Academic journal article American Journal of Entrepreneurship

Marketing Communication: What Does It Mean to Small Business?1

Academic journal article American Journal of Entrepreneurship

Marketing Communication: What Does It Mean to Small Business?1

Article excerpt

Introduction

According to The Price Group (2007), 7 out of 10 small business owners know their core market but less than 5 percent have a formal marketing plan. Further, 90 percent waste their money on a "shotgun" approach to marketing while 99 percent fail to adequately fund their marketing efforts. Price goes on to state, "By looking at the allocations to budgets it becomes clear that many business owners are confused about what really constitutes marketing [while], their reluctance to fund a wellplanned, consistent marketing efforts often leaves them without the income they counted on." (p. 10)

Understanding how small businesses use marketing communication is an important area for practitioners and scholars to consider. In a recent study Bell, Parker, Hendon and Marks (2006) attempted to gain an understanding of how small business owners dealt with issues relating to certain aspects of integrated marketing communications, particularly advertising and public relations efforts. Using an online survey instrument developed with assistance from the Arkansas Small Business Development Center (ASBDC), the researchers gathered important information for further consideration in this area.

Their findings yielded some important points for consideration. This paper seeks to address some of those findings that may be noteworthy to practitioners assisting small businesses as well as scholars researching in the areas of entrepreneurship, marketing and advertising. The researchers of this paper seek to examine five areas of interest from the collected survey data:

* efforts at budgeting (and expenditures) for marketing communication (specifically advertising),

* utilization of advertising agencies,

* evaluation of marketing communication effectiveness (particularly in the area of advertising),

* knowledge of target customers and target market, and

* public relations efforts.

"So many businesses big and small still don't know enough about their customers. You need to know who they are if you are to effectively market to them and grow your customer base." (Shirtcliffe, 2006, p 33) It is the hope of the authors that the information presented here will lend itself to further study in this area and also to more efficient practices by small business owners and consultants to such enterprises.

Literature Review

Advertising and entrepreneurship are areas of academic study fortunate enough to have a wealth of knowledge regarding theoretical research, case studies and other scholastic activities. Unfortunately there is a considerable gap of knowledge related to how these two disciplines interact and are utilized in the private sector. Harris and Reese (2003) found that there was no definitive indication that small businesses were engaged in planning for marketing and advertising activities. Furthermore Perry (2001) determined that very little planning at a formal level goes into any type of small business activities, yet if small business owners engage in even a minute amount of planning, they are less likely to fail. Zontanos and Anderson (2004) more pointedly suggest that entrepreneurs have a limited understanding of marketing. They further observe that small firms have much leaner resources and significantly higher closure rates than large firms.

Smallbone, et al (1993), commented that small firms need to adjust their market development and continuously search for new market opportunities and an expanded customer base. Firms that address the issues of market opportunity and customer base appear to have a greater chance of survival than those who maintain the status quo. Zontanos and Anderson (2004) go on to conclude that, "marketing provides the key interface between small business and its external environment".

An important point discussed in the literature by several scholars is that small business owners face enormous challenges in developing effective marketing strategies due to limited resources, particularly in the area of effective advertising (Harris and Reese, 2003; Lipput, 1995). …

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