Entrepreneurial Marketing vs. Traditional Marketing
Posted In: Business News
Startup activity in 2016 continued an upward trend for the third year in a row, according to the Kauffman Index of Entrepreneurship, which measures new business creation in the United States. In 2014, the index was at its lowest point in the last 20 years. But just three years later, it had rebounded, reaching close to its peak before the Great Recession decline.
It’s generally accepted that entrepreneurs behave differently concerning marketing, according to Management & Marketing. Unfortunately, entrepreneurial marketing is not highly developed. “There is a strong need to develop tools, principles and theories to help businesses — especially start-ups and small ones — to survive and thrive in an increasingly hostile and unpredictable environment.”
The following sections explore entrepreneurial marketing and how it contrasts with traditional marketing.
What Is Entrepreneurial Marketing?
One commonly used definition for entrepreneurial marketing says that it’s “proactive identification and exploitation of opportunities for acquiring and retaining profitable customers through innovative approaches to risk management, resource leveraging and value creation,” according to Management & Marketing.
Others believe the marketing process is fully assimilated into entrepreneurship. Instead of the market being a place for transactions, it’s a process that enables producers and consumers to co-produce and co-consume not only a product but a lifestyle and an identity. Thus, entrepreneurial marketing is, in this sense, a process of co-creating opportunities.
There are many other different types of definitions for entrepreneurial marketing. But among the many definitions, one thing that’s clear is the concept is better understood when contrasted with traditional marketing.
Entrepreneurial Marketing vs. Traditional Marketing
There are four key concepts that separate entrepreneurial marketing from traditional marketing, according to the Journal of Research in Marketing in Entrepreneurship.
- Business Orientation: While traditional marketing is defined by customer orientation, entrepreneurial marketing is defined by entrepreneurial and innovation orientation. The former typically requires an assessment of market needs before developing a product, but the latter often starts with an idea and then trying to find a market for it.
- Strategic Level: A top-down approach is used in traditional marketing, where a clearly defined sequence of activities, such as segmenting, targeting and positioning, takes place. “Successful entrepreneurs practice a reverse process from the bottom up: once identified a possible market opportunity, an entrepreneur tests it through a trial-and-error process,” Management & Marketing “After that, the company begins to serve the needs of some clients, and then expands as the entrepreneur, in direct contact with clients, finds out their preferences and needs. Later, new customers with a similar profile to those who have purchased the product are added.”
- Tactical Level: Entrepreneurial marketing doesn’t fit in with the “four Ps of (traditional) marketing” — product, price, place and promotion — because entrepreneurs adopt an interactive marketing approach that’s driven by their preference for direct and personal contact with customers. Entrepreneurs interact with customers with activities like personal selling and relationship marketing activities. From word-of-mouth marketing to online audience engagement methods, entrepreneurs are trying to connect with customers in a personal way. Even when, for instance, entrepreneurs create a nonprofit marketing plan, they are looking for messaging, tactics and more that abide by the key idea of interacting with and connecting to customers.
- Market Information Gathering: Entrepreneurs understand the importance of monitoring the marketing environment, but they use informal methods like personal observation or collecting information through their networks of contacts.
It is surprising that the best practices of successful entrepreneurs often ignore traditional marketing concepts. Entrepreneurs declare that they do not use marketing, as they associate marketing with advertising, because they cannot afford high costs of communication. Moreover, entrepreneurs seem to be concerned about current, operational issues and seem to ignore long-term ones. And also, their approach does not follow the textbook discipline. But these appearances are deceptive: entrepreneurs practice a different marketing, they are flexible in terms of tactics but are always concerned about how to provide long-term customer value. Their approach is not necessarily logical and sequential rather unconventional and organic, because they “live” with their customers’ needs and preferences.
–Management & Marketing
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