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1.2 Statement of the Problem
The government of Ethiopia has made considerable efforts to the textile
sector development due to its strategic and comparative advantage to the
country. The government went to the extent of establishing an independent
institute which assists textile firms in their production and marketing
activities. Despite these efforts, the performance of the sector is not
satisfactory. As a result, like it is the case in many Sub-Saharan African
countries, the textile sector has suffered a decline in sales in recent years
(ETIDI, 2012) largely due to the inability to compete in the face of low cost
and high quality production in Asia. This claim is further supported by the
fact that export of textile products does not figure even among the top ten
export products of Ethiopia (EBDSN, 2009).
Given the large domestic market, the favorable land for cotton production,
and the oversea market opportunities created through AGOA, COMESA, All
But Arms, and some other bilateral agreements, the textile industry should
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have flourished and played a significant role in the country‘s economy.
However, regardless of these opportunities, the sector‘s development has
been constrained over the years by many factors (EBDSN 2009).
These constraining factors are related to marketing, production, and raw
materials (ETIDI, 2012). The problem of raw material for textile production
has been given a due attention, and considerable hectares of land have been
allotted to it (for cotton production). The consultative forum held by Ministry
of Trade and the textile firms‘ managers and scholars in September (2013)
pointed out that production capacity is not as such the critical problem for
most companies but their competitiveness even in the domestic markets.
Thus, the marketing problem has remained the top critical problem in the
sector and hence becomes the center of attention for this study. Let alone
being competitive in the global markets, the sector has not even exploited
the local market opportunities as expected. Still, the imported textile
products hold a large domestic market share and many Ethiopian
companies are engaged in importing the products mainly from China,
Indonesia, India, and U.A.E which collectively account for 70% of the local
textile market (ETIDI, 2012).
The above controversy of huge potential for textile production and market on
the one hand and the restricted scale of export and increment of imported
textile products on the other hand clearly indicate the competitiveness
problems of the textile firms. The competitiveness of companies is
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determined by their ability to design and implement appropriate marketing
strategy considering their particular circumstances (Porter, 2000). On the
other hand, the sophistication of consumers‘ preferences and the desire to
see a better world calls for marketing strategies to become more deliberate
and systematic (Kotler, Kartajaya, and Setiawan, 2010). As a result,
marketing strategy has become more important than ever before for
companies to be competitive, and hence prioritizing it is an important
exercise.
Thus, the central research question here was, therefore, how do Ethiopian
textile firms formulate and implement their marketing strategies? Examining
such processes helped the researcher to identify the marketing strategy
problems. In line with this central research question, the following specific
research questions were worth to be raised so as to dissect the central
research question and then approach the problem from a broader
perspective.
Specific research questions
- What is the level of emphasis given to marketing strategy at corporate
level?
- How do firms formulate their marketing strategies?
- How do firms implement their marketing strategies?
- How do firms link their marketing enabling environments with their
marketing strategies?
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- How are firms‘ marketing strategies linked to their competitiveness?
- To what extent are firms‘ marketing enabling environment linked to
their marketing performance?
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