- Open Access
Entrepreneurial marketing: the missing link in social enterprise studies
Journal of Global Entrepreneurship Researchvolume 9, Article number: 39 (2019)
In spite of the recurrent emphasis on the importance of social enterprise (SEs) in the entrepreneurship literature, there has never been a research conducted on the marketing approaches for a social enterprise. The focus of this article is on the entrepreneurial marketing (EM) aspects in social enterprises by reviewing more than 170 articles that had to do with SEs and marketing including marketing for non-profits, SE management, financing SEs, social marketing, services marketing, relationship marketing, and entrepreneurial marketing. The analysis of the review revealed that a social enterprise can enjoy the elements of entrepreneurial marketing in four areas: first, in competing in the market; second, in its endeavors to attract finance to its structure; third, in employing volunteers; and fourth, in presenting its services or product to its target audience. The relative domains are finally proposed in a model of entrepreneurial marketing in social enterprises which shows that EM in SEs is not a single-dimension phenomena but is rather a multipurpose tool in service of any social enterprise to be enjoyed in the four aforementioned areas.
When the aim of an effort is to alleviate a social problem via presenting a service or product to a target population, social enterprises come in handy. But what should an enterprise do in order to offer that benefit to the society? The concept of “marketing,” in spite of being an important element of any enterprise, has mostly been overlooked in the social enterprise literature. As Doherty et al. (2009) state: “… despite the obvious potential for SEs in relation to ethical, social and relationship marketing, there has been little research carried out in the area of marketing management in SEs” (Doherty et al., 2009). While the concept has been ignored in social enterprises, it has received great attention in the business section. In this regard, Kotler (2000) describes marketing as identifying and addressing the human and social needs. In short, “meeting needs profitably” (Kotler, 2000). In addition, Kotler and Zaltman introduced the social marketing concept for the first time in the 1970s. Social marketing, according to Kotler and Zaltman (1971), concerns exploiting the activities involved in business marketing for social and health care. They assert “the application of marketing logic to social goals is a natural development and on the whole a promising one. The idea will not disappear by ignoring it or rallying against it” (Kotler & Zaltman, 1971). Here, it is necessary to elaborate the difference between social marketing and marketing for social enterprises. Social marketing is a process that applies marketing principles and techniques to create, communicate, and deliver value in order to influence target audiences’ behaviors which benefit the society as well as the target audience (Kotler & Lee, 2008) for example social marketing may be used to promote vaccination against diseases in societies, but marketing for social enterprises, according to Doherty et al. (2009) “… can offer opportunities for managers of SEs to fashion unique marketing strategies to support the growth and development of their organizations” and also “[help them] to co-create sustainable product/service offers via reputation, trust, brand identity, relationships and social capital” (Doherty et al., 2009).
There are also some fields of study that are nigh to marketing in social enterprises, namely services marketing which mostly refers to both business to consumer (B2C) and business to business (B2B) services and includes marketing of services such as accommodation services, car rental services, telecommunications services, financial services, travel and tourism services, health care services, and so forth. There is also the domain of innovative marketing which by definition refers to “doing something new with ideas, products, services, or technology and refining these ideas to a market opportunity to meet the market demand in a new way” (Kleindl, Fried, & Hisrich, 1996). In other words, it is the process of marketing a product or service to the target group via ideas and processes that were not exploited before. This can be done by making changes in the product design, launching the product in unique places, promoting it through unconventional methods, uniquely pricing the product, and so forth. The other topic that comes to mind when speaking of social enterprises is social innovation. Social innovation, according to Sanders (2008), is defined as innovative activities and services that are motivated by the goal of meeting a social need and that are predominantly developed and diffused through organizations whose primary purposes are social (Sanders, 2008).
Thus, the aim of this paper is to inspect the literature chain of social enterprise to identify the position and requisiteness of “entrepreneurial marketing” in it. For doing so, we will perform a systematic review to discuss the studies that have been done in the field of social enterprises and contain considerable findings to present to their target audience.
To achieve a profound discernment about a scientific matter, scholars are advised to stand on the shoulders of giants. In this case, the giant in point is the history of the deeds and studies conducted with the aim of introducing a benefit to a society with the goal of improving societal and living standards. To do so, it is necessary to explore the studies that have been conducted regarding the management of social enterprises and their main keywords were related to marketing.
The first trails of social change making for good can be traced back to Sasanian Persia (224–651 CE) where during the late Sasanian period, charitable foundations were established for the sake of one’s soul and the money was used for the poor or public construction projects that benefited the community, and were a model for the later Islamic waqf (Daryayee, 2009), “a foundation that a Muslim individual established by turning privately held real estate into a revenue-producing endowment. The endowment was to provide a designated service in perpetuity” (Kuran, 2013). Another historically significant social cause is gharz-al-hasaneh, a charity/beneficent loan without interest (Karwowski, 2015); this institution of social benefit is mentioned in the Quran several times (Quran 2:245, 5:12, 57:11, 64:17, 73:20, Oxford World’s Classics edition; Haleem, 2004). The concept of “cooperative” also addresses social benefits. As the International Co-operative Alliance defines it “A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise” (ICA, 2015). The principles of working together in cooperatives to achieve a common social purpose were to address the spiraling poverty levels for those in traditional trades who were displaced during the industrial revolution (Doherty et al., 2009).
In this light, Yunus, Moingeon, and Lehmann-Ortega (2010) made a clear perspective of SEs in relation to two extreme types of corporate bodies. He explains that “On the one hand, companies can be seen as profit-maximizing businesses, whose purpose is to create share- holder value. On the other, non-profit organizations exist to fulfill social objectives.” (Yunus et al., 2010). They depicted this in a chart that is presented here in Fig. 1. In this chart, it shows how a social business can borrow from the aforementioned extremes.
Moreover, Bornstein and Davis (2010) tender a fine point; they suggest that instead of using negative terms in defining entities such as “nonprofit” and “nongovernmental,” it is better to refer to them as “social,” “social purpose,” or even “citizen sector organizations” (Bornstein & Davis, 2010). Further, they define social entrepreneurship as “a process by which citizens build or transform institutions to advance solution to social problems, such as poverty, illness, illiteracy, environmental destruction, human rights abuse and corruption, in order to make life better for many” (ibid).
As can be concluded from the intersection of the aforementioned studies, every “social” phenomena have to do with the improvement of “society,” thereupon “social enterprises” are entities aiming to ameliorate the deficiencies of societies and improving their living standards while they are self-sufficient income wise.
Conversely, our selected definition of SE is that of Defourny and Nyssens’s (2012): A social enterprise is an agent in an economy whose main aim is –instead of making a monetary profit for shareholders or owners- to make a social impact. This kind of business is run by providing product and services to market in entrepreneurial and innovative manners and its priority in using its financial resources is achieving social goals. The management in such businesses must be clear and responsible and has to include employees, consumers, and stakeholders who are influenced by its activities (Defourny & Nyssens, 2012). There has been several researches conducted on the topic of social enterprises, including financing SEs (Bugg-Levine, Kogut, & Kulatilaka, 2012; Millar & Hall, 2012), marketing in SEs (Dholakia & Dholakia, 1975; Liu, Eng, & Takeda, 2013; Mitchell, Madill, & Chreim, 2015; Powell & Osborne, 2015), and social marketing (Austin, 2006; Cheng, Kotler, & Lee, 2011; Hastings & Domegan, 2014; Lefebvre, 2011), but none of them succeeded in presenting a comprehensive entrepreneurial marketing approach for SEs.
Kotler (2000) believes marketing can be defined from two perspectives: social perspective and managerial perspective.
Marketing is a social process in which individuals and groups freely transact and achieve whatever they need or want by creating, delivering, and exchanging product or services that are of value.
Marketing management is the art and science of exploiting marketing concepts for selecting target markets and attracting, retaining, and increasing customers by creating and delivering superior value and communicating with them (Kotler, 2000).
With the above two perspectives in mind, it is scrutable that both social and managerial aspects of traditional marketing are reflective in SE’s marketing approaches, creating and exchanging value in the social part and selecting markets and communicating with the target audience in those markets in the managerial part. But since traditional marketing has its own limitations for SEs that are restricted in their financial sources, other marketing approaches should be enjoyed, approaches that suit the SE’s budget better and help them reach their goals more accurately.
The process of historical development in entrepreneurial marketing (EM) has been shaped in the last four decades. Traditionally marketing and entrepreneurship were considered two different academic majors but there exist a couple of schools of thought in academic communities. Kuratko (2006) expresses this as follows: “It was not too long ago that the field of entrepreneurship was considered little more than an applied trade as opposed to an academic area of study. There was no research to be accomplished because it was thought that those who could not attend college would simply ‘practice’ the concept of new business start-up” (Hills, Hultman, & Miles, 2008). This not only shows that entrepreneurship itself is a developing field of study but also affirms that SE marketing is still emerging as a new field of academic research.
In the last 15 years by the enhancement of research frontiers on EM, researchers had extended the development of EM in such areas as SMEs (Bjerke & Hultman, 2002; Erik, 2006; Hacioglu, Eren, Eren, & Celikkan, 2012; Lodish, Morgan, & Kallianpur, 2001; Stokes, 2000), the educational realm (Collinson & Shaw, 2001), cultural environments (Mottner & Ford, 2005), tourism and accommodation (Boonchoo et al., 2011), and non-profits and charity organizations (Holmes, Jorlöv, & Bonnedahl, 2015; Mottner & Ford, 2005; Urbina, 2015). But unfortunately, EM application in social enterprises has not yet been studied.
From the early EM literature and through the works of Stokes (2000), it was suggested that more suitable applications of marketing in entrepreneurial contexts is subject to using a conceptual model of marketing processes excerpted from the actions of entrepreneurs. Stokes also believed that some features of EM are different from those used in traditional marketing approaches (Table 1).
The semblance of SE’s formation and EM principle in Table 1 is very persuasive that EM is the most fitting marketing approach for SEs, because of the following:
Market needs are most of the time the SE’s motive for existence
Target market’s customers are the identifiers of SE’s goals
SE’s always need to interact with their customers to set and modify their goals
Customers of SEs are most of the time introduced and linked via informal networks
Morris, Schindehutte, and LaForge (2002) also found EM a phenomenon that is related to small- and medium-sized enterprises (SMEs) because they possess limited resources and use more creative tactics that are based on individual networks. In this light, Hallbäck and Gabrielsson (2013) assert that small businesses enjoy the great qualities of EM by challenging the common conventions in the market, and they (like Morris et al) believe that EM is more opportunity-oriented than administrative (Hallbäck & Gabrielsson, 2013).
Eventually, it is possible to integrate a number of EM definitions in the literature with those marketing definitions that are more developed (Lumpkin & Dess, 1996; Sheth & Uslay, 2007) to achieve a comprehensive definition:
EM is a combination of innovative, proactive, and risk-taking activities that create, communicate, and deliver value to and by customers, entrepreneurs, marketers, their partners, and society at large (Whalen et al., 2016)
Marketing in non-profits
Traditional marketing activities in business are not in full compliance with the non-profit sector, which is because the focus point in marketing is the bottom line sales but in the non-profit section, there are three focus points: customers, volunteers, and donors (Pope, Isely, & Asamoa-Tutu, 2009). Yet since social enterprise and non-profits have their differences in terms of “attaining money,” “employment,” and “return on investment (ROI),” their marketing approaches cannot be exactly the same as well. So in this paper, the most suitable marketing approach for SEs will be probed.
The results of our systematic review revealed that a social enterprise can enjoy the elements of entrepreneurial marketing in four areas: first, in competing in the market; second, in its endeavors to attract finance to its structure; third, in employing volunteers; and fourth, in presenting its services or products to its target audience.
The proposed model in Fig. 2 affirms that entrepreneurial marketing is not a single-dimension phenomenon but it is rather a multipurpose tool at the hand of any social enterprise to be enjoyed in the aforementioned areas.
An interesting point in the findings was that the closest results were of those Ph.D. theses that were conducted during the last 3 years (i.e., 2016–2018). This means that EM approach is growing to be a concern among the academic society and its applications should be introduced deservedly to those that aspire to improve the qualities of life for people. That is what social enterprise founders, stakeholders, and managers are after.
To embark on discussing the findings of this research, it is necessary to point out why marketing is an important activity within an enterprise. The importance of marketing for an enterprise is best depicted by Gross (2016) in six aspects: (1) informing: you may know all the details of your product but do your consumers? marketing is the most effective way to communicate your value proposition to your customers in a fun and interesting way; (2) equalizing: with the emergence of social media, marketing is not necessarily an expensive endeavor for SMEs in competing with their bigger competitors; (3) sustaining: marketing is not a one-time fix, it is an ongoing strategy that helps businesses flourish; (4) engaging: customers nowadays want to be engaged even outside the stores, and using marketing you can send your customers content to keep them engaged beyond store hours; (5) selling: enterprises need to create inviting content to draw customers in and lead them to a purchase. Marketing helps sales, and sales help your business; and (6) growing: while current customers should always be your main priority, marketing efforts can help you expand this base (Gross, 2016).
Among the most influential works that embarked on studying entrepreneurial marketing in SEs was that of Shaw (2004). During her research on the intersection of marketing and entrepreneurship, Shaw introduced three areas in this crossroad: focus on change, opportunity orientation, and innovational management approach. She recognized the most eminent characteristics of EM to be showing reaction to the market and having intuitional ability to forecast the changes in the demands of customers. Shaw also identified four themes which she believes would help to understand EM in SEs, these were opportunity recognition, entrepreneurial effort, entrepreneurial organizational culture and networking (Shaw, 2004). Furthering research in this field, Zontanos and Anderson (2004) addressed the communicating role of the entrepreneur in EM. They stated that the benefit of marketing in a small enterprise in contrast to that of a large enterprise is in the close relationships between entrepreneurs and customers. They also emphasized that entrepreneurs must be great communicators, that is, they should be effective in communicating and powerful in persuasion and influencing (Zontanos & Anderson, 2004). Also in this light, Martin (2009) concluded in his research that entrepreneurs must wisely spend their time in communicational skills to improve it (Martin, 2009). Therefore, if the managers of social enterprises intend to apply an entrepreneurial approach to their business, they need to maintain close relations and interactions to their customers and improve their communicational skills for that matter. These are the qualities that are also pursuable in entrepreneurial marketing which translate into that by applying EM approaches in the four domains discussed in Fig. 2, social enterprises can benefit from lower budgets for marketing while achieving better results, maintaining constructive relationships with their customers, and aiming at more significant market goals.
Moreover, Kotler and Keller in their 2006 book named Marketing Management point out that the entrepreneurial and creative marketing paradigm arises from the initiatives of their implementers in a context of traditional ideas of businesses. This kind of marketing is a result of the power of shortcutting from the routine thinking in a creative manner and transforming intangible phenomena to tangible ones (Kotler & Keller, 2012). Regarding the creativity aspect of marketing, Berthon, Ewing, and Napoli (2008) also assert that not only all of the traditional marketing principals do not apply in entrepreneurial enterprises but also they should not be used in such entities (Berthon et al., 2008). As for the development and evolution of EM research, Hills et al. (2008) introduced 10 variables of EM that were considered worthy of study: (1) the lack of economies of scale; (2) severe resource constraints; (3) a limited geographic market presence; (4) a limited market image; (5) little brand loyalty or market share; (6) little specialized management expertise; (7) decision-making under even more imperfect information conditions than in larger firms; (8) a marked scarcity of time per major management task; (9) a scarcity of professional managers; and (10) a mixture of business and personal goals (Hills et al., 2008). Rezvani and Khazaei (2013) conducted a prioritization on the aspects of EM and also recognized the importance of EM in empowering businesses in the face of changing environments. They eventually concluded that this prioritization takes different forms regarding the viewpoint the individual in case. For instance, managers considered calculated risk the most important aspect and believed that such aspects as value creation and customer intensity are of less weight and prioritization (Rezvani & Khazaei, 2013).
Gilmore (2011) believes that EM is driven by the entrepreneur and is an opportunity-based and intuitive phenomena. She also asserts that the social context affects the nature of EM activity (Gilmore, 2011). Kraus, Filser, Eggers, Hills, and Hultman (2012) also stated that there are three areas of science that are the foundations of EM research: (1) the theoretical foundations of management, entrepreneurship, and marketing; (2) the intersection of marketing and entrepreneurship research; and (3) marketing for SMEs and new VCs (Kraus et al., 2012). Also on the subject of research in EM, Fillis (2015) proposed that biographical research is of great benefit in EM research: “It contributes to the rethinking of entrepreneurial marketing epistemology by providing alternative avenues for data collection, analysis, and theory construction, given the limited perspectives adopted so far. The biographical approach also addresses ontological concerns since it uncovers a distinct form of knowledge. Its interpretive focus embraces the complexities of subjective worlds and lived experience” (Fillis, 2015).
As Littell et al. (2008) assert: “A systematic review aims to comprehensively locate and synthesize research that bears on a particular question, using organized, transparent, and replicable procedures at each step in the process.” So the coding process was begun and four distinct focus areas were identified for SE Marketing, namely: donors, markets, competitors, and target audience.
This is to say that any SE that embarks to compete in a market eventually has to act in these four areas in which EM elements can be enjoyed. The elements of each area are mentioned in Fig. 2 according to their sources.
In light of the result of this study, it can be concluded that social enterprises have to strengthen their opportunity-seeking abilities (Gilmore, 2011; Morris et al., 2002; Whalen et al., 2016) in order to perform better in the market. They also have to employ more creative (Kotler & Keller, 2012) and innovative approaches (Olofsson, 2015; Rydback & Chen, 2010; Shaw, 2004), i.e., not counting on traditional marketing approaches that much in facing the market environment and competition since change is a necessity for competing triumphantly (Asiedu, Byrne, & Corena, 2011; Sigasa, 2015).
Regarding the donors dealing area of social enterprise management, it can be seen that since budgeting (specially first periods financings) is being conducted by focusing on donations and investments of donors (Brooks, 2009; Bugg-Levine et al., 2012; Salman, 2011; Scherrer, 2016), social enterprises have to augment their communication skills and also make the donors/investors sure about the SROI. Making and keeping networks are other tools that can help SEs perform better in this area.
Moreover, when SEs embark on employing volunteers, they have to keep in mind the importance of promotion opportunities for the volunteers regarding their experience and expertise and also prepare an enjoyable work environment for them (Zhonglv & Wei, 2014). This must be an environment in which impartiality (Bota, 2014) and cost management (Khan, 2015) are considered intelligently.
Communication is a fundamental element of any organization. SEs also have to count big time on it (Zontanos & Anderson, 2004) especially while interacting with their target audience. In value creation (Miltenburg, 2015) vis a vis value co-creation (Whalen et al., 2016) are also significant processes that can impact the public image (Tilahun & Cozonac, 2015) of a social enterprise.
Since the aim of this paper was to draw upon the existing literature in order to identify the influential role of marketing in SEs, an in-depth systematic review was conducted and more than 170 articles that had to do with SEs and marketing (including marketing for non-profits, SE management, financing SEs, social marketing, services marketing, relationship marketing, entrepreneurial marketing) were reviewed.
According to the aim mentioned above, the inclusion criteria for this research is for the publications to have an element of marketing/entrepreneurial marketing in a social enterprise or SME context. This might be a marketing/entrepreneurial marketing activity at the management level that influences any of the four areas of donors, market, competitors, or target audience. The time span of the inclusion criteria is 2000–2018. The reason for considering non-social SMEs in this research is that there was hardly any literature covering marketing or entrepreneurial marketing in social enterprises. But this strategy makes it possible to identify the analogous themes and orientations between SMEs and SEs regarding the entrepreneurial marketing activities. The studies that have been included are either articles in international journals, books published by credible publishers, and theses that have been conducted in accredited universities. The research is from both developed and developing countries.
Since the quest for “entrepreneurial marketing in/for Social Enterprises” returned no direct results in academic search engines, the closest phrases were considered instead. These phrases were: “Marketing in Social Enterprises,” “Management of Social Enterprises,” “Successful Social Enterprises,” “Branding in Social Enterprises,” and “Social Enterprises.”
The huge amount of academic resources that were gathered needed to be managed via a vehement electronic manager, so the Mendeley® software was used to categorize and review the material. Using the atlas ti® software for coding and categorizing the data and investing about a year on the project, the four social enterprise EM utilization domains were recognized and the model presenting their indexes (Fig. 2) was introduced to be used as a base for future studies.
Small and medium enterprises
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The research was solely funded by the author.
Availability of data and materials
The datasets used and analyzed during the current study are available from the corresponding author on reasonable request.
Mohamad Asgari Ghods is an entrepreneur and PhD candidate at the University of Tehran who won the “Entrepreneur Student Award” of 2015 at the faculty of entrepreneurship. He is studying entrepreneurship in the public sector, and his research interest is mainly on social enterprise with the aim of mitigating poverty in the world.
The author declares that he has no competing interests.
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