LOW COST STRATEGY AND MARKET PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES (SMEs) IN SOUTH EASTERN NIGERIA

Abstract

This study examined the relationship between low cost strategy and Market Performance of Small and Medium Enterprises (SMEs) in South Eastern Nigeria. The work was carried out to identify the extent low cost strategy business approach has helped to achieve business goals. The design adopted was survey; and questionnaire was used as an instrument of data collection. The data collected were presented in tables and analysed using mean statistic and tested with Pearson product moment correlation coefficient (at 0.05% level of significance) through SPSS version 21.0. From the results of the test of hypotheses, it could be seen that hypothesis 1, 2, and 3 have the Pearson correlation coefficient value up to 0.80-0.89 indicating that there is very strong relationship among the variables under study. Therefore, low cost strategy has positive and significant relationship with customer acquisition, sales volume and market share in small and medium scale enterprises (SMEs). It was concluded that the achievement of improved market performance in small and medium scale enterprises (SMEs) depends on the extent of implementation of low cost strategy. The study recommends that the small and medium scale enterprises (SMEs) should intensify efforts to offer their products on low cost so as to achieve higher sales.  In addition, small and medium scale enterprises (SMEs) have to adopt varying pricing strategies so as to attract different categories of customers to the business.