Effects Of Promotion Mix On Profitability Of Service Rendering Micro And Small Enterprises In Sheger City: The Case Of Melkanonosub City

Abstract

The Government of Ethiopia is focusing on the MSEs sectors for its role in job creation and Poverty reduction. The focus stems from the increasing of unemployment and poverty problem. The study on factors affecting profitability and sustainability of micro and small scale enterprises has a paramount importance. These business organizations employ and provide job opportunities to significant number youths and self-employment. MSEs are also the incubation centers for large business. However, they are facing many challenges such as marketing problems, financial problems, and high competition levels. The objective of this study is, therefore, to identify factors that determine Micro and Small enterprises performances. The study used both Primary data and secondary data. The survey method of research was involved to collect from 316 randomly selected respondents, who were workers of SMEs. However, only 285 questionnaires were retrieved, which were also used in the data analysis with 90% response rate. The sample was taken from formally registered MSEs by theMelkaNono Subcity’s Trade and Industry Bureau. Among the registered SMEs, Town Agriculture, Industries, Services and General Construction, work enterprise were selected based on a combination of high proportionate share and economic importance. A sample of 316 workers of MSEs engaged in 5 sectors was taken for the study using stratified random sampling. In the process of answering the basic questions, a questionnaire that include demographic profiles, Economic factors of MSEs, and determinant factors that affect the performance of MSEs designed in a closed ended and likert scales. After the data has been collected, it was analyzed using simple statistical techniques (tables and percentages) and descriptive statistics. The results of the study indicate the individual characteristics of MSEs, characteristics of MSEs and the commonly practiced promotion methods by MSEs. The result reveals that most MSE employees were male youth between age 18 to 24 years who were TVETI graduates and women participation is low (31.6) as compared to male. Even if majority of the employees were experienced in the industry above four years, however, their promotion mix awareness was very low and do not commonly use the promotion mix element instead use word of mouth and personal selling efforts. From the regression analysis, there were five independent variables (promotion mix elements) out of which personal selling and direct marketing have inverse relationship with the dependent variable (Profitability), while the remaining sales promotion, publicity and advertisement have direct relationship with the dependent variable. Finally its recommended that MelkaNonoSubcity have to encourage women participation on MSEs by crating women only and projects with mandatory 50% women members, provide access to SME through infrastructure development such as roads, shades and training for SMEs employees and owners on using scientific promotion mix elements. More over TVETIs are expected to provide training services in collaboration with concerned government bureaus to improve the profitability and sustainability of micro and small-scale industries in the study area.