The relationship between market share and corporate performance for firms in the tea industry: case of Tanganda Tea Limited.

Abstract

The majority of the Zimbabwean Industries were in the collapsing realm as indicated by a decline in the aggregate demand leading to the loss of market share. This unwelcome relapse has caused companies to defy the odds such as Tanganda by resorting to market share strategies in order to insulate itself. Faced with this situation prompted the researcher to carry out a research on the relationship between market share and corporate performance for firms in the tea industry: Case of Tanganda Tea Limited. The study objectives were to establish the relationship between market share and profitability, the relationship between sales promotion and the growth of sales (market share), the relationship between market share and competition. The other dominating firms were used in the comparison of the market share for the comparison of the sales occupied by each and every organization such as Insscor, Ariston, Lyons and Others .A case study approach was used with the use of descriptive and explanatory design. The qualitative and quantitative approach was also used. Questionnaires, Interviews and Observations were used in data gathering for both the management and customers for Tanganda. Theories, Scholars of various versions were reviewed in order to get mutual understanding of other authors and researchers about the impact of market share on the corporate performance of Tea industries on the basis of the study’s objectives and research questions. Scholars and authors concurred that sales promotions , are better weapons that contributes to company performance intensively emphasis on sales revenue and market share of the company, whereas others argue against that they have negative effect. Primary sources such as questionnaires and interviews in conjunction with secondary sources were employed in data gathering. The study had a target population of 150 respondents which consisted of 110 consumers and 40 management of Tanganda. The researcher employed stratified sampling to choose the research area, companies and respondents in this study respectively. The response rates for customers and managers were 68%, 88% respectively and tables, graphs were used in data presentation for instance questionnaires response rate. The Stata 11 for regression was used to establish and explain the relationship between the variables from the researcher’s objectives. The results concluded that there is a positive linear relationship between “sales promotions and market share”, “sales promotions and market share”, and “market share versus competition”. The result also discloses that competition is strain to the company since it reduces the market share of the company. The quality of tea is also the most influential weapon that affects the demand of tea. Sales promotions are a useful weapon in gaining a huge market share. Results from this study point towards the need to put in place supportive measures for the company to solve this problem of market share. The recommendations are of product diversification, knowing the rival firms so as to apply strategies to compete, educating the customers about the health tea and sales promotions. Thus this can help Zimbabwe to resuscitate the tea industry and be a better field of doing business.