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Entrepreneurial marketing in small businesses: A conceptual exploration

Rosalind Jones and Jennifer Rowley
International Small Business Journal 2011 29: 25
DOI: 10.1177/0266242610369743

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DOI: 10.1177/0266242610369743
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Rosalind Jones
Bangor Business School, Bangor University, UK

Jennifer Rowley
Manchester Metropolitan University, UK

Abstract
This article proposes further development of the concept of entrepreneurial marketing towards
the concept of entrepreneurial marketing orientation. Drawing on the earlier research and scales
in the entrepreneurial orientation, market orientation, innovation orientation and customer
orientation literatures, the article proposes a conceptual model for entrepreneurial marketing
that identifies the components of such a model, together with specific indications of the overlap
between scales in the different areas. This model implicitly suggests that marketing in SMEs is
intertwined with other activities and behaviours in the small business enterprise, and argues that
in order to understand marketing in SMEs it is essential to understand its context, specifically in
relation to customer engagement, innovation and entrepreneurial approaches to marketing.

Keywords
customer orientation, entrepreneurial marketing, entrepreneurial orientation, innovation orientation,
market orientation, SME marketing

Introduction
Marketing, and more specifically, market orientation has been identified as an important contribu-
tor to business performance (Deshpande et al., 1993; Jaworski and Kohli, 1993; Narver and Slater,
1990). Conversely, several researchers have identified the absence of market orientation and skills
in SMEs which often leads to lower performance levels and higher risks of business failure
(Alpkan et al., 2007; Blankson and Stokes, 2002; Brooksbank et al., 2004; Hill and Blois, 1987;
Huang and Brown, 1999; McCartan-Quinn and Carson, 2003). Davis et al. (1985: 31) suggested
that: ‘marketing academicians have almost entirely neglected investigations at the small enterprise/
marketing interface’.

Corresponding author:
Rosalind Jones, Bangor Business School, Bangor University, Bangor, Gwynedd LL57 2DG, UK
E-mail: abs822@bangor.ac.uk

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26 International Small Business Journal 29(1)

Fortunately, given the importance of small business to the economy, there has been a much
greater level of activity in relation to marketing in SMEs over the last 20 years (Blankson and
Omar, 2002; Blankson and Stokes, 2002; Brooksbank, 1991; Brooksbank et al., 1999, 2004;
Carson, 1990, Carson and Cromie, 1989; Carson et al., 1995; Gilmore et al., 2001; Hill, 2001;
Stokes, 1998), and this has led to a developing body of knowledge around SMEs and their mar-
keting strategies, planning and activities, as discussed later in this article. However, much of
this research has taken as its foundation the disciplinary perspectives of marketing and/or strat-
egy, and has been published in journals in these fields. It is therefore, timely to seek to energize
the debate about marketing and market orientation within the mainstream small business
literature.
A recognition of the significance of the interaction between entrepreneurship and marketing has
led to the proposal of the concept of ‘entrepreneurial marketing’ (EM). While some authors argue
that EM is important for all organizations (large and small), there is a general recognition that the
concept is particularly apposite to the small business context. In this context, EM, as a concept
makes an explicit statement about the approach to marketing adopted by SMEs, and also acknowl-
edges the need to understand marketing in SMEs within the wider conceptual base and frameworks
of small business and enterprise.
This article responds to calls for the further development and exploration of the concept of EM
(Collinson and Shaw, 2001; Kraus et al., 2006; Morris et al., 2002). The article proposes that the
EM paradigm should be advanced to include an approach to marketing that is grounded in the
knowledge bases of not only marketing, but also innovation, entrepreneurship and, customer
engagement and relationships. This philosophical standpoint is operationalized through a focus on
‘orientations’. Thus, the article seeks to integrate key facets of the market orientation (MO) scales,
with facets from customer orientation (CO), entrepreneurial orientation (EO) and innovation ori-
entation (IO). In particular, the case is argued for the inclusion of the notion of customer orientation
as a distinct component of EM, rather than being subsumed under MO. This article arrives at this
position as a result of an extrapolation of the key themes in the EM literature from the SME per-
spective, together with a review of the EO, MO, IO and CO literatures. On this basis, a new entre-
preneurial marketing orientation (EMO) model is proposed.
This article first summarizes the EM literature, with a focus on its application in relation to
marketing in SMEs. Then, the case for the inclusion of each of the orientation measurement scales
emanating from the EO, MO, IO and CO literature is argued. This culminates in a proposal for a
conceptual model of EMO as a basis for research exploration of EM in SMEs. The article con-
cludes by proposing a number of areas for research and development with a view to advancing the
concept of EM.

Entrepreneurial marketing in SMEs

SME marketing has been actively researched over the last two decades and this research has dem-
onstrated that small firms exhibit different marketing behaviours with large firms, and that form
the foundation for traditional marketing theory (Freel, 2000). Attempts to adapt and apply tradi-
tional marketing models to SMEs, based on the assumption that the basic principles of marketing
developed in large businesses are universally applicable, have been unsuccessful. Research on
small firm owner-managers found that it was not unusual for them to have negative attitudes
towards traditional marketing ideas (Cohen and Lindbore, 1972; Hogarth-Scott et al., 1996). The
market orientation of SMEs is highly dependent on the marketing knowledge of the entrepreneur

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Jones and Rowley 27

or small business owner, who tends to be a generalist rather than have management or marketing
skills (Hogarth-Scott et al., 1996).
However, there is now an acknowledgement that although the SME’s approach to marketing
may not fit established theories, successful SMEs are able to capitalize on their unique benefits of
‘smallness’. Carson et al. (1995) proposed that SME marketing was in fact entrepreneurial mar-
keting, a distinctive style characterized by a range of factors that included an inherently informal,
simple and haphazard approach. This approach is a result of various factors including: small size;
business and marketing limitations; the influence of the entrepreneur; and, the lack of formal
organizational structures or formal systems of communication with sometimes no systems at all
when it comes to marketing. This form of marketing tends to be responsive and reactive to com-
petition and opportunistic in nature (Carson et al., 1995). It also tends to be highly dependent on
networking (Gilmore and Carson, 1999; Gilmore et al., 2001; Miller et al., 2007) and the oppor-
tunities it provides for the generation of social capital (Bowey and Easton, 2007; Cope et al.,
2007; Miller et al., 2007; Shaw, 2006). Networks facilitate the formation and generation of
customer contacts where word-of-mouth recommendation is facilitated through use of inter-
organizational network relationships and personal contact networks (Gilmore et al., 2001; Hill
and Wright, 2001).
More recently, Morris et al. (2002: 5) have defined EM as ‘the proactive identification and
exploitation of opportunities for acquiring and retaining profitable customers through innovative
approaches to risk management, resource leveraging and value creation’. Researchers also view
EM behaviour as being derived from entrepreneurial thinking, entrepreneurs being innovative,
calculated risk takers, proactive and opportunity orientated (Kirzner, 1973) while Hills and
Hultman (2006: 222) identified EM behavioural characteristics which included ‘marketing
tactics often two way with customers’ and ‘marketing decisions based on daily contacts and
networks’.
It has been proposed that marketing has much to offer the study of entrepreneurship (Hills,
1987; Murray, 1981) and, conversely, entrepreneurship can look to marketing as the key function
of the firm, which can encompass innovation and creativity (Collinson and Shaw, 2001). Indeed,
empirical evidence suggests that there exists a significant correlation between an enterprise’s mar-
keting and entrepreneurial orientations, both widely being responsible for corporate success (Miles
and Arnold, 1991). The relatively recent development of EM theory has generated a substantial
body of literature surrounding the interface between marketing and entrepreneurship. Yet research
findings on the marketing and entrepreneurship interface are fragmented, and there is as yet no
integrated analysis or comprehensive theory (Kraus, 2006). Indeed, Carson (2005) cited in Hills
and Hultman (2006: 232) put the case for a more holistic approach to the domain: ‘I think we need
a holistic interpretation of the domain, rather than focusing on an either/or scenario.’

Reviewing the orientation literature

As discussed in the previous section there is increasing interest in EM theory, and a well estab-
lished recognition of its grounding in both marketing and entrepreneurship theory and practice.
This section will argue that, on the basis of an analysis of the EM literature any consideration of
EM must embrace innovation and customer engagement and, relationships. Accordingly, in this
section, previous work MO, EO, CO and IO scales is summarized and conceptualized, where pos-
sible, with respect to SMEs. In addition, the scales that were used to inform the components in the
proposed EMO model are identified and discussed.

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28 International Small Business Journal 29(1)

Market orientation
MO is widely recognized as having a positive effect on business performance (Deshpande, 1999;
Jaworski and Kohli, 1993; Kotler, 1984; Kotler and Anderson, 1987; Narver and Slater, 1990,
1999; Webster, 1988). Although literature has provided a variety of definitions of MO, most authors
appear to adopt one of two perspectives (Tajeddini et al., 2006; Verhees and Meulenberg, 2004),
that of Kohli and Jaworski (1990) or Narver and Slater’s (1990) definition. Kohli and Jaworski
adopt a behavioural perspective, using marketing intelligence rather than a customer focus as the
central element. In contrast, the Narver and Slater scale is based on a cultural perspective, identify-
ing three behavioural components: customer orientation; competitor orientation; and inter-
functional coordination. Both models are rigorously tested for reliability in large firms research but
opinion remains divided as to which is the more suitable (Pitt et al., 1996; Tajeddini et al., 2006).
Deshpande et al. (1993) developed a MO scale, which embodied a CO focus and later, Deshpande
and Farley (1998) developed the ‘MORTN’ scale, based on elements of Narver and Slater’s (1990)
scale, Kohli et al.’s (1993) ‘MARKOR’ scale and Deshpande et al.’s (1993) scale.
Owing to their robustness, reliability and validity, Narver and Slater’s (1990) MO scale and
Kohli et al.’s (1993) ‘MARKOR’ Scale are used in the MO element of the proposed EM orientation
model. The MO dimensions that inform the EMO model are: market intelligence generation (Kohli
et al., 1993); responsiveness towards competitors (Kohli et al., 1993); and integration of business
processes (Narver and Slater, 1990).

Customer orientation
CO has its roots in early services marketing literature in which the importance of customer-focused
employees was a tangible sign of quality for the firm and its services (Gronroos, 1982). Since then,
the concept of CO within firms has been investigated by a number of authors and researchers;
indeed, some authors view CO as the ‘pillar of marketing’ (Deshpande et al., 1993; Jaworski and
Kohli, 1993; Slater and Narver, 1995). Narver and Slater (1990) observed that CO requires a suf-
ficient understanding to create products or services of superior value, defining CO as a culture that
accentuates the creation of customer value as the overriding organizational goal, while Cardwell
(1994) argues that a company’s very survival will depend on moving closer to the customer, fully
understanding the customer’s needs and wants, building a relationship and, therefore, developing
an attitude of consistent customer dedication.
Zontanos and Anderson (2004) assert that a small firm’s marketing advantage is precisely linked
to the close relationships between the entrepreneur and the customers, in contrast to larger firms
where it is much more difficult to embed entrepreneurship and a customer orientation into its orga-
nizational culture. Small firms’ generally narrow and localized customer base creates a much shorter
line of communication between the firm and its customers (Weinrauch et al., 1991), with entrepre-
neurs often knowing their customers personally. As a result of such a close interactive relationship,
benefits arise such as higher customer loyalty and higher levels of customer satisfaction (Carson,
1985; Lindman, 2004). Long-term relationships between the customer and entrepreneurs are often
cemented by the small firm’s ability to react to customer needs quickly as they are more likely to be
flexible in their ability to respond to customer inquiries (Carson et al., 1995).
CO has been identified and investigated by a number of researchers in a range of disciplines.
Some authors regard CO as central to the marketing concept and view CO and MO as interchange-
able concepts (Deshpande et al., 1993; Shapiro, 1988; Webster, 1988). Narver and Slater (1990)
regard CO as a culture that accentuates the creation of customer value as the overriding organiza-
tional goal, while others such as Jones et al. (2003) maintain MO and CO orientation as separate

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Jones and Rowley 29

concepts and, according to Day and Wensley (1988), a balance must be found between the two
orientations. From a slightly different perspective Drucker (1954) defined CO as a philosophy and
a set of behaviours directed toward determining and understanding the needs of the target customer
and adapting the selling organization’s response in order to satisfy those needs better than the com-
petition. CO also features in the services management and marketing literature in which companies
that adopt a customer satisfaction perspective are considered more able to attain organizational
goals with greater effectiveness than their competitors (Reichheld and Sasser, 1990). Conversely,
Saura et al. (2005) identify CO as resting in both the sales literature and the MO literature. The
sales literature promotes customer centrality for service excellence and uses such measures as Saxe
and Weitz’s (1982) service orientation and customer orientation SOCO scale, which examines the
relationship between service and customer orientations. This scale is still frequently used and
adapted in the sales literature. Deshpande et al.’s (1993) MO scale is known as a customer-oriented
scale based on corporate culture and organizational innovativeness while Saura et al. (2005) devel-
oped scales that are more representative of Drucker’s definition. The scales of Despande et al.,
Saura et al., and Saxe and Weitz, are used in the proposed new model as they represent central ele-
ments of the CO concept from a range of perspectives and this work is proven for its reliability and
validity. CO dimensions from the scales that inform the CO aspect of the model are: responsive-
ness towards customers (Kohli et al., 1993); communication with customers (Narver and Slater,
1990); understanding and delivering customer value (Deshpande et al., 1993; Saura et al., 2005;
Saxe and Weitz, 1982).

Entrepreneurial orientation
Entrepreneurial personality traits that are identified in the body of entrepreneurship literature largely
inform the EO measurement scales and constructs. Therefore, the dimensions of risk taking, pro-
activeness and innovation are often incorporated (Covin and Slevin, 1991; Ginsberg, 1985;
Khandwalla, 1977; Lumpkin and Dess, 1996; Miles and Arnold, 1991; Morris and Paul, 1987;
Naman and Slevin, 1993). Investigation of EO relating to research in SMEs includes Salavou and
Lioukas’ (2003) investigation of market focus, technological posture and EO. Furthermore, Kreizer
et al. (2002) propose that EO research should include culture, innovation, risk taking and pro-active-
ness. Khandwalla (1973) developed the ‘ENTRESCALE’ that has sub-constructs of innovation and
pro-activeness, entrepreneurial proclivity and a propensity for risk taking. This scale has been sub-
sequently refined (Covin and Slevin, 1989; Miller and Friesen, 1978) and much citied in the EO
literature, being noted for its reliability and validity in numerous studies (Covin and Slevin, 1989;
Khandwalla, 1977; Miles and Snow, 1978). More recently Knight (1997) adapted the ‘ENTRESCALE’
scale while Matsuno et al. (2002) also developed an EO scale adapted from earlier EO research stud-
ies (Covin and Slevin, 1989; Miller, 1983; Morris and Paul, 1987). Matsuno et al.’s scale considers
receptiveness to innovation, risk-taking attitude and pro-activeness towards opportunities. Knight’s
and Matsuno et al.’s scales reflect the consensus view of the EO literature preferring orientation
scales that are known for their reliability and validity. They inform the EMO model with the follow-
ing dimensions: research and development (Knight, 1997); speed to market (Knight, 1997); risk
taking (Matsuno et al., 2002); pro-activeness (Matsuno et al., 2002).

Innovation orientation
While the interface between marketing and entrepreneurship has generated debate, the MO litera-
ture has also identified a relationship between innovation, MO and company performance (Connor,
1999; Hurley and Hult, 1998; Jaworski et al., 2000; Slater and Narver, 1998; Verhees and

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30 International Small Business Journal 29(1)

Meulenberg, 2004). Narver and Slater (1990) propose that the practice of continuous innovation
remains an ever-present element of all three identified components of a market orientation
(Tajeddini et al., 2006), while many entrepreneurial activities, such as the identification of new
opportunities, the application of innovative techniques, the conveyance of goods to the market-
place and the successful meeting of customer needs in the chosen market, are also elementary
aspects of marketing theory (Collinson and Shaw, 2001). They propose a more in-depth approach
to EM that takes into account the characteristics of the entrepreneur, whereby marketing and entre-
preneurship are seen to have three areas of interface: change focused; opportunistic in nature; and
innovative in their approach to management. Kuratko (1995) describes an entrepreneur as ‘an
innovator or developer who recognizes and seizes opportunities, converts those opportunities into
workable/marketable ideas, adds value through time, effort, money or skills, assumes the risks of
the competitive marketplace to implement these ideas and realizes the rewards from these efforts’.
Miles and Darroch (2004) consider EM activities to be closely coupled with creating superior
advantage by using innovation to create products, processes and strategies that better satisfy cus-
tomer needs (Covin and Miles; 1999), while Hills and Hultman (2006: 222) describe EM charac-
teristics which reflect such activities as ‘a flexible, customization approach to market’ and
‘innovation in products, services and strategies’. Hills and Hultman (2006) view innovation as a
fundamental element of EM, proposing a theoretical model of the research field of EM that incor-
porates entrepreneurship, marketing and innovation as the core elements.
There are limited IO measures to draw upon because of the strong focus on innovation as an
output (patents and so on) rather than as a firm behaviour. Hurley and Hult (1998) and Aldas-
Manzano et al. (2005) examined innovation in relation to MO, but they failed to consider innova-
tion as a culture or behavioural orientation of the organization. Siguaw et al.’s IO (2006) scale was
judged to be the most appropriate for the EMO model as they conceptualize IO using a set of inter-
firm innovative behaviours that are drawn together from pertinent strands of the innovation litera-
ture. Dimensions drawn from this scale that are incorporated into the EMO model are: overarching
knowledge infrastructure (Siguaw et al., 2006); and encouraging, stimulating and sustaining inno-
vation (Siguaw et al., 2006).

Towards the EMO model

In the previous section a number of MO, CO, IO and EO scales were identified as being central to
the understanding of these orientations. On the basis of these scales, coupled with the characteris-
tics of EM identified in the literature, we propose the EMO model in Figure 1. The model shows
four key orientations, and argues that any concept of EM that is an accurate reflection of the way
in which successful small businesses market must embrace aspects of behaviours that have tradi-
tionally been researched in the entrepreneurship, innovation, and customer engagement and rela-
tionship fields. In other words, in small businesses it is impossible and not fruitful to seek to
differentiate between marketing, innovation, entrepreneurship and customer engagement. The evi-
dence for this assertion is most powerfully evident in the overlaps between orientation scales in
these different fields. In Figure 1 such overlaps have been resolved as discussed below, in order to
offer a clear set of dimensions for EMO.
The EMO model has been created by collapsing existing scales to generate a set of dimensions,
and by identifying the key dimensions within each orientation. In engaging in this process we have
been guided by the acknowledgement that replication and adaptation of marketing scales is com-
mon, and if conducted systematically and rigorously can generate a useful basis for further empirical
research and the development of new theory (Hart and Diamantopoulos, 1993). In particular, we
have noted that the deletion and merger of items is considered acceptable where they are

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Jones and Rowley 31

CUSTOMER ORIENTATION
• Responsiveness towards
customers
• Communication with
customers
• Understanding and
delivering customer value

MARKET ORIENTATION
ENTREPRENEURIAL
• Proactively exploiting ORIENTATION
markets
• Research and development
• Market intelligence
• Speed to Market
generation
• Risk taking
• Responsiveness towards
• Pro-activeness
competitors
• Integration of business
processes
• Networks and relationships
INNOVATION ORIENTATION
• Overarching knowledge
infrastructure
• Encouraging, stimulating
and sustaining innovation

Figure 1. The SME Entrepreneurial Marketing Orientation (EMO) Conceptualized Model.

conceptually related (Hair et al., 1995; Parasuraman et al., 1985). The creation of the model involved
the following stages:

(1) The identification of key scales for MO, CO, EO and IO, as discussed above.
(2) Where necessary, the identification of dimensions from the items in these scales, typically
with the aid of comparisons between two or more scales from the same field.
(3) A comparison the dimensions identified in each of the orientations, MO, CO, IO and EO,
for any overlap in dimensions.
(4) The allocation of any dimensions that occurred in more than one scale to their ‘dominant’
orientation.
(5) A review of the SME and EM literature in order to identify any potential omissions. Two
pertinent dimensions have been included in the MO aspect of the model. These are ‘proac-
tively exploiting markets’ (Hills and Hultman, 2006) and ‘networks and relationships’
(Carson and Gilmore 1999; Morris et al., 2002).

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32 International Small Business Journal 29(1)

Conclusion
By taking a more contextualized view of marketing and by defining CO through consideration of
the appropriate literature of MO, EO, IO and related literatures, this article has sought to integrate
discussion of EM activities in SMEs into the wider conceptual base and frameworks of the field of
small business and enterprise and, to propose a new model for EMO. This model needs further
testing in a range of different contexts, but has the potential to inform the development of both
practice and theory in marketing in SMEs.
The developing notion of EM has a number of themes emanating from it; central to this is the
relationship between MO and EO, and how entrepreneurs undertake marketing. In order to draw
these strands together this article has revisited the discussion of EM particularly in relation to the
SME context and the basic definitions of MO, EO, IO and CO. This revisiting, together with the
evidence of the importance of networks and word-of-mouth recommendation, and creation of value
for customers by way of innovation, suggests that CO is one of the pivotal dimensions of EM. This
stance seeks to embrace the essential nature of EM based on what entrepreneurs and SMEs do in the
marketing arena. We propose that the themes of MO, EO, IO and CO should be embraced and inte-
grated within the developing paradigm of EM, while acknowledging that these orientations operate
and interact dynamically depending on the firm’s size, market sector and stage of development.
The exploration of the concept of EM has surfaced a wide-ranging agenda for further research
on both EM and associated topics:

(1) Customer co-creation requires further investigation, including the exploration of the link
between CO and IO and the extent to which customers are involved in the development and
design of new products and services.
(2) Further research could be undertaken within SMEs to enable a deeper understanding of the
relationship between MO and CO.
(3) Further research could be undertaken in SMEs to investigate the relationship between IO
and EO, and to ascertain the extent of alignment of the concepts.
(4) Exploration is required to consider how marketing in SMEs evolves as the business grows,
and whether specific marketing competencies are increased (developing Carson’s [1990]
Levels of Activity model).
(5) Not all enterprises may benefit from a generalized EM approach. Exploration is needed to
consider whether different approaches to EM are appropriate under different market condi-
tions or in different sectors.
(6) Although the literature suggests that business performance is improved when MO
(and activities) are aligned, in order for measurable and conclusive evidence to be assured,
there is a requirement for a more sophisticated understanding of what constitutes business
performance in SMEs. For example, the female entrepreneurship literature is rich with a
range of social factors that affect the way entrepreneurs plan the development of their com-
pany, while family owned or non-entrepreneurial owner-managers may seek to limit firm
size to minimize stress levels and risk levels, and retain their advantage of keeping direct
and close contact with their customers. Hence, growth measured by financial turnover is
not the only indicator of success.
(7) Further research is proposed that examines the ways in which larger firms implement EM,
by examining the existing overlaps of the EO, MO, IO and CO orientation concepts,
through links between formal customer relationship management systems and processes,
and product and service innovation.

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Jones and Rowley 33

(8) It would be useful to understand decision making and strategies within SMEs in relation
to non-promotional aspects of the marketing mix, that include pricing and placement
(distribution), as these have received limited attention to date.

Acknowledgement
The authors would like to thank the two anonymous reviewers for their insights and constructive comments
which contributed greatly to this paper’s development.

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Rosalind Jones is a Lecturer in Marketing, at Bangor Business School, Bangor University. Her research
interests include SME marketing and entrepreneurial marketing. Her PhD was in the area of software
technology firms and other research interests include tourism, hospitality and public sector research. She
teaches SME marketing, entrepreneurial marketing, marketing strategy and management.

Jennifer Rowley is Professor of Information and Communications at Manchester Metropolitan University.

Her research interest are wide ranging and embrace information and knowledge management, e-marketing,
branding and relationship marketing.

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