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Do Marketers Matter for Entrepreneurs?

Do Marketers Matter for Entrepreneurs?

Stephen J. Anderson, Pradeep Chintagunta, Frank Germann and Naufel Vilcassim

Can marketers help improve the world? While this question may seem vast and unknowable, a new Journal of Marketing study proposes otherwise. Exploring a critical, yet largely unaddressed research question, our team proposes that marketers can help entrepreneurs in emerging markets grow their businesses. And flourishing entrepreneurs in these markets can then improve lives, sustain livelihoods, enhance overall living standards, and strengthen societies.
 
Entrepreneurs are ubiquitous in emerging markets. In 2010, more than 31% of the adult population in Uganda, the setting for our study, was either starting a business or running a business less than four years old. However, many emerging market entrepreneurs struggle to make ends meet and their firms’ growth rates are low, stifling the positive impact they could have on society. As Banerjee and Duflo (2011) assert, the low growth rates seem to result from most businesses being “utterly undifferentiated” and failing to attract customer interest. 
 
Marketing helps firms differentiate by attempting to answer the question, “Why should the customer buy from the firm and not elsewhere?” Thus, we examine whether entrepreneurs in emerging markets can benefit from marketers’ help. 
 
To test marketers’ effect on emerging market entrepreneurs, we conducted a randomized controlled field experiment with 930 Ugandan businesses. The experiment allowed us to examine the impact of a business support intervention in which international professionals from varying functional backgrounds (e.g., marketing, consulting) volunteered time to help small-scale entrepreneurs. Our results show volunteer marketers are effective at helping entrepreneurs grow sales, profits, assets, and employees. Specifically, compared to control firms, the entrepreneurs supported by volunteer marketers grew monthly sales by 51.7% on average, while their monthly profits improved by 35.8%, total assets increased by 31.0%, and paid employees rose by 23.8%. An analysis of interactions between volunteers and entrepreneurs indicates the marketers spent more time on product-related topics than other volunteers during the intervention. Furthermore, analyses indicate the marketers helped the entrepreneurs focus on premium products to differentiate in the marketplace. In line with the study’s process evidence, firms with greater market knowledge or resource availability benefitted significantly more than their peers when matched with volunteer marketers. Because small-scale businesses form the commercial backbone of most emerging markets, their performance and development are critically important. And marketers’ positive impact on the businesses highlights the need for the field’s increased presence in emerging markets.

Given the positive and direct impact marketers can have on growth outcomes, we hope our study will motivate marketing practitioners to work with entrepreneurs and early-stage ventures in emerging markets. Governmental and non-governmental organizations actively serving emerging markets should also benefit from our findings when designing and implementing future business support services. Entrepreneurs should also take note of our findings and solicit marketers’ help. Finally, we hope business schools will incorporate versions of our ‘remote coaching’ intervention into their emerging market programs with a focus on matching entrepreneurs with their marketing students. We also hope multinationals will participate in future remote marketing coaching interventions like ours. In short, we envision multinationals allowing and enabling their interested marketers to spend a few hours a week remotely coaching an emerging market entrepreneur. This endeavor, we believe, could be a win-win for the entrepreneurs and the multinationals: The entrepreneurs’ businesses would likely grow and the multinationals would likely have more satisfied employees, accrue corporate social responsibility-related benefits, and learn about opportunities (and threats) that exist in emerging markets.

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From: Stephen Anderson, Pradeep Chintagunta, Frank Germann, and Naufel Vilcassim, “Do Marketers Matter for Entrepreneurs? Evidence from a Field Experiment in Uganda,” Journal of Marketing.

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Stephen J. Anderson is Assistant Professor of Marketing, University of Texas at Austin, USA.

Pradeep Chintagunta is Joseph T. and Bernice S. Lewis Distinguished Service Professor of Marketing, University of Chicago, USA.

Frank Germann is Associate Professor of Marketing, University of Notre Dame, USA.

Naufel Vilcassim is Head of Department, LSE Vice Dean TRIUM Executive MBA Program, and Professor of Marketing, London School of Economics, UK.