Critically discuss relevant SME and entrepreneurial theory and provide critical thinking regarding marketing practice using examples and supporting evidence.

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Introduction

The emergence and growth of small to medium enterprises (SMEs) globally has generated increasing interest into research on how the strategy and tactics of these companies differ from or overlap with general marketing theories, as well as theories designed for multinational corporations (MNCs) (Bridge, O’Neill, & Cromie, 2003, p. 123). Through definition, SMEs benefit from less financial and human resources than their large corporate competitors, yet some of these companies managed to gain a competitive position in their respective industries (Chaston & Mangles, 2002, p. 67). With less financial resources dedicated to marketing and significantly smaller marketing teams, SMEs revolutionised areas of marketing through the need to find more creative ways to gain a good position in the market (Burns, 2007, p. 259). Whilst marketing in the traditional sense through extensive paid for advertising campaigns and price competitiveness requires extensive funds, SMEs have a need for more cost effective campaigns with tangible results, as their ability to invest in marketing initiatives is significantly lower (Storey & Greene, 2010, p. 33). In order to respond to this practical need, an increasing number of scholarly research projects are focusing on tracing the successful strategy of SMEs that thrive in conquering a significant market share (Knight, 2000, p. 13). The impact of the perceived success of small companies has generated a paradigm shift in the entrepreneurial world, hinting at the fact that a well executed vision counts more than a company’s cash flow. At the same time, the influence of the internet and globalisation has made its impact felt on the ability of SMEs to advance beyond their capability to serve local customers (Dholakia & Kshetri, 2004, p. 311). Often opting for the most effective means of marketing, SMEs have indeed become the role models of other companies in their attempt to communicate with and gain the loyalty of customers (Lu & Beamish, 2001, p. 567). As such, this essay is analysing the relevance of standard marketing practice to SMEs and also the innovative solutions employed by small or medium businesses and their impact on the academic knowledge regarding marketing. Drawing a parallel between available scholarly knowledge and practice exemplified through the successful marketing initiatives of SMEs, this essay attempts to draw a clear conclusion in regards to the emerging paradigm shift in marketing.

Entrepreneurship and organisational structure in SMEs

Entrepreneurs usually become owner-managers of SMEs through launching their business idea and gaining the necessary funding for it from grants, loans or self-funded initiatives (Stokes & Wilson, 2010, p. 35). Due to the fact that the entrepreneur is in charge of all the decision making of a firm, SMEs are often faced with operational and strategic challenges that their large corporate counterparts do not experience (Stokes, Wilson, & Mador, 2010, p. 194). On the other hand, SMEs have the advantage of an organisational structure that presents closer working relationships within the company, which can aid the business to become an industry leader (Chaston, 2000, p.

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