Cairo Leather Industries Company: Teaching Case Study
On the eve of what would be a stormy management review meeting, Cairo Leather Industries Company’s head of marketing was restless. Top on the agenda of the business meeting that day was the presentation of fiscal plans for the financial year to the company’s board of directors. The restlessness experienced by the marketing executive was due to the demands for growth laid out by the company’s heads.
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There were fears that the expectations may be unrealistic and hard to achieve. Owing to the challenges experienced in his department, the marketing executive had forecast a difficult beginning to the company’s forthcoming fiscal year.
Most of the company’s growth strategy was the responsibility of the head of marketing (Apaydin & Samara 2012, p. 7). He was the one in charge of the plans put in place to ensure that the company achieved the envisaged growth within the specified period of time.
In the days leading to this all important meeting, the company’s research team had furnished the marketing executive’s office with results from various surveys conducted in the market.
The results of the survey suggested that the company needed to increase its sales volumes if it were to achieve the envisaged growth by 2015. According to Apaydin and Samara (2012, p. 7), the company relies on domestic sales for most of its earnings. Exports to countries like Jordan and the United Kingdom make up just 7% of the company’s exports.
In the previous years, the company’s main customers were drawn from the upper class in the society. Given the changing consumer trends worldwide, the company sought to expand its consumer base from its traditional markets. The marketing executive felt that the company needed to move with the trends to succeed in the market.
In light of this expansion agenda, the company relies on the marketing department to develop a strategy for growth. The marketing executive and his team come in at this juncture. Consequently, there are various consumer concepts that needed to be addressed in this particular meeting.
In the opinion of Kotler, Keller, Hassan, Baalbaki, and Shamma (2012, p. 41), the past results of a company’s performance are relevant to the understanding its performance in the future.
Kotler et al. (2012, p. 47) add that market research enables an organization to decide on what concepts to improve for the realization of the envisaged growth. In light of this, there are various problems that require to be addressed by Cairo Leather Industries. In point form, the problems are as follows:
- What are the emerging consumer trends in the region?
- How can product strategy be used to give value to the company’s commodity?
- How can the company use its brand to increase sales?
- In what ways can the company make use of viral marketing to its advantage?
- How can the organization position itself in the leather market industry in light of increasing competition?
The restlessness of the marketing executive and his team was attributed to the questions raised above.
The current teaching case study is based on an analysis of the company introduced above. The case begins with a brief description of the leather industry. Thereafter, the paper gives an overview of Cairo Leather Industries Company. In this section, the study examines the company’s history and its current operations.
In addition, the paper addresses the company’s marketing and growth strategies, as well as its image as a brand. Ultimately, the paper outlines some of the marketing problems faced by the company.
In this regard, students are expected to come up with solutions to the problems raised in this case study. Based on their understanding of marketing concepts, the students are expected to provide necessary alternatives. The solutions will enable the marketing executive to develop a growth strategy for the company.
Teaching Case Study
An Overview of the Leather Industry
According to the Industrial Modernization Centre (2013, par. 1), leather is an important element of industrialization in Egypt. The whole process of leather production is a skill that requires a lot of effort on the part of the employees (Gareth & George 2010).
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The transformation of leather from its rudimentary form to a product worthy of sale in the market requires a great amount of skill. To this end, companies in the leather and tanning industry make use of modern technology aimed at coming up with high quality products.
Consequently, the leather industry in Egypt is made up of two main parts. There exists the upstream and the downstream sectors of this industry. According to Apaydin and Samara (2012, p. 10), the production of leather materials is associated with the upstream sector of the industry.
On the other hand, the downstream part of the leather industry is involved in the manufacture and distribution of leather products. The two parts of this industry are interdependent. The dynamics in one of the parts affect those in the other.
For example, the quality of the leather items produced affects how well they sell in the local and international markets. Consequently, the overall success of the industry depends on the individual success of the constituent parts.
Apaydin and Samara (2012, p. 10) point out that the hides of animals are the raw materials in the production of leather. The hides undergo multiple processes before the leather is used in the manufacture of items like belts, shoes, wallets, and saddles.
In this regard, cattle hide happens to be the commonly used raw material in the production of leather. That notwithstanding, there are cases where hides of other animals like snakes and crocodiles are used in the industry. In such cases, the leather items produced end up in the high end markets of designer labels like Gucci (Apaydin & Samara 2012, p. 11).
The upstream sector of the leather industry commences with the skinning of animals that have been slaughtered. What this means is that the quality of the skins at this point will determine the whole production process. After the skinning, Leafe (2000, p. 25) suggests that the hides are sorted and trimmed. In this phase, such impurities as hair and dirt are removed from the hide.
Tanning follows next and happens to be the most important stage. The tanning process ensures that the raw material does not rot. The hide is an organic material that is susceptible to decomposition. That is why it has to be processed to avoid this. Further, the process helps to ensure that the raw material remains pliant and water resistant.
After the tanning process, the by-product is dyed and oiled. According to Leafe (2000, p. 25), the dyeing process helps to restore the natural oils that were lost in the tanning process. In addition, the process is beneficial in that it allows the leather to take a color suitable for its final application. The leather is then dried and final touches made to ensure a good finish.
As aforementioned, the actual manufacture of leather products occurs in the downstream sector of the leather industry. According to Apaydin and Samara (2012, p. 14), this stage of production involves the actual crafting of leather into suitable products for sale.
Given that it is a labor intensive process, many countries rely on manual labor given that automated labor is costly. Leafe (2000, p. 27) suggests that cutting tools act as the supporting appliances in this process of production.
The international leather industry is dominated by countries like China and India. Apaydin and Samara (2012, p. 14) suggest that the two countries dominate the industry owing to the availability of cheap labor in their market. In the MENA region, Egypt stands out as the main producer of this commodity given the qualified labor required in the upstream sector.
Labor Industry in Egypt
Information obtained from the official website of the Industrial Modernization Centre (2013, par. 1) suggests that Egypt’s leather is famous for its unique texture. Owing to the climatic conditions prevalent in the country, the quality of leather produced by the cattle is usually high. Apaydin and Samara (2012, p. 15) point out that the leather industry plays a significant role in the country’s economy.
Apaydin and Samara (2012, p. 15) illustrate that the leather industry accounts for approximately 5% of the country’s total industrial production. The contribution translates to about US$ 600 million to the country’s income. Most of the income comes from the domestic market.
However, the country exports leather and related products to countries like China, the United States of America (USA), Saudi Arabia, and Lebanon. The industry provides employment to about 250,000 million people.
The leather industry in Egypt is divided into the two sections discussed above. According to Apaydin and Samara (2012, p. 16), Egypt focuses on the upstream sector of the leather industry as opposed to the downstream sector.
The two argue that there is high export value in the marketing of leather to developed nations like the USA. In such countries, tanning is prohibited due to environmental factors. The ban makes it possible for Egypt to access this lucrative market.
According to Egypt’s Industrial Modernization Centre (2013, par. 1), the Robiki region is host to a modern tannery. The location has allowed for the migration of tanneries from other locations in the country. The relocation is meant to create a central zone for the production of leather.
In this new location, the government has invested heavily in setting up infrastructure like schools and other facilities to provide skilled labor to the industry. The completion of this new location will allow the country to become globally competitive in the labor market.
The manufacturing of leather products is a costly endeavor. To this end, investors shun the high costs brought about by high tech equipment. Instead, they focus on the tanning sector (Apaydin & Samara 2012, p. 18). Consequently, the government of Egypt encourages companies to venture into the manufacturing sector so as to reap maximum benefits due to value addition on the products sold.
Cairo Leather Industries Company
The Egyptian company was established in 1990. According to Apaydin and Samara (2012, p. 21), the company is a subsidiary of Lasheen Group. The group has made other investments in the medical, electrical, and legal fields. The company realized there is huge demand for leather, locally and internationally.
It responded to this demand by making heavy investments in the industry. In 2000, the company began setting up tanneries for the production of leather. In the years that followed, the company experienced incremental growth, allowing it to expand (Apaydin & Samara 2012, p. 21).
The company specializes in the manufacture and distribution of various leather commodities like belts and wallets. According to Apaydin and Samara (2012, p. 22), the company is shifting from the traditional upstream sector of the leather industry to the downstream sector.
To this end, the company produces the aforementioned products not only for the local market, but also for the international market. The main export destinations include Australia, Saudi Arabia, and the USA.
Despite the stiff competition in the global leather industry, Cairo Leather Industries Company makes use of the high quality raw materials produced locally. In addition, the company makes use of the trending fashion accessories and designs (Apaydin & Samara 2012, p. 23).
The company is targeting the high end market, which is mostly situated in developed countries. Consequently, Apaydin and Samara (2012, p. 22) point out that the company has an overseas office based in the United Kingdom (UK). The office coordinates most of the foreign sales.
The Industrial Modernization Centre (2013, par. 3) points out that the company increased its operating capital from 10 million Egyptian pounds (EGP) to 20 million EGP in just 3 years. The growth is attributed to the company’s lean and efficient management structure.
According to Apaydin and Samara (2012, p. 24), the company’s total staff number is only 150. The company focuses on highly skilled labor to ensure the production of high quality commodities.
As aforementioned, Egypt relies more on the manual production of leather products as opposed to the use of machines. Like the rest of the leather manufacturers in the country, Cairo Leather Industries Company relies on manual labor for its operations.
According to Apaydin and Samara (2012, p. 25), only 25% of the company’s production is automated. The manual labor is beneficial to the management of issues that involve the design of the products.
The manufacturing process takes into account the raw materials required to produce the leather items. Leafe (2000, p. 23) suggests that the raw materials should be sorted out depending on the defects present in each and every one of them.
Cairo Leather Industries applies the same procedure. It further classifies the leather depending on the type of animal from which it was sourced. The company oversees the actual manufacture and distribution of the products from the same facility (Griffin 2011; Pride 2011).
The company targets both domestic and foreign markets to sell its products. According to Apaydin and Samara (2012, p. 32), the company has consistently recorded incremental sales growth over the years. The exports have led to a trend shift within the domestic leather market.
Demand for the company’s products varies depending on the various seasons in the export destinations. Apaydin and Samara (2012, p. 32) point out that peak sales are usually witnessed during Christmas and Valentines seasons.
According to Apaydin and Samara, the company has a catchy mission statement. The statement reads: “To design and create elegant useful leather goods for your personal lifestyle. We are proud of our craftsmanship” (Apaydin & Samara 2012, p. 33).
Given the mission statement, it is evident that the company has a desire to produce high quality leather products. It follows that its main market is the upper class given their focus on the quality of a commodity as opposed to the price (Apaydin & Samara 2012, p. 33).
The main competition that Cairo Leather Industries faces is similar companies in the fashion sector. The said sector usually demands high quality products owing to the unique tastes of the high end customers. The company prides itself in making use of 100% authentic leather.
Consequently, the authenticity of the leather, according to Apaydin and Samara (2012, p. 33), is essential in giving the company an upper hand in the industry. In addition, the company seeks to use its design prowess to position itself in the market and fight competition (Gareth & George 2010, p. 45).
Kotler and Keller (2008, p. 54) argue that a company is required to develop a unique language to help it position itself in the market and fight competition. Consequently, Cairo Leather Company has used its brand to attract customers who have a monthly income of between 3000 and 7000 EGP.
According to Apaydin and Samara (2012, p. 34), the said market represents about 8 million of Egypt’s total population. However, the company is evidently weak on positioning itself in the foreign market. In addition, the company needs to make its brand more visible in the market. The company’s growth strategy depends on these two elements (Goldman & Sigismond 2010).
According to Apaydin and Samara (2012, p. 36), the company’s slogan at its inception was “prestige”. Just as the name suggests, the company’s intention is to resonate with the upper and middle class members of the society.
After a few years in operation, the company decided to re-brand and take up a new slogan, “quality of lifestyle”. Apaydin and Samara (2012, p. 36) argue that the new slogan was intended to position the company to meet its consumers’ dynamic demands.
To this end, it becomes clear that in the fashion industry, one has to be dynamic if they are to sell their brand widely. Cairo Leather Company has relied mostly on the word of mouth to market its operations.
Apaydin and Samara (2012, p. 36) point out that the company has not focused enough on mass advertisement to market its products. However, in recent times, the company has resorted to print and electronic media as an avenue to market its products. Consequently, its sales volume has grown drastically.
Given the current global marketing dynamics, companies are taking to the internet as a platform for advertising their brand. According to Kotler et al. (2012), viral marketing allows for increased visibility of a company’s brand. Going forward, the company needs to adopt the emerging marketing portals on the internet.
According to Seven K (2013, par. 1), the company has a wide range of products. It deals in more than 300 products. There are 11 categories into which the commodities are subdivided. From wallets to card holders, the company deals in just about every imaginable leather product. The diversity is particularly important in furnishing the ever growing demand for leather products in the high end market.
According to Apaydin and Samara (2012, p. 37), the company’s products are not gender or age specific. A variety of products are aimed at both men and women. In addition, the company has products for teenagers, the youth, and the older members of the society.
Depending on preferences, the company produces various items in a number of colors. However, the company should conduct an annual review of its products to see which should be removed and what should be added to the existing line of products.
Kotler et al. (2012, p. 73) argue that branding is a marketing concept that helps to sell the company better than advertisement campaigns. Like other companies, Cairo Leather’s brand influences customers’ perceptions.
The ability of a customer to purchase a given commodity relies on the perceptions they develop from a particular company’s image. Consequently, the marketing manager at Cairo Leather should conduct surveys to constantly gauge how customers perceive the brand.
Different surveys reveal that the company is more popular among men compared to women (Apaydin & Samara 2012, p. 40). More specifically, the company is largely associated with belts and wallets as opposed to the other commodities sold.
According to the surveys, most consumers are not aware that the company sells female products alongside the male products sold. The retail stores owned by the company record high sales of male products as opposed to the female products like purses.
The survey further revealed that the company’s brand is exclusive to consumers in the high end market. According to Apaydin and Samara (2012, p. 40), the Egyptian population group that fits in the company’s target market is mostly composed of people in their late thirties.
In essence, the company has locked out other potential clients. That notwithstanding, members of the young generation still purchase the fashionable items in the stores. However, the surveys reveal that they do so for their parents.
The various aspects discussed above pose various challenges to the company’s future prospective growth. An overview reveals that most of the challenges require marketing concepts as their solutions. For that reason, the company’s marketing department is expected to provide the necessary solutions for a growth strategy. According to Apaydin and Samara,
“…the Chairman’s point of view (is) that the business needs a fully integrated strategy across the various functions to drive an overall growth. The Board and the functional heads had a previous discussion earlier in preparation for the upcoming top management meeting on strategy” (Apaydin & Samara 2012, p. 42).
During the meeting, it is expected that the board will discuss the company’s performance and the way forward in terms of growth. In this regard, the marketing department is expected to propose a roadmap for growth while tackling the marketing challenges that tend to inhibit the intended growth (Goldman & Sigismond 2010).
According to Apaydin and Samara (2012, p. 42), the company is expected to venture into new markets, mostly foreign.
Among the elements inhibiting the company’s foray into the international market is the high cost involved in internationalization. It is expected that the financial details to be presented by the marketing head will reflect some sense of innovation to shift from the traditional domestic market to foreign markets. The company will examine how customers perceive its brand.
The examination will help to expand into a foreign market. Consumers in the foreign market’s high end section are more than those in the local market’s high end.
As earlier mentioned, the marketing head was restless on the eve of the all important meeting. It is important to recap some of the challenges facing his strategic growth plan. In point form, the problems are as follows:
- What are the emerging consumer trends in the region?
- How can product strategy be used to give value to a commodity?
- How can the company use its brand to increase sales?
- In what ways can the company make use of viral marketing to its advantage?
- How can the organization position itself in the leather market among increasing competition?
The objective of this case study, as already indicated, is to allow the student to apply the concepts of marketing they have acquired in class. In the process, students will suggest solutions to the growth impediments.
The suggestions will help the marketing department at Cairo Leather to formulate a growth strategy for the company.
In this teaching study, the researcher intends to examine various marketing concepts. To this end, the paper relies on a company operating in the MENA region and advances a teaching case study of the same. The Cairo Leather Industries Company provides a suitable reference point to understanding the various marketing concepts applicable to a company.
The company is facing various marketing problems. The information for this study was gathered methodically. Following is a brief background into the method of research employed in this study.
By responding to the marketing problems highlighted, the student will advance their knowledge in the field of marketing. Consequently, the study will have responded to the challenges facing the marketing department.
It should be appreciated that this study will present relevant recommendations with regards to marketing concepts to be applied in the company. All the recommendations will be geared towards ensuring that similar companies can apply the values discussed in this study to improve their operations.
Statement of the Study Problem
There are multiple concepts that the marketing department at Cairo Leather Industries Company can.make use of to ensure that that the company’s growth plan is achieved.
The researcher had various objectives that they sought to address in the teaching case study. In point form, the objectives are as follows:
- To determine the emerging consumer trends in the MENA region.
- To find out how a product strategy can be used to give value to a commodity.
- To find out how a company can make use of its brand to increase sales.
- To determine the ways in which a company can make use of viral marketing to increase sales.
- To determine how an organization can position itself in the leather market to deal with increasing competition.
The objective of this case study is to allow the student to apply the concepts of marketing they have acquired in class. According to Kotler et al. (2012, p 13), there are different marketing concepts that a company can make use of to improve its brand and position itself in the market.
The use of the concepts will help address the problem of challenges affecting the growth of the company (Griffin 2011). The solutions are necessary to allow the marketing department at Cairo Leather to formulate a growth strategy for the company.
Methods of Research
Depending on the type of study, researchers settle on research approaches suitable to a given subject matter (Richards 2004, p. 32). As a result of this, research approaches tend to be separated into three main categories. The first approach is called the exploratory approach. Secondly, there is the descriptive approach and, finally, the hypothesis method (Johns 2002, p. 37).
With regards to the current study, it is important to note that the teaching case study entirely relies on description as its research approach. To this end, the researcher made use of realistic philosophical paradigms. Such a perspective usually takes into account a deductive approach to research (Barney & Anselm 2010, p. 41).
The study focused on the marketing concepts that are necessary to resolve the marketing challenges at Cairo Leather Industries Company.
The study relied on secondary sources of information. Articles and books touching on the subject matter were accessed from the library and other resources. The books and articles were then reviewed critically.
A positivistic research perspective makes use of factual information to ensure that a researcher arrives at a logical conclusion (Barney & Anselm 2010, p. 38). In such a perspective, the researcher assumes that knowledge gathered through the analysis of various sources is beneficial. In this case, the researcher reduced the number of assumptions made.
Design of the study
The theories developed in a study are obtained through induction, abduction, or deduction (Smith 2007, p. 7). In the current research undertaking, the researcher used the relevant information that addressed the research objectives. The secondary information was collected from published articles and books, both in print and electronic format.
The main problem affecting the company’s growth is brand. The perceptions associated with the company are such that many consumers believe the entity is exclusively for the high end market.
However, Apaydin and Samara (2012, p. 44) point out that a significant portion of the company’s market is locally based. To this end, the company is expected to move into the international market given that the high end market is bigger in the international arena.
Kotler (2012) suggests that a company’s growth is tied to the sales made. Kotler adds that companies are expected to improve their brand and visibility to ensure that the number of customers increases. An increase in the number of customers leads to subsequent increase in sales. To this end, there are various concepts that can be applied to ensure that the problems inhibiting growth in the company are solved.
According to Kotler et al. (2012, p. 1), market research is a fundamental tool for any company that seeks to forecast its growth. The authors opine that market research is an important step that should be taken by any company seeking to formulate a strategy for future growth, like in the case of Cairo Leather.
In this regard, the company should have an idea about the demands of the customers. Significant financial decisions made without such information may lead to tragic losses.
Market segmentation is another important concept in marketing. According to Kotler et al. (2012, p. 9), any reference to a market is done in relation to the population that make up the consumers. Their segmentation demands that their numbers are reduced to smaller and relatively uniform groups.
Given the high end nature of the market targeted by Cairo Leather, it is important for the company to narrow down its foreign market in a similar fashion.
Kotler et al. (2012, p. 53) argue that marketing has various elements that have to be respected. In this regard, there are the price, place, product, and promotion aspects of marketing. All of them have to be considered when marketing a commodity. The concept of marketing developed using these elements is referred to as a marketing mix. The elements allow a company to target consumers and eventually reach them.
There are other elements of marketing outlined by Kotler et al. (2012, p. 67) that many companies do not factor in when planning for strategic growth. The understanding advanced in this instance is that a product passes through several processes by the time it arrives the consumer.
Kotler et al. (2012, p. 67) point out that a product is introduced into the market where it grows, matures, and then declines. The various stages mentioned are particularly important to a company’s management. The management is well informed on when to replace or upgrade the commodity.
The current study adhered to the required research etiquette (Barney & Anselm 2010, p. 39). All the sources of data are cited and referenced in accordance with the secondary sources they were accessed from. Moreover, all the information obtained from the various resources is acknowledged using the appropriate referencing style in line with the requirements of this research undertaking.
Threats to Validity
Information touching on marketing concepts exists in a number of studies, journals, books, and other forms of text. However, in this paper, sources from renowned authors, professionals, and relevant institutions were highly preferred (Smith 2007, p. 47). The resources relied upon provided accurate information. In addition, the information presented therein is neutral and does not serve the interests of the publishers.
In point form, some of the ethical considerations are discussed below:
- Given that this study is conducted as part of an academic undertaking, the researcher clearly understands the research ethics specified by the institution. Consequently, the research ethics prescribed by the university are adhered to throughout the research project.
- The process of collecting of data, as discussed above, was objective and thorough.
- With regards to the business ethics, the study factored in the component of time. Time is a valuable resource in any organization. Thus, the researcher collected current and updated information.
Inclusion and Exclusion Criteria
Most of the articles and books accessed were relevant to the marketing field. The information was not limited to organizations that are domiciled in the MENA region. Some of the sources initially accessed made reference to marketing in the general context of a company.
However, there were sources that were not closely related to the topic. To this end, the researcher made use of the data that highlighted information touching on marketing concepts. Such sources were considered owing to the link they established between branding and positioning of a company.
As an inclusion and exclusion criteria, the researcher also used the source’s year of publication (Johns 2002, p. 34). Priority was given to sources that were published after 2005. However, it was found that some sources published earlier than 2005 were also relevant to the study.
In such cases, an exception was made and such sources were included. Another criterion that was used is the credibility of the author (Johns 2002, p. 34). In this study, the researcher used sources published by reputable authors who are knowledgeable in the field.
Given this, authors of most of the sources that were used were affiliated to reputable organizations, such as universities and international bodies like the World Trade Organization. After the sources were subjected to the inclusion and exclusion criteria, they were reduced from the initial figure of 70 to a manageable figure suitable for the study (Smith 2007, p. 44).
According to Apaydin and Samara (2012, p. 7), Cairo Leather Industries Company is one of the large numbers of companies situated in the MENA region. The countries that make up this region include those in the Middle East and North Africa. Cairo Leather fits into this matrix.
The company is situated in Egypt, North Africa. The company is primarily engaged in the manufacture and distribution of leather products. It serves both the local and the international markets. The organization intends to come up with a growth formula to help it expand its operations in the local and international markets.
The marketing department is charged with the responsibility of coming up and implementing the growth strategy. Currently, the department is faced with the task of overcoming some marketing shortcomings inherent to the company. The department has to ensure that the growth goes on as planned.
The person tasked with the formulation of the growth plan is the company’s marketing head. However, his frustrations stem from various problems related to the company’s brand and market positioning (Kotler & Keller 2008).
The teaching case study is targeted at students in a specific field. The students targeted are those in the marketing field. The case study will address students of marketing from as low as the undergraduate level. The case provided is also beneficial to specialized students. Examples of such students are those engaged in the study of business management and finance.
Kotler (2012, p. 77) points out that strategic growth of any given company is hinged on the marketing approaches adopted by the management. The strategies that a company relies on to realize the sale of its products determines its growth in the industry. In the case of this study, the marketing concept is suggested as the model to be used by the students in addressing the problem facing the company.
In light of the objectives highlighted above, it is important to appreciate that the best strategy for the company to adopt in addressing competition and enhancing its success in the industry would be positioning. A discussion in this regard is provided below:
Positioning as a Competitive Advantage for the Company
According to Jerry (2013, par. 1), the world of business is laden with competition in the trade of a given commodity. In this regard, companies must strive to get an advantage over their competitors in the market. The aim is to retain existing customers and attract potential clients.
In this regard, such a company is expected to consider several factors like pricing, positioning, and general public relations. In this section, positioning is examined as a means of gaining a competitive advantage in the context of Cairo Leather.
Jerry (2013, par. 6) argues that marketing is all about creating the brand for a given company. To this end, positioning is looked at as a means of ensuring the brand has its domain in the market.
Jerry (2013, par. 9) adds that positioning is a marketing concept that has several possibilities like the price and usage of the commodity. In addition, Jerry (2013, par. 9) suggests that positioning takes into consideration geographical, psychographical, and commodity boarder factors.
In the case of Cairo Leather Company, the marketing strategy should consider positioning the organization against a broader market. According to Apaydin and Samara (2012, p. 27), the leather company is largely dependent on the domestic market.
Globalization allows the company to widen its market to reach other territories. In this regard, the company should seek to position itself against other alternatives to leather products internationally. In this case, the company should seek to be a provider of authentic leather products to counter the rise in commodities made with other materials.
Jerry (2013, par. 10) argues that companies would endeavor to position themselves against a price segment. To this end, the company should seek to attract other clients who are not in its high end preference bracket. In addition, the company should seek to position itself against the ‘usage’ segment (Gareth & George 2010, p. 34). In this regard, the company should seek to improve is brand and make it the best fashion accessory.
Gareth & George (2010, p. 35) argue that there is a geographical segment in the market. Such a segment implies that certain commodities are best suited to particular geographical areas. Cairo Leather is specifically in the fashion industry. To this end, the company would be best suited to position itself in places that are known for fashion. Such locations include, among others, France and Italy.
Analysis of External Environment
According to Apaydin and Samara (2012, p. 35) the Egyptian government is developing laws that encourage value addition on products. In this regard, the construction of a new headquarters will encourage the manufacture of commodities as opposed to processing leather only.
Analysis of Competitive Environment & Industry
Currently, the company’s competition is domiciled abroad. Apaydin and Samara (2012, p. 37) argues that the company has a strong domestic market. The same is due to the huge international market they are unable to penetrate. The fashion market is wide and the international market is the best for them to venture
Analysis of Consumer Segment
The main consumers of the products produced by the company are local. The foreign market mostly relies on leather and not the finished product (Apaydin & Samara, 2012, p. 38).
The importance of the marketing course taught using this case study is to help the students develop the necessary skills in marketing. Such marketing skills include those needed to maximize the sales of a given commodity. In this regard, the marketing concepts in this teaching case study will enable a student to provide the necessary solutions to a company that seeks to realize growth in different fronts.
In the opinion of Kotler et al. (2012, p. 41), the historical performance of a given company is very important to future operations. Understanding the historical performance increases knowledge on a company’s possible performance in the future.
The opinions and information provided in this teaching case study improve understanding with regards to how marketing trends can be used to spur the growth of a given company (Pride 2011).
The teaching case study provides critical information on how to position a company in the industry. Such positioning is important to ensure that the company performs in the market despite the prevailing conditions, including competition from other players.
In the case of Cairo Leather Industries, the company should seek to increase the production of hand-made materials. In the opinion of Apaydin and Samara (2012, p. 36), the high end market is more concerned about the quality of a product than on its price. Thus, the company should seek to position itself as the producer of authentic crafts in the region and in the whole world.
The case study, as aforementioned is intended to be beneficial to students. In this regard the following recommendations are in order:
- The teaching methodology to be employed should respect the fact that the study is meant to solve a problem in a company. Gatto (2002, p. 18) argues that explaining and collaboration are important teaching methods. Consequently, the two methods should be applied in a class setting. The teacher should explain the underlying principles. On the other hand, there should be collaboration on the part of the students to solve the problems raised in the teaching case study.
- It is important to note that the teaching case study can be applied to other situations in other industries. The case is not unique to Cairo Leather as a company. The findings of this study will go a long way in informing teaching and understanding of concepts in other industries.
- There are a number of issues unique to this case study. They include among others, the fact that the company is operating in MENA region and, specifically, in the leather industry. As much as the findings of this teaching case study can be generalized to other industries, it is important to come up with cases specific to other industries and other regions. For example, it is important to come up with a teaching case study of a leather company operating in the European market and compare the findings with those made in this teaching case study.
The teaching case study reveals that branding is a serious challenge in the company. As a result, the company should seek to improve its brand to attract female clients. Surveys conducted reveal that most of the customers who frequent the retail outlets are male.
Thus, the company should improve its brand to be non-specific with regards to gender. Lastly, with the changing times in the international market, all companies must ensure that they develop an online presence. The same is important in attracting overseas clients.
Apaydin, M & Samara, N 2012, ‘Seven K strategy development’, MENA Journal of Business Case Studies, vol. 2012 no. 2012, pp. 1-85.
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