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ISSUES RELATED TO MARKETING IN SMEs

BY: POOJA SHARMA SMRITI KHANNA

Marketing
Marketing

is "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Marketing in SME
Manufacturer Manufacturer Manufacturer

Consumer Retailer consumer

wholesaler

Retailer

consumer

ISSUES RELATED TO MARKETING


INADEQUACY OF FUNDS LACK OF PROFESSIONAL KNOWLEDGE UNFAMILIARITY WITH EXPORT ACTIVITIES LEGAL ISSUES IRRELEVANT MARKETING STRATEGY UNFAIR COMPETITION REDUCED PROTECTION LACK OF MODERN SCEINTIFIC MARKETING METHOD TRANSPORTATION ONLINE MARKETING OTHER ISSUES

Inadequacy of funds
SMEs

cannot afford to spend as heavily as a large unit does on marketing because of their weak financial base. They cannot meet the expenses of advertisement which creates the problem of customer awareness . Most of their products are sold through word of mouth publicity and direct selling.

Lack of Professional Knowledge


The

sector is mostly consisting of family run businesses which generally employs family members at various positions of hierarchy in the business. Some times these people lack professional knowledge and wisdom needed to market their products and services.

Unfamiliarity with export activities


The

SMEs particularly in the field of exports lack in awareness about the institutional support in terms of provision of foreign currency payments and other related activities of imports and exports. This is resulting in of less percentage of utilization of the available opportunities in the overall exports and related activities by these institutions.

Legal Issues
One

problem of marketing for a smallscale business is the issue of certification. Whatever your product, it is subject to laws and regulations regarding consistency, purity and the like. The impact of the agreements under WTO- The agreements under TRIPS calls for tighter patent laws through regulation of intellectual property rights which is becoming a costly affair to the SMEs.

Irrelevant and Inconsistent Marketing strategy


They

dont follow the relevant marketing strategy and end up with wrong marketing strategy applicable to the segment or the total market. Most of the SMEs jump from one marketing strategy to another for no valid reasons. This confuses the prospective buyers and also creates a low opinion of the company and its product line.

Unfair Competition
The

resources required for taking care of the various marketing aspects are obviously lacking with the SMEs with which they are not in a position to compete with large well established business houses and have to face unfair competition.

Reduced Protection
Reduced

protection has already lowered the SMEs competitive strength. The sector may face dumping by foreign competitors like China . The cost of antidumping investigations may be prohibitive for SMEs.

Lack of modern scientific marketing method


Still

in India we have many SMEs which are not well equipped with different software automations and various marketing techniques which endows the enterprise with a competitive advantage. Example. Supply chain management software. Potentious marketing concept

Transportation
Majority

of the SMEs are unable to participate in the Industrial exhibitions and Expos organized nationally and internationally. This is due to the high cost associated with transportation and traveling costs of the entrepreneurs themselves.

Online marketing
Several

enterprises have the notion that one has to be a big company to enter the online arena to market their products. Most of the SMEs are yet to realize that online marketing can and is the only be the cost effective, measurable and targeted advertising channel.

Other issues
Lack

of standardization Poor Designing and quality Lack of quality control Poor bargaining power Ignorance of potential markets Distribution contacts Lack of service after sales

SUGGESTION FOR IMPROVEMENT


1.

There must be some programme on making these organisations aware of the modern business tools. SMEs can be greatly benefit if they recognize the power of internet for exploring and managing the market online.

2. They should develop their websites in English language for spreading their reach beyond India. Bodies such as CII, Trade India can take up awareness programmes for them in systematic way and monitor the changes. 3. SMEs cannot do conventional marketing because of the limitation of resources. They need to think beyond conventional marketing practices of large companies and search for alternative marketing approaches such as personal contact networks, social networks,B2B portals, E-Commerce tools, Business Networks and Industry and Marketing networks.

4.

SMEs should realize that on the Internet, a big company will have the same chances as an SME to make an impact on the buyer. With the correct techniques any SME can make it to the top leaving behind even the biggest of the companies.

5.

Indian SMEs have to take note of technical barriers to trade(TBT) in view of technical standards set by developed countries.

6.

Good planned strategic approach, if adopted by SMEs can help them to overcome many of the barriers and obstacles that they face now.

Institutional support
Many forms of assistance are given from the institutions including
Assistance

in expansion of markets including Government purchases, reservation of certain items for government stores, price preferences and support in joint tendering for government purchase contracts.

A Market development scheme is specially operated by the Ministry of Small and Medium Enterprises (MSME) to encourage exports from this sector.

1.NSIC 2.SSIB 3.SIDO 4.SIDBI 5.SISI

As a part of the comprehensive policy package for promotion and development of MSMEs announced on 30th August, 2000, it was decided that the Small Industries Development Organisation (SIDO) should have a Market Development Assistance scheme similar to the one obtaining in the Ministry of Commerce. This scheme will operate in addition to the SIDO scheme for participation in the international fairs will cover all activities for which direct assistance is given under the existing scheme MDA Scheme of the Ministry of Commerce.

SIDBI

operates a scheme for direct assistance for financing activities related to marketing of the products of MSME sector. SISI provides aid regarding promotional activities and information about trading.

Conclusion

The nature of marketing is dynamic so does the problems associated with the marketing. SMEs have to broaden their horizon in this era of globalization. In SME sector, particularly for the area of marketing, government should launch programmes which provide awareness about E- commerce tools and its proper installation. SMEs need to imbibe these technical up gradation in order to gain a competitive advantage.