Challenges faced by SME's in South Africa: are marketing skills needed?

Abstract

In South Africa the SME sector has been placed on the governments priority list for economic assistance and job creation. The government expects 500 000 jobs to be created every year for the next 10 years - the bulk which is expected to come from the SME sector. Research conducted by Bowler, Dawood and Page (2006) and Phakisa (2009) estimate that 40% of new business ventures fail in their first year, 60% in their second year, and 90% in their first 10 years of existence. There are numerous reasons for these failures and many authors have identified the challenges these businesses face. The research problem of this study emanates from the current high business failure rate as well as the lack of and need for marketing skills of South African SME managers. The research investigates the correlation between business success and the need for marketing skills and to what extent the lack of these skills influence the failure or success of the business. The research made a direct link to the lack of marketing skills and the failure of businesses as well as the fact that managers and owners are aware of these shortcomings that they have. The conclusion is that there is a positive correlation between the success of a business and the need for marketing skills in South African SMEs. The challenge that now faces government, educational institutions and businesses themselves is to develop these marketing skills in such a way that the chances of survival of these SMEs are increased.