Chapter 6: Conclusions and Implications/
Recommendations of the Research
6.1 Conclusion
The general objective of the research was to examine how the Ethiopian
textile firms formulate and implement their marketing strategies. And the
resource based view which is considered as a determinant factor of their
competitiveness was applied to understand firms‘ strategies. In connection
to this, the fact that firms operate differently under similar external
environment justifies resource based view implying a firm‘s performance is
the result of its internal strength (Barney, 1991; Miller, 1986; and Zahay &
Griffin, 2010). Hence the justification of understanding marketing strategies
from the inside out approach emanates from this rational. As a result, the
resource based view was examined in this study in terms of the enabling
environment which specifically consists of marketing assets and capabilities.
Marketing strategy was also examined in terms of formulation and
implementation practices of the case firms. It is also argued in this study
that marketing strategy should be linked to firm performance as what gets
measured gets attention.
Accordingly, the data were collected and analyzed to effectively address the
specific research objectives stated in chapter one. For this reason, the
conclusions are made in accordance with those specific research objectives
and thereby confirm that no specific research objectives remained
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unattained. Hence, each of the following conclusions is drawn for each of
the specific research objectives raised.
The first research objective aimed to assess the level of emphasis given to
marketing strategy in the case companies. Both the within and cross case
analyses indicate that the level of emphasis given to marketing strategy in
the case companies is very low. Such low emphasis was explained in terms
of almost no resource commitment to market research, innovation, and
marketing capabilities. Such low commitment was also reflected on
companies marketing plan in that the firms‘ marketing plans seem sales
plans implying little expertise even in the preparation of the document.
Hence, the level of emphasis given to marketing is concluded to be low and
insignificant.
The second specific research objective was to examine how the firms
formulate their marketing strategies. The marketing strategy formulation
was examined in terms of market segmentation, targeting, positioning, and
differentiation.
Regarding market segmentation, the companies have applied no clear
segmentation criteria particularly to the international markets. The simple
logic applied in the segmentation seems the simplified demographical
variables such as sex and age. Thus, companies have not applied a specific
segmentation criterion which fits the specific market indicating
oversimplification of the dynamic and unique needs of each market and
treating it inappropriately (traditionally).
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Literatures strongly argue that the specific market needs can be understood
through targeting on few segments and serve them better than competitors
do. However, the case companies failed to target specific segments because
of their failure in proper segmentation. Hence, their approach is better
referred to as undifferentiated marketing without economies of scale.
In this case niche marketing seems the feasible competitive strategy for the
companies in export market. In niche strategies, companies can start with
one or few segments and expand the target markets after properly serving
the given market and develop good understanding about the market to serve
more segments. Literatures present many success stories about the
profitability of niche strategies for small companies and for companies in the
developing countries while operating in the developed countries (Parrish et
al., 2006).
Like the case in segmentation and targeting, the firms‘ differentiation
strategy is poor especially in the international markets. Companies have not
yet performed their best to communicate the uniqueness of their products
relative to their competitors, except for the attempts made by case company
four. The Ethiopian textile products are mainly made of cotton and the issue
of cultural uniqueness and design can be good sources of differentiation
which the companies have not yet used properly. Hence, there remains huge
task for the companies, the government, and other stakeholders to
differentiate Ethiopian textile products from the rest of the groups so that
buyers can pay for the differences.
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The issue of positioning goes with differentiation. One of the reasons why
differentiation was so poor for the textile products in the international
markets is that the brands have not been communicated to international
consumers. Further, these days marketing is thought to be a battle of
perception. Hence, without effective positioning, the companies cannot
penetrate the deadlock of the international markets despite the country‘s
eagerness to do so and the zeal for getting foreign currency and the aim to
narrow the trade balance through export. Similarly, the product variety can
still be the other source of positioning strategy through which the
companies can develop their competitive advantages. Hence, the companies
formulate their marketing strategies randomly that they are unable to
effectively create, communicate, and deliver customer values.
In the third objective, this study aimed to examine how the firms implement
their marketing strategies. In connection to this, marketing strategy
implementation was examined in terms of the marketing mix (the 4P's).
In terms of product strategy, the companies base customer‘s order for new
product development. The customer‘s order base new product production is
reactive which the current marketing environment may not support since
there is dynamism that the market tastes and preferences will not wait for
the reactions of the companies. Besides, the issue of branding has still been
a challenge for the companies in the international market.
In terms of pricing, it was understood that the companies have different
pricing strategies for local and international markets. This makes sense that
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the international markets need some extra costs which will be counted to
price. However, the companies experienced that their profitable prices (if the
price considers all forms costs of a product and some profit) are relatively
higher than the competitors‘ prices which mainly come from China, India,
and Pakistan. Hence, the companies need to adjust their prices relative to
competitors in the international market to compete with price, regardless of
their total costs. This may imply that sometimes they sell even for less prices
than the price for similar products in the local markets. Still, pricing
strategies have a lot to do with branding and positioning because if you
touch one, you touch them both.
The distribution outlets are still poor both in the local and international
markets. The companies mainly distribute their products either through
wholesalers or through the sole distributors in the domestic market. More
importantly, better channel management including strategic partnership
with channels with host counties should be established in the international
markets for the companies to effectively reach the international customers.
In the case companies‘ context, dealing with strategic partnership should
not be thought as ‗impossible‘ because case four in the study has made it
so.
The companies‘ promotional efforts are not still up to the required level even
in the local markets let alone in the international markets. Intermittent
advertisements and little sponsorship are the only promotional techniques
applied by the case companies for local markets. And trade fairs and
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exhibitions are the only promotional tools applied in the international
markets. In addition to these, the Ethiopian embassies abroad usually
promote the textile products on their ways to promote the investment
opportunities of the country. However, the embassies alone can‘t effectively
promote the products because of their limited efforts. Hence, companies
need to invest in promotion as promotion makes positioning and
differentiation possible and the quest for competitiveness can‘t be achieved
without being known, as the old saying ‗to be is to be perceived‘ holds true
in these days marketing. Thus, as it was true for marketing strategy
formulation, the firms‘ marketing strategy implementation of the case
companies is generally judged to be weak.
The fourth research objective was aimed to appraise the link between firms‘
marketing enabling environment and their marketing strategies. In this case
a more theoretical review was made and compared against the findings of
this research.
Marketing resources shape and enhance effective marketing strategy
formulation and determine the extent to which the formulated strategy will
be put into implementations (Morgan et al., 2012). This may imply that a
marketing resource is both the prerequisite and enabler of effective
marketing strategy. Besides, in the cross case examination it is understood
that the firm which invested more in marketing asset and capability
formulated and implemented better marketing strategy in the international
market. Thus, there is both theoretical and empirical support that the link
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between marketing enabling environment and marketing strategy is direct
and linear. However, the case firms failed to do so.
The fifth specific research objective was aimed to assess how firms
marketing strategies influence (are linked with) their competitiveness. In this
case, competitiveness was examined in terms of export performance and
some non financial measures such as perceived market share, customers‘
response, and ability to market innovative products. Such measurements
have significant meanings for future growth and sustainability of a company
(Kaplan & Norton, 1992). Accordingly, the performances of the companies
are judged to be fair in the local markets but poor in the international
markets. The customers‘ base even in the local markets is not sustainable
since the major buyer of their products is the government and it is unsure
whether the companies continue in this state if the government stops buying
from them.
However, literature argue that marketing strategy should focus on building
value to a firm by measuring and managing marketing performance
measures such as customer satisfaction or service quality so that economic
value may be improved (Rust et al., 2004). And it was evident that poorly
formulated marketing strategy will result in poor market performances and
the vice versa (evidence from the comparisons of successful and
unsuccessful firms in the cross case analysis). Thus, both empirical (from
the cases) and theoretical support exists that the link between marketing
strategy and company performance is positive and linear.
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The sixth specific research objective was aimed to scrutinize the extent to
which a firm‘s enabling environment is linked to its marketing
performances. In the attempt to address specific research objective four, it
was found that the link between marketing enabling environment and
marketing strategy is linear and direct. And in the attempt to address
specific research objective five, it was found that the link between marketing
strategy and a firm‘s performance is linear and positive too. However, the
link between marketing enabling environment and performance is implied
than direct in both discussions. Hence, it can be understood from this
transitively that there exists a positive link between firms‘ resources and
their marketing performances although it is mediated by marketing strategy.
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