Walk the talk
In recessionary times, the first thing that is being cut is the marketing budgets, but in reality no business will be sustainable or successful without marketing and the resultant sales. All businesses face the challenge of finding and retaining customers. It is therefore important to communicate about the product or service to a target market and establish effective distribution channels. Scholars such as Ivens, Pardo and Tunisini (2009) and Harris and Ogbonna (2003) show that entrepreneurs that are aware of the need for marketing show higher growth. Such entrepreneurs targeted their markets carefully while employing direct selling, web-based strategies and increasing media presence as a manner of communicating their messages. There are two types of challenges: if a market need exists, there will be competitors and marketers will have to communicate a unique differentiator to the target market, if no market exists, the advantages of the product will have to be communicated in order to create a need in the market (McKenna, 1991).
Goodstein (2000) found that global competitiveness is forcing entrepreneurs to increase market awareness and marketing knowledge within the team. Marketing techniques used should be sophisticated and state-of-the-art. Marketing ideas should be customer driven and position the organisation strategically. Rwigema and Venter (2004) contend that integrated marketing components are used to create sustainability and ensure business growth in the entrepreneurial firm. It is the backbone to achieving business success. Reputation management is no longer enough to create growth.
Prioritise to ensure return
With limited resources it is important to prioritise marketing activities and ensure return on investment through choosing the activities that will contribute towards the company success. Vorhies and Morgan (2005) warn that sales and marketing are critical success factors for small businesses. Activities should start with market research leading into promotion. As early as 1991, McKenna (1991) acknowledged marketing activities as important factors affecting business success. During a study done in Botswana by Temtime and Pansiri (2004) marketing activity was cited as the main factor to influence business success. Vorhies and Morgan (2005) identified that specific marketing activities contributing the most to business success include promotion, research and training.
Entrepreneurs however are unsure of the value of the marketing function and is therefore less inclined to develop marketing strategies or invest in marketing. Marketing capability is about having knowledge of the target market, customer needs and requirements and providing a solution to those needs. Entrepreneurs should focus on the customer to enable him to react according to client requirements, adjust prices and deliver a quality product at the right time and place. The entrepreneur must have knowledge of every aspect of marketing and the ability to undertake the necessary research. From the research, the entrepreneur should be able to identify a market need and develop the product or service accordingly. This is the first and most important step towards entrepreneurial success.
Find a niche
It is vital for entrepreneurial success to find a niche in the market, a protected place that will give a competitive advantage. Tai (2007) showed that the failure of finding the niche could lead to business failure. The process of identifying the target market, and areas of marketing requirements, such as product marketability, will require the development of a strategic marketing plan in which potential customers should be identified and their needs documented.
An empirical study proved the theories of these scholars. Market interaction was measured through marketing and customer relationship management. Marketing comprised of six items, advertising, communications, events, sales, networking and promotions. The effect of these factors on business success as measured through sustainability, growth, profitability and customer satisfaction was researched through a multiple linear regression analysis.
It was found that marketing of the business and customer relationship management explain 24.7% of the variance in the sustainability of businesses, 13.8% of the variance in business growth and 11.3% of the variance in profitability, proving that when marketing and customer relationship management is done well, the business will be more sustainable, will grow faster and will be more profitable. What has to be noticed is that there is no positive relationship between marketing and customer satisfaction. The assumption could be made that when a product or service has been marketed the customer expectations are raised.
Maintain marketing functions
The findings of the empirical study concurs other scholars who advised that maintaining the company's marketing functions will achieve profitability. The significant relationship between customer relationship management and sustainability also proves the point of Eisenhardt and Martin (2000) that cooperative relationships with clients will achieve business success. Entrepreneurs should therefore not focus on marketing to satisfy customers, but to open new markets and obtain new customers and, in such, positively affect profitability, sustainability and business growth. The interconnectedness of all the factors should not be ignored. Through intensive marketing, more customers will be secured which will require more employees and therefore affect business growth. Once the customers have been secured through marketing activity, operational excellence will be required to satisfy customers. Should the customer be disappointed through the delivery of the product or service falling short of the marketing message the marketing budget would have been wasted.
Posted on 26 Jan 2013 08:22
About Dr Frances Wright
Dr Frances Wright, in her capacity as Managing Director, is responsible for the overall management of Trinitas Consulting. Having first studied and practiced as an oral hygienist, she embarked on her career in operations management in 1986 and specialises in communications, marketing and the implementation of systems and processes that minimise waste, streamline business practices, enhance productivity, and maximise service delivery to a varied client base.