Abstract
Research over the years has shown that in order for any business to survive, the correct product mix must be offered to the market. If the product does not satisfy the needs of the market, its reason for existence can be questioned. This principle applies to all businesses – big or small. The question arises if SMEs adhere to this fact and, if so, how they go about doing this. SMEs over the world make huge contributions to economic growth and job creation and are seen to be a driving force for economic growth and development in any economy. In the highly competitive environment that SMEs operate in, selecting the right merchandise for the right customer is important and, in most instances, its ability to survive or perish. This study aimed to determine if SMEs in South Africa make decisions regarding the product mix and, if so, if they conform to different profiles regarding the decisions that they make. A questionnaire was used to collect the data and was sent to SMEs around South Africa operating in different industries. The results indicated that SMEs in South Africa consider product characteristics, consumer behavior and strategic aspects when making product mix decisions. Keywords: merchandising, product, SMEs, product mix, business, South Africa. JEL Classification: M00, M300, M310
Highlights
A business can have the best location and offer the best price, but the business will not be profitable if it does not provide the target market with products that they want (Kurtz, 2015, p. 493)
This study, aimed to identify if small retailer (SME) develop strategies when deciding on products to sell and if so what factors do SME owners consider when deciding on what products to sell in their businesses
The current study looked at three aspects that could have an influence on the decision making of SMEs with regards to product mix, product attributes, consumer behavior perceptions and product selection based on strategic aspects
Summary
A business can have the best location and offer the best price, but the business will not be profitable if it does not provide the target market with products that they want (Kurtz, 2015, p. 493). It involves identifying the right merchandise to sell and making the right product mix decisions based on customers’ needs and wants (American Marketing Association, 2014). The right merchandise is referred to as product mix or product assortment which is the total number of product lines that a retailer offers to its customers A small retailer (SME) may sell various product lines. These product lines may be fairly similar such as washing power and liquid soap, which are used for cleaning purposes or it may be totally different such as milk and screws. A business that is able to deliver the right merchandise to their customers is more likely to be successful in the long term (Erdis & Cant, 2015, p. 65)
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