Volume 2 (April), 2019: 77 – 89. POLITICAL ECONOMY OF PROMOTIONAL STRATEGIES AND THE GROWTH OF SMALL AND MEDIUM SCALE ENTERPRISES IN AFRICA: THE CASE OF NIGERIA
POLITICAL ECONOMY OF PROMOTIONAL
STRATEGIES AND THE GROWTH OF SMALL AND MEDIUM SCALE ENTERPRISES IN AFRICA:
THE CASE OF NIGERIA
Nelson
Goldpin OBAH-AKPOWOGHAHA, PhD
Department of Politics and International Relations;
North West University, South Africa
&
Bridget Uchenna EGWU
Department of
Management and Accounting,
Faculty of
Administration
Obafemi Awolowo
University,
Ile-Ife,
Nigeria
Abstract
This study examined the Political
Economy of Promotional Strategies and Growth of Small and Medium Scale
Enterprises (also called small-scale enterprise) in Africa with a special focus
on Nigeria. The data for this study were generated through the administration
of a questionnaire to entrepreneurs and managers of small and medium scale
enterprises (SMEs) in Nigeria. Convenience sampling was used to select 40
respondents from each category of SSEs totaling 240 entrepreneurs. Data
gathered were analyzed using descriptive statistics such as tables, percentages
and linear regression. The results showed that the various promotional
strategies used in Nigeria by SSEs included a display (25%), advertising (18%),
radio (19%), television (15%), gifts items (12%), and billboard (13%). SSEs
never used broadcasting, promotions (68%), out of home (68%), and print media
(63%), that could have enhanced their performance. Results also showed that the
results major factors that influenced the choice of promotional strategies used
by SSEs were the cost implication of using the PS (73%), resources of the SSEs
(79%) and growth orientation (73%), while other factors included location of
business (71%), management approach (86%), and overall success and survival
rate (75%). Finally, the results showed
that promotional strategies had no significant effect on the growth of SSEs in
Nigeria [advertising (t=0.53;p<0.05), sales promotion (t=1.01; p.0.05), and
product packaging t=0.80, p>0.05)].
The study concluded that promotional strategies enhance the growth of
SSEs, none - the- less, the Nigeria small-scale enterprises failed to use the
promotional strategies to their advantage.
Keywords: Nigeria.
Political Economy, Promotional Strategies, Small-scale Enterprises
Corresponding
Author*
Introduction
Industrial revolution of world economy has given more
space to local investors which has galvanized into Small-scale Enterprise (SSE)
that are mainly run by capitalists whose employees fall below 500. It operates
within a small segment of an economic system where other market forces are at
competition for space in context of demand and supply. Studies have revealed
that the development of African economy can be aided through government
intervention in SSE, giving soft loan and creating a conducive atmosphere for
it to thrive (European Commission, 2003; United Nations, 2008). Consequently,
project implementation, communal crises, ethnic bigotry and among others have
affected the budgetary allocation of most government in Africa in creating good
atmosphere for SSEs to thrive. While literature on SSEs surveys have stressed
the important of SSEs for economic reawakening in African economies (World
Bank, 2010; 12; Zwinoira, 2015 cited in Muriithi, 2017). Explicitly, issues that have served as a challenge to proposed SSEs’ owners in Africa
are the problems of consistence power supply; modern technologies; and basic knowledge
about what entails SSEs. This situation has worsened due to the plaque of corruption
bedeviling governmental institutions in the African political system and it has
constituted a huge barrier to its viable emergence in the continent (Obah-Akpowoghaha
et al., 2014).
Nigeria and
other African countries have been entangled with inconsistent policy reforms,
changing regulatory policies, volatile market place and rapidly evolving
technological advancement have exposed businesses thus leading to an
unpredictable business environment which continues to pose challenges to SSEs ability
to compete favourably and remain profitable in the continent. Despite the
overall importance of SSEs, every year many of them fail in their tens of
thousands in most African countries especially in Nigeria and this has been
associated with low support from the Nigerian government and the problem of
insecurity.
At the
onset of the new millennium, 24 per cent of businesses in the South failed
within the period of two economic years and while the total of 63 per cent were
incapacitated within six years in the global economic system (Wheelen and
Hunger, 2000). In Nigeria, many of these
businesses experienced premature deaths which may be associated to weak
governmental institutions, and because of the crucial role played by these
SSEs, there is an increasing need to understand the peculiarity of this sector
to ensure its growth and sustainability.
Essien (1995) notes that this failure rate is frightening and attributes
it to militating factors such as poor management, lack of human resources and
low production capacity among others. Despite the fact that these factors have
been studied and improved upon, SSEs continue to be plagued by poor performance
levels and high failures rates still persist till date even in the face of
increasing government support and interventions. There is therefore the need to
investigate how promotional strategies affect the growth of SSEs in Nigeria;
hence this study.
Scholarly
works have indicated that the importance of effective promotional strategies
cannot be overemphasized especially in the developing world where the need to
encourage local investors as a synergy to boost economic growth is highly
needed (Peter and Philip, 2006). But the need to embrace modern technologies
have retrogressed the development of SSEs in most African countries
(Obah-Akpowoghaha, 2014). Corroborating the above observations, Essien (1995),
noted that most small firms fail to see the need for advertising, sales
promotion, employing sales men and other forms of promotional strategies in
their business pursuit. Also, they highlighted the opinion that inadequate
knowledge and understanding of all the basic functions and importance of
promotional strategies by entrepreneurs/managers are deadly problems faced by
many small-scale businesses. Extrapolating from various scholarly works on
SSEs, the place of SSEs towards revolutionising African economy is germane such
as in the area of massive employment, growth of economic indices like Gross
Domestic Product, and effective device for poverty reduction.
However, in
Africa, a business is considered SSEs which is sometimes called small and
medium enterprises (SMEs) if it employs below 100 employees and this is also
applicable to the continent of Asia, while in some advanced states like US,
conceptualisation of SSEs or SMEs is based on when the employees fall below
500. Detail explanations on the context and concept of SSEs will be expatiated
in the course of conceptual review. Nevertheless, items such as the volume of
annual demand and supply made by a capitalist determined the nature or
description whether the business underpin SSEs or not. Also profit either
quarterly or monthly in relation to balance sheet total are part of the
features use to denote SSEs. There are complex variables used to capture the
meaning of the idea of SSEs (Muriithi, 2017), but most of these academic
definitions lack political economy undertones that underscore government
interventions, accessible loan, creation of infrastructural facilities and good
taxation policies for SSEs owners.
In a nutshell, this study will
underscore political economy and promotional strategies of SSEs in Africa with
special on Nigeria. The general goal of this investigation is to probe the
effect of promotional strategies on the growth of small scale enterprises in
Nigeria and identify the efforts of governments towards SSEs development. And
others are to examine the various promotional strategies used by SSEs in
Nigeria; investigate the factors that influence the choice of the promotional
strategies adopted by SSEs; and evaluate the effect of promotional strategies
on the growth of SSEs in the country. This led to the testing of hypothesis
that shown there is no significant relationship between the promotional
strategies and growth of SSEs; and there is significant relationship between
promotional strategies and the growth of SSEs.
Methodology
The study
will be carried out in Nigeria due to her population in Africa. The
methodological approach in this study will be anchored on primary and secondary
sources of data collection. Semi-Structured questionnaire will be adopted as
mechanism to address the objectives, while secondary data from the Ministry of
Trade and Commerce of the various states will be utilised. The population comprised of registered and
unregistered small-scale enterprises in Nigeria. The SSEs will be categorized
into manufacturing and service rendering in Nigerian cities. Convenience
sampling will be used in selecting forty respondents from each category of SSEs
in the selected cities where they are largely concentrated; totaling 240
entrepreneurs. Descriptive and Inferential statistics will be applied to
analyse the data. Descriptive Statistics such as frequency charts and
percentages will be used for presentation of data. Inferential statistics to be
used in testing hypotheses are chi–square and correlation analysis using
statistical packages for social sciences (SPSS). At the bivariate level,
chi-square test of analysis will be used to establish relationship between the
variables while at the multivariate level, multinomial logistic regression will
be adopted in respect to the research questions and test the hypotheses.
Small-scale
Enterprises (SSEs): A Conceptual Review
The task of reviewing literature on what constitutes
small and medium scale enterprises has not been an easy task because of the
divergent views expressed by scholars in this area of study. There are
interpretation of the numbers of employees; flows of income; assets; and the
management. Most times it is been refer to as Small and medium enterprises
(SMEs) or Small Scale Enterprises. And empirical investigations have dedicated
into these forms of denotations towards economic growth and the strength of SMEs
proliferation in a country. Its impact has been debated on against large firms
and establishment in developed and developing societies. Consequently the
thrust of scholarly debates on SME centre on poverty reduction; job creation;
and increasing economic indices such as GDP. The shortfalls upon this
literature are the inadequacy of disclosing the interplay of economies and
politics in a country on SMEs.
A
Small-Scale Enterprise (and sometimes called small and medium enterprises, that
is, SMEs) are businesses ventures owned by private individual (s) which usually
embodied few persons with a relative low rate of turnover. The growth of such
businesses arises out of stable political economic system engendered by the
implementation of accessible loan to petty traders and other business owners.
The important of SSEs to modern economy system have attracted global
organizations. The European Commission (2003) and United Nations, (2008) have
reiterated that SSEs are essential business that stir industrial revolution and
economic growth. In
Sub-Saharan Africa, SMEs has impacted over 90 percent of the economy in the
region that constitute relatively 95 per cent of operating firms (Hatega, 2007;
Kauffmann, 2005 cited in Muriithi, 2017). This form of business has employed
good number of youths in most developing economy and is very easy to manage and
run. Due to the diverse nature of SMEs, scholarly definitions have attracted
numerous variables that have made the concept of SMEs cumbersome to pin down.
Like the investigation by Beck; Demirgüç-Kunt and Levine (2003) identified that
SSEs do not enhance the quantity and quality of jobs which against other
thoughts concerning the vital role of SSEs or SMEs in most developing
economies.
In a study by
Thorsten Beck, Asl1 Demirgüç-Kunt (2003), and Ross Levine on SME, Growth, and
Poverty: Cross-Country Evidence revealed certain effects. The study adopted new
database and put together consistent variables in the context of SME size for
about 70 countries that cut cross developed and developing. The study
established a nexus between growth and SME which is not impactful to the
management of bias. Again countries investigations had shown a silence
influence of SME on the revenue or incomes of poor people, although the study
didn’t indicate the position of SMEs in relation to the measurement of the
extent of poverty on nations. The study further revealed non-support on SMEs by
certain institutions in order to boost national economic as against the thought
of Pro-SMEs in order to tame abject poverty. The study as well maintained that
a viable SME sector is an indication of successful economies; hence, the study
revealed that inter-country investigations do no align with the view that SME
boost ‘economic success.’ It further
revealed that an enabling environment for all business is necessary for
different levels of business in a country which foster healthy competition.
It added that good
governmental policies of that entails border issues, functional patent rights,
and the implementation of regulations and laws are prerequisites for
accelerating the ‘growth rate of GDP per capita’. Which may not likely in
consonance with subsidising of SMEs directly but do exhibit strength on the
rewards of laws aid the summary of working environment of business. The study
concluded that viable business atmosphere intensifies to assist poor income
individuals to build overall economic indices, but the research findings do not
aligned with the idea that a planned environment influences poverty in the
context of the impact of general economy Beck et al (2003).
In another
investigation carried out by Ancielo (1975 cited in Muriithi, 2017), in 75
countries revealed more than 70 definitions of SMEs that addressed issues
premised on the prevailing indicators. In US and Canadian’s economies, SMEs are
business ventures that accommodate less than 500 employees, Germany 250
employees, Belgium less than 100 employees and those that are called small
business are the one that falls within 100 employees, and while in African
countries like Nigeria any business above hundred employees can be termed big
business. Within this dichotomy, scholars such as Beck & Cull, 2014;
Dalberg, 2011; Fjose et al., 2010; Levine, 2005; Katia, 2014; OECD, 2005 cited
in Muriithi, 2017) have accepted less 250 employees which strategically
addresses developing economies.
Table:
1
Countries
|
Contribution to GDP (%)
|
Contribution to Employment
|
References
|
|
Ethiopia
|
3.4%
|
90%
|
|
|
Ghana
|
70%
|
49%
|
|
|
Kanya
|
40-50%
|
80%
|
Mwarari & Ngugi, 2013;
|
|
Nigeria
|
50%
|
70%
|
Ariyo, 2011; Kolasiński, 2012;
|
|
Rwanda
|
20.5%
|
60%
|
Mukamuganga, 2011
|
|
South Africa
|
50-60%
|
60%
|
DTI, 2012; Willemse, 2010;
|
|
Tanzania
|
60%
|
20%
|
|
|
Uganda
|
18%
|
90%
|
Uganda Ministry of Trade, Industry and Cooperatives (MTIC), 2015
|
|
Zambia
|
8%
|
30%
|
Mbuta, 2007
|
|
Zimbabwe
|
40%
|
15%
|
Katua, 2014; Zwinoira, 2015
|
Adapted from Muriithi,
(2017)
The above table shows the relevance and
effect of SMEs to some African economies. The configuration and concentration
SMEs differ in countries, most times the service industries are responsible for
over two-thirds of the jobs (Kamunge et al, 2014). The interaction of the
economies and politics is strategic to the growth of SMEs. Politics provides
the enabling environment for local investors to plan and see the need to
multiply business activities. Evidently, assisting owners of SME easy access to
loan for either expansion or creating branches in different location in a
country, but this has not been adequately feasible in most African countries
due to political violence among the ruling elite and budget deficits arising
from prolonged debt servicing. Consequently, technologies are one of the
driving forces for the success of SMEs in developed societies unlike African
countries that are weak in infrastructure (Obah-Akpowoghaha et al., 2014)
The study carried out by Muriithi, (2017) has identified issues like irregular power
supply; shortage of fund; lack of technical know-how among employees;
communication gap and primitive accumulation of wealth as challenges facing
SMEs in most African countries. He noted that within the context of political
economy, government’s investment and attention towards SMEs occupied little
cycle of most African budget, a sector that can facilitate development and
engage all levels or categories of classes in the society. Base on this
pitfall, Muriithi stressed that African government should identify the place of
SMEs in their annual budget as a promotional strategy to strengthen economic
growth and development in the continent. He added that with positive ethical
practices premised on robust legal arrangement, adequate infrastructural
facilities such power supply, good road and so on can intensify the
multiplication of SMEs, encouraging owners to be more creating in the business
venture. He argued that SMEs can change the face of African economy if politics
is not used for personal gain against national interest
Nature of
Small-Scale Enterprises
The
characteristics of small-scale enterprises differ from country studies and in
the context of developed to developing nations variables vary proportionally.
The quantum of employees in a firm, total revenue, relatively small shares and
so on constitute the nature of SSEs which most times are own and managed by
private individual (s). Consequently, the vital role of SMEs in both developed
and developing countries have faced series of academic debate. In the work of
Beck et al (2003), revealed much about the weaknesses of SMEs which reflected
on job availability and loss of the offer by most employees, and although has
no scientific bearing with net employment availability and nature firm in the
context size particularly. Biggs and Shah (1998) cited in Beck et al (2003)
maintained that in most Sub-Saharan African countries, big firms are source of
net job generation to the population arising from the manufacturing companies.
In the context of comfortable and quality job, Beck et al have revealed that microeconomics
indices have no much evidences or support of the notion as against large firms.
That based on empirical evidences large firms offer more employment security,
wage benefit and other lucrative incentives, employees go for SSEs when they
could not get job in a multinational establishment or large firms. In another
thought arising from Pro-SMEs that the activities of the business are simple
and innovative than larger firms, and this was further buttressed by Acs and
Audretsch (1987) cited in Beck et al. (2003), that SSEs or SMEs are flexible to
innovations and technological advancement compare to large organizations with
enormous skill intensive staff.
Developing
countries evidences revealed that the state of a firm has no favourable nexus
on ‘SMEs subsidization’ that can foster technology and which will cause high
rate of turnover. Again, Beck et. al. (2003) argued that Pro-SMEs believe that
small firms intensify national GDP and positive pressures on national boom in
the context of availability of goods and services. And the works of Little,
Mazumdar and Page, (1987 cited in Beck et al, 2003) on productivity studies
captured the idea that maximum productivities in an economy most times come
from medium size businesses than small businesses. In nutshell, the argument of
SSEs proponents or its opposing ideas can be seen from the perspective of
developed and developing economies. Beck et al (2003) revealed that advanced
states tend to have more financial strength to sustain and build SMEs compared to
the developing world, and this expresses a lot of economic implications in
activities of SSEs owners and the nature of the business
Strategies
for Small-scale Enterprises Growth and Survival
The methods
and techniques to develop a business generally cut across a lot of variables
and efforts from organization, government and the society. Modern day
businesses revolve around technologies and ethics which enable the business
venture to compete with other organizations.
The operational patterns of an organization in relation to ethical
practices and human relations are paramount to the success and the growth of
any business organization. In the context of Small-scale Enterprises or Small
and Medium Enterprises, most times the owners fall short of funds to carry out
marketing strategies but with the help of enabling environment put in place by
the government in areas of affordable mass media such as national radio and
Television; erecting of billboards; advertising on Newspapers are some of the
ways SMEs can be assisted by the government. But series of literature on
business in developing countries have identified issues like cultural defect;
poor educational system; lack of infrastructural facilities and policy
inconsistency as limitations to SMEs owners and the business itself
(Obah-Akpowoghaha et al, 2014)
Ayozie Daniel Ogechukwu et al., 2010 cited
in Sheetal et al (2012), observed that African countries should try to
extricate themselves from Western and European string and think independently
towards assisting growing business which will serve as the hub for economic
revolution. They added that in Nigeria there is no enough support towards SMEs
and this has eroded the nature of the business in the country, that government
investigate yearly execution of business policies in these set of business
ventures and ‘‘so that ancillary units can get their share in national as well
as international markets’’
Dan popsecu 2011 cited in Sheetal et al
(2012), stressed that government of developing countries, should create an
atmosphere for investing in information and communication technologies (ICTs);
exploring the internet, electronic commerce, telecommunications, building local
businesses (SSEs), getting involved in systematic discoveries and science of
research as a path and the improvement of capital, locating educational content
that can assist and build the youth, and encourage social security schemes.
In a similar thought Sheetal et al (2012),
stressed that the place of SMEs in national development cannot be
overemphasized especially in the areas of holistic development through given
hands to local people to participate in the economy. They added that SMEs
designed along cultural values within the natural environment help in tapping
into local skills, serves as a booster and bridging the gap of unemployment and
the growth of GDP.
Conversely, some societies in Asia have
recorded negative performance of SMEs which has been associated to market
strategies and implementations techniques. This occurred in Sri Lanka whereby
the methods of advertisement and modern innovations devices were not applied
(Gajanayake, 2010). This result is different from what was obtained in India
that shown SMEs as the driving device of India’s economy and chief employer of
labour. An important challenge in India was centred on communication problems
between consumers and the business’ owners which led to low rate of turning
over (Sheetal et al., 2012).
In the People’s Republic of China’s (PRC),
that experienced radical reformation within the economic sector through the
process of deregulation and globalization that made PRC’s economic growth
sustained till data. This was done through bringing innovations into existing
infrastructure that intensified the upgrade in the level of technology (Tracy
et al., 2008). Consequently the table below described some of the model adopted
by the People’s Republic of China (PRC) towards building on the technologies
and creating innovation within the economy.
Table: 2
Product Technology Capability
|
|||
High
|
Low
|
||
Product
Technology Capability
|
High
|
Fast
Follower Innovation Mode (Cluster Strategy)
|
Process
Capability Pioneering mode (Niche Strategy)
|
Low
|
Product
Technology Pioneering Mode (Niche strategy
|
Application
Specialist Mode (Free-riding strategy)
|
|
Source: Tracy et
al (2008).
Moving away from the issue of technology
and innovations, there are other areas that affect consumers’ mind-set towards
goods and services. The price system is a vital determining factor towards
having a viable SMEs or SSEs in country. Most times business’ owners fixed high
prices based on the cost of producing an item due to the cost of procuring
infrastructural facilities meant to be put in place by the government through
tax-payer money. This has made SSEs or SMEs not to survive or contributed
meaningful to the growth of developing economies. Sometimes government of
developing nations are quick in fixing prices against exploitation of masses
but the question of critical infrastructural facilities are not given proper
attention. This has resulted to ethical
issue and stymied the multiplication of SSEs and SMEs in Africa and other
developing states.
The
above analyses was also revealed in the investigation of Peter K. Turyakira on Ethical Practices of Small and Medium-sized
Enterprises (SMEs) in Developing Countries: Literature Analysis; the researcher
identified that the cause of business failure in Third World Countries is as a
result of non-compliance to ethical best practices that ought to be strictly
adhered. The findings equally indicated that due to the problem of ethical
compliance of employees and top executives in businesses, the growth of Small
and Medium-sized Enterprises has been jeopardised in Third World Countries.
Hence, the researcher recommended and concludes that unethical practices among
business associates particularly employee and managers have to be critically overhauled
and ethical regulations have to be strictly followed for profit and business
development especially SMEs in developing countries (Turyakira, 2018).
In related observation Mahmood (2008), stressed that there is need
for collaboration and synergies among SMEs owners by forming a formidable
alliances as clue to identify challenges and best international ethical
practices. And further added that SMEs should strive to incorporate a long term
business foresight as against the stereotype of short term that has heralded
most business in developing countries, that imbibing both terms it will
strategically aid community development. Another ethical phrase that seems
instrumental to the success of business has to do with the practices of utmost
good faith as the root of business revitalisation and commitment with
investors. Honesty and sincerity towards business agreement, adherence to
ethical codes of conduct and constitution are requisite to the growth of all
kinds of business venture whether international or local (Emerson 2009).
The above notion on ethical standard was further reiterated in the
work of Peter K. Turyakira stressed that
aforementioned notion of Emerson of ethical behaviour of staff and employer are
noble business standard that should made know and spelt out. He asserted that:
SME owners must desist from taking unfair advantage of their
employees, customers, and other stakeholders. Hence, SMEs must appreciate that
doing business requires exercising good faith and honouring their promises and
carrying out their responsibilities towards customers and stakeholders with
goodwill and good intention. With regard to contracts and other agreements, SME
owners must accurately represent their products and services, be honest in
transactions and honour their promises (Turyakira, 2018).
The above analyses revealed the pitfalls within third world
countries in ethical practices in business.
In another consideration, there is the view of socially
responsible and ethical practices that give much gain to businessmen in a long
term investment. Businesses that have succeeded globally maintained the act of
honesty and integrity, trustworthy, involving in fair profitable acts,
accepting commitment and being answerable for one’s own actions are vital for
local in the long run (Ahmad 2009). In contemporary society, ethical and the
call for social responsible behaviour are needed to grow business ventures and
network towards external stakeholder organisations. For Ahmad as well
identified that noted ethical practices in business serve as protection in
atmosphere of unpredictability. And stressed that ethical norms in an
organisation create a competitive advantage that boost business that separate
itself from its rivals (Ahmad 2009), high operational ethical code of operation
helps business’s owners to imbibe the act of integrity and honesty which are
vital ingredients to succeed international profit oriented competitive business (Hasnah, Ishak &
Sobei 2015 cited in Turyakira, 2018).
Extrapolating from the above analyses, the place of the government is
instrumental to the growth and survival of SMEs. SMEs strategies can only be
effective and efficient when there is enabling environment put in place by the
government of the day. SMEs are vital for bridging the gap of unemployment and
reducing the level of poverty when the businesses are sustained for a long
period of time without any form of shock. SMEs in the developing nations have
been poorly managed due to the nature of the society prone to crises and
uncertainty. This can only be overcome when government and SMEs owners are in
partnership towards building a national economy (Obah-Akpowoghaha et al. 2014)
Presentation,
Analysis and Interpretation of Data.
This
section deals with the presentation analysis and interpretation of the data
collected from the structured questionnaire filled and returned by 224 out of
the 240 entrepreneurs initially targeted. This indicates a response rate of 93
percent.
Table 3: Socio-Demographic Characteristics of
Respondent.
Variables Frequency Percentage (%)
Gender Male 125 55.8%
Female 99 44.2%
Total 224 100%
Age (years) < 25 16 7.1%
25-44 116 51.8%
45-64 79 35.3%
>65 13 5.8%
Martial
Status Single 42 18.8%
Married 143 63.8%
Divorced 16 7.1%
Widowed 11 4.9%
Separated 12 5.4%
Academic
Qualifications
Primary School 15 6.7%
Secondary School 82 36.6%
OND, HND, BA/Bask 112 50%
Masters Degree 15 6.7%
OND = Ordinary National Diploma, HND = Higher National
Diploma, BA = Bachelor of Art degree, BSc = Bachelor of Science degree.
Table above
shows that 56% of the respondents were males while 44% were females of age
ranging from less than 25 (N=16, 7%), 25-44 (N=116, 52%), 45-64 (N=79, 35%),
and those more than 65 years old (N=13, 6%). Most of the respondents were
married (N=143, 64%) these were followed by those who were single (N=42, 19%),
divorced (N=16, 7%), separated (N=12, 5%) and widows (N=11, 5%). Half (N=112,
50%) of the subjects had post-secondary education of Ordinary National Diploma
(OND), Higher National Diploma (HND) or first degrees (BA, BSc). Others had
secondary education (N=82, 37%), primary education (N=15, 7%) and masters
degree (N=15, 7%).
Table 4:
Business Characteristics of Respondents.
Variables Frequency Percentage
Business
Duration <5 years 52 23.2%
6-10 years 93 41.5%
11-15 years 59 26.3%
16-20 years 15 6.7%
>21 years 05 2.2%
Size of
Employees 1-5 80 35.7%
6-10 65 28%
11-15 46 20.5%
16-20 21 9.4%
>20 12 5.4%
Type of
Business Agro based-
Manufacturing 55 24.6%
Textile production 78 34.8%
Leather/Shoe-
Production 34 15.2%
Education 36 16.1%
Hotel/
catering services 21 8% 9.4%
Table above shows that entrepreneurs
who has been in business from 5years and below:
(N=52, 23.25%), 6-10years (N=93, 42%),
11-15years (N=59, 26%), 16-20 years (N=15, 6.7%) then 20 years and above (N=5,
2.2%). SSEs with 1-5 number of employees(N=80, 36%),6-10 (N=65,28%),11-15
(N=46,21%),16-20 (N=21,9.4%) then 20 and above (N=12,5.4%) entrepreneurs who
engage in Agro-base/manufacturing (N=55,25%) textile production (N78.35%),
Leather/Shoe production(N=34,15.2%), Education (N=36,16.1%) the hotel catering
(N=21,9.4%).
Table
5: Promotional strategies used by
Small-scale Enterprises.
Strategies Rarely Never Sometimes Frequently
[Number (%)] [Number (%)] [Number (%)] [Number (%)]
Television 35(15.6) 114(50.9) 42(18.8) 33(14.7)
Newspaper 8(3.6) 114(71.9) 39(17.4) 16(7.1)
Outdoor 8(3.6) 128(57.1) 62(27.7) 26(11.6)
Display 12(5.4) 114(50.9) 42(18.8) 56(25.0)
Billboard 12(5.4) 141(62.9) 43(19.2) 28(12.5)
Radio 16(7.1) 104(46.4) 62(27.1) 42(18.8)
Contests 13(5.8) 141(62.9) 44(19.6) 25(11.2)
Gift items 18(8.0) 125(55.8) 55(24.6) 26(11.6)
Promotion 10(4.5) 152(67.9) 39(17.4) 23(10.3)
Print media 9(40.0) 167(74.6) 26(11.6) 22(5.8)
Broadcast 7(3.1) 168(75.0) 36(16.1) 13(5.0)
Out of home 9(4.0) 153(68.3) 42(18.8) 20(8.9)
Direct-
Advertising 11(4.9) 138(61.6) 34(15.2) 41(18.3)
The promotional strategies used by SSEs are shown in
table above. Majority of the SSEs used Radio (N= 120, 54%) frequently (N= 42, 19%), Sometimes (N= 62,
27%) and rarely (N= 16, 7%). This was followed by Television (N=110, 49%) that
was used frequently (N=33, 15%), Sometimes (N=42, 90%), rarely (N=35, 16%) and
Display (N=110, 49%) used frequently (N=33, 15%), Sometimes (N=42, 19%), rarely
(N=12, 5%). Other promotional strategies used include: Gift items (N=99,44%),
frequently (N=26,12%) sometimes (N=55,25%) rarely (N=18,8%), outdoor (N=96,43%)
frequently (N=26,12%), sometimes (N=62,28%) rarely (N=8,4%), direct advertising
(N=86,38%), frequently (N=41,18%), sometimes (N=11,5%), Billboard (N=83,37%),
frequently (N=28,13%), sometimes (N=43,19%), rarely (N=12,5%), contest (N=82,37%),
frequently (N=25,11%) sometimes (N=44,20%), rarely (N=13,6%), promotion
(N=72,32%) frequently (N=23,10%), sometimes (N=39,17%),rarely (N=10,5%), out of
home (N=71,32%), frequently (N=20,9%) sometimes (N=42,19%), rarely (N=9,40%),
Newspaper (N=63,28%), frequently (N= 16,7%), sometimes(N=39,17%) rarely
(N=8,4%); print media (N=57,25%) frequently (N=22,10%), sometimes (N=226,11%),
rarely (N=9,4%) and broadcast (N= 56,25%) frequently (N=13,6%) sometimes
(N=36,16%) rarely (N=7,3%.
Most of the
SSEs did not use broadcast (N=168, 75%), print media (N=167, 75%), Newspaper
(N=114,72%), out of home (N=153,68%), promotion (N=152,68%), contest
(N=141,63%), Bill board (N=141,63%), direct advertising (N=138,62%), outdoor
(N=128,57%), gift items (N=125,56%), Television (N= 114,51%), display (N=
114,51%) while the remaining did not use radio (N=104,46%)
Table 6: Influence of Promotional
strategies used on Growth of Small-scale Enterprises
Variables Growth
Pattern
Increasing Decreasing Static Total
Profit 108 (48.2%) 17 (7.6%) 99
(44.2%) 224 (100%)
Turnover 117 (52.2%) 4 (1.8%) 103
(46.0%) 224 (100%)
Coverage 112 (50.0%) 12 (5.4%) 100 (44.6%) 224 (100%)
CAOOE 111 (49.6%) 17 (7.6%) 96 (42.9%) 224 (100%)
CAOOE=
Competitive Advantage Over Other Enterprise
As can be seen in table above, growth was recorded
among SSEs that used PS in the form of increase in profit (N=108, 48%),
turnover (N=117,52%), coverage (N=112,50%), and CAOOE (N=111,50%). Those that
did not use PS either remained static in profit (N=99,44%), turnover
(N=103,46%), coverage (N=100,45%) and CAOOE (N=96,43%) or recorded a decrease
in profit (N=17,8%), turnover (N=4,2%), coverage (N=12,5%) and CAOOE (N=17,8%).
Hypotheses
Testing
Hypothesis one: There is no
significant relationship between growth of small-scale enterprises and
advertising.
Table 7:
Relationship between Small-scale Enterprises, Growth and Advertising.
Small-scale
Enterprise Growth
|
ADVERTISING
|
Total
|
|||
Rarely
|
Never
|
Sometimes
|
Frequently
|
||
Decreasing
|
1 14.29%
|
0
0.00%
|
2
28.57%
|
4
57.14%
|
7
100.00%
|
Static
|
2
7.69%
|
4
15.38%
|
8
30.27%
|
12
46.15%
|
26
100.00%
|
Increasing
|
10
5.24%
|
119
62.30%
|
25
13.09%
|
37
19.37%
|
191
100.00%
|
Total
|
13
5.80%
|
123
54.91%
|
35
15.63%
|
53
25.66%
|
224
100.00%
|
Chi (6) = 29.9907 significant-value = 0.0000 < 0.05
Among the 7 respondents that were interviewed on
advertising’s contribution to the growth of small-scale enterprises in Nigeria,
14.29%, 0.00%, 28.57% and 57.14% reported that advertising rarely, never,
sometimes and frequently Decreases the growth of small-scale enterprises
respectively. Out of Twenty six (26) respondents 7.69%, 15.38%, 30.27% and
46.15% reported that advertising rarely, never, sometimes and frequently made
the growth of small-scale enterprises to be static in Nigeria respectively. And
finally, from 191 respondents 5.24%, 62.30%, 13.09% and 19.37% reported that
advertising rarely, never, sometimes and frequently increasing the growth of
small-scale enterprises in Nigeria. The chi-squared test in table 5 showed that
there is a significant relationship between advertising and the growth of
small-scale enterprises among the small-scale business owners in Nigeria since
significant value= 0.000<0.05 .
Hypothesis two: There is no
significant relationship between growth of small-scale enterprises and sales
promotion.
Table 8:
Relationships between Small-scale Enterprises, Growth and Sales
Promotion
Small-scale
Enterprise Growth
|
SALES PROMOTION
|
Total
|
|||
Rarely
|
Never
|
Sometimes
|
Frequently
|
||
Decreasing
|
0
0.00%
|
1
100.00%
|
0
0.00%
|
0
0.00%
|
1
100.00%
|
Static
|
2
0.00%
|
16
50.00%
|
5
21.90%
|
9
28.10%
|
32
100.00%
|
Increasing
|
1
0.5%
|
26
13.60%
|
98
51.30%
|
66
34.60%
|
191
100.00%
|
Total
|
3
1.34%
|
43
19.20%
|
103
45.98%
|
75
33.48%
|
224
100.00%
|
Chi (6) = 37.7716 sig-value = 0.000< 0.05
Only one respondent that were interviewed on sales
promotion’s contribution to the growth of small-scale enterprises in Nigeria,
0.00%, 100.00%, 0.00% and 0.00% reported that sales promotion rarely, never,
sometimes and frequently decreases the growth of small-scale enterprises
respectively.
Out of 32 respondents 0.00%, 50.00%,
21.90% and 28.10% reported that sales promotion rarely, never, sometimes and
frequently made the growth of small-scale enterprises to be static in Nigeria
respectively. And finally, from 191 respondents 0.50%, 13.60%, 51.30% and
34.60% who reported that advertising rarely, never, sometimes and frequently
increasing the growth of small-scale enterprises in Nigeria. The chi-squared
test in table 6 showed that there is a significant relationship between sales
promotion and the growth of small-scale enterprises among the small-scale
business owners in Nigeria since 0.000<0.05 . And the majority of the
respondents interviewed reported sales promotion frequently and sometimes
facilitates and increases the growth of small-scale enterprises in Nigeria.
Findings and
Conclusion
This study
examined the various promotional strategies (PS) used by small-scale
enterprises (SSEs) and investigated the factor that influenced the choice of PS
adopted by SSEs in the country. It also evaluated the effect of PS on the
growth of SSEs in the country. These were with the view to providing
information on PS that could enhance growth of SSEs in Nigeria and assist
entrepreneurs in the development of their businesses in the country. The result
showed that the various promotional strategies used by SSEs in Nigeria included
display (25%), advertising (18%), radio (19%), Television (15%), Gift items
(12%), and billboard(13%) . Result further showed that the major factors that
influence the choice of promotional strategies used SSEs were the cost implication
of using PS(73%), resource of SSEs (79%) and growth orientation (73%) while
other factors included location of business(71%) , management approach (86%)
and overall success and survival rate(79%) finally the result showed that
promotional strategies had no significant effect on advertising(t=0.53;
p>0.05), sales promotion (t=1.01; p>0.05) and product packaging (t=0.80,
p>0.05) the growth of SSEs in Nigeria. The study concluded that though
promotional strategies enhance growth of SSEs, nonetheless, the Nigerian
small-scale enterprises fail to use these promotional strategies to their
advantages.
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