The role of advertising in the course of entrepreneurial ventures is largely misunderstood by many academicians, practitioners and small business planners. Yet without a proper understanding of how entrepreneurs and small business owners view and use advertising, those who seek to study this area as well as those whose role in society is to advise and guide those working to develop their own enterprises are navigating without a compass.
This study seeks to address how small business owners in a mid-sized metropolitan area in a largely rural state view and use advertising in their ventures. By utilizing Internet-based surveys the researchers in this project seek to develop a greater understanding of how entrepreneurs and small business owners develop messages, understand target audiences and whether or not advertising is seen as a successful part of their businesses.
Entrepreneurship and Advertising are fields rich in theoretical research, case studies and other forms of scholarship, yet surprisingly little work exists in how these two areas are combined. In order to understand how advertising and entrepreneurship work together one must review literature in separate areas and consider the inclusion of research in retailing, marketing and other related disciplines.
In a 2003 study about advertising and marketing behaviors in small business firms, Harris and Reece found that much literature exists regarding competitive advantage. Yet, despite the wealth of knowledge on this topic, it was "not clear whether small businesses are engaging in marketing and advertising planning" (Harris and Reece, 2003). A study in the Journal of Small Business Management found that in fact very little planning of any kind goes into small business activities, yet those who do some amount of planning are less likely to fail (Perry, 2001).
For small businesses to succeed some marketing activities must take place. Small firms can gain advantage over the obstacles to success through the use of appropriate planning activities (Harris and Reece, 2003). One potential reason for the reluctance of some small business owners to engage in any type of advertising may be the perception that advertising clutter could negatively impact their businesses. Ha and Litman found that while there was in fact a negative correlation with advertising clutter the effects were limited to certain vehicles within distinctive advertising media (Ha and Litman, 1997). Other studies (e.g. Lohse, 1997) suggest that the way ads are designed will impact how consumers pay attention to them. Yet one thing is abundantly clear: businesses that fail to engage in some form of marketing to promote their businesses will eventually fail.
While some entrepreneurs may feel that money spent on advertising is wasted, evidence shows that consumers often value advertising that is believable, credible and ethical (Ducoffe, 1995). Given that many entrepreneurs are ethical individuals who wish only to succeed in their business ventures, advertising that is seen as good (believable, credible and ethical) would seem to be an important element in small business strategy. One growing enterprise among entrepreneurs is in the area of service retailing. Given the number of individuals starting businesses that offer services over goods, advertising will be an essential key to the success of those types of businesses. In their 1995 study Stafford and Day found that advertising which is both informative and rational works best for service retail firms; but how many business owners specializing in this area are aware of this?
Many experts acknowledge the fact that the greatest marketing challenge facing small business owners is limited resources for effective advertising (Lipput, 1995; Harris and Reece, 2003). Other experts (e.g. McCarthy, 1999) suggest that effectively written and placed advertisements will have a positive effect on business growth. A 1984 paper by Dart & Pendleton even suggests that advertising agencies have a means to act as both educator and facilitator to small business owners, yet given the high fees often charged by these agencies many entrepreneurs may feel as if they are at a disadvantage for using the services of an ad agency (Dart & Pendleton, 1984).
The issues we seek to address in this study relate to how, why and by what means small businesses owners are using advertising in their businesses. We also seek to address attitudes relating to whether or not small business owners feel that advertising is a successful component of their businesses.
An Internet survey instrument was developed by the researchers and placed on-line with assistance from the Arkansas Small Business Development Center (ASBDC). Prior to the on-line placement of this survey three email messages were written and sent to clients, small business owners and entrepreneurs, who had registered with ASBDC. The researchers...