Generic marketing strategies for small and medium-sized enterprises – conceptual framework and examples from Asia

Although the existing literature discusses strategies available to small and medium-sized enterprises (SMEs), they do not address the plight faced by SMEs, namely resource limitations in their strategy formulation. Drawing on deductive logic, this paper identifies and conceptualizes three marketing strategies which are generic to SMEs and which specifically take into consideration the competitive reactions of bigger incumbent firms. These three generic marketing strategies are substitution, free riding and strategic deterrence. Successful substitution calls for the SME to offer differentiated yet substitutable products to that of an incumbent so as to force accommodation by the latter. Free riding allows the SME to enter a served market segment without having to incur market development expenses. Finally, strategic deterrence aims to deter a bigger incumbent firm from embarking on aggressive counteractions against the SME. This can be achieved by the formation of strategic alliances and/or incurring sunk costs in order to signal the SME's commitments to stay in the market credibly. Examples from Asian SMEs are given to illustrate the three generic strategies.