Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Sseko Designs is a for-profit company that was founded to engage in social entrepreneurshi...

Sseko Designs is a for-profit company that was founded to engage in social entrepreneurship. Social entrepreneurship occurs when an entrepreneur founds an organization with the purpose of creating

Sseko Designs is a for-profit company that was founded to engage in social entrepreneurship. Social entrepreneurship occurs when an entrepreneur founds an organization with the purpose of creating social value. Sseko understands that to be successful, it has to create an effective marketing strategy to serve its target market and develop a marketing mix that provides value to consumers. Sseko's social mission is to create economic change through better income for Ugandan women. To be successful the company must earn profits in order to create economic opportunities in East Africa.


Sseko's story started when founder Liz Forkin-Bohannon quit her job at a global communications firm. Afterward, she traveled to Uganda and was stunned by the contrast between the five-star hotels and the poverty she saw on the streets. After some investigation, Liz learned that Ugandan women who finished schooling were given a nine-month break before college to go back to their villages and earn enough money to pay for tuition. Unfortunately, most women could not secure jobs with adequate wages. This means 98 percent of Ugandan women do not complete higher education.


After conferring with a Ugandan friend, Liz realized that what would make the biggest difference would be to provide the women with jobs that would allow them to earn their own money for college. What she needed next was not only a product that Ugandan women could develop and sell, but also a good marketing strategy that included opportunities for Ugandan women. During her college years, Liz disliked the flapping noise of traditional sandals, so she redesigned them by purchasing rubber flip-flop bottoms and tying them with ribbon. This was a low-cost way to reduce the flapping noise and allowed Liz to use the ribbons to tie the sandals in creative ways. Her ribbon sandals quickly caught the eye of other students who viewed them as fashionable. This product was also unique and would give Liz's company the opportunity to benefit from first-mover advantages.


Liz believed she could improve upon her original design using materials obtained locally. She was mindful that to be successful, the product would have to be of interest to a target market. A few years earlier Toms Shoes had introduced a social enterprise using a one-to-one model in which for each pair of fashionable shoes a customer bought, another pair would be donated to children in need. The enterprise was successful, proving that these types of products could gain customer acceptance. After developing a step-by-step manual, Liz formulated a strategy for a work-study model for Ugandan women who showed college potential. She would offer women employment during the nine-month period they had to earn money for college. The women would make sandals and other products that could be sold to consumers in the United States. The organization would place 50 percent of the women's salaries into a university savings account. At the end of the nine months Sseko would match the savings collected 100 percent with a scholarship. Sseko Designs (pronounced say-ko from the Lugandan word for laughter) was officially born.


Now Liz and her husband had to convince buyers of their products' value and potential market acceptance. Together they traveled the nation for six months in their Honda Odyssey minivan to try and convince stores to purchase sandals from Sseko Designs. The Bohannons adopted the following organizational mission statement: Sseko Designs uses fashion to provide employment and scholarship opportunities to women

pursuing their dreams and overcoming poverty.


Marketing Strategy


The Bohannons began to zero in on a target market who were interested in fashionable sandals and were also concerned about supporting a social cause. Now that the Bohannons had a product, they needed to focus on other marketing mix variables. Their pricing strategy needed to cover the costs of sandals and tuition. The sandals themselves cost \$ 47 for the rubber and leather bases and \$ 8-\$ 13 for the straps. What consumers seemed to like most about the shoes is that the straps are interchangeable and can be changed out to create new fashions. The shoes come with two sets of interchangeable ribbons and sell for approximately \$ 65 .


Within a year Sseko Designs obtained its first break when Martha Stewart included the sandals in her holiday gift guide. The target market sees value in the product not only for its unique design but for its ability to make a difference. This has been critical in the development of mutually beneficial relationships between Sseko Designs and its customers. 


Retailers were also interested in the social enterprise. Two companies in Portland, Oregon, saw the sandals as a great opportunity. They display the products with a point-of-purchase card that users can scan with their smartphones. That connects customers to YouTube videos demonstrating the various ways the ribbons can be tied.


The success of Sseko Designs enabled the company to expand into other areas, including accessories and handbags. While the sandals and accessories are developed in the company's Uganda workshop, Sseko Designs has also partnered with different groups in East Africa to develop crafted goods. This has allowed it to extend its distribution network beyond Uganda into other East African countries. Workers are paid \$ 200 to \$ 250 monthly compared to an average wage of \$ 60 With half of this money being saved in a college fund, Sseko Designs matches the savings at the end of the nine-month period so that enough funds are available to cover college tuition. Today Sseko Designs products are sold online and by 400 retailers in North America.


Shark Tank


On February 13,2015, Liz and Ben Bohannon presented Sseko to the panel of "sharks" on the reality television show The Shark Tank. The panel consisted of self-made billionaires including Dallas Mavericks owner Mark Cuban, real estate maven Barbara Corcoran, and venture capitalist Kevin O'Leary. The couple offered the sharks a 10 percent stake in the firm for a \$ 300,000 investment. At the time of the episode, Sseko sales had surpassed \$3 million. Company strengths included a committed workforce, strong consumer support for its mission, an established distribution network, and the unique and fashionable nature of its products. On the other hand, Sseko also had several weaknesses. The firm suffered losses in 2014 and 2015, and it was uncertain when profitability would be reached. The Bohannons explained that the reason for the loss is that they were putting more money into development and hiring more salespeople. They expressed their belief that as more Americans learn about Sseko, sales would increase and the firm would recoup its profits.


A negative cash flow often turns off investors. Of greatest concern to the sharks was the belief that the Bohannons had overvalued their business. The Bohannons explained they could not lower their valuation due to deals they had struck with four private investors. Kevin O'Leary told the couple he would require 50 percent equity for him to invest the full amount. The Bohannons rejected the deal.


Liz Forkin-Bohannon was not discouraged. She knew that 6 million people watch Shark Tank, and many would support their social mission. The exposure on the show resulted in a 500 -fold increase in traffic on their website and a 1,000 percent increase in sales for the month of February.


The show also gave Liz the chance to defend their marketing model. She believes that the prevailing view among the sharks is that they should earn profit quickly and then use some of those profits to donate to charity. However, Liz claims they are not in the business of philanthropy. She points out that millennials (also known as Generation Yand born during the 1980 s and 1990 s) tend to be less concerned with big brand names and more concerned with the story behind the brand. Research shows that the millennial generation is more engaged with brands and have a more personal connection to them. Brands that support a cause consumers care about are viewed favorably.


The Future


Sseko Designs has already had a major impact on Uganda. Not only is it the largest footwear manufacturer, it also serves to empower women. Those women that complete the ninemonth program learn important skills such as quality control and design that could help them in their future careers. Sseko has sent 60 girls to college and employed another 120 .


The trick for Sseko Designs is to maintain a strong marketing strategy that will allow it to remain profitable. While it is not easy to incorporate social impact into their marketing model, the Bohannons feel their venture will succeed. They hope to eventually build a production base for Sseko that would be able to produce products for both small and large brands. { }^{33}


How would you define the target market for Sseko Design sandals?


Here is a tip:

The target market refers to those homogeneous groups of consumers to whom the organization wants to sell its goods and services.

Jul 03 2021 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions