A different
approach
How is marketing different in
entrepreneurial setups?
Is marketing
any different in SMEs? The concept remains the same, but
the implementation is different from that of their larger
counterparts. Many analysts have attributed this to the
relatively lower scale of operations and the resource base.
However, many SMEs have time and again launched successful
marketing battles against the goliaths of the market.
A
different approach!
It has
to be understood that a SME is not just a scaled down version
of the large corporation. It is the owner – manager
(entrepreneurial) influence that differentiates it from
the rest. Drucker defines an entrepreneur as “…..someone
who not only searches for change, but also responds to it
in an innovative way, exploiting it as an opportunity”.
This characteristic of an entrepreneur is reflected in the
way he manages the marketing function.
Product
orientation
As mentioned
earlier, innovation and creativity are key entrepreneurial
traits; therefore developing new products and services is
always on. The marketing concept states that consumer need
should be at the base of any product development strategy.
Entrepreneurs manage to incorporate this philosophy in product
upgradation but to a large extent fail to do so in new product
development.
Typically, either the presence of an opportunity or competitive
pressures prompts SMEs to go in for new product development.
It does not stem from a consumer need. The result is that
most entrepreneurs have to go looking for a market after
a product is developed. Alternatively, sequential and incremental
modifications like improving after-sales service and additional
features to a product are made to the existing products
and services.
Targeting
and consumer definition
More
often than not, entrepreneurs use the trial-and-error method
for target definition, where an opportunity is converted
into a product or service offering, followed by the search
for the market. This reverse process is more a result of
the entrepreneur’s gut feeling rather than any formal
research.
Once
an initial market is identified, an attempt is made to identify
the preferences and tastes of the consumer. Entrepreneurs
generally excel in this area. This can be attributed to
the relatively lower scale of operations and personal and
regular contact with consumers.
Subsequently,
a clear target group emerges, but as a result of a process
of selection and elimination rather than proactive marketing.
The entrepreneur relies heavily on the word-of-mouth appreciation
generated by the consumer. The consumer group is gradually
built through this.
The
Mix
Most
entrepreneurs did not properly define the marketing mix.
The product decisions were taken on the basis of current
opportunities while price and place decisions were taken
on a trial-and-error basis.
However,
promotions were undertaken regularly. The success of the
promotions depended largely on the entrepreneur’s most
preferred P - personal contact. The personalised approach
to consumer-relationships provided a platform to run customised
promotions. These were preferred to mass promotions because
the entrepreneurs considered the ‘personal contact’
to be their unique selling proposition, USP.
Market
Intelligence
All
entrepreneurs have developed various forms of collecting
market information, though these are mostly unstructured.
Information gathering is done through networks, price lists
and other trade information catalogues. However, personal
observation also plays a major role. Formal tools of information
gathering are rarely employed.
The
implementation methodology of the marketing process of entrepreneurs
challenges the traditional approach. It does not have resource
flexibility and its scale of operations may not justify
the investment. Therefore, the entrepreneur uses all the
possible resources creatively and innovatively.
Related
reading:
“Entrepreneurial
marketing: a conceptualisation from qualitative research”;
Stokes, David; Qualitative market research: An international
Journal; 2000.
