Arab Open University - Faculty of Business B205B Exploring Innovation & Entrepreneurship

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ARAB OPEN UNIVERSITY – FACULTY OF BUSINESS

B205B EXPLORING INNOVATION & ENTREPRENEURSHIP
BLOCK 4 CREATING NEW VENTURES
ARAB OPEN UNIVERSITY- FACULTY OF BUSINESS STUDIES – OPEN UNIVERSITY COURSE-
B205 B
2 B205B - EXPLORING INNOVATION & ENTREPRENEURSHIP

BLOCK 4 CREATING NEW VENTURES
4.1 ENTREPRENEURIAL MARKETING
 Introduction
 The readings in this section are designed to help you to complete your
new venture challenge.
 The first reading considers the topic of entrepreneurial marketing.
Whatever your team’s proposed new venture, marketing is likely to be
an important consideration.
 Although you may have encountered marketing in previous modules,
this reading will allow you to consider how marketing in entrepreneurial
ventures differs from that undertaken by large or established
businesses.
B205 B
B205B - EXPLORING INNOVATION & ENTREPRENEURSHIP

3 BLOCK 3 CONTEXT AND VARIETY CASES
 Introduction & Review

 The following three readings cover the three key financial statements that
entrepreneurs need to prepare for their new venture:
1. the income statement (Reading 4.2),
2. the balance sheet (Reading 4.3) and
3. the cash flow statement (Reading 4.4).

You may have encountered these statements in previous studies or in your work,
but they are provided for anyone who wants a reminder of their purpose and
construction.
B205 B

BLOCK 3 CONTEXT AND VARIETY CASES
 Introduction & Review
4. fourth statement: the statement of changes in equity (‘equity’ will be
defined in Reading 4.3), detailing movements in the worth of the business
that do not arise from its operating activities: movements such as the
declaration of dividends and the raising of new capital by issuing new shares.
 This statement deals with issues that are not relevant to this module, which
is concerned with introducing students to business finance in terms of
business operations rather than the raising of finance and rewarding
shareholders;
B205 B

4.1 Entrepreneurial marketing
• This reading introduces the topic of entrepreneurial marketing and
considers how it differs from the marketing undertaken by large
businesses or those that have been operating for a considerable time.
• The article introduces the ‘4 Ps’ of entrepreneurial marketing and
provides examples of entrepreneurial marketing from a study of
entrepreneurs from minority-ethnic heritages operating early-stage
home-based businesses.
B205 B

4.1 Entrepreneurial marketing - Introduction

• As student, you will have studied marketing as part of your business and
management modules. You will be familiar with many of the terms and concepts
through the media or from your own experiences as part of an organization or as
a customer.
• For example, we are all exposed to the promotional activities of firms, be they on
television, press or increasingly online.
• We have also all been subject to the pricing decisions of firms – which, in the
case of many services such as mobile phones and domestic energy can often be
highly confusing for the customer.
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 The majority of marketing theory and practice has been developed in the context of large
businesses. This can be referred to as corporate traditional (CTM) or administrative
marketing (AM).
 Entrepreneurial marketing (EM) is used to describe the marketing undertaken by small
entrepreneurial ventures, often at start-up or early growth phase (Carson et al., 2001;
Collinson and Shaw, 2001; Morris et al., 2002; Martin, 2009).
 It should be noted that entrepreneurial approaches to marketing are not the sole preserve
of small firms, and the term can be applied to larger or established firms that adopt
innovative marketing approaches (Foxall and Minkes, 1996; Jones and Rowley, 2011).
 However, as firms grow and mature their approach to marketing tends to become highly
structured and routinised and less innovative.
ARAB OPEN UNIVERSITY- FACULTY OF BUSINESS STUDIES – OPEN UNIVERSITY COURSE- B205 B
 4.1 Entrepreneurial marketing - Introduction

 Although difficult to characterize precisely, entrepreneurial marketing
has been described as informal, dynamic, responsive to customer
needs and often simple in its design and execution (Collinson and
Shaw, 2001; Bjerke and Hultman, 2002; Fiore et al., 2013).
 Marketing is often undertaken by the owner of the business, who is
likely to be a generalist, rather than a marketing expert and will
typically be undertaken part-time alongside other activities (Hills et al.,
2008).
 These features suggest a more seamless and integrated approach to
marketing in small ventures than is often evident in administrative
marketing.

 Marketing in small firms is often assessed in the context of
larger firms, and has been judged to be reactive, short-term and
non-strategic (Zontanos and Anderson, 2004).
 Similarly, small firms are often considered to be unaware of
market trends as they do not undertake formal market research.
 However, it is the lack of long-term and fixed plans that allows
entrepreneurial marketing to be responsive and flexible.
10 B205B - EXPLORING INNOVATION &
ENTREPRENEURSHIP
4.1 ENTREPRENEURIAL
4.1 Entrepreneurial MARKETING
marketing - Introduction
 One key characteristic of entrepreneurial marketing is that the
entrepreneur or the entrepreneurial team are often very close to their
customers, interacting with them directly.
 They are therefore able to understand customer needs and, given the
increased flexibility associated with small businesses can often respond
rapidly to these needs.
 It is this closeness to the customer that removes the need for formal
market research.
 Larger firms are often more distant from their customers

and staff interacting with customers are distinct from those
developing or making products or services.
 A key process for interacting with customers or other
stakeholders is networking. Hence networking has been
identified as a key process in entrepreneurial marketing.
 Although access to resources is important for all types of marketing, entrepreneurial marketing
in particular is seen as ‘based on the resources available at the moment’ (Hills and
Hultman, 2013, p. 438).
 The acquisition of certain resources may be difficult. Entrepreneurs will shape their marketing
strategies according to the resources they have at hand or can readily acquire, rather than base
their business and marketing strategy solely on customer needs.
 As suggested in administrative marketing, entrepreneurial marketing also seeks to meet the
desires, needs and motives of both the entrepreneur as well as the customer (Miles and Arnold,
1991).
 Morrish et al. (2010), suggest that ‘the starting place for an entrepreneurial firm and therefore
entrepreneurial marketing activity is and must be the entrepreneur’.

• Traditional marketing is often associated with the ‘4 Ps’ – product, price,
place, promotion (Kotler and Keller, 2006).
• Whilst these all play a role in entrepreneurial ventures, four different Ps
have been identified as most important.
• These are: people, purposes, practices and process (Zontanos and
Anderson, 2004; Martin, 2009) and are described in the following table.
Dimension Description
This relates to the people in the entrepreneurial team – or to

an individual entrepreneur. Given the central role of
People individuals in entrepreneurial marketing – the traits, styles and
competencies of individuals are much more important than in
the structured approach of administrative marketing.
The entrepreneurial venture will often have arisen from a

customer need identified by the entrepreneur – and which
they feel strongly about. The venture is also is strongly
Purposes
influenced by the values and motivations of the founders and
key members of staff. Entrepreneurial marketing seeks to
meet
Dimension Description
Entrepreneurial marketing tends to be informal, dynamic,
responsive to customer needs and often simple in its design and
execution. Some entrepreneurs may not recognize they are
Practices engaging in entrepreneurial marketing, rather they are just doing
what is needed to engage with customers and other stakeholders.
However, it is this very informality and contingency that
characterizes entrepreneurial marketing.
Networking and developing a web of relationships have been
identified as key to entrepreneurial marketing. Through these
Process networks entrepreneurs and entrepreneurial teams can access
vital, timely and inexpensive market information that they can use
to shape their products and services.
Entrepreneurial marketing
 Martin (2009) suggests a fifth ‘P’ for entrepreneurial marketing –

‘Passion’.
 She observes that passion is important for entrepreneurs, sustaining
them through the ups and downs associated with new ventures.
 As she says ‘passion sustains entrepreneurs through the
uncertainties of daily decisions, the thrill of new innovations and the
challenges and setbacks that line the road to success’.
Entrepreneurial marketing in practice
• Anwar and Daniel (2016) undertook a study of entrepreneurs with ethnic
heritages that were operating online home-based businesses.
• Most did not have any formal marketing education or training and had started
their businesses with no external funding and hence had limited resources.
• When viewed through the lens of administrative marketing, it appeared that
their marketing approaches were unplanned and haphazard.
• However, when considered through an entrepreneurial marketing lens it could
be seen that they were highly action-oriented, willing to learn-by-doing and
experimentation.
 Entrepreneurial marketing in practice
 For example, one informant who runs an online education and tuition business,
described how he had experimented with advertisements for the business in the
newspaper, but stopped them after getting little response.
 In contrast, he reported that their learning and experimentation with search
engine optimization (SEO) had been successful in attracting international clients:
“We do search engine optimization for our business... what I have observed after
working a bit on my website… we have seen that our website was in the top two,
top three searches in the Middle East and Africa, so we are having more clients
now from Qatar, Oman, and Nigeria.”

 Interviewees described how they used online networking, via industry-specific
fora to attract clients.
 One informant described how participation in these online networks provided a
valuable means of keeping up with developments in his specialism:
… I answer people’s questions in online business fora, this helps a lot in
generating clientele and it also keeps me up to date with the things that I am
doing. Also I get a chance to read the comments/responses of people who are in
practice a lot longer than me, so it’s an opportunity for me to learn new tricks of
the trade.”
 Consistent with the contingency and flexibility associated with entrepreneurial
marketing, even though their businesses were based online, the interviewees
described how they used physical marketing materials, the telephone, and were
happy to attend face-to-face promotional and networking events.
 For example, some of the interviewees described how they had produced business
cards, leaflets and brochures and delivered these to local businesses or handed
them out at face-to-face networking events.
 The interviewees described how they were continually promoting their businesses
and were always looking for new ways to do this. One informant described how he
wore a T-shirt with his firm’s logo even when he was outside work:
 “As I said, it is not a 9 to 5 thing, therefore, you are

continuously promoting your business all the time, as I take this
jumper off I am wearing a branded t-shirt of my business.”
 “So while I am playing badminton or cricket, anyone can see
me and my business. Some people make fun of it but I do not
care as long as people see me and notice my business.”
 Conclusion
• Entrepreneurial marketing is characterized as informal, dynamic, responsive
to customer needs and often simple in its design and execution.
• While the lack of formal market research and marketing planning can make it
appear that entrepreneurs are not undertaking the marketing espoused in
text books – their more organic and informal approach allows responsiveness
and flexibility.
• However, the success of such an informal approach is reliant on keeping
close to the customer, which must form a key part of an entrepreneurial
marketing approach.

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1

ARAB OPEN UNIVERSITY – FACULTY OF BUSINESS

2 B205B - EXPLORING INNOVATION & ENTREPRENEURSHIP

B205B - EXPLORING INNOVATION & ENTREPRENEURSHIP

 Introduction & Review

3. the cash flow statement (Reading 4.4).

4 B205B - EXPLORING INNOVATION & ENTREPRENEURSHIP

5 B205B - EXPLORING INNOVATION & ENTREPRENEURSHIP

B205B - EXPLORING INNOVATION & ENTREPRENEURSHIP

4.1 Entrepreneurial marketing - Introduction

 4.1 Entrepreneurial marketing - Introduction

4.1 Entrepreneurial marketing - Introduction

4.1 Entrepreneurial marketing - Introduction

 Larger firms are often more distant from their customers

4.1 Entrepreneurial marketing - Introduction

This relates to the people in the entrepreneurial team – or to

The entrepreneurial venture will often have arisen from a

 Martin (2009) suggests a fifth ‘P’ for entrepreneurial marketing –

 Entrepreneurial marketing in practice

 “As I said, it is not a 9 to 5 thing, therefore, you are

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