THE JOSIP JURAJ STROSSMAYER UNIVERSITY OF OSIJEKFACULTY OF ECONOMICS IN OSIJEK CROATIA

POSTGRADUATE DOCTORAL STUDY PROGRAM IN MANAGEMENT HOCHSCHULE PFORZHEIM UNIVERSITY GERMANY

CROATIAN ACADEMY OF SCIENCES AND ARTS_____________________________________________________________

INTERDISCIPLINARY MANAGEMENT RESEARCH XVIIINTERDISZIPLINÄRE MANAGEMENTFORSCHUNG XVII

Grand Hotel 4 Opatijska cvijeta, Opatija, 13th - 15th May 2021

Published by:Josip Juraj Strossmayer University of Osijek, Faculty of Economics in Osijek, CroatiaPostgraduate Doctoral Study Program in ManagementPforzheim University, Business School, GermanyCroatian Academy of Sciences and Arts

For the Publisher:Boris Crnković, Ph.D., Dean, Josip Juraj Strossmayer University of Osijek, Faculty of Economics in Osijek, CroatiaThomas Cleff, Ph.D., Dean, Pforzheim University, Business School, Germany

Editors:Dražen Barković, Ph.D., professor Emmeritus, Faculty of Economics in OsijekKarl – Heinz Dernoscheg, Ph.D., International Business School Styria, AustriaAleksandar Erceg, Ph.D., Faculty of Economics in Osijek Jerko Glavaš, Ph.D., Faculty of Economics in Osijek Norbert Pap, Ph.D., University of Pecs, HungaryBodo Runzheimer, Ph.D., Pforzheim University, Business School, GermanyDirk Wentzel, Ph.D., Pforzheim University, Business School, Germany

Design:Krešimir Rezo, graf.ing. Krešendo, Osijek

Print:Studio HS internet d.o.o. Osijek

ISSN 1847-0408

Conference Proceedings is indexed in databases which are listed at the official web conference page: http://imr-conference.com

This publication is partly financed by the Ministry of Science and Education of the Republic of Croatia.

Program Committee: Željko Turkalj, Ph.D., professor Emmeritus, Faculty of Economics, J. J. Strossmayer University of Osijek, chairacademician Vlasta PiližotaBoris Crnković, Ph.D., Dean, Faculty of Economics, J. J. Strossmayer University of Osijek,Ivan Miloloža, Ph.D., Faculty of dental medicine and health, J. J. Strossmayer University of OsijekThomas Cleff, Ph.D., Pforzheim University, Business School, GermanyMirela Kljajić-Dervić, Ph.D., Dean, University of Bihać, Faculty of Economics Bihać, Bosnia and Herzegovinaacademician Brano Markić, Bosna and HerzegovinaZoran Jašić, Ph.D., Former Ambassador of the Republic of Croatia to the Republic of AustriaLjubo Jurčić, Ph.D., Croatian Economic AssociationMladen Vedriš, Ph.D., Effectus University College, Zagreb

Organizational Committee:Ivan Kelić, Ph.D., chairIvana Barković Bojanić, Ph.D., deputy chairAntun Biloš, Ph.D.Davorin Turkalj, Ph.D.Martina Briš Alić, Ph.D.Martina Harc, Ph.D.Dina Bičvić, Ph.D.Ivana Šandrk Nukić, Ph.D., Faculty of Civil Engineering and Architecture OsijekŽeljko Vojinović, Ph.D., Faculty of Economics in Subotica, SerbiaKenan Mahmutović, Ph.D., Faculty of Economics Bihać, Bosnia and HerzegovinaTin Horvatin, mag.oec.Katica Križanović, Ph.D. student Ivana Unukić, Ph.D. studentBruno Mandić, Ph.D. studentJuraj Rašić, Ph.D. studentSofija Turjak, Ph.D. studentBruno Budimir, Ph.D. studentSaša Mitrović, Ph.D. student

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CONTENTS

VORWORT .......................................................................................................................... XIIIFOREWORD ....................................................................................................................... XIV

MANAGEMENT .................................................................................................................... 15

Hana Begić, Ivana Šandrk Nukić and Mario Galić MARKET ANALYSIS OF PREFABRICATED BUILDINGS IN CROATIAN AGGLOMERATIONS AND CENTRAL EUROPE ...................................................... 17

Mira Ognjan, Morana Franov and Petra Ercegovac MEDIA HABITS AND BEHAVIOUR OF CROATIAN HIGH SCHOOL STUDENTS IN THE CONTEXT OF TIME MANAGEMENT .............................. 38

Vlasta Roška ECONOMIC AND FISCAL SUPPORT DURING THE COVID-19 PANDEMIC IN CROATIA ................................................................................................... 59

Dino Bruža PERSONALIZED ANIMATION ACTIVITIES IN TOURISM WITH THE EXAMPLE OF “ANIMATOR DESIGN” STARTUP ........................................... 80

Slobodan Stojanović THE IMPORTANCE AND FINANCIAL PERFORMANCE INDICATORS OF THE STRONGEST TRADING COMPANIES IN THE REPUBLIC OF CROATIA.................................................................................. 103

Ana-Marija Vrtodušić Hrgović, Ines Milohnić and Ema Petaković QUALITY DIMENSIONS IN HOUESHOLD ACCOMMODATION .................. 123

Luka Androja, Josip Miočić and Dražen Čular BASIC CHARACTERISTICS AND SIGNIFICANCE OF FACTOR ANALYSIS IN THE PROCESS OF DIGITALIZATION OF FOOTBALL CLUBS IN THE CITY OF ZADAR ................................................................................ 144

Davor Žmegač, Helena Šlogar and Krešimir Jerin ENTREPRENEURIAL ORIENTATION, LEARNING ORIENTATION AND BUSINESS PERFORMANCE IN COMPANIES .............................................. 163

Maja-Mihaela Salopek TOYOTA AS AN EXAMPLE OF ACHIEVING A COMPETITIVE ADVANTAGE THROUGH THE USE OF THE „JUST-IN-TIME“ SYSTEM ..... 181

Melita Srpak, Silvija Zeman, Tanja Bagar and Darko Pavlović WASTE MANAGEMENT IN VARAZDIN COUNTY FROM A SPATIAL PLAN ASPECT ................................................................................................... 201

Tomislav Mrčela, Jelena Dujmović Bocka and Tamara Zadravec DESIGN OF A SOCIAL SYSTEM DECISION-MAKING MODEL IN CRISIS ............................................................................................................... 218

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Marijana Cesarec, Bianca Matković and Franjo Trošelj USE OF MOBILE APPLICATIONS, ADVANTAGES AND DISADVANTAGES, IMPACT ON THE WORLD ECONOMY ............................. 240

Vlatka Hlupic SHIFTING THE MINDSET OF LEADERS ............................................................... 262

Aleksandar Erceg, Mirela Kljajić-Dervić and Vice Gulam INFLUENCE OF COVID-19 ON BUSINESS ENVIRONMENT – EXAMPLE OF CROATIAN SME GOURMET CO2 ............................................... 284

Igor Kralik and Gordana Kralik MANAGAMENT AND ECONOMIC ANALYSES OF PRODUCING TABLE EGGS.......................................................................................................................... 307

Mate Pađen and Davor Ćutić CONTRIBUTION OF DEFENSE INDUSTRY TO THE NATIONAL ECONOMY ................................................................................................... 321

Almir Peštek, Adna Osmanović, Velma Pijalovic and Lejla Lazovic-Pita HALAL TOURISM: IS THIS A NEW OPPORTUNITY FOR HOTELS IN BOSNIA AND HERZEGOVINA? ......................................................... 344

Josip Juračak, Gordana Brcković and Nenad Brkić DISTRIBUTIVNI CENTAR ZA VOĆE I POVRĆE LTD AS AN EXAMPLE OF A SUCCESSFUL PARTNERSHIP IN THE FRUIT AND VEGATABLE SUPPLY CHAIN ............................................................................. 361

Andreja Rudančić, Dominik Paparić and Dragutin Funda IMPACT OF THE IMPORTANCE OF SUSTAINABLE MANAGEMENT OF HUMAN RESOURCES ON THE PERFORMANCE COMPANY .................. 379

Petar Mišević, Zdravko Tolušić and Marko Akmačić RISK ANALYSIS IN THE OPERATIONS OF INTERNATIONAL EUROPEAN UNION COMPANIES FROM THE SHATE SECTOR AND EXISTING SOURCES OF HYDROCARBONS ............................................... 394

Dominika Crnjac Milić, Ljiljanka Kvesić and Ante Džidić MITIGATION OF ADVERSE ECONOMIC CONSEQUENCES TO THE BANKING SYSTEM CAUSED BY THE APPEARANCE OF COVID-19 VIRUS .......................................................................................................... 414

Ante Bačić, Željana Bašić, Nevena Aljinović and Ivana Kružić MANAGEMENT OF URBAN SECURITY: THE POSITION OF THE CROATIAN CITIES IN THE CONTEXT OF THE EUROPEAN CITIES ............................................................................................................ 436

Ioana Sorina Mihut and Larisa Nicoleta Pop Kanto THE ENTREPRENEURIAL BEHAVIOUR IN ROMANIA: A GENERAL ASSESSMENT OF THE IMPACT OF THE COVID19 PANDEMIC ............... 458

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Kristina Brščić, Tina Šugar and Katarina Lovrečić INDICATORS FOR SUSTAINABLE TOURISM – CASE OF ISTRIA REGION ........................................................................................... 475

Monika Pentz and Krisztián Háló EIN EFFIZIENTES MANAGEMENT BEI DEUTSCHEN FERIENSTRAßEN MIT KULTURELLEM ERBE EINE FALLSTUDIE AUS DEUTSCHLAND ....... 491

Krisztián Háló and Mónika Pentz THE MANAGEMENT IN INTERNATIONAL RELATIONSHIPS OVER THE DRAVA ............................................................................................................. 512

Zorislav Kalazić, Suzana Marković and Jasna Horvat FREE VISUAL CONTENT: AN OPEN BUSSINES MODEL IN THE VISUAL SECTOR OF THE CREATIVE INDUSTRY ..................................... 529

Nataša Rupčić and Marko Guščić ELECTRONIC REVERSE AUCTIONS – A FACTOR OF EFFICIENCY AND TRANSPARENCY EVEN IN CROATIA? ......................................................... 549

Matej Galić, Maja Buljat and Tomislav Horvat THE ROLE OF OPERATIONAL AND STRATEGIC PROCUREMENT MANAGEMENT .................................................................................................................. 565

Josip Britvić, Zvonko Merkaš and Tihomir Tenjeri POSSIBILITIES OF ISO 9001:2015 QMS AND ISO/IEC 27001:2013 ISMS INTEGRATION ........................................................................................................ 585

Vinko Samardžić, Marija Bulat Baban and Mario Banožić IMPORTANCE OF LOCAL GASTRONOMY FOR DOMESTIC TOURISTS IN THE REPUBLIC OF CROATIA .......................................................... 601

Dražen Barković and Ivana Barković Bojanić THE ECONOMICS OF LIFE-CYCLE HYPOTHESIS .............................................. 626

Ivan Miloloža RELATIONSHIP OF PROCESS AND INNOVATION PERFORMANCE WITH LEADERSHIP STYLE OF CROATIAN COMPANIES ............................... 637

FINANCE MANAGEMENT ............................................................................................ 651

Željka Kadlec, Hrvoje Roštaš and Danijela Vakanjac THE ROLE OF EU FUNDS IN ENTREPRENEURSHIP AND ECONOMY DEVELOPMENT IN VIROVITICA – PODRAVINA COUNTY .......................... 653

Tomislava Pavić Kramarić, Marko Miletić and Ivica Kusić THE INFLUENCE OF COVID19 PANDEMIC ON CROATIAN LIFE INSURANCE MARKET ........................................................................................... 673

Ticijan Peruško COST ANALYSIS ON THE LIFE INSURANCE MARKET OF THE REPUBLIC OF CROATIA ........................................................................................ 686

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Berislav Bolfek, Dario Vištica and Martina Maté DOMESTIC VALUE ADDED IN GROSS EXPORT FOR SELECTED CEE COUNTRIES ........................................................................................ 704

Zrinka Malešević and Lucija Lerga OPERATIONAL PROGRAMME FOR FOOD AND BASIC MATERIAL ASSISTANCE - EFFICIENCY OF THE FINANCIAL ASSISTANCE AND RESULTS ACHIEVED ........................................................................................................ 723

Melita Cita and Darija Prša PROFITABILITY OF COMPANIES OF SPECIAL INTEREST TO THE REPUBLIC OF CROATIA................................................................................................... 741

Petar Pepur, Stjepan Laća and Ivica Bašić THE IMPACT OF COVID-19 ON THE COMPANY’S LIQUIDITY .................... 757

Goran Ledinšćak, Ante Belamarić and Ivan Tolić IMPACT OF WORKING CAPITAL MANAGEMENT ON PROFITABILITY IN CROATIAN PROCESSING INDUSTRY ............................. 770

Karmen Prtenjača Mažer, Martina Briš Alić and Martina Harc OPERATIONAL RISK MANAGEMENT IN BANKS ............................................... 785

Marina Stanić Šulentić ANALYSIS OF THE INFLUENCE OF FIVE ROUNDS TAX REFORM ON INCOME ...................................................................................................... 804

Saša Bilić, Srećko Zajec and Ivan Ružić ADVANCED ANALYTICAL METHODS FOR COST OPTIMIZATION AND PREDICTION WITHIN CLOUD SHARED SERVICE CENTRE ............. 824

Urban Bacher and Kardelen Ciftci DAS DIEM-ZAHLUNGSSYSTEM – EINE ERSTE ANALYSE DER NEUEN WELTWÄHRUNG .............................................................................................. 846

Dubravka Mahaček, Ana Zrnić and Ivo Mijoč AUDIT PROCEDURES AND EXPENDITURES FOR EMPLOYEES OF LOCAL UNITS ............................................................................................................... 859

Danijela Rabar and Andrej Grbin COMPARATIVE EFFICIENCY ANALYSIS OF CROATIAN CITIES AND MUNICIPALITIES: A NONPARAMETRIC APPROACH FROM A FISCAL PERSPECTIVE .................................................................................. 874

ECONOMIC DEVELOPMENT AND GROWTH MANAGEMENT ............... 901

Vinko Vidučić, Maja Račić and Ljiljana Vidučić MODEL OF CRUISING TOURISM IN MEDITERRANEAN PORTS ................ 903

Daglas Koraca ICT AS A CAUSE OF ORGANIZATIONAL STRUCTURE CHANGES .......... 918

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Sofija Adžić WHAT KIND OF REGIONAL ECONOMIC POLICY COULD ENSURE FUNCTIONAL SUSTAINABLE DEVELOPMENT?............................ 937

Željko Holik and Željko Turkalj DIGITAL IDENTITY AS A FOUNDATION FOR THE DEVELOPMENT OF DIGITAL SOCIETY .................................................................. 949

Anamarija Delić THE ROLE OF BUSINESS SUPPORT INSTITUTIONS IN REGIONAL DEVELOPMENT: LESSONS LEARNED ............................................. 971

Milan Stanić THE IMPACT OF EU MEMBERSHIP ON PRODUCTION AND CONSUMPTION OF WINE IN THE REPUBLIC OF CROATIA ......................... 993

Mladen Jurišić, Jerko Glavaš, Ivan Plašćak, Oleg Antonić and Dorijan Radočaj NEWER CONCEPTS IN THE ECONOMY APPLYING GEOINFORMATION TECHNOLOGIES AND GIS ..............................................1004

Jasmina Gržinić GENERATION Y TRAVEL EXPECTATIONS AND CHALLENGES FOR TRAVEL AGENTS ...................................................................................................1018

MARKETING MANAGEMENT .................................................................................1035

Branislav Peleš, Dejan Balić and Dejan Liović HABITS AND PREFERENCES OF CUSTOMERS, BUYING BIOPRODUCTS IN THE REPUBLIC OF CROATIA ............................................1037

Lidija Nujić and Martina Ambrušec INFLUENCER MARKETING - NECESSITY OR SURPLUS IN TODAY’S TOURISM BUSINESS? ...........................................................................1054

Erik Ružić, Dragan Benazić and Sara Maga AN ANALYSIS OF THE SOCIAL MEDIA USAGE AMONG SALESPEOPLE IN B2B AND B2C MARKETS ..........................................................1074

Božidar Jaković, Dejan Tubić and Rikard Bakan SAFETY, NATURALLY-PRESERVED AND HEALTHY ENVIRONMENT AS A FACTOR OF RURAL DESTINATIONS MARKET POSITIONING IN POST-PANDEMIC PERIOD ................................1091

Helena Štimac, Anita Freimann and Krešimir Štefanović ATTITUDES ON THE APPLICATION OF INTERNET SERVICES IN THE WOOD PROCESSING INDUSTRY ............................................................1110

Valentina Helajz, Davorin Turkalj and Jona Tonković MARKETING POTENTIAL OF DIGITAL PHOTOGRAPHY ON SOCIAL NETWORKS - JONAJOUR CASE STUDY ...............................................1125

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Tibor Gonda GENDER DIFFERENCES IN TOURISM CONSUMPTION PATTERNS AND ATTITUDES TOWARDS TOURISM ...............................................................1141

Karmen Bušić, Ivan Kelić and Igor Stipić IMPACT OF INFLUENCERS ON ONLINE PRODUCT PURCHASES ...........1153

Bruno Budimir, Katarina Kulić and Marina Una Pajcur MOBILE MARKETING AS A COMPONENT IN CONSUMER’S BEHAVIOUR ........................................................................................1167

Thomas Cleff, Melina Otterbach and Nadine Walter NACHHALTIGKEITSKOMMUNIKATION IN SOCIAL MEDIA – DER EINFLUSS UNTERSCHIEDLICHER ARTEN DER NACHHALTIGKEITS-KOMMUNIKATION AUF DIE GLAUBWÜRDIGKEIT, AUF DIE WERBE-/MARKENEINSTELLUNG UND AUF DIE KAUFABSICHT AM BEISPIEL VON IN-STAGRAM ...............1183

Kenan Mahmutović THE IMPACT OF DIGITAL MARKETING ORIENTATION ON HOTEL MARKETING PERFORMANCE ..........................................................1211

HEALTH, EDUCATION AND WELFARE MAGEMENT .................................1233

Ivana Ljevak Lebeda SOCIALLY RESPONSIBLE TEXTBOOK PUBLISHING ....................................1235

Ivona Blažević, Dajana Džeba and Mirko Cobović HIGHER EDUCATION IN CORRELATION WITH THE LABOR MARKET NEEDS ...............................................................................................................1249

Agneza Aleksijević and Marko Aleksijević FOLLOWING KNOWLEDGE PATH TO “KNOWLEDGEBASED HEALTHCARE” ..................................................................................................................1269

Ivana Varičak, Silvija Vitner Marković and Romana Radočaj THE IMPORTANCE OF CIVIC COMPETENCES IN THE IMPLEMENTATION OF ACADEMIC SERVICE LEARNING ............................1292

Sandra Bršec Rolih, Zvjezdana Penava Brekalo and Ivan Bogović EFFICIENCY OF INSTITUTIONAL MECHANISMS OF THE CROATIAN HEALTH INSURANCE FUND IN MAINTAINING THE PRICES OF PRESCRIPTION MEDICINES IN CROATIA .........................1303

Ivana Vuković, Mirela Šumanovac and Zrinka Tolušić VUKOVAR-SRIJEM COUNTY EMPLOYEES’ PERCEPTION OF CORPORATE SOCIAL RESPONSIBILITY ........................................................1321

Ante Lozina, Željana Bašić, Ivana Kružić and Ante Sanader CHALLENGES OF CULTURAL HERITAGE MANAGEMENT ETHICAL AND LEGAL ISSUES ON EXAMPLE OF HUMAN SKELETAL REMAINS .................................................................................................... 1345

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Sanja Pešić, Mirko Pešić and Ivan Zeko-Pivač AN INQUIRY INTO THE SOCIO-ECONOMIC IMPACT OF COVID 19 TO THE FREE MOVEMENT OF WORKERS IN THE EU: HEALTHCARE SECTOR IN THE SPOTLIGHT ....................................................1366

Maja Karić, Andrej Starc and Josip Mesarić ASSESSMENT OF THE CHOICE OF MANAGEMENT METHOD BY INTRODUCING CHANGES IN THE HEALTHCARE INSTITUTION ........1382

Zsuzsanna Császár, Károly Teperics, Klára Czimre and Kitti Köves FOREIGN STUDENTS IN HUNGARIAN HIGHER EDUCATION .............1397

Jasminka Mihaljević, Neđeljko Knežević and Goran Jurišić KNOWLEDGE MANAGEMENT IN THE ACADEMIC LIBRARY: A REVIEW OF THEORY AND PRACTICE ...............................................................1417

Slavomir Vukmirović, Zvonko Čapko and Ana Babić THE INFLUENCE OF BLENDED LEARNING CONCEPTUALIZATION ON STUDENT SATISFACTION WITH DISTANCE LEARNING ...................................................................................1440

LAW & ECONOMICS MANAGEMENT...................................................................1453

Lovro Broketa, Nenad Rančić and Ozren Pilipović AUSTERITY: A POLICY OF SELF-INFLICTING HARM .....................................1455

Tomislav Jakšić THE ROLE AND DUTIES OF THE COURT APPOINTED TEMPORARY MANAGER IN THE MANAGEMENT OF THE LIMITED LIABILITY COMPANY UNDER THE CROATIAN COMPANIES ACT ...................................................................................1472

Marina Guzovski, Ivana Martinčević and Mirko Smoljić LEGAL ASPECTS OF USING PERSONAL DATA FOR DIRECT ADVERTISING IN THE DIGITAL ENVIRONMENT ........................1489

Vjekoslav Puljko and Marija Matković CONSUMER PROTECTION LOOKING FOR NEW SOLUTIONS IN THE EU ...............................................................................................1506

Iva Mihanović CONSUMER PROTECTION IN A DIGITAL ENVIRONMENT .......................1520

Gordana Martinović, Krešimir Starčević and Luka Mandić DENATIONALIZATION AND RETURN OF PROPERTY IN CROATIA AND NEIGHBORING COUNTRIES ..............................................1531

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Vorwort

Es ist uns ein Vergnügen, das Konferenzband “Interdisciplinary Management Research XVII/ Interdisziplinäre Managementforschung XVII” vorstellen zu können. Ein Buch aus dieser Reihe ist zum ersten Mal 2005 erschienen, als Resultat der Zusammenarbeit zwischen der Wirtschaftsfakultät in Osijek, Kroatien und der Hochschule Pforzheim, Deutschland, und insbesondere durch das Magisterstudium des Management. Die Zusammenarbeit der zwei genannten Partnerinstitutionen ist unter anderem durch jährliche wissenschaftliche Symposien gekennzeichnet, auf welchen interessante Themen aus verschiedenen Bereichen der Wirtschaft und des Managements vorgestellt und folglich in einem Band veröffentlicht werden. Jedes Jahr ziehen die wissenschaftlichen Symposien Akadamiker anderer kroatischer, sowie ausländischer Universitäten, einschließlich Deutschland, Ungarn, Polen, Rumänien, Slovenien, Montenegro, Bosnien und Herzegovina, Serbien, Indien, Irland, Czechien, Island, Israel, Italien, Sudafrica, Kanada, Litauen, Kosovo, Türkei, Belgien, Schweiz, USA, Slowakei, Schweden, Dänemark, Mazedonien, Mexico, Zypern und Großbritannien an, die ihren wissenschaftlichen und profesionellen Beitrag zur Diskussion über zeitgenössische Fragen aus dem Bereich des Managements leisten. Die Aktualität der behandelten Fragen, der internationale Charakter im Hinblick auf Themen und Autoren, die höchsten Standards der Forschungsmethodologie sowie die Kontinuität dieser Konferenzreihe wurden auch von der internationalen akademischen Gemeinde erkannt, weswegen sie auch in internationalen Datenbanken, wie Clarivate Web of Science, Thomson ISI, RePEc, EconPapers und Socionet, zu finden ist.Die neueste Ausgabe von “Interdisciplinary Management Research XVII/ Interdisziplinäre Managementforschung XVII” umfasst 84 Arbeitengeschrieben von 210 Autoren. Der Erfolg früherer Ausgaben ging über die Grenzen der Länder hinaus, deren Autoren schon traditionell Teil der Reihe waren. Jedes der Autoren leistete einen bedeutenden Beitrag zu diesem fachübergreifenden Managementforum.Als Herausgeber dieses Bandes hoffen wir, dass diese Reihe auch weiterhin Akademiker und Profesionelle dazu bewegen wird, in Forschung und Beruf die höchsten Standards zu beanspruchen, und dass es weiterhin als Ansporn zu weiteren Formen von Zusammenarbeit unter Teilnehmern dieses Projektes dienen wird.

Dražen Barković, Ph.D. professor emeritusProf. Dr. Bodo Runzheimer

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Foreword

It is our pleasure to introduce the book “Interdisciplinary Management Research XVII/ Interdisziplinäre Managementforschung XVII” to you. The first volume appeared in 2005 as a result of cooperation between the Faculty of Economics in Osijek (Croatia) and Pforzheim University (Germany), mainly through the postgraduate program “Management”. The cooperation between these partnering institutions has been nurtured, amongst else, through annual scientific colloquiums at which exciting topics in various fields of economics and management have been presented and later published in the proceedings. Over the years, the scientific colloquiums have drawn the attention of academic scholars from other Croatian universities, as well as from other countries including Australia, Germany, Hungary, Poland, Romania, Slovenia, Montenegro, Bosnia and Herzegovina, Serbia, India, Ireland, Czech Republic, Iceland, Israel, Italy, South Africa, Canada, Lithuania, Kosovo, Turkey, Belgium, Switzerland, USA, Slovakia, Sweden, Denmark, Macedonia, Mexico, Cyprus, and the United Kingdom each contributing to the academic and professional discussion about contemporary management issues. Actuality and importance of the issues discussed, the international character of the book in terms of authors and topics, the highest standards of research methodology, and continuity in publishing have been recognized by the international academic community, resulting in the book of proceedings being indexed in world-known databases such as Clariavate Web of Science, Thomson ISI, RePEc, EconPapers, and Socionet. The latest edition, i.e., Interdisciplinary Management Research XVII/ Interdisziplinäre Managementforschung XVII, encompasses treba 84 papers written by 210 authors. The success of former editions has echoed beyond the traditionally participative countries and authors.

As editors, we hope that this book will continue to encourage academic scholars and professionals to pursue excellence in their work and research and provide an incentive for developing various forms of cooperation among all involved in this project.

Dražen Barković, Ph.D. professor emeritusProf. Dr. Bodo Runzheimer

MANAGEMENT

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DIRECT MARKETING: THE USE OF PERSONAL DATA FOR ADVERTISING IN THE DIGITAL ENVIRONMENT

Marina GUZOVSKI, Ph.D. Libertas International University

E-mail: mguzovski@libertas.hr

Ivana MARTINČEVIĆ, Ph.D. University North

E-mail: ivana.martincevic@unin.hr

Mirko SMOLJIĆ, Ph.D. University North

E-mail: mirko.smoljic@unin.hr

Abstract

Advertising through digital media and direct marketing communication in the digital environment requires compliance with particular regulations governing this area, which relate to the collection and use of personal data and coordina-tion of all marketing communication activities in the campaign’s implementa-tion. For direct marketing communication for advertising and use of personal data, the respondent must give his consent by which he agrees that his data can be used for: direct marketing, specific electronic communication channels through which he will receive promotional messages, as well as a third party’s usage of his data.By browsing the websites, the data on users’ habits is being collected automati-cally or through cookies that users accept in full, in part or not at all, which prevents them from the full functionality of the website and services. Users often automatically and without reading, give their consent or accept cookies

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without knowing what cookies are or for what they have agreed to give their data and for what purposes.The purpose of this paper is to point out the importance of personal data in the digital environment, i.e., giving consent or acceptance of cookies by users for the processing and handling of personal data. The research aims to show how much of the attention users pay towards protecting their data in the digital environ-ment through the consent and acceptance of cookies or whether they have been informed about it in more detail. The research concept refers to the analysis of the possibilities of direct advertising in the digital environment without violat-ing the personal data of users, the results of the conducted survey research, and recommendations for further analysis and research.

Keywords: direct marketing, digital media, personal data protection, legal framework

JEL Classification: M31, K29

1. INTRODUCTION

Direct communication with customers through databases enables their identification and differentiation based on habits, needs, values for the com-pany, and adapting products, services, and messages to each customer through direct communication and building stronger connections. Databases contain individual data on current and potential consumers, including their names and surnames, contact information (address, e-mail address, telephone number, etc.) Age, gender, household income, occupation, level of education, geographi-cal location, hobby, and other important geographical, demographic, economic, social, psychographic, psychological characteristics and data on behavior in pur-chasing and consuming products.

Article 4. of the General Data Protection Regulation considers personal data to be all data relating to an individual whose identity has been or can be established in particular employing an identifier such as name, identification number, location data, network identifier, or employing one or multiple factors specific to that individual’s physical, physiological, genetic, mental, economic, cultural, or social identity. Given that databases contain some of the personal data subject to this regulation, it is essential to carefully collect and handle per-sonal data, processing, storage, protection, and data management. Every indi-vidual must agree to the use of personal data before the processing of personal

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data happens, which also applies to direct marketing communication to adver-tise where his data is being used for direct marketing. The individual may at any time withdraw the consent given under certain conditions.

Act on the Implementation of the General Regulation on Data Protection (Official Gazette 42/18), Electronic Communications Act (Official Gazette 73/08, 90/11, 133/12, 80/13, 71/14 and 72/17), Consumer Protection Act (Official Gazette 41/14, 110/15, 14/19) as well as Guideline No. 8/2020 on targeted advertising aimed at users of social networks are some of the legal reg-ulations governing the handling of personal data for direct advertising in the digital environment, on which we will look at in more detail in this paper, and present the results of research on understanding the importance of personal data protection and the legal basis for direct marketing communication.

2. METHODOLOGY

The methodology used in the paper explains the purpose, goal, and structure of the Paper. The first part of the paper discusses the legal framework governing personal data protection in direct advertising, which has a legal basis of consent or legitimate interest.

In the second part, the paper deals with the use of personal data in a digital environment for direct marketing through social networks and automatic data collection through cookies.

The results of the research conducted through a questionnaire are presented in the third part of the paper and relate to research questions:

How much attention do users pay to protect their personal data in the digital environment?Do users read the content of the given consents for the handling of their personal data?How familiar are users with the meaning of cookies, and have they been informed in more detail?Do users know about the possibility of deactivating automatic data col-lection via cookies?

In the paper’s concluding part, the paper’s main conclusions are presented based on the conducted research and further recommendations.

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3. PROTECTION OF PERSONAL DATA IN DIRECT ADVERTISING LEGAL FRAMEWORK

The regulatory framework governing the protection of personal data in the Republic of Croatia and all member states of the European Union has been in force since May 2018. The rapid development of technology has imposed the need to strengthen individual trust in activities in the digital environment and trust in electronic services that protect the right to privacy and the right to protection of personal data. When collecting, using, or processing personal data, the respondent is obliged to obtain information on: what the data is col-lected for, the legal basis for data collection, time storage of data, whether a third party will use the data, whether the data will be transferred outside the EU; data protection rights, legal filing of a complaint, possibility to withdraw consent and contact details of the persons responsible for data processing. Since direct marketing communication uses personal data for advertising or sending promotional and marketing materials, there must be a legal basis for marketing communication, which relates to the advertiser’s consent or legitimate interest. Consent is a voluntary, particular, informed, and unambiguous expression of the respondent’s wish. With a statement or explicit affirmative action, he con-sents to the processing of personal data relating to him (Article 4. paragraph 1. Point 11.of the General Data Protection Regulation).

The General Data Protection Office does not regulate the specific issue of di-rect marketing but the processing of personal data in general for a specific purpose with applying the principles: legality, fairness, and transparency, purpose limita-tion, data reduction, accuracy, storage restrictions, integrity, and confidentiality. Direct advertising based on consent or legitimate interest must be based on the stated principles and must not endanger the individual’s privacy or freedom. At any time following Article 21. of the General Data Protection Regulation, the individual to whom the direct marketing message was sent may request the ter-mination of these activities by objecting to the processing of personal data or withdrawing consent, and must be clearly and unambiguously informed when establishing the first direct communication. Any communication made after a complaint or withdrawal of consent to a person no longer has a legal basis.

When formulating consent when it comes to its purpose, consent for direct marketing must be separated from processing for another purpose, and the re-spondent must be informed about the channels of marketing communication

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(e-mail, SMS, call center, mail, etc.) and be allowed to choose the desired con-tact method. Acceptance of all marketing channels or no channels should not be conditional. When the respondent gives consent, he must also be informed whether another person or a third party will process the collected personal data based on the same consent.

Using personal data or contact lists or databases of others, organizations must prove that the data was obtained according to the General Data Protec-tion Regulation. That consent was given to the disposal of personal data and that the data can be used for advertising and direct marketing.

Article 107. paragraph 1. of the Electronic Communications Act (Official Gazette 73/08, 90/11, 133/12, 80/13, 71/14, and 72/17) stipulates that di-rect marketing communication through automatic calling and communication systems without human mediation, fax machines or e-mails, including SMS messages and MMS messages are permitted with the obtained consent from the subscriber or service user. Consumer e-mail address data obtained from their consumers to sell products and services may be used for direct marketing and sales of their own or similar products if the consumer has not refused such use of the data in advance (Article 107 paragraph 2.). The legal basis for sending a newsletter is consent or legitimate interest.

In the case of legitimate interest as a legal basis, the advertisement recipi-ent must be allowed to unsubscribe or oppose personal data processing during communication. When it comes to direct communication by telephone to con-sumers for the sale or promotion of products following personal data process-ing, this area is regulated by the Consumer Protection Act (Official Gazette 41/14 and 110/15) article 11. Any form of communication to consumers is prohibited who have registered in the consumer register that they do not want to receive calls of this kind. The “Do not call” register is kept with the Croatian Regulatory Agency for Network Activities (HAKOM). The entry or printing of data is performed by the operator with which the consumer has a subscrip-tion agreement based on his written request. The written request is submitted via the form in person, in writing, or via a registered e-mail registered with the telephone user’s operator. In case of a change of operator and keeping the same number, re-entry in the register is not required.

When buying data from companies that conduct primary data mining, it is necessary to understand what the seller offers. It is, therefore, necessary to know

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what this data means (what helpful information can be given from it), how the data is offered (one-time purchase or purchase of data at several intervals, for example, data delivery every month), how the data is delivered (CD-ROM, DVD, USB, printed on paper, etc.), how the data is structured (brief data, ex-plained data, data accompanied by statistical analysis, etc.) and what actions are allowed with the data (Brown, 2014: 169-170).

Legislation governing the protection of personal data of individuals who have agreed to have their data used for specific purposes by consent provides a sense of security and protection because they have agreed to have their data used under certain conditions and may at any time request change, correction or deletion of their data. The right to protection of personal data applies to every processing of personal data.

4. PERSONAL DATA IN THE DIGITAL ENVIRONMENT AND USE FOR DIRECT MARKETING PURPOSES

In the time we live in, where technology is more developed every day, and more and more activities occur in the digital environment, personal data protec-tion is gaining in importance and becoming a challenge in protecting personal data collected and processed daily in different situations. Direct marketing in-volves direct communication with target groups of direct and individual con-sumers, and the development of technology has enabled its success and efficien-cy. According to the American Direct Marketing Association (DMA) defini-tion, “direct marketing is an interactive system used by one or more advertising media to influence a measurable response and/or transaction at any location. In essence, this type of marketing is a combination of three marketing strate-gies: economic propaganda, sales promotion, and market research (Previšić & Ozretić Došen, 201: 237).

Speaking of direct marketing, we are talking about an innovative and alter-native method of using a zero-level marketing channel that allows direct contact of the manufacturer with the consumer and requires an immediate response or reaction. This reaction can be an order, a request, a request for additional infor-mation, registration, sending an e-mail address, a phone call, or a visit (Ružić, 2003). Electronic media are used as direct communication channels between

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providers and consumers. Individual, personalized, and direct communication via e-mail and other forms of communication used in the digital environment and in promotional activities (for sending offers and notifications) enables the development of relationships with consumers, influencing their satisfaction, participation in creating products and services, and a range of other activities.

Direct communication channels in the digital environment enable interac-tive communication with consumers and their better knowledge of needs and desires, thus creating a range of products and services according to their ex-pectations and providing value for them. Interactive marketing is an integrated process used by organizations to understand consumer behavior, technology, and other resources in order to create and manage value for consumers and cus-tomer relationships, thereby increasing value for stakeholders through relevant brands, products/services, ideas, and messages communicated and delivered to target consumers through appropriate channels and at the appropriate time (Shankar & Malthouse, 2006).

The unique approach to consumers with the application of modern technol-ogy, developing long-term relationships, inviting participation in creating prod-ucts or services, understanding consumer habits, and more is impossible if the company does not know its consumers and has no information about them can not develop effective direct marketing. Databases are needed and are necessary for the development of customer relations management and the positioning and differentiation of products or services concerning the competition (Smoljić et al., 2020: 424).

The digital nature of the Internet and other technologies enables a much more extensive and detailed insight into consumers’ characteristics and their behavior in the electronic environment. Databases and technologies for contact with consumers (Internet, mobile telephony, etc.) enable easier identification of individual consumers, precise segmentation and targeting of consumers, and adjustment of all marketing activities (offers, prices of sales and distribution channels, communications) to individual consumers (Škare, 2011: 2).

.. Automatic data collection (cookies)

Internet search results and search history are accompanied by text files called cookies, making it easier to target your ads to specific target groups. Based on

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consumers’ characteristics and preferences, targeted promotional messages are directed to current and potential customers. Cookies enable tracking users on the website due to statistics of visits, authentication, display of advertisements, etc. They are used for analytical and statistical purposes and the functioning of all website features, and a better user experience. The user can accept all or only those necessary or only those for marketing purposes. It can also turn them off permanently or temporarily in your browser settings, but this can sometimes affect the website’s functionality. Cookies consist of site visitor identifiers and various attributes that control browsers on what to do with the cookie.

Cookies are usually a pop-up that asks for consent and explains the changes and terms of the website’s use. The use of cookies on websites is also subject to legal regulations for protecting personal data, even though it does not ask for information such as name or e-mail address but remembers the IP address of the user/visitor, mobile device identifier, browser data, and so. Cookies are ap-plied following the Electronic Communications Act, the Privacy and Electronic Communications Directive (EU 2002/58/EC), the General Data Protection Regulation, and the Act Implementing the General Data Protection Regulation.

Given their characteristics and acceptance by users, there are several types of cookies: one-time cookies (deleted after closing the web browser), persistent cookies (not deleted), HTTP cookies (access to user application and program protocols), first-party cookies, third-party cookies, super cookies, zombie cook-ies (recovers after deletion) and so. When using cookies on the website (follow-ing legal regulations), the privacy conditions should be stated with an explana-tion of how to use cookies, the possibility of accepting (permission) to use cook-ies unless cookies are used to store information for the necessary functioning of the site or implicit consent. Cookies are used on the site). User permissions are required if cookies are used for statistical purposes or advertising.

.. Targeted advertising through social networks

Most social networks on the Internet do not charge for membership but often make money from advertising on their websites. Given the amount of information that members post in their user accounts (profiles), social network-ing platforms enable targeted advertising according to consumer demographic, psychographic, and behavioral variables (Soomro et al., 2012). In order for pro-motional campaigns to be as successful as possible and targeted at the target

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group of consumers, it is necessary to find out as much information as possible about current and potential users, their preferences, needs, and desires.

Social networks quickly change from a virtual place to meet and communi-cate to a space where ideas are created and promoted. Campaigns are encour-aged, people are motivated and grouped to realize specific social needs and de-sires. The results of online social campaigns can be directly measured, which gives advertisers insight into the ratio of invested and received and more de-tailed information about consumers themselves, based on which they can cre-ate promotional campaigns and business and marketing strategies. In terms of promotion, interactive marketing can process data in digital form, multimedia, interactivity that allows communication between two or more people and the ability to connect information.

Social media marketing is part of enhanced integrated marketing commu-nications representing how specific organizations or companies seek to con-nect and target their target markets and coordinate all parts of the promotional mix: advertising, personal selling, sales promotion, public relations, publicity. Integrated marketing consists of various marketing communication tools that coordinate all marketing communication activities to achieve synergy effects. The idea is to combine ad creation, market analysis, media use, and control the achieved results (Kotler & Keller, 2014: 689).

Social networks’ use requires the registration of users or the creation of pro-files using personal data for mutual communication and networking. Social me-dia interaction is often used for targeted advertising based on user preferences and based on search engines or IP addresses. These are all personal data subject to personal data protection based on the General Regulation on Personal Data Protection and Guidelines 8/2020 on targeted advertising aimed at users of social networks of the European Data Protection Board from September 2020.

These guidelines regulate the area of targeted advertising on social networks, including the potential loss of individual control over their data, risks of dis-crimination and exclusion, and the dangers of manipulation of individuals, where targeted advertising includes: advertising to individuals (based on data provided); advertising on data provided by the respondent when using a par-ticular service or particular device and advertising based on derived data. The guidelines apply to social network users (respondents), social network service providers (social networks), advertisers, and other participants such as market-

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ing agencies, ad networks, advertising exchanges, demand platforms and supply platforms, data management service providers, and companies specializing in data analysis. The legal basis for targeted advertising on social media is consent or legitimate interest, depending on targeted advertising.

Advertising to social network respondents may be targeted at respondents according to specific criteria (legal basis of consent or legitimate interest), with-in the social network (legal basis may be legitimate interest), advertising based on geolocation data, and user behavior based on monitoring via multiple de-vices than by various participants through cookies, pixels, etc. for which consent is required. Consent is not valid if offered to respondents with a pre-marked tick so that respondents can remove it if they do not want to give it.

5. RESULTS OF RESEARCH AND ANALYSIS

Through a questionnaire, and to obtain answers to research questions posed in the methodological part and increase the value of this paper, a survey was conducted on knowledge and understanding of the importance of personal data protection by giving consent, accepting cookies of all or only those for market-ing purposes and the use of “Do not call” register in the period from January 7 to January 18, 2021. The results are presented graphically, followed by the interpretation of the results. The research was conducted on a random sample in the city of Vukovar, Republic of Croatia.

The study involved 90 respondents, of which 58% were women, and 42% were men. 3 of the respondents that participated were under the age of 18 (3.33%), 9 respondents between 19 and 25 (10%), 21 respondents between 26 and 35 (23.33%), 19 respondents between 36 and 45 (21.11%), 23 respondents (25.56%) between 46 and 55, 10 respondents (11.11%) between 55 and 65 and 5 respondents that were older than 65 (5.56%). Regarding the level of educa-tion, 27% of respondents have completed secondary education (SSS), 31% of respondents have completed higher education (VŠS), 28% of respondents have a university degree (VSS), and 14% of respondents have a master’s degree or doctorate. 64% of respondents are employed, 30% of respondents are unem-ployed, and 6% are retired.

In the continuation of the questionnaire and given the importance of han-dling personal data when giving consent, respondents were asked whether they

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carefully read the purpose of giving consent before giving their consent to han-dling their data. 41% of respondents answered that they carefully read the con-sent before giving their consent to it, 26% of respondents do not read the data carefully, and 33% of respondents sometimes read the content of the consent to which they give their consent more carefully. The structure of responses is shown in Figure 1.

Figure 1. Introduction to the purpose of the given consent

Source: author’s research

When it comes to giving consent or accepting cookies when browsing the website and the actions of respondents, in this case, the appearance of pop-ups to accept or not respondents gave the following structure of answers: 39% au-tomatically accept all cookies without explicit content, 13% respondents read the content and accept only the necessary cookies as well as 13% of respondents who accept only those cookies that are used for marketing purposes. 35% of respondents press “x” or exit the cookie message. The structure of responses is shown in Figure 2.

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Figure 2. Handling of cookie messages on web pages

Source: author’s research

The next question in the questionnaire referred to the respondents’ aware-ness of the meaning of cookies in general and their use on websites. 34% of respondents were informed about cookies’ meaning, while 46% of respondents were aware of cookies’ essential characteristics. 20% of them were not informed what cookies mean. The structure of responses is shown in Figure 3.

Figure 3. Awareness of the meaning of cookies

Source: author’s research

When asked about knowing the purpose of cookies on websites or those cookies are those who remember everything that was viewed on websites, pref-erences, use for digital marketing, 39% of respondents said they were familiar with the purpose of cookies, 31% of respondents were partially familiar with

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the meaning of cookies, and 30% of respondents are not familiar with the pur-pose of cookies. The structure of responses is shown in Figure 4.

Figure 4. Knowing the purpose of cookies

Source: author’s research

Since cookies can be turned off in browser settings and deactivate their auto-matic data collection, respondents were asked whether they deactivated them or were they aware of this fact. 31% of them are aware of this possibility and have turned off automatic data collection, 47% have not turned off automatic data collection. In comparison, 22% of respondents are not aware that cookies can be turned off in browser settings. Figure 5 shows the structure of the response.

Figure 5. Knowledge of the possibility of deactivating automatic data collection via cookies in browser settings

Source: author’s research

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The Law on Consumer Protection enables entry in the “Do not call” register to prevent calls to users who are for promotional purposes or the sale of prod-ucts and services. 43% of respondents know this possibility of registration with their operator, and 57% of respondents are not aware of this possibility. The structure of responses is shown in Figure 6.

Figure 6. Knowledge of the possibility of entry in the register “Do not call”

Source: author’s research

The General Regulation on Data Protection and the Act on the Implemen-tation of the General Regulation have been in force in the Republic of Croatia for slightly less than three years. Personal data based on consent is processed in various transactions. Personal data is collected, recorded, organized, structured, stored, adapted or modified, used, harmonized, restricted their use, made available, transferred, etc. Considering that this is personal data and its sensitivity, it is evi-dent from the conducted research that more than 70% of the respondents read the content of the given consents, i.e., get acquainted with handling their personal data.

The impact of technology and business development in the digital environ-ment as well as the daily use of certain electronic services or simple browsing of certain websites require confirmation of specific privacy policies and accep-tance of cookies that do not identify the user by name and surname, but follow search history, IP address and so, and based on this collected data, analysis is performed. However, also users are monitored according to their preferences, specific marketing messages are directed to selected target groups through di-rect marketing. In the conducted research, when it comes to cookies, more than 60% of respondents accept all cookies, only necessary or only those for market-

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ing purposes, which allows them to be monitored according to specific criteria. Knowing the sensitivity of personal data in the digital environment, respon-dents were informed about the meaning and purpose of cookies (31% were not informed and learned more) and about accepting them in whole or in part (only those necessary for website functionality or those for promotional purposes). Given that there is a possibility of data protection and deactivation of cookies through user browsers, 22% of the survey respondents were not aware of this possibility, and 31% of them turned off automatic data collection.

For promotional purposes or product sales, users often receive various phone calls. According to the Law on Consumer Protection, these calls can be limited by entering the register “Do not call” at your operator. In the survey, more than half of the respondents were not aware of the possibility of banning calls. How-ever, they encounter specific calls for promotional purposes or product sales daily.

6. CONCLUSION

By applying the General Regulation on Personal Data Protection, any direct communication requires well-thought-out action, which must have a legal ba-sis. Direct communication for marketing purposes via e-mail, telephone, SMS, social media profiles, etc. For promotional purposes or sales, it must give the possibility to unsubscribe, especially if the legal basis is a legitimate interest in the user by the advertiser, not consent.

The main conclusions of the research:

Users need to be informed what personal data is collected, used, and for what purposes, and whether a third party and others can use the data.all those who handle personal data (data processing managers) must be informed about data protection policies, privacy policies, monitor changes in legislation in this area to be able to responsibly and fully pro-tect personal dataraising awareness of the importance of personal data protection in orga-nizations that collect, process and handle personal dataraising the level of awareness, education and informing users about the importance of personal data protection as well as the possibilities of de-activating the automatic collection of user data

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Direct marketing and direct communication activities according to the Gen-eral Regulation on Personal Data Protection, the Act on the Implementation of the General Regulation on Data Protection, the Electronic Communications Act, the Consumer Protection Act, and the Guidelines relating to targeted ad-vertising aimed at social network users are not prohibited. They only require special attention to the conduct and harmonization of marketing campaigns’ implementation activities with the legal regulations in force.

We need to continuously raise the level of awareness and educate users about the importance of personal data, their use and protection, and understanding cookies. This research can be the basis for further research, primarily if some recommendations would be implemented.

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