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ASSESSMENT OF MARKETING STRATEGY PRACTICES: THE CASE OF
DASHEN BREWERY
BY: ASRESAHEGN YILMA
DEPARTMENT OF MANAGEMENT
COLLEGE OF BUSINESS AND ECONOMICS
DEBRE BERHAN UNIVERSITY
MAY, 2018
DEBRE BERHAN, ETHIOPIA
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ASSESSMENT OF MARKETING STRATEGY
PRACTICES IN THE CASE OF DASHEN BREWERY
BY: ASRESAHEGN YILMA
A THESIS SUBMITTED TO THE DEPARTMENT OF MANAGEMENT
OF DEBRE BREHAN UNIVERSITY FOR THE PARTIAL FULFILLMENT
OF MASTER OF BUSINESS ADMINISTRATION (MBA)
DEPARTMENT OF MANAGEMENT
COLLEGE OF BUSINESS AND ECONOMICS
DEBRE BERHAN UNIVERSITY
MAY, 2018
DEBRE BERHAN, ETHIOPIA
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DEBRE BREHAN UNIVERSITY
SCHOOL OF GRADUATE STUDIES
APPROVAL OF THE THESIS
As members of Board examiners of the final MBA, Thesis open defense examination, we
certify that we have read and evaluated the thesis prepared by Asresahegn Yilma entitled
―Assesment of marketing strategy practice in case of Dashen Brewery‖ and examined the
candidate. We recommend that thesis be accepted as fulfilling the thesis requirement for
the degree of master of Business Administration (MBA)
Board of Examiners
External Examiner ________________________ _____________________
Internal Examiner _________________________ _____________________
Chair person _____________________________ ______________________
Date: ____________________
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DECLARATION
I, the undersigned, declare that this thesis is my own original work and has not been
presented in any other university. All sources of materials used for this thesis have been
duly acknowledged.
Name: Asresahegn Yilma
Signature: ---------------------
Date:----------------------
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DEBRE BREHAN UNIVERSITY SCHOOL OF GRADUATE STUDIES
As Thesis Research advisor, I hereby certify that I have read and evaluated this thesis prepared, under my guidance, by Asresahegn Yilma, entitled ―Assessment of marketing strategy practice in the case of Dashen Brewery‖. I recommended that it be submitted as fulfilling the thesis requirement for the degree of Masters of Business Administration (MBA). Berhanu Endeshaw __________________ _____________________ Name Signature Date
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ACKNOWLEDGEMENT
First and for most, I would like to give my glory and praise to the Almighty GOD for his invaluable cares and supports throughout the course of my life and helped me since the inception of my education to its completion and enabled me to achieve my career. Next, I‘m grateful to appreciate my Advisor Berhanu Endesahw who has taken all the trouble with me while I was preparing the proposal. Especially, his valuable and prompt advice, his tolerance guidance and useful criticisms throughout the course in preparing the proposal, constructive corrections and insightful comments, suggestions and encouragement are highly appreciated. A special word of mouth is his credit. My sincere and heartfelt gratitude goes to the marketing managers and employees of the marketing department of the company for their frank response to my interview questions and questionnaires without which this paper wouldn‘t come to life. Finally, I‘m greatly indebted to my brother Mezgebe Yilma, my sister Weineshet Mekonnen and my Dad Yilma Belay and to my friends for their encouragement, moral support and suggestions.
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Table of Contents CHAPTER ONE
ORIENTATION OF THE STUDY 1
1.1 Introduction 1
1.2 Background of the Study 1
1.3 Background of the organization 3
1.4 Statement of the Problem 4
1.5 Research questions 5
1.6 Objectives of the Study 5
1.7 Scope of the Study 5
1.8 Significance of the Study 6
1.9 Limitation of the Study 6
3. Organization of the Paper 6 5. Summary 7
CHAPTER TWO 7
REVIEW OF RELATED LITERATURE 7
2.1 Introduction 8
2.2 Overview of marketing Strategy 8 2.3 Marketing Strategy Development 8 2.4 Elements of marketing Strategy 9
2.4.1 Segmentation, Targeting and Positioning 9
2.4.2 Marketing mix strategies 11
2.4.3 Product strategy 12
2.4.4 Product Positioning Strategy 12
2.4.4.1 Product Elimination Strategy 12
2.4.4.2 New product development strategy 12
2.4.4.3 Product Mix Strategy 13
2.4.4.4 Product Life Cycle and Marketing Strategies 13
2.5 Key Issues in pricing strategies 16
2.5.1 Pricing Objectives 17
2.5.2 Types of pricing strategies 18
2.5.3 Factors affecting pricing decision 19
2.5.4 Internal factors affecting pricing decisions 19
2.5.5 External factors affecting pricing decisions 20
2.5.6 New product pricing strategies 21
2.5.7 Existing product pricing strategies 22
2.5.8 Price Bundling Strategy 22
2.5.9 Pricing Adjustment Strategies 23
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2.6 Integrated Marketing Communications (IMC) 23
2.7 Distribution Strategies 27
2.7.1 Selection of Distribution Channels 28
2.7.2 Types of Channels of Distribution 28
2.8 The Concept of Competitive Advantage 29 2.9 Conceptual Framework 30
CHAPTER THREE 31
RESEARCH DESIGN AND METHOD 31
3.1 Introduction 31 3.2 Research design 31 3.3 Research approach 31 3.4 Research Type 31 3.5 Research Method 31
3.5.1 Sample and population 32
3.5.2 Data collection instrument 32
3.5.3 Method of data analysis 32
3.5.4 Validity and Reliability 32
3.5.5 Trustworthiness 33
3.5.6 Ethical Consideration 34
3.6 Summary 35
CHAPTER FOUR 36 DATA PRESENTATION AND ANALYSIS 36
4.1 Introduction 36 4.2 Profile of respondents 36 4.3 Questionnaire analysis 37
4.3.1 Demographic Characteristics of the Respondents 37
4.3.2 Questions related to the company‘s target market 38 4.3.3 Questions related to market segmentation 39
4.3.4 Questions regarding the company‘s marketing mix strategies 40
4.3.5 Issues about the product quality 40
4.3.6 Question related to the affordability of the company‘s products 41
4.3.7 Availability & accessibility of the company‘s products 42
4.3.8 Inter-departmental communications 43 4.3.9 Product selling process 43
4.3.10 Question about marketing strategy practice 44 4.3.11 The company‘s means of advertising 45
4.3.12 The company‘s promotional tools effectiveness 46
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4.4 Interview analysis 46
CHAPTER FIVE 50
SUMMARY, CONCLUSION AND RECOMMENDATION 50
5.1 Summary 50
5.2 Conclusion 51 5.3 Recommendation 53
Reference 54 APPENDICES I
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LIST OF TABLES
Table 1: Reliability Statistics of Cronbach‘s Alpha
Table 2: Total Number of questionnaires distributed, returned and unreturned
Table 3: General information of respondents
Table 4: Employees opinion towards target customers
Table 5: Responses in relation with the basis of market segmentation
Table 6: Opinion of employees towards the company‘s marketing mix strategies
Table 7: Employees‘ response in relation to the company‘s product quality
Table 8: Opinions concerning the prices of the company‘s products
Table 9: The Company‘s products availability and accessibility
Table 10: Communication effectiveness between the departments
Table 11: The selling process of the company products
Table 12: Opinions of employees regarding marketing strategy practices
Table 13: The Company‘s advertising strategy
Table 14: Appropriateness of the company promotional tools
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LIST OF FIGURES Figure 1: Sales and product life cycles
Figure 2: Components of IMC strategy
Figure 3: Framework of Marketing Strategy
Figure 4: Channels of distribution
Figure 5: Company‘s overall marketing strategy
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LIST OF APPENDICES
Appendix-1 Questionnaire
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ACRONYMS
EFFORT Endowment Fund for the Rehabilitation of Tigray
SPSS Statistical Package for Social Science
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ABSTRACT The ultimate goal of any business establishment is to remain in business profitably through production and sales of products or services. Without optimal profit, a business firm cannot survive. One of the core activities in a business company to stay in business is having a well-developed marketing strategy. The ultimate success or failure of a company depends on its marketing strategy. So, it should be implemented effectively to achieve the company’s objectives. Having this in mind, the study has been designed to assess the marketing strategy practices of the Dashen Brewery in light of an integrated framework. Both primary and secondary data collection instruments were used to collect data. Closed ended and open ended questionnaires along with interviews were used for the purpose of data collection. The selections of the respondents were carried out by using purposive sampling research method because no other departments were concerned about marketing strategies and the researcher took all the respondents of marketing staffs as a total population of the study. The Dashen Brewery’s marketing strategy is effectively practiced by its employees and managers because they are committed to work and the smooth communication flow between marketing and other departments are the main important issue for the success of the work. It provides quality products with affordable prices by promoting its products by using high and effective advertising mechanisms with the determination of the buyers' accessibility to the products. Even though the marketing strategies of the company are effectively practiced, there are some problems that the company faced while implementing it. These are; Infrastructure problems, Economic problem, political problem, Intensive competition in the market, Shortage of raw materials, Seasonality of consumption, Sociocultural problems and the time and cost of awareness creation for the customers. Dashen Brewery exploits all the 4Ps of marketing mix elements to achieve its target. These marketing mix elements are product strategy, price, promotion and place/distribution strategy. These are vital to implement the marketing strategy effectively. The Marketing Mix Analysis has the dignity to help the company implement the right marketing strategies to satisfy and penetrate the company’s customer groups, which is phrased as target markets. Therefore, the company should constantly alter the sub elements of each marketing mix to successfully compete with its competitors and offer the greatest value to its customers.
Key words: Marketing mix (product, price, promotion and place), Target marketing, Dashen
Brewery, Marketing Strategy.
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CHAPTER 1: ORIENTATION OF THE STUDY
1.1 Introduction
This section mainly focuses on addressing the background of the study, statements of the
problem, Objectives of the study, Significance of the study, Scope and limitation of the
study and organization of the paper.
1.2 Background of the Study
As currently observed and understood from economic point of view that extensive
connectivity and interdependence of companies on one another might result in more risk
to every company due to advancement of technology and information revolution,
disruptive technologies and innovations, the ―Rise of the Rest‖, hyper-competition,
sovereign wealth funds, the environment and customer empowerment, etc. As a result,
these days, we surely anticipate more perhaps predictable and/or unpredictable economic
shocks and disruptions causing heightened levels of overall risk and unpredictable
futurities at both macroeconomic and microeconomic level. On top of the everyday
challenges dealing in perpetually competitive arena and the usual business cycles,
business leaders must bear in mind the existence of disturbances that challenge their
business planes; be it major or minor. Given the fact that the heightened turbulence is
becoming a healthy problem that trigger business leaders in either business of
government sectors to thoroughly and closely understand, accept and bring forth new
ways and strategies to deal with it if they are to succeed in their business goals in the
future. (Kotler & Caslione, 2009)
While formulating strategic plan, a company need to formulate a marketing strategy
before entering a new or already existing market. For company marketers, formulation of
a decent marketing strategy has big significance since it contributes benefits, including
raising the efficiency of new products launches, cost reduction and improving product
quality and market share performance. So, before starting to develop a product, the
entrepreneur must show that the product will be accepted by a target audience and their
marketing strategy will accomplish this goal (Zelalem & Negi, 2009).
In precise terms, strategic planning of marketing encompasses the exposition of clearly
stating a vision and mission of target markets and formulation of specific marketing mix
and setting the company‘s objectives for every product it will offer for market. Besides,
organizations should put in to consideration their internal strengths and by what means
and strategies these strengths could be leveraged to ensure sustainable competitive
advantage and profitability. These days, it is sure to be there that most companies face
some form of competition whatsoever no matter what sort of industry they are in, because
of several factors such as deregulation and due to globalization of many industries. As a
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result, marketing strategy has become the pivotal necessity for companies to maintain
profitability in the future. The process of strategic planning of marketing flows from a
vision and mission statement to the selection of target markets, and the formulation of
specific marketing mix and positioning objective for every product.(Dibb, 2005)
Marketing strategy is the process of planning and implementing company policies towards
realizing company goals in accordance with the company vision. Marketing strategies
include general ones such as price reduction for market share growth, product
differentiation, and market segmentation, as well as numerous specific strategies for
specific areas of marketing. Therefore, marketing strategy is most effective when it is an
integral component of corporate mission, target marketing, marketing mix and defining
how the organization will successfully engage customers, prospects, and competitors in
the market arena (Dibb, 2005)
For many companies doing a business in this digital age of globalization badly demand of
coming up with new and refined marketing strategies ways of implementing them.
According to one strategist; ‗Sparked by the innovation of new technologies such as the
internet, corporations need to put themselves in a position to go through radical business
strategies which might mean nothing different from involving the industry in a new
industrial revolution. Consequently, to insure survival and futurity of their business,
managers will need to steer their brains to new set of rules to cope up with world‘s
competitive nature of market and to meet technological innovation access requirements.
Another suggested that any corporation in the 21st century management need to suit itself
to management via the web. According to the suggestion, the internet revolutionizing the
way we deal with customers and suppliers and how to create values for them and letting
us be enlightened thereby how to make money in the process. In other terms; it is
revolutionizing marketing‘. As a result, companies need badly to retain most of skills and
strategies that have been practically sound and adopt new and major strategies and
practices in order to stay and grow prosperous in the world‘s latest economy. (Kotler,
Veronica, Saunders & Armstrong, 2005)
The very essence of the application of new reshuffled strategies, especially for a digital
marketer, is unquestionable. Particularly in the current marketing arena where everything
evolves at an unprecedented pace i.e. technology for automobiles, homes and shopping
continues to change according to technological possibilities which in turn imposes
business managers to readjust marketing strategies. In suggesting so, the main goal is to
get in mind of to make your target customer experience memorable. Given companies are
getting bigger, marketing strategies are evolving at accelerated pace. The most influential
means of change are the mobile, programmatic and the advertisement in the social
media. Line by line, marketing strategies have taken significant turn. I previous years,
marketing strategy was to stay top-of-mind with the customer through various media
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outlets with the planning and strategy being done once in a year and tweaked as needed
without much change. In today‘s economy, though with putting consumers at prior
consideration, marketing strategies resemble more on customer service rather than
fostering marketing campaign. It is no longer applicable to plan once and to say that‘s all.
Today‘s market must be consistent and relevant in the parameter of being usable for the
very present time. (Key Media Solutions, 2015)
Markets around the globe are set to experience increasing turbulence in the coming
years. That means greater uncertainty for companies' strategic planning – more volatility,
more complexity and more ambiguity. The tools managers use for strategic planning and
forecasting have changed considerably in the past few decades. But they are inadequate
when faced with challenges of today's fast-changing environments. Scenario-based
planning can be the answer to cope with the challenges of today's business.
(Rolandberger, 2013)
1.3 Background of the organization
The organization in question, Dashen Brewery factory was established in 2000 and it is
owned by Endowment Fund for the Rehabilitation of Tigray (EFFORT) corporate which
has 49% share and Duet, a UK investment company which owns the majority 51%. The
Dashen Brewery is located130 km northeast of Addis Ababa, in Debre Birhan and
occupies an area of 85,000 square meters of land. It also started to produce Draught beer
that enjoyed popularity and big sales.
Most of all the workers showed great commitment and dedication to keep the Brewery
and its product popular. The role played by the Brewery was significant in supporting and
promoting other social activities. It has excellent reputation in producing quality beer and
Draught. Today, Dashen is one of the largest breweries company in Ethiopia. The
Dashen recent brewery machines are equipped with new technology to meet the standard
of a modern Brewery that can compete and excel in the market.
In the year 2015/2016 Dashen two breweries, located in Debre Birhan and Gondar,
together produced over 3 million hectoliters of beer in a year, placing Dashen number
three in terms of market share. Market analysts forecast a deepening gap in the demand
and supply of beer based on the shortages witnessed today. The construction of roads
that connect different rural areas along with general improvement of the country's
infrastructure contributes to increase in demand for beer, aside from the shift from tella
and Teji, traditional beers, to bottled industrial beer.
The major functional department of corporate sales and marketing must work to
accomplish strategic objectives of the company. However, Dashen Brewery does not
have clear vision, mission and value statement which shows how the organization lags
behind from the strategic point of view.
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Thus, the purpose of the study were to assess the marketing strategy practices of the
Dashen Brewery factory and to identify whether it is aligned with the target marketing,
marketing mix and corporate mission to satisfy customer requirements.
1.4 Statement of the Problem
Competing in today‘s economy means finding ways to break out of commodity status to
meet customers‘ needs better than competing firms. All organizations both for-profit and
nonprofit require effective planning and a sound marketing strategy to do this effectively.
Without these efforts, organizations would not be able to satisfy customers or meet the
needs of other stakeholders. Having an effective marketing strategy allows companies to
develop popular products. Further, effective planning and strategy allows companies to
continue in their leadership in the area of their business while continuing their expansion
into the lucrative markets around the world. Many organizations use sound marketing
strategy to leverage their strengths and capitalize on opportunities that exist in the
market. Every organization from your favorite local restaurant to giant multinational
corporations; from city, state, and federal governments, to charities develops and
implements marketing strategies. (Ferrell and Hartline, 2011)
In fact when you run a business, everything might not be easily accomplished. Marketing
success is the lifeblood of any company. Everyone knows that a marketing strategy
influences the company‘s ability to generate profits or to stay in business. Not all too often
good product ideas are funded because of a poor marketing strategy. Likewise Dashen
Brewery is facing some problems while practicing/implementing the marketing strategies
and in fact the company has seen declining shares in recent years making it number
three in terms of market share after BGI and Heineken which was number two just after
BGI a few years before. Its first plant located in Gondar also shows decreasing production
due to local unrest and political problem contributing for the overall declining sales of the
company‘s products resulting in reduced market share.
Comparing the consumer of market coverage of the Dashen Brewery S.C it is the third widely selling company next to BGI and Heineken. As a matter of fact in the recent years the market distribution of the company was more or less confined to northern part of the country due to the location of the plant being in the northern part of the country and unidentifiable factors of why it focuses marketing distribution to focus only on the acclaimed location. Perhaps in the recent years, The Company‘s public relations and its product accessibilities are limited in this part of the country. The expansion of the BGI in Kombolcha town and the planting of the Raya Beer in Tigray region, the company is facing a great deal of competition on its market even in this part of the country. Another issue is that the beer industry in Ethiopia is growing very fast and new entrants both local and international are emerging from time to time making the competition stiff and further reducing the market share of Dashen brewery. Accordingly, this study will attempt to assess the problems associated with the marketing strategy practices in Dashen Brewery.
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1.5 Research questions
What are the factors to be considered in the marketing strategy?
How the marketing strategies that are practiced by Dashen Brewery aligned with
its mission, the target marketing, and marketing mix to satisfy customer
requirements?
What are the marketing mix elements devised for marketing strategies?
How does Dashen Brewery segment, position and target its customers to win
competitors and achieve its pre-stated goals?
What are the problems encountered by the company in implementing the
marketing strategy?
ASSESSMENT OF MARKETING STRATEGY PRACTICES:
1.6 Objectives of the Study
The general objective of the study is to assess the marketing strategy practices of the
Dashen Brewery and to identify whether it is aligned with the target marketing, marketing
mix and corporate mission to satisfy customer requirements.
The specific objectives are:
To explore the factors to be considered in marketing strategy
To identify the company‘s marketing mix strategies that will appeal to the target
market.
To investigate how the company strategically positioning and segmenting the
market to achieve its objectives.
To explore the marketing strategy practice of Dashen Brewery aligned with its mission, target market & marketing mix to satisfy customers need.
To identify problems encountering the marketing strategy implementation of Dashen Brewery and to give recommendations.
1.7 Scope of the Study
The scope of the study covered how the marketing strategies are practiced in the Dashen
Brewery to achieve its stated goals that aligned with target markets, positioning,
segmenting and the marketing mixes to satisfy customer requirements. The study is
delimited to the marketing strategy practices by the organization‘s side with concerned
employees (marketing department staffs and managers).The focus of the study were also
delimited to the data that is obtained from the rates using questionnaires and interviews in
the Debre Birhan plant only excluding Gondar plant that means further study of other
regions (Gondar Plant) in the country will have a significant effect on the
comprehensiveness of the study.
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1.8 Significance of the Study
The ultimate goal of any business establishment is to remain in business profitably
through production and sale of products or services. Without optimal profit, a business
firm cannot survive. One of the core activities in a business company is having a well-
developed marketing strategy. The ultimate success or failure of a company depends on
its marketing strategies. The initial investigation revealed that much has not been done on
this core activity, or at least, it has been a neglected area.
The study was therefore intended to help the company management to redirect their
attention to this highly essential function. The study was focused on how marketing mix,
corporate, mission, and target marketing used in order to enhance, maintain and attract
customers and to identify how those tools should affect their marketing strategy and
under taking such study is very crucial for any business entity so as to shape its
marketing strategy. The study was worth doing because it helped the company to look at
its problems, to take in to the alternative consideration, and to give basic knowledge
about marketing strategy and their significance in the Brewery industry. The study also
contributed towards the advancement of theoretical knowledge and serve as a reference
material for similar studies in future.
1.9 Limitation of the Study
Full cooperation of the respondents may not be attainable and their commitment to
complete filling the questionnaires and interviews to devote their time to provide the
researcher with the relevant information were seriously limited the outcome of the
research. Since the study was made based on interviews and questionnaires, these
method were not certain to clearly reveal real situations due to personal biased,
especially the interviews part were made with managers and those managers may not be
volunteer to give the true situation/sense of the organizations strategy because they may
fear that their competitors may imitate their ideas. The study was conducted on the
organization‘s side which is the marketing strategy practices of the employees and will not
cover the other stakeholders such as government (government regulation on Brewery
industries), intermediaries and to see what looks like the marketing strategy of the
company in terms of customers‘ side.
1.10 Organization of the Paper
The research project was organized into five chapters: Chapter one contain the
introduction part dealing with research problems, objectives, and scope, significance and
limitation of the study. The second chapter discussed the review of related literatures
about the subject matter. In chapter three, the research design and methods were
covered and chapter four focuses was on the analysis of the subject matter to investigate
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and evaluate the problems. Finally, chapter five covers the conclusions of the findings
and forwards recommendations.
1.11 Summary
The general objective of the study is to assess the marketing strategy practice of Dashen
Breweries. Doing business in today‘s turbulent and dynamic environment means
finding ways to break out of commodity status to meet customers‘ needs better
than competing firms. Everyone knows that a marketing strategy influences the
company‘s ability to generate profits or to stay in business. Not all too often good product
ideas are funded because of a poor marketing strategy. Likewise Dashen Brewery might
face with some problems while practicing/implementing the marketing strategies.
Dashen Brewery factory was established in 2000 and it is owned by Endowment Fund for
the Rehabilitation of Tigray (EFFORT) corporate which has 49% share and Duet, a UK
investment company which owns the majority 51%.
The scope of the study covered how the marketing strategies are practiced in the Dashen
Brewery to achieve its stated goals that aligned with target markets, positioning,
segmenting and the marketing mixes to satisfy customer requirements.
The study was intended to help the company management to redirect their attention to
this highly essential function. The study was focused on how marketing mix, corporate,
mission, and target marketing used in order to enhance, maintain and attract customers
and to identify how those tools should affect their marketing strategy and under taking
such study is very crucial for any business entity so as to shape its marketing strategy.
The study was conducted on the organization‘s side which is the marketing strategy
practices of the employees and will not cover the other stakeholders such as government
(government regulation on Brewery industries), intermediaries and to see what looks like
the marketing strategy of the company in terms of customers‘ side.
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CHAPTER 2: REVIEW OF RELATED LITERATURE
2.1 Introduction
The focus of this chapter is reviewing of literature that is related to the research problem.
Accordingly, the following major issues will be addressed i.e. overview of marketing
strategy, marketing strategy development, elements of marketing strategy, segmentation,
targeting and positioning, marketing mix strategy, pricing strategies and the concept of
competitive advantage and other sub topics will also be presented in order to give clear
idea about the area of the research.
2.2 Overview of marketing Strategy
Marketing strategy is a managerial process of analyzing market opportunities and
choosing marketing position that serves the company‘s purpose and objectives. It is the
company‘s response to external environment and consistent set of principles through
which company hopes to achieve its long run customer and profit objectives in a
competitive environment. Marketing strategies are means by which professional firms sell
their services to their intending clients. (Ganah, 2008)
Organizations are required to have game plan or road map if they want to be successful
and archive their goals and objectives. A strategy, in effect, outlines the organization‘s
game plan for success. Effective marketing requires sound strategic planning at a number
of levels in an organization.(Ferrell and Hartline, 2011).
Marketing strategy refers to an organization‘s integrated pattern of decisions that specify
its crucial choices concerning marketing activities to perform and the manner of
performance of these activities, and the allocation of marketing resources among
markets, market segments and marketing activities toward the creation, communication
and/or delivery of a product that offers value to customers in exchanges with the
organization and thereby enables the organization to achieve specific objectives.
(Varadarajan, 2010)
Marketing strategies are the means by which marketing objectives will be achieved and
are generally concerned with the four major elements of the marketing mixes; product,
price, promotion and place (Malcolm and Dunbar, 2007).
2.3 Marketing Strategy Development
After testing and selecting a product concept for development, the new product manager
must draft a three-part preliminary marketing strategy plan for introducing the new product
into the market. The first part will describe the target market‘s size, structure, and
behavior; the planned product positioning; and the sales, market share, and profit goals
sought in the first few years. The second part will outline the planned price, distribution
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strategy, and marketing budget for the first year. The third part will describe the long run
sales, profit goals, and marketing mix strategy over time. This plan forms the basis for the
business analysis that is conducted before management makes a final decision on the
new product (Ranchhod, 2007).
2.4 Elements of marketing Strategy
To be successful in the business world is not an easy job, to be able to accomplish the
marketing objectives; we need to have a strategy that includes different elements. Here
there are four major elements that are used in the literature to explain the detail of
marketing strategy. These are the Segmentation, Targeting, Positioning and the
marketing mixes (Roger, 1994)
2.4.1 Segmentation, Targeting and Positioning
Segmentation involves an analysis of the nature and composition of a market to identify
groups of potential buyers who have similar needs or characteristics, or display similar
behavior. These groups are known as market segments. Each segment seeks a unique
set of benefits from the product or service purchased. (Marilyn and Desmond, 2007)
Market segmentation is defined as the process of dividing the total market for a particular
product or product category into relatively homogeneous segments or groups. To be
effective, segmentation should create groups where the members within the group have
similar likes, tastes, needs, wants, or preferences, but where the groups themselves are
dissimilar from each other. (Ferrell and Hartline, 2011)
Bases for Segmentation
Theoretically the marketer‘s choice of a segmentation base is related to consumers‘
needs for, uses of or behavior towards a product or service. The main variables used as
bases for segmenting consumer markets can be grouped under the four headings below:
Geographic Segmentation
This method defines customers according to their location. Geographical factors can play
a major role in segmentation. For example, for businesses such as discount warehouses,
major supermarkets and franchised restaurant operations, market density is an important
factor to consider. This refers to the number of customers within a unit of land area such
as a square kilometer. (Marilyn and Desmond, 2007)
Geographic Segmentation refers to dividing a market into different geographical units
such as nations, states, regions, counties, cities or neighborhoods. A company may
decide to operate in one or a few geographical areas, or to operate in all areas but pay
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attention to geographical differences in needs and wants. Geographic segmentation is
one of the earliest and still most commonly used methods of segmentation, within both
the consumer and the industrial sectors. Geographic segmentation assumes that nations
close to one another will have many common traits and behaviors (Kotler, et al; 2005)
Demographic Segmentation
Demographic characteristics are means of describing individual consumers and
households. This general label encompasses a large range of measurable criteria related
to the consumers‘ sex and gender identification such as age, income, race, socio-
economic status and family structure. For example, the manner in which gender identity is
constructed means that women tend to express a much more differentiated and complex
need for skin care products than men do, although there are signs that this may be
changing slowly. It is most appropriate for products that have a clear bias towards a
particular demographic group. (Marilyn and Desmond, 2007)
Demographic segmentation consists of dividing the market into groups based on
variables such as age, gender, sexual orientation, family size, family life cycle, income,
occupation, education, religion, ethnic community and nationality. Demographic factors
are the most popular bases for segmenting customer groups. One reason is that
consumer needs, wants and usage rates often vary closely with demographic variables.
Another is that demographic variables are easier to measure than most other types of
variable. Even when market segments are first defined using other bases – such as
personality or behavior their demographics need to be known to assess the size of the
target market and to reach it efficiently. (Kotler, et al; 2005)
Behavioral Segmentation
Markets can be divided into discrete sub-groups according to the way people react to and
interact with the product itself. Although a more difficult concept to grasp, in markets
where other forms of segmentation are found to have little relevance, behavioral
segmentation holds the key to effective and innovative marketing. Occasions, benefits
sought, applications, user status and user volumes are some of the most popular forms of
behavioral segmentation criteria. (Marilyn and Desmond, 2007)
Behavioral segmentation divides buyers into groups based on their knowledge, attitudes,
uses or responses to a product. Many marketers believe that behavior variables are the
best starting point for building market segments. (Kotler, et al; 2005)
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Psychographic segmentation
Psychographic segmentation divides buyers into groups based on social class, lifestyle or
personality characteristics. People in the same demographic group can have very
different psychographic make-ups. (Kotler, et al; 2005)
The psychological variables derive from two principal types of customer; personality
profiles and lifestyle profiles (psychographics). Psychological profiles are often used as a
supplement to geographic and demographics when these does not provide a sufficient
view of the customer behavior. While the traditional geographical and demographical
bases (sex, age, income etc.) provide the marketer with accessibility to customer
segments, the psychological variables provide additional information about these and
enhance the understanding of the behavior of present and potential target markets
(Gunter and Furnham, 1992)
Target Market Selection
Marketing segmentation reveals the firm‘s market-segment opportunities. The firm now
has to evaluate the various segments and decide how many and which ones to target.
Market targeting involves evaluating each market segment‘s attractiveness and selecting
one or more segments to enter. An organization evaluates its strengths relative to the
competition and considers how many segments it can serve effectively. (Kotler, et al;
2005)
Positioning
The third and final step in the market segmentation process deals with positioning. Once
the company has identified the segments and chosen which segment or segments to
target the final step is to decide on, what position it wants to occupy in those segments.
Positioning is concerned with how the customers perceive the products and how it is
defined by the customers in order to maximize the potential benefit to the company. The
result is a persuasive reason why the target market should buy the product or products.
(Kotler and Keller, 2009)
2.4.2 Marketing mix strategies
Marketing mix is the set of variables that managers use to influence customers. These
variables include the product or service, price, advertising and promotion, and distribution.
The following four main marketing mix elements are described below. (Eric, 2011)
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2.4.3 Product strategy
Of all the strategic decisions to be made in the marketing plan, the design, development,
branding, and positioning of the product are perhaps the most critical. At the heart of
every organization lie one or more products that define what the organization does and
why it exists. Products fall into two general categories. Products purchased for personal
use and enjoyment are called consumer products, whereas those purchased for resale, to
make other products, or for use in a firm‘s operations are called business products.
(Ferrell and Hartline, 2011).
2.4.4 Product Positioning Strategy
The term positioning refers to placing a brand in that part of the market where it will
receive a favorable reception compared to competing products. Because the market is
heterogeneous, one brand cannot make an impact on the entire market. As a matter of
strategy, therefore, a product should be matched with that segment of the market in which
it is most likely to succeed. The product should be positioned so that it stands apart from
competition brands. Positioning tells what the product stands for, what it is, and how
customers should evaluate it. Positioning is achieved by using marketing mix variables,
especially design and communication. Although differentiation through positioning is more
visible in consumer goods, it is equally true of industrial goods. With some products,
positioning can be achieved on the basis of tangible differences (e.g. Product feature),
with many others, intangibles are used to differentiate and position products (Andrew ,
2001).
2.4.4.1 Product Elimination Strategy
Marketers have believed for a long time that sick products should eliminated. It is only in
recent years that this beliefs that became a matter of strategy. If a product‘s role
diminishes or if it does not fit into the portfolio, it ceases to be important. When a product
reaches the stage where continued support is no longer justified because performance is
falling short of expectations, it is desirable to pull the product out of the market place.
Poor performance is easy to spot (Walker, Boyd and Larreche, 1992).
2.4.4.2 New product development strategy
New-product development is an act of innovation which entails a process of identifying,
creating and delivering new-product values or benefits that were not offered before in the
marketplace. A firm can obtain new products in two ways. One is through acquisition – by
buying a whole company, a patent or a license to produce someone else‘s product. Many
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large companies have decided to acquire existing brands rather than to create new ones
because of the rising costs of developing and introducing major new products. The other
route to obtaining new products is through new-product development in the company‘s
own research-and-development department. By new products we mean original products,
product improvements, product modifications and new brands that the firm develops
through its own research-and-development efforts. (Kotler, et al; 2005)
2.4.4.3 Product Mix Strategy
A product mix (also called product assortment) is the set of all products and items that a
particular marketer offers for sale. The product mix of an individual company can be
described in terms of width, length, depth, and consistency. The width refers to how many
different product lines the company carries. The length refers to the total number of items
in the mix. The depth of a product mix refers to how many variants of each product are
offered. The consistency of the product mix refers to how closely relate the various
product lines are in end use, production requirements, distribution channels, or some
other way. These four product mix dimensions permit the company to expand its business
by (1) adding new product lines, thus widening its product mix; (2) lengthening each
product line; (3) deepening the product mix by adding more variants; and (4) pursuing
more product line consistency ( Aaker and Keller, 1990).
2.4.4.4 Product Life Cycle and Marketing Strategies
In today‘s highly dynamic marketing environment, a company‘s marketing strategy must
change as the product, market, and competitors change over time. Here, we describe the
concept of the product life cycle (PLC) and the changes that companies make as the
product passes through each stage of the life cycle. To say that a product has a life cycle
is to assert four things: (1) Products have a limited life; (2) product sales pass through
distinct stages with different challenges, opportunities, and problems for the seller; (3)
profits rise and fall at different stages of the product life cycle; and (4) products require
different marketing, financial, manufacturing, purchasing, and human resource strategies
in each stage. Most product lifecycle curves are portrayed as a bell shape as shown in
the following figure (Lancaster, 2004).
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Time
Figure 1: Sales and product life cycles (Baker, 2003)
The figures above show a typical product life-cycle (PLC), the course that a product‘s
sales and profits take over its lifetime.
Product life cycle shows the course of a product‘s sales and profits over its lifetime. It
involves five distinct stages: product development, introduction, growth, maturity and
decline. After launching the new product, the management challenge lies in making sure
that the product enjoys a long and healthy life. The new product is not expected to sell
forever, but the company will want to recover a decent profit to cover all the effort and risk
that went into launching it. Management is aware that each product will have a life-cycle,
although the exact shape and length is not known in advance. (Kotler, et al; 2005)
Product development Stage
It begins when the company finds and develops a new-product idea. During product
development, sales are zero and the company‘s investment costs mount.
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Introduction Stage
The introduction stage starts when the new product is first launched. Introduction takes
time, and sales growth is apt to be slow. Well-known products such as instant coffee,
personal computers and mobile telephones lingered for many years before they entered a
stage of rapid growth. In this stage, as compared to other stages, profits are negative or
low because of the low sales and high distribution and promotion expenses. Much money
is needed to attract distributors and build their inventories. Promotion spending is
relatively high to inform consumers of the new product and get them to try it. Because the
market is not generally ready for product refinements at this stage, the company and its
few competitors produce basic versions of the product. (Kotler, et al; 2005)
In this stage a company might adopt one of several marketing strategies for introducing a
new product. It can set a high or low level for each marketing variable, such as price,
promotion, distribution and product quality. Considering only price and promotion, for
example, management might skim the market slowly by launching the new product with a
high price and low promotion spending. The high price helps recover as much gross profit
per unit as possible, while the low promotion spending keeps marketing spending down.
Such a strategy makes sense when the market is limited in size, when most consumers in
the market know about the product and are willing to pay a high price (these consumers
are typically called the ‗innovators‘), and when there is little immediate potential
competition. If, however, most consumers in the limited market are unaware and know
little about the innovation, and require educating and convincing, a high level of promotion
spending is required. (Kotler, et al; 2005)
Growth Stage:
This stage is product life-cycle stage at which a product‘s sales start climbing quickly. If
the new product meets market needs or stimulates previously untapped needs, it will
enter a growth stage, in which sales will start climbing quickly. The early adopters will
continue to buy, and later buyers will start following their lead, especially if they hear
favorable word-of mouth. Attracted by the opportunities for profit, new competitors will
enter the market. They will introduce new product features, improve on the pioneer‘s
product and expand the market for the product. (Kotler, et al; 2005)
The firm uses several strategies to sustain rapid market growth as long as possible. It
improves product quality and adds new product features and models. It enters new
market segments and tries to grow sales further by selling through new distribution
channels. It shifts some advertising from building product awareness to building product
conviction and purchase, and it lowers prices at the right time to attract more buyers.
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Maturity stage:
The stage in the product life-cycle where sales growth slows or levels off. At some point,
a product‘s sales growth will slow down and the product will enter a maturity stage. This
stage usually lasts longer than the previous stages, and it poses strong challenges to
marketing management. Most products are in the maturity stage of the lifecycle, and,
therefore, most of marketing management deals with the mature product. Although many
products in the mature stage appear to remain unchanged for long periods, most
successful ones stay alive through continually evolving to meet changing consumer
needs. (Kotler, et al; 2005)
Product managers should do more than simply ride along with or defend their mature
products – a good offensive is the best defense. They should stretch their imagination
and look for new ways to innovate in the market (market development), or to modify the
product (product development) and the marketing mix (marketing innovation). (Kotler, et
al; 2005)
Decline Stage
This stage is a product life-cycle stage at which a product‘s sales decline. The sales of
most product forms and brands eventually dip. The decline may be slow, as in the case of
oatmeal cereal, or rapid, as in the case of gramophone records. Sales may plunge to
zero, or they may drop to a low level where they continue for many years. As sales and
profits decline, some firms withdraw from the market. Those remaining may reduce the
number of their product offerings. A product‘s failing reputation can cause customer
concerns about the company and its other products. The biggest cost may well lie in the
future. Keeping weak products delays the search for replacements, creates a lopsided
product mix, hurts current profits and weakens the company‘s foothold on the future.
For these reasons, companies need to pay more attention to their ageing products. The
firm should identify those products in the decline stage by regularly reviewing sales,
market shares, costs and profit trends. Then management must decide whether to
maintain, harvest for cash or drop each of these declining products. (Kotler, et al; 2005)
2.5 Key Issues in pricing strategies
Given the importance of pricing in marketing strategy, pricing decisions are among the
most complex decisions to be made in developing a marketing plan. Decisions regarding
price require a tightly integrated balance among a number of important issues. Many of
these issues possess some degree of uncertainty regarding the reactions to pricing
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among customers, competitors, and supply chain partners. Some issues like the firm‘s
pricing objectives, supply and demand, and the firm‘s cost structure, are critically
important in establishing initial prices. Other issues become important after the initial price
has been set, especially with respect to modifying the pricing strategy over time. (Ferrell
and Hartline, 2011)
There is no other component of the marketing program that firms become more infatuated
with than pricing: ‗‗Is our price too high? Is that why our sales are not stronger?‘‘
Conversely, managers might ask, ‗‗Is our price too low? Our sales are up, but are we
leaving money on the table?‘‘ These are common concerns that run through the minds of
decision makers in all firms (Ferrell and Hartline, 2011)
Among the four Ps, price is the only income generator and it is the value attached to a
product. Furthermore, price is the amount of money charged for a product or service. It is
the sum of all the values that customers give up in order to gain the benefits of having or
using a product (Kotler, 2010)
2.5.1 Pricing Objectives
Setting specific pricing objectives that are realistic, measurable, and attainable is an
important part of pricing strategy. There are a number of pricing objectives that firms may
pursue like profit oriented, volume oriented, market demand, market share, cash flow,
competitive matching, prestige and status quo. Remember that firms make money on
profit margin, volume, or some combination of the two. A firm‘s pricing objectives will
always reflect this market reality. Pricing objectives are not always about tweaking price
to increase profit or volume. Sometimes, firms simply want to maintain their prices in an
effort to retain their position relative to the competition. This pricing objective is called
status quo pricing. Although status quo pricing sounds like it involves little or no planning,
the decision to maintain prices must be done after a careful analysis of all factors that
affect pricing strategy. (Ferrell and Hartline, 2011)
Supply and Demand
The basic laws of supply and demand have an obvious influence on pricing strategy.
Although the inverse relationship between price and demand is well-known and
understood (as price goes up, demand goes down), it is essentially a supply-side
perspective. That is, the relationship between price and demand is most often seen from
the marketer‘s point of view. However, the demand-side perspective is often quite
different. Consider what happens when customer demand increases for a particular
product. Does the inverse relationship hold? Do prices fall? Hardly. In fact, during periods
of heavy customer demand, prices tend to stay the same or even increase. Gasoline
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prices over the summer are a good example, as is a new high-tech product in high
demand. (Ferrell and Hartline)
Nature of Pricing Strategies
Price is the ultimate payment in the switch of an offered good or service. This is explained
in other words as the worth or importance associated with a good or service and thus we
can say pricing strategies is a method where different companies establish prices for the
services and products that they provide when penetrating the market and when already
penetrating in one.( Roxer, 2009)
Marketing configuration of a company forms the underlying base of pricing strategies for
instance the non-intergraded competitive pricing.(Yan, 2008).
Various strategies of pricing are coached under guidelines of a couple of resolutions
embracing the financial, commercial and psychological factor. (Fall, 2008).
Innovation and positive movement of pricing strategies and its application as seen
through the positive continuous achievement in sales is always not seen by the external
members of a company. (David & Simonetto, 2005)
In the marketing environment, pricing strategy is a hard and complicated element and has
a necessity to show the supply and demand relations. The available strategies used in
pricing provide a simpler base for firms to attain their fore set objectives, share of the
market and gain index. (Donald, 2004)
2.5.2 Types of pricing strategies
There are 13 strategies of pricing among which include the following Low Price Supplier
Strategy experience curve, Leader Pricing, Complementary pricing, Penetration Pricing,
Price skimming and Premium pricing. (Forman and Hunt, 2005)
A company‘s rate of profitability and retention levels are highly affected by pricing. The
pricing strategies differ variously depending on the available industry, country of
operation, available clients and as well the way companies offer the value of their
products and services which will in the long run determine their productivity.(Huber (2008)
Price-Quality Pricing Strategy is a type of pricing strategy where customers carry an
opinion that products or services that have a high price carry a high level of quality. The
opinions carried in this are always with complex products and are not easy to test but can
be associated with constant use and discovery of value. (Heskett, 2009)
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Bundling and Quantity discount pricing strategy is another pricing strategy where a client
receives a benefit for doing bulk purchases. This is measured through lower per unit
pricing such that a customer pays less when he buys more of the product like a product
being cheaper if he buys a bulk of 5 than buying a quantity of one .This is so important in
helping to create product awareness. (Thomason, 2007)
Version pricing Strategy is commonly used in industries that offer technical services and
products where the same identified product is sold in more than two structures or
conformations. A first trial version of a structure may be sold out at a very cheap value or
given out for free. Loss leader pricing strategy is a strategy where you see the service or
product in order to attract a large number of customer to do purchases who when in the
customer basket are willing to buy the prices products which in the long run leads to
increase of profit. This type of strategy is best applied when there exist customers that do
bulk purchasing at the same time. (Kyle, 2009)
2.5.3 Factors affecting pricing decision
Business organizations, be it small or large their pricing decisions are affected by both
internal (controllable) and external (uncontrollable) environmental factors.
2.5.4 Internal factors affecting pricing decisions
Marketing objectives
Before setting price, the company must decide on its strategy for the product. If the
company has selected its target market and positioning carefully, then its marketing-mix
strategy, including price, will be fairly straightforward. For example, when Toyota decided
to produce its Lexus cars to compete with European luxury cars in the higher-income
segment, this required charging a high price. Sleep Inn and Travelodge position
themselves as motels that provide economical rooms for budget-minded travellers, a
position that requires charging a low price. Thus pricing strategy is largely determined by
past decisions on market positioning. (Kotler, et al; 2005)
Marketing-mix strategy
Price is only one of the marketing-mix tools that a company uses to achieve its marketing
objectives. Price decisions must be coordinated with product design, distribution and
promotion decisions to form a consistent and effective marketing program. Decisions
made for other marketing-mix variables may affect pricing decisions. For example,
producers using many resellers that are expected to support and promote their products
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may have to build larger reseller margins into their prices. The decision to position the
product on high performance quality will mean that the seller must charge a higher price
to cover higher costs (Kotler and Armstrong, 2005)
Costs
Costs set the floor for the price that the company can charge for its product. The company
wants to charge a price that both covers all its costs for producing, distributing and selling
the product, and delivers a fair rate of return for its effort and risk. A company‘s costs may
be an important element in its pricing strategy. Many companies work to become the ‗low-
cost producers‘ in their industries. Companies with lower costs can set lower prices that
result in greater sales and profits. (Kotler and Armstrong, 2005)
Organizational considerations
Management must decide who within the organization should set prices. Companies
handle pricing in a variety of ways. In small companies, prices are often set by top
management. In large companies, pricing is typically handled by divisional or product line
managers. In industrial markets, salespeople may be allowed to negotiate with
customers. In industries in which pricing is a key factor aerospace, steel and oil,
companies will often have a pricing department to set the best prices.
This department reports to the marketing department or top management. Others who
have an influence on pricing include sales managers, production managers, finance
managers and accountants. (Kotler and Armstrong)
2.5.5 External factors affecting pricing decisions
The market and demand
Whereas costs set the lower limit of prices, the market and demand set the upper limit.
Both consumer and industrial buyers balance the price of a product or service against the
benefits of owning it. Thus, before setting prices, the marketer must understand the
relationship between price and demand for its product. In this section, we explain how the
price–demand relationship varies for different types of market and how buyer perceptions
of price affect the pricing decision. We then discuss methods for measuring the price
demand relationship. (Kotler, et al; 2005)
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Competitors‘ costs, prices and offers
Another external factor affecting the company‘s pricing decisions is competitors‘ costs
and prices, and possible competitor reactions to the company‘s own pricing moves. A
consumer who is considering the purchase of a Canon camera will evaluate Canon‘s
price and value against the prices and values of comparable products made by Nikon,
Minolta, Pentax and others. In addition, the company‘s pricing strategy may affect the
nature of the competition it faces. If Canon follows a high-price, high-margin strategy, it
may attract competition. A low price, low-margin strategy, however, may stop competitors
or drive them out of the market. (Kotler, et al; 2005)
Other external factors
When setting prices, the company must also consider other factors in its external
environment. Economic factors such as boom or recession, inflation and interest rates
affect pricing decisions because they affect both the costs of producing a product and
consumer perception of the product‘s price and value. The company must also consider
what impact its prices will have on other parties in its environment. How will resellers
react to various prices? The government is another important external influence on pricing
decisions. Finally, social concerns may have to be taken into account. In setting prices, a
company‘s short-term sales, market share and profit goals may have to be tempered by
broader societal considerations. (Kotler, et al; 2005)
2.5.6 New product pricing strategies
Pricing strategies usually change as the product passes through its life-cycle. The
introductory stage is especially challenging. We can distinguish between pricing a product
that imitates existing products and pricing an innovative product that is patent protected.
Companies bringing out an innovative, patent-protected product face the challenge of
setting prices for the first time. They can choose between two strategies: market-
skimming pricing and market-penetration pricing. (Kotler, et al; 2005)
Market-skimming pricing
Many companies that invent new products initially set high prices to ‗skim‘ revenues layer
by layer from the market, a strategy called market-skimming pricing. Setting a high price
for a new product to skim maximum revenues layer by layer from the segments willing to
pay the high price; the company makes fewer but more profitable sales. (Kotler, et al;
2005)
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Market-penetration pricing
Setting a low price for a new product in order to attract large numbers of buyers and a
large market share. Rather than setting a high initial price to skim off small but profitable
market segments, some companies use market-penetration pricing. They set a low initial
price in order to penetrate the market quickly and deeply – to attract a large number of
buyers quickly and win a large market share. The high sales volume results in falling
costs, allowing the company to cut its price even further.
2.5.7 Existing product Pricing Strategies
Investigating the current prices may result to one of three strategic choices; maintaining
the price, reducing the price, or increasing the price.
Maintaining the prices: If the market segment from which the company drives a big
position of its sales is not affected by changes in the environment, the company
may decide not to initiate any change in its pricing strategy.
Reducing the prices: There are three main reasons for lowering prices.
First, as a defensive strategy, prices may be cut in response to competition. In addition, to
Successfully compete in mature industries; many companies reduce prices, following a
strategy that is often called value pricing. A second reason for lowering price is offensive
in nature. Following the experience curve concept, costs across the board go down by
fixed percentage every time experience doubles. Technology advances have made
possible the low cost production of high quality electronics gear. The third and final
reason for price cutting may be a response to customer needs. During a period of
inflation, all types of costs go up, and to maintain adequate profits, an increase in price
becomes necessary. How much the price should be increased is a matter of strategy that
varies from case to case. (Kotler and Garry, 2007)
2.5.8 Price Bundling Strategy
Bundling also called iceberg pricing refers to the inclusion of an extra margin (for support
services) in the price over and above the price of the product as such. This type of pricing
strategy has been popular with companies that lease rather than sell their products.
Under the bundle strategy, not only are costs of hardware and profits covered, anticipated
expenses for extra technical sales assistance, design and engineering of the system
concept, software and applications to be used on the system, training of personnel and
maintenance also include (Koter and Garry, 2007).
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2.5.9 Pricing Adjustment Strategies
Companies usually adjust their basic prices to account for varies customers‘ differences
and changing situations. Some of the pricing adjustment strategies are; discount and
allowance pricing, segmented pricing, psychological pricing, promotional pricing, value
pricing, geographical pricing and international pricing. (Kotler, 2007).
2.6 Integrated Marketing Communications (IMC)
Integrated marketing communications (IMC) refers to the strategic, coordinated use of
promotion to create one consistent message across multiple channels to ensure
maximum persuasive impact on the firm‘s current and potential customers. Without a
doubt, promotion and marketing communications are the most ubiquitous elements of any
firm‘s marketing strategy. This is not surprising because promotional activities are
necessary to communicate the features and benefits of a product to the firm‘s intended
target markets. Marketing communications includes conveying and sharing meaning
between buyers and sellers, either as individuals and firms, or between individuals and
firms. (Ferrell and Hartline, 2011)
Figure 2: Components of IMC strategy (Ferrell and Hartline, 2011)
Strategic Issues in
Advertising Print
Broadcast Online/Interactive
Wireless Direct Marketing
Sales Promotion Consumer Promotion
Trade Promotion
Personal Selling Account Management
Prospecting Retail Sales
Public Relations Publicity
Press Releases Newsletters
Integrated Marketing Communication
(IMC)
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Integrated Marketing Communications (IMC)
When selecting elements to include in the IMC program, it is important to take a holistic
perspective that coordinates not only all promotional elements but also the IMC program
with the rest of the marketing program (product, price, and supply chain strategy). Taking
this approach allows a firm to communicate a consistent message to target customers
from every possible angle, thereby maximizing the total impact on those customers. The
goals and objectives of any promotional campaign culminate in the purchase of goods or
services by the target market. The classic model for outlining promotional goals and
achieving this ultimate outcome is the AIDA model—attention, interest, desire, and action.
Attention: Firms cannot sell products if the members of the target market do not
know they exist. As a result, the first major goal of any promotional campaign is to
attract the attention of potential customers.
Interest: Attracting attention seldom sells products. Therefore, the firm must spark
interest in the product by demonstrating its features, uses, and benefits.
Desire: To be successful; firms must move potential customers beyond mere
interest in the product. Good promotion will stimulate desire by convincing potential
customers of the product‘s superiority and its ability to satisfy specific needs.
Action: After convincing potential customers to buy the product, promotion must
then push them toward the actual purchase
Along with advertising, sales promotion activities, such as product samples or
demonstrations, are vital to stimulating interest in the product. The enhanced
communication effectiveness of personal selling makes it ideally suited to moving
potential customers through internal desire and into action. Other sales promotion
activities, such as product displays, coupons, and trial-size packaging, are well suited to
pushing customers toward the final act of making a purchase. (Ferrell and Hartline, 2011)
Advertising
Advertising is a key component of promotion and is usually one of the most visible
elements of an integrated marketing communications program. Advertising is paid, non-
personal communication transmitted through media such as television, radio, magazines,
newspapers, direct mail, outdoor displays, the Internet, and mobile devices. Note that
Internet advertising is the fastest-growing medium, while traditional media such as
newspapers, radio, and magazines are struggling with meaningful declines in ad
revenues.(Ferrell and Hartline, 2011)
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Public Relations
Corporate affairs are a collection of strategic activities aimed at marketing an
organization, its issues, and its ideals to potential stakeholders (consumers, general
public, shareholders, media, government, and so on). Public relations are one component
of a firm‘s corporate affairs activities. The goal of public relations is to track public
attitudes, identify issues that may elicit public concern, and develop programs to create
and maintain positive relationships between a firm and its stakeholders. A firm uses public
relations to communicate with its stakeholders for the same reasons that it develops
advertisements. Public relations can be used to promote the firm, its people, its ideas,
and its image and can even create an internal shared understanding among employees.
Because various stakeholders‘ attitudes toward the firm affect their decisions relative to
the firm, it is very important to maintain positive public opinion. (Ferrell and Hartline, 2011)
Personal Selling and Sales Management
Personal selling is the most effective tool at certain stages of the buying process,
particularly in building up buyers‘ preferences, convictions and actions. Compared to
advertising, personal selling has several unique qualities:
It involves personal interaction between two or more people, so each person can
observe the other‘s needs and characteristics and make quick adjustments.
Personal selling also allows all kinds of relationships to spring up, ranging from a
matterof-fact selling relationship to a deep personal friendship. The effective
salesperson keeps the customer‘s interests at heart in order to build a long-term
relationship.
Finally, with personal selling the buyer usually feels a greater need to listen and
respond, even if the response is a polite ‗no thank you‘.
These unique qualities come at a cost, however. A sales force requires a longer-term
commitment than does advertising – advertising can be turned on and off, but sales force
size is harder to change. Personal selling is also the company‘s most expensive
promotion tool. (Kotler and Armstrong,2005)
Personal selling is paid personal communication that attempts to inform customers about
products and persuade them to purchase those products. Personal selling takes place in
many forms. For example, a Best Buy salesperson who describes the benefits of a
Hewlett-Packard laptop to a customer engages in personal selling. So is the salesperson
who attempts to convince a large industrial organization to purchase photocopy
machines. Some types of personal selling are highly complex and relational in nature.
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The complexity of these types of contracts requires a long-term, personal relationship
between salespeople and companies. (Ferrell and Hartline, 2011)
The Sales Management Process
Because the sales force has a direct bearing on sales revenue and customer satisfaction,
the effective management of the sales force is vital to a firm‘s marketing strategy. In
addition to generating performance results, the sales force often creates the firm‘s
reputation, and the conduct of individual salespeople determines the perceived
ethicalness of the entire firm. (Ferrell and Hartline, 2011)
Sales Promotion
Sales promotion includes a wide assortment of tools coupons, contests, price reductions,
premium offers, free goods and others all of which have many unique qualities:
They attract consumer attention and provide information that may lead to a
purchase.
They offer strong incentives to purchase by providing inducements or contributions
that give additional value to consumers.
Moreover, sales promotions invite and reward quick response. Whereas
advertising says ‗buy our product‘, sales promotion offers incentives to consumers
to ‗buy it now‘.
Companies use sales promotion tools to create a stronger and quicker response. Sales
promotion can be used to dramatize product offers and to boost sagging sales. Sales
promotion effects are usually short-lived, however, and are often not as effective as
advertising or personal selling in building long-run brand preference. To be effective,
marketers must carefully plan the sales promotion campaign and offer target customers
genuine value. (Kotler and Armstrong, 2005)
Despite the attention paid to advertising, sales promotion activities account for the bulk of
promotional spending in many firms. This is especially true for firms selling consumer
products in grocery stores and mass-merchandise retailers, where sales promotion can
account for up to 70 percent of the firm‘s promotional budget. Sales promotion involves
activities that create buyer incentives to purchase a product or that add value for the
buyer or the trade. Sales promotion can be targeted toward consumers, channel
intermediaries, or the sales force.(Ferrell and Hartline, 2011)
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2.7 Distribution Strategies
Distribution is the process of planning, implementing and controlling the physical flow of
materials, final goods and related information from point of origin to points of consumption
to meet customer requirements at a profit. (Kotler and Armstrong, 2001)
Distribution is the process of getting products and services from producer to consumer or
users, when and where they are needed. It provides time, place, possession utility and
the transfer of ownership. (Achison, 2000)
Distribution system is the network of people, institutions or agencies involved in the flow
of a product to the consumers, together with the informational, financial, promotional and
other services associated with making the product convenient and attractive to buy and
re-buy.(Shaughnessy, 1992)
Place is also known as channel, distribution or intermediary. It is the mechanism through
which goods and/or services are moved from the manufacturer/service provider to the
user or consumer (Meggison, 1997).
Functions of Intermediaries
The primary role of middlemen is to transform the assortment of products made by
producers in the assortments desired by consumers. Producers make narrow
assortments in large quantities, consumers want broad assortments in small quantities,
discrepancy in quantity and assortment. Producer Specialization in production,
economies of scale etc., therefore wants to produce large quantities but narrow product
mixes. Other functions of intermediaries include: Assuming risk Provide working capital by
paying for goods before they are sold, Information Flow, Financing, Payment and title
flow, Negotiation, Contacts, and Promotion. A producer will use an intermediary when it
believes that the intermediary can perform the function(s) more economically and
efficiently than it can. "You can eliminate the middle man, but you can't eliminate their
functions ―a well-accepted maxim in marketing. (Littler and Wilson, 1995)
Channel Conflict
Channel conflict arises because each member wants to maximize its own profits or
power. Conflicts also arise because of frustrated expectations: each member expects the
other members to act in particular ways, and sometimes these expectations are
unfulfilled. For example, a retailer may expect a wholesaler to maintain large enough
stocks to cover an unexpected rise in demand for a given product, whereas the
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wholesaler may expect the manufacturers to be able to increase production rapidly to
cover such eventualities. (Blythe, 2005)
2.7.1 Selection of Distribution Channels
To determine what the final buyer wants and determine the best way to reach them,
Marketing oriented distribution is determined by the following:
1. Organizational Goals, Objectives (same day delivery), resources and capabilities.
Companies with wide product mixes can sell more directly to the retailers, have
more promotional skills etc.
2. Market Characteristics, Geography, greater distance use more intermediaries,
market density, clustering, market size etc., industrial vs. consumer, Buyer
Behavior, Where?/How? May need creativity
3. Product Attributes, IE Need to provide a service. Perish ability short channels,
storage requirements, space, fashion, size (reduce handling), complexity,
standard.
4. Environmental Forces, i.e. Competition, Technology need to determine the number
of Intermediaries, determine the channel width, intensity of distribution, the
products market exposure (Kotler and Garry, 2007)
2.7.2 Types of Channels of Distribution
Figure 4: Channels of distribution (Blythe, 2005)
Producer Producer Producer Producer
Retailer
Wholesalers
Retailer
Consumer
Retailer
Consumer Consumer
Wholesalers
Agents or Brokers
Consumer
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Products are rarely delivered directly from producer to consumer, but instead pass
through the hands of wholesalers, agents, factors or other middle men. (Blythe, 2005)
2.8 The Concept of Competitive Advantage
A business firm must make unreserved effort to provide its customers with more
advantages than its competitors must in order to be successful. These advantages could
be achieved through the following wining strategies.
Differentiation: because of which the customers find the firms product unique and more
attractive in some way and therefore the customer, is willing to pay premium price. Some
of the attributes firm uses to differentiate their products are:
Product feature for example Philips developed a television that can display two
channels on the same screen.
After sale service convenience and quality, services could be a critical factor in
deciding among alternatives.
Cost leadership: requires achieving a low cost position relative to once competitor. By
targeting broadly defined markets with standard products, firms hope to gain the greatest
possible benefits from economies of scale. Large portion of this R and D budget might be
directed toward process oriented intended to make the product easier and cheaper to
produce.
Market segmentation (focus strategy): producers must recognize that they cannot
appeal to all buyers in the same way. Buyers are too numerous, too widely scattered and
too varied in their needs and buying practices. Moreover, different companies varied
widely in their ability to serve different segments of the market. Rather than trying to
compete in an entire market, each company must identify the parts of the market that it
can serve best. Market segmentation helps the seller to divide the market into distinct
groups of buyers with different needs, characteristics and to develop profiles of the
identified potential marketing segments. This in turn will help to set the competitive
positioning for the product and creating a detailed marketing mix. The best way of
segmenting a market could be based on geographic, demographic, behavioral and
psychographic/lifestyle. (Emawaysh, 2002)
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2. 9 Conceptual Framework
The conceptual framework is designed to show how one element of marketing strategy relate with another in a way that indicates the main process, which is useful to show the course of the study. Target market, Segmentation, Positioning and the marketing mixes are the four major elements of marketing strategy that are very important in attaining organizational goals and objectives.
Figure 5: Conceptual framework
MARKETING STRATEGIES:
Strategy formulation, implementation and evaluation
Segmentation
Targeting
Positioning
Marketing Mix
Distribution
Promotion Price
Product
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CHAPTER 3: RESEARCH DESIGN AND METHOD
3.1 Introduction
This chapter describes and justifies the methodology selected to collect and analyze the
data and address the research questions. The chapter begins with research design. Then
the research approach, research type and method, population and sampling technique,
source and tools of data collection, procedures of data collection, reliability test,
trustworthiness, and method of data analysis, and ethical consideration were addressed
in this section.
3.2 Research Design
Since the general objective of the study is to assess the marketing strategy practice of
Dashen Breweries so the research method was obviously descriptive study. The
researcher chooses this method in order to explore detailed evidence about the problem
and define the problem under the study in a better way. The research approach and
research type are discussed in the next sub section.
3.3 Research Approach
Both qualitative and quantitative approaches were used to obtain the desired results of
the study and to explore detailed evidence about the problems. The purpose of using
mixed-method design is to make the research more comprehensive and to get more data.
Moreover, since both questionnaires and interviews were expected to be there as data
collection instrument, the researcher was required to analyze open ended and interview
questionnaire qualitatively and closed ended questions quantitatively.
3.4 Research Type
The study adopted a case study of research design by using both qualitative and
quantitative method to gather data. Using mixed method allows the researcher to reflect
participants‘ point of view, provides methodological flexibility and collects rich and
comprehensive data. In the course of analyzing the problems, both primary and
secondary data collection procedures were employed. To achieve this goal,
questionnaires, interviews and document reviews were the main tools.
3.5 Research Methods
Research method is “the general approach the researcher takes in carrying out the research project; to some extent, this approach dictates the particular tools the researcher selects. (Leedy and Ormrod, 2005) Sample selection, data collection, data analysis, validity and reliability, trustworthiness, as well as ethical consideration are discussed in the next sub section.
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3.5.1 Sample and Population The target populations of the study were the managers and employees of the marketing
department in Dashen Brewery. The populations of the study were all of the employees of
marketing department (census) including managers who are working incorporate sales
and marketing department. According to Rubin and Babbie (2008), purposive or
judgmental sampling is carried out based on the researchers own knowledge of the
population, its element and the nature of the research aim, in short based on the
researcher‘s judgment and the purpose of the study. Accordingly, the selections of the
respondents were carried out by using purposive sampling research method because no
other departments are concerned about marketing strategies and the researcher took all
the respondents of marketing staffs as a total population of the study. In addition to this,
the data were collected by using interview from marketing manager and regional sales
managers of the company.
3.5.2 Data collection Instruments
In order to gather the data from relevant sources, both primary and secondary data
collection instruments were used. The primary data were collected in the form of personal
interviews with marketing managers and closed and open-ended questionnaires were
also distributed to marketing department staffs. On the part of secondary data, written
documents on corporate strategies and marketing strategies, different reference books,
journal articles, Internet web sites, policies, procedures, and document reports from
Dashen were referred because referring these documents provide more data as input for
the research that is used in analysis part. The information that was collected by using
both instruments was integrated during data presentation and analysis phase.
3.5.3 Method of Data Analysis
The data were collected, analyzed and interpreted by using both qualitative and quantitative techniques. The data collected by open ended and interview questionnaires were analyzed qualitatively. Closed ended questionnaires were analyzed quantitatively by using figures, tables, percentages and likert scale (five point scale) statement computations.
3.5.4 Validity and reliability
Reliability and validity address issues about the quality of the data and appropriation of
the methods used in carrying out the research.
I. Validity: Validity refers to the extent to which an instrument measures what is supposed to measure. Data need not only to be reliable but also true and accurate. If a measurement is valid, it is also reliable (Joppe, 2000). The content of validity of
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the data collection instrument was determined through discussing the research instrument with the researcher experts in the field of study especially the researcher‘s supervisor. The valuable comments, corrections, suggestions given by the research experts will assist the validation of the instrument. A pilot study is defined as a mini version of a research or a trial run conducted in preparation of a full scale study and may be conducted specifically to pre-test a research instrument (Teijlingen & Hundley, 2001). ‗‘…the importance of the conduct of a pilot study as fundamental to any research as it serves the function of helping to detect possible flaws in the measurement instrument‘‘ (Teijlingen & Hundley, 2001) Watson, Atkinson, & Rose, 2007) and whether concepts have been adequately operationalized. This is achieved by pre-testing the instrument on a small number of participants having the same characteristics as those in the main study.
II. Reliability: Reliability refers to the consistence, stability, or dependability of the data. A reliable measurement is one that if repeated a second time gives the same results as it did the first time. If the results are different, then the measurement is unreliable. To measure the reliability of the data collection instruments, an internal consistency technique using Cronbach's alpha were used (Mugenda, 2008). Cronbach's alpha is a coefficient of reliability that gives an unbiased estimate of data generalization. An alpha coefficient of 0.75 or higher indicated that the gathered data are reliable as they have a relatively high internal consistency and can be generalized to reflect opinions of all respondents in the target population (Zinbarg, 2005). Reliability is established either through test-re-test where the same test administered to the same respondents at different times obtains the same results or parallel form reliability when the same test with different wordings or sequence of questions also results in the same data. (Sekaran, 2003) To see whether the data collection instrument was reliable 59 respondents were included in the test. The researcher uses Statistical Package for Social Science (SPSS) software to test the reliability of the data and the result of Cronbach alpha coefficient is portrayed in the following table.
Table 3.1: Reliability Statistics of Cronbach‘s Alpha
Reliability Statistics
Cronbach's Alpha Number of Items
.821 9
3.5.5 Trustworthiness
Unfortunately, many qualitative researchers have neglected to give adequate descriptions in their research reports of their assumptions and methods, especially regarding to data analysis. It has contributed to the criticisms of bias from the eyes of the number believers. This section tries to discuss about ensuring trustworthiness in Qualitative Research.
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Trustworthiness becomes a matter of persuasion whereby the scientist is viewed as having made those practices visible and therefore auditable. Validity in qualitative studies should be linked not to the truth or value as they are for the positivists. A study is trustworthy if and only if the reader of the research report judges it to be so. Trustworthiness has been further divided into credibility, which corresponds roughly with the positivist concept of internal validity; dependability, which relates more to reliability; transferability, which is a form of external validity; and conformability, which is largely an issue of presentation. (Sandelowski, 1993)
These four basic issues of trustworthiness in qualitative research are discussed below:
a) Credibility: One of the key criteria addressed by positivist researchers is that of internal validity, in which they seek to ensure that their study measures or tests what is actually intended. ―…the qualitative investigator‘s equivalent concept, i.e. credibility, deals with the question, ―How congruent are the findings with reality?‖ (Merriem, 1998) Thus, the researcher will make sure whether the study really measures what is actually intended.
b) Transferability: external validity ―is concerned with the extent to which the findings of one study can be applied to other situations‖. In positivist work, the concern often lies in demonstrating that the results of the work at hand can be applied to a wider population ( Merriem, 1998)
c) Dependability: In addressing the issue of reliability, the positivist employs techniques to show that, if the work were repeated, in the same context, with the same methods and with the same participants, similar results would be obtained. However, the changing nature of the phenomena scrutinized by qualitative researchers renders such provisions problematic in their work. (Marshall and Rossman,1999)
d) Conformability: Patton, (1990) associates objectivity in science with the use of instruments that are not dependent on human skill and perception. He recognizes, however, the difficulty of ensuring real objectivity, since, as even tests and questionnaires are designed by humans, the intrusion of the researcher‘s biases is inevitable. The concept of conformability is the qualitative investigator‘s comparable concern to objectivity.
3.5.6 Ethical consideration
There are several factors that make conducting research a challenge and problematic. Of
which accessibility of required information as per requirement in size and depth, financial
short comings, inadequacy of time to do profound and extensive consideration of
information and analysis, and so on may cause the conducting of the research as
satisfactory as needed a challenge. (Bickman and Rog, 2009) With this in mind the ethical
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considerations such as ethical ramification, harm to others, privacy concerns, voluntary
participation and deception should not be viewed as more important at any one particular
time in the process but rather they apply throughout the research.
While conducting the research the respondents were informed about the purposes of the
study before distributing questionnaire and being interviewed. The researcher not only
seeks to obtain consent from the participants but also is required to inform prospective
respondents that participation is voluntary. The respondent‘s the right to privacy and
anonymity was respected. No personal information of the respondents was revealed to
the public. The researcher also makes sure there will not be any physical, social or
psychological harm to the respondents due to their participation in the research.
Questionnaires were distributed and interviews were conducted only when the researcher
got the consent from the respondents.
3.6 Summary
This chapter described the research design and methodology used in this research and
raised issue like research design, research approach, research type, research method,
sample and populations, data collection instruments, method of data analysis, validity and
reliability, trustworthiness and ethical consideration in research. Since the general
objective of the study is to assess the marketing strategy practice of Dashen Breweries so
the research method was obviously descriptive study. Both qualitative and quantitative
approaches were used to obtain the desired results of the company and to explore
detailed evidence about the problems.
The study adopted a case study of research design by using both qualitative and
quantitative method to gather data. Purposive sampling was used in the research and the
populations of the study were all of the employees of marketing department including
managers who are working in corporate sales and marketing department. In order to
gather the data from relevant sources, both primary and secondary data collection
instruments were used. The data were collected, analyzed and interpreted by using both
qualitative and quantitative techniques. Reliability and validity address issues about the
quality of the data and appropriation of the methods used in carrying out the research.
Ethical considerations such as ethical ramification harm to others, privacy concerns,
voluntary participation and deception should not be viewed as more important at any one
particular time in the process but rather they apply throughout the research.
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CHAPTER 4: DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1 Introduction
In this section, the overall marketing strategy practices of Dashen Brewery will be
discussed. The success of the company‘s marketing strategy depends on the
environmental conditions.
Hence, it can readjust itself according to the conditions. This data analysis and
interpretation part is composed of different data and information that were gathered
through secondary data (written documents) and primary data (personal interviews with
marketing managers and the result of questionnaires from employees‘ opinions).
The focus of this section is mainly on the marketing strategy practices of the company
with respect to Target marketing and marketing mixes (Product strategy, Pricing,
Place/distribution and Promotion strategy) that constitutes for marketing strategy
applications/practices.
4.2 Profile of Respondents
As Table 4.1 shows, the questionnaires were distributed to 65 employees of marketing
department staffs. Among these 59 (90.76%) were kind enough to fill the questionnaires
properly and return them on time. The rest 6 (9.24%) were failed to complete and return
the questionnaires. All the returned questionnaires were completed and considered for
the analysis.
Table 4.1: Total Number of questionnaires distributed, returned and unreturned
Questionnaires Number
Percentage
Returned 59 90.76 %
Unreturned 6 9.24 %
Total distributed 65 100 %
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4.2 Questionnaire Analysis
4.3.1 Demographic Characteristics of the Respondents
Table 4.2: General information of respondents
From the above information about 72.88 % employees were male and the least amount 27.11 % staffs were females. This implies that majority of the marketing department staff is mainly dominated by male which shows there is a big gender disparity in the company. Employees whose age are between 18-25 account 13.6 % The age of majority employees were between 26 and 35 years old that accounts 69.46%. Employees who
Description of respondents
Response
Number Percentage
A) Gender
Male 43 72.88 %
Female 16 27.11 %
Total 59 100 %
B) Age (Years)
From 18-25 8 13.6 %
26-35 41 69.46 %
36-50 10 16.94 %
51-60 -
Total 59 100 %
C) Educational level
From Grade 1-12 complete -
Certificate -
Diploma -
BA/BSC 48 81.36 %
MA/MSC/MBA 11 18.64 %
PhD -
Total 59 100 %
D) Position
Senior manager 4 6.80 %
Manager 6 10.15 %
Staff 49 83.05 %
Total 59 100 %
E) Service years in Dashen
1-5 years 14 23.7 %
5-10 years 39 66.10 %
10-15 years 4 6.77 %
More than 15 years 2 3.38 %
Total 59 100 %
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were between 36 to 50 years are 16.94 %. This indicates that there is a potential advantage for working by majority between the age of 26-35 that advantages the company‘s personnel to be cool tempered and average experienced staff who can perform with pre-informed experiences on how effectively they function in the marketing activity of the factory. Besides, the 13.6% of the staff being young can put positive effect on the company‘s marketing efficiency over time having added trainings and personal experiences that help achieve the company‘s objectives. The age of staff as mentioned above being matured enough to consider practical situations on marketing trend through average years of experiences can contribute a lot to achieve future objectives of the company‘s marketing strategy and as the employees are more eager to work. When we saw the level of education all of the respondents were Degree and/or second degree holders of which 81.36% were first degree whereas 18.84% were second degree holders. Here, we can conclude that all the respondents are educated and well trained. This implies that it is a good advantage for marketing strategy application and gives the organization a competitive advantage because nowadays the Brewery industries are in a highly competitive market. In addition to this all respondents were expected to understand the questionnaire very well and respond correctly. With respect to the position of the respondents, 83.05 % of them fell in lower level employees and the lowest numbers fall in senior managers and managers. This indicates that, it is a fact that in every organization there are few managers and many employees that signify a few manager plans the activity and ordered the lower level employees of the company to do it. To this end, the highest number of respondents (66.10%) have experience of 5 to 10 years in the company and 6.77% of the respondents had 10 to 15 years of experience and 23.7% respondents had 2 to 5 years of experience and the rest 3.38% had more than 15 years of experience in the company. The highest numbers of respondents‘ years of experience shows they have average years of experience and some of whom used to work in the company‘s first plant in Gondar and relocated to Debre Birhan and the rest have already been working in Addis Ababa sales centers before the inauguration of Debre Berhan plant. There is relatively lower employee turnover that reduces cost of hiring new employees and saves time. As a result, the company can achieve its objectives and can maximize its profit. Generally, senior marketing staffs are knowledgeable about the marketing strategy practices and activities of the company. 4.3.2 Questions related to the company’s target market Table 4.3: Employees opinion towards target market
Target customers
Frequency
Percentage
Individual customers 37 62.71 %
Hotels, Restaurants and groceries 16 27.11 %
Other intermediaries 6 10.16 %
Total 59 100%
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The one and most crucial activity of the marketing strategy is the selection of target markets or the identification of the products to whom produced. Companies use the target marketing to their tailor for specific markets. As the above table (Table 4.3) shows, 62.71 % of the respondents said that the target markets are individual customers. 27.11 % of the respondents replied hotels, restaurants and groceries whereas the rest of 10.16 % of the respondents said the target customers are other intermediaries like retailers and whole sellers. Thus, the company‘s main target customers are individuals who have the interest of drinking bottled beer and draught beer. Moreover, as the researcher got additional information from the interviews of the managers, as a policy of the company, the main target customers are any individual:
Individuals who are more than 18 years old; hence, below 18 years old, they were tanagers and not allowed to drink beer at this stage.
People who have a good income level People who have not any medical problems People who are not prohibited by religion People who are living in city (for city residents), this implies that those target
customers are more users/drinkers of the company products.
4.3.3 Questions related to market segmentation Table 4.4: Responses in relation with the basis of market segmentation
Basis of market segmentation of Dashen Brewery
Number
Percentage
Geographic location 30 50.84 %
Psycho graphical or Lifestyle Segmentation 7 11.86 %
Economic situation 5 8.47 %
Demographic 17 28.81 %
Total 59 100 %
The table indicates that the majority of respondents said that the bases of the company‘s market segmentations are geographic location and demographic segmentation which accounts 50.84 % and 28.81 % respectively. 11.86 % respondents answered as the basis of segmentation is psychographic or Lifestyle Segmentation and the least number (8.47%) of respondents said that it is based on economic situation. From this responses, we can concluded that the basis of the company‘s market segmentation is the geographic location that can take many forms i.e. from urban to rural, north to south, warm areas to cold areas etc.
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Besides, the managers said that the basis of the company market segmentation is based on the facility of infrastructures like water, electricity, telecommunication, cultures, values, religion and urban areas. It is believed that, even though all the alternatives were the basis of market segmentation, geographic segmentation is the common form of the company‘s market segmentation mechanism. 4.3.4 Questions regarding the company’s marketing mix strategies Table 4.5: Opinion of employees towards the company‘s marketing mix strategies
Company‘s marketing mix to appeal
marketing strategy
Numbers
Percentage
Product - -
Price - -
Promotion -
Place - -
All the above mixes 59 100 %
Total 59 100 %
Marketing mixes are controllable elements of the company‘s products, prices, promotion Place/distribution strategies that are essential for the marketing strategy implementation. As shown in table 5, all employees (100%) responded the company exploits all the 4Ps of marketing mix elements. The response implies that the company uses all the 4Ps marketing mix elements for the purpose of marketing strategy implementation because each ingredient affects the other and each mix must be suitable to the target customers and to maximize its profits, gain market share and for competitive advantages. 4.3.5 Issues about the product quality Table 4.6: Employees‘ response in relation to the company‘s product quality
The company product‘s quality
Number Percentage
Very good 59 100%
Good
Medium
Poor
Very poor
Total 59 100%
Product qualities must exceed from the offering itself. As indicated in the table, all respondents replied the company‘s product qualities are quite surely very good. 100 % of the respondents believe the company products are very good as the employees are also internal customers of the company and they can be considered as external customer as
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they used to drink Dashen Brewery. The analysis reveals that the company provides quality products. Furthermore, the managers also witnessed about the company‘s product quality. They said, firstly the company provides two types of products (i.e. bottled beer and draught beer) .These products are produced with excellent qualities because in almost all stages of production, the company gives a high emphasis for quality to increase market share. In each stage of the fermentations, there are laboratory technicians who controlled the quality of the Brewery. The company also uses best technology available. The company product qualities in the production process and marketing perspectives are summarized as follows: Quality control from production processes point of view: quality in Dashen brewery has checked at every phase of production process. That is quality control was made at the very early stage of receiving raw materials through inspection centers. Most of the quality control were used to very technical statistical control methods identified using visual machines that shows problem or defect case of production process while the activity was on the progress. Quality from market or customer perspective with respect to color, clarity and foam of beer: Here, the important point is that quality perspectives should be based on customers‘ preference, not on internal evaluation. So, the ultimate objectives of product quality should be to delight the customers in every way possible. Brand, price, promotion, distribution and quality are the main drivers that influence the purchasing decision of the Dashen beer drinker. Market experience with poor quality of beer has focused the consumer on some key parameters. In addition to the products quality, the customers‘ primary reason for buying and using the company products are:
Proximity of supply/availability Effective promotion Lower price than others Fits with the customer‘s preference
4.3.6 Question related to the affordability of the company’s products Table 4.7: Opinions concerning the prices of the company‘s products
Prices of the product Number Percentage
Very cheap
Cheap
Affordable 59 100 %
Expensive
Very expensive
Total 59 100%
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As far as the theory is concerned, a large number of internal and external factors are examined before prices can be set. As per the response, 100% of the respondents revealed that the pricing strategies of the company‘s products are affordable and the response implies that the company pricing strategy is reasonable and affordable as a result most individual customers can handle this price. However, the marketing managers were revealed that the company has not any written pricing policy. The prices of the products are depends on different factors like:
Transportation charges: Costs are incurred by transporting inputs and distributing the final products
Competitors‘ costs: costs incurred in order to stand out competitors resulting in different pricing by competitors‘ pressure.
Economic factor: inflation and deflation affects the pricing strategy Gross profit costs: a margin that the company maintains in order to gain and
survive after covering its direct costs. Overhead costs: costs that are incurred for different marketing activities, wages,
salaries etc Net profit: the ability of paying the owners in the form of dividends Direct costs: costs that are incurred by raw materials, taxies, machineries etc
Generally, the pricing strategy is not in a single way because there is a highly turbulent environment and the price also will change according to the conditions. The company like any other organization, prices its products to maximize its profits or the price must cover the whole costs and should gain some profits. It works hard to lower its production, overhead and administrative costs by cutting redundant operations, increase efficiency and productivity. 4.3.7 Issues about the availability & accessibility of the company’s products Table 4.8: The Company‘s products availability and accessibility
Product availability and accessibility Number Percentage
Excellent 46 77.97 %
Very good 10 16.94 %
Good 3 5.08 %
Poor - -
Very poor - -
Total 59 100%
Distribution strategies are concerned with the channels of a firm that employ to make its goods available to customers. As table 4.8 depicts, 77.97 % of the respondents said, the availability and accessibility of the products are excellent 16.94 % replied very good and 5.08 % of the respondents responded as it is good. The response implies the distribution system of the company is
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brilliant and determines the product's marketing presence and the buyers' accessibility to the product. Thus, products availability is so nice and buyers can get the product easily in almost everywhere. 4.3.8 Inter-departmental communications Table 4.9: Communication effectiveness between the departments
Communication effectiveness between marketing and other departments
Number Percentage
Very good 54 91.53 %
Good 6 10.16 %
Somewhat good - -
Poor - -
Very poor - -
Total 59 100 %
Effective communication between departments is essential to accomplish strategic objectives easily. The above table shows that 91.53 % of the respondents reflected that the communication effectiveness between marketing and other departments are very good. The remaining 10.16 % said it is good. This replies the marketing department of the Dashen Brewery has a positive relationship and communication with other departments. This positive communication helps the department to accomplish the marketing strategy practices effectively and also reduces costs as well as saves time. 4.3.9 Product selling process Table 4.10: The selling process of the company products
Process of selling the products Number Percentage
Direct personal selling 8 13.55 %
Direct online selling
Indirect through the channels 51 86.44 %
Word of mouth
Telemarketing
Total 59 100 %
Table 4.10 shows about 86.44 % of the respondents agreed with the selling mechanism of the product is done by through indirect channels. The remaining 13.55 % answered that the selling process is through direct personal selling. The implication of selling for the company product is mainly through indirect channels. These indirect channels are intermediaries/agents who address the products from the producer to the consumers. Dashen Brewery has its criteria to select the best intermediaries such as; they must have financial capacity, skilled and experienced manpower, necessary logistics (or
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transportation), they must be legal or licensed, has storage capacity, well structured, and reputed. They should also be capable of maintaining closer contact with the company and different roots under its chain. 4.3.10 Question about marketing strategy practice Table 4.11: Opinions of employees regarding marketing strategy practices
Items Responses Total I am confident that I can perform my
job effectively. Strongly agree
Agree undecided Disagree Strongly disagree
Total 34 11 9 5 - 59
Weights 5 4 3 2 1 15
Percentage (%) 57.62 18.64 % 15.25 % 8.47 - 100 %
Weighted frequency 170 44 27 10 - 251
Calculated weighted mean 4.25
Table mean 3.0
It is clear that the table shows, the weighted frequency which accounts 4.25 is greater than the table mean which is 3.0. The majority of the respondents (57.62 %) who said Strongly Agree and 18.64 % said Agree and perform their duties effectively. 8.47% of the respondents responded that they disagree with the statement. The rest of 15.25 % preferred to stay in undecided. This implies that the employees can perform the marketing strategy practices of the company effectively. Hence, the Marketing strategies are the means by which the marketing objectives will be achieved, the employees and managers of the marketing department are genuinely performing their duties to achieve the company‘s objectives. They are also committed for their work. Hint:
Weights: (in a 5 point scale likert, the weights are given from 5 to 1/from strongly agree to Strongly Disagree).
Weighted frequency: Calculated by multiplying the each response by the weights. Weighted mean: weighted frequency divided by total respondents. Table mean: the sum of each weights divided by five.
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Fig 5: Company‘s overall marketing strategy
As can be observed from the above figure, almost all the respondents witnessed about the marketing strategy effectiveness. They responded that the marketing strategy of the company is sufficiently effectual. This implies the overall marketing strategy of the company accomplishes its duties with in a given constraints and the marketing strategy practices are successfully achieved its objectives. 4.3.11 The company’s means of advertising Table 4.12: The Company‘s advertising strategy
Best strategy of advertising Number Percentage
Media (TV, Radio, Newspaper) 24 40.6 %
Word of mouth 5 8.47 %
Free sampling 16 27.11 %
Internet 4 6.77 %
Billboard 10 16.94 %
Total 59 100 %
The table clearly reveals that the best strategy of advertising is through media communication (TV, Radio, newspaper) as 40.6 % of the respondents replied and 27.11 % responses filled that the currently the finest advertising strategy is free sampling. 16.94 % of the respondents said the best advertising strategy of the company is through billboard. 8.47 % replied that the best strategy is word of mouth. The remaining 6.77% responded as the preeminent way of advertising means is through internet websites. From this we can concluded that the best way of advertising means of the company‘s products is through media advertisement. This media advertisement includes TV shows
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the facial expression, Radio reaches at least in all regions, and newspapers. Generally advertising can reach geographically dispersed buyers efficiently. 4.3.12 The company’s promotional tools effectiveness Table 4.13: Appropriateness of the company promotional tools
Effectiveness of promotional tools Least Effective (1) Effective (2) Most Effective (3)
Advertising - - 20 33.89 % 39 66.10 %
Personal Selling 3 5.08 % 51 86.44 % 5 8.47 %
Sales Promotion - - 24 40.67 % 35 59.32 %
Public relation 5 8.47 % 26 44.06 % 28 47.45 %
The above table reveals, as a majority of the respondents replied advertising; sales promotion and public relations are the most effective mechanisms of the company‘s promotional tools and the other majority of respondents indicate that personal selling is effective. These all indicate the company‘s promotional mix strategies are vital for the marketing of products. It creates a good image for the Brewery and gained popularity as the company‘s perspectives of quality products. Moreover, the managers underlined about the promotional tools as the company gives attention for it and go beyond using Medias or vehicles; it also gives emphasis for social marketing activities like:
Constructing roads, schools, clinics, Bridges, contributing for public stadium construction, drinking water for some rural community etc
Participating in HIV/AIDS prevention Contributing to popular events by means of sponsoring various exhibitions, music
festivals, public gatherings, religious events, research forums etc. 4.4 Interview Analysis To gather more information about marketing strategy practices of Dashen Brewery, interview questions were forwarded to the marketing managers and senior managers of the company. Accordingly the interviewee‘s responses to the questions are depicted briefly as follows. However, most interview responses are presented and analyzed in the questionnaire analysis part as a supportive response. 1. Regarding the competitors and the marketing strategies designed to win the
competitors Currently, there are a number of competitors in the market, such as; St. George, Harar, Meta Abo and Bedele beers, walya beer, Heineken, Three other beer factories, Habesha Brewery in Debre Berhan, Amhara Region; Raya Brewery in Tigray region; and Kangaroo Beer in Mojo, Oromia region.
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This implies that there is an intensive competition in the market. The Dashen Brewery Company is still doing well even if the market share decreased from previous years due customers refusal to buy the because of the political problems and the company‘s affiliations to the government and however customers refusal to buy the product is not due to quality problem. For example, beyond delivering quality products and selecting best partners, Dashen Brewery marketing strategy focuses on implementing an efficient distribution network along with creative and innovative marketing. It gives special attention in training and upgrading the skills and competence of employees and partners. Furthermore Dashen Brewery has contributed a lot in social activities such as HIV/AIDS, sports, urban sanitation, contributing for public stadium and road construction, participate in the development of arts and support war victims to be a winner in the market. 2. The overall marketing strategy of the company in relation to promote modern
marketing and to achieve the company‘s objectives.
As per the interviewee replied, modern marketing is a complex practice that involves the production of quality and standard products, the establishment of various and efficient distribution networks, popularizing the product with fair prices and delivering continuous services after distribution. In this connection, Dashen Brewery has done a lot with regard to marketing strategies of its products. The marketing strategy of the company is effectively practiced and it is customer oriented. This indicates the Brewery‘s marketing strategy is effectively implemented by its employees to achieve its objectives because the workers showed great commitment and dedication to keep the Brewery and its product popular. These strategies will effectively accomplished by improving the type, quality and quantity of the products, by discarding all out dated machines and substituted them with modern and state of the art technologies, and by using the same bottles used by all modern Breweries and these do not get broke, bored or eroded easily: the bottles are also distributing in strong and handy creates. The company also implementing the marketing strategies effectively by advertising the product by erecting artistic notice board in towns, at main public squares, sight catching places, major outlets and inlets, public service stations and on vehicles, by using modern distribution networks to sufficiently supply and distribute to all parts of the country at an affordable prices, by contributing to popular events by means of sponsoring various exhibitions, music festivals, public gatherings, religious events, research forums, mass media programs etc and by providing training in the country and abroad, to production, technical and marketing personnel and thus improving their capability and capacity. The managers also explained that there are marketing strategy check lists which facilitate the marketing strategy practices to be implemented in effectively. These are: by define what the company is, identify the products that the company provides, identifies the target buyers/end users, determine whether the company will be a market category leader, follower, challenger, or niche player, and describes the unique characteristics of the products that distinguish them from the competition, define whether the pricing will be above, below, or at parity with the competitors and establish whether the company will
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lead, follow, or ignore changes in competitors' pricing, identify the distribution channels through which the products will be made available to the target market/end users, describe how advertising and promotions will convey the unique characteristics of the products, describe any research and development activities or market research plans that are unique to the business, describe the image or personality of the company and its products. These shows the employees can accomplish their duties easily by referring the marketing strategy check lists as a result the marketing strategy of the company will be implemented successfully. 3. Problems of marketing strategy practices/implementation
In fact when you run a business, everything might not be easily accomplished. Likewise the company faced with some problems while implementing the marketing strategies. The interviewee forwarded the following problems regarding the marketing strategy practices/implementation. These are:
Infrastructure problem: it is the major problem which hampers the company‘s marketing strategy to not to implement well. With any facility of infrastructures (like roads to transport beers, electricity to stay it with a refrigerator, water, telecommunication etc.), it will be very difficult to address for all regions.
Economic problem: as we know the income of individuals are not equal, some may have good income, in the contrarily some may not have enough money even to eat bread. Due to these financial problems, all people may not be drinking our beer/draught.
Political problem: Due to the country‘s current and ongoing political problem and the company‘s affiliation to the government is somehow affecting the implementation of marketing strategies
Intensive competition: there are direct/substitute/local competitors in the market. These competitors may affect our marketing strategy.
Shortage of raw materials: sometimes there is a shortage of raw materials when the rain is not enough for malt production.
Seasonality: there is some seasonality of consumption of beers. For example, in the fasting season most people may not drink alcohol beverages. So, during this season there will be less consumption of beer/draught.
Sociocultural problems: these are cultural entities like norms, religious and values which encumbers the marketing strategy to implement effectively. For example, some religions prohibited alcohol drinks including Dashen beer; some cultures have their own habits of drinks like areki (katikala), teji, tella, bukri etc. These all may affect the marketing strategy practices.
Awareness creation for the customers Shortage of supplies, there is a high demand in the market High cost of advertising program
These all implies that the company has faced a problem of implementing the marketing strategies and these problems may hinder the strategies to not to achieve the objectives of the company successfully.
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4. Future plan of Dashen Brewery
According to the managers, as a future plan, Dashen Brewery is planning to expand production volume from its current capacity 3 million hectoliter (2 million hectoliter from Debre Birhan plant and 1 million hectoliter from Gondar plant:) to 4 million hectoliter. The beer market in Ethiopia is expanding day to day. Currently Dashen Brewery is producing 3 million hectoliters of beer (1 hectoliter is equal to 100 liters) is consumed per year in Ethiopia. Before the Debre Birhan plant started production, it was only 1 to 2 million hectoliters of beer had been produced by the Gondar plant. Currently the Gondar plant is not producing at full capacity due to local unrest and it is only producing 1 million hectoliter and the rest 2 million hectoliter has been produced by the Debre Birhan plant. There is a shortage of beer in the market today. This reveals that there is a high demand of beer in the country, Ethiopia. To fill the gap between the demand and supply of beers, Dashen Brewery is planning to increase its production from 3 million hectoliter to 4 million hectoliters starting from June 2018. 5. The company‘s business strategy The company‘s overall business strategy is not limited to the specific strategy. By analyzing the internal, external and SWOT matrix, the Brewery will design its business strategy as: differentiation: by making the products unique to the customers and making attractive to pay premium price, cost leadership: the company provides the products in lower prices than competitors. Large portion of R&D budget is directed towards process oriented intended to make the product easier and cheaper to produce and focus strategy: by dividing the market in to distinct groups of the buyer, the company can compete the market because buyers are too numerous, too widely scattered and too varied in their needs and buying process. So, it is difficult to address for all buyers in the same way. This indicates that Dashen Brewery uses a combination of different business strategies to achieve its target. 6. Distribution strategy of the company ―Quality product is the key to the company success‖ said the marketing and sales managers of the Brewery. ―And as a result, everyone is willing to carry out our products.‖ they added. This shows that once quality product is produced, it will not have any problem to distribute it and Dashen Brewery produces quality products and distributes it through direct and indirect channels. An agent is assigned to each market or region or a big territory. For an agent to be selected by the company, it must have financial capacity, skilled and experienced manpower, necessary logistics (or transportation), it must be legal or licensed, has storage capacity, well structured, and reputed. The agent should also be capable of maintaining closer conduct with the company and different roots under its chain.
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CHAPTER 5: SUMMARY, CONCLUSION AND RECOMMENDATION 5.1 Summary As the objective of the study is to assess the marketing strategy practiced in the Dashen
Brewery S.C. The study is designed mainly to deal with how marketing mix, market
segmentation and target marketing are used in order to enhance, maintain and attract
customers and to identify how these tools are aligned with marketing strategy of the
company.
The company‘s overall product quality, marketing and distribution strategy, use of modern
and computerized machinery, employing of trained and experienced personnel, location
effectiveness, publicity, long and short term plans and determination to reshuffle
strategies on every aspect whenever needed to maintain continuity of company, social
involvement of company to contribute to the wellbeing of nearby community, over all
contribution of country‘s economic development, etc., are more or less considered and
data is analyzed to the extent the feasibility of several research conducting factors allow.
As a result the following findings are singled out from the study conducted.
The company‘s product quality is somewhat excellent no matter what there are
competitive companies with comparable demand of customers
The prices of company‘s products are accessible and affordable however the
distribution efficiency and reachability of product as wide as it should be isn‘t
efficient enough.
Readjustment of marketing strategy on reaching areas where other competitors
reach doesn‘t seem comprehensive.
There is very coherent Communication effectiveness between departments.
The most effective means of promotion were advertising, sales promotion and
public relation
The company‘s most widely used means of advertising are (TV, Radio,
Newspaper), Free sampling and Billboard
The company used all the 4Ps of marketing mix element in the marketing
strategies.
The company‘s bases of market segmentation is Geographic, Demographic,
Psychographic and behavioral
The marketing department of the company puts in to practice updated marketing
strategy more or less.
The company faced problems like infrastructural, economic, political, intensive
competition, shortage of row material, seasonality of consumptions, high cost of
advertising and other related problems while implementing marketing strategy
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The company has future plan of expanding its production volume from 3 million
hectoliters of beer to 4 million hectoliter starting from June 2018
5.2 Conclusion The main conclusions of the study in relation to each of the marketing strategy elements and the associated follow up actions considered to be needed are given below. Marketing strategies are the means by which the marketing objectives will be achieved. The employees and managers of the marketing department are genuinely performing their duties to achieve the company‘s objectives. The smooth communication flow between marketing and other departments are the main important issue for the success of the work. Dashen Brewery employs each of the marketing strategy elements to achieve its objectives. Those elements are selection of target customers, segmentation strategies and marketing mix strategy elements. Selection of target customers is a fundamental activity of the marketing strategy in Dashen Brewery. The company provides its products to those individuals who are more than 18 years old, who have good income level, who have not any medical problems and to whom for city residents. This shows that those target customers are more users of the company products. Market segmentation is the activity of subdividing the market along with some commonalities, similarity or kinship. It is also classified based on the customer characteristics such as demographic, geographic, behavioral and psychographic or lifestyle segmentation. However, among those segmentation bases the company uses geographic location as a major form of segmentation variables. In addition to geographic segmentation, the company market segmentation is based on the facility of infrastructures like water, electricity, telecommunication, cultures, values, religion and urban areas. Dashen Brewery exploits all the 4Ps of marketing mix elements to achieve its target. These marketing mix elements are product strategy, price, promotion and place/distribution strategy. These are vital to implement the marketing strategy effectively inseparable because each mix affects the other. Therefore, all the mixes are essential for the company to achieve its customer requirements. The Brewery provides two types of products such as; bottled beer and Draught beer. These products are produced with excellent qualities because in almost all stages of production, the company gives a high emphasis for quality. In each stage of the fermentations, there are laboratory technicians who controlled the quality of the Brewery. The company also uses the best technology to add quality to the products. To sum up, quality product is the key to the company‘s success. In terms of the pricing strategy, Dashen Brewery sets the fair pricing strategy for its customers. The objective is to maximize its profits. It has not any written pricing policy as
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a result the prices of the products are depends on different factors like; transportation charges, Competitors‘ costs, Economic factors, Gross profit costs, Overhead costs, Net profit, Direct costs. Generally, the pricing strategy is not in a single way because there is a highly turbulent environment and the price also will change according to the conditions. The company like any other organization, prices its products to maximize its profits or the price must cover the whole costs and should gain some profits. But the company works hard to lower its production, overhead and administrative costs by cutting redundant operations, increase efficiency and productivity Promotion strategy is also an essential tool for the practice of the marketing strategy of the company. The company promotional tools are advertising, personal selling, sales promotion and public relation. The Dashen Brewery promotes its products by means of erecting artistic notice board in towns, at main public squares, sight catching places, major outlets and inlets, public service stations and on vehicles etc and contributing to popular events by means of sponsoring various exhibitions, music festivals, public gatherings, research forums, religious events etc. The company‘s promotional mix strategies create a good image for the brewery and gained popularity as the company‘s perspectives of quality products. Moreover, the company gives emphasis for social marketing activities like; constructing roads, schools, clinics, Bridges, contributing for the construction of public stadium etc and participating in HIV/AIDS prevention as major promotional tools. The best way of advertising means of the company is media advertisement. This media advertisement includes TV, Radio and newspapers. Distribution strategies are concerned with the channels of a firm that employ to make its goods available to customers. The distribution system of the company is brilliant and determines the product's marketing presence and the buyers' accessibility to the product. Thus, products availability is so nice and buyers can get the product almost everywhere. The selling processes of the products are mainly through intermediaries. Dashen Brewery has its own criteria to select the best agent such as; they must have financial capacity, skilled and experienced manpower, necessary logistics (or transportation), they must be legal or licensed, has storage capacity, well structured, and reputed. They should also be capable of maintaining closer contact with the company and different roots under its chain. Even though the marketing strategies of the company are effective, there are some problems that the company faced. These are; Infrastructure problem, Economic problem, Intensive competition in the market, Shortage of raw materials, Seasonality of consumption, Sociocultural problems and the time and cost of awareness creation for the customers.
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5.3 Recommendation Even though the marketing strategy of Dashen Brewery is practiced effectively by employees and managers, it has some problems. Therefore, the study recommends the following points based on the analysis;
A company, whether it is a business or nonbusiness, needs to have a mission, vision statement or reason for being came in to existence. However, Dashen Brewery does not have those statements. Therefore, the company should develop and put its mission, vision and value statements for all stakeholders. Since these statements are a frame for the marketing strategy activities to be achieved in the long run.
What makes the most economic sense, what makes the most community sense,
and what makes the most common sense and constitutes the highest and best use of marketing strategy is to simply let includes all the parameters of the population. It is to mean that the target customers of the company, the one who are above 18 years old and not prohibited by religion. The company simply ignores less than 18 years old and religious prohibited customers. So, it is better to include those customers by producing Alcohol free Breweries.
Currently, there is a high demand and shortage of supply of Breweries in the
market. Therefore, the company should work more to fill the gap between the imbalances of demand to supply requirements and recognize that they can no longer take their customers‘ loyalty for granted, and need to adopt ongoing marketing strategies to satisfy the demand of the customers‘ requirement and to stay ahead of their competitors.
The Marketing Mix Analysis has the dignity to help the company implement the
right marketing strategies to satisfy and penetrate the company‘s customer groups, which is phrased as target markets. Therefore, the company should constantly alter the sub elements of each marketing mix to successfully compete with its competitors and offer the greatest value to its customers.
In the research project, the researcher has assessed the marketing strategy
practices of the Dashen Brewery on the organization‘s side. So, for future the researcher recommends to see the overall marketing strategy of the company by involving the organization, customers, intermediaries, government (government regulations in Brewery industries) and a survey study of marketing strategy practices in the Brewery industries of Ethiopia.
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APPENDICES
Debre Birhan University
Faculty of Business and Economics
Department of Management, MBA Program
Interview questions to be filled by Marketing Managers of the Dashen Brewery Company
Dear respondents;
The purpose of this interview question is to enable me to carry out a research for the partial
fulfillment of master’s degree in Business Administration (MBA). The research focuses on Dashen
Brewery S.C with the topic of “Assessment of Marketing strategy practices”. A Marketing strategy
interview questions are tools used to collect data from people regarding Marketing. Hence, to
gather information, I kindly seek your assistance in responding to the questions listed below. Any
information you present will be kept utterly confidential and will be used only for academic
purpose. Your cooperation and prompt response will be highly appreciated.
Thank You in advance!
1. Who are your target consumers? And how does the company positioned its products?
2. Have you identified whom the consumers of your products in terms of geographic location,
age group or economic situation?
3. What is the company’s overall business strategy (Differentiation, cost leadership, focus
strategy)?
4. Is there any competition? Who are your competitors? What are your major competitive
advantages?
5. What are the marketing strategies offered by the company (in terms of 4Ps)
6. What are the problems you encountered in implementing the marketing strategies?
7. What is your future plan to expand your products or to increase your market share?
8. What factors do you consider in setting pricing strategy? Or what are the bases for your pricing
strategy?
9. What distribution objectives and strategies are the company pursued?
10. What promotional tools do the company used?
11. What is the status of promotional mixes done by the company interims of advertising, personal
selling, sales promotion, participating in bazaars and exhibitions, broachers etc.?
12. What is the role of advertisement in the promotional campaign? When is the best time to
advertise your product? Is there any seasonality in the market?
13. Over all how do you evaluate the company’s current marketing strategies?
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Debre Birhan University
Faculty of Business and Economics
Department of Management MBA Program
Questionnaires to be filled by employees of the marketing department of Dashen Brewery
Dear respondents;
The purpose of this questionnaire is to enable me to carry out a research for the partial Fulfillment
of master’s degree in MBA. The research focuses on Dashen Brewery S.C with the topic of
“Assessment of Marketing strategy practices”. A Marketing strategy questionnaires are tools used
to collect data from people regarding Marketing. Hence, to gather information, I kindly seek your
assistance in responding to the questions listed below. Any information you present will be kept
utterly confidential and will be used only for academic purpose. Your cooperation and prompt
response will be highly appreciated.
N.B:
Writing your name is not necessary
You can give more than one answer
Put “ √ ” for your choice in the box provided
Thank You in advance!
1. Gender
Male Female
2. Age (in years)
18-25 26-35 36-50 51-60
3. Educational level
1-12 Complete Certificate Diplomas BA/BSC
MA/MSC/MBA PhD Other (if any) ______________________________
4. Position
Senior Manager Managers Staff
5. How long have you been employee of Dasehn Brewery S.C?
One up to five years Five to ten years Ten to fifteen years
More than fifteen years
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5. Who are the company’s major customer groups?
Customer groups
Hotels and restaurants and groceries
Individual customers/consumers
Other intermediaries
Others
7. What would you suggest as the best strategy of advertising the company’s product?
Media (Newspapers, Radio, TV) Word of mouth Free sampling
Internet Billboard Other (kindly suggest another method)____________
8. What would you suggest as the best strategy of advertising the company’s product?
Advertising strategy
Media (Newspapers, Radio, TV)
Word of mouth
Free sampling
Internet
Billboard
Other (if any )
9. What is your opinion concerning the price of the company’s products?
Very cheap
Cheap
Affordable
Expensive
Very expensive
10. The company’s products availability and accessibility are?
Excellent
Very good
Good
Fair
Poor
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11. What is your opinion about the products quality?
Very good
Good
Medium
Poor
Very poor
12. On the rate 1 to 3, where 1 represents “least effective” and 3 “most effective” how would you
rate the company’s overall marketing strategies?
1
2
3
13. On the rate 1 to 3 ,where 1 represents “least effective” and 3 represents “most effective”, how
would you rate the appropriateness of the following promotional mixes to the company? (Please
put a tick mark for each provided box).
Promotional tools 1 2 3
Advertising
Personal selling
Sales promotion
Public relation
14. What marketing mix strategies does the company use?
Product
Price
Promotion
Distribution
All of the above mixes
15. How would you rate the communication effectiveness between corporate sales and marketing
department and other departments?
Very good
Good
Somewhat good
Poor
Very poor
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16. What are the customers’ primary reasons for buying or wanting to use the company’s
products?
Quality of product
Proximity of supply
Lower price than others
Effective promotion
Customer preference
Other (if any please specify_________________________________________
______________________________________________________________
17. What are the bases of segmenting the market?
Geographic location
Psychological or life cycle
Economic situation
Demographic
Other (if any) please specify ____________________________________________
18. What is the process of selling the products of the company?
Direct personal selling
Direct online sales
Indirect through the channels
Word of mouth
Telemarketing
Other please specify___________________________________________________
19. I can perform the marketing strategy practices of the company effectively.
Strongly agree
Agree
Undecided
Disagree
Strongly disagree
20. What are the major problems encountered in implementing marketing strategies?
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
21. If you have further comments please indicate in the space provided below.
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
