Free «Small Business Marketing Strategy» Essay

Literature Review

Introduction

It is accepted that the fundamental principles of marketing are collectively applicable to both large and small businesses. The research of marketing in SMEs has been a problematic topic for most researchers over the last two decades. SME marketing is believed to be done via networking or through a combination of transactions, interactions, relationships, and network marketing (Etemad 2004).

One of the significant forces behind running of every market economy has been identified as the small and medium-sized enterprises. There are only a few who need to be convinced beyond this statement, though it may sound familiar. According to statistics, among the developed nations, the SMEs play a significant part in developing the economy. The purpose of MSEs in the emerging economies is a spring board to the future development of the nation economies. In Western economies, approximately 99 per cent of businesses are under SME classification, whereby they are providing employment to around 53 per cent of the entire work force. The SME is accounting for 50 per cent of Europe’s GDP. According to the data by SBA (Small Business Administration), in the United State, the SME account for approximately 99.7 percent of the entire employers, while providing jobs for 53 per cent in the private sector, and accounting for 47 percent of all sales in the US. The Small and Medium-sized Enterprises in Japan also caters for approximately 99 percent of all the business and provide employment to about 77 per cent of the nation’s work force. During the last one decade, in the emerging economies an extraordinary massive number of companies have emerged in the private business sector, where significant sections of them are classified as SME (DIMITRATOS 2010).

The research on the SME, and in particular in the private enterprise context, has been going a transformation over the last two decades. There has been a variety of research conducted on the development of SME, some of which have been focusing on the emerging economies. The relevant researches have been on the rise according to the increasing importance of the SME in the development of the national economies. There is an impression that the research so far carried out has covered all aspects of the SME practices. Nevertheless, the ongoing debate indicates that there is much to be discussed for further development of SME (Rialp 2007).

Furthermore, there is a need for practical study on the marketing and management matters in the small enterprises. Those presented in short supplies, mostly in relation with strategies, are of significant value, though insufficient. Initially, studies regarding strategies were based on the world-known and successful corporations. According to Cravens (1994), the empirical examination and conceptual focus of the strategy has taken the central part of the problems and the experiences of high profile 500-class firms (ZHANG 2009).

Therefore, investigating the strategies related to the small firms is inherent in reflecting the outcomes provided by the previous studies.

The term “small firm or small enterprise” is used in organizing statistical data based on quantitative indicators, such as profit, capital, earnings, balance sheet totals, equity, production, sales, and market position among other market indicators. The indicators are different from one economy to another and from a nation to another. Among many other criteria, the number of employees and the turnover are the most significant indicators in defining the nature on business (Solberg 2006).

In Japan, the SME are defined in the Small and Medium Enterprise Basic Act, whereby they refer to the enterprises with less that or capital that is equal to 300 million Yens or regular workforce of less than or equal to 300, and sole ownerships with less than 300 employees (Rialp 2007).

People operating SME often start the business for various reasons. Intrinsic factors such as the opportunity to promote their living standards and personal satisfaction are the criteria applied by SME operators to define the successes of their business. According to Paige (2002), small business owners and operators are known to educate their customers about their products as one of the marketing strategies Creativity, such as targeting product-exclusive markets, and pooling resources with other operators can be of significant help to the business operators in attaining their personal and business targets (Hatch 2002).

The inventiveness and originality in marketing is significant to the success of small businesses. To distinguish the small businesses from the larger retailers offer more standardized product varieties. The small business operators perform better when they are innovative, unique, and offer improved qualities. The internet is a beneficial avenue through which to develop innovative marketing strategy for small scale businesses. Unfortunately, there is little research that has been conducted on the internet marketing since technology is changing rapidly not considering that it is new. Despite these restrictions, several researchers suggest that the internet is an area where SME can gain the necessary exposure to a wider market. The research conducted by Swatman and Poon indicates that using the Internet considering the underlying benefits, the business would gain a success. Most of the small business operators using the Internet as a mean of marketing their products have reported further benefit in the form of emerging opportunities (Solberg 2009).

Electronic Marketing (E-Marketing) may be seen as an upcoming philosophy and a new business activity in the marketing of products, information, services and ideas through the internet and other electronic gadgets (Hallberg 2000). While reviewing the available literature, it was noticed that e-marketing vary according to the different author’s perspectives. For that, while Chaffey defined e-marketing objectives via digital technologies. According to Chaffey, the use of electronic information and application for the executing and planning the distribution, conception and pricing of services, goods and ideas to create the exchange that meet the individuals and organizational goals. On the other hand, the main limitations in the available literature are the ineffective ways of dealing with the definition and concept of e-marketing. In this respect, the most researches have misused the term e-marketing the majority marketing researchers have used the term e-marketing /e-business/e-commerce as equivalents for the same meaning, which is incorrect since they are deferent. For instance, e-marketing tend to have a broader scope as compared to the internet marketing. Internet marketing refers solely to the internet; while E-marketing tends to include internet and all the e-marketing tools. To contrast, the e-commerce and the e-business have a broader a wider range as compared to the e-marketing (Etemad 2004).

According to Zetlin, SME operators feels that possessing quality products is important; nevertheless, alternative means of attaining success in their marketing include a responsibility for the quality, being flexible to change, innovation in marketing, maintaining good supplier-customer relationships, as well as hiring quality people and empowering them. According to Bird (2002), the firms with innovative owner were successful in small business operation.

According to Ratnatunga and Romano’s work, marketing in SME can be regarded as a strategy, culture, and tactics. Marketing as a strategy activates the actual market position of SME. Marketing as a culture analyses the customers’ needs and evaluates the competitiveness of SME. Marketing as a tactics analyses the 4Ps impact on the performance of the SMEs. Nevertheless, Ratnatunga and Romano admitted that the classification of the marketing of SMEs is arbitrary and it is open for further research (Mak 2003).