MARKET AUDIT

Market Audit



Executive Summary

Majivuno Arts & Craft International is startup organization that deals with Indigenous African arts and craft. The firm is developing a network of supplies of arts and handicraft work in conjunction with other local Artist from different parts of the country. The objective is to market and export the Art work to Western Europe specifically Germany that has a growing market for Indigenous African Arts. Majivuno deals in Textile Handicraft, Clay, Beads and Jewellery, Hand knitted carpets, Baskets, Stone carvings, Glass, Ceramic, Pottery, Paintings, Cowries' shell and Bone products and Woodwork. The market of handicrafts is booming and Kenya's share is less existent in the German market (CBI Markey Survey). To fill this gap, the firm is concentrating on the premier handmade handicrafts, to compete with the local competitors in Germany along with the big players in markets like Italy, China and India. The Competition is fierce due to bulk of cheap machine made goods by the competitors; the focus of Majivuno will be on pure African craftsmanship and value addition to the consumers. The firm intends to sell through local distribution networks under contract terms. This will be achieved through development of relationship with the retailers in order to access and penetrate the market.

TABLE OF CONTENTS

Introduction5

Economic Analysis6

Social Cultural Analysis7

The Product8

A.Perceived Product innovation9

1.Compatibility9

2.Complexity9

3.Trial ability9

4.Observability10

B.Problems and Resistance to Product Acceptance on the Preceding Evaluation10

Market Description11

Geographical region(s)13

SWOT ANALYSIS14

Transport and Communication of the Region15

A.Consumer buying habits16

1.Product use patterns16

2.Product Feature preferences16

3.Shopping Habits17

B.Distribution of the Products17

1.Typical retail outlets17

C.Sales Promotion and Advertising20

1. Advertisement20

D.Pricing Strategy21

E.Compare and Contrast Product and Competition's Products22

Competitor's Products24

Market size27

Preliminary Marketing Plan29

The Marketing Plan29

Marketing objectives30

Target Markets30

Market Penetration and Coverage34

Product adoption35

Promotion mix35

1.Advertising35

2. Sales Promotion36

Distribution: from origin to destination37

Port selection37

Channels of Distribution (Micro analysis)37

1.Retailers37

Price determination38

Terms of sale39

Method of Payments40

Pro forma financial statements and budget41

Resource requirements43

Finances43

Personnel43

Market Audit

PART ONE

Introduction

Germany is potentially a lucrative market for Kenyan's export of Indigenous Handicraft and art. As the biggest economy in European Union, Germany represent a market of about 82 million people occupying an area of 357 000 sq. km. The population comprises of both Germans and foreign immigrant's which offers a rich cultural diversity. The social - Cultural climate in Germany has evolved over the last decade in such away as to welcome change, deter intolerance and promote equality. Indeed a 1990's comprehensive survey of the international art and handicraft market appearing in the magazine Capital established that African art has had a very stable price structure. This came as no surprise to some art watchers since Germany has a longstanding tradition of collections, trade and scholarly studies in the field. (www.bundesbank.de)

Back to the African Art and Handicraft market in Germany, according to Euro Statistics, the European Union gifts and decorative articles market of which African arts and Handicraft is a subset was worth about $ 35 billion. In 2000-2004, the market skilled a mean development rate of 5.0%. In 2004, Germany was the biggest market, accounting for 24.6% of total EU market, pursued by France (17.2%), United Kingdom ...