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The Impact of Marketing Strategy on Small and Medium Scale Enterprises

(SMEs): Case Study in Bangladesh

Conference Paper · October 2016

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 International Postgraduate Research Conference (IPRC 2016), 8 – 10th October 2016

NO ID: YMMXM

The Impact of Marketing Strategy on Small and Medium Scale Enterprises

(SMEs): Case Study in Bangladesh

*Abu Shams Mohammad Mahmudul Hoque, Zainudin bin Awang

Faculty of Economics and Management Sciences, Universiti Sultan Zainal Abidin, 21300,
Kuala Nerus, Terengganu, Malaysia
*Corresponding author

Abstract
Firm Performance (FP) of Small and Medium Enterprises (SMEs) has been considered as the
most significant torrential force behind the economy of both advanced and emergent countries
due to numerous assistances in creating employment opportunities, minimizing poverty, enabling
communities, providing of goods and services, contributing toward the GDP, and triumphing
sustainable growth and development. Similarly, with other evolving countries, the SMEs
performance is a critical leitmotif for Bangladesh currently. However, due to weak marketing
strategy, and regulatory constraints, it is getting more and more difficult for Bangladeshi SMEs to
survive in the entrepreneurial world economy and also to contribute to sustainable growth to GDP
of Bangladesh. Hence, this study will try to investigate the impact of Entrepreneurial Marketing
(EM) strategy on performance of SMEs in Bangladesh. This study used descriptive survey
research design, and a sample size of 384 SMEs was drawn through simple random sampling
out of the registered SMEs in Bangladesh. For this study, primary data was employed and
collected through the administering of close-ended structured questionnaires, and for that SPSS
software was used to analyze the respondent’s profile and to test the hypothesis, AMOS software
was used. This research work exposed that Entrepreneurial Marketing (EM) strategy has
significant impact on the performance of SMEs in Bangladesh. Consequently, this study also
suggests that there is a dire need to concentrate on EM strategy as it works for the engine of
boosting SMEs performance in Bangladesh.

Keywords: Entrepreneurial Marketing (EM); Firm Performance (FP); Small and Medium
Enterprises (SMEs); & Analysis of Moment Structure (AMOS).

150 of 265 Page

Introduction
SME sector is a fundamental part of an economy and measured as a dynamic application of
economic growth of Bangladesh (Montoo, 2006; Ghobadian & Gallear, 1996; Ladzani & Van
Vuuren, 2002) and it acts for employment generation, embarking on innovation, immense to
alleviate the poverty of the country, social stability and economic welfare of the countries are
the major role of SMEs (Arinaitwe, 2006; Ayyagari, Beck & Demirguc-Kunt, 2005; Karides,
2005; O’Regan & Ghobadian, 2004; and Audretsch, 2002). The government of Bangladesh
has acknowledged the SMEs as a precedence sector to achieve prompt economic growth
and also to reinforce the process of industrialization. As a result, SMEs have come to the van
of Bangladeshi economic activities, though Bangladeshi SMEs have been facing multifarious
problems related to resources and finance, marketing strategy, transportation, environment,
and technical & technological know-how (Chowdhury & Rashid 1996). Hence, adopting an
entrepreneurial approach as an underpinning of strategic management is necessary to
minimize economic problems (McGrath & MacMillan, 2000) and to cope up with rapidly
evolving environments of competition all over the entrepreneurial world economy. Thus, to
explore the impact of EM strategy on firm’s performance of SMEs in Bangladesh is the
objective of the study.

Background of The Study

In fact, SMEs, which can act as the engine of growth shortly of Bangladesh, becomes more
challenging due to lack of proper marketing, and appropriate entrepreneurial behavior in the
arena of Globalization (Alauddin 2015). Consequently, Entrepreneurial Marketing (EM) is vital
for a firm’s better performance and enduring success in the current extremely competitive
business environment according to an anecdotal observation of the researcher. The adoption
of the EM concept is essential for the survival of SMEs in the competitive environment, which
is argued by the several researchers (Hoque and Awang, 2016a; Raju et al., 1995; Sargeant
and Mohamad, 1999).

Despite the importance of EM in the modern business world, the need for investigation of
EM’s impact on firm’s performance is still ignored by researchers in the developing countries
(Hoque and Awang, 2016b). As far as this researcher is aware very few exertions have been
taken to work on the influence of EM on SME’s performance comprehensively in a developing
country. Since Bangladesh has been chosen for the study among the developing countries,
the literature analysis indicates that very limited research has been attempted in Bangladesh
to see the influence of entrepreneurial marketing concept leads to better firm’s performance
of SMEs or not to date.

Literature Review
Entrepreneurial Marketing (EM) has a broad meaning, since it integrates two other concepts
that, until some years ago, were perceived as two separate business disciplines: marketing
and entrepreneurship. By Hills & LaForge, EM were settled during the entrepreneurship and
marketing research conference in 1992, which wrote first about the entrepreneurship and
marketing interface. Three years later Gerald Hills produced the empirical research regarding
the marketing
Characteristics of Samples
The context of the respondents is exposed in Table 14. The respondents were covered of
64.32% male and 35.68% females, the mainstream of which were in the age group of
between 30-39 years (53.9%). Greatest of the respondents are manager of the firms
(71.62%). The majority of them had achieved education up to diploma level (41.92%). And
majority (44.53%) of the firms have been established less than 3 years.

Table 14: Profile of Respondents

Characteristics Frequency Percentage

Gender Male 247 64.32
Female 137 35.68
Age 29 years and under 88 22.91
30-39 years 207 53.90
40-49 years 67 17.44
50 and above 22 5.75
Relationship with firm Owner-manager 109 28.38
Manager 275 71.62
Education High school level or less 97 25.26
Diploma level 161 41.92
Undergraduate level 106 27.60
Post-graduate level or more 20 5.22
Number of employees 49 or less 185 48.17
50 and more employees 199 51.83
Firm Age 3 years or less 171 44.53
4-6 years 47 12.23
7-10 years 67 17.44
11 years or More 99 25.80
Conclusion
This study analyzes how marketing strategy (i.e. EM) can influence the FP of SMEs in
Bangladesh. The significant inference from this study is that EM strategy has a significant
impact on performance. Hence, it can be stanch that EM strategy can impact the success
and survival of the SMEs of Bangladesh. Moreover, this study confirmed the role EM as an
important aspect of organizational marketing strategy, additional research is needed to refine
the understanding of this integrated construct. Future research is also needed to determine
competitive advantage for SMEs performance and integrate them into EM model. Scholars
can conduct more research from other facets of EM as to see how firms can make a more
suitable strategy in winning the rivalry with other business in the entrepreneurial world
economy.

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