The SME's currently need to upgrade their knowledge and skills to respond the complex market needs, in order to make their position and competitiveness on the market. There is a very close connection among marketing orientation and the level of development of small business. Among other macro and institutional factors, marketing has become one of the most important for SME's development. To be competitive means to create optimal marketing mix by using the four marketing instruments: product, place, promotion and price (4P). The situation of SME's in the Republic of Macedonia is characterized by disturbances in their development through the period of transition. The reasons for such situation are focused mainly on the highest (macro) level, but there are still some opinions that firms are not very innovative or creative in implementing the real marketing concept in practice. The owners or managers in this SME's are not aware or educated in the sphere of marketing and the possibilities for implementation of business activities. Responding to the consumer needs should be a base for creating the whole strategy and the process of consumer satisfaction has to be an indicator for the development small business. This should be a base for creating the contemporary relationship management concept in order to make a real business strategy for positioning the SME’s in order to increase the completeness on the market.Marketing orientation; SME’s development; Marketing concept; Promotion; Integrated communication

Tatiana Mirchevska

Vladimir Mirchevski

English

Research Papers in Economics

AE  Interferenţe economice 
 
Amfiteatru Economic  40 
 
THE ROLE OF MARKETING IN SME’S DEVELOPMENT 
IN REPUBLIC MACEDONIA 
(Rolul marketingului în dezvoltarea IMM-urilor în Macedonia) 
 
 
 
 
 
 
Abstract 
 
The SME's currently need to upgrade 
their knowledge and skills to respond the 
complex market needs, in order to make their 
position and competitiveness on the market. 
There is a very close connection among 
marketing orientation and the level of 
development of small business. Among other 
macro and institutional factors, marketing has 
become one of the most important for SME's 
development. To be competitive means to 
create optimal marketing mix by using the 
four marketing instruments: product, place, 
promotion and price (4P). 
The situation of SME's in the 
Republic of Macedonia is characterized by 
disturbances in their development through the 
period of transition. The reasons for such 
situation are focused mainly on the highest 
(macro) level, but there are still some 
opinions that firms are not very innovative or 
creative in implementing the real marketing 
concept in practice. The owners or managers 
in this SME's are not aware or educated in the 
sphere of marketing and the possibilities for 
implementation of business activities. 
Responding to the consumer needs should be 
a base for creating the whole strategy and the 
process of consumer satisfaction has to be an 
indicator for the development small business. 
This should be a base for creating the 
contemporary relationship management 
concept in order to make a real business 
strategy for positioning the SME’s in order to 
increase the completeness on the market. 
 
Keywords: ●Marketing orientation 
●SME’s development ●Marketing concept 
●Promotion ●Integrated communication 
 
 
 
      Rezumat 
 
IMM-urile au nevoie permanent să-şi 
actualizeze cunoştinţele şi aptitudinile pentru 
a putea răspunde nevoilor pieţelor complexe, 
aşa încât să î şi stabilească o poziţie  şi 
competitivitate pe piaţă. Există o legătură 
foarte strânsă între orientările marketingului 
şi nivelul dezvoltării micilor afaceri. Printre 
alţi factori macroeconomici şi instituţionali, 
marketingul a devenit unul dintre cei mai 
importanţi pentru dezvoltarea IMM-urilor. A 
fi competitiv înseamnă a crea un mix de 
marketing optim folosind cele patru 
instrumente de marketing: produs, piaţă, 
promoţie şi preţ (Cei patru P). 
Situaţia IMM-urilor în Republica 
Macedonia este caracterizată de tulburări în 
dezvoltarea lor în perioada de tranziţie. 
Motivele acestei situaţii sunt în principal la 
nivel macroeconomic, dar există şi păreri cum 
că firmele nu sunt prea inovative sau creative 
în implementarea conceptului marketingului 
în practică. Patronii sau managerii IMM-
urilor nu sunt conştienţi sau educaţi în sfera 
marketingului  şi posibilităţilor de 
implementare a activităţilor de afaceri.  
A răspunde nevoilor consumatorilor 
ar trebui să reprezinte baza pentru crearea 
unei întregi strategii şi satisfacţia 
consumatorului ar trebui să fie un indicator al 
dezvoltării micilor afaceri. Aceasta ar trebui 
să reprezinte baza pentru crearea conceptului 
de management relaţional pentru a realiza o 
strategie de afaceri în poziţionarea IMM-
urilor astfel încât să completeze piaţa. 
 
Cuvinte cheie: ●Orientare de marketing 
●Dezvoltarea IMM-urilor ●Conceptul de 
marketing ●Promovare ●Comunicaţii 
integrate 
Assoc. Prof Tatiana  Mirchevska Ph.D 
 Institute of Economics, University  
“St. Cyril and Methodius” 
tatjana@ek-inst.ukim.edu.mk 
 M. Sc Vladimir Mirchevski 
manager INEX, Skopje,  
Macedonia, 
 inexrac@freemail.com.mk AE  Economic Interferences 
 
Nr. 21● Februarie 2007  41
 
Introduction 
 
In the contemporary conditions, 
the implementation of marketing in the 
small business has become the challenge 
and the necessity. The necessity is a 
result of the increased competition and 
the rapid market differentiation. In such 
environment, the position of small and 
medium enterprises (SME’s)  has 
become more complex due to the fact 
that their survival and development is 
possible only in favourable economic 
environment, institutionally supported 
mechanism, development of the 
entrepreneur initiative and creativity on 
organisational level as a prerogative for 
creation of the market positioning.  
The SME’s which works with 
success in contemporary conditions 
should create their market position 
through permanent communication with 
the consumers in the transaction process, 
but also within the process of sharing and 
delivering all the information’s necessary 
for maintaining the most appropriate 
customer relationship management 
process. In such manner, the 
implementation of marketing as a 
business conception has great 
significance in SME’s development from 
the aspect of discovering the needs and 
demands of the consumers as well as 
from the aspect of creation of optimal 
marketing mix of the products and 
services which are being offered on the 
market. This article has elaborated some 
of the problems of implementation of 
marketing for small business in the 
Republic of Macedonia as one of the 
basic conditions for increasing their 
development in the common sense.  
 
1. The appearance and 
development of small business  
in the Republic of Macedonia 
The transition process in the 
Republic of Macedonia and especially 
the privatisation process which has 
started at the beginning of 1993 have 
influenced a lot of disturbances in the 
economic and social sphere. This process 
has influenced the appearance of SME’s 
from different nature and activity. The 
dynamic of this process was determined 
by the actual political and economic 
conditions of the company’s existence. 
For example, in the period of political 
and war disturbances in 1999 and 2001, 
this dynamic was not so rapid. 
In the theory and practice, there 
are some opinions about the 
characteristics of the dynamic of SMEs 
development. Some of them rely on the 
quantitative data for the participation of 
SME’s in the total export, their 
innovation capability and the capacity to 
make a rapid growth. (1) According to 
some analyses, only 5% of the total 
SME’s has potential for creating a rapid 
growth and increasing the competitive 
position on the market. Some of the 
reasons for such conditions are the 
problems of erratic and spontaneous 
starting of the new SME’s on the base of 
the current market impulses and without 
some predictive activities of the market 
research, which should be a base for 
implementation of the marketing 
concept. 
A large number of small 
businesses failed in relatively short 
period of time, and they can not reach the 
optimal point in their development. For 
this situation, the theoretical and 
practitioners opinions are that the reasons 
for such situation are (2):  
• the small scope of the national 
market,  
• decreased purchasing power of 
people,  
• difficult approach to the financial 
assets which are very important 
• the problems with the fiscal 
system in the country, AE  Interferenţe economice 
 
Amfiteatru Economic  42 
 
• law regulations in the financial 
system; 
• strongly oriented Byrocratical 
procedures 
• infrastructure problems 
• the level of implementation of 
marketing concept in the practice. 
Of course, it is very important to 
mention that there are varieties of factors 
which influence the dynamic in SME’s 
development. On macro level, the 
conditions for the implementation of 
developing performances in the SME’s 
activity are depending of the economic 
system, law regulations, and institutional 
support for entrepreneurial development. 
But, the factors on the micro or company 
level are also very important. Those 
factors are influencing the innovation 
and creativity of the entrepreneurs and 
are based on the possibilities for 
implementation of the marketing 
possibilities and the contemporary forms 
of management for successful 
positioning on the target markets.  
 
2. The significance of marketing in 
SME’s development- the conditions 
in Macedonia 
 
The strategically approach in 
creating the business politics of SME’s 
means acceptance and implementation of 
the marketing conception in the business. 
The marketing approach in the business 
sphere is a permanent activity of 
diagnosis of the market condition as well 
as finding the ways for positioning the 
company on the market segment.  
Marketing orientation is one of 
the most significant micro competitive 
factors of some small business. The 
knowledge about the marketing influence 
in the sucesfull business practice has 
influenced the necessity for an 
appropriate approach to all marketing 
instruments. The creation of the 
marketing strategy has been 
accomplished in the 4P’s combination: 
product, place, price and promotion. In 
order to be created one successful 
marketing strategy, the significance of 
proper and exact information’s should 
not be neglected. 
Implementation of marketing in 
the small businesses working in the 
Republic of Macedonia is not on an 
envious level. This state is due to more 
reasons, and the most common are the 
following: 
Low level of investing power in 
the economy, low level of technical 
modernisation of the production which is 
resulting into a non differentiated 
assortment of goods: 
• low level of capacity usage, high 
production costs and decrease of 
competitiveness and placement  
• Lack of starting with 
implementation of international norms 
and standards for quality of products 
(ISO, HASSP, and other.) 
• insufficient human and financial 
resources in enterprises for successful 
implementation of market and business 
way of working 
• insufficient knowledge about the 
marketing concept, managerial functions 
and developing processes in companies 
e.g. 
A rather newer analysis for the 
level of marketing orientation of small 
businesses rightly pictures the situation 
of practical implementation of the 
marketing concept and applying of the 
marketing strategy in the direction of 
greater competitiveness of Macedonian 
economy. (3) This analysis is based on 
primary research on an example (case 
study) of small and medium enterprises 
in the country segmented according to 
largeness, annual gain, and the activity 
characteristics. According to the 
research, these small businesses in 
creation of the marketing strategy very AE  Economic Interferences 
 
Nr. 21● Februarie 2007  43
 
often put an emphasis on the product and 
its quality. The strategy and distribution 
is mainly based on own channels and 
distribution whenever it is possible. But, 
the thing that has particularly negative 
effect, and that sense and way is 
negatively reflecting on macro and micro 
level is lack of promotion strategy. A 
distinctive feature of many small 
businesses in this sense is incident 
change of various promoting 
instruments, from which the most often 
used is printed promotion materials.  
Results from another empirical 
research (4) for implementation of 
promotion, actually integrated 
communication approach that covers all 
instruments of promotion shows that 
SME apply a stereotype or partial 
activities.  It means that there is not 
culture of a marketing or communication 
behaviour that basically has an aim to 
establish an interactive communication 
as foundation for functioning of modern 
relations i.e. supplier/merger -consumer 
relations on the market.   
SMEs most often implement 
advertising, and the least direct 
marketing (Internet). This points to a 
weak implementation of interactive 
communication in the process of 
marketing communication in general. It 
is interesting that companies "relay' on 
one of the oldest but still relatively 
effective form of communication and 
promotion, i.e. advertising "lips to lips", 
promotion of a personal type in the 
relations relatives between relatives, 
friends and co-workers. Also, important 
is the fact that interviewed persons know 
very little about forms as publicity and 
public relations, so they very rarely use 
that forms in own communication 
strategy.  
Poor usage of the Internet in 
business marketing communications is 
confirmed with the fact that many 
companies do not possess own WEB 
sites, which today is considered to be 
necessary for market positioning of 
companies in the whole world.  The mere 
fact for insufficient coverage and 
presentation on WEB site, as the most 
modern form/way of interactive 
communication and direct marketing, 
points to a bad establishment of the 
integrated communication process, that is 
most generally a one-way process and so, 
not enough effective, seen from the 
aspect being unable to receive a feed-
back from the customers and consumers 
of services for a short time.  
To some level this slow down the 
process of interactive marketing research 
as particularly indispensable activity for 
implementation and control of marketing 
in general.  
Simultaneously, that points to a 
short time advertising and marketing 
market orientation of companies that the 
effects of one integrated communication 
strategy can be seen in a short time, 
which is far from the modern concept of 
"relationship marketing” that is largely 
used as a basic concept in market 
oriented companies in developed market 
economies. 
 
Conclusion 
 
The small business in Macedonia 
is running their business activity in the 
very complex and turbulent environment. 
The imitating factors are the causes for 
the low development of this sector. The 
institutional solutions could make such 
situation easies, but it doesn’t mean that 
all the problems could be easily passed 
due to the given practical solutions.  
The entrepreneur as a person in 
small business should have an 
independence and optimism that the 
business activity will give some results. 
In that sense, the entrepreneur’s 
creativity has an exclusive role from the 
aspect of the decision making process. It AE  Interferenţe economice 
 
Amfiteatru Economic  44 
 
is already known that among the most 
important decisions, are those which are 
in relation to the marketing concept 
implementation as an imperative for the 
positioning and development of the small 
business. 
When talking about small 
businesses in the Republic of Macedonia, 
more analysis show that marketing as a 
business concept is not sufficiently 
present and implemented or is based on 
partial marketing solutions. The analysis 
of the current situation of small 
businesses in the Republic of Macedonia, 
in fact its marketing orientation shows 
that implementation of marketing in 
business concept is presented through 
strategic approach of optimalisation of 
the marketing elements in suitable 
combination is on a very low level. 
Reasons for this state lay primarily in the 
absence of needed knowledge for the 
core role and meaning of this business 
concept and contribution that its proper 
implementation enables direction to a 
successful development of small 
enterprises in the country.   
Pressure of the competition that 
continually ruthlessly imposes on small 
businesses creates the need of a steady 
orientation towards market changes. A 
successful small business should 
recognise and implement marketing 
skills supported by necessary knowledge 
for this business concept. This 
understands steady research on market 
changes, characteristics and relations that 
rules the market. On this foundation we 
should build proper forms of positioning 
based on optimal combination of the 
marketing mix elements: products, 
prices, promotion and distribution, inter-
mixed in a competitive marketing 
strategy for positioning and development 
of small businesses on the market. 
 
 
 
Endnotes 
 
(1) Fiti T., Hagi Vasileva M.B., Beitmen M.:" Pretpriemnistvo", Ekonomski 
fakultet, Skopje, 1999, p.204 
(2) PHARE, EU and NEPA: “Estimation of development of SME’s in Republic 
Macedonia”, Skopje 1998 
    (3)Study "Analysis of SME competitiveness and efficiency (competence), European 
Agency for Reconstruction and the Ministry of Economy, 2005, p.2/6 
           (4) The research is carried by the authors of the article 
 
References 
 
1. Carter S., Jones Evans D. Enterprise and small business, Prentice Hall, London, 
2000 
2. Fiti T., Hagi Vasileva M.B., Beitmen M. Pretpriemnistvo, Faculty of Economics, 
Skopje, 1999 
3. Group of autors. The SME's in the economy development of Macedonia, The 
Institute of Economics, Skopje 2002 
4. European Agency for Reconstruction and the Ministry of Economy. Analysis of 
SME competitiveness and efficiency, Skopje 2005. 
5. PHARE, EU and NEPA. Estimation of development of SME’s in Republic 
Macedonia, Skopje 1998 

Enterprise and small business,

Estimation of development of SME’s in Republic Macedonia,

European Agency for Reconstruction and the Ministry of Economy. Analysis of SME competitiveness and efficiency,

Faculty of Economics,

Group of autors. The SME's in the economy development of Macedonia, The Institute of Economics,

THE ROLE OF MARKETING IN SME’S DEVELOPMENT IN REPUBLIC MACEDONIA

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