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AFDELING FOR VIRKSOMHEDSLEDELSE
Working Paper 2000 -11
The Retarded Kid Brother:
In search of an adequate marketing approach
for small entrepreneurial firms
Per Blenker
UNIVERSITY OF AARHUS C DENMARK
ISSN 1398-6228
THE RETARDED KID BROTHER:
IN SEARCH OF AN ADEQUATE MARKETING APPROACH
FOR SMALL ENTREPRENEURIAL FIRMS
Per Blenker, University of Aarhus, Aarhus
ABSTRACT
It is often argued that the main problem of small entrepreneurial firms is their
lack of marketing capabilities and that small firms should adopt the marketing
management approach developed for large firms. But most small firms are
reluctant to adopt the marketing concept - they act as the retarded kid brother.
This paper, however, argues that the marketing management approach is in
disharmony with the entrepreneurial approach and that a key difference lies
in the entrepreneur´s approach to opportunity identification and his use of
resources. Inspiration for an entrepreneurial marketing approach may be
found in the theory of relationships and it is argued that entrepreneurial
marketing involves two tasks. One is developing the firm´s established
relationships. This is achieved by market investments, i.e. the commitment
of resources to particular external actors. These are customer dependent
market activities. The other task is to provide the right circumstances for new
relationships. This is performed by marketing investments: resources
committed to the creation of internal marketing assets. These are customer
independent marketing activities.
INTRODUCTION
Numerous studies of small entrepreneurial firms indicate that one of their
main problems is their lack of marketing capabilities. As a consequence of
this lack of capabilities, small firms encounter problems in handling their
marketing activities. Marketing deficiencies thus prevent many small firms
from performing and competing as well as they might. (Gibb & Scott, 1985;
Hisrich, 1992; Hills & LaForge, 1992; Molian & Birley 1994).
As a solution it is often argued that a relationship exists between “success”
and the adoption of the marketing concept. Small firms should adopt the
An earlier version of this paper has been presented at UIC Research Symposium on
Marketing and Entrepreneurship, August 4-5 2000, Chicago
marketing concept - or they should develop a marketing practice similar to
the planning approach to marketing. Small firms are adviced to adopt the
strategic marketing planning approach as it has been developed for large
organisations – i.e. adopt the formal text-book marketing process of analysis,
planning, implementation and control (Carson, 1990; Waalewijn & Segaar,
1993, Kotler, 2000). The line of argument is usually based on the idea that
marketing management can be imposed on small firms by a kind of “transfer”,
“selling” or “learning” approach. As a “soft technology” Marketing
Management - the idea of analysis, planning, implementation and control, can
be “transferred” into small firms (Carson, 1990).
Even though market orientation is part of the managerial philosophy of many
small business entrepreneurs, in the sense that they emphasise customer
satisfaction, small firms generally seem reluctant to adopt the marketing
concept (Meziou, 1991). Numerous articles have therefore attempted to
describe the relationship between entrepreneurship and marketing - and the
two disciplines do in fact have a strong interface. Both stress the interplay
with the environment via exchange and transactions, both treat the uncertainty
and turbulence in the firm´s environment and both deal with the problem of
innovation, new product introduction and new venture creation. But a key
difference in the interface between marketing and entrepreneurship lies in
their treatment of innovation (Knight et.al., 1994, Hisrich, 1992; Hills & La
Forge, 1992, Miles & Arnold, 1991; McGowan & Rocks, 1994).
The problem is that we have two “good things”: marketing and entrepreneurship - and the ideal firm should have both. But apparantly the two good
things do not go well together. Very little of the marketing strategy literature
is aimed at developing strategies for small entrepreneurial firms, and traditional marketing approaches may not be suitable when translated into the
small-business context. Instead it can be argued that small firms require an
approach of their own. (Hills & LaForge, 1992, Carson, 1990)
In the paper the following quote from Schumpeter will serve as a guideline
for the re-thinking of a marketing approach for small entrepreneurial firms:
“To be sure we must always start from the satisfaction of wants, since they
are the end of all production, and the given economic situation at any time
must be understood from this aspect. Yet innovations in the economic system do not as a rule take place in such a way that first new wants arise
spontaneously in consumers and then the productive apparatus swings
round their pressure. We do not deny the presence of this nexus. It is, however, the producer who as a rule initiates economic change, and consumers
are educated by him if necessary; they are, as it were, taught to want new
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want new things, or things which differ in some respect or other from those
things they have been in the habit of using. Therefore while it is
permissible and even necessary to consider consumers´ wants as an
independent and indeed the fundamental force in a theory of circular flow,
we must take a different attitude as soon as we analyse change”.
J. A. Schumpeter
What is needed is a marketing concept based both on the “satisfaction of
wants” but also on “process of economic change”, which goes better with
the idea of entrepreneurship - or a re-market-orientation of the marketing
concept to adjust it to the needs of small entrepreneurial firms.
MARKETING
The “marketing concept” is the cornerstone of the marketing discipline.
(Kohli & Jaworski, 1990; Kotler, 1997). To be market-oriented is a cultural
orientation that relates to basic beliefs about the importance of the customer
(Lewitt, 1960; Webster, 1992). If this culture guides the organisation, the firm
should focus on customer needs in its target markets.
Normative marketing management literature argues that the market orientation
should lead to a strategic marketing approach. Based on a careful analysis
of customers and competitors - and the firm´s resources and capabilities, the
firm should decide on how to compete in its chosen markets, expressed in a
segmentation, targeting and positioning strategy (Day & Wensley, 1988;
Kotler, 2000).
Finally the strategic marketing approach has implications on the operational
level, where the firm seeks to link its activities and direct its resources in
such a way that it fills the gaps the market. Marketing strategies are implemented by mixing the ingredients of the recipe: the four P´s of product, price,
place and promotion (McCarthy & Perreault, 1993; Kotler, 2000).
The value of the marketing planning lies in its ability to clarify management
thinking and in informing and guiding subordinates and employees because it
states objectives, establishes priorities, motivates and directs the staff.
Although the market orientation is primarily an external orientation focusing
on customers and competitors it thus has a number of internal implications for
the firm. The marketing-oriented firm needs internal market intelligence and
planning. To be marketing-oriented, firms must therefore have a specific inhouse function that possesses marketing skills. The marketing function
3
allocates the firm´s internal financial, human and productive resources to
different markets, customers and products - and seeks to co-ordinate its own
functional activities to obtain an inter-functional orientation (Carson, 1990;
Webster, 1992).
But it can be argued that marketing thinking is mostly concerned with running
existing businesses - and less concerned with the entrepreneurial problem of
creating new activities. Traditional marketing management focuses on present
short-term opportunities, as it primarily addresses well-established needs
rather than latent and future ones - and sees innovation as minor and
incremental changes in product design, quality or packaging. New products
are responses to the changing needs of the customers. Innovation is thus, in
principle, an essential concept in marketing, but real innovation seems absent
in mainstream marketing management theory. The customer orientation of the
marketing concept implies an “outside-in” or a “market pull” conception of
the firm-environment relationship. A number of demand gaps exist “out there”
in the market, and they are not filled until firms have discovered them and
“reacted” on them by changing their products or ways of production.
Innovation is based on the analysis of signals coming from the market, which
the firm should “adapt” to (Duus, 1997).
Accepting the marketing concept means that products are not given in advance. Despite this principle, product development is usually treated as a
marketing research problem of “evaluating” ideas, where new product ideas
are tested for market acceptance. But marketing management does not offer
many clues as to where the ideas for new products come from. There is a
problem of “real innovation”. In marketing textbooks the chapters on product
development often include vague paragraphs on “creativity” or “brainstorming” as a solution to the creative problem. This means that the customer
- rather than the marketer or the entrepreneur - is seen as the innovator. But it
can be questioned whether customers will be able to know the opportunities
for innovation, unless they are highly “educated customers” or “lead-users”
in close interaction with the producer (von Hippel, 1988). By following the
traditional marketing approach, the firm runs the risk of becoming “ a
prisoner of its market, and marketing in the firm can become more of a
control mechanism rather than one that releases the entrepreneur to
develop the potential of his enterprise. Marketing is not the innovative
force it arguably should be and may be a possible barrier to continued entrepreneurial activity in the venture” (McGowan & Rocks, 1994)
4
ENTREPRENEURSHIP
Unlike marketing, entrepreneurship is explicitly focused on innovation.
Originally entrepreneurship was not thought of as a business function, but as
the innovative function of society. Schumpeter (1934) defined these individuals who start new enterprises as entrepreneurs. In this process by which
new organisations come into existence, the entrepreneur performs the function
of creation for society. The creative function, by which an entrepreneur
adapts a creative idea to a market opportunity by way of new combinations of
resources, can be specified as a combination of two dimensions:
-
The combination of new product ideas, new ways of production or ways
of using materials into a business idea in order to meet new demand.
-
The acquisition of the resources necessary to undertake the business. This
involves convincing other to join or contribute to the venture.
Thus entrepreneurship is fundamentally an opportunity-focused activity. It
creates value by pulling together a unique package of resources to exploit this
opportunity. The entrepreneur must therefore link the opportunity he has
identified, with the key resources that are necessary to exploit the opportunity. In this way the entrepreneurial “opportunity-seeking function” will
either revolutionize, de-stabilise the pattern of production and re-organise the
industry, as seen by Schumpeter (1934) - or it will bring a dis-equilibrium
into balance, as seen by Kirzner (1973).
In both cases, the entrepreneur uses his ability to see through the “strategic
windows” of imperfect information. The environment opens a window of
opportunity - a short period with a very low degree of “fit” between the
requirements of the market and competencies of the firms competing in that
market (Abell, 1978; Christensen et.al. 1991). But the entrepreneur also uses
his ability to reach and assemble resources that were previously underutilised, in a new and more efficient way. The entrepreneur can thus both
make shifts in the use of existing and available resources and assemble potential new resources in order to realize perceived opportunities (Ardishvili
& Cardozo, 1994).
Expressed in marketing terms, the entrepreneur identifies the market as he has
seen situations in terms of unsatisfied needs, but unlike marketing, entrepreneurship is primarily an “inside-out” or “supply-push process”. Not-
5
yet-existing opportunities are not “discovered” and “reacted” upon - but
deliberately “invented” or “created” by the entrepreneur (Blenker, 1996).
SMALL FIRMS
As indicated above, the traditional marketing management approach implies
that a small firm should study its position in the marketplace. It should understand both its own strengths and weaknesses (SW) and the variables in the
market that pose opportunities and threats (OT). When the firm understands
the causes and effects of the marketing variables, this knowledge can be used
to formulate a marketing plan, a plan which in a series of steps manipulates
the controllable marketing variables of the firm in order to fulfil its long-term
objectives.
In the case of small firms, however, we often find that their practice departs
significantly from the well-ordered textbook recipe prepared for the professional managers in large firms. Leppard & McDonald have put this problem
into words: Marketing “concentrate almost exclusively on the “medicine”
itself and showed little concern for the ”patient”. That this should happen
makes about as much sense as a doctor dispensing the same drug to every
patient he sees, irrespective of his or her condition” (Carson, 1990).
Small entrepreneurial firms tend to operate under many different constraints,
but the most important one, seen from the marketing management perspective,
is their low functional specialisation, limited marketing personnel, and rather
rudimentary marketing structures. If it can be found at all marketing staff has a
rather low degree of influence within small firms, and only simple and ad hoc
planning systems. They have only limited resources, such as: limited
capability of obtaining market information, informal and un-planned
decision-making, lack of a traditional marketing structure in terms of a
marketing department with specialist expertise (Carson, 1990; Coviello et.al.
1994). Limited energies are therefore devoted to the traditional activities of
marketing, such as market analysis, the process of analysis, planning,
implementation and control of marketing activities and the management of the
four Ps. Most new ventures neither have a detailed marketing plan nor are
they based on a thorough market analysis of the customers’ acceptance of the
business concept. But as firms grow, they build a functional specialisation,
with departments each serving a separate function in the firm, and among
these functional departments also a marketing department and a formal
marketing infrastructure that possess the expertise required. In this way small
6
firms will be able to gradually improve their marketing resources and
abilities as they grow into large firms.
To defend the practices of the small firm, their advocates argue that the
marketing function in small firms may be informal, but it is rather flexible.
The main difference between large and small firms lies in their objectives
and management styles. Small firms are managed in a personal way. In the
same way as the entrepreneur knows his staff personally, he also knows the
central external actors around the firm. And in the same way as the entrepreneur prefers to tackle problems as they occur, he responds to customer
needs and wants as they appear. From this point of view, small firm entrepreneurs are “doing marketing” based on the omnipresence of the entrepreneur, and the development of relationships has a high priority in his “distinctive marketing style” (Carson, 1990).
From a traditional marketing management perspective this “distinctive marketing style” of informal flexibility looks like “short-terminism”. The entrepreneur is a “poor planner” - and marketing strategy becomes incremental
and discontinuous. The small firm’s haphazard, irrational and unplanned
practice of marketing - its lack of planned marketing – makes them look like
the retarded kid brother of the large firm. (Carson, 1990; Hisrich, 1992;
McGowan & Rocks, 1994).
It seems, however, that even without a well-defined marketing function, these
small firms, perhaps by way of an “intuitive marketing approach”, often
succeed in building long-term relationships with specific customers and
strong networks in their markets. Changes occur, not only as the consequence
of a consistent and planned product-market strategy. This can also be
described as an “involved marketing style”, where the entrepreneur is highly
committed to demands or suggestions from outside actors, such as suppliers
or customers. Small firms typically have a more direct and close interface
with their customers because few customers account for a large amount of the
firm´s sales (Hisrich, 1992).
Traditional marketing thoughts, as developed for large companies, do not
serve adequately in small entrepreneurial firms. A major explanation seems
to be that the traditional approach does not fully appreciate how small firms
actually perform their marketing activities by listening to the responses from
the market, and it does not acknowledge the nature of decision-making as
both informal and a mix of planning and doing. It can further be argued that a
traditional marketing management practice might limit the entrepreneurial
potential of the small firm because of the rather sterile analysis and planning
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approach, which, due to the “paralysis by analysis” problem, could become a
change-blocking mechanism (Hussey, 1994).
MARKETING & ENTREPRENURSHIP – A SIMPLE VIEW
To summarise the previous arguments, we can say that both the marketing and
the entrepreneurship processes involve the identification of an opportunity,
the use of resources, some kind of strategy and the development and
management of the activity. This process is illustrated in figure 1.
Figure 1. The Tasks of Marketing and Entrepreneurship.
Return on
internal & external
investment
Creating value by
managing the activity
Opportunity seeking
and idea identification
Business
opportunity
New
activity
Marketing strategy
and planning
Assembling and
integrating resources
Commitment of
internal & external
resources
Marketing
Entrepreneurship
Although marketing and entrepreneurship seem to contain the same general
tasks, the focal point of the two approaches differ. Figure 1 shows how entrepreneurship is primarily concerned with the right side - with conceiving a
new venture and with filling resource gaps - while marketing tends to focus
8
on the left side - developing a new venture by planning and managing. Both
sides, however, involve the development of distinctive competencies.
Of course, formalised planning plays a major role in evaluating and implementing the opportunities identified. Analysis and planning is useful in the
process of setting priorities, selecting the opportunities to pursue and in the
implementation and management of the new activity. But the lack of an
entrepreneurial element would limit the firm to allocating resources among
its known set of product/market investments, it would optimise the allocation
of resources within the constraints of its existing business of today
(Christensen et.al. 1991; Ardishvili & Cardozo, 1994). It thus seems obvious
that some kind of entrepreneurial skill is useful for marketing. Marketing
would benefit if it could include the entrepreneurial understanding of the
environment - the entrepreneurial ability to make sense of the market conditions and to generate the resources that are necessary for opportunities to
occur. Such an ability would make it possible to invent market opportunities
for products that do not yet exist and thus create the firm´s future.
MARKETING & ENTREPRENEURSHIP
AN OPPORTUNITY AND RESSOURCES VIEW
Above we have argued that the traditional view on performing marketing, i.e.
focusing on analysis, planning, implementation and control and on the use of
the 4P´s, may not be suitable for small entrepreneurial firms. There is a need
for a re-market-orientation of the marketing concept. We have also indicated
that such a re-orientation should encompass both the customer orientation of
the marketing concept, the opportunity focus and the entrepreneur´s specific
forward-thinking change mode based on both available and potential
resources.
Further, it can be argued that traditional marketing is based on the “optimization of the resource utilization” perspective (Ardishvili & Cardozo, 1997a;
Penrose, 1979). But there are two sides to superior performance. One is what
the inputs are, and the other is what the firm does with these inputs.
Following this distinction we can conclude that:
-
9
Marketing seeks to re-deploy existing internal resources to more promising opportunities. An example could be reallocation to a new product/market combination that utilises the firm’s existing resources in a
better way.
-
Entrepreneurship seeks not only to re-deploy existing resources, but also
to deploy new and external resources to a new opportunity. In this case,
the entrepreneur must get access to additional resources.
Table 1 illustrates these differences between marketing and entrepreneurship,
depending on whether the focus is on present resources or on resources that
can be made available. Marketing primarily seeks to utilize existing
resources, while entrepreneurship is concerned with increasing the resources
available.
Table 1. The Marketing and Entrepreneurship Conception of Resources.
Marketing
Entrepreneurship
Resources are allocated Resources are allocated to
The allocation across products and custom- market activities, by the use
of scarce
ers, by formally distributing of informal co-ordination
resources
them to various functions with other actors, with no
inside the firm, using an in- clear boundary between the
ternal formal management firm and its environment
system
Opportunities are exploited Opportunities are realized
The increase in the market outside the firm both by new combinations of
of scarce
in order to harvest resources existing resources, and by
resources.
that can be used to build up gaining access to resources
other resources inside the outside the firm
firm
Marketing management is directed towards organising the inner side of the
firm, by allocating resources to departments and activities. In doing so,
marketing management allocates scarce resources to several different product/market combinations, often by adapting portfolio thinking. The product/markets are treated as investments, and resources are allocated on the
basis of expected return and risk. In this case the resource-base is fixed.
But marketing, in the marketing management perspective, is unable to identify
new opportunities and to provide additional resources that are necessary to
pursue an opportunity. It must therefore lean on other disciplines which are
able to perform these lacking functions. Table 2 illustrates how the marketing management must lean on the disciplines of market analysis and finance in order to fill out the two missing functions.
10
Table 2 The Relation of Disciplines.
present
Resources
prospectiv
e
present
marketing
management
finance
Opportunities
prospective
market analysis and
product development
entrepreneurship
The opportunity identification function is left to market analysis. From this
point of view the firm can grow by adding new product/market combinations
one by one if it carefully analyses the market and develops new products that
fulfil the needs of the market. The market analysis approach, however,
presumes an existing opportunity or business concept, formulated as a new
product or service idea. There is thus a knowledge gap regarding the initial
identification of potential new business ideas (Hills & LaForge, 1992).
In the same way the problems of providing means for growth are left to finance. The problem of external financing influences the entrepreneurial
process as the entrepreneur cannot freely control his firm when there are
external resource providers to satisfy. The financial problem is thus related
to marketing in the way that the lack of a marketing plan containing an
analysis of market size and sales forecasts often hinders initial seed capital
funding (Hisrich, 1992)
Neither marketing management, nor market analysis or finance indicates fully
which new product-market opportunities may become available, or which
resource requirements they impose. This is not a means-end problem of
economising with given resources - not a question of efficient utilization of
means to achieve ends, but a question of knowing what other people do not
know, and do not know that they have overlooked (Kirzner, 1973). The
essence of entrepreneurship is the question of simultaneous identification of
means-end combinations - the ability, at one and the same time, to turn
problems into opportunities and not to accept apparent resource constraints.
In the entrepreneurial case we assume the existence of both multiple investment opportunities and an expandable resource base. While marketing
management is the analysis of what is - entrepreneurship seeks to etsblish
what is possible (Blenker, 1996). At one and the same time it is question of:
-
11
What is needed? This is the question of how entrepreneurs become aware
of or search for new market opportunities. The marketing answer is the
market analysis of customer wants and needs.
-
What can we provide? This is the question of how entrepreneurs select
and allocate resources among known product/market alternatives. In
marketing management, the answer is based on the analysis of existing
and available resources and their ability to provide the prospective offer.
-
What additional resources can be marshalled? This is the question of
how the entrepreneur seeks and assembles resources to pursue opportunities. In a very narrow sense this is a financial analysis, but in a
broader sense it is the identification of opportunities to assemble the
necessary resources from outside the firm. (Ardishvili & Cardozo, 1994)
This is the essence of entrepreneurship – an overview that shows market
possibilities expressed in customer needs - and recognises combinations of
resource supplies that can be employed in the pursuit of the opportunity.
Usually a change in one dimension is related to stability in another. One
dimension creates the context for the change in the other. In marketing, the
environment is assumed to be changing while the firm is somewhat stable. In
entrepreneurship this is not the case. Both the market needs and the available
resources are perceived as changing. Entrepreneurship thus deals with real
uncertainty rather than with risk. In the case of marketing management we
usually treat the innovative process as a question of dealing with risk, but the
entrepreneur must deal with real uncertainty. Further, the entrepreneurial use
of personal relationships and networks is a strong element in their way of
performing both the marketing function and the entrepreneurial function. An
entrepreneurial approach to marketing should incorporate this strength.
MARKETING AND ENTREPRENEURSHIP
INTERACTION & RELATIONSHIPS
Several attempts have been made to challenge the dominating paradigm of
marketing. Examples are “relationship marketing” or the “network approach”
developed by the IMP-group. These attempts build on other assumptions of
the marketing process. The buyer is seen as less passive, it is assumed that a
dyadic relationship exists between buyers and sellers, and the boundary
between the firm and its environment is less clear-cut than traditionally
assumed (Grønross,1993; Håkansson & Snehota, 1989).
From these alternative points of view, the marketing process is an interactive
process of which the establishment and management of relationships are the
most essential elements. Such an approach fits in well with entrepreneurship
theory. Both the process of identifying ideas for new ventures and the process
12
of finding the resources necessary to pursue the opportunity require contact
with external relationships. The interpersonal component is thus significant in
both the marketing and entrepreneurship function.
In the opportunity identification of the marketing function it is essential to
keep close contact and maintain long-term relationships with customers to
identify their needs, wants and aspirations as the basis for new business
ideas. But also in the resource acquisition of the entrepreneurship function
are relationships with the resource suppliers essential. Because business
ideas are generated without undue regard to the resources already available,
a good business concept should be able to further resource acquisition. The
entrepreneur thus needs a “resource-network” of good working relations with
resource suppliers. (Cromie & Carson, 1997).
In the following we will conclude with a few implications of the previous
thoughts: First, the importance of the networks for the entrepreneur´s seizing
opportunities. Second, the difference between market and marketing
investments, and third, the distinction between a collaborative and a competitive environment influencing the accessibility of additional resources.
Regarding the first element, seizing opportunities, the entrepreneur must
bring himself in a position where future opportunities are likely to appear.
The entrepreneur´s personal network, his communication with customers, is
his “common sense” mechanism to marketing, his way of gathering information on market activities, and it build on the ability to look for and respond
to signals in the market (McGowan & Rocks, 1994). These signals may take
on many forms such as: customer requests, supplier suggestions, ideas from
colleagues or competitive threats - but they all lie outside the boundary of the
firm.
Within marketing management, the sources that can be used for change, its
“action-parameters”, come from within the firm. In entrepreneurship the
sources of change also come from the interaction of the entrepreneur with his
environment. Rather than investing resources in internal assets, resources are
invested in developing networks. A large part of the marketing activities of
small entrepreneurial firms lies outside the firm. To be really marketoriented, resources should thus be directed, not towards building internal
marketing assets, but towards the world outside of the firm - the market. This
raises a question regarding the different roles of the marketing function in
small entrepreneurial firms. The entrepreneurial firm may not need the same
large amount of internal marketing resources. Instead it should balance
13
investments between the two tasks illustrated in figure 2 (inspired by
Johanson & Matsson, 1985). Figure 2 illustrates how small entrepreneurial
firms, in accordance with the traditional marketing paradigm, should develop
their own internal marketing capabilities - but at the same time practice
interaction-based marketing in order to develop external relationships.
Figure 2. Balancing Marketing and Market Investments
Marketing investments
Market investments
- nurture already existing rela- provide the right circumstances
tionships
for new relationships
- develop external relationships
- develop internal marketing capabilities
- commit resources to particular
- commit resources to internal
external actors
marketing assets
- customer-independent marketing - customer-dependent market
activities
activities
- create market assets
- create internal assets
One task is developing the nature and characteristics of each of the relationships that have already been established. This task is performed by market
investments, i.e. the commitment of resources to particular external actors in
the market. These market investments are thus very customer-dependent
market activities. Another task is to provide the right circumstances for establishing new relationships. Marketing investments perform this task: i.e.
investments committed to the creation of internal marketing assets that can
produce strategies and manage the four P´s of the marketing process. These
marketing investments are customer-independent marketing activities in the
sense that the investments are not made with an explicit customer in mind.
The entrepreneur’s network affects his access to resources. The accessibility,
however, depends on both the collaborative and competitive environment.
Traditional marketing theory would normally either assume that all resources
are equally accessible to all entrepreneurs and would focus on the
competitive environment. That is the question of how many entrepreneurs are
competing for the same resources, and how strong these competitors are. The
collaborative environment is, however, dependent on the entrepreneur’s
networking abilities - on his ability to build relations with the providers of
additional resources. The scope and density of his network thus affect his
opportunities for assembling resources.
14
CONCLUSIONS
In this paper the traditional marketing management approach has been criticised for being unable to handle the marketing problems of small entrepreneurial firms. Three different conclusions may appear from this critique.
The first one could be that the critique is not appropriate. Despite its weaknesses, the traditional marketing management approach has shown its
strengths during its history. The marketing management approach with its
focus on customer needs is a universal approach.
One may also conclude that the critique hits the mark, but in a selective way.
A traditional marketing approach may be useful for a large number of firms,
but entrepreneurship and network theory are a better foundation for the
solution of the market problems of small entrepreneurial firms.
A more radical conclusion is that this critique has severe consequences even
for large firms with a high functional specialization – and that large firms
have to learn from the small firm approach – that even large firms need entrepreneurship to integrate their functional specialization. This is perhaps the
biggest challenge.
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