An empirical analysis of advertising by women entrepreneurs.

A major phenomenon in the U.S. economy has been the increasing number of women-owned businesses. According to the U.S. Census Bureau's "Latest Survey of Women-Owned Businesses," the number of women-owned businesses increased by 57.4 percent between 1982 and 1987, with the receipts of these businesses

rising by 81.2 percent over this same period. Similarly, the number of businesses owned by women as non-farm sole proprietorships increased from 1.9 million in 1977 to 4.4 million in 1987. Women's share of businesses also has increased from 22.6 percent in 1977 to 30.7 percent in 1987 (State of Small Business 1990). Women also are starting businesses at over twice the rate of men and could well own and operate 50 percent of all businesses in the United States by the year 2000 (New Economic Realities: The Rise of Women Entrepreneurs 1988).

The majority of research on women-owned businesses is a relatively recent phenomenon focusing on a wide range of issues. An early study by Schwartz (1976) examined the characteristics and attitudes of women business owners. He found that female entrepreneurs tended to closely control their business operations and also experienced barriers to the acquisition of initial capital. Several studies (Hisrich and Brush 1983, Neider 1987, Scott 1986, Watkins and Watkins 1983) found that women entrepreneurs were generally married and between the ages of 30 and 45, typically had backgrounds in the liberal arts, and had previous work experience in a variety of areas, such as teaching, retail sales, and office administration. Birley, Moss, and Saunders (1987) examined the differences between female and male entrepreneurs and found that both women's and men's past experience helped in providing managerial skills in the start-up stage. There was little difference between their levels of education and their financing process. Many studies have determined that women business owners are more similar to than different from men across psychological and demographic dimensions, such as motivations for starting their businesses (independence, achievement, and job satisfaction) (Chaganti 1986; Geoffee and Scase 1985; Hisrich and Brush 1983; Holmquist and Sundin 1990; Longstreth, Stafford, and Mauldin 1987; Schrier 1975; Schwarts 1976).

The most frequently cited problems of women-owned businesses are the lack of experience in management, accounting, advertising, and finance (financial planning, obtaining lines of credit, collateral position, and lending processes) (Buttner and Rosen 1988, Hisrich and Brush 1987, Kaplan 1988). The biggest obstacles for women are the financial aspects of venture start-up and management (Brush 1992).

Despite the tremendous growth in the number of women-owned enterprises and the increasing impact on society and the economy, there are few studies discussing the relationship between women entrepreneurs and advertising. Some research has been reported regarding entrepreneurs and advertising. A study by Van Auken, Doran, and Rittenburg (1992) examined advertising media strategies among entrepreneurs. Jackson and Parasuraman (1988) indicated that the disadvantages of advertising for small firms are their relatively limited financial and professional resources. Their results support the traditional assumption that the yellow pages are a well-used advertising medium. Brunning and Adams (1988) examined the effectiveness of promotional tools for small industrial businesses and found that trade shows can be an effective means of competing on an equal level with larger firms and can deliver a qualified audience to the small industrial firm at a relatively low cost.

While women business owners may be more similar to men than different, the nature of differences might affect advertising strategy. There is evidence that men and women's communication styles differ. Tannen (1990, 42) characterizes male-female conversation as cross-cultural communication: "...women speak and hear a language of connection and intimacy, while men speak and hear a language of status and independence...." While women may use communication to establish connection with others, avoiding confrontation or conflict, men may tend to view others more competitively and use conflict as a way of negotiating status. A number of studies provide evidence that women tend to place more emphasis on relationships (Carlson 1971; Erikson 1968; Hodgson and Watson 1987; Kanter 1977, 1987; Miller 1976). Konner (1982) argues that biological differences cause men to be more aggressive in nature, and that this aggression is further learned and reinforced socially; on the other hand, women tend to evolve behavior patterns that emphasize sensitivity, communication skills, community, inclusion, and relationships. Jelinek and Adler (1988) report that women may have an advantage of good interpersonal skills, meaning that women and men may talk more easily about a wider range of topics with women. All of these findings seem to support the notion that women have a nurturing nature, that they strive for community and try to build relationships, and that these characteristics are reflected in their communication styles. Since advertising may be the primary tool most companies use to communicate with potential customers, differences in communication style are relevant in examining the types of advertising strategies selected.

In addition to differences in communication style, women tend to be primarily concerned with the method used to accomplish a task, while men are more concerned with the result of the task (Baird 1976, Rotter and Portugal 1969, Sargent 1981). This difference also may contribute to differences in strategy development by men and women. With respect to advertising strategy, this might indicate a greater focus on the part of women on the advertising methods used, while men might be postulated to be more concerned with the results of that advertising.

Corporations are changing. As Kanter (1987) states, a growing number of companies are empowering more of their work force, both male and female. Nonetheless, the "glass ceiling" keeping women, out of the highest positions has not yet been penetrated to any great extent. One alternative for women facing the glass ceiling is to start their own businesses. So, even though androgyny, an approach which blends behaviors previously deemed to belong exclusively to men or women, may be the new management mode (Sargent 1981), it is unclear to what extent managerial behavior has become androgynous, either in large corporations or small businesses. It might be speculated that,

particularly for women bumping up against the glass ceiling, creating their own businesses allows them to succeed using the style of decision-making and communication most comfortable for them. If this were true, differences might be detected in the advertising strategies selected by female entrepreneurs as compared to male entrepreneurs (who currently represent the vast majority of entrepreneurs).

PURPOSE OF THE RESEARCH

The purpose of this study is to extend prior research regarding the selection of advertising media, building on findings regarding the use and effectiveness of advertising media by entrepreneurs reported by Van Auken, Doran, and Rittenburg (1992). The current study focuses on advertising media decisions made by women entrepreneurs. Vaccaro and Kassaye (1988) noted that little is known about the effectiveness of alternative advertising media. The difficulty of measuring the effectiveness of advertising media also has been noted by Belch and Belch (1990). This article uses stepwise multiple regression analysis to analyze and better understand the determinants of perceived effectiveness of the various advertising media. It uses a nationwide survey of women entrepreneurs which collected information concerning their use of advertising media during their first and most current year of operation.

In a study sampling 375 small businesses in the Midwest, Van Auken, Doran, and Rittenburg (1992) found that the advertising media that was ranked as one of the three most effective during the first year in operation was the most important factor in determining which advertising media were used during the most current year in operation. Rather than changing the advertising mix over time, these findings suggest that small businesses do not change their assessment of the relative effectiveness of alternative advertising media as they become more established.

This study employs Van Auken, Doran, and Rittenburg's (1992) methodology to determine: (1) the usage and perceived effectiveness of alternative advertising media used by women entrepreneurs; (2) the relationship between firm demographics, business-related problems and previous usage of alternative advertising media, and the perceived effectiveness rankings of advertising media; (3) whether a national sample of women entrepreneurs exhibit a tendency to continue with the same advertising media strategy over time; and (4) whether women entrepreneurs report similar media usage and effectiveness ratings as a general population of entrepreneurs. An examination of these issues will provide a better understanding of patterns of advertising media and their relative perceived effectiveness by women entrepreneurs. An analysis of usage patterns, perceived effectiveness and what factors affect perceived effectiveness can provide a better understanding of women as business owners and of important operational aspects of their businesses. The research expands our understanding of how smaller firms use advertising, which is an important operational consideration for smaller firms that has received very little attention in the literature. These results can be beneficial to potential and new women entrepreneurs in providing insight into developing advertising strategies for their businesses.

SAMPLING METHODOLOGY

An initial sample of 400 women-owned businesses was selected from the Directory of Women Entrepreneurs (1990). To ensure geographical representation, the U.S. was divided into four quadrants, and a random sample of 100 businesses was drawn from each quadrant. Questionnaires were sent to women-owned businesses in 45 states and the District of Columbia. A questionnaire was developed and pretested in April 1991, and all mailings occurred during May 1991. A total of 121 usable questionnaires were returned from 36 states, resulting in a 30.75 percent response rate.

The survey collected information on the use and perceived effectiveness of alternative advertising media by the women entrepreneurs. Respondents were

asked to indicate which of various alternative advertising media were used during the first and current years of operation and to rank those advertising media in order of perceived effectiveness. Advertising media not used by the women entrepreneurs were not ranked for effectiveness. For example, if five of the alternative advertising media had been used, then the respondent was asked to rank those advertising media in order of perceived effectiveness (1 = most effective and 5 = least effective). If three of the alternatives had been used, respondents were asked to rank those advertising media in order of perceived effectiveness (1 = most effective and 3 = least effective). The advertising media examined include: television, newspapers, radio, telephone directories, fliers, word-of-mouth/referrals, participation in community events, and direct mail. Information on the relative use of the advertising media provided a better understanding of the methods used by women entrepreneurs. Information on the perceived ranking of advertising media will provide insight into how women perceived the effectiveness of these alternatives. This aspect of the study will also address the lack of knowledge of the effectiveness of alternative advertising media as noted by Vaccaro and Kassaye (1988). The respondents also were asked to rank the three most difficult problems they experienced during their first year and during their most current year of operation (establishing market identity, advertising, bookkeeping, personnel, inventory management, accounts receivable, supplier relations, short term debt, long term debt, cash flow, and balancing family needs with the demands of the business). In addition, the survey gathered information on women-owned businesses' demographics such as: type of business (service, retail, and other), years in operation, type of ownership structure (sole proprietorship, partnership, and corporation), size of market served (local, regional, national, and international), initial capital, and size of the local community. This type of information is likely related to the use and perceived effectiveness of the alternative advertising media. For example, the type of business, size of market served, size of community, or years in business may have a significant impact on the methods of advertising used and relative effectiveness of the alternative advertising media.

Female entrepreneurs experience varying business problems which directly depend on the type of business; however, similar women-owned businesses would be expected to have common problems. For example, the selection of the most effective advertising media would be expected to be a common problem among women entrepreneurs. It is also expected that the types of advertising media used will change over time in response to changing problems, markets, capital resources, cash flows, relationships with media agents, etc.

The sample was initially subdivided into three groups (service, retail, and other). The percentage of each group using each type of advertising media was tabulated for the first and current year of operation. The percentage of firms ranking each advertising medium as one of the top three most effective methods also was tabulated for the first and current year of operation.

A series of stepwise regressions were used to analyze factors affecting the effectiveness of the various advertising media during the first and current year of operation. A total of eight regressions were used for both the first and current year of operation. The dependent variable in each regression was the effectiveness of various advertising media for the first and current year of operation. The independent variables in each regression consisted of the firm's demographics and the most common problems that women-owned businesses experienced in the operation of their businesses (see the appendix for the definition of the regression variables). The small size and limited resources of women-owned small firms found by Van Auken, Gaskill, and Kao (1993) and Hisrich (1989) may place operational constraints, resulting in a variety of business problems, and limit available alternative advertising possibilities. Limitations on the use of alternative advertising media may also be related to the demographic characteristics of the firm, such as type, location, market served, community size, etc., of the firm. The purpose of the regression analysis was to investigate and explain differences between the respondents' rankings of the effectiveness of the alternative advertising media.

RESULTS AND DISCUSSION

Summary information of selected characteristics of the women-owned businesses in the sample indicated that:

(1) Approximately 49.6 percent of the firms in the sample were service businesses, and 16.3 percent of the firms were retail businesses. The remaining firms (34.1 percent) were in other business categories such as manufacturing, finance, construction, wholesale, and professional. These results are similar to the findings in several other studies, which found that a great majority of the women-owned businesses were service-oriented (Cuba, Decenzo, and Anish 1983; Hisrich and Brush 1984; Neider 1987; Schrier 1975; Scott 1986; Smith, McCain, and Warren 1982). The high percentage of nontraditional women-owned businesses in such fields as manufacturing, construction, insurance, and finance is consistent with Hisrich and Brush (1984, 1987).

(2) More than one-half (56.9 percent) of the women-owned enterprises in the sample operated as sole proprietorships, while 32.5 percent were corporations, and about 10.6 percent were partnerships. This finding is consistent with other studies, which have found that women most often choose sole proprietorships as the preferred form of a business structure and is comparable to findings for male-owned businesses (Cuba, Decenzo, and Anish 1983; Hisrich and Brush 1987; Mescon, Stevens, and Vozikis 1983-84).

(3) The market that women-owned businesses in the sample served was almost equally divided into local, regional, and national (26.8 percent, 29.3 percent, and 26.0 percent, respectively), while 17.9 percent focused on international markets. In previous studies, most of the women-owned enterprises served only local markets. For example, the results of Hisrich and Brush (1987) indicated that almost one-half of the business served only local markets.

(4) The majority of the respondents (71.3 percent) had an initial capitalization of less than $20,000. Of the remaining firms, 18 percent required $20,000 to $50,000; 8.2 percent required $50,000 to $100,000; and only 2.4 percent required more than $100,000 to begin operations. The required initial capitalization in this study is somewhat higher than Hisrich and Brush (1987), who reported that 53 percent started their businesses with less than $5,000.

Table 1 presents descriptive information regarding the percentage of firms using each type of advertising media during their first year and current year in operation. Referrals are the most commonly used method of advertising by all categories of firms for both the first and current year. In addition, community events, telephone directories, and direct mail were frequently used during the first year, while referrals, telephone directories, community events, and fliers were used more during the current year in operation. Radio and television advertising by all categories of the firms was generally the least utilized of the media examined (less than 8 percent) for both time periods. A likely explanation is that using television advertising is too expensive for most smaller firms, including those owned by women.

Across all 121 firms, the percentage of firms utilizing referrals, community events, direct mail, telephone directory, and television advertising media did not change markedly from the first to the current year. However, approximately 50 percent more of the sample firms were using fliers in the current year relative to the first period of operations (from table 1, 48.0 percent current year compared to 31.7 percent in the first year of operations). Similarly, approximately 50 percent fewer firms were using newspapers and radio in the current year relative to the first period of operations.

An examination of usage patterns by type of firm indicates the following:

(1) Service firms -- less usage of all advertising media from the first year to the current year. The exception is that the use of fliers increased substantially.

(2) Retail firms -- the use of advertising media generally increased from the first year to the current year, with the exception that radio and television usage declined.

(3) Other firms -- the change in usage is mixed with some media increasing (referrals, telephone directories, and fliers) and other categories decreasing (community events, direct mail, newspapers, and radio).

Table 2 presents descriptive information regarding the percentage of firms ranking specific advertising media as one of their top three in effectiveness for the first and most current year of operation. Referrals are ranked as the most effective in terms of increasing sales by the highest percentage of firms. This is reasonable because referrals would be expected to have the advantage of greater source credibility and would not be viewed by consumers as advertising. The more believable the source of the referrals, the more likely the message will be perceived as credible. Crane (1972) has called credibility the most important source characteristic in marketing communication. Referrals tend to be the TABULAR DATA OMITTED most persuasive form of consumer information.

The advertising media that was most often ranked as the second most effective varied. by the type of firm. The second most frequently ranked advertising medium by all firms and service firms is community events during the first and current year. Community events are inexpensive and have high message credibility. This combination of attributes suggests a powerful promotional force that might be attractive to most organizations, institutions, and individuals (Govoni, Eng, and Galper 1986). Telephone directories and community events are ranked second by retail firms and other firms, respectively, during their first year.

Radio and television advertising were least often ranked as one of the most effective advertising media for all types of firms. Although television is an expensive advertising medium, the percentage of firms ranking it as effective increased from the first to the current year. Radio, which was used by less than 5 percent, was generally not ranked as one of the most effective advertising media by the respondents for all types of firms. Retail firms, however, had a higher percentage ranking for both television and radio in terms of effectiveness than did service and other firms.

These effectiveness rankings indicate the changes in how women-owned businesses perceive advertising after being in operation for several years. The shifts in the effectiveness rankings of various media are:

(1) All firms -- a large increase in the effectiveness of fliers, while direct mail and newspapers declined in effectiveness;

(2) Service firms -- a large rise in the effectiveness rankings for fliers from 8.2 percent to 27.9 percent and a slight increase in television, while all other advertising methods declined;

(3) Retail firms -- a large decrease in the rankings for telephone directories and newspapers, and a large increase in the rankings for community events; and

(4) Other firms -- a large increase in the rankings for telephone directories and a large decline in the rankings for direct mail. According to Govoni, Eng, and Galper's (1986) observations, direct mail advertising actively seeks out a designated reader and creates its own opportunities rather than passively waiting to be noticed at an opportune moment. However, this advertising method has become prejudged by recipients as "junk mail." This may explain the large decline in the percentage of firms that rank direct mail as an effective advertising medium. This might be true if mailings have not been effectively targeted, which may be likely among small businesses that may not have the resources for efficient mailing list management. In addition, the effectiveness of direct mail is measured and evaluated more easily than other forms of advertising, which might account for the ability of entrepreneurs to assess its effectiveness or lack thereof.

A series of ordinary least squares (OLS) stepwise multiple regressions were conducted to identify significant explanators of the perceived effectiveness of each of the eight alternative advertising media examined. The general formulation of the regression models examined and definitions of the variables utilized are presented in the appendix. Since the dependent variables are binary rather than continuous (1 if the advertising media being examined is ranked by firm management as one of the three most effective, 0 otherwise), weighted least squares and/or logistic rather than OLS regression techniques may result in more efficient coefficient estimates. However, OLS is utilized in the current study since the OLS estimated regression coefficients ([b.sub.i]) are readily interpretable as the change in probability that the advertising media will be ranked as one of the three most effective per unit change in the independent variable ([x.sub.i]).

Table 3 displays the final regression results (estimated beta coefficients, t-statistics, and levels of significance) for the independent variables that were found to be significant (p-value of [is less than or equal to] .05) determinants of the perceived effectiveness rating for the eight advertising media examined. The independent regression variables are listed in the order they were added to the model by the stepwise regression procedure along with the partial [R.sup.2] for each variable. Table 3 also includes the overall F-value (level of significance) and adjusted [R.sup.2] for the final regression models for each advertising media for both the first and current year for each of the eight advertising media. Only those variables which were found to have a p-value of [is less than or equal to] .05 were included in the regression models.

During the first year of operation, the effectiveness of the advertising media utilized is expected to be related to various characteristics of the business and market served. As shown in table 3, differences in the effectiveness rankings, in the first year of operations, of television, newspapers/magazines, radio, telephone directories, fliers, word-of-mouth/referrals, participation in community events, and direct mail were found to be significantly related to certain of the independent variables. However, the particular independent variables that are significant determinants of the ranking of any particular advertising media differ markedly across the eight advertising media examined.

Specifically, the regression results indicate the following for the first year of operations. The probabilities for television and radio being ranked as one of the three most effective media utilized, in the first year of operations, are positively associated with the firm's initial capitalization (a 2 percent increase in probability for each unit change in initial capitalization). Given that these two advertising media are relatively costly compared to the others examined in this study, it should come as no surprise that the likelihood of a particular firm using this media and also ranking it as one of the three most effective utilized is positively related to the amount of initial capital available.

Additionally, the likelihood that telephone directories will be ranked as one of the most effective advertising media utilized is positively associated with the firm being a retailer (a 24 percent increase in probability). Similarly, service firms, compared to other types of firms, are less likely (a 22 percent decrease in probability) to rank fliers as being one to the most effective advertising media utilized. The likelihood of word-of-mouth/referrals being ranked as one of the most effective media is negatively associated with the firm's initial capitalization (4 percent decrease in probability per unit change), and whether or not the firm is organized as a partnership (a 25 percent decrease in probability). The effectiveness ranking of participation in community events is negatively correlated with the size of the market (a 10 percent decrease in probability per unit change), and positively correlated with the size of the community (a 5 percent increase in probability per unit change). Finally, the effectiveness ranking of direct mail is positively associated with the firm being organized as a corporation (a 22 percent increase in probability per unit change).

Table 3 also presents the results of the stepwise multiple regressions that predict the likelihood of the various advertising media being ranked as one of the three most effective in the current year TABULAR DATA OMITTED of operations. The most pervasive finding of these regressions is that, for seven of the eight media examined, the most important determinant of the media's effectiveness ranking in the current year is whether or not it was ranked as one of the three most effective media in the first year of operation. In all cases, except for radio, the current year's effectiveness ranking is found to be positively associated with the first year's ranking (ranging from in excess of a 50 percent increase in probability for word-of-mouth referrals, and telephone directories to 31 percent for direct mail). It was originally believed that women-owned firms would change their advertising mix over time. Instead, the regression evidence indicates that the forms of advertising deemed most effective and used currently were generally ranked as one of the most effective forms of advertising in the first year of operations as well. This result suggests that women-owned businesses do not change their assessment of the relative effectiveness of alternative advertising media as they become more experienced and established. This finding is consistent with Van Auken, Doran, and Rittenburg's (1992) findings from a previous study of small business firms.

Fiske and Taylor (1984) observed that once a cognitive structure is formed (an idea accepted), it may become more and more resistant to change over time. Similarly, once the manager of a female-owned business has formed an initial opinion about the effectiveness of particular advertising media, this opinion is likely to be quite enduring, unless strong contrary evidence emerges. It is difficult for managers to estimate the effectiveness of advertising media. Therefore, it is quite reasonable that managers would like to hold to their early evaluations and continue to use what they are familiar with rather than take risks on media with which they have less experience.

While the pattern of advertising activity among women entrepreneurs is consistent with that of the broader sample (consisting of both men and women) reported by Van Auken, Doran, and Rittenburg (1992) in terms of current-year media selection being determined primarily by the entrepreneur's perception of media effectiveness in the first year, a sharp contrast can be seen in media usage reported by women entrepreneurs. Table 4 compares advertising media usage for the first year of operation and the current year for women-owned firms versus the average for all firms from Van Auken, Doran, and Rittenburg's (1992) previous study. The questions asked were identical in the two studies, but Van Auken, Doran, and Rittenburg's (1992) list of media captured any direct mail under "fliers." The current study added "direct mail" in order to differentiate this from nonmailed fliers. Therefore comparisons cannot be made for the direct mail category.

Most dramatic are the percentages for referrals: more than 90 percent of women-owned firms reported using them compared to about 30 percent of all firms. Likewise, about half of women-owned firms reported using community events, compared to 13-14 percent of all firms. About half the women-owned firms reported using the telephone directory, compared to about 20 percent of all firms. Women-owned firms' use of newspaper advertising was higher in the first year than all firms' use (39 percent vs. 26 percent), but approximately the same in the current year. Use of fliers was a great deal higher for women-owned firms, and increased from 32 to 48 percent in the current year, while all firms reported a slight decrease from 12 to 11 percent. Women-owned firms reported less use of radio, perhaps attributable to the smaller proportion of retail firms in the sample. Television usage was slightly higher for women-owned firms in the first year but about the same in the current year, around 4 to 5 percent. These findings would seem to suggest that female entrepreneurs either use different media or perceive their media usage differently from male entrepreneurs.

Table 4
COMPARISON OF PERCENTAGE OF WOMEN-OWNED BUSINESSES USING EACH ADVERTISING
MEDIA FOR THE FIRST AND MOST CURRENT YEAR OF OPERATION WITH PREVIOUS STUDY
FINDINGS(*)

                          Women-Owned Firms             Previous Study
                              (n = 121)                   (n = 132)

Advertising Media      1st Year    Current Year    1st Year    Current Year

Referrals                90.7           93.5         29.0          27.7
Community Events         49.6           49.6         13.2          13.7
Direct Mail              46.3           41.5          NA            NA
Telephone Directory      48.0           50.4         20.7          19.4
Newspaper                39.0           23.6         26.3          21.3
Fliers                   31.7           48.0         12.1          11.4
Radio                     7.3            3.3         15.9          14.4
Television                5.7            4.9          2.6           4.3

* Previous study: Van Auken, H., M. Doran, and T. Rittenburg (1992), "An
Analysis of Small Business Advertising," Journal of Small Business Management
30 (April), 87-99.

Without another data source, perhaps provided by the media rather than a self-reported measure, it is impossible to determine whether female entrepreneurs actually use different media. Some differences might be attributed to the high proportion of service firms in the sample of women-owned firms and lower proportion of retail firms, but even these differences would not seem to explain such dramatic differences in use of referrals, community events, telephone directory, and fliers. Another possible explanation is that women tend to communicate differently from men, and this difference is reflected not just in personal communication, but in business communication as well. Women's emphasis on relationships (Carlson 1971; Erikson 1968; Hodgson and Watson 1987; Kanter 1977, 1987; Miller 1976; Tannen 1990) is consistent with the findings reported here. Differences in communication style might explain why women would favor personal communication with prospective customers through referrals, community events, or response to an ad in the telephone directory as opposed to the impersonal radio or television ad. Capital resources for advertising might explain low usage of expensive media, but these media are used by a small percentage of all small businesses. The greater reported use of personal communication methods by women-owned firms cannot be accounted for simply by considering capital resources. Whether women actually use referrals and other personal communication methods more often cannot be evaluated, but clearly women perceive these forms of communication as important tools in promoting their businesses.

An alternative explanation might be a greater awareness on the part of women entrepreneurs of the communication methods employed, and the value placed on such personal connections and relationships with others. Such an explanation is consistent with the findings of Baird (1976), Rotter and Portugal (1969), and Sargent (1981) regarding women's focus on methods used to accomplish a task.

CONCLUSIONS AND IMPLICATIONS

The purpose of this study was to report the results of a survey of the advertising methods used by 121 women-owned businesses. The perceived effectiveness of advertising methods utilized by women entrepreneurs during the first year in operation and the current year were discussed and contrasted. Determinants of the women-owned businesses' methods of current advertising were identified. These findings provide evidence that referrals were found to be perceived as both the most utilized and most effective advertising medium by the largest percentage of women-owned businesses.

During the firm's first year in operation, referrals, community events, direct mail, and telephone directories were commonly used by all firms. The pattern is similar for the current year of operation. The results appear to be inconsistent with Vaccaro and Kassaye (1988), who state that most small firms continue to place their advertising dollars primarily in newspaper ads, with occasional budgets allocated to radio and television advertisements. The telephone directories are a well-used medium, which is consistent with the findings of Jackson and Parasuraman (1988). Trade shows (which would have appeared as "other-please specify" in the questionnaire) were seldom mentioned by the women business owners as a type of advertising. Trade show activity has increased dramatically in recent years, and it has shown to be a cost-effective advertising method for small businesses (Brunning and Adams 1988). Respondents in this study did not indicate increased trade show use, however. Referrals were ranked the highest in effectiveness of the various media by all categories of firms during the first year in operation. All firms except retailers ranked community events as being second most effective, while retail firms ranked telephone directories in second place during the first year. The results indicate that women-owned businesses change their perceptions of effectiveness after being in operation for several years. Some rankings are consistent, while others change significantly between the first year in operation and the most current year. The changes in rankings of the different advertising media varied by category of firm.

One of the most significant findings in this study is that women-owned businesses tend to continue the method of advertising used during the first year in operation. This is consistent with findings by Van Auken, Doran, and Rittenburg (1992). The result can be explained by assuming that female entrepreneurs may not be any more skilled at selecting appropriate advertising media than male entrepreneurs. Alternatively, they may have a limited advertising budget, as suggested by Seglund (1985). Another possibility is related to the personality traits of many women entrepreneurs, such as risk taking, autonomy, cognitive structure, innovation, creativity, competence, and leadership. Varadarajan (1985) suggested that most small business owners tend to be preoccupied with day-to-day operations and seem not to use formalized planning procedures in guiding the destiny of their businesses. Therefore, they may conveniently continue to use the advertising media initially selected. It is very difficult to measure the effectiveness of advertising, and the additional cost associated with its measurement may be perceived as prohibitive by many women entrepreneurs. This difficulty forces them to rely on their own judgment and experience and the "biased" assistance provided by the advertising agencies.

A particularly interesting finding of this study is the difference in reported use of the various media between women-owned firms and all firms, the latter reported by Van Auken, Doran, and Rittenburg (1992). Women entrepreneurs report greater use of referrals, community events, telephone directory, and fliers than a general sample of small business owners. The difference, whether it is in actual usage of these media or perceived usage, might be attributable to differences in women's communication styles and the value women place on personal forms of communication. This finding would seem to have implications for relationship marketing and the strengths women might have in building rapport with potential customers. Some managerial implications for women entrepreneurs might be to build on this strength in developing effective communication strategies. Male entrepreneurs may need to examine their awareness of advertising strategies employed and the effectiveness of those strategies. All entrepreneurs might consider the value of a more androgynous approach.

Academic training might include a greater emphasis on how the individual characteristics or communication style of an entrepreneur influences advertising strategy and its effectiveness. Such an approach might aid budding entrepreneurs in self-awareness and in selecting appropriate advertising strategies. This implication also applies to government agencies facilitating small business development.

While the findings of this study suggest a pattern, they are far from conclusive and represent an area ripe for further investigation. Despite the limitations, these findings serve as an excellent basis for hypothesis development in future research into the advertising methods of women-owned businesses. Data collected from women-owned businesses throughout the world would provide a more comprehensive understanding of how to select advertising methods and would allow many types of cross-sectional studies, especially geographic and multi-cultural comparisons. Further research should focus on providing in-depth insights into other variables expected to be related to women-owned businesses' advertising, such as adeptness at media selection and level of preoccupation with operations. The contribution of this study may provide some insight toward the understanding of female entrepreneurs' business practices, increase the awareness of selecting effective advertising media, and improve the potential for success of women-owned businesses.

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Dr. Van Auken is an associate professor of finance at Iowa State University in Ames, Iowa, and a recent Fulbright Scholar. His research interests are in small firm financing, business development, and entrepreneurship.

Dr. Rittenburg is an assistant professor of marketing at the University of Wyoming. Her primary research interest is small business marketing.

Dr. Doran is an associate professor of accounting at Iowa State University. His research interests are on assessing the effects of financial accounting statement disclosures and accounting method choice on firm performance and shareholder wealth.

Mr. Shu-Fang Hsieh received his master's degree in business administration from Iowa State University in 1992.