The State of Strategic Marketing in Kenya's Sugar Companies

Abstract

This study set to explore the state of strategic marketing in Kenya's sugar companies. The study was founded on the premise that the sugar industry was going through turbulence in face of liberalisation but there was no conscious effort on the part of the industry to counter this or to initiate strategies that would protect it against such eventuality in future. This paradox led to the second objective of the study which was to explore the impediments that hampered companies from initiating aggressive marketing in face of a scenario that had seen other enterprises collapse. The study confirmed the postulation that there was no serious marketing in most of the sugar industries. Since strategy if about positioning oneself ahead of competitors, conclusions derived were basically looked at from a competitive angle. Specifically, the following fmdings were derived: 1. While the sugar industry was facing competition notably from imports, domestic players did not regard themselves as real competitors fighting for similar markets as their production was often below the required consumption. Thus, many did not see the point of spending money and energy on marketing strategy. 2. The industry was still heavily regulated by government forces and decisions on, say, going abroad, were still pegged on government authority. Thus, the companies could not explore alternative markets at will even as their domestic markets were saturated. 3. All the sugar companies regarded their products as being qualitative and were therefore confident that there was no differential advantage from the product of competitors . Packaging was a new aspect one of the companies was exploring and it was felt that this would give the company a major differential advantage once it is launched. 4. As a marketing tool, pricing was not available for manipulation in the marketing mix because pricing decisions were taken at a Chief Executives forum that compelled the entire industry to maintain a uniform pricing structure. These factors blocked the flexibility required in competitive markets. Where the playing field is not level, the implementation of marketing strategy becomes hard. 5. It was established that virtually no advertising was carried out by the industry. The objectives of advertising are to inform, persuade and remind consumers to buy. These objectives would only thrive in markets that are characterised by numerous products. Where consumption is higher than production, however, these objectives may not hold. 6. Distribution was perhaps the only variable that received emphasis but even for this, the amount of effort was limited as customers were often required to collect sugar from the millers. But there was remarkable effort in choosing locations with many companies keeping off the their competitors' zones. The second objective of the study was to fmd out impediments to the establishment of strategic marketing practices in sugar companies. The following factors were identified: 1. Deficiencies in production did not create cause to compete and consequently there was no need for marketing strategy. 2. Government regulation of the industry did.not permit aggressive marketing. In fact there were internal systems in companies-that regulated the amount of sugar that could be sold to a single customer. The purpose of this regulation was to avoid hoarding and the development of cartels who could buy entire consignments and hold the industry at ransom. 3. Lack of management support was detected in the development of the marketing function. There were no budgets allocated to the function because many of them saw no good cause to spend. They argued that they could after all sell their entire consignments without spending. In view of these findings, the following would be the recommendations for management consideration: 1. If the industry has to survive, there will be need to reduce the level of government control. While this could be done through the proposed liberalisation, there is need to lobby for urgent measures like the freedom to leave market forces to control the industry. 2. The local sugar industry appears unique in the sense of having local production higher than consumption. Because of this, the industry has remained largely production focused. There is need for managers to look at the fate that has befallen other enterprises in Kenya and collect the ammunition before the actual war starts. The war is inevitable as more sugar companies plan to enter the race giving consumers a wider choice. 3. There is need for the establishment of marketing departments in sugar companies. These departments should be put at the start of the marketing chain and not as appendages of other departments.