Entrepreneurial Marketing (EM) Theory Development and Practice for Growth of Organizations

Executive summary

This discussion explains EM theory development and practices for the organization’s growth. EM are activities implemented by an organization to identify opportunities, using innovative risk management approaches, resource leveraging, and value creation to acquire and retain customers. EM creates an idea or product then finds a market, focuses on innovation, risk-taking, proactiveness, value creation, and leveraging resources, and uses informal decision-making process unlike traditional marketing (TM), which develops a product that meets customer needs, focuses on product, price, places, and promotion and uses formal plan on goals and decision making. The conceptual framework for EM created by Bjerke & Hultman in 2002, seven dimensions of EM by Morris, schindehutte, and LaForge in 2002, EMICO (combination of entrepreneurial orientation(EO), market orientation (MO), innovation orientation(IO), and customer orientation(CO)) framework by Jones and Rowley in 2009, the EMO (entrepreneurial marketing orientation) model by Jones and Rowley in 2011, The six-factor model by Kilenthong, Hultman, and Hills in 2015 and Eight dimensions EM by Chaston in 2016 explains how EM theory evolved. The discussion also explains how different organizations have used the eight EM dimensions for survival and growth.

1. Introduction

Successful entrepreneurship needs a balance of different aspects of business like financing, accounting, marketing, and management. Companies use marketing activities to identify consumers and make consumers buy their products or services. Marketing is one of the essential aspects of business, for if consumers aren’t aware of the new products, a company cannot be successful. Even though there are many reasons why businesses fail in a start-up failure post-mortem of over 110 firms done from 2018 by CBInsights, poor marketing accounted for 35% of the start-up failure, as shown in figure 1 (CB Insights, 2021). Conducting effective marketing is crucial for the growth of businesses, and one way of enhancing marketing is through implementing entrepreneurial marketing concepts (Boukhris, Penney, and Harms, 2015). EM are activities implemented by an organization to identify opportunities, using innovative risk management approaches, resource leveraging, and value creation to acquire and retain customers (Hisrich and Ramadani, 2018).

2. EM vs. TM

EM differs from TM in a variety of concepts. Unlike EM, which creates an idea or product and then finds a market, TM defines market needs before designing products (Martin, 2009). TM develops a product that meets customers’ requirements; this limits room for creativity and new ideas; on the other hand, EM focus on co-production for products and services between customers and co-workers and discovering creative ways to connect with the customer ((Stokes, 2000)). TM focuses on principles like the product, price, places, and promotion, while EM focuses on innovation, risk-taking, proactiveness, value creation, and leveraging resources ((Martin, 2009)).TM has a formal plan on goals and decisions to be taken. In contrast, EM does not rely on a standard procedure and uses an informal decision-making process depending on customers and markets (Nwankwo and Kanyangale, 2020).

3. Development of EM theory

Research has developed different models and frameworks used to measure the construct of EM. The conceptual framework for EM created by Bjerke & Hultman in 2002 explains that EM is based on four main pillars; entrepreneurship, resources, actors, and process, as shown in figure 2 (Hills, Hultman and Miles, 2008). The entrepreneurship pillar represents opportunities , how they can be recognized and implemented to increase customer value; resources pillar is a crucial element to help improve customer; the process pillar assembles all the other pillars to generate the desired results; actors pillar are individuals that implement the process to achieve customer value (Kolongahapitiya, 2018).

Figure 2. Four pillars of the conceptual framework (Hills, Hultman and Miles, 2008)

In 2002, Morris, schindehutte, and LaForge introduced seven dimensions of EM under the three major categories: Entrepreneurial orientation (proactiveness, opportunity focused, risk-taking, and innovation), market orientation (customer intensity and value creation), and resource leveraging (Fiore et al., 2015). The model added that an entrepreneur’s characteristics also affect the entrepreneurial orientation of a company. The model also added that SMEs could implement each dimension despite the level of each dimension contribution (Kolongahapitiya, 2018).

In 2009 Jones and Rowley developed the EMICO (combination of entrepreneurial orientation(EO), market orientation (MO), innovation orientation(IO), and customer orientation(CO)) framework, which introduced 15 dimensions of EM under the four main orientations: EO, MO, IO, and CO (Arpa, Tiernan, O’ and Dwyer, 2012). In 2011, the EMO (entrepreneurial marketing model) model based on the ‘EMICO’ framework was developed by Jones and Rowley. EMO revealed that the 15 dimensions are the determinant of EM (Kolongahapitiya, 2018). EMO also defined the 15 dimensions under the four significant orientations: CO, IO, MO, and EO (Jones, Suoranta, and Rowley, 2013). EMO model stated that the critical orientations overlap, as illustrated in figure 3 (Kolongahapitiya, 2018). Therefore addressing the four crucial orientations will ensure support growth and proper implementation of EM in an organization.

Figue 3. EMO four orientations interaction (Kolongahapitiya, 2018).

In 2015, The six-factor model was developed by Kilenthong, Hultman, and Hills explained the six main dimensions of EM as growth orientation, opportunity orientation, total customer focus, value creation, informal market analysis, and closeness to the market (Kilenthong, Hultman, and Hills, 2016). Kilenthong, Hultman, and Hills also confirmed the seven dimensions model developed by Morris, schindehutte, and LaForgein 2002.

In 2016 Chaston described EM as a managerial philosophy for the growth of all organizations with the following eight dimensions: proactive innovation, opportunity-driven, willingness to change, innovation focus, resource leveraging, customer intensity, risk management, and value-driven as illustrated in figure 4 (Kolongahapitiya, 2018).

Figure 4. Eight dimensions of EM by Chaston 2016 (Kolongahapitiya, 2018).

The EM theory evolved mostly in SMEs because they never believed in traditional marketing; instead, they relied on word-of-mouth marketing (Sadiku-Dushi, Dana, and Ramadani, 2019). Despite SMEs depending on EM, researchers believe all organizations, irrespective of size, age, and other characteristics, can still use EM to achieve the desired goals (Kolongahapitiya, 2018).

4. Use of EM dimensions

Each EM dimension plays an essential role in an organization’s long-term survival and growth. The discussed are ways the eight dimensions, proactive innovation, opportunity-driven, purpose-driven, innovation focus, resource leveraging, customer intensity, risk management, and value creation, have contributed to the survival and growth of some organizations.

Pro-activeness is the anticipatory behaviour of an organization that helps organizations act on future situations, take control of the situation, and solve problems as soon as they are aware of them (Bass, 2018). Example proactive organization is US-based Budget Truck rental firm that introduced the intelligent virtual agent to provide instant answers to customers. This helped the company reduce 28% of centre calls and save $875 000 in seven months (Swinscoe, 2019).

Innovation is doing something different in changing customer needs and markets (Nwankwo and Kanyangale, 2020). For example, the Netflix home entertainment industry introduced a streaming service that brought the brand’s success by embracing change technology and using it as an opportunity for innovation (Cail, 2020).

Risk-taking involves engaging in behaviours or activities with potential danger or positive outcomes (Nwankwo and Kanyangale, 2020). For example, TOMS, founded by Blake Mycoskie, had investors turn down the “buy one, give one” business model because they believed the model wasn’t sustainable. The company took the risk of implementing the business model. TOMS shoes are wildly popular because people purchase shoes knowing another pair will help the needy. As of 2019, TOMS has donated over 95,000,000 shoes to needy families (Petan, 2021).

Leveraging resources is using available resources creatively to create new opportunities to achieve challenging goals (Nwankwo and Kanyangale, 2020). For example, Dell took its core competencies in the PCs and is now using their competencies on computer servers and other electronic devices to improve their market (Suri et al., 2020).

Customer intensity is how a company creates marketing relationships with its customers to ensure a positive customer experience for customer loyalty and profits (Nwankwo and Kanyangale, 2020). For example, Disney resort puts a lot of effort into every phase of their customers’ experience, planning a customer-friendly environment, proper training of cast members, and planning for customers’ return through reusable magic bands and customer experience app, which makes customers keep revisiting (Bell, 2019).

Value creation offers a valuable product that motivates customers to continue using the products or services (Nwankwo and Kanyangale, 2020). Vasco Data Security International (VDSI) provides authentication and digital signature solutions to the world’s largest financial institutions. Vasco offers secure data access and helps application developers to use security functions in Web-based and mobile applications. Diverse products and services have helped the company grow at 12% annually, making Vasco a leader in Cybersecurity (Melvin, 2016).

Opportunity driven is the ability of a business to assess the environment and identify opportunities (Nwankwo and Kanyangale, 2020). For example, Amazon started in 1995 as an online retailer for physical books. Amazon carried over 2.5 million different book titles dominating e-commerce and cloud computing. In 2000, Amazon’s third-party marketplace started other products making the company the leading online retailer today (Ludwig, 2020).

Purpose-driven is the ability of the company to work in collaboration to offer high-quality products or services and develop social support programs to create team spirit (Nwankwo and Kanyangale, 2020). For example, Airbnb is a travel accommodation industry with over 5000 employees. In 2015 Airbnb dissolved the human resources department and established the Employee Experience Group. Airbnb built a workplace where physical, emotional, intellectual, virtual, and aspirational are considered to inspire employees (BBC, 2017).

5. Conclusion

This discussion shows that EM is an appropriate tool for all organizations to gain a competitive advantage; therefore, EM can be supplementary to the existing marketing theories. EM concepts help to highlight a company’s strengths and values to customers, innovative products and services help a company stand out among competitors. EM uses informal marketing tools like social media marketing, unlike traditional marketing, making it cost-effective for the organization. The EM theory evolved mostly in SMEs because they never believed in traditional marketing; instead, they relied on word-of-mouth marketing. Despite SMEs depending on EM, researchers believe all organizations can still use EM to achieve the desired goals irrespective of size, age, and other characteristics. Therefore, the implementation of EM dimensions is crucial for the sustained growth of businesses.

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