The Effect of Product Quality on Customer Brand preference in Small and Medium Size Companies in Buea.
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Small business entrepreneurs operate in a very competitive environment in Cameroon which invariably affects their survival. Marketing strategy has been an operational focus and a method for achieving all-inclusive business success.
This study focuses to establish the effects of marketing strategies on the sales performance of small and medium enterprises in Buea Municipality. Specifically, the study sought to examine the effect of promotional marketing strategy, price marketing strategy and place marketing strategy on the sales performance of SMEs in Buea. The study was guided by the marketing mix theory and the theory of push and pull.
The adopted a descriptive research survey design, using convenient and simple random sampling techniques to sample 100 SMEs operators in Buea using a structure questionnaire. Results show that promotional strategies had a positive significant effect on effect on the sales performance of small and medium enterprises in Buea Municipality.
The study further concludes that the employment of promotional strategies helped to keep customers informed of what the firm offered, promotional strategies informed clients or customers on both the price where to get the product and the price.
The study findings revealed that pricing strategies had a positive significant effect on the sales performance of small and medium enterprises in Buea Municipality. However, pricing the product too low or too high can have unintended consequences sales.
Pricing strategies give SMEs the flexibility in setting prices and winning new business or maintaining prices and increasing the profit margin. Place strategies had a positive effect on the sales performance of small and medium enterprises in Buea Municipality.
Location-based marketing is one of the best ways to convert foot traffic and online traffic into new customers. Location-based marketing helps to remove barriers to sales. The study recommends that SMEs in Buea SME owners should be more committed to their pricing strategy to sustain the profitability performance of enterprises in Buea Municipality.
1.1 Background of the Study
Marketing is generally considered as the process by which companies create value for customers and build strong customer relationships to capture value from customers in return (Cavusgil& Zou, 2004). A strategy on the other hand is a firm’s game plan for competition and survival in a turbulent environment. According to Mohamed et al., (2014) a marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales. Sales performance is the sum of all efforts that it takes to deliver a product or service, therefore is measured in terms of items produced and services performed within a given period. Several marketing strategies can take any small and medium enterprise from mediocre to success when utilized correctly.
Breaking into a new business climate and finding customers is hard work, but when equipped with innovative ideas and proven techniques, financial markets sales personnel can become extremely successful (Kisaka, 2012). Key small and medium enterprises’ marketing strategies will always include an in-depth review of the value of follow-up. All successful sales intermediaries understand that consumers need to be contacted again and again to make a vital connection.
Mustapha (2017) expressed that a marketing strategy is an important tool for any SME to remain in a competitive market environment and be stronger. Without the appropriate marketing strategy, an enterprise cannot survive in today’s competitive environment nor witness superior performance. The adaptable marketing mix strategies are advertising, promotion, distribution, customer servicing, packaging, sales, and distribution strategies. The prior expectation is that marketing mix strategies influence increased profitability and sales of SMEs. Mustapha (2017) stressed that an ineffective marketing strategy hurts the organization‟s performance, product quality, customer satisfaction, and profitability.
Marketing strategy has become an important tool globally for any organization to remain in a competitive market environment and wax stronger (Ebitu, 2016). It is a vital prerequisite that can promote the industry’s ability to strengthen its market share and minimize the impact of the competition (Adewale, Adesola & Oyewale,2013).
A marketing strategy could also be viewed as a way of providing a quality product that satisfies customer needs, offering affordable price and engaging in wider distribution, and backing it up with an effective promotion strategy (Owomoyela, Oyeniyi & Ola,2013).
Marketing strategies are programs and tactics designed to achieve the objectives of an organization. A marketing strategy outlines the strategic direction and tactical plans that marketing teams must implement to support the company’s overall objectives (Ebitu, 2015). Marketing strategy articulates the best uses of business resources and tactics to achieve its marketing objectives. It states which opportunities are to be pursued by an organization indicates the specific markets towards which activities are to be targeted and identifies the types of competitive advantage that are to be developed and exploited (Weitz& Weasley, 1988).
Marketing strategy starts with market research, developing a vision about the market (s), selecting market targets strategies, designing positioning strategies, setting objectives and implementing the marketing programs to meet the value requirements of the target markets (Mustapha, 2013).
It is a logic in which customer needs, attitudes, and competitors’ products are assessed and continues through into advertising, promotion, distribution and where applicable, customer servicing, packaging, sales, and distribution.
According to Owomoyela, Oyeniyi and Ola (2013), marketing strategy is a way of providing a quality product that satisfies customer needs, offering affordable prices and engaging in wider distribution, and backing it up with an effective promotion strategy. Marketing strategy is a vital tool that businesses and especially SMEs can use to strengthen their market share and minimize the impact of competition.
The number of new small and medium enterprises in Cameroon is shrinking rapidly. Competition is stiff within small and medium enterprises and product performance has not been effective compared to the last decade (Otieno, 2015). Most small and medium enterprises have sharpened their marketing strategies as a mechanism to guarantee the success of their business in the future. The challenge thus facing the small and medium enterprises is the need for diversification of their products better tailored and suited to meet the needs and development of the country. For while small and medium enterprises can play a very significant and critical role in a nation‟s developmental process, the challenge currently being faced is how small and medium enterprises marketers respond by creatively introducing small and medium enterprises policies, instruments and marketing techniques to serve as a basis for the country‟s sustained economic development (Njoroge, 2015).
1.2 Statement of the Problem
In the past, many studies on marketing strategies were limited to large enterprises and are carried out in a western context (Olutunia and Obamuyi, 2008). This accounts for a few studies on marketing mix strategies to address the issue around performance in the SMEs sector in developing countries such as Cameroon.
Most SMEs in developing countries, like Cameroon, are struggling to survive under intense competitive environments both domestic and international. Small and Medium Enterprises (SMEs) in Cameroon have not performed creditably well and hence have not played the expected vital and vibrant role in the economic growth and development of Cameroon. This situation has been of great concern to the government, citizenry, operators, and practitioners. These challenges could be a result of a perceived ineffective marketing strategy which is hurting the organization’s performance, product quality, customer satisfaction and profitability. Small and medium enterprises (SMEs) operators need to provide a quality product with good packaging that satisfies customer needs, offer affordable prices and engage in wider distribution and back it up with an effective promotion strategy to survive the pressure from the global market competitive environment.
Studies by Ebitu (2015) indicated that marketing problems such as difficulty in managing firm’s advertising, lack of adequate marketing research, unawareness of competition, poor branding and packaging, low level of knowledge on business market analysis, poor promotion, poor segmentation strategy, poor pricing technique and unplanned distribution contribute negatively in affecting Small and Medium Enterprises (SMEs) sales volume and profit margin. This, therefore, creates a good avenue to fill the gap, thus this study will assess the effect of marketing strategy on the performance of small and medium-sized enterprises in Buea Municipality.
1.3 Research Questions
Main Research Question
How do marketing strategies influence the sales performance of small and medium enterprises in Buea Municipality?
18.104.22.168 Specific Research Questions
How does promotion marketing strategy influence the performance of SMEs in Buea Municipality?
How does price marketing strategy influence the performance of SMEs in Buea Municipality?
How does place marketing strategy influence the performance of SMEs in Buea Municipality?
1.4 Objectives of the Study
1.4.1 Main Objectives
The main objective of the study is to examine the effects of marketing strategies on the sales performance of small and medium enterprises in Buea Municipality
1.4.2 Specific Objectives
- To examine the influence of promotion marketing strategy on the business performance of SMEs in Buea Municipality
- To assess the impact of price marketing strategy on the business performance of SMEs in Buea Municipality
- To determine the influence of place marketing strategy on business performance of SMEs in Buea Municipality