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production capacity is spinning 20 tons per day, weaving and knitted
55,000
meter per day, and finishing 60,000 meters per day.
According to the key informant, the level of emphasis given to marketing is
low and there is no defined set of budget for marketing alone. And there are
no considerable branding attempts for the products. The company
dominantly produces products for local customers and government is the
major buyer of the product. The company gets direct purchase from the
government for its huge consumption in military, prison, and other
institutions. Hence, such strategies as segmentation and targeting are not of
major concern to this company in the domestic market. In its marketing
plan, the company sets out to increase its exports to 40% of its total
production by producing high quality export standard products (different
from local products) to satisfy the government‘s encouragement and to
benefit from foreign currency for their raw materials and machineries
importation. The plan further elaborates to increase its total production and
sales even in the local market though production expansion. Although, it
was not possible to find such figure from the marketing plan, the key
informant explained that some amount of budget is allowed for market
research at management level and the figure can be estimated based on the
action plan (which can be prepared when needed). The key informant
elaborated this as:
‗‘the
company needs to expand its market to international level and hence
some budget is allocated for market assessment. The Textile institute and the
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Ethiopian embassies in their respective countries are helping us in searching
for international markets. We send them our sample products and they try to
create link for us. In the coming five years, we will be good at export when our
expansions are finished and new machineries are installed’’.
But these days, the company export is limited only to 5% of its total
production.
The key informant further explained that the base for new product
production is customer order and usually the government is the major
customer. But sometimes the company conducts some market research
regarding the rural and urban customers‘ preferences about wearing
apparels. And, since its production is based on customers‘ order, the
company sells most of what it produces as quality is agreed based on the
specification.
The company‘s base for setting its pricing strategy is going price. In view of
this, the company believes that it has developed economies of scale which
enable it to produce at a relatively lower per unit cost than competitors in
the domestic market. Hence, its relative going price with the competitors will
still be profitable to it. The key informant also explained that the company
exports some products usually based on trial bases but receive considerable
amount of return claims (about 50% of exported product) even from that
limited quantity of export (which is only 5%).
Regarding promotion, the company is not engaged in promotional activities
for both local and international markets but for different reasons. For the
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local market, the major buyer is the government which has already known
its product and quality level which implies that promotion may not be as
such important. But in the international market, the company lacks
experience to do it on the one hand and it assumes that it is very expensive
to do so on the other hand. However, it tries to use the opportunities
created by the ETIDI and Ethiopian embassies and tries to promote through
attending bazaar and exhibitions. But the key informant does not feel that
the efforts made for
promotion so far is enough
The company‘s strength in the domestic market comes in its distribution
system. Although it does not have any defined distributor in the
international markets, it uses sole distributor to the domestic markets. The
sole distributor has outlets in major cities of the country and serves the
nearby customers (usually the government bodies) near to their areas of
operation. And the company sets clear distribution policy in that if a
distributor or wholesaler comes to distribute its product; so far as it meets
the minimum requirement of sales amount and legal requirements, it can do
so. However, the key informant mentioned no one single company which has
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