Effect Of Market Orientation On Performance Of Small Scale Enterprises In Kisumu City, Kenya

ABSTRACT

Globally, organizations need marketing strategies to strive and generate superior financial

performance. According to Economy survey 2016, five out of seven new small scale

enterprises in Kenya do not experience growth in sales volume and profit. In Kisumu,

very few small scale enterprises have grown into large formal enterprises, an adverse

scenario which may or may not be attributed to market orientation. A number of studies

have focused on effect of market orientation on organizational performance with

contradictory results. The purpose of this study therefore was to determine the effect of

market orientation on the performance of small scale enterprises in Kisumu City. The

specific objectives were to: investigate the effect of customer orientation on performance,

to find out the effect of competitor orientation on performance and to analyse the effect of

innovation orientation on performance of small scale enterprises in Kisumu City .The

study was anchored on Dynamic Capabilities theory and a correlational research design

was adopted. The target population for the study was 1321 registered SSEs operating

within Kisumu City, Kenya. Stratified random sampling technique was used to stratify the

SSEs. Simple random sampling was then used to select a sample size of 30% from each

sub set giving a sample size of 396 SSEs. Data was collected using questionnaires. A

pilot study of 40 respondents and Cronbach alpha was used for reliability test .The

obtained reliability co-efficient was acceptable because it was greater than the acceptable

value of 0.7 .Content validity was done by exposing the instrument to experts in the field

of marketing and the researcher’s supervisor to check for any error. Data was analysed

objectively using SPSS. Regression Analysis was used to find the effect of customer,

competitor and Innovation orientation on organizational performance of SSEs in Kisumu

city. The study findings revealed that customer orientation accounted for 22.9% change in

organizational performance (β=.479, p=.000), competitor orientation accounted for

35.0% change in organisation performance (β=.592, p=.000), innovation orientation

accounted for 52.9% change in the organizational performance(β=.727, p=.000).All the

variables had a unique strong and positive significant contribution to small scale

enterprises in Kisumu city.It was therefore recommended that SSE owners be educated on

the significance of market orientation strategies as a key element of enhanced SSE

performance. The study will benefit the small scale business owners in Kisumu and

Kenya by clarifying the significance of market orientation strategies as a key element of

enhanced SSE performance.