research on gtp

THE BIRTH OF A TEXTILE BUSINESS IN GHANA WILL BE SUCCESSFUL WITH A PROPER INTEGRATION OF A MARKETING MIX

CASE STUDY: GTP LIMITED

GROUP TWO MARKETING RESEARCH

SUBMITTED BY

Rosemary Arkofah Asiamah WIUC/03/2094

Percy Asare WIUC/03/1854

Mattew Sarpong WIUC/03/2117

Abigail Gunn WIUC/031822


1.1 INTRODUCTION

New innovations in clothing production, manufacture and design came during the Industrial Revolution - these new wheels, looms, and spinning processes changed clothing manufacture forever.

The ‘rag trade’, as it is referred to in the UK and Australia is the manufacture, trade and distribution of textiles.

There were various stages - from a historical perspective - where the textile industry evolved from being a domestic small-scale industry, to the status of supremacy it currently holds. The ‘cottage stage’ was the first stage in its history where textiles were produced on a domestic basis.

During the Industrial Revolution, new machines such as spinning wheels and handlooms came into the picture. Making clothing material quickly became an organized industry - as compared to the domesticated activity it had been associated with before. A number of new innovations led to the industrialization of the textile industry in Great Britain.

Today, modern techniques, electronics and innovation have led to a competitive, low-priced textile industry offering almost any type of cloth or design a person could desire. With its low cost labour base, China has come to dominate the global textile industry

1.2 BACKGROUND OF THE STUDY

Industrial development has been recognised as one of the surest means of ensuring higher and sustained growth rates. Hence, African countries including Ghana pursued import substitution industrialisation in the 1960s and 1970s. The rationale was to move African economies from their agrarian state to modern industrialized economies as has been the case of the east and south-east Asian economies.Consequently, policies to promote import substitution industrialisation were pursued and this led to the establishment of light industries to produce goods


locally and operate behind tariff barriers. Like many African countries, Ghana’sindustrial strategy was meant to reduce economic dependence; hence, manufacturing industries were established to produce items that were previously imported.

Consequently, industries making textiles, soap, wood works, aluminium, metal, tomention but a few, were established. However, during the initial stages, the sector was largely dominated by foreign owned firms but a shift of government policies in the mid 1970s led to increased state participation in the sub-sector. For over two decades after ISI was started, the textile sub-sector dominated the manufacturing sector and contributed signifi cantly to livelihood. It employed about 25,000 of the labour force, accounted for 27% of total manufacturing employment and operated at about 60% of plant capacity (MOTI, 2004). The textile sub-sector has also been an important source of foreign exchange in Ghana.

By mid 1970s about 16 large and medium sized textile companies had been established in Ghana. The garment industry also had some 138 medium andlarge-scale garment manufacturing companies during that time. However, inconsistent government policies over the years have contributed greatly to the decline in the sub-sector’s activity levels. As at 2002, the four major companies that survived the turbulence in the sub-sector are the Ghana Textile Manufacturing Company (GTMC), Akosombo Textile Limited (ATL), Ghana Textile Product (GTP), and Printex with GTP maintaining the lead in the industry. The garment industry comprised of numerous small-scale enterprises which took the form of a sole proprietorship and were engaged in making garments for individuals as well as uniforms for schools, industries and governmental institutions such as the police, the army, hospitals, etc, and also for the exports market. The garment industry, however, depended directly on the textile industry.

The focus of this study is on Ghana Textiles Prints (GTP)


1.3 OBJECTIVES OF THE STUDY

Marketing Mix forms an integral part of the implementation of the various marketing strategies used in the production and marketing of goods and services.

The objective of the study is to establish how a proper integration of a “marketing mix” can help a textile business to succeed in Ghana.

Marketing Mix is the marketing manager’s controllable factors that can be used to solve a marketing problem.

1.4 RESEARCH QUESTION AND HYPOTHESIS

The studies will emphasis that a textile business in Ghana can succeed if quality wax prints and cloth are produced with varying styles and distinctive features of typical Ghanaian symbols, widely distributed through depots and relatively short channels at affordable prices.

Even though it is possible to succeed, textile businesses can also fail if high tariffs are imposed and when the Ministry Of Trade and Industry fails to curb the influx of foreign prints on the market.

1.5 LITERATURE REVIEW

Ghana’s textile industry is mainly concerned with the production of fabrics foruse by the garment industry and also for the export market. The sub-sector ispre dominantly cotton-based although the production of man-made fibers is alsoundertaken on a small scale. The main cotton-based textile products include:African prints (wax, java, fancy, bed sheets, school uniforms) and householdfabrics (curtain materials, kitchen napkins, diapers and towels). These productsform the core of the sub-sector. The main products of the man-made fibers (synthetics) and their blends include: uniforms, knitted blouses, socks etc. These are mainly made from polyester, acryl and other synthetics. There are also a


number of small fi rms which hand-print their own designs onto bleached cotton fabrics, also known as tie and dye or batik cloth. Also, traditional or indigenous textiles such as Kente cloth (traditional woven fabric), Adinkra cloth (traditional handprinted fabric) and other types of woven fabrics used for various purposes such as smock making etc. are proposed.

Total industry output peaked at 129 million yards in 1977 with a capacity utilisation rate of about 60 percent. GTP maintained the lead in the industry withan annual production of 30.7 million yards (includes the outputs of Juapong andTema plants). This was followed by GTMC, ATL, and Printex with production levelsof 15 million, 13 million and 6 million yards, respectively. Unfortunately, total industry output declined from its 1970 level to 46 million yards in 1995 but recovered to 65 million yards in 20005.

As at March 2005, GTP was producing 9 million yards, ATL 18 million yards,GTMC 2.24 million yards and Printex 9.84 million yards. A total annual output of39.04 million yards was produced by the industry as at March 2005, which translates to an average of 49.4% of initially installed capacity of the four firms. Thus, output had declined from 65 million yards, in 2000 to 39 million yards in 2005(attached in the appendix). The reason for the decline in output varies.

ImportsGhana’s textile industry imports a lot of its raw material inputs for its operations,and also finished goods. Imports of raw materials are mainly from the Netherlands, China, India, the U.S, the E.U, Nigeria, Thailand to mention but a few. Textile imports into the country comprises of dye stuffs and chemicals, calico, khaki fabric, prints and fi nished textiles and garments of various kind like new dresses, bed sheets, used textile goods like blankets clothing curtains, accessories, like zippers, fasteners etc. Machinery and equipment and spare parts are also imported for use in the sub-sector. Whereas raw material imports such as cotton are complementary to local production, imported African prints from Nigeria, Côte d’Ivoire and South-East Asia tend to crowd out local production. These fi nished products often bear the patent designs, logo and trademarks of local textile industries, which are sold on the local market at a very cheap price.


Imports of textile have grown steadily over the years. In 1992, the country im -ported US $ 35 million worth of fabrics and garments. This increased to US $ 57million in 1998 and by the first half of 1999 US $ 42 million worth of fabrics andgarments were imported (MOTI, 2002). It is estimated that at the end of the firstquarter of 2005, imported textile prints will have accounted for 48% of total textile prints in the Ghanaian market (Ghana Employers Association, 2005).The local market is facing stiff competition from finished imported textile printssuch as calico, grey abaft, furnishing materials usually from Côte d’Ivoire, Nigeria,China, and most recently from India and Pakistan. Consumers have argued thatalthough the locally produced finished fabrics are relatively better in terms ofquality, the market for imported products has increased because the productshave attractive colours, new designs, a softer and glossier finish.


1.6 MARKETING MIX

Marketing decisions generally falls into the following four controllable categories;

a. Product b. Pricec. Place (Distribution)d. Promotion

The four P’s are the parameters that a marketing manager can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that centre the four P’s on the customers in the target market in order to create perceived value and generate a positive response.


Product DecisionThe term “product” refers to the tangible, physical products as well as services. Here are some examples of the product decisions to be made:

Brand names Functionality Styling Quality Safety Packaging Repairs and Support Warranty Accessories and services

Wax prints or cloth should meet the needs of a particular target market. For example, a luxury product should create just the right image for “customers who have everything,” while many basic products must be positioned for price conscious consumers. Other important aspects of product may include an appropriate product range, design, warranties, or a brand name. Customer research is a key element in building an effective marketing mix. Your knowledge of your target market and your competitors will allow you to offer a product that will appeal to customers and avoid costly mistakes.

To achieve growth, a textiles business like GTP would need to diversify its products, offering related products. Offering a whole range of products is most successful if the raw materials, production processes, and distribution methods are similar, which means you do not have to acquire new suppliers, skills and equipment, and distribution methods.


Price Decisions

“Price” refers to how much you charge for your product or service. Determining your product’s price can be tricky and even frightening. Many small business owners feel they must absolutely have the lowest price around. So they begin their business by creating an impression of bargain pricing. However, this may be a signal of low quality and not part of the image you want to portray. Your pricing approach should reflect the appropriate positioning of your product in the market and result in a price that covers your cost per item and includes a profit margin.

The result should neither be greedy nor timid. The former will price you out of the market; pricing too low will make it impossible to grow. As a manager, you can follow a number of alternative pricing strategies. Below some common pricing strategies. Some price decisions may involve complex calculation methods, while others are intuitive judgments. Your selection of a pricing strategy should be based on your product, customer demand, the competitive environment, and the other products you will offer.

Cost-plus Value-based Competitive Going-rate Skimming Discount Loss-leader Psychological

Distribution (Place) Decisions

“Place” refers to the distribution channels used to get your product to your customers. What your product is will greatly influence how you distribute it. If, for example, you own a small retail store or offer a service to your local community,then you are at the end of the distribution chain, and so you will be supplying directly to the customer. Businesses that create or assemble a product will have two options: selling directly to consumers or selling to a vendor. Some examples of distribution decisions include:


Distribution channels Market coverage (inclusive, selective, exclusive distribution) Specific channel members Inventory management Warehousing Distribution centres Order processing Transportation Reverse logistics

Promotion Decisions

“Promotion” refers to the advertising and selling part of marketing. It is how you let people know what you’ve got for sale. The purpose of promotion is to get people to understand what your product is, what they can use it for, and why they should want it. You want the customers who are looking for a product to know that your product satisfies their needs. To be effective, your promotional efforts should contain a clear message targeted to a specific audience reached via an appropriate channel. Your target audience will be the people who use or influence the purchase of your product. You should focus your market research efforts on identifying these individuals. Your message must be consistent with your overall marketing image, get your target audience’s attention, and elicit the response you desire, whether it is to purchase your product or to form an opinion. Marketing communication decisions include:

Promotion strategy (push, pull) Advertising Personal selling and sales force Sales promotions Public relations & publicity Marketing communications budget.

The four P’s—product, price, place, and promotion—should work together in your marketing mix. Often, decisions on one element will influence the choices available in others. Selecting an effective mix for your market will take time and


effort, but these will pay off as you satisfy customers and create a profitable business. The worksheets that follow will help you construct your marketing plans. Once you have a good marketing mix—the right product at the right price, offered in the right place and promoted in the right way—you will need to continue to stay on top of market changes and adopt your marketing mix as necessary. Marketing is a part of your venture that will never end.

Four P’s WorksheetsThe following set of worksheets will help you understand and tailor your marketing mix to your customers’ needs. The four sections relate to the four P’s of product, price, place, and promotion. In the first part of each section, you will complete a table to help yougain a better understanding of what you are offering and what your competitors are offering. In the “Further Assessment” part of each section, you will answer questions to help you tailor your marketing mix to your customers’ needs.

PRODUCT

Your Product Your Competitors’ Product

Product(e.g., fresh fruit beverageProduct Variety

Product Appearance

Product Quality

Product Features


Product Functionality

Services

Brand Name

Packaging

Warranties

ASSESMENT

1. What features are considered basicfeatures by your customers (ones thatmust be offered)?2. What features are missing from the existing product/service choices in the market place?How can your product/service address this gap?3. What are the key features/benefits of your product and service, especially as they compare to what your competitors are supplying?4. How can your product give you an advantage inthe marketplace?


PRICE

For each of the following pricing strategies, describe the advantages and disadvantages of using that method for your product. Which is the best one for you to use?

Advantages and Disadvantages for Your Product

Cost-Plus

Value-Based

Competitive

Going-Rate

SkimmingDiscountLoss-Leader

Psychological

For each of the following pricing aspects, describe the advantages and disadvantages for your product in the first column.In the second column, describe to what extent your competitors are following that approach.

Advantages and Disadvantagesfor Your Product

To What Extent Are Your CompetitorsUsing This Policy for Their Products?

Trade Discounts

Price FlexibilityPrice Differences AmongTarget Customer Groups


Seasonal AllowancesCash and EarlyPayment Discounts

ASSESMENT

1. How sensitive is your target marketto changes in prices?2. How does your expected pricingcompare to your competition’s pricing?3. Will pricing make your business special?4. How will your products/services providea better price-performance balance thanyour competitors’ products/services?

PLACE

In the first column, describe how your product is distributed. Describe your competitors’ product distribution in the second column.


Direct Sales

Reseller Sales

Market Coverage


Inventory

Transportation

Logistics

ASSESMENT

1. What is the best way to sell your product?Direct selling? Through a reseller?Will this be a competitive advantageor disadvantage?

2. How will your plan for coverage andother place decisions compare to thoseof your competitors? Will this be acompetitive advantage or disadvantage?

PROMOTION


Advertising

Radio

Television

Print


Electronic

Word of Mouth

Generic

Public Relations

Personal Selling

Sales Promotion

ASSESMENT

1. What promotion efforts are mosteffective for your target market?

2. How can your promotion strategygive you an advantage in the Marketplace?


1.6 NATURE OF DATA AND DATA INSTRUMENTS

The researcher employed the use of focus groups, face-to-face interaction and questionnaire to gather data from respondents.

The researcher used the Marketing 300 upper class as their sample size that is made up people with varying ages.

Data collected were both from primary sources and secondary sources.

1.7 LIMITATION

The researcher encountered the following problems;

1. Time factor2. Information was scarce concerning the topic3. Our respondents could not differentiate GTP from other brands

1.8 RECOMMENDATIONS

The textile sub-sector has the potential of accelerating growth in the industrialsector and the economy as a whole and has, therefore, become one of the mainpriority areas of government. The government initiated various programmes aimed at restructuring and improving the textile and garment industry. These


programmes were meant to enable the industry to take full advantage of theAfrican Growth and Opportunity Act (AGOA)9 and increase employment opportunities for the growing population, expand and diversify the economy, promote both domestic and foreign investment as well as stimulate exports. Some of the national economic policies aimed at stimulating the sector include the following:

• Textile/Garment Cluster Network: A Spinnet Textile/Garment Cluster has beenformed by the government in collaboration with UNIDO to bring together micro,small, and medium scale operators in the textile industry. The cluster was formed to address the problems faced by the sub-sector. Since its inception, the cluster had assisted in training in mass production strategies, sub-contracting, up-grading of technical and marketing/managerial skill of members, and financial assistance.

• Textile/Garment Training Centre: This is a training centre or laboratory established by the government in collaboration with UNIDO to be used to up-grade skills of textile and garment industries that take advantage of AGOA and exports in other destinations. The industry is also currently supported by 21 national vocational training institutes, which provide basic practical and theoretical training in tailoring and dressmaking.

• PSI-Export Action Programme on Textiles and Garment: Export Action Programme on Textiles and Garments is a special initiative of Ghana’s presidentdesigned to enhance private sector growth and development within the president’s vision of creating a ”Golden Age of Business” in Ghana.

• Tariffs: The current tariff structure is being revised to conform to the actualeconomic trends. It has been proposed that import duties on all importedclothing should be increased to create a level playing field for all textile productsin Ghana. In addition, tariffs on all textiles manufacturing raw materials areto attract zero rate of tariffs in order to reduce cost of production for locallymanufactured textiles.


APPENDIX


A QUESTIONNAIRE ON THE TEXTILES INDUSTRY IN GHANA

ALL INFORMATION IS CONFIDENTIAL

PERSONAL INFORMATION

1. Name………………………………………………….. (optional)

2. Which of the following age range in do falla. 15-25yrs b. 26-35yrs c. 36-45yrs d. 45-years and above

3. Sex F M

4. Occupation………………………………………………………………..

PRODUCT

5. Are you familiar with GTP wax prints? …………………………………(Yes/No)

6. Are you satisfied with the quality of GTP wax prints?....................................(Yes/No)


7. In terms of thickness?................................................(Yes/No)

8. The colour blends and design?...............................................(Yes/No)

9. The life span of the cloth………………………………………………………(Yes/No)

PRICE

10. How expensive is GTP wax prints compared to other brands.

a. Expensive b. Very Expensive c. Moderate

11. How the price of GTP wax prints does affects its patronage…………………………. (Negative/Positive)

PLACE/DISTRIBUTION

12. Where did you buy your last GTP cloth or other cloths?

13. How easy did you identify the location of the place you sought your print?a. Very Easyb. Enquiryc. Marketd. Mall

PROMOTION

14. How did you get to know the product?

A. Family/FriendsB. AdvertsC. Fashion ShowsD. Fashion Magazines


GENERAL QUESTIONS

15. In your view, do you think our textile industry produces enough prints for our Market?..............(Yes/No)

16. How does the influx of imitated products from abroad, smuggling and dumping impact on how well our textile industry performs? ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

17. Do you think our textile industry should operate source markets and even diversify its raw materials? …………………………………(Yes/No)

18. What is your general impression on the GTP product?

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References

Ampofo V.O (2002), Ghana’s Textile and Garment Industry, Ministry of Trade andIndustry, Industrial Development and Investment Division.

Ghana Employers Association (2005), Measures to Save the Textile Industry inGhana, a report prepared by the Sub-committee of the National TripartiteCommittee on Measures to Save Ghana’s Textile Industry, March.

Ministry of Trade and Industry (2002), Study of the Textile Sub-sector, a reportprepared by Brucks & Associates for MOTI, November.

Peter Quartey (2006), The Textiles and Clothing Industry in Ghana


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