Impact and sustainability of the market development approach to business development services (BDS) in the Maragua avocado market linkage project

Abstract

This study was conducted with the objectives of firstly, determining the impact of market development approach to BDS and secondly, to assess sustainability of BDS market in the Maragua avocado market linkage project. SMEs play significant role in employment and economic growth in Kenya. However, their growth is hampered by a myriad of problems. Key among these problems is inaccessibility of business development services SMEs. Over time, numerous projects have been initiated in collaboration with donors and other non-governmental organization to address this constraint. The focus of the study was on all market players in the Maragua avocado market linkages project. These were the SMEs, the service providers and the market development facilitator. The study had two main objectives:- To determine the impact of the market development approach to BDS on the Maragua Avocado market linkage project. To assess sustainability of the BDS market in the Maragua Avocado market linkage project. Earlier studies have shown that only a small percentage of SMEs have had access to any business development services. Even though the amount of donor and government funds channeled into the sector has continued to grow, the number of SMEs having access to these services remains dismal. Additionally, an earlier study found that the business development services offered by the markets are not perceived to be relevant by SMEs operating in those markets. The study therefore sought to find out the impact the new market development approach to BDS was having on both the market and SMEs in the maragua avocado market linkage project where it was being applied. A sample of 121 respondents identified for the study. Primary data was collected interviews guided by a structured questionnaire. The data obtained was then coded and tabulated in the form of frequencies and percentages. These descriptive statistics were used to analyze the objectives. The study results revealed a positive trend on all the five variables used to measure the impact of the market development approach on business development services. The market development approach to business development services was found to have had significant impact on the market and the SMEs it served. The approach had made the BDS market more transactional based through expansion of awareness, acquisitions and purchases of BDS by SMEs. Additionally, the approach had expanded the market as indicated by growth in purchases of BDS among SMEs. Further, the market had gained diversity and competitiveness through expanded number of services providers and the market BDS offering. Moreover, the quality and relevance of BDS offering by the market was found to have improved tremendously as shown by the high rate of multiple purchases. Finally, the study noted that the approach had deepened the market to reach micro and female managed enterprises, segments hitherto undeserved. With respect to the second study objective, the study results indicated that market had become more transactional. The study found that the market was providing access to desired business development services in the avocado export business through unsubsidized commercial channels. This finding anchored the positive prospect of a competitive and sustainable BDS market. This was indicated by the improvements numbers of service providers, significance of revenues generated by service providers from serving SMEs and market cost effectiveness in delivery of BDS through growing numbers of SMEs served by the market. The study concluded that the market development approach to business development service was the best approach in developing business development services markets from which SMEs could access the services transactionally.