Marketing in successful agri-food small and medium sized enterprises in the North of England

Abstract

Small and Medium sized Enterprises (SMEs) are vital components of many economic sectors including agri-food. However, due to their nature, SMEs face a number of developmental problems in their growth stages, including a lack of formalised marketing. Improving marketing is thus a potential source of competitive advantage for the industry and is therefore of policy interest to the Ministry of Agriculture Fisheries and Foods (MAFF). This research is an attempt to understand SMEs marketing and identify the successful patterns of agri-food SMEs in the North of England, in terms of their marketing practices. The comparative, integrated model to marketing research, blending the process model with the contingency approach was employed. Both quantitative and qualitative techniques from the transactional and relational marketing literature were used in order to examine twenty hypotheses, and test the marketing practices of agri-food SMEs, and their influence on performance. Furthermore, the ownership status effect (subsidiary or independent) on marketing of SMEs was examined. Then, five cases were analysed to verify the survey's results, and gain a deeper understanding of how and why marketing is practised the way that it is, in successful agri-food SMEs. This research provided evidence to suggest that agri-food SMEs differ from other SMEs in terms of their marketing orientation. It also provided evidence to suggest that the most successful have a very good understanding of the fundamental marketing principles. Moreover, it showed that marketing practices differ between subsidiary and independent SMEs, in three marketing areas, namely Strengths Weaknesses Opportunities Threats (SWOT) analysis, strategic focus, company/brand reputation. There is also an environmental difference between the two groups namely European or government regulation posing a threat to the survival of the company. The case studies showed that most successful SMEs are product oriented and pay attention to high quality, variety and service. They all operate on distinct niche markets or have a niche product in an established market. They are familiar with planning and strategy concepts, undertake many of them internally and constantly seek to strengthen their relationship with their customers. Furthermore, the independent companies do not have the tendency to spend large budgets on marketing research, but try to gain marketing information from family, friends, their sales-force and their customers. Subsidiaries, on the other hand, tend to have bigger contracts/accounts, which allow them to get information from their customers. The thesis concluded by proposing a model of successful marketing for agri-food SME, and making recommendations for policy makers. These included the following areas: 1. Emphasis on high product quality, and niche market or product; 2. Control of the marketing effort, by means of regular performance feedback meetings; and 3. The establishment of an on-going marketing information gathering system, by using all available employees who are in contact with customers, including van drivers and the sales-force.