Six questions for SME managers to enhance competitiveness
Most of the SME managers know that they need to enhance marketing orientation in their company in order to create competitive advantage and thus, enhance the financial success. The difficulty, however, is how to do it?
SME managers are the drivers of performance and their decisions correlate to a large degree to the success of a company. It is very typical that the education, previous work and life experience influences on the focus of SME managers’ work and priorities. Especially in knowledge-intensive businesses, managers’ education and previous experience often is in engineering or technology. This may lead to a situation that managers’ primary focus is in other tasks than marketing. Does it matter if they do it properly? Let’s look at some viewpoints, why it does matter.
Firstly, I will share a couple of examples what do I mean by that managers do not know much about marketing. Secondly, in connection with the example, I will discuss what the possible consequences can be. Finally, I will ask questions that hopefully will stimulate your thoughts and learning.
You own perception of the reality may be biased
Especially in knowledge intensive businesses, managers do not know that they are involved in marketing. What do I mean by that statement? Firstly, in my research, (see Neuvonen, H. 2014, Understanding brand strategy adoption by high tech SME managers, https://jyx.jyu.fi/dspace/handle/123456789/43098) the general opinion among the SME managers, despite the fact that they all were responsible for marketing decisions, was that their primary focus was in other tasks than marketing. Often the justification is that the primary focus is in designing or developing a prototype or a product. However, the data highlighted an interesting viewpoint: what managers say and how they behave is somewhat contradictory. Sometimes, they were just unaware of the content and meaning of marketing.
At first, when asked how much they participated in the marketing activities, most of them struggled answering. Nevertheless, when I asked them to describe a typical working day, the description involved a great deal of marketing activities such as trying to identify potential customers, trying to find out their needs, trying to network and gain support from experts, trying to collaborate with other organisations in promoting their product (also called indirect promotions), trying to sell the product and build up the awareness.
Most of the SME managers were involved in marketing even though they were not quite aware of it. Their working day involved a great deal of marketing activities, and they understood the importance of knowing the customer needs. Interestingly, some of the managers did not perceive it as marketing. They called it product development or managing and, consequently, they did not see their activities as marketing activities.
Figure 1 below illustrates SME manager’s own perception of the reality. The two circles below, which are connected with a line to the manager, are those elements that the knowledge-intensive SME managers saw as the most important areas of focus in their everyday work. The circle above, which is connected with dotted line to the manager, illustrates the area that (s)he is not quite familiar with. According to the descriptions in the in-depth interviews, a manager’s work included a great deal of marketing activities. Nevertheless, they often gave a different meaning to those activities and did not consider them to be marketing.
Figure 1. SME manager’s own perception of the elements of focus
For those SME managers, looking to improve their company’s competitive advantage, I challenge to spend a moment thinking of:
- “Do I know what I’m actually doing?”
Allocation of resources
Secondly, background and previous experience do not only prevent managers from understanding what they are actually doing, it may also direct to allocating too much future resources on product development. As a consequence of this kind of a situation, managers may allocate more resources to product development instead of creating added value to the customer by using marketing tools. Prior experience has implications also for the staffing practices and founder team composition in the new businesses. For those SME managers, looking to improve their company’s competitive advantage, I challenge to spend a moment thinking of:“How much resources (time, money, knowledge) do I invest in marketing?”
2. “How much resources (time, money, knowledge) do I invest in marketing?”
3. “What is the composition of our staff/managerial team from the experience viewpoint?”
Tendency of not even receiving information concerning marketing
Thirdly, it is crucial to understand the non-marketing background from the viewpoint of how messages are interpreted. The human attention span is almost zero since the non-marketing mind-set inhibits receiving messages. This leads to nonawareness and lack of knowledge.
”You reflect it all the time through your own experience”
The above quotation depicts well the assumption that the issues he/she considers worth discussing and drawing attention to are somehow related to or important to his/her own experiences. Hence, the tendency is to postpone or avoid marketing related decisions. When discussing the key reasons of moving forward the implementation, the respondents brought up the need of money. However, when interpreting the data, it was apparent that the respondents also lacked knowledge. For those SME managers, looking to improve their company’s competitive advantage, I challenge to spend a moment thinking of:
4. “Do I need more money or knowledge?”
5. “When was the last time I tried to learn something new about marketing?”
6. “Have I postponed strategic marketing decisions?”
All in all, many experts stress the need to enhance marketing orientation in SME’s in order to create competitive advantage and thus enhance their success. I agree, that the need has not disappeared. Moreover, I suggest that a market-oriented attitude needs to be built from the very beginning. Managers need to be aware of the fundamentals of marketing since it is a prerequisite to managing marketing. In fact, managers who understand how much their work involves marketing are more open and willing to learn more and they have the tendency of even receiving information concerning marketing.
Heidi Neuvonen, JAMK University of Applied Sciences, School of Business, heidi.neuvonen (at) jamk.fi