Small scale units are exposed to numerous problems. Major problems faced by these units are concerning raw-material, labor financial and marketing. Problem of marketing is more complicated in case of small scale industries. These units are in no position to face the onslaught of large scale limits w.r.t., quantity quality and cost and at the same time are not in a position to assess the prevailing market scenario (or) changes which are taking place w.r.t. tastes, liking, disliking, competition, technology etc. moreover these units do not possess the requisite expertise to adjust their operations according to the changed situation.
1) Problem of standardization:
Small scale units face problems w.r.t. fixing the standards and sticking. This results in the poor quality of their products and it adversely effects their image (or) goodwill in the market.
2) Competition from large scale units:
Small scale units are ill equipped to face competition from large scale units w.r.t. quantity, quality and cost. In the modern competitive world there is survival of the fittest, even the existence of small scale units is endangered.
3) Poor sale promotion:
Small scale units have limited financial resources and hence cannot afford to spend more on sale promotion. These units are not having any standard brand name under which they can sell their products. various channel members too exploit them because of the lack of goodwill of their products in the market.
4) Poor bargaining power:
Small scale units because of their limited resources and lower scale of operations are in a week position while negotiating with the suppliers of raw-material, finances (or) marketing agencies. They are always at the receiving end and as such are not in a position to safeguard their interests.