STUDENT NAME:
Aiperi Issayeva ID L0246WTWT1013
MODULE NAME:
Entrepreneurship
LECTURER’S NAME:
Paul Reynolds and Anand Walser
Table of content
1.0 Introduction ............................................................................................................................. .. 2
2.0 Literature Review and Critical Analysis ................................................................................... 2
1.1 Marketing Orthodoxy ............................................................................................................ 2
2.1 Alternative marketing approaches ......................................................................................... 3
2.1.1 Market Orientation .................................................................................................... ...... 4
2.1.2 Market Orientation and success ...................................................................................... 6
2.1.3 Public relations ...................................................................................................... .......... 7
2.2 Marketing-entrepreneurship interface .................................................................................... 7
3.0 Conclusion ................................................................................................................................. 9
4.0
References ........................................................................................................................................... 10
1.0 Introduction
According to Reynolds and Day (2011) 95% of all firms all over the world are small firms that
have less than 250 employees. However most of the start-up businesses do not survive for the
first 5 years of existence (John Day and Paul L Reynolds, 2011). So the development and
survival of the small firms depend on marketing and entrepreneurship (Hill, 1995). This paper
reveals whether marketing orthodoxy is applicable for all small firms and talks about alternative
marketing approaches that small companies can use in the their business to survive and further
succeed. In particular case a start-up business idea is Hard Rock Almaty that is used as vehicle
for critical discussion. Hard Rock Almaty is franchise restaurant in Almaty, Kazakhstan. It
provides high quality American-style food. The paper also suggests a set of advices to improve
the future marketing performance of small firms as well.
2.0 Literature Review and Critical Analysis
1.1 Marketing Orthodoxy
Marketing is a simple term by itself, but as a society becomes more complex, so the marketing
does so. Before, marketing was instituted as a subject of applied economics. Afterward, it
became a subject that focuses on the sales raise. In course of time the attention of marketing
modified and today it is a school that considers behavioral science, tries to understand the
structure of buying/selling, focuses on commodity and management and etc.
2
In 1972 Philip Kotler presented generic concept of marketing where 4 axioms define generic
marketing. Axiom 1: Marketing includes 2 or more social elements. Axiom 2: At least one of the
social elements is pursuing a reaction from 1 or more other elements. Axiom 3: The market's
reaction possibility is not secure. Axiom 4: Marketing is the effort to make the required reaction
by producing and suggesting values to the market. These 4 axioms are explicit criteria for a
marketing process (Kotler, 1972).
Marketing orthodoxy and set of the standard business schools are more applicable for the
large firms, rather than small firms.
McNamara’s (1972) investigation on the marketing concept implementation by small firms shows
that they have been more averse than larger firms to follow the marketing concept in order to achieve
organizational goals (McNamara, 1972). The marketing concept is not familiar for many small firms
and its managers because they simply haven’t study usual marketing course.
Consequently, many small firms are applying the marketing concept without deliberately
knowing they are doing so (Fekri, 1991).
2.1 Alternative marketing approaches
There are some marketing concepts that are widely used in the business like:
Production Orientation is approach that is used by the companies that believe that using mass
production strategy should reduce the costs; consequently it will maximize their profit. The
main aspect of this business approach is to have reasonable prices and costs. Product/service
does not have to be advertised. Usually firms with this approach try to standardize
product/service in order to keep costs down.
Sales Orientation is approach that pushes the product to the customers. It encourages
product/service promotion through advertising, sales, offers and many other ways. Usually
companies just found on their own opinion what customers like and prefer without carying out
any appropriate research.
Societal Orientation considers satisfaction of the company’s significant “public” as a central
concern that leads business to success. This significant “public” includes customers, workers,
3
stockholders, dealers, government departments, public organisations and etc. When company is
makes any decision or any action, it should consider this “public” interests as well.
Market Orientation stands by opinion "the customer is king". Organisations that use this
approach are focused on customers’ needs and wants and all activities are made to satisfy the
customer. Product or service is developed based on the market research, once the product or
service is launched, company still is doing research and tries to find out what customers think
about the product/service, how it can be developed. As marketing environment is unstable and
always changes, companies that uses Market Orientation approach always conduct further
research and tries to meet and satisfy customer needs and wants (Peterson, 1989).
2.1.1 Market Orientation
But the concept of marketing has changed over time. Nowadays, customer should be at "heart"
of the business. Accordingly to this fact, Hard Rock Almaty is advised to implement Market
Orientation approach because it is most applicable for the small firms. If customer will find that
firm can’t provide product/service that doesn’t satisfy his/her needs and wants, the customer will
buy competitor’s product/service that does meet his/her requirements.
Market Orientation can be measured by two scales called MARKOR developed by
Kohli, Jaworski (1993) and MKTOR by Narver & Slater (1990).
Accordingly to Jaworski & Kohli (1993) Market Orientation includes market intelligence
perspective and MARKOR contains: intelligence generation, intelligence dissemination, and
responsiveness (Jaworski, B.J., & Kohli, A.K., 1993). While Narver and Slater (1990) claim that
market orientation culturally based behavioral perspective and MKTOR contains 3 behavioral
parts: customer orientation, competitor orientation and inter-functional co-ordination (Narver,
J.C., & Slater, S.F. , 1990).
4
Figure 1. Market Orientation by Jaworski & Kohli
Source: http://www.emeraldinsight.com/content_images/fig/0420250201001.png
5
Figure 2. Market Orientation by Narver and Slater
Source: http://www.strategic-planet.com/wp-content/uploads/2010/12/MarketOrientation- Culture.jpg
Though scholars do not have same opinion of the market orientation’s contents and concept.
Nevertheless, marketing concept, market orientation and customer orientation are occasionally
used as synonyms (Nwankwo, 1995). In summary, the main components of market orientation are
considered as significant aspects for SMEs success. (Helen Reijonen, 2010)
2.1.2 Market Orientation and success
All entrepreneurs tend to have their own perceptions of what success means to them and in
their business operations (Simpson, 2004). These perceptions are often affected by the
characteristics of the businesses and owners (Walker, E., & Brown, A., 2004). However,
market orientation emphasizes longstanding focus and success. Narver and Slater (1990)
argued that Market Orientation leads companies to make greater value, to attain competitive
advantage and have high and positive market performance (Narver, J.C., & Slater, S.F. , 1990).
6
2.1.3 Public relations
Marketing and Public relations (PR) are terms that have many common aspects and can get a
good output working together, but in the right way. PR helps companies to get attention, make
company to be known by the public. PR manages company’s image, reputation, and
information about the company among customers, suppliers, dealers, government departments,
public organisations, press and media. Difference between PR and advertising is that PR usually
sends the message about company by a third party, for example, newspapers, magazines, TV
and etc. Customers are more likely to believe to the third party information rather than to simple
straight company’s advertisement.
But PR in a small firm needs accurate planning, research and management. Usually one bad
article has a more powerful impact rather than many positive ones. There are many different
ways of PR methods, but particularly small business doesn’t need to use all of them, because
some of them can be costly. Hard Rock Almaty for the first phase of its development is
recommended to use PR through Social media, for example using online websites, having page
in Facebook, Twitter, Instagram, LinkedIn and etc. Another PR method that really can help to
build positive reputation for a small firm is word of mouth. Only having a really good
product/service, management can help to spread the positive word of mouth. Nowadays there are
many environmental, social issues and people really do care about them. So Hard Rock Almaty
may be involved into some charity that will show that the firm has same cares as its customers
and it will help to build positive reputation. Later on Hard Rock Almaty should try to be listed for
some winning awards (Scott, 2008).
2.2 Marketing-entrepreneurship interface
Recently there is high attention has been paid to the marketing-entrepreneurship interface in
the many business and management journal articles, reviews and books. It is very important to
note the need for a multi-disciplinary perspective and a more broad comprehensive approach to
study in the topic. (Nystrom, 1998).
Marketing and entrepreneurship have basically 3 important zones of their interface: they are
both are focusing on changes, they are looking for opportunities and they are innovative in their
approach to management (Collinson, 2001).
Reynolds and Day (2011) paper shows marketing – entrepreneurship interface diagram that
consists from three circles – marketing, entrepreneurship and additional one is small to medium
7
size business (SME). Considering the interface of entrepreneurship and marketing, the main
point is on exchange and transactions (Sheth, 1988).
Figure 2. Marketing – entrepreneurship interface
There are 3 options that can be taken. First one is to put marketing into entrepreneurship, second
one is to put entrepreneurship into marketing, and third one is to look for harmony in action and
competency. In the first option, everything starts from the entrepreneurial business and then
reviews how the firm use marketing within it, whereas for the second option tries to recognize
how marketing generates entrepreneurial actions, e.g., manufacturing new product/service
within a new market section Carson et al. (1995) explained the third option, but Hills (1995)
talked about it concisely: “Worthy marketing is essentially entrepreneurial activity. It is
overcoming with uncertainties, changes, considering risks, providing innovations that attract
customers. Also right entrepreneurship should be marketing oriented. Focusing on customer’s
needs and wants is heart of the business. Application of marketing strategy that generates
customer satisfaction is vital to survive for small businesses” (Carson, 1995) (Hill, 1995).
The improvement of the future marketing performance of small firms
Covin’s analyzed (1988) group of small to medium organisations, that were differentiated
towards entrepreneurship and marketing. The analysis showed that the better performance was
8
for those organisations that used mixture of both entrepreneurship and marketing orientations.
Though earlier researches has note the significance of either a marketing orientation or an
entrepreneurial orientation, the result of his report suggests that this two concepts should be used
as synergistic, and organizational skills are needed for small companies’ success (Covin, 1988).
According to Hill (1995) right entrepreneurship certainly is marketing directed. And the
utilization of different marketing strategies that raise satisfaction among consumers is
indispensable for survival. (Hill, 1995)
2.0 Conclusion
The result of this assignment shows that marketing orthodoxy is not fully applicable for the small
firms as it is planned for the stable business environment and rather for the large firms than
SMEs. There some marketing approaches, particularly marketing orientation, that are stated and
explained above, are suitable for the small firms in order to survive in a competitive market
nowadays. Additionally small firms are recommended to concentrate on its customers and use
PR methods to control and improve its reputation among customers. SMEs need to consider
marketing-entrepreneurship interface that shows that marketing and entrepreneurship are
disciplines that are closely related to each other and have 3 zones of interaction. Good marketing
is a good entrepreneurship. Application of marketing strategy that generates customer
satisfaction is vital to survive for small businesses. (Carson, 1995)
9
4.0 References
1. Carson, D..C.S..M.P.a.H.J., 1995. Marketing and Entrepreneurship in SMEs, An
Innovative Approach. 1st ed. New Jersey: Prentice Hall.
2. Covin, J.G.a.S.D.P., 1988. The infuence of organizational structure on the utility of
entrepreneurial top management style. Journal of Mana gement Studies, 25(3), pp.217–34.
3. Collinson, E.a.S.E., 2001. Entrepreneurial marketing - a historical perspective on
development and practice. Management Decision, 9(761 - 766), p.39.
4. Fekri, M., 1991. AREAS OF STRENGTH AND WEAKNESS IN THE ADOPTION OF THE
MARKETING CONCEPT BY SMALL MANUFACTURING FIRMS. Journal of Small
Business Management, 29(4), pp.72-78.
5. Helen Reijonen, R.K., 2010. The adoption of market orientation in SMEs: required
capabilities and relation to success. Journal of Strategic Marketing., 18(1), pp.19-37.
6. Hill, G.E., 1995. Marketing and Entrepreneurship in SMEs: An Innovative Approach. Printice
Hall.
7. Jaworski, B.J., & Kohli, A.K., 1993. Market orientation: Antecedents and consequences.
Journal of Marketing, 57(3), pp.53–70.
8. John Day and Paul L Reynolds, 2011. Exploring the marketing - entrepreneurship
interface: bringing an understanding of small business marketing into the curriculum.
Department of Strategy and Marketing The Business School, -(-), pp.2-16.
9. Kotler, P., 1972. A Generic Concept of Marketing. Journal of Marketing, 36(2), pp.46-54.
10. Nwankwo, S., 1995. Developing a customer orientation. Journal of Consumer
Marketing, 12(5), pp.5–15.
11. Nystrom, H., 1998. The Dynamic Marketing-Entrepreneurship Interface: A
Creative Management Approach. Creativity & Innovation Management, 7(3), p.122.
12. Narver, J.C., & Slater, S.F. , 1990. The effect of a market orientation on business
profitability. Journal of Marketing, 54(4), pp.20–35.
13. Nikolaos Tzokas, S.C.P.K., 2001. Marketing and Entrepreneurial Orientation in Small Firms.
Enterprise & Innovation Management Studies, 2(1), pp.19-33.
14. McNamara, C.P., 1972. The Present Status of the Marketing Concept. Journal of
Marketing, 63(1), pp.50-57.
15. Peterson, R.T., 1989. SMALL BUSINESS ADOPTION OF THE MARKETING CONCEPT
VS. OTHER BUSINESS STRATEGIES. Journal of Small Business Management, 27(1), pp.3846.
10
16. Scott, D.M., 2008. The New Rules of Marketing and PR: How to Use News Releases, Blogs,
Podcasting, Viral Marketing and Online Media to Reach Buyers Directly. 1st ed. New Jersey:
John Wiley & Sons.
17. Simpson, M..T.N..&.B.S., 2004. Small business success factors: The role of education and
training. Education þ Training, 46(46), pp.481–91.
18. Sheth, J.N.-.G.D.M..&.G.D.E., 1988. Marketing theory: Evolution and evaluation. 1st ed.
New York: John Wiley & Sons.
19. Strong, C.A., & Harris, L.C. , 2004. The drivers of customer orientation: An exploration of
relational, human resource and procedural tactics. Journal of Strategic Marketing, 12(3), pp.183204.
20. Walker, E., & Brown, A., 2004. What success factors are important to small
business owners? International Small Business Journal, 22(6), pp.577–94.
11