Market Entry Modes for SMES in Handcrafts Sub-Sector in Tanzania: The Case of Dar es Salaam

Abstract

This paper focuses on the market entry modes for Small and Medium Enterprises (SMEs) in handcraft sub-sector in Tanzania. The fundamental argument is that, although much has been done on market entry mode for SMEs little information exist in handcrafts sub-sector in Tanzania. Both qualitative and quantitative research design were employed and the sample size of 120 handcraft f irms was taken and the designed questionnaires were administered to owner-manager or managers in order to capture the required data. Findings show that the majority of the SMEs employed indirect exportation through local and foreign intermediaries. Few of them use trade fairs, friends and relatives in foreign countries as their entry modes. Also, results revealed that owner-managers or managers were constrained by little knowledge of the international market, unfaithful partners or customers in foreign countries, duplicate taxes and lack of marketing skills of establishing reliable networks. The conclusion is that, the dominant market entry modes for SMEs in handcraft sub sectors in Tanzania are through local and foreign intermediaries. The selection of entry mode is highly influenced by the size of the firm regarding capital and the number of employees. Therefore, the Government must support handcraft traders in providing clear information about foreign market, assist traders or artisans in transportation and living expenses in foreign trade fairs and imposition of reasonable charges or taxes for the handcraft products. Likewise, the handcraft SMEs should promote team-work in their trades so as to capture and have voice in the international market.