Positioning in SMEs: entrepreneurs`perceptions and strategies.

What is it about?

This paper applies the concept of positioning to SME companies to explore how SME entrepreneurs understand and approach the positioning of their company, and what differences exist compared to large companies and brands. Using a qualitative research approach, the study is based on focus groups involving thirteen SME entrepreneurs. The data were analyzed using a qualitative structuring content analysis, which resulted in a newly developed and empirically based typology of SME positioning strategies. The results indicate that SME entrepreneurs view positioning as highly relevant but differ from larger companies in terms of market and brand orientation. Building on the interviews, an empirical matrix of four positioning strategies was developed which SME entrepreneurs typically employ: Specialization, Differentiation, Conviction, and Opposition. Overall, the present findings contribute to a better understanding of SME entrepreneurs' positioning strategies as important building blocks for market and brand success. The new positioning typology provides a conceptual contribution for further research in the marketing/entrepreneurship interface. Based on the developed positioning typology, we propose a two-step approach for SME entrepreneurs. First: Gaining clarity on the basic positioning dimensions. Second: Exploring four strategic fields of action.

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Photo by Kristian Egelund on Unsplash

Photo by Kristian Egelund on Unsplash

Why is it important?

The concept of positioning is fundamental to how a company approaches and succeeds in a market. It is seen as highly relevant in an increasingly competitive landscape of saturated markets and an “over-communicated society” characterized by low attention span (Ries and Trout, 2001, p. 6). As the concept of positioning encompasses strategy, marketing, and branding elements, there are different definitions and theoretical approaches (Urde and Koch, 2014, p. 479). Despite a growing body of literature (e.g., Saqib, 2020), research on positioning has focused mainly on large companies and brands. Based on a systematic review of the SME marketing literature, Bocconcelli et al. (2018) noted that “[the] recent literature lacks contributions dealing with segmentation and positioning strategies” (p. 243), and there is a clear need for more research on small and medium-sized enterprises (SMEs) in light of their distinctive character. Positioning and building brands “is a challenge for small business with limited resources and budgets” (Kotler and Keller, 2016, p. 314) and lack of marketing personnel and skills (Gruber, 2004). The “sometimes quite sophisticated methodology” (Hooley, 2020, p. 198) of segmentation, targeting and positioning as presented in the marketing literature does not sufficiently address this fact. Especially when resources are limited, entrepreneurs need to focus and find new ways to markets, Kotler and Keller state, providing some recommendations for SME branding, but without an in-depth and study-based analysis of the positioning problem in SMEs (Kotler and Keller, 2016, p. 315).

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