AN APPRAISAL OF THE PROMOTIONAL STRATEGIES OF SOFT DRINKS INDUSTRY IN NIGERIA

(A CASE STUDY OF NIGERIA BOTTLING COMPANY PLC)

CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND OF THE STUDY

Soft Drinks Manufacturing Industries in Nigeria adopt many strategies to enhance the sale of their variously branded products, various sales methods such as branding, heavy promotional efforts in form of sales promotion, personal selling, advertising, public relations and publicity are adopted as strategies to enhance sales efforts. Besides, the effects of mass production and cut-throat competition in soft drinks market in Nigeria have equally called for various strategies to be adopted by the company involved. Mass production and competition are not the only factors that have contributed in making soft drinks industries apply strategies in promoting their products. Dwindling and deteriorating economy in Nigeria have drastically reduced per capital income of average Nigerians, making them’ to concentrate on basic necessities of life-food, shelter and clothing. Soft drinks are no longer in their scale of preference. This condition has not only brought the use of promotional tool to its strategies in promotion of soft drinks.

Needless to say that every soft drinks company in Nigeria adopts one or more of the promotional tools to inform and persuade the target market about its products.

If one looks closer at some of the strategies adopted by some of these soft drinks companies, one may discover that some of these strategies are wholesome and helpful to marketing managers “of these companies while some are grossly inefficient and run counter to the appeals and objectives of the organization. A typical example of inefficient promotion strategies is where a half nude girl is shown on the television screen serving some brands of soft drinks to a group of people. The objective may be to attract attention, but such strategy is very discouraging especially in the Christendom, many promotional strategy of this soft have collapsed resulting in a considerable waste of time, energy and company’s resources.

Nigerian Bottling Company Plc, makers of Coca-cola products, the focus of this study, is one of the best-known leaders in soft drinks industries in Nigeria and indeed the whole world. Although the company enjoys leadership position, its life is not altogether easy. Some firms in the industry keep challenging its strength while others try to take advantage of its weakness. The company’s risky and prominent position calls for well-designed and carefully throughout strategies .capable of achieving the promotional objectives of the company.

There is no gain-saying that promotional strategies that are not carefully designed and planned could easily make the company miss a turn in the road and lose its leadership position in the industry. It therefore, becomes imperative for Nigerian Bottling Company Plc, to be careful in choosing and ‘planning strategies it adopts in the sales of its variously branded products.

1.2    STATEMENT OF PROBLEM

The Nigerian Bottling Company Plc was incorporated as a private company in November 1951, to establish and operate factories for the bottling and distribution of soft drinks in Nigeria,’ particularly the world famous Coca-cola Company of Atlanta, U.S.A. The company whose operation is presently spread throughout Nigeria has 17 factories located variously at Lagos, Kano, Ibadan, Port Harcourt, Kaduna, Jos, Benin City, Enugu, Owerri, Otta, Maiduguri and Onitsha.

In an attempt by this bottling company to develop their soft drinks industries in Nigeria, many other so~ drink company’s raised their he~ in competition because they have seen that this bottling company has stand their grounds in the country. This made these companies to adopt several promotional strategies to attract the publics’ attention and also induce them to action.

These problems and many more that was encountered by this bottling company (Coca-cola) can be summarized at thus:

To crown it all the research study is prompted by 3 main problems:

1.       To examine the extent of competition in Nigeria Bottling Company.

2.       To identify those economic problems that can prevent the consumers from consuming the Coca-Cola Product.

3.       To determine the extent of the effect of price and promotional strategies that has been adopted by the Nigerian Bottling Company as the market leader.

1.3    OBJECTIVES OF THE STUDY

The primary objective of this research study is to determine or evaluate the promotional strategies adopted by Nigerian Bottling Company Plc, makers of Coca­cola products.

Other minor objectives are:

1.       To determine whether the company engages in aggressive promotional strategies.

2.        To determine how often the company uses each of the promotional strategies available to them.

3.       To determine which of promo-tool and medium that the company uses most frequently in reaching the target audience.

4.       To determine the effectiveness of the advertisement in terms of creation of awareness and recall level.

5.       To determine whether the company has adequate budget to meet up with the promotional activities of the company.

6.       To determine whether the current sales promotion titled: “You Can Be One of the Mega Millionaires” has significally increased the consumption of Coca­cola products in recent times.

7.       To determine those possible strategies to be recommended to enhance the company’s sales effort.

1.4    RESEARCH HYPOTHESES

Based on the above stated objectives, the following assumptions are made:

1.       Consumption pattern of Coca-cola is dependent on the promotional effort of the company.

2.       Promotion of Coca-cola significantly affects the attitude of consumers towards the products.

3.       Returns generated by the Nigeria Bottling Company are directly proportional to the effort ofthe product.

1.5    SIGNIFICANCE OF THE STUDY

At this juncture, one may ask why the researcher has chosen to spend his valuable time, effort and energy in writing on this topic titled: An Appraisal of the Promotional Strategies Adopted by Soft Drinks Industries in Nigerian with special emphasis on Nigerian Bottling Company.

Some markets leaders believe they are in “essential commodity” business, therefore, strategy in promotion is considered a waste of money. When things get rough the tendency is to cut budget and in many cases promotional budget is out NBC, should not make such silly and gravious mistakes.

The company should understand that the position it occupies should not be taken for granted. The company is like a large elephant being attacked by swarm of bees. The largest and nastiest bees keep buzzing around the leader and any slightest opportunity will lead to disastrous attack. This research work is, therefore, very essential to keep the company abreast of the strategies in promotion to launch defensive attack against other soft drink companies.

This research work will not help the company to maintain its guard against its market challenges, market followers and other soft drink firms but also will help the firm to come out with an effective, well-designed and up-to-date promotional strategies capable of keeping the company afloat amidst of all rigors of competition.

In other words, this research is of paramount importance because it will add to what is to guide the company in designing, promotional strategies, (although not a substitute for a bad product) that will lead to:

a.       Providing information about the company’s products, ideas and services.

b.       Persuading present and potentials customers, no matter the economic condition, to buy.

c.       Holding present customers and attracting new ones.

d.       Helping the company to remain in business.

e.       Differentiating the company’s products.

f.       Increasing sales in off-seasons.

Ovaltine (Nigeria) Limited paid the penalty by failing to keep its products, Ovaltine constantly in the minds of consumers. When Milo and Bornvita surfaced with their well-designed promotional strategies, Ovaltine was sweptoff the market. We, therefore, hope that the findings and recommendations offered in this research study will help Nigerian Bottling Company to overcome such mistakes.

Other researchers will also find this project useful. It will form a base for continued research and assessment on the subject matter.

1.6    SCOPE AND LIMITATIONS OF THE STUDY

Scope of study simply means where the research is expected to cover Nigerian Bottling Company Plc has several plants throughout Nigeria’ but this study is directed mainly to Enugu Plant located in Enugu State.

The researchers were made to understood, the Nigerian Bottling Company Plc, Enugu plant control 65% of the market share of soft drink market in Enugu, which highlights the company as a market leader. The researcher also gathered from the sales manager that the main customers of their product were the younger ones of school age, teenagers and adults. Since their sales promotional emphasis is based on schools, it becomes inevitable to conduct the research within the post-primary and post-secondary schools levels. To descend below the post primary would be problematic, as the kids could not complete the questionnaire. And to ascend above the post­university would be faced with the problem consumers, who consume less of the product. One may argue what of those outside this group? Enugu, which is the zone of study, could boast that greater percentage of the non-focus groups has passed through one form of school system or the other. Therefore, the choice of sample would be a representative one.

Although, the research was conducted successfully, it was however, with some short­comings such as:

1.       Areas of Coverage: Nigerian Bottling Company has several plants scattered all over the country; but the study was carried out on only one plant (Enugu). Enugu plant, itself, covers many areas out of which only Enugu Urban were covered in this research. Most of the advertising Companies are done at national level; therefore, researcher findings at Enugu Plant may fairly serve for generalization, although not an ideal condition.

2.       Excess Literature: Promotional strategy is a field; many authors have published big and comprehensive volumes. There was the problem of extracting from the lot, data that are relevant to the project, as the researchers do not go into much detail of accumulated data over the years.

3.       Time Constraint: To do adequate justice to a research of this nature would have required enormous expenditure of time. A research of this magnitude would require about seven to eight months of this magnitude would require about seven to eight months of uninterrupted study to cover it adequately but very few months were given coupled with final year academic work and nature of the semester system.  In other words, a major constraint to the investigation was the short time given for conducting and reporting of this investigation.  It is believed that subsequent researchers will continue from where we stopped.

4.       Financial Constraint:  As a result of economic hardship in the country, the researcher does not have enough money with which to carry out the research and yet feed properly.  As a result the researcher went without food on few occasions and this was not a happy experience.

5.       Bureaucracy:  Because of office bureaucracy or red tapeism and anti-research attitude of Nigerians, difficulty was encountered information needed for this project.

6.       Sample Size: The researcher encountered the problem of reaching a reasonable sample size of the population in order to have actual and genuine opinions.  Despite the above constraints, the researcher is confident that the final report has a good degree of validity and reliability.

1.7    DEFINITION OF TERMS

To enhance the understanding of this project, the researcher has taken time to explain the following terms:

1.       Promotional Mix:  This includes the elements of promotion which are employed in combination to achieve an organizational goal or objective.

2.       Personal Selling:  A kind of seller’s promotional activity conducted on a person-to-person basis with the buyer.

3.       Advertising:  Impersonal selling of goods and services, ideas or policies, usually done through the mass media such as radio, television etc. and which are fully paid for.

4.       Consumer:   An individual who is the final user of a product or service.  He may buy or may not buy has the capacity to consumer.

5.       Media:   Media refers to the different types of vehicles or devices by which advertising messages reach the audience.

6.       Sales Promotion:  It is a short-term incentive aimed at encouraging purchase or sale of a product or service.

7.       Public Relations:  This is the activities of the NBC that help in building and maintaining sound and productive relation.  Most often it is interwoven with publicity which is non-personal stimulation of demand for a product, services, or business unit or obtaining favourable presentation of it upon radio, television, or stage that is not paid for by the sponsor.

8.       Promotional Strategy:  Is a controlled, integrated programme of communication methods and materials designed to present a company and its products to prospective customers.

9.       Promotion:  The marketing communication undertaken to accept ideas, concepts or things.

10.     Population:  The entire universe or area in which the research is to be conducted.

11.     Sample;   A small group of universe, which the research is taken in order to generalize.

1.8     HISTORICAL BACKGROUND

Nigerian Bottling Company Plc is one of the few multinational organizations that had its beginnings in Nigeria.  From a small family owned operation at inception, it has grown to become the predominant bottle of alcohol-free beverages in Nigeria responsible for the manufacture and sale of over thirty-three (33) different Coca-coal brands.

The Nigerian Bottling Company Plc (NBC) was incorporated in November 1951, as a subsidiary of the A.G. Leventis Group with the franchise to bottle and sell Coca-cola products in Nigeria.

Production began in 1953 at a bottling facility in Ebute-metta, Lagos.  Over the years production capacity has grown and it presently has thirteen (13) bottling facilities and over Eighty (80) distribution warehouses located across the country.

Since production started, NBC Plc has remained the largest bottler of non-alcoholic beverages in the countries in terms of sales volume with about 1.8 billion bottles sold per year, making it the second bottles sold per year, making it the second largest market in Africa.

Today, it is a part of the Coca-cola Hellenic bottling Company (Coca-cola Hellenic).

One of the Coca-cola company largest anchor bottlers worldwide. Coca-cola Hellenic in 2009. The company is driven by over 6,000 employees, a culture of passion for excellence, sophisticated technology and the best distribution network in the country with 13 high performing bottling plants, over 80 deports and over 200,000 sales outlets nationwide, it supply some of the most ubiquitous and best known brands including; Coca-cola, Fanta, Sprite, Schweppes, Eva Water and Five Alive.

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