SIGNIFICANCE OF STRATEGIC MARKETING PRACTICES TO THE EFFECTIVE AND EFFICIENT PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISE
ABSTRACT
Despite the fact that small and medium-sized enterprises (SMES) are rapidly garnering prominence as economic and industrial pillars for any nation seeking serious and revolutionary change, their development and administration have been treated with blatant levity and incompetence.
This has contributed significantly to some of the numerous challenges that SMEs face in order to survive and succeed in Nigeria. Aside from other external influences, strategic marketing management is a crucial internal component that has a significant impact on the performance of SMEs.
To better understand the significance of this idea, this study attempts to uncover the nature and outcome of the relationship between strategic marketing management methods and SMEs. The first chapter, which serves as an introduction, discusses the nature and structure of small and medium-sized firms (SMEs).
It also seeks to highlight the importance of strategic marketing tactics in the success of SMEs. The second chapter examines key literatures and past work by scholars, thinkers, and academics on the nature and impact of the relationship between SMEs and strategic marketing management methods.
The third chapter describes the methodology used to collect and analyse data for the goal of the research. Chapter four focuses on the display, analysis, and interpretation of obtained data to ensure tacit and easy, and more importantly, meaningful understanding. State the significant findings for each hypothesis.
Chapter five provides a summary of the study, conclusions, recommendations, and proposals for further research.
Chapter one
1.1 Introduction
Small and medium-sized firms (SMEs) are a growing horizon in both the local and global markets. The urgent need for and knowledge of its revolutionary implications on any economy is widespread.
As a result, the sub-sector’s industrial growth has become more intense. This is visible in many efforts to encourage developing countries to prioritise and actively participate in small and medium-sized businesses.
Nigeria is a country of about 130 million people, with abundant human and natural resources. The volume of trade in Nigeria’s economy is immense, and the types of economic activity are getting increasingly specialised and advanced.
The global trade activities resulting from Nigeria’s trade development are mostly focused on Nigeria in the context of Western Africa. According to Olubajo (1985), Nigeria accounts for approximately 70% of all cargo travel from the United Kingdom to West African countries.
This suggests that without Nigeria as a significant market, negatively impacted. Nigeria exports cocoa, palm kernel, rubber, coffee, and a few industrial products. If SMEs existed, the country would generate a significant amount of foreign exchange.
One of the reasons she is focusing her resources on SMEs is the expectation that such investment will help her achieve her import substitution and export promotion goals,
thereby alleviating some of the problems with her balance of payments, national income and GDP, low per capita income, low standard of living, and social insecurity, among others.
Nigerian governments have taken steps over the years to help promote participation and productivity in small and medium-sized enterprises (SMEs). Some of these expedient actions include providing subsidies in the 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 the level of investment consistent with national economic growth targets, creating an enabling environment, establishing industrial development centres (IDC),
like the National economic schemes and programmes import duty drawback Without a doubt, significant stress has been placed on SMEs to look inward, grow and expand their raw material supply, and enhance output and export commerce. Today, history is being written to create tomorrow’s prospective international enterprises (Sanusi, 2003).
The steps taken by various governments were based on the recognition of the strategic importance of SMEs to the economy, their low survival capacity, and the need to develop Nigerian entrepreneurs.
Despite these efforts by the government, Nigerian participation in and performance of SMEs has been abysmally low. Many thinkers believe that inefficient and unproductive management techniques are to blame for this bad scenario.
The primary motive for working in business is to attain organisational goals. Many business decisions have an impact on the extent to which organisational goals are met. In the case of SMEs, product/service and marketing decisions have an impact on their profitability.
SMEs’ development has always been driven by the desire to fulfil organisational goals in an effective manner. All management practices should be adjusted to fulfil organisational goals.
When confronted with the overwhelming requirement to fulfil organisational goals, SMEs can explore new pathways to accomplish these goals. Strategic management encompasses a range of approaches. According to Jain (1983), as referenced by Osuagwu (2002), the emphasis on strategic management has resulted in strategic marketing.
Marketing concerns, along with those from other functional areas of company, play an essential part in shaping corporate objectives and strategies. A firm’s corporate strategy describes the pattern of resource allocation in order to achieve the desired goals, as well as the level of engagement between the organisation and its environment.
Corporate strategy is thus the art and science of developing, implementing, and assessing cross-functional decisions that allow an organisation to achieve its stated goals (Adeleke, Ogundele, & Oyenuga, 2003).
Marketing, as a science and a way of life, plays an important part in the economy of developing countries such as Nigeria. Without competent marketing operations, Nigeria’s national economy may not make significant growth.
It may be reasonable to argue that efficient and successful marketing methods enable a developing country like Nigeria to participate efficiently and effectively in small and medium-sized enterprises (SMEs).
With advances in technology and productivity, along with an ever-changing environment (with its associated shocks and surprises), an economy’s future growth can be attributed to the effectiveness and efficiency of its marketing techniques.
As a result of recent economic reforms in the country, including as deregulation, privatisation, and commercialization activities, SMEs are undergoing rapid and radical transformations. They are responding to the economic developments.
To recognise and capitalise on shifts, which may be threats or opportunities, SME management must first grasp the major trends affecting the SME environment, as well as rivals’ strategic responses.
SMEs’ strategic decisions must consider economic, political, competitive, technological, legal, social, and cultural pressures. Marketing, of all the organic business operations in a company, is the most vulnerable to changes in the external environment.
It is vital to emphasise that the success of SMEs, as demonstrated by their effective and efficient performance, ensures that Nigeria will reap the multiple benefits of industrialization.
It is sufficient to mention that small and medium-sized firms (SMEs) are responsible for the remarkable economic success, growth, and development of today’s newly industrialised nations (NICs) such as China, Japan, Singapore, and Korea.
1.1 Statement of the Problem
The low performance of small and medium-sized firms (SMEs) in Nigeria as a result of a lack of strategic marketing knowledge prompted the necessity for this research. It is perhaps appropriate to state that functional marketing approaches in SMEs play an important role in achieving organisational objectives.
A lack of marketing perspective causes optimal corporate strategies to fail when there are environmental changes and shifts, environmental influences (in terms of threats and opportunities), and marketing practices used to achieve objectives in the face of environmental influences.
The relevance of marketing tactics varies per industry, just as the impact of the Nigerian business environment on certain businesses varies frequently. An accurate understanding of industry dynamics will go a long way towards improving management techniques in specific industries.
The business environment and strategy have been shown in empirical studies to have a major impact on organisational performance. According to Henderson and Poole (1991), entrepreneurship is more than just invention.
Inventions have been treated as under the control of organisational managers, whereas the business environment has been viewed as constraints that, under certain conditions, organisational managers can proactively change.
Some researchers have been interested in understanding why commercial enterprises perform differently across industries. Many people believe that variable correlations can be accurately calculated by analysing data from a cross-section of organisations representing diverse industries.
In these studies, natural business laws are believed to exist regardless of industry classification. However, some believe that homogeneity assumption legislation may only apply to industries with similar strategy.
In light of the preceding, three main areas of environmental perception, marketing tactics, and organisational performance will be explored. An organization’s marketing strategy is linked to its aims and environmental perception.
Marketing methods vary depending on organisational aims and perceptions of environmental variables. Marketing profit, sales, volume, market share, and marketing cost are the standard performance metrics used to evaluate all marketing operations.