Entrepreneurship, Second Edition

5.2. Entrepreneurs Face Unique Marketing Challenges

Entrepreneurial marketing is different from marketing done by established companies for a number of reasons. First, entrepreneurial companies typically have limited resources—financial as well as managerial. Just as they rarely have enough money to support marketing activities, they also rarely have proven marketing expertise within the company. Most entrepreneurs do not have the option of hiring experienced marketing managers. Time—as well as money and marketing talent—is also often in short supply. Whereas larger corporations can spend hundreds of thousands or even millions on conducting extensive marketing research, testing their strategies, and carefully designing marketing campaigns, new ventures find creative and less costly means to validate their ideas and reach customers.

Most entrepreneurs face daunting challenges. Their companies have little or no market share and a confined geographic market presence. As a result, they enjoy few economies of scale; for example, it is difficult for small companies to save money on "media buys" because their range of advertising is so limited. Entrepreneurs usually are restricted in their access to distributors—both wholesalers and retailers. On the customer side, entrepreneurs struggle with low brand awareness and customer loyalty, both of which must be carefully cultivated.

Not only is market information limited, but also decision making can be muddled by strong personal biases and ...