The Relationship Between Market Penetration and Performance of Selected Small and Medium Enterprise

Small and medium enterprises (SMEs) are operating in a highly competitive environment, as such there is a need for SMEs to have a strategy to grow. This study examined the relationships between market penetration and performance of SMEs. It adopted a mixed approach and a simple random sampling method. Three hundred and sixty-one copies of the questionnaire were distributed among the manufacturing SME owners in Nigeria, and 12 SME owners were interviewed. Structural equation modeling (SMART PLS) was used for the quantitative analyses, and manual thematic was used for qualitative analysis. The findings revealed that market penetration has a significant influence on the performance of SMEs, showing (β = 0.760, R2 = 0.578) 58% of variance in performance of SMEs is explained by market penetration. Qualitative analysis revealed the growth strategies adopted to increase performance to be continuous innovation, product quality, diversification, and customer satisfaction. The study recommended that SME owners should dominate the market with their different well-packaged and innovative products, readily available and easily accessed by customers.