The Effect of Marketing Strategy on Organizational Profitability in the case of Ontex Ethiopia
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Date
2019-06
Authors
Girmachew, Elelta
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Publisher
Addis Ababa University
Abstract
The research is conducted to investigate the effect of marketing strategy on organizational profitability in the case of Ontex Ethiopia. This research also aims in examining to what extent product, price, promotion and place strategies influence the organizational profitability. The data conducted had a close ended five point likert scale questionnaire. The research conducted used a non-probabilistic convenience sampling technique for the key account customers since all customers are located in different areas of the city. The questionnaire was physically distributed to 181 key account customer (supplier of the product) it is important to investigate suppliers since canbebe is only a manufacturer. Further an interview with the sale/project manager of Ontex Ethiopia was conducted to see why the organization is currently utilizing such strategies. The data analysis was done using statistical package for Social Science (SPSS version 20). By running a correlation test and regression analysis the study has determined to what extent each marketing mix strategy affects the profitability of Ontex Ethiopia. The findings indicate that Ontex Ethiopia had adopted product development strategies, adoprtion of product development strategies has resulted in a positive and significant effect on organizational profitability. Product development strategy has helped Ontex Ethiopia achieve its business goals such as entering new markets by expanding their territory, selling to existing customers and winning over customers from other competitor’s. Pricing strategy had a significant effect on Ontex Ethiopia’s profitability. However pricing the product to low or to high can have unintended consequences in sales. Pricing strategies gives Ontex flexibility in setting prices and win business or maintain price and increase profit margin. The study further concludes that employment of promotional strategies helped to keep customers of what the firm offered. Place strategy has an insignificant effect on the Ontex Ethiopia’s profitability. Distribution of the product is handled by different partners of the organization, involvement of the manufacturer is found to be keen in distribution. The study recommends that Ontex Ethiopia should persistently embrace product development strategy as this strategy provides a framework for creating new products, improving performance, cost or quality of the product. Ontex Ethiopia is continuously adopt pricing strategy such as market penetration pricing, economy pricing, price skimming and premium pricing as these factors have a positive impact on the profitability of the organization. Promotion strategy should also be embraced continuously for reminding the customers about the existence of the product and should state how the product is unique as compared to other products. As for the place strategy there should be a clear invovment of Ontex Ethiopia as of where the product should be delivered in a cost efficient way in different territories.
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Keywords
marketing mix strategy, product, price