Analysis of Kristian Leven Photography in London - Essay Example

? Managing Small Business: An Analysis of Kristian Leven Photography in London BY YOU YOUR SCHOOL INFO HERE HERE An Analysis of Kristian Leven Photography in London 1.0 Introduction Kristian Leven is the sole trader ownership of Kristian Leven Photography located on Mill Hill in London. This business specialises in wedding photography, offering customers a variety of photography packages with innovations occurring in specialised service delivery. The main mission of the owner is to capture wedding-related moments as they occur in the naturally with very little interference from the photographer. This is unique from other wedding competitors that provide photography services with specific manufactured (posed) shots. Kristian Leven is able to stand out from competitors with his naturalistic approach to wedding photography that better captures special events and moments as they occur. 1.1 Methodology Research was gleaned for the report utilising a qualitative methodology, involving an open-ended interview structure with the sole proprietor, Kristian Leven. The interview occurred on April 5, 2013 and was scheduled for 45 minutes. Leven was proposed questions on such concepts as motivation, funding sources, problems that occur in daily business operations, the social environment, and the entrepreneurial marketing mix. Findings from the interviews were compared to theoretical secondary literature on entrepreneurship and small business management to determine correlations between theory and actual business practice; or to identify dissimilarities between theory and actual business management. 2.0 Funding sources for Kristian Leven Research indicates that credit cards are the most common funding source for entrepreneurs, due to tightened restrictions with banking institutions and other lenders associated with the credit crunch of 2007 and 2008 (Schmith 2008). Leven indicated that he achieved start-up funding by networking with family members in order to obtain an initial co-signed personal loan for ?5000. Leven further supplemented this funding for the start-up venture with a credit card by which he was able to procure equipment and initial inventories not covered by the personal loan that was utilised to set up a storefront. Leven had considered seeking out a private investor, however he was concerned about the potential of contractual agreements being established that guaranteed shared profitability. Leven trusted in his ability to grow the business revenues early that would provide him with the capital necessary to launch a successful photography business. Leven fit the profile of entrepreneurs that must rely on credit cards as a relevant funding source and networking with family members to achieve start-up capability. Leven had submitted a formal business plan to bankers when he was just 19 years old, but his plan was rejected as the lenders believed he was too young and inexperienced to successfully manage the business. Today, Leven is proud to announce an annual cash flow position of over ?200,000. 3.0 Networking Networking is, according to Leven, one of the most fundamental success factors for how Kristian Leven Photography has experienced growth and gained a positive brand reputation with satisfied customers. Leven does not consider his family members to be viable networks for operating or managing the business, or in improving its position. Leven had personal experience with a family-operated business during his childhood in which many disputes about operations and financing were present. This ties in closely with the theoretical literature in which Johanisson and Monsted (1997) indicate there is no evidence available indicating that personal network capacity contributes to the success of the small business. Instead, Leven relies on professional networking, which are contacts that are developed through business operations. Leven indicated that nearly 80 percent of his business growth is attributed to word-of-mouth advertising that stems from satisfied clients with personal experience utilising Leven for their photography needs. Relationships, in this fashion, are built on trust and reciprocal acts between the sole trader and targeted customers. Several of these professional relationships have transformed into social relationships that provide further motivation to stay dedicated to business success and building the confidence needed to be a successful entrepreneur. Leven often meets customers outside of the formal office environment, inviting clients and potential customers to explore his portfolio of work over casual lunches and dinners as a means of sparking interest and, potentially, opening new markets for revenue growth. Theory indicates strong evidence that social networking has critical benefits for the entrepreneur, especially as it relates to the creative industries in which Leven operates his business. Social networks essentially function as target markets, in which consumer choice is influenced strongly by the sentiment and opinion of others in the social environment (Beck 2007; Ormerod 2005; De Vany 2004; De Vany and Walls 1996). Leven seems to understand the relationship between theory and practice as it pertains to the powerful influence that social networking has on the brand reputation of the business. By building trust with important markets, Leven is able to exploit the propensity of customers and other professionals in the social environment to provide positive sentiment about Leven’s business and mission. There are complex emotions and needs related to the creative industries and consumer behaviour, which is the rationale for why networking with previous and impending clients provides more visibility whilst also satisfying psycho-social needs to spark a decision-making outcome that favours Kristian Leven over competition. 4.0 Management problems Leven indicated that recruitment is one of his largest business challenges, attempting to identify individuals that fit within the cultural context of the business mission. Leven currently only maintains two full-time employees who assist with set-up during wedding events and coordinate customer appointments and in-house photo shoots. Leven’s main concern is providing employees with autonomy as his business is so reliant on being able to provide positive first impressions that are directly related to employee social competency. Consumer behaviour theory indicates that customers often make decisions based on first impressions which serve as the framework for how they perceive a competitive brand (Schiffman and Kanuk 2010). Leven has had previous experience with employees who were not intrinsically motivated to satisfy Leven’s service excellence guarantees, leading to negative first impressions and lost revenues. As the sole trader and also the executive manager of the business, Leven relies heavily on his employees to represent the brand image he has established due to his obligations and workload. Theory indicates that entrepreneurial ventures that find success in their markets have specific human resource-related characteristics. This includes providing worker autonomy, the establishment of a team-based structural design, and management that provides freedom to workers to adjust their daily work tasks in response to changing internal and external conditions (Ireland, Covin and Kuratko 2009; Hayton 2005). Leven has been unable to establish a model of recruitment that identifies appropriate employee characteristics most likely to provide service excellence and positive first impressions with important revenue-building clients. Leven does not have an established formal training framework as he believes that employees that will fit within the organisational culture he has established will maintain inherent characteristics that are appropriate and relevant for a customer-centric service model. Kristian Leven Photography also experiences management problems related to the planning process. This is due to the fact that markets (customers) are so widely diverse in their needs, both psychological and sociological, that predicting future revenue flows becomes difficult. Leven has found high levels of fluctuation in customer demand in which sometimes the demand is over his capacity to serve effectively whilst at other times there is virtually no business available. This makes it difficult to control inventory levels (as many photography products have a limited shelf life) and therefore costs in the process. Dess, Lumpkin and McKee (1999) indicate that planning for cost control is one of the most effective means of ensuring business longevity and competitive advantage. To combat this problem, Leven has procured a software program that tracks historical demand levels, based on completed service agreement numbers, to assist in the planning process. He has found that this has improved inventory management and holding costs, as well as waste of expensive film and development products. 5.0 Small business problems Leven has found that many of his customers are price-sensitive either because they have expended a great deal of personal finance on the actual wedding planning process or because markets maintain limited resources whilst still demanding a top quality wedding event. This price-sensitivity has made him increasingly aware of the impact of pricing on his competitive position whilst still attempting to keep costs low operationally. Tam (2004) indicates that customers tend to perceive higher service value when it is believed that the buyer receives superior service compared to the actual costs of obtaining the service. Leven has found difficulty in establishing a pricing structure that is comparable to his premiumisation strategies that he has defined as being linked with excellence in competitive service quality. Unfortunately, Leven is not equipped with the resources to expand his operating presence outside of the London region, therefore when price-sensitive buyers have market control, he cannot simply seek new market opportunities elsewhere. Finding the appropriate balance between high service quality marketing as aligned with an appropriate, market-centric pricing methodology is very difficult for this small business. Leven has been attempting to position the business in terms of quality, a means of differentiating the business from competitive wedding photography businesses. Leven felt that focusing on quality would improve perceptions of service excellence and also justify a moderately higher pricing structure. Actual practice, however, has indicated that price-sensitivity in target markets serves as the foundation for whether or not his services will be selected over rival photographers. This has led to considerable planning activities to try to create a value proposition that emphasises both quality and affordability. According to Hisrich and Peters (2002) the value proposition can serve as a tool for competitive advantage and gain market interest by aligning core values and service with customer needs. Positioning is directly related to competitive forces. The company’s two main competitors are Mark Anderson Photography in London and Stephen Hyde. Hyde provides very low price structures that capture many low resource customers. However, Hyde stages his photography sessions which makes wedding photographs appear artificial. Stephen Hyde positions the business according to celebrity presence in the portfolio which captures the attention of customer segments that make decisions based on social reference groups. This positioning gives Hyde much more brand presence to many markets. But it is the naturalistic philosophy of Leven that awes customers when they view his portfolios. 6.0 The Entrepreneurial Marketing Mix and new media The 4Is of entrepreneurial marketing include a cyclical relationship between information gathering, innovation, identification of target markets, and interactive marketing. Leven has been, since the business’ inception, attempting to create a brand personality that is distinguishable from competitive forces. Aaker (1996) describes the dimensions necessary in order to create an effective brand personality. These include sophistication, sincerity, excitement and competence. Other than the finished product (the photos or videographic products), so much of the photography business is intangible, therefore brand-building is necessary to differentiate between similar service providers. Leven fits the entrepreneurial identity known as the artisan identity as described by Carter and Jones-Evans (2006), an individual with a motivated personality that achieves intrinsic satisfaction from his line of work. Leven believes that he can emphasise the core values and beliefs of his own personal ideology of photography as a selling point and brand identifier. To build the brand successfully, however, information must be gathered about market characteristics, especially psycho-social needs. Leven maintains an online and in-store satisfaction survey (deliverable by email to registered customers) that assists in providing quantitative statistics (it is a ranked order scale) about where the business needs improvements or where its strengths lie in the minds of consumers. This information then assists in identifying opportunities for innovations in service delivery, following the 4I model of entrepreneurial marketing. This is how Leven is able to identify and target his desired markets, by focusing on how customer segments view the Kristian Leven Photography brand. Leven targets his customers using advertisements, both in social media (which is cost-effective) and in direct mailing that spotlights his competitive advantages and value proposition. According to Bennett and Rundle-Thiele (2004), the only legitimate asset that a business has that cannot be replicated is the brand identity. Kristian Leven works with very diverse customer segments that hail from different ethic and regional locations, all sharing different social and psychological characteristics. Many of his customer are Asians (a less price-sensitive market), mostly from collectivist countries. Theory indicates that collectivist customers are very group-oriented and build their identities and decision-making processes on the holistic sentiment of the group or family structure (Cheung et al. 2008). When targeting the more profitable Asian markets, he often utilises wedding photos of the collective family whole in direct mailing literature, in an effort to spark an emotional response related to quality of the photography and the relevance of Asian actors depicted in the photographs. The data that he correlated to Asian market, collectivist characteristics has indicated that this type of marketing approach builds more interest in Kristian Leven over competitive forces. Other customer segments not fitting the collectivist profile tend to want Leven to provide planning services and consultation along with photography as many lack the knowledge of these processes without gaining support from professionals. He believes that this research-supported need of buyers assists in selecting his brand for competence. His independent market research and customer satisfaction metrics indicated more need for consultation, thus giving him an opportunity to differentiate by competence, which was highlighted by Aaker (1996) as being an important construct in building a positive brand personality. This ties in closely to the marketing theory related to branding which states that a brand that is able to provide consumers with positive perceptions of self-expansion will likely achieve more loyalty (Zhang and Chan 2009; Greenwald et al. 2002). Leven seems to understand the need for the entrepreneur to develop a solid brand and innovate in marketing tactics and strategy in order to gain target market attention and brand preference over competition. His company’s presence on social media also accomplishes how he is able to differentiate and position the business on the market with a quality emphasis. Pathak (2011) indicates that markets are never static, constantly in a state of evolution in which cultural diversities play a role in consumer decision-making processes. He is able to gain followership on Facebook and LinkedIn to determine which customer segments find connection with his brand philosophy and service ideology. Wang et al. (2002) indicates that how an individual perceives an ad will determine their specific attitudes related to the brand. Kristian Leven understands the complexity of perceptive evaluation which is why he seems to have chosen social media as he can freely adjust marketing messages based on volume of responses received and followership ratios calculated on the social media websites. 7.0 Conclusion As indicated by the research and the primary data gathered from Kristian Leven, there are many dimensions of small business management and entrepreneurial theory that align theory with actual practice at the photography business. Leven is likely achieving such significant revenue growth by understanding the complexity of social and consumption behaviour with his target markets and then translating this into innovative service delivery ideology and advertising strategy. Coupled with networking, planning, conducting market research, and being socially interactive with clients in different segments, Leven gains competitive advantage through brand-related differentiation. Theory versus practice is closely correlated in this particular business model. References Aaker, D.A. (1996). Measuring brand equity across product and markets, California Management Review, 38(Spring), pp.102-119. Beck, J. (2007). The sale effect of word of mouth: a model for creative goods and estimation for novels, Journal of Cultural Economics, 31(1). Bennett, R. and Rundle-Thiele, S. (2004). Customer satisfaction should not be the only goal, Journal of Service Marketing, 18(7), pp.514-523. Carter, S. and Jones-Evans, D. (2006). Enterprise and small business: principles, practice and policy. Harlow: Pearson Education Limited. Cheung, F., Cheung, S., Zhang, J., Leung, K., Leong, F. and Yeh, K. (2008). Relevance for openness as a personality dimension in Chinese culture, Journal of Cross-Cultural Psychology, 39(1), pp.81-108. Dess, G.G., Lumpkin, G. and McKee, J.E. (1999). Linking corporate entrepreneurship to strategy, structure and process: suggested research directions, Entrepreneurship: Theory and Practice, 23(3). De Vany, A. (2004). Hollywood Economics. London: Routledge. De Vany, A. and Walls, W.D. (1996). Bost-Einstein dynamics and adaptive contracting in the motion picture industry, The Economic Journal, 106(439), pp.1493-1514. Greenwald, Anthony G., Mahzarin R. Banaji, Laurie A. Rudman, Shelly D. Farnham, Brian A. Nosek, and Deborah S. Mellott (2002), “A Unified Theory of Implicit Attitudes, Stereotypes, Self-Esteem, and Self-Concept,” Psychological Review, 109 (1), 3-25. Hayton, J.C. (2005). Promoting corporate entrepreneurship through human resource management practices: a review of empirical research, Human Resource Management Review, 15, pp.21-41. Hisrich, R.D. and Peters, M.P. (2002). Entrepreneurship. New York: McGraw-Hill Irwin. Ireland, R., Covin, J. and Kuratko, D. (2009). Conceptualising corporate entrepreneurship strategy, Entrepreneurship Theory and Practice, 33(1), pp.19-45. Johanisson, B. and Monsted, M. (1997). Contextualising entrepreneurial networking, International Studies of Management & Organisation, 27(3), pp.109-136. Ormerod, P. (2005). Why most things fail: evolution, extinction and economics. London: Faber & Faber. Pathak, S. (2011). Managing cultural diversities in internationalisation of business, International Journal of Enterprise Computing and Business Systems, 1(1). Schiffman, L.G. and Kanuk, L. L. (2010). Consumer Behaviour, 10th edn. Upper Saddle River: Prentice-Hall International. Schmith, S. (2008). Credit card market: economic benefits and industry trends, Department of Commerce – International Trade Administration. [online] Available at: http://corporate.visa.com/_media/ita-credit-card-report.pdf (accessed 2 April 2013). Tam, J.L. (2004). Customer satisfaction, service quality and perceived value: an integrative model, Journal of Marketing Management, 20, pp.897-917. Wang, C., Zhang, P., Choi, R. and D’Eredita, M. (2002). Understanding consumers’ attitudes toward advertising, Eighth Americas Conference on Information Systems, pp.1143-1148. [online] Available at: http://melody.syr.edu/hci/amcis02_minitrack/RIP/Wang.pdf (accessed 3 April 2013). Zhang, Hong and Darius K-S. Chan (2009), “Self-Esteem as a Source of Evaluative Conditioning,” European Journal of Social Psychology, 39, 1065-74. Appendix A: Personal Reflection Reflection is defined as “looking backward on a particular experience, making sense of it and determining what to do in the future based on this knowledge” (Drew and Bingham 2001, p.221). This course taught me the absolute value of networking in providing competitive advantage and even bringing new markets to the small business owner. Reflectively, I had never thought much about social or professional networking as I am not largely extroverted, believing more strongly in my own competencies to manage a business without supplementary support. However, when making an honest assessment of my previous social networking experiences, I realised many opportunities that could have had outcomes in my favour rather than the ends these situations met. For instance, conflict occurring in group work due to radically different values and beliefs led to deadlines being missed and a breakdown of social cohesion. This course taught me the value of considering the viability of various networks that can open the doors to trust, reciprocity, and even new market potential. The information learned through this reflection will assist in working with diverse customers, diverse suppliers and even internal staff members more effectively. These are traits necessary to run a successful entrepreneurial venture. I was also astounded to learn about the many different values and benefits of the marketing function, especially related to the 4Is of the entrepreneurial marketing mix. I was not, before this class, able to make the distinction between the traditional 4Ps of marketing and other strategies that are more relevant for small business owners. I think, based on learning, that this ties in closely with the need for networking as the 4Is demand interactivity with target consumers that have been identified. The primary data achieved when working with Kristian Leven also provided more emphasis on marketing’s importance for differentiation and also positioning a business properly in competitive markets. Reflective review of learning has indicated that this could be a powerful business management enhancer in the future from a personal perspective, having seen the complexities and inter-dependencies between brand reputation and the ability to attract profitable target markets. What needs more development is my lack of understanding about how to be responsive to markets that are not static and where consumer attitudes create a variety of unpredictable behaviours. The coursework taught that market conditions can be difficult and that there must be adaptability and flexibility in the business model to seize opportunities. The specific strategies, however, on how to adapt seem to be unique to each business type and owner profile. Reflecting on weaknesses of learning will assist in coming up with strategies to research adaptability strategies in order to be a more effective business owner in the future with the skills and competencies required of a corporate entrepreneur. Honest reflection involves not only understanding one’s strengths, but also their weaknesses as well. Reference Drew, S. & Bingham, R. (2001) The Student Skills Guide. 2nd edn. Aldershot: Gower. Read More