An Empirical Analysis of Advertising by Women Entrepreneurs

Article excerpt

A major phenomenon in the U.S. economy has been the increasing number of women-owned businesses. According to the U.S. Census Bureau's "Latest Survey of Women-Owned Businesses," the number of women-owned businesses increased by 57.4 percent between 1982 and 1987, with the receipts of these businesses rising by 81.2 percent over this same period. Similarly, the number of businesses owned by women as non-farm sole proprietorships increased from 1.9 million in 1977 to 4.4 million in 1987. Women's share of businesses also has increased from 22.6 percent in 1977 to 30.7 percent in 1987 (State of Small Business 1990). Women also are starting businesses at over twice the rate of men and could well own and operate 50 percent of all businesses in the United States by the year 2000 (New Economic Realities: The Rise of Women Entrepreneurs 1988).

The majority of research on women-owned businesses is a relatively recent phenomenon focusing on a wide range of issues. An early study by Schwartz (1976) examined the characteristics and attitudes of women business owners. He found that female entrepreneurs tended to closely control their business operations and also experienced barriers to the acquisition of initial capital. Several studies (Hisrich and Brush 1983, Neider 1987, Scott 1986, Watkins and Watkins 1983) found that women entrepreneurs were generally married and between the ages of 30 and 45, typically had backgrounds in the liberal arts, and had previous work experience in a variety of areas, such as teaching, retail sales, and office administration. Birley, Moss, and Saunders (1987) examined the differences between female and male entrepreneurs and found that both women's and men's past experience helped in providing managerial skills in the start-up stage. There was little difference between their levels of education and their financing process. Many studies have determined that women business owners are more similar to than different from men across psychological and demographic dimensions, such as motivations for starting their businesses (independence, achievement, and job satisfaction) (Chaganti 1986; Geoffee and Scase 1985; Hisrich and Brush 1983; Holmquist and Sundin 1990; Longstreth, Stafford, and Mauldin 1987; Schrier 1975; Schwarts 1976).

The most frequently cited problems of women-owned businesses are the lack of experience in management, accounting, advertising, and finance (financial planning, obtaining lines of credit, collateral position, and lending processes) (Buttner and Rosen 1988, Hisrich and Brush 1987, Kaplan 1988). The biggest obstacles for women are the financial aspects of venture start-up and management (Brush 1992).

Despite the tremendous growth in the number of women-owned enterprises and the increasing impact on society and the economy, there are few studies discussing the relationship between women entrepreneurs and advertising. Some research has been reported regarding entrepreneurs and advertising. A study by Van Auken, Doran, and Rittenburg (1992) examined advertising media strategies among entrepreneurs. Jackson and Parasuraman (1988) indicated that the disadvantages of advertising for small firms are their relatively limited financial and professional resources. Their results support the traditional assumption that the yellow pages are a well-used advertising medium. Brunning and Adams (1988) examined the effectiveness of promotional tools for small industrial businesses and found that trade shows can be an effective means of competing on an equal level with larger firms and can deliver a qualified audience to the small industrial firm at a relatively low cost.

While women business owners may be more similar to men than different, the nature of differences might affect advertising strategy. There is evidence that men and women's communication styles differ. Tannen (1990, 42) characterizes male-female conversation as cross-cultural communication: "...women speak and hear a language of connection and intimacy, while men speak and hear a language of status and independence. …