Product Differentiation as a Competitive Tool in the Marketing of Soft Drink ( a Case Study of Limca Bottling Company Plc, Okigwe)
Chapter One
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.
- Examination of the effect of product differentiation on the competitive trend of the company
- Determination of the impact of the product differentiation on the profitability of the company
- Examination of the role of product differentiation on the market
- Identification of the problems the company faces in differentiating its product.
CHAPTER TWO
LITERATURE REVIEW
INTRODUCTION
The aim of this chapter is to bring together views of various authors/ writes who have written on similar subjects. The reviews will first look into what is called market segmentation from where product differentiation takes its origin, after which a look will be taken into product differentiation in other relevant fields.
This review will be based mainly on information entreated through secondary data such as quotation of academicians and other professionals cited in text books of various authors/ written.
HISTORY OF THE SOFT DRINK INDUSTRY
The fascination began with mineral waters, which have been popular for many years. The mineral start in India in 1930 by K.N. Jethwanis family with a bottle of thumbing soft drink. Later it was changed to famous Limca plc the makers of Limca, Gold sport and pearl soda.
In 1981 a group of foreign investors came to Nigeria for manufacturing soft drink. It was established and commission in 1982 and was sited at warri which is known as Warri bottling company and it is the pioneer plant.
Today the group have other seven plants located all over the country at present the company’s turn over rose from N900m in 2006 to about 2008 to 20% in 2009 in the soft drink industries.
MARKET SEGMENTATION
In essence, it is the process of dividing a varied or different groups of buyers within which broads smaller patterns of buyers needs exist. By doing thus, the marketing planners attempting to break the market into more strategically manageable parts which can then be targeted for more precisely by making a series of change to the marketing mix.
An approach to segmental analysis [ willison Grilligan, 1997. 274] that is of increasing interest effort is to be directed at customers or market segments with the greater profit potential , it is essential showing the existing picture the regard to customer profitability and prospects for the futures.
Customers profit ability analysis has been defined as the evaluation analysis and isolation of all the significant cost associated with servicing a specific customer/ giving of customers proven the point on order is received through manufacture to ultimate delivery. Any organization that decides to operate in some market, whether customer, industrial resellers or government will recognize that it cannot serve the total consumer in that market.
The consumers are too numerous widely slaughtered in heterogeneous in their buying requirements or saying practices to be effectively and superiorly served by one organization or the other.
CHAPTER THREE
RESEARCH METHODOLOGY
This chapter will show the type of research done and the methods used. The chapter will be treated under the following sub –heads
- Research design
- Sources of data
- Population of study
- Sampling procedure
- Method of data collection
- Method of data analysis
- Validity of instrument
RESEARCH DESIGN
In this research the research that was considered most appropriate was the survey method of research design because of its descriptive property. This type of research describes the staff and consumers behaviour and to offer explanation on methods of influencing these behaviour.
A survey consists of data by interviewing a limited number of people (sample) selected from a large group. This type of research design has advantage of setting to the original sources of information
SOURCES OF DATA
These research is base on two sources;
- Primary data
- Secondary data
PRIMARY DATA: This information is collected personally by the researcher through observation and interview with the sample of the population of interest to the research; primary data is more reliable and used in solving research problems.
SECONDARY DATA: These are the information relating to the subject matter gotten by the researcher as contained in published materials like text book journals,. Articles and even recorded message.
Therefore, all the data in this research work were gotten from personal interview with any evidence and from the work of other authors and writers on the concept of product differentiation.
METHOD OF DATA COLLECTION
In each organization or supermarket the approval of the managers was sought in order to administer questionnaire in his company. Attempts were made to establish good report with respondent using verbal introduction of self and purpose of the research
After that, they were served with questionnaire, which they were asked to fill and return to the manager of the company with whom an arrangement was made for later collection of the questionnaires. The same method was used in the two sampling.
POPULATION OF STUDY
To select the sample size the target population of the entire population need to be defined. The findings of the study are held to be staff of marketing department of limca soft drink and the distributors of limca soft drink were selected and questionnaire were personally administered. The target populations are as follow
- Staff of marketing department 80
- Staff of marketing department 70 150
CHAPTER FOUR
PRESENTATION ANALYSIS AND INTERPRETATION OF DATA
ANALYSIS AND PRESENTATION OF DATA
This chapter deals with the presentation of that analysis of the questionnaires administered on respondents.
Total of [150] questionnaires were distributed among the marketing staff and distributors the distribution was as follows
Marketing staff = 80
Distributors = 70
The 150 questionnaires distributed [130] was returned within the stipulated time while twenty [20] were outstanding.
Ten [10] out of those returned were however rejected due to errors detected in their percentages of response computed were tabulated in cross tabulation tables constructed for case of analysis. The statistical techniques adopted for testing the hypothesis generated in this study was the chi- square [x2].
CHAPTER FIVE
SUMMARY RECOMMENDATION AND CONCLUSION
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;
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.
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.
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.
- 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.
- That product differentiation should be support by heaving promotion so as to achieve its aims as soon as possible.
- That soft drinks firms should not consider the high cost of differentiating a product but the benefits, earned as result.
- 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.
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.
REFERENCES
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