Estudios Gerenciales vol. 38, N.

° 165, 2022, 493-506

493

Research article

An Analysis of Marketing Strategy in Small-and-Medium-sized Colombian Enterprises

Mónica Franco-Ángel*
Associate Professor, School of Business and Economic Studies, Icesi University, Cali, Colombia.
[email protected]

Mariam Rabih Awad Urbano

Student, Department of Management, Birkbeck College - University of London, London, United Kingdom.
[email protected]

Abstract
This study analyses the marketing strategy implemented in SMEs. A case study is carried out with eight Colombian manufacturing
companies with more than ten years of creation and more than fifty employees. The results show that these companies do not
follow traditional marketing models, nor do they have formal and structured processes. Instead, their marketing strategy is based
on understanding their customers, with whom they have a close relationship, by developing innovative products that meet their
needs, structuring their costs to offer a competitive price, and constantly communicating the value they generate to the market.
This article concludes that these companies follow a marketing strategy that allows them to be sustainable and competitive with
the available resources.

Keyword: SMEs; marketing strategy; dynamic capabilities; marketing capabilities; SMEs management.

Un análisis de la Estrategia de Mercadeo en Pequeñas y Medianas Empresas colombianas

Resumen
Este estudio analiza la estrategia de mercadeo implementada en las PYMES, para esto, se adelanta un estudio de casos con
ocho empresas manufactureras colombianas, con más de diez años de creación y más de cincuenta empleados. Los resultados
evidencian que estas empresas no siguen los modelos tradicionales de mercadeo ni cuentan con procesos formales y estructurados.
La estrategia de mercadeo obedece a comprender a sus clientes, con quienes tienen mucha cercanía, al desarrollo de productos
innovadores que satisfagan las necesidades de los mismos, a la estructuración de sus costos para ofrecer un precio competitivo y a
una comunicación constante del valor que generan al mercado. Se concluye que estas empresas siguen una estrategia de mercadeo
que les permite su sostenibilidad y competitividad acorde con la disponibilidad de sus recursos.

Palabras clave: PYMES; estrategia de mercadeo; capacidades dinámicas; capacidades de mercadeo; gestión de PYMES.

Uma análise da estratégia de marketing em pequenas e médias empresas colombianas

Resumo
Este estudo analisa a estratégia de marketing implementada nas PMEs, por isso, foi realizado um estudo de caso com oito empresas
manufatureiras colombianas, com mais de dez anos de criação e mais de cinquenta funcionários. Os resultados mostram que
essas empresas não seguem os modelos tradicionais de marketing sem ter processos formais e estruturados. A estratégia de
marketing deve-se a conhecer a seus clientes, com os quais está muito próximo, desenvolver produtos inovadores que atendam suas
necessidades, estruturar seus custos para oferecer um preço competitivo e comunicação constante do valor que produz ao mercado.
Conclui-se que estas empresas seguem uma estratégia de marketing que permite a sua sustentabilidade e competitividade de
acordo com a disponibilidade dos seus recursos.

Palavras-chave: PME; estratégia de marketing; capacidades dinâmicas; capacidades de marketing; Gestão de PME.

* Corresponding author.

JEL classification: M30; M31.

How to cite: Franco-Ángel, M. & Awad Urbano, M. R. (2022). An Analysis of Marketing Strategy in Small-and-Medium-sized Colombian Enterprises. Estudios
Gerenciales, 38(165), 493-506. https://doi.org/10.18046/j.estger.2022.165.5286

DOI: https://doi.org/10.18046/j.estger.2022.165.5286

Received: 15-12-2021
Accepted: 18-05-2022
Available online: 03-11-2022

© 2022 Universidad ICESI. Published by Universidad Icesi, Colombia.

This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/)
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1. Introduction and discusses the results in the light of the theory.

Finally, the sixth section provides the limitations and
In recent decades, small and medium-sized suggestions for further research, and the seventh pre-
enterprises (SMEs) have gained interest in global sents the conclusions and practical implications.
markets for their contribution to countries' economic
growth. These enterprises, described as vibrant en- 2. Marketing in SMEs
gines (Jovanovic, Arsic, & Nikolic, 2018), dominate
global economies in terms of job creation and number It is essential to recognize that SMEs’ characteristics
of companies (Katua, 2014); they account for more than differentiate them from large firms (Franco, Santos,
95% of all enterprises worldwide and generate between Ramalho, & Nunes, 2014). According to Mujiya, Wijayanti,
60% and 70% of total employment in most countries Dewi, Prayogo, Aulia, Utami, and Mustikasari (2018), large
(International Trade Centre, 2015). firms tend to be more structured, while SMEs tend to be
Despite their importance, SMEs have significant more instinctive and detached from academic paradigms
weaknesses that impede their sustainability and growth and theoretical structures. Although such characteris-
and make them less competitive in the market. Lack of tics do not always influence their competitiveness, they
management skills is one of the most recurrent problems do impact their organizational structure. In this sense,
in these companies (Lobontiu & Lobontiu, 2014). Although although the organizational structure of SMEs allows
there is a growing body of research, there is still much to them to be more flexible and adaptable to change (Lavia
discuss in SME business management. & Hiebl, 2015), it also makes them less formal in some
To gain sustained competitive advantage, SMEs ways (Candiya, Mpeera, Munene, & Akol, 2017).
need to continuously adapt to their environment, iden- The marketing area does not escape from the spe-
tify opportunities, mobilize resources, and transform cificity of SMEs; therefore, it has a different behavior than
themselves through continuous renewal (Cao, Tian, & that of large companies. For the most part, the decision-
Blankson, 2022). In this sense, they are required to have making process in this area is informal and unstructured
the capability to offer fast and operational responses (Esposito, 2013). Activities are limited to the availability
to a highly dynamic marketplace. Specifically, dynamic of resources, which is reflected in a simplistic marketing
marketing capabilities become crucial for these com- strategy that is reactive to competition (Franco et al.,
panies to develop, release and integrate their market 2014). In SMEs, it is common to find a permanent focus
knowledge and resources (Kachouie, Mavondo, & Sands, on sales (Lobontiu & Lobontiu, 2014) rather than on
2018), achieve sustainability and growth, and increase marketing strategy.
competitiveness (Cao, Duan, & El Banna, 2019). On the other hand, given that in most cases SMEs are
The present study focuses on SMEs' dynamic mar- managed and run by their founders, their personality,
keting capabilities. The objective is to analyze the knowledge, and perception greatly influence their deci-
marketing strategy implemented in SMEs to identify sions, including those made in marketing (Bretcu, 2014).
and determine the actions related to positioning, Such personal decisions affect marketing effective-
segmentation, clients, product, price, placement, co- ness in the organization (Kaszás, Péter, Keller, & Kovács,
mmunication, and innovation. 2016), as they can lead to a narrow and short-term
For this purpose, a case study is carried out with interpretation (Bodlaj & Rojšek, 2014).
twelve companies located in Cali-Colombia, which be- Marketing has been defined as a social process behind
long to the manufacturing sector, have more than ten an exchange of products that creates value for others
years of creation, and between 50 and 200 employees. It (Kotler & Armstrong, 2017), and more recently, Ayele
was also considered that the companies own recogniz- and Barabadi (2019) define it as the process of identify-
ed brands in the market. Only eight companies were ing and satisfying customer needs while meeting the
included in this study because it was possible to obtain firm's profitability expectations. The role that marketing
information about all the studied variables. plays in organizations is key, both for positioning and by
This research provides valuable insights into the its impact on financial performance (Cacciolatti & Lee,
marketing behavior and practices of SMEs. Further- 2016). Since SMEs need to adapt to a competitive and
more, it confirms that SME management is fundamen- dynamic environment constantly, they have to develop
tally different from large firms without being more or marketing capabilities and adopt strategies to stay in the
less successful. market and grow. A significant body of work has focused
This article consists of six sections. The second on marketing in SMEs (Miles, Gilmore, Harrigan, Lewis,
section presents the literature review and highlights & Sethna, 2015), and studies have found support for a
some basic concepts about marketing in SMEs. The positive relationship between marketing in SMEs and
third section outlines the research methodology. The performance (Bocconcelli, Cioppi, Fortezza, Francioni,
fourth section focuses on the individual case analysis. Pagano, Savelli, & Splendiani, 2018).
The fifth section develops a cross-analysis of the cases
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The resource base-view theory claims firms’ com- Okoroafo, 2011) and improving quality perception and
petitive advantage results from the conjunction of their confidence among buyers in their purchase decisions
resources and capabilities (Barney, 1991). Therefore, (Leek & Christodoulides, 2012).
the latter are the critical ingredient in a company to
coordinate and exploit resources (Grant, 1991). Teece, 2.2 Segmentation
Pisano, & Shuen (1997) consider different levels of capa-
bilities: organizational capabilities, which combine the Customer segmentation is referred to the process
resources with routines that facilitate the generation of that divides large, heterogeneous markets into smaller
value in the company; and dynamic capabilities, which segments that can be more effectively reached with pro-
allow the reconfiguration of resources and routines ducts and services consistent with their unique needs
according to environmental changes. Hence, dynamic (Kotler & Armstrong, 2017). This capability — which
ones result from the combination of resources and in- enables firms to identify potential consumers and offer
ternal capabilities, providing companies with the ability the required products and services (Setia, Venkatesh,
to implement new strategies to adapt to changing market & Joglekar, 2013) through differentiated marketing
conditions (Makkonen, Pohjola, Olkkonen, & Koponen, strategies (Valeriu, Tudor, & Andrei, 2011) — is key to
2014; Kachouie et al., 2018). achieving success. In addition, by reaching customers
Dynamic marketing capabilities enable to detect the more effectively, the company will be able to retain them,
market and link with partners (Mu, 2015); to connect and capture new markets, differentiate itself from other
collaborate with customers (Verhoef, Leeflang, Reiner, competitors, and gain a foothold in the market.
Natter, Baker, Grinstein, Gustafsson, & Saunders, 2011);
to develop new products and processes, and to enter 2.3 Clients
new markets (Um & Kim, 2018; Joensuu-Salo, Sorama,
Viljamaa, & Varamäki, 2018) through of strategies of Customer knowledge has been considered crucial
product, price, communication, distribution, and inno- to enhancing the company's competitiveness (Masnita,
vation that generate value for the company and lead to Yakub, Nugraha, & Riorini, 2019) since they are the
achieving competitiveness (Cao et al., 2019). holders and contributors of new ideas and knowledge
Different approaches are used in the operationaliza- (Chaithanapat, Punnakitikashem, Khin, & Rakthin, 2022)
tion of marketing. Thus, McCarthy (1960) defines product, and influence their ability to sense, evaluate, and design
price, place, and communication as the main variables new products that satisfy the consumer needs (Zulu-
to consider. Dolan (1997) adds the variables of clients, Chisanga, Boso, Adeola, & Oghazi, 2016). The close contact
firms, competitors, collaborators, and context. Ayele and with their customers provides companies with informa-
Barabadi (2019) argue that marketing involves research tion and new ideas that could improve the innovation
and tactical operations and focuses on segmentation, (Chaithanapat et al., 2022), makes a successful process
positioning, targeting, and a competitive environment. of production (Imran, Hamid, Aziz, & Ul Hameed, 2019),
Finally, Falahat, Ramayah, Soto-Acosta, and Lee (2020) allows building trust, gaining their commitment (Kajalo
consider product, price, communication, place, target & Lindblom, 2015), and collaborate with them (Verhoef et
market, planning, partners, presentation, and passion. al., 2011).
This study will analyze the dynamic marketing capa-
bilities related to positioning, segmentation, clients, 2.4 Product
product, price, placement, communication, and innova-
tion which will be explained below. Product development capabilities refer to a company’s
ability to manage and develop products and services
2.1 Positioning to meet consumer’s needs (Tan & Sousa, 2015). When
companies deliver new differentiated products with
According to (Kotler & Armstrong, 2017), positioning unique characteristics to the market, they can ensure
is the act of designing the offerings so that they occupy their success (Hanaysha, Al-Shaikh, Joghee, & Alzoubi,
a place in the customers’ minds and are preferred by 2022) and can improve the competitive advantage of the
them. Therefore, the positioning strategies represent company (Bodlaj & Cater, 2022; Bocconcelli et al., 2018). In
the underlying processes that a firm must develop to this sense, products that are considerably different from
achieve a particular advantage in the market (Teece et that of competitors offer more significant opportunities to
al., 1997). Firms compete in several dimensions, such as companies (Nagle & Müller, 2018).
innovation, quality, value, and service, and their market-
ing capabilities enable them to achieve a competitive 2.5 Price
advantage (Hassan & Craft, 2012). Thus, when a firm has
high market positioning, its brand differentiates itself Pricing policy is of great importance for SMEs since,
from its competitors leading to high consumer loyalty out of all the marketing variables, it is the one that is
and consumer-derived brand equity (Gammoh, Koh, & directly related to the firm's revenue. The ability of a com-
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pany to set its prices, considering costs, competition, and Innovation capability is related to product design
customers, will allow it to gain a competitive advantage and packaging changes, initiatives to raise consumer
(Hofer, Niehoff-Hoeckner, & Totzek, 2019) by offering the knowledge and awareness of products and enhance
market better value for money. Hence, an appropriate communications, design distribution channels, and
pricing strategy conduces firms to have a unique product define pricing methods (OECD, 2005).
position in the market (Tan & Sousa, 2015; Bodlaj & Firms compete for clients with other companies, and
Cater, 2022). Companies must implement processes to innovation plays a critical role in gaining a market posi-
organize their cost structure and define pricing policies. tion and improving performance (Bocconcelli et al., 2018).
Authors such as Franco-Ángel and Urbano (2016) find Therefore, their ability to develop innovative solutions and
that SMEs are aware of the importance of this marketing marketing innovation can be regarded as a valuable firm
ability for its sustainability in the market. resource (Hanaysha et al., 2022).

2.6 Distribution 3. Methodology

Distribution systems connect the producers with In recent years, the use of qualitative research has
the customers, act as channels for the movement of been increasing, given its usefulness for gaining in-
goods, and perform different functions such as sales, depth insights into processes and behaviors presented
communication, demand monitoring, market survey, and by companies and their founders, managers, and exe-
collecting customer feedback for the producers (Nasiri, cutives. Associated with qualitative research are case
Ghaffari, & Davoudpour, 2015). Therefore, the ability to studies, which allow a specific situation to be studied in
build, develop and maintain a strong distribution network greater depth and detail (Freeman & Cavusgil, 2007; Yin,
is a key factor for the firm success (Udokporo, Anosike, 2009).
Lim, Nadeem, Garza-Reyes, & Ogbuka, 2020). Kumar, Therefore, qualitative research is carried out in this
Sharma, Shah, and Rajan (2013) suggest that distribu- study, consisting of a multiple case study of 12 Colom-
tion network design and management lead to customer bian SMEs located in the city of Cali, belonging to the
loyalty. Kumar, Sunder, and Sharma (2015) show that a manufacturing sector, given the opportunity to generate
successful distribution process positively influences firm results that allow comparisons to be made (Yin, 2009).
performance. The companies were selected intentionally to
guarantee the desired results in this study. Selected
2.7 Communication companies were located in the same city, established
for over ten years, had between 50 and 200 employees,
Marketing communication is the company's ability and were easily accessible for interviews. Since it was
to manage its marketing plan (Pham, Monkhouse, impossible to obtain information about all variables in
& Barnes, 2017). Companies incorporate different the 12 companies, the study only included 8 of them.
marketing abilities, resources, and knowledge to com- To guarantee the confidentiality requested by the
municate themselves with their clients (Valos, Ma- companies, they will hereafter be referred to as Com-
plestone, Polonsky, & Ewing, 2017; Keshari, 2021) and pany A, B, C, D, E, F, G, and H.
to persuade them to acquire their products and services For data collection, semi-structured in-depth inter-
to contribute the profit (Nugraha & Hakimah, 2019), thus views were conducted, considering that they are one of
enhancing the performance of the company. Therefore, the most suitable tools for mapping individual behavior
the role of market communication is essential in building (Berg & Lune, 2012). To counteract the subjectivity of
relationships with clients (Masnita et al., 2019) and opinion (King, 1994), two people in each company were
maintaining their loyalty. interviewed including the founder — who in the eight
selected SMEs serves as general manager — and the
2.8 Innovation manager or person in charge of marketing and sales
activities. In addition, to complement the evidence with
Innovation capabilities are defined as the creation other sources (Yin, 2009), documentation from the com-
or improvement of products, processes, management panies, information from their websites and social media
systems, or new ways of selling new or existing products were used. Interviews were conducted in person by the
(Maldonado-Guzmán, Garza-Reyes, Pinzón-Castro, & authors and recorded. Two visits were made to each
Kumar, 2019). These capabilities are considered a key company, each lasting three hours.
element in the enterprises’ competitiveness (Hanaysha The interviews were analyzed, and the verbatims
et al., 2022), especially for SMEs (Aksoy, 2017), since they were interpreted, considering the audio recordings and
increase knowledge and enable the firm to be success- the notes taken by the interviewers. To seek convergence
ful (Ioanid, Deselnicu, & Militaru, 2018). between the different pieces of evidence, the information
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was triangulated by comparing the interviews conducted Table 1. General information on companies.
in each company (Yin, 2009). When the results did not Enter- Age Employ- Economic Activity
coincide, the company was asked for an explanation and prise (years) ees
the necessary adjustments were made. To obtain reliable A 40 150 Production and commercialization of
fast food
measures with the method, the same protocol was used
B 36 120 Production and commercialization of
for all interviews. processed meats
C 37 180 Production and commercialization of
4. Case studies nuts
D 20 96 Production and commercialization of
The information obtained from each company was macadamia nuts
analyzed separately, considering the variables studied. E 55 148 Production and commercialization of tea
Table 1 presents general information on companies, F 20 65 Production and commercialization of
women's shoes
such as their age, number of employees, and economic
G 17 56 Production and commercialization of
activity. leather goods
Table 2 presents the evidence obtained from H 25 120 Production and commercialization of
Companies A, B, C, and D. And Table 3 shows those packaging.
obtained from Companies E, F, G, and H. Source: own elaboration.

Table 2. Individual analysis of each case.

Variables Enterprise A Enterprise B Enterprise C Enterprise D
Structure Has a structured commercial Has a structured commercial Has a structured commercial area. Has a structured and
of the area. area. formalized marketing and sales
marketing area.
area Has a head for marketing and Does not have a head for Does not have a head for Has a head for marketing and
sales marketing and sales. marketing and sales. sales.
Has a strategic marketing plan Does not have a strategic Does not have a strategic Has a strategic marketing plan.
marketing plan. marketing plan
Positioning Knows its market share and Knows its market share but Knows its market share but Knows its market share and
profitability by segment. does not know its profitability does not know its profitability by profitability by segment.
by segment. segment.
Has information on its national Has information on its national Has information on its national and Has information on its national
competitors and partially on its and international competitors. international competitors competitors and partially on its
international ones. international ones.
It does not have a research It does not have a research It does not have a research It does not have a research
system to identify and meet system to identify and meet system to identify and meet new system to identify and meet new
new customers and markets. new customers and markets. customers and markets. customers and markets.
Knows the perception that Does not know the perception Does not know the perception that Knows the perception that
customers have of their that customers have of their customers have of their products. customers have of their
products. products. products.
Its competitiveness is based on Its competitiveness is based Its competitiveness is based on low Its competitiveness is based
low prices and product quality. on product quality and prices and product quality. on product quality and
differentiation. differentiation.
Segmenta- Has a defined and structured Has a defined and structured Does not have a defined and Has a defined and structured
tion customer segmentation customer segmentation structured customer segmentation customer segmentation
process. process. process. process.
Has marketing strategies for Does not have marketing Does not have marketing Has marketing strategies for
each segment. strategies for each segment. strategies for each segment. each segment.
Clients Recognizes the importance of Recognizes the importance of Recognizes the importance of Recognizes the importance of
customers and is concerned customers and is concerned customers and is concerned about customers and is concerned
about having excellent about having excellent having excellent communication about having excellent
communication with them. communication with them. with them. communication with them.
Has a lot of information from Has a lot of information from Has a lot of information from their Has a lot of information from
their customers and often uses their customers and often uses customers and often uses it to their customers and often
it to make decisions; however, it to make decisions; however, it make decisions; however, it is not uses it to make decisions.
it is not systematized. is not systematized. systematized. Information is systematized.
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Table 2. Individual analysis of each case (Continuation).

Product Has a department that Has a department that Has a department that is Has a department that
is responsible for the is responsible for the responsible for the development of is responsible for the
development of new products. development of new products. new products. development of new products.
Packaging design is done by Packaging design is done by Packaging design is done by an Packaging design is done by
an external marketing and an external marketing and external marketing and advertising an external marketing and
advertising firm. advertising firm. firm. advertising firm.
The differentiating factors of The differentiating factors of its The differentiating factors of their The differentiating factor of its
its products are the taste and products are the quality of the products are the contribution they products is the quality.
quality. raw materials and the taste. make to the nutrition of customers
and the packaging.
Products are mainly in the Products are mainly in the Products are mainly in the growth Products are mainly in the
growth stage. introduction and growth stages. and maturity stages. maturity stage.
Price Defines the prices considering Defines the prices considering Defines the prices considering the Defines the prices considering
the costs, the desired the costs, the desired costs, the desired profitability, and the costs, the desired
profitability, and the market. profitability, and the market. the market. profitability, and the market.
Has a parity prices strategy. Has a parity prices strategy. Has a low prices strategy. It seeks Has a high prices strategy. It
It seeks to maintain and It seeks to maintain and to maintain and increase market pursues the achievement of
increase market share. increase market share. share. financial goals.
Distribution Has its sales points and Has its sales points and Distributes its products through Has their sales points and
franchises. also distributes its products intermediaries. also distributes its products
through intermediaries. through intermediaries.
The determining factor for The determining factors for The determining factors for The determining factors for
selecting the distribution selecting the distribution selecting the distribution network selecting the distribution
network is geographical. network are geographical and are geographical and logistical. network are geographical and
logistical. logistical.
Bases its relations with Bases its relations with Bases its relations with the Bases its relations with
the channel on trust and the channel on trust and channel on trust and closeness. the channel on trust and
closeness. closeness. closeness.
Uses information technology Uses information technology to Uses information technology
to manage the channel. manage the channel. to manage the channel.
Communica- Has defined and structured Has defined and structured Does not have defined and Has defined and structured
tion a communication plan for its a communication plan for its structured a communication plan a communication plan for its
products. products. for its products. products.
Uses the following Uses the following Uses the following Uses the following
communication strategies: communication strategies: communication strategies: sales communication strategies:
Advertising, sales promotion, Advertising, sales promotion, promotion, personal selling, Advertising, sales promotion,
public relations, personal personal selling, direct public relations, and word-of- personal selling, direct
selling, direct marketing, marketing, public relations, mouth. marketing, public relations,
social media, and word-of- social media, and word-of- and word-of-mouth.
mouth. mouth.
Analyzes the profitability Analyzes the profitability Does not analyze the profitability Analyzes the profitability
of their communication of their communication of their communication of their communication
strategies. strategies. strategies. strategies.
A media agency supports It is supported by a media It is supported by a media agency It is supported by a media
the implementation of the agency for the implementation for the implementation of the agency for the implementation
strategy. of the strategy. strategy. of the strategy.
Innovation Does not have a structured Does not have a structured Does not have a structured Does not have a structured
research and development research and development research and development area. research and development
area. area. area.
Rates its capacity for Rates its capacity for Rates its capacity for innovation at Rates its capacity for
innovation at 3.5 on a scale innovation at 3.5 on a scale of 4.0 on a scale of 1 to 5. innovation at 5.05 on a scale
of 1 to 5. 1 to 5. of 1 to 5.
Considers market trends and Considers market trends, Considers market trends, Considers market trends and
consumer behavior to develop consumer behavior, and consumer behavior, and consumer behavior to develop
new products. capacity of production to competitors to develop new new products.
develop new products. products.
Launches new products at Launches new products at Launches new products at least Launches new products at
least twice a year. least twice a year. once a year. least twice a year.
Source: own elaboration.
Table 3. Individual analysis of each case.
Variables Enterprise E Enterprise F Enterprise G Enterprise H
Structure of the Has a structured and formalized marketing Does not have a structured and formalized Has a structured commercial area. Has a structured commercial area.
marketing area and sales area. marketing and sales area.
Has a head for marketing and sales. Does not have a head for marketing and sales. Does not have a head for marketing and Does not have a head for marketing
sales. and sales.
Has a strategic marketing plan. Does not have a strategic marketing plan. Does not have a strategic marketing plan. Does not have a strategic marketing
plan.
Positioning Knows its market share and profitability by Knows its market share but does not know its Knows its market share but does not Knows its market share but does not
segment. profitability by segment. know its profitability by segment. know its profitability by segment.

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Has information on its national and Has information on its national competitors. Has information on its national Has information on its national
international competitors. competitors. competitors.
Has a research system to identify and meet Has a research system to identify and meet new Has a research system to identify and It does not have a research system to
new customers and new markets. customers and new markets. meet new customers and new markets. identify and meet new customers and
markets.
Knows the perception that customers have of Knows the perception that customers have of their Knows the perception that customers Knows the perception that customers
their products. products. have of their products. have of their products.
Its competitiveness is based on product Its competitiveness is based on low prices and Its competitiveness is based on product Its competitiveness is based on
quality and differentiation. product quality. quality, low prices, speed of production, product quality and differentiation.
and design.
Segmentation Has a defined and structured customer Has a defined and structured customer Has a defined and structured customer Has a defined and structured
segmentation process. segmentation process. segmentation process. customer segmentation process.
Has marketing strategies for each segment. Does not have marketing strategies for each Does not have marketing strategies for Does not have marketing strategies for
segment. each segment. each segment.
Clients Recognizes the importance of customers Recognizes the importance of customers and is Recognizes the importance of customers Recognizes the importance of
and is concerned about having excellent concerned about having excellent communication and is concerned about having excellent customers and is concerned about
communication with them. with them. communication with them. having excellent communication with
them.
Has a lot of information from their customers Has a lot of information from their customers and Has a lot of information from their Has a lot of information from their
and often uses it to make decisions. often uses it to make decisions; however, it is not customers and often uses it to make customers and often uses it to make
Information is systematized. systematized. decisions. Information is systematized. decisions. Information is systematized.
Product Has a department that is responsible for the Has a department that is responsible for the Has a department that is responsible for Has a department that is responsible
development of new products. development of new products. the development of new products. for the development of new products.
Packaging design is done by an external Packaging design is done by an external marketing Packaging design is done by an external The company's marketing area carries
marketing and advertising firm. and advertising firm. marketing and advertising firm. out the packaging design.
The differentiating factors of its products are The differentiation factors of its products are the The differentiating factors of its products The differentiating factors of
quality and variety. quality of the raw material and the manufacturing. are the speed of manufacturing, the its products are quality and
price, and the design. differentiation.
Products are mainly in the growth and Products are mainly in the introduction stage. Products are mainly in the growth and Products are mainly in the maturity
maturity stage maturity stage. stage.

499
 500
Table 3. Individual analysis of each case (Continuation).
Price Defines the prices considering the costs, the Defines the prices considering the costs, the To define the prices, the costs, the To define the prices, the costs, the
desired profitability, and the market. desired profitability, and the market. desired profitability, and the market are desired profitability, and the market
considered. are considered.
Has a parity price strategy. Has a low prices strategy. Has a low prices strategy. Has a high prices strategy.
The price strategy seeks to maintain and The price strategy seeks to maintain and increase The price strategy seeks to maintain and The price strategy pursues the
increase market share. market share. increase market share. achievement of financial goals.
Distribution Distributes its products through Has their sales points and also distributes its Has their sales points. Has their sales points.
intermediaries. products through intermediaries.

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The determining factors for selecting the The determining factors for selecting the The location of the sales points is defined Sales are made in a personalized way
distribution network are logistical. distribution network are logistical. according to the geographical location of through commercial advisors.
its customers.
Bases its relations with the channel on trust Bases its relations with the channel on trust and
and closeness. closeness.
Uses information technology to manage the Uses information technology to manage the Uses information technology to manage Uses information technology to
channel. channel. the channel. manage the channel.
Communica- Has defined and structured a communication Does not have defined and structured a Does not have defined and structured a Do not have defined and structured a
tion plan for its products. communication plan for its products. communication plan for its products. communication plan for its products.
Uses the following communication strategies: Uses the following communication strategies: sales Uses the following communication Uses the following communication
Advertising, sales promotion, personal promotion, personal selling, direct marketing, and strategies: sales promotion, personal strategies: advertising and word-of-
selling, direct marketing, public relations, and word-of-mouth. selling, direct marketing, social media, mouth.
word-of-mouth. and word-of-mouth.
Analyzes the profitability of their Analyzes the profitability of their communication Analyzes the profitability of their Does not analyze the profitability of
communication strategies. strategies. communication strategies. their communication strategies.
It is supported by a media agency for the It is supported by a media agency for the It is not supported by a media agency for It is not supported by a media agency
implementation of the strategy. implementation of the strategy. the implementation of the strategy. for the implementation of the strategy.
Innovation Does not have a structured research and Does not have a structured research and Does not have a structured research and Does not have a structured research
development area. development area. development area. and development area.
Rates its capacity for innovation at 4.0 on a Rates its capacity for innovation at 3.5 on a scale of Rates its capacity for innovation at 3.5 on Rates its capacity for innovation at 4.0
scale of 1 to 5. 1 to 5. a scale of 1 to 5. on a scale of 1 to 5.
Considers market trends, consumer behavior, Considers market trends and availability of raw Considers market trends and consumer Considers consumer needs to develop
and raw material availability to develop new materials to develop new products. behavior to develop new products. new products.
products.
Launches new products at least twice a year. Launches new products at least three times a year. Launches new products monthly. Launches new products frequently.
Source: own elaboration.
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501

5. Cross-case analysis and discussion although they do not have a formal system for managing
customer information and market research is informal
Once the individual analysis of each company has been and intuitive, it is evident that they are very close to their
conducted, we move on to this section, which assembles a customers, and these are very important to them. Kajalo
comparative analysis of the results obtained in this study, and Lindblom (2015) evidence the closeness that SMEs
considering the main dimensions analyzed. The empirical have with their customers and confirm that this increases
evidence obtained shows the following results for each their competitiveness.
variable. According to the interviews:

5.1 Structure of the marketing area “Our market positioning is due to product quality.
This is the most important for us. Clients must be
Only two of the companies interviewed have a structure satisfied.” (Company H manager)
in the marketing area; the other does not have this area “Customers know that they always find a wide variety
structured. As previously evidenced by Esposito (2013), of products in our stores that are the latest fashion
the area is not created, and they do not have a strategic trend and hold fair prices.” (Company F manager)
marketing plan. There is a preference for formalizing
the commercial area rather than the marketing area, 5.3 Segmentation
which has been confirmed by Lobontiu & Lobontiu
(2014). Companies A, B, C, G, and H have constructed Eight companies have a structured market seg-
the commercial area, and from there, they organized mentation process and recognize the importance of
marketing and sales activities, which are limited to segmentation for their performance. This is supported by
the availability of their resources (Franco et al., 2014). Kotler and Armstrog (2017), who state that a better iden-
Despite not having a formalized marketing area, these tification and understanding of customers can ensure
companies carry out marketing activities and recognize greater financial efficiency. However, only three of these
the importance of these activities for their excellent companies have marketing strategies for each segment
performance. which means a problem for their positioning. It is evident
In all eight companies, the founder is the general that different customer groups require different marketing
manager and is also in charge of the marketing area and strategies (Valeriu et al., 2011). Despite this, companies
makes all decisions, which is supported by Bretcu (2014) claim to know their customers well and address their
and Franco-Ángel and Urbano (2016) in their studies. marketing activities to them.
According to the interviews: According to the interviews:

“The commercial area is in charge of implementing the “We know who our clients are and focused the
strategies that we define in the management area... marketing strategy on them.” (Company B manager)
these vary according to the behavior of the clients and “We reach all our clients despite not having enough
can be decided at any time.” (Company B manager) resources to do differentiated marketing.” (Company
“The heart of my company is the sales force. They C manager)
do everything... they are in charge of understanding
and satisfying customers, and they vouch for the 5.4 Clients
revenues.” (Company G manager)
All companies recognize the importance of clients and
5.2 Positioning are concerned about having excellent communication with
them, following up with them, and being very attentive to
All companies know their market share, but five of customer satisfaction surveys, complaints, and claims.
these do not know the profitability of the segments. In Also, all companies agree that they are very close to their
contrast, all eight companies have a good knowledge of clients and strive to develop long-term relationships with
their competitors. Furthermore, they state that they are them, as found by Kajalo and Lindblom (2015). They argue
positioned in the market because their customers re- that this orientation toward their customers has positively
cognize them and often prefer them, which is also con- impacted firm performance, in line with the findings of
firmed in research by Franco-Ángel and Urbano (2016). Hassen and Singh (2020), Kajalo and Lindblom (2015), and
According to the interviews: Zulu-Chisanga et al. (2016), who argue that understand-
ing customers generates market differentiation and
“We know the position of our competitors and know competitive advantage. Besides, these companies claim
why the clients prefer us.” (Company A manager). to have a lot of information from their customers and
often use it to make decisions. Nevertheless, only four
In general, competitiveness is based on product companies have systematized this information.
quality. Three companies compete with low prices; According to the interviews:
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502

“For us, our clients are the company's heart. They are Another three maintain a low prices strategy and argue
our reason for existing, and we want our customers to that they manage to remain in the market by lowering
always be with us.” (Company D manager) their costs as much as possible. And the other two su-
“In our company, customer service is our banner. pport a high prices strategy given the differentiation of
From the doorman to the manager, we are ready to their products.
welcome customers. Customers are our treasure.” In terms of their pricing objectives, six companies
(Company H manager) seek to maintain and increase market share, while two
“We have a lot of information from our clients and companies pursue the achievement of their financial
often use it to make decisions, but do not have an goals. The clarity of SMEs in their financial objectives has
information systematization process.” (Company B been confirmed by Franco-Ángel and Urbano (2016), who
manager) found that although the processes in these companies are
not very structured, there is a great effort to define and
These companies determine the loyalty of their maintain a financial strategy that allows them to achieve
customers based on the volume of their orders and re- sustainability.
purchase and do not have defined indicators to measure According to the interviews:
customer loyalty.
According to the interviews: “We track the prices of our strongest competitors and
adjust our prices to theirs.” (Company C manager)
“We don't use indicators to know if customers are “Having competitive prices in the market is our main
loyal, but we have knowledge about this.... If they concern. We don’t want to lose our customers. So, if
come back to buy from us, then clearly, we have to the competition lowers its prices, we also do it, always
retain them.” (Company C manager) looking to lower our costs so as not to affect the
“If customers are satisfied, they come back and keep profitability.” (Company F manager)
buying. They bring other new customers. We are more "Our products are differentiated in the market, and
interested in new customers because those who are our customers are not so price sensitive. They are
already customers are easily maintained.” (Company more interested in the quality and performance of the
G manager) products.” (Company H manager)

5.5 Product 5.7 Distribution

All the interviewed companies are producers and Four companies distribute their products directly to
marketers. Products differentiate mainly by quality. All customers at their sales points and use intermediaries.
firms care about satisfying the needs of their consumers. Two companies sell their products only at their sales
Additionally, the companies ensure that they constantly points. And other two use only intermediaries.
obtain information on the performance of their products in Most companies use geographical and logistical
the market through satisfaction surveys and personalized criteria to select the distribution channel. Their main
meetings with their clients. This information allows them interest is that the channel allows the products to reach
to improve their value offer, maintain their position in all their customers in the shortest time possible and
the market, and develop new products (Um & Kim, 2018; maintain the quality. In addition, companies argue that
Joensuu-Salo et al., 2018). They agree that differentiation they are very interested in maintaining good relation-
in their products has given them an advantage over their ships with members of the distribution channel — based
competitors. As evidenced by Bodlaj and Cater (2022) and on trust and closeness — and to recognize them as a
Nagle and Müller (2018). strategic partner. In that sense, Kumar, Sharma, Shah,
According to the interviews: and Rajan (2013) suggest that distribution network design
and management lead to customer loyalty. Kumar, Sunder,
“We want our products to meet customers’ needs and and Sharma (2015) show that a successful distribution
go beyond this. We want customers to have a wonderful process positively influences firm performance.
experience with them.” (Company E manager) According to the interviews:
“Our products are our value offer to customers, and
our mandate is to comply and not fail our customers. “We manage the channel relations through constant
It is sacred to us.” (Company C manager) visits to their members, this proximity has allowed
us to develop relationships of trust with them and
5.6 Price increase their loyalty in the long term.” (Company D
manager)
All eight firms have a pricing strategy and recognize “The distribution channel is our right hand. Thanks
its importance in competitiveness, as discussed by Hofer to them, we can have greater geographical coverage,
et al. (2019). Three firms have a price parity strategy greater customer satisfaction, and a bigger sales
and compare themselves to their strongest competitors. volume.” (Company A manager)
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503

5.8 Communication “Although we do not have many resources, we are

always concerned about innovations in our products
Only four companies have a structured communication to respond to the needs of our customers.” (Company
plan and a defined budget for these activities. However, G manager).
all companies state that there are always resources to
carry out the necessary actions to achieve the company's On the other hand, there is no structured research
objectives. and development area nor an established budget in the
All companies consider direct communication with studied companies. However, the interviewees state that
their customers one of their most significant advantages, the companies pursue differentiation in the market. For
as it allows them to build better relationships. This finding this purpose, they resort to innovation, because they
is confirmed by Masnita et al. (2019). These companies consider it an important issue for competitiveness, which
see word-of-mouth as a communication and prestige tool, is confirmed by Aksoy (2017). Therefore, the innovation
as evidenced by Keshari (2021). strategy is present, and when resources are required,
According to the interviews: they are allocated as long as the investment generates
opportunities.
“We are in permanent communication with clients According to the interviews:
and strive to maintain a good image with them,
transmitting transparency in the way we do business “When the time comes to develop a new product,
and security in the quality of our products.” (Company we allocate the budget. Of course, this is done when
A manager) we are sure that the product has a lot of potential.”
“The customers themselves are the ones who (Company D manager)
recommend the products to their acquaintances.
So quality is vital to us. My family and I use the new In general, these companies develop their products
products before they are launched, so we check their seeking to satisfy the needs of their customers and
quality and comfort.” (Company H manager) respond to market trends, as evidenced by Hassen and
Singh (2020).
The most used strategies for these companies are
advertising, sales promotion, public relations, personal “We are always innovating because we serve our
selling, and direct marketing. Only three companies use customers in a personalized way and develop products
social media. Most companies are supported by a media to meet their needs.” (Company H manager)
agency to implement their communication strategy.
In general, the indicator of return on marketing 6. Limitations and suggestions for further research
investment is the volume of sales achieved, and the
communication strategy is approved by the general The limitations of this study include the size of the
manager and his/her management team. sample and its structure. Further research could in-
According to the interviews: clude a larger sample and analysis of the impact of the
dynamic marketing capabilities on the SMEs' financial
“We know that investment in marketing works when performance. On the other hand, it could be relevant to
sales increase. That's our indicator.” (Company E understand how SMEs develop these capabilities and
manager) how they could improve them. The study also calls for
"The way to know if the communication strategy is qualitative research on dynamic marketing capabilities
working is throughout sales. If the product doesn't adopted by successful SMEs to understand their behavior
sell, we stop investing immediately.” (Company E and best marketing practices, which can be transferred to
manager) other firms for improvement.

5.9 Innovation 7. Conclusions and practical implications

The companies interviewed relate innovation to the This study shows that in contrast to large companies,
development of new products and state that launching SMEs use marketing in a casual and reactive way, paying
new products at least once a year is essential for little attention to structured and formal plans.
competitiveness. This finding agrees with the studies The results show that founder-managers of SMEs are in
of Hanaysha et al. (2022) and Ioanid et al. (2018), who charge of defining the marketing strategy, which is driven
found that product innovation is important for a firm’s by their perception of the market. This strategy is based
sustainability. Hence, these companies consider them- on the information obtained from their customers through
selves innovative as they constantly develop new pro- their proximity to them. These companies emphasize
ducts, in contrast to the study of Ayele and Barabadi customer satisfaction, their flexibility in serving them, and
(2019), who find a low tendency towards innovation in SMEs. their willingness to provide quality products and excellent
According to the interviews: service as key elements in gaining customer loyalty.
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