Problems of SMEs: Some observations on problems related to Marketing and Technology
SMEs face several problems like finance, management, information, marketing and technology etc. Here, I am presenting a brief discussion on the Problems related to Marketing and Technology.
Marketing:
The marketing functions can be divided into sales promotion, price policy, advertizing, product design and finally selling methods. SMEs may face difficulties in marketing products due to poor quality, lack of knowledge of markets and marketing skills. Owing to the low level of technology, their products may be poor and of inconsistent quality. Often the products may not be attractively packaged or described. SMEs often lack the knowledge to explore niche markets for their products. The owner entrepreneur often have no special skills in these matters and does not know where he can get reliable information about the market developments, advertizing opportunities, or better marketing channels. They also lack the resources to advertize and promote their products. The business will not promote itself; advertising and promotions are the lifelines of a business. Yet, SMEs often do not have enough financial resources to spend on advertising.
In the context of the above, some possible suggestions for market development and market access are given below:
Market Development:
Product quality is the primary consideration in marketing. Various measurements may be taken to assist SMEs in developing their markets, both locally and internationally. The following steps may be taken:
• Create institutions to enhance product quality.
• Encourage SMEs to take up franchises and assist others to develop franchises
• Provide incentives to SMEs to participate in trade fairs both at home and abroad
• Make greater effort by government or private sector for developing marketing and management skills
• Institute special marketing board to handle the marketing of SME products
Market Access at the national and international level
• Enable SMEs to take advantage of the opportunities for market expansion through the adoption of electronic commerce.
• Provide better information on markets
• Encourage large companies to use SMEs in subcontracting
• Assist SMEs to access the export market through joint trade and investment promotion missions
• Facilitate the forging of intra-firm linkages
• Make available electronic data bases on business matching and facilitation services.
Technology:
The problem of technology and access to and adoption of new technology is inextricably linked to Knowledge-based economy. To overcome the nature of the constraint faced by SMEs in applying and adopting technological improvements, government assistance is required in a package. The private sector may also assist in this regard. Many of the activities and initiatives with regard to removing impediments to technology access require at the outset, a comprehensive data base, which includes information on the technologies available, the cost of technology and the expertise available to impart the requisite skills that accompany the adoption of new technology. Such database also facilitates technology exchange and technology sharing.
Technology transfer may be facilitated through encouraging and bringing direct foreign investment. SMEs generally lack technological information and the technological capabilities. Even when SMEs are able to access the information on technology, their capacity to apply is constrained by the lack of financial resources and skills that go with new technology. This problem should be looked into by the government. Extensive technical training may be recommended for training extension workers who may be in a better position to explain new technology to SMEs
Whether technological change can be successfully applied in SMEs will depend also on managerial abilities. The difficulty of applying new technology in SMEs may require some qualitative change in the attitude of the managers. Education for a change in attitude and motivation may improve the situation.
Some strategic direction in addressing the access to technology will require:
• The creation and increased awareness of technological developments
• The encouragements of the adoption of appropriate technology
• The encouragements and support of innovation and creativity in SMEs
• The setting up of extension centers and providing trained personnel to help SMEs make effective decision about technology.
Professor Rafiqul Islam
Advisor, Faculty of Business & Economics
Daffodil International University
