EFFECT OF PROMOTIONAL TOOLS AS A MEANS OF SMES MARKETING STRATEGIES

1.1 Introduction

Small and Medium Enterprises (SMEs) are the backbone of economic expansion and progress everywhere, including Nigeria. They are the most practical and real means of achieving industrial growth that is self-sustaining (Oyebamiji, Kareem, and Ayeni, 2013). Productivity in SMEs is essentially the achievement of the maximum degree of performance with the least amount of resources used. It shows how many and how well-made the items are in relation to the resources used. It is clear from the productivity literature that inputs and outputs are at the heart of practically all definitions of productivity. The marketing strategies of small enterprises have been evaluated in relation to current models that are based on the strategies of giant firms. This is most likely the cause of the criticism that small-scale marketing techniques have received for being non-traditional, informal, transient, and non-strategic.

This chapter will address the background information that motivated this study, the challenges that prompted it, its aim, and its objectives as a preface to subsequent sections of the study. Additional factors include the study's significance, scope, limitations, research questions and hypotheses, and the definition of technical terms.

1.2 Background of Study

Over the past several years, promotional strategy has grown significantly in prominence and value as a tool for marketers. Nonetheless, there are differences in the outcomes of marketing tactics depending on the place where the company is mentioned as well as the attractiveness of the relevant brand (Alvarez & Casielles, 2005). The telecommunications sector is primarily responsible for the widespread, fiercely competitive, and alluring sales campaigns that are currently seen in Nigeria. Businesses must run promotions to raise awareness among potential clients of their existence and products in order to increase sales. To retain these clients, they must convince them to purchase their goods. The target market, the product's stage in its life cycle, its attributes, its decision-making phases, and its distribution route must all be taken into account by the groups when choosing an acceptable promotional mix.

The actual implementation of marketing aspects by small company firms is a crucial aspect of marketing promotional techniques. The new paradigm marketing concept as it relate to relationship marketing. Coviello et al (2002) have noted, this may be because such criticisms are based on the practices of larger firms. Furthermore, there could be a problem with the imposition of academic marketing standards that disregard a lot of the special components that small businesses use to sell themselves. Some small businesses may not even use marketing, yet they nonetheless manage to thrive. The majority of small businesses appear to employ a relationship-based marketing strategy, according to the survey.

Many people find the potential independence and financial rewards that can come from owning their business. Some however, hesitate to pursue their dreams because they do not think they have enough education, experience or money while some are simply afraid they might fail. Others cannot accept the idea that they can change their lives and that people like them could ever own a business. For some still, going into business is to eke-out living because they have lost their job and there are no other really available ways to earn a living or even survive. Whatever the reason, owning your business could be one of the most challenging, satisfying, demanding and rewarding step one takes in life. However, there are real risks and difficulties in starting any new business. These necessitate a proper feasibility study and better marketing practices. Many experts recognize marketing practice as a major problem and relevant solution to the growth of small-scale business.

In both the developed and developing countries the government is turning to small industries as a means of economic development and a veritable means of solving problems. It is also a seedbed of innovations, inventions and employment. At present, in Nigeria small-scale business assists in promoting the growth of the country’s economy, hence all the levels of governments at different times have policies which promote the growth and sustenance of small-scale business. Small-scale industry orientation is part of the Nigerian history. Evidence abounds in the communities of what successes our great grandparents made of their respective trading concerns, yam barns, cottage industries, and the like. The secret behind the successes of a self reliant strategy does not lie in any particular political philosophy; so much as the people attitude to enterprise and in the right incentive is adequate enough to make risk worthy business a necessity for the nation. There had been many policy actions by the government, governmental agencies and the private sector to promote Small and Medium Enterprises (SMEs) in Nigeria.

SMEs have contributed greatly to Nigeria development by provision of employment, marketing of goods and services and, growth and development of rural areas. It has also brought about the growth of indigenous entrepreneurship in Nigeria. A business whether small or big, simple or complex, private or public, is created to provide competitive prices. Business in Nigeria has been classified as small, medium and large. However, a small-scale industry can be defined by the criteria of project costs, capital cost, turnover by the employee etc. The Federal and State Ministries of Industry and Commerce have adopted, the criterion of installed fixed capital to determine what small-scale industry is, in this respect the value has varied from N60,000 in 1972 N159,000 in 1975, N250,000 in 1979 and N500,000 in 1986, to a fixed investment not more than N2,000,000 (two million naira) in 1992. These figures are exclusive of building and subject to government determination and land pervading objectives of public policy. in the wake of SAP and SFEM, this value has now been reviewed and subsequently increased to five million naira. Since this happened, there may be a need to classify the small-scale industry into MICRO and SUPER MICRO business, with a view to providing adequate incentives and protection for the former.

In the meantime, any business or enterprise below the upper limit of N250,000 and whose turnover exceed that of a cottage industry currently put at N500,000 per annum is small-scale industry. The National Directorate of Employment (NDE) concept of a small-scale industry had been fixed to a maximum of N35,000. However, there are many enterprise in Nigeria categorized as small businesses. Most of them are in the commercial sector and there is also trend now towards the service industry, hotels, restaurants, fast food etc.

Small-scale business, small-scale industries and small-scale entrepreneurship are used interchangeably to mean a small industry firm and will be used as such in this paper. Its deliberation was to refer to the operational definition. In Nigeria and worldwide the seem to be no specific definition of small business different authors, scholars, and school have different ideas as to differences in capital outlay, number of employees, sales turnover, fixed capital investment, available plant and machinery, market share and the levels of development these feature equally vary from one country to another.

Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the Effect of Promotional Tools as a Means of Small and Medium Enterprises (SMEs) Marketing Strategies.

1.3 Statement of Problems

Investigation revealed that the desirability of the brand in question and the place where the company is mentioned both affect how different promotional techniques work. In Nigeria today, the telecom sector is largely responsible for the prevalence of sizable, competitive, and alluring sales promotions (Alvarez and Casielles, 2005).

The very low productivity of the private sector and the lack of diversification of the economy are due mainly to the inhospitable business environment, infrastructure deficiencies, poor security of lives and property and the use of obsolete business methods all acting as constraint. But many experts recognize marketing as a major problem and relevant solution to growth of small-scale business.

1.4 Aim and Objectives of Study

The aim of the study is to investigate the Effect of Promotional Tools as a Means of Small and Medium Enterprises (SMEs) Marketing Strategies. In achieving this aim, the following specific objectives were laid out as follows:

1. To examine the factors that hinder the effective promotion of SMEs product marketing in the area under study;
2. To identify the promotional strategies that enhance small and medium scale enterprises productivity; and
3. To ascertain the correlation between business location and efficient SMEs productivity in the area under study.

1.5 Research Questions

The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

• Is there correlation between business location and efficient SMEs productivity in the area under study?
• What are the promotional strategies that enhance small and medium scale enterprises productivity?
• What are the factors that inhibit the effective promotion of SMEs product marketing in the area under study?

1.6 Research Hypothesis

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

Hypothesis One

• H0: Promotional strategies has no significant effect on SMEs productivity in the study area
• H1: Promotional strategies has significant effect on SMEs productivity in the study area

Hypothesis Two

• H0: Small and Medium Enterprises location has no significant effect on productivity in the area under study
• H1: Small and Medium Enterprises location has significant effect on productivity in the area under study

1.7 Significance of Study

The outcome of this research will help SMEs Owners/Managers to determine whether or not effective promotion will boost sales and profit. Promotional techniques are important, and small and medium-sized businesses should know this. Promoting a business is an active activity that requires careful consideration to get the greatest outcomes. This demonstrates how important advertising is in conveying to consumers the advantages of a good or service.

The results of the study would provide an insight into the kind of marketing practices adopted by small-scale in accordance with the traditional expository tendencies of marketing concept, which focuses in satisfying the need and wants of target market profitably. This knowledge would no doubt help entrepreneurs, academics, scholars and marketing practitioners alike to keep abreast of current marketing practices of small-scale business. Essentially, the study would contribute immensely to the expansion of and improvement of the theoretical base of marketing teachers in terms of practices common in small-scale businesses.

1.8 Scope of Study

The scope of this research is focused on the Effect of Promotional Tools as a Means of Small and Medium Enterprises (SMEs) Marketing Strategies using SMEs in Uyo Metropolis located at Akwa Ibom State as a case study.

1.9 Limitations of the Study

During the course of this study, many things militated against its completion, some of which are:

1. Time Constraint:The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
3. Lack of Initial Cooperation from Respondents: A particular limitation of this work came as a result of the respondent refusal to offer their cooperation at the initial time they were contacted. This contributed in making the success of this research study difficult.

1.10 Definition of Terms

Strategic Planning:

This is a process of defining organization strategic, decision and making decisions on allocation its resources, to measure this strategy, includes its capital and people.

Organization:

This is an organized body of persons or cooperate bodies aiming towards a particular objective.

Small Scale Business:

These are firm’s organizations with less than 250 employees and whose asset base is below N200m.

Objectives:

These are the future expectations of an individual’s cooperate body or organization. They are the targets which an organization hopes to achieve. Objectives are usually on a long term basis.

Business:

This is an economic activity oriented towards producing goods and services at a profit of satisfaction to mankind.