a project for multinational marketing course a leather brand from Ethiopia

1. Nature leather ınternatıonal: leather
producing company in Ethiopia
By : Abdulmenan Sherif “MASTERS OF
BUSINESS ADMINISTRATION”
abdulmenan4@gmail.com

2. Objective of the study
 To fulfill the course multinational marketing course of
business administration
 To create a well known and internationally
competitive brand in leather market of Ethiopia
 To show Ethiopia is a suitable country to invest in
leather industry and has a potential market
 To show business opportunities for stake holders
especially Turkish companies which are interested in
leather industry
 To open further and detail studies about leather
industry of Ethiopia

3. NATURE LEATHER INTERNATIONAL
 1.INTRODUCTION
1.1 Nature leather international:-is a leather producing company which will be
established in the horn of Africa, Ethiopia and the company will produce
leather products to local countries and will exports to other countries.
1.2 Why Ethiopia is selected to the domestic country of Nature leather
company?
 Ethiopia is the leading country in leather production : from African
countries. The country specially produces and exports unprocessed and semi-
processed hides to middle east and European countries. Recently there are
some infant industries eastablished in Ethiopia to produce finished leather
products and offer to the nearby market and export to other countries.
 Build internationally known brand:Although Ethiopia is producing leather
and export in large quantity there is not any internationally known brand.
Natıre leather international will try to build international brand owned by the
producing country.
 It is competitive advantage with an raw materials, and skilled manpower

4.  2. What are the products of Nature leather
international company?
 Nature leather international will be established in
industry zone of Addis Ababa Ethiopia and produce
leather garments, industrial gloves, bags, leather
jackets for men and women and leather shoes for men
women at different ages and styles.
 3. The Ethiopian market conditions as a great
leather supply potential for the new company
 Ethiopia has the largest livestock production in Africa,
and the tenth largest in the world, with 45.5 million
cattle, 26 million sheep and 21.7 million goats at current
estimates. The annual potential supply of hide and skins
is estimated at 4.8 million pieces of hide and 12 million
pieces of skin.

5. Animals distribution in Ethiopia 2011
Cattle 45.5 million
sheep 26 million
goat 21,7 million
Annual potential supply
of hide
4.8 million
4. Target market of Nature leather international products
4.1 Ethiopia and Turkey as target market
The domestic country of the company is Ethiopia assuming that the country’s local
market as the immediate target market and also the products will be exported to
Turkey. In the long run the product will be distributed to other countries

6.  Ethiopia is populated with 90 million people
and it a great market potential
 Few competitors are found in Ethiopian leather
industry
 Nature leather international industry will produce
locally and globally competitive shoes, belt, wallet
and bags both in quality and in price

7.  4.3 Turkey as target market of Nature leather products
Turkey especially Istanbul is center of tourists
The total number of foreign tourists visiting Istanbul
reached 8 million in 2011, as reported from official data .
According to a statement released by the Istanbul Culture
and Tourism Department, number of foreign tourists
visiting Istanbul surpassed eight million. In 2010, 6.9
million foreign tourists had visited Istanbul.
Visitors from Saudi Arabia, bahrain Iraq, Kuwait, Germany,
Russians, Americans, Italians and French are increasing
 Istanbul is a big market center to introduce a new product
for other markets of the world
Geographic advantage: Geographically Turkey is the bridge
between Asia and Europe

8. The trade relationship between Ethiopia and Turkey :
Ethiopia has an embassy in Ankara
Turkey has an embassy in Addis Ababa since 1925
Turkey was the sixth country to open an embassy in Ethiopia.
Today the relations between the two countries are described
as excellent, both politically and economically
There are Turkish investors in textile, construction and
flower industry in Ethiopia . For example Ayka Addis is
Turkish company invested in textile sector of Ethiopia and
the company is successful in exporting textiles. There are
about 10,000 people working in this company and Ethiopians
living in the capital city have a positive attitude towards
Turkish investors.
The experiences of these companies in the country will be
positive feedback for the expected joint ventures from Turkey
to Nature leather international company.

9.  4.4 Target markets in long run
In long run neighbor countries of Ethiopia that have a common
market agreements and a special trade and political relationship
agreements like trade agreements between East and South
African countries COMESA will be chosen the essential markets
of the products. The consumers in these countries are assumed
to be in the same consuming behavior so that the company will
export the products with little or without modification
Middle East countries: can be taken as one of the largest target
of the company. People in the Middle East wants light leather
products that will be suitable for summer and semi-deserts so
that the company produce to satisfy the needs and wants of the
groups
Europe and America:The market in these countries is expected
to be highly competitive since the ability and willingness to pay
in these countries is better than other markets in Asia and Africa
so that leather companies from other region compete to have
better market share in Europe and America.

10.  5. ENVIROMENTAL CHARACTERSTICS OF THE
DOMESTIC COUNTRY GENERAL VIEW
the Government of Ethiopia has been actively
encouraging export industries including leather,
horticulture, garment, and tourism.
The privilege differs slightly from industry to industry,
the leather industry has privileges such as
i)tax exemption for inputs,
ii) tax holiday for 5 years, and
iii) lease of land with basic infrastructure, e.g. electricity,
water supply, and telephone, for a low price.
The business environment of Turkey will be studied with
joint ventures from Turkey

11.  6. Social and cultural environments of targeted
countries
 Leather industry enterprises are continuously influenced
by the social and cultural factors around them on both
strategic and tactical terms. The leather industry must
keep up with the changes around it to be able to survive
and compete against its rivals. In the competitive
environment, leather industry is expected to utilize up-to-
date technologies in order to improve its current situation
and enhance its export potential.

12.  7. Marketing strategies of Nature leather
international
The leather company is a global company which produces
standard products suited for different local areas of the
world. Since the company invites joint ventures from
Turkey it will be easy to localize the product to Turkey.
It is expected that the joint ventures will bring their
company’s experiences ,working cultures especially the
packaging styles, labeling and setting the right price in
accordance with local markets.
Nature leather international will use different
promotional elements for a particular country

13.  For example in Ethiopia most of customers prefer products
with appropriate price so that the company should adjust
relatively low price products so that people in the country
promote the product by word of mouth. Besides that use
mass media even if the advertising cost is expensive
 But in Ethiopia there are few television channels and the
company can address customers using television
advertisement. TV advertising allows the product to reach
large number of people, both at regional as well as at
national levels.
 Various segments of people like house wives, young people
and children are targeted through different channels like
cartoon

14.  Disadvantages of TV advertisement
 Cost is very high.
 TV advertisements are short interval of time, thus they do not express much
about the product.
 It involves complicated procedure. Producing the TV advertisement involves
hiring advertising agency, video editors, and actors.
 Promotion in Turkey
 People in Turkey are highly engaged in using social media such as
facebook, twitter and other communication boxes so that the company
will use the social media for advertisement.
 Advertising through the Internet
 Use attractive and user friendly website to the company which can display all
the features of the products and invite customers to buy the product online .
 Through Internet usage business organizations can easily achieve the
following:
 create communication between the company, potential buyers, distributors
and agents;
 feed buyers with all relevant sales information;
 encourage buyers to order through the network system.

15.  Buyers visiting the Exporter’s Firm
 In many instances, buyers prefer to visit manufacturing locations
before placing an order because in some cases samples do not tell
the truth about mass production. During the visit, international
buyers like to see and approve the product mixes, sizes and
colours; the quality standards; the operational efficiencies; the
manufacturing capacities; the skills of the staff; the
organizational capacities; the shipping efficiency
 Buyers visiting the Exporter’s Firm
 In many instances, buyers prefer to visit manufacturing locations
before placing an order because in some cases samples do not tell
the truth about mass production. During the visit, international
buyers like to see and approve the product mixes, sizes and
colours; the quality standards; the operational efficiencies; the
manufacturing capacities; the skills of the staff; the
organizational capacities; the shipping efficiency

16.  Channels and physical distribution decisions
 There are many functions to be carried out in moving the
product from producer to customer. Those functions require
funding and, often, specialist knowledge and expertise. Few
producers have either the resources or the expertise to carry out
all of the necessary functions to get product to the ultimate user.
 Turkey: Nature leather international will have distributors
inside the country and also in Turkey. Since the joint venture
is from Turkey it is expected that the distributing and
promotional function is at the shoulder of the joint venture
 intermediaries provide wider market exposure
 few producers have sufficient capital to market direct and
 Producers can usually earn a higher return on investment by
employing available capital in activities other than those of direct
marketing.

17.  Challenges of the New Leather Company
problem of bureaucracy when the company is established
The entrance of immitated substituents may reduce the
expected market share of the company
Inadequate Internal Demand
Pollution Problem
High Degree of Subjectivity in Quality Assessment and
Grading
Insufficient Enterprising Attitude of the Industry
Technology Management and Financial Problems

18.  REFERENCES
 Derk Bienen, Ethıopıa Investment Prospects: www. trade and investment in
Ethiopia 2012 April 27 2013
 The Transformative Power of PartnershipsAfrican governance facility
program SADC trade development:2011/2012 page 14
http://www.africaprogresspanel.org/files
 12th international economic forum in Africa:
www.africaneconomicoutlook.org day of entrance May 02 2013
 International Journal of Economics and Management Sciences
 Ethiopia investor leading the Ethiopian business revolution
http://www.ethiopiainvestor.com/index. May-11-2013
 International Journal of Economics and Management Sciences: volume
2.article.8 http://www.managementjournals.org/ May 11-2013
 Rajasekhara Mouly Potluri: Assessment of effectiveness of marketing
communication mix elements in Ethiopian service sector( page 62 may 2-
2013)
 (http://www.istanbulview.com/istanbul-attracts-record-of-tourists/May-
05-12)
 http://www.briefingwire.com/pr/advantages-and-disadvantages-of-tv-
advertising day of entrance May 05-2013

19. THANK
YOU