Any businessman or company would like to see that their products or services are in demand on the market and are used with demand by possibly large number of people. To create such an environment, in addition to their own experience and natural intuition, they must use the "scientific approach", i.e. global experience and technology which are available particularly in marketing and proven in many countries.
According to people, professionals in this regard, the level of development of marketing communications in Azerbaijan has quite substantially increased over the past two years. Firstly this is due to the overall development and economic growth that has made Azerbaijani markets attractive to many foreign companies and investors who have started to implement their marketing strategies in Azerbaijan in such spheres as trade in food and drink, cars, electronics.
There were opened local branches of foreign advertising agencies, media planning firms, services for public relations. There are also local companies that operate creatively and do not inferior to their foreign competitors, but in general, local companies differ with great conservatism and are yet reluctant to accept new tendencies. According to the competent experts in marketing, even greater changes are expected over the next two or three years, but today, they say, we like 4-year-old kid who is learning to properly fold the words in the sentence. In their opinion, at this stage of development, one of the limiting factors is the plagiarism of advertising, and here the government can make its help, revising and improving Law on Advertising and the Law on Copyright Protection. Outdated approaches of marketing planning still dominate in Azerbaijan, particularly in the field of protection of interests of clients, market analysis, sales promotion materials. For example, it is possible to say there are no private commercial entities engaged in market research on the domestic market. The only organization where domestic business entities can appeal with an order to analyze a particular segment of the market, to determine the price for new products or to conduct a survey of consumers is the Marketing Society of Azerbaijan. At the same time, on the Internet it is possible to find paid market researches - reports on market study in Azerbaijan, carried out by foreign firms.
In addition to the small number of professionals, the lack of private companies to study the market is connected with the low activity of businessmen and entrepreneurs. Advertising on TV, the Internet, sending e-mails via SMS, sales promotion (seasonal discounts, discount cards, etc.) - although all these and other elements of marketing activity are present in Azerbaijan, still they have not made transferred Azerbaijani market goods and services into the boiling cauldron (like in Dubai), which with healthy competition and knowledge would form a new culture of relations, new products and services, new ideas.
The vast majority of people are aware that with their ability to decide what and where to buy, they become the center of the whole process, but manufacturers and retailers are doomed to find effective ways to meet their needs. Shopper marketing is a new concept of marketing, which has become recently popular amongst world's major brands. It is based on a simple idea how well to study the behavior of potential buyers and find ways of winning their loyalty to transform them from simple consumers to permanent customers.
Zappos is online footwear and clothing retailer, the number of customers of which reached 4 million over the last year.
But the most significant achievement is that 75% of buyers are in the category of permanent clients, chief operating officer of the company Alfred Lin said. Agree that this result is not only and not so much the quality of goods, high quality of service, but also great staff working with clients, Lin said. The company's culture focuses on making sure every interaction with the customer results in them saying, "That was the best customer service I have ever had," Lin said. All employees that are hired for their corporate office, regardless of position, are required to undergo a 4-week customer loyalty training course, which includes at least 2 weeks of talking on the phone with customers in the call center at full salary. After a week of training, the new employees are offered $2,000 to leave the company immediately, no strings attached. This is to ensure people are there for the love of the job and not the money, Lin said.
In the WEF's Global Competitiveness Index for 2009-2010 in the category "Efficiency of the commodity market", among other evaluation criteria, there are two that are relevant to the affected theme: the degree of customer orientation, that is how companies are responsive to customers and are able to retain them, and buyer sophistication, i.e., how buyers decide to buy something - only on the basis of low prices or on the basis of selective analysis of exploited properties and characteristics of the goods.
According to a study conducted by IBM Company, more than 80% of market participants have suggested that by 2020, their main goal is to win the consumer trust. (Institute for Business Value, "Shopper advocacy in the new economic environment," January 2009). In order to gain the trust it is necessary to fulfill promise, say the authors of the study, and primarily to ensure the availability of goods on the shelves. However, approximately in 17% of cases, the advertised products are absent in sale. Retail industry loses annually $93 billion due to lack of desired products at the store. One of the reasons is outdated supply chain, which does not take into account the demand for goods.
Max Bahr Holzhandlung GmbH, a pioneer since 1879 in Germany's highly competitive do-it-yourself (DIY) market, presently owns more than 80 shops, which sell about 40,000 different products, both under its own brand and imported from around. These are products for home and farmland - wallpaper, carpets, wooden products, appliances and instruments, cottage furniture, plants and flowers. 30% of all goods are stored at the central warehouse of the company, 70% are delivered directly to suppliers. In the state it has 4,500 employees, who aim to advise and serve any client at the highest level. The commodities of the company are always in demand.
After an increase in the number of commercial facilities in 1990s the company directed its efforts to have more sales per square meter of selling area, and it demanded a permanent presence (and in sufficient quantities) of any products in the list of goods sold on the shelves of stores. To achieve this goal, it needed a new approach, which would have improve the supply chain and provide the necessary inventory to service orders while optimizing costs for the purchase and storage of the stored goods.
"We made decisions on the number of the stored goods separately for each commercial facility," said Anna Schoning, one of the heads of Max Bahr. "Planners have studied the data of computerized POS terminals and then manually placed orders for replenishment. Each store had its own terminal, connected to the server of IBM. However, often situations emerged where the lack of certain commodities and emerging alternative costs strongly affected the number of sales. Also, to maintain such a large staff of planners cost expensive.
Max Bahr appealed to IBM for automating the process of sending orders to replenish stocks to the central warehouses and suppliers. It was necessary to take into account many factors: the maximum place occupied by the goods on the shelves, the upcoming promotion of certain products, the time of order implementation by the supplier, range, and others. Hardware-software solution for dynamic optimization of goods accounting and inventory control (Dynamic Inventory Optimization Solution), developed by IBM, was one of the most important business tools that ensured increased sales and kept the company competitive.
Perhaps these examples seem more grotesque in the conditions of Azerbaijan's market and realities. But the question is not in it, but that in the presence of knowledge and desire, it is possible to get improved in these or other ways. Studying the world experience, the use of new technologies in spheres such as marketing investment, quality, pricing, risk management, chain supply management can positively impact on market development and help the true prosperity of entrepreneurship in Azerbaijan, - but the main question that the interests of all parties coincide.