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Essay: Marketing in Small Businesses

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  • Published: 1 February 2018*
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…Marketing in Small Businesses


Small sized enterprises do have important economic, social and political roles in employment creation, resource utilization and income generation. Small business has complex and reciprocal relations with its wider environment which need to be understood not only for their contribution but also to be able to say something about its prospects. Up to date, most small business research has been limited or micro oriented, focusing on the functioning of the small business and its immediate contacts with the environment. But the wider environment ' the developing character of industrial society, the wider economy and the political order is gradually being given more attention, even if much of the running is being made by those whose interest in the small scale enterprise is often indirect.

As indicated in the next section, applying marketing to a small business is particularly an important process. Marketing is a business philosophy, based on the principle of putting the customer to the core of the process first. It is an attitude of mind, an approach of doing business, which should be accepted by the whole organization. One of the main problems in looking at the role of marketing in any enterprise, however, is people's inability to see how the philosophy and principle of marketing combine with marketing practice. The principle of marketing theory is one of a sound sequence of activities. A perfect example of this order is provided by the marketing planning process, which is a series of progressive and interlinked sequential steps which, if followed correctly, will produce a sound marketing strategy and plan.

Carson, Cromie & McGowan (1995) state that there are several factors that clearly impact on the marketing management decision-making activities of small enterprises which must be taken into account. These are the inherent characteristic of small enterprises and how these impact on formal marketing approaches. Similarly, entrepreneurial characteristic must be taken into account and how these impact on decision-making activity of small enterprises. Other issues such as marketing management style and the organization of marketing will also be addressed in more detail in an effort to gain a better and more reasoned insight into how all these factors impact on a small enterprises marketing strategy. Small enterprises by definition are small in size. This has a major significance on the management and decision-making capability of such organizations. It generally means the existence of certain significant deficiencies. Internally, small enterprises are restricted by a general lack of financial resources which suppresses their growth potential. Similarly, they do not have the benefit of a team of specialist experts those functional aspects of business. Externally, the small enterprises small size means that it generally does not have control over its environment and certainly has little influence or impact on this environment. One manifestation of this is its vulnerability to adverse environmental change and competitive threats.

A small enterprise is also characterized by its entrepreneur. The entrepreneur is likely to dominate all decision-making throughout the enterprise. The style of this decision-making will be heavily influenced by entrepreneurs' culture and background and will be dominated by their personality and desire for power and influence. As a consequence of size limitations and entrepreneurial influence, decision-making is also likely to be lacking in structure and processes, and therefore is likely to be non-sophisticated, even simplistic, in nature. Clearly these characteristics will have an impact on the marketing activity of small enterprises if some of the aspects of marketing management are considered, for example: market positioning, targeting and market share. Market positioning entails a firm positioning itself in its market by taking account of a range of factors. Primarily in relation to the competition it thinks it can outperform and the market opportunities that appear to be most attractive. Targeting entails developing a highly focused strategy aimed at a specific grouping of potential customers who have been identified as being most responsive to a firm's offerings. Marketing share is another objective of marketing which companies use as a strategic objective and as a means of measuring competitive performance comparison (Carson, 1992).

Marketing Characteristics of Small Firms

It is widely accepted that small enterprises have different characteristics from those of large companies, but the most significant difference relate to the business objectives, management style and marketing practice of these enterprises rather than their relative size (Leppard & McDonald, 1987).

Carson (1985) states that the characteristics of small enterprises are many and varied and they tend to be different from large company attributes. When viewed from a marketing perspective, many small enterprises' features and characteristics can be described as constraints. For example: there are three broad constraints on small enterprises' marketing activities. Limited resources, such as limitation on finance, marketing knowledge, time, may all contribute to limited marketing activity relative to large companies and large competitors. Specialist expertise may be a constraint because managers in small enterprises tend to be generalist rather than specialist. Also, marketing expertise is often the last of the business disciplines to be acquired by expanding small enterprises.

In addition, there have been observations of a general weakness in marketing by small enterprises and suggest that this may arise because the enterprise have difficulty in attracting and affording qualified personnel (Broom, Longenecker & Moore, 1983). In a similar vein, the owner of a small enterprise needs to be, or become, his own expert in many areas because, unlike the manager in a large company, he is not usually in a position to employ experts (Gaedeke & Tootelian, 1980). In this view need to be a general specialist, it has been noted that essential differences in managing small and large enterprises arise because in the former the focus is on the pragmatic use of techniques as aids to problem slving, whereas in the latter it is on achieving high coordination and control of specialists (Scholhammer & Kuriloff, 1979).

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