The Effects of Marketing Strategies on Sales Performance of Small and Medium Enterprises in Kenya

Abstract

Small and medium enterprises in Kenya are shrinking rapidly. Competition is stiff within the small and medium enterprises and product performance has not been effective compared to the last decade. 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. This study sought to establish the effects of marketing strategies on sales performance of small and medium enterprises in Kenya. The study was guided by the marketing mix theory and theory of push and pull. This research adopted a descriptive research survey to determine the effects of marketing strategies on sales performance of small and medium enterprises in Kenya. This study‟s target population were small and medium enterprise managers operating at the Central Business District in Nairobi. To come up with an appropriate study sample, the study utilized stratified sampling technique where the small and medium enterprise owners were classified into different business areas including food and restaurants and other non-food item businesses. The study intended to use a sample size of 50 small and medium business managers within the Nairobi CBD which were duly registered by the County Government being 10% of the population. This research collected primary data using questionnaires. The questionnaires comprised of both open and closed ended in line with the objectives of the study. Data collected was analyzed using descriptive statistics. Data analysis was done using Statistical Package for Social Sciences (SPSS version 21.0). The study concludes that considerable number of SMEs in Nairobi County had adopted product development strategies, adoption of product development strategies resulted to a positive significant effect on the sales performance of small and medium enterprises in Kenya. Product development strategy helps SMEs achieve business goals, such as entering new markets, selling more to existing customers or winning business from competitors. Pricing strategies had a positive significant effect on the sales performance of small and medium enterprises in Kenya. However, pricing the product too low or too high can have unintended consequences sales. Pricing strategies give SMEs the flexibility in setting prices and win new business or maintain prices and increase the profit margin. Promotional strategies had a positive significant effect on effect on the sales performance of small and medium enterprises in Kenya. The study further concludes that 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. Place strategies had a positive significant effect on the sales performance of small and medium enterprises in Kenya. 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 Kenya should continually embrace product development strategy as this strategy provided a framework for creating new products or improving the performance, cost or quality of existing products. The SMEs should continually adopt pricing strategies (market penetration pricing, premium pricing, price skimming and economy pricing) as these tactics were found to have a positive impact on sales performance. Although a successful pricing strategy can increase revenue and profitability, careful planning is also essential to minimize the risk of costly mistakes related each specific strategy. SMEs must continually embrace promotion strategies.