Sunday, September 14, 2008

Marketing practices in European Mid-Sized firms

Recently, Keith Perks and I published a paper on the marketing practices in entrepreneurial mid-sized firms in high-tech and conventional industries. We studies companies from France, Germany and Italy. The research started as a debate we had on the interface between entrepreneurship and marketing which has emerged as one of the major research constructs in the past decade. However, there was relatively little or no research focusing on the mid-sized firms. We selected firms on the basis of following criteria.

Criterion 1: Entrepreneurial involvement-privately owned
Criterion 2: Operating in high-tech (electronic, telecommunications and software) or ‘conventional’ industries (mechanical engineering, metal).
Criterion 4: Located in Italy (high-country culture context), France (medium-country culture context and Germany (low-country culture context).
Criterion 5: Employing between 100-499 staff.

Our research explored the ideas of entrepreneurs on market orientation issues namely; opportunistic behaviour, sales and marketing approach, strategic planning effort, and customer orientation. Our research further explored the entrepreneur’s conceptualization of marketing and approaches to strategy and planning. We employed a grounded theory and multiple case methodology approach exploring perceptions and practices of marketing among entrepreneurs in France, Germany and Italy. As our focus was to gain in-depth information in-depth interviews as a method was employed.

Findings (excerpts only):
1. Opportunistic behaviour:
The pattern of responses related to seeking opportunities in foreign markets indicated that entrepreneurs in our study sample spent a substantial amount of their time seeking opportunities in domestic and international markets. Most respondents stated that they spent 25%-50% of their total time travelling and developing the market for their company. This phenomenon was observed across countries and business contexts.

2. Sales and marketing approach:
SMEs are frequently reported as rarely having marketing departments or employing marketing professionals. In our analysis there is evidence that several of the firms have marketing departments and marketing professionals in product management and marketing communications. This is prevalent among the high-technology firms. However, among the ‘conventional’ industries there are no marketing departments or marketing professionals. While differences were observed across industries, there were no differences across countries.

3. Strategic planning effort:
In most cases the entrepreneurs’ discussed strategy in terms of intuition and experience rather then formalized managerial analysis and decision-making. The firms also referred to the involvement of the top managers in leadership and strategic direction and vision. Some of the respondents articulated explicit views which indicated they were using formal strategy making and business and marketing plans. However, many of them also suggested a cautionary approach towards the structured marketing planning process. The ‘academic way’ of developing marketing plan was also questioned.

4. Customer orientation:
All entrepreneurs stated with emphasis that they work closely with their customers and are engaged in developing solutions and innovations in collaboration with them. It could be observed from the discussion that the customer orientation was not only limited to the marketing activities and relationship building but also channelled into the production, engineering as well as the R&D departments. The issue of positive customer partnership in innovation was observed across all of the responses. However, activity intensity and integration of customer partnership ranged widely.

Overall, we found interesting similarities among European mid-sized firms and their market orientation. We observed the sector specificity and its impact on market orientation however the no significant impact of country culture context. Several other interesting findings are summarised in the paper published in the ‘International Journal of Entrepreneurship and Small Business’. The full reference to the paper is:

Perks, K. J. and Shukla, P. (2008), "An exploratory study conceptualising marketing thought in entrepreneurial medium-sized firms in high-tech and conventional industries in France, Germany and Italy", International Journal of Entrepreneurship and Small Business, Vol. 6 No. 2, pp. 192-211.

The findings provide insights to entrepreneurs and budding entrepreneurs across the world as to what factors they should focus on while managing a growing firm.