Marketing Environment and Business Failure: A Study of Small and Medium Scale Enterprises (SMEs) in Northern Nigeria

Abstract

Marketing environment can be seen as those actors and forces that hinder the ability of the marketing manager to achieve competitive advantage. The success of an organization largely depends on how well it defines, understands and faces changes in its marketing environment. The reason for this is that organizations are assumed to be an open system, as interaction between these organizations and their marketing environment is inevitable. Marketing environmental factors include;macro environment otherwise non as the external environment which represents, economic, political, natural, demographic, technology, and culturalenvironments, it is also the large environment that the marketer cannot controllable. The second environment is the micro environment, otherwise non as the small environment that is said to be controllable to the marketer, it is otherwise non as the internal environment, which include; consumers, suppliers, marketing intermediaries/middle men, company, organizational culture, organizational structure and leadership (Anoloui and Karami, 2003). Hence, business growth and survival depend on the marketing environmental factors that are either macro or micro in nature.However, the operations of SMEs include a possibility of success as well as failure. The success of SMEs can be seen in feeder services to large scale industries; they also open up opportunities for upward social mobility, employment generation, innovation, productivity, job growth and stability, foster economic flexibility and contribute to competition and economic efficiency. SMEs also contribute to income generation through exportations. They represent about 90% of the industrial sector in terms of the number of enterprises. They also account for 70% of national industrial employment if the threshold is set at 10 -50 employees, and contribute 10% of manufacturing output (Ajayi, 2002). The India SMEs represents 99% of all employers; employ 51% of private sector workers, employ 38% of workers in high-tech occupations, provide about 75% of new jobs in the private sector and represent 96% of all goods exported (Twist, 2000). In USA, SMEs have been responsible for the creation of 80% of all new jobs (Mead &Liedholm, 1998). In Northern Ireland and the UK, it is estimated that SMEs account for about 56% and 48% of employment in the private sector respectively (Buckland, 1997). On the other hand, the failure rate is narrowed down to the Nigerian context because of the focus of the study to Northern Nigeria, scholarly researches like; Abiodum (2010) Basi ( 2005) and Akwari (2007) observes that the increased rate in business failure, despite all the support and incentives as most business rarely survived their first year in operation. Timmons (1994) shows that over 20% of new ventures fail within one year and 66% within six years. Gangulay (1985) claims that almost 50% of the fits fail in the first four years of their lives.Onugu ( 2005) reveals that only about 10% of industries run by its members are fully operational. Given that such a large ...

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