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Guerrilla Marketing: a Low-Cost Strategy for Startups

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Guerrilla Marketing: a Low-Cost Strategy for Startups Guerrilla Marketing: A low-cost strategy for startups Mari Bergan Hæreid Solveig Indregård NTNU School of Entrepreneurship Submission date: July 2015 Supervisor: Roger Klev, IØT Norwegian University of Science and Technology Department of Industrial Economics and Technology Management Aim of the thesis Startups at an early stage typically have few financial resources available which limits their marketing possibilities. An alternative for startups may be the low cost strategy of guerrilla marketing. As theory on the phenomenon is limited, a more precise understanding of the concept should be developed. The following areas will be addressed: 1. A presentation and discussion of existing theory on guerrilla marketing, along with theories on traditional marketing 2. An empirical study of the phenomenon 3. An analysis and discussion based on the empirical findings and theoretical propositions 4. A critical discussion of the research method i ii Preface This master thesis is the result of a theoretical and empirical study conducted as part of a Master of Science degree at the Norwegian School of Entrepreneurship (NSE), at the Norwegian University of Science and Technology (NTNU). The study was initiated in January 2015 and completed July 3rd, 2015. The study has enabled us to understand a phenomenon in depth by applying theoretical knowledge acquired through our academic courses with practical cases. The paper addresses the subject of guerrilla marketing from the perspective of the startup company. Our goal is to contribute to the theory in this area, and educate fellow entrepreneurs on the subject. In addition, the subject personally motivates us, as we both are responsible for the marketing of our separate startups. Thus, we hope to gain greater insight into how to use guerrilla marketing in order to create awareness about our respective products and startups. We would like to thank our supervisor, Roger Klev, from the Department of Industrial Economics and Technology Management at NTNU, for his guidance on this thesis. Gratitude is also given to the interviewees who took the time to share valuable knowledge, experience and insight, making this thesis possible. Trondheim, July 3rd, 2015 ________________________ ________________________ Solveig Indregård Mari Bergan Hæreid iii iv Abstract A reason as to why many startups fail is poor marketing. Due to scarce financial resources, startups are restricted from using traditional marketing methods that are associated with high costs. An alternative strategy that does not require extensive financial resources and can help break through the endless clutter of marketing campaigns is guerrilla marketing. The aim of this paper is to contribute to the research on the subject by addressing the following: What is guerrilla marketing and how can startups use it in the promotion of their products? In order to answer this research question, a theoretical and empirical study has been performed. The work of Hutter and Hoffmann (2011) is used as a foundation for the theoretical study. Other sources are used to supplement their views, in addition to theory on traditional marketing where theory on guerrilla marketing is limited. A multiple case study exploring the unconventional campaigns of six different companies is used as a basis for the analysis and discussion of the thesis. Data regarding the campaigns was mainly collected through in-depth interviews. The campaigns possess several characteristics similar to those of guerrilla marketing and are studied to gain a better understanding of the phenomenon and how guerrilla campaigns can be created. Findings from each case are compared and contrasted, and further linked to the theory presented. Based on the analysis and discussion, the following revised definition of guerrilla marketing is proposed: Guerrilla marketing is an alternative, low-cost advertising method that exclusively utilizes unpaid channels by creating an unconventional campaign that causes an unexpected reaction, motivating recipients to distribute the message. The precise definition should not be used as a strict set of requirements that must be met, but rather as guidelines for where focus should be directed. The low cost aspects force the startup to consider alternative strategies differing from those of traditional advertising. This may contribute to making a campaign unconventional. This is important in order to elicit a reaction in recipients, which may motivate them to further distribute the message. The media and influencers can also be encouraged to distribute the message. These strategies eliminate the distribution costs of the campaign. A framework regarding how startups can create a guerrilla marketing campaign to promote their products is also proposed. The framework consists of the following steps: (1) set the goals for the campaign, (2) identify the target audience, (3) design the message and campaign, (4) prepare the v distribution, (5) establish the budget, and (6) measure the results. Similarly to the definition proposed, the framework serves as a set of guidelines, rather than steps that must be followed. The proposed definition challenges existing theory. Based on a framework used in traditional marketing, the steps were revised and adjusted to better fit the context of guerrilla marketing. A framework addressing how a guerrilla campaign can be created does not exist in theory, and is therefore viewed as a possible new contribution to theory. vi Sammendrag En årsak til at mange oppstartsbedrifter mislykkes er manglende fokus på og ekspertise innenfor markedsføring. Grunnet begrensede økonomiske ressurser, er bruken av tradisjonelle markedsføringsmetoder, som er forbundet med høye kostnader, vanskelig. En alternativ strategi, som krever mindre omfattende økonomiske ressurser og kan bidra til å skille seg ut i mengden av markedsføringskampanjer, er geriljamarkedsføring. Målet med denne avhandlingen er å bidra til forskning på feltet ved å studere følgende spørsmål: Hva er geriljamarkedsføring, og hvordan kan oppstartsbedrifter bruke strategien til å promotere produktene sine? Et teoretisk og empirisk studie har blitt gjennomført for å besvare problemstillingen. Det akademiske arbeidet til Hutter og Hoffmann (2011) brukes som et grunnlag for det teoretiske studiet. Andre kilder, i tillegg til teori om tradisjonell markedsføring der teori om geriljamarkedsføring er begrenset, er benyttet for å supplere deres synspunkter. Et studie med flere “case”, der ukonvensjonelle kampanjer fra seks ulike selskaper er forsket på, er brukt som grunnlag for analyse- og diskusjonsdelen. Data om kampanjene ble i hovedsak samlet inn gjennom dybdeintervjuer. Kampanjene innehar flere egenskaper som ligner på geriljamarkedsføring. De er studert for å få en bedre forståelse av både fenomenet og hvordan geriljakampanjer kan planlegges og gjennomføres. Resultatene fra hvert “case” er sammenlignet og analysert i lys av teorien som er presentert. Basert på analysen og diskusjonen, er følgende revidert definisjon av geriljamarkedsføring foreslått: Geriljamarkedsføring er en alternativ lavkost reklameform som utelukkende benytter seg av ubetalte kanaler ved å lage ukonvensjonelle kampanjer. Kampanjen forårsaker en uventet reaksjon, som motiverer mottakerne til å distribuere budskapet videre. Den nøyaktige definisjonen bør ikke anses som krav som må oppfylles, men heller som retningslinjer for hvor fokus bør rettes. Lavkost-aspektet tvinger oppstartsbedriften til å vurdere alternative strategier som avviker fra tradisjonelle reklameformer. Dette kan bidra til å gjøre en kampanje ukonvensjonell. Dette er viktig for å framprovosere en reaksjon hos mottakerne, som igjen kan motivere dem til å dele budskapet videre. Mediene og personer med stor påvirkningskraft kan også bli oppfordret til å distribuere budskapet. Disse strategiene eliminerer distribusjonskostnadene ved kampanjen. Et rammeverk om hvordan oppstartsbedrifter kan planlegge og gjennomføre en geriljamarkedsføringskampanje for å promotere sine produkter er også foreslått. Rammeverket består av følgende trinn: (1) sett mål for kampanjen, (2) identifiser målgruppen, (3) utform budskapet og vii kampanjen, (4) forbered distribusjonen, (5) fastsett budsjettet, og (6) mål resultatene. I likhet med den foreslåtte definisjonen, bør rammeverket anses som retningslinjer, fremfor en oppskrift som må følges til punkt og prikke. Den foreslåtte definisjonen utfordrer eksisterende teori. Basert på et rammeverk som brukes i tradisjonell markedsføring, ble trinnene i rammeverket revidert og justert for å bedre tilpasses geriljamarkedsføring. Et rammeverk, som tar for seg hvordan en geriljakampanje kan planlegges og gjennomføres, eksisterer ikke i teorien, og forslaget kan derfor anses som et potensielt bidrag til teorien. viii Table of content 1 INTRODUCTION 1 2 THEORY 4 2.1 Existing theory on guerrilla marketing 4 2.1.1 What is guerrilla marketing? 4 2.1.1.1 Guerrilla “enters” Marketing 4 2.1.1.2 Definitions 5 2.1.1.3 Instruments 9 2.1.2 How to create a (guerrilla) marketing campaign 13 2.2 Discussion of theory 17 2.2.1 What is guerrilla marketing? 17 2.2.1.1 Effects and characteristics 17 2.2.1.2 Instruments 22 2.2.1.3 Placement of the term 26 2.2.1.4 Propositions 28 2.2.2 How to create a (guerrilla) marketing campaign 28 2.2.2.1 Steps in creating a (guerrilla) marketing campaign 29 2.2.2.2 Propositions 34 3 METHOD 35 3.1 Research approach 35 3.2 Research design 35 3.2.1 Research method 36 3.2.2 Selection process 37 3.2.3 Data collection 41 3.3 Data
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