Creation of a marketing department and it’s development on the example of Kerama Marazzi company

*Source: accounting reports of the Kerama-Sochi LLC for the period from 2014-2018.

**Source: Robinson T. R., 2009. Information about indicators.

A clear vision of the dynamics of the development of financial indicators is shown in figure 7.

Figure 7. Multiple line graph of dynamics of financial results of Kerama-Sochi LLC*

*Based on the source: accounting reports of the Kerama-Sochi LLC for the period from 2014-2018

2.6 Conclusion of financial analysis

Summing up the financial analysis for the period from 2013 to 2018, there are indicators that satisfy the normal values ??are:

- net assets exceed the authorized capital, in addition, they increased over the 5 analyzed years;

- the security ratio with own working capital at the end of 2018 is 0,16, which corresponds to the optimal value;

- profitability analysis showed an increase in all three calculated indicators, at the end of 2018, ALL had reached normal values;

- the dynamics of equity relative to the total change in the assets of the organization is positive;

- revenue growth over the entire analyzed period, compared with 2014, this indicator over 5 years increased by 132 040 thousand rubles, which in 2018 is 272 202 thousand rubles;

- growth in profit from sales, despite a negative indicator in 2014 (-10 330 thousand rubles), since 2015 there has been a growth in profit, and in 2018 it is 18 116 thousand rubles, which is 28 446 thousand more than in 2014;

- growth in profit before interest payable and taxation (EBIT) per ruble of revenue, where in 2018 it is 15 779 thousand rubles.

Throughout the analysis, the most negative or non-normal indicators were obtained in 2014 and 2015. In addition to the internal mechanisms carried out by Kerama-Sochi LLC during the analyzed period, another trend may be played by the instability of the ruble exchange rate throughout the country during these years (this information is taken from accounts of the Central Bank of the Russian Federation).

2.7 Quantitative part: survey

A survey is a structured questionnaire that is provided to a sample of the population and is designed to receive specific information from respondents (Malhotra, 2012).

This questionnaire will be conducted to assess the structure of marketing departments, the effectiveness of marketing tools for development. The population of this analysis are various companies that have their own marketing department. Accordingly, the sampling unit is the manager of the marketing department. To a greater extent, the focus will be on companies whose activities are related to the construction industry, production, and sale of ceramic products. The sample will consist of 40 managers from the marketing department, one person from the company. Consequently, this survey includes 40 organizations. All questions in this survey are provided in a closed form. Questions for the questionnaire are compiled based on the analysis of several questionnaires, which were based on marketing research. Moreover, questions concerning specialties that can function in marketing services were taken from the already analyzed literature. This survey will be generated using the Google form. This format was chosen because it makes it possible to quickly receive respondents' answers in an already processed format. The type of interviewing method is electronic mail survey. The questions for the questionnaire were compiled on the basis of the analyzed literature and examples of surveys with a similar topic.

The structure of the questionnaire includes 5 blocks with questions, where several main measurement scales are included: nominal, ordinal and interval scale. The first block includes questions for identifying the correspondent (age, gender, experience in the marketing sphere). The second block of questions is aimed at obtaining information about the organization in which the manager works. The second block of questions is aimed at obtaining information about the organization in which the manager works, and about the structure of the marketing department. The third block of questions is related to the definition of effective communication channels for product development. The fourth block is devoted to understanding which social networks are used to promote the products of companies. The fifth block includes questions about the possibility of events that are organized to expand the customer base, for existing partners, for regular customers. The sampling technique for this survey is - quota sampling, because the selection of respondents consisted of 2 stages. Firstly, companies that work in the construction industry were selected. Secondly, letters were written to selected 70 organizations with a question about the presence of a marketing department, because managers of marketing departments were required to pass the questionnaire. Of the 70 organizations, only 40 had a marketing department. It should be noted that it was not possible to interview only construction companies because of the failure to receive a response from many organizations. Therefore, companies from other areas were taken. The questionnaire layout is attached in the Appendix.

MS Excel will be used to analyze the data, because it is convenient for structuring an array of information, as well as for providing information in different visual forms.

Results of the questionnaire

According to the results of the survey, 40 managers of marketing departments agreed to take the questionnaire.

Among the organizations whose managers passed the survey (figure 8), the largest number were small businesses (41%). This result is very useful for this project, because Kerama-Sochi LLC is also a small enterprise. Moreover, according to the questionnaire, 34 marketing managers work for organizations that are Russian.

Figure 8. Pie chart showing sizes of surveyed organizations*

*Based on the source: according to the results of the responses after the survey

According to the data obtained after the survey, 31 companies working in the construction sector and 9 companies from the transport industry participated in the questionnaire. Below is a graph with the results for better visualization and understanding (figure 9). Thus, it turned out that you can get a more complete picture of how the marketing departments in construction companies conduct their activities, which is important for the results of this study.

Figure 9. Bar graph showing areas of companies surveyed*

*Based on the source: according to the results of the responses after the survey

Among the managers of marketing departments who work in small enterprises (according to the results of a survey of firms that are small businesses - 17), the question "How many specialists are included in your marketing department?" the most popular was the answer, where the range of specialists was from 1 to 3 (figure 10). Nevertheless, the most popular answer was 5 specialists, but among the respondents there were mainly managers from large enterprises, which is less relevant for our study.

Figure 10. Bar graph describing the number of specialists of a marketing department in small enterprises*

*Based on the source: according to the results of the responses after the survey

Analysis of the answers to the question “What kind of specialists work in your department?” showed the following result (in this question, several options could be chosen):

- public relations officer (31 respondents), it was the most popular answer;

- manager of the marketing department (30 respondents);

- marketing analyst (24 respondents);

- SMM specialist (20 respondents);

- marketing coordinator (13);

- marketing assistant (9).

Moreover, there was an answer in the line “other”, where the respondent indicated that the director of the marketing department is also an analyst (figure 11).

Figure 11. Bar graph describing the number of specialists in marketing departments of organizations*

*Based on the source: according to the results of the responses after the survey

The following question was formulated in order to understand what, in the opinion of experts in the marketing field, specialties are most needed by the marketing service. If compare figure 11 and figure 12, it is clear that the leading positions are still occupied by specialties: marketing analyst, public relations manager and marketing department manager.

Figure 12. Bar graph describing the necessary marketing specialists according to the respondents themselves*

*Based on the source: according to the results of the responses after the survey

Based on the results of the following question: “In your opinion, is it necessary to create a marketing department in the company's branches (if the needs of the clients of the branches differ due to their location in another region)?”, the most popular answer was “yes” (33 out of 40 respondents answered positively).

To the question "Does your marketing department hold meetings to discuss current issues?" the most popular answer was - yes, meetings take place if necessary (16 managers). The second popular answer was - yes, meetings take place every week (13 managers), the third - yes, every month (8 managers), the fourth - no, meetings are not held (2 managers), and the fifth - yes, every day (1 manager). For a better understanding of the ratio of the answers received below is the pie chart (figure 13).

Figure 13. Pie chart showing the frequency of meetings in the marketing departments*

*Based on the source: according to the results of the responses after the survey

Among the respondents to the question “Has your company's profit increased or decreased over the year after the creation of the marketing department and its activities?”, the most popular answer was “profit increased” (34 out of 40 respondents). Moreover, to the question “If the profit of the organization has increased, then by how much” the most popular answer was “doubled”. To the question “If the profit of the organization has decreased, then by how much” the most frequently chosen answer was “profit remained at the same level”.

The answers received by the managers of the marketing departments helped to understand through which communication channels customers can most often learn about the products or services that organizations provide (figure 14). In this question, among the respondents, the "company official website" (34 from 40) was the most chosen answer.

Figure 14. Bar graph showing the popularity of using communication channels with customers*

*Based on the source: according to the results of the responses after the survey

The survey results showed that the presence of an official website is in demand among buyers (26 out of 40 respondents, where 4 out of 40 organizations do not have a website at all). Moreover, the results illustrate that 28 organizations have the “online purchase” function, which is carried out through the company's website.

The respondents in the questionnaire had to answer a series of questions about such a popular social network as Instagram. Among the results, there are several interesting points. 27 managers replied that their organization has a profile in this application for product promotion. Therefore, this tool is popular as a means of promoting the product. Moreover, 31 respondents said that the marketing department is developing and promoting the profile of the organization in Instagram.

To the question "What tools does your marketing department use to promote products / services using Instagram?", answers were as follows (figure 15):

- publication of posts (26 respondents);

- publication of stories (21 respondents);

- customer consultation on emerging issues (17 respondents);

- periodic holding of various headings (13 respondents);

- acceptance of orders (12 respondents);

- holding contests and sweepstakes (9 respondents);

- live broadcasts (7 respondents).

Figure 15. Bar graph showing the popularity of Instagram promotion tools*

*Based on the source: according to the results of the responses after the survey

On the one hand, to the question “Does your marketing department attract bloggers to advertise a product / service using social networks”, 75% of respondents answered “no.” On the other hand, to the question "In your opinion, is advertising of a product / service using a blogger effective or not?" 73,5% of respondents chose “yes, effectively”. It can be concluded that this type of promotion has potential, but it is not yet so common among construction companies.

The most popular social networks from the question “In your opinion, which social networks are suitable for advertising a product / service?” were (figure 16): Instagram (34 managers), Telegram channel (15) and Facebook (12). Therefore, these directions can be taken in attention to product promotion.

Figure 16. Bar graph showing the most popular social networks for product promotion*

*Based on the source: according to the results of the responses after the survey

The marketing department took the habit of holding events that are created to expand the customer base, for existing partners, for regular customers. The frequency of such events varies among respondents:

- yes, events are held as necessary (16 respondents);

- yes, events are held every month (9 respondents);

- no, events are not held (6 respondents);

- yes, events are held every year (5 respondents);

- yes, events are held every week (3 respondents);

- yes, events are held once every half a year (1 respondents).

It is interesting that those respondents who replied that they didn't carry out events are all employees of microenterprises. The graph will provide all the answers to this question (figure 17).

Figure 17. Bar graph showing the frequency of events by marketing departments*

*Based on the source: according to the results of the responses after the survey

The graph shows that there is a need for such formats among companies. Therefore, if Kerama-Sochi LLC this format will meet the branch's marketing strategy, then it can be included in the responsibilities of the marketing department.

Further, in the questionnaire, event formats were selected by popularity to attract consumers: participation in exhibitions (20), presentations (19), entertaining events (15), contests and quizzes in the organization (10), sampling- free distribution of product samples traded by firms (6), flash mobs (3), webinars (2). For clarity, below is a graph (figure 18).

Figure 18. Pie chart showing the types of events held by marketing departments*

*Based on the source: according to the results of the responses after the survey

To the question "Your marketing department is looking for partners, when is going to hold any event?" the most popular answer was yes (23). Only 9 people chose “by necessity,” and 2 said “no”. The results make it clear that finding partners for the event is a normal and useful practice (figure 19).

Figure 19. Bar graph describing whether the interviewed organizations attract partners for events*

*Based on the source: according to the results of the responses after the survey

2.8 Qualitative part: in-depth interviews

Sample and data collection

This format of qualitative analysis is carried out to grasp the structure of the marketing departments of the branches and their interaction with the head office. Moreover, the chosen analysis method will help to find out the insights of work processes and possible development tools used by marketing services. In-depth interviews were selected due to a lack of necessary information in open sources. In addition, the information obtained during all interviews will be useful, because these branches are part of Kerama Marazzi LLC, like the Sochi branch, they all work in the construction industry and have the necessary experience in the marketing field, which will be useful in developing recommendations to create a marketing service for Kerama-Sochi LLC.

Respondents were chosen for in-depth interviews using the snowball method. This format was chosen because of the difficulty in finding the right specialist in this field, since little information is available in open sources. According to this method of selecting respondents, several suitable specialists are initially selected, who will then share the contacts of their colleagues (Naderifar, Goli, Ghaljaie, 2017). The initially selected respondent is the general director of Kerama-Sochi LLC - Bukhareva Nina Alexandrovna.Then the respondent contacted the director of the marketing department of the head office - Yegorova Elena Vyacheslavovna. After the interview, this specialist gave contacts to 10 potential respondents, of which only 8 people agreed to conduct the interview.

The initially selected respondent is the general director of Kerama-Sochi LLC - Bukhareva Nina Alexandrovna. Then the respondent contacted the director of the marketing department of the head office - Yegorova Elena Vyacheslavovna. After the interview, this specialist gave contacts to 10 potential respondents, of which only 8 people agreed to conduct the interview.

Respondents who agreed to the interview:

- Siberian Alexander Gennadievich. General Director of Kerama-Volgograd LLC. He has been in this position for 15 years.

- Director of the marketing department of Kerama-SPB LLC. This respondent asked for privacy. She has been in this position for 6 years.

- Karsakov Maxim Konstantinovich. General Director of KERAMA-Golden Ring LLC. He has been in this position for 4 years.

- Berdnikov Igor Petrovich. General Director of Ufa-Kerama LLC. He has been in this position for 13 years.

- Director of the marketing department of Kerama-Crimea LLC. This respondent asked for privacy. He has been in this position for 4 years.

- Kochergin Valery Nikolaevich. General Director of Orelshtamp LLC. He has been in this position for 13 years.

- Victor Dudinets. General Director of VOLGA-KERAMA LLC. He has been in this position for 10 years.

- Krivorotov Dmitry Nikolaevich. General director of Sibir-Kerama LLC. He has been in this position for 4 years.

All interviews are a semi-structured type from existing ones. This means that all respondents answer open questions, there is a detailed discussion of a specific topic. Questions for the interview were created in advance, based on the analyzed literature and on the basis of those tasks that should be solved for this project. All layouts of prepared questions for respondents are presented in the Appendix. The way of communication with respondents was carried out through the WhatsApp program. This format was a forced format because of the coronavirus and because all respondents are in different cities of Russia. This program was chosen for the interview, because it was convenient for all specialists. Venues for interviews were at home. All interviews were recorded using audio recordings for further transcription with the permission of the respondents.

Data analyses

The most important goal of conducting these interviews with respondents from different branches of the Kerama Marazzi company was to obtain answers to the question of the interaction of the marketing departments of the head office and the branches. And the necessary information was acquired during the interviews. Firstly, all 8 departments of the surveyed branches have a linear organization structure for the marketing department. Respondents (5 out of 8 specialists) noted that this structure works most effectively based on their work experience. Secondly, the reasons were identified that contributed to the fact that the branch needs its own marketing department. The most popular responses among respondents were the following reasons:

- the difference in the preferences of customers of each branch and their reaction to product advertising (specifics of the regions);

- lack of time to monitor and regulate all processes of the branch, because the genius director of the organization is forced to take on the implementation of marketing tasks;

- due to the fact that the activities of branches tend to become wider and more powerful with time, it becomes more and more difficult to control each department;

- increase the competitiveness of the branch.

To determine the functions of the future marketing department of Kerama-Sochi LLC, respondents from eight branches and the manager of the head department were asked about the interaction of the departments among themselves, which functions are carried out at the local level, and which marketing issues are resolved at the head office level. Respondents were asked questions regarding a number of functions that are performed by the marketing departments (Urbonaviиius, Dikиius, Kasnauskienл, 2017). After analyzing the answers, the results were as follows: the head office of the marketing service develops a basic marketing strategy for the company and for all affiliates that solve marketing problems. Relative to this function, the departments of the branches, when solving marketing problems, must adhere to the set marketing strategy. At the expense of pricing policy and its installation, the head office develops recommended prices for each product, where a prerequisite is not to put below the specified price. However, a branch sets the final price for each product, taking into account the current situation in the market where a branch operates. The head marketing department is fully responsible for the “product development” function. Branches only receive a finished and distributed product for further sale to the final consumer. Product promotion is carried out by both the head department and the marketing departments of the branches, where the main marketing department develops promotion recommendations and a compulsory brand book, which is sent once a year when the new annual collection of Kerama Marazzi LLC is launched. In turn, the departments of the branches are required to comply with the conditions that are prescribed in the brand book, while pursuing its policy of promoting the product, which is effective in the current market of a region. Nevertheless, advertising solutions developed by a branch must be agreed with the head office. Marketing research is carried out by both the head department and marketing services at the branches. The main office is engaged in market research for further decisions, and also analyzes the work of the marketing departments of branches to monitor the effectiveness of these departments. The marketing services of various branches are also responsible for this function, where they analyze the current market situation, the internal activities of the company, develop marketing strategies arising from the final analysis, but all decisions must first be approved by the head office. Regarding SMM functions, the most popular answers among respondents were: the head office develops and creates content for publication on social platforms, and the branches have the right to publish only the prepared material by the head office. Nevertheless, affiliated societies have the right to use the capabilities of tools on social networks, but having previously agreed upon marketing decisions with the main department.

To the question “Does the marketing department of your branch present the new annual collection of Kerama Marazzi LLC?” 9 out of 10 respondents answered positively. Moreover, the question regarding the amount of expenses for holding this event, the most popular answer was about 2 million rubles, where the head office pays half of the costs.

To the question “Does your department use radio stations to advertise products? If the answer is yes, then with what frequency does it work most effectively?” the most popular answer among respondents (9 out of 10) was, yes, they use this type of advertising. At the expense of frequency, the answer “once a month” was often answered. To the question “Does your department use print media for product advertising? If the answer is yes, then with what frequency does it work most effectively?” 8 out of 10 respondents answered positively, regarding the frequency of use, the most popular answer was “twice a year”. To the question “Does your department use website promotion to promote products? If the answer is yes, then with what frequency does it work most effectively?” all respondents answered positively, 7 out of 8 respondents answered that they use this type of advertising twice a month. Moreover, 5 respondents noted that they are using Yandex Direct and Google AdWords to promote the web site of the branch. To the question “Does your department use banners for product advertising? If the answer is yes, then with what frequency does it work most effectively?” 8 out of 8 respondents answered that they are using, and the most popular answer to the next question was “once a month”. However, the general director of Kerama-Sochi LLC noted that this branch already uses this method of advertising and based on experience, the most effective option for the frequency of use of this tool is by season, because the largest flow of people happens in summer and winter, when a huge number of tourists come in town. Moreover, this respondent noted that the Sochi branch uses advertising with banners at the airport in the winter and summer seasons and voiced the costs of this service. CEO of Kerama-Sochi LLC spoke about his wishes regarding what functions he would like for the marketing department to perform:

- analysis of the internal activities of the branch;

- analysis of the market in which the organization operates;

- analysis of competitors and their pricing policies;

- work with social networks

- a specialist who will organize presentations.

In this regard, the results of strategic and financial analysis confirm that the activities of the Sochi branch over the past 5 years are becoming more stable and stable, and the current market conditions and external factors that may affect the development of the Kerama-Sochi LLC create a favorable environment for the implementation of new projects.

In the next part, recommendations on the creation and development of the marketing department at Kerama-Sochi LLC will be signed. Due to all the analysis of the current market and the activities of the branch, the signing plan will be based on the results that were outlined in this part.

3. Project section

This section includes the development of recommendations and measures for the creation and functioning of the marketing department at Kerama-Sochi LLC. The plan to create a marketing service in the Sochi branch can be divided into several stages (Table 11).

Table 11. Stages of the plan to create a marketing department in Kerama-Sochi LLC

The reasons why the other branches of Kerama Marazzi decided to create their own marketing department were (found out during in-depth interviews):

- the difference in the preferences of the clients of each branch and their reaction to product advertising (that is, the advertising installations that came from the head office did not fully work on the market, taking into account the specific demand of a particular region)

- the general director of the branch is forced to deal with the marketing tasks coming from the head office. However, due to the heavy workload of the general director for marketing, he does not pay enough attention to solve the strategic and current problems of the company's development

- increase the competitiveness of the branch through the competent use of marketing tools.

In order for the organization's activities to be agile and supple, firms must constantly analyze the internal and external state of an organization, where information is obtained due to economic, political, legal, technical, social factors. (Pankrukhin, 1999). Kerama-Sochi LLC has been operating for 16 years, increasing sales, increasing its regular customer base, revenue (follows from the financial analysis), and expanding the range of products. For this reason, it becomes more difficult to manage all the processes of activity, there is a need for the help of other specialists (from in-depth interviews with respondents). Having discussed all issues with the Moscow office, the Sochi branch decided to im...