PLACE OF CONVENTIONAL MARKETING THEORIES AND TECHNIQUES IN TERMS OF PRICING, DISTIRBUTION AND ADVERTISING, IN THE MANAGEMENT OF SMALL SCALE ENTERPRISES IN NIGERIA

ABSTRACT

The work considers the place of conventional marketing memories and techniques in the operations of small scale enterprises in Nigeria, it thrust is pricing, distribution and promotion with special bias for adverting. The main objective of this study is to examine the place of conventional marketing theories and techniques in the management of small scale enterprises in Nigeria. A study of selected firms in Abia State Nigeria. The specific objectives includes to:Ascertain the effect of exclusive distribution theory and pricing techniques on effective planning in small scale enterprises; Examine the effect of skimming pricing theory on sales performance; Ascertain the effect of advertising on product diffusion.The data base is survey oriented thus questionnaire guided. A total of 60 selected small and medium scale enterprises were surveyed and data was analysed using spearman rank correlation, Pearson correlation and simple regression.The summary of findings of this research work are; the adoption of exclusive distribution theory and strategy in the marketing of products among small scale enterprises in Nigeria do not significantly effect sales volume planning. This is because the market offer of these firms are not often unique to evoke demand and the level of competition and the small scale enterprise level is also very high. The enterprises also find it difficult to segment their market and the geographic spread of these market is not wide. Based on this, market planning and management activities are poorly executed.Skimming pricing strategy and theory is not acceptable among small scale enterprises in Nigeria especially as they do not enhance sales performance. This situation is traceable to the quality of the product of these firms. They lack innovative and aesthetic values that attract demand in the absence of the pull and push advertising strategies, hence sales volume is observed to be low, market coverage is poor and customer loyalty is difficult to be established and sustained.Advertising contributed significantly in the product diffusion process especially based on the use of below the line media of word of mouth communication, mobile vehicular advert, referral marketing and the use of opinion leaders. These media of advertising complement the role of the push and pull advertising strategies given the poorly adopted role of marketing intermediaries. In line with the major findings of this work, the researchers recommend that;Small and medium scale enterprises should employ exclusive distribution theory and strategy in the marketing of products and should also improve on their product offer and make them unique so as to evoke demand and should also adopt segmentation technique. This will enhance market planning and management activities.Small and medium scale enterprises should also improve the quality of their products as they lack innovative and aesthetic values that attract demand in the absence of the pull and push advertising strategies, which would have a positive effect on sales volume, market coverage and customer loyalty. Small and medium scale should also improve on advertising techniques so as to enhance the product diffusion process using efficient and effective advertising media.

TABLE OF CONTENTS

Title -------------------------------------------------------------------------------------------------------i

Declaration-------------------------------------------------------------------------------------------------ii                                                                                                           

Certification -----------------------------------------------------------------------------------------------iii                                                                                                         

Dedication -------------------------------------------------------------------------------------------------iv                                                                                                       

Acknowledgement-----------------------------------------------------------------------------------------v                                                                                                   

Table of contents------------------------------------------------------------------------------------------vi                                                                                             

List of tables------------------------------------------------------------------------------------------------ix

Abstract------------------------------------------------------------------------------------------------------x                                                                                                     

CHAPTER ONE: INTRODUCTION

1.1   Background of the study------------------------------------------------------------------------------1

1.2   Statement of problem----------------------------------------------------------------------------------2

1.3   Objectives of the study -------------------------------------------------------------------------------3

1.4   Research Questions -----------------------------------------------------------------------------------3

1.5   Research Hypothesis ---------------------------------------------------------------------------------- 4

1.6   Significance of the Study------------------------------------------------------------------------------4

1.7   Scope of the study --------------------------------------------------------------------------------------4

1.8   Limitations of Study------------------------------------------------------------------------------------4

CHAPTER TWO:  REVIEW OF RELATED LITERATURE                                                                                           

2.1 Conceptual review---------------------------------------------------------------------------------------6

2.1.1      Introduction-----------------------------------------------------------------------------------------6

2.1.2 Nature and Meaning----------------------------------------------------------------------------------6

2.1.3 Marketing characteristics of small firms-----------------------------------------------------------8

2.2 Theoretical Framework--------------------------------------------------------------------------------12

2.2.1 Theory of Product Diffusion------------------------------------------------------------------------12

2.2.2 Theory of market penetration, skimming and competitive pricing-----------------------------14

2.2.3 Theory of distribution (selective, intensive and exclusive)-------------------------------------15

2.2.4 Theory of segmentation------------------------------------------------------------------------------18

2.2.5. Theory of product Positioning ----------------------------------------------------------------------24

1.2.5      Theory of Consumer Analysis---------------------------------------------------------------------25

2.2.6 Theory of Market Measurement--------------------------------------------------------------------28

2.2.7 Marketing Theory ------------------------------------------------------------------------------------33

2.3 Contribution of Small and medium scale enterprises to economic development in Nigeria---34

2.4 Challenge to the development of Small and medium scale enterprises---------------------------38

2.5 Empirical Review---------------------------------------------------------------------------------------40

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Research design------------------------------------------------------------------------------------------43

3.2 Study area-------------------------------------------------------------------------------------------------43

3.3 Population of the study----------------------------------------------------------------------------------44

3.4. Sampling plan-------------------------------------------------------------------------------------------44

3.4.2 Sampling size------------------------------------------------------------------------------------------44

3.5 Data collection Procedure------------------------------------------------------------------------------45

3.5.1 Instrument----------------------------------------------------------------------------------------------45

3.5.2 Source of Data----------------------------------------------------------------------------------------45

3.7 Method of Data analysis--------------------------------------------------------------------------------45

3.8 Model Specification-------------------------------------------------------------------------------------45

3.9 Validity---------------------------------------------------------------------------------------------------46

CHAPTER 4: DATA PRESENTATION AND ANALYSIS

Table 4.1 Questionnaire distribution and retrieval------------------------------------------------------47

Table 4.2 Exclusive distribution on sales volume planning --------------------------------------------49

Table 4.3 skimming pricing in sales performance--------------------------------------------------------51

Table 4.4 computation of r_s--------------------------------------------------------------------------------51

Table 4.5 Advertising and product diffusion-------------------------------------------------------------53

Table 4.6: Advertising and product diffusion rate--------------------------------------------------------54

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary-----------------------------------------------------------------------------------------------57

5.2 Conclusion---------------------------------------------------------------------------------------------58

5.3 Recommendations -----------------------------------------------------------------------------------58

References

LIST OF TABLES

Table 4.1 Questionnaire distribution and retrieval------------------------------------------------------47

Table 4.2 Exclusive distribution on sales volume planning --------------------------------------------49

Table 4.3 skimming pricing in sales performance--------------------------------------------------------51

Table 4.4 computation of r_s--------------------------------------------------------------------------------51

Table 4.5 Advertising and product diffusion-------------------------------------------------------------53

Table 4.6: Advertising and product diffusion rate--------------------------------------------------------54

CHAPTER ONE

INTRODUCTION

1.1  Background of Study

In the current competitive business environment, marketing can be seen as a matrix of business activities organized to plan, produce, price, promote, distribute goods, service and ideas for the satisfaction of relevant customers and clients. Achumba & Osuagwu (19940 posit that marketing is important for the success of any organization, whether service or product oriented. Boohene, Sheridan, and Kotey (2008) confirm that marketing performance is central to success in today’s fast moving competitive markets, and measuring marketing’s performance is critical to managing it effectively. The process of communicating the value of a product or service to customers, for the purpose of selling the product or service has become complex in recent times due to globalization. There is also the need to exceed the expectation of customers since satisfiedcustomers: (i) are the organizations least expensive customers; (ii) buy again and again; (iii) talk favourably about the business, which means free advertising; (iv) pay less attention to competition and (v) tend to buy new products or equipment lines an organization may, add later (Kotler, 1988). As a result of this, organizations, including Small and Medium Enterprises(SME’s) have realized the need to institute strategies that will help them gain an in depth understanding of the market, particularly with regards to their market, particularly with regards to their competitors and customers. Organizations achieve this objective effectively by considering the total marketing environment and its impacts on a company or product or service (Aaker,1988). The role of SME’s in economic development cannot be underestimated.  According to Subrahmanya et.al(2010). Policy makers, economists and business experts admit that SME’s are the drivers of economic growth as they have contributed to over 50% of the Gross Domestic Product(GDP) and provided over 60% of the total employment in so-called developed, high income countries. Developing nations have also benefitted from SME’s. In Nigeria for instance, the sector accounts for about 70% of industrial employment and well over 50% of the country’s GDP (Abor & Biekpe,2007). In spite of their invaluable contributions to economic growth, SMEs increasingly face fierce competition from larger firms due to emerging technologies, innovation and relaxing trade barriers. The situation makes it difficult for the SME’s to survive or maintain their business position in the local and global market (UNCTAD,2004).

1.2 Statement of Problem

Although it can be argued that the performance of SME’s is adversely affected in the global market, most of the enterprises in this sector in Africa and Nigeria in particular have, in their own small way adopted some marketing strategies that have enabled them survived the stiff competition over the years. As pertained in most developing countries, indigenous Nigerian SMEs also experience lack of trained manpower, poor infrastructural development, lack of adequate or sufficient capital, and also face intense competition form superior foreign companies. More importantly, owners of these businesses have understood the role that marketing strategies play in enhancing the performance of contemporary companies (Taiwo, 2010). The SME’s in Nigeria have also recognize this need and now incorporate various market mix elements to improve their market outreach/coverage, new product ratio, price positioning, competitive orientation, etc.  to survive and grow (John & Davies,2002). Although strategic marketing places a vital role in the performance of SMEs (as revealed and discussed in this study), many research efforts in the area of marketing practices in developing economies have emphasized on macro issues and the management structure of an organization as the measure of performance in terms of market share, growth, efficiency and well being of consumers and clients. According to Akinyele (2011), the static and macro analysis of marketing practices in developing economies, minimizes the imoact of marketing environment on the achievement of performance measures.

These a-for discussion are poorly adopted among SMEs in Nigeria, hence performancd is retarded. Given this, the work x-rays the place of conventional marketing theories and techniques of pricing, distribution and advertising in the growth and development of the economy of Nigeria via the SMEs.

1.3 Objectives of study

the main objective of this study is to examine the place of conventional marketing theories and techniques in the management of small scale enterprises in Nigeria. A study of selected firms in Abia State Nigeria. The specific objectives includes to:

i.               Ascertain the effect of exclusive distribution theory and pricing techniques on effective planning in small scale enterprises.

ii.             Examine the effect of skimming pricing theory on sales performance.

iii.           Ascertain the effect of advertising on product diffusion.

1.4 Research Questions

The following research question will be stated to guide the study, they are stated below:

i.               What is the effect of exclusive distribution theory and pricing techniques on effective planning in small scale enterprises?

ii.             What is the effect of skimming pricing theory on sales performance?

iii.           What is the effect of advertising on product diffusion?

1.5 Research Hypotheses

The following hypotheses stated in null form serve as a guide to the study. These hypotheses are stated below;

H₀₁: the assumption of exclusive distribution theory has no significant effect on sales volume planning in small scale enterprises.

H₀₂: skimming pricing theory has no significant effect on sales performance.:

 H₀₃: advertising has no significant effect on product diffusion.

1.6 Significance of study

This study will be significant to small and medium scale owners as it will enable them understand the marketing theories and strategies and theory effect on the marketing performance of SME’s. it will also serve as a spring board for further researchers who wants to research on the subject matter.

1.7 Scope of study

The scope of this study is limited to examine the place of conventional marketing theories and techniques in time management of small scale enterprises in Nigeria. The study is further limited to studying selected forms in South East Nigeria.

1.8 Limitation of study

In a study of this nature, a lot of problems are bound to appear. It was then a task for the researcher to strive to achieve the best I could in spite of these problems.

This study however, was limited by lack of relevant material. Past studies in this area of study are very scanty and difficult to come by

Finance: The researcher was constrained by lack of finance . A lot of expenses were also incurred in questionnaire typing and interview schedule. This constraint also posed a problem

The researcher being a graduating student had to allocate the available time between lecture hours and appointment schedule with these respondents. Even some of the educated people were reluctant filling their questionnaires.

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