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The Effect of Social Entrepreneurs in Developing Marketing Strategies for Handicraft of Productive Families in Old City of Sana’a – Yemen

Background

The Old City of Sana’a is renowned worldwide as one of the most authentic example of urban civilizations that developed in the second century BC. Owing to its critical heritage values, it has gained attention from people across all fields such as architects and historians who seek to retain its integrity and authenticity. Its cultural value makes it one of the one of the regions where the handicraft business flourishes, as part of the social entrepreneurship projects in Yemen.

However, following the Yemeni revolution of 2011, there has been an exponential deterioration in the economic infrastructure of the city. UN Habitat (2020) notes that even before the conflict, there was widespread disruption of economic and commercial activities, severely reducing the employment and income opportunities in both the public and private sectors. It was on this background that the role of social entrepreneurship emerged, especially as the Old City of Sana’a is a renowned tourist site.

Social entrepreneurship emerged as a critical support for the economy during and after the upheavals created by political instability. ElHidri and Baassoussi N. (2018) explain that social enterprises provide a strong foundation for socioeconomic development in the MENA region. Similarly, Zanganehpour (2015) holds that the flourishing social entrepreneurship in the MENA region, to which Yemen belongs, is attributed to the chronic poverty, unemployment, and socioeconomic inequalities.

However, without efficient marketing of the products, the sector cannot attain its maximum potential. Marketing is a crucial aspect of business operations as it is one of the key determinants of a firm’s market share. Effective marketing strategies give a business a competitive edge as it reaches a wider audience, with high conversion rates, increasing its profitability. Satar et al. (2016) elucidate that for social entrepreneurs to serve the community better, they need to adopt professional business operations and certain marketing techniques.

Regardless, social entrepreneurs, particularly in developing countries such as Yemen face significant challenges such as lack of funds, business skills, and time, causing them to adopt informal marketing strategies.

The conflict in Yemen has reduced the number of tourists visiting the country. The Old City of Sana’a heavily relies on tourism, especially for the productive families involved in the production of handicrafts. Consequently, they need to adopt several revenue generating strategies to survive in the market. Reuters. (2013) observes that there is a reduction in the availability of traditional resources and customers due to intensified competition.

The productive families have been forced to target customers outside of Yemen, creating the need for middlemen who are referred to as buying agents. Similarly, Makhitha (2016) found that most of the buyers of the handicrafts prefer to work with intermediaries (middlemen) in the country of origin. Productive families depend on the buying agents who connect them to buyers, especially for those involved in the export of handicrafts. For productive families to increase the profitability of their products, they need to shorten the distribution channels by reducing the number of middlemen.

Hence, productive families have to adopt innovative entrepreneurial approaches in their marketing strategies to remain profitable and meet their primary objectives. Social entrepreneurs play a critical role in the economy of developing countries in the MENA region. However, their effect in the development of marketing strategies for handicrafts among productive families in Yemen has not been established. This literature review examines past studies and information from government as well as nongovernmental organizations to examine the role of social entrepreneurs in the development of marketing strategies.

The review is divided into four thematic sections beginning with an exploration of social entrepreneurs, handicrafts, and productive families before generating hypotheses to be examined based on the discussion of development of marketing strategies. The review then ends with a summary of the chapter and conclusions drawn from the studies.

Social Entrepreneurs

Social entrepreneurs have been observed to create significant social change in their respective fields, with impacts extending to their societies and economies. As different stakeholders explore the role of social entrepreneurship in economies, there are grey areas on the difference between their approach and others such as charitable NGOs. Beckmann (2012) sought to answer the question by examining the static and dynamic impact that social entrepreneurship has on society.

The static perspective explores the solutions and products delivered by social entrepreneurs at a particular time (Beckmann, 2012). Conversely, Beckmann (2012) explain that the dynamic approach examines the impact that social entrepreneurs have on not only their environment but also on other actors. Hence, social entrepreneurs are change agents who will develop new patterns of value creation that other actors can adopt, creating a larger static impact. In the context of the present study, the dynamic approach is more relevant as it investigates how social entrepreneurs the innovative impact of social entrepreneurs where they enable other actors to provide solutions as well as goods and services.

Regardless, Montgomery et al. (2012) caution against the perception of the individual social entrepreneur as the heroic individual who finds success against all odds. Instead, Montgomery et al. (2012) appeal for an approach that examines the barriers that they face from institutions and other players in the environment in which they exist. For Montgomery et al. (2012), social entrepreneurship should be examined as a collective and collaborative effort of different actors and stakeholders to provide resources, avail resources, and other forms of support to create change. Hence, for sustainable change, social entrepreneurship needs to be examined through a collective lens where cooperation and collaboration with external actors effect the transformation needed in society.

Characteristics of Social Entrepreneurship

Holistically, social entrepreneurship entails creating and conserving social value, various activities, and operations representations, encouraging entrepreneurial approaches to social use and external environment awareness. Social entrepreneur’s characteristics include; independence, goal driven, risk measuring ad entrepreneurial alertness among others. Unlike conventional entrepreneurship, which seeks profits, social entrepreneurship entails seizing opportunities to benefit the community.

Abu (2012) posits that social entrepreneurship should be characterized by less focus on profits maximization but instead focus on safeguarding community welfare. However, social entrepreneurs should adopt innovative marketing skills to ensure that organization has steady growth. Adopting a strategic marketing plan will ensure the organization is sustainable and self-sufficient.

Differences between Traditional and Social Entrepreneurship

Questions arise within scholarly circles on the difference between social entrepreneurship and traditional entrepreneurship since the former seeks to generate profits as well. A comparison of traditional and social entrepreneurship is critical in the development of marketing strategies as the two both seek profits, albeit for different objectives. Huybrechts and Nicholls (2012) hold that social entrepreneurship’s primary goal is to offer solutions to various social problems while traditional entrepreneurship’s sole aim is to generate profits.

Beckmann (2012) goes a step further and explains that the impact of social entrepreneurship is transformative. Similarly, Bacq et al. (2013) note that innovation lies at the heart of social entrepreneurship with the goal of changing the way social needs are addressed. Hence, for social entrepreneurship, money is a tool for affecting change while for traditional entrepreneurship, it is the primary goal sought.

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There is no standard measure for determining the impact that social entrepreneur has while the process is standardized in traditional entrepreneurship. El Ebrashi (2013) explains that for traditional entrepreneurship, there are set methods for measuring their value, based on comparing the price/earnings ratios. For traditional entrepreneurship, its value is determined by examining the financial revenue generated. El Ebrashi (2013) posits that there is no direct methodology to measure the value; the value of social entrepreneurship lies in the benefits acquired by the people targeted by the venture. Hence, it is relatively easy to determine whether a business is meeting its goals for traditional entrepreneurship while there is no specific methodology to determine whether the objectives of the social entrepreneurship project are being met.

Social entrepreneurship seeks social change that can only be affected through ethical means. Using data from 49 members of a social enterprise in India, Haugh and Talwar (2016) concluded that social entrepreneurship has a more ethical approach in its operations. The authors argue that traditional entrepreneurship seeks to discover opportunities, innovate, and creating new business ventures with the implicit pursuit of commercial objectives that are sometimes associated with unethical behavior.

In the same vein, Roundy (2017) holds that social entrepreneurs ensure that the resources they gather are well-utilised, with no corruption from parties with vested interests, demonstrating their full commitment for the project. For traditional entrepreneurship, sometimes the profit motive drives the actors to act in ways that barely meet the ethical threshold so long as they are complying with the legal framework.

Importance of Social Entrepreneurship

Social entrepreneurship is a crucial element of poverty eradication, especially in rural areas. Social entrepreneurs primarily thrive in resource-constrained environments, hence they have a positive social impact on the communities in which they operate as well as the entire country. Satar et al. (2016) established that social entrepreneurship emerges as a response to failures by both state and the private sector to meet the needs of marginalized and low-income sections of the society. Similarly, Al-Khalqi (2017) holds that social entrepreneurs respond to the needs of communities that are traditionally marginalized or excluded by the existing market and nonmarket actors. Consistent with these assertions, Azmat (2013) argues that social entrepreneurship solves social ills and satisfy human and ecological needs in both developing and developed countries. Hence, there is consensus that social entrepreneurs elevate the livelihoods and economies of people and regions that would not have access to resources in the mainstream society through sustainable development.

Evidence from existing literature shows that social entrepreneurship has been used to change the positions of marginalised groups such as youth, people living with disabilities, and women in society. Al-Khalqi (2017) observes that in the MENA region, social entrepreneurship has been promoted to meet the needs of the growing youth population and for wider development. Congruently, Haugh and Talwar (2016) concluded that social entrepreneurship has been used to increase the agency of women, while opening up opportunities that change the social order in which they are embedded. Therefore, social entrepreneurs enhance the lives of marginalized sectors of society by providing an economic lifeline through job creation and income generation.

Handicrafts and Productive Families

The handicraft is categorized as one of the subsectors of the creative industries within the social entrepreneurship sector. According to Ghouse (2012), small crafts firms within the sphere of creative industries occupy a central place particularly in developing countries. The low requirement for capital means that marginalized groups such as women and youth can start the business easily, enabling them to sustain their livelihoods. Similarly, the UN Habitat (2020) states that Yemen has a long history in artisanal manufacturing with Sana’a placed as a center for handicraft production, particularly in metalworking, leather, woodcarving, gold and silver filigree, and embroidery. They provide stable employment and is a key source of income opportunities for different people within the community.

The industry’s uniqueness lies in the involvement of traditional knowledge, considerably low investment, creation of jobs with minimal costs, and the rare use of machinery and energy (Ghouse, 2012). Ghouse (2012) adds that the sector has critical traditional knowledge that is passed on across generations. However, the sector faces critical challenges in the age of technological innovations and globalization. In Iran, Divandari et al. (2017) found that some of the handicrafts such as carpets, shawls, socks and fur coats have lost their appeal as the economic status of the people gradually changes.

Productive Families in Old City of Sana’a – Yemen

Productive families in the Old City of Sana’a – Yemen provide a wide array of culturally embedded handmade products like jewelry, woodcraft, leather, and textiles for trade. Ordinarily, the families produce the craft products while the buyers may buy directly from them or through middlemen. However, under the prevailing conditions, there has been a significant reduction in production of several traditional manufacturing as the production costs rise while the demand decreases. UN Habitat (2020) observes that many traders have switched to the sale of weapons and ammunition, which are considered more lucrative.

Similarly, Makhitha (2016) notes that in the era of globalization, the productive families are faced with numerous challenges such as resource constraints and increased competition. The situation is exacerbated by the proliferation of machine-made substitutes that are relatively cheaper and available in a wide variety. Besides, the families are reluctant to adopt new technology, pitting them against products that incorporate more advanced technologies in various areas such as marketing.

Role of Productive Families in the Handicraft Sector in Development

Handicrafts play a central role in the development of rural areas as they are the principal source of livelihood for productive families. Divandari et al. (2017) investigated the role of handicraft production in sustainable development in Iran using a study population from the village of Sar Aqa Seyyed. The authors found that as the agricultural sector was limited in capacity, the productive families in the region generated income from the handicraft industry.

Similarly, Ahmad et al. (2016) investigated the role of the handicraft sector and the economic value of handicrafts for both the individuals and the national economy in India. They established that the handicraft sector in India is one of the most important sources of employment. Particularly, in the rural areas, the handicraft sector provides the second largest source of income after agriculture. Ahmad et al. (2016) add that the sector reduces rural-urban migration, promoting proper urban planning in developing countries.

Besides, the unique characteristics of the handicraft sector make it a key player in the local and national economy of any country. Ahmad et al. (2016) explain that the sector is largely environment friendly with the possibility for fair trading practices. Consistent with these findings, Ahmad Bhat and Yadav (2016) concluded that productive families in the handicraft sector strengthen a nation’s cultural identity and the preservation of traditional heritage at reduced costs due to the low capital required. FAO (2019) state that handicrafts are an essential element of a nation’s cultural heritage as they are based on ancient traditions. The low capital requirements translate into more people participating in the industry, elevating its role in the national economy.

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The handicraft sector reduces inequalities, particularly in the context of gender. A report by FAO (2019) concluded that the handicraft business has potential to improve the status of women in the society as it provides them with paid work. Congruently, Ramadan et al. (2014) investigated the role of handicrafts in three Egyptian governorates of Cairo, Giza and Fayoum and found that they support women’s efforts to meet the daily needs of their families. Hence, the handicraft sector supports a country’s efforts to reduce gender inequalities by empowering women financially, thereby elevating their role beyond the unpaid domestic chores.

Mechanisms for Supporting Productive Families

One of the most crucial role that key actors can play in supporting productive families is increasing their capacity for production. Divandari et al. (2017) suggest that stakeholders can support the handicraft industry through training for the productive families to maintain their cultural heritage while generating income. Similarly, FAO (2019) found that there is a need for the implementation of training, capacity development and consultation programs in Uzbekistan on best practices in handicraft production.  Similarly, a report by FAO (2019) on the assessment of possibilities for income diversification through rural crafts found that the potential for the home-based businesses have not been fully utilised partly due to a lack of relevant information and capacity to compete with other products at the international level. The authors suggested that the government should support productive families through the provision of infrastructure such as machinery that can is used for cleaning wool.

The producing families and consumers interact through intermediaries in the demand/supply chain. Ahmad et al. (2016) encourage collaboration between the government and the productive families to infuse modern technology in ancient art. According to the authors, while the handicraft sector faces stiff competition due to the globalization, with the right infrastructure, it has potential that can be utilised to provide economic benefits for the nation.

Divandari et al. (2017) also established the need for networks and networking, as a key marketing tool of products. Productive families rely heavily on the networks of relationships to gain market information, hence, this consideration needs to be factored during the development of marketing strategies. Through these interactions, the productive families gain critical insights into the needs of the customers and identify opportunities that they can utilize in the market.

Developing Marketing Strategies

The development of an appropriate marketing strategy is critical for business success as it is contributes to an organization’s competitive edge. Organizations meet their marketing objectives through their marketing strategies which determine how they compete against their rivals. According to Ghods (2019), the development of a marketing strategy requires a considerable amount of intellectual process usually performed at a higher hierarchical level with consideration given to the internal and external environments.

An effective marketing strategy is dependent on the selection of the target market, product, price, distribution channel, and the communication channels. It uses a market-driven, customer-centric approach. Makhitha (2017) found that in South Africa, craft producers do not have sufficient knowledge about the lifestyles and preferences of their potential customers. Hence, they cannot create the promotional strategies that are necessary to access their customers.

Selection of the Target Market

Strategic marketing is based on a careful analysis of customers, competitors, and a firm’s resources and skills to compete in a given market. Makhitha (2016) established that in South Africa, some craft producers with no understanding of the market assume that the needs and preferences of the customers are homogeneous. On the other hand, Roundy (2014) concluded that social entrepreneurs have to make deliberate efforts to adapt their messages depending on the customer groups that they are addressing.

Product Development

Organizations make crucial decisions on the products that they are to offer in the market as a means of satisfying the needs of the selected markets. Makhitha (2016) explains that the distance between productive families and the customers is a hindrance to matching the needs of customers to products on offer. From a qualitative study on the challenges facing craft producers in South Africa, Makhitha (2017) determined that majority of the productive families are unskilled, with limited resources, negatively impacting their ability to match the quality standards and capacity required by their customers.

Similarly, Gustafsson (2018) posits that expansion of the activities in the production of handicrafts may not be a primary goal of the entrepreneur. The enterprises are dependent on the personality and goals of the owners who may be content with just having sufficient resources to provide for themselves and their families. Productive families are driven by the desire to satisfy their artistic sensibilities while they are compelled to balance their artistic vision and market demand (Makhitha, 2017). Without understanding the market demands, they cannot meet them since their vision may be contrary to what the middlemen and end consumers want.

Price Determination

Price strategy affects the performance of a firm, hence social entrepreneurs need to adjust their prices accordingly to enhance competitiveness. () found that the price of a commodity determines its competitiveness and the accessibility to trhe audience. Within the handicraft industry, Gustafsson (2018) established that purchase decisions are determined by the price-quality ratio, the nature of the handicraft and the originality.

Development of Marketing Communications

For Roundy (2017), the central element in any marketing strategy is the creation of attractive and motivational exchanges with the target audiences. Ghods (2019) explains that the development of marketing communications heavily relies on understanding the behaviours and preferences of the customers, and the resources available for communication. Using interviews from 121 participants, Roundy (2014) found that social entrepreneurs spend more time communicating about the social issue they are addressing as opposed to the product they are selling.

However, Roundy (2017) advises that social entrepreneurs need to convey both social and business messages to the customers. Crafting such messages can only be possible if social entrepreneurs understand the business and social value-oriented demands of the customers. To meet this goal, Roundy (2014) suggests that social entrepreneurs should incorporate design thinking in their marketing strategies, where they seek to address the problems of their customers owing to the dual focus of their ventures.

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Creation of Distribution Channels

Within the handicraft sector, products are distributed through various channels such as direct sales, craft markets, wholesalers, and retailers. Makhitha (2016) found that in South Africa, the primary channels are direct sales, craft markets, and small retailers. This observation is attributed to the fact that products are targeted towards particular market segments. However the most important factor is the lack of access to other segments such as large retailers as most of the crafts are sold through informal markets owing to the limited sources of capital.

Social Entrepreneurship and Marketing

Within the social entrepreneurship sphere, marketing strategy is a key element in attaining the desired social impact. Ghods (2019) advises that social entrepreneurs should begin by conducting a comprehensive market research to determine the existing and potential consumers, market size, and competitors. Understanding the competitors will enable the social entrepreneur to determine their competitive advantage as well as gaps that need to be filled.

Findings from a qualitative study based on interviews from 38 social entrepreneurs show that marketing is relevant for social entrepreneurs, yet they face unique challenges as they seek to understand and educate their customers (Roundy, 2017). Social entrepreneurs must ensure their ventures remain profitable while meeting the goal of their intended social change for sustainability, considerably impacting their marketing strategy. Roundy (2017) established that social entrepreneurs face difficulties in balancing the resources spent on their customers and those left for their beneficiaries.

Similarly, a study carried out using data from 47 articles published in peer-reviewed journals between the years 1995-2018 indicates that social entrepreneurs face different challenges as compared to entrepreneurs in conventional businesses. According to Bandyopadhyay and Ray (2019), these challenges arise from stakeholder’s varying expectations amidst resource constraints and lack of skills and strategies in marketing. The individuals work with scarce resources, especially in the early stages since most stakeholders do not perceive marketing as important, believing that it is not related to the social mission of the ventures.

Hence, social entrepreneurs are forced to be innovative in their marketing strategies. For instance, Roundy (2017) registered that social entrepreneurs in form strategic alliances, especially during the early stages. Roundy (2017) advises that social entrepreneurs must create a more complex message system as they have more diverse constituents including customers, beneficiaries, and impact investors.

Summary

Ultimately, social entrepreneurs play a critical role in addressing the needs of marginalized sectors of the society. In the developing countries, social entrepreneurs support innovation to reduce poverty where resources are scarce. Their innovative approaches provide solutions to communities and by extension, in national economies. Similarly, the productive families in the handicraft sector create employment and generate income, especially for rural communities such as those in Old City of Sana’a. However, without efficient marketing strategies, the productive families face challenges that inhibit the potential within their businesses. Social entrepreneurs should strive to provide innovative solutions to these challenges by using a collaborative approach where they involve other actors such as the government.

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