Analysis of marketing consequences of export value-added cinnamon products: A case study in small and medium scale exporters in Sri Lanka

Abstract

Ceylon cinnamon (Cinnamomum zeylanicum) is recognized as the world’s largest pure cinnamon exporter, holding 90% of the global market share. Sri Lankan small and medium-scale cinnamon exporters are struggling to enhance their market position amidst increasing global competition and changing customer demands. The industry must sustain itself by developing value-added products and implementing innovative marketing strategies. This study examined the current status of exporting value-added products and conducted a SWOT analysis of existing marketing strategies to propose improvement for cinnamon value addition. Primary data were collected through a filed survey using a pretested semi-structured questionnaire with purposively selected 20 sample units (small- and medium-scale cinnamon exporters) from Galle and Matara districts in Sri Lanka. Data were analysed using descriptive and inferential statistics. Results revealed that exporters are producing medicinal products (80%), bark oil (75%) and leaf oil (75%) as their key value additions. They use competitor-based pricing (90%) with distribution channels such as direct exporting (78%), distributors (35%), online marketplaces (17%), and government trade missions (21%). Promotional efforts focus on advertising (31%), digital marketing (84%), and social media marketing (64%). The one-sample Wilcoxon signed-rank test showed that perceptions of product quality (W = 180, p < 0.001), pricing strategies (W = 175, p < 0.01) and promotional effectiveness (W = 170, p < 0.01) were significantly affect profitability. Key significant strengths identified were product quality (mean = 3.9), efficient international distribution (mean = 4.1) and competitive pricing (mean = 4.05). Distribution challenges (mean = 3.62) and branding limitations (mean = 3.76) were noted as weaknesses. Further, rising global demand (mean = 3.81) and growth of online sales (mean = 4.38) are key opportunities. Regulatory changes (mean = 3.71) and competition from other countries (mean = 3.67) pose significant risks. The study concludes that to grow sustainably amid rising global demand and competition, the Ceylon cinnamon industry needs to enhance branding, distribution, and marketing strategies. It is suggested that awareness and knowledge dissemination programs, combined with adequate motivation, be promoted to encourage effective marketing trends and tactics.