SAMARA UNIVERSITY

ASSESMENT OF THE PROMOTIONAL PROBLEM IN SMALL SCALE

BUSINESS ENTERPRISE IN THE CASE OF SAMARA CITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MARKETING MANAGEMENT

ARESEARCH PROPOSAL SUBMITTED TO THE DEPARTMENT OF MARKETING

MANAGEMENT OF SEMARA UNIVERSITY IN PARTIAL FULFILMENT OF THE
REQUIREMENT FOR BACHELOR OF ART (BA) DEGREE IN MARKETING
MANAGEMENT.

REPARED BY: YIHUNIE ANIMUT

ID NO, 1203556

ADVISOR, G/MICHAEL . E(MA)

March 2015

Samara, Ethiopia
 TABLE OF CONTENT
TABLE OF CONTENT......................................................................................................................................I
ABSTRACT...................................................................................................................................................III
CHAPTER ONE..............................................................................................................................................1
INTRODUCTION...........................................................................................................................................1
1.1 Background of the Study....................................................................................................................1
1.2.Statement of the problem.................................................................................................................3
1.3.Research Questions...........................................................................................................................4
1.4.Objective of the study........................................................................................................................4
1.4.1. General objective.......................................................................................................................4
1.4.2. Specific objective.......................................................................................................................4
1.5.Significance of the study....................................................................................................................4
1.6. Scope of the study............................................................................................................................5
1.7. Organization of study........................................................................................................................5
CHAPTER TWO.............................................................................................................................................6
LITERATURE REVIEW....................................................................................................................................6
2.1 Definition of promotion.....................................................................................................................6
2.2. Objectives of promotion...................................................................................................................7
2.3. Factors affecting the selection of promotion blend..........................................................................8
2.4 The promotion mix elements...........................................................................................................13
2.4.1. Advertising...............................................................................................................................13
2.4.2. Personal selling........................................................................................................................14
2.4.3. Sales promotion.......................................................................................................................14
2.4.4 Public relation...........................................................................................................................15
2.4.5. Direct marketing......................................................................................................................15
2.4.6. Empirical Literature..................................................................................................................16
CHAPTER THREE.........................................................................................................................................18
METHODOLOGY OF THE STUDY.................................................................................................................18
3.1. Description of the Study Area.........................................................................................................18
3.2.Target Population...........................................................................................................................18

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 3.3. Source of data.................................................................................................................................18
3.4. Data collection method...................................................................................................................18
3.5. Sampling technique and sample size..............................................................................................19
3.6 Sample size......................................................................................................................................19
3.7 Data analysis method.......................................................................................................................20
3.8 Work plane and budget..................................................................................................................20
3.8.1. Time table................................................................................................................................20
3.8.2. Budget Required......................................................................................................................20
REFERENCES..............................................................................................................................................22

II
 ABSTRACT
This research paper will be conducted to assess the promotional problem in small scale
enterprise in the case of Samara city. The major purpose of the study will assess promotional
problem in small scale enterprise in Samara city to suggest possible solution with respect
reconsideration of its, performance data collection method, use both primarily and secondary
data collection technique. To collection data the researcher will be use different written books
and magazines. Sample of 60 respondents will be taken from the total population of 150
entrepreneurs using stratified sampling method. The researcher will be use descriptive research
design and descriptive data analysis method.

Key words:- Promotional,Problem,In Small Scale,Business, Enterprise,Advertising,

III
 CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Many people have carried out researches to find out if promotional elements have influence on
sales. For instance, Ndambuki (2000) did a research and found out that indeed promotional
elements have effect on sales which turned out to be different from the findings of Ondiri (1998)
who found out that there is no significant difference effect on sales. However, the difference may
have been caused by geographical difference as Ndamuki (2000) did his research in rural setting
while Ondiri carried out research in town setting. Ndambuki’s finding is also the same as
(Kivuva, 2003) that, those products which are on promotion tend to have more demand than
those which do not.

Promotion has defined as the coordination of all sellers initial efforts, to get up channels of
information and persuasion in order to sale good and service as promote an idea. Promotion is
communication of information between seller and potential buyer or others in the channel to
influence attitudes and behavior. The marketing managers’ main promotion job is to tell target

1
customers that the right product is available at the right place and at the right price. (William
D.Perreault and Jr.EJermeMcc Clay, 2000)

Promotion is defined in many ways; it is persuasive communication that motives peoples to buy
whatever an organization is selling goods, service or ides. Promotion may take the form of direct,
face to face communication or indirect communication through such media as television, radio,
magazines, newspaper, direct mail, billboard, the internet, floor ads and other channels. (Gordon
Oliver, 1995)

The objective of the message is to persuade the audience to purchase the product or service.
Therefore, the consumer needs to be receptive to the message and to be able to interpret it in
such a way that the intent to purchase is established (Koekemoer, 2004a:135). For this to be
effective, marketers have to be able to develop messages that will reach and convince the
designated target market. Various promotional tools are at the disposal of the marketer to reach
the target consumer.

cation attempts to provide information to the consumer about the organizations products and
service offerings. The various methods of communicating with the consumer need to be in
agreement to deliver a holistic and effective message that will satisfy both organizational and
consumer needs.

Promotion has been defined as the coordination of all seller initiated efforts, to get up channels
of information and persuasion in order to sell good and service as promote an idea. (George E.
Belch and Michael A.Belch, 2007). It is the upward reassignment of an individual in an
organization hierarchy accompanied by increasing responsibilities, enhanced and usually with
increased income through not always. (Monappa and Saiyadian, 1990). It occurs when an
employee moved from one job to another is higher in pay responsibility and/or organizational
level. It is one of the most pleasant vents that happen to people in an organization. Generally; it
is given as recognition of persons past performance and future promise. (Werther and Davis,
1997).

Promotion refers to the mix of promotional elements a firm uses to communicate with its current
or potential customers about its products or service. promotion efforts can be directed to the
ultimate consumer, to an intermediary or to both. Promotion is fundamental to success of your

2
firms because, without promotion. potential customers won’t know about the existence and
benefits of your products or service (Amstrog,gray and Pilip Kotler,2007).

1.2.Statement of the problem

Small scale enterprises may face many marketing activities constraint and some of the Samara
city small scale enterprises enable to sale their products or services and create awareness through
use promotional tools. As we know, consumers are not ready to purchase a product and service
without provider make awareness and communicate using different promotional tools,
particularly organization consumers. But sometimes personal consumer may purchase small
quality for a short period of time, even if, enterprise would not advertise.

However, not only the promotional problems arise in Samara city small scale enterprise, but it
also occurs in Ethiopia at large. From many of the promotional problems in Ethiopia such as lack
of awareness the important of promotion, the strategy by itself not allowed allocating adequate
budget, the enterprises have no trust on promotion reward and have no any knowledge about
multi dimension of promotional tools in one hand.

While, most of developed countries absolutely depend on promotion in their life and there
all business activities. Even if, in developing country, enterprises can either adopt the same
promotion strategy in different countries or change it for each local market. (NJ. Pientice,
Hall, 1989) many companies today have regional marketing programs with in national
boundaries, localizing their products, advertising, promotion and sales efforts to satisfies the
local consumers, needs and wants.

In addition, in today competitive environment, any business activities should be performing as

customers’ expectation, first they identify customers’ needs and wants through promotion. To
have product and goodwill, small scale enterprise would like to use promotional tools. Here, it
does not meamea different parameter they can use promotional tools which are compatible with
their business. TThe factors that initiate the researcher to select this topic are unfavorable work
condition (environment), absence of sufficient support and administrative inefficiency as the
problem of Samara university

Therefore, the student the researcher will be like to deal, the promotional problems in Samara
city micro and Small Scale enterprises.

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.

1.3.Research Questions
1. What are the factors that lead micro and small scale enterprise not focus on
promotion strategy?
2. To what extent enterprise level of knowledge about promotion mix?
3. To what extent promotion is useful to micro and small scale enterprise?

1.4.Objective of the study

This paper has general and specific objectives to assess the promotion problems in Samara city
particularly on micro and small scale enterprise.

1.4.1. General objective

 To assess the promotion problem of micro and small scale enterprise in Samara city

1.4.2. Specific objective

In this paper, it has the following specific objectives;

 To identify the factors that influences the micro and small business enterprise promotional
performance.
 To understand micro and small scale enterprises level of knowledge to promotion mix.
 To know the benefit of promotion to micro and small business enterprise.

1.5.Significance of the study

The proposal paper will be provide valued information to all micro and small scale enterprise
regarding promotion mix elements which has communication tools and to convince customers to
their product and services.The paper also identify the major problems in micro and small scale
enterprises really today practice. This also helps to the enterprise and potential business to
improve their progress and to take a corrective action in related to promotional practice.

It will be helped to the society in the case of creating awareness’ regarding promotional practice
which means they know whether the advertising is correct or incorrect in terms of promotional
policy.

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On the other hand, the proposal paper will be given to the students researchers as a starting point
to investigating future other problems related to promotion practice. And this paper not only help
students but also to other researchers as a springboard to other thematic area in future time.

1.6. Scope of the study

The study will be focus on the problem of promotion in micro and small scale enterprises in
Samara city. The study will be determinate to the extent of assigning the effect of the entities
promotion strategy over their competitors in and around Samara city.

Conceptual; this research entirely focused on assessing the promotional poblem of small scall
business enterprise

Geographical; Due to a shortage of time and budget the study is focused on micro and small
scale business enterprise in Samara city.
Methodological; the researcher use descriptive research design to describe the promotional
problem in the micro and small scale enterprise and the study is conducted using stratified
sampling technique.

1.7. Organization of study

The researcher will be consist five chapters. The first chapter deals introduction which consists
background of the study, statement of the problem, objective of the study, significance of the
study, scope of the study, and organization of the paper. The second chapter shows review of
literature, the third chapter concern research methodology which consist research design, target
of population, sample size determination, sampling technique, data type and source and methods
of data analysis, the fourth chapter deals with data presentation, analysis and
interpretation .Finally, at the last chapter, chapter five summarized major findings, conclusion
and recommendation.

5
 CHAPTER TWO
LITERATURE REVIEW
2.1 Definition of promotion
Promotion is one of the four elements of marketing mix i.e product, price, promotion and place. It is a
communication link between sellers and buyers for the purpose of influencing, informing or persuading
a potential buyers purchasing decision. The promotion mix specify that how much attention to pay to
each of sub categories and how much money to budget for each. A promotional plan can have wide
range of objectives including: sales increase, new product acceptance, creation of brand equity,
positioning competitive realization and creation of a corporate image.( Http:// en. Wikipedia.
promotion marketing)
Promotion is communication information between seller and potential buyer or others in the
channel to influence attitudes and behavior. The marketing manager main promotion job is to tell
target customers that the right products are available at the right place and at the right price.
(William D. Perreault, Jr.EJermeMcc Clay, 2000)

Promotion is designed in many ways it is basically persuasive communication that motivates

people to buy whatever on organization is selling goods, service or ideas. Promotion may take
the form of direct face to face communication or indirect communication through such media as
television, radio, magazine, newspaper, direct mail, billboards and other channels.(Gordon
Oliver, 1995).

Promotion has been defined as the coordination of all seller initiated efforts, to get up channels
of information and persuasion in order to sale goods and service or promote an idea. (George E.
Belch and Michael A. Belch,2007 )

Promotion is the upward reassignment of an individual in an organization hierarchy accompanied

by increased responsibility enhanced and usually with increased income through not always so.
(Mo nappa and Saiyadian, 1990).

Promotion when occurs an employee is moved from one job to another is higher in pay,
responsibility and/or organizational level. It is one of the most pleasant vents that happen to

6
people in an organization. Generally it is given as recognition of persons past performance and
future promise.(Werther and Davis, 1997).

Bekowitz et al. (1989) defined promotion as a means of communication between the seller and
buyer. To communicate with customers, a company can use one or more of the promotional
alternatives that is personal selling, advertising, sales promotion and public relation.

2.2. Objectives of promotion

The different promotion methods are all different form of communication. They should
encourage customers to choose a specific product, therefore promotions overall objective is
informing, persuading and reminding customers. (D. Perreault, Jr, E.Jerome McCarthy, 2000).

According to Boone and Kurtz (2001) Promotional objectives differ considerably from one
organization to another and within organizations over time. Large organizations with multiple
promotional programs operating simultaneously may have quite varied promotional objectives.
For the purpose of analysis we focus on the following five promotional objectives.

Create awareness (Provide information)

A considerable amount of promotion is directed at creating awareness. For an organization

introducing a new product, new brand or brand extension, making customer aware is crucial to
initiating product adoption process. Creating awareness is important for existing products too.

Promotional efforts may be aimed at increasing brand awareness, product feature awareness,
awareness of image related issues or awareness of operational characteristics.

Stimulate demand or increase demand

Most promotions perceive the objective of increasing demand for a good or service. Some
promotions are aimed at increasing primary demand, the desire for the general product category
when an organization is the first to introduce an innovative product it tries to stimulate primary
demand, demand for a product category through pioneer promotion.

Pioneer promotion informs potential customers about the product, what it is, what it does, how it
can be used and where it can be purchased.

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More promotions, however, are aimed at increasing selective demand, the desire for a specific
brand to build selective demand, a marketer employee promotional effort based on the strength
and benefits of a specific brand.

Reduce sales fluctuation (stabilize sale)

Demand for many products varies from one month to another because of factors such as climate;
holyday and seasons. A business however, cannot operate at peak efficiency when sales fluctuate
rapidly.

Changes in sales volume translate in to changes in production, inventory levels, personnel needs
and financial resources required.

Differentiate the product

A frequent objective of the firm’s promotional efforts is product differentiation. Homogeneous

demand for many product results when consumers reared the firm’s output as virtually identical
to its competitor’s products.

Accentuate the product’s value

Promotion can explain the greater owner ship utility at a product to buyers, there by accentuating
its value and justifying a higher price in the market place.

Benefits both consumer and business products a firm’s promotional messages must build brand
image and equity and at the same time deliver “call to action”.

2.3. Factors affecting the selection of promotion blend

Each promotion blend should be design to achieve the firm’s promotion objective in each
marketing strategy.

The particular blend a firm’s selects also depends on other factors include: The promotion budget
available, the stage of product in its life cycle, nature of the market , price, the nature of the
product, the nature of competition, the target of the promotion

Size of promotion budget

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Areas barrier in any implementing any promotional strategy is the size of the promotional
budget. A single, 30 second television commercial during the super bowl telecast cost and
advertiser $2million .While millions of viewers may see the commercial, making the cost per
contact relatively low; such expenditure exceeds the entire promotional budgets of thousands of
firms. Size of budget or fund available for promotion affects promotional efficiency, there are
some economies of scale in promotion and when the promotion budget is limited, sales
promotion and direct mail may be attractive possibilities. (Boone and Kurtz ,2001 )

Stage of product in its life cycle

During product life cycle stages, promotion blends may have to change to achieve different
promotion objectives. There are four stages.

Market introduction” this new idea is best “During market introduction, the basic promotion
objective is informing. If the product is a really new idea, the promotion must build primary
demand for the general product idea. New product or market with high cost and less sales
volume (profit).

Market growth stage “our brand is best “In this stage more competitors enter the market and
promotion emphasis shifts from building primary demand to stimulate selective demand-demand
for a company’s own brand. The main job is to persuade customers to buy and keep buying the
company’s product. The goal of promotion is to create brand conviction and purchase.

Sales people should deal with distributor aggressively. Sales promotion tools are important. Mass
selling may become more economical.

Market maturity stages “our brand is better really “More competitors have entered the market.
Promotion becomes s more persuasive .Mass selling and sales promotion may dominate the
promotion blends at consumer products firms. More of the promotional budget is allocated to
trade and consumer deals. Firms that have strong brands are able to use remainder type
advertising at this stage to be sure customers remember the product name. This may be much
less expensive than persuasive efforts.

Sales declining stage “let’s tell those who still want our product”. The total amount spent on
promotion usually decreases as firms try to cut costs to remain profitable, since some people

9
may still want the product, firms need more targeted promotion to reach these customers. Use
only basic sales promotion devices. (Boone and Kurtz,2001)

Nature of the market

The marketer's target audience has a major impact on the choice of promotion method. when a
market include a limited number of buyers ,persona selling may prove a highly effective
technique. However, markets characterized by large number of potential customers scattered
over geographic areas may have the cost of contact by person’s sales people prohibitive.in such
instance, extensive use of advertising may make sense. The style of customer also affects the
promotional mix. Personal selling works better in a target market made up of industrial
purchasers or retail and wholesale buyers than in a target market consisting of ultimate
consumer's..(Boone and Kurtz,2001 ).

Price

The price of good and service is another factor that affects the choice of promotional mix.
Advertising dominates the promotional mixes for low unit value products due to the high per
contact costs in personal selling. These costs make the sales call an unprofitable tool in
promoting lower value goods $ services. Advertising in contrast, permits a low promotional
expenditure per sales unit because it reaches mass audience .for low value consumer goods such
as soft drink and snack food, advertising is most feasible means of promotion. on the other
hand ,consumers of high priced items like luxury cars expect lots of well presented
information .personal selling appeal to those potential customers.(Boone$Kurtz,2001).

Nature of the product; makes a big difference.

The target customer view of the product is the common unread that ties together all the variables
in a marketing mix. The customer’s view of the product affects the promotion blend, too. The
impact of some general product characteristics on promotion blends are;

Highly standardize products with minimal servicing requirements usually depend less on personal selling
than do custom products with technically complex features and requirement for frequent maintenance.
Consumer products are more likely to rely heavily on advertising than are industrial products. (Boone a
nd Kurtz.2001)

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The nature of competition

Requires different promotion. Firms in monopolistic competition may favour mass selling
because they have differentiated their marketing mixes and have something to talk about. As a
market tends to ward pure competition or oligopoly it is difficult to predict what will happen. In
markets that are drifting toward pure competition, companies resort to price cutting. Lower price
may be offered to middlemen, customers or both.(Boone and Kurtz, 2001).

Target of promotion helps set the blend

According to (Boone and Kurtz,200). Promotion can be directed to five (5) different groups,
final consumers, industrial consumers, retailers, wholesalers and even a company’s own
employees. The right promotion blend for each group can be different.

Promotion to final consumers

- The large number of potential customers almost forces producer of consumer products
and retailers to emphasize mass selling and promotion.
- Sales promotion such as contests or free samples may build consumer interest and short
term sales of product.
- Effective mass selling may build enough brand familiarity so that little personal selling is
needed as in self service and discount operations.
- Personal selling can be effective; too some retailer’s specialty shops in particular rely
heavily on well informed sales people.

Promotion to industrial customers

Industrial customers are much less numerous than final consumers and there is more reason to
emphasize personal selling. Industrial customers may have technical questions or need
adjustments in the marketing mix. Personal selling becomes more practical as the size of each
purchase increases. Larger unit purchases are more typical in industrial markets.

Promotion to retailers

Much promotion to retailers in concerned with informing mass selling in trade magazines can be
valuable here especially when the firm is promoting a new offering.

11
Personal selling is so important in dealing with retailers is that marketing mixes may have to be
adjusted from one geographic territory to another to meet competitive situations.

Sales promotion target at retailers usually focus on short term arrangements that will improve the
retailers profit.

Promotion to wholesalers

Promotion to wholesalers is very similar to promotion to retailers except that wholesalers are less
numerous and perhaps even more aware of demand and cost.They respond to economic
argument.

Promotion to employees

Some companies put a lot of emphasis on promotion to employee’s especially sales people. Sales
promotions like contests give a free trip to a big seller are common in many businesses.

Stage of the buying decision

Kotler (2000) noted that knowing the customers stage of decision making also affects the choice
of promotional mix

Pre purchase stage; in pre purchase stage, advertising is more help full than personal selling
because advertising informs the potential customers of the existence of product and service.

Purchase stage; at this stage personal selling plays a greater role.

Post purchase stage; in this stage the buyer needs personal contact hence sales person is
important.

Channel strategies

Kevin et al(2003) noted that promotion strategies assist in moving a product through the channel
of distribution.

Push strategy; in this approach personal selling and sales promotion play a major role. Sale
people call on wholesalers to encourage orders and provide sales assistance and this increase
purchase of product (Jams and Philip , 2001).

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Pull strategy; the manufacturer directs its promotional mix to customers to encourage them to ask
retailers for the product. Seeing the demand from ultimate consumers , retailers order the product
from wholesalers(Hardie,1999).

2.4 The promotion mix elements

Bekowitz et al. (1989) defined promotion as a means of communication between the seller and
buyer. To communicate with customers, a company can use one or more of the promotional
alternatives that is personal selling, advertising, sales promotion and public relation. Fische
(1996) noted that three of this elements, which include advertising, sales promotion and public
relation, are often said to use mass selling because they are used with group of perspective
buyers. In contrast, personal selling uses person to person interaction between a seller and
perspective buyer. Personal selling activities include face to face, telephone and interactive
electronic communication. Promotion mix is a combination of promotional methods used to
promote a specific product. The five possible elements of promotion mix elements are as
follows;

2.4.1. Advertising
Berkowitz (1989) defined advertising as any paid form of non-personal communication about an
organization, a good, service or an idea by an identified sponsor. The paid aspect of this
definition is important because the space for the advertising message normally must be bought.
The non-personal component of advertising is also important as it involves mass media such as
TV, radio and magazines which are non-personal and don’t have an immediate feedback as does
personal selling (McCarthy, 1996). There are several advantages to a firm using advertising as its
promotional mix. It can be attention getting. I company can control what it wants to say and to
whom the message is sent. It also allows the company to decide when to send its message to all
receivers in a market segment. Advertising has same disadvantage like; Lack of direct feedback,
the cost to produce and place message are significant (Berkowitz,1989). Most firms concentrate
on product advertisement and institutional advertisement.

Institutional advertising: this builds goodwill or an image for an organization rather than
promoting a specific good or service. Four alternative form of institutional advertisements often
used, which include

1. Advocacy advertisement: This states the position of a company on an issue.

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2. Pioneering advertisement: which are used for an announcement about what a company is,
what it can do or where it is located.

3. Competitive institutional advertisement: which promotes the advantage of one product class
over another and are used in markets where different product classes compete for the same
buyer. 4. Reminder institutional advertisement: This brings the company’s name to the attention
of the target market again.

Product advertising: this is focused on selling product. It is used in the introductory stage of
product life cycle.

2.4.2. Personal selling

Kotler (2000) noted that personal selling is a use full vehicle for communicating with actual and
potential buyers. Personal selling involves the two ways flow of communication between a buyer
and seller often in face to face encounter designed to influence a person’s purchasing decision.
However, with advances in technology, personal selling is also takes place over the telephone
and through video conferencing between buyer and seller. Kotler and Levy (1994) also noted
that personal selling service three major roles in a firms overall marketing effort. Sale people are
the critical link between the firm and its customers, sale people are the company in the
customer’s eye. Lastly personal selling may play a dominant role in a firms marketing program.
Sale people can create customer value in many ways; for instance, by being close to the
customer, sale people can identify creative solution for customer problems. According to
berkowitz (1989) personal selling define as any paid form of interpersonal presentation of goods
and services. Unlike advertising, personal selling is usually face to face communication between
the sender and receiver. Advantage of personal selling, a sale person can control to whom the
presentation is made, the seller can see or hear the buyer’s reaction to the message. Disadvantage
of personal selling are also; flexibility, high cost of persona selling, most expensive promotional
mix.

2.4.3. Sales promotion

According to Boone and Kurtz(2001) sales promotion defined as marketing activities other than
personal selling, advertising, and publicity that enhance consumer purchasing and dealer
effectiveness .

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Kotler (1994) noted that if sale promotion is conducted continuously they loss their effect.
Customers begin to delay until a coupon is offered or they question the product value. When
organizing sales promotion firm can direct sales promotion to ultimate consumers that is
consumer oriented sales promotion support a company’s advertising and personal selling. On the
other hand firms can also direct their sales promotion to traders like wholesalers, retailers or
distributors. This can be done by giving the traders allowance and discount.

2.4.4 Public relation

Fiske (1980) defined public relation as a form of communication management that seeks to
influence the image an organization and its product and service. Public relation usually focuses
on communicating positive aspect of the business. This involves a company to use publicity tools
like news release were by the company informs a newspaper, radio station or other media of an
idea for a story.

Kotler (2000) noted that non-profit organizations really heavily on public service
announcements, which are free space or time donated by the media. The publicity efforts are
coordinated with news releases, conferences, advertising, voluntary activities, endorsements and
any other activities that may have impact on public perception.

2.4.5. Direct marketing

Kotler (2000) defined direct marketing as an interactive, marketing system that uses one or more
advertising media to affect a measurable response a transaction at any location. Hardie (1991)
emphasized that sales product through direct marketing are growing rapidly. Today many direct
marketers see direct marketing as playing a major role that of building a long term relationship
with the customers.

Major channel for direct marketing: direct marketers use a number of channels for reaching
prospects and customers. These include face to face selling, direct mail, catalog, tele-marketing
and other direct response media (kotler 2000).

 Direct mail: involves an organization sending an offer, announcement, reminder or other

item to a person at a particular address (hardie 1991).

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  Catalog marketing: occurs when company’s mail one or more product catalog to select
address. They may send full time merchandise catalog, speciality consumer catalog and
business catalo usually in print form but sometimes in CD, videos or online (kotler 2000).
 Online marketing: in online marketing the consumer, not the marketer gives permission
and controls the interaction as they decide what marketing information they receive about
which product and service under what condition (kotler 2000).

2.4.6. Empirical Literature

Drucker (1999) noted that marketers use numerous tools to elicit response from the target
markets. These tools include: Place, Price, Products and Promotions also referred to as 4Ps of
marketing (McCarthy, 1996). Marketing mix decisions must be made for influencing the trade
channels as well as the final consumers and in return sales. Typically a firm can change any of
the marketing mix to achieve the desired response from the potential buyers. For instance, a firm
can change its price, sales force size and advertising expenditures in the short run. It can develop
new products and modify its distribution channel only in the long run. Kotler (2000) indicated
that the 4Ps represent the sellers’ view of the marketing tools available for influencing buyers.
From the buyers’ point of view, each marketing tool is designed to deliver a customers’ benefit.
Lauter (1990) suggested that the seller’s 4Ps correspond to the customer’s four Cs that include:
customer solution, cost, convenience and communication as shown in the table below.

Product Customer Solution

Price Customer cost

Place Convenience

Promotion Communication

Table 2.1: Customers Cs corresponding to sellers’ Ps

Winning companies will be those who can meet customer needs economically and conveniently
and with effective communication. Marketing mix is a controllable factor that the marketing
manager can take to solve a marketing problem (Bekowitz et al., 1997).

16
Aryeetey et.al (1996) indicated that most of the small business enterprises’ operators have little
formal education in managing their business. The background of the owners/managers, therefore,
places a limitation on their managerial capabilities. This problem has affected the scope of their
operation and therefore they are not able to take full Advantage of emerging opportunities (Steel,
1996). In certain situations, managerial incompetence has led to operational inefficiencies
resulting in poor performance (Pappoe, 1992) Small scale enterprises produce largely for the
domestic market although there are few of their products for export markets Those producing for
export are unable to identify the specific buyers in the export trade. This creates the problem of
unfair competition from outside producers as well as dumping of goods from the developed
countries Aboagye et.al (1998). With regard to the use of modern technology, the operators of
the small scale Business enterprise in metal work use basic locally developed technology and
machinery which restrict incentives to innovation. These are limited in capacity and efficiency.
The small scale enterprise thus, experience much wastage of materials as well as frequent
machine breakdow Anderson, (1998).Technical expertise in the SMEs is also limited. Some of
the small enterprise are not aware of the availability of modern technologies or do not have the
capability to develop and apply them. Moreover, where there is such awareness, luck of funds
restricts their acquisition. Olu, (2009). Goze, (1990) in his study of small enterprise, stated that,
few small enterprise start their projects with their own capital (personal saving) and with
assistance from families and close associat

CHAPTER THREE
METHODOLOGY OF THE STUDY
3.1. Description of the Study Area
The researcher will give greater emphasis on the assessment of the promotional problem in
small scale business enterprise service , Samara City. It is one of the largest towns which are
found in afar regional State, it has a latitude and longitude of 11°47'32"N and 41°0'31"E with an
elevation 432 meter (1,416 feet) above sea level. Samara has 591.3 k.m away from Addis Ababa
City which is the capital City of Ethiopia.

17
3.2.Target Population
The target population of study was all employees who working in the enterprise directly or
indirectly concerned to promotional practice in their enterprises. Here, the total population of the
study was 150 employees. Out of 150employees, 60 of the employees take as respondents and
conduct to in detail. This implies that, we were taken 40% of each enterprise. This also indicates
according to some books stated that the respondents should be greater or equals to 30% is fair
and validly to do appropriate research paper.

3.3. Source of data

It is true that the whole effort of the study is depending on the data that collected from different
sources. The student researcher focused on two major sources to assess the promotion problem in
micro and small scale business enterprise. These are the primary and secondary data from
different category sources. The student researcher obtained and used primary source of data by
distributing self-administered questionnaires and the researcher also assessed secondary sources
of data including libraries, books, and internet and enterprise documented comprehensive review
of existing document of the enterprises were utilized

3.4. Data collection method

The collect relevant data for the study, First the student researcher will be develop questionnaire
and distributes into the target population or respondents. Questionnaires both structured (close-
ended) questions that require respondents to choose from a predetermined set of alternatives and
unstructured (open-ended) question so as to allow respondents to replay in their own words.

3.5. Sampling technique and sample size

Under this study, the student researcher used stratified sampling technique to be minimize time,
cost and avoid personal bias. Depend on the nature of target population; the student researcher
used the stratified sampling techniques. Therefore, the sample size of the study wills 60
entrepreneurs. And then the researcher used stratified sampling for each enterprise to arrive at
appropriate representatives.

Stratified sampling technique will be use to arrive at representative sample for the study, where
the population will first be divided in to strata and treated as a population .this technique was
used since the study unit has an equal chance of being selected in the sample size. Stratified
sampling is a method of polling that separates the population in to groups with commonalities

18
and then polls numbers of each group. a stratified sampling provides greater accuracy than a
simple random sampling of the same size and may be less expensive because a smaller sample
often provides greater precision .since a proportional stratified sampling includes the groups
percentages as they occur in the population, there will be no danger that any one group was
going have a disproportionate representation in the study. Dividing the population in to series of
relevant strata means that the sample is more likely to be representative as it ensures each strata
is representative.

3.6 Sample size

A sample size of 60 was selected based on (Taryamane, 1967) sample size determination
formula.

n=N/1+N (e²)

n=150/1+150(0.1²)

n=60

NB: n=sampling size

N=total population

e=margin of error

3.7 Data analysis method

Having the data collected from both primary and secondary source, the research team preceded
towards the drawing of conclusion by logical inferences (analysis and interpretation of data). In
this study researcher prefer will use percentage and tabulation method to analyse data.
Percentage method will be used to compute and get the total picture of data collected from
sample respondents which will be serve as base for making comparative analysis. Tabulation on
the other hand is used to summarize the data in the form of tables.

19
 3.8 Work plane and budget
3.8.1. Time table
To conduct this thesis, the researcher will have clear action plan that enable the researcher to
undertake and manage the research effectively. To do so the detail action plan is prepared as
follow

Table 3.1.Time Schedule

Activities to be carried out Month (Oct.2016to July 2017)

No.
Dec Jan Feb Mar Apr May June
Writing research proposal  
1
Submission of first draft research proposal to 
2
advisor

Approval of proposal from advisor 

3

4 Data collection 

Data editing and coding  

5

6 Data analysis and summary of findings 

Conclusion and Recommendation 

7

Presentation of the first draft of report  

8

Preparation the final report 

9

Compiling and submission of senior essay 

10

3.8.2. Budget Required

Table 1Transportation and bed rent

No Descriptions Subtotal (Birr)

1 For transportation cost 2200

3 For food per day 160 birr 4900

Sub total 7100

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 Stationary Cost

No Item Unit Quantity Unit Price Total

1 Printing Paper Pcs 300 3(birr) 900

2 Photocopy Paper Pcs 200 2.5 (birr) 500

3 Note Book Pcs 8 80.00 640.00

4 Pen and Pencil Pcs 10 25.00 250.00

5 Flash Disk (16 GB) Pcs 1 340.00 340.00

Sub Total 2630

Miscellaneous Cost

No Item Quantity Unit Price Total Cost

1. Communication Cost (Telephone and Internet

1350.00
cost)

Sub Total 1350.00

Logistics Summary

No Descriptions Subtotal (Birr)

1 Stationary cost 600.00

2 Pride cost Expenses 850.00

3 Miscellaneous cost 1500.00

Sub total 2950.00

21
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