Marketing for small-to-medium enterprises 761
entrepreneur mean that a much more casual
and natural approach to market research is
done. In fact, it is unlikely even to be recog-
nized as market research; instead it is more
about ‘gathering information’ which may occur
by any method or means. Correctness and
rigour are not considerations. Intuitive judge-
ment is the basis of evaluation.
Segmentation, niche marketing and
market share
These are well recognized marketing strategy
tools in the textbook literature, indeed, much
of the support literature for SME development
advocates that such enterprises follow these
strategies. However, in practice, whilst many
SMEs may in fact attempt to implement such
strategies, the relative smallness of SMEs and
their vulnerability to market forces means that
they will often ‘fall-into’ market niches which
previously had not been considered. Equally,
whilst a market segmentation strategy may be
advocated, the opportunistic nature of the
entrepreneur will often take an SME outside
such segments to an extent they become
meaningless.
Market share is of little consequence to
SMEs. The resources needed to measure market
share would far outweigh any benefits, espe-
cially when the outcome is likely to be a
percentage figure which is so small as to be
meaningless. Even if market share is known, it
is unlikely an SME can do much to increase it
since it has neither the resources nor the ability
to make significant impact upon the market.
For most SMEs, the strive for increased reven-
ues and the subsequent positive effect on the
enterprise’s well being are much more impor-
tant than knowing whether or not market share
has grown.
Pricing strategies
The textbook literature advocates elaborate
alternatives on pricing strategies which have an
implied aspect of control over the consumer’s
decision making perception. However, because
of SMEs’ relative smallness, such control is
almost impossible without substantial differ-
entiation which most firms do not enjoy. An
option advocated by the textbook literature is
to use price discounting as a sales stimulation,
however, given the limitation of finance and the
implications for adverse cash flow and the
innate survival and enterprise protection
instinct of the entrepreneur, this is neither an
attractive or natural option.
These are just a few examples of the
incompatibility of marketing theory in the
context of SMEs. Of course, there are those who
will argue that any marketing theory can be
applied in any context, and taken in the most
general sense this would be a fair argument.
However, SMEs do not function at a ‘general’
level, they operate at the ‘situation specific’
level – a circumstance which is uniquely indi-
vidualistic. In applying general marketing prin-
ciples to a ‘situation specific’ SME, another well
known analogy comes to mind – ‘putting round
pegs into square holes’ with enough forced
manipulation they can be made to fit, but not
perfectly.
So, if marketing theory is incompatible
with SME marketing characteristics, what is the
alternative? A useful start point is to consider
which aspects of marketing that fit closest to
SME characteristics and which can be per-
formed by entrepreneurs/owners/managers as
they ‘do business’. Thus, let us consider theNature of SME marketing
Nature of SME marketing
In the general sense, the basic principles and
concepts of marketing are as relevant to SMEs
as to any other domain. However, as illustrated
by the examples in the previous section, some
theories, tools and techniques of marketing are
not as relevant or useful to SMEs. The nature of
SME marketing is that of a concept which is
dominated by the inherent characteristics of the