street level marketing for international micro entrepreneurship

8/14/2019 Street Level Marketing for International Micro Entrepreneurship

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Street Level Marketing for International Micro Entrepreneurship

Dr Stephen Dann and Dr Susan Dann

Keywords: Internet, Microbusiness, Street Level Marketing, Niche marketing,

Conceptual paper

Abstract

The nature of the Internet as a medium of information has created opportunities for a

global market place of ideas. As part of this new wave of idea driven commerce, there

has been a rapid increase in the number of niche orientated products being developed by

microbusinesses, operating without much of the traditional overheads of small business,

who are using the Internet as their sole distribution mechanism. This paper offers an

examination of idea driven microbusiness, and examine Internet marketing strategies for

the microbusiness entrepreneurs. In particular, the paper focuses on the use of the intra-

niche focused street level marketing concept for microbusinesses to assist in the

development of goods and services for a psychographic niche of which the

microbusinessperson is a member. In addition, this paper explores the value of the

Internet as an export medium for non-American microbusinesses attempting to access

the US ideas market

Introduction

This paper looks at the role of the Internet in facilitating global microbusiness success,

and creating market access opportunities through delivering microbusiness idea-

products across the Internet. In particular, it focuses on the ability of non-American

microbusinesses to use US based faciliator companies to deliver idea commerce

products into America. Facilitator businesses are described as those on-line


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organisations that offer business to business functions, such as printing and distribution,

for idea products such as art, music or entertainment. It also examines the value of the

business to microbusiness market from both the perspective of the microbusiness for

channel control, and the commercial opportunities for the facilitator businesses.

Microbusinesses Defined

Microbusinesses are defined as small-medium enterprises (SME) consisting of five, or

less, employees (Baldwin, 1999). For the most part, the microbusiness sector remains a

largely hidden organisational structure, as it has previously been encompassed by SME

definitions, which regarded businesses of between 1 and 100 employees as being of

roughly equivalent nature. However, with the rise in the number of SOHO (small

office, home office) businesses, and the increasing focus on small operator e-commerce

projects, the microbusiness is now a significant factor in global economics.

Characteristics of the Global E-Microbusiness

For the purpose of this paper, a global e-microbusiness is defined as an Internet based,

globally focused business organisation consisting of less than five employees. In order

to qualify as globally focused, the microbusiness must either directly ship products to

international markets, or make use of an international distribution mechanism, which

allows for global access to their products (Dann and Dann, 2001a). For example, a

microbusiness based in Los Angeles that only serves the L.A. market through the

Internet would not qualify as a global e-microbusiness. Simply using a global medium

does not automatically give the microbusiness a global focus - they must make their

product available to buyers beyond the borders of their native land in order to qualify as

a global microbusiness. For example, an Asian microbusiness that uses a US based


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distribution service, that ships exclusively to the US mainland, does still qualify as a

global microbusiness, given that is the distribution of the product outside the country of

origin of the microbusiness. However, this would exist as a technicality - for the

purpose of this paper, the global microbusiness must have a distribution strategy that

does not tie the organisation to a single country.

Nature and Structure of Idea Driven Microbusiness

Given the nature of the Internet as a medium of idea exchanges, one of the most

common aspects of e-microbusiness is the provision of idea driven e-commerce (IDE).

Idea driven commerce has been used to describe those categories of products that are

based on eliciting emotional responses from consumers for example, art, graphics,

audiovisual and interactive experiences. For this paper, IDE will be limited to those

products which are distributed through the Internet, and which are designed to elicit a

cognitive-emotive response from an end consumer, eg art, music and graphics design.

Microbusiness Outcomes: Idea Products and Services

So what then are the most common forms of cognitive-emotive idea products that are

distributed on the Internet? There are four main types of products that are best suited to

the current conditions of the Internet which are digitised art, music, interactive software

and web sites. Digitised art includes any artist or design work that can be viewed

digitally, and is available for sale commercially as either a printed work or permanent

assignment of digital reproduction rights. This limitation to the product removes any

non-commercial artist work from consideration as part of the microbusiness portfolio.

Similarly, the on-line distribution of music requires that the music be available for sale

in a commercial form (either as a licensed download or a sample of a commercially


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available album) to limit this application to those bands or musicians using the Internet

as a distribution outlet for commercial gain. Interactive software includes those

programs made available under commercial agreements, shareware arrangements or any

public licence that does not exclude commercial revenue from the sale of the product.

Finally, the microbusiness web sites are those web sites that provide content for the

intent of commercial gain, either through the sale of support merchandises, direct

subscription or advertising revenue. For the purpose of this paper, digitised art and

music will be examined, as these products have the greatest need for facilitator

companies.

Factors in Global Microbusiness Success

Despite such a variance in the type and nature of the global microbusiness, there are a

series of common factors that increase the likelihood of success for these operations.

Initially, as with businesses of any size, an e-microbusiness must have a business focus

including the need for the use of marketing. In addition, global e-microbusinesses need

to consider their distribution strategies for accessing their global target markets, eg for

those based inside America, they need distriubtion strategies for reaching non-US

markets, whereas those based outside America can use the Internet for entering the US

market. Finally, the e-microbusiness operator needs to examine whether to use their

own distribution mechanism, or to make use of an existing business to business

distribution channel. The authors have chosen to use the street level marketing paradigm

as the basis for their analysis of the marketing of global e-microbusinesses.

The Street Level Marketing Paradigm


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Street Level Marketing (SLM) is a new conceptualisation of small and medium

enterprise marketing that represents those entrepreneurial marketers servicing the needs

of their own niche-market community by delivering products that were developed

within their community (Dann and Dann 2001b). It is a technique especially suited to

the microbusiness community, as many exist to service smaller intra-niche markets. An

example of this microbusiness can be found in the development of a piece of software

(e-mail client) to meet a specific niche need (multiple e-mail account handling) after the

programmer could not find an existing product. The personal success of the program

can lead to a commercial opportunity to service the market of others who had similar

needs to those of the programmer. In the broader microbusiness sense, SLM represents

a movement away from the established belief that all marketing must be based on a top-

down research and discover target needs, then develop products to match the needs

approach used by larger organisations. Instead, this approach validates the marketing

methods of the entrepreneurial marketer who focuses on developing products to service

their own needs first, and then expands the application of this product to people with

similar needs inside their market niche.

SLM Expanded

SLM expands into a series of sub-elements which operationalise the concept, which are

illustrated in Figure 1 (Dann and Dann 2001b).

Figure 1 Components of Street Level Marketing

TAKE IN FIGURE 1


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The central tenet of SLM is the need to use the principles of marketing in the operation

of any business. In the microbusiness context, marketing is seen as the ability to

recognise that the product was developed to solve a personal need, has a wider

application in the community, and can be tailored to best suit the needs of the niche.

The four elements of the marketing orientation include the need for the microbusiness to

engage in marketing activities, use the marketing philosophy, gather marketing

intelligence and engage in some forms of marketing research (Doyle and Wong 1998;

Gray et al 1998). For a business that consists of five or less people, these tasks are

usually handled as an informal part of the daily operations, in that a client focus can be

easily maintained (marketing philosophy in action) when the members of the

microbusiness are developing their product for their own needs. Similarly, marketing

research in this context is both quantitative where necessary, but primarily reliant on

secondary data or qualitative research. Customer feedback in microbusiness

organisations is usually directed straight to the person responsible for implementing the

suggested changes.

Market Immersion is the second element of the SLM technique. This formally

recognises the involvement in the market niche as a criterion for success as an SLM

business. Where a microbusiness is focused on delivering a product to a target market,

their level of market immersion is critical in determining whether SLM is applicable.

Those microbusinesses that develop products under the conventional top down approach

to target market selection are not part of the SLM process, and must be examined under

conventional marketing techniques. The value of market immersion for the

microbusiness comes from inherent knowledge of the needs of the marketplace from

personal experience, informal information networks and a marketplace reputation.


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Reputation within the niche also forms a part of the credibility of the product and

microbusiness engaged in SLM.

Credibility splits between the source credibility theories of advertising and promotion,

and the street credibility of the microbusiness (Garbino and Johnson 1999). Street

credibility is the combination of personal and corporate reputation, perceived expertise,

social network capital, market mavenism (Feick and Price 1987), target market empathy

(Andreasen 1994, Walker Langmeyer and Langmeyer 1992) and peer group respect.

The value of street credibility extends beyond the professional reputation of the

microbusiness through to the personal reputations of the staff of the business, and their

dealings with other members of the niche.

The final element of SLM for microbusinesses is the notion ofaidmheil, which is the

notion of faith in the product and self belief and belief in the potential success of the

microbusiness. Faith in this context is not associated with a religious experience or

belief structure (although it can help when running a microbusiness). Instead, this is a

formal recognition of the need for a level of personal confidence in the product and a

self confidence in the microbusinesss ability to deliver on their promises (Flores 1998).

Quite often this is reflected in the personal mission statements of microbusiness

operators who express an inherent faith in their product, or a belief in their eventual

success. The aidmheil of a microbusiness can also be represented through the owner-

operators willingness to undertake the higher risks of small business operation and

working for themselves instead of working for another organisation.

Gaining an Internet advantage for SLM Microbusinesses


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Having proposed that a microbusiness, using intra-niched focused SLM tactics, can use

the Internet for servicing a global market niche, how can these businesses gain the

maximum effect from their on-line presence? Tetteh and Burn (2000) proposed a six

point structure for maximising on-line effectiveness for SME marketing. These are:

Define clear goals for being on-line. For the e-microbusiness, an on-line presenceshould be established with a series of goals and objectives in mind for two reasons.

First, clear goals are needed to plan the development of the microbusiness and its

on-line presence. Second, set goals allowing for calculated strategies in developing

on-line networks, business relationships and determining what infrastructure is

needed to service the targeted global on-line niche.

Develop infrastructure that adds value to the business. Microbusinesses arerestricted in the degree to which they can extend their organisational capacities

before moving into the SME category, or losing sight of their core business.

Microbusinesses are advised to only add those functions to the e-microbusiness that

result in an increase in value for example, a microbusiness that uses the Internet to

conduct wholesale transactions with on-line retailers does not need to develop their

own on-line retail outlet.

Incorporate and install networking features between stakeholders. For intra-nichetargeted products, this can be as simple as creating a means of communication and

exchange amongst niche market members through a discussion forum. Above all,

the priority should be to create a network of value between all of the relevant

stakeholders, such as the end users and the product manufacturers support staff

(where the microbusiness is a retailer), or between the microbusinesss product

designer and the retailers. Microbusinesses based around entertainment products


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such as music or literature often develop extensive networks between client-users

(their fans) and client-distributors (live music venues / book stores).

Use the virtual infrastructure to create virtual values of process, product and image.Process values involve using the on-line infrastructure to give greater depth and

detail to the on-line product for example, a microbusiness that creates specialist

wood souvenir carvings can contain additional information on the history of the art,

links to further information, and even a discussion forum for other artists. This

develops a sense of value for the customer in visiting the virtual infrastructure and

encourages repeat visits. It also serves to enhance the reputation of the product

through enhanced corporate image for the microbusiness. Virtual infrastructure can

also be used as the basis of cybercommunities, which can create a strong loyalty to

the product, web site and microbusiness (Dann and Dann 2001a)

Cultivate a virtual culture for the microbusinesss clientele. Given that an SLMmicrobusiness will be dealing in a marketing niche in which it, or the member staff,

will have personal relationships and networks, this aspect is a valuable reminder to

encourage those members of the target market to continue their interaction with the

microbusiness on-line. In addition, as mentioned above, cybercommunities can

enhance the value of the microbusiness by creating a supportive community of

product users, who can also contribute to the ongoing development and refinement

of the microbusiness products (Dann and Dann 2001a). By developing a virtual

culture that supports the microbusiness, it also serves to enhance and expand the

potential target audience from the initial niche, through the extended on-line social

networks of members of that niche. One significant advantage of the Internet over

classic distribution channels is the ease with which a niche product can expand its


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market via a horizontal spread through informal social networks of the primary

target niche (Cothrel and Williams 1999).

Continual response: The final and most essential element of the on-line existence ofthe microbusiness is the need for continual monitoring and response to market

changes. A hallmark of the SLM process is the use and reliance on constant

feedback from fellow members of the market niche as they use and refine the

product to meet their needs. This is one area where the microbusiness has the

significant advantage of flexibility and speed of response to changing conditions as

it relies on (at most) an initiator convincing four other people to respond to a

stimulus. This allows for much faster response times (particularly for solo operated

e-microbusinesses) that can begin production of new ideas immediately, when

compared with slower requests for formal permission to expand the product line. In

this way, most microbusinesses have similar characteristics to entrepreneurs when it

comes to responses to environmental change and stimuli (Collinson and Shaw 2001)

Microbusinesses can benefit significantly from engaging in structured and deliberate use

of the Internet to maximise their exposure to their target niche, and to gain the

maximum outcome for their on-line efforts. Part of this, however, also requires an

important initial decision process of determining what role the Internet will play in the

product distribution strategy.

Microbusiness: Market Access through the Internet

In terms of this paper, market access is seen as the capacity to deliver goods to a

consumer within a specific target market (eg regional market such as the East Coast of

America, or a psychographic market such as fans of impressionist painting). Selecting

the market access to be gained through the Internet returns the discussion to the notion


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of idea driven commerce, and how ideas can be moved across national boundaries

through e-commerce. It also poses the question of how the Internet can be used will it

be used as a mechanism for reaching a global audience outside of America, or will it be

used by a global company (ie an organisation based outside of the USA) to reach an

American target market?

The value of the Internet as a global export medium into the American target market is

emphased for two reasons. First, many of the idea commerce organisations that offer

Internet based product distribution services are located within the US, and that provides

considerable cost advantages for delivering into America. Second, the relatively large

percentage of Americans using the Internet, when compared to other national markets,

is still disproportionately high. As a result, it represents an opportunity for non-

American idea commerce providers to be able to deliver into a lucrative market without

having to establish a physical shop presence in the USA.

Global reach to access Global markets

The first and most touted use of the Internet for global marketing has been its role as a

low cost, highly accessible global network of exchange (Javalgi and Ramsey 2001).

From the perspective of the e-microbusiness, the Internet offers global access to either

the microbusinesss web site, or to a microbusiness facilitators web site (see below).

Issues of the removal of geographic and time constraints associated with physical store

locations give the microbusiness a much greater level of independence in their

production and distribution of idea products.

Global Reach to Access USA Market


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An alternative view of the role of the Internet arises from the current American focus of

a large number of the idea commerce facilitator companies. These organisation have

geographically limited distribution networks, combined with a range of US trade laws

and taxes that restrict the movement of certain goods out of the USA. Rather than seeing

the limitations of American based products as a flaw in the global e-commerce

economy, many international microbusinesses can use these services as a method of

entering the American market. For example, a graphics designer working in Puerto

Rico designing products with an Hispanic focus can access US based print companies

through the Internet, and facilitate an entry into the American marketplace that would

otherwise be difficult to achieve from their home country. Similarly, non-American

musicians can distribute their work through American based music web sites without

requiring a work visa or permits that would be needed to tour America, or an importer

to bring the music content into the USA. Consequently, the Internet significantly

lowers many of the entry barriers faced by international microbusinesses in entering US

markets.

Microbusiness Facilitators: Microbusiness to Business Commerce

The ultimate value of the Internet for many microbusinesses has been access to a range

of intermediary business to business service providers. The ultimate irony of the

Internet has been the rise of the very intermediary channel that it was alleged to have

been capable of eliminating. Business to microbusiness commerce has flourished, as

idea based commerce providers can create economies of scale in storing, processing and

dealing in idea products. One aspect of the rise of the idea product, and the growing

success of the business to microbusiness relationships, has been the ability of digital

products to be reproduced in almost limitless supply.


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Additionally, the digital product is able to be transferred without recourse to

conventional product distribution channels, and usually through a range of automated

processes (preset upload scripts where the microbusiness controls the input of the

content). The increase in self-service B2B systems works to the advantage of

microbusiness operations, as the content creator of the uploaded materials is usually

also responsible for the product pricing and description. Compare this to a process

where the creator hands over their work to a printer, who produces the products for a

wholesaler, who then onsells to a retailer, who writes the product description and sets

the price, and this is then conveyed to the target market via public relations and

advertising. In niche products, particularly SLM based products where street credibility

and source credibility are important factors for success, it is important to have the

shortest viable chain from product producer to product user (preferably the product

producer should also endorse their product by being a product user as well). The

automation of these processes also works to the advantage of the consumers, who can

access the microbusinesss product without needing to rely on the availability of the

microbusiness owner.

Case Studies of Microbusiness Facilitators

The final element of the paper examines a brief series of case studies of three different

forms of on-line microbusiness idea product facilitators. These are:

music distributors short order merchandise; and graphical design printing and production


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Global Music Marketplace MP3 Distribution

Perhaps the most infamous use of the Internet as a distribution mechanism was the rise

in peer to peer file sharing during the late 1990s with services such as Napster and

Gnutella. Whilst the majority of public attention for these services was focused on the

illicit trade of copyright materials, these peer to peer services also presented new

delivery alternatives for copyright owners wishing to distribute samples of their work.

In addition, the proposed redevelopment of Napster into a fee paying content search

service (prior to Napster filing for bankruptcy) permitted independent musicians

operating as microbusinesses to use the service as a sales and distribution outlet (IUMA

2002). Microbusinesses hosting content through IUMA can rely on the service to act as

an agent, distributor and collection agency for their products.

The independent music industry is also strongly associated with SLM business and

microbusiness productions in that many musicians produce music products for their

own niche (eg surfers producing surf music, DJs developing turntable equipment), or to

provide microbusiness services such as small scale recording studios or video

productions to fellow artists.

Just in Time Microproduction Delivering to a Market of One

Associated with the development of microbusiness music producers is the concept of

just-in-time microproduction, which is designed to service the product needs of the

microbusiness sector. One on-line music host, MP3.com, provides just-in-time

production of short runs (include individual pressings) of mixed media audio and data

CDs for the microbusiness musicians using their site. Similarly, other microproduction

services such as Cafepress.com produce short run merchandise for microbusiness


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clients. The Cafepress service hosts the microbusiness users images associated with a

range of products (eg mugs, shirts, mousepads and hats), and also provides secure on-

line purchasing arrangements for the store. The microbusiness owner provides the

graphical content for the products in a non-exclusive licence arrangement, and the

Cafepress site provides the production, on-line store, and shipping for the

microbusiness.

On-line Art Production- Idea Driven Commerce

The third aspect of business to microbusiness support is the manufacture of idea driven

commerce products by enterprises such as Zazzle.com. The Zazzle site provides on-line

hosting for high resolution graphics that can be purchased through the site as posters

printed to either high resolution paper or direct to canvas. One of the key points of the

service, which they highlight to potential customers and users, is that they see their role

as enablers of idea commerce by providing the intermediary function of production and

shipping for digital content. Microbusinesses using this service can focus on the

production of the idea content (artistic work) without needing to develop extended

supply chains of printers, art exhibitors and distribution networks. The Zazzle service

also facilitates niche orientated art publishing by offering a key word (up to 9 per

image) search mechanism, and up to four genre locations (eg landscape, religion,

patriotic, college life) in order to unite similar art and artists, as both a convenience to

the consumers using the service, and the intra-niche focused microbusiness artists.

The essence of these services is to provide economies of scale to collective groups of

microbusinesses by diffusion of establishment costs of capital equipment across a wide

range of product users. In addition, as these services provide an aggregate meeting


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point for a range of independent suppliers, they are able to host intra-niche markets - for

example, MP3.com can host an intra-niche market for producers of classical music. At

the same time, the producer-users of the intra-niche products are able to deal directly

with members of the same niche market. In general, systems such Zazzle and MP3.com

allow the microbusinesses to produce just-in-time idea products, for intra-niche markets,

without the expense of start up costs, or the need to sink large amounts of capital into

product stockpiles.

Conclusion

The emergence of facilitator organizations on the Internet opens up a vast array of

marketing opportunities for micro businesses. The global nature of the Internet brings

with it potential for global expansion, although in the past, the logistics of shipping

world wide were often beyond the scope of micro businesses. Having access to products

sales websites that could not deliver the products was more likely to cause frustration

for out of range potential customers than to make sales. Recognising that many micro

businesses are intra niche operators, traditional marketing models are of little relevance

as they assume a level of resourcing for marketing activities that is unrealistic.

The emergence of the successful new model of on line facilitator organizations

simultaneously overcomes problems of marketing, production and delivery for globally

focused micro businesses. Assuming the continued development and acceptance of

facilitator organizations on line, barriers to entry for small businesses, particularly into

difficult to enter markets like the US, will continue to be substantially reduced. Further

the new business model of just in time off shore manufacturing opens up new

opportunities for a variety of creative micro businesses. This paper has outlined some of


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the current developments in this field and provides a basis for future comparison as the

global micro business develops as a future trend in international commerce.


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Figure 1 Components of Street Level Marketing

Marketing

Orientation

Marketing Philosophy

Marketing Intelligence

Marketing Research

Marketing Activities

Source Credibility

Street Credibility

Credibility

Self belief

Product belief

AidmheilMarket

Immersion


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Web sites

www.iuma.com

www.mp3.com

www.cafepress.com

www.zazzle.com/welcome/home/default.asp

street level marketing for international micro entrepreneurship

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