Factors determining the marketing of products to townships amongst SMEs within the retail sector

The needs of the customers residing in townships are generally met by informal retailers operating spaza and tuck shops. These retailers sell personal and household products such as cooking oil, sugar, maize flour, snacks, soap, paraffin, candles, matches, disinfectants, cigarettes, and prepaid airtime for mobile phones. However, several factors determine the success and marketing of these products to townships by retailers. Therefore, this study sought to analyse the factors determining the marketing of products to townships amongst Small and Medium Enterprises (SMEs) within the retail sector. Thus, a literature review was conducted to collect information to identify factors determining the marketing of products to townships amongst SMEs within the retail sector using several databases. The year 2012 signaled the commencement of an organised search for publications that were pertinent to the topic. The researcher searched for journals published on township retail and marketing using buzzwords relevant to the current study. The findings of this study show that the following are marketing factors: product quality, product price, customer satisfaction, customer loyalty, and customer service. Non-marketing factors encompass competition, the transport system, road infrastructure, security, licensing and regulatory requirements, and business location. Therefore, retailers are asked to pay particular attention to these factors because they are crucial to marketing and achieving a competitive advantage.


Introduction
Cut-throat competition in the retail sector has recently presented several challenges for businesses operating in the township. As such, it is imperative to identify the unique marketing offering that retailers can offer customers to be competitive amidst the rivalry between large and small retailers. In this regard, it has been noted that product quality and price are critical for retailers to be competitive. Managing the price mechanism for retailers in the township is still a subject of debate. Thus, charging lower prices can assist retailers in increasing their customer base and subsequently growing their income. On the other hand, businesses that are not doing well or stagnating do not have the luxury to lower their prices because such a decision can negatively impact business turnover .
Another observation by Basardien, Parker, Bayat, Friedrich and Appoles (2014) suggests that product pricing is one of the challenges affecting local South African retailers in the townships. It is alleged that foreign-owned retail shops set competitive prices to keep their businesses afloat and generate significant sales volume and revenue. This is because foreigners are collectives and operate as a group to benefit from bulk purchases as compared to local retailers, who are individualistic. In addition, if retailers remain relevant in the market, they can adopt a differentiation strategy based on superior customer service (Bressler, 2012). In South Africa, it has been observed that most retailers lack customer service skills. A study of small business owners in Johannesburg found that most small businesses fail because of poor customer service. As such, most businesses are left to flourish on their own through trial and error without basic business management skills (Mavunga, 2014). However, retailers focusing on service excellence can develop a 586 solid and sustainable customer base. Thus, rendering good customer service is a critical aspect of achieving continuous growth and development in the marketplace (Worku, 2013).
The business's survival and growth depend not only on having good products but also on satisfying its customers. Thus, customers happy with the shopping environment and experience will likely return and do more business with retailers (Oni & Fatoki, 2013). Furthermore, it has been observed that customer satisfaction and loyalty play a critical role in driving customers' repurchase intentions. As such, retailers who want to increase their sales revenue through customer repurchase behaviour should focus on achieving customer loyalty and satisfaction and ascertaining the behaviour customers exude before satisfaction (Chinomona & Dubihlela, 2014). Therefore, customer loyalty is critical for the success of retail businesses in townships. Thus, retailers must identify the antecedents of customer loyalty to foster it and channel resources aimed at achieving it (Jere, Aderele, & Jere, 2014).
The retail sector is part of a trading section encompassing retail trade, motor vehicle repair, motorcycles, personal and household goods, hotels, and restaurants. The specific categories are general dealers, retailers of food, beverages, and tobacco in specialised stores, pharmaceutical and medical goods, cosmetics and toiletries; textiles, clothing, footwear and leather goods; household furniture, appliances and equipment; hardware, paint and glass (Gauteng Province, 2012). The South African retail sector contributes about 5.7% of the total gross domestic product (GDP). Furthermore, retailing in South Africa comprises two different sectors, the formal sector (Shoprite, Pick n' Pay, and Spar) and the informal sector, which encompasses hawkers and spaza shops (Aye, Balcilar, Gupta & Majumdar, 2013). Independent retailers encompass those selling food and non-food items, such as cash and carry retailers, retailers operating spaza shops, and superettes (PWC, 2012). Recently, most retailers have opened shops in townships targeting lowincome households. Customers in townships visit these independent retailers for daily and weekly purchases. Independent retailers often stock fast-moving consumer goods and operate at low profit margins (Das Nair & Chisoro, 2015;Gauteng Province, 2012). Thus, the needs of the customers residing in townships are met by informal retailers operating spaza and tuck shops. These retailers sell personal and household products such as cooking oil, sugar, maize flour, snacks, soap, paraffin, candles, matches, disinfectants, cigarettes, and prepaid airtime for mobile phones (Coetzer & Pascarel, 2014).
There has been a significant theoretical contribution to the literature on marketing in the retail sector in South Africa. Several studies have highlighted the different factors that determine or affect the marketing of products within the retail sector in townships (Makhitha, 2016). Another school of thought suggests that due to cut-throat competition in the retail sector and economic pressures, it is important for retailers to identify factors critical to the marketing of their products so that they are deemed a store of choice. Thus, retailers should understand what motivates shoppers or customers to patronise their business or products among other retailers (Mafini & Dhurup, 2015). Therefore, this study analysed the factors that determine the marketing of products among SMEs within the retail sector in townships.
This article is structured as follows: After the introduction, a research methodology is discussed, followed by the results and a discussion of marketing and non-marketing factors that determine the marketing of products to the township. The article ends with a conclusion.

Research Methodology
A literature review was conducted to locate township retail among small and medium enterprises and analyse the information gathered from various databases. Only scholarly articles published between 2012 and 2023 were considered for inclusion in the researcher's comprehensive evaluation of the existing body of published research on township SMEs within the retail sector.
The year 2012 signaled the commencement of an organised search for publications that were pertinent to the topic. Because there is a lack of information on township retail amongst SMEs, particularly on non-marketing factors, the 11 years were chosen as a proxy. In order to locate papers that were pertinent to the comprehensive literature review, the researcher utilised a variety of search strategies. In the first step of the research process, the researcher conducted an exhaustive article search across several different online databases, including EBSCO's Business Source Complete, ScienceDirect, and Google Scholar.
The researcher searched for journals published on township retail using buzzwords pertinent to the current study. The search produced a collection of articles representative of the main corpus of research in this area of study. The researcher then optimised the search on Google by using numerous combinations of township retail amongst SMEs-related keywords. This complemented the first list with publications from other periodicals and internet-based sources. Table 1 shows the research questions that guided this study.

Research question RQ1
What are the marketing factors determining the marketing of products to townships among SMEs within the retail sector?

RQ2
What non-marketing factors determine the marketing of products to townships among SMEs within the retail sector?

Results and Discussion
Finding the relevant literature on township retail among small and medium enterprises requires searching many databases. The information used in this investigation was partitioned into distinct categories according to the different types of published works, namely books, journal articles, internet sources, and conference transcripts. As mentioned earlier, the researcher restricted the scope of the comprehensive evaluation of the current corpus of published research on the retail sector within townships to only include scholarly articles published between 2012 and 2023. This decision was made to ensure the evaluation was as accurate as possible. Several factors, both marketing and non-marketing, determine the marketing of products to townships. As shown in Figure 1, the extensive literature review revealed the following marketing factors: product quality, price, customer satisfaction, customer loyalty, and customer service. Furthermore, the search revealed that non-marketing factors encompass competition, the transport system, road infrastructure, security, licensing and regulatory requirements, and business location. Figure 1 shows the factors determining the marketing of products to townships.

Marketing Factors Determining the Marketing of Products to Townships
As discussed earlier, marketing factors that determine the marketing of products to townships among SMEs within the retail sector include the following: product quality, product price, customer satisfaction, customer loyalty, and customer service. The following sections will provide details on each of the factors.

Customer Service
Customer service is everything that organisations do to create a remarkable customer experience when accessing products and services (Machado & Diggines, 2012). Customer service is a crucial aspect of business and enables retailers to compete effectively. It has recently been difficult for retailers to stock unique merchandise in their businesses or stores. However, excellent customer service separates them from the competition because it is difficult for retailers to copy good customer service (Terblanche, 2013). Similarly, it has been noted that customers in the modern age are looking for a convenient shopping experience, speed and efficiency in processing, better quality and value items, shorter queues, and a healthy and clear shopping environment. The crux of this school of thought is that most retailers are selling identical merchandise, so retailers can only differentiate their store or business with the quality of their customer service. Thus, retaining or satisfying a customer involves more than simply providing products. It has more to do with delivering excellent personalised service of the highest order (Babu, Babu & Narayana, 2012).
Customer services such as caring for customers' needs, listening to their comments, and the availability of backup services could provide a retailer with a competitive advantage (Chiliya, Herbst & Roberts-Lombard, 2009). They further maintain that most township retailers do not measure their customers' needs and wants since they assume that price is the main competitive advantage and that customers only buy products based on price. It takes much more than customer service and price for customers to be loyal to a township retailer. Parker (2014), cited in Sewell, Mason & Venter (2014), maintains that successful retailers identify merchandise and customer value issues and develop strategies to achieve them. Therefore, providing customer service that aligns with what customers want is essential. Kursunluoglu (2014) mentions that customer satisfaction and loyalty in shopping centres are affected by customer service. However, customer service that meets and exceeds their expectations creates customer loyalty and satisfaction.

Product Price
Product price is one factor affecting the marketing of products in the retail sector. A study on migrant businesses has found that migrant enterprises, especially Somalian enterprises, have a competitive advantage over South African spaza shops because of the prices of their products. They are deemed to offer lower prices and better services than their local retailers. In addition to providing competitive prices, they offer credit, give exact change, sell goods in flexible quantities (for example, one tea bag or an egg as opposed to a box), and offer hampers (collections of goods sold at a discount) (Gastro, 2018). Product price assists customers in evaluating the quality of the product if it is difficult to use other features to make such an evaluation. Furthermore, customers use product prices to decide where or which retailer to purchase from. Thus, retailers need to set attractive prices for customers and cover the cost of the product and the expenses of running the business while ensuring profitability for the retail outlet (Terblanche, 2013). Worku (2013) states that small and medium-sized companies often fail to succeed in South Africa due to a lack of entrepreneurial skills and access to finance. This tends to affect product pricing as township retailers may not have pricing skills or be able to afford a price strategist.
Retailers in South African townships have moved from survival to price competition as shopping malls have been brought to townships. The retailer's choice, the number of items, the evaluation of prices, the perception of price fairness, and the likelihood of deferring from choosing an item all influence a consumer's reaction to a retailer's offering (Hamilton & Chernev, 2013). Retail pricing is often affected by the manufacturers. Buehler and Gartner (2010) point out the issue of non-binding price recommendations from manufacturers to retailers, which facilitates coordination in the vertical supply chain. Furthermore, it places minimal rules for the retailer to follow, blocking them from using their pricing strategies.

Product Quality
It is essential to keep in mind that the business does not evaluate the quality of the product from its standpoint; instead, the quality of the product is estimated from the consumer's viewpoint. In connection with this, it brought up two significant aspects that influence the quality of the product, namely, the anticipated rate of the product and the recognised quality. In more specific terms, if the customer's perception of the product's quality is consistent with their expectations, they will evaluate the quality of the product favourably and report feeling satisfied with their purchase. On the other hand, if the quality of the product as perceived by the consumer is not up to par with what was anticipated, then the product can be classified as having poor product quality. Therefore, the business's ability to satisfy the consumer's expectations is a primary factor in determining whether a product is excellent or poor (Razak, Nirwanto & Triatmanto, 2016).
There is no one-size-fits-all approach for retailers to serve township customers. However, customers prefer quality goods and are prepared to pay extra. Increased competition in the township has exposed customers to a greater variety of products, making them more selective buyers. Thus, it is a misconception for retailers to believe that customers living in the township would purchase downscaled products (Petousis, 2014). It is vital to take into account what the customers think. Their previous exposure to a product's quality, which they evaluate in terms of the overall excellence or superiority of a particular product in comparison to alternatives, has an impact on their propensity to make future purchases, the amount of money they are willing to spend, and the extent to which they would recommend a product to someone interested in making a similar purchase (Paulssen, & Das Guru, 2020). Malik, Ghafor and Iqbal (2012) observe that when product or service quality meets the customer's expectations, it reinforces the customer's trust in the product. When service quality fails to meet customer expectations, the customer is dissatisfied and forced to try competing brands.

Customer Satisfaction
The advantages customers receive from the performance of the service or product are what drive customer satisfaction, which is an after-purchase experience. Thus, to achieve satisfaction, retailers are advised to continuously monitor elements that may lead to customer satisfaction or dissatisfaction and work towards improving the issues that lead to customer displeasure (Dukic & Kijevcanin, 2012). Retailers can use customer satisfaction to be competitive and differentiate their products from those of rival retailers. The reality is that retailers who achieve high customer satisfaction do not face competitive pressure regarding price. After all, satisfied customers are willing to pay a higher price for a service or retail shop that meets their requirements rather than switch to a competing retailer offering lower prices because the risk of buying from another retailer is unknown (Bateson & Hoffman, 2016). Satisfied customers would be content and happy with the product. Customer satisfaction in a business is crucial because it influences customer loyalty and can lead to customer trust and repeat purchase decisions (Chinomona & Dubihlela, 2014).
Furthermore, customers who are not satisfied switch brands from unsatisfying to satisfying brands. Terpstra and Verbeeten (2013) state that satisfied customers tend to be loyal and willing to buy products and services at higher prices. They add that customer experience over time with a business determines satisfaction, thus making it essential to prioritise customer satisfaction for retailers.

Customer Loyalty
Customer loyalty is the favourable inclination of customers towards the retailer or his products relative to other retailers offering the same products. Thus, it combines a customer's positive behaviour and attitude towards the retailer. One attribute of customer loyalty is the willingness of the customer to recommend the retailer or his services and products to other customers (Kaura, Prasad & Sharma, 2015). The importance of achieving customer loyalty in business has been overstated, as several studies have proven that it is a prerequisite for business success. Ganiyu, Uche and Elizabeth (2012) observe that loyal customers are the lifeblood of the business because, among other things, they are willing to patronise a service irrespective of the prevailing price and provide the industry with enormous opportunities for growth by recommending the company to potential customers.
Molaee, Ansari and Teimuori (2013) agree that loyal customers spend their resources on the organisation and market the products or services to other customers. Utami (2015) adds that trust influences customer loyalty and that customer retention results from satisfied customers. Thus, customer satisfaction makes retaining customers within a business less complicated. In a corporation, customer loyalty inspires and motivates employees to work harder to serve their customers (Rizan et al., 2014). Customer loyalty also improves cross-selling, spreads positive word of mouth, and reduces marketing and replacement costs (Utami, 2015). Zakaria et al. (2014) mention that loyalty is vital to retaining customers and that loyal customers are less price-sensitive. This motivates and inspires internal stakeholders, as they can do their best to serve their customers without worrying about pricing.

Non-Marketing Factors Determining The Marketing of Products to Townships
Non-marketing factors determining the marketing of products amongst SMEs within the retail sector include the following: competition, the transport system, road infrastructure, security, licensing and regulatory requirements, and business location, as shown in Figure 1. The following sections will provide details regarding the six factors.

Competition
One major factor retailer must consider when marketing products in townships is competition. In reality, major retailers and foreignowned businesses pose a challenge to other retailers because they sell products of good quality at a cheaper price (Makhitha, 2016). Similarly, Pick n Pay (2016) has noted that the presence of spaza shops has declined because of the shopping centres where major retailers are operating. Thus, in the context of these observations, it is critical to assess the level of competition and the capacity of one's retail business to stand or compete with established or new retailers.
Another school of thought suggests that competition is critical for marketers of products and services in townships. As such, there is a need to analyse the level of competition in an environment where one intends to operate or market his products. According to Hartnack and Liedeman (2017), a highly competitive business environment can reduce the profit margin and eventually push the retailer out of business. Badenhorst-Weiss, Cillers and Eickers (2014) reiterate that small retail owners face competition from big retail chain stores; hence, small retailers need to identify and channel their efforts toward sustaining the competitive advantage they have over small and big retail businesses. Therefore, retailers should perform a competitor analysis to better understand the target market. According to Strydom (2015), "heightened levels of competition between informal businesses and formal businesses has a major negative effect on the business survival of the informal retailers." Therefore, small retailers in South Africa are forced to contend with competition on a variety of fronts in order to ensure their continued existence.

Licensing and Regulatory Requirements
Business licensing and regulatory requirements are critical factors determining the marketing of products for retailers in townships. In addition to existing licensing and regulatory requirements, the government of South Africa introduced a bill that compels business owners to register with local municipalities, irrespective of their size. Thus, with increased red tape or bureaucracy in offices, the registration process takes time and eventually frustrates retailers. Furthermore, this bill has empowered business inspectors to search premises, investigate customer complaints, confiscate products, and close businesses (Bauer, 2013). When it comes to the by-laws that regulate informal small business retailers in the Cape Town Metropolitan area, several small business groups in the city believe that these by-laws are unfair to the small business retailers and favourably disposed toward national retailers that are interested in penetrating the township market. According to Battersby, Marshak, and Mngqibisa (2017), these associations consider the bylaws unachievable for the spaza businesses since they are designed to foster the growth of shopping malls more conducive to the success of national merchants.
The importance of business licensing and regulatory requirements has been overstated in the literature. For instance, the retail liquor sector has strict regulatory requirements and strict enforcement of trading laws. As such, retail business owners face hurdles regarding business registration. Furthermore, there are frequent fines and police harassment, which forces most liquor operators in townships to close their operations (Hartnack & Liedeman, 2017). The Western Cape government reinforces this observation by stating that businesses that need licensing cannot operate without a valid licence. Additionally, retailers selling food and liquor may also need to comply with health and safety regulations. Thus, retailers must comply with licensing and regulatory requirements before marketing their products (Western Cape Government, 2014).

Road Infrastructure
Infrastructure is a broad term that may be used to refer to different aspects that are critical for a business to thrive. In the context of this study, road infrastructure is very vital for the marketing of products in townships. Road infrastructure provides physical access to customers and enables retailers to evaluate and understand where their businesses should be located (Badenhost-weiss, Cillers & Eicker, 2014). The Micro, Small, and Medium-sized Enterprises (MSMEs) that dot the African continent are the backbone of the continent's commerce and industry. Expanding these small businesses is critical to Africa's overall economic development and accounts for approximately 80 percent of the continent's employment opportunities. A good road infrastructure can help reduce the expenses of transporting goods for MSMEs and make it simpler for small businesses to access domestic and international marketplaces. The construction of new roadways to connect marketplaces and the improvement of the circumstances of existing roads could increase their performance, contributing to the establishment of jobs and the reduction of destitution (Kilsah Consulting, 2023).
The construction of new roads is a primary factor contributing to economic growth. Suppose an economy does not invest in the construction of good roads. In that case, mobility within the economy will be severely hampered, reducing the amount of produce and other products transported to markets. (Wanjiku, 2014). When a business is located in an area with a good road network, it gains a competitive advantage because it increases the accessibility of its products to customers. As such, retailers must assess the road infrastructure to ascertain whether it is ideal for opening a business or marketing products within a targeted jurisdiction (Badenhostweiss, Cillers & Eicker, 2014). According to Kaare and koppel (2012), infrastructure improvements can benefit individual enterprises. The improvement of roadways can result in substantial increases in the efficiency of travel, an increase in productivity, a reduction in travel time to business locations, a boost in the efficiency of transportation, and an improvement in the proportion of on-time deliveries.

Security and Crime
Security and crime rates are equally important in determining the marketing of products for retail operators in townships. South Africa has the daunting task of improving the business environment by reducing the crime rate to facilitate business development, specifically in the retail sector. A study on the impact of crime on business in South Africa suggests that escalating crime levels in various municipalities reduce business owners' appetite to enter new markets (Mahofa, Sandaram & Edwards, 2016). Smith (2014) reports that Gauteng has the highest crime rate, followed by KZN, the Western Cape and Eastern Cape. It is further noted that business owners have pointed out the adverse effects of low security levels and a higher crime rate on their operations. In this regard, the cost of security is seen as a financial burden because retailers have to invest in securing their business premises or products. Burger and Lancaster (2014), who have argued that there is an increasing burden of crime on businesses, echoed these sentiments. The implication is that high levels of crime force retailers to safeguard their interests, staff, and customers. In addition to corruption and violent protest action, a security breach is also disruptive to marketing products in townships. Thus, retailers must analyse these factors before marketing products in various townships.
In South Africa, crime levels are very high, as shown in Table 2 of South Africa's crime statistics. For instance, the South African Police Service (SAPS) has provided the nation's most recent crime statistics, spanning the period from October 2021 to December 2021 and encompassing the third quarter of the fiscal year 2021/22. A combination of fewer crimes reported and fewer crimes found through police work resulted in a 3.3% decrease in the total number of crimes reported during this period (Businesstech, 2022). However, despite the decline, the level of crime remained significantly higher, which is a cause of concern for businesses, especially retailers operating in townships.

Business Location
Location is very critical for the success of any business. Thus, retailers marketing products in townships are not exceptions to the need for an appropriate business location. In the same vein, it is vital to operate in an area where there is more traffic. Similarly, customers prefer retail owners to operate close to their homes or in areas that are more accessible and convenient (Pick n Pay, 2016).
On the other hand, Makhitha (2016) argues that high rental costs are a major hindrance for businesses that want to be located near the major shopping centres in townships. Good business locations are expensive, so small retailers must market their products in less costly areas. The reality is that high rental costs eat into retailers' profit margins. Conversely, while the location is critical for business, it has also been noted that the absence of physical space to extend or build infrastructure affects the marketing of products in Tembisa township. Thus, businesses that want to expand or put-up structures for shops in their preferred locations cannot find land or space to do so (Charman, 2017).

Transport System
Transporting products in Africa is costly due to a lack of infrastructure, which affects prices and makes small enterprises less profitable. Therefore, African products are less competitive than those from other regions. Adequate road transportation will affect the degree of business competition. Good road infrastructure could lower business costs and increase enterprise competition among nations. To attract customers, robust competition between businesses will increase market diversity and African production output (KilSah Consulting, 2023).
The transport system is crucial if retailers market their products in townships and if customers can access the retailer's products. Modise (2015) believes that a substandard transport system increases the cost of doing business and generally affects the mushrooming and growth of economic activities. Furthermore, it has been noted that the productivity of different sectors of the economy is vibrant when there is a good transport network or service. The absence of an effective transport system prevents marginalised communities from accessing markets and subsequently affects retailers who want to market their products in these communities. The reality is that retailers want an easily accessible form of transportation to enable the movement of goods or products. Equally, customers need an effective transportation system to facilitate their movement from one place to another. Thus, enhancements to transportation will promote economic integration, stimulate competition, generate agglomeration economies, and generate other "broader" economic benefits because they will reduce transportation costs and increase access to markets and labour (Gibbons et al., 2019).

Conclusion
This study analysed the factors that determine the marketing of products to townships among SMEs within the retail sector. The current literature review has highlighted that retail is one of the most important and vibrant sectors, attracting much interest from business owners. However, despite the interest in entering the retail sector in townships, there are multifaceted problems and issues that one needs to consider before marketing products. The following are some of the marketing factors identified in this study: product quality, product price, customer satisfaction, customer loyalty, and customer service. Thus, retailers are asked to pay particular attention to the five factors because they are crucial to achieving a competitive advantage in marketing products in townships. Also, this review has noted that non-marketing factors such as competition, the transport system, road infrastructure, security, licensing and regulatory requirements, and business location are some of the critical factors determining the marketing of products in the township. The implication is that the onus is on retailers to conduct a thorough review or analysis of these factors and the trading environment in general so that the business can thrive without encountering hurdles.