@ CDI 2011 Career Development International, 4 (2): 108 – 119

Impact of Marketing Strategies on the

Business Performance of Small and Medium
Enterprises in India
Preetam Pai
Department of Marketing, Rohit Khan College of Science and Technology, New Delhi, India.
danielimran@gmail.com

Kahn Sadeeq
Department of Marketing, Rohit Khan College of Science and Technology, New Delhi, India.
wendyzakhaev@gmail.com

Abstract
Great deal of inconsistencies exist in the literature regarding the influence of marketing strategies on
business performance of SMEs, highlighting the need for more exploration, especially in different cultures
and settings in order to build theory and update literature. This study attempts to determine the impact of
marketing strategies on business performance of SMEs in India. A survey questionnaire was used to gather
data from 205 SMEs in Delhi Metropolis of India. The simple regression in SPSS was used to analyze the
data collected. The results indicate that market segmentation, promotion, product quality and relationship
marketing had significant impacts on business performance of SMEs in India. Based on these findings, the
study concluded that marketing strategies have a significant impact on the business performance of SMEs
in India. The study recommended that Indian SMEs should embrace marketing in all of its forms and adopt
effective marketing strategies to gain competitive advantages in the industry.

Keywords: Marketing Strategies, Business Performance, SMEs, India

INTRODUCTION

Marketing has been described by the American Marketing Association (2013) as the activity, set of
institutions, and processes for creating, communicating, delivering, and exchanging offerings that have
value for customers, clients, partners, and society at large. Typically, marketers have a range of tools they
use and these include mega marketing (Kotler, 1986) and the so-called “4Ps” of marketing (McCarthy,
1995) among others. Mega marketing is a term used to describe the type of marketing activity required
when it is necessary to manage elements of the firm's external environment (governments, the media,
pressure groups, etc.) as well as the marketing variables; but two more Ps (public relations and power) are
sometimes added to the marketing mix so as to ensure that the firm is competitive in the market (Kotler,
1986). Marketing seems easy to describe, but extremely difficult to practice (Kotler & Connor,1997).
Marketing have evolved, and it involves an assessment and the inclusion of various stakeholders in the
decision making process (Darroch et al. 2004; AMA 2008).
A marketing strategy is a method of focusing an organization's energies and resources on a course of action,
which can lead to increased sales and dominance in a targeted market. It is most effective when it is an
integral component of overall firm strategy, defining how the organization will successfully engage
customers, prospects, and competitors in the market arena (Hill & Jones, 2013). According to Aaker
(2008), marketing strategy is a process that can allow an organization to concentrate its resources on the
optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage.
Kimani (2014) posits that marketing strategies are fundamental in setting out basic and long term activities
in the marketing field. The formulation, evaluation and selection of market-oriented strategies
consequently contribute to the goals of the company and its marketing objectives
Marketing strategies constitute one of the key functional strategies that Small and Medium Enterprises
(SMEs) adopt to enhance performance. Organizations including Small and Medium Enterprises have
realized the need to institute strategies that will help them gain an in depth understanding of the market,
particularly with regards to their competitors and customers (Dzisi & Ofosu, 2014).

108
 @ CDI 2011 Career Development International, 4 (2): 108 – 119

The marketing of small firm characterized as unstructured, loose and informal. SME marketers may
consider marketing as a synonym of either advertising or selling basic marketing concepts such as
segmentation, targeting, positioning, customer orientation and seeking for competitive advantage apply to
small as well as large ones (Awan & Hashmi, 2014). Ardjouman & Asma (2015) argued that adoption of
technology in marketing management strategies can be mainstreamed into SMEs development agenda and
that marketing management strategy is a veritable tool for sustainable development of SMEs. SMEs often
flourish on their adaptability and agility such as their close proximity to their customers, their openness
towards new ways of working, and their risk taking approach, but many of them are also susceptible to
major external shocks (Berry, 2002; Laforet & Tann, 2006). The major challenge faced by many SMEs
have been how to globalize their operations in order to be able to better source raw materials and
components and to take advantage of proximity to global markets in order to compete head to head with
much larger companies(EurActiv, 2009). Although SMEs experience difficulties in absorbing and coping
with obstacles, they need to develop an ability to deal with the ever increasing challenges in the global
market (Leopoulos, 2006). As a step, these organizations activate marketing strategies and tactics that can
help them take decisions on a number of variables to influence mutually-satisfying exchange transactions
and relationships (Taiwo,2010).
The purpose of this study is therefore to examine the impact of marketing strategies on the business
performance of SMEs in India.

The following hypotheses will be tested to accomplish the purpose stated above:

1. Ho: Market segmentation has no significant impact on business performance of SMEs in India.
2. Ho: Promotion has no significant impact on business performance of SMEs in India.
3. Ho: Product quality has no significant impact on business performance of SMEs in India.
4. Ho: Relationship marketing has no significant impact on business performance of SMEs in India.

LITERATURE REVIEW

Marketing strategies
This study focuses on four (4) marketing strategies peculiar to SMEs in India. These are: market
segmentation, promotion, product quality, and relationship marketing.

Market segmentation
According to Kotler (1997), ‘market segmentation is a process of identifying groups of buyers with
different desires or requirements’. In the view of Shrimp (1993), ‘market segmentation is a process of
dividing a total market into groups of consumers who have relatively similar product needs’. Oyedijo
(1996) maintains that ‘market segmentation is defined as the process of identifying and evaluating various
strata or layers of market’. Similarly, Stanton (1994) observes that ‘market segmentation is the process of
dividing the total, heterogeneous market for a product into several sub markets or segments, each of which
tends to be homogeneous in all significant aspects’. Market segmentation is a marketing concept which
divides the complete market set up into smaller subsets comprising of consumers with a similar taste,
demand and preference. A market segment is a small unit within a large market comprising of like-minded
individuals; one market segment is totally distinct from the other segment; a market segment comprises
individuals who think on the same lines and have similar interests; the individuals from the same segment
respond in a similar way to the marketing mix strategies of the marketer. Market segmentation is the
process of defining and subdividing a large homogenous market into clearly identifiable segments having
similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely
matches the expectations of customers in the targeted segment. Few companies are big enough to supply
the needs of an entire market; most must break down the total demand into segments and choose those that
the company is best equipped to handle. Market segmentation is the process of dividing a broad consumer
or business market, normally consisting of existing and potential customers, into sub-groups of consumers
(known as segments) based on some type of shared characteristics. In dividing or segmenting markets,
researchers typically look for shared characteristics such as common needs, common interests, similar
lifestyles or even similar demographic profiles.

109
 @ CDI 2011 Career Development International, 4 (2): 108 – 119

Market segmentation is the identification of portions of the market that are different from one another.
Segmentation allows the firm to better satisfy the needs of its potential customers. The marketing concept
calls for understanding customers and satisfying their needs better than the competition. But different
customers have different needs, and it rarely is possible to satisfy all customers by treating them alike
(Blocker & Flint, 2007; and Burinskiene & Rudzkiene, 2008). Mass marketing, according to Crowford &
Jim (2011), refers to treatment of the market as a homogenous group and offering the same marketing mix
to all customers. Mass marketing allows economies of scale to be realized through mass production, mass
distribution, and mass communication. The drawback of mass marketing is that customer needs and
preferences differ and the same offering is unlikely to be viewed as optimal by all customers. If firms
ignore the differing customer needs, another firm likely would enter the market with a product that serves a
specific group, and the incumbent firms would lose those customers. Target marketing, on the other hand,
recognizes the diversity of customers and does not try to please all of them with the same offering. The
first step in target marketing is to identify different market segments and their needs. The overall aim of
segmentation is to identify high yield segments– that is, those segments that are likely to be the most
profitable or that have growth potential – so that these can be selected for special attention (i.e. become
target markets) (Crowford & Jim 2011).
Many different ways to segment a market have been identified. Business-to-business (B2B) sellers might
segment the market into different types of businesses or countries. While business to consumer (B2C)
seller might segment the market into demographic segments, lifestyle segments, behavioral segments or
any other meaningful segment. The segmentation-targeting-positioning (STP) approach highlights the
three areas of decision-making. Market segmentation assumes that different market segments require
different marketing programs – that is, different offers, prices, promotion, distribution or some
combination of marketing variables. Market segmentation is not only designed to identify the most
profitable segments, but also to develop profiles of key segments in order to better understand their needs
and purchase motivations. Insights from segmentation analysis are subsequently used to support marketing
strategy development and planning. Many marketers use the S-T-P approach; segmentation-targeting-
positioning, to provide the framework for marketing planning objectives. That is, a market is segmented,
one or more segments are selected for targeting, and products or services are positioned in a way that
resonates with the selected target market or markets (Desarbo, Ramaswamy, & Cohen, (2012); Gavett,
(2014); Goldstein, (2004); and Hoek, Gendall & Esslemont, 2011).

Promotion
Promotion is a process through which organizations communicate with their target audiences in order to
inform, direct, remind, update, convince, persuade and influence them to respond in a favourable way to an
organization and its offerings using one or more of the following tools: advertising, personal selling, public
relations, publicity, sales promotion, direct marketing and word of mouth (Brenan & Eric, 2011).
Promotion is the process whereby organizations reach out to their target customers through a number of
media in order to inform, educate, remind, direct, and sensitize them about an organization, its offerings,
and its activities in order to persuade and influence them to exhibit positive attitudes and overall
behaviours towards the organization (Carter, 2004). Promotion transcends the focus on merely gaining
customer patronage, but broadly encompasses the goal of convicting, influencing, persuading and shaping
positive attitudes and behaviours towards an organization (Mahmud & Ahmadu, 2010). Promotion is
executed using a number of tools, known as promotional tools, and they basically include: advertising,
personal selling, public relations, publicity, sales promotion, direct marketing and word of mouth. These
tools are strategically combined, integrated and coordinated to communicate persuasively with target
markets with the ultimate goal of eliciting a positive response (Henry, Derrick & Shan, 2014).
In marketing, the promotional mix describes a blend of promotional variables chosen by marketers
to help a firm reach its goals. It has been identified as a subset of the marketing mix. It is believed that
there is an optimal way of allocating budgets for the different elements within the promotional mix to
achieve best marketing results, and the challenge for marketers is to find the right mix of them. Activities
identified as elements of the promotional mix vary, but typically include the following:
a) Advertising: Advertising is the non-personal presentation and promotion of ideas, goods, or
services by an identified sponsor in a mass medium. Examples include print ads, radio, television,
billboard, direct mail, brochures and catalogs, signs, in-store displays, posters, mobile apps,
motion pictures, web pages, banner ads, emails.

110
 @ CDI 2011 Career Development International, 4 (2): 108 – 119

b) Personal selling: Personal selling is the process of helping and persuading one or more prospects
to purchase a good or service or to act on any idea through the use of an oral presentation, often in
a face-to-face manner or by telephone. Examples include sales presentations, sales meetings, sales
training and incentive programs for intermediary salespeople, samples, and telemarketing.

c) Sales promotion: Sales promotion is an incentive-based tool used for a pre-determined limited
time to increase consumer demand, stimulate market demand or improve product availability.
Examples include coupons, sweepstakes, contests, product samples, rebates, tie-ins, self-
liquidating premiums, trade shows, trade-ins, and exhibitions.

d) Public relations: Public relations is a planned and sustained effort to gain goodwill, while
building and maintaining mutually beneficial relationships between an organization and its publics.
It includes efforts such as employee relations, community relations, media relations, corporate
social responsibility, free publicity as well as paid efforts to stimulate discussion and interest in the
organization. It can be accomplished by planting a significant news story indirectly in the media,
or presenting it favorably through press releases or corporate anniversary parties. Examples
include newspaper and magazine articles, television and radio presentations, charitable
contributions, speeches, and seminars.

e) Direct marketing: Direct marketing is a channel-agnostic form of advertising that allows

businesses and nonprofits to communicate directly to the customer, with methods such as mobile
messaging, email, interactive consumer websites, online display ads, fliers, catalog distribution,
promotional letters, and outdoor advertising.

f) Word of mouth: Word-of-mouth refers to the passing of information by verbal means, especially
recommendations, and also general information, in an informal, person-to-person manner. Word-
of-mouth is typically considered face-to-face spoken communication, although telephone
conversations, text messages sent via SMS, and web dialogue, such as online profile pages, blog
posts, instant messages, and e-mails are also included in the purview of word-of-mouth
communication (Palmer, 2005). It is believed that this form of communication has valuable source
credibility i.e. opinion leaders, co-workers, neighbors, friends and relatives that are more likely to
influence consumers’ choice than any other source of information at little or no cost (Eze & Ozo,
2005). The word-of-mouth testimonial is an extremely important factor in the calculus of the
consumers’ final purchasing decision. It can even be a more influential factor than mass media
communication (Palmer, 2005). Santiago and Lewis (2000)) defined word of mouth as a
communication in which people share their evaluations and assessments on service providers and
service products. Word of mouth communication is a type of referral communication from person
to person that tends to rely heavily upon the credibility of the source of that information or referral
to the product, service, or company being referred. It has been widely acknowledged as an
informal communication source between consumers that has great economic impact (Afton &
Ashton, 2012).

111
 @ CDI 2011 Career Development International, 4 (2): 108 – 119

Product quality
Product quality entails a group of features and characteristics of a saleable good which determine its
desirability and which can be controlled by a manufacturer to meet certain basic requirements. Most
businesses that produce goods for sale have a product quality or assurance department that monitors
outgoing products for consumer acceptability (Ward, Ethan & Hunt, 2010). Broadly defined, quality refers
to the ability of a product or service to consistently meet or exceed customer requirements or expectations.
Different customers will have different expectations, so a working definition of quality is customer-
dependent. When discussing quality one must consider design, production, and service. In a culmination of
efforts, it begins with careful assessment of what the customers want, and then translating this information
into technical specifications to which goods or services must conform. The specifications guide product
and service design, process design, production of goods and delivery of services, and service after the sale
or delivery (Eric, Harold & Ryan, 2012 and Garvin, 2005). Some of these consequences of poor quality
include loss of business, liability, decreased productivity, and increased costs. However, good quality has
its own costs, including prevention, appraisal, and failure. A recent and more effective approach is
discovering ways to prevent problems, instead of trying to fix them once they occur. This will ultimately
decrease the cost of good quality in the long run. There are several costs associated with quality:
a) Appraisal costs: Costs of activities designed to ensure quality or uncover defects;
b) Prevention costs: Costs of preventing defects from occurring;
c) Failure costs: Costs caused by defective parts or products or by faulty services;
d) Internal failures: Failures discovered during production;
e) External failures: Failures discovered after delivery to the customer (Douglas & Judge, 2001).
Successful management of quality requires that managers have insights on various aspects of quality.
These include defining quality in operational terms, understanding the costs and benefits of quality,
recognizing the consequences of poor quality and recognizing the need for ethical behavior. Understanding
dimensions that customers use to judge the quality of a product or service helps organizations meet
customer expectations. These dimensions of product quality, according to Sebastianelli and Tamimi (2002)
include:
a) Performance: Main characteristics of the product;
b) Aesthetics: Appearance, feel, smell, taste;
c) Special features: Extra characteristics;
d) Conformance: How well the product conforms to design specifications;
e) Reliability: Consistency of performance;
f) Durability: The useful life of the product;
g) Perceived quality: Indirect evaluation of quality;
h) Service-ability: Handling of complaints or repairs.
Relationship marketing
Relationship marketing is strategy that emphasizes customer retention, satisfaction, and lifetime customer
value. As opposed to transactional marketing’s focus on one-off sales, a good relationship marketing
strategy is rooted in building customer loyalty and lasting, long-term engagement with your customer base.
Benefits include increased word-of-mouth, repeat business, and a willingness on the customer’s part to
provide valuable feedback to the company (Sakhei & Fenghi, 2011).
Relationship marketing is a facet of customer relationship management (CRM) that focuses on customer
loyalty and long-term customer engagement rather than shorter-term goals like customer acquisition and
individual sales. The goal of relationship marketing (or customer relationship marketing) is to create strong,
even emotional, customer connections to a brand that can lead to ongoing business, free word-of-mouth
promotion and information from customers that can generate leads. Relationship marketing stands in
contrast to traditional transactional marketing, which focuses on increasing the number of individual sales.
In the view of Oliver (2012), relationship marketing is marketing activities that are aimed at developing
and managing trusting and long-term relationships with larger customers. In relationship marketing,
customer profile, buying patterns, and history of contacts are maintained in a sales database, and an
account executive is assigned to one or more major customers to fulfill their needs and maintain the
relationship. Relationship marketing is about forming long-term relationships with customers. Rather than
trying to encourage a one-time sale, relationship marketing tries to foster customer loyalty by providing
exemplary products and services.

112
 @ CDI 2011 Career Development International, 4 (2): 108 – 119

Marketing strategies and business performance

Several studies have been conducted on the impact of marketing strategies on the performances of
businesses. Below present a review of these studies and their major findings and methodologies. Slater and
Narver (2000) in their study used survey with a sample of fifty three single businesses through regression
method. The study model relationship marketing strategies and marketing communication strategies
against business performance. The study provided a robust backing for the presence of a positive
relationship between marketing communication strategies, relationship marketing strategies and
performance. Shoham and Rose (2001) examined market strategies and performance relationship. Survey
design was used and a sample of two hundred and fifty small firms from four businesses such as beverages,
food, construction and agriculture were chosen for comparison across Nigeria. One hundred and one
owners responded by completing and returning the questionnaire received. The study model product
quality strategies, product diversification marketing strategy and customer relationship strategies against
performance measured by sales growth. They report a positive and significant association between product
quality strategies, product diversification marketing strategy, customer relationship strategies and sales
growth. Subramania and Gopalakrshna (2001) investigated the relationship between market strategies and
performance in the context of a developing economy, using a survey questionnaire administered on one
hundred and sixty two manufacturing and service firms in developing countries. The result was analyzed
using regression method and the finding indicated that market orientation is an important predictor of
performance. Agarwal, Erramalli and Dev (2003) in their study of the impact of marketing orientation on
the business performance in service firms: role of innovation, examined the association between marketing
orientation and performance in the hospitality business, more specifically to international hotels. Two
hundred and one data was generated through survey questionnaire and the preliminary questions were pre-
tested on thirty hotel chief executives who joined an executive development program at a leading hotel and
restaurant in the north- eastern USA. The finding shows that MO is positively related to both financial
measures of performance- service quality, customer satisfaction, and employee satisfaction and non-
financial of performance-occupancy rate, gross operating profit and market segment. It establishes a strong
positive association between MO and all forms of performance. Au, and Tse, (1995) in their study which
employed hotel as sample with marketing managers as respondents using survey methodology. The results
indicated no significant association between market orientations and hotel performance. Haugland,
Myrtveit & Nygaard (2007) conducted studies on marketing strategies and firm performance in the service
industry. The sampling border is the Dunn and Bradstreet data base which consisted of accounting
information for all the Norwegian limited companies and it include five hundred and thirty hotels
registered in the data base. The findings indicated that marketing strategies have only an uncertain
consequence of absolute productivity and no effect on return on assets. Shigang and David (2011) studied
marketing strategies, business environment and performance of construction SMEs in China. The study
specifically modelled competitive marketing strategy, relationship marketing strategy and business
environment against performance. Apply the survey research design and the correlation technique, the
study found a significant relationship existing between competitive strategies, relationship strategies,
environment and the performance of construction SMEs in China. Uchegbulam, Akinyele and Ibidunni
(2015) investigate the impact of competitive strategy on performance of Small and Medium Enterprises in
Nigeria. Gaining insight from existing literature and theoretical models four hypotheses were developed
and tested using regression analysis. Copies of well structured questionnaire were administered to 150
randomly selected SMEs in Ikeja and Surulere local government areas of Lagos State. The findings
revealed that there is a relationship between product features and customer base; product customization
and sales growth, value added products and revenue growth. It also indicated that better product quality has
an influence on returns on investment. Ebitu (2016) studied the impact of product quality, marketing
communication and relationship marketing strategies on the performance of SMEs in Akwa Ibom state,
Nigeria. 240 copies of questionnaire were issued to SMEs in the three senatorial districts of the State. This
formed the sample of the study. The data obtained was analysed using Pearson Product Moment
correlation analysis which was computed electronically by the use of Statistical Package for Social Science
(SPSS) version 21. The study revealed that there is a significant impact of product quality strategy and
relationship marketing strategy on the profitability and increased market share of SMEs in Akwa Ibom
State.

113
 @ CDI 2011 Career Development International, 4 (2): 108 – 119

METHODOLOGY

This study was conducted within the Metropolitan City of Delhi, Capital of India. The study used
structured questionnaire to elicit data from 205 SMEs in Delhi Metropolis of India. Convenience sampling
technique was adopted to select the elements that constituted the sample for the study. The instrument was
confirmed for validity, using authority vetting approach, while Cronbach Alpha approach was used to
confirm the reliability of the instrument. Simple regression in SPSS was used to analyze the data collected.

ANALYSIS AND RESULTS

Decision rule:
Accept the alternative hypothesis if (P < .05) and reject the null hypothesis, if otherwise.

Hypothesis one

HO: Market segmentation has no significant impact on business performance of SMEs in India.

H1: Market segmentation has a significant impact on business performance of SMEs in India.

Table 1: Regression model summary showing the impact of market segmentation on business
performance of SMEs in India
Model R R Square Adjusted R Square Std. Error of the Estimate

1 .563a .316 .309 2.43240

a. Predictors: (Constant), Market segmentation

Table 2: ANOVAa showing the impact of market segmentation on business performance of SMEs in
India
Model Sum of Squares Df Mean Square F Sig.

Regression 260.257 1 260.257 43.988 .000b

1 Residual 562.073 204 5.917
Total 822.330 205
a. Dependent Variable: Business performance
b. Predictors: (Constant), Market segmentation

114
 @ CDI 2011 Career Development International, 4 (2): 108 – 119

Table 3: Regression coefficients showing the impact of market segmentation on business

performance of SMEs in India
Model Unstandardized Standardized T Sig.
Coefficients Coefficients

B Std. Error Beta

(Constant) 4.598 .751 6.125 .000
1
Market segmentation .668 .101 .563 6.632 .000
a. Dependent Variable: Business performance

Interpretation of result
Tables 3 above show the regression analysis carried out to test hypothesis one, and the result shows that
market segmentation strategy has a significant impact on business performance of SMEs in India, because
the sig .000 is less than the significance level of 0.05. Furthermore, table 1 and table 2 further show a
significant F statistic indicating the models prediction strength (F = 43.988, R2 = 32%, P < 0.05). In
conclusion, the result shows that HO is rejected and H1 is accepted.

Hypothesis two

HO: Promotion has no significant impact on business performance of SMEs in India.

H1: Promotion has a significant impact on business performance of SMEs in India.

Table 4: Regression model summary showing the impact of promotion on the business performance
of SMEs in India
Model R R Square Adjusted R Square Std. Error of the Estimate

Table 5: ANOVAa showing the impact of promotion on the business performance of SMEs in
India

Model Sum of Squares Df Mean Square F Sig.

Regression 364.937 1 364.937 75.797 .000b

1 Residual 457.393 90 4.815
Total 822.330 91

1 .666a .444 .438 2.19423

a. Predictors: (Constant), Promotion

a. Dependent Variable: Business performance

115
 @ CDI 2011 Career Development International, 4 (2): 108 – 119

Table 6: Regression coefficientsa showing the impact of promotion on the business performance of
SMEs in India
Model Unstandardized Standardized T Sig.
Coefficients Coefficients

B Std. Error Beta

(Constant) 4.440 .601 7.390 .000
1
Promotion .735 .084 .666 8.706 .000
a. Dependent Variable: Business performance

Interpretation of result
Table 6 above shows the regression analysis carried out to test hypothesis two, and the result shows that
promotion has a significant impact on business performance of SMEs in India, because the sig .000 is less
than the significance level of 0.05. Furthermore, table 4 and table 5 further show a significant F statistic
indicating the models prediction strength (F 75.797, R2 = 44%, P <0.05). In conclusion, the result shows
that HO is rejected and H1 is accepted.

Hypothesis three

HO: Product quality has no significant impact on business performance of SMEs in India.

H1: Product quality has a significant impact on business performance of SMEs in India.

Table 7: Regression model summary showing the impact of product quality on the business
performance of SMEs in India
Model R R Square Adjusted R Square Std. Error of the
Estimate

1 .483a .233 .225 2.57625

a. Predictors: (Constant), Product quality

Table 8: ANOVAa showing the impact of product quality on the business performance of SMEs in
India
Model Sum of Squares Df Mean Square F Sig.

Regression 191.808 1 191.808 28.899 .000b

1 Residual 630.522 204 6.637
Total 822.330 205
a. Dependent Variable: Business performance
b. Predictors: (Constant), Product quality

116
 @ CDI 2011 Career Development International, 4 (2): 108 – 119

Table 9: Regression coefficientsa showing the impact of product quality on the business performance
of SMEs in India
Model Unstandardized Coefficients Standardized T Sig.
Coefficients

B Std. Error Beta

(Constant) 5.134 .818 6.278 .000
1
Product quality .618 .115 .483 5.376 .000
a. Dependent Variable: Business performance

Interpretation of result
The table 9 above shows the regression analysis carried out to test hypothesis three, and the result shows
that product quality has a significant impact on the business performance of SMEs in India, because the
sig .000 is less than the significance level of 0.05. Furthermore, table 7 and table 8 show a significant F
statistic indicating the models prediction strength (F 28.899, R2 = 23%, P < 0.05). In conclusion, the result
shows that HO is rejected and H1 is accepted.

Hypothesis four

HO: Relationship marketing has no significant impact on business performance of SMEs in India.

H1: Relationship marketing has a significant impact on business performance of SMEs in India.

Table 10: Regression model summary showing the impact of relationship marketing on the business
performance of SMEs in India
Model R R Square Adjusted R Square Std. Error of the
Estimate

1 .442a .195 .187 2.63947

a. Predictors: (Constant), Relationship marketing

Table 11: ANOVAa showing the impact of relationship marketing on the business performance of
SMEs in India
Model Sum of Squares Df Mean Square F Sig.

Regression 160.485 1 160.485 23.036 .000b

1 Residual 661.845 204 6.967
Total 822.330 205
a. Dependent Variable: Business performance
b. Predictors: (Constant), Relationship marketing

117
 @ CDI 2011 Career Development International, 4 (2): 108 – 119

Table 12: Regression coefficientsa showing the impact of relationship marketing on the business
performance of SMEs in India
Model Unstandardized Coefficients Standardized T Sig.
Coefficients

B Std. Error Beta

(Constant) 5.570 .822 6.778 .000
1 Relationship
.557 .116 .442 4.800 .000
marketing
a. Dependent Variable: Business performance

Interpretation of result
Table 12 above shows the regression analysis carried out to test hypothesis four and the result shows that
relationship marketing has a significant impact on the business performance of SMEs in India, because the
sig .000 is less than the significance level of 0.05. Furthermore, table 10 and table 11 show a significant F
statistic indicating the models prediction strength (F 23.036, R2 = 20%, P <0.05). In conclusion, the result
shows that HO is rejected and H1 is accepted.

CONCLUSION AND RECOMMENDATION

This study was focused on examining the impact of marketing strategies on the business performance of
SMEs in India. Primary data were gathered and analyzed using simple regression. The findings revealed
that market segmentation, promotion, product quality and relationship marketing strategies have significant
impacts on business performance of SMEs in India. Based on these findings, the study concluded that
marketing strategies have a significant impact on the business performance of SMEs in India. The study
recommended that Indian SMEs should embrace marketing in all of its forms and adopt effective
marketing strategies to gain competitive advantages in the industry.

REFERENCES
1. Anderson, E. W. (1996). Customer Satisfaction and Prince Tolerance. Marketing Letters, 7(3), 265-74.
2. Avlonitis, G. J.; Indounas K. A. (2006). Pricing Practices of Service Organizations. Journal of Services
Marketing, 20(5), 346-356.
3. Banasiewitz, A. (2002). Loylaty program planning and analytics. Journal of Consumer Marketing, 22(6),
332-339.
4. Banyte, J., & Salickaite, R. (2008). Successful diffusion and adoption of innovation as a means to
increase competitiveness of enterprises. Inzinerine Ekonomika-Engineering Economics(1), 48-56.
5. Banyte, J. (2008). Conceptions and methods of marketing within dynamic business environment.
Inzinerine Ekonomika-Engineering Economics(1), 7-8.
6. Barnes, J. G. (1995). The Quality and Depth of Customer Relationships in Proceedings of the 24th
EMAC Conference, Michelle Bergadaà, ed. Cergy Pontoise: European Marketing Academy, 1393-402.
7. Barnes, J. (1994). Close to the customer: but is it really a relationship? Journal of Marketing
Management, 10, 561-570.
8. Barnes, J. G. (2003). Establishing meaningful customer relationships. Managing Service Quality, 13 (3),
178-186.
9. Bartlett, J. E., Kotrlik, J. W., & Higgins, Ch. C. (2001). Organizational Research: Determining
Appropriate Sample Size in Survey Research. Information Technology, Learning and Performance
Journal, 19(1), 43-50.
10. Bendapudi, N., & Berry, L. L. (1997). Customers’ Motivations for Maintaining Relationships with
Service Providers. Journal of Retailing, 73(1), 15-37.

118
 @ CDI 2011 Career Development International, 4 (2): 108 – 119

11. Berry, L. L. (1995). Relationship Marketing of Services – Growing Interest, Emerging Perspectives.
Journal of the Academy of Marketing Science, 23, 236-245.
12. Bolton, L. E., Warlop, L., & Alba, J. W. (2003). Consumer Perceptions of Price (un)fairness. Journal
of Consumer Research, 29, 474-91.
13. Burinskiene, M., & Rudzkiene, V. (2007). Application of logit regression models for the identification
of market segments. Journal of Business Economics and Management, 7(4), 253-258.
14. Burns, D. J., Neisner, L. (2006). Customer Satisfaction in a Retail Setting: the Contribution of Emotion.
International Journal of Retail & Distribution Management, 34(1), 49-56.
15. Consuegra, D., Molina, A., & Esteban, À. (2007). An Integrated Model of Price, Satisfaction and
Loyalty: an Empirical Analysis in Service Sector. Journal of Product & Brand management, 16(7),
459-468.
16. Coulter, K., & Coulter, R. (2002). Determinants of krust in a service provider: the moderatingrole of
lengh of relationship. Journal of Services Marketing, 16(1), 35-50.
17. Cronin, J. JR., Brady, M. K., & Hult, G. T. M. (2000). Assessing the Effects of Quality, Value, and
Customer Satisfaction on Consumer Behavioral Intentions in Service Environments”. Journal of
Retailing, 76(2), 193-218.
18. Day, G. S. (1994). The Capabilities of Market-Driven Organizations. Journal of Marketing, 58, 37-52.
19. Dick, B., & Basu, K. (1994). Customer Loyalty: Toward an Integrated conceptual framework. Journal
of the Academy of Marketing Science, 22(2), 99-113.
20. Dovaliene, A., & Virvilaite, R. (2008). Customer value and its contribution to the longevity of
relationship with service provider: the case of theatre industry. Inzinerine Ekonomika-Engineering
Economics (1), 66-73.
21. Dwyer, F. R., Schurr, P. H, & OH, S. (1987). Developing Buyer-Seller Relationships. Journal of
Marketing, 51, 11-27.
22. Fisscher, O., (2005). Nijhof, A. Implications of Business Ethics for Quality Management. The TQM
Magazine, 17(2), 150-160.
23. Fournier, S., Dobscha, S., & Mick, D. G. (1998). Preventing the Premature Death of Relationship
Marketing. Harvard Business Review, January – February, 42-51.
24. Fullerton, G. (2005). How Commitment Both Enables and Undermines Marketing Relationships.
European Journal of Marketing,. 39 (11/12), 1372-1388.
25. Garbarino, E.; Johnson, M. S. (1999). The Different Roles of Satisfaction, Trust, and Commitment in
Customer Relationships. Journal of Marketing, 63, 70-87.
26. Gendall, P. (1998). Estimating the Effect of Odd – Pricing. Journal of Product & Brand Management,
7(5), 421-32.
27. Gendall, P., Holdershaw, J., & Garland, R. (1997). The effects of odd-pricing on demand. European
Journal of Marketing, 32(11/12), 799-813.
28. Ginevicius, R. (2008). Normalization of quantities of various dimensions. Journal of Business
Economics and Management, 9(1), 79-86.
29. Gruen, T. V., Summers, J. O., & Acito, F. (2000). Relationship Marketing Activities, Commitment, and
Membership Behaviors in Professional Associations. Journal of Marketing, 64, 34-49.
30. Gundlach, G. T., Achrol, R. S., & Mentzer, J. T. (1995). The Structure of Commitment in Exchange.
Journal of Marketing, 59, 78-92.
31. Gundlach, G. T., & Murphy, P. E. (1993). Ethical and Legal Foundations of Relational Marketing
Exchanges. Journal of Marketing, 57, 35-46.
32. Gwinner, K. P., Gremler, D., & Bitner, M. (1998). Relational Benefits in Services Industries: The
Customer‘s Perspective. Journal of the Academy of Marketing Science, 26, 101-114.
33. Henning-Thurau, T., Langer, M. F., & Hansen, U. (2001). Modeling and Managing Student Loyalty: an
Approach Based on the Concept of Relationship Quality. Journal of Service research, 4, 331-44.
34. Henning-Thurau, T.; Gwinner, K. P.; Gremler, D. D. (2002). Understanding Relationship Marketing
Outcomes: an Integration of Relational benefits and Relationship Quality. Journal of Service Research,
4 (3), 230-47.
35. Homburg, C., Koschate, N., Hoyer, W. D. (2006, July). The Role of Cognition and Affect in the
Formation of Customer Satisfaction: a Dynamic Perspective. Journal of Marketing, 70, 21-31.
36. Huber, F., Herrmann, A. & Wricke, M. (2001). Customer Satisfaction as an Antecedent of Price
Acceptance: Results of an Empirical Study. Journal of Product & Brand Management, 10(3), 160-9.

119