Essay: Marketing in SMEs: An Investigation of Owner Managerial Education on Market Orientation and Marketing Innovativeness

Introduction
Market orientation has been subject to considerable attention from academics since the 1990s (Jaworski & Kohli, 1993; Goldman & Grinstein, 2010; Liao, Chang, Wu & Katrichis, 2011; Narver & Slater, 1990; Panigyrakis & Theodoridis, 2007; Wood, Bhuian & Kiecker, 2000). Marketing innovation has been under investigation for even longer with references dating back to early 1960s (Abernathy & Clark, 1985; Burns & Stalker, 1961; Utterback, 1975). Market orientation is a firm’s marketing philosophy and its implementation in terms of decision-making (Shapiro, 1988), collecting and using market intelligence (Kohli and Jaworski, 1990), culturally based behaviour (Narver and Slater, 1990), strategy (Ruekert, 1992) and customer orientation (Deshpande et al., 1993).
Research on innovation spans a number of disciplines, with economic approaches alone adopting several different theoretical perspectives, each of which offers significant insights. A broad consensus considers innovation to be the process of implementing new ideas to create value. At an aggregate level, innovation represents the successful exploitation of ideas that are new to an adopting organization, into profitable products, processes and/or services (Damanpour, 1992; Johannessen).
Even though both market orientation and innovation in marketing have been studied separately, studies focussing on the relationship between the two constructs are rare (Augusto & Coelho, 2009). The extant literature on the topic is skewed heavily towards studying market orientation and its measurement. The relationship between market orientation and marketing innovation needs to be investigated further for clarity. (Augusto & Coelho, 2009, Lukas & Ferrell, 2000).
Marketing by SMEs
Small and Medium enterprises form the backbone of the global economy with well over 95% of all businesses all over the world falling in this category (Das, 2008). The economic crisis of 2008-2009 re-focussed attention on sustainability and it is only intuitive to say that if 95% of the firms in the world are not competitive, a durable model of growth cannot be achieved. This has brought the issue of marketing abilities of small businesses back on the table. Scholarly work on the topic in the early 2000s had already established the importance of marketing in the sustainability of small businesses (Gillmore et al., 2001; Blankson and Stokes, 2002; Hill, 2001; Siu, 2000; Morrison, 2003)
The unique characteristics of SMEs (Carson, 1990) offer a mix of strengths and weaknesses to firms to fight the marketing war. Where, lack of a strong brand and market power is a weakness, the flexibility due to the organic nature of organization and flexibility in production and pricing are strengths (Cannon, 1991; Stasch and Ward, 1987).
The SME Owner Manager:
Whether SMEs are able to leverage their strengths and negate their weaknesses in marketing depends upon the marketing decisions taken by the firm which in case of SMEs is synonymous with the decisions by the owner manager. The centrality of owner manager as the decision maker and the firm’s marketing decisions effectively being the owner manager’s decisions has been established (Reason & Mughan, 2002). When the decisions by an individual become the decisions by a firm, the characteristics of the individual will affect his or her decisions and therefore the firm’s decisions (Hackinson et al, 1997; Simpson & Taylor, 2002). The managerial and decision making competencies of SME owner manager become a critical determinant of the marketing performance of SMEs.
Competency can be broadly defined as an underlying characteristic that could be a motive, trait, skill, an aspect of their self-image or social role, or body of knowledge which they use (Boyatzis, 1982). Various competencies of owner managers in various contexts have been studied (Adam and Chell, 1993; Durkan et al, 1993; Lau et al, 1999; McClelland, 1987; Snell and Lau, 1994; Murray, 1996). The quest to improve managerial decision making and competencies has traditionally been through the process of ‘doing and learning’. This method is very inefficient and unsystematic. (McCauley et al, 1998). Not only is this process of learning competencies unduly long but also has potentially disastrous consequences for the firm. This realisation led to the rise of formal education in colleges and universities in the form of various executive education and management development programs.