The Relevance Of Product Positioning In The Marketing Of Soft Drinks In Nigeria

Project and Seminar Material for Marketing

The Relevance Of Product Positioning In The Marketing Of Soft Drinks In Nigeria


Abstract


This study is to examine relevance of product positioning in the marketing of soft drinks in Nigeria with specific reference to Nigerian Bottling Company Plc, Kaduna. The fundamental objectives of the study are to identify the impact of product positioning on the marketing and sales of soft drinks, to determine how product positioning improve on the profit of the organization and to ascertain the level of consumers’ satisfaction of the company. The primary and secondary sources of data were used for data collection. Questionnaire was administered to 80 staff of the reference organization. Data gathered from the respondents was analyzed and the finding revealed that shortfall in sales and profit is responsible for product positioning due to competitors’ market influence; that there is need to increase company’s turnover and maximize profit ; that consumers’ satisfaction is enhanced; that shareholders fund should be maximized through increase in rate of turnover and profit. It was concluded that the idea behind product positioning does not end in the satisfaction of changing taste of the consumer. It also helps to increase sales and profit of the organization. It was recommended that companies should engage in it regular interval so as to cut down the cost of value analysis strategy which is a segment of product positioning and Companies should ensure that Research and Development Department as well as other sources where new product strategic plan emanated from should be explored not neglected.


Table Of Contents


Preliminary Page(s)

  • Title Page
  • Declaration
  • Certification
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of Contents

Chapter One

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objectives of the Study
  • 1.4 Research Questions
  • 1.5 Statement of Hypothesis
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitations of the Study
  • 1.9 Definition of Terms

Chapter Two

Literature Review

  • 2.1 Introduction
  • 2.2 Marketing Concept
  • 2.3 Product Defined
  • 2.3.1 New Product Defined
  • 2.3.2 Product Classification
  • 2.4 Innovation Defined
  • 2.5 Product Life Cycle
  • 2.6 Product positioning
  • 2.7 Purpose of Product positioning
  • 2.8 Product Design
  • 2.8.1 Overview of Product Design Process
  • 2.8.2 Product Design Specification (PDS)
  • 2.8.3 The Design Process
  • 2.9 Product and Process Innovation in Manufacturing Companies
  • 2.9.1 Linking Product and Process Innovation
  • 2.10 Creating, Organizing, and Using Knowledge for Innovation
  • 2.11 Impact of Product positioning on the performance of manufacturing company
  • 2.12 Background of Nigerian Bottling Company Plc Kaduna

Chapter Three

Research Methodology

  • 3.1 Introduction
  • 3.2 Research Design
  • 3.3 Population of the Study
  • 3.3.1 Sampling Size
  • 3.3.2 Sampling Techniques
  • 3.4 Data Collection Instrument and Administration
  • 3.5 Method of Data Analysis
  • 3.6 Justification of the Instrument Used

Chapter Four

Data Presentation and Analysis

  • 4.1 Introduction
  • 4.2 Data Presentation
  • 4.3 Test of Hypothesis
  • 4.4 Summary of Findings

Chapter Five

Summary, Conclusion and Recommendations

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendations
  • Bibliography
  • Appendix

Chapter One


Introduction

1.1 Background to the Study

Innovativeness is one of the fundamental instruments of growth strategies to enter new markets, to perform better in the current market, to increase the market share and to provide the company with a competitive edge. It is motivated by the increasing competition in global markets, companies have started to grasp the importance of innovation, since swiftly changing technologies and severe global competition rapidly erode the value added of existing products and services. Thus, innovations constitute an indispensable component of the corporate strategies for several reasons such as to apply more productive manufacturing processes, to perform better in the

market, to seek positive reputation in customers’ perception and as a result to gain sustainable competitive advantage. Particularly over the last two decades, innovativeness has turned into an attractive area of study for those researchers who tried to define, categorize and investigate its performance impacts, especially due to its practical relevance. Innovations provide firms a strategic orientation to overcome the problems they encounter while striving to achieve sustainable competitive advantage.

Technological oriented companies have begun to recognize that a blend of innovation and marketing in their overall strategy is vitally important to the achievement of the corporate performance of the firm. The corporate goal of a company could be multifarious but the most common one that cut across many firms in a competitive market is survival, which is achieved through increase in sales and profits. To achieve this goal, the blend of product positioning and marketing concept philosophy must be harmonized with the company’s global strategy. Product positioning on the other hand involves the introduction of a new good or service that is new or substantially improved in a strategic way that makes it visible, accessible and obtainable by the target customers.

There are stages of product life cycle and these include introductory, growth, maturity and decline stage. The introduction starts when the new product is first launched. Introduction takes time, and sales growth is apt to be slow. Well known products, lingered for many years before the entered stage of rapid growth. In this stage, as compare to other stage, profit are negative or low because of the low sales

and high distribution and promotion expenses. if the new product satisfied the market, it will enter a growth stage, in which sale will starts climbing quickly. The early adopters will continue to buy and later buyer will start following their lead, especially if they hear favorable

word of mouth. Attracted by the opportunities for profits, new competitors will enter the market. They will introduce new product features. The increase in competitors leads to an increase in the number of distribution outlets and sales increase. Just to build reseller inventories prices remain where they are or fall only slightly. Companies keep their production pending at the same or a slight higher level. At a particular point, a product’s sales growth will slow down, and the product will enter a maturity stage. This maturity stage normally last longer than the previous stages and it posses strong challenges to marketing management. Most products are in the maturity stage of the life cycle and there most of marketing management deals with the mature product. The sales of most products from brands eventually dip. The decline may be slow, or rapid sales may plunge to zero, or they may drop to low level where they continue for many years. This is the “decline stage”.

At the declining stage, it will be necessary to innovate product, in order to make it withstand the strong competition from competing products and to suit the changing desires of the

customers that consumes the product. As it is widely recognized, needs change over time and companies must reflect these changes in their products if they are to achieve the economic objective of increase in turnover, maximizing profit and satisfaction. Throughout modern

history, most product positioning receives increasing support and attention. The underlying reason is that markets are highly dynamic. A product that was a profitable product yesterday may not be profitable tomorrow.

Furthermore, successful new products command substantially higher profit margin than mature or declining products. Successful new products are profitable –at least for a while before competitors roll out their own me-too products to the market and eventually compete on price basis. Most companies face the inevitable choice of product positioning on gradually fading products for the market. However, it should be noted that product positioning is not only carried out at the declining stage of a product, it can also be done to a totally novel product at the introductory stage.

Marketing of new product goes through a period of growth, reach a peak, and eventually decline. In addition, profit tends to reach a peak and usually begin to decline earlier than sales volume. Optimum sales volume is often reached only after competitors have entered the field, price rivalry has become

intense and profit margin have been shortened. To sustain profit, new products/ services may be needed long before sales of established product/ services have begun to fall. The salient causes of product/ services

life cycles may be as a result of instability of consumer demand and instability of competitive position.

Innovation refers to the process that covers product design, production system design, product introduction processes and start of production (Johansen, 2005). “This includes the generation of opportunities, their selection and transformation into artefacts (manufactured products) and activities (services) offered to customers and the institutionalization of improvements in the New Product Development (NPD) activities themselves” (Ebrahim 2010).

It is against this background that the study investigates impact of product positioning on the performance of manufacturing company.


1.2 Statement of the Problem

The experience of most manufacturing companies under recessionary economy is largely characterized by low-consumer demand except for certain products, the demand of which is quite inelastic, most companies in Nigeria usually strive hard to improve on their marketing activities as demanded by environment and at the same time, remain in business.

The effect of low- consumer demand would result in low sales performance, shortfall in profit and low consumer patronage which all have great

implications on the attainment of the organizational objective. In order to actualize the organizational objective, the company (Nigerian Bottling Company Plc) came up with the strategic plan of improving and developing new product to remedy its problems.

Companies competing in this fast-paced industry must be able to effectively manage innovation to ensure growth. Unfortunately, there are notable challenges in today’s environment: product design is more intricate, regulatory requirements are more rigorous, quality and production processes are more complex. Moreover, companies are managing many more new ideas and, partly driven by the growth of private labeling, have greatly expanded their product portfolios. And, because of the urgency of getting new products or product changes to market, avoiding costly errors is made much more difficult. These obstacles help to explain why the food industry is one of the few where time-to-market for new products, line extensions, and reformulations is actually increasing.

In this research work, an attempt would be made to evaluate and geared toward priority to look into the associated problems and rendered solution to them and to make some viable recommendations to the company.


1.3 Objectives of the Study

The objective of the study is to examine the relevance of product positioning in the marketing of soft drinks in Nigeria. The specific Objectives are:

  1. To identify the impact of product positioning on the sales of Nigerian Bottling Company Plc.
  2. To determine how product positioning improve on the profit of the organi
  3. To ascertain the level of consumer satisfaction.

1.4 Research questions

The research would seek to address the following questions:

  1. What is responsible for product positioning in Nigerian Bottling Company Plc?
  2. How does the company source for strategic plan for new product?
  3. What are the short- term and long- term impact of product positioning to the organization?

1.5 Statement of Hypotheses

The following hypotheses are formulated to guide this study:

  • Hoi: Production innovation has impact on the sales of the company. Ho2: Product positioning increases the profit of the organization,
  • Ho3: Product positioning does not have impact on the level of consumers’ satisfaction

1.6 Significance of Study

The output of this project will be of great value to manufacturing companies that are involved with technological products. Firms will be able to apply market performance knowledge of innovative products in designing their innovation funnel and not inhibit their innovative capacity by using fixed rules and standard to all products. The analysis from market trend can help to decide on the type of innovation strategy to embark upon, how to effectively use product positioning as a distinct strategy. In addition, this project will also highlight ways through which this important aspect of product development can be improved upon. The output of this research would also be useful to the following categories of people:

The organization taken as case study: The result and recommendations from this research work would help product managers to see product positioning as part of their task by bringing them out of the shell of just rolling out products without monitoring its life cycle.

To the other organizations within the same industry of which the case study belongs: This will also assist in fashioning out the business model to maximize sales, profit and consumer satisfaction that is re-directing their products to meet the change in tastes of the consumers.

This would serve as a source of information to other researchers of product positioning in the academic field of marketing.


1.7 Scope of the Study

The scope of this study is to examine the impact of product positioning on the performance of manufacturing company. This study would be restricted to Nigerian Bottling Company Plc, Kaduna. The study will also be strictly within the framework of the stated objectives.

The study also covers the degree to which it takes into account marketing strategies in proper marketing of its product. Also all other area related to the actual function of marketing will be studied for the purpose of knowing the extent of their relatedness.


1.8 Limitations of the Study

Some problems were encountered in the course of executing this research. Typically, non co-operation from some of the respondents and difficulty in retrieving some of the questionnaires.


1.9 Definitions of Terms

Impact:

Measure of the tangible and intangible effects (Consequences) of one thing’s or entity’s action or influence upon another.

Product:

Anything that can be offered to a market that might satisfy a want or need.

Innovation:

The process of translating an idea or invention into a good or service that creates value or for which customers will pay.

Performance:

The action or process of carrying out or accomplishing an action, task, or function.

Manufacturing:

The process of converting raw materials, components, or parts into finished goods that meet a customer’s expectations or specification.

Company:

A voluntary association formed and organized to carry on a business.


Chapter Five


Summary, Conclusion And Recommendations

5.1 Summary

This research brings to light some of the benefits of product positioning, which can be regarded as organization’s survival strategy. Product positioning can be described as a situation where product is improved upon to meet the ever-changing needs of consumers, organizational turnover and profit. An “old” product can be placed as a “new” product in the market after making some minor changes .On the other hand, an entirely new product can also be introduced into the market as a result of research findings. Most technology based company innovations are mostly technology-driven contrary to market-driven technology, which is stimulated by the consumers’ needs.

Products like any other living beings undergo a normal lifecycle and at every stage of the life cycle, the product experiences some changes in the demand for them. Product positioning can be also be carried out on product already in the market. Also, the research outlines that the company could achieve its short-term and long-term objective through product positioning which would enhance increase in sales, profit maximization and consumers’ satisfaction.


5.2 Conclusion

In this research paper, the impact of product positioning on the performance of manufacturing company was examined. The background has revealed that most products require innovation due to constant changes in the taste of consumers and the need for company to increase sales and maximized profit.

It appears that philosophy of marketing concept is yet to be taken seriously, most companies reckon with this concept in practice. In the practical sense, the needs and wants of the consumers are satisfied through the company’s product(s). For a product to meet these objectives of satisfactions, it must undergo product positioning at regular intervals because of the dynamic nature of consumer’s needs and wants that changes over time.

The idea behind product positioning does not end in the satisfaction of changing taste of the consumers, this aspect of product positioning also helps the company to have an edge over competing products in terms of sales. Sales would increase over time because more consumers would be attracted

to the new product. Not only would these, product positioning enhance the attainment of profit maximization to the company as a result of increase in turnover. The rate at which consumers patronize such product has facilitated profit maximization.

Finally, it is worthy to note that product positioning is not limited to once in a product’s lifetime. A product can be innovated as many times as possible. This aspect of product positioning is mostly done on consumers’ goods. This is so because the cost in carrying out product positioning on consumers good is not that high as the amount that will be spent in carrying out innovation on industrial goods.


5.3 Recommendations

Having undertaken a thorough study of the impact of product positioning on the performance of manufacturing company, it is deemed necessary to give some useful suggestions and recommendations, which would help in improving the quality of consumer goods and improving the satisfaction of consumers. The recommendations are as follows:

  1. Companies should engage in extensive research, to find out the actual needs of the consumers in relation to what should be produced. This would go a long way in preventing the production of products which are not actually needed because of its failure to satisfy the needs and wants of the consumers;
  2. In addition, companies should carry our research on the changing taste of the consumers periodically so as to adjust the already existing product, to meet the dynamic taste of consumers because failure to do so would reduce the product sales and profit;
  3. Since product positioning helps in reducing cost of consumer goods, Nigerian Bottling Company management should engage in it at regular interval so as to cut down the cost of value analysis strategy which is segment of product positioning;
  4. Management of Nigerian Bottling Company should ensure that Research and Development Department as well as feedback of consumers from sales personnel where new product strategic plan emanated from should be explored and made use of so as to enhance provision of products that are expected by consumers. Such report includes that from sales persons who are always in touch with the consumers and understand most of the competing products and in addition they know the position of their company’s product in terms of competition in the market;
  5. Finally, in carrying out product positioning, management of Nigerian Bottling Company should ensure that the “new” product is real improvement on the old one. Consumers should not just be deceived that a product quality has improved while in the actual sense, there is no alteration on the product.

The Relevance Of Product Positioning In The Marketing Of Soft Drinks In Nigeria


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