REGIONAL COOPERATION AND ECONOMIC INTEGRATION

CEFTA-2006 AND ANHANCING COMPETITIVENESS OF THE REGION - SOME SECTORAL ASPECTS
process of transition is significant (Thomas, 1991) there are still many limitations that
diminish its total effects (Hooley, 1993). Although marketing helps the processes are
done more efficiently than before, some structural problems that the companies have to
overcome are quite challengeable.
There are several constraints that firms have to take into consideration when adopting and
practicing marketing orientation in transitional countries. Namely, those are the general
infrastructure problems (Thomas, 1991), the lack of managerial expertise, weakness of
supporting industries (Buntzman et al, 1993), perception barriers (McDonalcd, 1993;
Shipley and Fonfara, 1993), etc. Naturally, if monopoly prevails in the market, then
marketing just adds to the costs, without increasing revenues.
Some factors driven by demand should be noted also. Excess demand, characteristic for
many segments of Eastern Europe lessens the importance of marketing. Moreover, limited
competition implies that consumers do not have valid choice, and therefore, many buyers
lack reference points when new brands enter a market (Becker and Baker, 1995). On the
other hand, in some markets, excess supply is present, however, low purchase power for
these consumers restrains the marketing development.
In order to accelerate overcoming of listed problems most Governments in transitional
countries are offering some incentives to foreign companies in order to bring them to the
domestic market and achieve certain benefits of foreign direct investments (FDI). The most
common advantages of FDIs are productivity and technology spillovers, while managerial
and marketing effects are not as much obvious. Setting up of foreign MNCs’ subsidiaries
usually is accompanied with bringing of some company-specific intangible assets that
enables them to be competitive in domestic market. Some of these intangible assets,
marketing among other knowledge, can be expected to spill over to local firms over time
as a result of employee turnover, linkages, or simple demonstration effects (Kokko and
Kravtsova, 2006). At the same time, learning from the experiences of MNCs and bridging
their mistakes, business in the developing countries may much better address marketing
issues and benefit from that.
As mentioned before, literature review reveals strong gap in this field of study. With just
a few studies referring to the examination of how marketing strategies differ between
local firms and MNCs’ affiliates in developed countries almost nothing is known about
it in a country in transition such as Serbia. Therefore, the purpose of this paper is to
examine whether there is the difference in adoption of marketing strategy and executing of
marketing activities between Serbian companies and MNCs’ subsidiaries, which are doing
their business on the territory of Serbia.
2. Research design and methodology
In order to address possible variations in marketing approach in MNCs and domestic
companies, we investigated the differences in marketing practices between Serbian
companies and MNCs operating in Serbia. We are starting from premise that foreign
companies operating in Serbia conduct unified marketing practices which reflects their
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