Research Article: 2017 Vol: 16 Issue: 2
Tatiana Valeryevna Terentyeva, Vladivostok State University of Economics and Service
Nina Vladimirovna Shashlo, Vladivostok State University of Economics and Service
Alexey Alexeyevich Kuzubov, Vladivostok State University of Economics and Service
Customer Value, Branding, Strategic Positioning, Business Entity of the Fishing Industry, Competitive Strengths, Resonance of Values, Consumer Market.
In the modern realities of the market economy, the conditions of running business for business entities of the fishing industry are characterized by the increased risk level in the processes of bringing products to the consumer that is conditioned by the strengthening of the competition in the structured markets, the deepening of production positioning segments and the challenges of the global environment. The basis of the successful functioning of any business entity is a good choice of a market segment and fixing of a legible, targeted market position that increases the effectiveness of functioning even in the conditions of uncertainty. The strategic positioning as a vector of the future development of the goods offered in the market by a specified business entity allows solving conceptual problems.
When developing separate elements of the blocks of the strategic positioning mechanism for business entities of the fishing industry, it is necessary to consider the market features of their functioning. The essence, as well as the role and value of separate elements of the strategy system, changes with the development of information technologies. From the beginning of the 1990s, the scientific tendencies which demonstrate the emergence of a new concept of organizations’ strategic management according to which the marketing approach dominates and the efficient strategy of positioning the defining condition of the activity effectiveness of business entities in general have been formed. At the same time, in the modern scientific literature there are differences of scientists’ opinion on the essence of the positioning strategy. On the assumption of this, the need for the adaptation of the already existing approaches or working out of new ones has become adequate taking into account the specific operating conditions of business entities according to the industry classification. The necessity of complex and systemic justification of the approaches to the formation and realization of a positioning strategy also arises for business entities of the fishing industry considering that this problem has not been solved in this sector.
Today, there is no consensus concerning the positioning of a trademark, goods or a firm in the works of the researchers dealing with the positioning problems. The modern approaches to the formation of a marketing positioning strategy are reflected in the works of famous foreign and domestic scientists, such as (Aaker, 2002; Keller & Kotler, 2010; Mintsberg, 2001; Fatkhudimov, 2000; Minett, 2004; Lu Lu & Butenko, 2011). These authors have formed the theoretical and methodological base of research of the specified range of problems with the solution of its many methodological and applied aspects.
Despite the growing interest in the positioning problem from the theorists and practitioners of marketing, the approaches to the choice and realization of positioning strategy still remain systematized; The questions of conceptual approaches to the formation of a production positioning strategy of fishing business entities in the conditions of the open economy and the limitations of their budgetary support are insufficiently studied and remain debatable. The additional justification is required for the factors which influence the effectiveness of s specified strategy and also the methodical approaches to their development taking into account the sectorial characteristics of functioning. From this perspective, the research objective consists in the scientific justification of the theoretical and methodological grounds as well as the applied directions of shaping a positioning strategy of business entities of the fishing industry taking into account the specific conditions of their functioning and industry classification in the conditions of the open economy and the limitations of budgetary support.
The theoretical and methodological base of the research is the contributions of the economic science classics, theoretical and practical developments of scientists and experts in the marketing sphere, strategic management marketing and enterprises’ strategic positioning, which provided the complexity of studying this problem. The probability and proof of the received results is conditioned by the use of general scientific and special methods of perception: Abstract and logical, monographic, economical and statistical, sociological, graphic and systemic methods.
The fundamental prerequisite of positioning strategies’ success is the consumers’ perception of goods offered in the market as unique or as such most of which efficiently satisfy needs (Fatkhutdinov, 2000). According to the concept of multi-attributiveness, goods gain uniqueness owing to the professional combination of their functional and associative attributes, being relevant to consumers’ needs. However, the concrete list of these attributes substantially depends on the presence of strengths of business entities and in the long term can provide it with sustainable comparative advantages. It is from these positions that the authors have proved the component elements and formation stages of the conceptual essence of the production consumer value which will be offered to consumers by a particular enterprise (Figure 1).
It is the first step in identifying the strategic positioning vision which in general influences the effectiveness of a positioning strategy in many respects. To separate the industry characteristics of the production consumer value concept formation of business entities of the fishing industry, the theoretical and methodological approach including particular stages has been developed (Figure 1).
Defining the "generic" (Kotler & Keller, 2010) core product, the research of the explicit and implicit (emotional) needs of customers, the methods of their satisfaction and the stereotypes of perception. The methodological base of solving this task is the modern economic and psychological theories of human wants, marketing theories of the interpretation of the core product and its attributes. The decision on the potential of separate segments of market, the assessment of its characteristics (economic, demographic, cultural, psychological) and also the views of customers, their purchasing motivations and associative impressions shall be accepted by the enterprise on the basis of the primary information obtained as the result of market studies.
Defining the value of the goods or the attributes of the goods, most significant for customers, which serve as the main criteria of their consumer preferences? At this stage there is the ranging of the attributes of goods revealed during the marketing studies on their significance. Usually, the subjective appraisal of the customer about the ability of goods to satisfy his needs arises on the basis of several criteria. The scientists and skilled workers did not manage to define their exact number; however, there is an opinion that the amount of such attributes of goods has to range from three to five (Lu & Butenko, 2011).
Defining the benefits from purchasing the goods, i.e., their tangible and intangible advantages in comparison with goods of competitors. At this stage, the quantitative and qualitative assessment of the models of the goods dominating in the market is carried out, the proposals of competitors are studied, the market’s vacancies and segments with high competition are defined. On the basis of the comprehensive, system and objective analysis of the own concept of goods and market, the specific characteristics of the goods are defined, which will distinguish them from the proposal of competitors and at the same time best of all correspond to the vital values and beliefs of consumers, satisfying their needs.
Defining concrete real and alleged attributes of the goods, i.e., their functional and associative characteristics. The final stage is a logical continuation of the previous one as at this stage business entities fill significant attributes (specific characteristics) of the goods revealed at the previous stage with real content and quantitative characteristics.
The offered methodological approach to the formation of the concept of the consumer value of the goods can be applied by business entities functioning in the consumer market as well as in the business market among which are the enterprises of the fishing industry. The confirmation of this thesis is that the vast majority of business entities (except those having own shops) directly cooperate with intermediate trade or production structures, but not with end users. However, in such markets there are differences in decision-making process by buyers. In the consumer market, buyers subjectively assess the real and associative attributes of the goods on the basis of which the benefits from their consumption are defined. They also subjectively assess the importance of these benefits for themselves; therefore, they feel satisfaction or dissatisfaction of their own needs. The sequence of the industrial buyers’ thoughts is similar; however, they use professional and formalistic approaches in decision-making. The competence and rationality are the main characteristics of businessmen; therefore, Minett calls the relations between them "an old-fashioned money marriage" (Minett, 2004).
The next fundamental difference of the specified market is the complexity of decision-making by businessmen and a variety of approaches to their justification. The concrete real and alleged attributes of consumer goods form the basis for the justification of the need of processing enterprises in raw materials purchase and for intermediate trade structures in the formation of their commodity stocks. The business market subject’s own corporate values which are considerably conditioned by buyers’ demand in the consumer market influence the principled approaches to the determination of parameters of competitive advantages and real and alleged attributes of producer durable goods, including primary products.
The effective interaction of subjects of business and consumer markets is considerably determined by the presence of the so-called "resonance of values" in the behavior of buyers and sellers. In modern conditions, it has become routine to base one’s own communicative programs on the symbols and images of "distinctive corporate behavior" meeting the modern principles of ethical and social responsibility of business entities. Nevertheless, "the level of resonance of values is connected with how a company-supplier manages to express the values which a certain individual consumer tries to embody in the lifestyle" as one of the famous experts of B2B-marketing Minett notes (2004).
In the domestic theory and practice of strategic management, in particular in the formation of a positioning strategy of goods and services, this matter is rather new (Lu Lu & Butenko, 2011; Kotler, Kartajaya & Setiawan, 2011; Demchuk & Sushko, 2012). It means how the production of resources supplier is associated with the values and approaches to life of end users. More and more foreign experts appreciate the resonance of values for ensuring the efficiency of market positioning strategy of enterprises’ products and also communicative programs in their realization. The issues of the degree of importance of the specified factor in the positioning of "fashionable" and "technological" goods remain debatable. At the first sight, it is possible to assume that the resonance of values has greater influence in the positioning of goods groups with a high degree of emotional complexity, demand for which depends more on the stereotypes of consumers’ behavior dominating in the certain interval of time or fashion (Aaker, 2002; Armira, Drosos, Skordoulis & Chalikias, 2016).
However, due to the information technology development, the rapid increase is observed in the awareness of end users concerning technologies and principled approaches of business doing of enterprises-manufacturers of producer durable goods. The number of consumers refusing to consume goods of those producers that cooperate with suppliers of unethical behavior increases every year. Therefore, the specified factor exerts great influence on effective business running by business entities making producer durable goods. Thus, sellers in the business market have to understand and be able to predict the needs of both their business partners and the end users. For example, for fishing business entities, the professional approach to the formulation of the concept of product as goods determines the comprehension of needs and motivations of processing enterprises in raw materials purchase and also in the meaning of "generic" needs and purchasing motivations of the end users in foodstuffs (Figure 2).
It should be noted that the mentioned factor is also significant in the positioning of production of commercial fishing business entities in Russia. As it is known, the commercial fishing production is standardized goods with a low degree of functional and emotional complexity. As it is difficult for business entities to distinguish themselves by means of the external attributes of products, the resonance of values can be reached through shaping end users’ confidence in the production and processing technologies applied by the enterprise. The main indicators of formation of such confidence are meant to be:
1. Firstly, sufficient information on the applied technology and its compliance with the ethical standards of vital values at a consumer’s choice;
2. Secondly, credibility, i.e., it is necessary to convince consumers that they are not deceived;
3. Thirdly, the actions consistency of business entities, that is, consumers have to be convinced that the chosen activity is constant. It is considered that this factor will allow reaching positive effect in the market positioning of products of the fishing industry’s business entities as these enterprises produce raw materials for production of goods with a high degree of emotional complexity.
For the purpose of formulation of the positioning concept of commercial fishing products as goods, the authors have investigated the economic factors determining the behavior of enterprises in the market, have made the analysis of the motivations of processing and procurement organizations in raw materials purchase and also have conducted the market research of needs and purchasing motives of buying foodstuffs by end users through the example of one of segments (the representatives of the segment of the generation Y "Millennium" in Russia). The results of these studies are used in the formulation of the concept of the consumer value of the fishing industry’s business entities production according to the technique which is shown in Table 1.
|Table 1: Basic Elements Of The Consumer Value Concept For Business Of Fishing Industry|
|Concept elements||Essential characteristic for the specified segment|
|Ensuring explicit needs:|
|"Generic" essence of the goods||Maintenance of the organism’s activity||64.7%|
|Maintenance of the physical activity level||54.6%|
|Freedom of choice||21.7%|
|Self-expression of own lifestyle||12.9%|
|Social contacts||Up to 3.5%.|
|Ensuring emotional needs:|
|Desire to enjoy the taste of food||71.7%|
|Desire to get usefulness for health||51.3%|
|Desire to feel confident in the correctness of choice||21.7%|
|Desire to enjoy the caloric content of food||21.3%|
|Desire of self-nurturing feeling||20.5%|
|Desire to enjoy the look of food products||16.9%|
|Desire of homemaking feeling||14.3%|
|Desire to enjoy new and unusual food||11.8%.|
|Value||Valuable criteria of purchase:|
|Safety for health||73.0%|
|Evidence-based norms of food||14.5%|
|Values of reference groups of influence||Up to 10.0%.|
|Benefits/Advantages||Combination of factors:|
|Acceptance quality level||27.7%.|
|Significant real and alleged (associative) attributes||Real attributes:|
|Content in food of injurious additives (the most significant of which are: GMO (66.8%), synthetic additives (54.6%), nitrates, nitrites and the remains of pesticides (54.3%), growth hormones and antibiotics (44.1%), radionuclides (39.2%)|
|Tastiness corresponding to national traditions|
|Caloric content and ratio of macro and microelements.|
|Rational feelings of consumers, cause emotions of safety for health|
|Patriotic feelings, persuade of the correspondence of the taste of food products to consumers’ national and family traditions|
|Rational feelings of consumers, cause emotions of fullness and persuade of the ability of food products to maintain a high level of consumers’ physical activity.|
Note: Developed by the authors.
As the core value safety for health and ecological safety serves as the main criterion in consumer behavior of the specified segment in Russia, therefore the main real attribute in positioning of foodstuffs will be the content of injurious additives (the most significant ones from the point of view of consumers are reflected in Table 1).
Evidence-based norms of food are an important criterion influencing the consumer behavior of the certain segment’s consumers and such attributes as the caloric content and the content of macro and microelements take the third place.
As shown in Table 1, the associative attributes of food products have to correspond to functional ones, at least to supplement them, but not deny.
However, the vast majority of domestic enterprises give preference in their own strategy of positioning to such characteristics of food products as the caloric content and the content of macro and microelements, connecting their consumption with two important associations-self-expression of their own lifestyle and satisfaction of consumers’ needs for social contacts (Khalilova & Romanova, 2013; Bukhvald, 2014). The importance of the called attributes for other age categories should not be denied; however, for the segment of the generation Y "Millennium" in Russia, these positioning strategies are outdated. Consequently, for the consumers of the investigated category, the positioning strategies of food products need completion which, in its turn, will exert multiplicative impact on the market positioning of raw materials for their production.
From our point of view, the basic elements of the consumer value concept of commercial fish products as raw materials for production of food products accepted to the views of the representatives of the generation Y "Millennium" in Russia have to be the following (Table 2).
|Table 2: Basic Elements Of The Consumer Value Concept Of Commercial Fish Products As Raw Materials For Food Production, Acceptable To The Views Of The Representatives Of The Generation Y In Russia|
|Concept elements||Essential characteristics of the elements important for trade transactions in the business market|
|"Generic" essence of the goods||Meeting the explicit needs of industrial buyers:|
|Compliance to demands of end users according to the content or lack of injurious additives, based on the macro and microelements ratio; suitability for industrial processing.|
|Meeting the emotional needs of industrial buyers:|
|Ability to form the associations significant for end users.|
|Value||Value-conscious criteria of purchase:|
|Evidence-based standards of safety for health of the person and environmental friendliness; national traditions of food behavior.|
|Benefits/advantages||Combination of factors: Price/quality criteria:|
|Accepted both for processing enterprises and for end users; obligations for the level of production quality assumed voluntarily according to the evidence-based standards of safety and environmental friendliness.|
|Significant real and alleged (associative) attributes||Real attributes:|
|1) Indicators of the content of injurious additives significant for end users;|
|2) Indicators of the content of micro and macro elements, important for end users;|
|3) Technical and technological parameters significant for industrial buyers.|
|To form associations of safety for health of the person, positive influence on ecology and environment, correspondence to national traditions|
Note: Developed by the authors.
The basic need of food manufacturers in providing with raw materials is its compliance to the requirements of ends users for the content of injurious additives and macro and microelements-on the one hand and suitability for industrial processing-on the other hand. Besides, the ability of business entities of the fishing industry to create the associative attributes of the production significant for end users should be important for industrial buyers. It is by such criterion that the decisions on rather specific quantitative parameters of fish products shall be made. As the customers of food products in the researched segment assess the competitive advantages on the basis of the combination of the price/quality factors, the similar behavior of industrial buyers of fish products is justified. To our mind, the indices of competitiveness of the specific commercial fishing enterprise depend on the assumed liabilities on the quality level of fish products according to evidence-based norms of safety and environmental friendliness. The vision of competitiveness parameters of fish products, formed in such a manner, being a criterion of the positioning strategy efficiency, will provide the business entity with sustainable advantages in the long-term period and will allow differentiating from competition.
The following step of the strategic positioning vision formation is working out principled approaches (strategy) of the market coverage. As the development process of a positioning strategy is integrated by two organizational stages, namely the development of conceptual approaches to the "generic" essence (idea) of goods and actions aimed at their launching to the market, the differentiated approach to their formation in the section of the market’s separate segments is one of the defining preconditions of the efficiency of a strategy. It is such approach that allows a business entity to meet the customers’ needs better and with more effective methods, making a real difference from their competitors.
The differentiated approach allows identifying target audiences better for the purpose of associative attributes creating of certain goods (group of goods generic on demand), relevant for a concrete segment of the market and subsequently, effective communicative programs (Mintsberg, Queen & Goshal, 2001; Aaker, 2002). However, at the first stage of the positioning strategy formation of business entities, the principled decision is made about the number of segments and with what specific attributes the consumer value can be created and offered. It is known that an enterprise begins its activity, having focused on one segment of the market on selective, market or product specialization. If the market is considered by an enterprise as a uniform totality of consumers, then a mass (aggregated) approach to its coverage is used, otherwise a differentiated one.
So, the solution of business entities at the strategy choice of the market coverage is influenced by the economic opportunities of the enterprise and also the corporate strategies of the highest order (financial) for at this stage the issues of determination of future investments volumes are resolved. Besides, the crucial role in making of such decisions is played by the specific features of goods, the characteristics of the market and the intensity of competition in it. In any case, the strategy of market coverage is one of key aspects of strategic positioning vision of goods (group of goods).
An extremely great role is played by this problem solution in the strategic positioning of commercial fishing business entities; however, the process of the strategy development of market coverage has fundamental differences. First and utmost, the approaches to the separate markets’ segmentation require further theoretical and methodical elaboration. As it was already noted, the system of the markets’ segmentation on functional purpose and branch origin of products was formed in domestic science and commercial activity of business entities; at the same time, the set of technical and technological parameters, determining the suitability of raw materials for processing with the specified purpose, are taken as indicators of its quality (Emelin & Putivskaya, 2012; Knysh, 2014; Basovskii & Protasev, 2011). It is considered that for more effective segmentation of the products’ markets it is necessary to include the indicators of environmental friendliness and safety for health of the person in the list of the enumerated factors significant both for industrial buyers and for end users of food, in particular.
The general postulate of business entities’ ability to realize their own strategic initiatives is the availability of market share that allows influencing market conjuncture. There is no common vision on the specified range of problems in scientific literature; the level of a market share fluctuates from 10 to 50 percent (Barngolts, 2011; Lifits, 2009; Vinslav & Sokolova, 2004; Bakulev, 2003). The vast majority of commercial fishing business entities do not possess such share and they have to compete in a dozen segments of the markets on some products’ types in the absence of an opportunity to influence their conjuncture. In our opinion, business entities need to apply special approaches to comprehension of their own market leadership and mechanisms of its ensuring in such situation. This mechanism can be interpreted as an ability of business entities to inform the consumer about their value, choosing the corresponding forms of strategic partnership.
So, business entities exercise the choice of the consumer value concept based on their own strategic priorities, legal restrictions, tastes and preferences of consumers, etc. and its message to the market is possible on the condition of effective integration on all length of marketing channels at the realization of fish products. Besides, the important condition of positioning strategy realization of business entities is the pro-active stand of the state on the specified range of problems. The problem is not new to the fish sector; it has found its solution in many countries which supply fish products to the world market. Nevertheless, the experience of foreign countries shows that the modern mechanisms of interaction of fishing enterprises (fish sector) with procurement and processing enterprises and also regulatory measures of the specified processes from the state demand improvement.
The new forms of integration processes in the commercial fish sector are also relevant for the solution of tasks in strategic positioning of business entities’ products, namely for formation of the protection mechanism of the consumer value concept as intellectual property item. After formulation of the concept of goods (group of goods) and the strategy of its market coverage, this step completes the general idea of positioning.
Firstly, a certain mechanism determines the principles and approaches to the protection of the unique characteristics of goods against copying by competitors, as well as principled approaches of competition which will be applied by the enterprise in the market. Secondly, this mechanism solves a number of tasks on perception improvement of goods (group of goods) by consumers. In other words, this mechanism has to make "visible" and clear for consumers all competitive advantages of the goods formulated in the consumer value concept.
The organizational process of the protection mechanism formation of the consumer value concept as intellectual property item should be considered from the two points of view: Economic and legal aspects. First of all, it is expedient to business entities to consider the economic possibilities of introduction of this or that branding system (Figure 3). At this stage, the issues of the opportunity and economic feasibility of introduction of own brand (trademark) and also the width of the assortment list of goods, which will be offered under one branded name, are resolved. The consumer value concept can be extended for the positioning of several nomenclature groups of goods made by an enterprise. In the markets of the standardized consumer goods, the multibrand strategy is used which allows stimulating demand. The above-mentioned versions of a branding system are widely used by business entities, competing both in the consumer market and in the business markets. In commercial practice, various tools are developed (trademarks, logos of goods, quality marks and slogans), which are designed to emphasize the qualities and characteristics of goods or the enterprises in general and, thus, help them to differentiate from competition.
However, the introduction of the specified tools is problematic for producers of raw materials; it is difficult for them to differentiate by means of the external attributes of products as there appear standard requirements for their characteristics from the industrial buyers. It concerns to full extent fish products as raw material. The formal procedure of trademarks and logos registration for fishing business entities is also complicated. On the other hand, a vast majority of business entities have no financial opportunities and qualified specialists for registration and building of their own brands. (Kuzubov & Shashlo, 2017; Vorozhbit & Shashlo, 2016).
Thus, it is possible to establish the fact of the need and importance of developing a special branding system of commercial fishing business entities’ products. As previously noted the processing and extracting business entities of the fisheries sector can reach the resonance of values only owing to the formation of end users’ confidence in the production technology applied by them. It should be reminded that by the results of the conducted market research a considerable part of the Y generation’s representatives in Russia (43%) considers that the key role in the formation of food quality is played by the applied production technology.
So, the production branding factor is significant and it is important to use it in the positioning of commercial fishing business entities’ products as these enterprises considerably differ in organizational and technological approaches of their production activity, which influences the quality of their products. A number of domestic scientists associate the content or lack of harmful substances in fish products with the use level of modern means of agro technical, zootechnic and veterinary character (Campbell & Sommers, 2004; Vasilyev, 2003; Konovalov, Shulbaeva & Shternis, 2010; Nikiforova & Gubasova, 2012; Belov, 2006). Despite the developed legislation on the maximum permissible norms of use of the specified substances, there is an urgent need for improving the state control of its compliance in the majority of the world countries, including Russia.
No less important task is working out a transparent and clear system of informing the society on the safety of the applied technologies. This system can be used not only for improving the control over the environmental friendliness level of the used technologies of processing and production, for decreasing their negative influence on the environment, but also will allow solving a number of problems in the market positioning of fish products. An equally important task is the scientific justification of methodical approaches to determining the levels of the ecological safety of fish products.
On the basis of the conducted research, it can be stated that the efficiency of the positioning strategy of business entities’ products substantially depends on professional and successful vision which has to solve such conceptual tasks as the unique consumer value concept formulation, the development of market coverage and also the protection system of the developed value as an intellectual property item. The efficiency of the unique consumer value concept, in its turn, is conditioned by the presence of the so-called "resonance of values" of sellers and buyers that will be demonstrated as a result of actual and associative attributes formation of food and fish products as raw materials for their production, corresponding to moral and ethical beliefs of end users.
Besides, the concrete list of production attributes has to consider the strengths, the business entities which in the long term can provide sustainable comparative advantages. Inasmuch as fish products are standardized goods, it is difficult for business entities to differentiate by means of external attributes of products. According to the authors, the resonance of values can be reached through shaping end users’ confidence in the production technology applied by a business entity. For the purpose of ensuring the recognition of technologies of fishing business entities, it is offered to adopt their ratings at the level of the ecological safety of products. The strategic positioning formation considers more accurately in these very terms the industry characteristics of business entities functioning and the needs of buyers of fish products.