COLLEGE OF BUSINESS AND ECONOMICS

M EKELLE UNIVERSITY

DEPARTMENT OF MARKETING

ASSESMENT OF MARKTING MIX STRATEGY IN THE CASE OF LEMLEM FOOD

COMPLEX COMPANY

A RESEARCH PAPER SUBMITTED TO THE DEPARTMENT OF MARKETING IN

PARTIAL FULFILLMENT OF REQUIREMENTS FORBACHELOR OF ART DEGREE IN
MARKETING.

JUNE 2013

MEKELLE, ETHIOPIA

Acknowledgment
First of all I would like to thank almighty God who helped me in every aspect of my life. I would
like to express my deepest gratitude to Ato Yibeltal Nigussie for his advice, guide and
professional support in developing this research paper.

My special gratitude also goes to the manager and customers of lemlem food complex company
for providing the necessary information.

In addition I would like to thank my parents, Compassion International and LDP specialists for
their financial and other supports. Finally I would like to thank all members of Mekelle
University library staffs for their endurance in searching for materials requested and provision of
this material write and developing the paper.

i
Abstract

This research paper is prepared to assess the marketing mix strategy of Lemlem food complex
company proper use of marketing mix strategy enables the business to be successful in planning
and capable of producing products and services properly.

The objective of the study is to assess the marketing mix strategy of the organization under
consideration of product, price, place and promotion systems in its management in accordance
with the standards and the theories of marketing mix and to investigate an over view of
marketing mix practices. To reach this objective, data is collected from the company here, for
primary data the researcher use interview and questioner and for secondary source of data is
collected from documents related to marketing mix.

The result and discussion part of this research is analyzed based on the data collected through
interview and questioner with some supporting documents. Based on this the study intended to
suggest possible solution to the problem identified.

The study is expected to mare manufacturing companies aware of the importance of including
marketing mix strategy in their operations.

ii
Chapter one
1. Introduction

1.1Background of the study

Marketing uses the “marketing mix” to achieve its objective of reaching customers, motivating
them to buy its service or parts and making them loyal to the company. The marketing mix is the
set of tools available to the company to shape the nature and way of offering its services or
products to its customers. (Kotler, 2004)

At the early time people think marketing is only the act of selling and advertising activities.
However, selling and advertising is only the tip of the marketing iceberg. Today marketing must
be understood not in the old sense of making a sale ”telling and selling” but in the new sense of
satisfying customer need if the marketer does a good job of understanding customer need
develops productive that provides superior value product, price, distribution and promotes them
effectively these products will sell very easily.(kotler,2006)

A company marketing environment consists of the actors and forces outside marketing that affect
marketing management’s ability to build and maintain successful relationship with target
customer. Successful companies know the vital importance of constantly watching and adapting
to the changing environment.

A company marketing environment is made up of micro environment which consists customers

which are the company suppliers, marketing intermediaries, customers, competitors and publics.
Also the company include micro environment which consists of the larger social forces that
affect micro environment such as demographic, economic, natural, technological, political and
cultural forces.

Generally marketing managers should have to know more about this environment which helps
them to plan and carry out their companies marketing program successfully.

Marketing philosophy guide organizations to design strategies that build profitable relationship
with target consumers. Also designing marketing program can enhances customer relationship
bytransforming the marketing strategy into action which consists of firms marketing mix in
order to gain strongest possible competitive advantage and then to harvest a sound profit.
This marketing strategy crates strong brand image of the company in the minds of customer.
These mixes are product, price, promotion and place also called 4p’s. In this study, the
researcher will try to assesshow these 4p’s strategies are organized and how they relate tothe
overall profitability of Lemlem Food complex Company.

1.2 Statement of the problem

Marketing mix strategy is an important concept in marketing and it plays crucial role in the
development of business enterprise. Also it will help a given business to sustain with in the
highly competitive environment.

As Lemlem food complex company is one of the business based sector marketing mix activity is
essential. In this study, the following problem areas that are within the marketing mix strategy of
the company assessed. The major problems are:-

-Marketing mix strategy and quality of the product

-Availability of major outlets to sale products.

-Time gap between order and delivery of the product.

-Company did not step forward in terms of promoting its product.

-How a company set a price.

These problem areas are theme of this study. In so doing the following are basic question that
was addressed in this study:-

1. How the company doesdevelop its marketing mix strategy?

2. What kind of strategy to penetrate the existing market?
3. What are the main factors that are affecting the effectiveness of marketing mix strategy in
the company?
4. What are the external variables specifically competition that the firm faces in its
operation?
5. What are the main factors that are affecting the effectiveness of marketing mix strategy in
the company?
1.3 Objectives of the study

1.3.1 General objectives

General objective of this study is to asses marketing mix strategy in Lemlem food complex
company and to provide possible recommendation and suggestion to the problem.

1.3.2 Specific objectives

-To assess the effectiveness of the company marketing mix strategy.

-To assess the competitors action.

-To examine the quality of the product in the minds of customer.

-To suggest possible way in success of marketing mix strategy as possible.

1.4 Methodology of the study

1.4.1 Population of the study

The target populations for this study were the general manager and customers of the company.

1.4.2 Sample size and sampling techniques

Sample size:-To make this study reliable the study incorporate the general manager and around a
sample of 30 customers of the company because they are small in number, in addition they are
also the target group who have much information about the organization.

Sampling technique: - The researcher preferred to useconvenience sampling technique to select

the customers.Because it is easy to apply and less time consuming.

1.4.3 Types of data collection method

To accomplish the study the information were collected from both primary and secondary
sources of data. The primary source of data: - includes questionnaires, interview and observation.
This means when the researcher has interviewed the general manager and distribute questioner to
customers of the company. The researcher had also assessed through observation. The secondary
source of data:-this data was collected from different materials that are available in the company
such as annual report of the company, documents and other books related to this topic available
in Mekelle university library and the literatures that are written on the topic of this study.

1.4.4 Data analysis method

To analysis the collected data of this study, the researcher was used both qualitative and
quantitative method of data analyzing. The qualitative method that would be used is descriptive
data analysis method. An Interview was made with manager then the researcher will present it
descriptively. Analyzing and presenting of the collected data is made via percentage method in
tabular form.

1.5 Significance of the study

-This research was assessed the cause of marketing mix problems in the company.

-Helps to select the appropriate marketing mix strategy to the company.

-To have competitive advantage over competitors.

-This research will be used for those who interested to undertake further study in related topic.

1.6 Limitation of the study

Due to time constraint, lack of material source related to this study, lack of financial resource and
vast nature of this study, this study has only focuses on the marketing mix strategy of Lemlem
food complex company.

1.7 Scope of the study

This study will address the company’s overall marketing mix activity and its competitor’s action
from the company operation up to the final product.
1.8 Organization of the study

The research paper is composed of four chapters. The first chapter is an introduction that covers
the background of the study, statement of the problem, objective of the study, methodology of
the study, significance of the study, scope of the study, limitation of the study and organization
of the study. The second chapter deals with Literature review. The third chapter emphasis on
presentation of data analysis and interpretation of the data. Finally, the last chapter deals with
conclusion and recommendation of the research
CHAPTER TWO

LETERATURE RIEVIEW

2.Marketing mix strategy

marketing mix is a set of marketing tools that firms use to pursue and achieve and achieve its
marketing objective in the target marketing mix strategy classified in to four .These are product,
price, promotion and place.

-Price:-includes its price, discount, allowance and payment.

-Promotion:-includes sales promotion, advertising, personal selling , publicity, public relation

and direct marketing.

-Place;-includes channels, copulate assortment, location, inventory and transportation.

2.1product strategy

What is product?

Product:-s anything that can be offered to a market for often attention, acquisition, use of
consumption that might a want or need(kotler, 2005, p232)

The other three definition of the product are;

1. Good, idea, method, information, object, orservice that is the end result of a process and
service

2. A commercial distributed good that is a tangible personal property B, output or result of a

fabrication, manufacturing or production process and C. passes through a distribution channels
before used.

3. Marketing:-a good or service that most closely meets the requirements of a particular market
or segment and field enough profit to justify its continued existence. (Business dictionary)
2.1.1Product quality

product quality is one of the marketers major positioning tools .quality has a direct impact on
product or services performance thus; it is closely linked to customer value and satisfaction in
the narrow sense ,quality can be defined us freedom from defects, but most customer centered
companies go beyond this narrow define instead ,they defined quality in terms of creating
customer value and satisfaction the American society for quality defines quality as the
characteristics of a product or services that bear on its ability to satisfy stated or implied
customer needs. (Kotler 2006, p239-240)

2.1.2Branding

A brand is a name, term, sign, symbol, design or a combination of these intended to identify the
goods or services of one seller or group of sellers and to differentiation them from those of
competitors. Brand has become so strong that hardly anything goes unbranded even fruits and
vegetable(kotler,2005,p.243) Brand is a set of expectation that consumers have when consuming
or thinking about consuming a product or services from a specific
company.2.1.3packagingPackaging involves designing and producing the container or
wrapper for a product. The package includes a product's primary container and it may also
include a secondary package that is thrown away when a product is about to be used. Finally it
can be include a shipping package necessary to store and ship the product. Labeling printed
information appearing on or with the package is also part of packaging. Traditionally, the
primary function of the package was to contain and protect the product in recent times. However,
numerous factors have made packaging an important marketing tool. Increase competition and
cutler on retail store shelf's means that packages must now perform many sales tasks from
attracting attention to describing the product to marketing the sale. Companies are realizing the
power of good packaging to create instant consumer recognition of the company or brand.
(Kotler, 2005, p.244)
2.1.4 LabelingLabels may range from simple tags to product complex graphics that are parts
of the package. They perform several functions. At the very least, the label identifies the product
or brand. Such as the same Sunkist stamped on an arranges. The label might also describe several
things about the product, who made it, where it was made, when it was made, its contents, how it
is to be used and how to use it safely. Finally the label might promote the product through
attractive graphics. (Kotler and Armstrong 2005, p.245)2.1.5Product classificationProducts
and services fall in to two brand classes based on the types of consumers that use them.1.
Consumer products: - bought by final consumers are usually classified according to consumers
shopping habits.=> Convenience, shopping, specialty and unsought products. => Convenience
products:-are consumer products that the consumer usually buys frequently, immediately and
with a minimum of compression and buying effort.=> Shopping products: - are consumer goods
that the consumer, in the process of selection and purchase, characteristically compares on such
bases as suitability, quality, price and style.=>Specialty products: - consumer product with
unique characteristics or brand identification for which a significant group of buyers is
willing.=>Unsought products: - consumer products that a consumer either does not know about
or bugging.2. Industrial products: - bought by industries or organizations for further processing
for use in conducting a business. ( kotler and Armstrong, 2006, p. 2340 )2.2Pricing strategy
Price is one of the major marketing mixes Definitionprice:- is one of the amount of money
charged for a product or service or the sum or value that consumer exchange for the benefit or
having or using the product or services.Price was set by negotiation between buyer and seller
fixed price polices. Setting one price for all buyers is relatively modern idea that arose with the
development of large scale retailing. however some companies are now reversing fixed pricing
trend by using dynamic pricing charging different price depending on individual customers and
situation (kotler, Armstrong 11th ed, 2005, p.304)Factor to consider when setting price Internal
factorA. marketing objective:- the companies must decide on its strategy for the produce. if the
company has selected its target market and positioning carefully that it's marketing mix strategy
including price will be fairly straight forward. At the same time the company may seek
additional general or specific objective. General objective include survival, current profit
maximization, market share leadership and product quality leadership (kotler, Armstrong 11 thEd,
2005 p.309).B. marketing mix strategy: - price is the only one of the marketing mix tools that a
company's uses to achieve its marketing objective. Pricing decisions must be coordinated with
produce, design, distribution and promotion decision to form consistence and effective marketing
program. (Kotler, Armstrong 11thEd, 2005, p.310)C. Cost:- set the floor for the price that the
companies can charge the price. The company wants to charge a price that both covers all its
costs for producing, distributing selling the product and delivers a fair rate of return for its efforts
and risk. (Kotler, Armstrong 11thed, 2005, p.312)D. Organization consideration: - management
must decide who within the organization should set price companies handle pricing in a variety
of ways. In small companies’ price are often set price. Are often set by top management rather
than by the marketing or sales department. In large companies pricing is typically handled by
divisional or product managers. In industrial market sales peoples may be allowed to negotiate
with customers with in price range. even, top management sets the pricing objective and policies
and it open approved the price proposed by lower level management or sales people ( kotler,
Armstrong 11th ed, 2005, p.312) External factor A. Nature of the product and demandBefore
setting price marketers must understand the relation between price and demand for its
product .Pricing in different types of market1. Under pure monopoly: - the market consists of
many buyers and sellers so that a seller cannot charge more than the going price because buyers
can obtain as much as they need of the going price.

2. Under monopolistic: - the market consists of many buyers and seller who trade over a range of
prices rather than a single market price. Arrange or price occurs because the seller differentiates
their offers to buyers.3. under oligopolistic competition: - the market consists of a few sellers
who are highly sensitive to each other's pricing and marketing strategies. (Kotler, Armstrong 11 th
Ed 2005. p.315) B. Competition:- in setting a price the company must also consider competitors
costs and prices and possible competitor costs and prices and possible competitors reaction to the
company's own pricing moves.C. other external factors :- economic conditions such as boom or
recession, inflation interest rates affect pricing decision these are:-- government- social concern-
companies short sales- market share profit goals (kotler,armstrong 11thed, 2005 p.319)2.2.1

Pricing approachesThe price the company charge will be somewhat between one that is too
low to produce a profit and another is too high to produce any demand. However these 3
approaches help companies to set reasonable price A. Cost based pricing: - is by adding a
standard markup to the cost of the product also called cost plus pricing.B. Break even analysis
and target profit pricing: - is another cost oriental pricing that firm tries to determine the price of
which it will break even or make the target profit it is seeking.C. value bases pricing: - is setting
price based on buyer price prion of value rather than on the seller cost. Value pricing - offering
just the right combination of quality and good service of a fair priceD. Competition pricing: - is
setting price based on the price that competition for similar product (kotler, Armstrong 11thEd
2005, p.320-324)

2.2.2 New product pricing strategy A market skimming pricing;-setting a high price
for new product to skim maximum revenues layer by large from the segments willing to pay the
high price the company makes fewer but more profitable sales.B. Market penetration pricing;-
setting a low price for a new product in order to attract a large number of buyers and a large
market share2.2.3 Product mix pricing strategiesA. product line pricing ;setting the price
steps between various products in a product line based on cost differences between the
product ,consumer evaluation of different factors and competitor's priceB.Optional product
pricing;-the pricing of optional or accessory products along with a main product.C.capture
product pricing ;-setting a price for product that must be used along with a main product such as
blades for a razor and film for a camera D. by product pricing ;-setting a price for a product in
order to make the main product price more competitive,

- Price adjustment strategies

-Discount and allowances pricing-Discounts;-a straight redaction in price on purchase as during
a stated period of time .-Allowances;-promotional money paid by manufactures to retailers in
return for an argument to feature the manufacturers’ production some way.A. segment pricing;-
selling a product or services at two or more price, where the difference in price is not based on
difference in cost.B. Psychological pricing;-a pricing approach that consider the psychology of
price and not simply the economics the price it used to say something about the
product.C .Reference pricing;-price that buyers carry in their mind and refer to when they look at
a given product (kotler, armostrong 2005, 307-399)
2.2.4 Discrimination price or price differentiationDiscrimination price or price
differentiation exists when sales of identical goods or services are transacted different prices
from the same provider (En,wikepd,or lwiki price discrimination)Types of price discrimination -
first degree price discrimination ;-price varies by customer's ability or willingness to pay.-Second
degree prices discrimination;-a price varies according to quality sold. Larger quantities are
available of a low unit price .these is particularly wide speed in sales to industrial customers,
where bulk buyers higherdiscounts.-Third degree price discrimination ;-price various is buy
attributes such as location or buy costumer segment ,or in the most extreme case by the
individual customer's identity where the attribute in question is used as a proxy for ability
willingness to pay (en,wikeoad,or/wiki/price discrimination)2.3Promotional strategy 2.3.1
Meaning of promotion

promotion ;-is the element of an organizations marketing mix that sense that services to
inform ,persuade and remind the market of the product and/or the organizational selling if, in
hopes of influencing the recipients feelings believes or behavior (station1894,p,456)

Promotion is the marketing function concerned with persuasively communicating to target

audiences the components or the marketing programs in order to facilitate exchange between the
marketers and the consumed and to help satisfy the objective or both (Phillip kotler 1998.459)

As a marketing function, promotion can be defined us any personal and non personal
communication that create a favorable disposition towards a good services or idea in the mind or
the recipient or the communication (Burnett, 2002p, 6)

2.3.2Types of promotional mix

In their communication program organizational use one or more of the pure basic types of
promotion (Burnett, 2002 p.7)

1.Advertising ;-s any paid form of non personal communication and promotion of ideas ,goods
or services by unidentified sponsor advertising includes any informative or persuasive message
carried non personal medium and paid for by a sponsor whose product if in some way identified
in the message. Although some advertising such as direct mail is directed of specific individual
most advertising messages are tail and to a group and use mass media such as radio,
television ,newspaper ,magazine and outdoor (Burnett 2002,p.7)

2.Personal selling ;-is interpersonal communication with on more prospective purchase for one
the purpose or marketing presentation ,answering question ,and procuring orders in order to sake
marketing sales .it includes sales cause to a business by a field representative (field selling).in
store assistances of assess clerk(retail selling) and representative selling of home (door to door
selling).it is also two way communication between personal selling and customers or other
organization .(Burnett ,2002,p.7)

personal selling is the face presentation of the company .in the case of food complex company
personal selling is not such an appropriate because the company's product is not such complex
and the cost of personal selling is to high as relates to other promotional mix and the company
does not have such enough money (budget).

3.public relation and publication ;-is coordinate attempt to create favorable perfect image in
the minds of public by supporting certain activities or programs .publishing commercially
significant news widely circulated medium or obtaining favorable publicity that is for able
presentation on radio ,television or stage that are not paid for by the sponsor ,the use of
information and the communication is that information through ,variety of media to influence
public opinion.

4. Sales promotion;-consist of marketing activities to the basic value of the product or services
for a limited time and direct stimulate consumers (burnett2002.p.2)
According to millers, sells persons are media or non media marketing pressure applied for pre-
determined in a limited period of time in order to stimulate trail, increase consumers demand or
improve product quality. Sales promotion is marketing activity' that adds to the basic values of a
product. For a limited time and directly stimulate consumer purchasing ,or the effort of sales
force .sale force promotion targeted at three audiences such as consumer ,reseller and the sales
force1it is competitive that provides an extra incentive for the target audience to buy or
distinguish sales promotion from the other three promotional mix tactics.(burnett,2002.p.349-
348)

2.3.3Promotional Strategy

Promotional strategy may demand little or a lot from retailers. One strategy may require that
solves do little than stock the product; another strategy may defends on the reseller's ability to
explain to consumers how product works.

Promotional mix strategy can be broadly classified as:-

=> Pull Strategy

=> Push Strategy

Pull strategy: - direct marketing effort of ultimate consumer and emphasize large advertising
expenditures. It may include additional incentives to buy through the use of coupons, rebates,
free sampling of sweepstake. This promotion effort should create sufficient consumer demand to
''pull" the product through the channels. Pull strategy requires little promotion effort from the
resellers. Their primary responsibility resolves around strong, shelving and maintaining the
product. Pull strategy is plausible if demand of the product is high and it is possible to
differentiate the product its real or emotional features.

Push strategy: - direct marketing effort of a resale and thus depends greatly on their personal
selling ability. The manufacturer pushes the product through the channels the resellers are asked
to demonstrate product, distribute sales promotion devices and activity to sell the product. If the
product is relatively new and acceptable substitutions exist then a push strategy to stimulate
reseller support. They don't have large enough budgets to engage in mass advertising. Because
much is asked of resellers, much stimulation on the part of manufacturer is required. Most
companies use combination of pull and push strategies. (Burnett 2002, p. 6-9)

2.3.4Promotional objectives

Falls in to five general categories

A. creating awareness:-making sure consumers know who the companies

B. creating understanding:- providing key information use full for decision making.

C. creating change in attitude:-dealing with motive that consumers are strongly falling about.

D. creating change in behavior:-ranging from the passive behavior to active.

E. creating enforcement:-offering tangible and intangible rewards for the consumer favorable
choice.

2.4 Place| Distribution

Definition: - place or distribution is the other component of the marketing mix. A business firm
should provide its materials when customers want to some place. The other definition of
distribution is the displacement of traditional resources from marketing channels by new product
of interiorities. Distribution is physical point of consumption to meet customers’ requirement.
(Kotler and Armstrong 11th Ed, p.379)

There are two types of channels of distribution method are available

1. Direct distribution:-is take the product and sales directly to end users. It is decentralized
exchange because there are no intermediaries involved.

2. Indirect distribution: - involves intermediaries to distribute products.

2.4.1Place / Distribution decision

Distribution is about getting the product to the customers. Distribution decision includes
-Distribution channel

-Wave having

- Order porosity

- Transportation

-Channel mentor

2.4.2 Functions of distribution channel

The presence of intermediaries in the marketing channel is an attempt to reduce the cost of
performing the marketing function through special fashion. The total cost of marketing may
therefore be lowered as a result of the combine effort of all channel members. Place and
possessition gaps that separate goods and services from those who would use them. Therefore,
member in the marketing channel perform key function. (Kotler, 7thEd)

2.4.3 The logistics of the market place

In marketing logistics is defined as allocating and controlling financial and human resources
committed to physical distribution manufacturing supported purchasing operations. Cannels are
route or passengers, or means or distributing a product from producer to the ultimate buyer.
Physical distribution consists of the material management of incoming materials supplies
transportation and other associated activities. These include warehousing and inventory of
physical goods from the time they are produced up to they reach to the ultimate buyer. Therefore,
channel decisions have to do with what route or means to take physical distribution decision. (G.
William 2nd Ed.)

2.4.4 Importance of marketing channels

Marketing channel is a set of independent organizations involving in to the process of marketing
a product or service available for use of consumption by the consumer of business users.

According to channel discussion directly affect other marketing decisions. The companies prices
depend on weather of workers with national discount charges, use the quality specialty store, or
success directly to customers. The friends’ sales force and communication decisions depend on
how much persuasion, trading motivation supports channel needs.

Companies often pay too little attention to their distribution channels sometimes with damaging
results.

CHAPTER THREE
Data Analysis and Interpretation

3.1 Customers Analysis and Interpretation

This part of the study deals with presentation and analysis of data, collected from sample
respondents to search for appropriate answers to basic questions raised at the beginning of the
research study. Secondary data from organization and interviews conducted with manager
concerned. To gather the necessary information 30 questionnaires including 18 questions were
distributed to the customers and one questioner to managers of the organization.

The age structure of the customers has its own impacts on marketing mix activities of any
organization.

Table 1. Age structure of the customer in the study and impact on marketing mix strategy.

Age class Frequency Percentage

<18 2 7%
19-45 25 83%
46-65 3 10%
≥66 - -

Total 30 100%

Source: own survey (2013)

From the above table1, the age is a decisive factor in preference of food products. Referring to
table1, majority (83%) of the respondent is within 19-45 age class and (10%) of the respondents
is within the age class 46-65. This result shows that the majority of the Lemelem food complex
factories customers are adult and while the remaining of the respondents are youth.

Table 2 Respondents income level (birr)

 Monthly income Frequency Percentage
500-1000 6 20%
1001-1500 11 37%
1500-3000 7 23%
3000-4000 3 10%
4000-6000 3 10%
Above 6000 - -
Total 30 100%
Source: own survey (2013)

As it is observed from the above table 2, with regard to the income level of the respondents
(20%) of them do have an income 500-1000, (37%) of them 1000-1500 per month (23%) of
them 1500-3000, 10.0% of them 4000-6000 and (10%) of them have an income of 3000-4000
per month respectively. So that majority of customers are located under the income level range
between 1001-1500.

Kinds of company’s customer

 Kinds of company customer
Wholesaler; 10%

Retailer; 27%

End-user; 63%

Wholesaler Retailer End-user

Chart 1 kind of company customers

As show in the above figure from the total sample of the respondent, (10%) are wholes sellers,
(27%) of the respondents are retailers and (63%) of them are end users. This implies that end
users constitute the largest number off the sample, which is followed by retailers.

Table3 kinds of products customer use

Product type Frequency Percentage

Flour 20 67%
Spaghetti - -
Macaroni 3 10%
All of them 7 23%
Total 30 100%
Source: own survey (2013)

As shown in the above table. Majority (67%) of customer use flour product, (10%) of the
customers uses macaroni and the remaining customer uses all the products. This implies that
majority (67%) of the respondents are consumers of flour, (23%) of them are consumers of all
products of the company and the remaining (10%) are consumers of macaroni.

3.1.1 Product Analysis and Interpretation

Product quality as means/causes of marketing/product mix strategy in the company.

Product quality is one of the major causes that affect the product mix strategy of the company

Table 4 customer opinion (responses) on the quality of flour product of Lemlem food
complex.

Product (flour) quality rate Frequency Percentage

Very high 2 7%
High 6 20%
Medium 22 73%
Low - -
Very low - -
Total 30 100%
Source: own survey (2013)

As shown in the above table 4, the respondent opinion about the company products quality
indicates that (73%) of the respondents rate the flour product as medium quality level. (27%)
(Including high and very high) above medium quality level and (0%) below medium quality
level. This results show that the all of flour consumers are satisfied with the company flour
product since all respondents responded that the quality of the product is medium and above.

Responses of customers to the company product performance.

Table 5 customers’ opinion on the standard of product quality (flour) with that of other
competitors product.

Quality standards Frequency Percentage

Very high - -
High 10 33%
Medium 20 68%
Low - -
Very low - -
Total 30 100%
Source: own survey (2013)

Respondents were asked about the standard of the flour product quality of the company in
comparison with other competitor products. Their responses are summarized in the table 5. The
majority of customers (67.7%) think the standard quality of flour product when it is compared to
other competitors is medium and the remaining (33.3%) respondents responded high.

3.1.2 Pricing Analysis and Interpretation

Pricing strategy is one of the 4Ps marketing mix strategies. Price is the only element of the
marketing mix that produces revenue; all other elements represent cost. Customers are price
sensitive. But it doesn’t mean that there are no customers those are price sensitive rather this
statement reflects the characteristics of the majority of customers

Response of the customer to the company price strategy

Setting stable price of the product is one of the main factors in gaining competitive advantage in
the environment.

Price stability Frequency Percentage

Very stable - -
Stable 19 63%
Fluctuate 11 27%
Very fluctuate - -
Total 30 100%
Source: own survey (2013)

Table 6. Customer opinion on company price stability.

As shown in the above table 6, the majority (63%) of the respondents said that the company
pricing strategy is stable, while the remaining of the respondent (27%) responses that the
company price fluctuates.

Price as the cause of marketing mix strategy in the company.

Table 7. Customer opinion on their standards of company product price with other
competitors.

Product price of the company

Pricing standards Frequency Percentage
Very expensive - -
Expensive 3 10%
Similar 26 87%
Cheep 1 3%
Very cheap - -
Total 30 100%
Source: own survey (2013)

From the above table 7, analyzing a price of the products in Lemlem food complex share
company with the other company by considering the product of the price of the company (10%)
of the consumers showed that the price of the company is expensive and the majority of
respondents responded the product price is similar to other company while, (3%) of the
respondent said the price is below its competitors. This result show the price as the company
product is very fair as compared to other company competitors.

Table 8 customers opinion on their standards of company product quality with comparable
to its price.

Comparing price with quality Price is comparable to product quality

Frequency Percentage
Strongly agree 1 3%
Agree 18 60%
Neutral 9 30%
Disagree 2 7%
Strongly disagree - -
Total 30 100%
Source: own survey (2013)

As shown in the above table 8, to analyze the customers price of the product standard
measurement parameters. Based on this data, the majority of the respondents (60%) of them
agree that the price of the product is comparable with its price. (30%) of the respondents
responded the quality of the product is neutral, while (3%) of the respondents responded that the
quality of the product is above the price of company product and the remaining (7%) of the
respondents responded that the quality is below the price of the product.

Table 9 customer opinion on their customer satisfaction on company product pricing

Level of satisfaction on company pricing

Satisfaction standard Frequency Percentage
 Very satisfied - -
Satisfied 21 70%
Neutral 8 27%
Dissatisfied 1 3%
Highly dissatisfied - -
Total 30 100%

Source: own survey (2013)

As it is observed from the above table 9, show the level of customer satisfaction on company
product pricing. Based on this, the majority of the respondents (70%) are satisfied on company
product pricing and (27%) respondents said neutral while the remaining (3%) respondents said
dissatisfied.

3.1.3 Promotional Analysis and Interpretation

Under this section one of data analysis and presentation the detail analysis of respondents
responds on questionnaires raised/inquired on the promotional strategy of the company is stated
analyzed as follow

Media selection as the cause of promotional mix strategy in the company

Media selection one of the problems of promotional mixes strategy in the Lemlem food complex
company.

Promotion media Frequency Percentage

TV - -
Newspaper - -
Radio 3 10%
Sales Person 14 47%
Magazine - -
Other 13 43%
Total 30 100%
Source: own survey (2013)
Table 10 company promotion

As indicated on the above table 10, the respondents responded about the company promotional
elements they use to be informed about the company product information. As it is seen on the
above table, majority (47%) of the respondents’ uses sales person, as (10%) uses electric media
(radio) and 43% of them heard about the company product from words of mouth and other
sources. When comparisons among promotional elements used by customers of the company
sales person are over emphasized compared to electronic media and printed media.

Table 11 customer opinion on the company promotional activities compared to

competitors.

Degree of promotional
attractiveness
Frequency Percentage
Very high -
High 4 13%
Medium 11 37%
Low 13 43%
Very low 2 7%
Total 30 100%
Source: own survey (2013)

Respondents were asked about the attractiveness of the company product promotion in
comparison with other competitor promotion activities. As shown in the above table 11, the
majority (43%) of the respondents think that the promotional activities of the company is less
attractive (low) compared to other competitor promotional activities. On the other hand (37%) of
them labeled it as medium and (7%) very low and (13%) of them leveled it as high attractive.
The researchers believe that in this competitive business world the acceptable attractiveness
standards should be high when looking from the perspective of customers.

Table 12 Frequency of the promotional activities of the company as compared to other

company
 Frequency of promotion Frequency Percentage
Very high - -
High 5 17%
Medium 12 40%
Low 10 33%
Very low 4 13%
Total 30 100%
Source: own survey (2013)

As table 12 indicates the majority (40%) of respondents responded that the frequency of
promotional activities when compared to other company is medium,( 33%) of the respondents
said the promotional frequency is low, (13%) respondents rated the frequency of promotion very
low, while (17%) said it is high.

Customer attitude as the cause of promotional mix strategy in the company

Customer attitude towards promotional campaign of the company is one of the factors that affect
the quality/performance of the promotional activity of the company.

Table 13 Attitude of customers toward the company product after they see promotional
activities

Attitude change Frequency Percentage

Very good 3 10%
Good 11 37%
 Neutral 16 53%
Bad - -
Very bad - -
Total 30 100%
Source: own survey(2013)

Customers are asked if their attitude towards the company flour product is changed after they see
promotional activities and their responsesare summarized as the following. Majority(53%) of the
respondent said their attitude toward the company product stayed the same (neutral) and (37 %)
said good while (10%) of the respondents said their attitude toward the company flour product
has change very good after the promotional activity. This shows how much the promotional
activity can affects the customer attitude towards the company product.

Table14 the ability and willingness of the sales person to handle customer adequately

Salesperson ability Frequency Percentage

Very good 5 17%
Good 14 47%
Neutral 9 30%
poor 1 3%
Very poor 1 3%
Total 30 100%
Source: own survey (2013)

Respondents were asked about the ability and willingness of the sales person to handle customer
adequately and majority (47%) of respondent responded good, (30%) neutral and (17%) of
customer rated the ability of salesperson very good while 7% of the customer responded poor
and very poor.

3.1.4 Distributional Analysis and Interpretation

Producing a product or service and making it available to buyers requires building relationship
with customers and key suppliers and resellers in the company supplier chain. During purchasing
state the buyer fits the seller from whom product is in preferred channel of distribution.

Place of purchase as the chance of distribution a mix strategy in Lemlem food complex
share company.

Table 15 Customer opinion on the place purchase company product

Place of purchase Frequency Percentage

From company/ store 16 53%
From agent 3 10%
From wholesaler 2 7%
From retailer 9 30%
Total 30 100%
Source: own survey (2013)

Table 15 shows customers opinion on place of purchase company product. As shown in this
above table 15, the majority (53%) of the respondents responded that they purchase the company
product directly from company store, 30% of them purchase from indirectly from retailers and
(7%) of them purchased from whole sellers, while the remaining (10%) respondents purchased
from agent. This result shows that majority of the company customers purchase company
product directly from manufacture and indirectly from the retailers and whole sellers.

Responses of customers to the company distributional performance

Company distributional strategy can be analyzing in different way. Some of them are
convenience of distribution strategy, delivery speed on the company and customer satisfaction is
seen in the eyes of customers.
Table 16 customer opinion on company distributional strategies with computation of other
competitor distributional strategy.

Quality Convenience of Delivery speed of the Customers satisfaction

measurement distribution strategy company
frequency Percentage frequency Percentage frequency Percentage
Very high 2 7% 2 7% 3% 10%
High 9 30% 6 20% 8% 27%
Medium 7 23% 16 53% 17% 57%
Low 12 40% 5 17% 2% 7%
Very low - - 1 3% -
total 30 100% 30 100% 30% 100%
Source: own survey (2013)

From table 16 above, the company distributions in the eyes of customers, the first column
(convenience of distribution strategy) indicates (40%) of the customers said the product of the
company distribution is not convenient to them, while (23%) of the respondents answered as
medium level, (30%)rated high and the remaining (7%) said the company product distribution is
convenient to them. This data shows that majority of the company product is distributed
conveniently to its customers. In terms of the delivery speed of company distribution, the
majority (53%) of the respondent answered as medium level, (27%) (20+7%) of the respondent
has responded that the delivery time above medium level and the remaining (20%) of the
respondent response rate the delivery time below medium level. From this data we can
understand that delivery time (lead time) of the company distributional strategy is long.

The other factor in measuring the quality of distributional strategy is customer satisfaction. In
this respect majority( 57%) of the respondent said that the distribution medium,( 27%) the
respondents rated high, (7%) of customers are not satisfied with company distributional strategy,
while the remaining (10%) of the respondent are highly satisfied with company distribution
strategy.

3.2 Interview response of the manager

Under the marketing mix strategies of the company, analysis and interpretation of the manager
presented as follows. As our study is depend on manager interview of the company ,the
marketing mix strategy of the company is highly influenced by marketing mix factors such as
quality product price the product, promotional actives of the company and distributional
activities also have a significant effect on marketing mix activities and tactics in relation with its
implementation and application.

3.2.1 Product mix strategy

As the definition of product mix strategy is the set of all product line and items that a particular
seller offer for sale, Lemlem food complex company also has its own product mix strategy and
also the company has standard marketing strategy. In addition to this the manager of the
company said that quality of the company’s product is high in relation to other competitors'.

3.2.2 Pricing strategy

In many cases companies follow the existing price in the market. Based on the manager
interview the companies consider quality of the product, environmental situation (the market)
and the customer capacity in order to set a price. Sometimes the company can adopt the cost plus
pricing techniques that customers are willing to pay. The company can produce the product
highly for low and medium income level and additionally for income level.

3.2.3 Promotional strategy

The company doesn't use any promotional activity besides promoting the product by the sales
force some times the company gives training for sales force and the promotional strategy of the
company is highly influenced by sales force.

3.2.4 Distributional strategy

Choosing the right channel to distribute our product is the serious issue for our organization.
Based on the response obtained the company uses both direct and indirect channel system and
the product mainly distribute in Mekelle.
According to the manager interview the company has the problem of value delivery network
between the company suppliers, distributers and ultimate customers.

CHAPTER FOUR

4. Conclusion and Recommendation

4.1. Conclusion
The majority (83%) of customers were found between age intervals of 19-45. Regarding income
level of customers’ majority (37%) of them have 1001-1500 monthly income, (20%) ofthem
have 500-1000 and both 3001-4000 and 4001-6000 have (10%) each and there are no customers
who have a monthly income above 6000 Ethiopian birr.

Concerning product mix specifically the product quality (7%) of customers are said that quality
level of the product is very high (20%) of them said that it's high and (73%) of them said its
medium and as compared to competitors(33%) of customers said that it’s high and (68%) of
customers said its medium. So that we can say that the quality of the product is high but in
relation with competitors the product quality of the company is medium.

With respect to pricing strategy of the company (63%)of customers said that the company's
product price is stable, (27 %) said that it is fluctuated. In comparing with competitors(10%) of
them said that it'sexpensive, (83%) of them said that it's similar with competitors and the
remaining (33%) of them said that it's cheap. Based on the above information we can saythat the
price strategy of the company is stable and comparing with competitors the company has similar
price with competitors and majority of customers are satisfied by company's product price. In
addition (33%) of customers are strongly agree with the company's product quality is comparable
with its price(60%) of them are agreed, (30%) of them are remain neutral and (7%) of them are
dissatisfied. So that we can say that the company product price is comparable with its price.

Regarding promotional mix (47%) of customers are said that sales force is the major type of
promotional mix that the company use to provide product information, (10%) of them said that
we heard from radio and the remaining (43%) get the information from word of mouth.
Comparing with competitors promotional activity(13%) of customers are said that the
promotional activity of the company is high, majority (43%) of customers said that its low,
(37% )said its medium and (7%) of them said that its very low.Majority(47%) of customers said
its good, (30%) of them are neutral, (17%) of them said it’s very good,(3%) of them said its low
and (3%) of them also said it’s very low. In generalcustomers are neutral about the promotional
activity of the company.
From distribution point of view more than half (53%) of customers are purchased the product of
the company from the company's store and (53%) of the companies’ customers have neutral
attitude towards the overall promotional activity of the company.

The rate of quality of the product is very high as per the response of company's general manager.
Concerningthe form of promotional strategy the manager said that the company use personal
sellingand in the future thecompany's plan to incorporate all promotional tools besides personal
selling.

The manager also said that the company mainly distribute its product here in mekelle and the
company use both direct and indirect channel but the company's distribution is highly affected by
government regulation because the output offered tothe market by using the government offer
input is only distributed to the customers identified by the government but the product produced
by using inputs that are not offered by the government is distributed as per the distribution
strategy of the company.

4.2. Recommendation
As the majority of the company's customer are of 16-45 then the researcher recommend the
company to increase the company no of customer by providing additional product s beside flour
like spaghetti and macaroni.

The researchers also recommend that the company increase the number of retailers to facilitate
the distribution system of the product. In the other hand the company also has to increase the
product quality and setting a price that is affordable, in order to retain and attract customers.
Customer not to shift other competitors 'and to attract new customers.

The researcher suggests that the company also increase the use of other promotional tools in
addition to personal selling. On the other hand the company should have to usepromotional tools
that are used to provide product information to the customers in more adequate and an attractive
way.

The company also have to provide suggestion box and other feedback handing
mechanizing/techniques to identify the problem and good side of the company because they
helps the company to increase its sales volume and market share.

The researcher also suggests that the participation of other department in setting price to make
the price more effective and setting price that's affordably by the customer.

The researcher recommend that the company should have to make deep investigation for the
reason that the satisfaction level of customers is remain neutral towards the distribution strategy,
besides the government intervention and the company should expand distribution to outside of
the city as it is not enough yet. The company should search for the source of raw materials to
increase the production and distribution.

REFERENCE

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2. Evans, R Joel, Barry and berman: marketing USA 1997
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5. Philip Kotler and Gurry Armstrong, principle of marketing 11th ed USA 2006
6. William J. Stanton fundamental of marketing 4th ed New York 1975
7. Philip Kotler marketing management, analysis, planning implementation and control 6 th
ed 1988
8. W.w.w.net meba.com /marketing mix/
9. Business dictionary. Com
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