Marketing Intelligence & Planning

SME marketing in practice

Audrey Gilmore, David Carson, Ken Grant,
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 SME marketing in practice

Audrey Gilmore
Reader in Marketing, Department of Marketing,
University of Ulster at Jordanstown, Newtownabbey, Northern Ireland
David Carson
Professor of Marketing, Department of Marketing,
University of Ulster at Jordanstown, Newtownabbey, Northern Ireland
Ken Grant
Senior Lecturer, Department of Marketing, Monash University, Melbourne,
Australia
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Keywords opportunities and circumstances and so

Small-to-medium-sized Introduction decision making occurs in a haphazard and
enterprises,
Marketing decision making, This paper advocates that networking is an apparently chaotic way, according to
Networking, Marketing strategy, inherent tool of marketing which is wholly personal and business priorities at any given
Qualitative techniques compatible with SME decision-making point in time (Scase and Goffee, 1980). Clearly
characteristics in relation to marketing such limitations will influence, indeed
Abstract
determine, the marketing characteristics of
Acknowledges that SMEs (small to activities. After a brief overview of relevant
medium-sized enterprises) cannot SME marketing and networking literature, an SME. SMEs do not conform to the
do conventional marketing the research study aimed at understanding conventional marketing characteristics of
because of the limitations of how SME owner/managers use networking marketing textbook theories; instead their
resources which are inherent to all
in their marketing activities. The paper marketing is characterised by the limitations
SMEs and also because SME
owner/managers behave and think concludes by advocating that networking is a outlined above. Thus, SME marketing is
differently from conventional marketing ``competence'' and as such can be likely to be haphazard, informal, loose,
marketing decision-making developed as a way of doing marketing for unstructured, spontaneous, reactive, built
practices in large companies. In
SMEs, that is, marketing by networking. upon and conforming to industry norms.
this context the discussion
focuses on SME characteristics
and how these impact upon
marketing characteristics within
SMEs' limitations and marketing Networking in SMES
SMEs. In a search for ``alternative''
marketing approaches, the characteristics For SMEs networking can mean using a
inherent existence of the owner/ It is well documented that SMEs have unique variety of networks. The inherent existence
manager's ``network'' in its various
guises such as personal contact
characteristics that differentiate them from of the owner/manager ``networks'' is built
networks, social networks, conventional marketing in large around their normal interactions and
business networks and industry organisations (e.g. Carson, 1990). These activities such as personal contact networks
and marketing networks and how characteristics may be determined by the (Knoke and Kuklinski, 1982), social networks
these networks are used is
considered. Some evidence from
inherent characteristics and behaviours of (Starr and MacMillan, 1990), business
an empirical study carried out the entrepreneur or owner/manager; and networks (Donckels and Lambrecht, 1997),
simultaneously in Northern Ireland they may be determined by the inherent size industry (Andersson and Soderlund, 1988)
and Australia is presented which and stage of development of the enterprise. and marketing networks (Piercy and
illustrates how and why networking
Such limitations can be summarised as: Cravens, 1995). Clearly it is important to
is used by SME owner/managers
as a tool or approach for carrying limited resources (such as finance, time, understand how owner-managers use these
out meaningful marketing. marketing knowledge); lack of specialist networks. Curran and Blackburn (1994)
expertise (owner-managers tend to be found that owner-managers tend to have
generalists rather than specialists); and relatively small and non-expensive networks
limited impact in the marketplace. In with little resort to expected external
addition, SME marketing is haphazard and contacts such as accountants and bank
informal because of the way an owner- managers. While these networks were used
manager does business; they make most deliberately to solve problems, the formation
Marketing Intelligence & decisions on their own, respond to current and development of the networks were
Planning
19/1 [2001] 6±11
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[6]
 Audrey Gilmore, David Carson largely unstructured and coincidental in frequent than with international markets
and Ken Grant nature. because of convenience.
SME marketing in practice For SME owner-managers, the costs of
Networking for business activities is about
Marketing Intelligence & ``companies joining together with a common networking are implicitly hidden because
Planning
19/1 [2001] 6±11 objective, working together, and co- any explicit costs or expenses are low in the
operating'' through the exchange and sharing immediate term. For example, the cost of
of ideas, knowledge and technology (Dean et networking will include minor expenses such
al., 1997). Such networking can occur as a club or trade membership, the cost of
through trade events, personal contacts, in dinner at trade functions, or the cost of
liaison with marketing intermediaries and as entrance fees to exhibitions. Therefore
part of the SME owner managers' social owner-managers do not consciously need to
endeavours. The characteristics of SME consider the cost of this ``intangible'', difficult
networking are therefore striking in their to access and measure aspect of their
similarity to SME marketing characteristics. marketing activity as opposed to the more
SME networking tends to be informal, loose, tangible, easier to measure aspects of
unstructured, spontaneous, reactive, conventional marketing activity. This
structured around and conforming to inherently fits comfortably with SME owner-
managers' way of doing business.
industry norms.
Networking occurs as a natural and
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inherent entrepreneurial activity. An SME

owner-manager's personal contact network
Marketing by networking will be represented by people who can help
In bringing together the deliberations on the entrepreneur in arriving at decisions for
SME marketing and definitions of networks the wellbeing of the enterprise. The SME
and networking this debate focuses on the owner-manager/entrepreneur will be the
notion of ``marketing by networking''. focal point of this network ± although it may
Networking is a naturally inherent aspect of not always seem so in practice. The network
SME owner-manager decision making, will change according to current
particularly those decisions relating to circumstances, one of the most documented
marketing. This is because owner/managers examples being that of a ``start-up'' network
must go outside the businesses' physical compared with a network belonging to an
confines in order to do business and this established entrepreneur of some years. Also,
business is marketing-led activity. Thus, networks will change according to need; for
SME owner/managers are doing marketing example, new people may be enlisted into a
through their natural and inherent network when some new area of real or
networking activity, through all their normal potential interest becomes paramount. Some
individuals may serve the entrepreneur's
communication activities, such as
network as regular advisers, for example,
interacting and participating in social,
close friends, family, the company
business and trade activities. Some of the
accountant or bank manager, others may
characteristics of ``marketing by
simply form part of an ongoing and
networking'' are that it is based around
inadvertent information-gathering process.
people-orientated activities, it is informal,
The entrepreneur may not necessarily
often discreet, interactive, interchangeable,
appear to be the focal person but rather
integrated, habitual, and can either be
someone who is part of a broader social
passive or proactive. gathering of peripheral activity.
Marketing by networking is done through In addition to being a natural activity,
personal contact networks (PCNs), carried networking can be an acquired skill or
out with people with whom the owner- competency for the SME owner/manager.
manager has had a relationship ± either in That is, owner/managers can develop
the past or currently. The way in which networking skills or competencies over time;
marketing by networking is carried out is they can learn from experience who or where
often pre-determined by industry behaviours to network and how to do it effectively.
and norms through regular or irregular Sometimes entrepreneurs will consciously
meeting occasions and industry activities or seek out information from certain
in just doing business. The frequency and individuals believed to have a contribution to
focus may vary depending on the nature of make; on other occasions information will be
the markets in which the company operates; gleaned subconsciously.
for example, international networks may be Some illustrations of marketing by
more focused than domestic networks networking will be provided from a
because of the need to plan ahead, whereas collaborative study of Australian and Irish
contact with domestic markets may be more SMEs which focuses on how SMEs use
[7]
 Audrey Gilmore, David Carson networking in doing business with were collected by means of in-depth
and Ken Grant competitors and customers. interviews. These were tape-recorded with
SME marketing in practice
the informants' prior consent. The owner/
Marketing Intelligence & Methodology managers were told that the purpose of the
Planning
19/1 [2001] 6±11 This research study sought an understanding research was to gain an understanding of
of how SME owner-managers do marketing. how SME owner/managers ``do business''
Large firm models applied to small firm rather than focusing on their definitions and
settings have been criticized, and small firm descriptions of networking. This was a
researchers are thus urged to conduct studies crucial factor in the study as it avoided a
that are sensitive to the unique scenario whereby the informants would
characteristics of small firms. Given that the provide answers that they felt the
study of small firms is a relatively new interviewer expected. The interviews were
branch of social science research (Churchill semi-structured insofar as the interviewers
et al., 1986; Brockhaus, 1987; Bygrave, 1989) had a checklist of areas to cover, rather than
and the relative lack of understanding of a list of pre-determined questions. As such,
small firms, it is argued that emphasis the interviewers gave the informant the
should be placed on empirical research of a fullest opportunity to relay stories and events
phenomenological nature. This points to a which they deemed relevant.
qualitative approach where the aim is to
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The findings in relation to interfaces of

explain rather than predict phenomena networking activities, networking with
(Leavy, 1994) and to understand things rather competitors and networking with customers,
than measure them (Gordon and Langmaid, are described and illustrated below.
1988). Furthermore qualitative methods are
considered to be particularly suitable for Networking with competitors
gaining an understanding of decision making The empirical study highlighted that there is
in small and medium-sized firms (Carson et considerably more communication between
al., 1998). the SME owner/manager and his/her
Qualitative research offers a variety of competitors than is widely reported in the
methods. Based on the specific aims of this
literature. Owner/managers may
research, in-depth interviewing was deemed
communicate with competing firms and often
to be the most appropriate means for
are quite supportive of each other. Indeed,
collecting the relevant data. In-depth
many owner/managers claimed to know
interviews are thought to be one of the best
their competitors personally, and would have
methods to investigate an individual's
no hesitation in contacting them for help or
behavior or attitudes (Tull and Hawkins,
advice. For example, some owner/managers
1990); and semi-structured or unstructured
describe relationships with their main
interviews have been found to be particularly
competitors as follows:
effective for collecting data from owner-
. . . there's a lot of openness between people
managers of small enterprises (Curran and like ourselves and (the biggest competitor) . . .
Blackburn, 1994). One of them came to me and said, ``Look, I'm
going to England to see (big retailer), should I
Findings: how SME owners/managers use know anything about them. . .? Can I buy you
networks for marketing lunch and come and talk to you . . .''?
The study focused on SME owners and
managers who operate in business markets We share jobs . . . we work together. To a
in Northern Ireland and in the Melbourne certain degree we are still competitive but if
he has too much work on, he'll send me some
area, Australia. The participating companies
of the work to do for him; and if we have too
operated in a wide array of industries
much on, or we're given a job that we don't
including engineering, textiles and food. specialise in and he does. We'd give it to him,
These SMEs employed between ten and 250 and things like that.
employees (thus in keeping with the
European Commission definition of SMEs). A high level of co-operation seemed to exist
A second criterion for firm selection was between some competitors. The reason for
that the firm had been in operation for more such collaboration in many cases was to
than five years. This criterion was included prevent the client taking the work to a
so as to eliminate those firms which were company outside the domestic market, ``It
experiencing growth volatility that is would have to go outside of (local region),
normally associated with the start-up phase, that's the difficulty''.
especially in the first four years of trading In other cases one company might engage
(Storey and Johnston, 1986; Storey, 1989). in a joint arrangement with a competitor if a
Within these criteria, a total of 45 SME particular project is too large for either to
owner-managers were selected. The data complete on their own, or if one company
[8]
 Audrey Gilmore, David Carson requires new resources or skills. For was important to get my face back into the
and Ken Grant example: limelight, to get to the Executive Director, to
SME marketing in practice . . . at times we would realise we are not going know the national people. I can be seen to be a
Marketing Intelligence & to get this (business) on our own, so we would ``doer'' in these organisations. Likewise they
Planning ask one of our competitors, ``Would you fancy could see that I could get things done in the
19/1 [2001] 6±11 organisation.
having a go at this with us''? Especially if it
was an area in which we felt we were under-
While SME owner-managers claim to
resourced. So it's not difficult to work with
our competitors. . . communicate quite openly, the managers
will guard against speaking too freely about
Many SME owner-managers recognise the certain things, most notably any plans they
advantage of maintaining good relations with might have for substantial changes to the
competitors for the overall good: firm. For example, one manager who was
. . . we do try to improve professionally. I very active in ``professional circles''
suppose, when you think about it, it's bound described how the decision to introduce a
to be for the good of everyone. I suppose that's
new discipline into his company was kept
inherently what it's about.
from other industry players by employing an
Trade associations or institutes often provide agency to recruit the new staff members with
the ideal forum for managers to meet: appropriate skills:
. . . that is the reason we started the clothing . . .so we didn't place the advertisement,
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institute . . . so that it would be an because we were aware it may be sensitive

independent place for you as an employee of a and we didn't want people to know how we
big company . . . as a manager who wanted . . . were expanding our business just yet. So the
something for the future you could go along advertisement was placed, if you like,
there and speak your mind . . . It worked anonymously. . .
fantastically for many years.
Also SME owner-managers will be reluctant
In speaking of the benefits of such bodies, to expend their personal resources in the
most would claim that they inform of general pursuit of something which will eventually
developments within the industry, which benefit the entire industry. For example, a
includes what other firms are doing and how manager speaking of the possibility of
buoyant their business is relative to their introducing new technology to his company:
own. For example: . . .it's particularly difficult because the
. . . to find out what exactly is going on . . . on a research and development is in the whole
daily basis you know. industry . . . we're trying to develop a system
within our own business that hasn't been
. . . when I talk to other (practitioners) locally
really fully developed outside the industry . . .
and I'd say, ``how are things going. . .''? Or
we're actually providing the rest of the
perhaps you're very busy, then you find out
industry with information.
what the trends are from talking to these
people. . .. So while competitor collaboration does take
. . . there is one annual general meeting held place, it is balanced with caution when it is
in (city) . . . where all the members come felt that the benefits enjoyed by each party
together and we would talk . . .. . . and after the are proportionate to their respective inputs.
after-dinner speaker, we retire to the bar and Managers will guard against speaking too
then people talk among themselves. freely about certain things, especially any
plans they might have for substantial
Trade associations act as a means for the
changes to the firm or its direction. However,
manager to become known to his peers
in doing all of this, SME owner/managers
within the industry. While occasions such as
rely heavily on using their networks and
exhibitions or committee meetings ensure a
their networking skills for all aspects of
certain degree of formality, they create the
marketing in the context of competitor
opportunity for more social encounters:
It's not a confrontational group. We all meet activity.
professionally and are reasonably supportive
of one another. Whilst we compete on service Networking with customers
and on price, we don't disagree with each SME owner-managers often make a
other, we don't bad-mouth one another. That's concerted effort to include customers and
how I get to know the partners in the other potential customers in their networking. In
firms, I would know them socially and this study, the customers in most cases were
professionally. firms, as opposed to consumers. The concept
Similarly, with professional associations, of building relations with another company
one entrepreneur stated: is more complex than building relations with
So I got myself back on branch council . . . individuals. In discussing this with the
That put me back in the (profession) spotlight. managers in the study, it became apparent
I was in the newsletters. I was Treasurer, that that, when they claim to have a relationship
[9]
 Audrey Gilmore, David Carson with a client company, they are actually We would try to get to know them now. . .. We
and Ken Grant referring to their relationship with a few key wouldn't be very obvious, you know we are
SME marketing in practice not the type of people who say ``let's go out
figures in that company. More importantly,
Marketing Intelligence & should that person or persons with whom the and get drunk over lunch'', but we would meet
Planning them and go to the same trade functions, etc.,
19/1 [2001] 6±11 manager has contact leave the company, very
and try to be friendly but on a professional
often the relationship with the company level. I think that's what people want.
dissolves, as the following comments
illustrate: . . . as Managing Director with a strong
We would lose a client for a while because the personality I am not loved or liked by
``link'' personality left. A new one comes in everyone. Not everyone would invite me into
and he of course goes to the people he's used their home, I can tell you. I am not the most
to dealing with, then he moves on. relaxed, ``have a beer with me'' type of person
but I'm in business with these people, I'm
Needless to say we did suffer as the main friendly in a professional way ± not to go
people in management lost their jobs and they dancing with them.
were the people who had all the contacts with
customers. SME owner-managers recognise that they are
perceived to be the point of contact by their
These companies had now realised the clients/customers. They make themselves
importance of developing relationships with available to speak to these people if
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a wider range of personnel throughout the requested, even when a member of staff could
company and recognised the importance of quite adequately handle the enquiry. This is
individuals who may have managerial roles especially true of long-term customers/
in the future. clients. For example:
Indeed the ability to form a relationship in The private clients won't talk to anyone else.
the first instance and maintain it over time It's the most important thing they've done in
will depend on the characteristics of the years and they have to talk to a ``partner'' in
individuals: the company.
. . . it always has to be taken into
In some cases, customers become accustomed
consideration that personalities are very
important, you know, and provided that the to speaking to the manager:
selling personality and the purchasing It's not a preference to speak to me, it's a
tradition, you know, because I have been here
personality are compatible . . . that means
all the time, they just out of habit ask for me,
quite a lot to a business.
whereas if I tried to ``retrain'' them gradually
Some further illustrations of building and . . . other people in the place could deal with
maintaining relationships with customers in them, could deal quite well with them.
the industry are given below: There is a realisation among SME owner-
. . . There was a two-way network. I never
managers that often customers prefer
missed a social event, I never missed any
communicating with their ``peers'':
dinners or anything, I went. None of the other
Younger people would rather talk to younger
consultants went but I went. We had a drink, I
people, they many see us as a bit stuffy or
met the heavies in the industry whom I didn't
something . . . I mean the senior men and
know at the time and then you get talking to
these people would know me but the next
them and they get to know your philosophies
generation don't know me, they know our
and when they move around the industry
younger associates and they communicate
they know how you think. I suppose that's
with them.
good.
Another widely held belief is that contact
. . . Initially it was from my having a range of
contacts and having the courage to approach with new clients is best done in person. For
them and probably having the hunger and the example:
drive to help clarify in their minds how they . . . I think, once you get there and you know
could use me. what the person looks like, sometimes you
can form a better relationship on a one-to-one
SME owner-managers recognise that basis . . .
building relationships are vital to the
These findings illustrate the variety of
company's success and they invest
elements that will impact on how the SME
considerable time and effort in maintaining
does marketing by networking with
good relations with regular clients. For
customers. It is important to recognise the
example:
influence that personality, age and
. . . If you have it (a relationship) with the
individual, you'll have it with the company. I experience of the two communicating parties
mean you've got to start somewhere, and who will have on the networking relationship.
better than to start it with than the person The nature of manager-customer networking
across the desk from you or on the other end and how it is done will either contribute to or
of the 'phone. spoil the integrative way SMEs do
[ 10 ]
 Audrey Gilmore, David Carson marketing. That is, the creation and American Journal of Small Business, Vol. 11
and Ken Grant existence of effective networking will be No. 3, pp. 43-9.
SME marketing in practice concerned with maximising marketing Bygrave, W.D. (1989), ``The entrepreneurship
Marketing Intelligence & opportunities and ensuring the enterprise's paradigm (I): a philosophical look at its
Planning research methodologies'', Entrepreneurship
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and improved with the advent of experience. SMEs: some empirical findings'', Journal of
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[ 11 ]
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