Idea Transcript
Mirkó György Gáti
INFLUENCING FACTORS OF SMALL AND MEDIUMSIZED ENTERPRISES’ MARKETING ACTIVITIES – IN PARTICULAR AS REGARDS ON ONLINE MARKETING ACTIVITIES
Department of Marketing
Supervisor: Dr András Bauer, CSc
© Mirkó György Gáti, 2015
Corvinus University of Budapest Doctoral School of Management and Business Administration
INFLUENCING FACTORS OF SMALL AND MEDIUMSIZED ENTERPRISES’ MARKETING ACTIVITIES – IN PARTICULAR AS REGARDS ON ONLINE MARKETING ACTIVITIES Doctoral Dissertation Mirkó György Gáti
Budapest, 2015.
TABLE OF CONTENTS
I. INTRODUCTION ................................................................................................ 1 I.1. Topic outline, explanation of topic selection ......................................................................... 2 I.1.1. Definition of SMEs ............................................................................................................... 3 I.1.2. The importance of SMEs in the European Union and in Hungary ..................................... 12 I.2. Aim ...................................................................................................................................... 17 I.3. Theoretical and practical significance .................................................................................. 18 I.4. Structure.............................................................................................................................. 21
II. LITERATURE REVIEW ...................................................................................... 22 II.1. SMEs and large enterprises ................................................................................................. 23 II.1.1.The marketing of SMEs ...................................................................................................... 27 II.1.2. SME marketing models ..................................................................................................... 41 II.1.3. Marketing tools in SMEs ................................................................................................... 51 II.2. The role of the internet and IT in economics and marketing ............................................... 58 II.2.1. Effect of the internet value chain on sectoral competition .............................................. 58 II.2.2. Effect of IT services on the Hungarian SMEs .................................................................... 59 II.2.3. Online marketing in SMEs ................................................................................................. 63 II. 3. Internal factors .................................................................................................................. 79 II. 4. External factors .................................................................................................................. 88 II.5. Performance ....................................................................................................................... 90 II.6. Theoretical framework of the dissertation ......................................................................... 95
III. EMPIRICAL RESEARCH ................................................................................... 96 III.1. Aim of the research ........................................................................................................... 96 III.2. Research questions ............................................................................................................ 96 III.2.1. Theoretical framework of the research with research questions ................................. 101 III.3. Research method ............................................................................................................. 102 III.3.1. Research paradigm ........................................................................................................ 102 III.3.2. Mixed-methods research ............................................................................................... 106 III.3.3. Qualitative methodology ............................................................................................... 108 III.3.4. Quantitative methodology ............................................................................................ 112 III.3.5. Applied scales ................................................................................................................ 120 III.3.6. Empirical research plan ................................................................................................. 131 III.4. Preliminary studies .......................................................................................................... 133 III.4.1. Influencing factors of the social media presence of SMEs ............................................ 133 III.4.2. Scope of the marketing activity of SMEs ....................................................................... 136
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III.5. Research: Factors influencing the marketing of SMEs ...................................................... 140 III.5.1. Qualitative phase ............................................................................................................140 III.5.2. Conclusions of the qualitative phase ..............................................................................159 III.5.3. Quantitative phase .........................................................................................................161 III.5.4. Conclusions of the quantitative phase ...........................................................................187 III.5.5. Discussion of the results .................................................................................................190
IV. Conclusions ................................................................................................ 198 APPENDIX ........................................................................................................ 199 Annex 1. Marketing definitions from a historical perspective .................................................. 199 Annex 2. Types of IT systems ................................................................................................... 200 Annex 3. Offline/online marketing communications tools ....................................................... 201 Annex 4. Categories of Hungarian SMEs .................................................................................. 202 Annex 5. Letter of invitation for survey and in-depth interview .............................................. 203 Annex 6. Interview outline ...................................................................................................... 204 Annex 7. Survey ....................................................................................................................... 205
References....................................................................................................... 214 Publications of the author related to the topic of the dissertation .................... 239
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List of figures Figure 1. The aim of the dissertation Figure 2. Development process of the marketing of SMEs Figure 3. Holistic model of marketing of SMEs Figure 4. Tasks of people dealing with marketing (percent, N=170) Figure 5. Types of social media Figure 6. Theoretical framework of the research Figure 7. Theoretical framework of the research with research questions Figure 8. Steps of discriminant analysis Figure 9. Lessons from the analysis of case studies Figure 10. Initial codes of the qualitative in-depth interview analysis Figure 11. Interpretation of the marketing activity by SMEs (N=15) Figure 12. Importance of the marketing activity by SMEs (N=15) Figure 13. Personal responsibility of the marketing activity by SMEs (N=15) Figure 14. Success of the online and social media marketing by SMEs (N=15) Figure 15. Marketing qualifications of the respondents of the survey (N=141) Figure 16. Scatter plot depicting the groups (PLANNINGSTRATINT)
17 40 49 55 75 95 101 119 138 144 146 149 151 156 165 184
List of tables Table 1. SME definitions of the Bolton Committee by industry Table 2. Definition of SME s of the European Commission Table 3. Scientific definitions of SMEs Table 4. Definition of SMEs in Hungary (1 January 2005) Table 5. The change of the SME concept in Hungary Table 6: Distribution of Hungarian enterprises by number (2015) Table 7. Distribution of employees in Hungarian SMEs, by sectors (percentage) (2003; 2012) Table 8. Differences between the SMEs and large enterprises Table 9. Differences between traditional and SME marketing theories Table 10. Scientific gap in the interpretation of the marketing of SMEs Table 11. Some of the dimensions of role and relevance of marketing Table 12. The model of the role and relevance of marketing Table 13. Marketing competencies of the SMEs Table 14. Other theories/models of marketing of SMEs Table 15. Emphasis on marketing activities by company size Table 16. Online marketing communication tools in Hungarian SMEs Table 17. The application of IT in marketing, from a historical perspective Table 18. Benefits and drawbacks of web presence for SMEs Table 19. Managerial influencing factors of SME marketing Table 20. Paradigms of the scientific research Table 21. Criteria of discriminant analysis Table 22/a. Measurement dimensions of the classic marketing tools (N=122) Table 22/b. Measurement dimensions of the online marketing tools (N=122) Table 22/c. Measurement dimensions of the social media marketing tools (N=122) Table 23/a. Measurement dimensions of the entrepreneurial orientation (N=122) Table 23/b. Measurement dimensions of the ability to adapt (N=122) Table 23/c. Measurement dimensions of the importance of marketing (N=122) Table 23/d. Measurement dimensions of the marketing communication skills (N=122) Table 23/e. Measuring dimensions of the market orientation (N=122) Table 24/a. Measurement dimensions of marketing performance (N=122) Table 24/b. Measurement dimensions of corporate performance (N=122) Table 25. Activity, time, and implementation schedule of the doctoral research Table 26. Sample characteristics of the qualitative in-depth interview research Table 27. Interpretation of the marketing activity Table 28. Importance of the marketing activity
6 7 8 10 10 14 16 26 35 36 42 44 46 50 52 57 65 69 81 105 115 123 124 124 125 126 127 127 128 130 130 132 143 147 150
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Table 29 Personal responsibility of the marketing activity Table 30. Online marketing communication and its success Table 31. Social media and its success Table 32. Relationship between marketing tools and marketing performance Table 33/a. Basic characteristics of the corporate sample of the survey (1) Table 33/b. Basic characteristics of the corporate sample of the survey (2) Table 34. Principal components of the marketing activity variables Table 35. Factors of the online marketing activity variables Table 36. Principal components of the social media marketing activity variables Table 37. Names of the dependent variables Table 38. Names of the independent variables Table 39. Values of Box’s M test Table 40. Group averages and standard deviations Table 41. Intra-group correlation matrix Table 42. Wilks’s λ, single-variable F-value (2 and 119 degrees of freedom) Table 43. Canonical discriminant functions Table 44. Significance of the canonical discriminant functions Table 45. Coefficients of the standardized canonical discriminant function Table 46. Structural matrix (Pearson’s correlation matrix) Table 47. Canonical discriminant functions by group average Table 48. Chances to belong to a group prior to discriminant analysis Table 49. Classification results of the cases Table 50/a. Significance level of the independent variables for discriminant analysis Table 50/b. Correlation coefficients of the structural matrix for discriminant analysis Table 50/c. Test of discriminant functions for discriminant analysis Table 50/d. Cross-validation of the discriminant analysis Table 51/a. Summary of qualitative dissertation results Table 51/b. Summary of quantitative dissertation results
152 154 156 158 163 164 167 168 169 170 171 173 176 177 177 178 179 179 180 181 182 183 185 185 186 186 194 195
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Acknowledgements Many people have contributed to this dissertation. Above all, I thank my supervisor, András Bauer, who promoted the formulation and the development of the topic, and helped in every stage of the research process with his adept insights, wise advices, and relevant guides. I am grateful to him for standing by me throughout the process.
Among my colleagues, Krisztina Kolos has been extremely helpful in the designation of the theoretical and methodological directions with her useful comments, and suggestions.
I thank my grandmother, my father, and my mother, who supported me all the time, and believed in me. I would not be here. Among my colleagues, Tamás Csordás, Erzsébet Malota, and Tamás Gyulavári have been very helpful, both in professional, and in formal issues. I am very grateful for them for these gestures of support. Ágnes Neulinger supported, encouraged, and motivated me all the time to execute the task, and to trust in myself.
Thank you all.
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Motto […] How does the scientist, for instance, arrive at a new discovery? Does he start with making experiment after experiment, gathering fact after fact, without having a vision of what he expects to find? Rarely has a truly important discovery in any field been made in this way. Nor have people arrived at important conclusions when they were merely chasing a phantasy. The process of creative thinking in any field of human endeavour often starts with what may be called a "rational vision," itself a result of considerable previous study, reflective thinking, and observation. When the scientist succeeds in gathering enough data, or in working out a mathematical formulation to make his original vision highly plausible, he may be said to have arrived at a tentative hypothesis. A careful analysis of the hypothesis in order to discern its implications, and the amassing of data which support it, lead to a more adequate hypothesis and eventually perhaps to its inclusion in a wide-ranging theory.
The history of science is replete with instances of faith in reason and visions of truth. Copernicus, Kepler, Galileo, and Newton were all imbued with an unshakable faith in reason. For this Bruno was burned at the stake and Spinoza suffered excommunication. At every step from the conception of a rational vision to the formulation of a theory, faith is necessary: faith in the vision as a rationally valid aim to pursue, faith in the hypothesis as a likely and plausible proposition, and faith in the final theory, at least until a general consensus about its validity has been reached.
Irrational faith is the acceptance of something as true only because an authority or the majority say so, rational faith is rooted in an independent conviction based upon one's own productive observing and thinking, in spite of the majority's opinion, […]. Fromm (2008: p. 146)
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I. INTRODUCTION There was a beauty. There was sweetness. I contemplated a delicate rose. And reality smashed down on me like a loose boulder. Attila József (1937): There was a beauty (fragment)
The opposition of the difference between the imagined and the underlying, existing reality in the quote from Attila József can be interpreted as follows: the metaphor of the rose is the physical manifestation of a piece of the imagined world, while the stone is the painful reality on the ground itself.
This parallel reminds me of the ambivalence with the status and scientific handling of small and medium-sized enterprises (SMEs). According to Palócz (2010), the fastgrowing SMEs are the potential engine of an economy, i.e., they play an important role for an economy to develop at the right pace. The economic importance of SMEs is reflected among other things in the increase in the number of employees, jobs creation, the stimulation of competition, the stimulation of the local and regional economic development, the promotion of innovations, as well as the support of entrepreneurial skills. With respect to jobs creation, SMEs employ a considerable share of the total number of employees in Hungary. In contrast, SMEs are often not dealt with in a way corresponding to their importance, either in practice or in scientific research.
In Hungary, many enterprises shut down annually. Many SMEs suffer from a lack of resources, specific to the sector, whereby in many cases neither everyday activities, nor the appropriate operation of the corporate functions are possible. Under these circumstances a different approach is necessary for scientists when they examine these economic actors.
The contradiction outlined led me to research the SME sector within the framework of this dissertation. This research focuses on the marketing activity of these companies, by which activity they can survive more successfully in the competition of their sector.
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I.1. Topic outline, explanation of topic selection Research into the marketing activity of SMEs is considered to be a fairly exciting field according to scientific sources, since it is in many ways different to what the marketing profession is accustomed to and practices on a daily basis in the case of large companies. Observing the marketing activity of SMEs from the point of view of research, researchers do not necessarily face the same problems as in the case of large companies and do not get close to solving SME problems if they apply the same methods they use during the analysis of large companies. Therefore, in the eyes of the researcher, the marketing of SMEs is a very diverse field, since there are fewer rules of thumb and more unexplored paths, whose discovery could also represent a challenge.
If the economic significance of SMEs is as important as the economic statistical summaries say, then the question arises as to what is the competitive advantage of these companies which differentiate them from their competitors? In a number of industries the competitive disadvantage of SMEs vs. large companies can be levelled by means of the different e-business1 solutions (in parallel with the spread of the internet) or simply the conscious application of the marketing activity. Based on this assumption, it is worth examining from a marketing aspect, what factors determine the different marketing solutions of SMEs.
It is important that the marketing research into SMEs, which are of crucial importance to Hungary’s economic development, be brought to the fore. The results will help provide SMEs with useful practical advice during their day-to-day operation as well as the scientific researchers of SMEs.
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e-business: complex system of commercial processes, business applications, and organizational structures to create high-performance business models (Kalakota és Robinson, 2002 In: Zilber és Araújo, 2012: 103. old.).
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I.1.1. Definition of SMEs From the perspective of the performance of this doctoral research, exact specification of the topic and the operationalization of the main concepts belonging to the researched topic are primary and indispensable considerations. This is also the case with SMEs, where – due to their particularities – it is necessary to examine several factors at the same time in order to collect a future sample. Therefore, the actual definitions which currently exist in the European Union (EU) and Hungary are first collected, then – with the research problem in mind –the one to be used is selected. This way a grounded definition can be obtained for use in the dissertation both in a scientific sense and in practical terms (Tonge, 2001).
A kind of agony (Curran, Stanworth, Watkins, 1986: p. 3) can be observed in the scientific communities in connection with the definition of SMEs which results in the emergence of various definitions, mostly with doubtful and disputable outcomes (Bolton, 1971; Binks and Coyne, 1983). While showing respect for the objectivity of the research, questions arise mainly regarding how we interpret size, because based on its dimensions (number of employees, sales return, profitability, etc.). In some sectors all firms may be regarded as small, while in other sectors there are possibly no firms which are small (Tonge, 2001).
In order to use the definition in a well-established way, first of all there is a need to differentiate between entrepreneurship and enterprise to ensure that the definition is not interpreted in an overly broad sense or in an incorrect way.
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Entrepreneurship:
an
activity
or Enterprise: entrepreneurship includes
possibly an attitude which is innovative, the business activity on one hand and involves
the exploitation
of market the organisational background on the
opportunities, is creative and helps in the other. While the term entrepreneurship alternative combination of resources. It is involves various forms of organisation characterised by a bigger uncertainty (business associations, cooperatives, sole which is more than financial risk-taking. proprietorships), the enterprise in this Aim: profit maximisation and value regard means a more specifically defined creation in the broader sense (Szerb, phenomenon (Polereczki, 2011). 2004).
Due to this distinction, the term small and medium-sized enterprises is used during the definition and characterisation of SMEs in this dissertation. The definitions presented define in many aspects the term SME according to objective, overlapping measurement criteria (Hill, 2001a). From the point of view of this dissertation, however, it is considered necessary to use the term in a unified framework, therefore a new definition based on the ascertainment of the literature is created.
Definition of SMEs in the European Union and in scientific communities
The definition of SMEs is first studied from a broader perspective, on the basis of the different EU directives and the community definitions which have been taking shape for decades (Bolton Committee, European Commission: EC). The diversity of definitions used by researchers in scientific articles are then gathered and presented in order to create the SME definition most appropriate for the purpose of this dissertation, in light of the most recent Hungarian definitions.
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Bolton Committee
The most orthodox and most widely accepted definition was provided by the Bolton Committee (1971). It identifies three key factors, which have an influence on the management and decision-making of SMEs, and based on these factors it mentions two definitions, one economic and one statistical.
According to the economic definition, SMEs must comply with the following criteria:
They have relatively small market share.
They are managed by owners or part-owners in a personalised way and not through the medium of a formalised management structure.
They are independent in the sense of not forming part of a larger enterprise.
The statistical definition sets out three main goals during the definition of SMEs:
It is necessary to specify the actual size of the SME sector and its contribution to the economic indicators (GDP, employment, export, innovation, etc.).
The change of the contribution of the SME sector to the economy in the recent period must be shown.
An international comparison must be made possible in case a fair statistical definition can be provided (which is not an aim of the present dissertation).
Of course, such an SME definition can be broadly interpreted, as the term “size” cannot be easily fitted to any general definition which covers more than one industry. In compensation, the Bolton Committee (1971) created various definitions for each industry, complementing them with selection criteria which differ from industry to industry (Table 1).
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Table 1. SMEs definitions of the Bolton Committee by industry Industry Manufacture Building industry Mining, quarrying Retail trade Other processing industry Services Trade, car repair Wholesale trade Road transport * £: pound sterling, GBP
Criterion