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AN EXAMINATION OF THE MARKETING PROBLEMS OF SELECTED SMALL AND MEDIUM SCALE ENTERPRISES

ABSTRACT

Small and Medium Scale Enterprises (SMEs) as defined by the National Council of Industries (2009) refer to business enterprises whose total costs excluding land is not more than two hundred million naira (N200,000,000.00) only. Although, there exists no consensus among policy makers and scholars concerning the point at which a business firm is deemed to be small or medium. Indeed, there is no universally or even nationally acceptable standard definition except that the scale of business needs to be defined for a specific purpose. The problem of SMES identification is more acute in the developing countries because apart from the fact that , small and medium scale business are difficult to count, they are also difficult to measure individually, hence statistics on the number, size, geographical distribution and activities of enterprises and the SME sub-sectors are partial and highly unreliable (USAID,2004).The United Nations Industrial Development Organization (UNIDO) identified fifty definitions of small scale business in seventy-five different countries based on parameters such as installed capacity utilization, output, employment, capital, type of country or other criteria, which have more relevance to the industrial policies of the specific country. However, it has been suggested that the SMEs sub-sector may comprise about 87 per cent of all firms operating in Nigeria, excluding informal - enterprises.In spite of its definitional problem, there exists a high level of consensus on the importance of SMES, especially the SMEs sub-sector to economic growth and development. Oluba (2009) has, however, observed that the importance of SMEs varies with sectors and with the developmental stage of a country. He opined that developing characteristics such as the level of capital allocation/requirements, management size and arrangement as well as limited market access which make SMEs less amenable to the disappointing results of development strategies that focus on large, capital intensive and high import dependent industrial plants as well as failed public enterprises.According to Nnnana (2005),The government in The Nigerian Vision 2010 initiatives had envisioned an environment in which small and medium scale enterprises would contribute about 34% (gross value of manufacturing to GDP ratio) to the national product and generate 60-70% employment with sustainable yearly growth, and a low mortality rate for businesses. The envisioned future for SMEs in Nigeria is that of “a strong and virile small and medium scale enterprise that enjoys strong institutional support, contributing significantly to the Gross National Product (GNP).

CHAPTER ONE

INTRODUCTION

1.1       Background to the Study

The research in general aims is to assess challenges in managing Small and Medium Enterprises (SMEs) in Nigeria, A case study of Iringa Municipality. This chapter discussed on the background of the research problem, statement of the problem, research objectives, research questions, hypothesis significance, scope, limitation of the study, as well as definition of key terms.

Small and Medium Enterprises (SMEs) do boast of having high economic power among the lives of citizens in developing countries such as Nigeria. Researches shows that SMEs contribute to the economic development of the country, for instance in Nigeria a lot, about a third of the GDP of the country originates from the SME sector (Msoka, 2008). According to the Informal Sector Survey done in 1991, it shows that SMEs operating in the informal sector alone consist of more than

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