ST.

MARY’S UNIVERSITY
SCHOOL OF GRADUATE STUDIES

PRACTICES AND CHALLENGES OF MARKETING

STRATEGY, THE CASE OF OROMIA FOREST &
WILDLIFE ENTERPRISE

BY
ADEM MOHAMMED HUSSEIN

MAY, 2015
ADDIS ABABA, ETHIOPIA
 PRACTICES AND CHALLENGES OF MARKETING STRATEGY,

THE CASE OF OROMIA FOREST & WILDLIFE ENTERPRISE

BY
ADEM MOHAMMED HUSSEIN

A THESIS SUBMITTED TO ST.MARY’S UNIVERSITY, SCHOOL OF

GRADUATE STUDIES IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE DEGREE OF MASTERS BUSINESS
ADMINISTRATION (MBA- GENERAL)

MAY, 2015
ADDIS ABABA, ETHIOPIA
 ST.MARY’S UNIVERSITY
SCHOOL OF GRADUATE STUDIES
FUCULTY OF BUSINESS

PRACTICES AND CHALLENGES OF MARKETING

STRATEGY,
THE CASE OF OROMIA FOREST & WILDLIFE ENTERPRISE

BY
ADEM MOHAMMED HUSSEIN
SGS4Z/0345/2005

APPROVED BY BOARD OF EXAMINERS:

___________________________ __________________________

Dean, Graduate Studies Signature

___________________________ __________________________

Advisor Signature

___________________________ __________________________

External Examiner Signature

___________________________ __________________________

Internal Examiner Signature

 DECLARATION

I, Adem Mohammed Hussein, the undersigned, declare that this project work entitled
“Practices and Challenges of Marketing Strategy in the case of Oromia Forest & Wildlife
Enterprise” is my own original work. I have carried out it independently with the
guidance and suggestions of the research advisor. And it has not been presented in St.
Mary University or any other University.

Adem Mohammed ___________________________

(The Researcher) Signature

__________________________

Date

St.Mary’s University, Addis Ababa MAY, 2015

I
 ENDORSEMENT

This thesis has been submitted to St. Mary’s University, School of Graduates
Studies for examination with my approval as a University advisor.

________________________ _____________________
Advisor Signature

St.Mary’s University, Addis Ababa May, 2015

II
 Acknowledgments
First and for most, I would like to give my glory and praise to the Lord of creations for
his valuable cares and supports throughout the course of my life and helped me since the
inception of my education to its completion and enable me to achieve my career.
Next, I’m grateful to appreciate my advisor Dr. Temesgen Belayneh, who has taken all
the trouble with me while I was preparing the paper. Especially, his valuable and prompt
advice, his tolerance guidance and useful criticisms throughout the course in preparing
the paper, constructive corrections and insightful comments, suggestions and
encouragement are highly appreciated; a special word of mouth is his credit.

My sincere and heartfelt gratitude goes to the target respondents of the staff,
(management and employees) of the company at head quarters and selected branches for
their frank response to my questionnaires and checklists for discussions without which
this paper would come to life.
Finally, I’m greatly indebted to my better half Fozia Edris, my kinships Ahmed Hesen
and Munteha Mohammed and to my families for their encouragement, suggestions, and
uncountable financial and moral support.

i
 Table of Contents
Acknowledgments.................................................................................................................................. i

Table of Contents .................................................................................................................................. ii

Acronyms .............................................................................................................................................. v

List of Tables ....................................................................................................................................... vi

List of Figures ..................................................................................................................................... vii

Abstract .............................................................................................................................................. viii

CHAPTER ONE ..................................................................................................................................... 1

INTRODUCTION................................................................................................................................... 1

1.1. Background of the study ................................................................................................................ 1

1.2. Statement of the problem ............................................................................................................... 8

1.3. Research questions ....................................................................................................................... 10

1.4. Objectives of the study................................................................................................................. 11

1.5. Significance of the study .............................................................................................................. 11

1.6. Scope of the study ........................................................................................................................ 12

1.7. Limitations of the study ............................................................................................................... 12

1.8. Organization of the study ............................................................................................................. 12

CHAPTER TWO .................................................................................................................................. 14

REVIEW OF RELATED LITERATURE .......................................................................................... 14

2.1. Introduction .................................................................................................................................. 14

2.2. What is marketing? ...................................................................................................................... 14

2.3. What is strategy? .......................................................................................................................... 16

2.4. Definition of marketing strategy .................................................................................................. 16

2.5. Why is marketing strategy?.......................................................................................................... 17

2.6. Types of marketing strategies ...................................................................................................... 17

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 2.7. Marketing mix strategy ................................................................................................................ 20

2.8. Critics of marketing mix strategy................................................................................................. 20

2.9. The product dimension ................................................................................................................ 21

2.9.1. What is a product ...................................................................................................................... 21

2.9.2. Lumber product dimension ....................................................................................................... 21

2.10. The price dimension ................................................................................................................... 24

2.10.1. What is a price? ....................................................................................................................... 24

2.10.2. Pricing framework .................................................................................................................. 25

2.10.3. Price determination ................................................................................................................. 25

2.10.4. Pricing strategies ..................................................................................................................... 26

2.10.5. Pricing factors ......................................................................................................................... 26

2.10.6. Types of pricing strategy ........................................................................................................ 27

2.11. The promotion dimension .......................................................................................................... 28

2.11.1. Promotion through the product life cycle ............................................................................... 29

2.12. The place dimension .................................................................................................................. 29

2.12.1. Distribution, marketing channels and channel partners .......................................................... 29

2.12.2. Distribution strategies ............................................................................................................. 30

CHAPTER THREE .............................................................................................................................. 32

RESEARCH MRTHODOLOGY ........................................................................................................ 32

3.1. Chapter Overview ........................................................................................................................ 32

3.2. Research approach and methods .................................................................................................. 32

3.3. Sampling Design .......................................................................................................................... 33

3.4. Sources of data ............................................................................................................................. 34

3.5. Research instruments ................................................................................................................... 35

3.6. Methods of data analysis .............................................................................................................. 35

3.7. Ethical issues ................................................................................................................................ 35

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CHAPTER FOUR................................................................................................................................. 36

RESULTS AND DISCUSSION ........................................................................................................... 36

4.1. Chapter Overview ........................................................................................................................ 36

4.2. Respondents Profile ..................................................................................................................... 36

4.3. Rationale for sales decline ........................................................................................................... 38

4.4. Company product profile ............................................................................................................. 38

4.5. Product Dimension....................................................................................................................... 40

4.6. The price dimension ..................................................................................................................... 44

4.7. The promotion dimension ............................................................................................................ 45

4.8. The place dimension .................................................................................................................... 47

4.9. Analysis of the managements’ group discussion ......................................................................... 49

4.10. Discussion of the Results ........................................................................................................... 52

CHAPTER FIVE .................................................................................................................................. 61

SUMMARY, CONCLUSION AND RECOMMENDATION ........................................................... 61

5. 1. Summary of the major findings .................................................................................................. 61

5. 2. Conclusion of the study .............................................................................................................. 63

5. 3. Recommendation of the study..................................................................................................... 66

References .............................................................................................................................................. i

List of Appendices ............................................................................................................................... iv

iv
Acronyms
- AMA -----------------------------------------American Marketing Association
- BCG ------------------------------------------Boston Consulting Group
- CEO------------------------------------------ Chief Executive Officer
- CPG-------------------------------------------Consumer packaging Goods
- E.C.--------------------------------------------Ethiopian calendar
- HBR ------------------------------------------Harvard Business Review
- OFWE ----------------------------------------Oromia forest and wild life enterprise
- PLC ------------------------------------------ Product Life Cycle
- STP ----------------------------------------------Segmentation, targeting and positioning
- SWOT ----------------------------------------Strength,Weakness,Opportunity and Threats
- U.S. -------------------------------------------United States
- 4Ps ---------------------------------------------Production, price, promotion, place

v
 List of Tables

Table No. Description Page No.

Table No.1 American soft wood Lumber product standard 23

Table No.2 Relative comparison of lumber production in branches 33

Table No.3 Sample frame and sample size computation 34

Table No.4 Customers Demographic analysis (gender) 36

Table No.5 Customers Demographic analysis (Age category) 37

Table No.6 Employees Demographic analysis (gender) 37

Table No.7 Employees Demographic analysis (Age category) 38

Table No.8 OFWE Lumber standards 39

Analysis of factors affecting customers’ current and future state of

Table No.9 40
buying

Table No.10 Analysis of Respondents’ preference rate of width dimension 41

Table No.11 Analysis of Employees perceived width dimension preference 43

Table No.12 Product attributes affecting customers buying decision 44

Table No.13 Analysis of Heavy buyers of company’s product 54

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List of Figures

Figure No. Description Page No.

Percentage change in production, sales and revenue generated

Figure No.1 during the last growth and transformational plan in Oromia 6
forest and wild life enterprise.

Diagrammatic representation of set of marketing mix elements

Figure No. 2 20
(4P’s)

Types of promotional strategies employed at different stages of

Figure No. 3 29
product life cycle

vii
 Abstract
This is a descriptive research study was conducted to assess and evaluate the current
practices and challenges of the marketing strategy of the OFWE’s lumber business unit
with the frame work of the 4P’s marketing mix elements by employing purposively
selected 18 traders and 72 experts and management members of the company selected
and studied using structured questionnaire, interviews and group discussions.

Both primary and secondary data were used and analyzed, the major findings of the
study, shows, the company is following mass marketing strategy with production system
that doesn’t satisfy customers need and offered to the market at bid sales operation that
didn’t allow the company to reach all customers and not able to attract others.

The result of the study indicates that, the existing market strategy is full of challenges and
problems in all 4P’s variables studied. The absence of product standards, the higher
price charged than competitors, the increasing supply of competitors product, difficulty
of improving the quality of the product, and the poor promotional measures and service
delivery leads to significant customers compliant, that worsen the company’s business
operation. Therefore, it is recommended that the company should conduct a periodic
market survey and put to place the most relevant strategy as soon as possible.

Key words: Marketing mix, Target marketing, Oromia forest and wild life enterprise (OFWE),
Marketing Strategy

viii
 CHAPTER ONE

INTRODUCTION
This section is designed to address the background of the study, statements of the
problem, Objectives of the study, Methodology, Significance of the study, Scope and
limitation of the study.

1.1. Background of the study

According to U. S. General, Omar Bradley, the role and value of strategy in the military
sector is stated as “In war, there is no second prize for runner-up”, (December 2011),
indicates that how far the role of strategy is decisive in the military operations.

It’s analogous to the military principle of concentration of force to overwhelm energy.

Concentration of marketing energy is the essence of all marketing strategies and market
segmentation, targeting and positioning is the conceptual tool to help in achieving this
focus.“Market segmentation is to divide a market into smaller groups of buyers with
distinct needs, characteristics, or behaviors who might require separate products or
marketing mixes.” (Charles W. Lamb 2003).

Marketing strategy is the goal of increasing sales and achieving a sustainable competitive
advantage. It includes all basic and long-term activities in the field of of marketing that
deal with the analysis of the strategic initial situation of a company and the formulation,
evaluation and selection of market-oriented strategies and therefore contributes to the
goals of the company and its marketing objectives. (http://en.wikipedia, (May 2009)

Business dictionary also defines marketing strategy as; an organization’s strategy that
combines all of its marketing goals in to one comprehensive plan. A good marketing
strategy should be drawn from market research and focus on the right product
mix in order to achieve the maximum profit potential and sustain the business and
recognized as a foundation of marketing plan. (http://www.businessdictionary.com)

1
A contemporary definition given by American Marketing Association which is most
emphasizes on the 4Ps marketing mix elements as “the activity, set of institutions, and
processes for creating, communicating, delivering, and exchanging offerings that have
value for customers, clients, partners, and society at large”.(Marketing Principles
(index.html) (v. 1.0).
a) Creating offerings - related with the product dimension
b) Communication – which is related to the Promotion dimension ,
c) Delivering – related to the Place dimension of the mix ,
d) Exchange – related to the Price dimension of marketing mix element
Another writer David Aaker defines Marketing strategy as a process that can allow an
organization or a company to concentrate its resources on the optimal opportunities with
the goals of increasing sales and achieving sustainable competitive advantages. (Strategic
Market Management 2008).
In order to develop and implement a sound marketing strategy firms need to conduct a
careful and precise scanning of their internal and external environmental factors, giving
due attention for internal factors of the marketing mix elements i.e. the 4Ps.

Today, business firms recognize that they cannot appeal to all buyers in the market place
or at least to all buyers in the same way. Buyers are too numerous, too widely scattered,
and too vary in their needs, and buying practices. (http//toolkit.smallbiz.nsw.gov.au./part/3/)

Thus business enterprises have moved away from mass marketing and toward the market
STP- segmentation targeting, and positioning, to serve which means identifying and
grouping various customers in to segments that have common needs or will respond
similarly to marketing actions. Each segment will respond to different marketing mix
strategies.

After segmenting markets based on demographic, Psychographic, behavioral

characteristics and geographic locations select and target one or more target group by
choosing among the alternative strategies; undifferentiated/mass marketing,
concentrated/targeted and product verity /differentiated targeting strategies available in
selecting that best suit to the company’s marketing strategy or selecting one or more of
2
them, and developing marketing mix strategies and programs tailored to each instead of
scattering their marketing efforts.(Philip Kotler and Gray Armstrong, pp194).

The potential benefit of a well developed STP strategy enables the organization to
establish and strengthen its position in the market and in this way operates effectively.
Not only does it then become far more difficult for a competitor to attack but it also
allows the organization a greater degree of market sector knowledge and customer
loyalty. (Richard M.S.Wilson and Colin Gilligan (2009), PP321).

Brodrechtova (2008), explained that marketing strategy is a roadmap of how a firm

assigns its resource and relates to its environment and achieves a corporate objective in
order to generate economic value and keep the firm ahead of its competitors.

The overall concept of marketing strategy of STP is relies on the marketing mix
elements, which consists of the 4P’s strategies; the product marketing strategy, the price
marketing strategy, the place/distribution marketing strategy and the promotion
marketing strategy.

Among the 4 P’s, Product dimensions are an important part of a marketing mix.
Leonidou, et al (2002), have studied about marketing strategy. They synthesized
empirical studies about marketing strategy and concluded that product design, brand mix
(name, sign, symbol, and design), warranty, customer service as pre- and after-sales
services, and product advantages (such as luxury, prestige, and quality) are an important
variables of product marketing strategy.

The study of Lee and Griffith (2004), conducted on the the marketing strategy in Korea
concluded that adjustment of prices to market situation have positive influence on the
market share and adaption of pricing strategy would increase the market share, and the
pricing method has positive relation with proportion of sales and profit level, this can be
studied or treated under the second P’s of price marketing strategy.

Other variable related to one of the marketing mix element is promotion (the third P’s). It
indicate that firms which have a greater commitment to their target market use higher

3
level of advertising, and find themselves better off, than firms who have less commitment
that used low level of advertising (Lee & Griffith, 2004).

In recent days active and advanced exporters have more control on distribution activities,
as well as the time of delivery of the product, and distribution channel more successful in
business, which can be addressed as a fourth P’s of place marketing strategy. (Eusebio et
al, 2007).

Therefore, it is clear that the availability and on-time delivery are very important and firm
with better distribution method of the Place marketing strategy, is successful in a
competitive market environment.

Today’s intense global competition around the globe affects the offerings of business
organization in the market place in different ways. In order to beat and remain
competitive companies need to have developed a sound marketing strategy. The purpose
of having marketing strategy is to modify/ influence/shape the affect, cognition and
behaviors of customers and consumers in ways that are conducive to their acquisition,
possession and consumption of specific product offerings of an organization (Carpenter
et al. 1997).

Companies who have developed their marketing strategy by considering proper segment,
appropriate targeting and positioning strategy by aligning the 4Ps marketing mix strategy
properly, can meet the target customers need at the best of affordable price and better
than competitors, provided that, the company is better off in the market place and will be
able to achieve its goals.

Implicitly the very purpose of any business organization is to maximize the profit through
building valuable customer relationship. So to realize this, the company need to organize
its marketing strategy around the marketing mix elements of the 4Ps i.e. product,
promotion, place or distribution and price of the products or services (Philip Kotle rand
Kelvin Lane, 2009)

4
For a company to effectively market a product or service the 4ps should be get right and
viewed as one unit and structured to support each other, otherwise the marketing strategy
will be confusing and uncoordinated (www.learn marketing.net).

The motive that makes the researcher to study this business unit’s marketing strategy is as
follows:

It the largest source of revenue among the business units the company is operating. The
researcher believes that, if the marketing problems, and challenges in the current
marketing practices of this business unit is properly identified and well solved, it can be
used as step stone to replicate the study for the rest of other business units.

Another reason for this study is to see whether the company’s marketing practice is
comply with the accepted scientific marketing approaches, and to identify what major
problems and challenges hinders the implementation of target marketing strategy.

Another reason for this study is the observed situation of the business operation showing
the inconsistency of production, quantity sold, and revenue collected over the last five
years that shows abnormal business operations that requires attention and corrective
actions.

On the other hand customers of the company buying this product is few in number as
compared to the large volume of product offered and reasonably high demand for the
product is one of the reason the researcher is motivated to conduct the research on the
marketing issues of the product.

There is a customer’s complaint issue, which has been reported from the preliminary
study of recently conducted market research that shows because of poor service delivery.

5
Fig1:- chart showing Marginal production quantity sold and marginal revenue collected
during the last five years.

Source:- OFWE Data base (2007).

It is observed that, the official data of the company reveals that the percentage change in
the production volume of lumber (Marginal product) from year 2003E.C. onwards shows
increasing at an average of 4.67% annually.
The percentage change of sales volume (Marginal Quantity) was at 22.53% between year
2003 & 2004 E.C., and shows declining until year 2006, and shows a better change of
rising between years of 2006 & 2007E.C.
The graph of percentage change of revenue earned (Marginal Revenue) from sales of
lumber shows that the change in the percentage between year 2003 E.C. and 2004 E.C.
was 64.11%, and shows sharp declining by the end of 2005E.C. from year 2006 onwards
the revenue shows significant change of increments than both percentage changes of
production and sales volume.
The summary of performance data of five years pattern of sales shows the company’s
undesirable trend of operation which is not as good as required. The marginal revenue
shows decreasing at an average of 19.79 % (OFWE data base 2007 E.C.)
The overall situation of the company shows that the firm understudy is in trouble of
marketing operations. Therefore, it is worth mentioning that the company has to conduct
research and fetch for solutions that can better off the firm under study.

6
Failure to do so will lead to a host of unfavorable consequences on the decline or loss of
sales and customers, remains with poor product quality and services, leads to high cost of
operation, loss of competitive advantage, more over suffers from intense competition and
leads to bankruptcy.

1.1. 1. Company Profile

The Oromia Forest and Wildlife Enterprise (OFWE) is a public enterprise established at
regional level by regulation No.122/2009, issued by Oromia Regional State. Its main
objective is to attain sustainable management and utilization of forest and wildlife
resources of the region through co-ordination and integration of the available physical,
financial, and human resources.

The enterprise has been established with a fully paid up capital of birr 1,409,422,000 and
the formation of this public enterprise having nine branches is organized under the newly
incepted forest and wildlife enterprise, (regulation No.122/2009).

The enterprise in general has a mission of conserving natural forest, involving in the
development and management of manmade (plantation) forest for commercial purposes.
The enterprise has given the total forest concession area of 1,742,488 hectares, out of this
figure 74,215 hectares is covered by manmade (plantation) forest, 1,209,955 hectares are
of natural, and the rest is open and bush lands, (Regulation No.122/2009).

Both the natural forests and plantation forests managed by the enterprise provides
important forest goods and services. Its protective function comprises nature conservation
and protection of biodiversity, soil protection, carbon storage, water recharge and water
quality and its productive function involves timber production, biomass for bio-energy,
construction wood, and non-timber forest products.

The official performance report documents of the company, shows that 33 saw mills have
been employed that yields 27,076 cubic meters of mean annual production of lumber and
being sold for Birr 122,337,244 per annum. Among many business units the company
used as a source of income, lumber product has a lion share that provides 57% of the total

7
revenue. The rest 43% of the revenue comes from sales of primary forest products
/Construction wood, Fuel woods, Logs, Transmission poles/, sales of None-timber forest products
(honey, Gum, bamboo, Essential oils, Forest Coffee), Ecotourism services and from hunting of wild
life, and other services like rates and rents, are businesses undertaken by the enterprise. Among
the many business units a company is operating, the researcher has selected the lumber
product business unit in order to study the current “practices and challenges of its
marketing strategy” with the frame work of the 4P’s marketing mix elements.

1.2. Statement of the problem

OFWE is one of the public enterprises producing significant volume of lumber products
of different dimensions and features in most of its branches and make available for sale in
mass market. Currently, the firm is exhibiting frequently occurring customers’ complaint
for product quality, being charged in tremendously increasing product (lumber) price and
poor service delivery of sales operation for the last consecutive years which is not
resolved yet, is becoming a concern of the management in every quarterly performance
evaluation meetings.

The firm offers the product with different dimensions and features in mass without
having differentiated features and clearly known brand name and image to the existing
mass market. Without knowing which product type is more demanded and provides
immediate return and make the business more profitable in the market and where there is
no clear market strategy, can threaten the company’s business operation.

The problem now becomes critical and gets emphasis and the management of OFWE
starts to react on in conducting market research to identify the major reason/s for the
customers’ dissatisfaction and compliant, about the offerings and reducing the quantity
and frequency of buying the product than before.

One of the existing situations observed in the area of the firm’s marketing strategy needs
assessment is lack of using target marketing, rather practicing mass marketing through
bid sales policy. It is worth mentioning that, some of the loyal customers and heavy
buyers of the product are going to resist involving in bid sales programs of the enterprise.

8
This leads the firm to be in a position of sales decline and loss of customers, provided
that it is adversely affect the balance of working capital and fear of fail to cover the major
costs, including the fixed costs of basic business operations of the firm under study.

Another area of the existing problem is the customers’ significant complaints on the
company’s service delivery. This in turn has got the attention and concern of
management. As a result, the actions of conducting market survey has been employed,
based on the results, certain actions like a price cut, has been taken to attract the existing
customers, and filling the current gap in the practices and procedures of doing the
business. On the other hand, the company is following procedures, and methods used in
setting price and methods employed in selling the product is the only auction bid sales
policy.

In order to attract customers and build brand image the need for advertisement is
unquestionable. However, the practice of the firm under study in implementing this 4P is
not sound enough. The practice of linking and synchronizing each marketing mix
elements (the 4P’s) specifically the promotional mix elements which are most appropriate
to the particular business unit of the company under study is seemed to be overlooked;
thus the reason for this is may be the company’s existing sales policy or other marketing
strategy gap which should be clearly identified by the ongoing research study.

As indicated on the above discussions, it is clear that the firm’s marketing strategy
practices and challenges have certain deficiencies that should be assessed and the gap in
STP and marketing mix strategy should be identified and appropriate strategy should be
developed, implemented, and maintained in order to improve the existing situation and
keep moving with the ever changing environment of the market.

Though, recently the enterprise has tried conducting market research in order to identify
the ongoing problems and reasons with short term solutions, yet the problem is going on.
Therefore, it requires intensive market research and developing a sound marketing
strategy in order to overthrow the problem permanently.

9
Despite the efforts made so far, the problem of customer’s compliant, poor service
delivery, fail to produce and market based on market need, using bid sales mass
marketing strategy rather than target marketing, fail to compute with import products, and
challenged by domestic product suppliers and fail to attract new customers, and
threatened to lose the existing ones, fail to aware customers, and create strong and
attractive channel of distributions and fail to set attractive price are among the many
problems remains unsolved and will continue to affect the marketing activity of the
enterprise and if not solved, it leads to the question of survival at large.

Therefore, the purpose of this study is, to assess the practices and challenges of marketing
strategy of the enterprise (OFWE) and to come up with a solution to overthrow the
ongoing problems.

1.3. Research questions

In order to achieve the research objectives, the following basic research questions were used
in guiding the study;
 Why sales decline and customer complaints become serious issue?

 What are the features and dimensions of the products available for sale, and how
does OFWE is practicing the offer to reach its customers?

 What is the degree of compatibility between the existing pricing policy practices
and accepted pricing strategy?

 What promotional measures are being adopted and why not being effective in
creating as many customers as possible?

 What distribution systems and channels are available and how do they operate?

 What are the challenges of marketing strategy of OFWE in segmentation and

marketing mix strategies?

10
1.4. Objectives of the study
The general objective of the study is to assess and evaluate the challenges and practices
of marketing strategy of OFWE, with the frame work the 4P’s marketing mix elements.

The specific objectives of the study are the followings:

 To identify the reasons for sales decline and customers’ compliant.

 To identify the features and dimensions of the products available and the
practices of the company’s offerings to reach its customers

 To analyze the degree of compatibility between the existing pricing policy

practices and accepted pricing strategy.

 To identify the promotional mix elements being practiced and the reason for not
being effective in creating significant number of customers.

 To examine the type and availability of market channels and systems and how
they are operating in meeting the customers’ need?
 To assesses the challenges of marketing strategy of OFWE in segmentation and
marketing mix strategies and recommend for possible solutions.

1.5. Significance of the study

This research study is believed to have the following significances:

It has a practical significance in shading light in the OFWE. The study can be used by the
management of the enterprise OFWE to resolve the problem related to marketing strategy
of the particular business unit under study and other business units the company is
undertaking. It can serve as a stepping stone for the company to conduct a research on the
area of marketing of the same product for further study or, other business units.
Conducting this study enhances the researcher’s skill and knowledge for further research
in the area.

11
1.6. Scope of the study
OFWE is operating in nine branches in Oromia Regional States in almost all zones of the
region, where seven of them are located outside of Addis Ababa and two of them are
located in Addis Ababa. Due to limitations of finance, time, information and logistics, the
researcher is limited to the three purposively selected branches.

Because of purposive sampling is employed the target population is limited to 18

customers and 72 experts and management members and only three relevant departments.

There is a limitation on data analysis and presentation methods that employs frequency
tables and percentage computations.

Among many business units operated under the company, this research study considered
only lumber product business unit.

1.7. Limitations of the study

There is no well developed forest product market in Ethiopia; therefore, it is one of the
limitations in obtaining relevant information.

Because of time and resource limitation, it is not easy for the researcher to reach the
branches far from Addis Ababa like Jimma and Borena. Therefore, the researcher has
limited to employ purposive sampling techniques in selecting target respondents

The company under study is established recently and lacks certain necessary information,
like market shares, market destinations and market channels, to support the study
undertaking by the researcher.

There is limitations of data analysis instruments used for the study.

1.8. Organization of the study

This project report is organized under five chapters. Chapter one consists of introductory
part that comprises background of the study, statement of the problem, objectives of the
study, Basic research questions, significance of the study and scope of the study. The
second chapter deals with review of related literature. The third chapter deals with
12
methodology of the study which comprises study areas, source of data, data collection
method, sampling techniques, data analysis method, reliability and validity of data, and
the ethical consideration. The fourth chapter deals with the results and discussions of the
study, the fifth chapter deals with the conclusions and recommendations of the study.

13
 CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1. Introduction
In this part of the study, the most relevant and appropriate literatures have been reviewed
so as to link the theoretical and empirical studies made on marketing and marketing
strategy, particularly on marketing mix strategies, which enable the researcher to analyze
the results obtained from the data collected, for the study and to link with the practices of
the company under study.

2.2. What is marketing?

Different meanings and definitions have been given from early classical narrow views to
today’s contemporary and broader views. Some of the writers show their views as a set of
process; others mention as a system of activity and some of them as a performance of
different activities. Here are some of the lists of the meanings given among many
definitions provided by different scholars.
Kotler, in one of his writings, states that Marketing as a social and managerial process by
which individuals and groups obtain what they need and want through creating and
exchanging products and value with others.
American Chartered institute of marketing also defines marketing as a management
process which identifies, anticipates and supplies customer requirements effectively and
at a profit.

(Evans and Berman) also forwarded his views as a process; marketing is the anticipation,
stimulation, facilitation, regulation and satisfaction of consumer and public’s demand for
products, services, organizations, people, places, and ideas through the exchange process.

14
Santon, also wrote his view as a set of system of business activities designed to plan,
price, promote and distribute want satisfying goods and services to present and potential
customers.

(AMA) wrote as one of the classical views of marketing that defines the marketing as the
performance of business activities that direct the flow of goods and services from
producers to consumers (AMA).The classical views most emphasizes on distribution
aspect of a marketing., and therefore, it is too narrow to describe what marketing is.

However, (Kotler), in his marketing management books wrote, the contemporary and
broader view of marketing as stated and summarized as an organizational function and a
set of processes for creating, communicating, and delivering value to customers and for
managing customer relationships in ways that benefit the organization and its
stakeholders. In broader terms marketing is defined as a system of business activities
designed to plan, price, distribute and promote want satisfying products (goods and
services) to present and potential customers.Hence, the aim of marketing is to meet and
satisfy target customers’ needs and wants better than competitors. Marketers must have a
thorough understanding of how consumers think, feel, and act and offer clear value to
each and every target consumer. (Kottler ,– PP 151)

By 2004, the official definition of marketing adopted by American Marketing

Association (AMA) states that “Marketing is an organizational function and a set of
processes for creating, communicating and delivering value to customers and for
managing customer relationships in ways that benefit the organization and its
stakeholders.” (Marketing News 2004, p. 1):

By 2007, the AMA adopted the following as its new official definition of marketing
Marketing is the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners, and
society at large. (Marketing News 2008, p. 28):

15
2.3. What is strategy?
Different meanings of strategy are forwarded by different scholars. According to business
dictionary.com the definition of strategy is given as “Strategy is about broad business
options and choices that have organization-wide impact. There is always more than one
way to achieve a vision or support a mission. Strategy is a hypothesis of the best way for
the organization to achieve its vision and mission. Strategy requires selection among
alternative ways of doing things, focusing on a few things, and deferring or rejecting the
rest. Strategies can be long-term (e.g., “What must we do to achieve our vision?”), or
short-term (e.g., “What should we do to achieve our short-term business goals?”).

The importance and value of strategy is highly emphasized in the course of military
operation, as stated and quoted by one of the U.S. general Omar Bradley. “In war, there
is no second prize for runner-up”, (Far East Journal of Marketing and Management Vol. 1
No. 1 December 2011).
Strategies answer the broad question “What approach(s) should we pursue to get the
results we want?” Strategy is different than tactics; tactics answer more narrow questions,
such as: “What specific actions should we take at our level, which is consistent with the
organization’s overall strategy?”

2.4. Definition of marketing strategy

According to business dictionary definition, marketing strategy of an organization is an
organization’s strategy that combines all of its marketing goals in to one comprehensive
plan.
A good marketing strategy should be drawn from market research and focus on the right
product mix in order to achieve a maximum profit potential and sustain the business.
According to the Wikipedia, free encyclopedia (May 2009) definition, “Marketing
strategy is the goal of increasing sales and achieving a sustainable competitive advantage.
Marketing strategy includes all basic and long-term activities in the field of marketing
that deals with the analysis of the strategic initial situation of a company and the
formulation, evaluation and selection of market-oriented strategies and therefore
contribute to the goals of the company and its marketing objectives.

16
Business firms, weather it is a private or a public owned, need to develop a
comprehensive marketing strategy in order to realize their mission and objectives.
According to Phillip Kotler and Gray Armstrong (2004), marketing strategy is defined as
“the marketing logic by which the business unit according to OFWE, the Lumber
business, hopes to achieve its marketing objectives.

2.5. Why is marketing strategy?

The followings are among many advantages marketing strategy provides for
organizations.
Marketing strategy is used to facilitate an organization to achieve and sustain a
competitive advantage in the marketplace and enables the organizations to create market
based relational assets and market-based intellectual assets for the organization
(Srivastava et.al 1970).It enable an organization to establish and nurture mutually
beneficial exchange relationships with customers (Bagozzi 1975). It also help to modify/
influence/shape the affect, cognition and behaviors of customers and consumers in ways
that are conducive to their acquisition, possession and consumption of specific product
offerings of an organization (Carpenter et al. 1997). It is also used to identify and
leverage new points of differentiation (MacMillan and McGrath 1997).and enhance the
salience of non-price criteria vis-à-vis price or vice versa in buyers’ choice decisions.

2.6. Types of marketing strategies

As the problem of market and its environment is diverse, the marketing strategies
implemented in smoothening the business operations are also vary. These are some of the
marketing strategy organizations are adopting and implementing in order to win their
marketing objectives.

In the early growth stage of market according to Borden, Ansoff, Kerin and Peterson
(1978), it is advisable to use a market growth strategy that provides the manager to
choose among additional strategies, (segment expansion and brand expansion.

Another type of market strategy which has been developed by Boston Consulting Group,
is a market maturity strategy, whereby used in correcting among the market failures, like

17
when sales growth slows, stabilizes and starts to decline. In early maturity, it is common
to employ a maintenance strategy (BCG), where the firm maintains or holds a stable
marketing mix”.

A market decline strategy is characterized by at some point the decline in sales

approaches and then begins to exceed costs. And not just accounting costs, there are
hidden costs as well; as Kotler (1965, p. 109) observed: At some point, with declining
sales and rising costs, a harvesting strategy becomes unprofitable and a divesting strategy
necessary.

Borden’s “marketing mix” is an early marketing strategy concept in his review article of
the marketing mix, Borden (1964) credits James Culliton, in 1948 describing the
marketing executive as a 'decider' and a 'mixer of ingredients.' This led Borden, in the
early 1950s, to the insight that what this mixer of ingredients was deciding upon a
'marketing mix'".

In differentiation and segmentation strategy according to Smith (1956, p. 5), a firm tries
bending the will of demand to the will of supply.' That is, distinguishing or differentiating
some aspect(s) of its marketing mix from those of competitors,

In a mass market or large segment, where customer preferences are relatively

homogeneous (Hunt, 2011, p. 80), revealed that, a greater quantity is sold for a given
price and makes it less amenable to substitutes. With segmentation, a firm recognizes that
it faces multiple demand curves, because customer preferences are heterogeneous, and
focuses on serving one or more specific target segments within the overall market.

The Dean’s skimming and penetration strategy is also one of the marketing strategies
that can be characterized by when a firm introduces a product with a high price and after
milking the least price sensitive segment, gradually reduces price, in a stepwise fashion,
tapping effective demand at each price level. With penetration pricing a firm continues its
initial low price from introduction to rapidly capture sales and market share, but with
lower profit margins than skimming".(Dean’s).

18
Andrews’ SWOT analysis, is the widely used marketing strategy at a corporate level, to
intensively analyze company’s internal and external factors that enable to identify
weaknesses and threats along with company’s strengths and existing opportunities to
build up competitive strategy. (Business Policy: Text and Cases (Learned et al., 1965).

Ansoff’s Growth Strategies in the marketing is a popular type of strategy characterized

by ‘product-market' strategy. The product-market concept results from Ansoff’s new and
existing products with new and existing markets in a two by two matrix’.

Porter’s generic strategies, relies on the dimensions of strategic scope and strategic
strength. Strategic scope refers to the market penetration while strategic strength refers to
the firm’s sustainable competitive advantage. The generic strategy framework comprises
two alternatives each with two alternative scopes. These are Differentiation and low-cost
leadership each with a dimension of Focus-broad or narrow (porter 1984).

The innovation strategy is also among the strategies, deals with the firm's rate of the new
product development and business model innovation. It asks whether the company is on
the cutting edge of technology and business innovation. There are three types: Pioneers,
Close followers, and late followers.

Managements seek to know how they are going to make their market grow, like the
OFWE, in this case, These ways of growth are termed as organic growth (horizontal
integration, Vertical integration, diversification and intensification). Horizontal growth is
whereby a firm grows towards acquiring other businesses that are in the same line of
business for example a clothing retail outlet acquiring a food outlet. The two are in the
retail establishments and their integration lead to expansion. Vertical integration can be
forward or backward. Forward integration is whereby a firm grows towards its customers
for example a food manufacturing firm acquiring a food outlet. Backward integration is
whereby a firm grows towards its source of supply for example a food outlet acquiring a
food manufacturing outlet.

19
2.7. Marketing mix strategy
To effectively market a product or service there are four things you need to get right:
Product, Price, Place and Promotion. These four elements are known as the marketing
mix or the 4Ps. The four elements should be viewed as one unit and structured to support
each other; Otherwise a firm's marketing strategy will be confusing and uncoordinated.

Borden’s “marketing mix” is an early marketing strategy concept in his review of the
marketing mix, Borden (1964) credits James Culliton, in 1948 describing the marketing
executive as a 'decider' and a 'mixer of ingredients.' This led Borden, in the early 1950s,
to the insight that what this mixer of ingredients was deciding upon a 'marketing mix'".

Fig.2: diagrammatic representation of set of marketing mix elements (4P’s)

Source:- www.learnmarketing.net

2.8. Critics of marketing mix strategy

The contemporary definition of American Marketing Association of marketing is defined
as “the activity, set of institutions, and processes for creating, communicating, delivering,
and exchanging offerings that have value for customers, clients, partners, and society at
large (Marketing Principles (index.html) (v. 1), emphasizes on the activities that
marketers have to do and shows similarities and differences with marketing mix of 4Ps.
a) Creating offerings - related with the first P of the marketing mix element i.e.
Product (goods and service).
20
 b) Communication – which is related to the Promotion dimension
c) Delivering – related to the Place dimension of the mix
d) Exchange – related to the Price dimension of marketing mix element but shows
certain difference, in scope and dealing with early marketing mix elements of the
4p’s.
This marketing definition most describes and emphasize on what marketers or marketing
professionals do, where the marketing mix elements or the 4Ps fail to capture all the
activities of marketing. In general terms this means that the four Ps are not exactly the
same as creating, communicating, delivering, and exchanging. Another central theme of
this definition lies on the benefits marketers create for customers termed as value
creation. Those Firms who are operating with this philosophy are said to be market
oriented. Hence, a marketing orientation is not an excuse to fail to make profit.

2.9. The product dimension

2.9.1. What is a product

Business dictionary.com defines a product as follows: A product is a good, idea; method,
information, object or service created as a result of a process and serves a need or
satisfies a want it has a combination of tangible and intangible attributes (benefits,
features, functions, uses) that a seller offers a buyer for purchase.

As the product is the item being sold to the customer, the thing that will bring in money,
its features and design need careful consideration. Whether the firm is manufacturing the
product or purchasing the product for resale, they need to determine what product
features will appeal to their target market. Lumber is defined as a manufactured wood
product derived from a log through sawing or planing (American soft wood
Standard).The marketing practice covering the lengths, width and thickness of lumber
permit the buyer to obtain specified dimension or specified assortments of the product.

2.9.2. Lumber product dimension

Lumber products has to be designed, produced, assorted and categorized and
standardized according to the purpose they are intended to be used in the market.

21
Therefore, companies producing lumber and market them in the best way their products
fits the demand of the market. For example one of the American lumber companies
“Stimson lumber”, producing different standardized dimensions of lumber set by the
“American soft wood lumber standard “and categorized according their purpose. Here is
an example of the company’s lumber product dimensions offered to international market.
A lumber dimension named Stepping-lumber designed to be used for stair treads.
Customarily surfaced three sides and bull-nosed on one edge. Finish is another dimension
designed and produced for - a high-quality piece of lumber graded for appearance, often
used for interior trim or cabinet work, Flooring is as its name indicates, a product type
designed as a tongue and grooved piece of lumber typically used as a finished floor,
Ceiling is also another type of dimension of lumber designed and produced as a piece of
patterned, tongue and grooved lumber, used to cover the ceiling of a room, porch or other
partially enclosed areas, the Partition as its name indicates a product having a tongue and
grooved piece of lumber with the same pattern run on both sides.(http://stimson-
lumber.s3amazonaws.com). In Ethiopia such kinds of standard for this particular product
is not yet known.

OFWE is producing 42 different lumber dimensions and offer to domestic market, which
is not yet subject to foreign market. The dimension assigned and the standard of the
product set by the company, doesn’t consider customers need, rather it is based on the
natural characteristics of the raw materials. The size of lumber is depends on the width
size of log material. As the width size of the log increases, the width of lumber is larger,
the larger the width of the lumber, the higher is its demand and price and vise versa.

The table below shows how the “American soft wood lumber product” standards, help
the company to produce different lumber dimensions based on the purpose the product is
fit for.

22
Table1:- “American soft wood lumber product” standards,
Item Thicknesses Widths
Nominal Minimum Dressed Nominal Minimum Dressed
Inch Inch
mm inch mm Inch
3/8 8 5/16 2 38 1-1/2
1/2 11 7/16 3 64 2-1/2
5/8 14 9/16 4 89 3-1/2
3/4 16 5/8 5 114 4-1/2
1 19 3/4 6 140 5-1/2
1-1/4 25 1 7 165 6-1/2
Finish 1-1/2 32 1-1/4 8 184 7-1/4
1-3/4 35 1-3/8 9 210 8-1/4
2 38 1-1/2 10 235 9-1/4
2-1/2 51 2 11 260 10-1/4
3 64 2-1/2 12 286 11-1/4
3-1/2 76 3 14 337 13-1/4
4 89 3-1/2 16 387 15-1/4
3/8 8 5/16 2 29 1-1/8
1/2 11 7/16 3 54 2-1/8
5/8 14 9/16 4 79 3-1/8
Flooring
1 19 3/4 5 105 4-1/8
1-1/4 25 1 6 130 5-1/8
1-1/2 32 1-1/4
3/8 8 5/16 3 54 2-1/8
1/2 11 7/16 4 79 3-1/8
Ceiling
5/8 14 9/16 5 105 4-1/8
3/4 17 11/16 6 130 5-1/8
1 18 23/32 3 54 2-1/8
4 79 3-1/8
Partition
5 105 4-1/8
6 130 5-1/8
1 19 3/4 8 184 7-1/4
1-1/4 25 1 10 235 9-1/4
Stepping
1-1/2 32 1-1/4 12 286 11-1/4
2 38 1-1/2
Source: National Institute of Standards & Technology Voluntary Product Standard PS 20-10 Natl.
Inst. Stand. Technol. Prod. Stand. PS 20-10, 50 pages (June 2010)

23
2.10. The price dimension
2.10.1. What is a price?
Alike the product business dictionary.com gives definitions of price. i.e. “price is a value
that will purchase a finite quantity, weight, or other measure of a good or services, as the
consideration given in exchange for transfer of ownership,” price forms the essential
bases of commercial transactions. It may be fixed by a contract, left to be determined by
an agreed up on formula at a future date, or discovered or negotiated during the course of
dealings between parties involved.
In Marketing principle book sited on http//2012book.lardbucket.org, shows and briefly
states that price has a lion share of price dimension in the product mix strategy.“Price is
the Only Revenue Generator”. Price is the only marketing mix variable or part of the
offering that generates revenue. Buyers relate the price to value. They must feel they are
getting value for the price paid.
Prices can be easily changed and easily matched by competitors. Consequently, product’s
price alone might not provide a company with a sustainable competitive advantage.
Nonetheless, prices can attract consumers to different retailers and businesses to different
suppliers. (http//2012book.lardbucket.org)

An article cited on the http//www.learn marketing.net, highly emphasizes that among the
4Ps marketing mix elements pricing is one of the most important elements of the
marketing mix, as it is the only mix, which generates a turnover for the organization.
The remaining 3p’s are the variable cost for the organization. It costs to produce and
design a product; it costs to distribute a product and costs to promote it. Price must
support these elements of the mix. Pricing is difficult and must reflect supply and demand
relationship. Therefore, pricing a product too high or too low could mean a loss of sales
for the organization. (http://www.learnmarketing.net/Price.htm.

Alike the determinants stated in the marketing principle cited in business dictionary.om,
learnmarketing.net also considers the factors that should be considered in pricing
products or services as, fixed and variable costs, Competition, company objectives,

24
proposed positioning strategies, and target group and willingness to pay. This implies that
the decisions made with regard to price and pricing is highly critical, therefore,
companies need to have a carefully designed pricing strategy that should be aligned with
company’s objectives.

2.10.2. Pricing framework

The marketing principle sited above and other marketing management and marketing
strategy books emphasizes that there should be a frame work for companies to follow in
setting a price for their products and services.

Before pricing a product, an organization must determine its pricing objectives.

Companies do accomplish their objectives with their pricing strategies For example, one
firm may want to capture market share, another may be solely focused on maximizing its
profits, and another may want to be perceived as having products with prestige, another
may focus on to maintain its status quo including the analysis of estimating the demand
for the product or service, the costs, and analyze all factors (e.g., competition,
regulations, and economy) affecting price decisions.

2.10.3. Price determination

Business dictionary definition.com and a book of principles of marketing suggest that in
commerce, price of goods and services is determined by any of the following three
factors.
1) A buyer is willing to pay: - indicates that buyers have the upper hand of setting
price and sellers will be the receivers of the price. It is impossible for a seller to
set high price to earn maximum return from its operation, therefore, this shows
that it is not recommended to follow profit maximization strategy.
2) A seller is willing to accept: - this shows the opposite position of the parties stated
above; this favors the sellers better than buyers. This provides better opportunity
for the seller to have set a price as high as buyers are able to afford, provided that
sellers are able maximize their return.

25
 3) The competition is allowing to be charged: - with this regard, the seller has no
option as compared to buyers, weather the return he/she earn is enough or not.
With product, promotion, and place of marketing mix, it is one of the business variable
over which organizations can exercise some degree of control. It is a criminal offence to
manipulate price in collusion with other suppliers, and to give a miss leading indication
of price, such as charging for items that are reasonably expected to include in the
advertised, list, or quoted price.
(http//business deictionary.com)

2.10.4. Pricing strategies

There are lots of different pricing strategies but every strategy must cover at least
business’s costs unless the price is being used to attract customers to the business (loss
leader pricing). A product is only worth as much as people are prepared to pay for it. The
amount your target markets are prepared to pay for your products/services depends on
product features and the target market's budget. You will also need to consider
competitor pricing and factors within your marketing environment. Effective pricing
involves balancing several factors.

Pricing is one of the most important elements of the marketing mix, as it is the only mix,
which generates a turnover for the organization. The remaining 3p’s are the variable cost
for the organization. It costs to produce and design a product; it costs to distribute a
product and costs to promote it. Price must support these elements of the mix. Pricing is
difficult and must reflect supply and demand relationship. Pricing a product too high or
too low could mean a loss of sales for the organization.

2.10.5. Pricing factors

Pricing should take the following factors into account; these are the fixed and variable
costs, the market competition, the company objectives, the proposed positioning
strategies, and the target group and willingness to pay. The pricing strategy will usually
based on the organization’s corporate objectives.(http//learnmarketing.net)

26
2.10.6. Types of pricing strategy
Today, there are so many pricing strategies of pricing are used by thousands of
companies all over the world. Among many strategies available, learnmarketing.net
highlights the following lists of pricing strategy along with the appropriate desirable
applications, with are presented below. (http//learnmarketing.net).

Penetration strategy, this pricing strategy is applied and used as setting a lower price
initially until the desired market share is met, then automatically increase price, this type
of strategy is applicable in businesses like rents of television satellite.

Skimming pricing, is a type of pricing strategy that is objectively targeting profit

maximization by setting higher price initially until the product is available to a wider
market. Another type of pricing strategy is competition pricing, this strategy is mostly
applicable in many of business organizations, with three options, of lower, the same or
the higher. Product line pricing is also another type of pricing strategy, setting different
prices for the same product having different features.

A bundle pricing is also one of the pricing strategy implemented, this is mainly
applicable and used as a promotional measures like, “Buy one and get one free”. A
psychological pricing is another pricing strategy, in order to help as a price positioning
strategy. Premium pricing is a type of pricing strategy which enable to price products or
services of superior quality or highly valued ones.

Optional pricing is also another strategy to set product price, this is more applicable for
regular products if ordered with some special features or designs, added or incorporated
or as special order on the regular product. Cost based pricing and cost plus pricing
strategies are employed as adding mark up price of certain percentage to meet the desired
profit. The cost based strategy is somewhat different from cost plus strategy in a way that
it considers the regularly changing or volatile cost of production, thus pricing is this type
of product is done frequently.

27
2.11. The promotion dimension
A successful product or service means nothing unless the benefit of such a service can be
communicated clearly to the target market. Promotion is any activity to raise awareness
of a product or to encourage customers to purchase a product.

The different types of marketing communications an organization uses compose its

promotion or communication mix, which consists of advertising, sales promotions, public
relations and publicity, personal selling, and direct marketing.(marketing principles
(index.html) (v.1.0).

Advertising is one of the promotional measures employed in many organizations

including OFWE; it is characterized by the elements of paying to disseminate a message
that identifies a brand (product or service) or an organization being promoted to many
people at one time. The typical media that organizations utilize for advertising of course
include television, magazines, newspapers, the Internet, direct mail, and radio. One of the
biggest factors an organization must determine is the media that provides the biggest
bang for the buck, given a product’s characteristics and target market.

Public relations (PR), is one of a means of disseminating the desired information that
helps improve and promote an organization’s image and products by putting a positive
spin on news stories. Public relations materials include press releases, publicity, product
placement, and sponsorships. One of the OFWE’s PR practices as promotional measures
is participating on sponsorship of many large events or public ceremonies celebrated at
regional level. However the fact that the company’s PR involvement in the public relation
mostly emphasizing and giving priority for forest development part of the company than
the marketing and production activities, and not practiced with the intention of marketing
objectives. Many companies also use PR to promote products and to supplement their
sales efforts. PR is often perceived as more neutral and objective than other forms of
promotion because much of the information is tailored to sound as if it has been created
by an organization independent of the seller.

28
2.11.1. Promotion through the product life cycle
As products move through the four stages of the product lifecycle different promotional
strategies should be employed at these stages to ensure the healthy success and life of the
product.
When a product is new, that is at introductory stage, the organization’s objective will be
to inform the target audience of its entry. Television, radio, magazine, coupons etc may
be used to push the product through the introduction stage of the lifecycle. Push and Pull
Strategies will be used at this crucial stage. At growth stage the product organization will
employ strategy to increase brand awareness and customer loyalty, at maturity stage of
the lifecycle the product will be experiencing increased competition and will need
persuasive tactics to encourage consumers to choose their product over their rivals. At the
decline level the product reaches the decline stage of its life cycle, all the organization
can do is use strategy to remind consumers about the product in a bid to slow the
inevitable.

Fig 3:- Types of promotional strategies employed at different stages of product life cycle

Source:- www.learnmarketing.net

2.12. The place dimension

2.12.1. Distribution, marketing channels and channel partners

Distribution refers to how an organization will distribute the product or service they are
offering to the end user. The organization must distribute the product to the user at the

29
right place at the right time. Efficient and effective distribution is important if the
organization is to meet its overall marketing objectives. If an organization underestimate
demand and customers cannot purchase products because of it, profitability will be
affected.
A marketing channel is the specific avenue a seller uses to make a finished good or
service available to you for purchase for example, whether you are able to buy it directly
from the seller, at a store, online, from a salesperson, and so on is referred to as the
product’s marketing channel1 (or distribution channel). The firms a company partners
with to actively promote and sell a product as it travels through its marketing channel to
users are referred to by the firm as its channel members (or partners). Companies strive to
choose not only the best marketing channels but also the best channel partners.

The two types most frequently known channel partners are wholesalers and retailers.
Market environment is changing from time to time, in recent years, the lines between
wholesalers, retailers, and producers have begun to blur considerably. For example,
Microsoft is a producer of goods, but recently it began opening up its own retail stores to
sell products to consumers, much as Apple has done. (Daniel Lyons, “The Lost Decade,”
Newsweek, November 9, 2009, 27).

Two types of channel of distribution methods are available. Indirect distribution involves
distributing your product by the use of an intermediary for example a manufacturer
selling to a wholesaler and then on to the retailer.. Direct distribution involves
distributing direct from a manufacturer to the consumer For example Dell Computers
providing directly to its target customers. The advantage of direct distribution is that it
gives a manufacturer complete control over their product. (Principles of Marketing,
Philip Kotler 15th editions)

2.12.2. Distribution strategies

Depending on the type of product being distributed there are three common distribution
strategies available:

30
1. Intensive distribution Used commonly to distribute low priced or impulse purchases
products e.g. chocolates, soft drinks.

2. Exclusive distribution Involves limiting distribution to a single outlet. The product is

usually highly priced, and requires the intermediary to place much detail in its sell. An
example of would be the sale of vehicles through exclusive dealers.

3. Selective Distribution A small number of retail outlets are chosen to distribute the
product. Selective distribution is common with products such as computers, televisions
household appliances, where consumers are willing to shop around and where
manufacturers want a large geographical spread.

If a manufacturer decides to adopt an exclusive or selective strategy they should select a

intermediary which has experience of handling similar products, credible and is known
by the target audience.

31
 CHAPTER THREE

RESEARCH MRTHODOLOGY

3.1. Chapter Overview

This chapter provides research methodology to be used in the study in order to achieve
research objectives. The chapter presents research design, population and sampling
technique, types of data and instrument of data collection, procedure of data collection
and methods of data analysis.
The study area of this research is the Oromia Forest and Wild life Enterprise located its
head quarters in Addis Ababa, and has nine branches operating in different zones of
Oromia regional states out of which sample respondents were selected.

3.2. Research approach and methods

Descriptive research study design was employed to analyze the current practices and
challenges of the marketing strategy of the selected business unit (Lumber). Qualitative
data was used for the study in order to help the researcher to understand the existing
situation, events, experiences and challenges and action of the participants to address the
issues raised in the basic research questions of the study.
Relevant variables of each marketing mix elements of the 4P’s i.e. the product, the price,
the promotion and the place were involved and analyzed to bring about the desired
results. Categorization of the variables under the study area includes; the followings:

The product aspect of the first 4P’s variables studied includes the features, the
dimensions, the quality, the attractiveness, the availability of product. The price aspect of
the 4P’s variables studied includes the price level, the perceived value of product, the
affordability and profitability, The third category of this project study is designed to
address, the promotional measures employed and their attractiveness, effectiveness, and
efficiencies. The place aspect of the strategy, involves, the availability of channels for
distribution, the channels’ attractiveness, the service delivery approaches and its quality
and the provision of after sales benefits.
32
3.3. Sampling Design
Purposive sampling is employed using the production performance as a criterion, five
branches of top performers (Arsi, Borena-Guji, Jima, Sheger, Finfine) were selected,
Experts from Marketing, Production and Finance departments and managements working
for these branches including the head quarters were selected as a target respondents.
Table 2: relative comparison of lumber production in branches
Name of Branch Mean Annual Relative
production (M3) contribution (%)
Arsi 18,485 71%
Borena-guji 2,119 8%
Jima 1,607 6%
Sheger 1,122 4%
Finfine 1,031 4%
Others (sum of 4 branches ) 1702 7%
Total 26,066 100%
Source: OFWE data base 2005EC.

Target respondents of the customer group is all existing customers or traders involved in
centralized bid sales operations of the enterprise that are common to all of the branches
organized under the company were considered for the study.

Jima and Borena branches are excluded from the study due to distance, time and financial
constraint of the researcher; therefore, three branches Arsi, Sheger and Finfine were
selected for the study.

The target respondents of employees/experts for the study were experts working in
production, marketing and finance, departments at head quarters and branches.

3.3.1. Population of the Study

The total population of the study were a mix of customers and staff (experts and
Management), the total customers employed for this study were the traders involved in
the bid sales operation of the company, and the entire employees (experts) and
management of the company working at head quarters and branches.
3.3.2. Sampling size
All existing traders of the lumber products were selected and studied. Experts working in
the marketing department including the marketing managers at each selected branches

33
 and head quarters were selected and being studied. Experts of production dep’t are
relevant for the study were involved from selected branches and head quarters. In finance
department experts working on inventory management, control and valuation were
selected and involved in the study. The management members at each selected branch
and head quarters were selected and involved in the study undertakings by the researcher.
For simplicity the total respondents the researcher has used in the course of study is
displayed using the following table:
Table 3: Sample frame and sample size computation
Description of respondents Units Branch HQ Sample frame Sample size
Customers
Lumber traders involved in bid sales No - 18 18 18
Staff
Experts - Marketing Department No 4 x 3 = 12 3 15 15
Experts - Production Department No 3x3=9 2 11 11
Experts - Finance Department No 3x3=9 2 11 11
Management - both at branch & head quarters No 8 x 3 =24 11 35 35
Total No of Respondents No 54 36 90 90
Source: - Survey of 2015

As we see from table based on the criterion used the sample size for the study area were
18 for traders and 72 for staff (experts & Management), provided that the total sample
frame is equal to the total sample size of 90.

3.3.3. Sampling Techniques

Purposive sampling method was employed using the production performance as a
criterion for target branch selection, target respondents of experts were selected based on
the information expected from the respondent that is most relevant to the study were
considered. All management members were considered relevant to the study and were
selected; traders of lumber who were buying the product sold through bid sales were
considered relevant and were selected for the study.
3.4. Sources of data
Data were collected from both primary and secondary sources.

34
3.4.1. Primary data
The primary data source were information collected from target respondents using
structured and semi-structured questionnaires, filled by target respondents of traders and
experts selected from branches and head quarters, and the managements arguments,
judgments, opinions and reflections collected and organized during group discussions
made at head quarters and selected branches with managements.
3.4.1. Secondary data
Secondary sources of data were documents available at the company’s head quarters and
branch offices. These were official documents of the company, annual performance
reports, magazines, and data bases available at head quarters and branches.

3.5. Research instruments

Instruments used for primary data collection were structured and semi-structured
questionnaires, filled by target respondents of traders and experts selected from branches
and head quarters. Check lists for group discussions with management at branches and
head quarters were employed in order to get balanced information. Secondary data were
obtained by reviewing of the available documents at company’s head quarters and branch
offices, such as the official documents of the company, annual performance reports,
magazines, and data bases.

3.6. Methods of data analysis

Data processing or analysis is an important part of the whole survey operations.
Descriptive statistical tools such as percentage, frequency distribution, mean, and charts
were used to describe and present the analysis of the research. The major findings were
presented by using figures, percentages and statement computations.

3.7. Ethical issues

There were opportunities to debrief all those who have been involved in the research. All
activities that required the involvement of the respondents were carried out with the full
consent of the respondents. Respondents’ right to privacy were respected.

35
 CHAPTER FOUR
RESULTS AND DISCUSSION

4.1. Chapter Overview

In this part of the research, the researcher has presented the major findings of the study in
five sections. The first section deals with the analysis of the sample respondents of both
the employees’ and customers’ general profile. The second section presents the analysis
of the first 4Ps (product Dimension) marketing of the marketing mix. The third section
provides the analysis of the second 4Ps (Price Dimension) marketing in the mix, under
the study area. The fourth section covers the third 4Ps (Promotion Dimension) marketing.
The fifth part discusses about the last part of the 4ps (Place Dimension) marketing.
To meet the objectives of these study questionnaires were distributed to sample
respondents. All target respondents of customers and employees were responded to the
questionnaires; and all the accepted responses were complete and found to be valid for
analysis.

4.2. Respondents Profile

4.2.1. Customers’ respondents
Table 4:- Demographic analysis (Gender)
Valid Cumulative
Gender Frequency Percent Percent
Valid Male 17 94 94
Female 1 6 100
Total 18 100
Source:- Survey 2015
Out of 18 customers respondents involved in the study, only 6% is female, the remaining
94 % (17) are male.

36
Table 5:- Demographic analysis - (Age category)
Valid Cumulative
Age category Frequency Percent Percent Percent
18-25 0 0 0
26-35 5 28 28
36-45 6 33 61
Valid 46-55 7 39 100
above 55 0 0
Total 18 100
Source:- Survey 2015
Almost all of the respondents are at productive age. 28% (5) of them are between age of
26 and 35, 33 %(6) of them are between age of 36 and 45, the rest 39%(7) of the
respondents belongs to 46 to 55 age group. The analysis of the educational level of
respondents shows that, about 11%(2) of them are those who are able write and read,
56%(10) of them are the 12th or 10th grade complete as per the old and new curriculum of
education, 28% (5) of them are diploma holders, the rest 6%(1) respondent belongs to
university graduate. About 89 %(26) of the respondents are married, the remaining
11%(2) are unmarried.
Their business relationship with the company in buying lumber product (since 2000
E.C.) shows, majority of customers 78%(14) have more than seven years relationship, the
remaining have 5 years (17%) and 3 years and below (5%) respectively.

33% (6) of the customers respondents are found to be operating their business in the
capital of Ethiopia, (Addis Ababa) 56% (10) of them are operating their business in
different zonal capitals or cities, only 6%(1) respondent said their business is located in
the woreda town.
4.2.2. Employees respondents’
Table 6: - demographic profile -Gender
Valid Cumulative
Gender Frequency Percent Percent
Male 26 83 83
Valid Female 9 17 100
Total 35 100
Source;- Survey 2015
Out of the sample size (37) of employees, 94% (35) of them have been respondents of the
study. Among the participants involved 83% of the respondents are male; the remaining
17 % (6) are female.
37
Table:- demographic analysis – Age
Valid Cumulative
Age category Frequency Percent Percent
18-25 0 0 0
26-35 15 43 43
36-45 14 40 83
Valid 46-55 5 14 97
above 55 1 3 100
Total 35 100
Source:- Survey 2015
The age category of respondents shows majority of them falls between the age of 26 and
45, and small portion of them falls from age 46 up to 55 and only one employee is found
to be at the age of above 55. The survey of educational status of respondents under study
shows that, 80 %(28) of them are those who are graduates of having first degree and
above, the remaining 20% (7) are diploma holders. Nearly half of the respondents are 21-
30 years of work experience, about 31%(11) of them have, below ten, 14%(5) of them
have 21 up to 30 years, the rest 2 employees (6%) were served above 31 years. The
marital status of the respondents shows 86% and 14% married and unmarried
respectively. The composition of employees respondents job location (area) shows
43%(15), 26%(9), 17%(6) and 14%(5) of them is from Arsi, Head quarters, Sheger and
Finfine branches respectively.

4.3. Rationale for sales decline

The analysis of data shows that, the reasons for the company’s sales decline is due to
increasing customers compliant because of poor service delivery of the company, and the
possibility of getting alternative sources of supply with relatively cheaper price than the
company’s offerings.

4.4. Company product profile

OFWE is a public enterprise whose source of business operation is forest and forest
products, among many offerings of forest products; the company has producing 42
different lumber products (dimensions) at an average of about 27 thousands of cubic
meter of lumber annually, by employing 33 semi modern and out dated machineries
found in nine branches of the company and offering to domestic mass market using bid
sales policy at center of head quarters. The product design, the dimension and the
38
standard of the product is set by the company. There is no available national standard for
the product under study. This is a critical problem in marketing the product, because the
current standard set by the company doesn’t consider the purpose like the one we observe
in the study, which has been produced based on the purpose it is intended to use that
allows manufactures to produce and offer on the bases of the market need.
Table 8: 42 different Standard of lumber dimensions produced and offered by OFWE
S.NO. Product Dimension (Mt)
Length Dimension Thickness Dimension Widths Dimension
1 4 0.05 0.05
2 4 0.05 0.075
3 4 0.05 0.1
4 4 0.05 >12<20
5 4 0.05 >20<25
6 4 0.05 >25<30
7 4 0.05 >30
8 4 0.025 <12.5
9 4 0.025 >12<20
10 4 0.025 >20<25
11 4 0.025 >25<30
12 4 0.025 >30
13 3.5 0.05 >125
14 3.5 0.05 <125
15 3.5 0.025 >125
16 3.5 0.025 <125
17 3 0.05 >125
18 3 0.05 <125
19 3 0.025 >125
20 3 0.025 <125
21 2.5 0.05 _
22 2.5 0.025 _
23 2 0.05 _
24 2 0.025 _
25 1.5 0.05 _
26 1.5 0.025 _
27 1.3 0.05 _
28 1.3 0.025 _
29 1.2 0.05 _
30 1.2 0.025 _
31 1 0.05 _
32 1 0.025 _
33 0.9 0.05 _
34 0.9 0.025 _
35 0.8 0.05 _
36 0.8 0.025 _
37 0.7 0.05 _
38 0.7 0.025 _
39 0.6 0.05 _
40 0.6 0.025 _
41 0.5 0.05 _
42 0.5 0.025 _
Source:- OFWE data base (2007 E.C.).
39
4.5. Product Dimension
4.5.1. Customers response analysis of product
The survey, conducted on the opinions of their current business relationship with the
company in relation to the experience they have before reveals that, 28%(5) of them said
that they have an intimate relationship with the company, 39%(7) of them said that the
relationship is loose, 17%(3) of them said that they have recognized as not bad not good
to mean in between, the rest 17%(3) of the respondents said that the relationship we have
with the company is offensive.
The analysis of respondents current and future state of buying opinion shows that,
50%(9) of them said they want to continue buying as much as the available offerings,
39%(7) of them said that they want to continue buying in being highly selectively, and
the rest 11%(2) of them said they will be in different to mean they want to react
accordingly.
Customers’ current and future state of purchasing is affected by many reasons, among the
alternatives identified and listed below, respondents’ rate according to the priority they perceived
that affect their buying decision.

Table 9: ‘factors affecting customer’ current and future state of buying

Frequency Valid Cumulative
Factors/ Reasons
Percent Percent
Less product quality than import 9 50 50
Higher or equal price compared to import 4 22 72
Poor information accessibility 5 28 100
Poor service quality 0 0 0
Availability of similar product 0 0 0
Total 18 100
Source:- survey of 2015

40
Customers are asked to respond their buying preferences of different product dimensions,
by prioritizing the length and width dimension, and the analysis of data obtained from
data base of the organization reveals that customers have different preferences.

Table: 10 analysis of Respondents’ preference rate of width dimension

Cumulative Rank
Product Dimension Frequency Valid percent percent
20-25 9 50 50 1
12_20 6 33 83 2
0.1 1 6 89 3
25-30 1 6 95 3
>30 1 6 100 3
18 100 _
Source:- survey of 2015
Customers’ preference for the OFWE’s offerings is highly different. The analysis shows
that 50% of the respondents preferred the product with width dimension of 20-25 as their
first priority, followed by product dimension with width dimension of 12-20 accounting
33% of respondents. Products with dimensions 25-30,>30,and 0.1 each accounts 6%
preference rate as a customers' first priority next to the two dimensions selected before.

evaluation of the current practices and procedures OFWE is following in its marketing
strategy in matching their needs and reaching others shows that 33%(6) of them are
somewhat agree with the operation, 28%(5) of them said that they are strongly disagree
17% (3) said that they are somewhat disagree and 11%(3) said that they are in neutral and
strongly agree, respectively.

The survey of rating the company's product quality when compared to similar domestic
products reveals that 22% (4) of the respondents said its quality is excellent, the same
percent of respondents said its quality is very good and good respectively. 28% (5) of the
respondents recognize as not good and not bad to mean it is an average, the rest 6% (1)
respondents said that its quality is poor as compared to similar domestic products.

41
The analysis of rating the company's product quality when compared to similar imported
products reveals that 28% (5) of the respondents said its quality is very good, the same
percent of respondents said its quality is good and poor respectively. 11% (2) of the
respondents recognize as not good and not bad to mean it is an average.

The most influential attributes/features of lumber product of the company that influence
the buying behavior of customers have been assessed. The result shows that, about
28%(5) of the respondents said that it is because of the brand image of the product,
23%(6) of them said it is due to the high perceived value of the product, 22%(4) of them
said it is because of the product quality, 11%(2) of the respondents said that it is due to
the availability of different variety of product, the rest 6%(1) shows that it is because of
the physical appearance or attractiveness of the product.
Among the possible reasons listed, the results of the analysis shows that, 33% of the
respondents said that, it is due to lack of advertisement, 17% of them sad , it is because
of sales practices is only limited to bid sales system, 25% of them said that it is because
of sales operation is being practiced on head quarter only, and the availability of domestic
and import products in the market are equally contributes to the existence of the problem.

4.5.2. Employees Response analysis of product

Current practices of OFWE's marketing strategy from targeting strategy effectiveness
prospective reveals that 29% of respondents said it is somewhat attractive and average,
23% said attractive 11% said highly attractive and the rest 9% said not attractive.
The analysis of rating the company's product quality when compared to similar domestic
products reveals that 34%(12) of the respondents said it is relatively comparable, 26%(9)
of the respondents recognize as superior, 17%(6) of them said it is the same with
domestic products supplied by competitors, about 11%(4) of the employees said that the
product of OFWE is superior 9%(3) of them said it is incomparable.3 of the employees
didn’t respond.
The quality aspect analysis of the product when compared to import products shows that
46 %(16) of the respondents said it is relatively comparable, 29%(10) of them said that it

42
is incomparable with import product,20%( 7) respondents said less superior, only 6%(1)
said superior.
Table: 11 Employees perceived width dimension preference
width dimension preference
Dimension 20-25 25-30 >30 12_20
Frequency 18 28 18 10
Percent 51.4 80.0 51.4 28.6
Rank 2 1 2 3
Source:- survey of 2015

As shown above, the perceived preference rate of customers has been analyzed and rated
by employees of the company; each dimension category is evaluated independently. 80%
(28) of the respondents said that customers preference of buying this dimension (25-30)
has a first priority, followed by either of the dimensions (20-25 or > 30) available which
is preferred equally (51.4% each) as a second priority; and
(12-20) dimension is preferred next to the two alternatives when the supply and demand
forces are in balance, in which this can’t be realistic in the market environment.
Analysis of the view of employees with the attractiveness of the product dimensions
/feature/ compared to the competitors’ domestic products shows that only 20%(7) of the
respondents recognize that it is more attractive, others said that 37%(13) attractive,
26%(9) somewhat attractive, 14%(5) said lees attractive, and only 3%(1) said not
comparable.
Analysis of the view of employees with the attractiveness of the product dimensions
/feature/ compared to the competitors’ Import products shows that only 11%(4) of the
respondents recognize that it is more attractive, others said that 20%(7) attractive,
34%(12)lees attractive, 9%(3) said not comparable respectively.

Among the possible lists of attributes of lumber product of the company that affect and
most influence the buying behavior of customers has been listed and subjected to rating
by customers according to their views has been analyzed as follows,

43
Table 12: product attributes affecting customers buying decision
Code Attributes of the product Frequency Pref. rate (%) Rank
availability of different product 3
I variety/product dimension/ 3 8.57
II physical appearance - - -
III brand image 2 5.7 4
IV quality of the Product 14 40 1
V perceived value of consumers 8 22.8 2
VI Scarcity of the product 8 22.8 2
Total 35 99.87
Source:- survey of 2015
40%(14) of the respondents rate, product quality, 22.8%(8) of them said that the perceived value
of the customers & scarcity of the product accounts equally, and followed by the availability of
different dimension (8.57%) and brand image of the product 5.7% respectively.
4.5.2. Employees Response analysis of product

4.6. The price dimension

4.6.1. Customers’ Response analysis of Price

The analysis of the current price of OFWE’s lumber compared to similar domestic
products shows that 17% of the respondents said that the price of the company is
exorbitant, 33%(6) of them said that it is very expensive, 28%(5) of them said it is
expensive, 17%(3) of the respondents said it is economical or fair and 6%(1) of the
respondents said that the price is inexpensive or cheap. On the other hand the same
product if compared to similar import products shows that 17%(3) of the respondents said
that the price of the company is exorbitant and very expensive and cheap respectively
11%(2) of them said that it is expensive, 39%(7) of the respondents recognized as
economical or fair.

Survey of the perception of the customers towards the use value of the company's
product shows that 6%(1) of the respondents perceived as excellent, 22%(4) of them
44
perceived as an average majority of them 72%(13) perceived as good , and none of them
are said poor and very poor.
The assessment on the affordability and profitability of the customers' business in buying
the company's product shows that above half of the respondents 63% (12) said yes,
33%(6) of them said no. following the above response, survey of customers interest in
buying the company’s product continually is conducted. The result shows, that half
(50%)of them said average, 22%(4) of them showing high interest, 17%(3) and 11%(2)
of them explains they have a minimum interest and have no interest respectively.

4.6.2. Employees Response analysis of Price

About 46% (16) of the respondents shows that the price of the company is more expensive and
14%(5) said it is much more expensive than domestic product, 31%(11) and 9%(3) of them only
said the price is less expensive and cheap than domestic offerings.

the respondents opinion shows that 29% (10) and 37% (13) indicates that the company's price
compared to import products is cheap and less expensive, 29%(10) and 6%(2) of respondents
opinion survey result shows it is more expensive and exorbitant than competitors’.

Customer’s perceived use value analysis shows that 37%(13) and 29% (10) of respondents replies
as poorly valued and not valued at all.29%(10) and only 6%(2) of the respondents perceived as
less valued and highly valued respectively.

4.7. The promotion dimension

4.7.1. Customers Response analysis of Promotion
Respondents’ analysis shows that customers have different sources of information about
the lumber product of OFWE. About 44% (8) of them get information from News paper,
each of 17% (3) of them said that they have got information from TV and Public relations
(PR). The rest 22% (4) of the respondents shows there is no means of information about
the product.

45
respondents are asked to rate the effectiveness of promotion adopted by the company in
providing necessary information to them and others about its offerings, is examined as
half(50%) the respondents said that it highly effective, 33%(6) of them said moderately
effective, 11%(2) said less effective, the rest 6%(1) said in effective.

The analysis of respondents asked to evaluate the advertisement practice of the company
in attracting customers, shows that 39% said attractive, 28% said more attractive, 17%
said that it is less attractive, the rest 11% and 6% said that it is indifferent and un
attractive respectively.

Assessment of respondents to rate the perceived brand image of the company's lumber
product, shows that 39% of the respondents said that it is popular, 28% said very popular,
17% said less popular, 11% and 6% said that extremely popular and unpopular
respectively.
4.7.2. Employees Response analysis of Promotion
In the analysis the result shows 69%(24) of the employees said customers have got information
from newspaper 17% from public relation program and 9%(3) said from TV, the rest 6% (2) of
them said among the alternatives given none of the means's are employed for transmitting
company product information.

The attractiveness and effectiveness of the promotion system have been studied and yields the
following results. More than half (51%) and 20%(7) of the respondents shows the in effectiveness
of the system, the remaining 23%(8) and 6%(2) of them responds as effective.

The Brand image perception analysis shows that, 40%(14) of the respondents said it is popular,
14%(5) said less known 23%(8), 11%(4)and 9%(3) of the respondents perceives as biased,
wrongly differentiated or as undifferentiated respectively.

Advertisement practice of the company in creating as many customers as possible have been
subjected to survey, the data indicates that 57%(20) said that the practice is less attractive, 6%(2)
of them said highly attractive, 26%(9) and 9%(3) of the respondents shows unattractiveness and a
practice that doesn’t make sense respectively.
46
4.8. The place dimension
4.8.1. Customers response analysis of Place
The survey conducted on the opinion of the availability of the product shows that 39%(7)
of the respondents said that the product is mostly available, about 28%(5) of each of them
said that it is both often and occasionally available, and only 6%(1) of them said always
available.

The assessment undertaken to know what kinds of benefits of after sales services
provided by the company in order to attract and retain customers shows that 44%(8) of
the respondents said that there is no service provision, 17%(3) of them said that there is a
sort of warranty for undelivered product and 11%(2) of them said, a provision of sales
return for defected or sold products yet not received or being unavailable during the time
of delivery, about 28% (5) of them gave no response.

Survey conducted and rated on the delivery systems and approaches of the company
reveals that about 50% of the respondents said it is good, 22%(4) and 11%(2) of them
said very good and excellent respectively, the rest 11%(2) and 6%(1) responds as very
poor and poor respectively.

The evaluation of after sales service of the company reveals that, about 56% of the
respondents said that it is good, 28%(5) of them said very good, about 11%(2) of them
said excellent, the rest 6% of the respondents reply as it is very poor.
Respondents have been asked whether or not they have been made compliant about the
offerings, and responds as 50% of them said yes, the rest said no.

The most probably occurring reasons for customers compliant have been rated by
respondents as follows, 50% of the respondents said the occurrence of delivering
defected products, and the bureaucratic and lengthy procedures are equally affecting our
smooth relationship and business operations, requesting for sales return for products sold
and being not available on stock during delivery accounting 37.5% of the respondent.

47
The absence of deliverers, and pass perimeters and signatories of sales and agreement
documents are not available is recorded as 62.5% as a fourth reason of compliant to be
occurred.

Respondents’ have been asked to rate the overall service quality the company is
providing shows that 33%(6) of them said average and good respectively, about 28%(5)
of them said very good and the rest 6% of the respondents said it is excellent

4.8.2. Employees response analysis of Place

80% of the employees under study respond as they have been involved in customer's complaint
resolution; the remaining 20% didn’t involved. The Service delivery Quality of the company
when analyzed shows the following results. about 31%(11) 14%(5)and 11%(4) replied as good,
average and poor; the remaining respondents 17%(6) and 9%(3) reply as very good and excellent
respectively.

The survey result of the availability of product shows that 49% of the respondent indicates it is
always available. 26% of the respondents said it is mostly available and others 11% said that it is
often and rarely available; the remaining 3% of them said it is occasionally available.

Respondents have been asked whether or not the delivery systems and approaches is
exist, shows that 63%(22) said yes, and 31%(11) No, the rest 3%(2) doesn’t respond.

The effectiveness and efficiency of delivery system was studied. Among the respondents
34%(12) said less in effective and in efficient 11%(4) said highly in efficient and in
effective 31%(11) said moderately effective and efficient 11%( 4) of them said highly
effective and efficient the rest 11%(4) doesn’t give any response.

What after sales service benefits the company have experienced has brought to the study,
the result of analysis provides the following information. It shows that 46% (16) of the
respondents said sales return, 17%(6) said warranty and 9%(3) are said transportation
29%(10) of them doesn’t reply at all.

48
 4.9. Analysis of the managements’ group discussion
The third category of target respondents under this study is the management groups who
have a total sample size of 36; out of them 88.7% (31) of them is participated in the
discussion and respond for interview questions. In the course of discussion their different
reflections and views have been observed.
1. The first question for the entry of the discussion was about what challenges and the
possible reason/s pertaining for the company’s customers being few in number and no
significant number of new entrants is being added?
The followings are mentioned and agreed up on: the company has no clear marketing
strategy, rather a sort of sales policy and procedures employed for bid sales operation ,
bid sales operation which is based on lot system that allows a competing buyer in bid
sales to buy a mass product containing all types of dimensions produced in one batch in
a given product site has been practiced to be sold for an individual buyer, which favors
those buyers who have a capacity of buying large volume of products and discourages
others. This in turn creates a sense of monopolistic behavior of few individuals to buy the
company's product. The current situation shows there is an increasing volume of import
products entering in to the market backed with a significant amount of domestic illegal
products supplied to the market brings about a better choice for buyers of the product
provided that the company's market or sales is going to threaten. On the other hand the
company's production system is not market oriented as stated and concluded by all of the
management followed by in capability of producing quality products due to outdated
machineries that can't exactly fit the required standard or resembles the standardized
import product is becoming less demanded than competitor's products. Another possible
reasons mentioned by management is the poor service delivery systems and applications,
and bureaucratic lengthy procedures that exhibits many customer complaints.

2. a. Managements have been asked and discussed up on the top most preferred
dimension of the product is rated accordingly. Their preference is mostly affected by
the availability of the offering in types and quantity. However they have rated their
customers demand preference using width dimension as a criterion shows, that about

49
 half 48%(15) of them agreed on 20-25 with dimension as first priority preference,
followed by the same dimension and 12-20 dimension as equally preferred as a
second priority and 80.64% (25) members recognized that 25-30 is their customers'
third priority preference.
b. Does each product dimension (type) is properly targeted to customers according to their
needs? If not, what are the reasons? The discussion made with management provides the
following answer: Almost all members replied as NO with justifiable reasons and
common consensus, having no clear marketing strategy is the main reason among many,
it is not worth mentioning about applying a targeting strategy in any business
organization like OFWE. on top of this the production system is also far away from
demand driven production strategy, the current marketing practices OFWE exhibiting is
depend on bid sales operation of mass marketing than target marketing. No market
research is exhaustively conducted since establishment, that can identify the problems
and suggest the possible solutions, management said. Machineries used and raw materials
employed as a factor of production is not to the required standard that yields standardized
lumber products as per the market need is another reason and challenges the company is
encountering.
c. management’s views in evaluating OFWE’s current practices, of marketing strategy in
satisfying and retaining the existing customers and in attracting and reaching others is
mentioned in detail under question number one above. In general it is incapable of
satisfying and retaining the current customers and attracting the prospects.
3. The third question is all rounded and too vast in answering questions related to the
4Ps marketing mixes by comparing the company’s current position with competitors,
Evaluation of company's offerings compared to Domestic and import products
offered by competitor’s, the availability and the quantity of the product offered is
perceived as good, but lacks consistency, the perceived quality of the product
according to management is perceived as good in relative terms. The price charged by
the company is high (expensive) and the advertisement practices is poor, Demand for
the product is high, said the management.

50
4. The evaluation of the effectiveness of bid sales operation, of the company is brought
to discussion by management, and reaches on consensus, that it is not always
effective and efficient, it can be effective in selling non standardized and defected
products for which pricing the product difficult is getting difficult.
5. Currently, the company is subjected to certain marketing problems and threats
observed. Managements argue that there is a significant change on the sales that
shows declining and few customers are observed in buying the product selectively.
Some of the management group said there is inventories not sold and kept on stock,
others said no, with unidentified reasons. Decisions made in resolving the problem is
not prompt as required.
6. the overall evaluation of production and marketing strategy of the company in
meeting the long term Company's objectives needs emphasis, because the company
currently have no sound and clear marketing strategy, therefore, in order to withstand
the current competition it is desirable to develop and implement appropriate
marketing strategy, otherwise.
7. Managements arguments and suggestions of what OFWE's marketing strategy in the
future should be identified and stated as :the need for market research, improving the
production systems to make it customer driven, developing and implementing
appropriate management models that can improve performance, quality, effectiveness
and efficiency in production, operation, marketing and provision of service. The need
for regular discussion with employees, customers and stakeholders enable the
company in identifying problems and fetching opportunities in order to with stand the
current and future market forces. Opening large retail out lets in different corners of
Addis Ababa, and other regional or zonal capitals to reach prospects. Another means
of improving sales and increasing market share is to enter in to international market
by improving the product quality using modern production technologies backed with
skilled and knowledgeable human resources is highly emphasized.

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4.10. Discussion of the Results
4.10.1. Introduction
To effectively market a product or service there are four things business organizations
need to get right: Product, Price, Place and Promotion. The four elements make the
marketing mix or the 4Ps and should be viewed as one unit and structured to support each
other, otherwise a firm's marketing strategy will be confusing and uncoordinated.
4.10.2. Product
Among the 4 P’s, Product dimension is an important part of a marketing mix.Leonidou,
et al., (2002) in his studies, synthesized the empirical studies about marketing strategy
and concluded that product design, feature, brand mix (name, sign, symbol, and design),
warranty, customer service as pre- and after-sales services, and product advantages or
values (such as luxury, prestige, and quality) are variables of product marketing strategy.

The lumber product of OFWE is characterized by lengths, width and thickness which
form the product dimension or feature that permits the buyer to obtain specified
dimension or specified assortments of the product.
In one of the study undertaken about the company’s product feature variables is to study
the preference rate of customers of top three dimensions among the 42 “dimension”
offered for sale.
As the analysis customer’s respondents shows, for the width dimension preference shows
that 20-25 as 1st, the 25-30 as 2nd, and the >30 as a 3rd priority respectively. The
employees survey analysis shows 25-30 as 1st, both the >30 and 20-25 dimension as 2nd
and 12-20, as a third priority. The management group discussion result fall on the
argument of the 20-25, 12-20, and 25-30 followed by >30 dimensions are among the
highly preferred width dimensions customers frequently buy. As a result the 20-25, is
rated as first, 25-30, as a second and 12-20 width dimension is chosen as a third priority
preference, therefore, it is clear that these dimensions are the highly preferred product
features by the company’s customers.

52
This is the challenging part of the marketing practices of the company; therefore it is
desirable to conduct an intensive market research in order to identify the customers’
demand level of each 42 dimensions to serve each market segment according to their
preference. This is the most important part of the product feature in the applications of
target marketing strategy.
The fact that, the current practice of the company is a mass marketing strategy, which
doesn’t enable the company identify customers’ preferences, and the entire dimensions
are not equally available at a time, customers have no options to decide on buying the
dimension they prefer and continued buying based on the supply of the company.
However, today business Organizations recognizes that they cannot appeal to all buyers
in the market place or at least to all buyers in the same way. Because, buyers are too
numerous, too widely scattered, and too vary in their needs, and buying practices.
Therefore, business enterprises have moved away from mass marketing strategy toward
the target marketing strategy in order to serve according to their need and respond for
product features they most prefer.

All respondents including the management, proves that the current practices, procedures
and marketing strategy in retaining the existing customers and attracting new entrants is
viewed as not capable enough of doing so. Many practical reasons are forwarded and
agreed up on that can exacerbates the problem, it is clear that, using outdated machineries
yield poor quality products, illegal suppliers can provide poor quality and non
standardized products with lees price, availability of domestic and import product can
provide options/choices for buyers, using less sized raw material yields less sized lumber,
poor service delivery dissatisfy /repel/ customers, unclear marketing strategy can’t give
clear directions for marketing practitioners and the management as well. The application
of the only bid sales policy in lumber marketing of the company, is another bottleneck of
the customer’s satisfaction and attracting of others, because there are many other options
of sales policy available in free market economy system. The rigidity of the system can’t
improve the existing situation.

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On the other hand the product feature or dimension the company is currently offering for
sale is designed and produced based on the natural behavior of the product, not on the
bases of the purpose the product is going to use. Because, customers satisfaction is based
on the benefits the product provide for them. Therefore, the company should emphasize
in designing and producing of the product on bases of the purpose it is marketed for, and
have think of standardizing the product in order to make fit for the purpose and meet the
customers need at both local and global levels.
The strong relationship between customers and business firms on the bases of mutual
benefit is a base for customer retention and loyalty. The customers view towards the
relationship shows that, above half of them perceived not as good as required, significant
number of them replied as moderate and good. Only half of them prefer continue buying
as much as the available offerings. customers who have, a line share of buying the
company’s product (heavy buyer), who are being benefited, may prefer the current mass
marketing practice of the company in order to build their comfort zone being dominating
the existing fewer buyers and protecting new entrants. The view of others (half of the
customer respondents) might be different and as per the contemporary marketing
operations which would really be.
Table 13: -list Heavy Buyers and qty of lumber sold for them during the last 6 months
Qty Bought Share of
No Buyers' Name Cubic meter) Buying (%)
1 Hysem pine General Trading 1652 24.0
2 Hani Mahadi(Amard wood products Spp.Ent 1507 21.9
3 Jemal Waballa 1008 14.7
4 Abrico Manufacturing 604 8.8
5 Katama Laggase 593 8.6
6 Haji Buno 338 4.9
7 3F 269 3.9
8 Heyru shariif 248 3.6
9 Wedesa metal and wood work micro enterprise 155 2.3
10 Service along the Nile 134 1.9
Total 6877 100.0
Sources: - OFWE customers’ record data base (Head quarter - 2007)

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The relationship between buyer and seller can be enhanced by many factors, the product
quality, and the service delivery, the provision of after sales services, the accessibility,
warranty, terms of payments and credit facilities, discounts, and many others. The
company under study doesn’t provide any of the above benefits, and therefore, the
customers’ judgment is quite right in expressing the existing situation of the company as
it is consistent with marketing theories.

The emphasis have been given on the study of the product quality of the company, given
the fact that it is the abundantly used semi processed raw material for producing many
products like, house and office furniture, doors and windows in buildings of house and
villas, roads and other construction sectors. The survey conducted incorporates
customers, employees and management members. On the course of the study, more than
half of both the customer and employees perception and including the result of discussion
analysis of management reveals that the quality and attractiveness of the product when
compared to both similar domestic and import lumber product offered by competitors is
perceived as good.

The result of the relative comparison shows good not to mean, the best of all, and doesn’t
have limitations; the survey result itself shows that about quarter of the respondents
replied as not good not bad, to mean it is not as satisfactory as required. On the other
hand the same number of customers said that it is poor when compared to import product.
This indicates that the quality of the product is good but it is not as to the desired
requirement.
Views of customers and employees in identifying the attributes of the company’s lumber
is differently reported, Thus the report shows, about quarter of customers, said brand
image 23%, said perceived value, while the employees respondents of 40% said product
quality and 31% said perceived value. Therefore, these attributes of the product could be
considered as a company’s product feature identity which could be kept as the area of a
competitive advantage of the firm if worked on better and developed to the desired
standards. This enables the company in designing and implementing promotional mixes.

55
The existing situation of the company in dealing with few customers shouldn’t be
recognized as healthy business operations. Customers have been studied to reasonably
identify and prioritize the reasons. About half of them prioritized two reasons equally, as
the supply of domestic and import product and lack of promotion and the practice of sales
being limited to bid sales.
The fact that the demand for and the value of forest products particularly, lumber
product increases from time to time import of lumber products from abroad and the
production of domestic product increases to fill the market needs. About half of the
respondents, reason is the increasing supply of the product from alternative sources. This
indicates that customers have got alternatives or choices. However OFWE is continue
computing with only bid sales mass marketing strategy with limited promotion activities,
that doesn’t effectively persuade customers in buying the product. Besides, mass
marketing strategy is not desirable for heterogeneous market preferences; however, the
existing customers of OFWE as well as the prospective ones, have different preferences
and needs, and react as per their preferences. Therefore the company should get prepared
to serve them according to their preferences, to meet mutual benefits. As a result, as
competition becoming tougher and customers’ choice increase will lead the company’s
marketing system in trouble. In order to be in safe position, prompt and corrective action
is desired to be taken and appropriate marketing strategy should be in place, otherwise.
4.10.3. Price
Price is the only marketing mix element that can generate revenue. Pricing a product too
high or too low could mean a loss of sales for the organization. It is advisable that price
should have an objective and strategy. Companies are setting prices for their products
based on objectives set at corporate level. OFWE is experiencing pricing for lumber at
head quarter. However, the objective of setting price is not yet clearly identified.
Being a public enterprise, the pricing policy objectives and procedures should be kept in
to account and the price to be set is just and fair. Therefore, the existing pricing practice
and procedures lacks clear objectives of pricing and pricing policy, as there are many
selling policies or methods exist, the firm is depend on only bid sales policy.

56
The comparison analysis of the company’s product with competitors’ have been brought
to study and analyzed. The survey result shows that, if the company’s lumber price is
compared to domestic lumber product, the view of 78% of customer’s respondents said,
expensive, nearly half of them said expensive in relative terms, when compared to import
products because of quality difference with export product. The analysis of management
group discussion also reveals that the price of the company’s lumber product in relative
terms is recognized as expensive.
Price and pricing in an business organization needs careful decisions as it is the key
element in the marketing mix elements. It is the only revenue generator that can cover the
others’ three costs. OFWE has a practice of setting the price at corporate level, but it is
not clearly stated weather the pricing objective, is aligned with the overall objectives of
the company, and mission. Because pricing in public enterprise have got social
responsibility in its marketing activities, hence customers, stakeholders and the
community have interest on the company’s product price and pricing. Therefore, the
objective of pricing should consider the responsibility the company has as a public
enterprise, however, the result of this study shows that, the company is charging higher
price than others, which is no comply with the theory that it could be fair and just as
much as possible.

Even though, the price of lumber offered by OFWE is expensive, all customers studied
and about three-fourth of employees said that the product is liked by consumers, which
indicates that the use value of the product is appreciable by consumers. Therefore, this
evidence shows that, the demand for the product is high. All customers respondents
witnessed that, trading this product with the company can provide reasonable profit, and
most of them said that, they want to continue buying the product, while others prefer
continue buying selectively.
By now the company is doing the business setting the price by referring competitor’s
price, this may leads the company in losing the social responsibility part of its objectives
and missions of establishment. Therefore, it is worth considering this part in pricing to
the extent of complying with the legal and theoretical aspects of charging

57
customers/citizens. It is better to be in a position of improving the quality of the product
to the import standards and be able to substitute the import products, in order to gain the
price advantage.

4.10.4. Promotion
Promotion is any activity to raise awareness of a product or to encourage customers to
purchase a product. The aim of promotion is to put the image of product or service in the
mind of customers.
The intension of studying this part is to see how customers perceived, the practical
applications of the promotion and weather, the practice of OFWE is comply with the
accepted theory.
Customers and employees of the company have been studied, about half of the
customers and nearly three forth of employees respond as customers found information
from News letter, few of the respondents said TV, is also used as a media of information
of the company’s product.
The attractiveness and effectiveness of the promotion activity, while subjected to study
shows that customers of 83% and 67% said effective and attractive, while 71% of
employee’s respondent said effective and almost all of the respondents said the
promotion system is unattractive.
News paper used as media of promotion is the Addis Zemen, which a company is used
with the intension to disclose few information bid sales of particular product of limited
quantity and place, that is going to be sold on a fixed period of time, rather than
displaying the entire information of product availability, quality, market out lets or
channels of distribution, terms of payments and other benefits, which enable the
company to persuade the existing and prospective customers, to be convinced and decide
to buy the offerings of the company, than participating on a single auction (Bid) with
limited criterion that allows only few buyers.
Respondents of customers and employees perception about the attractiveness of the
promotional measures employed and its effectiveness and efficiency is different.
Customers studied are those who are involved and bought the company’s product on the

58
basis of bid sales operation, there is no way of buying lumber product from OFWE other
than Bid (auction) displayed on the Addis Zemen News paper, and no one can involve on
the bid sales system other than those who have qualified the set criterion set for the
engagement. Therefore it is naturally limited and applicable to certain target group, and
not for mass market, or different segments of markets.

4.10.5. Place
The place dimension of the 4P’s recognizes all activities to market products available to
customers with the required quantity, as well as quality, at the right time and place. It is
about how to manage the entire resources in order to deploy the intended product to the
customers to achieve the mutual benefits.
Employees and customers are subjected to the study, where, 80% of employees and half
of customers responded as there is a significant customers compliant is reported with the
reasons mentioned by 66% of customers and 56% of employees perceived as poor
service delivery of the company which is still approved by the managements’ members
argument. Provided that, the result of the study shows that the problem with the company
in customers’ compliant is highly significant because of poor service delivery of the
company.
On the other hand, both customers’ and employees’ response analysis reveals that the
problem with regard to product availability is minimal. However, the effectiveness and
efficiency analysis of that customers’ response when summarized shows it is not as
effective and efficient as required, on the other hand the employees response analysis
shows that the service is significantly in effective and in efficient followed by the
managements inefficient and ineffective argument, provided that the company’s service
delivery system and approach is not effective and efficient as required

The result of analysis shows that, among the customers involved in the survey, about half
(50%) of them have complained for not being served properly and clearly prioritized
their reasons, as the absence of relevant staff at the time of delivery (62%), bureaucratic
and lengthy procedures (50%) and receiving (hand over) of defected products (50%).

59
In general, the overall evaluation of the company’s service delivery analysis from
customers’ prospective, result shows, about 33% of customers replied as good and
average, 28% as very good and only 6% as excellent indicates that, there is significant
problem with place marketing activities of the company.

In place marketing strategy, the availability, distribution channels and channel strengths,
the service deliveries and after sales services are among the variables to be studied. When
we come to the practical aspect of the company, the company, is producing lumber
products in all of its nine branches using 33 sawmills out of which about half of them are
old and out dated models. Sales is made at the head quarters, resides in Addis Ababa,
without deploying a single item to the center, sales is made using bid sales announcement
printed on the Addis Zemen News paper, to invite respective customers, after winners are
selected, the process of delivering the product is processed at the second hierarchy
(Branch level), and the final hand over is completed at the third (Distirict) level of
hierarchy. The deal of channels and channel distributions is completed forming a
producer to whole seller (Bulk buyers), channel of distribution.

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 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5. 1. Summary of the major findings
 A total of 90 respondents were selected from total population using purposive
sampling in such a way that, 18 from traders, 37 from experts and 35 from
management members respectively. All 18 traders 35 employees/experts and 31
management members were studied provided that 93.33% of the target
respondents were studied.
 Lumber product offered by OFWE is characterized and identified by a feature of
length, width and thickness dimensions only. With these assortments of
dimensions the company forms its own 42 different standard items of lumber
products, and made available for sale at undifferentiated market segments or mass
market. This shows that, in OFWE there is no practice of reaching and serving
customers based on their need, because the product is not manufactured on the
bases of the purpose it should be made for, and there is no national standards of
lumber product that could allow the manufacturer to produce as per the standards
and offer the product based on the customers’ preferences.
 If there is a national standard of the product, the company can produce and market as
per the standard to meet the customers need. On the other hand customers can react
on the bases of their preferences of dimensions and the differences they feel the one
most suit their need which is the base for the firm to set and implement
segmentation, targeting and positioning market strategy to reach and serve each
customers group.

 Lumber products OFWE is offering for sale with width dimensions of the 20-25,
25-30 and the 12-20 are the most preferred top three identified products, shows that

61
 there is a need for identifying the rest of each of 42 product dimension’s preference
rate of customers which enables the company to produce and market based on the
needs and preferences of the customers, that allows the company to develop and
implement target marketing strategy, which is still impractical unless certain
changes in the sales policy is come to exist.
 The identified current practices, and major challenges OFWE is encountering
includes the following:
A. Challenges
 the absence of national standards of the product
 the use of out dated machineries, provides poor quality product
 Excessive supply of illegal trade of log and lumber product currently flooding the
market, and the adverse effect of trade policy to encourage importers in supplying tax
free lumber from abroad.
 Shortage of logs with larger width size that enable to produce lumber of larger width
dimension that is more preferred and valued.

B. Current practices
 There is a poor service delivery systems,
 Lack of clear marketing strategy, (pricing policy, and factors to be considered in
pricing, pricing objectives) is not clearly stated in the company’s sales policy guide
line.
 using only bid sales operation,
 Fail to follow market based production system
 poor accessibility of information
 higher price charging than competitors do, customers pay because of the quality and
attractiveness of the company’s product is good,
 Customers make profit out of product purchased at higher price that encourages them
to continue buying the product, because of the good perceived value of the product

62
 Newsletters (Addis Zemen) is the only promotional measures used by the company
which is not attractive except that it is believed effective, for traders involved in bid
sales operations.
 There is inefficient and ineffective service of delivery that leads to significant
customers’ compliant.
 The relationship between customers and the firm is not as good as required.
 The perceived value and the brand image of the product is recognized as good
5. 2. Conclusion of the study
5.2.1. Product dimension

1) The fact that the quantity of the entire dimension is not equally available at a time,
customers have purchased according to the supply of the company. However, the
analysis of the first top three lumber dimension preference made concludes that,
20-25 is preferred as first, followed by the 25-30 width dimension as a second,
and 12-20 width dimension of the product is chosen as a third priority preference
of OFWE’s lumber product dimension.
2) The current practices, procedures and marketing strategy in retaining the existing
customers and attracting new entrants is recognized as negative, with reasons
identified as major challenges and problems.
3) Only half of the respondents view indicates the positive aspect of good
relationship of the customers with the company, in response for buying the
company’s product.
4) It is the supply of the product from other sources (import & Domestic supply)
enabling the customers to have alternatives or choices, followed by poor
promotion activities and the centralized bid sales operation of the company that
makes the company being remain with few customers.
5) Factors affecting the buying behavior of the company’s customers are “the quality
of the product compared to import products, the poor accessibility of information
and the higher or relatively the equivalent price charged by the company” are
rated as 1st, 2nd, and 3rd, reasons respectively.

63
 6) The perceived quality and attractiveness of the company’s product when
compared to both similar domestic and import products offered by competitors is
recognized as good.
7) The perceived quality and brand image of the company’s lumber is recognized as
equally important attributes of the product

5.2.2. Price dimension

1. The summary of the price analysis results shows that the price of the company in
relative terms when compared to both domestic and import price of competitors’
ranges from expensive and very expensive to exorbitant reveals that the price charged
by the company is recognized as expensive.
2. The perceived value of the company’s product is recognized as good, by all
respondents and above half of employees studied and the consensus of management
group discussion results.
3. Even though, the company’s price is perceived expensive than it could be, customers
are willing to continue buying because, it is believed that they are still making profit
out of it.
4. The fact that most of the customers showing strong desire to continue buying the
company’s product with recognized higher price than competitors’ is due to the
accepted perceived value of the product.
5. The summary result shows that bid sales operation of the company is not as effective
as required.
6. Some of the major problems and challenges the company is currently facing are
identified by the management group discussions.
a) absence of national standards of lumber product,
b) the illegal trade of log and lumber product currently flooding the market,
c) the adverse effect of trade policy to encourage importers to import tax free
lumbers,
d) the use of outdated machineries and un availabilities of modern sawmill
machines and related technologies that can improve the quality of product,

64
7. The performance data of five years pattern of sales shows the company’s undesirable
trend of operation which is not as good as required. The marginal revenue shows
decreasing at an average of 19.79 % (OFWE data base 2007 E.C.)
8. The current practices of pricing, pricing policy, factors to be considered in pricing,
and pricing objectives, and strategy of the company is not clearly set as a guide line to
follow and to make use of as an instrument in the course of implementations and
evaluations.
5.2.3. Promotion dimension
1. OFWE’s customers’ source of information is News letter, with limitation of the use
of the media as not to attract new customers, except used as to inform the existing
ones, to inform them in order to participate on bid sales operation on a particular
date, at a specified place on the bases of limited criterion.
2. The attractiveness and effectiveness of the promotion activity, while subjected to
study shows that it is no effective and attractive as required.
5.2.4. Place dimension
1. The reason for the significantly observed customers’ complaint is argued by all
respondents’ shows, that it is due to poor service delivery of the company.
2. The problem with regard to product availability is recognized by all respondents
as minimal, however, the effectiveness and efficiency of the company’s service
delivery system and approach is not effective and efficient as required.

3. About half of the customers respond as they have been complained for not being
served as required, among the reasons identified are: the absence of relevant staff
at the time of delivery, bureaucratic and lengthy procedures, forced to receive
defected products. The overall evaluation of the company’s service delivery
survey shows that there is a significant problem with service provision of place
marketing activities of the company.

65
5. 3. Recommendation of the study
5.3.1. Product Dimension

 OFWE is currently practicing mass marketing strategy which doesn’t enabling the
company to serve its customers based on their needs and being challenged in ,
meeting the existing customers’ need and attracting others. Therefore, it is desirable
to conduct a market research to identify the preference level of each dimensions of
the company’s lumber product, in such a way to segment, position, target and serve
customers according to their needs, if the company put this in to practice, it will be
in a position of implementing target marketing strategy which enable the company
to overthrow the existing problem and bringing about a significant change in
business operation.
 On the other hand the product feature or dimension the company is currently
producing and offering for sale is designed and produced based on the natural
behavior of the product, not on the bases of the purpose the product is intended to
be made for. Because, customers satisfaction is based on the benefits the product
provide for them. Therefore, the company should emphasize in designing and
producing of the product on bases of the purpose it is made for, and have think of
standardizing the product in order to make fit for the purpose and meet both the
local and global market needs.
 The perceived positive result of the product quality is not as satisfactory as
required. Even though, the company’s product quality is superior to domestic
products, the result shows that, import product’s quality is higher than the
company’s product. It is clear that, rivals can have strategies to withstand, the
existing competition and to have the lion share in market place, in such a way that,
they are going to have the upper hand in setting market price and providing
different benefits of services that can attract more customers towards them.
Therefore, it is desirable to improve production system and strategy that can
improve the products quality, designs, Dimensions and features according to market
need along with improving the service delivery in order to meet the market
requirement, by employing modern research and development systems.
66
  Currently the brand image of the company’s product and its perceived value is
recognized in the analysis and conclusion part as good is mainly works for today,
and it doesn’t guarantee the tomorrow’s market demand, Thus it could be developed
more to the desired level consistently.

 The current practice of producing and offering lumber to the mass market is not
comply with the contemporary marketing strategy, that makes the company’s sales
to decline or shows abnormal trends. Therefore, it should be either improved or
replaced as much as possible by market oriented production system and target
marketing strategy supported by the appropriate management model that can
improve the service delivery systems.
 As the competition among the rival increases from time to time, companies should
seek for currently existing and forecasted ones. There is a need for strong
decisions and actions to be taken in order to make smooth functioning of the
business relationship as revealed by the analysis that the current marketing practices
is in trouble. Therefore, in order to see a better improvement of the company’s
business, the management has to bring the issues on board, and fetch for solution,
that can improve the overall operations of the business. Among the solutions I
recommend for the company’s betterment is putting appropriate production and
marketing strategy, i.e. target marketing and the best fit management model in
place.
5.3.2. Price Dimension

 Pricing a product too high or too low could mean a loss of sales for the
organization, because rice is the only marketing mix element that can generate
revenue. It is advisable that price should have an objective and strategy.
Companies are setting prices for their products based on objectives set at
corporate level. OFWE is experiencing pricing for lumber at head quarter.
However, the objective of setting price is not yet clearly identified.

67
  Being a public enterprise, the pricing policy objectives and procedures should be
kept in to account and the price to be set is just and fair. Therefore, the existing
pricing practice and procedures lacks clear objectives of pricing and pricing
policy, as there are many selling policies or methods exist, the firm is depend on
only bid sales policy.

 In the course of setting price appropriate pricing strategy and objective for each of
the business units OFWE is undertaken should be considered properly. There
should be a pricing policy and procedures to each of the bossiness units in the
marketing strategy
5.3.3. Promotion dimension
 Promotion is any activity to raise awareness of a product or to encourage
customers to purchase a product. The aim of promotion is to put the image of
product or service in the mind of customers. The one currently OFWE is
practicing and customers of buyers involved in bid sales is perceived as an
attractive and effective means of advertisement is perceived as effective and
attractive by customers of concerned target group can be recognized. However,
this means of advertisement can benefit only that target group and may be the
regulatory body. Therefore, it is not worth mentioning that its advantage in
attracting new entrants is equal to zero, which is in contrary to promotional
measures undertaken to attract new customers. Therefore, the existing
promotional system is not as to the standard, it doesn’t comply with the accepted
theories and could be replaced by new promotion system that could comply with
the accepted promotional measures.
5.3.4. Place dimension
 The analysis and conclusions of this part is related to the quality, effectiveness
and efficiency of service delivery that leads to customers’ compliant if not
implemented as required. Unless the alternatives or choices are too narrow, no
one customer is stay long with the company whose reputation with customer
handling is poor. On the other hand, the marketing channels of lumber product

68
 offered by the company doesn’t have clear channels of distribution hence, the
whole product at every round of sales is made on bid sales system, the company
as a producer, and bulk seller of mass product, doesn’t have any access of
information, about the market situation next to the channel he made a bulk sales
for. Therefore, it is impossible to mention any comment or suggestions on the
effectiveness or attractiveness and efficiency of the channels.
 In order to withstand this problem the existence of proper place marketing
strategy, which involve segmenting, positioning and targeting of different
channels of distribution and creating appropriate strategy of targeting to serve
each channel should come to place, along with sound and clear marketing and
production strategy.

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References
Aaker, David Strategic Market Management 2008.
http://en.wikipedia.org/wiki/Special:bookSources/9780470056233
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List of Appendices

Appendix i Self administered questionnaires filled by Traders

Appendix ii Self administer questionnaires filled by employees of the company

Appendix iii Checklists for interview and group discussion with management

Appendix iv Product dimension preferences of top ten buyers( Arsi branch)

Appendix v Frequency table of Employees respondents for analysis

Appendix vi Frequency table of Customer respondents for analysis

 APPENDIX I

A SELF ADMINISTER QUESTIONS TO BE FILLED BY CUSTOMERS ON “PRACTICES AND

CHALLENGES OF MARKETING STRATEGY”, (ENGLISH VERSION)

Dear respondents;
The purpose of this questionnaire is to enable me to conduct a research for the partial fulfillment of MBA
degree. This research questions focus on the OFWE’s marketing Strategy of Lumber product which is the
main source of the enterprises income with the topic of “Practices and challenges of marketing strategy”,
the case of Oromia Forest and Wild Life Enterprise.
A Marketing strategy questionnaires are tools used to collect data from relevant customers who have a
direct relationship with marketing operations.
Hence, to gather relevant and reliable information for the study , I kindly request your kind and helpful
assistance in responding to the questions listed below. Any information you disclosed will be kept ethically
and will be used only for academic purpose. Your prompt response will be highly appreciated.
Thank you for your cooperation!
Note:
 Writing your name is not mandatory
 Select your answer by encircling or underlining your answer among the given choices

I. General information (Personal Profile of the Respondents)

Part I. Demographic Profile of respondents
1. Gender
i. Male
ii. Female
2. Age
i. 18-25
ii. 26-35
iii. 36-45
iv. 46-55
v. Above 55
3. Education level
i. Can read and write
ii. 10th or 12th grade complete as per the curriculum
iii. Diploma
iv. First Degree and above
4. Marital status
i. Married
ii. Unmarried
iii. Divorce
iv. Widowed
5. Geographic location - Business location of customers
i. Addis Ababa
ii. Zonal capitals
iii. Woreda Towns
Part II. PRODUCT DIMENSION
A. For Customer’s opinion survey
1. Are you a customer of OFWE? If your answer is yes, among many offerings of the company which
one of the forest product you most buy for sale?
i. Logs
ii. Timber
iii. Construction woods
iv. Fire wood
v. Lumber
2. For how long you have been in relationship with the company in buying the company’s lumber
product?
i. Above 7 years
ii. 5-7 years
iii. 4-5 years
iv. 3-4 years
v. Less than 3 years
3. How do you perceive the current relationship of your business undertakings you have with the
company in relation to the experience you have some years ago?
i. Intimately close
ii. Somewhat close
iii. Not good not bad
iv. Less offensive
v. Highly offensive
4. What is your current and future state of purchasing the company’s lumber product?
i. Switched off the customer ship
ii. Decide to Switched off the customer ship
iii. I’m in different
iv. Continue buying selectively
v. Continue buying at increasing rate in frequency and volume of purchasing
5. If your answer for question No. 4 is different from choice No.V, the possible reason/s for your decision
are provided by letters a,b,c, and d. rate them 1 st through 4th according to the level of their influence on
your decision and put them on the space provided.
i. Less in product quality than import product;
ii. Higher or equal in price compared to import product;
iii. Poor in accessibility of information and advertisement about the product accessibility,
price and others;
iv. Poor in service delivery and customer chandelling.
1st.____________, 2nd ___________, 3rd _______________ 4th _____________
If your answer is different from the above possible reasons state it below as clearly as possible.
______________________________________________________________________________________
______________________________________________________________________________________

6. Being a customer of OFWE, among the product dimensions offered by the company (shown on the
table), which product dimension you most prefer purchasing? Rate your preferences by putting
Numbers 1, 2, 3 etc. under width dimension, according to the degree of your preferences from highest
to lowest. (Hint: 1 stands for the highest preference, then 2 and 3 follows).
Width dimension(cm)
Length Thickness >30 25-30cm 20-25cm 12-20cm 10cm 7.5cm 5cm
0.025
0.5mt-0.9Mt 0.05
0.25
1Mt 0.05
0.25
1.5Mt 0.05
0.25
2Mt 0.05
0.25
2.5Mt 0.05
0.25
3Mt 0.05
0.25
3.5Mt 0.05
0.25
4Mt 0.05
 7. To what extent you agree with the current practices, procedures OFWE is following in its marketing
strategy in matching your purchasing needs and reaching others?
i. Strongly disagree
ii. Somewhat disagree
iii. I’m in Neutral
iv. Somewhat agree
v. Strongly agree
8. According to your view, how do you rate the quality of lumber product of the company compared to
similar products offered by domestic suppliers?
i. Poor
ii. Fair/not good not bad
iii. Good
iv. Very good
v. Excellent
9. Compared to import products?
i. Poor
ii. Fair/not good not bad
iii. Good
iv. Very good
v. Excellent
10. What attributes of lumber product of OFWE most influence you buying?
i. Variety of the product
ii. Physical appearance
iii. Brand image
iv. Product quality
v. Perceived value
11. According to your opinion what might the reason be for the number of customers becoming few in
contrary to the availability of abundant features (i.e. 42 dimensions) of the product the company is
offering? Rate the probable reason/s below and put numbers 1, 2, 3, or 4 on the blank space provided,
according to their relative order you think they influence the issue.
i. Sales limited to bid sales operation __________
ii. Sales operations being practiced on head quarters only ___________
iii. Lack of promotion or advertisement ___________
iv. The availability of import and similar domestic products in the market_______

Part III. PRICE DIMENSION

1. How do you rate the current price of OFWE’s lumber relative to similar products of domestically
produced and offered by competitors?
i. inexpensive
ii. Fair/economical
iii. Expensive
iv. Very expensive
v. Exorbitant
2. How do you rate the current price of OFWE’s lumber relative to similar products of imported lumber
offered by competitors?
i. inexpensive
ii. Fair/economical
iii. Expensive
iv. Very expensive
v. Exorbitant
3. How do you perceive the use value of the company’s product as compared to its price?
i. Very poor
ii. Poor
iii. Good
 iv. Average
v. Excellent
4. Does the current price set by the company is affordable and profitable to you?
i. Yes
ii. No
5. Based on your answer for question No. 4, how much is your interest to continue buying the company’s
product?
i. High
ii. Average
iii. Minimum
iv. No interest
Part IV. PROMOTION DIMENSION
1. From where do you get information about the lumber product of OFWE?
i. TV
ii. Radio
iii. News papers
iv. Trade magazines
v. Public relations
2. Being a customer of the company, how do you rate the effectiveness of promotion adopted by the
company in informing you and others about its offerings in creating mutual benefits for both parties?
i. Highly effective
ii. Moderately effective
iii. Less effective
iv. In effective
3. How do you rate the perceived brand image of OFWE’s lumber product?
i. Unpopular
ii. Less popular
iii. popular
iv. Very popular
v. Extremely population

4. How do you evaluate the advertisement practice of the company in creating as many customers as
possible?
i. Un attractive
ii. Less attractive
iii. Attractive
iv. More attractive
v. Indifferent

Part V. Place Dimension

1. What is your opinion on the availability of the product
i. Rarely available
ii. Often available
iii. Occasionally available
iv. Mostly available
v. Always available
2. Based on your experience, how do you rate the delivery systems and approaches of OFWE?
i. Very poor
ii. Poor
iii. Good
iv. Very good
v. Excellent
3. How do you rate the after sales services like warrantees, sales returns and insurance coverage provided
by the company in order to safeguard the customers from the likelihood of occurring of risks of
manmade and natural disasters?
 i. Not known
ii. Very poor
iii. Poor
iv. Good
v. Very good
4. In your experience, having a customer ship relation with the company, have you ever made a
complaint about the offerings?
vi. Yes
vii. No
5. If your answer to the question above is yes, based on your experience, what was the reason for your
compliant? And rate the one you faced most and made you offensive? Put figures in the blank spaces
provided in front of the case according to their weight you perceived to be ranked (1, 2, 3 and 4).
i. delivery defected product compared to the amount paid _______
ii. Delayance in the delivery system _____________
iii. Request for sales return of unavailable product being sold in Bid _________
iv. The absence of service providers, Deliverers, passes per miters etc. ________
6. How do you rate the service quality you received from the company’s respective body or the
department?
i. Poor
ii. Average
iii. Good
iv. Very good
v. excellent
 A SELF ADMINISTER QUESTIONS TO BE FILLED BY CUSTOMERS ON “PRACTICES AND
CHALLENGES OF MARKETING STRATEGY”, (AMHARIC VERSION)
ቅድስት ማርያም የኒቨርሲቲ - የድህረ ምረቃ ት/ት
ST. MARY UNIVERSITY SCHOOL OF GRADUATES STUDIES

ውድ ተሳታፊዎች፡
የዚህ መጠይቅ መሰረታዊ ዓላማ ተማሪው በቅድስት ማርያም የኒቨርሲቲ - የድህረ ምረቃ ት/ት
የመመረቂየ ጽሁፍ ለማዘጋጀት በርእስ “Practices and challenges of marketing strategy”, the
case of Oromia Forest and Wild Life Enterprise. ላይ ጥናታዊ ጽሁፍ ለማዘጋጀት በማለም
በኦሮሚ ደንና ዱር እንስሳት ድርጅት የጣውላ ምርት ገበያ ለይ ጥናቱን ይሰራል፡፡
በመሆኑም ለዚህ ጥናታዊ ጽሁፍ መሳካት የርስዎ ቅንና ምልካም ምላሽ ከፍተኛ ግምት የሚሰጠውና
ለውጤታማነቱ አቢይ ሚና ያለው ስለሆነ ከዚህ በታች የተዘረዘሩትን ጥያቄዎች በጥሞና በማንበብ
እንዲሞሉ በትህትና ይለመናሉ፡፡ለመጠይቁ የሚሰጡት ምላሽ ሚስጥርነቱ በጽኑ የሚጠበቅ ከመሆኑ
በተጨማሪ አገልግሎቱ ለተማሪው መመረቂያ አገልግሎት ብቻ የሚውል በመሆኑ ማንኛውም ተሳታፊ
ይህንን ታሳቢ በማድረግ ግዜውን ሰውቶ መጠይቁን በመሙላት ለሚያደርጉልኝ ቅን ትብብር
በድጋሜ ላመሰግን እወዳለሁኝ፡፡
መሳሰቢያ
 ስምዎትን መጻፍ አየጠበቅቦትም
 መጠይቁን ስሞሉ ከተሰጡት አማራጮች መልስ ይሆናል ብለው የመረጡትን ፍደል ወይም
ቁጥር በመክበብ ወይም ከስሩ በማስመር ይሙሉት

II. አጠቃላይ ሁኔታ

ክፍል I. የግል ሁኔታ

1. ጸታ
i. ወንድ
ii. ሴት
2. እድሜ
i. 18-25
ii. 26-35
iii. 36-45
iv. 46-55
v. ከ 55 በላይ
3. የትምህርት ደረጃ
i. ማንበብና መጻፍ የሚችል
ii. 10ኛ ወይም 12ኛ ክፍል ያጠናቀቀ
iii. ዲፕሎማ
iv. የመጀመሪያ ዲግሪና ከዚያ በላይ
4. የጋብቻ ሁኔታ
i. ያገባ
ii. ያላገባ
iii. የፈታ
5. የንግድ ድርጅትዎ የስራ አካባቢ
i. አዲስ አበባ
ii. የክልል ዞኖች ዋና ከተማ
iii. የወረዳ ዋና ከተማ
ክፍል II. የጣውላ ምርትን በተመለከተ
1. የኦሮሚያ ደንና ዱር እንስሳት ድርጅት ደንበኛ ኖት መልስዎ አዎን ከሆነ ድርጅቱ ለገበያ
ከሚያቀርባቸው የደን ምርቶች በይበልጥ የሚገዙት የትኛውን አይነት ምርት ነው
i. ግንድ
ii. የግንባታ እንጨቶች
iii. ማገዶ
 iv. ጣውላ
2. ከ2000 አ.ም. ጀምሮ ባለው ግዜ በደንበኝነት የቆዩበት የግዜ ገደብ ምን ያክል ይሆናል
i. 7 አመት
ii. 6 አመት
iii. 5 አመት
iv. 4 አመት
v. 3 አመት እና ከዚያ በታች
3. ባሁን ወቅት ከድርጅቱ ጋር ያለዎትን የንግድ ግንኙነት ቀደም ሲል (ከ2000 አ.ም. በፊት)
ከነበራው አንጻር እንዴት ይመለከቱታል
i. ጥብቅ ግንኙነት
ii. መካከለኛ
iii. መጥፎም ጥሩም ያልሆነ
iv. ምቾት የሌለው
v. አሰልቺና አድካሚ
4. የድርጅቱን ምርት (ጣውላ) በመግዛት ረገድ ባሁን ወቅትና የወደፊት አቓምዎን እንዴት
ይገልጹታል
i. ደንበኝነቴን ሰርዣለሁ
ii. ደንበኝነቴን ለመሰረዝ ወስኜያለሁ
iii. ለመወሰን ተቸግሬያለሁ
iv. ውስን ምርቶችን ብቻ ለይቶ በመግዛት ለመቀጠል
v. የድርጅቱ አቅርቦት በፈቀደ መጠን ያለማቀረጥ መቀጠል
5. ለጥያቄ ቁጥር 4 የሰጡት መልስ ከቀረቡት አማራጮች ከ V የተለየ ከሆነ ለጉዳዩ እንደ
ምክንያትነት ሊቀርቡ የሚችሉ ክስተቶች ከ a እስከ e ተዘርዝራል ለውሳኔዎ ምክንያት
ይሆናሉ ብለው ያመኑበትን እንደ ክብደታቸው ቅደም ተከተል በተሰጠው ባዶ ቦታ ላይ
ፍደላቱን ያኑሩ
i. የምርቱ ጥራት ከውጭ አገር ከሚገባው የጣውላ ምርት ያነሰ በመሆኑ
ii. ዋጋው ከውጭ አገር ከሚገባው ጣውላ ጋር ስነጻጸር እኩል ወይም ከዚያ በላይ
በመሆኑ
iii. የምርት መረጃ ማግኘት ያለመቻልና እና በድርጅቱ የማስታወቂያ ስራ ያለመኖሩ
iv. ደካማ የአገልግሎት አሰጣጥ እና የደንበኛ አያያዝ ግድፈቶች
v. የተመሳሳይ ምርት አቅርቦት በገበያ ውስጥ በበቂ ሁኔታ መኖር
1ኛ.________, 2ኛ ________, 3ኛ ________ 4ኛ _________ 5ኛ _____
መልስዎ ከላይ ከቀረቡት አማራጮች ውጭ ሆኖ ካገኙት ቀጥሎ ባለው ክፍት ቦታ ላይ አስተያቶን
በዝርዝር ይግለጹ
___________________________________________________________________________
___________________________________________________________________________
______________________________________________________._____________________
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___________________________________________________________________________
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6. እንደ ደንበኝነትዎ ድርጅቱ ለገበያ ከሚያቀርባቸው በሰንጠራዡ ላይ ከተዘረዘሩት የጣውላ

ምርቶች በይበልጥ የሚገዙትን ወይም ለመግዛት የሚመርጡትን የጣውላ አይነት በሰንጠዡ
ክፍት ቦታዎች ለይ እንደሚገዙት ምርቶች የቅደም ተከተላቸው 1፣2፣3፣4፣ 5፣ …. በማለት
በምርቱ አካያ ይምሉ፡፡
ስፋት(ሳ.ሜ)
ቁመት ውፍረት >30ሳ. 25- 20- 12- 10ሳ. 7.5ሳ. 5ሳ.
(ሜ) (ሜ) ሜ 30ሳ.ሜ 25ሳ.ሜ 20ሳ.ሜ ሜ ሜ ሜ
0.5-0.9 0.025
ሜ 0.05
0.25
1ሜ 0.05
 0.25
1.5ሜ 0.05
0.25
0.05
2ሜ 0.05
0.25
3ሜ 0.05
0.25
3.5ሜ 0.05
0.25
4ሜ 0.05
7. የኦሮሚያ ደንና ዱር እንስሳት ድርጅት ባሁን ወቅት እየተገበረ ያለውና የሚከተለው የገበያ
ስልትና ሂደት የርስዎን እና መሰል ነባር ደንበኞቹን የግዥ ፍላጎት ያማከለና የሌሎች አዲስ
ደንበኞችን ተደራሽነት በማረጋገጥ ረገድ ያለው ሚና ከፍተኛ ነው የሚለውን አሳቤ እንዴት
ይመለከቱታል፡፡
i. በፍጹም አልስማማም
ii. በመጠኑ አልስማማም
iii. ከሁለቱም የለሁም
iv. በመጠኑ እስማማለሁ
v. በጣም እስማማለሁ
8. በርስዎ አመለካከት የድርጅቱን የጣውላ ምርት በአገር ውስጥ እየተመረተ በሌሎች
አቅራቢዎች ለገበያ ከሚቀርበው የጣውላ ምርት ጋር ስነጻጻር ያለውን የጥራት ደረጃ እንዴት
ይመለከቱታል፡፡
i. ደካማ ነው
ii. ተመጣጣኝ /መጥፎም ሆነ ጥሩ ያልሆነ/ ነው
iii. ጥሩ ነው
iv. በጣም ጥሩ ነው
v. እጅግ በጣም ጥሩ ነው

9. የድርጅቱን የጣውላ ምርት ከውጭ አገር ከሚገባው የጣውላ ምርት ጋር ስነጻጻር ያለውን
የጥራት ደረጃ እንዴት ይመለከቱታል፡፡
i. ደካማ ነው
ii. ተመጣጣኝ /መጥፎም ሆነ ጥሩ ያልሆነ/ ነው
iii. ጥሩ ነው
iv. በጣም ጥሩ ነው
v. እጅግ በጣም ጥሩ ነው
10. የድርጅቱን የጣውላ ምርት ለመግዛትዎ በይበልጥ ምክንያት ከሆንዎት ወይም ካነሳሳዎት
የምርቱ መገለጫዎች የትኛው ነው፡፡
i. የምርቱ አይነት በርካታ መሆን
ii. የምርቱ ገጽታ ማራኪነት
iii. የምርቱ መልካም ስምና ዝናው
iv. የምርቱ ጥራት
v. የምርቱ አገልግሎት/ፋይዳው
11. የኦሮኦሚያ ደንና ዱር እንስሳት ድርጅት ለገበያ ከሚያቀርበው በርካታ የጣውላ ምርት (42
አይነት) አንጻር ያለው የጣውላ ደንበኞቹ በቁጥር አናሳ እንደሆኑ የታወቃል፡፡ ለዚህም
በምክንያትነት የተጠቀሱት በተራ ቁጥር ከ i እስከ iv የተዘረዘሩ ቢሆኑም ከቀረቡ
ዝርዝሮች በርስዎ አመለካከት እንደየ ክብደታቸው ቅደም ተከተል ከዝርዝሮቹ ፊት ለፊት
ባሉት ባዶ ቦታዎች ላይ 1ኛ፤ 2ኛ ፤ 3ኛ እና 4ኛ ይሆናሉ ብለው ያመኑትን ባዶ ቦታ ላይ
ይምሉ፡፡
i. የሺያጭ ሂደቱ በጨረታ ብቻ የተወሰነ መሆኑ __________
ii. ሺያጩ በዋና መ/ቤት ላይ ብቻ የተወሰነ መሆኑ __________
 iii. የማስታወቂያ ስራ እጥረት __________
iv. ተሳሳይ የአገር ውስጥና ከውጭ አገር የሚገባ ምርት ገበያ ላይ መኖሩ __________
ክፍል III. የምርት ዋጋ ሁኔታ
1. የድርጅቱን የጣውላ ምርት ዋጋ በአገር ውስጥ እየተመረተ በሌሎች አቅራቢዎች ለገበያ
ከሚቀርበው የጣውላ ምርት ዋጋ ጋር ስነጻጻር ያለውን ልዩነት እንዴት የገመግሙታል፡፡
i. ውድ አይደለም
ii. ተመጣጣኝ ነው
iii. ውድ ነው
iv. በጣም ውድ ነው
v. እጅግ በጣም ውድ ነው
2. የድርጅቱን የጣውላ ምርት ዋጋ ከውጭ አገር ከሚገባው የጣውላ ምርት ዋጋ ጋር ስነጻጻርስ ፡፡
i. ውድ አይደለም
ii. ተመጣጣኝ ነው
iii. ውድ ነው
iv. በጣም ውድ ነው
v. እጅግ በጣም ውድ ነው
3. የድርጅቱ የጣውላ ምርት የሚሰጠውን አገልግሎት ወይም ፋይዳ ከሚገዛበት ዋጋ አንጻር
ስገመገም
vi. በጣም ደካማ ነው
vii. ደካማ ነው
viii. ጥሩ ነው
ix. መካከለኛ ነው
x. እጅግ በጣም ጥሩ ነው
4. የርስዎ ድርጅት የኦሮኦሚያ ደንና ዱር እንስሳት ድርጅት ባሁን ወቅት በሚያወጣው ዋጋ
በመግዛት ትርፋማ እየሆነ ነው ይላሉ፡፡
i. አዎን
ii. አይደለም
5. ከላይ በተራ ቁጥር 4 ላይ በተመለሰው መልስ መሰረት የድርጅቱን ምርት በቀጣይነት የመገዛት
ፍላጎትዎን እንዴት ይገልጹታል፡፡
i. ከፍተኛ ነው
ii. አማካይ ነው
iii. አነስተኛ ነው
iv. ፍላጎት የለም
ክፍል IV. ማስታወቂያን በተመለከተ
1. ስለ ድርጅቱ የጣውላ ምርት መረጃ ከየት ያገኛሉ፡፡
i. ቲቪ
ii. ሬድዮ
iii. ጋዜጣ
iv. የንግድ መጽሄቶች
v. በድርጅቱ የህዝብ ግንኙነት ኮሚኒኬሽን
2. በድርጅቱ ስራ ላይ እያዋለ ያለውን የማስታወቂያ ስራ አስፈላጊውን መረጃ ለርሶም ሆነ ለሌሎች
ከማድረሱ አንጻር ውጤታማነቱን እንዴት ያዩታል፡፡
i. በጣም ውጤታማ ነው
ii. መካከለኛ ነው
iii. በመጠኑ ውጤታማ ነው
3. ውጤታማ አይደለምየድርጅቱን የማስታቂያ እንቅስቃሴ ደንበኞችን ከመፍጠር አንጻር እንዴት
የመለከቱታል፡፡
i. የሚስብ አየደለም
ii. በመጠኑ ይስባል
iii. ይስባል
iv. በጣም ይስባል
v. አሻሚ ነው
4. የኦሮኦሚያ ደንና ዱር እንስሳት ድርጅት የጣውላ ምርት መልካም ስሙን እና ዝናውን እንዴት
ይገመግሙታል፡፡
i. ዝነኛ አይደለም
ii. በመጠኑ ዝነኛ ነው
iii. ዝነኛ ነው
iv. በጣም ዝነኛ ነው
v. እጅግ በጣም ዝነኛ ነው
ክፍል V. አቅርቦት ስርጭትና አገልግሎት አሰጣጥን በተመለከተ
1. የምርት አቅርቦትን በተመለከተ
i. በይበልጥ አይገኝም
ii. አልፎ አልፎ ይገኛል
iii. በተወሰኑ ወቅቶች ይገኛል
iv. በአብዛኛው ይገኛል
v. በማንኛውም ወቅት ይገኛል
2. ደንበኞችን ለመሳብና ለማቆየት ከሚደረጉ ከንግድ ግንኙነት እንቅስቃሴዎች አንጻር ከምርት
ሺያጭ ሂደት በኃላ በድርጅቱ የሚሰጡ አገልግሎቶች ካሉ
i. ግድፈት ያለው ምርት መመለስ፤ ገንዘብ ተመላሽ መድረግ፤
ii. ዋስትና መስጠት
iii. የእንሹራንስ አገልግሎት መስጠት
iv. የተራንስፖርት አገልግሎት መስጠት
3. ካለዎት የንግድ ግንኙነት ልምድና ተሞክሮ አንጻር የድርጅቱን የምርት ማስተላለፍ፤ ስርጭት፤
ርክክብ ሂደትና ሲስተምን እንዴት ይገመግሙታል፡፡
i. በጣም ደካማ ነው
ii. ደካማ ነው
iii. ጥሩ ነው
iv. በጣም ጥሩ ነው
v. እጅግ በጣም ጥሩ ነው
4. የድርጅቱን የከሺያጭ (ከክፊያ) በኃላ አገልግሎቱን እነዴት ይመለከቱታል፡፡
i. በጣም ደካማ ነው
ii. ደካማ ነው
iii. ጥሩ ነው
iv. በጣም ጥሩ ነው
v. እጅግ በጣም ጥሩ ነው
5. ከድርጅቱ ጋር ባሳለፉት የደንበኝነት ዘመንዎ ከጣውላ ንግድ ስራ ጋር በተያያዘ ምክንያት
ቅሬታ አቅርበው ያውቃሉ፡፡
i. አዎን
ii. አላቀረብኩም

6. ከላይ ለተጠየቀው ጥያቄ መልስዎት አዎን ከሆነ፤ በምክንያትነት ልነሱ የሚችሉ ክስተቶች
በሮማውያን ቁጥር ከ1 እስከ 4 ተዘርዝራል፡፡ካለዎት ልምድ በመነሳት ከርስዎ እውቅ ክህሎትና
ልምድ አነጻር የተዘረዘሩትን ምክንያቶች እንደየክብደታቸው ቅደም ተከተል 1ኛ፤ 2ኛ ፤ 3ኛ
እና 4ኛ በማለት ክፍት ቦታ ለይ ይሙሉ፡፡
i. ጉድለት ያለው ምርት መረካከብ ላይ _______
ii. ረዥም የርክክብ ሂደትና ቆየታው _______
iii. ድረጅቱ በእጁ ላይ የሌለውን ምርት ስሸጥና ተመላሽ ገነዘብ ስጠየቅ _______
iv. የአስተናጋጅ ሠራተኛ/ኞች አለመገኘት/ አለመኖር _______
7. ባጠቃላይ የድርጅቱን ሁለንተናዊ የአገልግሎት አሰጣጥ የጥራት ደረጃ እንዴት ይገልጹታል፡፡
i. ደካማ
ii. መካከለኛ
iii. ጥሩ
iv. በጣም ጥሩ
v. እጅግ በጣም ጥሩ
APPENDIX II

SELF ADMINISTER QUESTIONS TO BE FILLED BY EMPLOYEES OF THE COMPANY

UNDER STUDY ON “PRACTICES AND CHALLENGES OF MARKETING STRATEGY”,

Dear respondents;
The purpose of this questionnaire is to enable me to conduct a research for the partial fulfillment of MBA
degree. This research questions focus on the OFWE’s marketing strategies of Lumber product which is the
main source of the enterprises income you are working for, with the topic of “Practices and challenges of
marketing strategy”, the case of Oromia Forest and Wild Life Enterprise.
A Marketing strategy questionnaires are tools used to collect data from relevant people/employees and
customers who have a direct contact with marketing operations and whose decisions and reactions affect
the company’s business operation.
Hence, to gather information, I kindly request your kind and helpful assistance in responding to the
questions listed below. Any information you disclosed will be kept ethically and will be used only for
academic purpose. Your prompt response will be highly appreciated.
Thank you once again for your cooperation!
Note:
 Writing your name is not mandatory
 Select your answer by encircling or underlining your answer among the given choices

III. General information (Personal Profile of the Respondents)

Part I. Demographic Profile of respondents
1. Gender
i. Male
ii. Female
2. Age category
i. 18-25
ii. 26-35
iii. 36-45
iv. 46-55
v. Above 55
3. Education level
i. Can read and write
ii. 10th or 12th grade complete as per the curriculum
iii. Diploma
iv. First Degree and above
4. Work experience (years of service in the company under study)
i. 0 to 10 years
ii. 11 to 20
iii. 21 to 30
iv. 31 and above
5. Marital status
i. Married
ii. Unmarried
iii. Divorce
iv. Widowed
6. Job location of the respondent in the enterprise
i. Arsi Branch
ii. Finfine Branch
iii. Shager Branch
iv. Head Quarters
 Part II. PRODUCT DIMENSION
1. Being a member and actor of the company’s strategy, among the product dimensions offered by the
company (shown on the table), which product dimension customers most prefer? Rate their preferences
by putting Numbers 1, 2, 3 etc. (at least the top three) under width dimension shown in the table below,
according to the degree of their preferences.
Width dimension(cm)
Length Thickness >30 25-30cm 20-25cm 12-20cm 10cm 7.5cm 5cm
0.025
0.5mt-0.9Mt 0.05
0.25
1Mt 0.05
0.25
1.5Mt 0.05
0.25
2Mt 0.05
0.25
2.5Mt 0.05
0.25
3Mt 0.05
0.25
3.5Mt 0.05
0.25
4Mt 0.05

2. How do you evaluate the current practices, procedures OFWE is exercising in its marketing strategy in
matching the existing customer’s need and reaching prospective customers having abundant features of
lumber product offered for market?
i. Highly attractive
ii. attractive
iii. average
iv. Somewhat attractive
v. Not attractive
3. How do you evaluate the quality level of lumber product your company offered for market compared
to similar products offered by domestic suppliers?
i. incomparable
ii. The same as
iii. Relatively Comparable
iv. Less superior
v. Superior
4. According to your opinion how do you rate if compared to the import products?
i. Incomparable
ii. The same as
iii. Relatively comparable
iv. Less superior
v. Superior
5. What is your view with the attractiveness of the product dimensions /feature/ compared to the
competitors’ domestic product’?
i. more attractive
ii. Attractive
iii. Somewhat attractive
 iv. Less attractive
v. Not comparable
6. Compared to the competitors’ import product?
i. more attractive
ii. Attractive
iii. Somewhat attractive
iv. Less attractive
v. Not comparable
7. Among the following possible attributes of lumber product of OFWE which one do you think that most
influence the buying behavior of customers? Rate them 1,2,3…. According to their weight you
perceived one comes after the other.
i. The availability of different product variety/product dimension/
ii. Physical appearance
iii. Brand image
iv. quality of the Product
v. Perceived value of consumers
vi. Scarcity of the product

Part III. PRICE DIMENSION

1. How do you rate the current price of OFWE’s lumber compared to similar domestic products supplied
by competitors?
i. Inexpensive/cheap
ii. Less expensive
iii. More expensive
iv. Highly expensive/Exorbitant
2. Compared to similar products of imported lumber offered by competitors?
i. Inexpensive/cheap
ii. Less expensive
iii. More expensive
iv. Highly expensive/Exorbitant
3. How do you evaluate the perceptions of customers about the use value of the product compared to its
price they pay in purchasing the product?
i. Not valued
ii. Poorly valued
iii. Less valued
iv. Highly valued
v. Superior value
4. According to your opinion does the current price of the company affect the buying behavior of the
customers?
i. Yes
ii. No
Part IV. PROMOTION DIMENSION
1. From where do your company’s customers most get information about the offerings of your company?
i. TV
ii. Radio
iii. News papers
iv. Trade magazines
v. Public relations
2. Being a manager, or marketing manager, or marketing expert or as one of the company’s employee
having relevant information related to customer creation, how do you rate the effectiveness of
promotion adopted by the company in creating as many customers as possible?
i. Highly effective
ii. Moderately effective
iii. Less effective
iv. In effective
3. How do you evaluate the perceived brand image of your company’s product?
i. Totally Unknown
ii. Undifferentiated
iii. Wrongly differentiated
iv. Biased
v. Popular
4. How do you evaluate the advertisement practice of your company in creating as many customers as
possible?
i. Doesn’t make sense
ii. Un attractive
iii. Less attractive
iv. Highly Attractive
PART V. PLACE DIMENSION
1. Being an actor of the marketing strategy of the company, have you ever been involved in resolving a
customer’s compliant?
i. Yes
ii. No
2. If your answer to the question above is yes, based on your experience, how do you evaluate your
company’s service delivery quality?
i. Poor
ii. Average
iii. Good
iv. Very good
v. excellent
3. What is your opinion on the availability of the product
i. Rarely available
ii. Often available
iii. Occasionally available
iv. Mostly available
v. Always available
4. Is there a delivery system and approaches existed in the company you are working for?
i. Yes
ii. No
5. Based on your answer above, how effective and efficient the delivery system and approaches of
company is in reducing customers compliant to a minimum?
i. Highly in effective and in efficient
ii. Less in effective and in efficient
iii. Moderately effective and efficient
iv. Highly effective and efficient
6. What benefits of after sales services the company offer in order to attract and retain customers?
i. Sales return
ii. Warranty
iii. Insurance coverage
 APPENDIX III

CHECKLISTS FOR INTERVIEW AND GROUP DISCUSSION

1. Your company is producing 42 different standardized dimensions of lumber products and supplied to
mass market of Ethiopia one of highest papules country in Africa. Therefore, the demand for lumber
offered by OFWE is subjected to a national market; however, the company is currently dealing with
only few customers on hand.
a. What do you think the challenges and the possible reason/s for being remain with very
few numbers of customers and not able to attract others?
2. Among the product dimensions offered by the company (shown on the table below),
a) Which product dimensions your customers most prefer in buying? (Thick “x” in the
boxes under product dimension in the table provided)
Width dimension(cm)
No. Length Thickness >30 25-30cm 20-25cm 12-20cm 10cm 7.5cm 5cm
0.025
1 0.5mt-0.9Mt 0.05
0.25
2 1Mt 0.05
0.25
3 1.5Mt 0.05
0.25
4 2Mt 0.05
0.25
5 2.5Mt 0.05
0.25
6 3Mt 0.05
0.25
7 3.5Mt 0.05
0.25
8 4Mt 0.05
b) How do you see the company’s practices and trends the way that each product
type/dimension to be allocated to targeted customers or customer groups according to
their buying needs?
c) How do you see the current practices, OFWE is following in its marketing strategy in
matching the offerings with the existing customers’ buying needs and reaching others?
d) What do you think the possible reasons are?
3. How do you evaluate your company’s offerings in comparison to competitors’ both domestic and
import lumber product?
i. the availability,
ii. the quantity,
iii. the quality
iv. the Price,
v. the advertisement practices
vi. the service delivery systems and procedures
vii. the overall demand and competition
4. OFWE’s current practice of sales is bid sales operation
a) With regard to marketing strategy, what challenges most your company has been
encountering?
b) What you think the company’s marketing strategy should be in the future.

5. What significant change you observed in the current marketing operation of the company? What do
you think the reasons for and what possible solutions you may suggest?
i. Decline in sales volume of the product compared to previous trends?
ii. The willingness of customers being involved in the bid sales shows declining?
iii. Large volume of inventory is observed than experienced before?
iv. Only few customers continue buying, small portion of selected features/dimensions, of the
product?
v. Non customary actions were taken at head quarters, and some special decisions were made
(like special offers) to bring back the customers?
vi. Revision of price level has been made provided that, price cut strategy has been come to exist
and implemented?
6. How do you evaluate that the current pricing practice, procedures, objectives and sales systems,
promotional practices and service deliveries your firm adopting can sustain the existing customers and
sales in meeting the company’s long term financial needs and objectives in a sustainable bases?
APPENDIX IV
PRODUCT DIMENSION PREFERENCES OF TOP TE BUYERS (ARSI BRANCH)
Table:- the top ten heavy buyers and their preferences of buying different dimension of lumber product offered
by OFWE since Tahsas (January) 2006 E.C.
Qty Product dimension preference
Bought % share
3
No Cusotomer (M ) of buying 1st 2nd 3rd 4th
3.5, 3-
1 Hysem Pine Gneral Trading 4142 34.7 4Mt 1-0.5mt 1.5mt 3.5

2 Ketema Legesse 1533 12.9 3.5mt 1.5mt 3,2,1mt 0.5-0.9

3 Abrico Manufacturing 1304 10.9 4mt _ _ _

4 Haji Buno 877 7.4 4mt 2mt 3.5,3,2.5 0.5-1.5

Amard wood products 2.5- 0.5-2,0.5-
5 Enterprise 1474 12.4 3.5mt,4,3,1.5 1mt 4mt _

6 EBAM Trading 576 4.8 4mt _ _ _

7 Sevice along the Nile 230 1.9 4mt _ _ _

8 Zinedin Kuma 59 0.5 4mt _ _ _

9 3F 41 0.3 0.5-2mt _ _ _

Total 11,926 100.0

year tahsas 2006 to date
Sources: - OFWE data base (Arsi Branch, 2007)
APPENDIX V
Table:- Frequency table of Employees respondents for analysis
Frequency Total Percentage

Area of analysis i ii iii iv v vi na i ii iii iv v vi na

DEMOGRAPHY
1 29 6 35 83 17 0 0 0 0 0
2 0 15 14 5 1 35 0 43 40 14 3 0 0
3 0 0 7 28 35 0 0 20 80 0 0 0
4 11 17 5 2 35 31 49 14 6 0 0 0
5 30 5 35 86 14 0 0 0 0 0
6 15 5 6 9 35 43 14 17 26 0 0 0

PRODUCTION
1
2 4 8 10 10 3 35 11 23 29 29 9 0 0
3 3 6 12 4 9 1 35 9 17 34 11 26 0 3
4 10 0 16 7 2 35 29 0 46 20 6 0 0
5 7 13 9 5 1 35 20 37 26 14 3 0 0
6 4 7 9 12 3 35 11 20 26 34 9 0 0
7

PRICEE
1 3 11 16 5 35 9 31 46 14 0 0 0
2 10 13 10 2 35 29 37 29 6 0 0 0
3 0 4 8 20 2 1 35 0 11 23 57 6 0 3

PROMOTION
1 3 0 24 0 6 2 35 9 0 69 0 17 0 6
2 2 8 18 7 35 6 23 51 20 0 0 0
3 3 4 8 5 14 1 35 9 11 23 14 40 0 3
4 3 9 20 2 0 1 35 9 26 57 6 0 0 3

PLACE
1 28 7 35 80 20 0 0 0 0 0
2 4 5 11 6 3 6 35 11 14 31 17 9 0 17
3 4 4 1 17 9 35 11 11 3 49 26 0 0
4 22 11 2 35 63 31 0 0 0 0 6
5 4 12 11 4 4 35 11 34 31 11 0 11 0
6 16 6 0 3 10 35 46 17 0 9 0 0 29
Source:- survey 2015
APPENDIX VI
Table:- Frequency table of customers respondents for analysis
Frequency Total Percentage
Area of analysis i ii iii iv v vi Na i ii iii iv v vi na Total
DEMOGRAPHY
1 17 1 18 94 6 100
2 0 5 6 7 18 28 33 39 100
3 2 10 5 1 18 11 56 28 6 100
4 16 2 18 89 11 100
5 6 10 1 1 18 33 56 6 6 100
0 0
PRODUCTION 0 0
1 0 0 0 18 18 0 100 100
2 14 1 3 18 78 6 17 100
3 5 7 3 3 18 28 39 17 17 100
4 0 0 2 7 9 18 11 39 50 100
5 0 0
6 0 0
7 5 3 2 6 2 18 28 17 11 33 11 100
8 1 5 4 4 4 18 6 28 22 22 22 100
9 5 2 5 5 1 18 28 11 28 28 6 100
10 2 1 5 4 6 18 11 6 28 22 33 100
11 0 0
0 0
PRICEE 0 0
1 1 3 5 6 3 18 6 17 28 33 17 100
2 3 7 2 3 3 18 17 39 11 17 17 100
3 0 0 13 4 1 18 72 22 6 100
4 12 6 18 67 33 100
5 4 9 3 2 18 22 50 17 11 100
0 0
Promotion 0 0
1 3 0 8 0 3 0 4 18 17 44 17 22 100
2 3 3 4 8 18 17 17 22 44 100
3 9 6 2 1 0 18 50 33 11 6 100
4 1 3 7 5 2 18 6 17 39 28 11 100
0 0
Place 0 0
1 0 5 5 7 1 18 28 28 39 6 100
2 2 3 0 0 8 5 18 11 17 44 28 100
3 2 1 9 4 2 18 11 6 50 22 11 100
4 1 0 10 5 2 18 6 56 28 11 100
5 9 9 18 50 50 100
6 11 11 0
7 0 6 6 5 1 18 33 33 28 6 100
Source:- survey 2015