ABSTRACT
Albeit, small and medium scale enterprise (SMES); as
economic and industrial stanchions for any nation inclined towards meaningful
and revolution is fast gaining attention, its development and management have
been treated and handled with obvious levity, and ineptitude. This has contributed in no little way, to
some of the myriad of problems facing SMEs survival and success in Nigeria. Aside other external factors, strategic
marketing management are a major determining internal factor that greatly
affects the performance of SMEs. To
better appreciate the significance of this concept, this research work tries to
expose the nature and result of the relationship between strategic marketing
management practices and SMEs. Chapter
one, which is the introductory chapter, focuses on the nature and structure of
small and medium scale enterprises (SMEs).
Also it tries to lock at the significance of strategic marketing
practices to the success of SMEs. Chapter two reviews relevant literatures and
previous work of scholars, theorists, and academics, on the in-depth nature and
resultant effect of the relationship between SMEs and strategic marketing
management practices. The third chapter discusses the methodology employed in
gathering, and analyzing data for the purpose of the research. Chapter four
centers on the presentation, analysis, and interpretation of gathered data for
tacit and easy, more so, meaningful understanding. State the major findings in respect of each
hypothesis. Chapter five makes a summary of the study, concision,
recommendation, and suggestions for further studies.
TABLE OF CONTENT
Pages
Title
page i
Certification ii
Dedication iii
Acknowledgement iv
Abstract vi
Table
of Content vii
List
for Tables x
CHAPTER ONE:
1.0 Introduction 1
1.1 Statement of the Problem 5
1.2 Objective of Study 6
1.3 Research Question 7
1.4 Hypothesis 8
1.5 Significant of the Study 8
1.6 Scope and Limitations of the Study 9
1.7 Research Methodology 10
1.8 Literature Review 11
1.9 Plan of the Study 12
1.10 Definition of Terms 12
References 13
CHAPTER TWO: LITERATURE REVIEW
2.1 Marketing in Developing Countries 14
2.2 Industrial marketing 18
2.3 Strategic Marketing 21
2.4 Environments of Marketing 25
2.5 Organizational Performance Measures 28
2.6 SMEs Marketing Management 32
References 36
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction 39
3.1 Restatement of Research Question 39
3.2 Research Design 40
3.3 Sampling Design and Sample Frame 41
3.4 Characteristics of the Study Population 41
3.5 Data Collection Instrument 42
3.6 Test and Validity and Reliability 42
3.7 Administration of Data Collection Instrument 43
3.8 Procedure for processing/Analyzing collected Data 43
3.9 Limitation of Methodology Used 44
References 45
CHAPTER FOUR: DATA ANALYSIS, DISCUSSIONS
INTERPRETATION AND PRESENTATION
4.0 Introduction 46
4.1 Test of /Variability and Reliability 46
4.2 Classification of Firms Based on
Activities/Operation 47
4.3 Classification of Firms Based on Staff Strength 48
4.4 Gender Distribution of Respondents 49
4.5 Age Distribution of Respondents 49
4.6 Educational Background of Respondents 50
4.7 Classification of Respondents based on
Work Experience 51
4.8 Employment status of Respondents. 52
4.9 SMEs strategic Marketing Practice and Environment
Perception. 43
4.10 Extent of Organization performance Measure 54
4.11 Hypothesis Testing 56
4.11.1
Hypothesis 1 56
4.11.2
Hypothesis 2 58
4.11.3
Hypothesis 3 59
4.12 Relationship between Strategic Marketing Practice
Organizational Performance 61
4.13 Interpretation and Discussion 62
CHAPTER FIVE: FINDINGS, SUMMARY, CONCLUSION,
RECOMMENDATION AND SUGGESTIONS FOR FURTHER STUDIES
5.1 Findings 64
5.2 Summary and Conclusion 65
5.3 Recommendation 66
5.4 Suggestion for Further Studies 68
Bibliography 70
Questionnaire 72
LIST OF TABLE
TABLE
Table
1: Test of Validity and Reliability
“ 2: Classification
of Firms based on activities
“ 3” Classification
of Firms according to Staff Strength
‘ 4: Gender
distribution of Respondents.
“ 5: Age
distribution of Respondents
“ 6: Education
Background of respondents
“ 7: Classification
of Respondents according to work Experience
“ 8: Respondents
work/Employee status
‘ 9: Extent
of Strategic Marketing practices and Environment Perception of SMEs under
Survey
“ 10: Extent
of Organizational Performance Measures
“ 11: X2 Contingency table (strategic Marketing Practice and Organizational Performance
“ 12: X2 Contingency table (Environment Perception and Organizational
Performance)
“ 13: X2
Contingency table
(Environmental Perception and Strategic marketing practice.
“ 14: Spearman
rho correction (Extent of Relationship between
strategic marketing practice and Organizational Performance)
CHAPTER ONE
1.1
INTRODUCTION
Small and medium scale enterprises (SMEs) is a
burgeoning horizon in the local and global arena. The dire need and understanding of its
revolutionary effects on any economy is rife.
This have made it remain very prominent in the industrial growth of the
sub-sector have been intensified. This
is evident in the various attempts to inspire developing countries to
accentuate and actively participate in small and medium scale enterprises.
Nigeria is a country of more than 130 million people, with
a lot of human and natural resources.
The volume of trade in the Nigeria economy is very substantial
and enormous, more so, are the types of economic activities becoming
specialized and advanced. The global
trade activities occasioned by Nigeria’s
trade development focus mainly of Nigeria in the context of West Africa.
According to Olubajo (1985) about 70% of Cargo traffic to West Africa countries from the United Kingdom is for Nigeria. This implies that without Nigeria as a
major market, adversely affected. Nigeria also
exports such products like cocoa, palm kernel, rubber, coffee, and few industrial
products. If SMEs are country would earn a substantial foreign exchange. One of the concentrating her resources on
SMEs is the expectation that such investment could help attain her import
substitution, and export promotion drive objectives, invariably, creating a
relieve on some of the problems of her balance of payments, the National income
and Gross Domestic products (GDP), low per capita income, poor standard of
living, social insecurity, inter alia.
Nigerian governments have over the yeas taken
actions to help increase participation and productivity in small and medium
scale enterprises (SMEs). Some of these
expedient actions include provision of subsidies in form of tax holidays and
other support services, integrating the bankers’ committee to address the
paucity of financial resources due to low domestic savings insufficient to
match with the level of investment consistent with national economic growth
targets, creating enabling environment, establishing industrial development
Centres (IDC), like the National economic schemes and programmes import duty
draw back, export credit guarantee scheme, export development and expansion
fund, import duty draw back, export credit guarantee scheme, export development
and expansion fund, structural adjustment programme, (SAP) with the expectation
that new entrepreneurial spirits and initiatives would be ignited to make SMEs
flourish. No doubt, much emphasis was
placed on SMEs to look inward, develop and increase their raw materials supply,
and boosts output and export trade.
Today, history is being made towards the creation of tomorrow’s
potential multinational corporations (Sanusi, 2003). The steps taken by various governments were
predicated on the recognition of the strategic importance of SMEs to the economy,
their low survival capacity, ad the need to develop entrepreneurial abilities
of Nigerians, despite these efforts by the government, the participation of
Nigerians in, and the performance of SMEs have been abysmally low. This malign situation, as argued by many
theorists, is traceable to inefficient and ineffective management practices.
The main motivation for being in business is to
achieve organizational goals. A lot of
company decisions affect the degree of achievement of organizational goals
(Osuaguwu, 2002). As regards SMEs,
decisions on products/services, and marketing affect the profitability of any
SME. The development in SMEs has always
been founded on the drive to achieve organizational goals efficiently. All management practices should, therefore,
be tailored towards the achievement of organizational goals.
Challenged by the overriding need to achieve
organizational goals, SMEs can explore new avenues to achieve these
organizational goals. A variety of
approaches can be used by are generally called strategic management. According to Jain (1983) as cited by Osuagwu
(2002), the thrust on strategic management has given rise to strategic
marketing.
Marketing considerations together with those of
other functional areas of business play an important role in structuring
corporate objectives and strategies. The
corporate strategy of a firm represents the pattern of resource allocation in
order to achieve the desired goals, and the level of interaction of an
organization with its environment.
Corporate strategy is therefore the art and science of formulating,
implementing and evaluating cross-functional decisions that enable an
organization to achieve stated objective (Adeleke, Ogundele, Oyenuga, 2003).
Marketing, both as a discipline and a way of life,
has a germane role lot play in the economy of a developing country like Nigeria. Without effective marketing activities, there
may be little progress in the national economy of Nigeria. It may be justified to assert that it is
through efficient and effective marketing practices that a developing country
like Nigeria
can participate efficiently and effectively in small and medium enterprises
(SMEs). With advancing technology and
increasing productivity, coupled with an ever changing environment (with its
attendant shocks and surprise), the future growth of an economy can be said to
be a function of the effectiveness and efficiency of its marketing practices.
As a result of the recent economic reforms in the
country, e.g deregulation, privatization and commercialization exercises, SMEs
are undergoing rapid and radical changes.
They are adjusting to these economic shifts. To understand and take advantage of the shifts,
which may be threats or opportunities, management of SMEs first need to
understand the important trends shaping the SMEs environment and the strategic
responses of competitors. Strategic
decisions by SMEs must take into account economic, political, competitive,
technological, legal, social, and cultural pressures. Among all the organic business functions in a
company marketing is the most exposed to changes in the external environment
(Mann, 1980). It is important to note
that the success of SMEs through their effective and efficient performance
means that the numerous benefits of industrialization will not elude Nigeria. Suffice it to say that small and medium scale
enterprises (SMEs) are behind the laudable economic success, growth and
development of today’s newly industrialized countries (NIC) such as China, Japan, Singapore, Korea, etc.
1.1
STATEMENT OF THE PROBLEM
The low performance of small and medium scale
enterprises (SMEs) in Nigeria
consequent o lack of strategic marketing know – how initiated the need for this
research. It is perhaps pertinent to say
that functional marketing practices in SMEs play a vital role in the
achievement of organizational goals.
Lack of marketing perspective makes optimum
corporate strategies unsuccessful when there are environment changes and
shifts, the influences of the environment (in terms of threats and
opportunities), and the marketing practices used in achieving objectives in the
face of the environmental influences.
The importance of marketing strategies varies form one industry to
another, just as, the impact of the Nigeria business environment on
particular industries varies often.
Effective understanding of industry dynamics will go a long way in
aiding management practices in specific industries.
Environment of business and its strategy have been
empirically demonstrated to have significant impacts on organization
performance. According to Henderson and Poole (1991), entrepreneurship involves more than
invention, inventions have treated strategy to be under the control of
organizational managers, while business environment have been seen as
constraints, which under certain conditions, organizational managers can
proactively, change.
Some researchers have been interested in explaining
variations in business firms’ performance across industries. Many have assumed that variable relationships
may be appropriately estimated by analyzing data from a cross-section of firms
representing various industries. In
these researches, natural business laws are assumed in exist regardless of
industry classification. However, some
have argued that the homogeneity assumption laws may exist only in the context
of similar strategies within an industry.
In the light of the above, three key areas of
environment perception, marketing strategies, and organizational performance
are to be investigated. An organization’s marketing strategy is tied to its
organization goals and environment perception.
Differences in organizational goals and perception of environment
characteristics result in a variety of marketing strategies. The standards of performance by which over
all marketing operations are generally evaluated are marketing profit, sales,
volume, market share, and marketing cost.
1.2
OBJECTIVES OF STUDY
The primary purpose of this research is to identify
areas of small and medium scale enterprises (SMEs) marketing practices, which
require strengthening in order to cope with the complex and dynamic nature of
SMEs environment. Pertinently, the
objectives of this research study are to:
i.
Determine the
strategic marketing practices of SMEs in Nigeria.
ii.
Determine the
perception of environment impacts by SMEs in Nigeria.
iii.
Determine the
relationship between strategic marketing practices and organizational
performance measures
iv.
Determine the
relationship between environment perception and strategic marketing practices.
v.
Determine the
relationship between environmental perception and organizational performance
measures.
1.3
RESEARCH QUESTION
In order to achieve the objectives of this research,
the study will attempt to provide answers to the following question.
i.
What is the
relative degree of importance attached to specific aspects of strategic
marketing?
ii.
What is the
relative degree of importance attached to specific aspects of strategic marketing?
iii.
What is the
relationship between strategic marketing practices and organizational
performance?
iv.
What is the
relationship between strategic marketing practices and environment perception?
v.
What is the
relationship between environments perception and organizational performance
measures?
1.4
HYPOTHESES
To provide answers to the research question, the
following hypothesis will be tested.
i.
That the
relationship between strategic marketing practices and organizational
performance measure is high and positive.
ii.
That the
relationship between environment perception and organization performance
measures is high and positive.
iii.
That the
relationship between environment perception and strategic marketing practices
is high and positive.
In the entire situation the null (Ho) hypothesis will be tested against the alternative
(HA) hypothesis.
1.5 SIGNIFICANCE OF THE STUDY
A study of this kind is expected to make theoretical
and practical contributions to small and medium scale enterprises (SMEs)
marketing activities. This study
provides a basis for closer scrutiny of the formulations and applications of
the different relevant aspects of strategic marketing in existence and in
use. Answers could then be sought
regarding contemporary applications of strategic marketing, its degree of
applicability in specific business concerns.
The research will, also, contribute to strategic marketing acceptability
and applications in industrial marketing and other similar sectors.
This study is likely to be useful to SMEs
organizations, manufacturing, service, and industrial companies, and
professional managers who are constantly looking for marketing approaches that
can be used to achieve organizational goals.
Also, government, organization, and individuals concerned with
formulating business policies can benefit from this study. Finally, this research study is expected to
stimulate research interests in other aspects of small and medium scale
enterprises (SMES) in general, and
marketing, in particular.
1.6
SCOPE AND LIMITATIONS OF THE STUDY
The foundation on which this study is based is that
organizational performance of SMEs in Nigeria is dependent on efficient
and effective strategic marketing practices.
This study will concentrate on strategic marketing practices of SMEs in Nigeria, and
the relationships existing between these practices and organizational
performance measures.
Marketing perspective has been extended to profit
and non-profit, product and services organization, etc. This study will be limited to profit making
SMEs in Nigeria. This is because their (SMEs) actions have
tremendous effect on the national economy.
The exploratory nature of this research work should
be noted so that its limitation can be understood. More so, the usual problems associated with
survey research methodology my constitute some of the limitation of this
research. The inadequacy of secondary
data from SMEs necessitated the need to acquire such from other external
secondary sources that may likely give a perception of SMEs performance from a
distance. Also the time frame of the
study restricted the research to some industrial areas in Lagos state.
1.7
RESEARCH METHODOLOGY
This research study is concerned with the strategic
marketing practices of small and medium scale enterprises (SMEs) in Nigeria. For the purpose of collecting necessary data
for this research, primary and secondary date collection methods will be
used. The primary data will be collected
with the aid of be asked to indicate their level of agreement or disagreement
with specific statements. The secondary
data will be collected from reports and documents from SMEs. Secondary data will also, be collected from
reports outside the companies and from literatures.
A total of twenty (20) indigenous small and medium
scale enterprises (SMEs) in Ikeja (10 companies), and Ilupeju (10 companies)
industrial areas of Lagos
state were used for this study. Questionnaires were administered to officers
and managers in these companies that are in the marketing/commercial
department.
Question were based on strategic marketing practices
and environment perception. For
strategic marketing practices, questions will cover such areas as marketing
objectives, marketing resources, market segmentation, product, pricing,
promotion, and distribution decisions.
Environments perception questions will cover areas as the impacts of the
economic, technological, buyer behaviour, competitive, social, political, and
legal factors.
Strategic marking practices and environment
perception will constitute the independent variables while organizational
performance measure will constitute the dependent variable base on:
i.
Return on
investment
ii.
Market share
iii.
Marketing
expenditures
iv.
Investment
intensity
v.
Customers’
satisfaction, the questions will be based on the firms’ performance and
operations for a period of five (5) years (2001 – 2005).
Responses to the question were analyzed using
frequency, percentages (%) chi-square, and spearman rho correlation
analysis. Findings from this research
will be comprehensively discussed in the light of the research problem,
hypotheses, purpose and objectives, research questions, literature of the
research, and other relevant issues to the research. Conclusions will be drawn and recommendations
made. Areas for further research studies
will be suggested.
1.8
LITERATURE REVIEW
A review of relevant literatures was made in the
following areas:
i. Marketing
in Developing Countries
ii. Industrial
Marketing
iii. Strategic
Marketing
iv.
environment of
Marketing
v.
Organizational
Performance Measure
vi.
Small and Medium
Scale Enterprise
Marketing Management
1.9
PLAN OF THE STUDY
The research work will be divided into five (5)
parts: part one (1), introduction; part two (2), Review of related Literatures;
part three (3) research methodology; part four (4) interpretation, analysis and
discussions; part five (5) Conclusion, recommendations and suggestions.
1.10 DEFINITION OF TERMS
Idest: That
is
Inter alia: Among other things
Life blood: necessary
requirement which given support
Marketing –mix: the expedient marketing elements/functions that
enhance effect and efficient marketing.
Niche: Suitable,
comfortable, advantageous position, place situation.
Operational zed: breaking
up a complex system into functional parts
Synergies
(synergistic): a pool of collective
efforts, galvanized towards achieving set goals and
objectives.
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