CHAPTER ONE

INTRODUCTION

1.1   Background ofthe Study

The problem of marketing of Small-Scale Enterprises is truly born of our time; it is product of the standard of timing enjoyed by advanced communities and the ways in which those communities organize the resources to meet the standard. The marketing is as old as trade itself but the marketing of small scale product, as it is introduced today has affected a large segment of the economy because of the important position and role occupied by small and medium scale business. But despite this recognized status of SMEs and the adoption of different strategies of marketing excess capacities and satiated appetites is still a dream.

The ideal marketing strategies of Small-Scale Enterprises should be adequate market to cover the job of getting people to buy. The persuasion of the customer should be the centre of a whole complex of activities ranging from the conception of the products through to a point beyond its sale where every endeavour is made to sustain the good will of the customer towards the product and it’s well identified producer.

To cover this spectrum of activities and to expand the success rate and the performance of the success rate and the performance of the economy through the small and medium scale enterprises marketing strategy can therefore be defined as adjusting the whole activity of a business to the needs of the customer or potential customer and to give such product (Sma1l Scale Product) and advantage over its competitors. This is really a definition of attitude within the SMEs which demands absolute customer orientation the organization wide generation of market intelligence pertaining to current and future customer need, dissemination of the intelligence across department and organization-wide responsiveness to it. (Crawer 2004).

The effective strategy for the marketing of small scale business covers every action by the fun and its employees which in any way might affect customer attitudes towards the fun and products or service it suppliers. The allocation and the use of resources to develop new products, the design of products, the efficiency of production, packaging advertising credit, branding, the method of personal selling distribution, ability to deliver, after sales services are the influence on the success of marketing SMEs today.

According to Lowly (2005) marketing removes the distinction between mailing and selling, both affect customer attitudes whereas marketing is a comprehensive relationship to the market, selling is specifically concerned with affecting customer attitudes so that they favour a particular product or services. According to him original investment decisions should be based on marketing, as should be the continuing profitability of such decisions.

Most developing countries including Nigerians are undergoing reforms that opening their economics to greater international competition meanwhile the domestic factors markets are not adequately developed to ensure the successful adoption of SMEs to this new competitive environment, unlike large firms SMEs are at a disadvantage and require efficient and effective marketing strategies in order to survive and raise profitability level.

The importance of SMEs to large – term economic stability, decries from their size and structure which under adequate marketingcondition allow them the flexibility and ability to weather adverse condition of economic. SMEs play an important role in fostering income stability, growth and development as well employment modern economics operate as complex network of firms in which a firm’s competition position depends, in part, on the efficiency of its suppliers. Therefore, SMEs competitiveness affects the competitive position of the economy as whole. In addition, adopting the best marketing strategy for SMEs improved the efficiency of domestic markets and make productive use of scare resources, such as capital, facilitating long term economic growth.

Despite this advantage offered by SMEs they have limited aces to capital markets, both locally and internationally in part because of higher risk informational barriers and the higher cost of intermediation for smaller firms. As a result, SMEs often cannot obtain long term finance in the form of term debt and equity, hence this is need for SMEs in Nigeria to understand the complexity modernity and intensity of modern marketing strategy which is basically to maintain the maximum profitability of capital equipment in buyers markets which are steatite under conditions of extensive competition. Effective marketing strategy that will allow the small scales enterprises to stand out against all competition need to consist of amalgamation of design, packaging, branding, advertising, price policy and be used to create the image of a unique product.

1.2   Statement of Problem

The problem of SMEs are enormous ranging from restricted access to loans and grants, debt equity and insufficient supply of skilled workers and the general inability to gain advantage over competitions. They face constraints in the technical knowhow to harness marketing information to gain competitive edge.

The diminished role of SMEs to public contracts and sub contracts often because of cumbersome bidding procedure and low lack of information inhibit participation in this market. Inefficient distribution channels and their controls by large firms pose important limitations to marketing for SMEs. Other problems are international competition, taxation and tariffs, legal problem management skills and training and institutional constraints make it imperative for SMES to adopt effective and efficient marketing strategies.

1.3 Purpose ofthe Study

The purpose of their study is to determine the best marketing strategies for Small-Scale Enterprises, with the following specific objective.

i.     To identify the existing marketing practices to SMEs operations

ii.    To determine a practicable marketing strategy for SMEs that gives competitive advantage and long terms profitability.

iii.   To identify the constraints to the survival of SME and the adoption of good marketing strategy.

iv. Formulate ways and recommendations to sustainable marketing strategies for Nigerian SMEs.

1.4   Research Questions

The study answers the following question:

i.     To what extent has the existing marketing practices affected the performance of SMEs.

ii.    What marketing strategies guarantee practicability and competitive advantage for SMEs?

iii.   What are the constraints and challenges faced by SMEs in the quest for enhanced profitability?

1.5   Research Hypotheses

1.               Null Hypothesis: Existing marketing practice has not improved the performance of SMEs in Lagos.

Alternate Hypothesis: Existing marketing practices has improved the performance of SMEs in Lagos.

2.               Null Hypothesis: Positioning marketing strategy does not guarantee profitability and competitive advantage for SMEs.

Alternate Hypothesis: Positioning marketing strategy guarantee profitability and competitive advantage for SMEs.

3.               Null Hypothesis: The prevailing environment in Lagos does not constitute constraints and challenges to the effective marketing of SME products.

Alternate Hypothesis: The prevailing environment in Lagos constitute constraints and challenges to the effective marketing of SME products.

1.6   Scope oftheStudy

The study focuses only in the marketing strategies for Small-­Scale Enterprises in Lagos state with Shomolu Local Government Area as a case study.

The study hopes to cover some selected Small-Scale Enterprise within this area with product market. A specific product /or line of related product that can satisfy a particular set of needs and wants for all people on organization that are willing and able to purchase the products.

Strategic Marketing: Involves planning, objectives, control units, setting objectives for target markets and translation of such plans into short-term result with implementation and evaluation techniques.

Positioning Strategy: The combination of product channel of distribution, price and promotion strategies selected by the management to position a firm against its key competitors in the needs and wants of the target market.

1.7   Definition of Terms

Small Scale Enterprises: a business unit or organization with less than 50 employees on its payroll. Such organization also uses low technology for production process.