SME and Entrepreneurial Theory: Best Practices for Marketing in the Hospitality Industry

This presentation discusses SME and entrepreneurial theory, the characteristics, importance, advantages, and disadvantages of SMEs. It also explores best practices for marketing in the hospitality industry, including word-of-mouth marketing and telemarketing.

SME and
entrepreneurial
theory

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Table of Content
• Introduction
• Explanation of SME
• Characteristics of SME
• Importance of SME
• Advantage of SME
• Disadvantage of SME
• Best practice methods and techniques of entrepreneurial
marketing in chosen organisations
• Word of mouth to mouth marketing

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Introduction
• Small and medium sized
enterprises are those
businesses which operate
with few number of
employees cover less
geographical area
(Cusmano, 2018).
• They are the one who
provide local products to
their local customers and
they contribute an economy
to grow well.

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Explanation of SME
• In context of UK, SME are those organisations which are
having employees below than 250 and they have less than
£25 million turnover. It also includes having gross asset
less than £12.5 million (What is a small business or SME,
2020).
• According to a research, it is recorded that there are almost
5.94 SMEs business across the UK at the start of 2020.
• SME are those organisations which maintain
employees, revenues and asset below a certain limit.
Every country is having their own definition of SME
and has fixed a certain limit for them which are
different from another country (Gebauer, 2018).

Limited investment- The capital which is required by the entrepreneurs to start their
SME is less due to their small scale operations (Liñán, Paul and Fayolle, 2020).
Labour intensive- SME’s did not require high quality of machinery and tools, they
only require good quality of management and skilled labours to work for the company.
Less number of employees- Due to their small scale of operations, SME requires less
number of employees. Hence, they high fewer employees as compared to large
companies.
Management- Most of the SMEs is managed by a single or few group of individuals.
In context of family business, the head of the family take all managerial decisions for
the business.
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Characteristics of SME

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Importance of SME
• Employment generation- SME help
an economy to grow by generating
various kinds of jobs and opportunities
for those individuals who seek
employment for their survival.
• Promote local products- SME focus
to offer local products to their
customers which is essential to
maintain the culture of an economy.

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Advantages of SME
• Better control over business- Due to
its size the owner can operate their
main operations and have full control
over the business (Saura, 2021). All
decisions are taken by the owner.
• Better communication- SME are
having better communication due to
less number of employees and there are
less chances of miscommunication due
to small communication chain.

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Disadvantages of SME
• Less use of technology- Manpower is
use more in SME as compared to
technology due to less investment.
Machinery and tools require high
investment which a SME is unable to
manage. Hence, they choose manpower
efforts more than machinery.

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Overview of chosen
organisation

The Hospitality industry is chosen for the report which is one of the
fastest growing industries in UK. Two hotels are chosen whose
description are mentioned below-
Haytor Hotel, Torquay- This is one of the oldest hotels in UK which
is founded in the year 1835 and it is headquartered in Devon,
England, UK.
The Marstan Hotel, Torquay- It is also SME hotel with employees
less than 25 and earns revenue of nearly 5 million per year (Marstan
Hotel, 2022). They are having well developed rooms for their
travellers and have swimming pools inside the building as well as
outside.

It is essential for these hotels to maintain their
marketing activities appropriately and achieve their aim
and objectives with the help of few effective practices
of marketing.
In context of the above two hotels, they are focused to
promote their business through social media marketing
by uploading the pictures and features of their
destinations to gain the attention of travellers.
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Best practice methods and techniques of
entrepreneurial marketing in chosen
organisations

Word of mouth to mouth marketing
This is the marketing procedure where a company is required to
satisfy their customers appropriately and further work is done by
customers themselves by communicating the benefits of products and
services to their friends, family members and the close ones whom
they know and communicate (Li and et. al., 2018).
This will help to gain the attention of more customers and it is the
tendency of a customers that whatever they heard in market, they will
get attracted to that specific services and product and try them at once
to gain same experience which they heard by their known one.

1. It helps to build a good relationship with customers because Haytor hotel gets
personal with their customers and identify their expectation to fulfil them. This not
only influence customer to spread good reviews about the hotel but it also helps to
create a trust and good relationship between customers and hotel.
2. Another advantage of word of mouth is that it cost lesser than any other
marketing method (Husniah, Lanz and Supriatna, 2019). In actual it does not cost
anything for the business, they re only required to serve best services to their
customers who paid for the services and further work is done by their customers
themselves.
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Advantages of word of mouth marketing

1. Haytor hotel cannot control what people say about them. This
is the choice of customers that whether they want to express their
good experience or not with their relatives.
2. Results are always unpredictable because it depends on the
nature and behaviour of customers whether they share their
reviews or not. In case they share only bad reviews about the
hotel than it may decline number of customers for them.
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Disadvantages of word of mouth marketing

1. They are required to engage more with
customers who review their services on their
social media sites.
2. They must manage their social media
accounts appropriately and share their good
reviews of customers to gain more customers.
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Some effective word of mouth marketing
strategies for Haytor hotel

Telemarketing
It is the marketing method and technique where companies promote
their goods and service over telephone by communicating the
features appropriately (Rahayu, Rasid and Tannady, 2018).
This technique is used by Marstan hotel, their front office
department convey about the services and booking discounts through
telephone to their regular customers.
They record the contact number of their guests when they first
arrive the hotel and they continue to communicate with them through
telecommunication medium.
Here, they send computer generated mails and messages to their
customers to aware them.

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Advantages and Disadvantages of telemarketing
Disadvantages of telemarketing-
•Customers may get irritated with continuous calls from
the hotel at unwanted time.
•Analysing exact customer expectation is difficult
through telephone and by limited time of talk.
Advantages of telemarketing-
• It helps to provide a more interactive and personal sale
services for the hotel.
• It helps to create an immediate rapport with customers
(Ghatasheh and et. al., 2020).

1. It is essential for the hotel to hire skilled and talented employees to
respond calls and manage their telephone activities.
2. Avoid calling customers at night time (Tilka and Johnson, 2018).
3. It is essential that the individual who is appointed for telemarketing for
hotel have all knowledge about the hotel and its services so that he/she will
clear the doubts of their customers immediately.
4. Recording the issues and questions which is asked by their customers is a
good habit for the hotel. This will help them to analyse most commonly
asked questions about which service so that they will improve and further
focus to satisfy their customers with same services.
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Effective strategies for telemarketing

From the above information it is concluded that marketing is one of the most essential
activity for the companies to promote the products and services of company and aware
their customers. SME are those businesses which are having less number of employees
and who earn limited revenue as compared to other big businesses. They main
advantage of SME is that it offers local products to local customers to maintain the
local culture. SME faces issue of funding because banks also hesitate to provide them
loans easily due to their durability. Most of the SME did not last long for many years.
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Conclusion

References
•Cusmano, L., 2018. SME and Entrepreneurship Financing: The Role of Credit Guarantee Schemes and Mutual Guarantee
Societies in supporting finance for small and medium-sized enterprises.
•Gebauer, J., 2018. Towards growth-independent and post-growth-oriented entrepreneurship in the SME sector. Management
Revue, 29(3), pp.230-256.
•Ghatasheh, N. and et. al., 2020. Business analytics in telemarketing: cost-sensitive analysis of bank campaigns using
artificial neural networks. Applied Sciences, 10(7), p.2581.
•Husniah, H., Lanz, A.R. and Supriatna, A.K., 2019, November. The equilibrium solution of word-of-mouth marketing
strategy. In Proceedings of the International Conference on Industrial Engineering and Operations ManagementRiyadh,
Saudi Arabia.
•Li, P. and et. al., 2018. Discount pricing in word-of-mouth marketing: An optimal control approach. Physica A: Statistical
Mechanics and its Applications, 505, pp.512-522

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