Marketing strategies for closing the market access gap experienced by small craft producers in South Africa

The purpose of this paper was to determine the need for a marketing strategy on the part of small craft producers in South Africa. Existing literature on marketing planning and the local craft industry was used to prove that craft producers need marketing strategy planning to overcome the market access challenges they currently experience. Craft producers lack access to the market and need to formulate appropriate marketing strategies in order to overcome this obstacle. A marketing strategy impacts positively on business sales and the profitability of a business, and is the backbone of any enterprise, regardless of size. However, craft producers need an understanding of the market for them to formulate an effective and efficient marketing strategy. Corresponding author: KM Makhitha Email addresses for the corresponding author: makhikm@unisa.ac.za First submission received: 24th May 2018 Revised submission received: 15th August 2018 Accepted: 10th December 2018 Introduction Craft producers in South Africa have limited access to markets (Department of Sports, Arts, Recreation & Culture [DSARC], 2007; Hay, 2008; Makhitha, 2016; Makhitha & Bresler, 2011). They struggle to market their products competitively, and also face competition from foreign craft producers (DSARC, 2007). The local craft industry is further crippled by a lack of reliable and accessible research data (Department of Economic Development [DED], 2009), which impedes the industry’s development and competitiveness. Craft producers do not determine which products to sell to which target market. Since different markets have different needs, producers should determine the needs of each, before deciding which to focus on by offering products that can meet their unique needs (Makhitha, 2016). This requires that they do marketing planning, such that all aspects of marketing activity are carefully coordinated and integrated (Carson & Cromie, 1990). Owing to the diversified nature of the craft industry, there is no universally accepted definition for ‘crafts’. In South Africa, the craft market encompasses “the creation and production of a broad range of utilitarian and decorative items produced on a small scale, with hand processes being the significant part of the value-added content. The production of goods uses a range of natural and synthetic materials” (Department of Arts, Culture, Science & Technology [DACST], 1997). Crafts are also known as handicraft or artisanal products, which are defined as those produced by artisans, either completely by hand, or with the help of hand tools or even mechanical means, as long as the direct manual contribution of the artisan remains the most substantial component of the finished product. These are produced using raw materials from sustainable resources. The special nature of artisanal products derives from their distinctive features, which can be utilitarian, aesthetic, creative, culturally attached, decorative, functional, religiously and socially symbolic and significant. (Unesco, 1997) Craft products include a wide range of items such as home furnishings, jewellery, fashion and fashion accessories, novelties and (corporate) gifts, garden and outdoor products, curios and collectibles, one-of-a-kind high-value individually made products, and indigenous artefacts which are culturally derived products (Department of Labour [DoL], 2011; Department of Trade and Industry [DTI], 2005). Journal of Business and Retail Management Research (JBRMR), Vol. 13 Issue 3 April 2019 www.jbrmr.com A Journal of the Academy of Business and Retail Management (ABRM) 148 Although research has been conducted by national and provincial governments (Cape Craft and Design Institute [CCDI], 2008; DSARC, 2007; DTI, 2005; Wesgro, 2000), the data have merely served to identify and define craft products and businesses, as well as problem areas and challenges experienced in that industry. Grobler (2005) investigated the level of understanding of consumer behaviour among people participating in community craft projects, and the findings showed that project owners/managers lack an understanding of consumer behaviour. This, in turn, leads to the formulation of ineffective and inappropriate marketing and product strategies being targeted at end consumers. Hay (2008) concurs that craft producers do not respond to market demands, which prevents them from accessing the market successfully. Marketing planning could be useful for craft producers, in that they will have plans in place on how to market their products effectively. With marketing planning, businesses formulate appropriate marketing strategies to compete in the market (Sengupta & Chattopadhyay, 2006), since they are able to respond to rapid changes in that environment (Gray & Mabey, 2005). The craft industry in South Africa The development of the craft industry is a key strategy of the South African government, as far as sustainable development and the creation of employment opportunities are concerned (DoL, 2011). The industry also contributes to economic growth and environmental stewardship (United Nations [UN], 2010), as evidenced by government initiatives, research, projects and entities that have been initiated in support of the industry: examples include the Cultural Industries Growth Strategy (DACST, 1998), the Sector Development Strategy (DTI, 2005), Gauteng Creative Industries: Craft Sector and the Gauteng Craft Development Strategy (DSARC, 2007), as well as the development of the KwaZulu-Natal Integrated Craft Hub (DED, 2009). There is an increasing demand for craft products globally, especially for home accessories and décor, gifts and products for garden and outdoor living, which are used simultaneously for decorative and functional purposes (United States Agency for Industrial Development [USAid], 2006). The rise in final customers’ disposable incomes, and the tendency to accessorise and restyle homes with unique articles, are major driving factors in the surge in demand for crafts and decorative products (Frost & Sullivan, 2005). In this country, recent decades have seen the opening of many homeware stores such as PepHome, @Home, @Home Living Space and Mr Price Home, as well as Woolworths’ Artistic Collection departments, which operate from inside Woolworths branches. All these retailers sell handcrafted products, which create opportunities for craft producers who also target craft retailers. The craft industry is dominated by small and medium enterprises (SMEs) (Hay, 2008) that are often unable to achieve the economies of scale that drive competition in many markets. It is difficult to create or sustain an industry association in the sector (DoL, 2008). The industry, which contributes R2 billion to the gross domestic product (GDP) in the craft industry value chain (Kaiser & Associates, 2005), consists of over 7 000 craft producer enterprises (DTI, 2005) and employs around 40 000 people (DED & SEDA, 2007 cited in McCarthy & Mavundla, 2009). The local market has shown strong growth of between three and four per cent annually, while the sector contributes 0.14 per cent of the GDP, of which R150 million is derived from export sales. Between 2001 and 2003, the government spent R97 million on the establishment and growth of the local craft industry (Create SA, 2004 cited in Grobler, 2005), emphasising the importance of this sector. Problem statement and objectives The craft industry, which is dominated by small and medium craft producer organisations (Hay, 2008:2), is crippled by a lack of reliable and accessible research data (DED, 2009:3), which impedes the industry’s development and competitiveness. According to the DSARC (2007:35, 67), marketing and branding are among the major challenges facing local craft producers. Craft producers experience difficulties selling to craft retailers, who purchase only 36 per cent of craft products from this country (DSARC, 2007:129). These producers have limited access to the market (Wesgro, 2000:33), since the foreign craft producers whom they compete with, are far more resourceful (DSARC, 2007:35). Craft producers therefore need to determine which marketing strategies can close the ‘lack-of-market-access’ gap that they experience. Marketing strategy is the backbone of every business, Journal of Business and Retail Management Research (JBRMR), Vol. 13 Issue 3 April 2019 www.jbrmr.com A Journal of the Academy of Business and Retail Management (ABRM) 149 and this research aims to determine which marketing strategies can help to close the market access gap confronting craft producers in this country. Literature Review SMEs and marketing Traditionally, marketing has been associated with large enterprises, yet a number of studies have focused on SMEs and have illustrated the importance of marketing in their success (Gilmore, Carson & Grant, 2001; Hills, Hultman & Miles, 2008; Simpson, Padmore & Taylor, 2001; Zontanos & Anderson, 2004). Evidence shows that marketing is often underutilised and misunderstood by owner-managers of SMEs (Zontanos & Anderson, 2004) and that marketing in those enterprises tends to be restricted by resource constraints in respect of finance, personnel, perceptions of related functions, and skills and attitudes towards marketing (Opuke, Abratt, Bendixen & Pitt, 2005; Simpson & Taylor, 2002; Wong & Merilees, 2005; Zontanos & Anderson, 2004). An SME’s owner-manager is also a decision maker who manages and attends to other functions within the business (Berthon, Ewing, & Napoli, 2008). However, SMEs need to create competitive advantage by formulating marketing strategies that are different from those of their competitors (Moriarty, Jones, Rowley & Kupiec-Teahan, 2008). They have to implement marketing activities if they are to grow and survive (Van Scheers, 2011; Zontanos & Anderson, 2004). Marketing plays a leading role in SMEs in comparison with other functions pertaining to overall planning (Brooksbank, Kirby, Taylor & Jones-