Alternative Advertising of Small Business, Entrepreneurial Startups and Their Effect on Profitability

Alternative Advertising of Small Business, Entrepreneurial Startups and Their Effect on Profitability

1. Literature review

Alternative advertising for small businesses and entrepreneurial startups

Cole, DeNardin & Clow (2017), advances that the internet has provided a viable advertising platform for all businesses regardless of size. The traditional advertising techniques that largely involve one-way communication are not cost-effective especially for small businesses and entrepreneurial startups. Similarly, such advertisement efforts are also quite ineffective and incompatible with a number of business systems and procedures within the contemporary world. Through this, Cole, DeNardin & Clow (2017), suggest that the use of technologically enhanced advertising systems like social media and other internet-based platforms is essential among small business and entrepreneurial startups.

Govender (2019), also agrees with this suggestion and asserts that small businesses operate over limited geographical space, which gives them the competitive advantage of close scrutinization of individual consumers to develop products and services that fit the exact tastes and preferences among their consumers. This can be an essential mode of acquiring much needed competitive advantage over large corporations within their environment. Nnanyelugo & Dakoru (2017), posits that integrated marketing communication (IMC) has significantly improved the efficiency and effectiveness of marketing operations among all business. Different studies have generated several alternative advertising strategies that are used by small businesses and entrepreneurial startups in enhancing their effectiveness and efficiency within their marketing operations.

Word of mouth

An individual’s peers have a significant influence on their consumption patterns and behaviors. Through this, Stewart, Kammer-Kerwick, Auchter, Koh, Dunn & Cunningham (2019), assert that individual businesses especially entrepreneurial startups and small businesses should always ensure high-quality goods and services that can trigger instant consumer loyalty. Loyal customers form the primary ambassadors of an organization and give positive reviews to their peers. Pere-to-peer communication forms one of the most effective, valid, and reliable source of product information. When a purchasing decision is financially risky of psychologically risky individual consumers heavily rely on the advice from their peers. This presents the need of enhancing consumer’s experience throughout the life cycle of a product. Ding, Jia, Wu & Yuan (2017), also asserts that individual companies have one duty to ensure effective word of mouth advertising among its consumers, which is to ensure they enhance the quality of their product and services. This will motivate consumers to spread information relating to the product among their families, colleagues, and friends.

The emergence of the internet as an essential driving force in the contemporary world has ensured future consumers as well as current consumers to interpersonally connect with each other regardless of physical distance. This has created a robust system through which product information can be easily shared and acquired. Gilboa, Seger-Guttmann & Mimran (2019), terms this as electronic word of mouth (eWoM). The virtual community built through the internet can be used by individual companies in promoting their products or by individual consumers who are optimally satisfied. Similarly, the interpersonal networks resulting from the use of different internet platforms also allow individual consumers to share their experiences with other consumers. Majeed & Sriram (2019), advanced a word of mouth model known as Network Coproduction Model. The model asserts that individual organizations together with their consumers jointly develop word of mouth communication by considering that marketing communication in the contemporary world is no longer unidirectional. The network coproduction model allows for the active exchange of messages and meaning within its framework.

Hernández‐Carrión, Camarero‐Izquierdo & Gutiérrez‐Cillán (2017), also advances that referrals through WOM is essential in increasing the rate of acquisition for new consumers. Through this, WOM is increasingly becoming an essential force behind the use of social media and other strategic marketing techniques. Other studies have also found WOM to be essential in informing influencers’ decisions, which also enhances other modes of advertisement like celebrity advertisement. Individual organizations should enhance their tie strength, the existing interpersonal relationship with their stakeholders, and their consumers. Dawes, Kennedy, Green & Sharp (2018), found that tie strength is the most essential factor that increases the spread of WOM in which strong tie strength ensures product information is quickly disseminated and to a wide recipient than weak tie strength. Moreover, source expertise has also been advanced to significantly impact the effectiveness of WOM advertising. Consumers have a significant level of trust in experts in specific fields. Through this, such experts always play a significant role in shaping the perceptions and consumption choices among individual consumers.

Williams & Horodnic (2016), asserts that predispositional ties play a significant role in shaping the spread of word of mouth product information. predispositional ties are existing similarities between the receiver and the source in relation to their interests and attitudes. Quality products and services always create a connection among stakeholders through trust and harmonized interest. There is also the need to create enjoyable experiences within Virtual social community to ensure individual users continue contributing to the quality aspects of a product and return purchase. The essence of social networking sites to the effectiveness of WOM as a form of advertising cannot be overlooked. These sites have the ability to influence the perceptions, beliefs, behavior, and values of individual consumers; hence organizations should enhance their efforts within such sites.

Additionally, several studies have advanced different tools to be used in accessing the degree of success of WOM advertising. One of these is a customer referral value (CRV). The CRV tool utilizes four steps in assessing the effectiveness of WOM  advertising (Krieger, Lodish & Hu, 2016). The first phase involves determining whether a consumer would consider purchasing the product without a referral. The second step involves predicting the future value of individual consumers referred to the company. The third step involves the prediction of future behaviors in consideration of past consumer behaviors. The fourth and last step involves predicting the timings of customer referrals. Yenipazarli, Vakharia & Bala (2019), also advanced the word of mouth equity as a standard measurement of the effectiveness of WOM. This approach takes into account the ability of the product information to change an individual consumer’s behavior and the volume of product information in relation to recommendations and discussions among individual consumers and potential consumers. It also considers how the available product information affects the effectiveness of other marketing strategies as well as the market share and sales volume.

Social media as an alternative advertising platform for small businesses and entrepreneurial startups

There has been a major shift in consumption patterns as a result of changes witnessed in changes in demographic structures within the contemporary world. The baby boomers generation is slowly withering away allowing the emergence of the Millenials as primary consumers in the contemporary world. Individual businesses of all sizes and at different growth stages need to deeply consider this within their systems and procedures. Olanrewaju, Hossain, Whiteside & Mercieca (2020), advance that the Millenials is a unique generation with individuals who were born and brought up during intense use of technology within several systems and procedures within their environment. As a result of this, they appreciate technologically enhanced systems and procedures. Olanrewaju et al. (2020), developed the slogan that states that “the customer is the king” in explaining why individual businesses in the contemporary world should re-organize their systems and processes to accommodate the changes in consumption patterns and behaviors witnessed among different market segments.

Social media creates a high sense of satisfaction among the Millenials through the use of different techniques and for small businesses and entrepreneurial startups to gain a fair market share that can enhance their profitability they have do increase their presence within social media. Ghezzi & Cavallo (2020), asserts that currently close to 80% of the Australian population are Millenials while more than 70% of them heavily use social media or have access to different social media platform through their friends, family, and colleagues. These highlights that consumers have shifted from the real world into the virtual world. Girija (2020), supports these and states that some generations like generation Y and generation Z derive emotional and psychological wellbeing through interaction with other individuals within social media platforms. Social media has evolved from being a normal social platform into a business platform. Several studies have been conducted in this regards and different systems and procedures useful in advertising have been advanced.

Brand communities

Creating a community with a shared vision, objectives, and goals allows individual organizations to enhance their marketing operations and foster effective competition. Girija (2020), Identifies brand communities “as a group of enthusiastic consumers organized around the lifestyle, activities, and ethos of the brand”. Companies are shifting their operations from creating communities in the real world to creating virtual communities with a touch of the real world by prioritizing the different needs, tastes, and preferences among consumers. There exist three conditions that an effective brand community must satisfy. These include brand authenticity, customer loyalty, and market efficiency. Poddar  & Agarwal (2019), Identify brand authenticity as a strong market command that gives individual consumers a unique identity within the community. Similarly, market efficiency entails proper and seamless marketing operations including enhanced distribution system while customer loyalty entails non-conditional product embrace from individual clients giving it a superior market command.

In building a brand community individual organizations are to only set the terms of operations among stakeholders and let the consumers manage and control themselves. Cox & Nguyen (2018), asserts that in most instances brand community provides a platform in which consumers share their experiences with a specific product or service offered. Positive consumer participation in such virtual brand communities ensures strong consumer ties. Hsieh & Wu (2019), also supports these and adds the essence of email marketing and search engine optimization (SEO) among small businesses and entrepreneurial startups. The effectiveness of these two marketing platforms can be gauged through link clicks and website traffic. Similarly, these two advertising strategies are cost-effective and enhance consumer relations, which ensures the profitability of an individual firm involved.

Viral marketing

Jin, Wu & Hitt (2017), advances the concept of viral marketing as an alternative marketing technique that can be used by small businesses and entrepreneurial startups. Viral marketing primarily utilizes word of mouth through the exploitation of well-structured social networks as well as the desire among customers to contribute to sharing product information with their family, friends, and colleagues. Organizations should create matching chemistry between the targeted audience and the advertising message to ensure successful viral marketing operations. Jin, Wu & Hitt (2017), Identifies three strategies that can be used for a successful viral marketing initiative. These include offline marketing, online advertising, and seeding emails.  Upon initiation of viral marketing campaigns, individual organizations should closely monitor the different reactions exhibited by consumers to inform future initiatives.

Guerrilla marketing

The use of other systems and procedures that are independent of an organization in promoting its products and services constitute Guerilla advertising (Singh, Chauhan & Dhir, 2019). Such marketing techniques suit the mode of operation of small businesses and entrepreneurial startups since they always involve relatively low cost and highly effective in generating positive consumer perception. They always involve high creativity, energy, and flexibility. The use of online platforms like social networks and blogs in guerrilla marketing increases its effectiveness. The effectiveness of such efforts can be measured by the sales that follow, as well as attendance of such events and customer acquisition rate as well as the website traffic that follows (Singh, Chauhan & Dhir, 2019).

Customer relationship management (CRM)

Guha, Harrigan & Soutar (2018), observes that the use of strategic planning in all marketing operations allows for the integration of different systems and procedures that collectively enhance the market position of an individual organization regardless of its growth stage. Small businesses and entrepreneurial startups should primarily focus on the use of relationship-oriented advertising strategies that allows them to build consumer loyalty through the use of customized marketing efforts that fit the specific needs as well as tastes and preferences of individual consumers. The contemporary world business marketing and advertising efforts have shifted from a product-centered approach to a consumer-centered approach. The consumer-centered approach greatly considers the message combination that is sent and received to potential consumers. Thakur & Workman (2016), identifies four essential actions that must be put in place to ensure effective customer relationship management. These include customer retention, customer acquisition, customer growth, and winning back customers. All these four are essential for the effective operation of a small business or an entrepreneurial startup. Thakur & Workman (2016), further observes that enhanced identification and acquisition of the right consumers form the beginning of an effective customer relationship management system. Similarly, accurate estimation of an individual consumer’s lifetime value also has an immense contribution to an effective CRM system

Anshari, Almunawar, Lim & Al-Mudimigh (2019), advances two key components that make up an effective customer relationship management. The first of these is competency in knowledge management. A knowledge management system involves al the systems that collectively facilitate the collection, analysis, dissemination, and storage of information. An effective knowledge management system is essential in understanding, segmenting, and targeting viable consumption markets. Guha, Harrigan & Soutar (2018), asserts that this is exactly what small businesses and entrepreneurial startups need to enhance their profitability. Additionally, a proper knowledge management system also ensures well-updated consumer information, which helps in identifying active consumers and predicts purchasing patterns, all necessary for customizing marketing efforts. The second component of effective CRM is competent relationship marketing. Anshari et al. (2019), also observes that this is always developed with time and organizations should not focus on short term relationship marketing strategies but should look to develop long term strategies. Social media is an essential advertising medium that provides room for an enhanced consumer relation. However, individual organizations with proper and well-planned operations among the various social media platforms always enjoy superior marketing relationships with consumers through active participation from both sides.

Mobile marketing

Mobile marketing is an emerging practice in contemporary. It integrates all forms of media and marketing communication channels in driving sales as well as CRM data to add value to web-based viral marketing. Mobile marketing can take several forms like downloadable content, streaming media, mobile internet, and wireless application protocol (Brown, Mawson & Rowe, 2019). It exploits the already available web-based infrastructure to interact with consumers and understand their needs, tastes, and preferences. Brown, Mawson & Rowe (2019), identifies that messaging allows firms to target specific consumers through the use of different forms like mobile text, mobile coupons, sweepstakes, quizzes, and content service.  On the other hand, streaming media allows individual customers to consume the content as it is delivered. Additionally, downloadable content is utilized in increasing consumer engagement with campaigns.

Brown, Mawson & Rowe (2019), states that the cost-per-acquisition can be used in gauging the effectiveness of mobile marketing. This generally assesses the cost incurred from a specific web-based exercise with the number of consumers generated. Similarly, mobile marketing allows efficient use of social networks in increasing consumer engagement and the consumption of different products and services.

Measurement of the effectiveness of social media programs

Social media can be used in accomplishing the following three goals. These include building loyalty, increase consumer awareness, and increasing sales. Guha, Harrigan & Soutar (2018), States that only one of these goals can be achieved at a specific time, which gives room for effective measurement. For instance, if the primary goal of such exercise was to build consumer awareness the firm involved can gauge website traffic, the volume of followers, number of mentions, and share of voice. Similarly, if the primary objective of such activities was to increase sales the firm involved can assess the number of repeat visits, time spent on the site, social mentions, and bounce rates among others. Additionally, in the case of building brand loyalty, the firm involved can assess content acceptance rate, repeated mentions, reviews, and recommendations as well as social connectivity among consumers.

Nnanyelugo & Dakoru (2017), Performed a study to gauge the level of use of online marketing strategies among small and medium enterprises (SMEs) and the perceived profitability associated with such kind of operations among them. The study observed that small and medium enterprises (SMEs) with websites were most likely to generate high-profit levels than their counterparts without websites. The study also observed that 79% of SMEs that use websites report increased profitability.  Similarly, a significant number of SMEs using the internet believe such operations as the best way of generating increased profitability. Through this, it is the desire for profits that drive small and medium enterprises to use web-based infrastructure and technology. Several other studies have also identified the essence of using internet-based operations among SMEs to be increasing their profit levels. However, …… asserts that the earnings from the internet among SSMEs are always marginal as a result of the complexity that exists in the contemporary world’s business environment.

Conclusion

The topic of alternative advertising methods among small businesses and entrepreneurial startups has been extensively covered. The different forms of alternative advertising that can be utilized by firms in ensuring effective marketing operations and enhanced competency. However, the majority of the alternative advertising techniques that have been suggested by several studies are online-based. There is inadequate literature in regards to available offline-based alternative advertising techniques.  This study will primarily concentrate on exploring different offline-based alternative advertising techniques that are used by small businesses and entrepreneurial startups and contribute to the few pieces of literature that have been advanced in this regard. The study will specifically concentrate on small businesses and entrepreneurial startup within Brisbane, Australia.

2. The research question, objectives and purposes

The intense competition that small businesses and entrepreneurial startups face from already established large corporations that operate from across different borders requires them to use any strategy that is within their disposal and capacity to enhance their level of competition. Marketing operations significantly impact the level of consumer loyalty, brand awareness, and sales volume. Though there are several online-based alternative advertising techniques that can be deployed by these organizations ion ensuring effectiveness and efficiency as well as enhanced profitability the large corporation also has a heavy presence in the majority of online-based platforms, which also help them eliminate the physical distance. For effectiveness and increased profitability, SMEs should consider offline-based alternative advertising techniques given that they operate in a relatively small geographical area. This forms the primary purpose of this study in which the study will look to explore the available offline advertising techniques that can be used by SMEs in Brisbane, Australia.

Research objectives

• To explore the different online-based alternative techniques that can be used by small businesses and entrepreneurial startups in enhancing their profitability
• To explore the perceived profitability associated with alternative advertising techniques among small businesses and entrepreneurial startups
• To analyze different offline-based alternative marketing techniques that can be used by small and medium enterprises in enhancing their competitive levels.
• To compare the cost-effectiveness and profitability of online-based alternative advertising and offline-based alternative advertising.

Research questions

1. What are the different offline-based alternative advertising techniques used by small businesses and entrepreneurial startups
2. What are the different online-based alternative advertising techniques used by small businesses and entrepreneurial startups

• What is the perceived profitability of online-based alternative advertising techniques used by small businesses and entrepreneurial startups?

1. What is the perceived profitability of offline-based alternative advertising techniques used by small businesses and entrepreneurial startups?
2. Research survey questions

The following research survey questions have been prepared in consideration of owners of small businesses and entrepreneurial startups within Brisbane, Australia as the primary respondents.

• What industry are you participating in?
• For how long has your business been in operation?
• Are their large corporations that operate their branches within your locality?
• Can you identify other small businesses within your locality competing within the same industry?
• On a scale of one to ten can you rate the level of competition that your business face
• Do you use online advertising techniques in promoting your product and services?
• Are there any offline-based alternative advertising techniques that your business utilize
• Can you recognize the different online-based advertising techniques used by other competitors?
• Can you identify the different offline-based advertising techniques used by other competitors?
• Between online-based and offline-based advertising techniques, which one do you consider as cost-effective and more profitable. Please give a reason for your answer

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