Effect of Entrepreneurial Marketing on the Performance of Micro, Small and Medium Enterprises in Kenya

Abstract

Micro, small and medium enterprises (MSMEs) play crucial roles in the economic well-being of a nation. In Kenya, MSMEs are estimated to be employing 14.9 million people and contributing 33.8% of the national GDP. Despite their importance, the MSMEs in Kenya continue to suffer slow growth and performance. This has partly been attributed to lack of/ ineffective marketing practices with statistics estimating that among the licensed firms, micro (58.3%), small (35.6%) and medium (33.5%) sized establishments in Kenya do not market or advertise their products/services. The purpose of this study was to examine the effect of entrepreneurial marketing on the performance of MSMEs in Kenya. Specifically, the study examined the effect of digital marketing, relationship marketing, pricing strategy and product/service innovation on the performance of MSMEs in Kenya. It was guided by positivism research philosophy. It utilized a descriptive survey design. The study population included 8,526 licensed MSMEs in Tharaka-Nithi County. Stratified sampling and random sampling techniques were employed to arrive at the study sample size of 368 MSME owners/managers. Data was collected using questionnaires through hand and delivery procedure. Quantitative data was analyzed using both the descriptive statistics and inferential statistics. Qualitative data was analyzed through content analysis. The results of the study showed that use of digital marketing techniques such as mobile phone, Internet and social media platforms among the MSMEs increased their performance. Relationship marketing through timely customer feedback, customer orientation and involvement and promotion of accountability and reliability enhanced the MSMEs performance. The study also established a strong correlation between pricing strategy and performance of MSMEs. Marketing by embracing products/services innovation was also found to have a significant effect on the performance of MSMEs. The results also showed that the joint effect of the studied variables was higher than their individual effects. Further, from the findings of the study, it came out clearly that other factors such as cost of internet and county levies and regulations were negatively affecting the marketing effectiveness of the MSMEs. The study concluded that MSME owners/managers need to embrace innovative and digital based marketing practices to achieve a competitive edge in the market. They also should look into building relational exchanges with their customers through relationship marketing for long term success. Moreover, they should in addition entrench effective pricing strategies in order to remain competitive and sustainable. They should also continuously come up with more innovative products/ services if they are report better performance. The study recommends that the MSME owners and managers should focus on innovative marketing strategies of digital marketing, relationship marketing, and effective pricing strategies and continuously innovate in their products/services offerings. It is also recommended that the MSME owners/managers should strive to use all the studied variables together since their joint effect on performance is higher. The study further recommends that the government should prioritize support for MSMEs to buttress their marketing functions through reduction of the chargeable tariffs, levies and licenses and installation of relevant Internet infrastructure and capacity building so as to enhance their performance.