EXPLAIN AND ANALYSIS THE CONTRIBUTION SMALL

Small Business & UK Economy



Small Business & UK Economy

Introduction

In recent years, the subject of market orientation has received a great deal of attention from marketing scholars who have developed, tested and refined market orientation scales for measuring the degree of market orientation that organisations exhibit (see amongst others, Kohli and Jaworski, 1990; Narver and Slater, 1990; Hart and Diamantopoulos, 1993; Hooley et al., 1998). Whilst the combination of changing market conditions has increased interest in the subject, it is surprising to realise that, despite the fact that in the UK some 95 per cent of firms are considered to be small business (Marketing Business Magazine, 1998, p. 10), there is little research on market orientation within the small business sector in the UK (Harris, 1998; McLarty, 1998). Supporting this assertion, McLarty (1998) stated that: “ … there is scant empirical evidence however on the part that marketing plays in SME research … ”. On the other hand, over the years, there has been increased related work published on diverse topics such as: “the role of the small firm in the UK economy” and “the future of the small firm in the UK economy” etc. (see Curran et al., 1993; Blackburn, 1996; Curran, 1996; Jarvis, 1996).

Evidence of Background Reading And Research

There is a general agreement in the literature that a market oriented firm is one in which all employees are committed to the continuous creation of superior value for the customer (Narver and Slater, 1990; Kohli and Jaworski, 1990; Deshpande et al., 1993; Day, 1994; Narver et al., 1998). In general, researchers agree that a market orientation encompasses three key behavioral components (i.e. “customer orientation”, “competitor orientation”, and “interfunctional co-ordination”) (Narver and Slater, 1990, cited in Narver et al., 1998; Kohli and Jaworski, 1990).

While to date, researchers have found congruence between market orientation and the performance of the business (Narver and Slater, 1990; Jaworski and Kohli, 1993; Deshpande et al., 1993), what is not clear is whether the market orientation concept is appreciated by the small business owner. The latter assertion is not surprising, in that as Stokes and Blackburn (1999) contend, while traditional marketing is conceived of as a deliberate planned process which proceeds from a careful identification of market needs by formal research, and through purposeful development of new offerings to the market place, the small business deliberation involves informal, unplanned activity that relies on intuition and energy of an individual (i.e. the owner-manager) to make things happen. According to the authors, it comes as little surprise to realise that small business owners have a problem with marketing and appear to give marketing a low priority compared to the other functions of their business, often regarding marketing as “something that larger firms do” (Stokes and Blackburn, 1999).

Academic Theories, Models

Moreover, in support of the above, Harris (1998) contends that in reality, the dimensions of market orientation may not be applicable in the small business sector. According to Harris (1998), several key factors impinge ...