Marketing Activities and Covid-19: A Mediating Role of Performance of Micro Enterprises in Southeast of Nigeria

Senol Dane^1*, Murat Akyuz² and Michael Isaac Opusunju²

^*Correspondence: Senol Dane, Department of Physiology, Faculty of Basic Medical Sciences, College of Health Sciences, Nile University of Nigeria, Nigeria, Email:

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Introduction

The federal government of Nigeria policies on COVID-19 such as hand washing, wearing of mask, staying at home, and keeping social distance has an on-marketing activities such price, product, promotion and place and this marketing activities also affect the performance of small and medium scale enterprises in Nigeria. A study prompted emphasized that prevailing government attitudes to policymaking indicate that Covid-19 can be beaten quickly by promoting performance [1]. Covid-19 pandemic is a human catastrophe upsetting billions of people on earth, and forcing harmful impact on the worldwide economy, industries, corporations, and small and medium enterprises [2]. However, the negative effect of COVID-19 resulted to reductions in employment among small businesses, reduction of expenditure, closure of business establishment, lack of innovation, very poor growth in terms of branches, increases in the number of customers and increase in the number of staff, lack of resources to purchase necessary raw material, asset cutting, poor product development [3].

Over the years, micro enterprises in South East of Nigeria adopted the COVID-19 policies of the Federal Government of Nigeria and used these policies in lined with marketing activities such as price, product, promotion and place in order to increase the performance. It is very unique to note that micro enterprises in South East of Nigeria is yet to understand the variables that has direct and indirect effect the dependent variable. The extant literatures on the empirical studies revealed that none of the studied addressed the variables by using mediator as performance. Also, none of these studies used micro enterprises in South East of Nigeria.

The objective of this study is to examine the relationship between marketing activities and COVID-19 as a mediating role of performance of Micro enterprises in South East of Nigeria. The specific objectives are to: determine the effect of COVID-19 on performance of Micro enterprises in Southeast of Nigeria, examine the effect of marketing activities on COVID-19 in Micro enterprises in Southeast of Nigeria while evaluate the effect of marketing activities on performance of Micro enterprises in Southeast of Nigeria.

The scope of this study is restricted to the relationship between marketing activities and COVID-19 as a mediating role of performance of Micro enterprises in South East of Nigeria. Also, the study is focused on COVID-19 which is measured as wearing of mask, hand washing with water and sanitizer, staying at home and keeping social distance and marketing activities such as price, product, promotion and place while performance is measured by expansion, survival, number of employees, and capital employed.

The hypotheses are stated below:

H01: COVID-19 has a significant effect on the performance of Micro enterprises in South East of Nigeria.

H02: marketing activities has a significant effect on COVID-19 in Micro enterprises in South East of Nigeria.

H02: marketing activities has a significant effect on the performance of Micro enterprises in South East of Nigeria.

Concept of marketing

Marketing is grounded within the philosophy and beliefs of the marketing concept in which marketers and decision makers try to identify and answer the requirements and desires of targets market better than competitors [4]. Marketing is said to be activities that relate to product, price, promotion and place which is meat to satisfy human needs and wants.

A product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need [5]. Kotler (2007) defines price as a cost of producing, delivering and promoting the product charged by the organization [6]. Every firm or store must cast itself into the role of communicator and promoter. Jones (2007) defines place as any way that the customer can obtain a product or receive a service [7] and Kotler and Armstrong (2006) define place or distribution as a set of interdependent organizations involved in the process of making a product available for use or consumption by consumers [5].

Concept of performance

Performance is a general structure that refers to the operations of the enterprise [8]. It has been noted that performance reflects the productivity of members of an enterprise measured in terms of revenue, profit, growth, development, and expansion of the organization [9]. It is generally displayed by effectiveness (the organization’s ability to achieve its objectives), efficiency (the ability of the Organisation to use resource s in a proper way), employees and customers’ satisfaction, innovation, products/services quality, and the maintenance of human resources [9]. 2Performance is measured using diverse parameters by different organisations some firms measure it through expansion, survival, number of employees, and capital employed. Also, performance can be measured based on the variables that are involved in the productivity, returns, efficiency, effectiveness, growth or even customer satisfaction [10].

Empirical studies

According to a cross-sectional study, 71.4 % and 59.1% of respondents agreed that there are high increment of price of convenience and shopping goods in market. Staying at home, keeping social distancing, transportation fee amendment and distribution had effect on the price of shopping and convenience goods. That price had a negative and statistical significant effect on distribution [11]. A recent study investigated the impact of COVID-19 pandemic on SMEs marketing activities in Rivers State of Nigeria. The study revealed COVID-19 Pandemic significantly impacts SMEs in Port Harcourt, Rivers State. The study concluded that, there is a strong, positive and significant impact of COVID-19 pandemic on SMEs marketing activities in Port Harcourt, Rivers State, Nigeria [2]. The effect of COVID-19 on the growth of small businesses was examined in Nigeria. There was a negative and significant effect of COVID-19 on the performance (growth) of small businesses in Nigeria [12].

Conspiracy theories

Conspiracy theories attempt to explain significant events and circumstances as the malevolent acts of secret and powerful groups [13,14]. The first set of needs is epistemic, including the desire to satisfy curiosity and avoid uncertainty. For example, research has linked conspiracy beliefs with the search for patterns and meaning even when no such patterns exist [15]. The second set of needs is existential, including the desire to restore a threatened sense of security and control [16]. For instance, people are more likely to believe conspiracy theories when they are anxious or worried [17], and when they feel that they have no power [18]. The third set of needs is social, including the desire to hold one’s self and one’s groups in positive regard. For instance, people are more likely to believe in conspiracy theories if they need to feel unique compared to others [19], feel a need to belong or feel that their group is underappreciated [20] or under threat [21].

Methodology

The study adopts a survey research design. The population of this study comprises of all registered Micro Enterprise in South East, Nigeria. According to Corporate Affairs Commission of Nigeria and SMEDAN (2017) there are 91,396 Micro Enterprise in South East (Table 1).

Table 1: Population of the study.

The sample size of the study was computed using Taro Yamane's formula (1967). The formula is: n=N/1+N(e)2 [Eq. 1].

In eq. 1, n=sample size, N=number of items in the universe (population), and e2=the square of maximum allowance for sampling error. It is the level of significance.

Accordingly, the sample size of the study was calculated thus:

n₂=91396/1+91396(0.05)z

n₂=91396/1+91396(0.0025)

n₂=91936/1+228.49

n₂=91936/229.49

n₂=389

A proportional sampling method a type of probability sampling technique was used to select the sample size across the six states in Southeast of Nigeria. Proportional random sampling is another name for stratified random sampling. Proportional or stratified random sampling is a sampling method in which a population is divided into smaller sub-groups called strata which are established based on common qualities or attributes shared by individuals, such as income or educational attainment (Table 2).

Table 2: Proportional method of sample size selection.

The data is collected using a structured questionnaire accompanied with a cover letter and the approach to data analysis is qualitative. The questionnaire is closeended designed using an ordinal measurement scale viaa- via the 5-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). The researcher also engaged the services of research assistant who assisted in the administration of the questions to the employees of the registered Micro Enterprise in Southeast Nigeria. The research assistants are educated on how to administer the questionnaire and the researcher ensured that she called on some management staff to ascertain if the research assistants carried out the assigned task effectively. The research assistants will return the copies of questionnaire after two weeks. The internal consistency or reliability of the instrument for this research is determined by means of Cronbach’s Alpha, using the Partial Least Square Structural Equation Model (PLS-SEM). Any instrument with a coefficient of 0.70 and above is seen as valid and reliable.

The Partial Least Square Structural Equation Model (PLS-SEM) is used to model the regression analysis that is used to test the hypotheses to determine if there is an effect of independent variables on dependent variable [22]. The PLS algorithm is a sequence of regressions in terms of weight vectors. The weight vectors that will be obtained at convergence satisfy fixed point equations. PLS-SEM is a non-parametric method that does not require that the data meet certain distributional assumptions. However, the parametric significant tests cannot be applied to test whether coefficients such as outer weights, outer loadings and path coefficients are significant. Instead, PLS-SEM relies on a non-parametric boot stap procedure to test the significance of various results such path coefficients, Cronbach’s alpha, HTMT, and R2 values and Q2. The Structural Equation Model that will be adopted for this study is as follows:

The model depicts the effect of measurement variables of marketing activities on COVID-19. It also shows indirect effect on performance, which serves as mediating variable.

Data analysis

Construct and indicator reliability

The indicator’s reliability is evaluated through factor loading, internal consistency and average variance extracted (AVE). The result (Table 3) shows that all the items’ loadings are higher than the recommended value which suggested that there is an acceptable indicator reliability. Also, the composite reliability (CR) varies between 0.990 and 0.989 showing that the constructs used have acceptable levels of internal consistency reliability.

Table 3: Factor loading.

Also, convergent validity is evaluated whether indicators of each latent variable theoretically explained the constructs, the researcher tested convergent validity of the reflective measured constructs. The convergent validity is evaluated by AVE and it should be higher than 0.50 as this indicates that on average, the construct explained over 50 percent of the variance of its items [23]. Composite reliabilities for three reflectively measured constructs ranged from 0.990 to 0.989, exceeding the minimum requirement of 0.70.

Discriminant validity

Discriminant validity demonstrates the extent to which a construct is categorized from other constructs because of either similarity or difference values [23]. The square root of AVE should be higher than the inter-construct correlations and maximum shared variance (MSV) should be lower than AVE. Table 4 indicating the test of discriminant validity. This is correspondingly confirmed by cross loadings which are less than all indicator loadings.

Table 4: Test of discriminant validity.

Structural model and hypotheses testing

Regarding the inner (structural) model, marketing activities has the strongest effect on COVID-19 in Micro enterprises in South East of Nigeria (Path coefficient of 0.987, t-statistics of 982.630), followed by COVID-19 has the less strongest effect on Performance of Micro enterprises in South East of Nigeria (Path coefficient of 0.904, t-statistics of 12.433) and also followed by marketing activities has moderate effect on performance of Micro enterprises in South East of Nigeria (Path coefficient of 0.066, t-statistics of 0.862).

Structural model assessment

The criteria facilitate the structural model assessment including coefficient of determination (R-square), cross validity of redundancy (Q square) and path coefficients. The empirical finding shows that the R-square of 0.974 which mean that COVID-19 and performance of Micro enterprises in Southeast of Nigeria had 97.4 percent. Also, R-square of 0.939 which mean that marketing activities and performance of Micro enterprises in Southeast of Nigeria had 93.9%. We can also assess the model’s predictive relevance by evaluating the Q-square. The smaller the difference between the predicted and originated values, the greater the Q square, after running blindfolding, the Q square is above zero for a particular endogenous construct demonstrating the accuracy in the path model’s prediction (performance:0.872 and COVID-19:0.930) [23]. The strength and significance of the path coefficient are evaluated for relationships hypothesized between the constructs. After running bootstrapping, we found our path coefficient values to be significant. This is presented by t-statistics which range from -1 to 1. The finding indicates that marketing activities has the strongest effect on COVID-19 in Micro enterprises in South East of Nigeria (Path coefficient of 0.987, t-statistics of 982.630), followed by COVID-19 has the less strongest effect on Performance of Micro enterprises in South East of Nigeria (Path coefficient of 0.904, t-statistics of 12.433) and also followed by marketing activities has moderate effect on performance of Micro enterprises in South East of Nigeria (Path coefficient of 0.066, t-statistics of 0.862). This shows that marketing activities has a stronger indirect effect on COVID-19 than performance.

Additionally, the study focuses on both direct effects and total effects that is the sum of direct effects and indirect effects between an exogenous and an endogenous construct in the structural model. We further explore whether there is an indirect effect of marketing activities has a stronger indirect effect on COVID-19 via mediator of performance.

Mediating effect of customer satisfaction

To examine the mediating effect of performance on the relationship between marketing activities and COVID-19 in Micro enterprises in Southeast of Nigeria, the direct effect between latent variables and endogenous latent variables should be significant as this effect be seen clearly when correlations between constructs are strong. We excluded performance from the path model, and then ran bootstrap. The result shows standardized path coefficients of indirect effect as 0.001, t-statistics of 989.932 and co-efficient of total effect as 0.987, t-statistics of 982.630. The table 5 shows that the total effect is statistically significantly stronger than indirect effects indicating that performance is a mediator affecting the relationship between marketing activities and COVID-19 in Micro enterprises in South East of Nigeria. The study revealed that COVID-19 is significant in enhancing performance of Micro enterprises in Southeast of Nigeria (t-statistics 12.796 and P-value 0.000) and marketing activities is significant in solving COVID-19 problem by Micro enterprises in Southeast of Nigeria (t-statistics 981.329 and p-value 0.000) while marketing activities is insignificant in achieving performance by Micro enterprises in Southeast of Nigeria (t=0.884 and p=0.377). The study also indicated the total effect and indirect effect of the variables.

Table 5: Path coefficient.

Discussion of Findings

This study demonstrated the COVID-19 is significant in enhancing performance of Micro enterprises in Southeast of Nigeria (t-statistics 12.796 and P-value 0.000) and marketing activities is significant in solving COVID-19 problem by Micro enterprises in Southeast of Nigeria (t-statistics 981.329 and p-value 0.000) while marketing activities is insignificant in achieving performance by Micro enterprises in Southeast of Nigeria (t=0.884, p=0.377). The study also realized that marketing activities has the strongest effect on COVID-19 in Micro enterprises (Path coefficient of 0.987, t-statistics of 982.630), followed by COVID-19 has the less strongest effect on performance of micro enterprises in Southeast of Nigeria (Path coefficient of 0.904, t-statistics of 12.433) and also followed by marketing activities has moderate effect on performance of Micro enterprises in Southeast of Nigeria (Path coefficient of 0.066, t-statistics of 0.862). The findings of this study are consistent with a recent study who indicates that there is a strong, positive, and significant impact of COVID-19 pandemic on SMEs marketing activities in Port Harcourt, Rivers State, Nigeria [2]. However, the findings of some other studies [11,12] was inconsistent with the findings of this study. The study also in line with conspiracy theories.

The current pandemic-related coping strategies may harm mental health, such as decreased well-being and increased depression and anxiety symptoms [24,25]. Also, inactivity due to COVID-19 disease can have a negative effect on physical and mental health and coping with stress and anxiety during isolation time [26]. Besides, there were some negative lifestyle changes due to the COVID-19 pandemic [27]. Furthermore, the fairly big changes in food consumption preferences were reported [28]. Also, in another study, there was a significant decrease in family incomes and a significant increase in family expenditures during the pandemic outbreak [29]. Also, Nigerian women entrepreneurs experienced the negative effect of COVID-19 outbreak on their businesses [30].

Conclusion and Recommendation

The study concluded that COVID-19 is significant in enhancing performance of Micro enterprises in Southeast of Nigeria (t=12.796, p=0.00) and marketing activities is significant in solving COVID-19 problem (t=981.329, p=0.00) while marketing activities is insignificant in achieving performance (t=0.884, p=0.377).

The study recommended that

✓ Micro enterprises in Southeast of Nigeria should continue to apply price concept, product concept, promotion, and place strategy in conducting their activities since it helps in solving the problem of COVID-19 and minimize the rate of spread of the virus since marketing activities are conducted by observing the government policies of COVID-19.

✓ Micro Enterprises in Southeast of Nigeria should continue to maintain COVID-19 policies such as washing of hand with water and sanitizer, wearing of mask, social distancing and staying at home since it contributes to increase in performance.

✓ Micro enterprises in South East of Nigeria should re-strategies it marketing activities since it does not contribute to performance.

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