Effects of advertising on the small and medium enterprises in Kenya : a case study on East African packaging Industries

Abstract

There exists a significant relationship between a firm’s advertising spending and its contemporaneous financial spending. Academic studies have indicated that about 90% of Small Medium Enterprises’ (SME`s) development is hampered by their limited financial resources, which, in relation to this study extends to failure to engage in the rather expensive and sometimes overlooked practice of advertising. This study focused precisely on the role that advertising has on financially constrained SMEs and how much its sales volume is affected when advertising is adopted. The academic literature on the organization and structure of SMEs in general and particularly in Kenya plus an extensive revision of when, why and how advertising works was used as a theoretical framework for this thesis.

The purpose of the study was to thus examine the overall nature of advertising and the effects it has on the growth and development of SMEs and in particular its sales volume. Objectively, the study investigated the functions of East African Packaging Industries (EAPI) marketing department. It sought to inquire as to the different strategies the company employs to market its products, and identify the economic impacts that advertising generates as a whole.

The research design that was used in the study was cross-sectional design. The sampling techniques were both cluster and simple random sampling. The population was of 180 respondents and having a sample size of 60 respondents. The sample frame was of 3 clusters targeting the major department at EAPI. The study used mainly primary data assembled from interviews, questionnaires and surveys. Secondary data was derived from previous researched literatures and books.

The findings of the research were analyzed and presented in form of discussion tables. Overall, the findings of the research were that advertising is an expensive venture for any SME and the repetitive nature of it makes it more and more inconsistent to adopt.