Session 03

Entrepreneurial Marketing

Theoretical Frameworks of
Entrepreneurship
 What we’re going to cover today..

Economic, social and

The theory of marketing
CompetitiveThe
theories and
marketing concept
psychological perspectives on strategies of
entrepreneurship entrepreneurship

Rationale of theoretical
frameworks for
entrepreneurship
 Learning Outcome(s)

The learning outcome(s) aligned with today’s session

is (are) :

LO1 Explain the relationship between marketing and

entrepreneurship
 Session Outcomes

At the end of the session learners should be able to:

• Evaluate a range of perspectives on
entrepreneurship
• Critically assess some of the relevant underpinning
theories or strategies of entrepreneurship
• Justify the rationale for understanding the theories
of entrepreneurship
Entrepreneurship Perspectives
 Economic Perspective
• The perception and understanding of entrepreneurship
has developed over time, since the introduction of the
word in the early 1700 by Cantillon to new perceptions
today.
• Nevertheless, it was the economists who first
introduced the concept with others to follow and added
to the debate.
• Over time economists have recognised the significant
role entrepreneurs play in the economy, but it was
difficult to integrate the entrepreneur into the theory.
• The debate continued over the last century, with
contributions from leading economists. (Blundel and Lockett 2011)
Timeline of Perspectives

Table 1. Timeline of Perspectives (Etemad 2004 cited in Burns 2016)

Timeline of Perspectives (cont’d)

Table 2. Timeline of Perspectives (Etemad 2004 cited in Burns 2016)

Timeline of Perspectives (cont’d)

Table 3. Timeline of Perspectives (Etemad 2004 cited in Burns 2016)

 Sociological Perspective

• This perspective explores the ways in which

entrepreneurial activity is influenced by the society
in which it takes place.
• In an article by Morrison (2000) she questions:
What triggers the release of enterprising spirit and
the initiation of entrepreneurship from a
sociological view point?
• Evidence of strong relationship between cultural
and the societal factors within which a person
operates.
Key Factors: Sociological Perspective

Family

Formal
Religion
education

Role
models
 Psychological Perspective

• This is also referred to as entrepreneurial characteristics or

personality traits.
• This perspective is widely researched and the most
commonly used to determine entrepreneurial performance.
• In contrast to the economic perspective which indicates
what an entrepreneur consider to be, the psychological
perspective explores what leads some people to become
entrepreneurs.
• As personality is genetically influenced the psychological
approach assumes that entrepreneurship is more nature
than nurture (sociological perspective) (Bridge and O’Neill
2013).
Psychological Perspective: Positive and
Negative Traits of Entrepreneurs

Positive Negativ
traits e traits
Need for Perfectionism
achievement Impulsiveness
Over optimism Knows it all
Risk taking External locus of
Desire for autonomy control
Locus of control Anti-authoritarian
Creativity
 Activity (20mins)

• Identify and discuss the various strengths and

weaknesses of the perspectives highlighted on
previous slides.
• Which of the following is/ are the dominant
perspectives underpinning entrepreneurial
behaviour and why?
• Justify your points on the Padlet platform and share
with the class.
Competitive Advantage Theories and
Strategies
 Competitive Advantage Perspective

This includes a range of theories and frameworks

such as:
• Use of non competition
• Creative destructive theory
• Environmental scanning (trends, uncertainties,
opportunities)
• Discovery theory and creation theory
• Experimental learning
• Blue Ocean and market driven/driving strategies
 Use of Non Competition Strategies

• Non competition strategies are used to prevent

existing or past employees or contractors of
entrepreneurial firms to desist from sharing or using
entrepreneurial ideas or secrets.
• Entrepreneurs with new ideas may create competitive
advantage by using such non competition strategies
through non-disclosure clauses.
• Entrepreneurial firms protect areas of businesses such
as client lists, innovative procedures or inventions,
new technology, trade secrets or other proprietary
information.
 Creative Destruction Theory

• This theory was coined by Schumpeter in 1934.

• He purports real innovations are single ‘mould-
breaking’ developments that can be linked to a
commercial opportunity:
new products or services
how they are produced
how or to whom they are marketed
• BUT frequent, incremental small-scale innovations
can create similar competitive advantage with lower
risk
 Creative Destruction Theory (cont’d)

• Introduction of a new or improved good

• Introduction of a new process
• Opening of a new market
• Identification of a new source of supply of raw
materials
• Creation of new types of industrial organisation
 Innovation and Competitive
Advantage
Frequency of Increasing
Innovation
competitive
High advantage

Low High
Degree of Innovation
Figure 1. Innovation and Competitive Advantage Curve (Burns 2016)
Innovative Intensity
Scale of innovation
In
cr
ea
si
Radical ad ng
va co
nt mp
ag e
e titi
ve

Major

Incremental

Occasional Frequent Continuous

Frequency of innovation
 Approaches to Innovation
1. Have a problem & find a solution
2. Have a solution & find a problem
3. Identify a need & develop a solution. Bolton & Thompson

Source: ARK Invest

 Experimental Learning and Creation
of New Market Demand
• Experimental learning or • Creating new demand
experiential learning by tactics
Kolb(2014) Exclusivity
Limited editions
Personalisation
Co-creation

Figure 2. Kolb’s Experiential Learning Cycle (Kolb 2014)

 Environmental Scanning, Trends and
Uncertainties – Identifying Opportunities

Figure 3. Observing Trends, Solving Trends and Gaps in the Marketplace (Barringer and Ireland 2016)
 Environmental Scanning and Trends
Observation
• Observing Trends
• Trends create opportunities for entrepreneurs to
pursue.
• The most important trends are:
• Economic forces
• Social forces
• Technological advances
• Political and regulatory change
• It’s important to be aware of changes in these
areas.
Trends and New Business Ideas

Figure 4. Trends and New Business Ideas (Barringer and Ireland 2016)
 Solving a Problem
Solving a Problem
• Sometimes identifying opportunities simply
involves noticing a problem and finding a way to
solve it.
• These problems can be pinpointed through
observing trends and through more simple means,
such as intuition, serendipity, or change.
• Many companies have been started by people who
have experienced a problem in their own lives, and
then realised that the solution to the problem
represented a business opportunity.
 Finding Gaps in the Marketplace

Gaps in the Marketplace

• Identifying opportunities is to find a gap in the
marketplace.
• A gap in the marketplace is often created when a
product or service is needed by a specific group of
people but doesn’t represent a large enough
market to be of interest to mainstream retailers or
manufacturers.
 Discovery and Creation Theories
Discovery theory Creation theory

Emphasis on external shocks forming Emphasis on actions undertaken by

opportunities in the market which entrepreneurs take to form and exploit
create opportunities opportunities

Opportunities exists and entrepreneurs Opportunities exists and entrepreneurs

need to find them need to find them

Competitive imperfections arise from Competitiveness arises from

changes in technology and consumer entrepreneurs ability to create and
preferences bring something new to deal with
market needs
 Blue Ocean Strategy

• Developed by W. C. Kim and R. Mauborgne in 2005.

• The strategy can be used by entrepreneurs to create
demand from unexplored market spaces (blue
oceans) rather than competitive market spaces (red
oceans).
• Entrepreneurs need to create value innovation in
such blue oceans as competition is irrelevant.
• Value innovation can be created using differentiation
and low cost, creating value for both the buyer, the
company, and its staff, thereby opening up new and
uncontested market space.
 Marketing Driven and Driving
Strategies
Entrepreneurs may focus on these strategies by
emphasising on:
• Market orientation
• Creating superior value for customers
• Improving and adapting internal capabilities of the
entrepreneurial firm
• Understanding competitive intelligence
• Developing market intelligence
 Activity (20mins)

• Why is a product or customer focus an important

characteristic for successful entrepreneurs?
• What did Schumpeter mean about by the term
creative destruction?
• What is the rationale for understanding theories
that underpin entrepreneurship?
 What we’ve covered today..

Economic, social and

The theory of marketing
CompetitiveThe
theories and
marketing concept
psychological perspectives on strategies of
entrepreneurship entrepreneurship

Rationale of theoretical
frameworks for
entrepreneurship
 References

• Barringer, B.R. and Ireland, R.D. (2016)

Entrepreneurship: Successfully Launching New
Ventures. 5th edn. Harlow: Pearson.
• Blundell, R., and Lockett, N. (2011) ‘Exploring
Entrepreneurship: Practices and Perspectives.’ Oxford
University Press. Oxford.
• Bridge, S and O’Neill, K. (2013) ‘Understanding
Enterprise: Entrepreneurship and Small Business’.
4th edn. Palgrave Macmillan. Basingstoke.
• Burns, P.(2016) Entrepreneurship: Start Up, Growth
and Maturity. 4th edn. Basingstoke: Palgrave
 References

• Kolb, D. A. (2014) Experiential learning: Experience as

the source of learning and development. London: FT
Press.
• Morrison, A. (2000) ‘Entrepreneurship: what triggers it?’
International Journal of Entrepreneurial Behaviour and
Research. 6 (2), 59-71
 Reading
Essential Reading
• Nijssen, E. (2017) Entrepreneurial Marketing: An Effectual
Approach.2nd edn. Abingdon: Routledge
• Tidd, J and Bessant, J. (2013) Managing Innovation: Integrating
Technological, Market and Organizational Change. 5th edn.
Chichester: John Wiley & Sons
Recommended Reading
• Chaston, I. (2015) Entrepreneurial Marketing: Sustaining
Growth in All Organisations. 2nd edn. London: Palgrave.
• Lodish, L.M., Morgan, H.W, Archambeau, S and Babin, J. (2015)
Marketing That Works: How Entrepreneurial Marketing Can
Add Sustainable Value to Any Sized Company.2nd edn. London:
Pearson Financial Times Press