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PAPERS IN ENGLISH
ECONOMIC SCIENCES
FINANCE, MONETARY CIRCULATION AND THE CREDIT SECTION
MECHANISMS FOR ENHANCING THE COMPETITIVENESS OF SMALL AND MEDIUM-SIZED ENTERPRISES IN LOCAL AND INTERNATIONAL MARKETS: THE ROLE OF ADVERTISING AND MARKETING STRATEGIES
Agil Magerramov
bachelor's degree, Baku State University, Azerbaijan, Baku E-mail: [email protected]
МЕХАНИЗМЫ ПОВЫШЕНИЯ КОНКУРЕНТОСПОСОБНОСТИ МАЛЫХ И СРЕДНИХ ПРЕДПРИЯТИЙ НА ЛОКАЛЬНЫХ И МЕЖДУНАРОДНЫХ РЫНКАХ: РОЛЬ РЕКЛАМЫ И МАРКЕТИНГОВЫХ СТРАТЕГИЙ
Магеррамов Агил
бакалавр,
Бакинский Государственный Университет, Азербайджан, г. Баку
ABSTRACT
This article analyzes mechanisms for enhancing the competitiveness of small and medium-sized enterprises (SME) in local and international markets. It examines the impact of advertising and marketing strategies on strengthening the market positions of SME. Using examples from American and Azerbaijani companies, the article explores effective approaches, including the use of digital channels, social media, and traditional media. Recommendations are provided for adapting marketing tools based on target markets. The findings highlight the importance of flexibility and innovation in marketing strategies for the long-term growth and sustainability of SME.
АННОТАЦИЯ
В статье анализируются механизмы повышения конкурентоспособности малых и средних предприятий (МСП) на локальных и международных рынках. Рассматривается влияние рекламы и маркетинговых стратегий на укрепление рыночных позиций МСП. На примере американских и азербайджанских компаний исследуются эффективные подходы, включая использование цифровых каналов, социальных сетей и традиционных медиа. В работе предложены рекомендации по адаптации маркетинговых инструментов в зависимости от целевых рынков. Полученные результаты позволяют сделать вывод о важности гибкости и инновационности маркетинговых стратегий для долгосрочного роста и устойчивости МСП.
Keywords: small and medium-sized enterprises (SME), competitiveness, marketing, advertising, international markets, digital channels, cultural characteristics.
Ключевые слова: малые и средние предприятия (МСП), конкурентоспособность, маркетинг, реклама, международные рынки, цифровые каналы, культурные особенности.
Библиографическое описание: Magerramov A. MECHANISMS FOR ENHANCING THE COMPETITIVENESS OF SMALL AND MEDIUM-SIZED ENTERPRISES IN LOCAL AND INTERNATIONAL MARKETS: THE ROLE OF ADVERTISING AND MARKETING STRATEGIES // Universum: экономика и юриспруденция : электрон. научн. журн. 2025. 3(125). URL: https://7universum.com/ru/economy/archive/item/19347
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Introduction
Small and medium-sized enterprises (SME) have become increasingly important in both local and international economies due to the current context of globalization and pressure of competition. They introduce new jobs, enable innovation, and play a significant role in regional development. However, SME face numerous challenges, including limited financial and human resources, a lack of extensive advertising support, and increased pressure from large companies. Under these conditions, the ability to effectively promote their products and services becomes essential for strengthening their market position.
While large companies have at their disposal resources of all types and can afford to run multi-level advertising campaigns, the SME often operate on shoestring budgets and have to rely on unconventional methods to derive competitive advantages. This calls for the implementation of efficient and versatile advertising and marketing schemes that will help SME to hold their own in both local and international competitions. Digital promotion channels, including social media, search engine optimization, and content marketing, lately flared into great importance, opening new opportunities for small- and medium-sized enterprises to build brand awareness and attract customers.
Characteristics of
The aim of this paper is to analyze those mechanisms that enhance the competitiveness of SME in various markets, focusing on advertising and marketing strategies. This paper discusses the key theoretical aspects of competitiveness, primary advertising tools, and analyzes both local and international marketing strategies. The research aims to identify successful examples of marketing approaches and offer recommendations for their effective adaptation to meet the specific needs of SME.
Main part. The concept of competitiveness and its specifics for SME
Competitiveness of enterprises, especially SME, represents a complex characteristic. It reflects their ability to successfully compete in the market, attract consumers, and develop sustainably in a changing economic environment [1]. In the broad meaning, competitiveness covers not only a real presence of high-quality goods and services but also an enterprise's ability to promptly respond to changes in the external environment, develop and implement innovations, use modern communication channels, address the needs of the target audience. The specifics of competitiveness for SME are determined by their limited resources and smaller scale compared to large corporations (table 1).
Table 1.
' competitiveness [2]
Characteristic Description
Flexibility and adaptability SME are characterized by the ability to quickly adapt to changes in the external environment, including fluctuations in demand and shifts in consumer preferences. This gives them an advantage in dynamic markets, where responsiveness requirements are high.
Resource limitations SME often operate with limited budgets and human resources, which compels them to seek creative and cost-effective solutions to implement competitiveness strategies, including unconventional marketing approaches and narrow specialization.
Focus on innovation To maintain competitiveness, SME actively implement innovations, whether in products, services, or internal processes. This helps them stand out in the market, especially when focused on specialized or niche areas.
Proximity to the consumer SME often work with local markets and can ensure closer, more personalized interactions with clients. This creates a competitive advantage through a better understanding of consumer needs and the ability to quickly adapt products or services to specific demands.
Quick decision-making The absence of multi-layered corporate structures enables SME to make management decisions swiftly, which is especially important in highly competitive environments. This feature allows them to quickly launch new products and adapt strategies to market changes.
Specialization and niche marketing SME are often focused on specialized, niche areas, which enables them to avoid direct competition with larger market players and better target a clearly defined audience. This focus on specific segments allows SME to build a strong customer base in their chosen field.
This competitiveness depends on the ability of SME to use innovation, adapt to changes, and remain flexible in management. These elements allow SMEs not only to compete successfully with large companies but also ensure their sustainable development within both the local and international markets.
The role of advertising in promoting and strengthening SME' market position
Advertising is one of the most important instruments to enable SME to consolidate their market position and improve the presence and recognition of their brand while gaining new customers. In highly competitive situations, the use of advertising strategies will be decisive for increased competitiveness, especially in the case of local markets. It would be possible to let people know about their products and services with the help
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of advertising, create a positive image, attract their target audience, and expand their reach into the marketplace.
The most accessible and effective channels for SME include digital media, social networks, and local advertising platforms [3]. These channels allow for direct interaction with customers and increase brand awareness within the desired segment.
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Digital advertising platforms, such as social networks and search advertising, are especially valuable for SME. In the digital advertising market, large technology companies are the leaders. The key player in this market is Google (fig. 1).
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* Google Meta Twitter *AOL * Yahoo Figure 1. Revenue of global companies from digital advertising, billion dollars [4]
Overall, in 2024, according to Statista, global spending on digital advertising will reach $740,3 billion. The average advertising cost per user is $63,7, and the largest market is the USA. Mobile advertising accounts
for 70% of the spending. Let's compare the key financial indicators of the digital advertising market in the USA and Azerbaijan in 2024 (table 2).
Table 2.
Comparison of digital advertising markets in the USA and Azerbaijan [5, 6]
Indicator USA (2024) Azerbaijan (2024)
Total digital advertising expenditure $298,4 billion $182,0 million
Largest market segment Search advertising ($132,0 billion) Search advertising ($78,0 million)
Average advertising spend per user $416,9 $9,1
Share of mobile advertising in total expenditure (2028) 73% 47%
Share of programmatic advertising in digital advertising revenue (2028) 82% 83%
Digital advertising platforms enable not only the promotion of goods and services with high accuracy and at low costs but also provide tools for targeting according to demographic, geographic, and behavioral features. This is particularly important for SME focused on local markets, enabling them to address advertising messages only to residents of certain regions. Besides, such platforms allow real-time analysis of the effectiveness of advertising campaigns and the ability to change strategy if necessary.
Social media plays an important role in brand building and strengthening customer loyalty. According
to Statista surveys, in 2024, around 86% reported using Facebook for marketing purposes, 79% used Instagram, and 65% used LinkedIn. SME can leverage social platforms for direct interaction with consumers, fostering trust-based relationships and maintaining loyalty. Customers who receive quality service and regular feedback through social media are more likely to recommend the company. Content marketing not only informs the target audience about the product but also provides valuable materials, which strengthens trust in the brand (fig.2).
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Increased brand awareness
Increased traffic
Attracting potential clients!
0 10 20 30 40 50 60 70 80
Figure 2. Benefits of social media marketing for SME according to surveys [7]
International digital platforms like Google, Insta-gram, and YouTube allow SME to easily adapt advertising campaigns for different countries and regions. For successful promotion, businesses should consider the cultural characteristics and values of the target audience, which contributes to positive brand perception and strengthens competitive positions in the global market.
In addition to digital channels, advertising in traditional media on local markets, such as local newspapers, radio, and television, also remains an important tool for SME. For example, according to Statista, in 2023, SME advertisers in the USA spent $61 billion on local media, compared to $50,8 billion spent in 2018. Traditional advertising reaches audience segments that may be less active in digital media, such as the older generation. Moreover, participation in local events and partnerships with other local businesses through sponsorship or joint advertising campaigns allow SME to strengthen their position within the community and increase brand awareness.
Thus, advertising is an integral part of the strategies for promoting and strengthening the competitive positions of SME. With the right selection of channels and a creative approach, SME can effectively use advertising tools to attract customers, enhance brand recognition, and enter new markets.
Marketing strategies for SME to enhance competitiveness
Marketing strategies for SME in the USA often involve original, targeted, and flexible approaches to promotion that take into account resource limitations and the desire to strengthen market positions [8].
The company CUBO, which focuses on supporting SME and individual entrepreneurs by creating an online platform for client interaction, is building a subscriber base to foster long-term customer loyalty. Its strategy emphasizes personalization: subscribers receive unique offers, special newsletters, and personalized promotions. This reduces dependency on traditional advertising channels by enabling low-cost, high-return campaigns. CUBO also uses a CRM system to track customer interests, which helps maintain high-quality engagement and trust in the brand.
The company Motion Invest, specializing in buying and selling small to medium-sized websites, focuses on retaining existing clients, viewing this as a more cost-effective approach than attracting new ones. The company employs marketing automation and CRM for personalized service. The automation system promptly reminds clients about new offers, birthdays, and discounts, which strengthens brand loyalty and reduces marketing costs.
The digital media company HerPaperRoute regularly offers clients new products and discounts, creating attractive conditions for repeat business. The company also uses email marketing to inform users about new products and promotions. This practice not only sustains interest in the company's products but also strengthens audience loyalty, contributing to stable growth even in highly competitive conditions.
In contrast to the USA, cultural characteristics play a significant role in forming competitive strategies for SME in Azerbaijan. Key factors include a strong commitment to local traditions and cultural values, the importance of personal relationships in business, and an emphasis on collectivism [9]. For small businesses to succeed, they must consider these aspects, adapting their marketing and operational strategies to build trust and strengthen connections with customers and partners. For example, the Azerbaijani company AzCake, which specializes in producing and delivering confectionery, uses cultural traditions as a foundation to enhance its competitiveness. AzCake focuses on national recipes and decorates cakes and desserts in line with Azerbaijan's traditional holidays and customs, creating a unique market offering. For instance, during holidays like Nov-ruz, the company offers a special menu featuring traditional Azerbaijani sweets, which attracts consumers who value national traditions. Additionally, AzCake actively collaborates with local influencers on social media, effectively promoting the brand among its target audience and boosting trust in its products.
These examples highlight that to enhance competitiveness, SME need to combine flexible marketing strategies with a deep understanding of the target market's specifics, whether digital technologies or cultural traditions.
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Conclusion
Advertising and marketing are now crucial mechanisms that complement the need for competitiveness by enabling SME to create brand awareness, attract and retain loyal customers, and, in effect, compete effectively within both domestic and global markets. Digital channels are especially effective for resource-poor enterprises, such as social media, content marketing, and programmatic advertising, which facilitate efficiently targeted audience engagement. Examples of American companies like CUBO, Motion Invest, and HerPaper-Route illustrate the successful use of personalization,
automation, and CRM to foster customer loyalty and reduce customer acquisition costs.
At the same time, for SME in countries with pronounced cultural characteristics, such as Azerbaijan, the consideration of local traditions and values is a vital part of a competitive strategy. Companies like AzCake leverage national traditions and cultural symbols to create a unique offering, which helps strengthen trust and attract a local audience. These examples highlight the necessity of a flexible approach that includes both digital tools and adaptation to cultural nuances, enabling SME to effectively grow and compete at various levels.
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