By Samuel A. Marandu (MA. Applied Economics- UDSM ,B.A Economics – UoN).
Dar es Salaam,
A cheerful and vivacious upcoming generation is inspired to form its own business schemes and a penetrating tunnel is at the limelight in Tanzania.
However, despite a series of resolute, consistent and persistent efforts that have for the past been instigated by the government and other youth stakeholders in their quest for advocating, encouraging and guzzling entrepreneurial culture amongst youth in the wake of the increasing unemployment levels, things are slowly beginning to take shape.
What currently remains a lingering weakness is the capability of the young generation to infuse and continually survive in the Tanzanian fragmented markets.
In this kind of market, both small, medium and large enterprises compete in the industry to market their products or services and boost profit margins. Intense examples of currently existing fragmented industry markets include the barber Shop industry, electronics, clothes and apparels and entertainment just to mention a few. In this form of markets no enterprise or single business has the capacity to dominate the market.
Whereas the majority of the young generation face start-up challenges such as inadequate business working capital, naivety and vulnerability in business and enterprise; this phenomenon tends to be a competitive, debilitating and expensive venture to the vigorous generation struggling to build and sustain a name for themselves and their businesses. Hence they are only left without ensuring excellent brand reputation so as to effectively compete and have their good share of profits.
However, despite the challenges that come with fragmented industries, there is still some sense of hope to thrive and toil. Young business people may influence on certain mechanisms in a mid to permeate and perhaps sustain in the market industry.
First, is the use of vertical integration to increase customer value,:- business people should ensure that they have gained control over or ownership of the suppliers, distributors and retails shops where their products are been sold. Vertical integration is advantageous in two ways. First, it encourages information flow whereby information on need, quality or opportunity is easily and adequately conveyed to a business person through the suppliers, distributors or retail outlets. Secondly it cuts down on the costs of production and increases sales and efficiencies.
However, the second one should be on the product differentiation, – this is where innovation comes to play. Selling differentiated products or services does not necessarily imply selling two different commodities. This entails distinctiveness, whereby Two Similar products have varying features that are recognizable and would aid in ensuring customers select their products. Use of color and graphics to enhance this mechanism is sometimes leveraged on.
The third one is to recognize your geographical area,- business men and women need to ensure that their ventures are strategically located in terms of geographical location. The third measure goes in hand with the customer specialization as the fourth.
And the last aspect is the provision of value added services to customers,- This is maintaining customer loyalty through providing complementary services to frequent customers whilst ensuring that the business owns full responsibility should the products have any faults.
For further inquiries and comments kindly contact me on;
Dar es Salaam.