MARKETING MANAGEMENT

Small businesses need a fluid approach to their marketing structures

By our News Team | 2023

Avoiding rigid and hierarchical marketing models enhances the vital free flow of information in the early stages of operations, study finds.

Small businesses in the early stages of their development should have a fluid marketing management model that disperses marketing responsibility between different groups of employees, avoiding rigid job descriptions and roles.

This diversity of ideas and inputs helps to produce in-depth market information to support marketing operations, rather than concentrating critical information under one individual or small department. Failing to disseminate timely market data can hinder business growth.

Marketing management

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While many nascent businesses instinctively avoid rigid marketing structures, or are forced to do so by lack of staff resources, the importance of this flexible approach has been confirmed by newly published research from the University of Eastern Finland in conjunction with the universities of Vaasa (also Finland), Erlangen-Nürnberg and Würzburg (both Germany).

The study is published in the peer-reviewed Journal of the Academy of Marketing Science.

According to the research, extensive dispersion of marketing responsibility in the early stages of business activities promotes the development of market orientation in firms, while an overly structured organisation of marketing responsibilities slows it down.

“Dispersion of responsibility for marketing activities and restraining from building structured positions for marketing helps start-ups to respond to their typical lack of market information,” says Professor Mika Gabrielsson from the University of Eastern Finland.

Study sample of more that 200 start-ups

The study was conducted with a sample of more than 200 new ventures and, three years later, it was repeated with almost half of these firms. In addition, the firms’ financial statements were used.

Research addressing the organisation of marketing in new ventures remains limited to date. Entrepreneurship research has mainly focused on the most promising types of marketing activities in young firms, but not the organisation of these activities. 

Marketing research, on the other hand, has examined the organisation of marketing activities only for established firms, which differ in their opportunities and challenges from businesses at an early stage of development.

The current study responds to gaps in previous research, offering managers of early-stage firms practical recommendations for how to design their marketing organisation.

“Although marketing activities are vital for young firms to ensure growth and survival, the role of marketing in the organisation has not previously been studied for these firms,” says Professor Andreas Fürst from the University of Eastern Finland and the University of Erlangen-Nürnberg.

“Our results show how the profitability of start-ups can be improved through the right organisation of marketing,” adds Professor Peter Gabrielsson from the University of Vaasa.

Find out more about the study ‘The role of marketing in new ventures: How marketing activities should be organized in firms’ infancy’ here.

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