The business landscape of New Zealand is in a state of slow and ongoing change. Many of our better-managed SMEs are successfully responding to pressures of competitive forces and complexity and incessant developments in the wider business environment. Entrepreneurship within these organizations seems to be their principal agent of change and is characterized by ongoing innovation, proactiveness and risk taking behaviours. To achieve success they are integrating entrepreneurial marketing techniques into their planning process to formulate their strategic marketing plans.
However, within most other organizations a trading and commodity mind set still prevails, or entrepreneurial activity is ad hoc, and marketing is continuing to be practiced in a tactical manner through use of personal networks and promotional techniques.
Entrepreneurial marketing is a relatively undeveloped discipline in the curricula of the New Zealand tertiary institutions even though innovation and entrepreneurship programs have grown dramatically overseas. Entrepreneurial marketing envisions the business of marketing and organizational existence differently. Entrepreneurial marketing sees ongoing entrepreneurship as a change agent of the marketing discipline. It assigns the role of continuous value creation to marketing through pursuit of opportunity and innovation, risk taking, and resource leveraging as against ensuring incremental improvement in performance - the traditional approach of marketing.
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This paper develops a conceptual framework using the entrepreneurial approach for marketing planning that could be effectively used by our entrepreneurs/businesses. The model proposed draws from well-known frameworks on marketing planning and the entrepreneurial process, and synthesizes relevant theories from these disciplines (Morris et al: 2001; Brooksbank: 1996; Kotler: 2000, Guilitinan et. al. 1997) into a practicable concept. Methodology used includes secondary data from literature searches of entrepreneurship and strategic marketing disciplines. The proposed model could also be used to teach the NZDipBus course Marketing Planning and Control offered by tertiary institutes in New Zealand. This could eventually lead to "win - win" situations for both our students and the SME's that employ them.
A conceptual entrepreneurial marketing planning framework is proposed; based upon a variety of frameworks in entrepreneurship and related disciplines (Morris et al: 2001). The marketing planning framework is integrated with entrepreneurial character themes, entrepreneurial orientation and the entrepreneurial process. The need for a consolidated entrepreneurial marketing planning framework is recommended to facilitate the learning experience of students in the NZDipBus Marketing Planning course.
Entrepreneurship is associated with adaptation and change of economic systems, often contributing to national economic growth (Bygrave, Reynolds & Autio, 2004: 5). Kuratka and Hodgetts (2004: 3) introduce entrepreneurship as, "an integrated concept that permeates an individual's business in an innovative manner". Entrepreneurs are individuals who recognize opportunities, being possible aggressive change catalysts within the marketplace. Halloran (1994: 4) defines an entrepreneur on a broad basis, as "one who assumes the risk of gaining profits or incurring losses in the undertaking of commercial transactions." This definition includes entrepreneurs from all walks of life, and it may be useful to incorporate 'calculated' risk to make the definition more meaningful to successful entrepreneurs.
It is against this background of entrepreneurism that frameworks are developed to encourage sustainability of entrepreneurial activity of SME's. Frameworks may be evaluated as basic conceptual structures of ideas, being a logical and systematic way to organize a phenomenon (Merriam-Webster: 1999). Applicable frameworks include relevant variables that constitute entrepreneurial activity, and bring structure to entrepreneurial components in terms of the ways in which they relate to one another. The framework used is the framework of the entrepreneurial process (Morris, Kuratko & Schindehutte, 2001: 40). This framework is considered along with the basic frameworks of marketing planning. Finally, a conceptual framework of the entrepreneurial marketing process is introduced, with the aim of enhancing sustainability of entrepreneurial ventures.
A literature review is conducted in the related fields of strategy, management, entrepreneurship and marketing. The opportunity to develop an innovative and entrepreneurial oriented framework for marketing planning is based on the finding that more clarity is required in delivering entrepreneurial marketing understanding to tertiary students.
Structures of ideas are depicted in a logical and systematic way to organize phenomena (Merriam-Webster: 1999). They serve to identify the relevant variables or components that constitute some subject area of interest, while also bringing order or structure to these components in terms of the ways in which they relate to one another. A framework provides the entrepreneur with a blueprint that converts abstraction into order, allows prioritization of variables or issues, and helps identify relationships (Morris et al: 2001). The development of the entrepreneurial marketing planning model in this study is conceptual in nature, with the purpose of aiding sustainability of entrepreneurial ventures. In this paper, an integrative framework for understanding entrepreneurial marketing planning is proposed, incorporating the entrepreneurial process (Morris et al (2001). The purpose is to explain and expand on entrepreneurial marketing planning.
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The entrepreneurial process as identified by Morris et al (2001) postulate that entrepreneurial events are easier to understand and likely to achieve better results when approached as a process. The entrepreneurial process is broadly implemented, from small ventures to corporate entrepreneurship. Moreover, the processes are sustainable, identifying entrepreneurship as ongoing or continuous at the individual or organizational level. The Morris et al (2001) framework consists of six interdependent stages. The framework is depicted in figure 1. The ideation phase of the process is represented in the first two stages, opportunity identification and business concept development. The remaining stages are concerned with implementation, representing the acquisition of necessary resources, implementation of the concept, managing and eventually harvesting the venture. Key decision variables or alternatives are also depicted at each stage of the process.
FIGURE 1 Framework of the entrepreneurial process
Identify an opportunity
Emergence of new market segments
Develop the concept
New organisational structure/forms
New sales or distribution channels
Determine the required resources
General management expertise
Marketing and sales expertise
Sources of supply
Licences, patents and legal protection
Acquire the necessary resources
Implement and manage
Implementation of concept
Monitoring of performance
Payback of resource providers
Achievement of performance goals
Harvest the venture
Absorption of new concept into mainstream operations
Licensing of rights
Shut down venture
(Source: Morris, Kuratko & Schindehutte, 2001: 40).
Marketing Planning and an Entrepreneurial Focus
The marketing plan is one of the most important outputs of the marketing management process and could benefit any entrepreneur (Abratt, Beffon and Ford: 1994). Various authors' exhibit similar contents of marketing plans (Kotler: 2000; Chaston: 2000), yet few integrate an entrepreneurial perspective. This study proposes a conceptual framework integrating entrepreneurial thought into marketing strategy and planning.
Guiltinan Paul and Madden (1997) developed a conceptual model of the marketing planning and management process, incorporating phases of analysis, establishing objectives, developing strategies and programs, and coordinating and controlling. Their method integrates marketing planning at the corporate level with that at the individual product/product line level. They further introduced facets of marketing philosophy and optimum market results as a starting and conclusive point respectively. To this end, they underpinned three fundamental principles to the model: adoption of a marketing orientation by taking leads from the market; secondly, achieving a fit between customers needs and organisations's capabilities and profit goals, and thirdly implementing the marketing concept in a highly coordinated manner using a comprehensive planning approach and a long term perspective.
The proposed Entrepreneurial Framework for Marketing Planning model (fig. 2) considers the framework of entrepreneurial process (Morris et al: 2001). It integrates synergistically all six stages of the process in the marketing planning framework and builds on the model proposed by Guiltinan et. al. (1997)
In the past innovations or entrepreneurial process in organizations generally evolved outside of the marketing function in response to aggressive competitor moves, changes in the market structure or within the industry, regulatory threats or external factors (Schindehutte et al. 2000). Marketing on the other hand has largely concentrated on ensuring satisfaction of customer needs with the organization's offering and processes. To achieve this marketing process has focused on incremental improvements in performance of existing offerings in line with the roles of a supporter and reactor of entrepreneurial activity (Schindehutte et al. 2000). Increasingly, however, marketing is being expected to play a more proactive role in the entrepreneurial activities of the organization and become responsible for leading the customer as against reacting to forces. For marketing to undertake the role of an initiator and champion of entrepreneurial activity (Schindehutte et al. 2000) it is essential that marketing planning incorporates real entrepreneurial activities in its framework such as conceptualizing major opportunities and acquisition of resources.
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New opportunities such as new organizational structure/forms, new processes and distinct product/services, which are generally the result of externally driven opportunistic entrepreneurial activities, are integrated. The model doesn't distinguish between opportunities and success factors emerging from inside the organization from those emerging from outside. By merging entrepreneurial activities with marketing, the model assigns a more strategic, proactive and opportunistic role to marketing as compared to its traditional role, which was largely tactical and reactive.
Entrepreneurial marketing expects marketing to get involved with not only provision of informational resources acquired through marketing research, but also assist in exploiting resources in ways such as tapping required human skills, and acquiring financial resources such as venture capital or bank loans.
In general corporate marketing planning leading to identification of opportunities and success factors would involve a broad assessment of the environmental threats and opportunities, corporate strengths and weaknesses, its core competencies, its current product portfolio and its long term objectives (Guiltinan et. al: 1997). Further in deciding whether it should continue with its current products as they are, redevelop them, or expand in different markets it would need an in-depth situation analysis of its current offerings and markets. This model posits that this analysis need not be limited to in depth understanding of current products and markets and may include closer review of current processes and structures used for serving the markets. In addition, this model incorporates pursuit of novel sources of customer value through identification and development of different processes, structures and entirely new products and markets.
The strategic focus awarded to the planning framework provides a general format for acquisition and allocation of resources and budgets. Product objectives and strategies and allocation of resources need to be determined on the basis competitive strength that the organisation can wield in the market and on the attractiveness of the market as shown by profitability in the market and opportunities for growth.
Similarly the type and extent of resources that will be acquired will be determined by the strategic focus, the capacity to take risks, the potential for success and the strengths and weaknesses of the organisation.
In large organisations, implementation and management is often in the hands of the middle management as also completion of detailed situation analysis (Guiltinan et al: 1997). By performing a situation analysis managers are able to identify major problems and opportunities in the microenvironment of the product, which feeds into marketing planning at the corporate level and guides the selection of marketing strategies and programmes for individual products and markets at the middle management level. In addition once the decision to continue with any product or market is taken at the higher levels the implementation and management of the resources, dedicated to the product and the market, is often left to the middle management. The proposed model (fig. 2) presented here however, doesn't distinguish between middle management activity and corporate level activity and leaves it open to be applicable to any size of an organisation.
As mentioned earlier this proposed model aids in the identification and sustainability of the portfolio of ventures. Harvesting and adding to mainstream and consolidation of product /market mix and other resources is built into the model. In general, consolidation is essential. Organisations are faced with many markets, customers, product and all other developmental options. Organisations cannot pursue all possible markets and all attractive product options because human and especially financial resources are limited, even if marketing assists in sourcing them.
This model also assumes that the ability to identify and proactively act on opportunities for innovation and new ventures is contingent on a number of factors such as - extent of entrepreneurial bent of the organisation, tolerance for failure, status of marketing within the organisation, and cross-functional co-operation.
Overall, the model includes planned innovation of new products, creation of new markets and development of new structures and processes, which will lead to enhanced customer value. This departs from restricting activity to better serving existing markets through incremental improvements, which have been the mainstay of traditional marketing.