Undergraduate Dissertation

An Investigation into the Relevance of
Guerrilla Marketing
to Small and Medium-sized Enterprises

Benjamin Bach
The University of Lincoln

06th April 2006

Table of Contents

Abstract ... 2

Table of figure ... 5

1. Introduction ... 6

2. Literature Review ... 7

2.1 Marketing Warfare Strategy ... 7

2.2 The Term ‘Guerrilla’ ... 9

2.3 Guerrilla Marketing ... 10
2.3.1 Guerrilla Marketing Benefit ... 11
2.3.2 Guerrilla Marketing Principle ... 12
2.3.3 Non-traditional Guerrilla Advertising Method ... 13
2.3.4 Word-of-mouth Communication ... 14

2.4 SME (Small and Medium-sized Enterprise) ... 15

2.5 Guerrilla Marketing Relevance to SME ... 17
2.5.1 Relevance of E-marketplace Guerrilla Marketing to SME ... 18

2.6 Examples of Guerrilla Campaign ... 20

2.7 Conclusion of Literature Review ... 24

3. Methodology ... 26

3.1 The Research Proce ... 26

3.2 Problem Definition ... 27

3.3 Research Design ... 28
3.3.1 Survey ... 28
3.3.2 Self-administered Questionnaire ... 29
3.3.3 Internet Questionnaire ... 29
3.3.4 Question Design ... 30
3.3.5 Critique ... 31

3.4 Sampling Unit ... 31

3.5 Data Collection ... 32
 

3.6 Data Analysi ... 32

3.7 Limitations of Methodology ... 33

4. Findings and Analysis ... 34

5. Implications of Findings and Analysis ... 39

6. Comparison between Theory and Practice ... 41

7. Conclusion ... 42

8. Further Areas of Research ... 43

9. Reference ... 44

10. Bibliography ... 47

11. Appendix ... 50

1. Introduction

Guerrilla (ge’rilə) marketing; an unconventional way of promotional marketing activities on a low-budget level. This aggressive marketing approach is characterised by creative and legal attacks targeted on competitors in order to maintain or increase awareness and impact to the customer. Guerrilla marketing stands for focusing on conventional goals such as profit or growth, but doing it by using exceptional promotional approaches, like advertising in yellow pages, wild postings or non-traditional outdoor advertising media vehicles. Customers are confronted with an increasing amount of advertising messages per day and therefore organisations have to develop advertising approaches to stand out in today’s media fragmentation. Especially small and medium-sized enterprises are having greater internal limitations regarding a restricted budget for marketing communications and facing bigger external uncertainties than large organisation. Thus, marketing campaigns have to become profitable for an enterprise. The low-cost communication effort is one of the major issues for guerrilla marketers. It is particular relevant for a small company to apply a differentiated set of promotional methods to diversify itself from competition, but guerrilla marketing is also becoming more adopted by large enterprises.

(Figure 1: Guerrilla Marketing for FedEx)

BBDO New York launched a guerrilla marketing campaign for FedEx in January 2006. This promotion was focused on advertising FedEx’s new online office product store.

This dissertation aims to give the reader a complementary insight of guerrilla marketing and investigates its relevance for a small and medium-sized enterprise (SME) in terms of generating profit. The purpose of this study is to identify how relevant this approach is to guerrilla entrepreneurs in small organisations, regarding profitability and flexibility in respect of strategy execution. The first section of this dissertation is concerned with the literal meaning and theory of guerrilla marketing, and its suitability for small and medium-scaled organisations. The second part focuses on the conduction of the survey which has been carried out in order to underline this research with qualitative and quantitative findings. Those findings are visualised and analysed in part three. The fourth part of this research study forms the implications of findings part, in which the results will be evaluated regarding the relevance of guerrilla marketing to small companies. The conclusion of this dissertation combined with a comparison between theory and practice highlight the last section of this research study.

In the following, literature review introduces guerrilla marketing as a metaphor of warfare.

2. Literature Review

This part is concerned with the literally meaning of marketing strategies, seen as a warfare weapon, to fight the marketing war against competitors. Furthermore, it gives an insight in four different marketing warfare strategy principles and highlights the specific term of guerrilla marketing strategy practice regarding entrepreneurial decisions, focused on small and medium-sized enterprises. The relevance for an SME to interact strategically online, by using guerrilla strategies combined with a selection of guerrilla campaign examples, concludes the literature review for this dissertation.
2.1 Marketing Warfare Strategy

A marketing strategy, according to Johnson and Scholes (2002), is a long-term direction and scope of an organisation, which achieves advantages through its resource formation in today’s vastly changing environment.

Businesses strategically consider their role in the growing market of competition and therefore are trying to create tactics to achieve substantial advantages, to battle their rivals successfully. Marketing warfare strategies are according to Ries and Trout (1986) strategies that try to draw parallels to marketing and warfare; focusing on analogies between military strategies and marketing strategies, in today’s business situations. The competitor is seen as the enemy and the market share refers to the battleground. In the 1980s business strategists like Ries and Trout (1986), as well as Philip Kotler (1980) adopted strategic military theories from books of Sun Tzu, The Art of War (translated 1910), or Carl von Clausewitz’s (1832) book, On War, in order to draw conclusions to the market situations.

An investigation of Ries and Trout (1986) concluded four main principles of marketing warfare strategies:

• The defensive marketing warfare strategy is focused on businesses which have already achieved a market leader position. The best way to improve or hold a position is by constantly attacking the market to protect the organisation’s market share, product positioning or profitability. To reciprocate the competitor’s attacks till the market position is assured, is the main objective in developing a defensive tactic. Defending the market position by scanning constantly the potential attackers and their alliances (market research) to highlight their weaknesses, is an essential principle. Furthermore, to attack the own organisational weaknesses can help to stabilise the market position and increase profit margins.
• The offensive marketing warfare strategy is used when businesses are focusing on the leader in the market. The strategy is created to obtain objectives like market share or key customer from the targeted competitor. Offensive tactics are concerned with attacking the weaknesses of the leader as effective as possible, e.g. lower prices or increase product quality. Launch the attack on as narrow a front as possible. The organisation, which is in the defending position, has to defend all of their barriers (markets); therefore, an attacking business can concentrate their power at a simple place (product or niche market). Furthermore, the time span of the strategic attack should be as surprising and as fast as possible to reduce the reaction time of the competitor.
• The flanking marketing warfare strategy implicates an attack focused on a market segment that the competitor does not consider to be critical, e.g. niche market sectors. A good flanking move must be made into an uncontested area. The most successful attacks are the surprising assaults because similar to the offensive attack, the competitor needs time to react.
  In addition, this could involve new product introduction, repositioning of existing goods or subtle promotional activities in market niches.
• The guerrilla marketing warfare strategy refers to the reservoir of tactical advantages, which small companies have in comparison to larger companies. Guerrilla marketing strategies are legal attacks targeted on the competitors, focusing on small market segments, e.g. distribution niches with flexibility and innovation in changing and eliminating tactics and approaches. Guerrilla marketers should penetrate a segment with unconventional marketing activities, such as short-term raids, product comparison or spreading the word-of-mouth. This strategic decision, mostly executed by small organisation with a limited resource arsenal, tries to gain customer awareness and to improve the business image.

These main principles are directions in which organisations can operate by executing their aggressive or defensive types of marketing tools. Marketing, seen as a metaphor of war, opens up new way of thinking about marketing and market research. It is not simply to sell products to the consumer; it is more about a battle of ideas to win customer’s hearts and minds (www.warc.com). In modern warfare a shift to unconventional and low-visibility operations can be identified. Similar to marketing, where a shift to below-the-line activities and viral communication are allocated. The next paragraph is focused on the strategies of guerrilla marketing and their literally definition.

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