THE EFFECT OF CUSTOMER PROPOSITION ON THE PERFORMANCE OF SMES. THE CASE STUDY IS Y AND K COMPANY LIMITED

Abstract

This study was on effect of customer proposition on the performance of SMEs. Three objectives were raised which included: To ascertain the  element of customer value proposition practice in Nigerian SME, to ascertain the readiness of customer value proposition practice in Nigerian SME and to  ascertain the effect of customer proposition on the performance of SMEs. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from Y and K company limited. Hypothesis was tested using Chi-Square statistical tool (SPSS).

Chapter one

Introduction

1.1Background of the study

Customer relationship management is now widely used in the marketing and sales departments of big corporations. In today’s increasingly competitive global economy, most businesses are attempting to differentiate themselves from their competition by providing superior consumer value. CRM may assist businesses in succeeding in the realm of e-business as a strategy to maximize client lifetime value. According to Ata & Toker (2012), companies who use CRM as a corporate strategy are predicted to expand at a higher rate than companies in the same industry that do not use CRM.

The industrial and commercial infrastructure in most countries is dominated by SMEs (Deros et al., 2006). According to Samsudin et al. (2011), smaller countries such as Malaysia will have a tough time competing in the global trade system, which is dominated by larger economies. CRM is also a difficult procedure for Nigeria to develop appropriate resources for the development of the food sector and trade. As a result, in order to be more competitive and relevant in the business world, SMEs must identify, prioritize, and minimize their business difficulties. This predicament also applies to Nigerian SMEs (Salleh and Kupusamy, 2007). In addition, due to a lack of resources and marketing skills, SMEs face significant problems in surviving and sustaining in the market (O’Dwyer et al., 2009). Lack of financial resources also limits SMEs’ potential to grow (Doern, 2009; O’Dwyer et al., 2009; Xu et al., 2007), as well as their ability to acquire more investment (Doern, 2009; O’Dwyer et al., 2009; Xu et al., 2007). (Wang & Yao, 2002). Similarly, the rise of the SMEs sector in Malaysia has been tremendous, contributing significantly to the country’s economic growth over time (BNM, 2005).

SMEs are important components of the economy and although their marketing approaches may differ from large organizations, SMEs represent more than 80 percent of the total number of establishments in the processed food segment. In 2010, the food industry contributed about 10 percent of the Nigeria manufacturing output attracting a total of #1.972 billion in 69 projects and employment in the processed food industry decreased in 2009 by 5.1 percent to 43,080 compared to 45,418 in 2008 (Talib et al., 2013). At the moment, the food industry seems to be one of the potential and important industries in Nigeria and therefore it is necessary to ensure delivering better customer value retaining customer and having good relationships with customers. Furthermore, SMEs need a low cost of CRM solution to adapt in business models and information technology structures instead of having a better relationship to retain customers.

Statement of the problem

SMEs are increasingly seeking to implement CRM in order to find a competitive advantage on which to base business prospects for longevity. In this competitive world market, SMEs play an important role in the national economies by providing job opportunities, enhancing exports of the country and also supplying goods to other manufacturing industries (Deros et al., 2006). However, little attention has been paid to research on Customer value proposition which takes a broader, strategic focusing on food industry in Nigeria. Thus, this study intends to look for the best practices of customer value proposition in organization to be adapted, modified and suited to the Nigeria SMEs. The intention of this research is to analyze the motives for which Nigeria’s SMEs adapt the elements of CRM practices with particular reference to whether this has impact on organizational performance. These drive the following questions: What are the elements of customer value proposition practices in Nigerian SMEs? What are the best practices of CRM practices in Nigerian SMEs? What are the readiness levels of customer value proposition practices in Nigerian SMEs?

Objective of the study

The objectives of the study are;

1. To ascertain the element of customer value proposition practice in Nigerian SME
2. To ascertain the readiness of customer value proposition practice in Nigerian SME
3. To ascertain the effect of customer proposition on the performance of SMEs

Research hypotheses

The following research hypotheses were formulated;

H0: there are no elements of customer value proposition practice in Nigerian SME

H1: there are no elements of customer value proposition practice in Nigerian SME

H0: there is no effect of customer proposition on the performance of SMEs

H2: there is effect of customer proposition on the performance of SMEs

Significance of the study

The study will be very significant to students and the SMEs owners. The study will also give a clear insight on the effect of customer proposition on the performance of SMEs. The study will also serve as a reference to other researcher that will embark on the related topic

Scope and limitation of the study

The scope of the study covers the effect of customer proposition on the performance of SMEs.

Research of this type is limited by these problems: 1. Time: Time factor is one of the limiting factor that affect this project work. That is the time limit allocated to complete this work is very short and does not allow for detailed investigation of the factors wanted by the researcher. 2. Insufficient literature material: The greatest hindrance is the unavailability of sufficient literature material for this work to effectively carryout the research and this has been a major constraint to the researcher. 3. Finance: In a project work like this, finance is one of the constraints that limit this research work. As a result of this, the researcher has to limit to available finance.  4. Poor response of workers(respondents): The response of the people during the interview was very poor and they responded very poor to the questions asked to them, some are incompetent to speak on such issues on the question or they will wont the answer to such questions as they think it is confidential. With this information was not let out easily, these result created a lot of complexity in the are of gathering information and made it more difficult for the respondents in getting vital information for this project.

1.8 DEFINITION OF TERMS 

1. Small scale business: Is therefore any business enterprise that is highly personalized situated within a local area of operation which is relatively small in terms of size, employment, turnover and capital and is actively managed by one or few person for the purpose of making profit.

Related Project Topics :