Advances in Economics, Business and Management Research, Volume 157 Proceedings of the 8th International Conference on Contemporary Problems in the Development of Economic, Financial and Credit Systems (DEFCS 2020)

Theoretical and Methodological Approaches and Stages of Formation Concept

Boris Tkhorikov Olga Gerasimenko Department of Management and Marketing Department of Management and Marketing Belgorod State National Research University Belgorod State National Research University Belgorod, Russia Belgorod, Russia [email protected] [email protected]

Aiman Kazybayeva Lyaila Zhakypbek “Marketing” Educational Program Higher School of Management (HSM) Almaty Management University Almaty Management University Almaty, Kazakhstan Almaty, Kazakhstan [email protected] [email protected]

Abstract—The paper describes the development stages of production process, and in the future serves need gratification classical marketing (market demand exceeds supply, improving of the client / company. The evolution of marketing theory the production process; formation of the concept of marketing takes into account the following socio-economic processes: and approaches to marketing activities, understanding marketing as an integral system, maintaining the concepts of • internationalization and globalization of the market; "consumer marketing", "managerial marketing", "organization image"; system analysis of strategic marketing as • the appearance of new requirements, change in the a general management theory; developing branding and pace and quality of life; marketing culture; the use of modeling consumer behavior, • development of extensive informatization and means based on a marketing tool - geomarketing of communication; as a combination of the use of marketing, geographic and information technologies) in the framework of the modern • development of modern educational technologies. period – a geomarketing tool as a combination of the triad “geographical - geoinformation - marketing” research. Foreign We will give a few explanations of the formation of the and domestic author's scientific positions, views in the field of geomarketing tool in the development of the evolutionary geomarketing are systematized, which prevailing a geographical theory of marketing. The following stages of classical representation as visual, detailed with the results of marketing are distinguished: marketing research. The areas of applied adaptation application of geographical results in analytical practice and managerial • 1860-1950 XX century – market demand exceeds business decisions are generalized. The stages and geographical supply, improvement of the production process; reach of geomarketing are analyzed from the position of the ubiquitous concentration of production; the marketing evolution theory of the classical marketing (Arising, formation, function was used as a specific management problem; popularization, spread), the author’s process of transforming • 1950-1980 XX century – the formation of the the main characteristics of geomarketing is proposed, the marketing concept and marketing activity approaches: dominant approaches are identified (managerial – information gathering; project and analytical – management and planning functional, product, institutional; understanding of trading network; geoinformational – optimal location search marketing as an integrated system, introduction the using the tools of geoinformation systems). concepts of "consumer marketing", "managerial marketing", "image of the organization"; the functional Keywords—geomarketing, geoinformation technologies, role of market segmentation based on a consumer marketing research, classic marketing, marketing maps, location, behavior model; evolution • beginning of the XXI century – a systematic analysis I. INTRODUCTION of strategic marketing as a general theory of management; development of branding and marketing The origin of traditional marketing is related with the culture; the use of consumer behavior modeling; works of scientists of the classical and neoclassical economics theory of A. Smith, A. Marshall. The core of this theory is the • 2020s XXI century – the modern stage: market understanding of value as a material category build up in the segmentation based on the marketing tool –

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geomarketing as a combination of the use of fact is documentarily approved in a special issue of the journal marketing, geographical and information technologies. «Economic » (1961). In 1952, the fundamental publication «American Geography: Current State and II. METHODOLOGY Prospects» was published, printed in the Russian translation A new scientific direction – geomarketing has in 1954 [8]. In the scientific work generalizes the attempt to methodologically formed in foreign and domestic scientific systematize geographical work to show the main areas of knowledge, the purpose is a detailed examination of the applied application of geographical results in analytical territorial features of market formation, consolidating both practice and managerial decisions. Geomarketing (marketing marketing and geography tools. Initially it referred as a term geography, according to ) was noted among the of “market geography”, “geography of sales markets”, in priority areas, as well as its outline positions were formulated. European scientific terminology – “geomarketing” [3]. III. RESULTS AND DISCUSSION The genesis of geomarketing represented in the 1930s XX Geomarketing was earmarked as a scientific field, century in the United States in the context of the scientific primarily engaged in establishing the geographical boundaries works of Applebaum W. The role of the location factor in the of markets and determining their capacity, as well as those study of the development of remote nodal points from the distribution channels through which goods move from center under conditions of the retail trade sector of the producer to consumer. economy was proved by the author in 1931 (studies were conducted in Cincinnati). Subsequently the author’s ideas The main conceptual and essential researches in the were practically applied in choice substantiating of geomarketing field are shown in table 1 [9]. alternatives the most profitable placement of «The Kroger Co» supermarkets, thereby confirming the author’s theoretical TABLE I. AUTHOR'S COPYRIGHT CHARACTERISTICS IN THE FIELD OF hypothesis. GEOMARKETING Authors/professional Geographical Key Points in the field Commercial companies in this period most frequently affiliation boundary of geomarketing used the capabilities of the consulting business and the Applebaum W., Harris USA Placement analysis of scientific community to research and monitor business C. () actual and potential opportunities in expanding product sales markets [4]. In the companies United States, as well as in selected European countries, a Flippono M. France • typology of group of specialists in the field of geography has been created, (geographer) territories (commercial enterprises) specializing in the use and generalization of marketing issues. • improvement Demand for a complex of marketing and geographical skills distribution networks is growing in this period. Grimmean I.-P., Belgium Roelandts M. Applebaum W. identified the following problem set of (geographer) geomarketing tasks [6]: Afonso P., Gomes М., Portugal Author's methodology Abrantes М.( marketers) of marketing • synthesis of empirical data on sales markets and sales operations; Berezovich I. (marketer) Russia Formation of assortment policy and • assessment of markets, allocation of service and trade investigation of zones; regional markets. Golubkova E.P., Orlova Russia Marketing • selection of distribution channels and locations for G.M. (marketers) communications and wholesale, retail trade and enterprises for service to the their role in regional public; markets Pankrukhina A.P. Russia Territorial Marketing • mapping of the results and marketing cartography. (marketer) Research Balabanova G.V. Russia Territorial Generalizing the scientific views of James P. and Martin (marketer) segmentation of the J. in the field of geomarketing research (the 1950s), the main food market ideas and states were point out: Golikova A.P., Russia Spatial analysis of the Chernomaz P.A. world market sales • geographical research has grown significantly, as a (marketer) market rule, to analyze the activities of a commercial business [7]; Simultaneously with the geographical research, within the • geographical studies of possible alternatives are American school of regional economics, a similar kind of dominated to expand the potential opportunities of scientific pilot research was initiated, which aimed at: additional markets of wide assortment line goods. 1. Research and monitoring of the territorial markets of In the 1950s in the opinion of James P. and Martin J., individual enterprises/groups of companies from the position geographic research to analyze the activities of commercial of marketing conditions of the products sale; business prevailed. During this period the role of geographical 2. Identification of perspective trends in products studies of potential alternatives to create additional markets of demand. wide range of products increased. Since detailed, visual maps are the result of geographical research, the skills of specialists The foundations of this theory laid by Shaw A., Weld L., in the field of geography have made a significant contribution later were advanced in the works of Frederick J., Duncan S., to the study of the markets of a certain territory. The scientific Cherington P. These scientific ideas were transformed into the theory of market management by J. Howard and McCarthy E.,

262 Advances in Economics, Business and Management Research, Volume 157 the core condition of which is determination of the optimal • 1930s - early 1950 XX century – stage of arising: the choice of the enterprise location, thereby enables the formation of geomarketing ideas (mainly in the USA), minimization of transaction costs [10]. the definition of the geomarketing concept and the range of issues that can be solved using its methods. Replication of geographical technologies and methods in The main focus of the study was the location analysis the early 1960s XX century to scale marketing problems has of real and potential mercantile establishment. The grown significantly, including elements of a modern works of Applebaum W., Cohen S., Goodman V., mathematical apparatus. An increasing interest in the results Ristow V.U. belong to this period. of marketing research is most pronounced by business structures and entrepreneurs. Geographical disciplines, • 1950s - early 1970s XX century – the stage of including geomarketing, are attracting attention of the formation: the use of geographical research and representative of educational institutions; teaching is methods in marketing research, an increase of the conducted in individual business schools that train combination of these methods, the use of the professionals in the field of entrepreneurship and mathematical apparatus; educational technologies of management. Geomarketing research paid special attention of the geomarketing art (academic discipline); teaching large companies, in particular: General Foods, Western an educational course at special courses (at large Electric, Dupont de Nemours, U.S. Steel and others. The mercantile establishment) and individual business industry specificity during this period is has distinguished by schools. the following: banking sector – monitoring of regional investment policy depending on the explication of If the demand for geomarketing research was formed geographical and economic factors; transport sector – study of mainly in the field of trade before, the social order has spread routes and locations of cargo traffic, adjustment of tourist to transport, banking and production activities now. New guides; trade sector – choice verification of the most efficient aspects of research appeared – the study of sales zones, service trade point. areas, their configuration and size, as well as their mapping. This was reflected in the works of Christaller W. and Lesch Scientific views in the field of geomarketing A., Bracey P., Berry B.J. L., Harrison W., Haggett P. and geographically expand beyond the scientific and geographical others. boundaries of the United States. According to Flippono M. the fundamental ideas of French geographers were actively used • Since early 1970s XX century – stage of by the business environment for practical purposes, but popularization. The ideas of geomarketing began to geomarketing remained exclusively in the form of framework develop in Europe, especially in the UK. Research on private research and had not formed as a separate scientific advertising, improving distribution networks and research area. In the second half of the 1970 XX century, territory typologization for commercial needs deserved attempts to theoretical research in the field of geomarketing particular consideration, as well as using GIS were taken by the British Market Research Society in the UK. technologies as a basis for geomarketing analysis. According to Grimmean I.-P., Roelandts M. [12], the basis Since the mid-1990s XX century in the CIS countries, of geomarketing consists in combining geography methods especially in Russia and Ukraine, in studies of regional with sale products thematics. This scientific direction is aimed markets began to appear some aspects of geomarketing at study of the regional and territorial products sales markets, research. This type of research was initially sent at economic including placement real and potentially perspective clients, and geographical analysis of the territory, which further led to distribution channels and analysis the competitive the formation of the territorial marketing concept, aimed at environment. The authors highlighted the tasks of increasing the attractiveness of the territories in terms of geomarketing: the location of advertising, improving investment activity. The key aspects are the purposeful distribution channels, placing new objects. The result of the formation, positive development and promotion of the study is the systematization of regional markets typologies determined territory image. Until recently, the concept of according to criteria groups, the design and verification of geomarketing was quite narrow; it meant a special tool in geomarketing maps. A trial typology of geomarketing maps traditional (business) marketing, aimed at geographical was realized in 1979 by British Market Research Society. On segmentation (geosegmentation) of the market and its basis the entire territory of Great Britain is divided into 18 geographical positioning (geo-positioning) of goods / thousand districts and region according by 36 group criteria, services. In the mid-1990s the concept of “place marketing” including customer characteristics of consumers. The (P. Kotler, D. Haider, I. Rein, 1994) was developed as a technique was called “Classification of residential areas” and reaction to significant changes in company strategies and then spread to the United States (1981), France (1984), public policies caused by globalization and regionalization Switzerland (1987), Belgium (1989), and was used in the processes (these two processes are synergistic and practice of developing transnational companies. interdependent). The generalized results of the stages of the geomarketing scientific direction development as a tool for the Thus, the following stages should be marked out in the stages of classical marketing are presented in table 2. development of geomarketing:

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TABLE II. COMPARISON AND STAGES OF DEVELOPMENT OF MARKETING AND GEOMARKETING AS A SCIENCE (COMPILED BY THE AUTHORS) Years The name of The evolution of Main Geomar- Geographic Key features of Leading the marketing theory authors keting boundaries Geomarketing researchers marketing Stage of geomarke- stage ting

1930s - «Integration» • functional Breyer, «Arising» USA • study of the concept Applebaum W., early 1950 marketing: production 1934; and methods of Cohen S., XX century of goods, development Duddy and geomarketing Goodman V., of marketing Revzan, • location analysis of Ristow V.U. institutions to ensure 1953; the real and potential the goods delivery (set McGarry, mercantile establishment of activities) 1950; • the use of • use of marketing Weld, 1917 geomarketing tools mainly tools to grow the in the field of trade manufacturing business 1950s - «Reconceptu- • managerial Alderson, «Forma- European • a modern Christaller W. early 1970s alization» approach to marketing 1957; tion» countries mathematical apparatus and Lesch A., XX century (the emergence of Davis, 1961; (France), appeared Bracey P., marketing Howard, USA • new areas of Berry B.J. L., management). 1957; research: the study of sales Harrison W., Marketing as a business Kotler, 1967; zones, service areas, their Haggett P., function Levitt, 1960; configuration and size, as Shaw A., • the origination of McKitterick well as their mapping. Weld L., quantitative research in 1957; • application in Howard J., marketing McCarthy, transport, banking and McCarthy E., 1960 production activities Göttmann A. early 1970s «Socializa- • marketing Hofer and «Populari- European • territory typologization Grimmean I.-P., XX century tion» management: business Schendel zation» countries, in the view of consulting Roelandts M. orientation on the 1978; UK, USA services consumer - value is Bartels,1976; • implementation of determined in the PIMS; geomarketing maps market. The marketing Houghton, • use of GIS technologies function is the adoption 1989 as a basis for of strategic and geomarketing analysis operational solution in • advertising research tool, the use of enterprise improving distribution material resources by networks means the marketing complex (4P) • expansion of the managerial approach: marketing as an element of the decision-making process the mid- «Informati- • relationship Vargo S.L., «Spread» European economic and geographical Kotler P., 1990s XX onal» marketing: the socio- Lush R.F. countries, analysis of the territory, Haider D., century economic process of 2004, USA, Russia, formation of the territorial Rein I., need gratification on Webster, Ukraine marketing concept within Berezovich I., the base of Malter and geomarketing Golubkova E.P., competencies joint use Ganesan, Orlova G.M., of interacting market 2005; Pankrukhina entities Kotler, 2008 A.P., • communicative Balabanova (relational) approach in G.V., marketing and Golikova A.P., consumer involvement Chernomaz P.A. marketing in interaction. From product marketing to service marketing • establishment and maintenance of long- term relationships with customers and partners, as well as internal marketing activities aimed at employees of organizations

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In general, several approaches to geomarketing developed IV. CONCLUSIONS in Russian science, among which the most common are the 1. The problem of the geomarketing development as a following (table 3). fundamental scientific direction considered in this article is largely due to the socio-economic conditions of the enterprises TABLE III. DESCRIPTION OF GEOMARKETING APPROACHES (COMPILED BY THE AUTHORS) existence and the possibility of a detailed and illustrative research of the market formation territorial features, Dominant Tasks Author's Instrumental consolidating both marketing tools and information approach commentary apparatus on the technologies, geography. Geomarketing is a tool of classic approach to marketing evolving from the socialization phase using a tool the complex of marketing-mix (4P). geomarketing evolution 2. Initiation of scientific research within the business Spatial, design operational • marketing Geographical (use school of the regional economy, using the specialists skills in and analytical gathering, research of geographic the field of geography, which consist in the regional markets [10, 13, 14, 15] visual technology data) study in terms of marketing criteria and conditions, the representation • presentation presence of potential business trends, verification of of market of market information analysis and geomarketing maps. customer 3. The formation of the territorial marketing concept behavior criteria increase in KPI focused on improvement the territories attractiveness in terms business of investment policy. 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