Organizational and Managerial Activities in the Development Process of Successful SME Marketing Networks

• Date: 01 June 2016
• Author: Lara Agostini
• Published date: 01 June 2016
• DOI: http://doi.org/10.1111/emre.12069

Organizational and Managerial Activities in

the Development Process of Successful SME

Marketing Networks

Lara Agostini

Department of Management and Engineering, University of Padua, Vicenza, Italy

The aim of this paper is to investigate how the development process of small and medium-sized enterprise (SME)

marketing networks is carried out, in terms of organizational and managerial activities, in successful networks

compared to unsuccessful ones. In other words, this study investigates which activities arecarried out in successful

(compared to unsuccessful) SME marketing networks and how they are carried out. Although much attention has

been focused on this phenomenon by both academics and practitioners, a high percentage of networks still fail. A

qualitative approach based on multiple case studies allowed me to provide managers with a series of guidelines

regarding the development process of successful SME marketing networks. The present study therefore represents

a noteworthy academic contribution to marketing network theory and practice.

Keywords: marketing network; SMEs; network management; development process

Introduction and setting

The theme of inter-organizational relationships has been

drawing the attention of representatives of economic

life, because inter-organizational relationships may

provide firms with significant benefits they would not

otherwise reach on their own (O’Dwyer et al., 2011), as

well as the academic world, since networks are

addressed by different disciplines (Dennis, 2000).

To date, literature has focused more particularly on

networks established with the aim of cooperating in

upstream value chain activities, such as research and

development (R&D), engineering and manufacturing,

rather than marketing networks, defined as formalized

collaborative arrangements focused on downstream

value chain activities, such as distribution, sales, or pro-

motion (Teng and Das, 2008; Swaminathan and

Moorman, 2009). Since recent inter-organizational rela-

tionships have developed with internationalization and

market competitiveness enhancement as their main

drivers (Yu et al., 2011), and different governments

inside and outside Europe have recognized the high

potential of marketing networks which has led to a series

of policies at regional and national level (e.g., Spence,

2003; Verschoore and Balestrin, 2011), marketing net-

works deserve more dedicated attention, also consider-

ing the fact that they have different features compared to

other types of networks (i.e., R&D networks).

The literature on marketing networks has, among

others, two significant shortcomings. First, there is a

lack of comprehensive analysis on the development

process and management of marketing networks.

Second, previous research has noted the high failure rate

of networks (Hyder and Eriksson, 2005) and yet there

are very few studies that describe how success (or

failure) has been achieved specifically (Reid et al.,

2008). More particularly, different authors cite one or a

few factors involved in the development process of mar-

keting networks, but an all-encompassing analysis of the

organizational and managerial activities from a process

perspective is still lacking, as too is their potential influ-

ence on network success.

Despite being potentially relevant for all types of

firm, networks seem to be particularly suited for small

and medium-sized enterprises (SMEs). Indeed, these

enterprises may need to look outside their boundaries

in order to overcome the constraints associated with

not having all the resources and competences required

to enhance competitiveness (Colombo et al., 2012).

However, ‘there is limited evidence focussing on SME

networking in relation to marketing activities’ (Gilmore

et al., 2006, 278–293).

Correspondence: Lara Agostini, Department of Management and Engi-

neering – University of Padua, Stradella San Nicola 3, 36100 Vicenza,

Italy. Tel: +393472898058. E-mail: agostini@gest.unipd.it

DOI: 10.1111/emre.12069

© 2016 European Academy of Management

European Management Review, Vol. 13, –(201 )

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On these grounds, the purpose of this article is to

investigate how the development process of SME mar-

keting networks is carried out, in terms of organizational

and managerial activities, in successful, as opposed to

unsuccessful, networks.

A qualitative approach based on multiple case studies

was selected since it has proved particularly useful for

network dynamics (Halinen and Törnroos, 2005).

This article contributes to the literature on the man-

agement of SME marketing networks by providing a

comprehensive picture on how the organizational and

managerial activities involved in the development

process of SME marketing networks should be carried

out in order for the network to be successful. The com-

parison between successful and unsuccessful cases is

key to understanding such dynamics, and has direct

implications both for theory and practice.

This study is set in the Italian industrial context in

which SMEs are predominant (more than 99%) and

form the backbone of the Italian economy (European

Commission, 2013), as is true for many European coun-

tries. While on the one hand their structure allows flexi-

bility (Schumacher, 1973), on the other hand, the limits

associated with their size restrict their ability to cope

with competitive and environmental pressures. This

article is therefore highly relevant in this context. In

addition, Italy is fertile ground for research in this area

since Italy was the first European country to enact a law

dealing with the topic of formal collaborations (the

Network Contract Law in 2009), which is the most rel-

evant but also not the only policy promoting networks

among firms.

The remainder of the article is organized as follows.

First, the peculiarities of marketing networks are given

in more detail, followed by a literature overview on

marketing networks, particularly with regard to the

organizational and managerial success factors identified

thus far. The activities involved in the development

process of marketing networks are also introduced.

Second, the methodology is described in depth. Third,

the data analysis and results are illustrated. Lastly, the

results are discussed in order to draw the conclusions,

identify the theoretical and practical contributions of the

article and suggest new paths for future research.

Theoretical background

Why focus on marketing networks?

Marketing networks may be defined as formalized col-

laborative arrangements focused on downstream value

chain activities, such as distribution, sales, or promotion

(Swaminathan and Moorman, 2009). In the field of inter-

organizational relationships, one of the most significant

differences is between marketing and R&D or techno-

logical networks1(e.g., Colombo, 2003). These two

types of networks differ in a variety of significant

aspects. The aim of R&D/technological networks is to

perform technological innovations, such as researching

basic technologies or developing specific applications or

products, thanks to external sources of technological

knowledge (Lee and Chang, 2014). Consequently, these

networks become fundamental assets used to create and

maintain a firm competitive advantage in high-tech

industries (Griliches, 1995). Marketing networks are

particularly useful in medium and low-tech industries

where the key competitive advantage typically comes

from understanding the needs of customers through mar-

keting activities (Lee and Chang, 2014). By their very

nature, R&D/technological networks imply the execu-

tion of different tasks in the back office of partner firms

which may involve a consistent number of employees in

their collaborative projects (Kaulio and Uppvall, 2009).

Conversely, marketing networks imply a direct contact

with markets and clients and are usually set up and

followed by entrepreneurs or managers. The highlighted

differences between the two types of network are likely

to lead, for example, to stricter contractual-based gov-

ernance mechanisms in R&D/technological networks

than in marketing networks in order to regulate knowl-

edge protection and ownership of intellectual property

rights, whereas governance in marketing networks

should be more devoted to controlling partner market

access and the relationship with clients. Moreover,

partner selection is likely to be based on different cri-

teria: firms are appealing as R&D/technological network

partners if they have a high technological capability and

a high level of knowledge. If they want to reap the

benefits of an R&D/technological network, partners

should have a high absorptive capacity and ability to

learn (Colombo, 2003; Lee and Chang, 2014). Competi-

tors can simultaneously cooperate with each other in

developing horizontal networks in which the allied firms

contribute similar resources in production processes or

R&D to share risks or to enjoy economies of scale net-

works (Gnyawali and Park, 2009; Esteban-Bravo and

Lado, 2011). This practice is frequent in the automobile

industry where twin (i.e., identical, only with minor

1Other forms of marketing cooperation, such as for example

joint ventures or franchising, exist but they are beyond the scope

of this article. The rationale behind this decision is that joint

ventures imply the equal participation of partners, while the

focus on this article is on firms cooperating while remaining

totally independent. Franchising, on the other hand, is a hierar-

chical relationship between a franchisor and a franchisee and it

involves the exploitation of one party’s core capability (Koza

and Levin, 1998). Moreover, the franchisor is more likely to be

a large firm and franchising requires high start-up and opera-

tional costs, as well as complex accounting, while this study

concentrates on lean forms of network which allow SMEs to

overcome their resource constraints while increasing their

market competitiveness.

L. Agostini

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