Heterogeneous effects of marketing strategies on sunflower oil processing small and medium enterprises performance in Tanzania: Mixed-methods evidence from Singida Region

Abstract

Sunflower oil processing small and medium enterprises (SMEs) in Singida Region, Tanzania, face persistent performance challenges despite growing domestic demand and government support for import substitution, yet limited evidence exists on whether specific marketing strategies differentially affect enterprise outcomes. This study therefore examines the heterogeneous effects of seven marketing strategies on market share, processing capacity, and profitability among sunflower oil SMEs, drawing on Risk Aversion Theory and the Theory of Choice as the theoretical framework anchoring the study. Using a pragmatic explanatory sequential mixed-methods design, quantitative data were collected from 384 SME owners, managers, and employees via structured questionnaires, complemented by key informant interviews and focus group discussions. Regression analyses reveal that wholesale distribution significantly increases market share (β=0.9356, p<0.05), while promotional campaigns (β=1.4572, p<0.01) and trade fair participation (β=1.0556, p<0.05) substantially improve processing capacity. Notably, promotional campaigns (β=0.9752, p<0.05) and trade fairs (β=0.9839, p<0.01) are the only strategies demonstrating statistically significant positive effects on profitability. In contrast, direct sales, retail supply, online and social media marketing, and branding and packaging show no significant influence on any performance indicator, reflecting structural constraints such as limited digital infrastructure, weak certification systems (Tanzania Bureau of Standards [TBS] and Tanzania Food and Drugs Authority [TFDA]), and low bargaining power. Theoretically, this study extends risk aversion and choice frameworks by showing that SME owners rationally prefer low-risk, visible marketing channels (wholesale, trade fairs, promotions) over higher-risk differentiation strategies under resource scarcity. Empirically, it provides novel evidence on strategy-specific performance heterogeneity in a least-developed country context, challenging assumptions that digital or branding investments automatically yield returns. Practically, the findings recommend that SMEs reallocate limited budgets toward promotional campaigns and trade fairs, form cooperatives for collective wholesaling, and phase in branding and digital marketing only after foundational infrastructure and skills improve. Policymakers should subsidize trade fair participation, strengthen wholesale market linkages, and support capacity-building in low-cost promotional techniques. Without strategy-specific targeting, SMEs risk diluting resources on ineffective channels, perpetuating vulnerability to imported edible oils.