ROLE AND PRACTICES OF MARKETING IN SMES

The purpose of this dissertation was to gain a more profound understanding of the role and practices of marketing in SMEs and, thus, to enhance the development of marketing theory in relation to this context. Traditionally, marketing theory has been developed based on studies on large organisations. Consequently, it cannot be applied directly to SMEs, where marketing practices may differ considerably from those of their larger counterparts. Thus, the need to examine marketing practices and develop a theory of marketing in SMEs has been recognised. More specifically this dissertation concentrates on examining three interrelated constructs: marketing concept, market orientation and success. Marketing concept is defined as an organisation’s purpose to identify the needs and wants in its target markets and then to satisfy those needs more effectively and efficiently than its competitors. Market orientation is the implementation of marketing concept. It consists of three behavioural elements: customer orientation, competitor orientation and interfunctional coordination and of three sets of activities: generating, disseminating and responding to market intelligence. Finally, market orientation is seen to enhance firm performance and success. This dissertation considers what the perceptions of marketing are, how marketing is adopted and implemented and what the relationship of marketing and business success is in the context of SMEs. The dissertation consists of two parts. It is based on four articles that are reprinted in the second part. In the first part, a summary is presented where the theoretical and methodological backgrounds are elaborated, the results reviewed and supplemented and, finally, conclusions drawn and ideas evinced for further research. In the empirical examination, a mixed methods programme was followed in the investigation of SMEs in North Karelia, Eastern Finland. The results indicated that SME marketers perceive marketing through concrete practices that often relate to promotion, selling and customer relationships. They do not seem to have adopted a single business philosophy but rather features of several philosophies that they estimate to best fit their business operations. With regard to market orientation, SMEs had adopted this to a certain extent. The focus was on customer information gathering, but to act in a truly market-oriented way would require paying more attention to the dissemination and responsiveness of market intelligence. SMEs differed in their notions and practices of marketing. Especially in the smallest of SMEs the role of marketing was not considered focal and it was often carried out unsystematically and sporadically. In addition, instead of traditional financial success measures, owner-managers emphasised personally related ones, such as job satisfaction. It seems that owner-managers have explicit or implicit notions of what they want to achieve with their enterprises and, at the same time, they have perceptions of what marketing consists of and what its outcomes will be. According to these perceptions, marketing is applied so that the self-defined important business goals and, thus, success is achieved.