Full Project – THE SIGNIFICANCE OF STRATEGIC MARKETING PRACTICES TO THE EFFECTIVE AND EFFICIENT PERFORMANCE

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CHAPTER ONE

1.1 INTRODUCTION

Small and medium scale enterprises (SMEs) is a burgeoning horizon in the local and global arena. The dire need and understanding of its revolutionary effects on any economy is rife. This have made it remain very prominent in the industrial growth of the sub-sector have been intensified. This is evident in the various attempts to inspire developing countries to accentuate and actively participate in small and medium scale enterprises.

Nigeria is a country of more than 130 million people, with a lot of human and natural resources. The volume of trade in the Nigeria economy is very substantial and enormous, more so, are the types of economic activities becoming specialized and advanced. The global trade activities occasioned by Nigeria’s trade development focus mainly of Nigeria in the context of West Africa. According to Olubajo (1985) about 70% of Cargo traffic to West Africa countries from the United Kingdom is for Nigeria. This implies that without Nigeria as a major market, adversely affected. Nigeria also exports such products like cocoa, palm kernel, rubber, coffee, and few industrial products. If SMEs are country would earn a substantial foreign exchange. One of the concentrating her resources on SMEs is the expectation that such investment could help attain her import substitution, and export promotion drive objectives, invariably, creating a relieve on some of the problems of her balance of payments, the National income and Gross Domestic products (GDP), low per capita income, poor standard of living, social insecurity, inter alia.

Nigerian governments have over the yeas taken actions to help increase participation and productivity in small and medium scale enterprises (SMEs). Some of these expedient actions include provision of subsidies in 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 with the level of investment consistent with national economic growth targets, creating enabling environment, establishing industrial development Centres (IDC), like the National economic schemes and programmes import duty draw back, export credit guarantee scheme, export development and expansion fund, import duty draw back, export credit guarantee scheme, export development and expansion fund, structural adjustment programme, (SAP) with the expectation that new entrepreneurial spirits and initiatives would be ignited to make SMEs flourish. No doubt, much emphasis was placed on SMEs to look inward, develop and increase their raw materials supply, and boosts output and export trade. Today, history is being made towards the creation of tomorrow’s potential multinational corporations (Sanusi, 2003). The steps taken by various governments were predicated on the recognition of the strategic importance of SMEs to the economy, their low survival capacity, ad the need to develop entrepreneurial abilities of Nigerians, despite these efforts by the government, the participation of Nigerians in, and the performance of SMEs have been abysmally low. This malign situation, as argued by many theorists, is traceable to inefficient and ineffective management practices.

The main motivation for being in business is to achieve organizational goals. A lot of company decisions affect the degree of achievement of organizational goals (Osuaguwu, 2002). As regards SMEs, decisions on products/services, and marketing affect the profitability of any SME. The development in SMEs has always been founded on the drive to achieve organizational goals efficiently. All management practices should, therefore, be tailored towards the achievement of organizational goals.

Challenged by the overriding need to achieve organizational goals, SMEs can explore new avenues to achieve these organizational goals. A variety of approaches can be used by are generally called strategic management. According to Jain (1983) as cited by Osuagwu (2002), the thrust on strategic management has given rise to strategic marketing.

Marketing considerations together with those of other functional areas of business play an important role in structuring corporate objectives and strategies. The corporate strategy of a firm represents the pattern of resource allocation in order to achieve the desired goals, and the level of interaction of an organization with its environment. Corporate strategy is therefore the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve stated objective (Adeleke, Ogundele, Oyenuga, 2003).

Marketing, both as a discipline and a way of life, has a germane role lot play in the economy of a developing country like Nigeria. Without effective marketing activities, there may be little progress in the national economy of Nigeria. It may be justified to assert that it is through efficient and effective marketing practices that a developing country like Nigeria can participate efficiently and effectively in small and medium enterprises (SMEs). With advancing technology and increasing productivity, coupled with an ever changing environment (with its attendant shocks and surprise), the future growth of an economy can be said to be a function of the effectiveness and efficiency of its marketing practices.

As a result of the recent economic reforms in the country, e.g deregulation, privatization and commercialization exercises, SMEs are undergoing rapid and radical changes. They are adjusting to these economic shifts. To understand and take advantage of the shifts, which may be threats or opportunities, management of SMEs first need to understand the important trends shaping the SMEs environment and the strategic responses of competitors. Strategic decisions by SMEs must take into account economic, political, competitive, technological, legal, social, and cultural pressures. Among all the organic business functions in a company marketing is the most exposed to changes in the external environment (Mann, 1980). It is important to note that the success of SMEs through their effective and efficient performance means that the numerous benefits of industrialization will not elude Nigeria. Suffice it to say that small and medium scale enterprises (SMEs) are behind the laudable economic success, growth and development of today’s newly industrialized countries (NIC) such as China, Japan, Singapore, Korea, etc.

1.1 STATEMENT OF THE PROBLEM

The low performance of small and medium scale enterprises (SMEs) in Nigeria consequent o lack of strategic marketing know – how initiated the need for this research. It is perhaps pertinent to say that functional marketing practices in SMEs play a vital role in the achievement of organizational goals.

Lack of marketing perspective makes optimum corporate strategies unsuccessful when there are environment changes and shifts, the influences of the environment (in terms of threats and opportunities), and the marketing practices used in achieving objectives in the face of the environmental influences. The importance of marketing strategies varies form one industry to another, just as, the impact of the Nigeria business environment on particular industries varies often. Effective understanding of industry dynamics will go a long way in aiding management practices in specific industries.

Environment of business and its strategy have been empirically demonstrated to have significant impacts on organization performance. According to Henderson and Poole (1991), entrepreneurship involves more than invention, inventions have treated strategy to be under the control of organizational managers, while business environment have been seen as constraints, which under certain conditions, organizational managers can proactively, change.

Some researchers have been interested in explaining variations in business firms’ performance across industries. Many have assumed that variable relationships may be appropriately estimated by analyzing data from a cross-section of firms representing various industries. In these researches, natural business laws are assumed in exist regardless of industry classification. However, some have argued that the homogeneity assumption laws may exist only in the context of similar strategies within an industry.

In the light of the above, three key areas of environment perception, marketing strategies, and organizational performance are to be investigated. An organization’s marketing strategy is tied to its organization goals and environment perception. Differences in organizational goals and perception of environment characteristics result in a variety of marketing strategies. The standards of performance by which over all marketing operations are generally evaluated are marketing profit, sales, volume, market share, and marketing cost.

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Full Project – THE SIGNIFICANCE OF STRATEGIC MARKETING PRACTICES TO THE EFFECTIVE AND EFFICIENT PERFORMANCE

Full Project – THE SIGNIFICANCE OF STRATEGIC MARKETING PRACTICES TO THE EFFECTIVE AND EFFICIENT PERFORMANCE

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