Effects of positioning strategies on performance in the micro and small scale enterprises: the case of furniture dealers in Huruma estate

Abstract

Small firms are probably most valued for their contribution to employment creation. While the ability of the individual small firm to create a large number of jobs is restricted to their growth, the sheer number of smaller enterprises ensures that their collective contribution to employment generation is substantial. Small firms have also introduced many products and services to the consumers, especially in specialized markets that are too small for larger companies to consider worthwhile. Firms have adopted various strategies like mergers, acquisitions, specialization, diversification, product development, pricing policy, promotion and distribution for competitive advantage. Positioning is the act of designing a firm‟s offering and image to occupy a distinctive place in the mind of the target market with concomitant effect of creating a customer-focused value proposition that would facilitate patronage thus a firm needs to consider positioning as one of its advertising strategies as way of maintaining a great competitive advantage. The research sought to understand the positioning strategies applied by these Small and Micro enterprises and their effect on performance. The study adopted a descriptive survey of the Small and Micro enterprises in the furniture industry located in Huruma, Nairobi; with a target population of 50 micro and small scale enterprises. Primary data was used for the purpose of this study. The data was collected using a semi structured questionnaire consisting of both open ended and closed questions. The questionnaire was self administered. The closed ended questions was analyzed quantitatively, based on percentages and frequencies and presented in tables and charts. The open-ended questions analyzed qualitatively using content analysis and the results presented under identified themes as per the objectives of the study. The Likert scale type questions were analyzed using mean scores and standard deviations. The study found that the organizations use the following Positioning strategies to gain a competitive edge in the market: positioning by Quality and customised positioning, product characteristics or customer benefits and positioning by competitor. The study recommends that the government use this study as body of knowledge to contribute in informing its efforts in the growth of the Micro and Small Scale Enterprises, particularly in its goal of achieving vision 2030.