Role of SMEs in Economy

Introduction

Entrepreneurs make a startup of new ventures. The SMEs, as well as new ventures, are essential for all of the economies. They generally help in giving newer employment opportunity in the economic regions where there is the possibility of less large scale business. In the general context, the startup is done with innovative enterprises identifying opportunities in a larger scale business (Aldrich, 2001). It was achieved from the research done in 2017, that 99.3% of the private sector business had started its business in 2016 and among them, 99.9 % of the business was small-or medium-sized(SMEs). Entrepreneurs, its behavior and the ways SMEs perform their business has its impact on the economic environment (Aldrich, 2001). This research has given its major focus on the distinct features of small business marketing environment in the fast food industry named Kiddylicious, Fentimans, and Grenade which operates its operation in the UK. It will also analyze the issues faced by them while operating in the market. The standard marketing theory will also be evaluated in this essay whereas it will also discuss the ways to develop the autonomous learning process to upgrade the learning skills of individuals.

Features of SMEs

There are three SMEs of UK which includes Kiddylicious is the firms of children snacks, Fentimans is the firms for manufacturing of drinks and Grenade is the sports nutrition’s brand. The small business marketing environment sets it apart from the larger competitors (Scarborough, 2016). Lower revenues, fee employees, lower profitability, smaller market area, fewer location, and sole ownership are some of the distinct features of these three SMEs. The revenues of this small-scale business are lower than making operation on a larger scale, but this doesn’t mean that it will have lower profitability(Acs and Audretsch, 2010). However, profitability will be lower when the comparison is made with the larger business scale. Small business also possesses fewer employees and serves in a smaller area. The definition of small-scale itself doesn’t allow it to a server in a larger area as the administration on a larger scale would push them in newer classification (Sommer, 2017). Moreover, small-scale business mostly organizes in sole proprietorships and don’t file its taxes. This business is also found in limited areas.

Marketing Operational Issues in SMEs

It is found that small business organization namely Kiddylicious, Fentimans, and Grenade generally possess key marketing operational issues such as attracting customers, considering demands, government regulation, finding the right staffs, etc. It is very problematic to attract the customers in small business scale as this business possesses a lesser variety of items to attract the customers. Moreover, the regulation of government is also one of the challenges for the small-scale business (Johnson, 2015). The regular changing regulations of government charge a large number of costs to the small scale company which is difficult for them to afford and bear. Furthermore, the common problem for the small-scale company is to find qualified employees (Storey, 2016). The qualified employees generally want higher salary which is difficult for the small-scale managers to pay to the recruited employees and thus, not able to hire the right people.

Apart from the above challenges, the poor infrastructure, issues related to quality control, inability to meet the credit conditions, regulatory complexities and documentation process are some more operational issues which are faced by the small/medium size companies. It is found that since SMEs doesn’t apply for larger money on its business thus, it comes up with many complexions (Chaudhuri & et al., 2001). It is very difficult for this scale company to take care of the health and safety of employees and deal with the long process of documentation due to a shortage of funds. On the other hand, unrealistic expectations and competition are further marketing operational issues which company face on its regular basis.

Marketing Theory and Business Research in SMEs

Marketing is the data analysis and collection process which help the companies to sell products and services (Dalota & Grigore, 2010). This data or information assist the company to evaluate newer products or make changes to the present ones, choose the proper distribution channels and make the creation of a brand. Customer’s demographics, statistics of industry, competitor’s information and also sales number are the data which is used by the company at the time of marketing (Acs and Audretsch, 2010). A marketing mix theory is a business tactic which is utilized to determine the offering of brands and products.

Position: A standard theory of marketing mainly says that sales can be maximized of fast food when the company positions its products and services as per the needs of consumers (Sava & et al., 2011). It is stated as making the creation of the image.

Price: choosing of the right price for the products in fast food helps in knowing the cost and required margin of profits. The perceived-value theory of marketing has stated that when the product’s price is made higher than the competitors, then consumers will rely on that company(Sommer, 2017). When a company minimizes the product’s price less than that of competitors, then customers can be attracted to the company.

Promotion: social media, personal relationship, advertising, sales promotion and also personal selling is regarded as the major tools of communication for fast food organization (Scarborough, 2016). These are appropriate tools which should be put in the message of the organization towards the right audience so that the right information can be transmitted to the customers with right appealing power and information.

Product: The products of the fast food company needs to fit the task of the consumers and should satisfy the customer’s needs (Sava & et al., 2011). The product could be both tangible as well as intangible. It is not important for the business to produce products but it needs to be procured from some other places.

Research is very important on SMEs and helps in providing jobs in different sectors. The market research is applied in various life-cycle of a company. The research helps in finding out the viability of the newer business. It helps while moving in the newer market. Research is also needed for the company to acknowledge the feedbacks of the customers regarding the products launched (Johnson, 2015). The small-scale business should make the planning of the market research by controlling it tightly.

It is seen that market research is beneficial for the smaller scale fast food business as compared to other techniques as it helps the small-scale company to make a creation of more compelling material of marketing (Sommer, 2017). It also makes identification of the targeted place which is required for the company. It also suggests the ideas needed for newer products and makes the minimization of the risk. It also helps the market research to go inside the mindset of the customers (Dalota & Grigore, 2010). Thus, it can be said that marketing research is one of the appropriate tools for the marketing of small-scale industry.

Best marketing practices

Word of mouth, Innovation marketing and social media are the best marketing practices which is linked with SMEs. The major issues for any small business is to attract the attention of the customers. the word of mouth is a powerful tools which is applied in old-fashion means of spreading the good news to the people in SMEs(Jahromy, 2009). it is also termed as modern methods of sharing the opinions by the means of social media.

Social media is also a social marketing practices which have transformed the individuals to interact and communicate with the individuals. since, social networling websites is very renowned and is used in daily lives so it have larger impact on the life of the individuals in SMEs. social media is not only a tool for communicating for amusement but it also involves important part of the strategies of market in SMEs(Ward & Dagger, 2007). the usage of social networking have been risen up constantly and its impact have termed stronger in everyday business practices.

Innovation plays a major role in marketing in SMEs. The new product development is said to be the lifeblood of the business in SMEs. the key engine for the growth is said to be have innovation. This marketing practices helps the SMEs business organisation to achieve greater penetrations and acknowledge the current appeal of the customers (Aldrich, 2001). it is stated that innovation attracts the larger number of customers.

It had been overviewed that all the three practices of marketing are linked with each other and is applied directly or indirectly linked with the marketing practices. Innovation have a closer view with social media which inturn is linked with word of mouth.

Conclusion

The severe growing SME sectors are linked rapidly with the changing economies which helps the people to enhance the lifestyle by coming out of poverty. However, it is analyzed that operating in the SMEs background is not as easy as they need to come up with some hurdles. Lack of qualified employees, the trust of customers, improper infrastructure, regulatory complexities, financial management, etc. are some of the marketing operation issues faced by the SMEs. On the contrary, the large business organization doesn’t have to face such issues due to the difference in operations. The usage of huge amount helps them to compensate many risk and issues. It had been seen that although all the three marketing practices are very important and efficient but social media is one of the effective means of marketing as it is widely used all over the world.

Recommendation

It is recommended to the fast food industry to enhance its level of competitiveness to achieve higher profitability. SMEs can cut the unwanted costs and maximize its efficiency. Moreover, they can also provide values to their products. Diversification of the products in the newer markets can also be appropriate measures to expand its operation and overcome the issues (Karadag, 2015). The company can make a well-established management environment so that employees along with customers get attracted upon. Also, a proper survey of the market and proper management of time could be appropriate measures for these issues. It is also important for the fast food companies to divide the task in a delegated manner to manage the task at a specified time (Karadag, 2015). Lastly, it is also recommended that business should mainly focus on social media and should advertise regarding its products.

References

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