction, a
problem of the so-called efficient complexes arises pointing out that efficient
complex should allow reducing expected losses with minimal costs or obtain
the highest reduction with available resources.
It is obvious that the reasoning of efficient complex of means or, more-
over, their efficiency evaluation can be rarely presented using typical and uni-
versally spread schemes. Often such evaluations can be performed only with
the help of expert systems. Moreover, many processes and dependencies have
clear stochastic nature, therefore expert systems must also be adequately ori-
ented.
Thus, the main objective becomes clear – to distribute financial resources
intended for value at risk reduction among value at risk reducing means in order
to obtain the maximum reduction of value at risk (the resultant of all the risks),
i.e. possible loss, described by the magnitude of loss possibility, reliability of
possibility and risk, and also to measure it in scale adequate for such evalua-
tion – three-dimensional utility function’s values’ scale.
With regard to what is said earlier, optimal risk portfolio management
problem should be formulated as follows:
To find such a distribution of resources intended for value at risk reduction
among separate risk types
wi : wi ≥ 0; ∑ wi = 1,,,
n
(4.2)
1
which, considering the obtained probability distributions

R1 (a1, s1), R2 (a2, s2) ... Rn (an, sn) (4.3)
of loss reduction means efficiency possibilities of a unit investment into sepa-

rate risk types ri would generate a utility function
U = u (e; p; r) = exp{e/r} · p{ξ ≥ e} (4.4)
maximizing the probability distribution of general loss reduction possibilities.
Thus here Ri(ai, si) are the unit-value effects of possible loss reduction of
random variables with presented parameters ai and si , and wi is a part of ex-
penses intended for risk management which is devoted for implementation of
i-th risk management mean. As it was already mentioned, estimations of means’
effects Ri(ai, si) in the research were obtained with the help of experts.
Technical analysis of situation can be interpreted as a solution to stochastic
optimization task.
As the object of the research is the problem of marketing efficiency man-
agement considering risk, for methodical explanation of further research it is
worthwhile to recall that in the context of 4P there are four different types of
risk – r1, r2, r3, r4, i.e. one for every component of marketing structure P1, P2, P3, P4.
Visually decision-making is presented using the following scheme
(Fig. 4.3).
Fig. 4.3. Search for intersection of effectiveness zone (left side) and
utility function (right side) of general value at risk reduction effects
With the help of statistical data and experts valuations it was determined
that investment of 1 Lt into means of avoiding losses under separate risk types
(here – under separate components of structure) should guarantee effects, de-
scribed by Normal probability distributions of effect possibilities, namely:
N(a1 = 1.35; s1 = 0.13), N(a2 = 1.51; s2 = 0.25), N(a3 = 1.83; s3 = 0.48),

N(a4 = 1.12; s4 = 0.39),
here ai are the mean values of respective probability distributions of effect pos-
sibilities, and si are the standard deviations.
Further, according to the logic of Fig. 4.3, the solution to (1)–(3) problem
is presented.
Fig. 4.4 section a presents Markowitz portfolio, which depicts all the pos-
sibilities (discrete case) of distributing a unit of investment among various risk
loss reduction means. Fig. 4.4 section b presents an efficiency line of portfolios,
with only maximum mean values of portfolios under the predetermined risk
level.
If one analysed only mean values, then the schemes of a and b sections
would provide the comprehensive information on the possibility of rational
distribution of funds. However, in practice it is necessary to know all the possi-
bilities and evaluate their reliability. Fig. 4.4 section c presents an efficiency
zone as an analogue of the efficiency line, or, simply, a spatial view of portfolio
possibilities when possibilities are characterized by their extent, reliability and
risk. If one took more detailed values of quintiles of probability distributions, –
percentiles, milipercentiles, etc., – the result would be a continuous set. The
geometrical view of such a possibility is presented in Fig. 4.4 section c, where
the set of quintiles is represented by percentiles.
As every portfolio possibility out of possibilities’ set is characterized by
three already mentioned parameters – the extent of avoidable loss, the guaran-
tee of avoidance and risk, related to a possibility under analysis, the selection of
the best possibility is getting complex in the sense that all the mentioned pa-
rameters have different dimensions: unit of money – for loss, probability – for
avoidance guarantee and probability distribution of possibilities – for loss be-
cause of risk. Therefore for selection of the best possibility an adequate utility
function is needed. In case of success, utility function can become the func-
tional, i.e. the rule, which would provide a financial estimation of the loss
avoided for every possibility evaluated by three parameters. However, in gen-
eral this is a problem requiring separate analysis, and utility function becomes a
means of possibilities’ grading or expert valuation. Fig. 4.4 section d presents a
utility function which evaluates utility of every possibility according to the fol-
lowing formula:
e 
U = exp  ⋅ p , (4.5)
r 
here: e – the extent of possibility, measured in monetary expression; p – reli-
ability of possibility; r – risk related to the analysed possibility.
Thus, U is an indicator without dimension.
In Fig. 4.4 section e the tangency point of efficiency zone (section c) and
utility function (section d) is presented. This point allows us to determine the
values of all the coordinates of the three-dimensional surface – extent of possi-
bility, reliability of possibility and risk class of the analysed possibility – and
also a structure of the respective portfolio.
Fig. 4.4. Visualization of (1)–(3) problem solving
In the presented case the structure is w1 = 0.52; w2 = 0.22; w3 = 0.06; w4 =

0.2. The value of possibility e = 1.43; the guarantee of possibility p = 0.55; and
r = 1.12.
Results of decisions of integrated marketing efficiency and risk manage-
ment possibilities will be presented in the same sequence.
4.4. Efficiency against or with risk

Today motivation of almost every activity is disclosed with the help of certain
“diptic”, when one line of story is intended for organizers of activity (owners)
interests’ satisfaction, and the second represents a risk of possibilities having
encouragement powers and nurturing caution, threatening with possible losses.
Thus cherishment of utility for the owner of activity is possible with a provision
of “tempering risk”, as well as with a provision of “risking in the name of
maximizing the value under creation”. Nevertheless, many researches on risk
management more apparently disclose the former line – to manage risk in order
to decrease the threats for efficiency extent.
Further in this paper, while projecting the scheme of marketing efficiency
increasing, the provision of risking in the name of maximizing the value being
created will be followed. This scheme is based on the system of estimations in
line with all the expert valuation rules and involving all the components of 4P
marketing structure. Every component of 4P structure was also analysed as a
whole of four components. This system is presented in Table 4.2. Here every
estimation shows the possibilities of a unit investment to develop a marginal
effect in the respective marketing segment. These possibilities are described by
possibilities’ probability distribution D (ai, si), where ai is a mean value of pos-
sibilities and si is the standard deviation of possibilities‘ set.
Now the task is different than the task of paragraph 3.2, – how to use
available resources in order to obtain value at risk reduction maximum. Now
we attempt to maximize the effect of costs described by the three indicators:
effect‘s possibility, reliability of this possibility and risk related to this possibility.
Table 4.2. Marketing 4P structure of expert valuations according to the effect of unit
costs
PRODUCT PRICE
a1 = 1.4; s1 = 0.042 a5 = 1.2; s5 = 0.03
a2 = 1.3; s2 = 0.0165 a6 = 1.32; s6 = 0.03
a3 = 1.275; s3 = 0.038 a7 = 1.325; s7 = 0.045
a4 = 1.375; s4 = 0.043 a8 = 1.275; s8 = 0.039
PROMOTION PLACE
a9 = 1.25; s9 = 0.018 a13 = 1.41; s13 = 0.043
a10 = 1.22; s10 = 0.025 a14 = 1.17; s14 = 0.015
a11 = 1.225; s11 = 0.04 a15 = 1.15; s15 = 0.035
a12 = 1.375; s12 = 0.045 a16 = 1.125; s16 = 0.038
There is no doubt that both problems arise from the same objective – how
to use in the best manner the resources intended for marketing efficiency in-
crease, but it is necessary to notice that there is no courage to say that the result
of the solution would be the same, i.e. that in both cases the same investment
portfolio would be selected. However, attempting to compare the solutions of
both problems would encourage experts to take universally the evaluation of
probability distributions of possibilities.
Thus, having the unit values presented by the experts in Table 4.2 and the
pairs of parameters of probability distributions of investment possibilities for
every component of marketing structure, the problem can be formulated as fol-
lows:
To find such a distribution of resources intended for marketing efficiency
increase among separate components of marketing structure
wi : wi ≥ 0; ∑ wi = 1 .
n
(4.6)
1
Which, considering the obtained probability distributions

D1 (a1, s1), D2 (a2, s2) ... Dn (an, sn) (4.7)
of unit investment possibilities to create marginal effect in every component of
marketing structure, would generate a utility function
U = u (e; p; r) = exp{e/r} · p (4.8)
maximizing the probability distribution of general effect of possibilities.
Here e is the value of investment effect possibility, p – the guarantee of
this possibility and r – the class of risk where the possibility belongs.
The influence of possibilities‘ probability distribution form

and statistical interdependence on optimal solution
Before analysing particular situations it is worth noticing that experts, present-
ing their own estimations, i.e. mean values and standard deviations of possibili-
ties as a measure of possibilities‘ variability usually do not present their opinion
about the form of the distribution (Normal, Pareto, etc.). Thus searching for a
particular solution the forms of the decisions under analysis will be selected,
retaining the values of parameters set by the experts.
Similarly, experts have not presented the indicators of interdependencies
of the analysed possibilities, however, they have stated that such dependencies
should certainly exist. Nevertheless, in order to evaluate the indicators of possi-
ble statistical dependencies with the help of experts one should possess certain
software for processing the expert opinions.
In order to measure the influence of the forms and interdependences of

probability distributions on possible decisions the following situations will be
examined:
First, when probability distributions are Normal and not correlated;
Second, when probability distributions are Lognormal and not correlated;
Third, when random variables describing the possibilities are correlated
and this correlation is expressed by a correlation matrix;
Fourth, when there are additional constraints wi.
It is worth noticing that in marketing research 4P receives a status of cer-
tain invariance, in the sense that even if marketing object varies substantially,
the costs of 4P marketing structure retain the proportions in the set limits.
In the expert valuations such an appearance is perceived as a phenomenon
of the structure hierarchy.
Experts in their valuations also have pointed out a certain structural hierar-
chy, a priori orienting towards a certain structure of costs between P1, P2, P3
and P4.
While performing estimations it was attempted to evaluate what changes
of 4P costs structure would be favourable for optimization of the general deci-
sion.
A situation when probability distributions are Normal, not correlated ran-

dom variables, available resources are distributed in equal parts among P1, P2,
P3 and P4, and optimization is performed in distributing resources among sub-
components. The results of the decision are presented in Fig. 4.5. Here the logic
of Fig. 4.4 is retained.
In 5a section all possible cases of funds distribution are presented, i.e. all
possible portfolios as a set of pairs of random variables’ “standard deviations –
mean values”, and in section 5b only the possibilities’ set of efficient portfolios
is presented. Here the portfolios having the highest mean value under the cer-
tain risk level are presented. Section 5c presents the efficiency zone, where ana-
logically to the efficiency line of “standard deviation – mean value” all the
efficiency lines “standard deviation – quintile” are presented. Section 5d shows
the geometrical view of adequate utility function, and section 5e – the mutual
position of efficiency zone and utility function, when utility function is ap-
proaching the surface of possibilities (efficiency zone), and the first tangency
point is indicating the solution (section 5f). Thus the resources distribution
structure (portfolio) among subcomponents P1, P2, P3 and P4 is determined,
which is oriented towards a possibility allowing to obtain the maximum of the
selected utility function. Further in the text the graphical representations of, in
our opinion, expected situations are presented.
g) w1 = 0.0167; w2 = 0.0778; w3 = 0; w4 = 0.1556; w5 = 0.0167; w6 = 0.0778; w7 = 0;

w8 = 0.1556; w9 = 0.0167; w10 = 0.0778; w11 = 0; w12 = 0.1556; w13 = 0.0167;
w14 = 0.0778; w15 = 0; w16 = 0.1556
U = 19.5
Fig. 4.5. Visualization of (4)–(6) problem solving, when distributions D(ai, si) from
Table 2 were assumed to be not correlated Normal variables N(ai, si)
g) w1 = 0.0833; w2 = 0; w3 = 0.0778; w4 = 0.0889; w5 = 0.0833; w6 = 0; w7 = 0.0778;

w8 = 0.0889; w9 = 0.0833; w10 = 0; w11 = 0.0778; w12 = 0.0889; w13 = 0.0833; w14 = 0;
w15 = 0.0778; w16 = 0.0889
U = 13.4
Fig. 4.6. Visualization of (4)–(6) problem solving, when distributions Di from Table 2
were assumed to be correlated random variables with the same ai and si values, and
investment proportions among separate Pi were left the same
g) w1 = 0.2667; w2 = 0.0711; w3 = 0.0533; w4 = 0.0089; w5 = 0.2; w6 = 0.0533; w7 =

0.04; w8 = 0.0067; w9 = 0.1333; w10 = 0.0356; w11 = 0.0267; w12 = 0.0044; w13 =
0.0667; w14 = 0.0178; w15 = 0.0133; w16 = 0.0022
U = 9.4
Fig. 4.7. Visualization of (4)–(6) problem solving, when initial distribution among P1,
P2, P3, and P4 is not balanced in equal parts, but according to proportion – 4:3:2:1
g) w1 = 0; w2 = 0.1465; w3 = 0.014; w4 = 0.1535; w5 = 0; w6 = 0.1129; w7 = 0.0108;

w8 = 0.1183; w9 = 0; w10 = 0.1083; w11 = 0.0103; w12 = 0.1134; w13 = 0; w14 = 0.0989;
w15 = 0.0094; w16 = 0.1036
U = 21.7
Fig. 4.8. Visualization of (4)–(6) problem solving, when the situation analogical to
Fig. 5 is analysed, based on the structure a priori provided by experts:
w1 = w1+w2+w3+w4= 0.314; w2 = w5+w6+w7+w8= 0.242;
w = w9+w10+w11+w12 = 0.232; w4 = w13+w14+w15+w16 = 0.2119
3
Fig. 4.6 presents the visualization of solution analogical to Fig. 4.5 only
with an assumption of correlation dependency between probability distribu-
tions, which is described by the conditional correlation matrix (4.9), where pre-
sented correlation coefficients describe average correlation dependencies
between sub-elements Pi.
 1 0,5 0,4 0,3 
 
 1 0,3 0,2  (4.9)
C ij = 
1 0,2 
 
 1 
Figures 4.7 and 4.8 present the visualization of solution analogical to

Fig. 4.5 with initial distribution among P1, P2, P3 and P4 is made according to
the proportion 4:3:2:1 and according to the structure provided by experts, re-
spectively.
Conclusions and Suggestions
1. Marketing departments should continue to play a crucial role in con-

temporary organizations, despite the recent trend towards dispersing
marketing activities. A powerful marketing function is associated with
improved financial performance above and beyond the impact of mar-
keting within the firm as a culture or orientation. The marketing func-
tion becomes especially instrumental and should be empowered in
particular under conditions of heightened competitive intensity, mar-
ket turbulence, and market potential. Generally, the findings above
suggest that the erosion of the power of the marketing function, if in-
deed real, is a worrisome trend that should be monitored very closely.
2. To determine the efficiency of costs of improving and effective of en-
terprise marketing, the state of marketing activities should be evalu-
ated at any required moment of time. Marketing is a complex
phenomenon, characterized by many different factors. Therefore mul-
ticriteria methods may be used for its quantitative evaluation. A great
number of values describe marketing activities, therefore, the calcula-
tions are based on the hierarchical set of criteria generated in the
work. The values of the elements of the marketing mix (4P) and the
values characterizing enterprise marketing in general are obtained
127
128 CONCLUSIONS AND SUGGESTIONS
based on the above-mentioned hierarchical system and by using SAW

method.
3. The results of marketing activities largely depend on the distribution
of the total costs of these activities among the four elements of the
marketing mix. Based on the economic effect obtained from costs per
element, it has been found that 32 percent of marketing expenses
should be spent on Product, 24 percent on Price, 23 percent on Pro-
motion and 21 percent on Place.
4. The efficiency of marketing strategies, as well as the total marketing
expenses, has become a prerequisite for achieving business economic
efficiency, while the study of this efficiency should become the prior-
ity for the research in the field of marketing and finances.
5. The management of stochastics of the limiting marketing system’s
costs makes the basis for planning the expansion of business activi-
ties, taking into account the rate of the growth, as well as the risk and
reliability.
6. A concept of an adequate investment portfolio may be directly applied
to optimize the structure of the marketing system. Simulation tech-
nologies allow us to solve the complicated problems of stochastic pro-
gramming emerging in this field in real time and with desired
accuracy. In the present work, the optimization problem of marketing
costs has been solved using adequate portfolio concept and technique.
7. Modern expert systems, allowing the criteria of efficiency, riskiness
and reliability to be generalized, are required for determining the in-
teraction between business development and marketing and quantita-
tive dependences.
8. The information systems of marketing should be created, which
would allow the users to define the elements of account and calcula-
tion, which, supplemented with the generated information about the
expected events, could better describe the complicated relationships
between the development of business and costs of marketing, based
on the conceptual approaches to the investigation of marketing costs
and addresses and forms of the dependences of business performance
results.
9. Business and marketing projects should be considered simultaneously
and any possibilities of interaction between business development and
marketing discussed in the previous statement and elsewhere should
be reflected in them.
CONCLUSIONS AND SUGGESTIONS 129
10. Business and marketing projects should be developed so that they

could become the tools of managing the designed business and the ac-
companying marketing system. The statement “projects for the whole
lifetime of business and marketing” should be implemented into real
life.
11. The lack of the results of marketing financial efficiency investigation
as well as the quantitative marketing models may be accounted for by
high riskiness of marketing and by the lack of the adequate research
methodology.
12. A breakthrough in marketing risk management would ensure a similar
growth in the effective use of the resources.
13. The creation of marketing risk management system presents new
challenges to risk research and management methods and practices.
An innovative risk portfolio methodology has been suggested and
used in the dissertation.
References
Adcock, D.; Halborg, A.; Ross, C. 2001. "Introduction". Marketing: principles and
practice (4th ed.), p. 15.
American Marketing Asociation (n.d.). Definition of Marketing. [Online]. Available:
http://www.marketingpower.com/AboutAMA/Pages/DefinitionofMarketing.aspx
Anderson, Paul F. 1981. “Marketing Investment Analysis”. In: Sheth, Jagdish N. (ed.),
“Research In Marketing”, Vol. 4, Chapter 1, pp. 1–37, Greenwich, CT: JAI Press.
Angelis, J.; Pinheiro de Lima, E.; Širaliova, J. 2010. Servitised experiences: business
and management implications. Verslo ir teisės aktualijos [Current Issues of Business
and Law], 5, p. 6–21. doi:10.2478/v10088-010-0001-1
Auh, S., Merlo, O. 2009. Marketing Subunits and Business Performance. ANZMAC
2009. Sustainable management and marketing conference.
Awad, E. M. & Chaziri, H. N. 2004. Knowledge Management. Pearson Education In-
ternational.
Bartels, R. 1968. The General Theory of Marketing. Journal of Marketing, XXXII
pp. 29–33.
Bennet, P. D. 1995. Dictionary of Marketing Terms, Chicago: American Marketing
Association.
131
132 REFERENCES
Bennett, A.R. 1997. The five Vs – a buyer’s perspective of the marketing mix. Market-
ing Intelligence & Planning. 15/3 [1997]: 151–156.
Bergman, B.; Klefsjö, B. 2007. Quality from Customer Needs to Customer Satisfaction.
Studentlitteratur, Lund.
Booms, B. H.; Bitner, B. J. 1980. Marketing strategies and organisation structures for
service firms. In Donnelly, J. & George W. R. (Eds.), Marketing of services. American
Marketing Association, 47–51.
Bordley, Robert. 2003. “Determining the Appropriate Depth and Breadth of a Firm's
Product Portfolio”, Journal of Marketing Research, Vol. 40, No. 1, pp. 39–53.
Brassington, F. and Pettitt, S. 2003. Principles of Marketing, Third Edition, Prentice
Hall / Financial Times.
Brown, S. W. 2005. When Executives Speak, We Should Listen and Act Differently,”
in “Marketing Renaissance: Opportunities and Imperatives for Improving Mareting
Thought, Practice, and Infrastructure. Journal of Marketing, 69, October, 1–25.
Cardozo, Richard N. and Smith Jr., David K. 1985. “On the Use of Financial Portfolio
Theory in Marketing Decisions: A Reply to Devinney, Stewart, and Shocker”, Journal
of Marketing, Vol. 49, No. 4, pp. 113–115.
Carson, D. 1993. “A philosophy for marketing education in small firms”, Journal of
Marketing Management, Vol. 9, pp. 189–204.
Chartered Institute of Marketing (n.d.) Definition of Marketing. [Online]. Available:
http://www.cim.co.uk/resources/understandingmarket/definitionmkting.aspx
Corsaro, D.; Snehota, I. 2010. Searching for relationship value in business markets: are
we missing something? Industrial Marketing Management 39: 986–995.
doi:10.1016/j.indmarman.2010.06.018
Cowell, D.W. 1984. The Marketing of Services, Institute of Marketing and the CAM
Foundation, Heineman Professional Publishing.
Lenskold, D. Marketing ROI and Measurements. A MarketingProfs Benchmark Report.
[online] [accessed 25 Jan. 2011] Available from Internet:
http://www.lenskold.com/content/papers.html
D’Esopo, M.; Almquist, E. 2007. An approach to mastering the marketing mix. Busi-
ness strategy series. (Vol. 8 No. 2), pp. 122–131
Devinney, Timothy M., Stewart, David W. and Shocker, Allan O. 1985. “A Note on the
Application of Portfolio Theory: A Comment on Cardozo and Smith”, Journal of Mar-
keting, Vol. 49, No. 4, pp. 107–112.
Dhar, Ravi and Glazer, Rashi. 2003. “Hedging Customers”, Harvard Business Review,
Vol. 81, No. 5, pp. 86–92.
Dobbs, Richard. 2005. “Managing Value and Performance”, McKinsey Quarterly,
Vol. 3 (Special Issue), pp. 4–5.
REFERENCES 133
Doyle, Peter. 2000. “Valuing Marketing’s Contribution”, European Management Jour-

nal, Vol. 18, No. 3, pp. 233–245.
Drucker, P.F. 1954. The Practice of Management.
Ellis, P. D. 2006. Market Orientation and Performance: A Meta-Analysis and Cross-
National Comparisons. Journal of Management Studies 43 (5): 1089–1107.
Fabozzi F. J., Markowitz H. M. 2002. The theory and practice of investment manage-
ment. USA: John Willey & Sons, Inc. 894 p.
Fakeideas. 2008. Revision: Reviewing the Marketing Mix. [Online] Available:
http://fakeideas.wordpress.com/2008/03/07/revision-reviewing-the-marketing-mix/
Farris, Paul W.; Bendle, N.T.; Pfeifer, P.E.; Reibstein, D.J. Marketing Metrics: 50+
Metrics Every Executive Should Master, Pearson Education, (2006) Inc. publishing as
Wharton School Publishing, Upper Saddle River, NJ.
Functions of Marketing. [Online]. Available: http://www.business-understood.
com/Functions-Of-Marketing.html
George, W.R. Chicago: American Marketing Association, pp. 47–51. Borden, N.H.
(1964), “The concept of the Marketing Mix”, Journal of Advertising Research, June,
pp. 2–7.
Ginevicius, R. and Ginevicius, A. 2008. Sustainability Decisions in Marketing Complex
Cost Optimization In: The 12th World Multi–Conference on Systemics, Cybernetics
and Informatics: WMSCI 2008: ISAS June 28–July 02, 2008 Orlando, Florida, USA:
proceedings. Vol. IV, pp. 241–246.
Ginevicius, R. and Podvezko, V. 2005. “Developing of a set of criteria for multicriteria
evaluation” Business: theory and practice Vol. VI (4) pp 199–207.
Ginevicius, R. and Podvezko, V. 2007. Multicriteria graphical-analytical evaluation of
the financial state of construction enterprises. In: Internationales Kolloquium
Planungsinstrumente für das Projektmanagement, 25–26 Oktober 2007 in Kołobrzeg /
Technische Universität Poznań, Vilniaus Gedimino technikos universitetas, HTWK.
Poznań, pp. 1–4.
Ginevičius, R.; Ginevičius, A. 2008. Sustainability decisions in marketing complex cost
optimization process, in The 12th World Multi-Conference on Systemics, Cybernetics
and Informatics. Orlando, Florida, USA June 29th – July 2nd, 35–40.
Ginevičius, R.; Podvezko, V. 2008. Daugiakriterinio vertinimo būdų suderinamumas,
[The problem of compatibility of various multiple criteria evaluation methods], Ver-
slas: teorija ir praktika [Business: Theory and Practice] 9(1): 73–80.
Ginevičius, R.; Zubrecovas, V. 2009. Selection of the optimal real estate investment
project basing on multiple criteria evaluation using stochastic dimensions, Journal of
Business Economics and Management 10(3): 261–270.
doi:10.3846/1611-1699.2009.10.261-270
134 REFERENCES
Goi, C. L. 2009. A Review of Marketing Mix: 4Ps or More? International Journal of

Marketing Studies. (Vol. 1, No. 1).
Greene, M. R. 1969. How to rationalize your marketing risks, Harvard Business Review
47(3): 114–123.
Greyser, S. A. 1997. Janus and Marketing: The Past, Present, and Prospective Future
of Marketing. Donald Lehmann and Katherine Jocz (eds.), Reflections on the Futures of
Marketing (Cambridge, MA: Marketing Science Institute, 1997): 3–14.
Grönroos, C. 1994. From Marketing Mix to Relationship Marketing: Towards A Para-
digm Shift in Marketing. Management Decision, 32(2), 4–20.
Gupta, A.; Raj, S.; Wilemon, D. 1985. R&D and Marketing Dialogue in Hi-Tech
Firms. Industrial Marketing Management, Vol. 14.
Hart, S.; Tzokas, N.; Saren, M. 1999. The Effectiveness of Market Information in En-
hancing New Product Success Rates. European Journal of Innovation Management,
Vol. 2.
Hodder Education (n.d). Introduction to the Marketing Mix – Pricing. [Online] Avail-
able: http://www.hoddersamplepages.co.uk/pdfs/cceabus6.pdf.
Hoffman, D. L.; Fodor, M. Can You Measure the ROI of Your Social Media Marketing?
MIT Sloan Management Review. Fall 2010.
Homburg, C.; Workman, J.P.; Krohmer H. 1999. “Marketing’s Influence Within the
Firm,” Journal of Marketing 63 (April), 1–17.
Horovitz, J.; Jurgens-Panak, M. 1994. Total Customer Satisfaction: Lessons from 50
companies with top quality customer service. Pitman Publishing.
http://en.wikipedia.org/wiki/Asset
http://sethgodin.typepad.com/seths_blog/2009/09/do-marketers-have-assets.html
http://www.businessdictionary.com/definition/asset.html
http://www.investopedia.com/terms/a/asset.asp
Investment Risks [online] [accessed 19 Dec. 2009] Available from Internet:
http://thismatter.com/money/investments/investment-risks.htm
Jack Trout. 2006. Peter Drucker On Marketing. [Online]. Available:
http://www.forbes.com/2006/06/30/jack-trout-on-marketing-cx_jt_0703drucker.html
Jagminas, V. 2008. Kaštų apskaita pagal veiklas, [Activity Based Costing]. [online]
[accessed 12 Dec. 2009] Available from Internet:
http://www.buhalteris.lt/index.php?cid=382&new_id=210195
Jobber D. 2010. Principles and Practice of Marketing, Sixth edition.
Jobber, D. 2001. Principles and Practice of Marketing, Third edition, McGraw Hill.
REFERENCES 135
Johnston, R. 2011. Marketing: A Challenging and Enjoyable Career. [Online]. Avail-

able: http://www.selfgrowth.com/articles/marketing-a-challenging-and-enjoyable-
career.
Kahn, K. 1996. Cross-functional Integration: A definition with implications for Product
development Performance. Production Innovation Managemnet, Vol. 12.
Kalčinskaitė, R. 2007. Apskaičiuota atsakomybė, [Estimated accountability]. [online]
[accessed 12 Dec. 2009] Available from Internet: http://www.buhalteris.lt/index.
php?cid=382&new_id=24378
Kaziliūnas, A. 2010. Impacts of different factors on the implementation of quality man-
agement systems and performance outcomes. Verslo ir teisės aktualijos [Current Issues
of Business and Law], 5, p. 75–92. doi:10.2478/v10088-010-0006-9
Kennon, J. The 3 Types of Investment Risk, [online] [accessed 22 Dec. 2009] Available
from Internet: http://beginnersinvest.about.com/cs/valueinvesting1/a/080103a.htm
Kintu, A.B. 2007. Functions of Marketing Channels. [Online]. Available:
http://www.shvoong.com/social-sciences/1681110-functions-marketing-channels/
Kotler marketing group (2010). Dr. Philip Kotler Answers Your Questions on Market-
ing. [Online]. Available: http://www.kotlermarketing.com/phil_questions.shtml#an-
swer5
Kotler, P. 1980. Principles of Marketing.
Kotler, P. 2003. Marketing Management, 11th Edition, Prentice Hall International Edi-
tions.
Kotler, P; Armstrong G.; Wong V.; Saunders J. (2008). Principles of marketing (5th
ed.). p. 7.
Kotler, Philip. 1971. Marketing Decision Making. New York: Holt, Rinehart an
Winston.
KPMG. 2008. Return on Technology – The Economics of IT Value Creation. Available
online: http://www.informationage.com/article_assets/articledir_889/444846/Research
%20Report%20June%2008%20sponsored%20by%20KPMG.pdf, Accessed on
2010.05.21
Langerak, F. 2003. An Appraisal of Research on the Predictive Power of Market Orien-
tation. European Management Journal, 21(4): 447–64.
Larreche, Jean-Claude and Srinivasan, Viji. 1981. “STRATPORT: A Decision Support
System for Strategic Planning”, Journal of Marketing, Vol. 45, (Fall), pp. 39–52.
Lauterborn, B. 1990. New Marketing Litany: Four Ps Passé: C-Words Take Over. Ad-
vertising Age, 61(41), 26.
Leeflang, Peter S.H. 2004. Is There a Future for Marketing? Holland Management
Review, 74 (6), 74–79.
Leenders, M.; Wierenga, B. 2001. The Effectiveness of Different Mechanisms for Inte-
grating Marketing and R&D. ERIM Report Series Research in Management.
136 REFERENCES
Lemon, Katherine; Rust, Roland T. and Zeithaml, Valarie A. 2001. “What drives cus-
tomer equity”. Marketing Management, Vol. 10, No. 1, pp. 20–25.
Libai, Barak; Narayandas, Das and Humby, Clive. 2002. “Towards an Individual Cus-
tomer Profitability Model: A Segment-Based Approach”, Journal of Service Research,
Vol. 5, No. 1, pp. 69–76.
Lukas, Bryan A.; Whitwell, Gregory J. and Doyle, Peter. 2005. “How can a shareholder
value approach improve marketing’s strategic influence?”, Journal of Business Re-
search, Vol. 58, No. 4, pp. 414–422.
Mačerinskas, O.; Matekonienė, J.; Pupinytė, A. 2003. Impact of Globalization on Na-
tional Economies: the Main Concepts, Engineering Economics 3(34): 68–75.
Maltz, E.; Souder, W., & Kumar, A. 2001. Influencing R&D/marketing integration and
the use of market information by R&D managers: intended and unintended effects of
managerial actions. Journal of Business Research, Vol. 52.
Martin, D. M. 2009. The entrepreneurial marketing mix. Qualitative Market Research:
An International Journal. (Vol. 12 No. 4, 2009 pp. 391–403).
Martinez-Lopez, F. J.; Casillas, J. 2009. Marketing Intelligent Systems for consumer
behaviour modelling by a descriptive induction approach based on Genetic Fuzzy Sys-
tems, Industrial Marketing Management 38: 714–731.
doi:10.1016/j.indmarman.2008.02.003
McCarthy, E.J. 1964. Basic Marketing, a Managerial Approach, Homewood, Ill.: Rich-
ard D. Irwin, Inc.
Mccormack R.W (n.d.). Functions of Marketing – Market and Marketing Philosophies.
[Online]. Available: http://ezinearticles.com/?Functions-of-Marketing---Market-and-
Marketing-Philosophies&id=3681188
McDonald, M. 1997. Marketing plans. How to prepare them: how to use them. Third
edition. Butterworth Heinemann, 485 p.
McKenna, R. 1991. Relationship Marketing: Successful Strategies for the Age of the
Customer, Addison-Wesley, Reading, MA.
Miller, K. D. 1992. A Framework for Integrated Risk Management in International
Business, Journal of International Business Studies 23: 311–331.
doi:10.1057/palgrave.jibs.8490270
Moenaert, R.; Souder, W.; Meyer, A., & Deschoolmeester, D. 1994. R&D – Marketing
integration mechanisms, Communication flows, and Innovation success. Production
Innovation Management, Vol. 11.
Mogran, N. A.; Slotegraaf, R. J.; Vorhies, D. W. 2009. Linking marketing capabilities
with profit growth, International Journal of Research in Marketing 26: 284–293.
doi:10.1016/j.ijresmar.2009.06.00
Möller, K. 2006. The Marketing Mix Revisited: Towards the 21st Century Marketing
by E. Constantinides. Journal of Marketing Management 22(3): 439–450.
REFERENCES 137
Moorman, Ch.; Rust R.T. 1999. The Role of Marketing. Journal of Marketing, 63 (Spe-
cial Issue), 180–97.
Morelli, M.; Eppinger, S.; Gulati, R. 1995. Predicting Technical Communication in
Product Development Organizations. The International Center for Research on the
Management of Technology, Massachusetts Institute of Technology.
Morris, M.; Schindehutte, M. and LaForge, R. 2002. “The emergence of entrepreneurial
marketing: nature and meaning”, Journal of Marketing Theory and Practice, Vol. 10,
No. 4, pp. 1–19.
Murphy, D. 2005. The Click in the Bricks. Research World, November, 29–30.
Naresh, K. Malhotra, David F. Birks. 2006. Marketing research: an applied approach.
Harlow, Financial Times Prentice Hall, 753 p.
Nath, P.; Mahajan, V. 2008. Chief Marketing Officers: A Study of Their Presence in
Firms’ Top Management Teams. Journal of Marketing, 72 (January), 65–81.
Ohmae, K. 1982. The Mind of the Strategist. Penguin, London.
Okolo, S. 2008. Risks in International Business, [online] [accessed 10 Dec. 2009]
Available from Internet: http://ezinearticles.com/?Risks-in-International-Business
&id=133170
Paliwoda, Stanley J.; Ryans, John K. 2008. Back to first principles. International Mar-
keting: Modern and Classic Papers (1st ed.). p. 25.
Parry, M., Song, X. 1993. “Determinants of R&D-Marketing Integration in High-Tech
Japanese Firms. Production Innovation Management, Vol. 10.
Pearlson, K. E.; Saunders, C. S. 2010. Strategic Management of Information Systems.
Fourth Edition, John Wiley & Sons, Inc.
Pennings, J. M. E. 2004. A marketing-finance approach towards industrial channel
contract relationships: a model and application, Journal of Business Research 57: 601–
609. doi:10.1016/S0148-2963(02)00394-6
Petromilli, Michael, Morrison, Dan and Million, Michael. 2002. “Brand architecture:
building brand portfolio value”, Strategy and Leadership, Vol. 30, No. 5, pp. 22–28.
Popovic, D. 2006. Modelling the Marketing of High-Tech Start-Ups. Journal of Target-
ing, Measurement and Analysis for Marketing, 14(3), 260–276.
Porras, J.; Robertson, P. 1992. Organizational Development: Theory, Practice, and
Research. Handbook of Industrial and Organizational Psychology”, ed. 2nd, Vol. 3.
Ginevičius, R.; Podvezko, V.; Ginevičius, A. ”Determining the Significance of the Cri-
teria Describing Enterprise Marketing”, The 15th World Multi-Conference on Sys-
temics, Cybernetics and Informatics, July 19–22, 2011, Orlando, Florida, USA.
International Institute of Informatics and Systemics. This edition.
Rafiq, M. & Ahmed, P. K. 1995. Using the 7Ps as A Generic Marketing Mix: An Ex-
ploratory Survey of UK and European Marketing Academics. Marketing Intelligence &
Planning, 13(9), 4–15.
138 REFERENCES
Robins, F. 1991. Four Ps or Four Cs or Four Ps and Four Cs. MEG Conference, 1991.
Rust, Roland. T., Lemon, Katherine N. and Zeithaml, Valarie A. (2001), “Where should
the next marketing dollar go?”, Marketing Management, Vol. 10, No. 3, (Sept–Oct),
pp. 24–28.
Rust, Roland. T., Lemon, Katherine N. and Zeithaml, Valarie A. (2001), “Where should
the next marketing dollar go?”, Marketing Management, Vol. 10, No. 3, (Sept–Oct),
pp. 24–28.
Rutkauskas A. V. 2003. Isoguarantess as instrument of portfolio decision making. In:
International conference “Modeling and simulation of business systems”. Edited by
H. Pranevicius, E. Zavadskas and B. Rapp. May 13–14, 2003, Vilnius, Lithuania. Kau-
nas University of Technology Press, “Technologija”, pp. 239–243.
Rutkauskas A. V. 2006. Towards Sustainable Decision Making Strategy in Currency
and Capital Markets. In: The 10th World Multi-Conference on Systemics, Cybernetics
and Informatics. July 16–19, 2006, Orlando, Florida, USA. International Institute of
Informatics and Systemics, pp. 45–50.
Rutkauskas, A. V. 2006. Adequate investment portfolio anatomy and decisions, apply-
ing imitative technologies, Economics: Research Papers 75: 52–76.
Rutkauskas, A. V.; Ginevičius, A. 2010. The Need for and possibilities of Marketing
Risk Management, in The 6th International Scientific Conference “Business and Man-
agement 2010” (May 13–14, 2010, Vilnius, Lithuania). 154–161. ISSN 2029-4441.
Rutkauskas, A. V.; Miečinskienė, A.; Stasytytė, V. 2008a. Investment Decisions Mod-
elling along Sustainable Development Concept on Financial Markets, Technological
and Economic Development of Economy 14(3): 417–427.
doi:10.3846/1392-8619.2008.14.417-427
Rutkauskas, A. V.; Stankeviciene, J. 2003. Formation of an Investment Portfolio Ade-
quate for Stochasticity of Profit Possibilities. Journal of Business Economics and Man-
agement, Vol. 4(1), pp. 3–12.
Rutkauskas, A.V. 2006. Adequate investment portfolio anatomy and decisions, apply-
ing imitative technologies, Economics: Research Papers 75: 52–76.
Rutkauskas, A.V.; Miečinskienė, A.; Stasytytė, V. 2008. Investment Decisions Model-
ling along Sustainable Development Concept on Financial Markets. Technological and
Economic Development of Economy 14(3): 417–427.
Rutkauskas, A.V.; Stankeviciene, J. 2006. Integrated Asset and Liability Portfolio as
Instrument of Liquidity Management in the Commercial Banks. Journal of Business
Economics and Management, Vol 7 (2), pp. 45–57.
Rutkauskas, A.V.; Stasytytė, A.; Ginevičius, A. 2008. Three-dimensional measurement
of market behaviour. The 5th International Scientific Conference “Business and Man-
agement 2008”. Vilnius, Lithuania 16–17 May, p. 297–302.
REFERENCES 139
Rutkauskas, A.V.; Stasytytė, V. “Optimal Portfolio Search using Efficient Surface and
Three-Dimensional Utility Function”, Technological and Economic Development of
Economy, Vol. 17, No. 2, 2011 (forthcoming).
Sabonienė, A. 2009. Lithuanian Export Competitiveness: Comparison with other Baltic
States, Inzinerine Ekonomika – Engineering Economics (2): 49–57.
Seggie, S. H.; Cavusgil, E.; Phelan, S. E. Measurement of return on marketing invest-
ment: A conceptual framework and the future of marketing metrics, Industrial Market-
ing Management 36 (2007) 834–841.
Sharma, A.; Iyer, G. R.; Raajpoot, N. A. 2009. A framework for offshoring marketing
processes in business-to-business marketing relationships, Industrial Marketing Man-
agement 38: 419–425. doi:10.1016/j.indmarman.2009.03.007
Sharpe, William F. 1981. Investments (2nd), New Jersey: Prentice – Hall.
Sheth, J. N.; Sisodia, R. S. 2002. Marketing Productivity: Issues and Analysis. Journal
of Business Research, 55 (5), 349–62.
Show, R.; Merriek, D. 2005. Marketing payback. Is your marketing profitable? Prentice
Hall.
Simister, P. 2009. Marketing Mix: How Many Ps In Marketing – 4Ps, 7Ps, 11Ps or
More? [Online] Available: http://businesscoaching.typepad.com/the_business_
coaching_blo/2009/02/marketing-mix-how-many-ps-in-marketing.html
Srivastava, Raj and Reibstein, David J. 2004. “Metrics for Linking Marketing to Finan-
cial Performance”, Working paper submitted to Marketing Science Institute, October
19th 2004, pp. 1–18, Available at: http://executiveeducation.wharton.upenn.
edu/globals/documents/metrics.pdf [Accessed 9th January 2006]
Stankeviciene, J. 2006. Real Estate Investment Portfolio Decision Making Under the
Risk and Uncertainty. In: The 10th World Multi–Conference on Systemics, Cybernetics
and Informatics: WMSCI 2006: ISAS July 16–19, 2006 Orlando, Florida, USA: pro-
ceedings. Vol I., pp. 51–56.
Suhobokov, A. 2007. Application of Monte Carlo simulation methods in risk manage-
ment, Journal of Business Economics and Management 8(3): 165–168.
Tang, Ch. 2010. A review of marketing–operations interface models: From co-existence
to coordination and collaboration. Journal of Production Economics, Vol. 125.
The nine functions of marketing. [Online]. Available: www.savepdf.org/download.
php?fid=27113
Tikkanen, H.; Kujala, J.; Artto, K. 2007. The marketing strategy of a project-based
firm: The Four Portfolio Framework, Industrial Marketing Management 36: 194–205.
doi:10.1016/j.indmarman.2006.03.006
Tull, D. S. 1967. The Relationship of Actual and Predicted Sales and profits in New
Product Introductions, Journal of Business, p. 233.
140 REFERENCES
Turban, E., Sharda, R., Aronson, J. & King, D. 2008. Business Intelligence – A Mana-
gerial Approach. Pearson Education, Inc.
Ulrich, K.; Eppinger, S. 2008. Product Design and Development. 4th ed., McGraw-
Hill/Irwin.
Valančienė, V.; Gimžauskienė, E. 2009. Dimensions of performance measurement
system in chantes research, Inzinerine Ekonomika – Engineering Economics (4): 41–48.
Verhoef, P.C; Leeflang, P.S.H. 2009. Understanding the Marketing Department’s Influ-
ence Within the Firm. Journal of Marketing. Vol. 73 (March 2009), 14–37.
Vlasenko, O.; Kozlov, S. 2009. Choosing the risk curve type, Technological and Economic
Development of Economy 15(2): 341–351. doi:10.3846/1392-8619.2009.15.341-351
Wang, Q. 2009. Multi-agent Assessment on Marketing Risk Based on Evidence
Theory, in Electronic Commerce and Business Intelligence. ECBI 2009. International
Conference, 6–7 June 2009, 370–373.
Ward, K. 2004. Marketing finance. Turning marketing strategies into shareholder value.
ELSEVIER.
Watkins, A.; Hill, R. P. 2009. A simulation of business-to-business decision making in
a relationship marketing context, Industrial Marketing Management 38: 994–1005.
doi:10.1016/j.indmarman.2008.06.002
Webster, F.E. Jr.; Steenkamp, J.B. E.M.; Wilkie, W.L.; Sheth, J.N.; Sisodia, R.S., et al.
2005. Marketing Renaissance: Opportunities and Imperatives for Improving Marketing
Thought, Practice, and Infrastructure”. Journal of Marketing, 69, October, 1–25.
Webster, F. E. Jr. 1997. The Future Role of Marketing in the Organization. Reflections
on the Futures of Marketing, Donald R. Lehmann and Katherine Jocz, Eds. Cambridge,
MA: Marketing Science Institute.
Webster, F. E.; Malter, A.J.; Ganesan, S. 2005. The Decline and Dispersion of Market-
ing Competence. MIT Sloan Management Review 46(4): 35–43.
Wen-Fei, L. U. 2004. Managing Marketing Risks. Dept. of Applied Economics and
Management, Cornell University [online], [accessed 12 Dec. 2009]. Available from
Internet: <http://hortmgt.aem.cornell.edu/pdf/smart_marketing/uva4-04.pdf>.
Wikipedia (n.d.). Marketing mix. [Online]. Available: http://en.wikipedia.org/wiki/
Marketing_mix
Wikipedia. The free encyclopedia. Marketing. [Online]. Available: http://en.wikipedia.
org/wiki/Marketing
Yeo, K.T. 2002. Critical Failure Factors in Information Systems Projects. International
Journal of Project Management, 20(2002).
Yudelson, J. 1999. “Adapting McCarthy’s Four P’s for the Twenty-first Century”,
Journal of Marketing Education, Apr 99, Vol. 21, issue 1, p. 60.
REFERENCES 141
Zavadskas, E. K.; Turskis, Z.; Tamošaitienė, J. 2008. Contractor Selection of Construc-

tion in a Competitive Environment, Journal of Business Economics and Management
9(3): 181–187.
Zavadskas, E. K.; Naimavičienė, J.; Kaklauskas, A. et al. 2008. Multi-criteria decision
support system of intelligent ambient assisted living environment. In: The 25th Interna-
tional Symposium on Automation and Robotics in Construction (ISARC 2008): se-
lected papers, June 26–29, 2008 Vilnius, Lithuania. Vilnius: Technika, pp. 717–724.
[online] Available at: http://www.isarc2008.vgtu.lt/ [Date accessed: 26 Feb 2009].
Zhang, D.; Xiao, S.; Lin M. 2008. Research on transnational marketing risk and
evaluation index system of Chinese retail enterprises. Service Operations and Logistics,
and Informatics, IEEE/SOLI 2008. IEEE International Conference on Vol. 2, 12–15
Oct. 2008 Page(s): 2592–2597
Zhang, L.; Chen, Y.; Chen, F. 2008b. Marketing Risk Evaluation of Supply Chain, in
Innovative Computing Information and Control. ICICIC '08. 3rd International
Conference on 18–20 June 2008, 142–142. doi: 10.1109/ICICIC.2008.346.
Zhou, Mei-Hua; Wang, Fu-Dong; Zhang, Hong-Hong; Meng. 2006. Method of
Enterprise Marketing Risk Early-warning and The Index System Construction, in
Management of Innovation and Technology, IEEE International Conference on Vol. 2,
21–23 June 2006, 718–722.
Zontanos, G.; Anderson, A.R. 2004. “Relationships, marketing and small business: an
exploration of links in theory and practice”, Qualitative Market Research, Vol. 7, No. 3,
pp. 228–36.
The List of Scientific Author's
Publications on the Subject of the
Dissertation
In the reviewed scientific periodical publications, included in Web

of Science data base
1. Rutkauskas, A.V.; Ginevičius, A. 2011. Integrated Management of
Marketing Risk and Efficiency, Journal of Business Economics and
Management 12(1): 5–23.
In the reviewed scientific periodical publications
2. Rutkauskas, A.V.; Ginevičius, A.; Stasytytė, V. 2007. Rinkodaros kom-
plekso sąnaudų struktūros optimizavimas kaip verslo tvarios plėtros
priemonė, Ekonomika: mokslo darbai. Vilnius: VU leidykla, 78: 115–
133.
3. Ginevičius, A. 2007. Rinkodaros būklės įmonėje kiekybinis įvertini-
mas, Ūkio technologinis ir ekonominis vystymas 13(1): 19–23. ISSN
1392-8619.
143
144 THE LIST OF SCIENTIFIC AUTHOR'S PUBLICATIONS ON THE SUBJECT…
In publications of international conferences, included in ISI

Proceedings data base
4. Rutkauskas, A. V.; Stasytytė, V.; Ginevičius, A. 2008. Three-
dimensional measurement of market behaviour, in The 5th International
Scientific Conference “Business and Management 2008”. May 16–17,
2008, Vilnius, Lithuania, 297–302.
5. Ginevičius, R.; Ginevičius, A. 2008. Sustainability Decisions in Mar-
keting Complex Cost Optimization Process, in The 12th World Multi-
Conference on Systemics, Cybernetics and Informatics. June 29th – July
2nd, 2008, Orlando, Florida, USA. ISBN-10: 1-934272-30-2 (Collec-
tion), 35–40.
In the reviewed scientific periodical publications of international

conferences
6. Гинявичюс, Р.; Гинявичюс, А. 2007. Оценка состояния маркетинга
на предприятии, in V International Scientific Conference “Manage-
ment and Engineering’ 07”, June 18–22, 2007, Sozopol, Bulgaria,
ISSN 1310-3946, XIX-XXI.
7. Руткаускас, А.В.; Стаситите, В.; Гинявичус, А. 2007. Оптимизация
структуры затрат маркетингового комплекса как средство
проектирования устойчивости развития бизнеса, в кн.: Материалы
5-й Международной научно-технической конференции "Наука –
образованию, производству, экономике". 5-й Международный
научно-практический семинар "Мировая экономика и бизнес-
администрирование малых и средних предприятий". Минск, 31 мая
– 2 июня 2007 г. Минск: БНТУ, 2007, С. 239–264.
8. Ginevičius, R.; Podvezko, V.; Ginevičius, A. 2007. Assessing the per-
formance of universities in a country, in 10th UICEE Annual Confer-
ence on Engineering Education, 19–23 March, 2007, Bankok,
Thailand, 269–272.
9. Ginevičienė, V.; Ginevičius, A.; Tamošauskas, P. 2007. A feasibility
study for the introduction of Master‘s degree courses into the university
curriculum base don multi-criteria evaluation methods, in 10th UICEE
Annual Conference on Engineering Education, 19–23 March, 2007,
Bankok, Thailand, 15–17.
10. Ginevičius, A.; Ginevičienė, V.B.; Podvezko, V. 2008. The Effective-
ness of Enterprise Marketing System, in Proceedings of the Interna-
tional Conference in Management and Marketing Sciences (ICMMS),
23–25 May, 2008, Athens, Greece, 480–483.
11. Rutkauskas, A.V.; Ginevičius, A. 2010. The need for and possibilities
of marketing risk management, in The 6th International Scientific Con-
THE LIST OF SCIENTIFIC AUTHOR'S PUBLICATIONS ON THE SUBJECT… 145
ference Business and Management 2010: selected papers. May 13–14,

2010. Vol. 1. ISSN 2029-4441, 154–161. Prieiga per internetą:
<http://www.vgtu.lt/leidiniai/leidykla/BUS_AND_MANA_2010/Finan
ce_Engineering/154-161_Rutkauskas_Ginevicius.pdf>.
12. Ginevičius, R.; Podvezko, V.; Ginevičius, A. 2011. Determining the
Significance of the Criteria Describing Enterprise Marketing, in The
15th World Multi-Conference on Systemics, Cybernetics and Informat-
ics. July 19th – July 22nd, 2011, Orlando, Florida, USA (forthcoming).
Adomas GINEVIČIUS
INCREASING ECONOMIC EFFECTIVENESS
OF MARKETING
Doctoral Dissertation
Social Sciences,
Economics (04S)
Adomas GINEVIČIUS
RINKODAROS EKONOMINIO EFEKTYVUMO
DIDINIMAS
Daktaro disertacija
Socialiniai mokslai,
ekonomika (04S)
2011 06 06. 13,2 sp. l. Tiražas 20 egz.

Vilniaus Gedimino technikos universiteto
leidykla „Technika“,
Saulėtekio al. 11, 10223 Vilnius,
http://leidykla.vgtu.lt
Spausdino UAB „Ciklonas“,
J. Jasinskio g. 15, 01111 Vilnius

1893 Ginevicius Disertacija WEB

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

1893 Ginevicius Disertacija WEB

Uploaded by

Copyright:

Available Formats

VILNIUS GEDIMINAS TECHNICAL UNIVERSITY

VGTU leidyklos TECHNIKA 1893-M mokslo literatūros knyga

© VGTU leidykla TECHNIKA, 2011

2. ĮMONĖS RINKODARINĖS VEIKLOS KIEKYBINIS VERTINIMAS................. 45

The Investigated Problem

Importance of the Thesis

campaign versus several regional product advertisements. The levels enable

The Goal of the Thesis

The Tasks of the Thesis

− to suggest a priority scheme of investigating the interaction between the

Importance of Scientific Novelty

Practical Significance of Achieved Results

Approval of the Results

Structure of the Dissertation

1.1. Dialectics of marketing potential and business

1.1.1. Content and functions of marketing

After reading at least a hundred of various marketing definitions author of

− satisfying customer needs;

The marketing mix

Marketing decisions generally fall into these four controllable categories.

The concept of 4Ps has also been criticized as being a production-oriented

parameter affecting the customer’s perception of the delivered service

Another article, “Revision: Reviewing the Marketing Mix” (Fakeideas,

Morris (2002) criticized traditional marketing on “[…] an over-reliance on

1.1.2. Interaction between marketing and sales and product

cation channels that supply PD department with critical information, as a valu-

Marketing function in the context of product development

Fig 1.1. Integrated product development process

These 6 iterative stages incorporated into a new product developement

The main concern of the Marketing and sales department is reduction of

Areas for integration

Taxonomies of marketing information in the product

not be achieved by using the marketing information. In addition, this taxonomy

Table 1.3. Types of marketing information (Source: Hart et al., 1999)

Customer segment Customer purchase

Important factors for cross-functional integration

The cross-functional integration has a multidisciplinary character as it in-

Discussion concerning the cross-functional integration

1.2. New enterpreneurship challenges for marketing.

1.2.1. Marketing department’s influence on company’s

Triggered by the ongoing discussion of the declining role of the marketing

influence simultaneously influence each other. Market-oriented firms tend to

In conclusion, the following should be said: First, marketing subunits

1.2.2. Optimal marketing structure – postulate of marketing

− to estimate stochastic dependencies between marketing input and ef-

Marketing mix structuring throughout marketing cost

Marketing Mix Optimization Problems’ Experimental Solution

The numerical characteristics of the effect of separate marketing means

The increase of total profit

formation that disaggregated marketing mix elements are independent accidental

The adequate portfolio formation for Marketing Mix under Risk

It is difficult to separate the difference between the effective surfaces visu-

Table 1.5. Optimal portfolios’ structures and characteristics

The situation analysis reveals the possibilities how to create dependences

2.1. The main tasks and objectives of enterprise

Second, enterprise marketing is a social system, integrating a particular

2.2. Methods and ways of quantitative evaluation of

2.3. Quantitative multicriteria evaluation of enterprise

2.3.1. Developing a set of criteria describing enterprise

The main idea of multicriteria evaluation is the integration of the criteria

∑ ωi = 1,0 (Hwang, Yoon, 1981; Ginevičius, Podvezko, 2009).

2.3.2. Multicriteria evaluation of enterprise marketing activities

2.3.2.1. The aims of quantitative evaluation of enterprise

where Sj is the value of multicriteria evaluation of j-th alternative, wi is the