Entrepreneurship in Marketing - Assignment Example

Entrepreneurship in Marketing Answer 1 Entrepreneurship can be described as a rapidly emerging concept, especially in case of non-profit public and private sectors. Markets have been observing a growing interest for entrepreneurship and this increase is taking place at a very fast rate. However, entrepreneurial marketing has also been suffering from various issues such as lack of funding and increase in competition leading to closure of many small and medium firms. The current report will through light on the emerging concepts of entrepreneurial marketing and how these concepts are helping traditional as well as more established firms to come out of their shell and involve in creative and innovative strategies. The objective of this essay will be to analyse the emerging themes in entrepreneurial marketing. The current status of entrepreneurship will be examined. The essay will also discuss emergence over the years. According to Morris, Schindehutte and LaForge (2002), “The concept of entrepreneurial marketing has been used in various ways, and often somewhat loosely.” This confusion arises because of the fact that every term in this concept can in interpreted in a different manner. Thus, it is possible to establish various interrelations which can greatly deviate from people to people and from time to time. These concepts and learning from the entrepreneurial experiences can be understood as new venture marketing or innovative marketing. Apart from the above, entrepreneurial marketing is also being considered as appropriate and preferred business concept in turbulent or emerging markets. Since its birth and various evolutions, entrepreneurial marketing has been moving on along two different trajectories. The first one is focusing on the marketing behaviour of small businesses as well as behaviour of the entrepreneur’s irrespective of the size and objective of the firm (Carson et al., 1995). The second one is assuming that entrepreneurial marketing behaviour is available not only in small and newly established ventures but also in bigger and much established firms too. This concept has gained more favour studying situations where a big company is in a declining stage and creates a positive turn-around situation for the company. This research line has been extensively followed in order to understand the benefits entrepreneurial marketing can provide so that there is positive influence on the overall creativity and innovativeness of contemporary marketing practices, especially implemented by larger and more established firms. The above argument also makes a base for this current study whose purpose is to understand the positive relationship between entrepreneurial marketing and established marketing activities. The current paper will also throw light on the influence entrepreneurial marketing creates on the broader marketing theories and concepts. Research of marketing in small businesses has invariably contributed to the development of the concept of Entrepreneurial Marketing. Entrepreneurial marketing has always been linked with innovation, creativity and emerging new concepts. With continuous research it has also been observed that significant amount of difference lies between smaller marketing firms and their larger counterparts. Researchers evaluating larger firms have now started to question the overall reliability and validity of marketing theories implemented by them. According to Brownlie (1998), the formal marketing strategy and planning has become obsolete and filled with shortcomings as these processes are carried out with imperfect future knowledge. Also, rapid changes in the market and economy is pulling back these strategies and planning concepts. Instead of just implemented old and tried concepts, following a managerial concept as well as creativity can be considered as more preferable and appropriate tool for strategy and planning. The current marketing practices are filled with uncertainty and ambiguity, as a direct impact of the changing consumer perceptions and even increasing demand among them. The reason for uncertainty can be attributed to the attempts of the business to analyze and rationalize. It has also been argued that in spite of a regular usage of variety of rational methods, not much of evidences have been gathered showing that rational approaches are better in generating positive results, compared to judgmental and creative approaches. In case of large firms, these issues are much complicated where higher uncertainty levels can be expected. Also, the increasing globalization impact has increased the level of uncertainty to manifolds. For instance, even if a large and established firm is following globalization strategy through franchising, it cannot be guaranteed that the same strategy will be successful in this current environment, given the increased competition from local and international counterparts and increasing volatility among consumer demands. Since many smaller organizations have grown and flourished under this similar environment of uncertainty and risk, researchers have concluded that this growth has been facilitated by managerial and creative judgment. Strong coo-relation has been found among the acts and strategies of bigger marketing firms during volatile and rough growth period and smaller entrepreneurial firms. As a result, creativity in management is also considered as a process theory construction. According to research studies, managers and owners from smaller firms are able to derive creative and new marketing forms. This is implemented in various forms such as examining various creative and successful practices outside traditional marketing boundaries. For instance, various tools for making marketing decisions such as portfolio analysis and SWOT analysis are still used by firms. However, they should be utilized in a more creative manner so that their effects are more pronounced. This might need implementing few changes here and there and amend the action course according to the contemporary requirements. Smaller firms are found to be more flexible, open to its customers as well as better in adapting as well as implementing creative changes. This is done by exploiting their core competencies which is considered as a risk among traditional and more established firms. According to Gilmore, Carson and Grant (2001), small and medium enterprises are not able to implement formal marketing tactics because of their limited access to resources and the difference in perception of its owner or management. Their processes can be termed as chaotic, non-linear and haphazard. Networking theory can be considered as a better alternative for understand and explaining marketing in small and medium enterprises. Networking in entrepreneurial marketing is viewed as major competency which influences an entrepreneur overall decision making process while formulating marketing strategies and plans. As the concept of entrepreneurial marketing grows stronger, the managerial judgment of these entrepreneurs evolves from mere managerial judgment and acting only on instinct to a more planned, considered and futuristic strategy. The concept of entrepreneurial marketing has gained much attention because of its perceived benefits. Adapted from a five-value model from Sheth and Sisodia (1999), these perceived values are widely acclaimed due to the broad application of entrepreneurial marketing in various ranges of disciplines. Some of them are sociology, economics, consumer behaviour and psychology. A detailed analysis of these values will help in better understanding of entrepreneurial marketing’s increasing attractiveness. Emotional value: in the context of entrepreneurial marketing, emotional value can be described as affective state or feelings aroused from various entrepreneurial activities. Sometimes, taking up entrepreneurship meets the emotional needs of owners and managers, and in these cases the emotional value of entrepreneurship is quiet high. According to Shane, Locke and Collins (2003), “passionate, selfish love of the work” is the central motive that encourages people to build an organization and make it profitable.” According to the theory of affective evidence, events at the workplace create negative or positive affective influence in workers and subsequently presage behavioural responses and attitudinal state. Economic Value: Economic value can be referred to as various economic benefits gained from starting a new venture. Whether to opportunistic entrepreneurs or craftsmen entrepreneurs, an important decision for future continuation of the business is the commercial profit obtained from these activities. For the craftsmen, profits will help in survival and livelihood and for opportunists; it will be growth and further expansion. Social Value: Social Value can be considered as those benefits obtained from group or interpersonal interactions. In context of entrepreneurship, this can be connected to the social status acquired from doing entrepreneurship or the benefits of a large social network. It would be wrong to consider them as individuals different from the normal society. Their overall social and interpersonal skills can be building throughout the entrepreneurship process. Epistemic Value: Epistemic Value is the benefit derived from the ability of the entrepreneur to provide novelty, arouse curiosity as well as satisfy the increasing desire for information and knowledge. Entrepreneurship environment is in general open and problems are exogenous and real time. Having a perfect and established structural knowledge is impossible and thus, entrepreneurship activities are implemented through constant learning and experience from past successes and failures. However, one big differentiator is the risk taking nature and going away from the carved path by entrepreneurs, which in general, is less seen in established firms. This is another advantage of entrepreneurship where the owners and managers are avid risk takers and thus they know how to prepare for tough conditions such as failure of a project or strategy. In order to understand the working of a small and medium enterprise, the enterprise chosen was Palliser Estate in New Zealand. The company is into wine manufacturing and distribution. The enterprise was started by 6 individuals in the year 1982 with just three workers and 20 acre vineyard. However, the company successfully created a niche market with its strategy and business acumen and by 2002; the enterprise has become one of the most successful producers of wine across the state with more than 45 employees and yearly net profit more than 900,000 dollars (Beverland and Lockshin, 2004). The business of vineyard is a tough one as grape wines need a minimum 4 to 7 years before producing fruits. However, this extended time period makes the wine business even more problematic. The reason behind this is once the wine matures, the producers are not very sure of the likings and preferences of customers by then. In order to cope up with this future risk, the owners planted classic grape varieties which are favoured irrespective of the time period. However, the company also made sure than the marketing activities of the firm was implemented accordingly. Entrepreneurship marketing was supported by aggressive response to competitors as well as planning for crisis management. The owners also agreed that the first batch of wine produced did nothing to enhance the firm’s brand equity. Initial selling was restricted to local consumers and wholesalers only. However, the company realized that in order to create a position in the premium market segment, they will have to focus on export. This was the first strategic move taken by Palliser. The risk taking ability as well as nature can be clearly seen here. Compared to a larger and established organization which would have focused on local market expansion, Palliser took a step further and ventured into export. Few of the benefits which can be explained are huge boost to the overall brand equity, international brand awareness and an upper hand over prices. The successful of their export strategy can be considered by the fact that more than 60 percent of the produced wine is exported and this percent is set to increase to 80 percent within few years (Beverland and Lockshin, 2005). This successful strategy of Palliser can be related to the crafting mentioned earlier. According to this perceived benefit, SMEs are able to create and implement sustainable entrepreneurial activities while having the realization that they need to manage their niche market with limited resources. One of the major strategies which lead Palliser to success was implementing simultaneous and not linear marketing activities. For instance, the firm implemented quality improvement tactics while having brand awareness activities run in various regions and though various marketing channels. The firm has made huge investments in new and advanced technologies which have helped in enhancing its overall operational effectiveness. However, it is also important to recover investment cost through increased sales. Palliser’s focus is not only in selling but also placing its products in strategic platforms leading higher product awareness and recall. This has resulted in a big change in the core strategies of the firm. At present, Palliser is aimed at creating a niche brand image for itself. The firm enhanced its product packaging by removing corks and including screw caps. The company has also started using a two-tier name for its brand. Screw caps helped in eliminating wine loss and have also helped in getting a positive publicity for the brand. Two-tier branding helped in increasing the flexibility of the firm. Through this strategy, the company obtained an outlet for those variants that did not meet the required quality standards set by various outside organizations as well as premium range of Palliser’s wine products. Another major strategic marketing tactic followed by the enterprise was spending a part of the sales budget in various relationship building activities as well as product placement. For small and medium enterprises, this strategy has been proved to be more useful and cost effective compared to purchase of expensive and pricey advertisement space. For Palliser, relationship building includes brand exposure as well as attaching itself with a more established and renowned brand. For instance, Palliser has been promoting its high end wine varieties in events such as Wimbledon, business class and flights as well as various luxurious hotels. Apart from the above strategy, Palliser has also started co-branding its wine bottles with Audi. Customers are given two free bottles of wine after every Audi purchase. Sufficient effort and time are spent in building positive brand recognition. For this, the management of Palliser has been registering into various global wine shows as well as using internet advertising for increasing its international exposure. According to the company’s philosophy, wining of these awards will enhance its overall brand recognition and brand strength as well as provide valuable publicity. Recommendations for a suitable future Entrepreneurial Marketing strategy The above case study of a SME has clearly indicated the various benefits of entrepreneurial marketing. Entrepreneurial marketing helped the company start from scratch and become one of the most famous wine makers across New Zealand. In order to establish long term brand strength, the company can involve in further entrepreneurial activities. It can be concluded that most of the entrepreneurial marketing concepts and strategies have proved to be successful given the current economic and global environmental conditions. The company should aim to offer the best services and products in the market. Though promotions and advertisements create demand and increase sales, they are not enough to establish a long term partnership with the consumers. This is possible only when the firm in continuously offering distinguished and better quality services and products. Next, entrepreneurs should aim at discovering better and more efficient solutions to the needs of the customers and at lower costs. Likewise in the case study, entrepreneurs should involve in premeditated creating of outstanding value to the consumers, resulting in increase of brand strength and deeper relationship with the consumers. Another way of creating a niche market for itself is developing a combined product and market oriented strategy. During the initial period of entrepreneurship, focus was given on strategic marketing and actions purely based on intuitions. However, as the company has grown to become one of the finest wine products, their stakes have also increased. Thus it has become imperative for the firm to inculcate both relational as well as transactional marketing approaches in their various business strategies. Answer 2 Researchers and analysts have started observing various loopholes in the business community and strategy implementation of mainstream marketing. Empirical observations have concluded that the behaviour of entrepreneurship marketing is not based on the traditional and prescribed marketing theories. Rather, they are found to be very different from the traditional marketing practices followed by larger and more established firms. However, investigations on the entrepreneurs suggest that the success rate of entrepreneurial marketing is much more compared to what it was 10-15 years ago (Morris, Schindehutte and LaForge, 2002). The performance, development and growth of an organisation depend considerably on the concept of intrapreneurship as it aids managers and owners to revitalize and renew their businesses. Thus, corporate entrepreneurship or intrapreneurship in a big firm can be considered as methods offering an organisation various strategic options for purifying its business concepts, enhancing competitive positioning and meeting the ever changing expectations and needs of the customers. These methods also help in improving the overall flexibility and reactiveness the organisation. Intrapreneurship is considered as an act of performing new things as well as departing from the regular or customary activities for pursuing future opportunities. However, bigger organisations have always been risk-averse, taking planned and previously implemented steps as well as keeping away from absolutely different ideas and concepts. Most of the established marketing firms believe is strategies which are already successful and have generated positive results in the past. Mainstream has always been criticized for neglecting the marketing methods adopted and applied by entrepreneurs. According to researchers and critic, this problem is deep rooted and starts with schools, colleges and universities. Most of the studies and marketing subjects in business schools are based on normative marketing theories which cannot support the imaginative and creative behaviour of entrepreneurs. Traditional marketing theories and concepts have also been criticised for providing unsubstantial and irrelevant strategies for B2B concepts. It has also been advocated that traditional marketing strategies have matured and increasingly becoming obsolete and insignificant compared to the new age entrepreneurial marketing. However, it is also important to understand the risks at stake for larger and well-established firms. Since they are dealing with much larger capital investments and stakeholders, future planning with secured and strategic steps and back-up plans are an absolute necessity. Firms following traditional marketing concepts have been successful so far and as a result, these firms resist any change in their strategies and marketing tactics. They are in general, inclined towards rational approach for decision making and using the strategy which is known to be best available among other options. The traditional form of marketing was at its high during the 1970s, where well established and super big firms and multinational corporations were having a golden period. During that time, these big multinationals thrived by dominating the market and economic environment and making profit from various economies of scale. However, global market and the economy have changed significantly after that and these big and large multinational no longer enjoy their dominance. This is clear from the fact that those companies which were listed as top companies across the globe 50-60 years back, are no longer in the same list. In fact, most of these organisations do not even exist. This proves that even after following successful and widely accepted strategies and marketing concepts, these companies had become habituated and failed to understand the coming changes and market evolution. As a result, they were not at all prepared for the increasing volatility and subsequently vanished during competition. The concept of intrapreneurship has been studied and evaluated under various circumstances. At an organisational level, the concept of intrapreneurship becomes more complicated. It can be defined as entrepreneurship within a firm or organisation. This can be attributed from the fact that organisations might create more than one unit of smaller firm within its brand name. It can be also defined as the emerging intentions and organisational behaviours which are responsible for the departure of traditional and customary marketing concepts. Intrapreneurship activities can continue within a firm irrespective of its size, reputation or market reach. They is not confined to creating new businesses or ventures but also involved in other creative and innovative activities such as developing new products and services, administrative techniques, competitive and strategic postures and technologies. The various character dimensions include competitive aggressiveness, risk taking, process innovation, venturing into new and unrelated areas. While establishing a connection between traditional marketing concepts followed by larger organisation and entrepreneurship, researchers have given emphasis to the growing need among the larger firms to cope up with the ever changing needs of customers, investors and other stakeholders. In order to better understand the working of a larger organisation, Brazil’s bigger power producing enterprise can be studied. The energy demand has seen a constant rise in the past few years. The country is known for its clean and renewable energy infrastructure. Before 1990, most of the generated electricity came from state-owned enterprises (Lyons, 2010). Most of the big hydropower plans were constructed by private firms under various contacts with the public energy firms. However, frequent delays in construction schedules due to deficiencies in budgets created issues such as demand and supply imbalances and cost-overrun. Also, environmental regulations were not very strict in Brazil as these regulations were properly established only after the 1990s (Blount, 2010). This resulted in construction of various facilities and plants without having standards. As a result, social and environment costs were high and created a lot of pollution. There was a steep degradation in the quality of water and diseases such as malaria and typhoid started to maul the nearby residents. There was a steep decline in the health of animals as well as plants in the Amazon area. The social and environmental impacts of the construction projects led the government of Brazil to stop these projects, especially near environmentally sensitive areas. Against this backdrop, Odebrecht has risen to become one of the largest consortiums by spending more than 600 million dollars on various sustainable development strategies for Amazon region (Odebrecht, 2010). The firm has been commissioning a continuous assessment of the overall environmental impact of various construction projects. In order to drive the innovation process, the firm not only projected the amount of harmful emissions in the coming years, but also implemented strategies for reducing harmful emissions and pollution in these areas. For instance, the firm implemented higher usage of turbines with low head implying smaller reservoir and subsequently lesser chances of flood. The above strategy also helped the firm in bringing forward sustainable and effective usage of natural resources. The company involved itself in various social activities such as training local citizens on necessary steps during emergencies. This programme has provided training to more than 36,000 individuals across various regions in the country. The company also provided necessary training to individuals helping them in gaining jobs such as welders, bricklayers, electricians and carpenters. With the help of local development strategy, the company not only established itself as a socially responsible corporate, but also increased its overall brand value. The company came to known globally and was benefitted in terms of international investments and association with various international NGOs. Future Benefits The above case study clearly illustrates the deviation of traditional marketing firms towards entrepreneurial and more creative areas. Also, with increasing consumer and investor awareness towards environment and social impact, organizations are now more involved in CSR and environmental activities. This has become one of the most favoured and adopted strategy among big organisations. Also, unlike small and medium enterprises, bigger organisations have sufficient resources and capital to involve in activities related to corporate social responsibility and future environmental sustainability. Surveys in the field of CSR and community have suggested that organisations involving in these activities are perceived to be socially responsible, subsequently gaining better brand recognition and brand equity. Apart from consumers and investors, bigger organisations are also facing a lot of fire from environmental organisations and NGOs because of their lower level of participation in social and environmental activities. As a result, more and more number of organisations is participating in various voluntary and global environmental programs. It has also been seen that larger organisations are finding it difficult to cope up with the increasing changes in customer demands. Traditional marketing concepts are no longer viable while implementing successful strategy for the new age customers. Thus, established organisations are now changing their fundamental concepts. For instance, more and more organisations are hiring young talents in much higher ranks, those which were only filled by experienced and senior ranked managers. The objective here is to dispense enthusiasm, risk taking ability, and force in the marketing strategies of these organisations. In order to ensure successful and long term growth and development, bigger and more established organisations should start inducing innovation and entrepreneurial marketing in the overall strategic and planning activities. 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