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1

Unfolding the Change Process in SME Marketing
Management
Competency
: A
Participative Case Study


Nicole Gross

Dublin Institute of Technology


087 7523973

18 Portmarnock Drive,

Portmarnock,

Co. Dublin,

Ireland.


nicole.g
ross@
dit.ie







Irish
A
cademy of
M
a
nagement

Conference

5
-
7 September 2012

Limerick, Ireland


Marketing Track











-

Competitive
Paper
-



2

Abstract

Small to medium enterprises (SMEs) are by far the most common business type in the
European Union, yet little is known about
their
marketin
g competency beyond the realm
of the entrepreneur. Moreover, the changes in marketing competency which transpire
once the small firm is faced with critical events, such as significant environmental
changes or technological advances, are still unexplored. T
he objective of this
paper

is
therefore to refine theoretical and empirical insights
into

how the firm’s members engage
in the process

of change in SME marketing competency, To
engage in this research
,

both
theoretically and empirically, the SME members’ c
hanging marketing practices
surrounding critical events were examined. Forty weeks of participant observation in an
Irish indigenous software SME yielded deep and insightful data on SME marketing,
especially detailed information in relation to the marketin
g competency change processes
which the members of the small firm collectively engaged in.

The main t
heoretical
contribution of this paper

is an emergent (grounded) process model of
change in
SME
marketing competency. This study advances present understand
ings on the changing
nature of marketing competency significantly and also adds new knowledge in relation to
its
processes and practices

which occur through that change
.




INTRODUCTION




In 2008, there were over 20 million small firms in Europe and on
ly 43.000 large firms
(European Commission Annual Report on EU SMEs, 2009). This means that almost all
businesses
which
exist in the European Union, except for the one per cent that are large
firms, are small to medium enterprises (SMEs). SMEs are of
criti
cal importance for the
economic stability and well
-
being of countries settled in the European Union
.
These
firms
contribute to more than half of the
total value
-
added

created by businesses in the
EU

and account

for two out of three of
all
private sector jo
bs
(around 90 million). In
addition to
bear
ing

a responsibility for wealth and economic growth
, they also play a
key

3

role in innovation

and R&D
(
www.ec.europa.eu
). Despite being the most ‘common’
business type by far, small firms are truly

quite special be
cause t
hey operate in
environments that are continually changing, especially in terms of technological
advancement and market periphery.


Small firms
said to be

quite creative, innovative and entrepreneurial in nature (Bjerke
and Hultman, 2002). They ar
e reported as being able to adapt to change and ambiguity
with ease, relying on what they know rather than what they have. This aspect in particular
has challenged many traditional business assumptions which are focused on economic
resources rather than on

knowledge (Bjerke and Hultman, 2002).

Yet, SMEs are not only
often disregarded by the conventional mainstream marketing
and management
literature
(Carson, 1990; Carson et al,

1995; Carson and Gilmore, 2000
; Reynolds, 2002), but

even
more apparent is the o
versight of the central role that the practitioners play in SMEs
especially when it comes to their capabilities, practices, requirements and marketing style
(Carson, 1990).
Indeed
, there
is
still quite
a
limited understanding
of
what practitioners
know abo
ut marketing and how they put this particular

knowledge into practice (Carson,
1990; Carson et al. 2002; Carson and Gilmore 1999; Hills, 2002). Also, it has yet to be
explored in
-
depth how the practitioners of marketing (in small firms) deal with the
chang
es they encounter and how they adapt their marketing practices to that change
(Kitchen et al, 1995).


4



This paper attempts to move beyond

conventional
definitions’ and concepts

of
marketing
,
many of
which have become ever more normative, formulaic, uni
versal and
almost sterile in nature over the years (Brownlie and Saren, 1992; Brooksbank et al,
2010; Hultmann and Hills, 2011; Hackley,
2003
;
Skålén,
and Hackley,

2011
)
. With that,
contemporary theory
will be derived
from
the empirical investigation of
sm
all firm
marketing practice.
C
ontemporary research in SME marketing practice
includes

the work
of
Carson et al (1998), Fuller (1994),

Gilmore and Carson (1999),
Gilmore et al,
(2001,
2006),
Hogarth
-
Scott
et al,
(1996), Reijonen (2010), O’Dwyer (2009) and Z
ontanos and
Anderson (2004
)
. These authors’ research has revealed a great deal about
SME
marketing.
Clearly,
many SMEs
do
rely on
honing, tacit knowledge, experience
and

intuition

when it comes to pricing their products and services
(
Carson et al,
1998)
.
I
nstead of carrying out
conventional
marketing planning, SMEs tend to
carry out unique
and adapted forms of
it
(
Fuller, 1994)
.
SMEs are

generally centered on customer
-
orientation,
customized or bespoke
work,
competitive
pricing and good

quality, informal
bu
siness planning and
word of mouth marketing
communication

according to Hogarth
-
Scott
et al

(1996)
. They also
tend to heavily
rely on
networking

(Zontanos and Anderson,
2004
).


T
ogether, these studies
have contributed to the present understanding that

smal
l
firm marketing is
quite distinguished
from marketing in larger firms indeed.
Th
is paper

5

attempts
to generate more original insights into SME marketing practice by asking the
following
research

questions:

1.

How does marketing
competency
change in an SME af
ter significant
environmental changes or technological advances?


2.

What processes and practices are integral to the change in the SME’s marketing

competency?




To find the answers to these questions, the paper has been based on
practice
-
based
empirical
re
search, including engagements in the study of
real
-
life situations and people
who are working in a small Irish
-
owned software firm.
Perhaps a focus on change
might
provide a
new ave
nue for an insight into SME marketing itself. The approach to
understanding

changes in marketing, as exemplified by major critical events, builds on
three literature bases: SME marketing, knowledge and competencies and change.


LITERATURE STREAMS


SME Marketing



Extant literature posits that when it

comes to
market share,
scale of business,
ownership, independence, operations, access to resources, growth patter
ns and
organizational learning, SMEs have distinct characteristics

-

many of
which distinguish
them from larger firms

(
Ashford and Towers, 2001
;
Burns, 1989
;
Broom
et

al
, 1983;
Carson and Cromie, 1989; Carson, 1990; Carson and McCartan
-
Quinn, 1995;

Deakins

6

and Friel, 1998
;
Faulkner and Johnson, 1992
;
Hill, 2001
;
Loecher, 2000
). In regard to
marketing,
SMEs also have unique characteristics. In their seminal paper “Marke
ting at
the Interface: Not ‘What’ but ‘How’” Carson and Gilmore (2000, p.1)
have provided a
contemporary classification of SME marketing. According to them,

marketing in small
firms can

be seen from the perspective of adapted standard textbook marketing, n
etwork
marketing, innovative marketing
(Table 1)
as well as competency marketing

(Ca
rson and
Gilmore, 2000)
.


Table 1
-

Contemporary Classification of SME Marketing


Approach

Description

Authors

Adapted standard textbook
marketing

Looks at
the adaptatio
n of
formal
marketing principles to small
firms

Brodie
et al
, 1997; Carson
et al
,
1998; Coviello and Brodie, 2001;
Coviello
et al
, 1997, 2000; Fuller,
1994; Hogarth
-
Scott
et al,

1996

Network marketing


Focused on the networking
ability of small firms

Car
son et al, 2004;
Gilmore and
Carson, 1999; Gilmore
et al
,
2001, 2006; Shaw, 1997, 2006;
Zontanos and Anderson, 2004

Innovative marketing

Concerned with on the creative
and innovative nature of SMEs in
relation to marketing which is
born out of resource li
mitations
and scope constraints

Blankson and Cheng, 2005;
Carson, 1985; Carson and
Cromie, 1989, Carson and
McCartan
-
Quinn, 1995; Chaston,
1998, Doole
et al
, 2006; Hogarth
-
Scott
et al.,

1996; Loecher, 2000;
O’Dwyer, 2009

Source: Adapted from Carson, D. an
d Gilmore, A. (2000), Marketing at the Interface: Not ‘What’ but
‘How’, Journal of Marketing Theory and Practice, Spring: 1
-
7



7


Whereas most scholars investigating SME marketing can be said to be aligned with the
former three approaches (Table 1), this
paper focuses on the forth approach, competency
marketing approach. Competency ma
rketing “refers to “using inherent and learned skills
(competencies) to do marketing” and entails “anything that impacts upon, or which
influences marketing, as well as actual
ly performing marketing activity” (Carson and
Gilmore, 2000, p.3).

Taking this lens
, marketing in small firms can be seen
as entwined
with any other business

decisions made. Moreover, it is
directly dependent on the
person(s) who engage in the practice of
marketing
.
Thus, the practice of marketing
derived from
the knowledge which is held by
the practitioner
(
s
)

of m
arketing and as well
as
from
their competencies

(specific knowledge
-
sets).
Knowledge and competencies
relating to marketing are subject to change

and learning over time (Carson and Gilmore,
2000a; Hill, 2001) and this fact is imperative to this p
aper.




Marketing Knowledge and Competencies




To take a closer look at marketing knowledge and competencies (and their change) in
SMEs, this stud
y has tapped into
a newly emerged research stream, a stream
which
borrows elements
from
social theory. Whereas other research
streams,

especially
within
t
he management

discipline
, have adopted this lens successfully (
Brown and Duguid,
2001; Chia and Holt,
2006; Jarzabkowski and Wilson, 2002;
Orlik
owski, 2000; 2002;

8

2010; Rasche and Chia, 2009
; Skålén and Hackley, 2011; Zwick and Cayla, 2011),
marketing scholars have

only leveraged it in recent years.
This perspective
is
conscious
move
away from the positivi
stic view of knowledge

that is posi
ted by the resource
-
based
view
(RBV)
(
Andrews, 1991
,

Barney, 1991;

Nelson
and Winter, 1982;

Peteraf, 1993
;

Teece, 1980; Wernerfelt, 1984)
, a view which has been
commonly adopted for SME
research and research at the market
ing/SME interface (
Golfetto and Gibbert, 2006
;
Knight and Kim, 2009
;

Thorpe, 2005).


In the social practice view, the (s
ocial) human being takes cen
ter
-
stage. Knowledge,
and therefore competencies (as a form of distinctive and unique knowledge), are se
en as
being intrinsically bound to the human and the individual is also acknowledged as a
knowledgeable agent (Giddens, 1984). Unlike the RBV, a social practice view
acknowledges that a person lives in, influences and is influenced by, an environment
which

is not bound to economic terms and outcomes entirely. It also puts forward the
view that the person
-

as a knowledgeable agent
-

not only has an influence over his
social environment but is also a product of it. People shape their social environment with
the knowledge that is held and, in addition, knowledge is enacted collectively. In
addition, social theorists such as (Bourdieu,
1979;
1990), Foucault (1990), Giddens
(1984) Goffmann (1977) and Taylor (1985
a,b
) have put forward frameworks which
enable scho
lars to study the practice of marketing in order to derive an insight into

9

underlying
knowledge. These frameworks put forward that cognitive knowledge is being
rooted and embedded in practical knowledge. Practical knowledge can be observed by
studying and
investigating the knowledgeable person
who is
engaged in the conduct o
f
marketing activities or is using
objects and artifacts
related to marketing
(Reckwitz,
2002; Schatzki et al, 2001). This study leverages the marketing
-
as
-
practice perspective to
source

information about marketing knowledge and competencies and its changing
nature.


Change



It is clear that all organizations
-

large and small


go through change of various levels
of complexity (March, 1981). No one organization is ever in a state of

complete stasis
(Bate, 1994).

T
his paper is not

however

concerned with
change that is continuous,
evolving, and incremental

(Porras and Silver, 1991).
It
examines change that is episodic
in nature, which means that it
is
“infrequent, discontinuous, and in
tentional” (
Weick and
Quinn,
1999,
p. 365).

Episodic change occurs during periods of div
ergence (Weick and
Quinn, 1999) such as in the cases of technological change or advancement (Tushman and
Anderson, 1986;
Weick and Quinn,

1999)
and

significant changes
in the firm’s external
environment (Lieberman and Montgomory, 1988).

Up to this date, research in SME
marketing has only considered change by exploring it as follows: (1) in relation to the

10

skills and traits held by the entrepreneur (Covin and Slevin,
1991
;
Morris
et al
, 2002), (2)
in regard to the small firm’s achievement of competitive differentiation (Carter, 2008)
and (3) as the firm’s response to turbulent marketing environments (
Ansoff
et al

1976,
Murray 1981).
T
hi
s
paper will

consider the episodic ch
ange of SME marketing
competency which has

been triggered by technological advancement and significant
environmental change.

Furthermore, it will consider the disablers of marketing
competency change, which will be opposed by enablers of change. The change

process
itself will also be unfolded.


METHODOLOGY





To examine knowledge and competencies relevant to SME marketing as well as the
change in SME marketing competency, a real
-
time exploratory case study was conducted
(
Eisenhardt, 1989; Yin, 2003).

An interpretive research approach was adopted by the
author
, which gives voice

in

the interpretations of marketing competency in the
first
-
order
analysis to the people who actually carry out marketing


the practitioners

(Van
Maanen, 1988)
.
With that, the

practitioners’

involvement in marketing or ‘doing’ of
marketing

has

become

important for analysis. Subsequently,

the task of formulating
deeper, more theoretical
second
-
order interpretations
was

assumed (Van Maanen, 1988)

11

and
emergent theory was developed

(Strauss and Corbin, 1990) by reporting the
interpretations in light of contextual factors and the existing literature base.



Data Collection




An Irish indigenous
small
software company served as research site. This company
was ten years in operation
, had about 35 members of staff including management and
programmers and was undergoing a period of significant change. This change
was caused
by technological advances as well as significant environmental change. Research access
to GeographiX


the case c
ompany
-

was negotiated beforehand and the support of the
small management team (CEO, COO, CFO, CTO, Product Marketing Director and MD
for the United Kingdom), the
primary data was collected on site
in 2007
during a period
of 40 weeks.
During this time, th
e author was watching what occurred, listening to what
was said and asking questions (Hammersley and Atkinson, 2006).

The
basic
aim was to
look beyond the obvious (
Goulding, 2005
),
achieve immersion into the research settings,
lean the local vernacular (El
liot and Elliot, 2003) and see the world through ‘their eyes’
(
Fellman, 1999
;
and McAlexander, 1995
). Thus it can be said that the data
collection
method borrowed many aspects from ethnography (Arnould and Wallendorf, 1994),
including a systematic data col
lection
,
par
ticipant observation
, pluralistic interpretations
and triangulation and also the collection of data from multiple sources.


12


Data was collected systematically and in multiple ways. E
-
mails as well as archival
material, including the business

plan as well as other business
-
related documents
,

were
important sources of information as they
gave important information in relati
on to SME
marketing practice. From this

data, insights into the
practitioner’s

marketing

knowledge

and competencies

were
de
rived
. However, participant observation
was the most
important aspect of the data
-
gathering strategy as it permitted for observations of
marketing practices as well as
the author’s
active participation in the ‘making of
marketing’ in the case firm

(Elliott

and Elliot, 2003).
.
The author
wrote fieldnotes

which
included
meeting notes, e
-
mails, observations and interpretations of the author

(Emerson
et al, 1995).
The last source of information was
formal as well as informal
interviews
which were conduced with
core members of the management team. These
served

not
only

as source
s of data, but also as sources
of triangulation for the ideas that emerged
from the qualitative da
ta
(
Arnould and Wallendorf, 1994).

Having used multiple
approaches
during data collection,

Lincoln and Guba’s (1985) criteria for trustworthiness
was met.
During the research process,

the

author did not only meet
up
with three formally
appointed debriefers

on a regular basis, but she also
relied on the independent audit of the
research by her p
eers (Lincoln and Guba, 1985; Patton, 1990).







13

Data Analysis



During the
data analysis stage of the research, the author moved the data to emergent
theory by applying principles of naturalistic enquiry (
Lincoln and Guba, 1985).
During
the analysis p
rocess, the author cycled among theory which was emerging from the
data
and

relevant literature to develop a

deeper

understanding
of SME marketing competency
and its change processes.
The
initial approach was to carry out a manual first
-
order
analysis (Van

Maanen, 1979)
which involved a thorough coding of the fieldnotes and all
additionally collected materials. Then a fine
-
grained coding
using QSR’s NVIVO
software
was developed
(Maclaran and Catterall, 2002). Not only

did this
program
me

capture
the complexi
ty of
the
data, but it also allowed the author to note, track and
change the ideas and reflections that were inherent in her qualitative research.

S
imultaneously
, the author also wrote up

a

thick description


to understand the
“multiplicity of complex con
ceptual structures, many of them superimposed upon or
knotted into one another, structures which are at once strange, irregular and inexplicit and
which he [the researcher] must contrive somehow first to grasp and then to render”
(Geertz, 1973, p.10)
. The
first
-
order concepts as well as the thick description helped to
uncover key elements of the informants’ meaning systems but not the deeper conceptual
patterns
or relationship in the data. To get the themes which might constitute the
foundation for developi
ng emergent theory, the author engaged in a

more structured


14

analysis to view the data at a higher level of theoretical abstrac
tion. Looking at common
themes and categories,
the eleven second
-
order themes emerged: perceiving threats to
current marketing pra
ctices, confusion and fragmentation within the firm’s internal
landscape, exploiting current marketing practices, sensing human anxiety and
organizational paralysis,
having centralized decision
-
making, engaging in customer
intimacy
-
bound marketing, renewin
g marketing competencies, projecting future
marketing, replicating perceived best practices, repositioning via interaction and
restructuring the new working organization.
In the third stage of the analysis, the eleven
major themes were
consolidated
into ag
gregate dimensions. This process involved an
examination of the relationships between the first
-
order

and the second
-
order concepts
that could be distilled into more simplified, complementary groupings. The eleven
themes were
assembled into the following f
our aggregate dimensions: context of SME
marketing competency destabilization, disablers of SME marketing competency change,
core marketing competency and enablers of SME marketing competency change.


FINDINGS


Data Structure



Figure 1
shows the data

structure of the findings.



15

Figur
e 1
-

Visualization of Data Structure and Findings

Perceiving threats to current
marketing practices
-
Events in the external environment
-
Eradication of competitive advantage
-
Competitive pressures
-
Miscalculation of market movements
-
Lack of growth opportunities
-
Shared concerns over firm’s future
markets and revenue streams
-

Different views in relation to core
marketing competencies
-
Individual perceptions of markets
and opportunities
-
Lack of support at board level
-
Divergent opinions in relation to the
future direction and strategy of the
firm
-
Focus on current marketing
strengths and abilities
-
Pride in current competencies
-
Fear of letting go of old marketing
competencies and practices
-
Failure to adopt new ideas
-
Pursuit of own visions and goals
despite indications from market
-
Inferiority complex and fear of failure
-
Emphasis on stringent control
-

Centralization of responsibilities and
decision
-
making
-
Emphasis on current competencies
without realizing the new for change
-
Ability to engage in
-
depth with the
customer becomes overarching
competency
,
which connects all
SBUs
-
Management team admits to this
competencies
-
Interpreting and integrating change
-
Focus on developing new
competencies
-
Renewing and building up existing
competencies especially knowledge
of the customer
-

Awareness of Change
-

intuiting and interpreting change on
all organizational levels
-
Focussing on future features of the
firm
-
Building on past operational and
contextual experiences
-
Replicating successful marketing
practices and approaches
-
Navigating and integrating change
by using mimetic approach
Sensing human anxiety and
organizational paralysis
Customer intimacy
-
bound
marketing
Confusion and fragmentation
within the firm’s internal
landscape
Exploiting current marketing
competencies
Having centralized decision
-
making
Projecting future marketing
Renewing marketing
competencies
Replicating perceived best
practices
Context of SME
Marketing
Competency
Destabilization
Disablers of
Marketing
Competency
Change
Core Marketing
Competency
Enablers of
Marketing
Competency
Change
Repositioning via interaction
-

Focus on targeted information relay
and exchange
-
Interpretation of current situation
-
Alleviation of fragmentation and
confusion
-
Integrating
,
operationalizing and
institutionalizing change via
interaction
-
Integrating and institutionalizing
change into hierarchy of the firm
-
Concise allocation of management
and responsibility within SBUs
-
Decentralization of marketing
decision
-
making
-

Enhanced clarity
,
unity and focus in
relation to the structural

features

of
the organization
Restructuring the working
organization

16

Perceiving threats to current
marketing practices
-
Events in the external environment
-
Eradication of competitive advantage
-
Competitive pressures
-
Miscalculation of market movements
-
Lack of growth opportunities
-
Shared concerns over firm’s future
markets and revenue streams
-

Different views in relation to core
marketing competencies
-
Individual perceptions of markets
and opportunities
-
Lack of support at board level
-
Divergent opinions in relation to the
future direction and strategy of the
firm
-
Focus on current marketing
strengths and abilities
-
Pride in current competencies
-
Fear of letting go of old marketing
competencies and practices
-
Failure to adopt new ideas
-
Pursuit of own visions and goals
despite indications from market
-
Inferiority complex and fear of failure
-
Emphasis on stringent control
-
De
-
centralization of responsibilities
and decision
-
making
-
Emphasis on current competencies
without realizing the new for change
-
Ability to engage in
-
depth with the
customer becomes overarching
competency
,
which connects all
SBUs
-
Management team admits to this
competencies
-
Interpreting and integrating change
-
Focus on developing new
competencies
-
Renewing and building up existing
competencies especially knowledge
of the customer
-

Awareness of Change
-
Intuiting and interpreting change on
all organizational levels
-
Focussing on future features of the
firm
-
Building on past operational and
contextual experiences
-
Replicating successful marketing
practices and approaches
-
Navigating and integrating change
by using mimetic approach
Sensing human anxiety and
organizational paralysis
Customer intimacy
-
bound
marketing
Confusion and fragmentation
within the firm’s internal
landscape
Dwelling on current marketing
competencies
Having centralized marketing
decision
-
making
Projecting future marketing
Renewing marketing
competencies
Replicating perceived best
practices
Context of SME
Marketing
Competency
Destabilization
Disablers of
Marketing
Competency
Change
Core Marketing
Competency
Enablers of
Marketing
Competency
Change
Repositioning via interaction
-

Focus on targeted information relay
and exchange
-
Interpretation of current situation
-
Alleviation of fragmentation and
confusion
-
Integrating
,
operationalizing and
institutionalizing change via
interaction
-
Integrating and institutionalizing
change into hierarchy of the firm
-
Concise allocation of management
and responsibility within SBUs
-
Decentralization of marketing
decision
-
making
-

Enhanced clarity
,
unity and focus in
relation to the structural

features

of
the organization
Restructuring the working
organization
First Order Themes
Second Order Themes
Overarching
Dimensions


17


It depicts the four main dimensions that emerged from the data analysis (right side of
the figure) as wel
l as their related second
-
order themes (middle) and the first
-
order
concepts that led to the formation of the themes (left side of the figure). This figure
appears to the fairly straightforward, however, many of these dimensions and their
components were o
verlapping and fuzzy in practice. For example, the contextual features
that led to marketing competency disruption tended to persisted throughout the study
rather than being replaced by the change enablers and disablers.


Representative supporting data

for each of the second
-
order themes is provided in the
appendix. The findings are reported in a descriptive or narrated account, based on the
author’s observations in the firm. They are also supported by representative quotes from
informants as well as ar
chival evidence.


Change Process Model


Having identified a static conceptualization of the key concepts that emerged from the
study, the author then moved on to theorize the dynamic processual relationships that
were the basis for emergent theory of SM
E marketing competency change in the case of
critical events. Figure 2 shows these relationships and emphasizes the central role played
by a core competency in facilitating the change process. As noted in the literature review,
a social practice perspectiv
e
-

marketing
-
as
-
practice


is a conceptual point of departure

18

(Skålén and Hackley, 2011; Zwick and Cayla, 2011). The small firm’s management team
failed to formally identify many actions and activities as marketing, yet in their implicit
knowledge about m
arketing permitted them to understand and react to the changing
market environments and technologies. Knowledge and competencies are embedded into
actions and activities that can be observed (Giddens, 1984; Reckwitz, 2002; Schatzki et
al, 2001) and these a
re fluid and subject to change. The emergent model suggests that
marketing is indeed not a normative, formulaic, universal and sterile concept (Brownlie
and Saren, 1992; Brooksbank et al, 2010; Hultmann and Hills, 2011; Hackley,
2003
). It is
a social pract
ice that changes and that is affected by change. Adopting this view has
produced pivotal shifts in modes of understanding. Exploring these shifts provides new
insights into SME marketing competency during change processes, especially episodic
changes that
happen once small firms have faced technological advances and significant
environmental changes.













19






20

Figure 2


An Emergent Model of SME Marketing Competency Change in the Case of an Irish
-
owned Software Firm



Awareness of
and assent to
core marketing
competency
Exploiting current
marketing
competencies
Sensing anxiety
and paralysis
Having centralized
decision
-
making
Renewing
marketing
competencies
Projecting future
marketing
Replicating
perceived best
practices
Repositioning via
interaction
Structuring the
working
organization
Change in SME
marketing
competency
Perceiving threats
to current
marketing practice
Context of marketing destabilization
Confusion and
fragmentation
within internal
landscape

Enablers of SME marketing competency change


Disablers of SME marketing competency change
Chaos and eccentricity
Chaos and eccentricity
Customer Intimacy
-
bound Marketing


21



The emergent model of SME marketing competency change shows the contextual
features associated with the change process (left side of figure) that helped to de
-
stabilize
the firm’s marketing competency. These contextual features made salient several sourc
es
of change disablers (top middle of figure) as well as several enablers of SME marketing
competency change (bottom middle of figure). The change disablers prevented the case
firm’s staff from challenging the status quo and hence they had inhibited market
ing from
being transformed into a new, changed state. During the change process itself, some
inhibitors of change were neutralized or even succeeded by the enablers of change. For
example, the firm’s members moved from rigidly relying on what they were goo
d at
(disabling effect) to the renewal and enhancement of their marketing competencies
(enabling effect). Anxiety and paralysis (disabling effect) were replaced by conviction
and certainty through projections of future marketing, replication of perceived b
est
practice and interaction (enabling effect) Furthermore, a transition took place from a lack
of structure and centralized power
-
holding (disabling effect) to the organization and
decentralization of decision making (enabling effect). Following the chang
e process, the
case firm GeographiX had established a new state in relation to marketing. Whereas
before, marketing was characterized by fragmentation, anxiety, dispersion and doubts, the

newly established state was characterized by cohe
rency and consisten
cy. The
members of
GeographiX
felt
confident and empowered

and t
hey radiated a positive image of their

22

firm
-

a firm which had dealt with
technological advances and
changes in the external
environment
.


The most obvious change transition is th
e middle t
ransition of Figure 2.
As the ability
to deliver a tailored, customer
-
focused value offering became accepted in the case firm,
the staff began to move away from resisting the change towards actions, activities and
engagements that helped them to come to te
rms with it. These included renewing
marketing competencies, projecting future marketing, replicating perceived best
practices, repositioning via interaction and restructuring the new working organization.
Findings showed that the disablers were initially
stronger than the enablers, however,
after admitting to their core competency, this changed. The path out of the old approach
to conducting and ‘doing’ marketing had been the admission to their core competency.
Customer intimacy
-
bounded marketing was much
more than the conventionally
perceived customer
-
oriented or customer focussed SME marketing approach (
Carson,
1993;

Gilmore
et al
., 2001,

Hogarth
-
Scott
et al
, 1
996
;
O’Dwyer, 2009). It acted as a link
between the old and new state of marketing competency. I
n addition, it spanned beyond
the boundary of individual actors and across different strategic business units. Unlike
customer focus, which is often put perceived to be a common and permanent feature of
SME marketing practice, it was temporarily lasting. I
t was lasting until another next

23

critical event that would have the power to possible re
-
negotiate and re
-
formulate the
SME’s marketing competency.


D
ISCUSSION AND CONCLUSION



The evidence from the study suggests that SME marketing

competency
, more
sp
ecifically
the change of
marketing
competency

in SMEs
,

is not dominant but central in
advancing
research in
marketing. SMEs make up 99 per cent of all businesses in the
European Union (http://ec.europa.eu). This study has moved
research in
marketing
forwar
d not only by capturing field
-
based evidence from the most common type of
European business

(in terms of size)
, but also by
centering
attention on the

practitioners
of

marketing. In doing so, the study has revealed that marketing is subject to change over
time, particularly when
members of a small firm are encountering

critical events

such as
technological and environmental changes
.
The empirical findings extend current research
in marketing, most of which has


to the present time at least


engaged in deb
ate rather
than practice when it comes to observing the changing nature of marketing (Brown, 1995,
1996; Brownlie and Saren, 1992; Kitchen
et al
, 1995; McCole, 2004; Murray
et al,

2002
;
Skålén and Hackley, 2011
)
.

Furthermore, the findings have extended the

knowledge base
of research in SME marketing. This base had, up to now, a restricted view on change: in
relation to the skills and traits held by the entrepreneur, in regard to the small firm’s

24

achievement of competitive differentiation or as the firm’s re
sponse to turbulent
marketing environments. Thus, process model of SME marketing competency change
(Figure

2
)
has added new dimensions to research in SME marketing.

In addition, it places
focus on the humanistic and social side of SME marketing competency
change, thus
reaching beyond the scope of entrepreneurial personality traits, economic theory and the
concept of competitive differentiation. The findings captured in the process model also
suggest that marketing competency changes in the small firm becaus
e of collective efforts
and involvements rather than the activities and practices of an entrepreneur/ owner/
manager.



The study has
also
provided novel insights because it has moved beyond an
appreciation of the owner’s or manager’s personality traits
, transitional/ entrepreneurial
competencies and operational skills (Carson and Gilmore, 2000a; Hill, 2001).
With that,
insights have been provided
that

abilities

and knowledge
-
sets underpin

the p
ractice of
marketing in the SME.
It has also become clear th
at despite SMEs being characterized as
being
entrepreneurial,
innovative
,
spontaneous

and
ever
-
evolving

i
n nature (Carson,
1993; Gilmore
et al
., 200
1, O’Dwyer, 2009; Stokes, 2000), in practice the competencies

do not

change much. Instead, they are bein
g ex
tended and renewed.
Furthermore, the
findings suggested that

a major change is the identification of or admission to a core
competency.
However, cu
stomer intimacy
-
bound marketing
,

as
it was in this case,

25

reaches far beyond the traditional conceptualization
s of customer focus and customer
orientation in small firms (
Carson, 1993;

Gilmore
et al
., 2001,

Hogarth
-
Scott
et al
, 1
996
).
It is a concept that enables transition and
temporarily
binds together
different
people as
well as
strategic
business units.


S
ummarizing it can be said that

th
e
notion of
SME marketing

as presented
by this
study stands in stark contrast to
marketing as it has been traditionally conceptualized
within the mainstream literature. SME marketing is clearly based on collective
knowledge

and interpretations


making it a social practice which can be observed within
the practitioners’ actions and activities.
Thus, the consideration of practitioners’
knowledge about marketing is one of the key notions
which should be at the heart of
the
fur
ther development of the SME marketing paradigm.






26

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32

Appendix


Second
-
order
Themes

Illustrative First
-
order Data

Perceived
threats to
current
marketing
practices
(Context)



In 2001 and 2002, the firm believed that Mo
bile Resource Management, which relies
on geographic intelligence
-
based mobile phone applications, was an interesting and
viable opportunity. However, the passing of time proved that this opportunity was
misjudged and the need for such mobile phone applica
tions had never materialized in
practice,
“there is not a lot of business in this
” (Ross, Product Marketing Director).



GeographiX had, in 2006, built a custom
-
made GIS solution for a significant UK
-
based telecoms company. This project had been very time
-
a
nd resource
-
consuming for
the firm. In the end, the tender was given to one of their competitors.
“It fell through”

as the Ross put it.



William, the Chief Operating Officer told me that in 2006, and in light of these
developments, the management team and b
oard shared and voiced concerns in relation
to the
firm’s furture markets and marketing strategies.

Confusion
and
fragmentation
within the
firm’s
internal
landscape
(Context)



Ross tried to describe to me the period of strategic confusion that followed on
ce the
team had recognized that the existing marketing strategy did not work any more. He
explained that in late 2006 to early 2007
“everyone was lost and had different ideas”.

For some time, according to him, there was a lack of unity and clarity in relat
ion to the
future structure and strategic direction of the company.



Ross:

“Some people in the company, well one person in particular, Rick (Chief
Executing Officer), still believes in it (the core location services business)…the rest
say it is a waste of t
ime”



William describes the firm’s new project to me and says
“the new strategic business
unit is cool and exciting and which makes the other business units (location service,
insurance and transport) look boring and slow”.

He revealed that there will be a
“conflict at some stage between the two of them”

and that “
the persona of the
organization needs to understand this schizophrenia”.



From my observations, the management team members had quite different
perceptions and opinions in relation to the firm’s cor
e marketing competencies. Harry,
the Chief Technology Officer (CFO) places huge emphasis on competencies such as
the ability to engage in technology development and networking. “
“The solution needs
to be clever, better difficult than easy… we have the tool
box software and expert
-
algorithms, simulations, designs, scenarios, hubs and geographical intelligence.
However, Joe, who is the firm’s Commercial Director, continually stressed the
importance of knowledge in relation to industry trends and competition.

It would be
interesting to know what risk models ESRI (
main competitor of GeographiX) provide
to insurers”. “I do think we need to build up our competitive intelligence on ESRI


through whatever means

are available”


33

Exploiting
current
marketing
competenc
ies
(Disabler)



Steven was speaking to me during our lunch sponsorship and exhibition at the Post
Magazine ‘subsidence’ event. Once the prospective client had left our exhibition
stand, he pointed out that our ‘InsuranceGeoAssist’ solution should be made av
ailable
not only to insurers but also to the public. He saw this as an opportunity because
GeographiX could charge a fee per transaction (competency: ability to search for and
positively identify market opportunities)



Steven (Managing Director United Kingd
om):

“We have a GeographiX vision of
commercial underwriting”…”What’s our vision on how they should implement
program X in their underwriting?” …”We should paint a vision that we can do a
better job than in Alpha Insurance”

(competency: engaged in visionar
y thinking in
relation to marketing possibilities)



Rick:

”We
do
have thought leadership and

strong reference sites”
(competency:
ability to provide an appropriate value proposition to customers)



Joe:


Just been doing some blog searching to see if anyone ma
kes a reference to
ESRI pricing
-

there are certainly bundles of griping on ESRI licenses.”
(competency:
conducting continuous and interactive market research)



Ross: “
W
hat distinguishes us from ESRI? Normally the provider has to build the
insurance applica
tion on their generic platform, which takes a long time and then the
insurer has to manage the data themselves. This costs a lot of money and takes up a lot
of time. We host the data, which means that from the time the contract is signed with
the insurer
to the time that the solution can be used is one day”
(competency:
knowledge how to
differentiate value offerings from competitors)




In relation to the Delta insurance tender, the team also discusses a partnership with
Ordnance Survey (OS). Steven:

“We wil
l present the solution to Delta Insurance and
then partner with OS… We find out what they [Delta] want and then tell them we’ll
partner”
(competency:
ability to partner and network with third parties)

Sensing
human
anxiety and
organizationa
l paralysis
(Di
sabler)



Ross:

“I do feel like I am operating in a vacuum”…” “I don’t think that the
management team will never change”



Steven:

“The management seems to fail to penetrate a chosen area properly, but
instead they move on quickly to other areas, anywhere whe
re they can make money.
GeographiX is afraid to commit and spend money”



Joe:

“GeographiX is reluctant to drop any strategic business units because they are
afraid that they might be dropping the winning one”.



Rick:

“The question is
(he draws a diagram):
we

do the R&D and the acquisition of
the first customer is done quite
good (draws a cloud and an arrow through it).

But
when the market expands
(draws an up
-
sloping line,)

we tend to get stuck
(draws
another cloud and two arrows pointing into the clouds).

So
, I worry that we have either
failed to anticipate the market opportunity correctly or failed to manage to execute the
roll
-
out poorly
”.



Steven:

“Our success is our downfall, because larger competitors like ESRI already
have all the data for many countries

and we have to get them. Also, we are a small
company and what if we go belly up? The insurer would have nobody to maintain the
data and update it because we are bankrupt and they are afraid of that, so they go

34

with the safe option of the bigger company.”

Having
centralized
decision
-
making
(Disabler)



When I came in Rick asked me how the Plus Magazine insurance event [at which the
firm had exhibited and sponsored lunch] went and I said that it had gone very well
.
He
asked if he could see the napkins and I
told him that Joe had taken some. He said
“do
we have any pictures?”

and I showed him the 2 pictures that I had taken with my
phone.



Ross:


we have to see if this whole to Search Engine Optimization thing is time well
invested before we present it to Rick




I observed the following conversation which occurred between Rick and Joe. It
appeared that Rick had overheard Joe’s phone conversation and he asked him after the
call finished

“How did it go yesterday?”
Joe:

“we have got a lot off Jean
[from Beta
insur
ance]




I gave Joe the’ Risk Exposure Study’ (RES) letter that Steven had drafted and printed
out the white paper as well. He approved it and then handed it over to Rick, who
started to scrutinize it. I saw Rick crossing lots of stuff out with a pen and rep
lacing
it… Later,
I printed off all the RES letters and twenty
-
three copies of the white paper
and started writing the addresses on the envelopes. Rick saw that and asked me to do
labels for them instead of writing on the envelopes.



In relation to the logo
s on the GeographiX website, I also received an e
-
mail from
Rick. In it he suggested the text for the logos

“How about ‘Welcome to GeographiX.
Please click on the logos below to enter our website.’ We should also add the Cork
office details to the “Contact

us” webpage, http://www.geographix.com/
contact.html”.

Customer
intimacy
-
bound
marketing
(Core
Competency)



Harry:

“in the transport business unit,

GeographiX’s main asset is the trust and
intimacy that we enjoy with two major clients, Tomol and Morsa. Th
is accounts for
>80% of the revenue in this unit.”



William:
“Our value proposition
is customer intimacy but we don’t necessarily want
to be there, we are kind of uncomfortable being there. The DNA [genetic/molecular
structure] of the company would prefer i
f we were a product company less involved
with the customer”



Rick: “
“in actuality we have adopted customer intimacy successfully…but this value
proposition is hard to scale and there is reluctance in the company to admit to this one
…we would like to think

that we are this
(pointing to the ‘product leadership’ word),

that’s how the company started out, but we never had this for a substantial period of
time … we never had a product leadership position in a mature market”.

Renewing
marketing
competencies
(En
abler)



Rick

(per e
-
mail)
:
“Dear all, GeographiX is planning to carry out a customer
assessment of all of the customers that we have with a company called Deep
-
insight
(see proposal attached). In order for them to carry out the survey, we looked at all
cust
omers GeographiX has worked with over the last 16 months.”



Extract from Website Statistics Report May: “
Fifty per cent of all referrals use the
keywords ‘GeographiX’ for searching. Ten per cent typed in ‘map’, three per cent
typed in ‘street’, two per cen
t typed in ‘Dublin’, two per cent typed in ‘road’ and less
than one per cent typed in ‘location’.


35



Extract from Website Statistics Report November
: “
What do people look at in
Google?

-

People are still mainly looking at the index, transport and LBS pages

-

I
nsurance pages are still not being looked at significantly”
(all above: renewal of
the knowledge about the customer)



William: “
We have not got a strong product in transport, but we have a strong
methodology”



Team:
“In transport our competencies and capabi
lities are: the relationships and
networks with our customers, the iCarShare research and development, our GIS
knowledge, data and software”



Rick: “
We are not good at rolling out perils to the United States and European
Market, at least at the moment”

(abo
ve: development of an awareness of firm’s
organizational strengths and weakness



I observed that a renewed effort was launched to conduct research into competition
and the Geographical Intelligence Systems (GIS) industry. With that, GIS in the
insurance ind
ustry, GIS in the United States, worldwide congestion
-
charging schemes
and reports on car
-
sharing. Business intelligence reports, white papers, ESRI GIS
solutions and pricing as well as other industry information, such as the UK summer
floods, were also co
llected, compiled and circulated (renewal of the firm’s knowledge
of the industry and competition)



Both phases of the insurance sales lead generation campaign extended the firm’s
network of potential clients. New contacts were also initiated in the insura
nce strand of
the business in the form of various data providers, including a German data provider
called KilleenSoft. In the transport business, the VIRTUOL event, which was hosted
in November (Section 4.6.1), not only served as a center point for renewin
g
relationships with Tomol and Morsa but also for establishing relationships with other
companies. (renewal of the firm’s ability to network)


Projecting
future
marketing
(Enabler)



Joe:

“we get Gamma and Delta Insurance, we will get Beta Insurance and th
en other
insurers will follow”.
Joe also told me that we are making money out of consultancy in
the transport SBU at the moment. However, once the contract with Tomol was
finished at the end of the year, GeographiX would have no more work in the transport
business. Hence, the transport SBU would also naturally die.



I asked William about the future of the firm’s strategic business units. I asked what he
believes will happen in the insurance SBU over the next 6 months


if we will be
pushed out of the competi
tive tendering process by bigger competitors. He said

“if we
cannot make it big in insurance, we will have to shed some SBU’s. And then we will
only be left with transport and iCarShare”.



The company
celebrate their ten
-
year anniversary

in
Kinsale (Cork).

During the
celebrations, the staff were engaged in a

teambuilding session and two
communications sessions, in which they were encouraged to
talk about their values,
vision and wishes for the future
. The desired image of the firm, as selected by the
staff,

was to be innovative, reliable, trustworthy and purposeful. Talking about the
future of GeographiX,
ideas and propositions emerged such as to have a
“good
and

36

open organizational culture”,


innovation from everywhere in the organization” and
“well specifi
ed core business and other business units clustered around”
. I believe
that this enabled the management team to receive a holistic and grounded view in
relation to how the change was being perceived and how future marketing practices
were envisioned collec
tively.

Replicating
perceived
best practices
(Enabler)



Joe:

“Phase 1
insurance sales lead generation

achievements included: We completed
a lead/gen campaign of over 30 general insurers in the UK market. The lead/gen
campaign was very successful securing m
eetings with 12 insurers… The targets for
Phase II (May to end July) are: A second phase of lead/gen to a further 35 companies
in the UK market.

We are using the same method as Phase I and hope to repeat the
success.




In April, GeographiX engaged in a lun
ch sponsorship and exhibition at an industry
event
-

the Plus Magazine ‘Property’ insurance event. Having experienced a good
exposure to the insurance market, it was decided to imitate this marketing awareness,
marketing communication, customer relationshi
p and brand
-
building exercise at a
different event


the Plus Magazine ‘Subsidence’ insurance event in June.



Joe attached a Power Point
file called ‘transport message’

in which he introduced
GeographiX’s Transport Suite, which is similar to the
‘InsuranceG
eoAssist’

Suite,
which contains the building blocks: underwriting, fraud and marketing. The transport
suite contained: congestion charging, road safety and car sharing. For each of them he
had developed a ‘message’ and ‘market drivers’.



At a follow
-
up in
terview,
Rick mentioned that GeographiX had succeeded in
developing InsuranceGeoAssist solution as a productized offering and that the two
insurance lead generation campaigns and the White Paper had opened doors for
GeographiX as a small company. These ini
tiatives had enabled the firm to establish
contacts, to test their ideas and technologies and develop relationships with the
insurers. Now they were preparing to expand into the United States in order to assist
the insurance companies there with geo
-
based
risk assessment and pricing.

Repositioning
via
interaction



The following example highlights how (during a management meeting) the team
interprets and conveys the reasoning behind the Risk Exposure Study.

William:

[Looking at the Power Point slide] “So, t
he Risk Exposure Study is also a
preparation for the insurance sales lead generation exercise”.

Joe:
“Yeah, but we should not confuse it with Phase One and Two of the sales lead
generation campaign. We would shoot ourselves in the foot”.

William:
“At the

end of the month we should have a list of twenty Risk Exposure Study
targets for Joe”.

Joe

[holding his hands up and shaking his head]: “Not me.”

William
: “Ok then give it to Steven”.

Joe
: “The advertising flier for it can be a letter and Nicole can hel
p”.
Bill and Steve nod
and agree to this.

Joe
: “This is not part of the sales officially, but under really [makes a swooshing hand
movement] it is [emphasis on is] part of the lead gen”

Steven: [adopting a contradicting tone] “John sees it as part of the

lead gen and sales”.

William:

“So, for all of June we will talk to targets”.


37

Joe
: “That matches with Phase Two, so that could be a stretch”.



In the next example,

key information is requested by Rick and some feedback is
conveyed between Harry and Rick.


Rick (posted in an online forum):
“I’ve spent some time going through the draft report.
Before giving any detailed feedback I’d like to understand whether we intend this report
to end up: 1. in the public domain, authored by GeographiX, 2. in the public

domain,
authored by the DAO or 3. in GeographiX’s bottom drawer.”

Harry (posted back):

O
ur goals are (now)...


establish contact with the players (done,
mostly)


get some honest insight into this market segment (done)


earn DAO’s trust for
future coop
eration


use it later in the year as part of our credentials in the space. For
now, I think there is a fourth destination: 4. written by GeographiX for the DAO’s bottom
drawer…”



This data illustrates an
information exchange, in which Rick disclosed some o
f his
intuitions, perceptions and opinions.

Rick (e
-
mail to Joe):
“When you get back we should probably try to make sure that you,
William and I (and to a lesser extent Steve) are all speaking the same language here, with
the same view of the priorities.
So when I worry about product in the insurance business,
what am I thinking about? Most of the time it’s not functions and features, but questions
like the following….”

Restructuring
the working
organization
(Enabler)



Extract from Business Plan Document:




Extract from the Deep Insight Sales Document:
“GeographiX specializes in using
location
-
aware software to solve complex business problems for its customers in three
primary market segments: Insurance;

-
Transport;
-

Location services”



Rick (per e
-
mail):

We are going one step further in how we split the individual
SBUs…with William to become the lead for insurance and location services; and Joe
to become the lead for transport. This is a significant change from today (GeographiX
supporting multiple vertica
ls/SBUs). Steven will continue to lead/run the UK business.
There are many reasons for this, but the primary reason is to have each SBU lead (i.e.
William, Joe) drive, and be accountable for driving, the performance and strategy of
that SBU, including mark
eting, sales, operations/delivery and strategy. To that extent
we are conscious of the need to move away from “consensus” decision
-
making, by
giving the SBU leads the responsibility and accountability to take on this role.”







38



Table presented by Rick

dur
ing an interview
:



LBS

Insurance

Transport including
the iCarShare
project

Board meeting time

10%

40%

50%

Risk

Low

Medium

High

Growth by 2015

Stagnant

2/3 times

10 times

Returns

+500.000

-
500.000

-
900.000
(iCarShare)

+500.000 (Tomol)

Strategic Foc
us

1 year

2 years

5 years

Level of investment

No 3 (low)

No 2

No 1 (high)