Marketing For Entrepreneurial Small Businesses Business Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.


'Marketing in SMEs is fundamentally different than marketing in large firms. This is partly because marketing implementation can be more important to success than planning and strategy' (Bjerke & Hultman 2002). Yes I completely agree to the writers statement. This can be proven with the help of certain examples. But before moving ahead let us first know the actual meaning of entrepreneurial marketing and some brief history related to small business marketing and marketing techniques used by large firms. Since last few decades a new phase of marketing is gaining importance as a subject and a topic for research. This new area of marketing is known as, "Entrepreneurial Marketing." In the present century Entrepreneurial marketing is gaining importance on a large scale. This is due to the recession phase which has caused many large firms to reduce their labor force. This is the only reason which has led to the growth and the importance of small and medium scale industries. The SME's are the ones providing employment opportunities on a large scale there by contributing in the economic development. Marketing and entrepreneurship are treated as two separate topics for study. Let us see the actual meaning of both the terms.


Entrepreneurship can be defined as a process which helps in the development of something valuable by contributing efforts and time, forecasting various financial and social risks and by achieving the personal satisfaction and monetary benefits.


The American Marketing Association defines Marketing as, "the process of planning and executing the conception, pricing, promotion and distribution of goods, services and ideas to create exchanges that will be responsible in satisfying the individual and organizational goals." (Dictionary of marketing terms cited in kotler 2003, pg 9)

Entrepreneurial marketing was previously considered synonymous to the small business marketing. But now many authors consider these terms as two different entities. Schumpeter (1934) was the first one to consider entrepreneurship as a completely different entity irrespective of business owners and managers. According to Schumpeter entrepreneurship is the process carried out by an entrepreneur whose function is to carry out new and innovative ways of production. So let us explore the difference between entrepreneurial/large firms marketing and SME's marketing.

Entrepreneurial/large firms marketing:-

The entrepreneurial marketing is the collaboration of two separate management areas. This term has been evolved as a matter of fact to explain the facts of marketing which are not covered by the traditional marketing techniques. Entrepreneurial marketing as defined by American Marketing Association and extended by Hills and Hultman (2008) is, "a process and the spirit of pursuing opportunities and creating new ventures thereby increasing the value of the potential customers by maintaining relationship with the help of innovativeness, creativity, flexibility and market immersion, etc." From the above definition it can be said that various marketing aspects and entrepreneurial aspects are blended into a conceptualization where companies can use marketing as a process to act entrepreneurially. (Morris, et al. 2002) According to Kotler (2003, p.4-5) as the organization grow there are three stages of marketing practice identified.

The very first stage is 'entrepreneurial marketing'. Maximum companies are started by the individuals who grab every single opportunity available and live by their own wits to survive in the market. For example the Boston Beer company founded by Jim Koch whose beer has been a number one selling 'craft' beer had low budget for communication in 1984. He used to carry beer bottles from one bar to other so as to persuade bar tenders to sell it. He used the techniques of direct sales and public relations for 10years due to the lack of advertising budget. Today he is the leader in selling craft beer with a budget of 210$ million.

The second stage of practice is 'Formulated marketing.' Small and medium businesses move towards formulated marketing as soon as they are successful. For example Boston beer now spends a sufficient amount of money in hiring sales people, advertising and in carrying market research. It has also established its own marketing department.

The third and the final stage is 'Intrepreneurial marketing.' In the entrepreneurial stage, companies lack in the creativity and passion of the guerilla marketers. Hence the managers of the company need to improve their relationships with the customers so as to find out ways to increase the customer value. Most of the firms stay small as the managers and the owners lack in motivation and are reluctant towards growth. The business behavior of these firms depends on the manager's personal goals and targets. As soon as the targets are achieved the firm loses its motivation for further growth.

There are other firms who strive to grow in the market like IKEA. The founder, Ingvar Kamprad's dedication towards growth leads to the broadening of the firms goals, thinking and action. Such firms are referred to as entrepreneurial/large scale firms. They have a fixed routine and are always dedicated towards growth and expansion. Entrepreneurial marketing was basically in terms of marketing was seen for creating certain amount of value to the customers.

In mainstream marketing, the most established strategies for gaining competitive advantage emerge from Ansoff (1957) and Porter (1980).

Ansoff's famous product/market matrix results in four different alternatives:

• Market penetration

• Market development

• Product development

• Diversification

From Porter (1980) we have learned four similar, although different, generic

Marketing strategies:

• Overall cost leadership

• Product differentiation

• cost focus

• Differentiation focus

SME's marketing:-

The root of the entrepreneurial marketing is grounded to some extent within the small and medium sector enterprises. The large firms marketing are based on the growth and entrepreneurial behavior whereas small business marketing regardless of its entrepreneurial status is compared to the marketing behavior in SME's. Small business marketing differs in practice from that of large firm marketing. In small business marketing the organizational layers are very few between the decision makers and the customers who lead to flexibility and speed in reaction for the changes in the customer needs. ( Bjerke and Hultman, 2002). The market information is easily gained by the owner and the manager with the help of personal market relations. (Carson, 1995) According to Bjerke and Hultman, 2002, "every small firm needs entrepreneurship for the purpose of growth and this growth is assimilated from its advantage in marketing. In smaller firms decision making is ad-hoc and the firms are able to grab the opportunities immediately and formulate strategies which is much slower in large and entrepreneurial firms. Marketing at the entrepreneurial interface is indeed one of the most focused and growing literature. This focus is due to a number of reasons which proves that marketing conducted by smaller firms is different from that of larger firms. For example, the set processes are followed by the larger firms whereas the smaller firms conduct self marketing campaigns. (Carson, 1999) SMEs contribute 50 per-cent of private sector income, 54 percent of the private sector jobs in the U.S. and most of the net new job growth. (U.S. Small Business Administration, 2004)

Final Statement:-

Today companies have to carry out their operations in a very turbulent environment where the risk is very high and ability to forecast is diminishing. Organizational goals and targets are unclear. Organizational planning, forecasting and management is getting difficult and in some cases even impossible. For this the leaders, managers and the entrepreneurs have to find out innovative ways and learn modern techniques but even have to create a market place for the customers. The most important thing for large as well as small firms is the Entrepreneurial marketing behavior. The entrepreneurial marketing research is grouped along the continuum where traditional marketing theories are applied to the SME's as a research on the one end of the continuum whereas the same research with different application is applied when assessed with the large firm on the other end. The entrepreneurial behavior and growing companies provides a base for such research. From such viewpoint there is a huge difference in entrepreneurial marketing and marketing management. Entrepreneurial marketing is not dependent on linearity, planning and rationality.(Carson, 2005) according to Hills (1995), "SME's require a simpler version of marketing practices which are used by large scale firms. From this we can definitely conclude that marketing in the SME's is fundamentally different from marketing carried on in large firms.