Market Orientation and Poverty Reduction: A Study of Rural Small Businesses in Ghana: An Abstract

Abstract

This paper examines how rural small businesses in Ghana enact market orientations within the context of government policy initiatives on small business growth with the aim of reducing poverty in rural communities. The present study recognizes that a large population of Ghana is reliant on the success of these small businesses in rural areas. We acknowledge that government policy intervention in rural economic development is necessary for small business growth and that market orientation is essential to the success of rural small businesses and subsequently poverty reduction. Therefore, the aims of this research are: (1) to examine the application of market orientation strategies among small businesses in rural Ghana, (2) to assess the impact of market orientation on business performance, and (3) to examine the implications of government rural development policy on poverty reduction through rural small businesses’ pursuit of market orientation strategies. To this end, the study addresses five specific research questions: What market orientation strategies do small businesses in rural Ghana pursue? What is the effect of market orientation strategies on rural small business performance in terms of sales and profits, market share, and consumer perceptions? How has the government of Ghana poverty reduction policies affected rural small businesses’ marketing practices? What are the key policy challenges encountered in the rural small business marketing domain?

Following a pilot study, the main study involved twenty-eight out of thirty-eight owner-managers of small businesses originally sampled accepted an invitation to participate in the study. We arranged appointments for the interviews and met in person with the owner-managers. Apart from key contacts known to the researchers, the researchers relied on snowball and foot-in-the-door data collection techniques to increase the number of participants in the research. Interviews were conducted at the respondents’ premises in non-contrived settings. The interviews were conducted over five periods (i.e., 2008, 2009, 2010, 2011, and 2012). The findings are consistent with other research on small businesses and support customer orientation as instrumental in market orientation strategies. The results yield rare examples of how small business owners nurture customer loyalty by developing friendship with their customers. Additionally, competitor orientation is accomplished through customer-initiated intelligence-gathering efforts. Inter-functional coordination does occur, though on an informal level, ad hoc. Furthermore, owner-managers attribute their business performance to their innovative strategies in surviving a competitive environment. While government policy initiatives are in place, these are not allied to the aspirations of rural small business owners. The study concludes by identifying additional avenues government can take to alleviate poverty in rural areas, such as improving infrastructure.

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