venture marketing summary

8/2/2019 Venture Marketing Summary

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Venture marketing Summery

0. Defining Entrepreneurial Marketing

Marketing (American Marketing Association )= The activity, set of institutions, and processes forcreating, communicating, delivering, and exchanging offerings that have value for customers, clients,

partners, and society at large1.

SMMEs have a lack of marketing skills, limited market presence, and limited market power

Marketing (Zyman) = a strategic activity and a discipline focused on the endgame of getting more

consumers to buy your product more often so that your company makes more money

Entrepreneurial Marketing = Entrepreneurial marketing is selling more products or services, to more

customers, more often, for more money, and at the same time being more efficient to create more

profit

Two things an entrepreneur needs to know before actually embarking on the route to more profit:

1. What am I selling to whom? (segmentation and targeting)

2. Why will these segments buy? (Positioning)

Sources of competitive advantage are technology, (excellent) design, a perceived high quality,

continual innovation, excellent customer service, reputation, and/ or other differences in customer

perception.

Value can be created along 3 dimensions:

1. Performance value (superior functionality)

2. Price value (low cost)

3. Relational value (such as personalized treatment)

‘boost the profit’

1. All possible customers; target group

2. Conversion; percentage of target group that buy product/service

3. Number of transactions per customer

4. Sales per transaction

5. Profit margin; difference between sales price and cost of sales

How does it relate to entrepreneurial marketing?

a. Be more efficient: cost of sales down

b. Get more money: pricing strategy

c. Sell more often



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d. Sell to more customers

e. Sell more products or services

1. Entrepreneurial marketing – a historical perspective on development and

practice (Collinson & Shaw)

- Traditional marketing: operates in a consistent environment, where market conditions are

continuous and the firm is satisfying clearly perceives customer needs

- Pure entrepreneurship: operates in an uncertain environment, where market conditions are

discontinuous and the needs of the market are as yet unclear

Overlap in 2 areas:

1. Where market conditions are continuous and entrepreneurship aids the process of

identifying as yet unperceived needs

2. In a discontinuous market where entrepreneurship guides marketing strategy to develop

existing needs in a new environment

3 areas of interface:

1. They are both change focused

2. Opportunistic in nature

3. Innovative in their approach to management

Successful marketing is undertaken by firms who identify new opportunities, apply innovative

techniques to bring the product/service to the marketplace and successfully meet the needs of their

chosen target market

Entrepreneurship often associated with small/medium firms (instead of small – large) because:

- In smaller firms entrepreneurial activity is often more visible in smaller firms

- When firms experience growth it can be difficult to sustain an entrepreneurial focus in a

multilayered management structure

Entrepreneurs will focus on various opportunities at once and are not easily convinced by the

sequential, structured approach to management, which is the focus of most management/marketing

texts

Entrepreneurial effort = energy, zeal, commitment, determination, persistence, opportunity and

focus, which are exhibited by the entrepreneur/ management team

Themes relating to management of entrepreneurial marketing :

1. Process of managing entrepreneurial marketing differs from the process of managing regular

approaches to marketing: because it commonly takes place within a fluctuating environment

2. Considers the position which marketing holds within the organization

3. Within entrepreneurial organizations, an informal rather than formal approach is often

adopted to the management of marketing



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Management of regular marketing: careful planning, rigour and familiarity with statistics and figures

Management of entrepreneurial marketing: intuition, informality and speed of decision making

4 key competencies for entrepreneurial marketing management:

1.

Experience of both the industry and the job2. Knowledge of the product and the market

3. Communication skills in being able to direct the organization

4. Sound judgement in being able to identify good market opportunities or key appointments in

personnel

Networks have been found to provide accurate information and advice, which can be used to take

market decisions and evaluate the validity of these decisions. Reasons to explain effectiveness of

networks:

1. Lacking information and knowledge, such organizations often make use of their personal

contact networks to provide them with market information and advice they need

2. As entrepreneurs rarely have the time, resources or the inclination to purchase market

research reports or seek the advice of business advisers, they often glean market information

from their personal contact networks, typically when undertaking other activities, such as

liaising with suppliers

2. An investigation of marketing practice by firm size (Conviello, Brodie &

Munro)

Both entrepreneurship and marketing have a customer focus, behavioral orientation that’s involved

with making the deal and developing distinctive competencies: Both are affected by environmentalturbulence and characterized by risk-taking and change

Small firms: limited resources, characterized by interdependence, distinctive managerial style,

ownership and scale/scope operations less rigid, sophisticated and complex than larger firms

marketing practices are different than those from larger firms

H1a: Formal approach to marketing activities is not practices by small firms, only large

H1b: market planning is more short term in smaller firms

2 patterns:

1. Firm size is a significant factor influencing marketing processes and practices, with small firm

orientation, perception or activities differ from larger firms

2. These conclusions are drawn from studies which have consistently used the traditional view

of marketing as their primary conceptual framework Product, price, promotion and place

(distribution) in order to generate a transaction (attract customers)

Marketing is process of identifying, establishing, maintaining and enhancing relationships with

customers and other stakeholders so that the objectives of all parties involved are met

4 types of marketing practice (P. 529 TABLE!)



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- Transaction marketing: involves a firm attracting and satisfying potential buyers by managing

the elements in the marketing mix

- Database marketing: tool used by businesses to develop and manage long term relationships

between company and its targeted customers

- Interaction marketing: implies face to face interaction within relationships

- Network marketing: occurs across organizations, where firms commit resources to develop a

position in a network of relationships

H2: Smaller firms are more likely to practice interaction marketing and network marketing

Managers need to analyze their organization’s achievements relative to specific objectives like:

sales, growth, market share, profitability, customer satisfaction or new product introduction

Larger firms are expected to apply variety of performance measures across these areas

Small firms may be more ad hoc in their control efforts, only one or two areas

H3a: Smaller firms are less comprehensive in scope

H3b: Market performance measures differ from larger firms in that they emphasize customer-

based information and profitability measures

RESULTS

- Marketing planning: larger the firm more formal, both small/large firms don’t have long-

term plans, managers from smaller firms feel the need to improve their planning skills H1a

supported, H1b partially supported)

- Marketing Practices: Smaller firms are more likely compared to larger firms to:

o Emphasize product/service offering in their market planning activities o Be interpersonal in their contact with primary customers

o Invest in personal relationships

o Conduct marketing at senior/general management level, rather than using specialist

marketers

o Emphasize marketing communication that is directed to a specific customer segment

rather than the mass market

Managerial intent, purpose of exchange, exchange duration do not differ for large small firms

H2 partially supported

- Market performance measurement: smaller firms are less likely than larger firms to use any

measures and the largest differences appear for competitive measures of performance

H3a is supported, H3b partially supported

IMPLICATIONS

1. To accurately depict and understand differences in approaches to contemporary marketing,

our theoretical framework should include full spectrum of marketing types

2. It is important to recognize that small firm marketing, although in unique in certain aspects,

is not fundamentally different from large firm marketing



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3. It is likely that most firms will experience the pressure to develop the capacity to practice all

4 types of marketing within their organization

3. Putting entrepreneurship into marketing: The processes of

Entrepreneurial marketing (Stokes)

- Traditional marketing: conceived of as a deliberate, planned process; marketing concept

assumes that a careful identification of customer needs through formal market research

precedes a structured development of a new products/ services in response to those needs

- Entrepreneurial behavior: regarded as representing a much more informal, unplanned

activity relying on the intuition and energy of an individual to make things happen

Entrepreneurship:

1. Personality studies of individuals that seek to identify common psychological and social traits

amongst entrepreneurs compared to non entrepreneurs (opportunistic, innovative,

proactive, restless)2. Behavioral investigations into what entrepreneurs do and the processes used to carry out

activities

Drucker: someone who searches for change, but responds to it in an innovative way,

exploiting it as an opportunity

Marketing:

1. Marketing as an organizational philosophy: set of values and beliefs concerning the central

importance of the customer to the success of the organization

2.

Marketing as a strategy: defines how an organization is to compete and survive in themarket place

3. Marketing methods: specific activities and techniques, like product development, pricing,

advertising and selection of distribution channels, which implement the strategy

4. Market intelligence: underpins each of these marketing principles

Entrepreneurs and owner-managers of small business define marketing in term of tactics to attract

new business word of mouth: marketing is not that necessary

Customer orientation vs. innovation orientation: usually assessment of market needs come before

new product/service development, entrepreneurs do it the other way around as they start with an

idea and then find a market for it

Top down vs. bottom up strategies:

Top down: strategy process develops in the following order:

1. Profiles of market segments are developed first using demographic, psychological and other

buyer behavior variables

2. Evaluation of attractiveness of each segment concludes with the selection of target segment

3. Selection and communication of a market position differentiates the product or service from

competitive offerings

Bottom up: targeting processes through the following stages:



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1. Identification of market opportunities: informal, ad hoc activities identify possible market

opportunities

2. Attraction of an initial customer base: find customers who may conform profile anticipated

by entrepreneur

3. Expansion though more of the same: expand by looking for more customers of the same

profile

- Advantages over top down: requires fewer resources and it is more flexible and adaptable to

implement

- Disadvantages over top down: less certain of success because it is over-dependent on

reactive rather than proactive marketing strategies, It takes longer to penetrate the market

to full potential, resulting in a limited customer base

Product, Price, Promotion, Place vs. Interactive and word of mouth marketing: Entrepreneurs do

not fit in the 4 p’s but involve direct interchanges and the building of personal relationships, they

prefer interactive marketing

Word of mouth: (1) Involves face to face, direct contact between a communicator and a receiver (2)

The communicator is perceived to be independent of the product or service under discussion

Disadvantages:

1. Self-limiting: reliance on networks of informal communications restricts organizational growth to

the limits of those networks

2. Non controllable

Market research vs. Networking: Entrepreneurs gather information informal through networks

instead of formal market research

Marketing Principles Traditional marketing Entrepreneurial marketing

Concept Customer-orientated, market-

driven, product development

follows

Innovation orientated, idea

driven, intuitive assessment of

market needs

Strategy Top down, targeting and

positioning

Bottom up targeting of

customers and other groups

Methods Marketing mix, 4/7 p’s Interactive marketing, word of

mouth

Market intelligence Formalized research and

intelligence systems

Informal networking and

information gathering



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3 had more resources/ proficiency than 2, which had more resources/ proficiency than 1

Activities contributing to product success and need for improvement: Most SME innovators

perform well in technology and production related activities, but had difficulties with marketing-

related activities

Better resourced SMEs have higher level of quality in implementing NPD activities



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5. Product launch, product advantage and market orientation in SMEs

Ledwith & O’Dwyer

This study aims to examine the impact of product launch, product advantage and market orientation

on new product development performance and organizational performance in SMEs.

The study identified several significant differences between the impact of product launch,

product advantage and market orientation o new product development and organizational

performance I small and large firms. It also indicate several areas in which small firms can

improve their new product and organizational performance.

Only literature on large firms, scare related to small firms

Te managerial implications suggest that managers need to place a greater emphasis o

product launch proficiency, new product characteristics and market orientation.

Influence of

1. Product launch

2. Product advantage

3. Market orientation

On new product development

Influence performance in SME’s

Relationship between these 3 points and performance SME’s

Literature suggest that organizations that are market-oriented can better satisfy customers, thereby

improving their organizational performance.

Relation between product launch and performance

New products critical for may organization to adapt to changes in markets, technology and

competition.

Strong correlation between new product success and a company’s health it is essential that

organization maximize the potential of their new products.

Key success factors for new product success:

Launch budget

Launch strategy

As first the product greater market share

Amount of marketing resourceseffective testing and research

Launch successhigh product advantages

In summation, the literature reviewed indicates the significance of proficiency in market testing,

launch budgeting, launch strategy and launch tactics to new product success and organizational

performance.

Product advantage and performance

Product advantage is a critical determinant of the success of new products and services

Complex nature of product advantage whereby an over focus on customer needs can lead to less

competitive products.

product advantage leads to the creation of superior value for customers relative to that offered by

competitors.

Product advantage = is the perceived level of a product’s design, attributes, and quality relative to

competition”.

Important driver of the product success.



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however, a study of NPD in small US firms found that small firms were more likely to succeed with

new products that were compatible with existing processes, products and technologies rather than

highly innovative and superior new products.

In summation, the literature reviewed indicates that product advantage is defined I terms of a

product’s quality, superiority, compared to competitor products and its ability to provide benefits and value to customers. Additionally, product advantage has been found to be a key determinant of new

product success and I turn organizational performance.

Market orientation and performance

Positive relationship between organizational performance and the adoption of a market orientation.

Organizations that are market-oriented, tracking and responding to customer needs and preference ,

can better satisfy customers thereby improving their organizational performance.

Implementation of market orientation leads to improved financial and marketing performance.

Langerak found that market orientation has no significant direct relationship with organizational

performance.

Slater and Narver found that competitor orientation is not significant in the relationship betweenorganizational performance and market orientation.

In summation, the literature reviewed indicates the significance of customer orientation, competitor

orientation, and interfunctional co-ordiation to new product success and organizational performance.

New product development in small firms

Significant differences between NPD management in small and large firms.

there is a level of consensus that small firms should develop new product that

are compatible with existing technical standards

should adopt one core technology

avoid high levels of diversification

difference between small and large firms, NDP processes in small firms:

informal

organic grow

better communicationinterfunctional coordination

working model (see figure 1 p. 100) relates

product advantage

product launch performance

interfunctional coordination

customer orientation

with two performance measures of interest new product performance

organizational performance

discussion and implications of the research

performance of large firms is significantly higher than that of small firms

organizational performance is liked to new product performance in both small and large

firms

large firms are significantly more proficient at market testing and launch tactics

small firms have been found to be less proficient at launching new products than large firms.

In other words by improving product launch proficiency small firms should improve their new

product success.



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The results suggest that when small firms try to develop unique, innovative and superior

products they tend to experience poor financial returns

A possible explanation for this could be found in Yap and Souder (1994) research, which

suggests that small firms are more likely to succeed with compatible rather than innovative

new products.

The study shows that in small firms there was a significant link between market orientationand performance, this was not reflected in large firms. Market orientation more significant

impact on small firms, than large firms.

conclusion

difference between small and large can be summarized:

Small firms perform less well than large firms in terms of organizational performance, new

product performance, and product launch proficiency.

Market orientation, comprising interfunctional coordination, customer orientation and

competitor orientation, is significantly linked with new product success in small but not in

large firms.

Proficiency I market testing and launch budgeting are linked with organizational and newproduct performance in small but not in large firms.

Areas small firms can improve their new product and organizational performance

Improving the product launch process

Maintaining high levels of customer orientation

Competitor orientation and

interfunctional coordination

determining the new product characteristics linked with new product success.



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6. “Barriers to successful new product development within small

manufacturing companies”

Small and Medium enterprises face numerous barriers, ranging from capital to

financial resources. However, these are not the only obstacles that they face; a lot of other

major barriers that SMEs face are related to new product development. There are 4 major

aspects that are connected with SMEs that lead to the barriers. First, these aspects will be

discussed, then the major barriers to product development will be discussed and an example

will be given.

The four major aspects or characteristics of SMEs that lead to the barriers further on

are: Entrepreneurs focus too much on technological issues or the exposure of effective

marketing, SMEs do not have access to genuine venture capital for long-term projects, they

need the capital, The internal skills need improvement and the entrepreneurs lack the trust in

themselves to engage in external services and SMEs fail to recognize requirements and theircommunication levels are poor. All these characteristics lead to the barriers that will be

discussed further on.

With all of the aspects above kept in mind, adding one very important aspect to the

mix is essential. The other aspect is: SMEs are run and controlled by one owner. This lead to

an autocratic and egocentric form of management where the owner is the only one who

dictates any orders; this inhibits one-way thinking and this acts as a barrier to integrating new

products. For example, if a SME is selling t-shirts and then a couple of employees found out

that if they start selling uniquely designed hoodies could be more profitable in the future.

When they bring it up with the owner, the owner still decides to sell the t-shirts because theyare profitable in the short-term. This way due to his power, short-sightness because he is

focused on decreasing costs and his time constraints and also his inexperience when it comes

to designs the owner acted as a barrier to a new product development.

In conclusion, all these aspects mentioned above lead to the MOST important barriers

that face all SMEs when it comes to new product development:

1. The influence of a dominant owner/manager

2. They focus on time and costs more than other key factors

3. They fail to understand the importance of product design



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7. Branding – does it even exist among SMEs?Mari Ahonen (2008)

According to the results found over the last years, branding in SMEs is a rarely studied phenomenonamong academics. Branding, especially corporate branding, is often a radically new concept for

people in small and medium sized enterprises (SMEs). The notion “brand ” can be defined as: product

marketing where the role of branding and brand management has been primarily to create

differentiation and preference for a product or service in the mind of the customer . It has developed

two different perspectives. First product branding, where “brand” has the definition that it is a

product or service, which a customer perceives to have distinctive benefits beyond price and

functional performance. Here it starts from a customer centric product branding.

Secondly, it has been noticed that brand architectures in companies exist not only on the product

level, but also includes corporate branding. Corporate branding is defined as a systematically planned and implemented process of creating and maintaining a favorable image and consequently a

favorable reputation for the company as a whole by sending signals to all stakeholders and by

managing behaviour, communication and symbolism. This is the multidisciplinary perspective where

a starting point has been an organization itself.

Until 2005, brand management receives little or no attention in the daily run of affaires in SMEs.

SMEs lack financial resources and brand management is not given the priority it needs for a strong

grand management. Branding is a critical issue in the SME sector because brands allow actors, such

as organizations, to say things about themselves in ways that every-day language cannot express. In

addition, brand was often considered as a strategy to distinguish a company’s offer and to create andmaintain customer confidence.

SME branding studies concentrate on product branding, however corporate branding discussion have

become more and more important. However, it was interesting to find out that most of the studies

concentrated on SME in terms of corporate branding, rather than product branding. Though, it was

noticed that theoretical backgrounds still utilized the knowledge of product branding rather than

purely corporate branding. SMEs lack the resources that large companies have, they have limited

resources and budget. Moreover, branding is expensive, that is the reason why small companies

cannot do that. Nevertheless, coherency in all corporate communications is good for supporting the

reputation of the company.

The results suggest that branding is not only a large companies’ issue but that SMEs could benefit

from these issues as well, and they should be more carefully taken into account with small business

companies. Now the theoretical background of the studies leans towards product branding

discussions. However, a small firm is a comprehensive complex, and corporate branding perspective

might give some new sights into this area. As the study revealed, branding does exist among SMEs.

Until these days, it has been rarely studied phenomenon, but little by little its importance is

understood, and it is considered as a new, interesting research area.



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8. Brand Management in Small to Medium Sized Enterprises (Berthon, Napoli,

Ewing, 2008)

Introduction:

There are limited empirical studies on alternative business philosophies, such as brand management.

However, the literature that is existing, mostly focuses on the analysis of large organizations (LOs).

This is remarkable, since small to medium-sized enterprises (SMEs) constitute the vast majority of the

total of organizations. The lack of research on brand management in SMEs could be due to the

following 2 reasons:

- SMEs lack the resources, capabilities, marketing power, compared to LOs?

- SMEs fail to realize that brand establishment can be maintained with relatively low budgets?

The article addresses this issue, because the authors are convinced that despite for the SMEs

limitations, they are able to successfully establish their brands. It will be explained whichmanagement principles, practices and philosophies are most amenable by SMEs, by comparing them

to LOs.

SME Marketing Management:

There are some key differences between SMEs and LOs that influence the marketing management

procedures:

- The CEO of an SME is often the main decision maker about all parts of the business (finance,

marketing, production, distribution, regulations, legal issues)

- SMEs face resource constraints, strategic planning is limited and decision making is often

based on a ‘’survival mentality’’. The management style is very personal to the firm’s owner.

Some other key differences are an important advantage for SMEs in brand management:

- SMEs tend to be very entrepreneurial, very flexible and innovative allows them better to

serve niche markets and be easily responsive to customer needs (get close to customers,

obtain valuable feedback).

- SMEs have a greater ability to enter new product markets, by leveraging marketing strategies

better.

- SMEs show a higher order level of organizational learning and are more adept at acquiringand utilizing market information, due to their entrepreneurial nature.

Problems for SMEs also arise from their difference with LOs:

- From a lack of marketing expertise and resources of financial, technological and managerial

nature, difficulties arise in interpreting market information, selecting media and designing

content.



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- Managers of SMEs lack the experience and need a lot of experimenting and learning on

brand management before becoming successful.

Concluding, marketing principles conventionally taken from existing resources can hardly be applied

to the SMEs context, because the differences in decision making, resources and practical nature of

the marketing management in SMEs.

Brand Management:

Brand management can be defined as the process of creating, coordinating and monitoring

interactions that occur between an organization and its stakeholders, so that the organization’s

vision corresponds with the perception of the brand by the stakeholders.

Brand management can bridge the gap between a brand’s image and its reputation. The main

purpose of it should be to ensure that marketing efforts are directed toward establishing and

maintaining a positive brand image in the minds of the key shareholders.

Results:

Brand Management Practices between SMEs (less then 200 employees) and LOs were compared

looking at the BMPs of low performing organizations and high performing organizations.

The following BMPs where included in the analysis:

- BMP 1 = brand delivers benefits customers truly desire

- BMP 2 = brand stays relevant

- BMP 3 = Pricing strategies are based on perceptions of value

- BMP 4 = brand is properly positioned

- BMP 5 = brand is consistent

- BMP 6 = brand portfolio and hierarchy make sense

- BMP 7 = brand uses full repertoire of marketing activities to build equity

- BMP 8 = brand managers understand what the brand means to customers

- BMP 9 = brand is given proper support and it is sustained over the long run

- BMP 10 = company monitors sources of brand equity

One of the conclusions has been that there are indeed key differences in the way that SMEs and LOs

implement their BMPs. Furthermore, well performing organizations (either small or large) implement

BMPs to a greater extent than organizations which perform worse.

SMEs that are focused on the management of their brand, have clear advantages over SMEs that

aren’t particularly aware of their BMPs. The first mentioned are generally better at understanding

their customers’ needs and their brand perception. Furthermore, they turn out to be more

competent at creating valued and relevant brands for their customers.



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Lastly, skills as brand consistency, the creation of a coherent brand architecture and the

communication of the brand’s identity to all the stakeholders turns out to be more prevalent at SMEs

which put their emphasis on brand management.

To conclude, large organizations (LOs) have the resources and expertise to be better at, and more

aware of their BMPs. However, SMEs do have the potential to optimize their performance, using

brand management practices. They can do this by mirroring themselves to the practices used by LOs

and adapting their management to their own needs and circumstances



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9. "A theory of brand-led SME new venture development ". Merrilees, B.

(2007).

Abstract

Purpose : The purpose of this paper is to understand how branding can facilitate small business

development of new ventures.

Design/methodology/approach : A conceptual approach was used for understanding branding in new

ventures. A model with eight propositions has been developed and then validated using then existing

case studies of exceptional entrepreneurs.

Findings : The key mechanisms proposed for branding to assist small business create new ventures

include opportunity recognition, innovation, business model development, capital acquisition,

supplier acquisition, customer acquisition, and success harvesting.

Originality/Value : The paper helps redress a relatively lack of research into small business branding.

Previous research has mainly focused on small business brand management of existing ventures. The

findings are readily translatable to small businesses launching new ventures. The pauper extends the

existing small business branding literature into a new domain, having a strong entrepreneurial

character.

Introduction

Small business branding is often seen as an oxymoron. Branding is usually considered the province of

big business. Many members of the public would associate a brand with large advertising

expenditures, reinforcing the mindset that big businesses can be brands, but not little businesses.

Just as small business branding might be considered an oxymoron, so might the term entrepreneurial

branding.

Previous research reinforces these thought patterns by mainly focusing on large firms. There

is very little research on small business branding, and the limited research on small business branding

is mainly concerned with brand management of an existing venture. This paper will look at the role of

branding in small business new ventures, using a qualitative research design.

Towards a theory of branding for small business new ventures

There is surprisingly little explicit research available on this topic. Available research contains limited

reference to branding and a very limited amount of direct (regarding branding) anecdotal research.

The general entrepreneurial research suggests the following key considerations in

developing a new business venture:

- innovation and creativity;

- opportunity recognition skills;

- a good business model;- access to capital;



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- accessing customers initially; and

- accessing suppliers initially.

The ideas are put forward as propositions at this stage and collectively form a new theory on how

branding might facilitate new venture entrepreneurial activities:

P1. Corporate branding provides an overarching integrating tool for the entire new venture

process.

The term “corporate” branding refers to the entire organisation and not necessarily a large company.

Essentially this is the suggestion from Abimbola (2001) discussed above, reflecting less resources

available to small businesses. Corporate branding is better than focusing on one or two product

brands because the former facilitates interaction with stakeholders other than customers, such as

suppliers and bankers. The corporate brand can be leveraged more than product brands. There could

also be advantages of using one or two strong product brands in dealing with particular customers,

so the product branding approach could complement the corporate branding approach. P1 sets the

scene for all of the other propositions:

P2. The founder/owner has to take responsibility for getting stakeholder buy-in to

the corporate brand.

We noted that four of the five studies discussed in the literature review allude to the key role of the

founder in the branding process. For many small businesses the founder, CEO and general manager

are likely to be the one person, so the weighty responsibility of achieving stakeholder buy-in falls on

the shoulders of the founder.

P3. Branding brings focus and discipline to the innovative and creative process.

The very nature of branding is a focusing tool. A brand focuses on a small number of core values that

are targeted at key customers. Innovation and creativity is by nature a somewhat uncontrolled

phenomenon, so a well-chosen means of bringing discipline to innovation is likely to benefit the newventure. A strong corporate brand vision ensures that the right innovations are pursued, not just any

innovation.

Another aspect of the branding-innovation nexus is the role of the consumer in the innovative

process. There is well-established literature that recognises that input from the customer can help

guide the innovative process in both large and small firms. Furthermore niche segments or sub-

cultures may give their own meaning to brands. This is called brand polysemy, ambi-brands or brand

morphing, which leads to multiple meanings being given to the brand. In essence, consumers are a

resource that can be leveraged by entrepreneurs and small firms to extend and strengthen their

(common) brand equity:



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P4. Branding could be seen as a fi lter to the opportunity recognition process.

Searching and capturing new ideas that lead to business opportunities is called opportunity

recognition. Authors have found it hard to allow for the unexpected or unusual opportunities that

may emerge in mapping out the opportunity identification process. Some authors have suggested

that serendipity goes to the heart of the opportunity recognition process. Serendipity is seen as areal capability rather than just chance. The challenge is whether branding considerations could help

interpret the otherwise infinite range of opportunities. Branding is a holistic tool, away of chunking

or processing information into bite size pieces. Branding helps reduce an infinite range of

opportunities into a relatively small number of discrete brand bundles. Branding might thus be a way

of learning how to handle serendipity effectively, especially for those small businesses that lack the

innate capabilities to do so:

P5. Branding sharpens the business model formulation.

The business model essentially specifies what the firm will offer to future customers; who the target

market will be and how to deliver the offer to the customer. The need in business models is to

identify critical resources and capabilities and work out how to leverage them into a competitive

advantage. We would suggest that branding principles can be used to sharpen the focus. It is a more

rigorous way of developing value propositions. Essentially the entrepreneur has to give consideration

as to how the brand will be developed.

P6. Branding increases access to new venture capital.

There are two ways that branding can help acquire capital. Firstly, as we have already argued,

branding can sharpen the business model formulation. The sharpened business model formulation in

turn can be translated into a sharper and better-justified business plan, which should increase the

chances of financial approval. Secondly, apart from the business plan itself, an additional role of

branding is the reputation of the organization applying for capital. A better branded/more reputable

entrepreneur will also increase the chance of financial support. In franchising the common business

format type of franchising is really inseparable from the brand, designing an innovative new franchise

model that is well branded should facilitate financing:

P7. Better branding will increase the acquisition of customers in the early and later stages of the

venture.

The role of branding in acquiring the initial set of customers has not been well established. Branding

will of course, be weakly established in the pre-launch period. However, despite the brand not being

fully manifest, the embryonic brand can help secure the initial customer sales. Some contracts or

agreements might be made even before launch. While identifying a new market is one thing, winning

its confidence can be tougher:



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P8. Better branding will increase the access to suppliers in the early and later stages of the venture.

Particularly with manufacturer’s brands, the overwhelming interest is in terms of whether

manufacturer brands are positively perceived in the minds of final consumers. Webster (2000),

however, has opened up a new role for manufacturer’s brands, namely as influencer on intermediate

channels, such as wholesaling or retailing.

When a new venture is established, a strong brand will help the small business in its dealings with

suppliers. However, as with P7, the beneficial effects of strong branding on future supplier

relationships also apply, to a lesser degree, in the pre-launch phase.

A theory of brand-les SME new venture development

We are now in a position to collectively refer to the eight propositions as the basis for a composite

theory. The new theory has been coined “brand-led” new venture development. It is called brand-ledbecause brand is a central or pivotal catalyst for all aspects of the pre-launch activity. P1 in particular

refers to the overarching role of corporate branding. It is not saying that branding is more important

than innovation, opportunity recognition, acquiring capital, acquiring customers or acquiring

suppliers. Rather, branding offers a way of integrating the new venture development process. Note

that the above model is normative, dependent on whether the small business actually uses a

branding emphasis. Particularly for innovation and opportunity recognition there may be almost no

role for branding allowed by entrepreneurs unless they choose to do so. The current paper is simply

raising the possibility for this influence to be built in. The reputation of the entrepreneur will

influence customer, supplier and capital acquisition regardless of whether the entrepreneur is even

aware of the notion of branding.

Illustrating the brand-led theory using ten case studies of best practice entrepreneurship

Given the novel nature of the proposed theory it is appropriate as the first stage of theory

development to use existing cases (secondary data) rather than initiate new cases through field

research (primary data). Ten cases were purposively chosen, namely those cases in Fifty Lessons

(2005). Their success makes them prime candidates for case selection because the brand-led model

focuses on exceptional entrepreneurs. We will isolate the relevant parts of the cases that contributeto validating the brand-led model. The evidence will be in terms of whether particular propositions

are supported by the specific case. Refer to the full article for discussion of these ten cases omitted in

this summary.

Discussion of the cases

Collectively, all propositions were supported in the ten examined cases. P2, P5 and P7 were

supported the most. There were slight differences in the nuances of how particular propositions

were validated, reflecting the individual character of the specific entrepreneur.



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The propositions and the justification relating to the propositions enable a more considered and

more comprehensive understanding of the role branding can potentially play in developing new

ventures.

In a few cases the interviews suggest extensions of the brand-led model. The material

indicates a potential critical role for the entrepreneur to use public relations to project the brand.This supports P2, with a further opportunity to factor it into P7. Another possible extension of the

brand-led model is the quote by Brent Hoberman, founder of lastminute.com, that firms need to get

the DNA of the new venture right from the beginning because it is hard to change later. We suggest

that this matter could be factored into P5. The business model should, if possible, give attention to

these matters from the outset.

Conclusions, limitations and future research

Branding has been missing from most of the SME literature despite a good coverage of marketing

more generally. The method used to develop a theory of brand-led SME new venture development

was qualitative, namely conceptual development with the help of the literature. Using the literature,

eight propositions were developed. Branding has been proposed as an integrating tool for SME new

venture development.

Finally, a set of ten published cases was used to provisionally test or at least validate or

illustrate the propositions. All propositions were supported, though we do not clearly know which

ones are the most critical.

Two extensions to the brand-led model of SME new venture development were inferredFrom the cases. Firstly, there seems to be a role for entrepreneurs to use public relations to drive

brand growth. Secondly, some consideration of corporate identity, values and culture is worthwhile

as early as possible, even at the pre-launch stage. These matters can be incorporated into the

business model.

The limitations of the study include the reliance on conceptual modeling. Inherently, a

theoretical paper can only propose a theory and not test it. Quantitative research is a better means

for testing a theory. Future research could include quantitative methods that code the propositions.

Implications for SMEs

It must be re-iterated that the brand-led model is optional and mainly relevant for high-aspiration

entrepreneurs that seek very high performance for their new venture. The current paper is simply

raising the possibility for this influence to be built into the planning for the new venture. The

proposal is that if branding can be explicitly incorporated, it can be a powerful, enabling force.

The model incorporates the major known phases of new venture development. All of the phases

have to be conducted anyway. The theory has not been tested holistically, but is consistent with ten

best practice entrepreneurship cases.



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10. Competitive advantage in small to medium sized enterprises (Aodheen

O’Donnell, Audrey Gilmore , David Carson, Darryl Cummings)

The role of competitive strategy is to achieve competitive advantage:

Competitive advantage has been defined simply as the unique position which a firm develops

vis-à-vis (in relation to) its competitors.

The aim of article is to compare described concept of effective advantage with real situation

in SME.

The concept of effective advantage

Competitors identification process

Development of competitive strategy implies the ability to compare the focal firm’s position

with its competitors. According to Porter managers should be able to identify the competitors

constituting their industry. Strategy literature suggests that managers need a significant

amount of time for analyzing each of their competitors, research showed that managers group

together competitors that exhibit similar behaviour and that they can name relatively few

companies as competitors – we can observe a process of categorization.

Sources, positions and outcomes of competitive advantage

The sources of competitive advantage for firms are superior skills and resources. As

positional advantages are seen innovation, quality, low cost processing, segment focus,

product superiority, low price, tailored offering and so on. Also performance outcomes of

competitive advantage have been examined and they are usually measured in terms of market

share and profits.

Small firms and competitive advantage

There has been little research that explores competitive advantage in small firms. Further, it is

thought that traditional competitive advantage models are not wholly applicable for small

firms because they assume the existence of scale economics. This research will try to develop

a model of competitive advantage that is appropriate for SMEs.

Methodology

A qualitative approach was chosen – in-depth interviewing of owner-managers was deemed

the most appropriate means for collecting the relevant data. Sixty owner-managers

participated in this research. They were NOT told the purpose is understanding of theirperceptions of competitive advantage.



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The study and analysis of the data

Competitors identification process

Owners- managers were not able to name many of their competitors – they did not recognized

one- and two-man bands as true competitor as well as much larger companies (SMEs tend toserve a specific segment often neglected by larger company).

Concerning supply-based approach owner-managers used direct communication with

personnel from competing (or non-competing) firms. The most common forum is a trade or

professional associations (these also keep managers informed of any changes to their

competitive set). Another option of competitor’s identification is to actually see the firm’s

offering.

Demand based approaches tended to be adopted in a passive or reactive manner. Owner-

managers did not proactively seek their customer’s views.

Owner-manager indicated that they relied on observations and the occurrence of ad hoc events

for alerting them to the need for reassessing their competitive threat.

Perceptions of sources of advantage

Owners-managers focused upon two key sources:

1. Personal network (and the network of their staff) – the key benefits of networking for

SMEs are: the provision of environmental information, support and confirmation in decision

making, generating new contacts and gaining ideas for new product offering

2. Their competencies (and those of their staff) – previous research identified these core

competencies: knowledge, experience, communication and judgment. The owner-managers

perceived the most valuable competency as experiential learning.

Perceptions of positions of advantage

Supported advantages:

Product quality – discussed in context of how their quality compared to that of their

competitors

Customer service – discussed in context of other positional advantages of high-quality and

tailored offering, personal contact with the customer was considered the key component of

customer service – customers should be made to feel valued by the SME

Innovation through differentiation – concerning new product development but also

developing new marketing methods, for example: “one stop shop” – providing customers by a

package or portfolio of goods and services, position of advantage had been achieved by

providing unique set of benefits that their customers truly valued



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Competitive pricing – owners-managers were aware of danger of making price their only

competitive weapon and none of SMEs claimed to offer the lowest prices in their industry

Cost control – the firms sought to monitor costs continuously and to make additional

expenditures only when absolutely necessary

Tailored offering – viewed as particularly valuable when competing with large firms,

however, owners-manager admitted that there were limits to the degree of tailoring they could

provide

Segment focus – SMEs tend to be more successful when they adopt concentrated marketing

segmentation or niche strategies, however, there was an evidence of the firm’s markets having

changed over time (reaction to decline in their original market or identification of

opportunities in new markets)

Positional advantages that are not obtained by SMEs:

Cost leadership, production capability, marketing capability, broad market scope, dealer

strength

Performance outcomes

Outcomes measured in terms of profit levels, customer loyalty, organizational growth (steady

growth is preferred to rapid growth), word-of-mouth recommendations, acceptable overlap

between business and personal lives

Conclusion

The findings demonstrate that the conceptual model was not entirely appropriate in an SME

context. This research provides a deeper understanding of competitive advantage as perceived

by SME owner-managers than discerned from previous research.



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11. Customer loyalty: an empirical study

(McMullan and Gilmore)

Abstract.

Purpose: This paper focus on establishing individuals’ level of loyalty and what sustains and develops

their customer loyalty.

Design/methods/approach: Two stage. First a postal survey, to measure customer loyalty. Second

examine what sustains and develops loyalty amongst differing levels of development.

Findings: It emphasizes the importance of a differentiated approach to developing customer loyalty

by appropriately rewarding customers at different levels.

Originality/value: It uniquely identifies an approach to understanding the sustaining and

vulnerability effects mediating customer loyalty development going beyond previous categorization

attempts.

Introduction.

Benefits of loyalty are;

1) Lower costs

2)customers are more likely to expand, so buy more products and;3) customers act as information channels to potential customers.

Customer loyalty being characterized by the customer’s preference to purchase a product, service or

from an organization consistently when the need arises to purchase.

This paper seeds to contribute to addressing the gap (lack of understanding the effects of its

development) in the context of a travel service.

Customer Loyalty.

General definition by Jacoby and Kyner: The biased behavioral response expressed over time, by

decision making unit, with respect to one or more alternative brands out of a set of such brands, and

is a function of psychological processes.

Ollier 1999 criticises this. His definition is: a deeply held commitment to rebuy or repatronize a

preferred product of service consistently in the future, causing repetitive same brand or same brand-

set purchasing, despite situational influences and marketing efforts.

Thus customer loyalty is not uniquely concerned with frequency and depth of purchase of one brand

over another, rather as the situation or opportunity arises.



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More knowledge about loyalty lead to better ways of segmenting customers according to their phase

within the process and management strategy adapted to the relationship-based needs of different

levels of customer loyalty.

The relationship between competition and loyalty becomes more intense as the competition rises.

This study sought to establish the level of loyalty and then identify the role of mediating effets in

customers’ loyalty development.

Mediating effects.

Mediating factors can act as sustainers or vulnerabilities, allow the modeling of the continued

influences of competitors, advertising, service failure and other external influences.

Additionally these effects impact upon and influence perceptions of competitors, advertising, servicefailure and other external influences.

Obstacles to loyalty: consumer idiosyncrasies, multi-brand loyalty, withdrawal from the product

category, changes in need and switching incentives and variety seeking behavior.

Until the variety-seeking consumer reaches action-inertia, the lure of new experiences will be too

tempting to ignore. Many travel services fall into this pattern.

The ferry travel sector.

Reason this sector: Firstly this is an important service within the travel sector providing important

transport links in many regions world wide. Secondly changes have arisen within this sector (due to

low cost airlines)

Aggressive competition in terms of price promotions have been characteristic of the ferry travel

market.

This sector has experienced a period of flux in terms of intense competition, exacerbated by changes

in consumer preferences and distribution channels.

Distribution and booking habits are also altering within this market. This has created a more

independent view of traveling and combined with the use of the internet has changed the patterns of

travel purchasing behavior.

Research design – stage 1

Postal survey, a 28 multi-item loyalty scale. In total 1,242 completed, valid questionnaires were

returned.



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There are numerous difficulties associated with interpreting scale scores.

The overall score is the best indicator of an individual’s loyalty development.

Scores were interpreted in relative rather than absolute terms.

Research desing – stage 2

Uses focus group discussions, people who did fill in the questionnaire.

A penel of practitioners and academics reviewed the discussion points to ensure that there was a

high degree of face validity.

The research focus was on analytic generalization with amphasis on theory building.

Findings.

High level of loyalty development:

There were many common themes underlying participants’ loyalty at this level. The results suggest

that the vulnerability of price persists and switching costs have little impact

Some of these participants stated that their loyalty had diminished over time.

Participants suggested a number of ways in which their loyalty could be enhanced, the main

approaches being recognition and reciprocity. Other suggestions were financially based.

Whilst most participants remained loyal during the then months interval between the survey and

focus groups, some did not. This was due to areas of vulnerability such as a lack of recognition,

unresolved areas of dissatisfaction, perceptions of high prices, low cost fares operated by low cost

airlines and alterations to the loyalty programme.

Medium level of loyalty development:

They would always use the ferry company and would continue to do so out of preference highlighting

commitment and cognitive consistency.

However, they also suggested numerous incentives to sustain or develop their loyalty. These include

rewards for loyalty to the company.

Many issues are similar to those raised by the participants with a high-level of loyalty deployment.

This may suggest that the loyalty of these participants had developed to the next level. However, in

contrast, some stated that up until recently they considered themselves very loyal, but have now

switched to using low cost arilne operators, thus the main vulnerabilities were price andconvenience



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Participants with a medium level of loyalty development had not yet established switching or sunk

costs to the same extent as the high level loyalty development participants.

Low level of loyalty development

Participants’ statements tended to reflect cognitive issues such as safety and price.

They felt strongly that loyalty must work both ways and that loyal customers should be recognized

and rewarded.

The majority of low level loyalty development participants and experienced dissatisfaction

No one appeared to have developed futher loyalty within this level.

Discussion and Conclussion:

The finding from this study highlight the importance of understanding how customers with differing

levels of loyalty development may respond better to a differentiated strategy due to the effect of

what sustains and renders their loyalty vulnerable.

It is important for companies to be aware that not all customers are interested in developing a

relationship, but for those who are there are expectations that the company will reciprocate and

recognize loyalty with appropriate rewards.

Highlighting mediating effects by the customer’s level allows for relevant issues at each level to be

identified, implications considered and strategies developed.

This study shows that customers with a medium and high level of loyalty seek and wish to develop

further relationship, but in order to do so for the company must reciprocate.

Greater two-way communication may lead to more effective and efficient ways of recognizing

customers who have experienced difficulties.

The key issue is that customers are discerning, knowledgeable and able to switch between service

suppliers relatively easily.



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12. Usage, barriers and measurement of social media marketing: An

exploratory investigation of small and medium B2B brands

“This study addresses the gap by focusing on business-to-business (B2B) SMes and their social

networking practices, particularly, usage, perceived barriers, and the measurement of effectiveness

of Social Networking Sites (SNS) as a marketing tool.”

Social networking sites such as Twitter, MySpace, Facebook and LinkedIn were a popular online

activity in terms of average time spent.

Social media (‘user-generated-communication’) has changed tools and strategies companies use to

communicate, highlighting that information control now lies with the consumer. Companies now use

social networking sites as tools to promote brand and support the creation of brand communities.

Aim of research:

1) Examining how B2B SMEs use SNS

2) Insight into the extent of use and reasons why B2B SMEs use SNS + insights into the

perceived barriers that inhibit usage

3) Examines differences between organizations from different industries in terms of their usage

of SNS

4) Measurement practices used by companies who engage in brand activities on SNS

5) Whether there are differences between users and non-users of SNS, based on their

organizational innovative levels

B2B branding and the internet:

- Branding allows B2B organizations to differentiate by creating a unique and consistent

identity

Enhanced quality perceptions in the market

Raises barriers to entry for competitive brands

Strong B2B brand is more likely to enjoy higher loyalty and more referrals from customers

Social networks, social media and SNS

- Social networks: two or more connected business relationships, where an ‘exchange’

exists between business partners (network: establishment of ties between individuals,

groups of people, organization depts or corporations), they promote activities and the

use of resources

- It has been argued that social media (particular SNS) can support brands, inc. B2B brands

by developing and maintaining relationships between B2B firms



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- Social media: new sources of online information such as SNS, blogs, chat-rooms, video

and photo sharing websites, podcasts

- Firms use social media to build direct relationships with customers, increase traffic to

their website, identify new business opportunities, create communities, distribute

content, collect feedback from customers and generally support their brand

Researcher’s actual study:

Data was collected from B2B SMEs in the UK, randomly from the FAME (business database containing

info about companies in the UK) via mailed questionnaire to capture the extent of usage of SNS by

SMEs, barriers and benefits of usage as well as questions about metrics used to evaluate the

effectiveness of SNS in supporting brand objectives

Findings:

27% of the B2B SMEs in the sample used SNS, majority used facebook. The main important goals of why firms used SNS were to attract new customers and cultivate customer relationships. Thus,

internet and technology could be used as tools to build relationships. Also, through SNS, B2B firms

can capitalize on pre-existing business networks to achieve word of mouth and to make their brands

better known.

Overall this study contributes to knowledge by exploring the barriers, usage and perceived benefits

of SNS among B2B SMEs in the UK

Importance of awareness (brand)

Limits/future research:

- Does not account of the reasons why B2B SMEs are not assessing the effectiveness of

SNS

- Future research should focus on enhancing knowledge with respect to the reasons why

the majority of SNS are not assessing the effectiveness of their sites



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13. SME Internationalization Research Summary

Past, Present, and Future

Internationalization – the concept - Internationalization is the geographical expansion of economic activities over a country’s

borders.

- Globalization is when a firm’s operations are managed on a global scale.

- Countries, especially those who have balance of payment deficits, tried to increase

international activities of their SME’s.

- There are 3 forces driving globalization of businesses:

1. Explosive growth of low-cost technology connecting people and locations

2. Dismantling of trade barriers and financial regulations

3. Widespread economic restructuring and liberalization, as well as growing markets inAsia

Johanson & Mattsson define internationalization as the “process of developing networks of business

relationships in other countries through extension, penetration, and integration”.

- International orientation: A firm’s general attitude towards internationalization

- International commitment: The requirements of the operation modes chosen, where full

commitment is a firm with a realized foreign direct investment.

International operations can be divided into

- Inward: Importing

- Cooperative: Working together with a foreign firm (e.g. Tough Gadgets & Amazon)

- Outward: Exporting (<= the focus of the rest of the article is on this one)

Internationalization theories focusing on MNE’s (Multi-National

Enterprises)

Research into Internationalization of companies began with studying large multinationals. However,these theories have proven not quite as applicable when tested with SME’s.

Internalization Theory

Large firms want to develop internal markets, to lower the costs within the firm. This includes

bringing new operations and activities under local governance (for example, an internal postal

service to communicate between different buildings of the same company, rather than TNT).

The Transaction Cost – Approach

Similar to the internalization theory, it states that the firm responds to a form of market failure by

internalizing operations if by doing so it lowers the costs of the entire business. The difference is thathere the unit of analysis is the transaction itself.



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The Eclectic paradigm

- Also known as the OLI Paradigm

- Internationalization of economic activity is determined by three types of advantages

1. Ownership advantages (intangible assets, technological capacities or product

innovations, for example)

2. Internalization advantage (Having optimized internal costs in the value chain)

3. Geographical advantages

Monopolistic advantage theory

MNEs (Multinational enterprises) have an advantage over foreign firms in their own market. This can

be because of superior knowledge (found in forms of: Manufacturing processes, brand names,

differentiated products, organizational talents, or patented technology). Once these advantages have

been established, they can be exploited internationally with virtually no additional costs.

Stage models of internationalization

These are a set of theories applicable to both larger firms and SMEs.

Uppsala Internationalization model (U-Model)

Current knowledge and experience in a market and resource commitment of firms (which collectively

form their state aspects) affect commitment decisions and current business activities (which are the

change aspects). These then in turn increase the market knowledge and stimulate further resource

commitment to foreign markets in the subsequent cycle. This model suggests internationalization is

an incremental process. It is sometimes proposed to have an additional theory to explain start-ups in

new countries, as this theory does not adequately account for that.

Innovation-Related models (I-models)

Each subsequent stage of internationalization is considered an innovation. The number of stages

varies significantly between models, but this is commonly accepted: Pre-export stage, initial export

stage and advanced export stage.

It is argued that

demarcation criteria for the different stages are too vague, and that they are more a matter of

subjective opinion rather than concrete science.

Network approaches to internationalization

In 1990, Johanson and Vahlne examined a firm’s internationalization by applying a networkperspective. Here the state and change aspects are respectively seen as resource commitments in



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networks in which the firm already has positions and investments in networks that are new to the

firm. This theory applies to firms of different sizes due to the transitivity of Firm-Firm relations and

Firm-Network relations.

This theory categorizes internationalization strategies as by the need to:

- Minimize the need for knowledge development

- Minimize the need for adjustment; and

- Exploit established network positions.

This model seems to ignore the strategic positions and influence of individuals, such as

entrepreneurs, which are very important in especially SMEs.

Resource-Based approach to internationalization

Resource based models try to explain the fundamental drivers needed for internationalization. They

recognize the importance of intangible knowledge-based resources.

However, it still proves difficult to identify and define the critical resources needed for

internationalization. Resources should have certain values, but which ones is much debated. The

following 2 lists are examples of such an existing contradiction:

- Durability, transparency, transferability, and replicability

- Valuable, rare, imperfectly imitable and not substitutable

SME’s are dependent on key internal and external resources. Their adjustment behavior is analyzed

along 2 dimensions:

1. Are the resources internal or external to the firm

2. Does the development of resources take place firm-oriented (inward) or network-oriented

(outward)?

This leads to 4 hypothetical modes of resource adjustment:

1. Internal resources in a firm-oriented mode

2. External resources in a firm-oriented mode

3. Internal resources in a network-oriented mode

4. External resources in a network-oriented mode

The first category is a firm that develops all critical resources themselves, and does not depend on

externally available resources to internationalize.

The second mode of adjustment makes use of the relationships with various expert organization,

research institutions or universities. They make use of external resources but in a firm-oriented

manner.

The third mode would traditionally be advanced R&D in an open market structure where knowledge

is shared (openly or between partner / networks).

The last category is rarest, and would entail mergers between two firms or joint ventures where one

company’s external resources are also shared in a (controlled) network.



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International Entrepreneurship

The internationalization of SME’s is almost always on initiative of the entrepreneur or high-level

management. But this still requires a strategic approach. Internationalization is intended to create

value in organization. But there is still a lack of integrative theory in this field. The exact definition of

entrepreneurial ventures is not very well defined, which does not aid development of theory.

Resource-based theory suggests only entrepreneurs that possess the right qualities (Intangible

resources) have what it take to exploit cross-country opportunities.

Innovation is at the heart of entrepreneurial activity. Invention is the discovery of an opportunity,

and innovation it’s exploitation.

Theories are being developed that link all these theories together into a unified one, to also integrate

the emerging aspects of international start-ups.

Conclusions and implicationsWith the growing role that SME’s play and the ease and quantity of internationalization increasing,

more research will inevitably be done in this field in the upcoming years. Proposed a conceptual

model focusing on four internationalization properties (mode, market, product, time) plus

internationalization performance as well as key antecedents (environmental, firm, and

entrepreneur’s characteristics) and consequences of internationalization (firm performance).

International Entrepreneurship places (even) more importance on the entrepreneurs and it gives

more importance to the time dimension, making time one of the strategic dimensions of

internationalization.



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An important implication of the model for practitioners is that they need to constantly evaluate

different elements related to internationalization. Especially crucial are the skills, competencies, and

management know-how the entrepreneur needs to develop in order to be successful in the process

of internationalization.



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14. Export Marketing Research and the Effect of Export Experience in

Industrial SMEs

(S. J. Hart , J. R. Webb & M.V. Jones)

This article begins with a summary of different texts on the topic Export Marketing Research.

Research Method

Sample:The research is built on 50 questionnaires. Filled in by British SME’s.

Variables:

- Company size (nr employees)

- Export experience (years of exporting and number of destinations)

- Importance of market research (scale 1 to 5)

- Market research activities (scale 1 to 5, from ‘use to a great extend’ to ‘not at all used’) - Use of market research (five point Likkert-type scale)

Analysis

Sample demographics70 percent employed fewer than 250 people. Median size was 150 employees.

Most companies had been exporting for more than 12 years.

They made up two categories;

- Companies exporting <12 years

- Companies exporting >12 years

The average number of export markets was 4.3.

There is an association between firm size and export experience (obviously), both in terms of the

spread of export operations and the number of years exporting.

Market Research Activities of the CompaniesThere were mentioned three factors of information dimensions important for British exporters.

1. Market Feasibility Information (market competition, buyers’ preferences) FORMAL Research

2. Adaption information (need for product adaption) INFORMAL

Research

3. Background Information (general condition of the export market)

According to the results;

There is a lack of consensus regarding the use of market research for export decisions.

On the one hand;

The sample tends towards agreeing that export

decisions would be modified in the light of

market research, and tends toward disagreeing

with the proposition that key decision makers

might not use market research.

On the other hand;

The sample agrees that research is used to back

up hunches and disagrees that decisions would

not be taken without market research. Which

suggest that the use of market research is rather

marginal

This differences;- May reflect a genuine equivocation towards how market research is used.



37

Or

- May revolve around the political nature of the area.

The influence of Firm Size and Export Experience on Market Research ActivitiesAs more geographic regions are covered by exports, there is an increase in the background

information collected, and the incidence of informal market research activities.

Size of firm seems to e related to the use of informal market research. There is a negative correlation

between size and market research. Larger companies may use market research data in a more

objective fashion.

When it comes to the length of time a company has been involved in exporting; no differences were

observed.

It could be that 12 years’ export experience is not enough to discriminate marketing research

activities.

Limitations of the Current Study 1. other determinants of export behavior have not been included ( : ownership, method,

organization, motivation etc..)

2. the analysis is limited to a descriptive comparison.

3. the question concerning export experience has failed fully to capture the total spectrum of sample

variability.

4. The sample is restricted to industrial firms and omits those companies involved in consumer

goods.

Managerial ImplicationsAlthough it is generally accepted that when a company has to face new situations which are

associated with heightened levels of risk, they have to use different marketing techniques, results of

this research shows different; actually few back their reported behavior with the appropriate

marketing research actions.

It shows also that the information is collected from a fairly restricted number of sources ( which

theoretically should be the other way around )

Both the extent of market research activity and the spread of export operations are positively related

to the size of the firm.

These former mentioned observations is combined in the article. They say that one of the most

practical ways in which smaller firms may reduce risk when engaged in export opereations is to make

use of wider range of information sources.

The results also suggest that the information collected and its use are enhanced in companies with a

greater spread of export operations. A lesson that is/could be taken from this: that experience of

exporting encourages the search for and use of information

The results of this research suggest that for companies to have any chance of increasing their success

rate in export activities, a constant process of evaluation needs to be undertaken to ensure that the

widest and most appropriate range of data sources are consulted, that the methods of collection are

congruent both with the types of information it is intended to gather and with the use to which it is

to be put.

And, those responsible for the management of organizations involved in export activities must

determined that data, once within the boundaries of their company, are organized and dissiminated

to the optimal effect.



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Summary and ConclusionsThis research has three basic objections;

1. identify the amount and the types of marketing research information.

2. identify the use to which the information is put

3. explore the relationship between these marketing research activities.

1. There was an identification of two major types of activity;

- Formal marketing research (surveys, seminars etc..)

- Informal marketing research ( customer/distributor visits etc..)

2. Use of information; some what contradictory. The sample of companies does put information to a

positive use, and that information is also used to back up hunches, with some decisions still

proceeding without marketing research.

3. It was found that the spread of export activity, in terms of the number of geographic regions

covered is associated with the importance of background information and the use of informal market

research.

The point of departure of this article was to begin to address the gap in

empirical knowledge concerning what kinds of marketing research activities

were carried out by exporting companies. The findings suggest that companies

once embarked on export activity, rely on personal contact with distributers

agents, customers and competitors to gather information concerning the

markets they serve. This information is used somewhat equivocally, toh to

modify decisions at the same time as being used to back-up hunches



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15. SME Marketing networking: a strategic approach

In studying this summary, I advise you to memorize the model set out in the figure and use the

analytical framework just to understand all its parts. As soon as you get the model, it might be nice to

read though the empirical findings and the conclusion of this summary, but it’s mainly about understanding the model. Good luck!

Analytical Framework of the Study

For this article, marketing networking in SMEs is defined as the network processes that are undertaken

by

SME owner-managers in managing their marketing activities. This study is then focused on how a

firm (generalized from a research of 12 firms) deals with changes in the market, in terms of SMEs

addressing strategic changes through the use of their marketing network processes (MNPs). These

MNPs are linkages to individuals (instead of groups), emphasizing on a SME owner-manager and the

individuals with whom he networks. All these connections together form the marketing network of an

SME, which should be regarded both as an organized web of network actors and an organized patternof activities.

MNPs, then, are said to have three dimensions:

1. Structural dimensions: Defined in terms of sources used and focuses on the physical structure

of each marketing network; What do they look like and who is involved in them?;

2. Relational dimension: Defined in terms of network linkages and measured in terms of the

strength of the marketing network linkages which exist; How do these marketing networks

operate?;

3. Usage dimension: How do MNPs of SMEs influence marketing activities and, subsequently,

why and when are they used (benefits)?

The Structural dimensions of a marketing network is defined in terms of a few structural components:

- Network size: the Actual number of direct contacts used by the owner-manager in an SME to

help him do marketing;

- Network formality: the extent to which formal business network contacts are used in doing

marketing compared to informal and social network contacts;

- Network diversity: the variety of network sources used;

- Network density: the connectedness or the extent to which network members are linked to

each other;

- Network stability: the number of network linkages within the marketing network of an SME

owner-manager that have existed for a minimum length of time;

-

Network flexibility: the number of network linkages formed and the number of network linkages broken within a specific period.

The Relational dimension focusses on the actual linkages between the owner manager and his network

sources/members, as the development and maintenance of said linkages is a key SME strength. The

three relational components are trust, which is defined as a willingness to rely on an exchange partner

in whom one has confidence, commitment, defined as the time and effort in maintaining network

linkages, and co-operation, which is seen as the level of interdependence between an SME owner-

manager and each marketing network member.



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The Usage dimensions analyzes the propensity for owner-managers to use these marketing network in

doing marketing. The dimensions then focuses on marketing activities in terms of how MNPs

influence these. The following marketing activities are deemed to be most important:

- Managing product decisions;

- Managing promotional activity;

- Planning marketing activities;

- Managing pricing;

- Managing distribution;

- Acquiring marketing resources;

- Increasing market knowledge;

- Marketing innovation.

In short, these dimensions of marketing network are presented in the following figure:

Empirical Findings of the Study

Structural dimension

The marketing networks seem to be rather extensive and formal (so no informal or social network

sources), with a mean size of 45 network sources. The network sources were strongly industry-specific

and channel-specific, with a high level of strong linkages; network density. Also high levels of

network stability and flexibility was found, which 2/3 of the linkages being stable (2 years or more)

and 1/3 of the linkages were made/broken within past 12 months.



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Relational dimension

Strong marketing network linkages were found within the distribution channel, with strong vertical

network linkage development through co-operation between the three types of SMEs researched,

manufacturing, intermediary and retailing firms. Apart from cooperation, commitment and trust were

also found in the management of these linkages.

Usage dimension

Managing distribution, promotional activity and product decisions were the three marketing activities

identified as those being most influenced by MNPs, whereas they were less well used for acquiring

marketing resources, planning marketing activities, managing pricing, marketing innovation or for

increasing market knowledge.

Conclusion

The three dimensions of MNPs, set out in the figure, turn out to be strongly related. As such, the

model developed in this study turns out to be a useful tool in understanding MNPs. Apart from

showing the individual dimensions of MNPs, it also stresses the dynamic nature of MNPs, as the three

dimensions cannot be seen as autonomous since they turn out to be inextricably linked.



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16. “Entrepreneurial Marketing by Networking”

SMEs do not conform to the conventional marketing characteristics due to many

reasons, the SMEs marketing decisions are affected by numerous aspects. That is why

marketing in SMEs is haphazard, spontaneous and unstructured; SMEs tend to only want to

survive in the market and decrease costs as much as they can, they want nothing else. One of

the most important things in an SME is the network of the entrepreneur or the owner. The

entrepreneur’s network is built around his normal and day-to-day interactions. Also, the

SME’s network activities are personal contact, social business, industry members, traders and

marketers. However, the most preferred one is personal contact network- any relationship or

alliance the owner has or may develop to further the potential of his or her enterprise.

Therefore, for an SME it is preferred to use the personal network of the entrepreneur. An

entrepreneur’s network will have people who can help out the entrepreneur in the well-being

of the enterprise. However, it must be noted that this personal network could change over time

and may also change when the need of the entrepreneur changes; for example from a need of quality to a need of distribution. Also, the network of the entrepreneur does not mean that the

entrepreneur is always the focal point; there may be more important people in that network.

Before understanding how entrepreneurs could use network to their benefit we must see what

the characteristics that influence the SMEs decisions are. They are: SME characteristics,

entrepreneur characteristics, SME life stage and the market or industry’s norms. Let us take

each aspect in depth and alone.

1. SME Characetists: SMEs are very small, have no resources whether financially or

physically. Therefore they have no effect on the market place. Also they lack expertise

and experience affects the whole function of the firm.

2. Entrepreneur’s Characteristics: The owner’s main goal is to maintain revenue,

maintain cash flow and to survive. Therefore they are not focused on marketing or any

other aspect of the firm.

3. Life-Cycle of the SME: The type of the SME marketing strategy in the introduction

phase is totally different than that of the maturity stage for example. For example, in

the introduction phase the SME uses his or her networking or connections to try and

market his or her product.

4. Norms of the Market: The SME must conform to pre-established norms in the market

they enter because they are small and have no market power at all.

All of the aspects mentioned above share one common thing, the thing is networking.

They are connected together by network, it is the intangible glue that combines them all

together. Therefore it could be said that the purpose of networking in SMEs is very important.

First of all, networking can help in supporting the decisions made by the owner. This can be

done through confirmation from other people in the market or his network. Secondly, it can

help gaining information about trends, market circumstances and new information. Thirdly, it

can help the SME to work or function in a way which is compatible with the resources it hason hand. Therefore, it could be said that SMEs can use networking as a marketing tool.



Basically speaking SMEs are marketing through networking all the time, during all the

process of their lifetime; this is done through their personal and social communications.

Marketing by networking is used by SMEs to enhance and support all aspects of the

marketing activity by talking with potential and already existing customers. Networking can

also be used in a marketing way to help the SME determine how the mix of marketing

components can be brought together to make a good marketing strategy.

In conclusion, we can say that the SME marketing decisions area affected by four things:

the SME characteristics, SME life stage, characteristics of entrepreur and the norms of the

market and industry, the underlying glue connecting all these aspects is networking. Which

can be used in many different ways to help the SME.

venture marketing summary

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