The Status of Marketing in Nigerian Small Business

By Ogwo, Ogwo E. | Journal of Small Business Management, April 1987 | Go to article overview

The Status of Marketing in Nigerian Small Business


Ogwo, Ogwo E., Journal of Small Business Management


THE STATUS OF MARKETING IN NIGERIAN SMALL BUSINESSES

The neglect of marketing in developing countries appears to be most acute among small businesses. In this exploratory study, an attempt was made to assess the practice of marketing in small businesses in Nigeria. Some of the factors that hinder the development of marketing in Nigeria are also identified. In many respects, this study is a partial replication of one conducted by Baker and El-Haddad in Egypt.1 The two studies differ in that this one confines itself to Nigerian small businesses, while the Baker and El-Haddad study examined both large and small businesses.

1 Michael J. Baker and Awad B El-Haddad, "An Analysis of the Current Status of Marketing in Developing Countries: The Egyptian Situation,' unpublished research report, University of Strathclyde, Glasgow, Scotland, 1982.

The Central Bank of Nigeria credit guidelines of 1985 tend to define small businesses using only annual turnover as a criterion. In the Central Bank's guidelines, a small business is defined as any enterprise with annual turnover not exceeding 500,000 Naira (one Naira = $1.12).2 For purposes of the present study, however, the Central Bank's turnover restriction is not used in defining small business. Instead, the definition of small business specified by the American Committee for Economic Development was used to select the 25 firms in the sample.3

2 S. A. Ogbonnaya, "Problems of Financing Small Business in Imo State, Nigeria,' B. Sc. Research Project, Imo State University, Aba Campus, Nigeria (1985), p. 8.

3 This definition stipulates independent management, ownership and capital supply controlled by an individual or small group; local work force (though market is not necessarily local); and small size relative to other firms in the industry. (Laurence L. Klatt, Small Business Management: Essentials of Entrepreneurship, Belmont, California: Wadsworth Publishing Co. Inc., 1973).

Nigeria is the largest single country in West Africa, with a population of about 90 million and a per capita GNP of 860 U.S. dollars.4 A reinvigorated small-business sector could constitute the engine for recovery from the current economic crisis, and ultimately, for economic development. It has long been recognized that marketing is important to overall economic development.5 Very little has yet been done, however, to convince public policy makers and entrepreneurs in the developing countries that marketing principles and methods can help them to achieve their economic objectives.6 The purpose of this exploratory study was to determine the status of marketing in small manufacturing firms in Nigeria as a step toward developing new marketing approaches and policies.

4 World Bank Annual Report, 1984 (Washington, D.C.: The World Bank, 1984), p. 85.

5 R. Bartels, "Marketing and Economic Development' in Macromarketing: Distributive Processes from a Societal Perspective, ed. C. C. Slater, Proceedings of the Macromarketing Seminar, University of Colorado, Boulder, Colorado, 1976, pp. 211-217. See also M. J. Baker and A. B. El-Haddad, "Marketing and Economic Growth,' paper presented at the Annual Meeting of the European Academy for Advanced Research in Marketing, Copenhagen, Denmark, March 1981.

6 J. R. Ritchie and R. J. LaBreque, "Marketing Research and Public Policy; A Functional Perspective,' Journal of Marketing (July 1975), p. 16.

METHOD

Data were gathered between January 1984 and February 1985 through interviews with at least three senior management executives in each of the 25 small manufacturing firms in and near Aba, Imo State, Nigeria, These 25 small firms represent 54 percent of the total number of manufacturing firms in the area under study, which is thought to be representative of Nigeria as a whole.

The 19 interview questions sought information on the degree of formalization in the firm's marketing process, management's understanding of marketing, the firm's market share, product development, competition, customer satisfaction, and expenditures on marketing. …

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