Factors influencing marketing strategy formulation for small and medium enterprises in Polokwane

Abstract

The aim of the study was to investigate the factors influencing marketing strategy formulation for small and medium enterprises (SMEs) in Polokwane. SMEs, worldwide, are regarded as the cornerstone for economic development. However, SMEs are faced with business marketing constraints that lead to their downfall. The study objectives were set and led to the formation of the hypotheses. The study adopted a quantitative approach and collected data from a sample of 412 SMEs from Polokwane using non-probability sampling methods, which are convenience and snowball sampling. A survey questionnaire sought responses from the respondents. The pilot test was done, and responses were used to eliminate unnecessary and confusing statements. The respondents were required to indicate their agreement or disagreement with questions on a five-point Likert scale. Descriptive statistical analysis, factor analysis, ANOVA and regression analysis were done to determine if the objectives of the study were achieved and to test hypotheses. SMEs were found to be using sales promotions, digital marketing, business branding, personal selling and email communication as part of marketing communication strategies. Product strategies used are product quality and packaging, branding and collaborative product development. The findings of the study depict that SMEs marketing communications and product strategies have a positive influence on their performance. The main challenges experienced by SMEs are lack of understanding for marketing research, lack of finance, lack of business planning, inexperienced employees and, the least experienced challenge, lack of customer demands. It was further found that demographic factors (business operation/ maturity, business training and annual turnover) have a significant influence on the marketing communication strategies adopted and the challenges facing SMEs. SMEs that have been in existence for over 10 years perceive marketing challenges differently from SMEs with less than 10 years of operation. It is necessary for the government to put in place progressive policies that can assist SMEs to improve their marketing strategy. It was recommended that SMEs attend training related to marketing to be equipped with marketing and business operations knowledge to minimise the experienced marketing challenges. Training will enable SMEs to do better in marketing communication or/and product strategies.