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Article Title:
The Impact of East African Regional Integration on the Market Leadership of Kenya's Mumias Sugar Company
by Beatrice Jemaiyo

Abstract:
Companies in the Kenyan sugar industry have a daunting task as they must survive and satisfy their shareholders? expectations in the industry, deal with low yields, and high costs of production and importation of low-cost sugar. The marketing environment of the sugar industry is complicated by regional integration in which Kenya plays a key role as a member of the Common Market for Eastern and Central Africa (COMESA) and East African Community (EAC). Kenya is expected to open up its markets to cheap sugar from the year 2012 from these regional blocs. The study focused on the market leader, Mumias Sugar Company (MSC), seeking to establish the marketing strategies it uses to maintain market leadership in the light of regional integration. The study targeted 357 senior and middle level managers of MSC from whom a sample of 112 respondents was selected. Sample selection methods used were, stratified sampling, purposive sampling and random sampling. The data was collected using self-administered questionnaires. Data was coded, cleaned, analyzed and interpreted using descriptive statistics (frequency, percentage) and inferential statistics (Chi-square and bi-variate correlations). The research found out that in the year 2008, MSC adopted diversification strategy to counter the effects of the RTAs resulting in cheap sugar imports. It established that electricity generation was the first diversification product. The study revealed that the increase in market share, a rise in profit and revenue and a decrease in operational costs were highly related as they gave a positive value of 0.7. The study recommends that Kenyan sugar firms should collectively lobby the Government to remove taxes on domestic sugar and that they should diversify into products such as alcohol, feedstock, newsprint and paper. The study is significant to the stakeholders of MSC since the owners are interested in the firm?s performance; employees in retaining their jobs and regular salaries, and the management will be interested in it because this is the base on which they will be judged and also to secure their jobs. The government will be keen on tax revenues as customers want to be assured of regular supplies of the products; suppliers also want market for their products.

Keywords: Impact, African, Regional, Integration, Market, Mumias Sugar Company, Kenya.

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