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Marketing in SMEs

Marketing in SMEs

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Published by: ptbanerjee4079 on Oct 09, 2012
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02/08/2014

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University of Chieti “G. d’Annunzio”Faculty of Economy and ManagementDepartment of Business Studies
SVILOPIM-Project INTERREG“Developmentpromotion of local systems to supportS.M.E. in Albania, Bosnia and Serbia.
Tuzla – Belgrade
Daniela Di BerardinoResearcher in Economy and Management of the EnterprisesDepartment of Business StudiesUniversity of Pescara – Chietidaniela.diberardino@unich.itTel number: +39 085 4537609
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MARKETING IN SMALL AND MEDIUM ENTERPRISES
 Daniela Di Berardino
1.PREVIEW
Small and medium enterprises are the typical business model of the Italian entrepreneurial system anda lot of these SME are family business. In Italy the 80% of working people are into SME, instead inthe UK the 55%, in France the 67%, in Germany the 60%, in Spain the 79%.More than 95% of all European enterprises belong to the SME size. The 55% of these SME in Europewas born between 1951 and 1970 years, the economic boom period, and a lot of them becamemedium firms.The Sme’s features are: narrow management (one o few persons); small task environment; resources,equity and human capital assigned by propriety.The Italian’s experience shows that the SME:-can obtain relevant competitive advantage into the bound task environment;-can make success into the large market by the focus or niche strategy or by the partnershipwith other firms (big o small);The competitive advantage that SME can obtain in the large markets requires these conditions:-No economy of scale;-High flexibility;-few big company;-fragmented market.During the last ten years many events threatened the SME: globalisation, outsourcing,enterprises’trust, brief product life cycle, consecutive innovation.However, the SME are able to change their organizations, manufactoring and process with moreflexibility than global players and during the last years many SME opened their market to the foreigncustomers, specially in the country in growth. The tools used for this purpose are the relationship withforeign partner and internet, thought that the Italian SME doing e-commerce, e-procurement, global promotion and market penetration into the foreign markets. A lot of them have an internet web sitewhere presents their product, their history, their distribution system, the price and other but few of SME, in Italy too, use internet channel for value generation.The main relationship built with big enterprises are franchising and supply chain relations (to supportthe growth and the market penetration), licensing and joint venture (to support the innovation, the product development, the leaning organization, to receive financial resources), and other concracts.Greater cooperativeness, sense of community, innovation, strategic flexibility and core competenceare necessary to SME’s growth and competitiveness. We can try these features into the network systems, where economic exchange is embedded inside a network of social and trust relations. Trustis necessary to create cooperation and value by the relations. The economic effects, largely, are lowcost, learning, market penetration and growth of management competencies.The main objectives of european SME, usually, are the sales growth and hight return on equity. TheItalian core industry is the mechanical, specially in the North East. This industry is composed by toolsand machinery for other industry, while textile industry, clothing factory, leather industry, shoefactory, and only the 9% of these SME has the 20% of sales by one client. These SME have make alot of relations with suppliers and retalires to support their growth.The Italian SME are much focused and produce speciality goods for the consumer market. TheseSME prefere niche strategies, focus on core competencies, differentiated goods and service, supportmore quality than price competition.2
 
The 55% of Italian SME situated in the North-East prefer foreign market, the 37% of their sales comefrom export, from global niche market. The main market are in the East Europe and Mediterranean, but this is a domestic market of the European Union.But the Italian SME needs more competencies, because the new value generation activities are theResearch and Development and Marketing and no more the manufactoring activities.Management competencies are essential to sound business practices; SME, generally, have severelimitation and lack of resource, thus they must rely heavily on developing suitable and appropriatecompetencies specially for marketing and strategy. What competencies are appropriate for SMEmarketing and strategy activities? How do SME’s develop such competencies?
2.THE ROLE OF MARKETING COMPETENCES IN SME
Into the SME the marketing and strategic competencies may be determined by the entrepreneur/owner manager and by the size an stage of the develompment of the enterprises. SME marketing isoften haphazard and informal, spontaneus, structured around industry norms an reactive, because themanager makes most decisions independent of others, responding to current opportunities andcircumstances and so decision making occurs in an chaotic way, according to personal and business priorities at any given point in time.The scope and variety of the decisions needed in running the SME business are more generalists thanspecialists in any one area, with the exception of a technical competence. The SME owners/managersis unlikely to take decisions on marketing issues in isolation from other aspect of the business.Marketing decisions have to consider other aspect of the business.For example, decisions on aspects of pricing may be taken because of a need to clear stocks, to relieve pressure on cash flows, rather than being marketing related. SME decision making is characterised bythe other aspects of the business whenever taking decision and these are different from conventionalmarketing competencies required for large companies. Specific competencies have a life cycle in thecontext of organisational change and in the different business environments passed by SME, so SMEneeds to adjust their competencies, resurces and product to their ever changing external environment.SME marketing related decision making will inherently consist of knowledge, experience, judgmentand communication according to their industry. Networking is used by managers to make sense of what happens in complicated markets and supportthe competitiveness against strong competitors. Networking is also a useful way for SME’s managersto expand marketing expertise and knowledge and it can help SME’s managers to use their limitedresources and compete more effectively with more powerful companiesIn a competitive environment managers have network contracts that consist of people who have potential to provide some specific service or support or from whom the might expect service or support. networking can include the product decisions, promotional activity, innovation, distribution,marketing activities and other.The access to profitable markets and the customer satisfaction are the key factors which determinesthe longterm success for all business. For SME, however, various factors limits this access, such asinadequate technology, geographic isolation, lack of financial and marketing resources, limitedresearch and development activities. Marketing play an essential role in developing the business of SME, supporting the access to profitable and international markets, .increasing SME’s effectivenessand investiment growth.
3.THE MARKETING PROCESS
There are many definitions of marketing. The better definitions are focused upon customer orientationand satisfaction of customer needs. The following definition is a most common description of marketing:3

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