SURVIVAL STRATEGY ADOPTION BY SMALL SCALE RETAIL OUTLET, IN NIGERIA (A CASE STUDY OF ROBAN SUPERMARKET G.R.A. ENUGU)

ABSTRACT

The subject of this research is survival strategies adopted by small-scale shops in Enugu State Urban.  The recent changes in the Nigerian Business environment have forced small-scale shops to formulate diverse survival strategy in order to survive the turbulence in Nigeria environment.

This study focuses on those things that small-scale shops can do and have done to accommodate market changes such as down sizing, expansion, offering discount, location and relocation of the shop at a better site, margin, cool structure, the product line, diversification, free gifts and bonus, differentiation and segmentation e.t.c.  To achieve this researcher’s constructed questionnaire based on research question formulated in chapter one.

The major findings in these studies are as follows.

1. Location and relocation of business at a better site is as important as the growth of the business.
2. Down-sizing small scale shops encourages higher profit margin from the specified field of treatment.
3. Discounts, free gifts and bonus, attracts customers patronage
4. Product line diversification, differentiation and market segmentation are the major strategies that can be adopted and have been adopted by small-scale shops in order to face and win it’s competitors.
5. To survive a small-scale must be responsive to the needs of it’s consumer’s financially up to date.

The major conclusion drawn from this study is that the survival strategies adopted by the small-scale shops are discount bonus, and gifts offered to consumer based on the quantity purchase.  The use of product line, product diversification, location and relocation, differentiation and market segmentation are greatly helpful for the survival of small-scale shop.  Recommendations were made based on the findings and conclusion drawn.

TABLE OF CONTENTS

Title page

Approval page

Dedication

Acknowledgement

Abstract

Table of content

CHAPTER ONE

INTRODUCTION

1.1     Background of the study

• Statement of the problem
• Purpose of the study
• Scope of study
• Research question
• Significance of the study
• Limitation of the study

1.8             Definition of terms

CHAPTER TWO

2.0     LITERATURE REVIEW

2.1     Retail shopping in Nigeria

2.2     Shop keeping as small business

2.3     Model retail strategies

2.4     Problems of small-scale business in Nigeria

References

CHAPTER THREE

Research Design and methodology

3.1     Research design

• Area of the study
• Population of the study
• Sample and sampling technique
• Instrument used for data collection
• Method of data collection
• Method of data analysis

CHAPTER FOUR

Data presentation and analysis

4.1     Presentation and analysis of data

CHAPTER FIVE

SUMMARY OF FINDINGS

5.1     The research finding

5.2     Conclusions

5.3     Recommendations

Bibliography

Appendix I

Appendix II

CHAPTER ONE

INTRODUCTION

• BACKGROUND OF THE STUDY

Survival strategy involves the development of a well articulated marketing strategy plan, for successful introduction of the product into the market.  The strategy is not static and would most probably undergo refinement and modification in subsequent stages.

The marketing strategy deals with the marketing mix co-ordinations, that would be used in the market and the marketing budget.  It could be broken down into sections.

1. The first sections should described, the market, size structure, behaviour and the company intended share of the market. It could be also describe product positioning and the possible project consequent on that.
2. The second part will delve deeper into the marketing mix component, the planned product quality which follows from the first, the planned price, distribution and promotion strategy. This section should also include the marketing budget needed to carry out the strategy.

• The third section is fallout from the previous two it describes the long run sales and profit goals based on the first two sections.

This is the process that continues through development stage as new information is accumulated about the product and the market.

Several analytical tools are available to firm technique risk analysis and Bayesian decision theory.  The key to whether a product should be developed is whether it will find easily to sufficient market acceptance to return a satisfactory project to its form.  What are expected minimum to maximum sales help determining risk involved.

The models for estimating sales adopted by manager’s differ depending on whether they are designed to estimate the sales of one purchased products, on in frequenting purchased product or a frequently product (Kotler E.D. 210)

No matter what type of product the first task is to estimate first time purchases, many techniques are available for doing this, the method used depending on the estimate of the producer.  One method is to just estimate the market potential and then the rate market penetration for each period.  The factor’s like a price etc. which may affect penetration are considered.

The company has to guess at the survival age distribution of the product, the lower ends of the age distribution will indicate when the first replacement sales will take place.  Several other factors influence replacement decision, the purchase discretion of the buyers.  Small product desire that repeat purchase be estimate mean sometimes as first time seller. The company  should try to estimate what happen in each repeat purchase class, to also whether the repeat purchase ration is likely to rise or fall.

Estimating sales is not the business analysis. Cost of subsequent product need to be estimated at the same time as sales, as it is in the nature promotional expenditures to influence both sales, of costs simultaneously.

We consider sales to cost against alternative marketing programs to determine the most favourable choice. There are number of strategies a small scale outlet can choose: the first is market retention, which is established market through product line and adaptation then there are balanced strategy when the organisation attempt to balance cost and revenue.

The third is market development strategy which when a firm’s concentration on market development growth sector / tailored to the need of new businesses in existing market. However, the risk involve are greater than the first two strategies described above. But well managed companies with a good track record will usually companies with a good track record will usually be adopting this strategy in the fulfillment of corporate objective for growth and improved profitability.

These components provide us the idea of opportunity set for the company and how the company can perform its activities in the environment in order to achieve its objectives.

The small scale retail can pursue more productive consistency or less depending on whether it want to acquire a strong reputation in a single field or participate in several fields. According to N.G. Nwokoye, he suggested two alternative strategies which may in the degree of products to offer customers.

Product differentiation strategy (a limited line strategy). Market segmentation strategy (a broad-line strategy).

Market segmentation refers to when a marketer attempt to cover a broad market with a single product or a very narrow product line which he attempt to differentiate psychologically in the eyes of various consumer segment through advertising and sales promotion e.g. a small scale retail is one super market in New Haven Enugu.

A super market and originally been defined as a complete, departmentalized good store with minimum sales volume of one million dollars a year and at least the grocery department fully self service in addition to above definition supervision market’s place heavy emphasis on price. As such at least in the past, they offered minimum services. Present day supermarkets differ a wide, variety of merchandise as they aim towards a one stop shopping services of the consumer supermarkets are departmentalized retail establishment but unlike departmental stores. The departments are organized on one large floor space.

The operating advantage of supermarket are low operating cost as a result of minimum investment in fixtures and fittings, self services and the operating strategy of low margin but high turnover and mass display of mechanize. The result is low prices to the customer. Supermarket may not appeal to service desiring customers but they do a very good job constitutes their target market.

1.2     STATEMENT OF RESEARCH PROBLEM

In most Africa most of the business organization are in size and operations there are some small large seized one with big operations owned by foreigners and wealthy indigenes but small scale are keep on operating side by side with those large once.  The small-scale basins enterprises survive the test of time due to the following.

1. Small capital Requirement: The capital required to commence business operation in West Africa is usually small. That is say that the establishment of business enterprises requires small capital. Thus, there are many small business enterprises in west Africa/Enugu.
2. Undeveloped local market: The market influences the level of operation of firm. The market in West Africa is not developed hence limiting the extent of the firm’s production. This keeps the size of the business and it’s operation in a small shape to enable it dispose what is produced.

iii.      Inadequate experience to manage large business organization. The businessmen in West Africa new haven are not well experienced in the management of large business enterprises. They lack the entrepreneurial drive to take large risks. The situation promotes small-scale business enterprises, which they have gained much experience in their management.

1. Nature of service: These are some services that require personal and special attention. The entrepreneurs prefer to operate such service in a small scale so as to achieve the objective of the specialized services. Such services include tailoring mediation, hairdressing, laundering.
2. Management conditions: The management condition of a small business unit always easy.  Some entrepreneurs want an easy way out thereby prefer to operate to small-scale business unit for easy management.
3. Need for flexibility: The large sized firm are not adaptable to changing time.  The small business unit can easily be adjusted or changing to adapt to the changing times and circumstance.  There is greater risk in adjusting the larger firms than small sized firms.

vii.       Desire for independence:       Some entrepreneurs have to be in control of all decisions and actions taken in their business concerns the only way a business unit can be under the control of one person is when the business units is a small one.  This desire to be independent prevents some businessmen to expand their business enterprises to a large unit.

For effective management of a small-scale business the manage is required to understand his strategy.  Such strategy must be consciously formulated by considering technological and environment factors, in small-scale business.

Nigeria bank for commerce and industry define small-scale business enterprises as firms or companies with assets (including working capital but excluding and not exceeding N750, 000 and paid employment up to 50 person, such as establishment must be wholly Nigeria enterprises promotion decree).

The central bank of Nigeria in its monetary policy circular N0. 2 (1980) defines small-scale business as an enterprise where annual turnover ranges between N25,000 to N500,000.

OWNER/MANAGER

It is the owner of a business, the capital supplier, and also an entrepreneur.  He passes the following.

• Self employment
• Self reliance
• Need for achievement
• Risk bearer
• Internal locus of control
• Innovator

1.3     OBJECTIVES OF THE STUDY

This study seeks to generate empirical knowledge about the survival strategies adopted by small scale retail outlets in Nigeria specifically the study as aimed at identifying the following:

1. The major problems that pose a threat to the survival of small scale firms in Nigeria.
2. The product market scope of small scale retail outlets.

• The growth sector of small scale retail outlet.

1. To identify the types of incentives adopted by those outlets.
2. The effect produced by location of stores.
3. To intimate the owners of the small-scale outlets to the use of discount, product line and diversification.

The small-scale firms come in far special mention here as a specially planned facility for retailing.

In the past retail shops developed in the central business district and drew their customer from the entire city. For example in terms of organized and unorganized retailing the area around Okpara Avenue and environment in Enugu can easily be described as the central business district develop with city expansion. In Enugu, there are several one is around Ogui Road O’conor street axis. Another is at the Ziks Avenue Achara Layout axis. There is also the Kenytta Street Edinburgh road axis.

Other business district have developed always from around the central city area in the adjoining area around Abakpa Nike Market, the Agbani road areas mostly in the neighbourhood area.  All the above differ from shopping centers which have been described by the American marketing Associate as a “geographic” cluster of retail stores, collectively handling an assortment of goods varied enough to satisfy most of the merchandise want from consumers within convenient traveling time and thereby providing attractions of the general shopping trade/shopping centers are much more than this as they are consciously planned.

Integrated and the total area of the shopping including the building are owned by an agency.

A planned and integrated shopping centre aim at achieving a tenant mix, which will produce optimum sales, rent, services to the community and profitability of the shopping centre.

According to Kaylin an ideal tenant mix strives to achieve:

1. A balanced diversification of steps in the centre by offering a wide range of products and services.
2. A specific image for the centre e.g. specially convenient.

• Maximal pedestrian flow in order to ensure that there is a 100% location advantage for all tenements.

1. Maximum sales potentials in the trade area.
2. A synergy between the satellite tenants and logical layout of shops.
3. A pleasant shopping environment

• Enough variety to create the maximum attractiveness to the population of that specific trading area.
• Maximum return on investment.

1.4     SCOPE AND LIMITATION OF THE STUDY

The scope of this research is essentially focused on shops in three selected areas in Enugu urban. New Haven, Ogui Road and Uwani.  The study of these three areas equally covers other communities in Enugu urban for they seems to be a special and well areas in Enugu were great shops are located.  In the course of undertaking the study, the researchers observed certain limitations to the study such as lack of finance and time factor.

1.5     RESEARCH QUESTION

1. What do you think has been the contribution of small scale Outlets in Nigeria?
2. What are the major problems confronting the development of small scale retail outlet in Nigeria?
3. What are the survival strategies adopted by small scale retail outlets in Nigeria?
4. Has the strategies adopted by this small scale retail outlet effective?

1.6     SIGNIFICANCE OF THE STUDY

In view of the service of small-scale outlets to the consumers, it becomes imperative for the survival strategies to be clearly spelt out for the existing and intending owners, it is the need for the study to make a viable and purposeful rectification so as to clearly identify the impact survival strategies for small-scale firms should be in decision relating establishment, this study is aimed at low effective is these strategies involved in the consumers satisfaction it is also the need for the study to arouse consciousness.

The important of the research study consideration in marketing the choice have been identified as follows:-

1. The Size of the Trading Area: This is the area from which stores located within the city regularly draw patronage.
2. The Population size of the trading area and the trend therein usually considered in terms of families or number of consumer spending unto and characteristics of population, particularly those that denote socio-economic status such as educational level, family size, extent of home ownership etc.

iii.      Total retail trade potential for the particular kind of business under consideration, which may be estimated from the amount of disposable income available in the community.

1. The competitive situation establishments handling related lines of merchandise.

1. Progressiveness of the community as evidenced by such factors as new construction in progress, adequately of school system, chamber of commerce and other civic activities police and fire protecting, public parking facilities.
2. Benefits accruing from labour specialization and expert services.

These manifest themselves in better buying, effective selling and better and over-all management.

1.7     DEFINITION OF KEY TERMS

Strategy is a programme’s which an organization employs in order to achieve her aim or the over all response of a local organization to the demand of her environment.  Strategy provides a business organization the concepts in order business activities the logic of the importance of strategy formulation is that every business has a strategy either conscious or unconsciously formulated.

Small retailing as a marketing institution has evolved over the years as is evident in the different types of retailer and function performed over time. There theories have been advanced to explain evolution of retail institution.  Three theory of natural selection maintains that the retail institutions that adopt best to its environment will survive and grow. The wheel of retailing theory maintains that retailing institutions pass through a life cycle. This life cycle begins with low-margin law price and minimum service offering as competitive moves.

The next stage in the life cycle sees the small scale retailer up grading its facilities and offering and adding more services in a bid to increase cost and therefore price makes the competitive environment attractive to a new law cost law margin and limited service competitor. Hence what is our business?

The logic of the important of strategy formation is that every business has a strategy, either consciously formulated. This is why stoner 9198% defines strategy as the overall response of a business organization over its environment.

Objectives tell us where an organization want to go but strategy tells us how to get there.  According to a soft (1969) a good strategy, have four major components. These are;

1. Growth vector of the organization i.e. the opportunity set.
2. Competitive advantage: This means the differential advantage.
3. Product market strategy: This simply is the mission of the organization.
4. Synergy: This means other advantages in the strategy.

REFERENCES

Ansoff, I, H: Delclerk RP and Hayes, R, L, (1976), from Strategic Planning to Strategies Management: 2^nd Edition: London, John Willey and Sons.

Schendel, D.E and Hofer, C.W. (1979)         Strategic Management: A New View of Business Policy and Planning: Boston; Little Brown.

Lawrence, PR and Corsh J, (1967)      Strategic Survival in Organization Environment Cambridge Mass, Harvard University Press.

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