- Case Study D Challenges Faced By Sme S In South Africa Are Marketing Skills Needed Michael Cant University Of South A 1 (106.57 KiB) Viewed 13 times
- Case Study D Challenges Faced By Sme S In South Africa Are Marketing Skills Needed Michael Cant University Of South A 2 (84.4 KiB) Viewed 13 times
Case Study D Challenges Faced by SME's In South Africa: Are Marketing Skills Needed? Michael Cant, University of South Africa, South Africa It is estimated that small business undertakings create about 80% of all new job opportunities and according to Bowler, Dawood, and Page (2006) more than 70% of all South Africans are employed in the small business sector. The government has identified small businesses as the way forward to create jobs and to stimulate economic growth in order to combat the huge number of unemployed youths in the country - which is currently at 30 % (2012). Nager, Swanepoel and van der Merwe, (2008: 37) indicated that small business development should be an essential component of all reconstruction and development initiatives, and this has the potential to economically empower the majority of the country's people. Even though small and medium enterprises (SMEs) have a major role to play in economic development it must be noted that the failure rate of SMEs is extremely high and will not be the solution to these problems unless it is managed well, and they are assisted in their overall management actions. Pearce and Byars (2002) indicated in their research that nearly 40% of new business ventures fail in their first year, a further 60% in their second year, and 90% in their first 10 years of existence. A main reason for conducting this investigation is due to this high incidence of failures and to try and identify reasons and causes that may help in alleviating these failures. Secondary resources such as Dockel and Ligthelm (2002), Cant and Ligthelm (2002) have indicated that either no or limited marketing is undertaken by SMEs in general which can be a contributing factor to the high failure rate of SMEs in South Africa. Kroon and Moolman (2007) indicate that due to the high start-up costs of SMEs, marketing is usually not given a priority but rather seen as an expense - and therefore neglected. This study poses the
question if marketing skills are important and to what extend South African SMEs managers have these skills. In this regard, the problem to be researched is the need for marketing skills amongst SME's. The focus will therefore be on the correlation that may exist between the need for marketing skills of SME's and the potential for success. In general, when a business fails, and by implication SMEs, the focus is on the financial skills and issues and usually not on other issues. It is mostly assumed that businesses fail due to a lack of cash flow, or not enough revenue without thinking of the other contributing aspects to such a situation. This study will focus on the marketing issues, and more specifically marketing skills, of SMEs. In this regard, the problem to be addressed will be on a lack or even incorrect marketing actions by SME's. This can and will contribute towards the failure of a business and therefore warrants attention. This approach is underscored by amongst others Bateman and Snell (2006) when they argue that they realised something was wrong with the business as the opportunities identified did not match the results they expected. They found that businesses generally could not sustain themselves due to a lack of sufficient cash reserves, and that sales were not enough to generate cash flow due to amongst others a lack of marketing skills or management was ineffective. The specific objectives of the study were to obtain feedback on the need for marketing skills amongst SME owners, and to establish whether an absence of these skills have an impact on the success of SME's perceptions of the importance of marketing for SMEs in South Africa. METHODOLOGY Secondary and primary sources were consulted in order to gather information regarding the managerial skills of small business owners. The main sources consulted include journals, articles, press reports, books, and research studies. As the aim of the research was to establish the need for marketing skills of SME managers and owners, a qualitative methodology was deemed appropriate for the primary research. The population of the research. consists of all registered small business owners in South Africa. A Department of Trade and Industry (DTI, 2007) list of 10 000 small business owners was available and served as the basis for the study. A sample of 1000 small business owners were randomly selected from this list and the 1000 questionnaires were completed by means of personal interviews during February 2008. Of these a total of 801 completed questionnaires were regarded as usable representing an 80% response rate. Based on Nederhof (2002) this can be regarded as a satisfactory response rate considering the sensitivity of the topic, the nature of the problem under investigation and the inhibitions that management might have regarding the survey. The main construct of this study was measured through the use of Likert-type scales. The basic scale design therefore consisted of a Likert-type scale with five scale points (with labels ranging from strongly agree to strongly disagree) and 11 scale items. This scale was found to be highly reliable with a Cronbach's alpha of 0.7. End of Case Study D
Marks Research
questions and objectives are key 1 for any study. Using the information in provided in the case study: a. Formulate the research
questions for this study. b. Formuate the objectives of the researchers 4 The researchers mention a correlation (relationship) between two variables. Name 2 these variables in the case study and indicate 8 which of them is the independent variable and which the independent variable There is a problem in the methodology 6 3 section. Identify what it is explain and why you say so using evidence from the case study. If the reseachers found a correlation of r = 4 0,9, between marketing skills and potential of 4 success of SME's, how should the coefficient be interpreted? 8 30 Use the response template to answer the
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