A Conceptual Framework to Unmask the Relationship between Marketing Mix Strategies, Marketing Culture and Sales Performance of Ugandan Manufacturing Firms ()
1. Introduction
In today’s global business environment, success in manufacturing firms depends on maximizing profits, having a large market share and a high volume of sales, and becoming a market leader ( Ghouri et al., 2011 ; Wibowo, 2021 ). Good sales performance has to do with high sales growth, sales volume and market share ( Ali and Anwar, 2021 ; Musigire, 2015 ; Mwenda, 2017 ). Successful manufacturing firms with higher sales play a crucial role in the generation of economic growth and development of their host economies through value addition to agricultural and other products, and provision of forward and backward linkages, thus accelerating overall economic growth ( Ernst & Young, 2011 ).
Although manufacturing firms are globally perceived as an engine of a country’s economy ( Hasniaty & Basmar, 2018 ), most global manufacturing growth was already decelerating in 2019 due to trade tensions between dominant economies. The decline is expected to continue due to economic disruptions triggered by COVID-19 and the war between Russia and Ukraine ( Uganda Bureau of Statistics (UBOS), 2018 ).
Further, UBOS (2018) states that the contribution of manufacturing firms to the GDPs of the developing countries of Sub-Saharan Africa varies, at 22% in Kenya, 18% in Tanzania, and 12.5% in Rwanda, while in Uganda these firms contribute up to 19.9% of GDP and employ approximately 90% of the total population. Despite their significance, many manufacturing firms in Uganda continue to suffer low sales performance in the form of declining sales, small market share, and low profit levels to facilitate their operations ( Kamukama et al., 2017 ). For instance, GBK Dairy Products Ltd. in Nyamitanga Mbarara South registered low sales in yoghurt, packed milk products (Dairy Investment Opportunities in UBOS, 2018 ), and Tuwereza Bakery in Mbarara also registered reduced sales to the extent of being forced to close. Coca Cola’s business and sustainability report for 2019 also revealed a decline in sales volume for their products.
“The marketing mix is the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market” ( Tang & Mesfin, 2020 ). According to Kotler (2015) , marketing strategies, referred to as product, price, place and promotion, are strategies that organizations use to react to market and internal forces that enable an organization to achieve objectives like sales performance. Ghouri et al. (2011) state that organizations that have implemented effective marketing strategies are able to increase their sales performance and market share. Studies by Taye (2021) , Ebitu (2016) and Mwenda (2017) also reveal that marketing mix strategies have a positive relationship with sales performance. However, there are other studies by bin Abdul Lasi & Man (2020) on marketing mix elements and brand loyalty.
Sales performance has also been associated with marketing culture ( Musigire, 2015 ). Marketing culture is considered a key element in enhancing a firm’s sales performance ( Appiah et al., 1999 ). More so, marketing culture elements, including selling task, service quality, organizational/internal communication and innovativeness, have been associated with high sales and a large market share ( Webster, 1995 ).
Much research has been done regarding the relationship between marketing mix strategies ( Ali & Anwar, 2021 ); marketing culture and sales performance ( Hamdan, 2020 ; Wawira, 2016 ); E-Marketing mix strategies and communication ( Chang et al., 2021 ). Most of these studies have focused on listed companies in developed countries whose features differ from manufacturing firms in a developing country like Uganda, and Mbarara City in particular. Most have also focused the independent variables in isolation, and hence the need for studies that fill this gap.
The current study thus intends to examine the relationship between the marketing mix strategies, marketing culture and sales performance of manufacturing firms in Mbarara City (Figure 1).
1.1. Literature Review, Hypotheses Development and Theoretical Background
1.1.1. Marketing Mix Strategies and Sales Performance
Several studies indicate a relationship between marketing strategies and sales performance ( Bintu, 2017 ; Chang et al., 2021 ; Hong & Hai, 2018 ; Kotler, 2015 ; Mwenda, 2017 ; Wawira, 2016 ). According to Hong and Hai (2018) , product quality refers to the extent to which a product meets the needs of its customer and, hence, a product development strategy must be focused on just that. Flynn et al.’s (2018) study showed that quality is an important element in the design and manufacture of products that are considered superior to those of competitors, and therefore improvements to product quality lead to an increase in sales. Gituma (2017) similarly asserts that organizations that implement effective marketing strategies are able to increase their sales performance through increased sales volume and market share. Bintu (2017) , whose research focused on the effects of marketing mix strategy on sales performance of small-scale businesses in Maiduguri Metropolitan, in Borno State in Nigeria, also concurs that
there is a relationship between the two. This is in line with the findings of Mwenda (2017) , which showed a positive and significant relationship between product quality and sales performance.
Additionally, Brata et al. (2017) reveal that marketing mix strategies have a positive and significant influence on the sales performance of large hotels in Nairobi. Based on a study on the effect of marketing strategies on the performance of small and medium enterprises (SMEs) in Kitengela Township in Kajiado County, Kenya, Ames (2016) concurs that there is a relationship between these variables. The latter study established that only place, promotion and product had a positive and significant relationship with business performance, however, whereas price marketing strategy had a positive but insignificant relationship with SME business performance. Cui et al. (2016) also analyzed the impact of price and promotion strategies on manufacturers’ sales, finding that these strategies affect sales performance.
Furthermore, an increase in the use of price discounts may lead to an increase in customers’ repeat purchase rate ( Cui et al., 2016 ). Ajan (2015) also concurs that price discounts, free samples, and in-store displays influence product trial. According to Kotler (2015) , marketing strategies that involve product, price, place and promotion are strategies that organizations use to react to market and internal forces and that enable an organization achieve objectives like sales performance.
In addition, in their analysis of marketing mix and sales performance, Oktaviyanti et al. (2015) found a relationship between these variables, and in their research on the effect of marketing strategies on the performance of SMEs in Cote d’Ivoire, Ardjouman and Asma (2015) established that marketing management strategies have a significant influence on SME performance. This is also in agreement with Kariithi’s (2015) study that found marketing strategies influenced the growth and performance of SMEs that operate air travel agencies.
Similarly, Kojo et al. (2015) found that distribution channels had a positive and significant impact on sales volume, and Owomoyela (2013) and Hamed and Farideddin (2016) agree that place has a significant effect on sales performance. A place strategy encompasses the distribution of a company’s products from the place of a manufacturer to the place of consumption. A study by Sundar & Ha Harthi (2015) similarly indicated that direct marketing advertising, personal selling, sales promotion and public relations enhance a company’s performance by enhancing customer attraction and sales volumes. To ensure that one’s company experiences something like growth in sales, organizations must therefore set aside a significant portion of their budgets for marketing activities. Thus, our first hypothesis:
H1: There is a positive and significant relationship between marketing mix strategies and sales performance.
1.1.2. Marketing Mix Strategies and Marketing Culture
Many studies have explored the relationship between marketing mix strategies and marketing culture ( Antunes, 2013 ; Houston et al., 2018 ). Akroush et al. (2015) argue that the culture of an organisation influences the strategies used for marketing mix strategies; and in order to be successful, an appropriate marketing culture is of paramount importance. One firm strategy that can constitute a part of the communication to consumers in the case of culturally loaded products is advertising spending. Importantly, firms publicize their advertising spending, which can signal social prestige to consumers, and thus directly affect consumer preferences and utilities. That is, when two products are virtually identical, consumers may prefer the more heavily advertised one, as increased advertising spending and the resulting product images create enhanced utilities among consumers ( Houston et al., 2018 ).
Antunes (2013) also concurs that consumer culture can influence how a company determines its marketing strategy. For example, marketing activities involving religion are considered ineffective in attracting customers ( Kamarulzaman & Madun, 2013 ). The development of Islamic economics in recent decades has contributed to the concept of marketing from an Islamic perspective. Marketing must be based on norms and ethics in order to avoid cheating, carelessness, and injustice ( Usman et al., 2017 ). Islamic marketing focuses more on the values and norms of a series of marketing activities, like marketing mix tools ( Ahmad et al., 2014 ). Thus, our second hypothesis is that:
H2: There is a positive relationship between marketing mix strategies and marketing culture.
1.1.3. Marketing Culture and Sales Performance
A number of studies have focused on the relationship between marketing culture and sales performance ( Kashif et al., 2017 ; Muhammad & Ahmed, 2018 ; Shakil, 2012 ). According to Kamau and Wanyoike (2019) , marketing culture significantly influences sales performance. It forms the core of what the company is really like, how it operates, what it focuses on, and how it treats customers that determine what is sold by a particular firm and the number of customers that buy it. Similarly, Muhammad and Ahmed (2018) state that marketing culture that accommodates Islamic teachings (values, ethics and Islamic symbols) contributes positively to a firm’s marketing performance. For example, the corporate culture of Islamic Bank is dominated by clan type of culture, which is characterized by close interpersonal relationships between individuals within the company, teamwork and employee participation in the preparation and implementation of business strategy, as well as the honesty and loyalty that holds the relationship together. Instilling a strong marketing culture in an organization makes intuitive sense. The research solidly confirms that marketing culture is a driver of superior sales performance.
Additionally, the “market culture pyramid” also depicts the importance of market culture and how the foundation of a superior market culture leads to superior value and performance relative to bench marked competitors Gallagher (2018) as cited in Usman et al. (2017) . Assessing marketing culture can furthermore have an influence on sales performance. Marketing culture can be assessed based on team cohesiveness, employee morale development and salespeople.The type of marketing culture is characterized by its orientation to the results. The criteria used to determine the effectiveness of an assessment is to focus on how to beat competitors and achieve targets. The management guidance used is the principle of competition in achieving productivity ( Kashif et al., 2017 ). Shakil (2012) and Lorraine et al. (2015) also found a positive and significant relationship between marketing culture and sales performance. Kamau and Wanyoike (2019) , however, that more than 90% of business excellence initiatives fail because of poor integration of market and culture among company managers in a corporate group. The cultural differences that exist within the group constitute a major barrier to sales performance. The lack of an effective organizational culture is a primary cause of poor sales performance. Thus, our third hypothesis is that:
H3: There is a positive relationship between marketing culture and sales performance.
1.1.4. Marketing Mix Strategies, Marketing Culture and Sales Performance
Various scholars have studied the relationship between marketing strategies, marketing culture and sales performance ( Hamdan, 2020 ; Putta, 2023 ). According to Gallagher (2018) , sales performance is a measure of achievement collected from the overall marketing mix activities of a company. Marketing mix strategies do not impact performance (product sales or market share) independently of each other. And because they interact to determine performance, marketing mix activities must be coordinated with marketing culture. This helps managers to take advantage of the complementarities and to avoid incompatibility between marketing mix instruments, given constraints by budget and the variables themselves. According to Owomoyela (2013) , the aim of the development of an organization’s marketing strategy is to establish, build, defend and maintain the organization’s competitive advantage. Marketing culture is also important in coping with environmental ambiguity and uncertainty in strategic marketing ( Wawira, 2016 ). As the cultural diversity of societies increases, the need for developing successful services marketing practices becomes more challenging ( Lorraine et al., 2015 ).
Marketing strategy and marketing culture have been important aspects of objective achievement in most organizations. An organization’s decision-making process for the selection and implementation of an appropriate marketing strategy facilitates the organization’s adherence to the objectives; however, most organizations do not meet their objectives while others venture into different strategies due to competition in the market ( Gallagher, 2018 ). As mentioned earlier, ensuring superior growth in sales requires that organizations allocate large portions of their budgets to their marketing strategies and culture ( Gituma, 2017 ). Also worthy of note, however, is that most companies fail to record an increase in sales revenue due to poor marketing strategies and marketing culture ( Lorraine et al., 2015 ). Thus, our fourth hypothesis:
H4: There is a positive relationship between marketing mix strategies, marketing culture and sales performance.
2. Methodology
2.1. Design, Population and Sample
This study adopted a cross-sectional and quantitative design, where data is collected at one particular point in time. This design was selected because it is generally quick, easy and inexpensive to conduct this type of study based on a questionnaire survey. The cross-sectional design also permitted the obtainment of useful data in a relatively short period of time. The target population for the study was the manufacturing firms of Mbarara City. According to Uganda Bureau of Statistics (2018) , there are 178 registered and licensed manufacturers operating in Mbarara City, comprised of 24 bakeries, 75 woodwork shops, 26 metalworks, 27 factories, and 26 milling operations. Using Krejcie and Morgan’s (1970) table for determining sample sizes for research activities, a sample size of 118 manufacturing firms was selected for the study (See Table 1). The study’s target population for participants was one CEO and one sales representative from each of the 118 firms requested to fill the questionnaire. The final response rate achieved was 48.2%.
2.2. Questionnaire and Variable Measurement
A five-point Likert scale (where: 1 = strongly disagree, 2 = disagree, 3 = neutral, 4 = strongly agree, 5 = agree) was designed to measure the respondents’ opinions and attitudes from the self-reported information obtained in the self-administered questionnaire. The questionnaire design is based on our review of relevant literature regarding marketing mix strategies, marketing culture and sales performance. The category of marketing mix strategies, in terms of product, price, place and promotion strategy, was measured using items adapted from the works of Ebitu (2016) . Marketing culture was measured with items involving
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Table 1. Population and sample size.
Source: Mbarara City Council (July, 2020).
innovation, selling task and internal communication ( Saguti, 2015 ). Sales performance was examined using measures such as sales volume, market share and market growth obtained from Akroush et al. (2015) .
2.3. Tests of Validity and Reliability
For purposes of language clarity, relevance and comprehensiveness of content, the researcher sought the guidance of various research experts to correct any errors in the questionnaires. The final questionnaires were then pre-tested on selected respondents to check the validity of the data collection tool. This was to ensure that the questionnaire described and quantified what it was meant to measure. The content validity index (CVI) was found to be greater than 0.6 and therefore considered relevant (See Table 2). A reliability analysis of the scale of the research instrument (questionnaire) used in the study was performed using Cronbach’s alpha coefficient test ( Cronbach, 1951 ). According to Sekaran (2003) , as a rule of thumb, some professionals require a reliability of 0.70 or higher (obtained on a substantial sample) before using an instrument. For this study, Cronbach’s alpha scores of 0.7 or higher were therefore considered reliable.
3. Empirical Findings
Pearson Correlation
Pearson’s correlation analysis was conducted to measure the strength of linear associations between the study variables and is denoted by (r) The Pearson correlation coefficient (r) can take a range of values from +1 to −1. The study variables were measured on a continuous scale, and thus the Pearson correlation was found to be the most appropriate to test the relationships between the variables.
3.1. The Relationship between Marketing Mix Strategies and Sales Performance of Manufacturing Firms in Mbarara City
The results in Table 3 show that there is a positive significant relationship between the marketing mix strategies and sales performance of manufacturing firms in Mbarara City (r = 0.451**, p ≤ 0.01). This implies that any positive change in marketing mix strategies (product, price, place and promotion) is associated with a positive change in the sales performance of the manufacturing firms. In addition, all of the dimensions of marketing mix strategies have a positive
Source: Primary data, 2020.
**Correlation is significant at the 0.01 level (2-tailed); *Correlation is significant at the 0.05 level (2-tailed).
significant relationship with sales performance and all of the dimensions of sales performance have a positive significant relationship with marketing mix strategies.
3.2. The Relationship between Marketing Mix Strategies and Marketing Culture of Manufacturing Firms in Mbarara City
The results in Table 3 show that there is a positive significant relationship between marketing mix strategies and the marketing culture of manufacturing firms in Mbarara City (r = 0.219**; p ≤ 0.01). This implies that any positive change in marketing mix strategies is associated with a positive change in the marketing culture of the manufacturing firms. Furthermore, the findings indicate that, among the dimensions of marketing mix strategies, it is only promotion that has a positive significant relationship with marketing culture (r = 0.896) and, among the measurements of marketing culture, only sales task has a positive significant relationship with marketing mix strategies (r = 0.303).
3.3. The Relationship between Marketing Culture and Sales Performance of Manufacturing Firms in Mbarara City
The results in Table 3 also show a positive significant relationship between marketing culture and the sales performance of manufacturing firms in Mbarara City (r = 0.616**, p ≤ 0.01). This implies that any positive change in marketing culture is associated with a positive change in the sales performance of the manufacturing firms. In addition, all of the dimensions of marketing culture (innovativeness, selling task and internal communication) have a positive significant relationship with sales performance, and all the dimensions of sales performance have a positive significant relationship with marketing culture.
3.4. Regression Analysis Results
Hierarchical linear regression analysis was used to determine the relationship between marketing mix strategies, marketing culture and the sales performance of manufacturing firms in Mbarara city. The regression model in Table 4 below is presented to examine the level of the predictors (namely, marketing mix strategies and marketing culture) in explaining the sales performance of manufacturing firms in Mbarara City.
In order to determine the predictive potential for each of the independent variables in Model 1, the control variable selected was the firm’s daily income.
3.5. Results
Model 1
The results in Table 4 indicate that the effect of the firm’s daily income on sales performance (β = −0.075, p ≤ 0.05) was insignificant. This is indicated by the probability value, which is above the acceptable value for a 95% confidence level.
Model 2
The results in Table 4 indicate that marketing mix strategies contributes 20%
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Table 4. Hierarchical regression model.
Dependent variable: Sales Performance; N = 198; **Regression is significant at 0.01. Source: Primary Data, 2020.
(R-Square change = 0.20) of the change in sales performance of manufacturing firms in Mbarara City. The results also show that a unit change in marketing mix strategies would result in a 0.349-unit increase in the sales performance of manufacturing firms (β = 0.349, p ≤ 0.01).
Model 3
The results in Table 4 indicate that marketing culture contributes 28.5% (R-Square change = 0.285) of the change in sales performance of manufacturing firms in Mbarara City. Thus, for a unit change in marketing culture, sales performance of these firms would improve by 0.548 units. This means that marketing culture is a significant predictor of sales performance among manufacturing firms in Mbarara City (β = 0.548, p ≤ 0.01).
Finally, in total, the variables entered in the model explain 48.2% of the variations in sales performance among manufacturing firms in Mbarara City, which means that 51.8% is explained by variables not considered in this study, such as climate and political factors. But considering the two predictors studied, the results indicated that marketing culture explains more of the variation in sales performance than marketing mix strategies does.
4. Discussion
The findings of the study indicate a significant positive relationship between the marketing mix strategies and sales performance of manufacturing firms in Mbarara City, hence confirming hypothesis one (H1). This implies that the sales performance of the manufacturing firms improves when marketing mix strategies dimensions, such as price, place, product and promotion, are fully implemented. The findings further imply that when firms produce quality products, enhance products’ physical appearance, and improve packaging, product visibility and branding, this will increase their sales volume and thereby sales performance. In addition, using a penetration pricing strategy to increase customer-purchasing abilities and value-based pricing strategy will improve the sales of the manufacturing firms. Finally, when manufacturing firms conduct regular promotion to create interest and brand awareness, use online promotional strategies like online advertising, and also focus on the right place to sell their products, their sales volume increases.
These findings are in agreement with the findings of Hong and Hai (2018) , Flynn et al. (2018) , Bintu (2017) , Mwenda (2017) , and Kotler (2015) , who carried out studies on the relationship between marketing strategies and sales performance and found a significant relationship. According to Hong and Hai (2018) , product quality is the extent to which a product meets the needs of its customer and a firm’s product development strategy must therefore focus quality. Flynn et al. (2018) also found quality to be an important element in the design and manufacture of products that customers considered superior to those of the competitors, thus increasing sales. Gituma (2017) similarly showed that organizations that implement effective marketing strategies can increase sales performance through increased sales volume and market share.
The findings of the current study also indicate a significant positive relationship between the marketing mix strategies and marketing culture of the manufacturing firms in Mbarara City, which confirms hypothesis two (H2). This implies that any improvements in marketing mix strategies should result in improved marketing culture among these firms. In addition, as indicated in the results promotion is the only significant indicator in this improvement. This implies that promotion activities result in improvement in the marketing culture. These activities may include the creation of brand awareness, online advertising, price-discount and coupon offerings, and promoting the product, activities that will result in improvement in the marketing culture of manufacturing firms in Mbarara City.
Similar findings have been advocated by others ( Kashif et al., 2017 ; Muhammad & Ahmed, 2018 ; Shakil, 2012 ; Usman et al., 2017 ). According to Kamau and Wanyoike (2019) , who found that marketing culture influences sales performance, it is the marketing culture that forms the true core of a company. This is in line with Muhammad and Ahmed (2018) , who agree that marketing culture that accommodates Islamic teachings (values, ethics and Islamic symbols) contributes positively to a firm’s marketing performance.
The findings of the study furthermore indicate a significant positive relationship between marketing culture and the sales performance of manufacturing firms in Mbarara City, hence confirming hypothesis three (H3). This implies that the sales performance of these manufacturing firms improves when the dimensions of marketing culture are fully embraced. The findings further indicate that improvements in innovativeness, through coming up with new ideas, keeping up with technological advances and adopting innovative approaches to solve problems, increase the sales performance of the manufacturing firms. Improvements in selling tasks, in terms of employing the right people and providing skill-based training and product knowledge to frontline staff, result in improvement in sales performance among the firms. Finally, once a company has proper internal communication in place, in terms of supervisors that clearly state what is expected, set clear policies and procedures that are made available to everyone, ensure that all employees understand the mission and vision of the firm, and involve the employees in setting standards, this will result in improvement in sales performance among manufacturing firms in Mbarara City.
These findings are in line with findings of Kamau and Wanyoike (2019) , Muhammad and Ahmed (2018) , Usman et al. (2017) and Kashif et al. (2017) , who found that marketing culture influences sales performance. It has been found to form the true core of a new company, determining how it operates, its focus, how it treats customers, what it sells, and to how many people ( Kamau & Wanyoike, 2019 ).
The results from the hierarchical regression confirmed a positive and significant relationship between the marketing mix strategies, marketing culture and sales performance of manufacturing firms in Mbarara City, hence confirming hypothesis four (H4). The addition of marketing culture in Model 3 also indicated a relationship between all of the variables and sales performance among manufacturing firms in Mbarara City. Together the variables explain 48.2% of the variance in sales performance, implying that the remaining 51.8% is explained by factors not considered in this study.
The findings were in agreement with Gallagher (2018) , who found that, for most organizations, marketing mix strategies and marketing culture were important for achieving objectives, in that selecting and implementing appropriate strategies enable them to adhere to their objectives. Gallagher also adds, however, that most organizations do not meet their objectives, and others venture into different strategies due to the competition in the market (ibid). A significant portion of a firm’s budget must therefore be set aside for marketing strategy and marketing culture in order for the firm to achieve substantial sales growth, ( Gituma, 2017 ).
5. Concluding Remarks
This study conceptualized sales performance of manufacturing firms in Mbarara City, centring mainly on the relationship between marketing mix strategies, marketing culture and sales performance. The results indicated that marketing mix strategies and marketing culture have a strong positive significant relationship with sales performance. Regardless of these findings, owners and managers of manufacturing firms can rely upon all of the variables to predict sales performance as the regression model results showed both marketing mix strategy and marketing culture to be significant predictors of sales performance. The emphasis, however, should be concentrated on marketing culture since it explains more of the variation in sales performance among manufacturing firms compared to marketing mix strategies, as indicated by the R-Square change values of 28.5% and 20%, respectively.
To recap, marketing mix strategies and marketing mix culture are important in achieving organizational targets, and thus choosing appropriate marketing strategies helps firms to meet those targets. However, such strategies and their implementation are not cheap, and firms must be willing to invest significant resources to achieve optimal sales performance.
6. Managerial and Theoretical Implications
Sales performance among manufacturing firms improves when the dimensions of the marketing mix, such as price, place, product and promotion strategies, are fully implemented. Thus a firm’s marketing strategies should include producing quality products, enhancing the product’s physical appearance, better packaging and product visibility, and improving branding. This leads to an increase in sales volume and hence high sales performance. Furthermore, using a penetration pricing strategy leads to an increase in customer-purchasing abilities. Value-based pricing strategies are used to improve the sales of the manufacturing firms. In addition, regular promotion by manufacturing firms creates interest and brand awareness, and this in turn leads to an increase a firm’s sales volume.
Limitations of the Study
1) This study used a cross-sectional design with the data collected at one point in time. As the findings from such studies are limited to the specific period under study, future studies could add to knowledge in the field by adopting a longitudinal research design.
2) The study used a quantitative approach, so adding qualitative elements would be a way for future studies to expand on what we have learned here.
Direction for Future Studies
1) Marketing culture and sales performance of mobile phone operators in Uganda.
2) E-marketing mix strategies, marketing culture and sales performance of manufacturing firms in Uganda.