1
UTILIZATION OF NON-PRICE COMPETITION MARKETING
STRATEGIES BY BREWERIES IN NIGERIA
BY
ABAH, JOSEPH KHEGH N.
PG/Ph.D/05/39716
DEPARTMENT OF VOCATIONAL TEACHER EDUCATION
(BUSINESS EDUCATION)
UNIVERSITY OF NIGERIA, NSUKKA
JULY, 2013
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UTILIZATION OF NON-PRICE COMPETITION MARKETING
STRATEGIES BY BREWERIES IN NIGERIA
BY
ABAH, JOSEPH KHEGH N.
PG/Ph.D/05/39716
A THESIS SUBMITTED TO THE FACULTY OF EDUCATION,
UNIVERSITY OF NIGERIA, NSUKKA IN PARTIAL
FULFILLMENT FOR THE AWARD OF THE
DEGREE OF DOCTOR OF PHILOSOPHY
(Ph.D) IN BUSINESS EDUCATION
JULY, 2013
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APPROVAL PAGE
This thesis has been approved for the Department of Vocational Teacher
Education (Business Education), University of Nigeria, Nsukka.
BY
……………………….
Prof. C.A. Obi
Thesis Supervisor
……………………………
Internal Examiner
………………………..
External Examiner
…………………………….
Prof. C.A. Obi
Head of Department
……………………………………..
Prof. I.C.S. Ifelunni
Dean, Faculty of Education
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CERTIFICATION
It is hereby certified that, Abah, Joseph Khegh N. a Postgraduate student in
the Department of Vocational Teacher Education, with Registration Number
PG/Ph.D/05/39716, has satisfactorily completed the requirements for research
work for the award of the Degree of Doctor of Philosophy (Ph.D) in Business
Education.
The work embodied in this thesis is original and has not been submitted in
part or full for any other Diploma or Degree of this or any other university.
……………………………..
Abah, Joseph Khegh N.
(Student)
…………………………
Prof. C.A. Obi
(Supervisor)
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DEDICATION
This work is dedicated to my late parents; Mr. Nundu Abah and Mrs.
Rachael, A. Nundu who so loved me but could not wait to see me come this far.
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ACKNOWLEDGEMENTS
Special thanks to God, the Almighty for giving me knowledge, protection
and good health that made it possible for me to undertake this enormous work of
reading. The researcher most sincerely thanks Prof. C.A. Obi (Mrs) for her quality
of supervision and character that are unprecedently reflected in this work. Very
much thanks to Professors E.E. Agomuo, E.C. Osuala, E. Anyakaoha, Dr. E.A.C
Etonyeaku, Dr. E. Osinem and Prof. B. Ogwo and all my lecturers for their
constructive suggestions and guidance while this work lasted.
Fondly remembered in the course of this work are; Dr. Chris Chukwurah,
Dr. Asuquo E. Dr. M. Ugwuanyi, Dr. M.C. Ejezie, Mr. O. Njoku, Mr. Adu .G.N.,
Mr. T.S Ayua, Mrs. T. Ombugadu, Mrs. C. Ajoma, Engr. H. Daudu Mr. G. Chia,
Mr. Iorkua, M. and others for their financial and moral supports. I am most
thankful to Mr. Lawrence, Itodo Sunday who took pains in typesetting the whole
work. Very high regards to my brothers; Terna, Magu, Tor and Nder for taking
care of my family while this study lasted.
To my family I thank Suen, Doo, Tyo, Vershima and Nguuma for their
love, care, understanding and endurance throughout the period of this study.
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TABLE OF CONTENTS
Title Page
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Approval Page
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Certification -
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Dedication
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Acknowledgements -
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Table of Contents
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List of Tables
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List of Figures
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Abstract
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Developing Good Product Features as a Non-Price Competition
Marketing Strategy -
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Branding as a non-price competition marketing strategy
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CHAPTER ONE: INTRODUCTION
Background of the Study
Statement of the Problem
Purpose of the Study
Significance of the Study
Research Questions Hypotheses Delimitation of the Study
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CHAPTER TWO: REVIEW OF RELATED LITERATURE
Conceptual Framework
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Product Handling as Non-Price Competition marketing Strategy
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Product Positioning and Differentiation as a Non-Price Competition
Marketing Strategy -
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Customer Service as a Non-Price Competition Marketing Strategy
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Promotion as a Non-Price Competition Marketing Strategy
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Breweries in Nigeria
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Theoretical Framework
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Related Empirical Studies -
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Summary of Literature Reviewed -
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CHAPTER FOUR: PRESENTATION AND ANALYSIS -
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Research Questions Hypotheses Major findings
Discussion of findings
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CHAPTER FIVE: SUMMARY, CONCLUSIONS AND
RECOMMENDATIONS -
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Restatement of the Problem
Description of Procedure Used
Summary of Findings
Implications for Marketing Education
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CHAPTER THREE: METHODOLOGY
Design of the Study Area of the Study Population for the Study Sample for the Study
Sampling Techniquefor the study
Instrument for data collection
Validation of the Instrument
Reliability of the Instrument
Methods of Data Collection
Method of Data Analysis -
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Conclusions Recommendations Limitations of the Study Suggestions for further Studies
References
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APPENDICES
Appendix A:
Appendix B:
Appendix C:
Appendix D:
Appendix E:
Appendix F:
Population Distribution Table
Sample Distribution Table Letter to the Respondents Questionnaire
Reliability Item Statistics for Computation
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LIST OF TABLES
Table 1
Mean rating and standard deviation of respondents on product
handling practices as non price competition marketing
strategies by breweries.
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Table 2
Mean rating and standard deviation of respondents on
customer-service practices as non price competition
marketing strategies by breweries.
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Table 3
Mean rating and standard deviation of respondents on
promotional practices as non price competition marketing
strategies by breweries.
Table 4
Table 5
Table 6
Table 7
Table 8
Table 9
Table 10
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Mean rating and standard deviation of respondents on
packaging practices as non price competition marketing
strategies by breweries.
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Mean rating and standard deviation of respondents on
branding practices as non price competition marketing
strategies by breweries.
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Summary of Analysis of variance testing the utilization of
product handling practices as non price competition
marketing strategies by breweries. -
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Summary of Analysis of variance testing the utilization of
customer-services practices as non price competition
marketing strategies by breweries. -
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Summary of Analysis of variance testing the utilization of
promotional practices as non price competition marketing
strategies by breweries. -
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Summary of Analysis of variance testing the utilization of
packaging practices as non price competition marketing
strategies by breweries.
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Summary of Analysis of variance testing the utilization of
Branding practices as non price competition marketing
strategies by breweries.
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LIST OF FIGURES
Figure 1.
Schema for Conceptual Framework
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Figure 2.
Schema for Theoretical Framework
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Figure 3.
Schema for the Study.
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Abstract
The major purpose of this study was to determine the utilization of non-price
competition marketing strategies by breweries operating in Nigeria. The study has
five specific purposes. Five research questions were raised and eight null hypotheses
were formulated for this study. Literature was reviewed on the conceptual and
theoretical frameworks. A survey research design was employed for the study. The
study covered six geopolitical zones of South-south, south-east, South-west, Northcentral North West and North-east. Population for this study was drawn from
breweries operating in Nigeria. A total of 73 commercial managers, 85 senior
marketing managers and 91 senior sales managers were involved to give correct
information on the utilization of non-price competition marketing strategies.
Instrument for data collection has six sections. The instrument was subjected to facevalidation by two experts in marketing and one in vocational education. Cronbach
alpha reliability test was used to determine internal consistency of this study. A
reliability coefficient s of 0.85 was obtained which showed that the internal
consistency of the instrument was high. Questionnaire was administered on
respondents with assistance of five research assistants. Data collected were analyzed
using frequency count, mean and standard deviations for research questions. The eight
null hypotheses were tested using Analysis of Variance (ANOVA) and t-test statistic
at 0.05 level significance. Based on the findings of this study, it was concluded that
non price competition strategies when used could reduce costs accompanying price
cuts among breweries in Nigeria and that utilizing customer service practices would
create customer satisfaction thereby enhancing repeat buying from customers. The
study recommended that breweries should use harmless handling practices so that
their products would remain safe for human consumption. It was also recommended
that breweries should not be deceitful in their promotional activities so that only
correct messages are sent to prospective and potential buyers.
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CHAPTER ONE
INTRODUCTION
Background of the Study
The aim of companies to maximize profit and remain consistently viable in
their chosen businesses is usually threatened by other companies producing similar
or identical goods or services for the same market. Those companies producing the
same goods or services for same market are looked at as competitors or business
rivals. Competition is an activity in which persons or organizations contest in
races, trade or sports. Kotler (2003) says that competition includes all the actual
and potential rival offerings and substitutes that a buyer might consider.
Price is the monetary value attached to goods and services. It is also one of
the marketing mix variables. While price competition can involve discounting the
price of a product to increase demand, non price competition focuses on other
strategies to increase market share. Non-price competition is the competition
among companies on the basis of marketing variables other than price. Clay,
Krishman, Wolf and Fernandez (2005) define non-price competition as the act of
vying for sales through better products, promotion, customer service and
convenience with only minor emphasis on price. Non-price competition implies
that a company can influence demand of its products or services by its marketing
activities.
Brue and McConnel (2002) define non-price competition as a marketing
strategy in which a company tries to distinguish its product or service from
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competing products on the basis of attributes like design, workmanship, quality of
service, extensive distribution, customer focus, or any other sustainable
competitive advantage other than price. Non-price competition, they further
explain typically involves promotional expenditure such as advertising, personal
selling, sales promotion (coupons, special order processing methods or free gifts)
packaging, marketing research, new product development and brand management
costs.
Riley (2006) enumerates the following as the reasons for utilizing non-price
competition marketing strategies: emphasize product features, service etc., build
customer loyalty towards the brand, distinguish brands through unique features,
customers perceive differences in brands and view them as desirable, must be
difficult for competitors to emulate the differences e.g. products and must promote
the distinguishing features to create customers awareness. Others are price
differences must be offset by the perceived benefits, free delivery and installation,
branding and heavy spending on promotion and extensive after-sales services.
Non-price competition focuses on other strategies other than price for
increased market share. Pride and Ferrell (2004) explain that non-price
competition occurs when a seller elects not to focus on price and instead
emphasizes distinctive product features, services, product quality, promotion,
packaging or other factors to distinguish its products from competing brands. Nonprice competition gives a company the opportunity to increase its brand’s unit
sales through means other than changing the brand’s price (Frank, 2001).
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Marketing deals with identifying and meeting human and social needs of
customers profitably. American Marketing Association in Kotler and Keller
(2005) defines marketing as an organizational function and a set of processes for
creating, communicating and delivering value to customers and for managing
customer relationships in ways that benefit the organization and its stakeholders.
Marketing is made up of four mix variables (Products, Place, Price and Promotion)
for product marketing and seven mix variables (Products, Place, Price, Promotion,
People, Process and Physical
evidence) for service marketing (Kotler and
Armstrong, 2006). The United Kingdom Chartered Institute of Marketing (1998)
in Ezuma (2004) define marketing as the management process responsible for
identifying, anticipating and satisfying customers requirements profitably. It is
looking at the business through the eyes of the consumers. Human needs and
wants of consumers are starting point of marketing, while identification of these
needs leads to finding products to satisfy these needs and wants.
A strategy is a plan to achieve a desired goal. It is a broad plan of action,
which serves as a link between policy and end, desired goal as well as a theoretical
guide towards implementation and monitoring of a programme (Tellis, 1997).
Marketing strategies are consistent, appropriate and feasible set of principles
through which a particular company or business organization hopes to achieve its
long-term customer and profit objectives in a particular competitive environment
(Kotler and Armstrong, 2006). Non price competition as a marketing strategy, in
spite of the additional costs involved, is usually more profitable than selling for a
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lower price and it also avoids the risk of price war. Non price competition
marketing strategies utilizable by breweries include product handling, customerservices, promotion, packaging and branding (product differentiation).
To brew is to convert raw materials (Starched cereal grains, water, hops and
yeast) into beer or other beverages by mixing and fermenting them. Brewery is a
place where beer is made or a company that makes beer. Brewer is a person or
company that makes beer. Breweries in Nigeria produce different brands of beerlager, stout, ale, poster, boch beer (Grossman, n.d).
In the world today, companies are mostly competing on the basis of product
quality, customer service. Packaging, product features, brand management and
promotion. Breweries in Nigeria should use all these to meet the needs of their
customers profitably. Price competition today is less effective because of
improved efficiency of companies, product development and increased reliability
of customers. It is then necessary that any company wanting to expand out has to
use any of the non price competition variables to increase sales. Breweries are
chosen for this study because of increasing popularity of their products in Nigeria
market.
Product-handling practices are very important to breweries and their
customers. A product is anything that can be offered to a market for use,
acquisition or consumption that must satisfy a want or need. Pride and Ferrell
(2005) define a product as a complexity of tangible and intangible attributes
including functional, social and psychological utilities or benefits. A product can
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be an idea, a service, a good or a combination of these three.
Products of any kind need good and careful handling so that they maintain
their quality. Good handling of products is important and that is why all producing
companies usually take all segments of physical distribution very seriously. The
way a product is handled is dependent upon its characteristics. Solid products that
cannot break or spoil easily are handled with less care while fragile ones like beers
are usually given good attention because of their nature.
To Dickson and Uthany (1994) good product handling starts from when it
is produced through order receipt and processing, warehousing the products,
inventory management up to transportation of these products to their consumption
points. Where they are not handled properly the result may be mass return inwards
because of breakages or wrong supplies. Stanton, Etzel & Walker (2004) explain
that good product handling procedures and techniques increase the usable capacity
of a warehouse, reduce the number of times a good is handled and improve service
to customers as well as increase their satisfaction with the product.
Customer-service practices that can be utilized by any company should be
capable of bringing back customers to the seller for a repeat buying. All business
organizations attempt to satisfy customer needs and wants through a set of
activities collectively known as customer service. Customers require a variety of
services, Pride and Ferrell (2004) state that customers at the most basic level need
fair prices, acceptable product quality and dependable deliveries. Customers also
need sizable inventories, efficient order processing, availability of emergency
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shipments, progress reports, post sale services, prompt replacement of defective
items and warranties. Attention to customer needs and preferences is crucial to
increasing sales and obtaining repeat sales. A company’s failure to provide desired
level of services may mean the loss of customers.
Promotional practices are many and vital to the profitability of any
company. The role of promotion in marketing is to communicate with individuals,
groups or organizations directly or indirectly to facilitate exchange by informing
and persuading one or more of the audiences to accept an organization’s products.
Promotion has advertising, sales promotion, personal selling, publicity, public
relations and direct marketing as its mix variables (Marn and Rosiello, 1992). All
these variables are individually wide enough to be used in the course of adopting
non-price competition. Marketers use them to reach their customers any time they
want. In Nigeria, breweries should utilize these promotion variables extensively in
the course of promoting their products.
Packaging is one the major components of a marketing strategy. A unique
cap or closure, a better box or wrapper or a more convenient container size may
give a company a competitive advantage. Pride and Ferrell (2004) define
packaging as the development of containers and a graphic design for a product. A
package is a vital part of a product. It makes a product more versatile, safer or
easier to handle. It can influence consumers’ attitudes toward a product, which in
turn affects their purchasing decisions. Packaging protects the product to maintain
its functional form. Packaging also offers the convenience consumers often look
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for in products.
Branding practices entice customers and promote brand loyalty. McCarthy
(2007) defines brand as a name, term, symbol, design or a combination thereof
that identifies a seller’s products and differentiates them from competitor’s
products. A brand name is that part of a brand which can be spoken, like letters,
words and numbers such as 7-up or ‘33’. A brand name is often a product’s only
distinguishing characteristic. Brand name helps consumers to identify products,
which helps them by simplifying shopping, guarantee quality and allow selfexpression.
Certain terms are associated with brand. These are brand mark, trademark
and trade name. Brand mark is that element of a brand that cannot be spoken,
often a symbol or design. A trademark is a legal designation indicating that the
owner has exclusive use of a brand or a part of a brand and that others are
prohibited by law from using it. A trade name is the legal name of an organization
such as Guiness Nigeria Plc, Nigeria Breweries Plc etc. rather than the name of a
specific product. Commercial managers, marketing Manager and sales managers
as stakeholders in breweries in Nigeria are selected as respondents to this study’s
instrument. Commercial managers in this study are those whose duties are to
enhance profitable operations of companies. Marketing managers are those
charged with the responsibilities of employing right marketing practices so that the
company’s products can profitably reach the final consumers. Sales managers on
the other hand, in this study are managers whose duties are to dispose of
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company’s products so that the aim of the company could be achieved-profit
making.
Statement of the Problem
Competition among business organizations offering same or similar
products or services is as old as business itself. As business organizations are out
to make profit, they are always counteracting any move from their rivals capable
of undermining their existence. If a company reduces the prices of its products to
attract more customers other companies will adopt same competitive strategy and
that usually leads to price wars among companies producing identical or similar
products or services for same market. Companies produce to sale and since they
are not alone in the market, they have to compete in order to have a good market
share to sustain their existence (Frank, 2001).
A good number of breweries in Nigeria have failed because they could not
withstand price competition from more viable rivals in the market (Ezumah,
2004). Ezumah further states that breweries like Pal larger beer, Champion
brewery, Golden Guinea brewery and even soft drinks like Dr. Pepper, Fanta
Chapman, inter soft drink etc failed because they could not withstand stiff price
competition from rival companies. He further explained that companies can better
survive using non-price competition as it requires just good quality products,
appealing product features, awareness creation, extra customer services, safe
product containers and differential advantage over competing brands.
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Owonubi (2009) advised new entrants into brewery sector that with the
current innovation, expansion and restructuring in the sector only identification
and use of differential advantage can make them viable and not price discounting
with increased multinational presence – influx of multinational companies in
brewery sector in Nigeria. Non-price competition marketing strategies emphasize
better quality of service, extended warranties, contractual relationship with
suppliers, increase in demand and development of brand loyalty among
consumers. Price cutting erodes profit as it leads to a lower price level (Perrault &
McCarthy, 2002).
Literature reviewed shows that no known studies on utilization of non price
competition marketing strategies have been carried out covering the six
geopolitical zones of Nigeria. Studies have been on promotion mix variables of
advertising, sales promotion, personal selling and publicity Umoru (2004);
Vincent (2000); Tayo (2004); Chukwura (2008); Ugwu (1999); OguejioforOsakwe(2002) and Okwelume (2005). Other studies have been on packaging and
branding all covering either a state, local government area or a metropolis. Such
studies are also on soft drinks or other beverages, or other commodities and non
on breweries (Nwana, 2000; Nwokolo, 1996; Eduh &Ibanga, 1988; Emefo, 1989;
Awara, 2001 and Idongesit & Bassey, 2008).
There is therefore the need for a study to cover more areas for reliability.
There is also need for a study to look at the utilization of non price competition
marketing strategies by breweries in Nigeria since there is none yet. This study is
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aimed at filling the above gaps. This study was therefore to determine the
utilization of non price competition marketing strategies by breweries in Nigeria.
Purpose of the Study
The major purpose of this study was to determine the extent of utilization
of non-price competition marketing strategies by breweries in Nigeria.
Specifically, the study sought to:
1.
determine the extent to which product-handling practices are utilized as
non-price competition marketing strategies by breweries.
2.
find out the extent to which customer service practices are utilized as nonprice competition marketing strategies by breweries.
3.
determine the extent to which promotional practices are utilized as nonprice competition marketing strategies by breweries.
4.
find out the extent to which packaging practices are utilized as non-price
competition marketing strategies by breweries.
5.
determine the extent to which branding practices are utilized as non-price
competition marketing strategies by breweries.
Significance of the Study
A good number of individuals and corporate organizations in Nigeria would
benefit greatly from the findings of this study.
The findings of this study would be beneficial to breweries as Knowledge
gained from it would enable them employ suitable handling practices to reduce
damages or breakages usually occurred when containers are roughly handled.
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This study would be beneficial to breweries as the results would enable
them discover customer services that are very significant for purchase decision
making among consumers.
The Federal Ministry of Commerce and Consumer Protection Council
would benefit from the study. The findings would enable them design suitable and
sound marketing laws and policies to regulate promotional practices as well as
protect the interest of Nigerian consumers. The findings would lead to legislation
against some harmful conducts as this would promote marketing ethics and
consumer welfare.
This study would be of great importance to marketing students and
lecturers in Nigeria. The study would broaden their understanding of packaging as
a non price competition strategy. Literature on packaging as a non price
competition marketing strategy in Nigeria generally is very scanty and
fragmented. This study would make a significant contribution to the existing
literature on non price competition.
The study would be of great value to marketing educators. The findings
would enable marketing educators understand that non-price competition involves
the use of certain variables as aforementioned when fighting for market share.
This study would be beneficial to curriculum planners. This study would
enable them come out with a curriculum that can enrich the knowledge of
marketing students and marketers in practice. Curriculum planners have the power
of influencing the conduct of learners by making curriculum contents
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comprehensive and desirable.
Knowledge gained from this study would be beneficial to distributors and
retailers of brewery products. This study would expose them to the relevance of
branding as a non-price competition marketing strategy.
Research Questions
The study addressed answer the following research questions:
1.
To what extent are product-handling practices utilized as non price
competition marketing strategies by breweries?
2.
To what extent are customer service practices utilized as non price
competition marketing strategies by breweries?
3.
To what extent are promotional practices utilized as non-price competition
marketing practices breweries?
4.
To what extent are packaging practices utilized as non-price competition
marketing strategies by breweries?
5.
To what extent are branding practices utilized as non-price competition
marketing strategies by breweries?
Hypotheses
The following null hypotheses were formulated for this study:
H01: There is no significant difference in the mean ratings of commercial
managers, senior marketing managers and senior sales managers on the
extent of utilization of product-handling practices as non price competition
marketing strategies by breweries.
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H02: There is no significant difference in the mean ratings of commercial
managers, senior marketing managers and senior sales managers on the
extent of utilization of customer-service practices as non-price competition
marketing strategies by breweries.
H03: There is no significant difference in the mean ratings of commercial
managers, senior marketing managers and senior sales managers on the
extent of utilization of promotional practices as non-price competition
marketing strategies by breweries.
H04: There is no significant difference in the mean ratings of commercial
managers, senior marketing managers and senior sales managers on the
extent of utilization of packaging practices as non price competition
marketing strategies by breweries.
H05: There is no significant difference in the mean ratings of commercial
managers, senior marketing managers and senior sales managers on the
extent of utilization of branding practices as non price competition
marketing strategies by breweries.
Delimitation of the Study
This study is delimited to non-price competition marketing strategies
utilized by breweries in Nigeria. In the study breweries operating in Nigeria’s six
geopolitical zones and not other companies were surveyed.
Respondents for this study are commercial managers, senior marketing
managers and senior sales managers of breweries operating in Nigeria.
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Information obtained from respondents is also restricted to the non-price
competition marketing strategies of product handling, customer services,
promotion and packaging as well as branding. This was because the
aforementioned are considered the core concerns of non price competition.
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CHAPTER TWO
REVIEW OF RELATED LITERATURE
Literature related to this study was reviewed under the following headings.
1.
Conceptual Framework
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·
·
·
·
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Product feature practices
Branding practices
Product-handling practices
Product positioning and differentiating practices
Customer-service practices
Promotional practices
Benefits of adopting non-price competition by brewing industries in
Nigeria.
2.
Theoretical Framework
·
·
·
·
·
·
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Non-price competition theory
Non-price advertising model
Profit theory of investment
Financial theory of investment
Advertising competition model
Integrated marketing communication model
Competition theory
3.
Related Empirical Studies
4.
Summary of Literature Reviewed
Conceptual Framework
Competition is a routine among business organizations producing identical
or similar goods or services for same market. Companies producing similar or
identical, goods or services with other producers do fight aggressively for
customers’ buying power or market share. All business organizations have rivals
or competitors that supply same goods or services and to boost sales and
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consequently profit, they have to find ways of having an edge over their rivals.
Competition is an activity engaged in by companies producing substitutable goods
over who should take the lion share of buyers’ purse.
Competition is as old as business itself. If two companies are operating in
an area, producing same goods, such companies are already in competition. The
same happen to companies rendering same services. Kotler (2003) defines
competition as including all the actual and potential rival offerings and substitutes
that a buyer might consider. Companies compete for market share and the demand
from customers in lots of ways. Prominent among them are the price and non-price
competition (Marn and Rosiello, 1992).
Every product offered for sale in any market has a price. This price
expresses the products value. Price is the amount of money and other items with
utility needed to acquire a product. A utility is an attribute that has the potential to
satisfy wants (Brue and McConnell, 2002). Almost anything of value- ideas,
goods, services, organizations etc. can be assessed by a price because in our
society the financial price is the measurement of value commonly used in
exchange.
Price is very important to the entire economy as well as to the entire actors
in the economy. To the economy, a product’s price influences wages and salaries
of workers, rent to be paid or received, interest to be charged as well as profits to
be made. That is, a product’s price influences the amount paid for the factors of
production: land, labour, capital and entrepreneur. Price thus is a basic regulator of
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the economy or economic system because it influences the allocation of factors of
production. As the allocator of resources, price determines what will be produced
or supplied and who will get the goods and services produced (demand).
To companies, price is a major determinant of the market for their products.
Price affects a company’s competitive position and its market share. Price has a
considerable bearing on a company’s resources and net profits. To consumers a
product’s quality varies directly with price, hence the slogan “the higher the price
the higher the quality is perceived to be” (Tellis, 1997). Value is the ratio of
perceived benefits to price and any other incurred cost. In most cases, goods that
cost higher are better and higher in value as compared to low priced ones.
Price competition involves discounting the price of a product to increase
demand. It is where a company tries to distinguish its product or service from
competing ones on the basis of low price (Stanton, Etzel and Walker, 2004). To
compete effectively using the price option, one has to match and beat the price of
competitors as well as need to be the lowest cost producer. To Pride and Ferrell
(2005) a price competitor must be willing and able to change the price frequently
and also respond quickly to any change in price by rival partners.
Non-price competition occurs when a seller elects not to focus on price and
instead emphasizes distinctive product features, services, product quality,
promotion, packaging or other factors to distinguish its products from competing
brands. McCarthy (2007) defines non-price competition as a marketing strategy in
which one company tries to distinguish its product or service from competing
30
products or services on the basis of attributes like design and workmanship.
Non-price competition involves the use of all other marketing variables
except price to win the patronage of customers. Cespedes (2006) defines non-price
competition as an act of vying for sales through better products, promotion,
service and convenience with only minor emphasis on price. Bennett (2005) says
non-price competition typically involves promotional expenditure such as
advertising, selling staff, sales promotions, marketing research, new product
development and monopolistic competition.
A strategy is a plan to achieve a desired goal. It is a broad plan of action,
which serves as a link between policy and end, desired goal as well as a theoretical
guide towards implementation and monitoring a programme (McCarthy, 2007).
Marketing strategies are consistent, appropriate and feasible set of principles
through which a particular company or business organization hopes to achieve its
long-term customer and profit objectives in a particular competitive environment
(Kotler and Armstrong, 2006).Non-price competition practices as systematic and
repetitive use of other marketing mix variables by companies to outwit their
business rivals in a market.
A beer is an alcoholic drink brewed and consumed commonly in Nigeria
and other countries. The word beer is derived from the Anglosaxon Baere,
meaning barley. It is a product of yeast fermentation of barley grains. Beers are
fermented and brewed from barley grain, which has been partially germinated to
convert its starch store to sugar as maltose through a process known as malting.
31
Nigeria is one of the English speaking West African countries. She gained
her political independence from her colonial master, Britain on 1st October, 1960.
She has an intimidating population of about 150 million people spread in her thirty
six (36) sates and the Federal Capital Territory (FCT). Abuja in seven hundred and
seventy four (774) Local Government Areas. Nigeria practices a mix economic
system where the Governments and private individuals are free to actively
participate in her economy. She practices the federal system of government with a
bicameral legislature at the federal government level.
Developing Good Product Features as a Non-price Competition Marketing
Strategy
Every business organization has a product or more to sell to its customers
for the purpose of sustaining its existence. To Stanton, Etzel and Walker (2004) a
product is a set of tangible and intangible attributes including packaging, price,
colour, quality, and brand, plus the seller’s services and reputation.
A product can be a good, service, place, person, organization, party, or
idea. In essence consumers usually buy much more than a set of physical attributes
when they buy a product. They are buying want satisfaction in the form of the
benefits they expect to receive from the product. Jobber (2006) has classified
products into consumer products and industrial or business products. Products
bought to satisfy personal and family needs are called consumer products.
Consumer goods are further classified as convenience goods, shopping goods,
specialty goods and unsought goods.
32
Convenience goods are tangible goods that the consumer knows enough
about before going out to buy them and actually buys them with a minimum effort.
Convenience goods are relatively inexpensive, frequently purchased items for
which buyers want to exert only minimal purchasing effort, such as, bread,
gasoline, newspapers, soft drinks, and chewing gum.
Shopping goods are goods or products for which buyers are willing to
expend considerable effort planning and making the purchase. Buyers allocate
more time for comparing stores and brands with respect to prices, product features,
qualities, services and perhaps warranties. Shopping goods are tangible products
for which consumers want to compare quality, price as well as style in several
stores before making a purchase. Examples of shopping goods are appliances,
fashionable apparel, furniture, automobiles, men’s suits, stereos and other
expensive items. Shopping goods require fewer retail outlets than convenience
goods. Their inventory turnover is low as they are not brought frequently and
middlemen expect to receive higher gross margins.
Specialty goods are tangible products for which consumers have a strong
brand preference and are willing to expend substantial time and effort in locating
the desired brand. Consumers of specialty goods are usually willing to forgo more
accessible substitutes to search for and purchase the desired brand. Specialty
goods posses one or more unique characteristics, and a significant group of buyers
is usually willing to expand considerable purchasing effort to obtain them.
Examples of specialty goods are Jaguar automobile, expensive men’s suits, stereo
33
sound equipment, health foods, photographic equipment and new automobile and
home appliances.
Unsought goods are goods that are purchased because of a sudden problem
that needs to be solved or when aggressive selling is used to obtain a sale that
otherwise would not take place. An unsought goods is a new product that the
consumer is not yet aware of or a product that the consumer is aware of but does
not want right now. Examples of unsought goods are cemetery plots, life
assurance, encyclopedias, emergency automobile repairs. They are goods not
wanted until their need arises, even though consumer might be aware of their
existence.
Jobber (2006) defines industrial goods as products purchased to
produce other products or for use in a firm’s operations. Purchases of industrial
products are based on an organizations goals and objectives. Jobber further
classifies industrial goods as, raw materials, major equipments, accessory
equipment and component parts.
Raw materials are the basic materials that actually become part of a
physical product. They are obtained from mines, forests, oceans and recycled solid
wastes. They are usually brought for conversion into finished goods and the
amount of their purchase is dependent upon the size of the factory and viability of
the company. Major equipment includes large tools and machines used for
production purposes such as lathers, cranes, and stamping machines. Major
equipments are usually very expensive and intended to be used in a production
process for a considerable length of time. Some of these major equipments are
34
custom-made to perform specific functions for a particular organization while
others are standardized products that perform one or several tasks for many types
of organizations.
Accessory equipment does not become part of the final physical product
but is used in production or office activities. Examples of accessory equipment
include typewriter, frictional horsepower motors, calculators and other tools. They
are cheaper than major equipment; are purchased routinely with less negotiation
and are treated as expensive item rather than as capital items. All these products
(consumer/industrial) have different features.
Component parts become part of
the physical product and are either finished items ready for assembly or products
that need little processing before assembly.
Belch and Belch (2001) defines product mix as the composite or total group
of products that an organization makes available to customers. We have the depth
of a product mix which is measured by the number of different products offered in
each product line. We also have width of the product mix and it is measured by the
number of product lines a company offers. A product item is a specific version of
a product that can be designated as a distinct offering among an organization’s
products. While a product line includes a group of closely related product items as
they are considered a unit because of marketing, technical or end-use
considerations. McCarthy (2007) says products are like living organisms and
therefore have life cycles. He enumerated the cycles as including production stage,
growth stage, maturity stage decline stage. Each of these stages having a distinct
35
marketing implication.
Branding as a Non-price Competition Marketing Strategy
McCarthy (2007) defines brand as a name, term, symbol, design or a
combination thereof that identifies a sellers products and differentiates them from
competition products. A brand name is that part of a brand which can be spoken,
like letters, words and numbers such as 7-up. a brand name is often a product’s
only distinguishing characteristic. Brand name helps producers to identify their
products, which it helps consumers by simplifying shopping, guarantee quality and
allow self-expression.
Certain terms are associated with brand. These are brand mark, trademark
and trade name. Brand mark is that element of a brand that cannot be spoken,
often a symbol or design. A trademark is a legal designation indicating that the
owner has exclusive use of a brand or a part of a brand and that others are
prohibited by law from using it. A trade name is the legal name of an organization
such as Guinness Nigeria Plc., Bottling Company, Nigeria Breweries etc. rather
than the name of a specific product.
Stanton et al (2004) classify brand into (a) manufacturer and (b) private
distributor. Manufacturer brands are initiated by producers and ensure that
producers are identified with their products at the point of purchase. A
manufacturer brand usually requires a producer to be involved with distribution,
promotion and pricing decisions. Brand royalty is created by promotion, quality
control and guarantees and it is a valuable asset to a manufacturer. Under this
36
arrangement, the producer tries to stimulate demand for the product, which tends
to encourage middlemen to make the product available.
Private distributor brands otherwise called private brands are initiated and
owned by resellers, that is, marketing organizations that buy products for the
purpose of reselling them. The major characteristic of private brands is that
manufacturers are not identified on the products. Private distributor brands give
retailers or wholesalers freedom to purchase products of a specified quality at the
lowest cost without disclosing the identity of the manufacturer.
Marketers should consider a variety of issues when they select a brand
name. The name should be easy for customers to say, spell and recall even to
foreign buyers. Short, one-syllable names like cheer can sufficiently satisfy this
requirement (Pride and Ferrell, 2005). Branding policies start with deciding
whether or not to brand at all. Homogeneous products needed the branded and are
usually difficult to brand even. Raw materials such as coal, woods as well as farm
produce are difficult to brand. While some organizations embrace generic brands,
others prefer individual, overall family, line family or brand- extension branding.
Some marketers of products that traditionally have been branded have embarked
on a policy of not branding often called generic branding. A generic branding
indicate only the product category such as aluminum foil, lager beer etc. and does
not include the company name or other identifying terms. Many suppliers market
in Nigeria are selling generic brands at prices lower than their comparable branded
items. Purchasers of generic branded grocery items tend to be concentrated in
37
middle income, large family or house holds that are price conscious and
predisposed to select regularly low-priced alternatives as opposed to temporarily
lower- priced products.
Individual branding is a policy of naming each product differently. One
major advantage of individual branding is that when an organization introduces a
poor product, the negative mages associates with it do not contaminate the
company’s other products. In overall family branding, all of a firm’s products are
branded with the same name or at least part of it in some cases, a company’s name
is combined with other words to brand items, for example Dangote Cement,
Dangote Sugar, Dangote Mills etc. Sometimes an organization uses family
branding only for products within a line rather than for all its products. This policy
is called line family branding (Stanton et al, 2004). The same brand name is used
within a line but the firm does not use the same for a product in a different line.
Orange pharmaceuticals, producing drugs; lever brothers producing detergents,
toilet soaps.
Brand- extension branding occurs when a company uses one of its existing
brand names as part of a brand for an improved or new product that is usually in
the same product category as the existing brand. Brand licensing is a more recent
trend in branding strategies when a company allows approved manufacturers to
use its trademark for a fee or royalty as low as 2 percent of whole sale revenue.
Though considered as a major leading in this review of related literature,
packaging as a product feature involves the development of a contained and a
38
graphic design for a product. It is a vital part of a product and makes a product
versatile, safer and easier to handle and use. Packaging influences customers’
attitudes towards a product, which in effect, affects their purchasing decisions.
Another product feature worth consideration here is labeling. Labeling is
the part of a product that carries information about the product and the seller. It
could be part of a package or it may be a tag attached to the product. Stanton
(1981) in Tavershima (2000) gives the following types of labels as brand label,
descriptive label and grade label. A brand label is the brand alone applied to the
product or package. A descriptive label gives objective information about the
product’s use, construction, care, performance, and other pertinent features. A
grade label identifies the product’s judge quality with a letter, number or word.
In Nigeria today a good number of products are wearing grade labels such
as NAFDAC number, NIS, A for vitamin A etc. products wearing these letters,
numbers or signs are usually adjudged as possessing acceptable quality or standard
and are therefore safe for consumption. One of the ways to satisfy customers and
gain a differential advantage over, and above competitions is through product
design which refers to the arrangement of elements that collectively form a good
or service. Good product design can improve the marketability of the product by
making it easier to operate, upgrading its quality, improving its appearance and
reducing manufacturing costs.
A distinctive design is one of the features that significantly differentiate a
product. Because of the importance of design to products and their users,
39
companies are being called upon to design products that are easily used by all
customers including disabled individuals, senior citizens and others needing
special considerations (Stanton et al, 2004). This approach of designing products
that are for all customers is called universal design. Universal design is
demonstrating that products designed for the disabled can work better for all
customers than do traditional design.
Product colour, like design is often the determining factor in a customers
acceptance or rejection of a product, whether it is a dress, beer, table, an
automobile, house etc. there is that possibility of enjoying differential advantage in
knowing the right colour and in knowing when to change colours. In beer
manufacturing in Nigeria, lager beers have their liquid and bottle colours different
from stout and all liquid and ale bottle colours. The colour of any beer indicate
whether it is a light or lager, or stout one. While lager beers: Gulder, Star, More
etc. have brown colour, Stout or ale as in Guiness, Legend, Turbo King etc are
black in colour.
A product of any kind can survive basically because of its quality more
than any other of its features. Product quality relates to a product ability to satisfy
its consumers. It is a set features and characteristics of a good or service that
determine its ability to satisfy consumer needs. Consumers differ greatly on what
constitutes quality of a product or service. What one consumer likes could be
totally distasteful to another hence as beauty, quality is in the eyes of the beholder
(Best, 2000). In recent years, many organizations have implemented total quality
40
management (TQM) progrmmes. Total quality management involves not just
specific procedures, policies and practices but a philosophy that commits the
organization to continuous improvement in all of its activities. All services
business
organizations
example,
civil
service,
government
agencies,
manufacturing, education etc. in Nigeria today are adopting total quality
management to improve themselves.
Warranties are intended to assure buyers that they will be compensated in
case the product does not perform up to reasonable expectation. In the past, courts
used to recognize only express warranties- those stated in written or spoken words.
These were considered limited in their coverage and seemed mainly to protect the
seller from buyers’ claims, hence the caution “caveat emptor,” meaning, “let the
buyer beware” (Best, 2000). Today, consumer complaints led to a governmental
campaign to protect the consumer in many areas including product warranties.
Courts and government agencies have broadened the scope of warranty coverage
by recognizing implied warranty, which means that a warranty was intended,
although not actually started by the seller. Producers are also being held
responsible, even when the sales contract is between the retailer and consumer,
hence the caution “Cavent Venditor” meaning, “let the seller beware”.
In many cases companies are held liable if they were not negligent in
production. The term product liability has become common in today’s business
world. Product liability is a legal action asserting that an illness, accident or death
resulting from the named product because it was harmful, faulty, or inadequately
41
labeled (Stanton et al, 2004). Many companies have to provide post sale service,
notably repairs to fulfill the terms of their warranties. Some do the repairs as well
as maintenance to augment their revenues.
Product Handling as a Non-price Competition Marketing Strategy
Product handling is one of the tasks in physical distribution management.
The other ones are inventory location and warehousing which involves assembling
the products; dividing them (bulk-braking) and storing products and preparing
them for reshipping. Another task in physical management is distribution centres.
Stanton et al (2004) state that an effective inventory location strategy involves the
establishment of one or more distribution centres. The idea, according to them is
to develop under one roof an efficient, fully integrated system for the flow of
products – taking orders, filling them and preparing them for delivery to
customers.
Product handling involves selecting the proper equipment to physically
handle products, including the warehouse building itself. To handle beer products
properly, beer companies have designed durable nice looking beer bottles, plastic
cartons, polythene containers and light cans that are disposable. Product handling
for brewery products starts from designing of bottles, containers cans to the
processing of orders from customers up to transportation to their consumption
points. In Nigeria today, all beer companies have acquired a fleet of trailers or
trucks that convey their beers to their distribution centers and customers.
Pride and Ferrell (2005) explain that the characteristics of the product often
42
determine how they can be handled. Beers as fragile goods have unique
characteristics that determine how they should be moved and stored. The loading
and unloading of beer on trucks or trailers require that they be handled carefully to
avoid breakages. When they are loaded, care must be taken to ensure that they do
not fall in transit. The drivers should also ensure that they speed minimally
considering our Nigerian roads. In the course of unloading and storing, beers have
to be kept upright in stores so that they do not fall and the cartons be close to each
other as that could serve as support for them.
Product Positioning and Differentiation as a Non-price Competition
Marketing Strategy
To build a profitable relationship with target customers, marketers must
understand customers’ needs better than competitors do and deliver more value.
The amount of competitive advantage gained by any company depends to a large
extent on its provision of superior value to customers. If a company positions its
product as offering the best quality or service, it must then deliver the promised
quality or service. Kotler and Armstrong (2005) define product as any thing that
can be offered to a market for attention, acquisition, use or consumption that might
satisfy a want or need. To Stanton, Etzel and Walker, (2004) a product is a set of
tangible, physical attributes assembled in an identifiable form. Each product has a
descriptive or generic name given by its producers. When buyers buy a product,
they are actually purchasing the benefits and satisfaction they think the product
will provide. All the products offered in the market can satisfy at least one form of
43
customer want or need.
Product positioning refers to the decisions and activities intended to create
and maintain a company’s product concept in consumer’s minds. When marketers
introduce a product, the attempt to position it so that it seems to posses the
characteristics the target market most desires. To Pride and Ferrell (2005), product
positioning is the customers’ concept of the product’s attributes relative to their
concept of competitive brands. In Nigeria, Guiness Stout is positioned as an
energy boosting beer while Gulder is positioned as a strong beer for mature or
strong people.
Effective product positioning helps serve a specific market segment by
creating an appropriate concept in the minds of customers in that market segment.
A company can position a product to compete head-on with other brands e.g.
Pepsi to Coca-cola in Nigeria. If a product has its brand image that will give it the
distinct appeal needed: style, shape, construction, quality of work, colour etc, all
elements of the product components of the marketing mix help create the image
and the appeal. Consumers, when they identify the benefits of a product, they are
likely to purchase it.
So many products are offered to the market and to gain customer patronage
each company do try in one way or the other to show how different its products
are from other offerings of other companies. Pride and Ferrell (2005) define
product differentiation as a marketing strategy whereby a company establishes in
the minds of its customers that its product is superior and preferable to competing
44
brands. Product differentiation involves developing and promoting an awareness
of differences between one company’s product and those of competitors. Stanton,
Etzel and Walker (2004) explain that differentiating your product from others is
done so that the company can remove itself from price competition but compete
on the non price basis that its product from or better than competitors’ products.
Product differentiation starts from product concept. Companies do start
looking at features that their product should possess when the idea of
manufacturing the product is initiated. Some companies would differentiate the
design of their product or the only difference may be in the brand or packaging.
Star has differentiated its beer from other lager beers on bottle design in addition
to content quality. In Nigeria today, beers are differentiated by bottle design,
product quality or volume. Beers like star, stout have can containers of 33 CL
Volume – apart from their distinctive big bottle designs. Their containers have
clearly differentiated them among beers offered in Nigerian beer market. Kotler
(2003) explains that product differentiation takes place along a continuum. That it
is a continuous process, at one extreme one can find physical products that allow
little variation. He further explains that some products can be highly differentiated
such as automobiles, cloths and furniture. These are differentiated on the basis of
features, performance or style and design.
Differentiating a product from those of competitors can take any shape
depending on the desire of the company designing the strategy. A company can
differentiate its product on such attributes as convenience durability, reliability or
45
reparability (Kotler and Keller, 2005). Product features also can be used to
differentiate products such features include design, brand, packaging, trade work,
label, colour, guarantee or warranty (Stanton, Etzel and Walker, 2004). Branding
means using a name, symbol, term, design or a combination of these to
differentiate the product of a given seller from those of the competitors. It is a
comprehensive term, which includes all methods of identifying a product minus
the package and shape of the product. Brand can be vocalized, example, star, and
it is the name referred to by the manufactures, middlemen and the ultimate
consumers. A large amount of brands of beer exist in Nigerian market, each
having its own brand name. Common among them are Gulder, Star, Stout, Harp,
More, Class 33, etc. Beer consumers have a wide range of choices to make while
wanting a beer.
A trademark is a brand or part of a brand that enjoys legal protection. Pride
and Ferrell (2005) define trademark as a legal designation indication that the
owner has exclusive use of a brand or a part of a brand and that others are
prohibited by law from using it. Like elsewhere in the world all trademarks used in
Nigeria are registered with relevant authorities for recognition and protection.
National Agency for Food and Drug Administration and Control (NAFDAC) and
Consumer Protection Council (CPC) require that all products sold in Nigeria are
well labeled. Belch and Belch (2001) define label as a paper or sticker pasted on a
product that identifies, warns, instructs and certifies the product. It carries
manufacturers’ identity, instruction, warnings and certification of his product. All
46
beers like other products have labels and this serves as one of their distinctive or
distinguishing features. Another product feature that can be used to differentiate
the development of a container and a graphic design for a product. It is a vital part
of any product as it makes products versatile, safer and easier to handle and use. A
good number of beers produced in Nigeria have very inviting containers (bottles or
cans). Packaging apart from attracting consumers, it also protects the product as
well as makes it maintain its functional form.
All these product features have clear ways of differentiating beers of one
company from beers of other companies. Wendell in Stanton, Etzel and Walker
(2004) explain that product differentiation is essentially concerned with the
bending of demand to the will of supply. After the product is positioned, a viable
differential advantage has to be identified. Differential advantage refers to any
feature of an organization or brand perceived by customers to be desirable and
different from those of competitors.
Customer-Service as a Non-Price Competition Marketing Strategy
Customers of all kinds need a variety of services from their suppliers. In
varying degrees all business organizations attempt to satisfy customer needs and
wants through a set of activities collectively called customer service. Pride and
Ferrell (2005) define service as an intangible product involving a deed, a
performance or an effort that cannot be physically possessed. It is the result of
applying human or mechanical efforts to people or objects. Customer service
according to them is a collection of assistance given to customers from the point of
47
acquiring goods to when they finally get to the point of consumption.
Customers of any trade need quality product, fair price, dependable
deliveries, sizeable inventories, efficient and prompt order processing, availability
of emergency supplies, prompt replacement of defective items, efficient post sale
services as well as guarantee or warranty (Pride and Ferrell, 2005). Attention to
customer needs and wants or preferences are crucial to increasing sales volume
and obtaining repeat sales. A company’s failure to provide the desired level of
services may mean the loss of customers (Kotler and Keller, 2005).
All customers accept quality products and sometimes pay higher to acquire
such products. The quality of a product is extremely important but it is probably
the most difficult of all the image – building features to define. A product is said
to be of quality when it has undergone modifications by way of changes that relate
to the products dependability and durability and usually is executed by alterations
in the materials or production process employed (Pride and Ferrell, 2005). Beers
are patronized in Nigeria on the basis of quality or taste of consumers. Product
quality, more than most product features, differentiate products from competing
ones. When buyers buy a product, they are actually buying the benefits and
satisfaction they think the product can provide. Beer customers can be lured into
buying a beer purely because of its high quality as compared to those of its
competitors.
Apart from quality, customers want fair prices from their suppliers. A
company that constantly hikes prices of its products is likely to record low sales
48
volume and consequently low profit. In setting prices, managers should take
cognizance of the prices of competing companies as too high prices can scare
away actual as well as prospective customers. Maintenance of sizeable inventories
for customers is another important service rendered by companies. Customers are
constantly ordering and it is only good that their orders be met at all times.
Inventory management involves developing and maintaining adequate assortment
of products to meet customers’ needs (Pride and Ferrell, 2005). They further said
that when too few products are carried in inventory, the result is stock outs or
shortages of products which cause brand switching, lower sales and loss of
customers. The possibility of cost increase, increase in risk of product
obsolescence, pilferage and damage is there when too many products are carried
especially the slow moving ones. Therefore, it is important that inventory cost be
minimized while maintaining an adequate supply of goods. This is good for
brewery products as overstocking can lead to some getting expired before use.
Prompt order processing is another customer service that enhances product
flow. Best (2000) explains that when order processing is carried out quickly and
accurately, it contributes to customer satisfaction, repeat orders and increased
profit. He enumerated three main tasks to order processing as including the
following:
1.
Order entry – This begins when customers or sales persons place purchase
order by mail, telephone, or computer. In some beer companies sales
service representatives receive and enter orders personally and also handle
49
complaints, prepare progress reports and forward sales order information.
2.
Order handling – This involves several activities once an order has been
entered: it is transmitted to the warehouse where the availability of the
product is verified and to the credit department where prices, terms and the
customer’s credit ratings are checked and with the credit department’s
approval, the warehouse fills the order.
3.
Order delivery – When the order has been filled and packed for shipment,
the warehouse schedules pickup with an appropriate carrier. An invoice is
sent to the customers, inventory records are adjusted and order delivery is
carried out.
Materials or products have to be physically handled in the course of
evacuation from their points of production to points of consumption. Features of
the product will determine how it should be handled. Best (2000) said beer or
liquids or gases have unique characteristics that determine how they should be
moved and stored. Beer bottles require careful handling to minimize breakage
while loading and in transit.
Provision of storage facilities to needy customers is another customer
service. Goods may be ordered, order processed but there may be no transport to
convey them. The selling company usually safeguards such goods until
appropriate means is hired to convey them. The absence of this service could
result to spoilage or theft. Brewery products, like many other products can be
purchased if they are available at the right time and place. This is where the
50
importance of prompt delivery is highly emphasized. Transportation is a very
essential customer service in almost all businesses. Cespedes (2006) said
transportation creates time and place utility for a company’s products. Product
availability and timely deliveries are solely dependent on transportation functions,
so a company’s choice of transport has a direct effect on customer service. Best
(2000) enumerated the common modes of transport as water, air, land and
pipeline. Nigerian beer producing companies use land most commonly in
conveying their products to customers.
In selecting transportation system Jobber (2006) enumerated the following
criteria:
1.
Cost – Marketers should compare alternative modes of transport to
determine whether the benefits from a more expensive mode are worth the
higher costs.
2.
Transit time – It should be one with shorter period of delivery. Transit time
he said is the total time a carrier has possession of the goods including the
time for pickup and delivery, handling and movement between points of
origin and destination.
3.
Reliability – It should be the mode that is consistent in its operations.
Marketers should choose the mode or carrier that can deliver on time and in
acceptable condition.
4.
Capacity – It should have ability to provide the appropriate equipment and
condition for moving specific kinds of goods. Products beers require
51
special means for shipment or evacuation to enhance safety.
5.
Accessibility – A carrier’s ability to make goods over a special route or
network is the measure of its accessibility. Selection of transportation mode
should be one that is most accessible to the user.
6.
Security – Safety of goods is measured by the physical condition of goods
on delivery. Poor security service and lack of security indirectly lead to
increased costs and lower profits for the company because damaged or lost
goods are not available for immediate sale or use.
Post sale services constitute another important aspect of customer service.
These after sales services could be repairs, adjustments, replacement of damaged
goods and warranties (Dalrymple and Parsons, 2002). Whether the customer is a
middleman or a final consumer, he needs to be given assistance once he has made
purchases as this can enhance his repeat purchases or build his confidence in his
business partner. Sometimes damages could occur while goods ordered and
supplied or the supply not as ordered, the supplier should make some replacements
of those goods damaged or wrongly supplied.
Customer services provided are most effective when service standards are
developed and stated in terms that are specific, measurable and appropriate for the
product. Example all orders must be filled within 36 hours of receipt and this
should be made known to customers and company employees and should be
enforced rigorously (Kolter and Armstrong, 2006).
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Promotion as a Non-Price Competition Marketing Strategy
To make good profit, sales have to be increased and increasing sales has to
do with creating awareness as per the availability of goods. Promotion does this
awareness creation job efficiently. McCarthy (2007) defines promotion as the
communication between the seller and buyer to change attitudes and behaviour.
The sales or marketing manager’s job is to tell target market that the right product
is available at the right place and with the right price. The common promotional
mix variables are advertising, sales promotion, personal selling, publicity, public
relations and direct marketing.
Advertising – This is used extensively as a non-price competition strategy.
It is a paid form of non-personal presentation and promotion of ideas, goods and
services by an identified sponsor (Kotler and Armstrong, 2006). Individuals and
organizations employ advertising to advertise goods, services, ideas, organization,
places, people, etc.
1.
To inform -
a.
Telling the market about a new product
b.
Suggesting new uses to a product
d.
Explaining how the product works
e.
Describing available services
a.
Correcting false impression and
b.
Building a company image.
2.
To persuade –
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a.
Building brand image
b.
Encouraging switching to your brand
c.
Changing customer’s perception of product attributes
d.
Persuading customer to purchase now and
e.
Persuading customer to receive a sales call.
3.
To remind –
a.
Remind customer that the product may be needed in the near future.
b.
Remind customer where to buy it.
c.
Keep in customers’ mind during off-season
d.
Maintain its top-of mind position in customers.
Kotler and Armstrong (2006) enumerate the following advertising media as
newspapers, Television, direct mail, radio, magazines, outdoor and Internet. In
selecting advertising media, they gave the following steps as: Deciding on reach,
frequency and impact – Reach: measure of the percentage of people in the target
market who are exposed to the advertisement campaign during a given period of
time. Many times the average person in the target market is exposed to the
message impact: the quantities value of a message exposure through a given
medium; Choosing among major media types – the marketer must know the reach,
frequency and impact of each of the major media types so that he could make a
good choice; Selecting specific media vehicles – if he chooses newspaper, which
one has he chosen? If it is Radio which one and if television, which of them has he
chosen and Deciding on media timing – should the advertisement be aired in the
54
morning, at noon or at spin? If it is newspaper is if the Sunday edition or any to
the working days?
Pride and Ferrell (2005) enumerated the following as uses of advertising:
To promote products and organization:- advertising is used to promote a good
number of things such as goods, services, ideas, images, issues, organizations,
institutions as well as people. We have institutional and product advertising.
Institutional advertising promotes organizational images, ideas, or political issues,
while product advertising promotes goods and services. Business organizations
use the technique to promote the uses, features, images and benefits of their
products.
To stimulate primary and selective demands;- primary demand is demand
for the product category, not for a specific brand. When a specific firm is the first
to introduce a revolutionary innovation, the marketer tries to stimulate primary
demand through pioneer advertising. Pioneer advertising informs people about a
product, what it is, what it does, how it can be used, and where it can be
purchased.
An advertiser uses competitive advertising to build selective
demand, which is demand for a specific brand. Competitive advertising points out
a brand’s uses, features and advantages that benefit consumers and that may not be
available in competitive brands. An increasing popular form of competitive
advertising is comparative advertising in which two or more specified brands are
compared on the basis of one or more product attributes. To offset competitors’
advertising;- when marketers advertise to offset or lessen the effort of a
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competitor’s promotional programme, they are using defensive advertising.
Defensive advertising may not necessarily increase a company’s loss in sales or
market share.
To make sales persons more effective;- Business organization that allot a
significant proportion of their promotional effort to personal selling often use
advertising to improve the effectiveness of sales personnel. Advertising created
specifically to support selling activities tries to pre-sell buyers by informing them
about a product’s uses, features and benefits and by encouraging them to contact
local dealers or sales representatives. Industrial products, insurance, and consumer
durables such as automobiles and household appliances are good for this type of
advertising.
To increase the uses of a product:- Absolute demand for any product is
limited and for this marketers can increase sales of a specific product in a defined
geographic market only to a certain point. To increase sales beyond this point,
they must either the geographic market and sell to more people or develop and
promote a large number of uses for the product. If a company’s advertising
convince buyers to use its product in more ways, than the sales with production
increase.
To remind and reinforce customers;- marketers sometimes use reminder
advertising to let customers know that an established brand is still around and that
it has certain uses characteristics and benefits. Reinforcement advertising tries to
assure current users that they have made the right choice and tells them how to get
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the most satisfaction from the product.
To reduce sales fluctuations: the demand for many products varies from
month to months because such factors like holidays, seasons, climate and customs
and no business can operate at its peak efficiency when sales fluctuate rapidly.
Changes in sales volume translate into changes in the production or inventory,
personnel and financial resources required. Advertising is often designed to
stimulate sales during the sales shift. A company’s use of advertising depends on
its objectives, resources and environmental forces, and the degree to which
advertising accomplishes the marketer’s goals depends to a large extent on the
advertising campaign. Brue and McConnell (2002) enumerate the following
advertising Campaign Steps: Identifying and analyzing the advertising target: the
advertising target is the group of people toward which advertisements are aimed.
Identifying and analyzing the advertising target is critical because the other steps
in developing the campaign are based on this. Advertisers analyze advertising
targets to develop an information base for a campaign and information needed for
analysis includes the location and geographic distribution of the target group, the
distribution of age, income, race, sex, and education; and consumer attitudes
regarding the purchase and use of both the advertiser’s products and competing
products.
Defining the advertising objectives: Advertising objectives guide campaign
development, the advertisers should define their objectives carefully to make
certain that the campaign will accomplish what they desire. Advertising objectives
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should be stated clearly and precisely and in measurable terms.
Creating the advertising platform: Before launching a political campaign
party leaders do meet and develop a political platform which stresses the major
issues on which the party will base its campaign. In similar vein, an advertising
platform consists of the basic issues or selling points that an advertiser wishes to
include in the advertising campaign. This campaign should consist of issues that
are the basis, marketers should analyze this stage carefully.
Determining the appropriation;- The advertising appropriation is the total
amount of money that a marketer allocate for advertising for a specific period of
time. Factors like the geographic size of the market and the distribution of buyers
within the market have a great bearing on the decision. While advertising
appropriation for industrial goods is usually very small than appropriation for
consumer convenience items such as soft drinks, beers, soap, razors, drugs
generally have large advertising appropriations. Of the many techniques used to
determine the advertising appropriation, of the most logical is the objective and
task approach. Under this approach, marketers initially determine the objectives
that a campaign is to achieve and then attempt to list the tasks required to
accomplish them.
Developing the media plan;- a media plan sets forth the exact media
vehicles to be used- specific magazines, television stations, newspapers etc. and
the dates and times that the advertisement will appear. To stimulate a media plan,
the planners select the media for a campaign and draws up a time schedule for
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each medium. The primary goal of any media planner is to reach the largest
number of persons in the advertising target per naira spent on media. The second
goal is to achieve the appropriate message reach and frequency for the target
audience while staying within the budget.
Creating the advertising message – In creating the advertising message,
such factors like products’ features, uses, and benefits often affect the message’s
content. Characteristics of the people in the advertising target – their ages, sex,
education, attributes, influence both content and form.
Executing the campaign–This requires an extensive amount of planning and
coordination. Whether an organization uses an advertising agency, many people
and companies are involved in the execution of a campaign, production
companies, research organization; media companies etc. are organizations that
contribute to a campaign.
Evaluating the effectiveness of the advertising–advertising can be evaluated
before, during and after the campaign. Evaluation before the campaign is called
pretests. To pretest advertisements, marketers sometimes use a consumer jinx.
This is a number of actual and potential buyers of an advertised product.
To measure advertising effectiveness during a campaign, marketers usually
take advantage of inquiries. Evaluation of advertising effectiveness after the
message is called posttest. Advertising objectives usually indicate what kind of
posttest will be appropriate.
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As to who develops the advertising campaign, Pride and Ferrell (2005) say
an advertising campaign may be handled by: Individuals or a few persons within
the company; Advertising development within the organization and advertising
agency–in small organizations, one or two individuals are responsible for
advertising and they depend heavily on personnel at local newspapers and
broadcast stations for copywriting, artwork and advice about scheduling media. In
a larger organization, advertising department create and implement advertising
campaigns. Depending on the size of the advertising programme, an advertising
department may consist of a few multi-skilled persons or sizable number of
specialists such as copywriters, artists, media buyers and technical production
coordinators. An advertising department sometimes obtains the services of
independent research organizations and also hires freelance specialists when they
are needed for a particular project.
Where an organization uses agency the company and agency jointly
develop advertising campaign. An advertising agency usually supplies the
company with the services of highly skilled specialists such as copywriters, artists,
media experts, researchers, legal advisers and production coordinators.
Advertising agencies are usually more objectives, because of their broad
experience in advertising, than the company’s employees about then company’s
products.
Advertising is used extensively in non-price competition. Many criticisms
have been leveled against it as being deceptive, increasing cost as well as
60
misinforming. Beer companies in Nigeria in spite of all those criticisms have
wholeheartedly adopted its use to promote sales, using all it s media at all times.
Kotler and Keller (2005) define sales promotion as short-term incentives to
encourage purchase or sales of a product or service. Whereas advertising offers
reasons to buy a product or service, sales promotion offers reasons to buy now.
Sales promotion is an activity or a material that acts as a direct inducement
offering added value or incentive for the product, to resellers, sales persons or
consumers. It encompasses all promotional activities and materials other than
personal selling, advertising and publicity. Most sales promotion activities are
cyclical and are designed to produce immediate, short-run effects. Jobber (2006)
enumerates the following sales promotion objectives: to identify and attract new
customers; to introduce a new product.; to increase the total number of uses for an
established brand; to encourage greater usage among current customers; to educate
consumers regarding product improvements; to bring more consumers into retail
stores; to stabilize a frustrating sales pattern and to increase reseller inventories.
Publicity as one of the promotional tools is communication in news, story
form, regarding an organization or its products, that is transmitted through mass
media at no charge. It can be presented through a variety of vehicles. The
following are some of the vehicles:
1.
News release – this is usually a single page of typewritten copy containing
fewer than three hundred words. It gives the company’s name, address,
phone number and contact person. It is found or used commonly by big
61
companies when introducing new products.
2.
Feature article:- this is a larger management (up to three thousand words)
that is usually prepared for a specific publication.
3.
Captioned Photograph:- this is a photograph with a big description that
explains the picture’s content. Captioned photographs are especially
effective for illustrating a new or improved product with highly visible
features.
4.
Press Conference:- this is a meeting used to announce major news averts.
Media personnel are usually invited to news conferences and are usually
supplied with written materials and photographs. In addition to above,
letters to the editor or editorial boards are sometimes prepared and sent to
newspapers and magazine publishers uses of publicity.
A good number of uses can be made of publicity by any company. Publicity
can be used to make people aware of a company’s products, brands, or activities;
to maintain a certain level of positive public visibility and to enhance a particular
image, such as innovativeness or progressiveness. It can also be used to overcome
negative images. Some companies use publicity for a single purpose while others
use it for several purposes. For maximum benefit, a company should create and
maintain a systematic continuous publicity programme. A single individual or
department within the organization or from its advertising agency or Public
Relations Company should be responsible for managing the programme. It is
important to establish and maintain good relationship with media personnel.
62
Personal contact with editors and other news personnel is often necessary because
without their input it is difficult to determine exactly how to design an
organization’s plasticity programme so as to facilitate the work of media news
people.
The negative impact of unfavorable publicity can be quick and dramatic. A
single negative event that produces unfavorable publicity can wipe not a
company’s favorable image and destroy consumer attributes that took years to
rebuild through promotional efforts. To protect an organization’s image, it is
important to avoid unfavorable publicity or at least to lessen its effects. An
organization can directly reduce negative incidents and events through safety
programmes, inspections and effective quality control procedures. Negative
publicity cannot be completely eliminated and so companies should establish
policies and procedures, for the news coverage of such events. Such policies
should be designed to lessen the negative impact of the negative publicity.
The common sales promotion tools used as non price competition strategies
are as follows:1.
Sample–A small amount of a product offered to a customer for trial. The
use of samples is based on the understanding that a good product speaks for
itself.
2.
Coupon – A certificate that gives buyers a saving when they purchase
specified products. A coupon enables the customer to buy a particular brand
at a reduced price and the buyer is compensated valve of the coupon
63
redeemed.
3.
Cash refund offer–This is a coupon except that the price reduction occurs
after the purchase rather than at the retail out. Under this tool a buyer sends
a proof of purchase to the manufacturer who then refunds part of the
purchase price by mail.
4.
Premium – Anything offered free of charge to serve as an inducement to
buy a product. It could be a free merchandise or a special price reduction.
5.
Price packs – Also called cents-off dealer, offer consumers savings of the
regular price of a product. The reduced prices are marketed by the producer
directly on the label or package.
6.
Advertising specialty – Also called promotional product, is a useful article
imprinted with an advertisers’ name, logo or message that is given as gifts
to consumers. Such gifts could be item, like T. shirts, pens, calendar, etc.
7.
Patronage reward – This is a cash or other rewards offered for the regular
use of a certain company’s products or services.
8.
Point of purchase promotions – These include displays and demonstration
that take place at the point of purchase or sale.
9.
Contests, sweepstakes and games – These give customers the chance to win
something like cash, trips or goods, by luck or through extra effort. A
contest calls for consumers to submit an entry – a jingle, guess, and
suggestions – to be judged by a panel that will select the best entries. A
sweepstake calls for consumers to submit their names for a drawing. A
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game presents consumers with something like bingo numbers, missing
letters – every time they buy, which may or may not help them win a prize.
A sales contest urges deals or the sales force to increase their efforts, with
prizes going to the top performers.
10.
Discount – This is straight reduction in price on purchases during a stated
period of time.
11.
Allowance – This is a promotional money paid by manufacturers to
retailers in return to an agreement to feature the manufacturers’ products in
some way.
All the above sales promotion tools are adopted by companies to boost
sales and consequently profit. In Nigeria, beer companies use many of them to
promote their beer business. Another promotional mix variable commonly used in
non-price competition is public relations. Kotler and Armstrong (2006) define
public relations as the building of good relations with the company’s various
publics by obtaining favourable publicity, building up a good corporate image and
handling or heading off unfavourable rumors, stories and events.
The common public relations tools are news, speeches, special events,
mobile marketing, written materials, websites and telemarketing. Nigerian
companies have come of age and are constantly using these tools to promote their
products. Beer companies have been using these tools and having been successful
in their beer business means, these having been paying them handsomely.
65
Personal selling is another promotional variables used by companies in
Nigeria. McCarthy (2007) defines personal selling as involving direct face – to –
face communication between sellers and potential customers. It is a process of
informing customers and persuading them to purchase products through personal
communication and exchange situation. The exact activities involved in the selling
process vary among salespersons and differ for particular selling situations. The
following are elements of personal selling process as enumerated according to
(Pride & Ferrell, 2005).
1.
Prospecting and evaluating – Developing a list of potential customers is
called Prospecting. A salesperson seeks the names of prospects from such
sources as the company’s sales records, referrals, trade shows, newspaper
announcements, public records, telephone directories, trade association
directories and many others. After developing the prospect list, a
salesperson evaluates whether each prospect is able willing and authorized
to buy the product. On the basis of this evaluation, some prospects may be
deleted and others are deemed acceptable and ranked relative to their
desirable or potential.
2.
Prospecting – before contracting acceptable prospect, a salesperson should
find and analyse information regarding each prospects specific product
needs, current use of brands, feelings about available brands and personal
characteristics. A salesperson uses this information when selecting an
approach and putting together a sales presentation.
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3.
Approaching the customer;- The approach- the manner in which a
salesperson contacts a potential customer is a crucial step in the process.
The prospect’s first impression of the salesperson may be a lasting one,
with long run consequences. The salesperson approaches the prospect and
explains that an acquaintance, an associate or a relative has suggested the
call. Repeat contact is another common approach, when making the contact,
the salesperson mentions a prior meeting. The exact type of approach
depends on the salesperson’s preferences, the product being sold, the
company’s resources and the characteristics of the prospect.
4.
Making the presentation – During the sales presentation, the salesperson
must attract and hold the prospect’s attention to simulate interest and stir up
a desire for the product. The salesperson should have the prospect touch,
hold or actually use the product.
5.
Overcoming objections – One of the best ways to overcome a prospect’s
objections is to anticipate and counter them before the prospect has an
opportunity to raise them. The salesperson may mention some objections
that the prospect would not have raised.
6.
Closing – Closing is the element in the selling process whereby the
salesperson asks the prospects to buy the product(s). During the
presentation because the prospect may be ready to buy. One closing
strategy involves asking the potential customer to take a try out order.
7.
Follow- up: After a successful closing the salesperson must follow up the
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sale. In the follow up stage, the salesperson should determine whether the
order was delivered on time and installed properly, if installation was
required. The salesperson should contact the customers to learn problems or
questions have arisen regarding the product. This follow up stage can be
used to determine customer’s future product needs.
To intelligently develop a sales force, a marketing manager must decide
what kind of salespersons will sell the company’s products most effectively. Based
on their functions, salesperson can be classified into three groups (Brue and
McConnell, 2002).
1.
to obtain orders a salesperson must inform prospects and persuade them to
buy the product. The order getters’ job is to increase the company’s sales
by selling to new customers and by increasing sales to present customers.
Order getting activities sometimes are divided into two categories as
current customer and new business sales. Under current customer sales
personnel call on people and organization that have purchased products
from the company at least once. These salespeople seek more sales from
existing customers by following up previous sales. New business sales
personnel locate prospects and convert them to buyers. Salespeople in
many industries help to generate new business especially in real estate,
insurance, appliances, heavy industrial machinery and automobile.
2.
taking order is a repetitive task that salespeople perform to perpetuate long
lasting, satisfying relationship with customers. Order takers seek repeat
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sales. The major objective of order taking is to e absolutely sure or certain
that customers have sufficient product quantities where and when needed.
We have inside order takers and field order takers.
3.
support personnel facilitate the selling function but usually is not involved
only with sales. Support personnel are primary engage in marketing
industrial products and are active in locating prospects, educating
customers, building goodwill and providing service of after the sale. The
three most common support personnel types are missionary salespersons,
trade salespersons and technical salespersons.
The intention of personal selling is to persuade the potential customer
accept the product, idea, issue, service, candidate etc. the most visible and
heavily used communication form when sales person and customer meet is face–
to–face communication rather than telephone. Language s used extensively and
could be by speech and writing. McCarthy (2007) says in personal selling, a
sales person and customer may use kinesics or body language which is
accompanied by moving one’s head, eyes, arms, hands, legs and so on. Head
nodding, winking hand and gesture and arms motions are all forms of kinesics
communication.
Direct marketing is the use of consumer direct channels to reach and deliver
goods and services to customers without using marketing middlemen. These
channels include direct mail, catalogues, telemarketing, interactive Tv, Kiosks,
Websites and Mobile devices (Kotler, 2003).
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The advent of technology has necessitated the use of direct marketing to
build a long-term relationship with customers-customers relationship marketing. A
good number of items or articles are now sent to customers directly without
utilizing the services of middlemen. Direct marketing has major channels to use.
One of these channels is direct mail. Direct mail marketing involves sending an
offer, announcement, reminder or other items to a person. Direct mail is a popular
medium because it permits target market selectivity, can be personalized, is
flexible and allows early testing and response measurement. Although, the cost per
thousand people reached is higher than with mass media, the people reached are
much better prospects (Kotler, 2003).
Until recently, mail was paper-based and handled by different postal
services in the world. Today, three forms of mail delivery have surfaced. These are
fax mail, e-mail, and voice mail.
1)
Fax Mail- The invention of fax machines has enabled marketers to send
fax mail announcing special offers, sales, and other events to prospects and
customers,. These fax messages can be sent and received without delay
almost instantaneously (Kotler and Armstrong, 2005).
2)
E-mail- Today, with Internet, many marketers send sales announcements,
offers, product information, and other messages to e-mail addresses to a
few individuals or large groups. According to Kotler and Armstrong
(2005), today’s e-mail messages have moved far beyond the drab text –
only messages of old.
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Today, e-mail advertisement uses animation interactive links, streaming
video and personalized audio messages to reach out and grasp attention. To
enhance good response, marketers can use e-mail to reach customers who
request them.
3)
Voice Mail- Some marketers have set up automated programmes that
exclusively target voice mailboxes and answering machines with prerecorded messages. These systems target homes between 10 am and 4 pm
and businesses between 7 pm to 9 pm when people are least likely to
answer. According to Kotler and Armstrong (2005) if the automated dialer
hears a life voice, it disconnects.
These new forms deliver direct mail at incredible speeds compared with the
post office’s snail mail pace. To avoid these mails being presented as junk mails,
marketers must carefully identify appropriate targets so as not to waste the
company’s money and recipient’s time.
Direct marketing has passed through many stages. The stages are carpet
bombing, data base marketing, interactive marketing, real-time personalized
marketing and lifetime value marketing.
1.
Carpet Bombing;- Direct mailers gather or buy as many names as possible
and send not a mass-mailing.
2.
Database Marketing;- Direct marketing mine the database to identify the
prospects who would have the most interest in an offer.
3.
Interactive Marketing;- Direct marketers include their telephone numbers
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and Web addresses, and offer to print coupons from the website.
Recipients can attract the company with questions. This, the company uses
it to up-sell, cross-sell and make their relationship deeper.
4.
Real-time personalized marketing;- In direct marketing, marketers know
enough about each customer to customize and personalize the offer and
message.
5.
Life-time value marketing;- Direct marketers develop a plan for lifetime
marketing to each events and transactions.
Benefits of adopting non Price Competition as a Marketing Strategy
Non-price competition is a marketing strategy, which occurs when a seller
elects not to focus on price and instead emphasizes distinctive product features,
service, product quality, promotion, packaging or other factors to distinguish its
product from competing brands. While price competition is based on cutting of
prices of goods to attract patronage, non-price competition looks elsewhere to
boost sales. Many companies have adopted this strategy and it has worked for
them.
Many factors have encouraged the adoption of non price competition
among companies. (Adirika and Ebue, 2001) enumerated the following as
encouraging its adoption as follows:
It is desired to imitate successful companies. The use of brand names has
proven to be very successful among many manufacturers. This has encouraged
growing companies to promote their brands to become successful as well.
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Another factor is the desire to keep customers. Most manufacturers agree that
buyers attracted on a non-price competition basis tend to be more permanent
customers than those secured on a price basis. Those on price basis leave
immediately, there is a change in price of the said product.
The desire to defend itself is also a factor encouraging the use of non-price
competition among producing companies. The use of non price competition by
some companies often cause other companies losing patronage to defend
themselves and such defensive action generally results in further use of non price
competition. Most advertisements and other promotional mix variables used by
competing manufacturers are for self defenses to regain lost customers. Such
defensive action on the part of the company losing patronage is another factor
contributing to the use of non-price competition among companies in Nigeria.
Tendency towards price uniformity is also a factor encouraging the adoption of
non-price competition. A good number of brewery products sold in Nigeria are
priced same. This means that any company wanting to boost sales can use another
competition strategy and not price.
Non-price competition is required to make price competition work. If a
company decides to cut its price to expand its output and sales but fails to
communicate same to the buyers, such a price cut is unlikely to be taken
advantage of. This is that some non-price competition is actually required in order
to make price competition yield a desired result. Pride and Ferrell (2005) have
listed the benefits accruable to any company that adopts non-price competition as
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a marketing strategy. Non-price competition gives an organization the opportunity
to increase its brand’s unit sales through means other than price changes. They
also stated that non-price competition can build customer loyalty to its brand. If a
customer prefers a brand because of non-price issues, it may not easily be lured
away by competing companies and brands.
Price is not the most durable factor from a standpoint of maintaining
customer loyalty. Customers, whose primary attraction to a store is based on nonprice factors, are less likely to leave their regular store for a lower competitive
price. Non-price competition increases the popularity of companies, which have
indulged or adopted the marketing strategy. Tools like advertising, company can
use so that its name is known far and wide. Non-price competition encourages the
general public participate in the activities of the company. Tools of non-price
competition like games, contests and sweepstakes make people identify with
companies using them at that time. The public also benefit by winning some
contests or games. In beer promotion such items like face cap, T-shirts, openers,
key holders, radio sets, motorcycles and even cars can be won in such games or
contests.
How to use advertised goods is usually highly simplified during promotion.
Non-price competition has come to stay in Nigeria, as it has become a source of
employment to experts working in factories to perfect quality as those engaged in
companies promoting goods. In spite of its numerous benefits, non-price
competition has conditions under which it can work better. Any company adopting
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non-price competition as a marketing strategy must be able to distinguish its brand
through unique product features, higher product, quality, improved customer
service, good promotion and attractive packaging. Buyers not only must be able to
perceive these distinguishing characteristics but must view them as desirable.
Brewing Industries in Nigeria
The brewing industry is one of the fastest growing branches of Nigerian
manufacturing sector. It contributes about 30 percent of manufactured value added
and provides direct employment of over 30,000 persons. A good number of
breweries in Nigeria produce mostly beers of their choice prominent among these
breweries are the Nigerian breweries Plc, Champion breweries Plc, Benue
breweries Plc, Consolidated breweries Plc, Padob Breweries, Inel Science Tech.,
Eastern Breweries. The country’s pioneer brewery was incorporated in 1946 and
commenced production in 1949 (CAC 2009).
Beer is brewed a bitter alcoholic drink made from malt and flavoured with
hops. Taylor, Green and Stout (2002) explained that the word beer is derived from
the Auglosaxon baere, meaning barley. Beer is thus a traditional product of yeast
fermentation from barley grains, rice or corn. It has a long manufacturing history
and brewers do jealously guard their particular brews. Each variety differs in the
types and proportions of ingredient used and the treatment each ingredient under
goes.
Taylor (2000) states that beer production starts with a process called
malting, where barley grains are steeped in water while naturally occurring
75
enzymes digest the starch to simpler carbohydrates, promptly, maltose (maltsugar). At the brewery, the malt is ground with water to achieve full the digestion
of the starch. This process called mashing often includes corn as a starch
supplement. Brewers then remove the liquid portion or worth and boil it to
inaccurate the enzymes. Dried petals of the vine called hops, are now added to the
worth, giving it flavour, colour and stability. Hops are also used as preservations
to prevent contamination to the worth.
Taylor, Green and Stout (2002) say there are two types of yeast species
employed in beer fermentation. That the yeast usually employed in beer
production called cerevisiae gives a uniform dark cloudiness to beer and is carried
to the top of fermentation rate by forming Coz. This yeast therefore is called top
yeast. That it is pruinanty in English types brews such as ale and stout. The second
species, Carlsbergensis, ferment the malt more slowly and produces a lighter,
clearer beer having less alcohol. This yeast sediments, and is thus called bottom
yeast. Its product is light or lager beer. According to Taylor et al (2002) almost
three quarters of the world’s beer is lager beer.
A normal fermentation requires approximately seven days in the
fermentation tank. The young beer is then transferred to vats for secondary aging,
which may take an additional six months. Brewers do leave some yeast in lay beer
and refrigerate the product to preserve it. The thick wall of the keg traps Coz
produced during the on going process of fermentation. If the beer is intended for
canning or bottling, it may be pasteurized at 140of for 55 minutes to kill the yeast
76
or filtered through a membrane filter. Some yeasts are used to seed new work and
the remainder may be dried for animal fee or pressed to tablets for human
consumption. Alcoholic content of beer is approximately 4 % C (Taylor, 2000).
In Nigeria today, a good amount of beers are brewed and consumed. We
have different brewery products: Gulder, Star, Harp, 33, Goldon spark, More, etc.
for lager, Turbo King etc for ale and Guinness, legend etc for stout. From all
indications beer production is one of the most lucrative businesses operating in
Nigeria today.
77
Product features
Promotion
Customer Services
Conceptual Framework
Product Handling
Branding
Product Positioning
& differentiation
Benefits of utilizing non price competition
marketing strategies
Schema for Conceptual Framework
Theoretical Framework
The following theories are discussed:
a.
Non price competition theory
b.
Non price advertising model
c.
Profits theory of investment
d.
Financial theory of investment
e.
Advertising communication model
f.
Integrated Marketing Communication
g.
Competition theory.
78
Brue & McConnell (2002) developed a competition theory known as non
price competition theory. This theory is based on marketing approach whereby the
cost of the product is minimized and other marketing factors are maximized by
creating a distinctive quality about the product such as its design, performance,
snob appeal, availability or service guarantees. According to them, non price
competition builds customer loyalty towards the brand, must be able to distinguish
brand through unique product features, customers must be able to perceive the
difference in brands and view them as derivable, should be difficult for
competitors to emulate the difference (patents), must proud i.e. the distinguishing
features to create customer awareness, price differences must be offset by the
perceived benefits and sellers shift the demand curve on the right by stressing
distinctive attributes (customers must perceive and desire particular attributes).
Companies compete for market share to maximize profits and sustain their
operations. Non price competition focuses on other strategies to increase their
market share. Marketing helps companies realize their desired profits by
strategically positioning and differentiating their products. Brue and McConnell
(2002) explained that non price competition typically involves promotional
expenditure such as advertising, personal selling, sales promotion, marketing
research, product development and brand management costs. Advertising is one of
the promotion mix variables that very much expands consumer demands for goods
and services.
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Renato and Joao (2005) developed a non price advertising model. The
model has one set of customers and two companies each offering a differentiated
brand of a certain product. Companies are labeled as A and B, PA and PB are the
prices of the brands produced by A and B respectively. Customers’ personal
preferences about each brand distort the perceived relative price. They explained
further that non price advertising tries to change consumers’ preferences,
associating products to trendy lifestyles, family feelings and so on. Shapio in
Jhingan (2006) developed the profit theory of investment and stated that
investment depends on profits and profits, in turn, depend on income. In this
theory, profits relate to the level of sales. He further said that total profit varies
directly with income level and that retained earnings also vary with profits
realized.
Companies (Manufacturing, service, merchandising etc.) value profits made
as they are the core aim of their investments. The amount of profits made
determine the viability as well as the sustainable operations of companies. Amount
of profits made by companies depends to a large extent on the marketing activities
of such companies. This is because; it is marketing that provides revenue for
manufacturing, accounting, personnel, administration and expansion of companies
(Best, 2000). Competition is meant to maximize sales and profit thereby realizing
the essence of investment.
Duesenberry (1999) presented a financial theory of investment known as
the cash flow theory. He emphasizes that the aggregate cash flow is the main
80
determinant of investment. The theory is based on the following propositions:
Gross investment starts exceeding depreciation when capital stock grows;
Investment exceeds saving when income grows and the growth rate of income and
the growth rate of capital stock are determined entirely by the ratio of capital to
income.
Marketing is at the centre of all these happenings. In the absence of good
marketing activities, any potential company can fail and become insolvent.
Marketing generates income to any company and in the absence of marketing; the
ratio of capital to income could be as bad as one hundred is to one. Stern (1994)
presented an advertising communication model. He classified the model into
macro and micro models. Macro model has nine elements. Two for the major
parties in any communication-sender and receiver. Another two for the major
communication tools-message and media. He further said that four others
represent major communication functions-encoding and decoding, response and
feedback. The last element being the noise-random and competing messages
capable of interfering with the intended communication.
Communication is very important in the interaction between buyers and
sellers. An uninterrupted communication can enhance an uninterrupted transaction
among business partners. Companies using non price competition use advertising
extensively to convey their message for enhanced patronage. Duncan (2002) in
Chukwura (2008) originated the IMC model and the model explained that talking
about the IMC cannot work without talking brand. Brand building is a vital aspect
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of marketing strategy as it creates and nurtures profitable relationship among
business partners. The model explained further that integrated marketing
communication (IMC) has the following features: that IMC is data-driven; that it
is customer-centered; that it is accountable and integrated; that it is strategic,
nurturing and profitable; that IMC is independent of any specific marketing mix,
recognizing the mix variables as distinct and that IMC is continuous and circular,
no beginning nor end as long as the practice is alive.
Apart from advertising, manufacturers are using public relations, publicity,
sales promotion, direct marketing, mobile phone marketing and event marketing to
effectively build their brands (Kotler, 2003). IMC model as originated by Duncan
is applicable to non price competition as all its components are same as those of
non price competition. Hunt and Morgan (n.d) propounded the competition theory
and said there are price and non price competition. In price competition, sellers
attempt to move up or down their individual demand curves by changing prices. In
non price sellers attempt to shift their demand curves to the right by means of
product differentiation, promotional activities or some other devices.
They further stated that the main cause of adopting non-price competition is
to take or have a competitive advantage over and above competitors. Kotler and
Armstrong (2006) define a competitive advantage as an advantage over
competitors gained by offering consumers a greater value, either through lower
prices or by providing more benefits that justify higher prices. All companies
strive to have a competitive advantage over their competitors, this they do by
82
finding new or better ways to satisfy their customers’ needs. Search for a
competitive advantage requires an understanding not only of customers but most
importantly of competitors.
In a perfectly competitive market or a free market economy, prices are
determined by the forces of demand and supply. The determination of prices by
the interaction of the invisible forces of demand and supply is known as the price
mechanism or price system (Anyanwuocha, 2004). Anyanwuocha notes that an
equilibrium price could emerge which equates demand with supply and this
illustrate the third law of demand and supply, which states that the equilibrium
price is that price which equates demand with supply. In a free market economy,
an equilibrium price is that market price for the commodity. This study is therefore
based on the theory of competition which could be price or non-price.
Non price
advertising model
Non price
Competition theory
Profit Theory of
investment
Competition theory
Theoretical Framework
IMC Model
Financial theory of
investment
Advertising communication model
Schema for Theoretical Framework
83
Related Empirical Studies
Empirical studies related to this study have been reviewed. Adamu (2000)
conducted a study on promoting sales through product quality by bakery
companies operating in Kano metropolis. The major purpose of this study was to
assess the influence of good product quality on sales volume. Three specific
purposes were given and same number of research questions raised. He found out
that quality more than anything could raise sales volume of bread just like any
other product. The study recommended that to remain profitably in bakery
business, bakers should insist on quality breads. The present study is related to
Adamu’s in that product quality is one of the non-price competition strategies. The
present study determines non-rice competition practices adopted by beer
companies in north central states of Nigeria.
Jang (2004) conducted a study on customer service as a marketing strategy
by hotels operating in Plateau State. The major purpose of the study was to find
out customer services rendered by hotels operating in Plateau State. Five specific
purposes were formulated for the study as ell as five research questions. The
research formulated three hypotheses. It was found that eighty-five percent (85%)
of hotels survive because of good customer services rendered. The study
recommended that to operate profitably, hotels should adopt more friendly
customer service posture. Jang’s study is related to the present one in that both are
about customers care for profitable operation. However, this study’s scope is
84
wider as it covers other areas like product differentiation, promotion as other nonprice competition variables.
Idongesit and Bassey (2008) carried out a study on consumer’s assessment
of advertising as used by Cross River Breweries. The major purpose of the study
was to evaluate the influence of advertising on Cross River Breweries. Three
purposes and three research questions were raised. Three hypotheses were
formulated and tested for the study. The study revealed that poor advertising
practices could weaken company’s product patronage. That there was a positive
correlation between exposure to advertising and consumer brand loyalty. This
study is quite related to their study because both studies are on beer marketing.
However, their study was conducted on just advertising which is just one of the
areas considered in this study.
Woods (1998) carried out a study on the suitability of contests and
sweepstakes as promotional strategies. The major purpose of the study was to
assess contests and sweepstakes as promotional variables. The study reveals that
promotion does little to contribute to customer franchise building for a product or
service. The present study is related to Woods’ study because this study uses sales
promotion as sales booster. However, Woods’ study covers only contests and
sweepstakes as against the present one, which covers all the promotional mix
variables. It was found that contexts and sweepstakes as promotional variables
increase demand of consumer goods.
85
Chukwurah (2008) conducted a study on utilization of integrated marketing
communications by manufacturing companies operating in Cross River State of
Nigeria. The major purpose of his study was to examine the utilization of
integrated marketing communication tools by manufacturing companies in Cross
River State of Nigeria. Five specific purposes were raised for that study. Five
research questions were formulated in line with the purposes and three null
hypotheses were also formulated for the study. It was found that all manufacturing
companies utilize the marketing communication tools at varying degrees. The
study recommended that to increase volume of sales among companies, marketing
communication tools be extensively utilized. This study is related to that of
Chukwurah in that non-price competition uses promotion and it is also used as one
of the marketing communication tools. The present study determines non-price
competition practices adopted by breweries in Nigeria.
Nwana (2000) conducted a study on the valuation of personal selling as a
promotional strategy in the marketing of beer in Cross River State. The major
purpose of the study was to assess the influence of personal selling in the
marketing of beer in Port-Harcourt Metropolis. The study had four research
questions and two hypotheses. Four specific purposes were formulated of the
study from which the research question and hypotheses were drawn. The
researcher found that advertising media assist in disseminating information that
enhances personal selling, that beers heavily published are easily sold during
personal selling activities. It was also found that though expensive, personal
86
selling takes beers to interior parts of the city and can make supplies directly to the
retailers.
Nwana’s study is related to this current study in that they are all on the
sales of beer using promotional variables. However, the present study is on nonprice competition practices adopted by beer producing companies operating in the
whole Nigeria. Vincent (2000) studied adoption of advertising as a non-price
competition strategy by Nigeria bottling company. The major purpose of the study
was to assess advertising as a non-price competition strategy by Nigeria Bottling
Company. Personal interview was used as data collection instrument wile
percentage, mean and standard deviation were used as statistical tools. The
findings of this study were that advertising boast of sales of any business
organization. That any business using electronic media stands to create wider
awareness to its products or services. That all forms of advertising can be
employed to create awareness inform or remind current and prospective customers
of the product. It was also found that print media was only suitable for advertising
products that are urban – oriented while radio was suitable for rural advertising.
Consequently, it was recommended that for repeat buying companies
should always be fair in their advertising campaigns. The relationship of this study
to the present is that all conducted a survey on non-price competition. While the
former research was on soft drinks the present is on beer. Taiwo (2001) conducted
an empirical study on promotional practices employed by soft drink manufacturing
companies as a non-price competition strategy in Nigeria. The study was to
87
determine promotional practices employed by soft drink manufacturing companies
and that was its major purpose. A structured questionnaire was used to collect
data. The mean and standard deviation were used to analyse the research questions
while t–test and analysis of variance were used to analyse the hypotheses.
The major findings of this study were that all soft drink manufacturing
companies in Nigeria use promotion to boast sales; respondents also agreed that
every soft drink company employ one form of promotion or the other every year;
it was also found that all soft drink companies in Nigeria do budget for
promotional activities every year. It was therefore concluded that promotional
activities are those that soft drink companies cannot do without.
It was recommended that soft drink companies should avoid comparative
advertising or promotion generally as that was detrimental to smaller soft drink
companies; it was also recommended that all promotional tools employed should
be mindful of consumers, not to deceive but create genuine awareness state and
uses or benefit of these soft drinks. The present study is very much related to the
former in that all are on non-price competition and promotion is one of the key
ingredients of non-price competition. Where they differ is the fact that the former
was on soft drinks while the current study is on breweries in Nigeria.
Ugwu (1999) carried out a study on adoption of promotion as a competition
strategy by food vendors operating in Lagos metropolis. The major purpose of this
study was to determine promotional tools that could be sued by food vendors in
Lagos Metropolis. The population of this study was made up of 226 registered
88
food vendors who operate as micro businesses in Lagos Metropolis. There was no
sample as entire population was studied. Data was collected using structured
questionnaire of 62 items statements as well as interview that was also structured
or closed ended. Mean, percentages and chi-square were used to analyse data.
Findings of this study revealed several forms of promotion tools that can be
employed by business organizations. Direct marketing was identified as being
commonly used by food vendors in Lagos Metropolis. This direct marketing was
said to be used commonly as the food come from producers direct to the
consumers as requested. It was also found that the use of appropriate promotional
tools enhances patronage of customers in those places where such were used.
It was therefore recommended that though promotions promote sales, it
should to be used with commensurate quality foods; the study also recommended
that sanitary officers from the state ministry of health should oftenly visit those
food joints to ensure sanity in those places as there could be out break of food –
related diseases as a result of poor or unhygienic environment. This study is
related to the present study as all are on competition and all are also use promotion
as a competition strategy.
Utaka (2003) assessed non-price competition strategies adopted by hotel
operators in Enugu Metropolis. The major purpose of his study was to evaluate
non-price competition strategies employed by hotel operators in Enugu
Metropolis. There was no sample as the entire population was studied. Data was
collected using a structured questionnaire. Mean scores and standard deviation
89
were used to answered research questions while t–test statistic was used to analyse
hypotheses. The findings of this study were that some hotels were only relaying on
promotion to lure customers without good facilities; it was also found that
customer services were very poor in some hotels in Enugu Metropolis contrary to
media promotions. The study revealed that some hotels harbour criminals or
snatchers operating in the town.
Based on the findings, the study recommended that promotion employed
should be on facilities available but not been unnecessarily deceitful in
promotional campaigns. This study is related to the present one in that they are all
dealing with non-price competition. Vande (2002) conducted an empirical study
on the influence of customer–service on patronage as perceived by beer sellers in
Makurdi Metropolis. The major purpose of this study was to assess the influence
of customer–service on patronage in Makurdi Metropolis. Mean and standard
deviation were used to analyse the four research questions while t–test and
ANOVA were used to test the four hypotheses. The study found that good
customer service encourages customers to have repeat buying in some beer joints,
as customers need respect, attention and accuracy in their transactions.
Consequently, the study recommended that adequate attention should
always be given to customers to ensure their repeat buying; customers should not
be cheated in their beer transactions if when they are drunk as they usually recall
correctly what the transactions were after the beers were off their systems. This
study Vande (2002) is related to the current study since customer service is one of
90
the components of non-price competition, which is the current study’s focal point.
Wale (2000) carried out a study on product differentiation practices
employed by toilet soap producing companies operating in Nigeria. The major
purpose of his study was to determine product differentiation practices employed
by toilet soap producing companies in Nigeria. A structured Questionnaire was
used to collect data. The mean and standard deviation were used to analyse the
four research questions raised for the study while
t-test and analysis of variance
were used to test the hypotheses. The major findings of the study were that toilet
soaps with good scent where more appealing to consumers and therefore
preferable; the respondents also agreed that soaps that do not dissolve easily were
more appealing to consumers; that toilet soaps differentiated on the basis of
general or children/adult were not having the desired patronage.
Based on the findings, the study concluded that toilet soap producing
companies should differentiate their soaps on the bases of scents, durability and
attractive label. The study recommended product differentiation based on issues
that were appealing to customers; it was also recommended that toilet soaps
should be less toxic, foaming and body-friendly, that is have good effect on the
body. Product differentiation is one of the non-price competition strategies that
companies use to entice consumers. This study is related to the present one in that
they all use product differentiation to have customers in the course of finding ways
to boast sales volume.
91
Soyinka (2004) conducted a study on adoption of product quality practices
as competition strategy by soft drink producing companies in South Western
States of Nigeria. The major purpose of the study was to assess product quality
practices adopted by soft drink companies as a competition strategy in South
Western States of Nigeria. The study had four research questions and four
hypotheses. A structured questionnaire was used to collect data. The mean and
standard deviation were used to analyse the four research questions while that four
hypotheses were analysed using students’ t–test and analysis of variance.
The major findings of this study among others included: respondents
unanimously agreed that quality products boast patronage of the product; all
consumers fondly go for the best in quality except where they are financially
handicapped; companies sticking to quality products usually declare huge profits
because of huge sales made; companies producing inferior products do find it
difficult to withstand better products in competition and that companies wanting to
remain in business do ensure standard of their products.
It was concluded that for any soft drink company to remain viable, it must
always produce nothing but the best in terms of its drinks. It was therefore
recommended that soft drinks companies should employ good hands to ensure
quality products or drinks; it was also recommended that soft drink producing
companies should always get good raw materials so that their products also could
be the best. This study is related to the current study because they all concern
themselves with competition so that the companies under consideration could
92
remain viable in their business.
Umoru (2004) conducted a study on the utilization of non price competition
as a marketing strategy by beverage companies in North Central States of Nigeria.
The major purpose of his study was to assess the utilization of non price
competition by beverage companies operating in North Central States of Nigeria.
Umoru’s study is related to the present study in that both are on non price
competition. However, while Umoru’s study was on utilization of non price
competition by beverage companies in North Central States the present study is on
utilization of non price competition marketing strategies by breweries in Nigeria.
Umaru (2005) studied the employment of non-price competition by GSM
operations as perceived by consumers in North Eastern States of Nigeria. The
major purpose of this study was to assess the extent of utilization of non-price
competition as a marketing strategy by GSM operators as perceived by GSM
consumers in North Eastern States of Nigeria. From the study population of 622, a
sample of 373 was used or studied. A structured questionnaire, personal interview
and secondary sources of data were used for the study to get or collect data. Data
analysed was done using tables, percentages, mean and chi-square.
The study revealed that GSM operators do not want to reduce prices of
their services for consumers; GSM operators have found Nigerians very suitable
as they do not complain when exploited; Nigerians have found so much pleasure
with GSM usage and therefore do not see anything wrong with it yet. The study
concluded that for consistent patronage, GSM operators should be fair in their
93
pricing polices and be consistent in their pricing policies.
Based on the findings and conclusions drawn, the study recommended that
the Federal Government of Nigeria should regulate pricing policies of all GSM
operators in the country; all GSM operators should explain to Nigeria why there is
always a hike in the prices of their services; when calls are made but not
connected there should be no charge for such a service since no link is made or
established; like NEPA used to do, whenever there is going to be signal fluctuation
GSM operators should formally inform Nigerian consumers so that they will not
be worrying their batteries. Umaru’ study has a good relationship with the current
study as all are on the non price competition. Though commodities under study are
different.
Gbaden (2008) conducted a study on marketing strategies adoptable by
Commercial Banks operating in Benue state. The major purpose of the study was
to determine marketing communication tools adaptable as marketing strategy by
commercial banks operating in Benue state. It was found that commercial banks
can use a combination of personal selling, advertising, publicity, direct marketing,
sales promotion and public relations in marketing their services. The present study
is related to Gbaden’s study because all are on promotion as a marketing strategy.
While Gbaden studied on the adoptability of promotion in the marketing of bank
services, the present study is on the utilization of promotion as a non price
competition marketing strategy by breweries in Nigeria.
Okwelume (2005) conducted a study on the use of integrated marketing
94
communication by commercial banks in Enugu state in introducing new products.
The major purpose of the study was to determine components of integrated
marketing communications used by commercial banks. It was found that
commercial banks use all the integrated marketing communication tools of
advertising, personal selling, sales promotion, direct marketing, publicity and
public relations in the course of selling their new products. The current study is
related to Okwelume’s study because all of these studies are on the use of
promotion mix variables as marketing strategy. While the former was on the use of
promotion mix variables as integrated marketing communication tools used by
commercial banks, the current study is on the utilization of integrated marketing
communication tools as a non price competition marketing strategies.
Brown (1994) undertook a study on coffee buyers. The major purpose of
the study was to determine sales response by consumers to sales promotion and
advertising. It was found that sales promotion yields faster and more measurable
response in sales than advertising; advertising was found to be capable of
deepening brand loyalty than sales promotions; loyal brand buyers tend not to
change their buying patterns as a result of competitive promotion and sales
promotion do not intend to yield new, long term buyers in mature markets because
they attract mainly deal-prone consumers who switch among brands as deals
become available. Brown’s study and the current study are related as both are on
promotion. While the former study compared some aspects of promotion, the
current study looked at the utilization of promotion as a non price competition
95
marketing strategy by breweries.
Nwokolo (1996) studied the influence of television advertising as a
marketing strategy for consumers’ demand for soft drink in Enugu metropolis. The
major purpose of this study was to evaluate contributions of television
advertisement on consumers’ demand for soft drinks. Six research questions were
raised and four hypotheses were formulated to guide the study. It was found that
factors that influence 7up soft drinks were not uniformly rated and that television
was the most effective medium of reaching consumers. The current study is
related to one conducted by Nwokolo because all of them are on advertising.
While the former was on the television advertising as boosting more demand, the
current study is on the utilization of promotion as a non price competition
marketing strategy by breweries.
Champy (1999) conducted a study on selling to tomorrow’s customer. The
major purpose of his study was to determine modern roles of sales persons. It was
revealed that the roles of salespersons have significantly changed with the ever
changing business as corporate bodies acquire new ways of doing things to gain
more knowledge and economic power and that industrial boundaries are changing
among others. The present study relates to Champy’s as both are on promotionpersonal selling. While the current study is on the utilization of promotion,
personal selling inclusive, as a non-price competition marketing strategy, the
former was on the determination of roles of salespersons on tomorrow’s
customers.
96
Clay, Krinsman, Wolf and Fernadez (2002) conducted a study on non price
competition in their online book industry. The major purpose of the study was to
determine effects of non price competition as a marketing strategy in the online
book industry. The study revealed that availability of low-cost information on
price would lead to all internet retailers to charge the same price for massive
production of goods and that price would be approximately costly. While their
study was on online book industry, the current study is on breweries operating in
Nigeria.
Ajiborah (2003) carried out a study on introduction of a new product using
integrated marketing communication strategy. The major purpose of the study was
to determine the introduction of a new product in the market using integrated
marketing communication approach. The study revealed that advertising creates
awareness and clears the way for direct marketing and sales persons; that personal
selling serves as a follow-up on advertising, creates opportunities for face-to-face
discussion between consumers and sales persons, that sales promotion facilitates
sales presentation, sales fairs and exhibitions, that direct marketing brings the
product directly to consumers and induces immediate enquiry and order; that
public relations and publicity informs consumers about the company and its
products, builds good image and cultivates good relationship between customers
and the company as well as goodwill; Ajiborah’s study is related to the current
study as both are on the use of promotion. While Ajiborah determined the use of
integrated marketing communication, the current study determined the utilization
97
of non-price competition marketing strategies by breweries.
Okpala (1996) carried out a study on the impact of advertising on the sale
of beer products. The major purpose of this study was to determine consumers’
perception on the impact of advertising on beer products. The study revealed that
advertising creates and promotes awareness among consumers about the
availability of beer products; advertising helps beer producers secure a good
portion of the Nigerian beer market and that advertising boosts sales and
invariably profits. Okpala’s study is related to the current study as both are on beer
and how promotion can impact on its activities. While the current study is on the
utilization of non-price competition marketing strategies by breweries in Nigeria
the former was on beer products assessing how advertising can influence its
demand.
Emefo (1989) conducted a study on the influence of advertising on
motivating consumer brand preferences for beer products. The major purpose of
this study was to assess market acceptance of various beer products in Anambra
state. Six research questions were raised for this study and two hypotheses were
formulated for same study. It was revealed that advertising helps create awareness
about the availability of beer products and motivates consumers’ brand
preferences for beer products. The present study is related to Emefo’s in that both
are on beer products and advertising. While the former studied influence of
advertising on beer demand the current study is on the utilization of non-price
competition marketing strategies by breweries in Nigeria.
98
Edu and Ibanga (1988) studied consumers’ assessment of advertising in
Cross River (Champion) Breweries. The major purpose of their study was to
determine consumers’ assessment of the influence of advertising in Cross River
breweries. The study revealed that there was a positive co-relation between
exposure to advertisement messages and consumer brand loyalty. Their study is
related to the current study because all the studies are on breweries and promotion.
Though the first studied just advertising the current study covers entire promotion
mix variables and even beyond as it is on the utilization of non-price competition
marketing strategies by breweries.
Tellis (1998) carried out a study on advertising exposure, brand loyalty and
purchase. The major purpose of the study was to determine impact of advertising
on inducing brand switching and loyalty. The study found that advertising appears
effective in increasing volume of sales by brand loyalty and how effective it is in
winning new loyalists. The study also showed that advertising was likely to have
some accumulative effects that had to loyalty and that has stronger impact on
response than does publicity. The current study is related to Tellis’ study because
all of them have advertising playing important role in the studies. While the
former study was only advertising, the current study is on the whole promotion
mix variables as a non-price competition marketing strategy.
Eisman (1991) carried out a study on coupon mis-redemption. The major
purpose of the study was to determine reasons for coupon mis-redemption or
cashing the coupon without purchasing a brand. The study found that coupon mis-
99
redemption or fraud occurs in a number of ways: redemption of coupons by
consumers for a product or size not specified in the coupon; redemption of
coupons by sales clerks in exchange for cash; gathering and printing coupons by
criminals who sell them to unethical merchants who in turn redeem them and
gathering and redemption of coupons by store managers or owners without the
accompanying sale of the product. The present study is related to Eisman’s study
in that all of them used sales promotion mix variables. While the former was on
the redemption of coupons as a sales promotion strategy the current study is on the
utilization of non-price competition marketing strategies by breweries in Nigeria.
Mangleburg and Bristol (1998) studied the problems of advertising to
children. The major purpose of the study was to ascertain whether advertising was
injurious to children. It was found that market place knowledge plays a significant
role in adolescents’ skepticism toward advertising; that greater knowledge of the
market place appears to give teens basis to evaluate advertisements and makes
them more likely to recognize the persuasion strategies used by advertisers. The
current study is related to their study because both focused on advertising as a
non-price competition strategy. While their study focused on the influence of
advertising on children, the current study looks at advertising as a strategy in the
non-price competition.
Tat, Cunningham and Babakus (1998) carried out a study on rebate offers.
The major purpose of the study was to ascertain the consumers’ perception of
rebate as a sales promotion marketing strategy. It was found that a negative
100
relationship exists between the use of rebate and perceived difficulties associated
with the redemption process. It was also found that consumers perceive
manufacturers as offering rebates to sell products that were not selling or faring
well. Another finding of that study was that non users of rebate were particularly
likely to perceive the redemption process; as too complicated and suspicious of
manufacturers’ motives for adopting the strategy. The present study is related to
their study as they all consider rebate as a sales promotion strategy. While their
study looked at the perception of consumers on rebates offered by manufacturers,
the current study looks at rebate as a sales promotion strategy as part of the nonprice competition marketing strategies by breweries in Nigeria.
Ragbubir and Corfman (1999) carried out a study on the influence of sales
promotion on brand purchase of consumers. The major propose of the study was to
determine whether price promotions affect pre trial evaluation of a brand. The
study revealed that offering promotion is more likely to lower brand’s evaluation
when the brand has not been promoted previously and that promotions are likely
to result in negative evaluation. The study agreed that marketers should be careful
in the use of price promotion or they may exhibit trial of a brand in certain
situation. The current study is related to their study in the sense that all have to do
with competition. While their study focused on price promotion the current study
is on the utilization of non-price competition by breweries operating in Nigeria.
Oguejiofor-Osakwe (2002) undertook a study on advertising of cosmetics.
The major purpose of the study was to assess the impact of advertising on
101
purchase decisions of cosmetic products by female lecturers in Nigerian
universities. The study revealed that advertising influences a lot of decisions on
cosmetics purchased by female lecturers in Nigerian universities. Advertising on
display on screen showing removal of dark spots, wrinkles, dark skin lowering
aging hire female lecturers, this they patronize a lot, the study revealed. The study
also revealed that advertising promotes impulse buying among female lecturers as
while in markets goods advertised but forgotten when seen become a must-buy
items. Oguejiofor-Osakwe’s study is related to the current study in that they all
have advertising a major component. While the former was on the influence of
advertising the current study is on the utilization of non-price competition
marketing strategies by breweries in Nigeria.
Ayogu (1997) conducted a study on the application of microbial enzymes
in brewing technology. The major purpose of the study was to assess the
possibility of shifting from the traditional use of yeasts in brewing industries to the
use of microbial enzymes. The study revealed that with advancement in
biotechnology, it would not be out of place if microbial enzymes could replace the
traditional use of yeast in brewing industries in the country. Ayogu’s work is
related to the current study as both are on the brewing industry in Nigeria. While
the former work was on the alternative brewing processes, the current study is on
the utilization of non-price competition marketing strategies by breweries in
Nigeria.
102
Agu & Obana (1991) studied beer production from Nigerian millet. The
major purpose of their study was to find out the possibility of producing beer with
millet. The study revealed that millet, like other grains- sorghum, corn, rice, can be
used to produce beer adopting the usual brewing process of mashing, filtration and
fermentation. The current study is related to their study in that both are on beer.
While their study was on search for grains to be used in beer production in Nigeria
the current study is on the utilization of non-price competition marketing strategies
by breweries in Nigeria.
Shavitt, Lowery and Haefner (1998) conducted a study on public view of
advertising. The major purpose of the study was to find out the general public
current attitudes towards advertising. A survey on 1000 adult consumers of
beverages found out that the general public do not trust advertising because of its
deceitful messages. It was also found that consumers do at times have confidence
in advertising claims when focused on their actual purchase decisions. The present
study is related to the Shavitt’s as advertising is one of the major components of
promotion as a non-price competition marketing strategy. While the present study
is on the utilization of non-price competition marketing strategies by breweries in
Nigeria, the former was on the public attitude towards advertising as a
promotional mix variable.
Awara (2001) carried out a study on the impact of sales promotion
techniques on the sales level of PZ industries. The major purpose of the study was
to assess impact of promotion techniques on the sales volume of PZ industries. It
103
was found that sales promotion creates brand loyalty among customers as well as
boosts sales generally. The study also shows that companies that indulge in
consistent sales promotion sale over and far above their business rivals. Awara’s
study is related to the current study in that all have sales promotion as a major
component of their studies. While the former was on the impact of sales promotion
on sales volume of an industry the current study is on the utilization of non-price
competition marketing strategies by breweries operating in Nigeria. Both studies
have promotion as a variable in their studies, the major purpose being varied.
Summary of Literature Reviewed
Companies compete for market share and demand from customers in
different ways. In this study non-price competition is one of the ways that can be
used by companies to compete. Non-price competition occurs when a seller elects
not to focus on price but instead emphasizes distinctive product feature, services
product quality, promotion, packaging or other factors to distinguish its products
from competing brands. The summary here is on conceptual and theoretical
frameworks.
Every business organization has a product or more to sell to its customers
for the purpose of sustaining its existence. A product is a set of tangible and
intangible attributes including packaging, price, colour, quality, and brand, plus
the seller’s services and reputation. A product can be a good, service, place,
person, organization, party, or idea. In essence consumers usually buy much more
than a set of physical attributes when they buy a product. They are buying want
104
satisfaction in the form of the benefits they expect to receive from the products.
Products are classified into consumer products and industrial or business products.
Brand is a name, term, symbol, design or a combination thereof that
identifies a sellers products and differentiates them from competition products. A
brand name is that part of a brand which can be spoken, like letters, words and
numbers such as 7-up. A brand name is often a product’s only distinguishing
characteristic. Brand name helps producers to identify their products, which it
helps consumers by simplifying shopping, guarantee quality and allow selfexpression.
Certain terms are associated with brand. These are brand mark,
trademark and trade name. Brand mark is that element of a brand that cannot be
spoken, often a symbol or design. A trademark is a legal designation indicating
that the owner has exclusive use of a brand or a part of a brand and that others are
prohibited by law from using it. A trade name is the legal name of an organization
such as Guinness Nigeria Plc., Bottling Company, Nigeria Breweries etc. rather
than the name of a specific product.
Product handling involves selecting the proper equipment to physically
handle products, including the warehouse building itself. To handle beer products
properly, brewery companies have designed durable nice looking bottles, plastic
cartons, polythene containers and light cans that are disposable. Product handling
for brewery products starts from designing of bottles, containers cans to the
processing of orders from customers up to transportation to their consumption
points. In Nigeria today, all breweries have acquired a fleet of trailers or trucks
105
that convey their products to their distribution centers and customers.
Product positioning refers to the decisions and activities intended to create
and maintain a company’s product concept in consumer’s minds. When marketers
introduce a product, the attempt to position it so that it seems to posses the
characteristics the target market most desires. Product positioning is the
customers’ concept of the product’s attributes relative to their concept of
competitive brands. In Nigeria, Guiness Stout is positioned as an energy boosting
product while Gulder is positioned as a strong product for mature or strong people.
Effective product positioning helps serve a specific market segment by
creating an appropriate concept in the minds of customers in that market segment.
A company can position a product to compete head-on with other brands e.g.
Pepsi to Coca-cola in Nigeria. Product differentiation starts from product concept.
Companies do start looking at features that their product should possess when the
idea of manufacturing the product is initiated. Some companies would
differentiate the design of their product or the only difference may be in the brand
or packaging. Star has differentiated its beer from other lager beers on bottle
design in addition to content quality. In Nigeria today, brewery products are
differentiated by bottle design, product quality or volume. Products like star, stout,
gulder, harp have can containers of 33 CL Volume – apart from their distinctive
big bottle designs. Their containers have clearly differentiated them among
brewery product offered in Nigerian beer market.
Customers of all kinds need a variety of services from their suppliers. In
106
varying degrees all business organizations attempt to satisfy customer needs and
wants through a set of activities collectively called customer service. A service is
an intangible product involving a deed, a performance or an effort that cannot be
physically possessed. It is the result of applying human or mechanical efforts to
people or objects. Customer service is a collection of assistance given to
customers from the point of acquiring goods to when they finally get to the point
of consumption.
Customers of any trade need quality product, fair price, dependable
deliveries, sizeable inventories, efficient and prompt order processing, availability
of emergency supplies, prompt replacement of defective items, efficient post sale
services as well as guarantee or warranty. Attention to customer needs and wants
or preferences are crucial to increasing sales volume and obtaining repeat sales. A
company’s failure to provide the desired level of services may mean the loss of
customers.
To make good profit, sales have to be increased and increasing sales has to
do with creating awareness as per the availability of goods. Promotion does this
awareness creation job efficiently. Promotion is the communication between the
seller and buyer to change attitudes and behaviour. The sales or marketing
manager’s job is to tell target market that the right product is available at the right
place and with the right price. The common promotional mix variables are
advertising, sales promotion, personal selling, publicity, public relations and direct
marketing.
107
Many factors have encouraged the adoption of non-price competition
among companies. The following factors are encouraging its adoption: it is desired
to imitate successful companies, it is desired to keep customers, it works towards
price uniformity, it makes price competition works, it builds customer loyalty, it
increases the popularity of companies and it encourages public patronage.
On theoretical framework, competition theory is based on marketing
approach whereby the cost of the product is minimized and other marketing
factors are maximized by creating a distinctive quality about the product such as
its design, performance, snob appeal, availability or service guarantees. Non-price
advertising model tries to change customers through prices, associating products
to trendy lifestyles, family feelings and so on. Profit theory of investment states
that investment depends on profit and profit in turn depends on income, this theory
relates profits to level of sales.
Financial theory of investment also known as cash flow theory emphasizes
that the aggregated cash flow is the determinant of investment. Advertising
communication model is classified into macro and micro model. Integrated
marketing communication model explain that talking about the IMC cannot work
without talking brand. According to the model, brand building is a vital aspect of
marketing strategy as it creates and nurtures profitable relationship among
business partners. Price competition theory states that there are two types of
competition: price and non-price. In price competition, sellers discount prices to
increase sales while in non-price competition, other marketing strategies are
108
adopted to increase sales.
Literature shows that no known studies on utilization of non competition
marketing strategies have been carried out covering the six geopolitical zones of
Nigeria. Studies have been on promotion mix variables of advertising, sales
promotion, personal selling and publicity. Other studies have been on packaging
branding all covering either a geo-political zone, state, local government area or a
metropolis. Such studies are also on soft drinks, service organization other
beverages and commodities and none on breweries. There is therefore need for a
study to look at the utilization of non price competition marketing strategies by
breweries in Nigeria since there is none yet. This study is aimed at filling the
above gaps.
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CHAPTER THREE
METHODOLOGY
This chapter described the procedure adopted for this study. It described the
design of the study, area of the study, population and sample of the study,
instrument for data collection, validation of the instrument, reliability of the
instrument, method for data collection and method for data analysis.
Design of the Study
In this study, a survey design was employed to collect data. A survey
research design is one in which the entire population or representative sample is
studied by collecting and analysing data from the group through the use of
questionnaire. Survey research focuses on people, their opinions, attitudes,
motivation and behaviour (Osuala, 2004). Here, opinions of managers are sought
on the utilization of non-price competition marketing strategies by breweries in
Nigeria. Chukwura (2008) used the design in his study on the utilization of
integrated marketing communication by manufacturing companies operating in
Cross River State. Temi (2001) also used survey design in his study on
promotional practices used by soft drinks producing companies as non price
competition strategy in Nigeria.
The survey design was considered suitable for this study since the study
solicited information from commercial managers, senior marketing managers and
senior sales managers on non price competition marketing strategies utilized by
breweries operating in Nigeria, using the questionnaire.
110
Area of the Study
The area of study for this research covered six geopolitical zones of SouthSouth; South east; South west, North central, North east and North West. Nigeria
is a good market for many goods and services. Like other companies, there are
many breweries in Nigeria enjoying her huge market, these breweries compete
aggressively for Nigerian market share. Nigeria is a vast market for all goods
because of her vast population having a big share of this market will certainly
make any company viable.
This study is therefore considered suitable in Nigeria because of a good
number of breweries operating in the country and a vast market for their products
which has made them to compete for.
Population for the Study
The population for this study was made up of all the breweries in Nigeria.
There are eleven breweries operating in Nigeria; these are Nigerian breweries Plc,
Guiness Nigeria Plc, Consolidated breweries, International Beer and Beverages
Industries, International Breweries, Sona breweries, Benue breweries, Padob
breweries, Inel Science Tech Nigeria, Champion breweries and Eastern breweries
(CAC, 2009) (See appendix A, Page 143).
Sample for the Study
Sample for this study is made up of 73 commercial managers, 85 Senior
Marketing managers and 91 senior sales managers drawn from all the breweries.
All the commercial managers, senior marketing managers and senior sales
111
managers were considered for this study (See appendix B page 144).
Sampling and Sampling Technique
Sample for this study was arrived at using purposive or judgmental
sampling, which is based on the status of respondents. According to Uzoagulu
(1998) purposive or judgmental sampling is a sample method where the
characteristics or special features of a subject grant him the qualification to be
included in the sample. Sidhu (2002) explains that is a stratified sampling in that
the selection of the cases is governed by some criterion acting as a secondary
control. He further explains that under this technique, the investigator selects a
particular group or category from the population to constitute the sample because
this category is considered to mirror the whole with references to the characteristic
in question.
Instrument for Data Collection
A structured questionnaire was used to gather data for this study. The
questionnaire has 52 items in five sections. Section A was used to elicit general
information about the respondents. Sections B to F used a scale that had response
options of Very High Extent to No Extent to elicit information about the various
aspects of no n price competition marketing strategies.
Section B has 19 items and was used to elicit information on the
respondents’ opinion on the extent product handling practices are utilized by
breweries in Nigeria.
Section C contained seven items. This section was used to the extent
112
determine customer service practices are utilized by breweries operating in
Nigeria.
Section D has seven questionnaire items. This section was used to
determine the opinions of respondents on the extent promotional practices are
utilized by breweries operating in Nigeria as a non-price competition strategy.
Section E has fourteen items and was used to ascertain the extent packaging
practices are utilized by breweries operating in Nigeria.
Section F has six questionnaire items to determine the extent branding
practices are utilized as non-price competition marketing strategies.
In all the sections, respondents were required to respond by ticking in the
columns provided as appropriate to them. Sections B-F were scored on a fivepoint scale as shown below:
Very High Extent
5
Points
High Extent
4
Points
Moderate Extent
3
Points
Little Extent
2
Points
No Extent
1
Point
Validation of the Instrument
The instrument was subjected to face-validation by three experts in
marketing and vocational education. Two Marketing experts from University of
Nigeria, Enugu campus (UNEC) were served with copies of the instrument for
113
validation. One research expert from Vocational education department was also
given the instrument to validate. Based on their corrections and suggestions,
amendments were made on the instrument before a final copy produced and used
for the study.
Reliability of the Instrument
Cronbach Alpha reliability test was used to determine the internal
consistency of this instrument. The instrument was administered on 20
respondents made up of 6 commercial managers, 6 marketing managers and 8
sales managers of soft drink (mineral water) companies operating in the north
central zone - Benue, Nassarawa, Plateau, Niger, Kwara, Kogi and FCT, Abuja.
Reliability index of 0.83, 0.81, 0.92, 0.90, and 0.81, for each of the five
clusters respectively was obtained and the overall score of 0.85 was obtained,
which showed that the instrument was reliable. The use of Cronbach alpha
reliability coefficient is considered appropriate in this study as it is used to yield
information about the precision of various items in the instrument in measuring the
common underlying phenomenon (See appendix E page 150).
Method of Data Collection
The questionnaire was administered on the commercial managers, senior
marketing mangers and senior sales managers of brewing companies operating in
Nigeria. Five research assistants delivered the questionnaire to five geopolitical
zones of North East, North West, South East, South -South and South West while
the researcher administered in North Central zone. Copies of the questionnaire
114
were distributed and collected in two weeks. 249 copies of questionnaires were
given to respondents on first visit. Copies were left with other staff for those
absent. While some respondents completed the questionnaire on the spot, the
researcher or his assistant went back to collect from those who where unable to
complete theirs at the time of first visit or were absent. This procedure of making
several visits to breweries to collect the questionnaire resulted to 100% return rate.
Method of Data Analysis
Data collected were analysed using frequency count and mean for research
questions. In calculating the mean for the items, the response category scale below
was used:
Very High Extent
4.5
-
5.00
High Extent
3.5
-
4.59
Moderate Extent
2.5
-
3.49
Little Extent
1.5
-
2.49
No Extent
0.5
-
1.49
Mean and standard deviation were used to provide answers to the five
research questions. Based on their response format of the five point pattern, mean
score of 4.5 to 5.00 was accepted as very High Extent, 3.5 to 4.49, high extent
2.50 to 3.49 moderate extent, 1.50 to 2.49 little extent and 0.50 to 1.49, no extent.
Hypotheses were tested using Analysis of Variance (ANOVA) at 0.05 level of
significance.
115
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
In this chapter data were presented and analysed based on the five research
questions raised and five null hypotheses formulated for the study.
Research Question 1
To what extent are product handling practices utilized as non-price
competition marketing strategies by breweries?
The items on product handling practices utilized as non price competition
marketing strategies by breweries covered items 1 – 19 and the data are presented
in table 1 below.
116
Table 1: Mean Ratings and Standard Deviation of Respondents on Product
Handling Practices as Non-price Competition Marketing Strategies
by Breweries
N = 249
S/N
1
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19
Item Statement
X
SD
Decision
Establishment of distribution centres nearer
customers
Use of machines for bottling and movement beers
Special containers for all products.
Employment of people specifically to be loading
and unloading beers to various depots/customers
Use of Warehouses at distribution centres
Use of loading platforms erected at distribution
centres
Use of trucks for the conveyance of Products to
customers
Employment of guards to watch over beers bought
but not yet collected by customers
Use of trucks specifically designed for conveying
product to customers and depots
A special handling procedure or technique used by
the company
Earliest delivery of products ordered
Standard loading of product procedure.
Customers pay for bottles/crates broken
Customers bring trucks to pack their consignments
Charging for consignments delivered to customers
Deliver products to customer free of charge
Warehouses in use rented by the company
Products kept in warehouse after production for
safety.
Bottling is done by specialist
4.01
1.04
High Extent
3.51
3.42
3.46
1.24
1.48
1.43
High Extent
Moderate Extent
High Extent
4.02
3.85
.90
1.90
High Extent
High Extent
4.10
.76
High Extent
3.76
1.30
High Extent
4.05
.88
High Extent
3.92
.95
High Extent
4.22
4.22
2.06
2.40
4.06
1.26
3.08
4.00
.86
.80
1.05
.46
.88
.58
1.54
.82
High Extent
High Extent
Little Extent
Little Extent
High Extent
No Extent
Moderate Extent
High Extent
3.27
1.17
Moderate Extent
Key: X=Mean; SD= Standard Deviation; N= Number of Respondents
As shown on Table 1 above, out of nineteen item statements covering
research question one, which is on product-handling practices as non-price
competition marketing strategies, respondents agreed that eleven practices were
117
utilized to a high extent; four were considered utilized to a moderate extent two
were utilized to little extent, while one was to no extent. Out of the 19 item
statements covering research question one, eleven item statements recorded the
highest score while one had the lowest remark. Respondents therefore agreed that
product handling practices are utilized by breweries.
Question 2
To what extent are customer service practices utilized as non price
competition marketing strategies by breweries? The items dealing with customer
service practices covered items 21 to 25. Data for these items are presented in the
Table two below.
Table 2: Mean Ratings and Standard Deviation of Respondents on CustomerService Practices as Non-price Competition Marketing Strategies by
Breweries
N = 249
S/N
Item Statement
20
21
22
23
24
25
Pricing same with competitors
Dependable delivery service for all customers
Provision of vehicles for the evacuation of products to
customers
Wrong supplied or in error immediately replaced on
receipt of return inwards
Giving to reliable and regular customers credit facilities
Discounts to big time customers
X
SD
Decision
3.77
3.91
4.26
1.18 High Extent
1.02 High Extent
1.1 High Extent
4.27
.72
4.34
2.73
.71 High Extent
1.41 Moderate Extent
High Extent
Respondents on customer-service practices as non-price competition by
marketing strategies breweries agreed that all the practices were utilized to a high
extent by breweries. The items had mean scores of 3.75 to 4.34. Out of six items
covering this research question, one had a mean score of 2.73 indicating that it was
118
utilized to a moderate extent. Only one item out of the six recorded has score of
less than 3.00 which meant that the practices were utilized to a high extent.
Question 3
To what extent are promotional practices utilized as non price competition
marketing strategies by breweries?
Data on promotional practices utilized as non price competition marketing
strategies are presented in the Table 3.
Table 3:
S/N
26
27
28
29
30
31
32
33.
34
35.
36.
37.
38
39
Mean Ratings and Standard Deviation of Respondents on
Promotional Practices as Non-price Competition Marketing
Strategies by Breweries
N = 249
Item Statement
X
SD
Decision
Huge sums of money budgeted for promotional
activities every year.
Regular advertisement of Products
Advertising messages for all classes of
consumers.
Advertising campaigns developed by the company
personnel
Activities of the company published by the public
relations department of the company through
news releases.
Several feature articles published by the company
since its inception.
Specified publicity programme for company
activities.
Specific sales force objectives
Training and retaining of sales force in the
company a routine for optimal performance.
Sales territories created for all products by the
company.
Free samples given to customers
Coupons introduced to attract repeat purchases.
Use of money refund as one of the sales
promotion devices
Rendering direct marketing services to customers
3.58
1.23
High Extent
4.33
4.84
72
.36
High Extent
Very High Extent
3.45
1.28
Moderate Extent
3.04
1.27
Moderate Extent
3.04
1.20
Moderate Extent
4.03
1.05
High Extent
4.16
4.04
.78
.98
High Extent
High Extent
4.37
.75
High Extent
2.13
4.31
3.89
1.27
.76
.97
Moderate Extent
High Extent
High Extent
4.28
.77
High Extent
119
The research question 3 had fourteen items which were on promotional
practices utilized as non-price competition marketing strategies by breweries. Out
of the 14 items, one was considered utilized to a high extent with the mean score
of 4.84 being on advertisement for all classes of customers. Nine were to high
extent, while four were utilized to a moderate extent. None was neither little nor
no extent utilized. Therefore promotional practices were highly utilized by
breweries.
Question 4
To what extent are packaging practices utilized as non price competition
marketing strategies by breweries? Data on the above research question are as
shown in Table 4 below.
Table 4:
Mean Ratings and Standard Deviation of Respondents on
Packaging Practices as Non-price Competition Marketing
Strategies by Breweries
N= 249
S/N
40
41
42
43
44
45
46.
Item Statement
X
SD
Decision
Use of bottles and cans of varying sizes for customer’
convenience
Bottles and cans stylishly designed to distinguish them
from those of competitors
Light containers in use
Research and development department undertakes
improvements in packaging all the times
Packages in the company designed by specialists
Packages designed undergo test packaging
Cartons and Bottles have product features on them.
4.09
.79
High Extent
3.97
1.00
High Extent
4.10
3.73
.79
1.20
High Extent
High Extent
3.75
2.85
4.81
1.14
1.23
.38
High Extent
Moderate Extent
High Extent
Table 4 covered research question four which is on packaging practices as
non-price competition marketing strategies by breweries. It has seven item
120
statements, out of these seven, respondents agreed that one was utilized to a very
high extent, five were highly utilized; and one utilized to a moderate extent. The
one utilized to a very high extent was on carton and bottles having product
features on them. Therefore the packaging practices were found utilized to a high
extent as shown by respondents’ responses.
Research Question 5
To what extent are branding practices utilized as non price competition
marketing strategies by breweries?
Responses to the above research question are presented in Table 5 as
shown below.
121
Table 5: Mean Ratings and Standard Deviation of Respondents on Branding
Practices as Non-price Competition Marketing Strategies by
Breweries
N = 249
S/No
Item Statement
X
SD Decision
47
Branding differently from other companies
4.79
.49 High Extent
48
Use of different brand marks for different brands
4.67
.50 High Extent
49
Exclusive right to use trade marks of goods 4.88
.32 High Extent
produced.
50
Brands of beer well labeled for better 4.76
.50 High Extent
identification.
51
Use of Manufacturer brands.
4.36
.70 High Extent
52
Use of private distributor brands.
2.38 1.12 Moderate Extent
Table 5 covered research question five with six item statements. Out of the
six item statements, four were utilized to a very high extent by the respondents.
Use of manufacturer brand was utilized to a high extent while use of private
distributor brands was utilized to a moderate extent.
Hypothesis 1
There is no significant difference in the mean ratings of commercial
managers, marketing managers and sales managers on the extent of utilization of
product handling practices as non price completion marketing strategies by
breweries in Nigeria.
Data in respect of the above hypothesis were presented in Table 6.
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Table 6
Summary of Analysis of Variance (ANOVA) for Testing the extent of
Utilization of Product Handling Practices as Non-price Competition
Marketing Strategies by Breweries
Source of Sum of Df Mean
variance
square
square
Between
groups
2.401
2
1.200
Within
groups
531.520 247
2.161
Total
533.921 249
F-cal
Critical
value
Level of Decision
sign
0.555
NS
3.00
0.05
The ANOVA results in table 6 above showed that the calculated F-value of
0.555 was less than the f- critical value of 3.00 at 0.05 level of significance (fcall=0.555<3.00, p< 0.05). Therefore the null hypothesis of no significant
difference in the mean ratings of commercial managers, senior marketing
managers and senior sales managers on the extent of utilization of product
handling practices as a non price competition marketing strategy by breweries was
accepted.
Hypothesis 2
There is no significant difference in the mean ratings of commercial
managers, senior marketing managers and senior sales managers on the extent of
utilization of customer service practices as non price competition marketing
strategies by breweries in Nigeria.
Results obtained after testing the above hypothesis with ANOVA at 0.05
level of significance were presented in Table 7 below.
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Table 7
Summary of ANOVA for Testing the extent of Utilization of Customerservice Practices as Non-price Competition Marketing Strategies by
Breweries in Nigeria
Source of Sum of Df Mean
variance
square
square
Between
3.411
1.706
groups
2
Within
432.520 247
1.758
groups
Total
435.951 249
F-cal
970
Critical
value
3.00
Level of Decision
Sign
0.05
NS
ANOVA results as presented in Table 7 showed that the calculated F-value
of 0.970 was less than the f-critical value of 3.00 at 0.05 level of significance (fcal =0.970<3.00,p<0.05). The value of the ANOVA is not significant, therefore
the hypothesis of no significant difference in the mean responses of commercial
managers, senior marketing managers and senior sales managers on the extent of
utilization of customer service practices as non price competition marketing
strategies by breweries is accepted.
Hypothesis 3
There is no significant difference in the mean ratings of commercial
managers, senior marketing managers and senior sales managers on the extent of
utilization of the promotional practices as non price competition marketing
strategies by breweries in Nigeria. Data relating to this hypothesis are presented in
Table 8.
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Table 8
Summary of ANOVA for Testing the extent of Utilization of Promotional
Practices as Non-price Competition Marketing Strategies by Breweries in
Nigeria
Source of Sum of Df Mean
variance
square
square
Between
2.612
1.306
groups
2
Within
499.532 247
2.031
groups
Total
502.144 249
F-cal
Critical
value
Level of Decision
Sign
0.647
NS
3.00
0.05
Null hypothesis 3 was tested with ANOVA at 0.05 level of significance.
Results obtained were presented in Table 8 above. The results reveled that the (fcal=0.647<3.00, P<0.05) calculated F-value of 0.647 was less than the f-critical
value of 3.00. Therefore the null hypothesis that there is no significant difference
in the mean ratings of commercial managers, senior marketing managers and
senior sales managers on the extent of utilization of promotional practices by
breweries in Nigeria as non price competition marketing strategies by breweries is
accepted.
Hypothesis 4
There is no significant difference in the mean ratings of commercial
managers, marketing managers and sales managers on the extent of utilization of
packaging practices as non price competition marketing strategies by breweries in
Nigeria. Table 9 below presented data relating to this hypothesis.
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Table 9
Summary of ANOVA for Testing the extent of Utilization of Packaging
Practices as Non-price Competition Marketing Strategies by Breweries in
Nigeria
Source of Sum of Df Mean
variance
square
square
Between
2.343
1.172
groups
2
Within
555.520 247
2.258
groups
Total
557.863 249
F-cal
Critical
value
Level
of Sign
Decision
.519
NS
3.00
0.05
The ANOVA results as presented in Table 9 revealed that the (fcal=0.519<3.00<p<0.05) calculated F-value of 519 was less than the critical Fvalue of 3.00 at 0.05 level of significance, therefore the null hypothesis of no
significant difference in the mean ratings of commercial managers, senior
marketing managers and senior sales managers on the extent of utilization of
packaging practices as non-price competition marketing strategies is accepted.
Hypothesis 5
There is no significant difference in the mean ratings of commercial
managers, senior marketing managers and senior sales managers on the extent of
utilization of branding practices as non price marketing strategies by breweries in
Nigeria. Data in respect of the above hypothesis are presented in Table 10.
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Table 10
Summary of ANOVA for Testing the extent of Utilization of Branding
Practices as Non-price Competition Marketing Strategies by Breweries
Source of Sum of Df Mean
variance
square
square
Between
3.111
1.555
groups
2
Within
562.510 247
2.287
groups
Total
249
F-cal
.679
Critical
value
3.00
Level
of Sign
0.05
Decision
NS
Data presented in table 10 above showed the summary of analysis of
variance (ANOVA) for testing the extent of utilization of branding practices as
non-price competition marketing strategies by breweries in Nigeria. The analysis
revealed that the (f-cal=0.679<3.00p<0.05) calculated F-value of 679 was less
than the f-critical value of 3.00 at 0.50 level of significance. Therefore, the null
hypothesis of no significant difference in the mean ratings of commercial
managers, marketing managers and sales managers on the extent of utilization of
branding practices as non price competition marketing strategies by breweries is
accepted.
Major Findings
Major findings of the study are summarized as follows:
1. respondents indicated that the utilization of distribution centre ( x = 4.01);
warehouses ( x=4.02); trucks ( x=4.01); earliest delivery (x = 4.22); loading
procedure (x =4.22); delivery charges (x =4.06) and safety of products ( x
=4.00) were the most product hand ling practices utilized to high extent by
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breweries. Free delivery (x =1.26) was found to be the handling practice
utilized to a little extent by breweries (Table 1).
2. respondents to customer-service practices showed that provision of vehicles
(x = 4.26), replacement of wrong supplies ( x = 4.27) and provision of credit
facilities ( x = 4.34) were utilized to a very high extent while provision of
discount ( x =2.73) was the little utilized practice (Table 2).
3. promotional practices were all found to be utilized to a high extent (x = 4.03
and above) except advertising campaigns ( x = 3.45); feature articles ( x =
3.04); public relations ( x = 3.04) and free samples ( x = 2.13).
4. on packaging practices respondents indicated that on packaging practices
indicated that use of cans and bottles ( x = 4.09); light containers ( x = 4.10)
and product features ( x = 4.81) were utilized to a very high extent by
breweries (Table 4).
5. response to branding practices showed that all the practices are highly utilized
to a high extent by breweries except use of private brand ( x = 2.38) (Table 5).
6. opinions of commercial managers, senior marketing managers and senior sales
managers were not significantly different on the extent of utilization of product
handling practices as non price competition marketing strategies. The
calculated f-value of 0.555 was less than the f-critical (table) value of 3.00 at
0.05 level of significance.
7. opinions of commercial managers, senior marketing managers and senior sales
managers were not significantly different on the extent of utilization of
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customer-service practices as non price competition marketing strategies. The
ANOVA results in respect of the above hypothesis showed that the calculated
f-value of 0.970 was less than the f-critical of 3.00 at 0.05 level of significance.
8. no significant difference in the means ratings of commercial managers, senior
marketing managers and senior sales managers on the extent of utilization of
promotion practices as non price competition marketing practices. The
calculated f-value of 0.643 was less than the f-critical value of 3.00 at 0.05
level of significance.
9. the ANOVA results on hypothesis four showed that the f-calculated was less
than the f-critical value (0.19 <v 3.00 pv0.05) at 0.05 extent of significance.
There was therefore, no significant difference in the mean ratings of
commercial managers, marketing managers and senior sales managers on the
extent of utilization of packaging as a non price competition marketing strategy
by breweries in Nigeria.
10. no significant difference in the mean responses of commercial managers,
senior marketing managers and senior sales managers on the extent of
utilization of branding as a non price competition marketing strategy. The Fcalculated of 0.679 was less than the F-critical value of 3.00 at 0.05 level of
significance.
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Discussion of the Findings
Utilization of Product Handling practices by Breweries
Findings pertaining to the use of product handling practices revealed that,
they were utilized to a high extent by breweries. This finding is in consonance
with the opinion of Clay, et al (2002) who stressed the importance of correct
product handling by companies to reduce their breakage, damage and spoilage. It
was also found that establishment of distribution centres nearer to customers was
utilized to a high extent. This finding is in consonance with Stanton et al (2004)
that distribution centres ease procurement processes for customers as well as
reduce transport cost.
It was also indicated that employment of guards enhances security of
company product not yet collected by customers was highly utilized. This in the
opinion of Belch and Belch (2001) that
product handling practices are so
important that no company can underrate for any reason. It was equally found that
the use of trucks for carrying products to customers was utilized to a high extent.
This finding implied that even customers who do not have vehicles of theirs can
buy with ease from breweries. Pride and Ferrell (2005) emphasized the use of
delivery vehicles by companies for speedy delivery of consignments as early as
requested or ordered. On the issue of special handling procedure or technique, it
was found that companies highly utilized the practice as it reduces breakage of
fragile products. This Betch and Belch (2001) says that fragile goods should be
technically handled considering their nature.
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Product handling is an important aspect in the activities of companies, be it
manufacturing or merchandising. One aspect of product handling is logistics
which involves the transporting, storing and handling of goods to match target
customers’ needs with the company’s marketing mix both within individual
company and along a channel of distribution (Walker, Mullins & Larreche, 2008).
According to them logistics provide time and place utility and makes possession
utility possible. Customers of companies do not want excuses but products. They
do not care how a product moves or is stored or what some channel members had
to do to provide it. Therefore their priority is that a product is desired and it is
within reach.
On the use of trucks to convey brewery products, it was found that
breweries utilize the strategy by providing suitable trunks to ease the sufferings of
their customers who do not have trucks of theirs. This Perreault & McCarthy
(2008) agree that all transporting functions should fit into the whole marketing
strategy to ease problems of customers. They went further to say that picking the
best transporting alternative depends on the product, other physical distribution
decisions and what service level the company and speed of trucks make them
better at moving small quantities of brewery products for shorter distances and are
more reliable in meeting delivery schedules which is an essential requirement for
logistic systems that require rapid replenishment of inventory after a sale.
On the special handling procedure, it was found utilized to high extent by
breweries. Stanton el al (2004) explains that products often move by several
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different modes and carriers during their journey. They say that loading and
unloading goods several times is often a real problem. Part of a shipment would
become separated, damaged or even stolen and this can raise cost and slow
delivery. It is therefore imperative that these problems be reduced by
containerization. In Nigeria, brewery products before they are packed into trucks,
they are first put into creates, cartons or polythene containers to reduce damages
and ensure easy handling.
On the storage of brewery products after production it was found to be
utilized as it assists in giving way for further production Ekerete (2005) state that
warehousing or storing provides time utility. He further states that maintaining the
right inventory level is very important as that was the only sure way of meeting
customer demands and consistently selling to customers. A company that is
stocked out when customers are ready to buy may not only lose the sale but may
also damage the relationship and the possibility of future sales (O’Neil & Iveson,
2009).
According to Kalu (1998) storing allows producers and middlemen to keep
stocks at convenient locations ready to meet customers’ needs. Storing or
warehousing can be a middlemen activity as well as that of manufacturers
depending on where it is being provided. The most important issue is that whoever
that is to provide it at any point, should do it appropriately to safe goods meant for
storage. According to Golder and Tellis (2003) two types of warehouses are
available to breweries like other manufacturers. These are private and public
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warehouses. Private warehouses are storing facilities owned or lease by companies
for their own use. According to them most companies, wholesalers and trailers
have storing facilities either in their main buildings or in separate location.
Companies use private warehouses when a large volume of goods must be stored
regularly. Companies can rent extra space if need arises. Public warehouses are
independent storing facilities and they do normally provide all the services that a
company’s own warehouses can provide. According to them, a company might
choose a public warehouse if it does not have a regular need for its own space.
Breweries because of their regular production should have enough warehouses or
space for their products and where such spaces are not enough, renting additional
space can be a good option.
Storing of goods reduces handling costs and ensures regular availability of
desired goods at right time and place. Perreault and McCarthy (2008) define a
distribution centre as a flow of goods and avoid unnecessary storing costs. Today
distribution centre concept is widely used by companies at all channel levels. This
study has shown that the handling strategy can be utilized by breweries operating
in Nigeria. More competitive markets, improved technology, coordination among
companies and efficient new distribution centres are bringing big improvements to
the physical distribution area of product handling.
Utilization of Customer-Service Practices by Breweries
Findings concerning free delivery of consignments to customers revealed
that free delivery enhances patronage by customers but costly to producers of
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those goods is utilized to a little extent. This finding is in agreement with
Lancaster and Massingham (2004) that free delivery of consignments to customers
enhances customer loyalty to companies though costly. As to whether warehouses
were utilized by breweries, it was found that breweries should utilize them to a
high extent. This is in consonance with Jobber (2006) that to ensure the safety of
goods, warehouses should be erected or rented for the housing of goods produced.
On the bottle and can designing, the study found out that they were better designed
by specialists. This agrees with Dalrymple et al (2004) that stylish design of
containers was another aspect of advertising for producing companies.
On the rendering of suitable customer services to customers, it was found
out that companies pricing same prices with their rivals were doing themselves
good by not offending their leader. This finding is in agreement with Best (2000)
that to be fair in competition same pricing was alright. That it could remove or do
away with price wars among rival companies. It was also revealed that dependable
delivery was utilized by breweries. So also was the provision of vehicles for
product evacuation. These were in agreement with Abah (2005) who confirmed
that timely delivery of goods by manufacturing companies was a good marketing
strategy in Nigeria. On the provision of credit facilities to regular and reliable
customers, it was found that the service was utilized to high extent. Pride and
Ferrell (2005) agree that provision of credit facilities to deserving customers not
only encourages them have a repeat buying but equally induces huge buying.
Provision of discounts to customers was equally found to be a service worth
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rendering to customers. Stanton et al (2004) agree that discounts should be given
to customers to encourage them buy more or pay promptly. This they said was a
good customer service.
Customers do not care about how a product was moved or stored or what
some channel members had to do to provide what they want or need. Rather,
customers think in term of the physical distribution-customer service level. This
means how rapidly and dependably a company can delivery what they want.
Morris & Davis (2008) say that all transporting storing and product
handling activities of companies and a whole channel system should be
coordinated as a system that seeks to minimize the cost of distribution for a given
customer service level. Schary (2002) states that prompt delivery of ordered goods
is very important to any business. He further explains that transportation provides
time and place utilities. Transportation can help achieve economics of scale in
production. The use of trucks by breweries in Nigeria would help reach out to
actual and potential customers with much ease. Early delivery of brewery products
can only be achieved in Nigeria through trucks as their flexibility and spaced,
irrespective of roads make them better at moving brewery products for shorter
distances - within Nigeria. The use of trucks to deliver brewery products is utilized
in Nigeria. This is because they go where rails cannot go and are reliable in
meeting delivery schedules which is an essential requirement for logistic systems
that require rapid replenishment of inventory after a sale.
Discounts are also important in non-price competition. Schary (2002)
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defines discounts as a deduction from the base of price. The deduction may be in
form of a reduced price or some other concessions such as free merchandise. The
common discounts available for customers, he further explains are the quantity
discounts which are deductions from the list price offered by the seller to
encourage customers to buy in large amounts or to make most of their purchases
from that seller.
Trade discounts on the other hand are reductions from the list price offered
to buyers in payment for marketing functions that they will presumably perform.
Cash discount is another form of discount. This one is a deduction granted to
buyers for paying their bills within a specified period of time. It is computed on
the net amount due after deducting trade and quantity discounts from the initial
cost. Breweries in Nigeria utilize all these discounts to lure customers patronize
them better. Where sales are boosted as a result of this strategy, breweries will
obviously be operating at a great return to their investments.
Utilization of Promotional Practices by Breweries in Nigeria
On the budgeting of huge amount of money for promotional activities, it
was found that the use of the practice was utilized to a high extent by breweries.
This is in consonance with Pervault and McCarthy (2002) who agreed that
promotion needs proper funding to achieve its aims. The study revealed that
regular advertisement of products was utilized to a very high extent by breweries.
Sellers (1996) says that regular advertisement of goods makes its sales
increasingly steady. On the issue of publication of company activities, the study
136
revealed that regular publication of company activities by its public relations
department was utilized to a high extent by breweries. This finding is same with
the opinion of Jobber (2006) who opined that establishment of public relations
department by companies was ideal for publication of its activities.
Results on feature articles indicated that their publications on companies
were however moderately utilized by breweries, same as publicity programmes.
These findings are in agreement with McCarthy (2007) who said that frequent
feature articles can lose its value since issues considered might become repetitive.
On the specific sales force objectives, it was found that they were utilized to a
moderate extent by breweries. This is in consonance with Pride and Ferrell (2005)
who stated that for sales force to achieve its objectives, those objectives be clearly
outlined and strictly followed. On the training of sales force, the study revealed
that training and retraining of sales force was a highly utilized service. This result
agrees with Kotler (2003) who said that for sales force to keep abreast with
marketing trends, they should be undergoing regular refresher courses.
It was found that creation of sales territories was to a high extent utilized by
breweries. This finding is in consonance with that of Kotler and Keller (2005) who
said that creation of sales territories eases burdens of both companies and their
customers who can easily reach those territories for their buying needs. On
introduction of free samples it was found that they were utilized service to
customers. Kotler and Armstrong (2006) said that free samples were an important
non-price competition tool for manufacturing companies. On use of money
137
refunds, the study revealed that it was a moderately utilized service. Pride and
Ferrell (2005) agreed that money refund make customers feel very much at home
with issuing companies. Rendering of direct marketing services to customers was
also found to be highly utilized. Kotler and Keller (2005) agreed that direct
marketing was a new trend in promotion but very effective, hence be used by
companies.
On the whole promotion is not just utilized to a very high extent by
breweries operating in Nigeria. It has some value in it. Several factors point out
the need for promotion today. As the distance between produces and customers
increases and as the number of potentials customers grows the problem of market
communication becomes very significant. Promotion disseminate information to
actual and potential customers to let them know that certain goods are available.
Consumers are more selective in their buying choices and a good promotional
programme is needed to reach them. It is also needed in period of shortage. During
this period advertising can stress product conservation and efficient uses of the
product while sales force can direct its efforts towards servicing and helping
customers solve their shortage problems.
Utilization of Packaging Practices by Breweries
Respondents agreed that putting brewery products into bottles and cans of
varying sizes was to a very high extent utilized service by breweries. This
agreement conforms with Lancaster and Massingham (2004) who said that
attractive containers lure customers to such products. On the use of trademarks,
138
respondents agreed that the service was also utilized to a moderate extent. This
agrees with many marketing authorities including Kotler and Armstrong (2006)
who said that trade marks as an important product feature tell customers that the
quality of the product was standard and from a legally established company.
Utilization of Branding Practices by Breweries
It was found that separate branding of products from competitors highly
utilized to a high extent by breweries as a non price competition marketing
strategy. This Stanton et al (2004) agreed that branding of product should be done
company by company, that is, every company should have its specific brands from
others.
On brand marks, it was found that the use of exclusive branding with marks
indicating the company in use was highly utilized. On the labeling it was found
that the practice was utilized to high extent. These agreements conform with Best
(2000) who said that product features like trademark, branding mark, label etc
were utilized by all the breweries. While respondents agreed on the use of
manufacturers brands they disagreed on the use of private brands. Cespedes (2006)
explained that manufacturers and private brands can be utilized by manufacturing
companies as a matter of which they prefer.
Hypotheses
The test of hypothesis one indicated that there was no significant difference
in the mean ratings of commercial managers, senior marketing managers and
senior sales manager on the extent of utilization of product handling practices by
139
breweries in Nigeria. The f-calculated was less than f-critical at 0.05 level; of
significance. The null hypothesis was therefore upheld by respondents.
Findings pertaining to hypothesis two revealed that there was no significant
difference in the mean ratings of commercial managers, senior marketing mangers
and senior sales managers on the extent of utilization of customer services by
breweries in Nigeria. The null hypothesis was upheld. Respondents unanimously
agreed on the adoption of these customer services by breweries. This finding
agrees with Pride and Ferrell (2005) who said that provision of correct customer
services lure customers to such companies as such services safe them a lot of
inconveniences.
Findings concerning hypothesis three showed that there was no significant
difference in the mean ratings of commercial, senior marketing and senior sales
managers on the extent of utilization of promotional services by breweries in
Nigeria. The respondents agreed that rendering of promotional services was highly
utilized that customers and consumers alike would be able to understand where to
go and procure products of their choices. This finding agrees with Osuala (1998)
who confirmed that promotion creates awareness as to where customer could get
goods of their choice.
The test of hypothesis four revealed that there was no significant difference
on the mean ratings of commercial manager, marketing managers and sales
managers on the extent of utilization of proper packaging practices by breweries in
Nigeria. The null hypothesis was therefore accepted because opinions of the
140
managers did not differ significantly with regards to the extent utilization of
packaging practices as a non price competition marketing strategies by breweries.
The findings concerning hypothesis five revealed that opinion of all the
managers did not differ significantly on the extent of utilization of branding
practices by breweries in Nigeria. This finding agrees with Belch and Belch
(2001) who confirmed that proper branding practices were best practices for
manufacturing companies. The null hypothesis was accepted because opinion of
all managers did not differ significantly on the extent of utilization of branding
practices by breweries in Nigeria.
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CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
In this chapter, a summary of the study, conclusions and recommendations
are presented.
Restatement of the Problem
Competition among business organizations offering same or similar
products or services is as old as business itself. As businesses are out to make
profit, they are always ready to counteract any move from their rivals or other
companies capable of undermining their existence. Companies compete on the
basis of price and non-price (Brue and McConnel, 2002). Clay, et al (2005) state
that a company that reduces price to attract more customers can be matched
immediately by similar competitive strategy and that usually leads to price wars
among companies producing identical or similar products or services.
A good number of breweries operating in Nigeria fail partly because of
financial constraints but mainly because such breweries cannot withstand price
competition from rivals (Ezumah, 2004). Such companies end up folding up as
bigger and more viable ones often push then to liquidation and subsequent
elimination. Ezumah (2004) states that breweries like Pal larger beer, Champion
brewery, Golden Guinea brewery and even soft drinks like Dr. Pepper, Fanta
Chapman, inter soft drink etc failed because they could not withstand stiff price
competition from rival companies. He further said that companies can better
survive using non price competition as it requires just good quality products
142
appealing product features, awareness creation, extra customer services, safe
product containers and differential advantage over competing brands.
Owonubi (2009) advised new entrants into brewery sector that with the
current innovation, expansion and restructuring in the sector only identification
and use of differential advantage can safe them and not price discounting with
increased multinational presence – influx of multinational companies in brewery
sector in Nigeria. Non price competition marketing strategies emphasize better
quality of service, extended warranties, contractual relationship with suppliers
increase in demand and development of brand loyalty among consumers. Price
cutting erodes profit as it leads to a lower price level (Perrault & McCarthy, 2002).
Description of the Procedure Used
The study utilized a survey research design. The major purpose of the study
was to determine the level of utilization of non-price competition marketing
strategies by breweries operating in Nigeria. Five research questions and five null
hypotheses were tested at 0.05 level of significance. A fifty two item structured
questionnaire was used to elicit information for this study. Population for the study
was composed of 11 breweries operating in Nigeria. Sample was made up of 73
Commercial Manager, 85 Senior Marketing Manager and 91 Senior Sales
managers drawn from all the breweries in Nigeria. Instrument for this study was
face-validated by three experts. Two from Marketing department, University of
Nigeria, Enugu campus (UNEC) and one from vocational education department,
University of Nigeria, Nsukka (UNN). Cronbach Alpha reliability test was used to
143
determine the internal consistency of the instrument. Reliability co-efficiency of
0.85 was obtained which indicated that internal consistency of the instrument was
high. The structured questionnaire was administered by personal contact with the
assistance of five research assistants. The five research questions were analyzed
using mean and standard deviation while the null hypotheses were tested using
analysis of variance (ANOVA) at 0.05 level of significance.
Summary of Findings
Based on the data analyzed, the following findings were summarized: Use
of distribution centres by breweries in Nigeria was found utilized to a very high
extent to make their products more accessible to their customers. Construction of
special containers by breweries for their products was found to a high extent
utilized. On the loading and unloading of products, it was found that breweries
employ people for the jobs. On the extent of utilization of warehouse, it was found
that breweries employ guards to watch over products brought but not yet collected.
While use of special handling procedure was utilized to a high extent as breweries
products are fragile. On bottling, it was found that breweries utilize specialists to
bottle their products to a high extent while platforms are erected at some
distribution centres for loading and unloading.
On customers-services, it was found that breweries price their brands same
with competitors. Early delivery of products was found utilized to a high extent by
breweries. Replacement of wrong supplies or error on receipt of return inward
utilized to a high extent by breweries. On credit facilities, breweries offer credit
144
facilities to reliable and regular customers and also give discounts to customers
who pay promptly or buy in large quantities.
On promotional practices, breweries create sales territories to ease
difficulties of their customers in procuring the commodity. Breweries in Nigeria
highly utilize direct marketing services to their customers. Construction of bottles
and cans of varying sizes is utilized to a very high extent by breweries in Nigeria
for customer convenience.
Packaging by breweries be done by stylish bottles. Use of trade marks is
utilized to a high extent by breweries. Utilization of research and development
departments was found to be utilized to a very high extent.
Breweries utilize to a high extent the services of brand mark for different
brands. Breweries have exclusive right to use trade marks of products produced.
Companies clearly print labeled for better identification. Use of manufacturer
brands by breweries was highly utilized by breweries in Nigeria. Private
distributor brands for beers in Nigeria were found to be moderately utilized.
Implications for Marketing Education
Findings of this study would have far reaching implications for breweries
operating in Nigeria as well as marketing educators. Brewing companies operating
in Nigeria would in this study find invaluable non-price competition practices
utilizable by the business for their profitable operations. They would find how the
use of suitable non-price competition could carry them to viable operations.
145
This study would assist lecturers and students of marketing education in no
small measure. In this, lecturers’ knowledge would be broadened and students
would find invaluable literature for their research works particularly in non price
competition marketing.
Conclusions
1.
Based on the analysis product handling practices when utilized as a non
price competition marketing strategies would reduce costs associated with
constant price cuts as the goods would remain intact and safe for
consumption.
2.
Utilizing proper customer service practices as non price competition
marketing strategies by breweries in Nigeria would create customer
satisfaction thereby enhancing repeat buying from customers.
3.
Customers who are constantly informed of current trends in the company
they buy from through regular promotional messages are better placed to
make rightful buying decisions.
4.
Utilizing correct packaging practices by breweries would erase fear of
breakages usually associated with fragile products thereby enhancing
comfort among customers in the course of handling brewery products.
5.
Branding enhances identification of products, proper branding practices
would not only enable customers quickly identify products of their choices
but also promote brand loyalty among brewery customers in Nigeria.
146
Recommendations
Based on the findings of this study and conclusions drawn, the following
recommendations are made:
1.
The management of brewing companies in Nigeria should ensure that they
use harmless handling practices so that they remain desirable and safe for
consumption.
2.
Customers’ patronage enhances the survival of companies; management of
breweries should ensure that the best customer-services are rendered to
customers to be sure of their repeat purchases.
3.
The management of breweries in Nigeria should ensure that undeceitful
promotional practices are used by their companies. They should avoid
deceitful practices while using promotion mix variables.
4.
The management of breweries in Nigeria should ensure that all their
containers are safe and not harmful to human health. Only Containers that
are free from contamination and less fragile should be used.
5.
Clean, clear branding of products should be used so that consumers could
easily know where, when and who produces which brew product Nigeria
market.
Limitations of the Study
In the course of undertaking this study, some limitations were found. One
was the difficulty in reaching respondents all over the country because of the large
nature of Nigeria. This made movement very costly and stressful. Some
147
respondents were not easily accessible because of the itinerant nature of their jobs.
This led to several v visits to the breweries.
A good number of breweries
registered with Corporate Affairs Commission were found to have been folded up,
this made traveling to such companies fruitless journeys. Crime rate in Nigeria has
made response to research instruments a fearful exercise, this compounded the
researcher’s problems thorough questionings were found a routine on brewery
gates on each visit.
Suggestions for further Studies
The following related areas can be further studied.
1.
Determinants of business failure of breweries in Nigeria.
2.
An evaluation of financial constraints of companies operating in Nigeria.
3.
The topic can be replicated in any geopolitical zone of Nigeria considering
her vast nature.
Product handling
Practices
Promotion Practices
Non price competition
marketing strategies
Branding Practices
Packaging Practices
Customer Service
Practices
Schema for the Study
148
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155
APPENDIX A
POPULATION DISTRIBUTION OF BREWERIES IN NIGERIA
S/N
Breweries in Nigeria
Location
1.
Nigerian breweries Plc
2.
Guiness Nigeria Plc
Apapa Lagos
Kaduna
Enugu
Ibadan
Aba
Port Harcourt
Ikeja Lagos
Benin
Aba
Ijebu-Ode
Kaduna
3.
4.
Consolidated breweries
International beer and
beverages industry
5.
International Breweries
Jos
6.
Sonna Breweries
Iganmu Lagos
7.
Benue Breweries
Makurdi
8.
Pabob breweries
Port Harcourt
9
Inel Science Tech. Nig.
Port Harcourt
10
Champion Breweries
Uyo
11
Eastern Breweries
Awo - Omama
Source: Corporate Affairs Commission, 2009
156
APPENDIX B
Sample Distribution of Commercial Managers, Senior Marketing Managers
and Senior Sales Managers of Breweries in Nigeria
S/N
Breweries in Nigeria
1.
Nigerian breweries Plc
Apapa Lagos
Kaduna
Enugu
Ibadan
Aba
Port Harcourt
Guiness Nigeria Plc Ikeja
Lagos
Benin
Aba
Consolidated breweries
Ijebu-Ode
International beer and
beverages industry Kaduna
International Breweries Jos
Sonna Breweries Iganmu
Lagos
Benue Breweries Makurdi
Padob breweries Port
Harcourt
Inel Science Tech. Nig. Port
Harcourt
Champion Breweries Uyo
Eastern Breweries Awo –
Omama
Total
2.
3.
4.
5.
6.
7.
8.
9
10
11
No. of
Commercial
Managers
No. of
Senior
Marketing
Managers
No. of
Senior Sales
Managers
5
5
8
18
3
3
4
3
3
5
4
4
4
4
4
6
6
6
7
5
6
7
13
13
15
12
13
18
3
3
4
4
4
5
6
5
7
13
12
16
4
4
4
5
5
5
7
5
5
16
14
14
4
3
4
4
5
5
13
12
3
4
5
12
4
3
4
4
5
5
13
12
73
85
91
249
Source: The Breweries, 2010.
Total
157
APPENDIX C
Department of Vocational Teacher Education
(Business Education Unit)
University of Nigeria, Nsukka
October, 2012.
Dear Respondent,
REQUEST FOR COMPLETION OF QUESTIONNAIRE
I am a postgraduate student of the Department of Vocational Teacher
Education, University of Nigeria, Nsukka undertaking a research on Utilization of
Non-price Competition Marketing Strategies by Breweries in Nigeria.
You are please requested to complete the questionnaire as indicated in the
instruction. I wish to assure you that your responses will be used for academic
purposes only, and information provided would be kept confidential.
Thank you.
Yours sincerely
Abah, Joseph Khegh
158
APPENDIX D
QUESTIONNAIRE
Utilization of Non-price Competition Marketing Strategies by Breweries in
Nigeria
Section A:
Please tick
General Information
or complete the following spaces provided as appropriate to you.
1.
Sex: Male
Female:
2.
Qualification: HND, B.Sc, MBA Others (specify)
3.
Cognate experience
1 – 5 years
4.
6 – 10 years
11 – 15
16 – 20
21 – 25
26 – above
Position held:
a.
Marketing Manager
b.
Sales Manager
c.
Commercial Manager
Section B:
To what extent are product-handling practices utilized as Non-Price
Competition Marketing Strategies by breweries in Nigeria? Please check in the
boxes provided to indicate the extent of their utilization in your company.
159
Key:
Very High Extent
(VHE)
5
High Extent
(HU)
4
Moderate Extent
(ME)
3
Little Extent
(LE)
2
No Extent
(NE)
1
S/No
Item Statement
1
Establishment of distribution centres nearer
customers
Use of machines for bottling and movement
beers
Special containers for all products.
Employment of people specifically to be loading
and unloading beers to various depots/customers
Use of Warehouses at distribution centres
Use of loading platforms erected at distribution
centres
Use of trucks for the conveyance of Products to
customers
Employment of guards to watch over beers
bought but not yet collected by customers
Use of trucks specifically designed for conveying
product to customers and depots
A special handling procedure or technique used
by the company
Earliest delivery of beers ordered
Standard loading of product procedure.
Customers pay for bottles/crates broken
Customers bring their trucks to pack their
consignments
Charge for consignments delivered to customers
Deliver products to customer free of charge
Warehouses in use rented by the company
Products kept in warehouse after production for
safety.
Bottling is done by specialist
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19
VHE
HE
ME LE NE
160
To what extent are customer service practices utilized as Non-Price Competition
Marketing Strategies by breweries in Nigeria?
VHE
S/No. Item Statement
20
21
22
23
24
25
HE
ME
LE
NE
Pricing same with competitors
Dependable delivery service for all
customers
Provision of vehicles for the evacuation
of products to customers
Wrong supplied or in error immediately
replaced on receipt of return inwards
Giving to reliable and regular customers
credit facilities
Discounts to big time customers
To what extent are promotional practices as Non-Price Competition Marketing
Strategies utilized by breweries in Nigeria?
VHE
S/No
Item Statement
26
27
28
29
30
31
32
33.
34
35.
Huge sums of money budgeted for promotional
activities every year.
Regular advertisement of Products
Advertising messages for all classes of consumers.
Advertising campaigns developed by the company
personnel
Activities of the company published by the public
relations department of the company through news
releases.
Several feature articles published by the company
since its inception.
Specified publicity programme for company activities.
Specific sales force objectives
Training and retaining of sales force in the company a
routine for optimal performance.
Sales territories created for all product by the
company.
HE
ME
LE
NE
161
36.
37.
38
39
Free samples given to customers
Coupons introduced to attract repeat purchases.
Use of money refund as one of the sales promotion
devices
Rendering direct marketing services to customers
To what extent are the packaging practices utilized as non-price competition
marketing strategies by breweries in Nigeria?
VHE
S/N
40
41
42
43
44
45
46.
HE
ME
LE
Item Statement
Use of bottles and cans of varying sizes for customer’
convenience
Bottles and cans stylishly designed to distinguish them
from those of competitors
Light containers in use
Research and development department undertakes
improvements in packaging all the times
Packages in the company designed by specialists
Packages designed undergo test packaging
Cartons and Bottles have product features on them.
To what extent are branding practices utilized as non-price competition
marketing strategies by breweries in Nigeria?
VHE
S/No.
47
48
49
50
51
52
Item Statement
Branding differently from other companies
Use of different brand marks for different brands
Exclusive right to use trade marks of goods
produced.
Brands of beer well labeled for better identification.
Use of Manufacturer brands.
Use of private distributor brands.
HE
ME
LE
NE
NE