Case: Construction Company

Marketing communications tools in SMEs

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3.1.2 Marketing communications tools in SMEs
Stokes (2000) presents findings indicating that most of small business owners associate marketing (and therefore marketing communications) with selling and promoting. At the same time other marketing communications activities are present (such as negotiating with customers, although they are not always regarded as marketing. Entrepreneurs prefer interactive marketing (Stokes 2000), what has different meaning from the interactive marketing described in the chapter 2.3.1. In this context the author means preference for personal interactions, having meaningful dialogues, and staying in touch with customers. Interactive marketing for small firms implies the ability to communicate and respond rapidly to individual customers through personal selling and relationships building to facilitate orders and recommendations. Having reviewed the literature concerning marketing in SMEs, I conclude that their marketing communication activities are not examined in away corresponding to the marketing mix described in the chapter 2.3. Instead, the researches emphasize the importance of networking, word-of-mouth, personal selling and, nowadays, internet activity for SMEs. There are also some considerations concerning advertising, public relations and usage of intermediaries. These can be considered as a possible marketing communication tools in SMEs and are presented further.
Marketing by networking

As opposed to formal data gathering for marketing-related purposed, small businesses employ networking. In the context of small business, network marketing refers to uti-

26 lizing information obtained from a network of personal and inter-organizational contacts for marketing decisions. The network may comprise customers, suppliers, competitors, professional bodies and associations (Stokes and Wilson 2010, 377). Networking is considered to be a natural and integral part of everyday business activity rather than a constructed task. It can be proactive and passive, overt and covert, with a clear issue at mind or the issue will be raised when it is appropriate (Carson and Gilmore. It is doubtful that one aspect of networking will become decisive, but it will contribute to the final decision. Entrepreneurial networking has no standard mechanism and there is rarely specific objective, but at the same time it contributes to successful SME marketing (the said article. These discussions suggest tome that in marketing communications activities of SME networking maybe an alternative to formal market research as networking may reveal information about prospects and their needs, effective channels, events that might be utilized for creating relationships. In this respects I find it to be worthy to identify the key establishments in the firm’s network and what information maybe obtained from them proactively for improving marketing communications.

Proactive approach to word-of-mouth marketing

It was established that referrals are the preferred way for the majority of SME owner- managers. According to Stokes and Wilson (2010, 380), in addition to assuming that people will recommend the business if it does a good job, there are ways to take a more proactive approach. The following stages are suggested by the authors fora word-of-mouth marketing campaign. Stage 1 Ensure the business offers services/products of a consistently high quality since it is a prerequisite for positive word-of-mouth Stage 2 Investigate how recommendations and complaints operate in the given industry. Entrepreneur needs to identify what type of customers are the most active in making referrals, what is being said about the business and when the recommendations are triggered. Stokes and Wilson (2010, 381) tell about studies which showed that recent customers were more likely to recommend than long-term customers which makes

27 sense to target recently acquired customers for word-of-mouth campaigns. In addition to the customers, small firms can be recommended by suppliers, other local businesses, professional advisors and consultants, friends and acquaintances who may not be direct customers of the business (Stokes and Wilson 2010, 375). Next, it is important to know what is being told and recommended, understand what benefits motivate the referrals recommend and if it is possible to provide incentives. The question when the recommendations are triggered is the most challenging and can be answered by some form of research among customers. Research findings show that customers, who have higher than normal commercial relationships sense of involvement with a business, are more likely to recommend it (Stokes and Wilson 2010, 382). Stage 3 Intervene to influence the recommending process. This stage requires information obtained at the previous two to develop methods to increase referral rates. This can bean explicit request for referrals, or just information in newsletter giving area- son to talk about the business. Stage 4 Defuse potential complaints. This step refers to identification of customers dissatisfaction and dealing with complaints in a manner that it will turn potentially negative word-of-mouth to positive experience and opportunities for stories about the firm.
Kotler et al. (2012, 789) states that personal influence has an especially great weight in two situations when items are expensive, risky or purchased infrequently and when the purchase suggests something about the buyer’s status or taste (for example a doctor, lawyer, architect, or interior decorator. In these cases word-of-mouth mainly occurs when people are most interested and often performs evaluation function. Stokes and Wilson (2010, 376) tell that that word-of-mouth often plays a crucial role in many consumer and business-to-business markets (Bayus 1985). Moreover, reliance on recommendations suits to the resources of small businesses. At the same time new firms need to build a customer base first and firms who intend to reach new target markets figure out how to reach customers who are not within an existing referral network.


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