Advertising and Profitability; Evidence from Selected SMES in Uyo

Abstract

Financial constraints, as well as a lack of managerial skills, equipment and technology, regulatory concerns, access to international markets, and unfair competition, are all reasons that impede the development of SMEs. SMEs require advertising strategies to ensure their long-term viability and growth in an ever-changing and competitive business environment. In this study, more attention will be paid to the question and relevance of advertising as a form of promotion to improve profitability. 50 small and medium scale enterprises were selected from Uyo. The survey was carried out in major urban center which is Uyo. This area was chosen because the tempo of economic activities being carried out by SMEs to meet the demands of the consumers is very high. The data used for this study were majorly primary and these were obtained from the field through the use of questionnaire. From the data gotten, Cronbach alpha was then used to test for the validity, consistency as well as the reliability of the data-set. All the constructs or items had Cronbach’s Alpha above the minimum acceptable reliability coefficient between 0.5 to 0.9 and therefore exhibits good internal consistency. Following the results, it is observed that the effect of advertising on profitability of the selected SMEs in Uyo metropolis is positive and significant. From the findings of this study, we conclude that advertising can significantly improve profitability of SMEs in AkwaIbom State.