Product Differentiation As A Competitive Tool In The Marketing Of Soft Drink (A Case Study Of Limca Bottling Company Plc Okigwe)

Project and Seminar Material for Marketing

Product Differentiation As A Competitive Tool In The Marketing Of Soft Drink (A Case Study Of Limca Bottling Company Plc Okigwe)


Abstract


The topic of this research work is product differentiation as a competitive tool in the marketing of soft drinks (A case study of Limca Bottling Company).

Chapter one focuses on the introductory aspect of this work e.g. problems of the topic, objectives of the research, and research hypothesis. The review of different writers’ opinion on this research work constitutes chapter two, which is the literature review, it goes further to examine the effect of product differentiation on the profitability of the company. Under this chapter, different forms of product differentiation and market segmentation were also looked into.

Chapter three deals with the research methodology, this covers the method used in the collection of both primary and secondary data, presentation analysis interpretation of data and testing of hypothesis is dealt in chapter four.

The chapter five attempts to make some suggestion and valuable recommendation essentially to Limca Bottling Company which if properly implemented, will go a long way in helping the company in the area of product differentiation and also in market segmentation.


Tables of Contents


Preliminary Page(s)

  • Title Page
  • Declaration
  • Approval
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of Content

Chapter One

1.0 Introduction

  • 1.1 Background of the study
  • 1.2 Statement of the problem
  • 1.3 Objectives of the study
  • 1.4 Research question
  • 1.5 Statement of hypothesis
  • 1.6 significance of the study
  • 1.7 Scope of the study
  • 1.8 Limitation of the study
  • 1.9 Definition of terms

Chapter Two

2.0 Literature Review

  • 2.1 Introduction
  • 2.2 History of the soft drinks industry
  • 2.3 Market segmentation
  • 2.4 Base for product differentiation
  • 2.5 Competition environment
  • 2.6 Marketing approach to competition
  • 2.7 Strategies for market challenges
  • 2.8 Strategies for market followers

Chapter Three

3.0 Research Methodology

  • 3.1 Research design
  • 3.2 Sources of data
  • 3.3 method of data collection
  • 3.4 Population of the study
  • 3.5 Sampling techniques
  • 3.6 Validity and reliability of instrument
  • 3.7 Method of data analysis

Chapter Four

4.0 Presentation of Data

  • 4.1 Analysis and presentation of data
  • 4.2 Research question
  • 4.3 Testing of hypothesis

Chapter Five

5.0 Summary, Recommendation and Conclusion

  • 5.1 Summary
  • 5.2 Recommendations
  • 5.3 Conclusion
  • References
  • Appendixes

Chapter One


Introduction

1.1 Background of the Study

Here is Nigeria where few soft drink industries exist could be said with high degree of precision that those firms are practicing product differentiation in the market.

This project will research into how effectively, efficient product differentiation is employed as a competition tool in the marketing of soft drink; how it helps the profitability of the company, also the problem and task involved in products differentiation will be investigated with some particular reference to limca bottling company. Bottlers of limca, real – soda and Gold spot.

Any organization that decides to operate in soft drink industry must recognize that it can neither save nor appeal to the total market with one product or one Marketing Mix . The idea is born out of the fact that the buyers may be too numerous widely spread and different in their purchasing behaviour.

Product differentiation is a competitive tool in the marketing of soft drinks and the prospects of product differentiation are the profits. Increasing sales, increasing market share, improved company image goodwill etc. product differentiation is not without its own problems. The major problem encountered in differentiating the market trend so as to know and follow the market trend, marketers knows that not every person is a consumer or customers. They know that consumers go more than some specific qualities in a product hence they [marketer] endeavor to science various segmentation in the market by introducing a variety of product innovation is the basic tool of serving and satisfying different segments in market and offering varieties of product for instance , markets thinks that the market is a of homogenous buyers while the market is a interogeneous in one product. Some people take it in order to feel relaxed so that the company will favour her product appeal to satisfy the needs of her various consumers in realization of this, the marketer showed know that the market is always nitrogen [Gousize. Okpara 2002: 2003] .

Tool for competitive edge. [Gazi S. Okpara 2002:2003 when the product of a company faces seven competition sales could be increased over those of rivets through innovation the price of innovation here would be to create a distinct value in a product from the offend by the rivals.

Supporting this assertion, Akande [1984:11] wrote “when product have become established and one feting the brunt of sever competition attempts at increasing company market share many be pursued through product reformulation or product replacement reformulation is often undertaken to give added value to the consumers and the consumer and a competitive edge through new features.


1.2 Statement of the Problem

Business fail these days because those responsible for formulating strategies and objectives, lack the foresight in identifying the various psychological needs and difference existing in those markets the company served. For any business to succeed it must have a depth knowledge of the market it is serving and must be able to develop strategies to satisfy the consumers of her product among the main strategies the can be used are.

  • After sales services
  • Discount
  • Product modification etc

In this study specific problems that will be addressed include the following.

  • Inability to create strategies to satisfy their costumers
  • Inability to create feasibility study for their product
  • Inability to identifying the various psychological needs and differences existing in these market which the company served

1.3 Objectives of the Study

The main objectives of this project are to look into this impact of product differentiation as a competitive tool the specific objectives include.

  1. Examination of the effect of product differentiation on the competitive trend of the company
  2. Determination of the impact of the product differentiation on the profitability of the company
  3. Examination of the role of product differentiation on the market
  4. Identification of the problems the company faces in differentiating its product.

1.4 Research Question

For the purpose of these researches the following are formulated to assist the researcher to identify the importance of product differentiation as a competitive tool in the marketing of soft drink.

  1. Is product differentiation being used in the firm’s?
  2. What are the bases for differentiating the product?
  3. Has product differentiation any significance on the market share of the company?
  4. Has product differentiation any impact on the competitive trend of the firm?
  5. What effects does product differentiation have on the profit of the organization?

1.5 Statement of Hypothesis

For the purpose of this research were the following hypothesis shall be fasted as they relate to the survey work under consideration.

  1. HO: Product differentiation does not improve profit of the firm.
    Hi: The product differentiation has a significant effect on the profit of the firm.
  2. Ho: Product differentiation does not improve the competitive capability of the firm.
    Hi: product differentiation improves the competitive capability of the firm.

1.6 Significance of the Study

Any company producing highly competitive product need to differentiate her product so as to distinguish her product (s) from that of the competitors as well as to be able to respond well to the challenges of the market competition, this research work will look more on the prospects of product differentiation as a competitive tool. This will be useful to business owners especially small business owners who will than learn that it pays to differentiate ones products as this policy will helps increase the firms sales volume, market share and profit. The government will also benefit from the fruits of this research since the improvement of the profit of firms will improve the nations economy.


1.7 Scope of the Study

In view of the numerous industries in the country and their location it become necessary that the research work on this issues be limited to only one key industry [ Limca bottling company Plc Okigwe which would represent a true sample of the industries in Nigeria]. It is on this basis therefore, that the various references made related to the sample used.


1.8 Limitation of the Study

A lot of constraints were encountered in an attempt to gather the necessary materials for the successful carrying out of the project.

The following problems were encountered in the course of this research.

Lack Material:

While carrying out this project research the work not been done on this particular subject this nearly made it impossible for to review past studies.

Economic Factor:

Due to the attitude of the personnel who suppose to give the necessary information for this study made me to spend more than necessary on transportation, then resort was made to vesting him whenever there is transportation fare.

Financial Constraints:

Inability to generate money made it impossible for me to carryout this research work effectively and efficiently.


1.9 Definition of Term

The value of a research work is incomplete unless the terms are defined in order to avoid some misconception or mi- interpretation that may arise.

Marketing Mix

This involves all activities that the marketer uses in achieving the marketing objectives eg. Product, prices, promotion, place, people, physical evidence and process management.

Product Differentiation

It is the decision of the management to produce two or more types of the same product, but differentiate in terms of styles, quality, packaging, size and colour.

Segmentation

It is the act of dividing a market into meaningful group of buyers strategy.

Marketing strategy is a business activity, which treat each consumer uniquely.

Product Standardization

It is a tool of market segmentation which treat the whole market equal by producing the sales standard of product for the entire market.

Is a group of interogeneous buyer who see different attribute in one product?

Marketing

Is a management process for identifying and anticipating and satisfying customer’s requirement profitably?


Chapter Five


5.0 Summary Recommendation and Conclusion

5.1 Summary

In today’s world there are a lots of soft drink firm’s producing soft drinks of same purpose and use. It is now impossible to count number of soft drinks firms existing in the world, talk of counting the number of brands available in various shapes style and colours.

The same thing applies to Nigeria soft drinks market in Nigeria today, we have more soft drinks firms of various flavour and colours.

The recognition of a soft competition led to the accepts of product differentiation. The purpose of this project is to determine the set of product differentiation on the sales level of the company, profit ability, and the market share of the company as well as the problems involved in product differentiation.

To gain insight into this topic various feats journal and write – up from various authors all over the world. However, to gain primary knowledge about the topic questionnaire were developed and administered on the company marketing staffs and distributors. The hypothesis tested by the researcher are;

  1. HO: That product differentiation does not improve profit of the firm.
    HI: That product differentiation has a significant effect on the profit of the firm.
  2. HO: That product differentiation does not improve the competitive capability of the firm.
    HI: That product differentiation improves the competitive capability of the firm.

Those hypothesis were tested at 0.05 level of significance and were accepted. The use of product differentiation is not only to fight back competition, but to more along with the change needs of the consumers.

Other findings in their research work is that communication is necessary for product differentiation and the cost of differentiating a product is high.


5.2 Recommendation

Having understood the prospects and problems in using product differentiation as competitive tool in Limca bottling company, it was find necessary to make the following recommendation based on the findings of this research work.

The recommendations are for Limca alone, but for the whole soft drinks firms.

  1. That soft drinks firms should differentiate their products in other to make greater sales which in turn leads to greater profits, large market share ad ability of fighting competition.
  2. That product differentiation should be support by heaving promotion so as to achieve its aims as soon as possible.
  3. That soft drinks firms should not consider the high cost of differentiating a product but the benefits, earned as result.
  4. The soft drink firms should spend more money time on marketing information so as to monitor the changes in market trend and make use of opportunities.

5.3 Conclusion

The competitiveness of a firm is determined by its ability to make better profits increase it’s market share, increase its sales etc. the fact that Limca bottling company is able to these effectively as reflected by the acceptance of the hypothesis and on the response of the distributors as well as my personal interview with the marketing staffs and managers.

It is suffice to make the conclusion that product differentiation is a competitive tool in the marketing of soft drinks.
The prospects of product differentiation are the following profit increasing, increase in sales, increase in market share , improved company’s image /good will etc.


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