The effect of consumer behaviour on the development of small, medium and micro manufacturing enterprises in Welkom

Abstract

In this study, the researcher employed literature review and an empirical study to: * Establish the effect of consumer behaviour on the expansion of the small, medium and micro manufacturing enterprises (SMMEs) in Welkom. * Determine the marketing strategies adopted by the manufacturing SMMEs in Welkom.

The Government of South Africa (SA) enacted the Small Business Act to assist small, medium and micro enterprises (SMMEs) to contribute to job creation in SA (Lotter, 2009: 53). Furthermore, the government established the Small Enterprise Development Agency (SEDA) in an effort to relate more closely to the SMMEs, so that they could contribute more meaningfully to the economy of the country by creating employment. In addition, the Umsobomvu Youth Fund and Youth Commission were established by the Department of Trade and Industry (DTI) to assist young entrepreneurs financially and non-financially to start and run sustainable small enterprises (South Africa. National Small Business Act 102, 1996: 3). However, significant research done on SMMEs in SA found that they had made no meaningful contribution to job creation. This problem was in fact so serious that most SMMEs were shutting down, a problem which included SMMEs situated in Welkom (Lotter, 2009: 53). This research project therefore sought to investigate the possible sources of this shutdown of manufacturing SMMEs in Welkom. Many other researchers had investigated possible causes such as the effect of the lack of business management skills, the closure of local gold mines, etc. However, the effect of consumer behaviour (CB) as the possible source of this shutdown problem had not been investigated; hence, this researcher chose to investigate the effect of CB on the development of the manufacturing SMMEs in Welkom.

The research design firstly identified the manufacturing SMMEs as the population for the study and the sample subjects as their top managers and supervisors. The mixed method was employed. The researcher used literature studies, the qualitative approach and the quantitative approach as the mixed method. Data collecting instruments were the personal interview and self administered questionnaires. The researcher employed the random sampling method and, in particular the systematic sampling method, to select the respondents. A letter of permission was obtained from the Matjhabeng municipality to conduct this research project and the subjects were given letters of assurance for ethical consideration.

The aim of using literature studies was to determine the relevant model for this research study and to determine the findings of earlier researchers on this topic. The model was the theoretical foundation on which the research project was based. The model determined from the literature studies indicated that CB was influenced by internal and external factors. Examples of internal factors included perception, attitudes, learning, personality, and beliefs etc., while examples of external factors included family, marketing communication, friends, economic factors, etc. This model underpinned the empirical research conducted, and the interview and questionnaire items were based on the influencing factors outlined by this model.

The empirical research was conducted to relevant collect data that could assist to answers the following research questions: * What are the effects of CB on the expansion of the manufacturing SMMEs in Welkom? * What are the growth strategies adopted by the manufacturing SMMEs in Welkom?

Interviews with top managers were recorded on voice recorder and supervisors completed questionnaires. Qualitative data were transcribed from the voice recordings, themes were developed from the transcripts and descriptive statistics were used to analyse the themes. Data from the quantitative method were analysed through the social package for social sciences (SPSS), employing descriptive statistics to determine the findings.

The analysis for quantitative data was represented by cumulative frequency distribution tables for each option of the questionnaire items, while the analysis for qualitative data was represented on a template for data coding and also compressed into frequency tables. The study‟s findings both from literature studies and from empirical research revealed that negative attitude, economic situation, cultural changes and improved education level of consumers resulted in non development of the manufacturing SMMEs in Welkom. The interview with the top managers further revealed that there was lack of specific marketing strategies adopted by the managers.

Therefore, it was shown in this study that the effect of CB on the development of the manufacturing SMMEs in Welkom was non development.