CHAPTER ONE

INTRODUCTION

1.1BACKGROUND TO THE STUDY

One of the most recent ideas in the history of exchange relations is the marketing concept. The marketing concept is a management orientation that holds that the key task of the organization is to determine the needs and wants of target markets and to adapt the target organization to delivering the desired satisfaction more effectively and efficiently than its competitors.

Economic history is well stocked with enough insight into the humble beginnings of present-day great corporations. Evidence abound that about all of the multi-national giant corporations in America, Europe and Nigeria were once cottage enterprises that grew as a result of the sheer ability and especially the marketing skills and efforts to produce and reproduce existing products better and cheaper.

The adoption of a customer orientation, which forms the basic assumption of the marketing function of a firm, places a high premium on customer satisfaction. This of course has very wide applications for all areas of the organization. One major implication is that if the firm or organization has to manage its limited financial resources profitably, there is an acute need to identify consumers’ needs and wants before actual production or provision of the goods is undertaken. In the absence of this, the company may be faced with the threat of product failure in the face of more competitive brands.

One of the most frequently used for identifying consumers’ needs and wants is the study of brands and brand preference patterns. Brand preference consists of a customer’s perception of a brand’s ability to satisfy his prescribed set of needs more than similar brands in the product class. A consumer’s preference for a particular brand among alternative brands is an indication thatceteris paribus, he will translate this preference to a purchase action when the situation arises. Consumer preference therefore is a crucial factor for management consideration especially in an attempt to implement the marketing concept. Since modern marketing holds the consumer as the centre-piece of all marketing actions, it appears logical to state that no fruitful marketing programme can be formulated and implemented without vigorously attempting to identify the tastes and preferences of the target market. The need for this becomes even more crucial in a developing economy like Nigeria’s at the threshold of technological take-off.

An understanding and determination of consumer preference and the factors that give rise to them ultimately becomes highly fundamental in planning and implementing the company’s marketing strategies. Brand and brand preference do result from both the nature of the product, the characteristics of the producer, the seller and the consumer as well as the prevalent situation. In an attempt to understand consumer preference on the basis of the nature of the product, one basic approach is consumer attitude measurement. Hence the inefficiency and ineffectiveness in the distribution management of the brewery industries in Nigeria prompted this research and also to investigate the factors responsible for this poor sales performance and also to proffer some workable solutions to them.

1.2STATEMENT OF RESEARCH PROBLEM

Numerous researches have been carried out to investigate the relationship between brand preference and consumer characteristics, characteristics of the product and the existing economic situation.

Most have used numerous measures which are not products of brand-specific to establish the relationship. Majority of these researchers have attempted to study consumer preferences and choice on the basis of personality, psychograghic and demographic characteristics.

However, Engel, Kollat and Black well pointed out that since World War II, economic and demographic variables have become less reliable determinants of products and brand preferences and choice, while personality variables have made minimal contributions to the understanding of consumer behavior.

The research work is embarked upon due to the problems encountered by the Nigerian Breweries Plc., in the course of branding and promoting their products.

1.3OBJECTIVES OF THE STUDY

Due to the fact that we have many brewers in the country today, there are many brands of lager beer in the market. The variety of brands of beer in the market has increased the consumer’s ability to exercise choice with less restraint. Therefore, the objective of the study is:

i.             The primary motives underlying the choice and subsequent purchase of a brand.

ii.            The consumer’s preference pattern for each brand.

iii.          The attributes that appeal to the consumers in their order of importance.

iv.          The average beer consumption rate of respondents per week.

v.           How the Nigerian Breweries Plc can improve sales performance through branding.

vi.          How the company, Nigerian Breweries Plc, decides on the particular to use in distributing its products.

vii.        To make recommendations in form of proffering solutions to the existing problems.

1.4    SIGNIFICANCE OF THE STUDY

The significance of brand and brand preference as a marketing tool such as this one is relevant in present-day Nigeria’s dynamic socio-economic environment to which the brewery industry belongs.

Products are subject to life cycles. A particular may emerge suddenly, enjoy rapid growth and reach a point of relative maturity and eventually move into a period of slow decline. The implication of this is that a company needs to identify consumers’ needs and wants before producing its brand of beer otherwise, chances are that it may be faced with a threat of product failure in the face of more competitive brands in its product class.

I therefore intend to find out among other reasons:

a.           If the Nigerian Breweries’ pattern of branding conforms with what obtains in management literatures.

b.           To ascertain whether it is adequate and dynamic enough with the ever changing economy.

c.           The relative importance of specific attributes of beer to consumers and how they relate to brand preference will be highlighted in this study.

d.           This study would be of immense assistance to brewery companies that want to formulate or reformulate their product strategy.

e.           This study would enable the brewers to know what attributes to improve on in their existing brands of beer and therefore plan marketing strategies to exploit their strengths.

f.            The findings of this study will be useful in the development of new product brands, improvement of existing brands and the planning of marketing strategies to exploit the preferences advantages.

1.5SCOPE OF THE STUDY

The study is focused on the beer industry with particular reference to Nigerian Breweries Plc and taking a cursory look at its lager beer and non-alcoholic beverages viz.:

i.             STAR

ii.            GUILDER

iii.          HEINEKEN

iv.          MALTINA

These brands were selected because

a.           They are familiar enough for consumers to be reasonably knowledgeable about them.

b.           They are easily and readily available in retail outlets.

c.           There is some degree of price variation amongst them.

d.           They are sufficiently advertised in the various mass media.

The geographical coverage of this study was limited to Benin City because of time and financial constraints. The limitation of geographical coverage is occasioned by the need for greater effectiveness of the research, given the constraints of time and finance.

It is hoped however that the findings of this study will allow for a more meaningful comparisons to be made with findings of similar studies conducted in other towns in Nigeria. This is because most experts agree that Benin City is a microcosm of the behavior of the entire Nigerian Federation.

1.6HYPOTHESIS OF THE STUDY

A hypothesis is a tentative answer to a research question. It is often stated in the form of a relationship between a dependent and independent variable (Agbonifoh and Yemore, 1999).

A hypothesis may be stated in a null form (Ho) or in the alternative (Ha).

Thus, the following hypotheses are to be tested:

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