EFFECT OF MARKETING STRATEGIES ON SALES GROWTH IN THE FOOD DRINK INDUSTRY (A STUDY OF CHI-EXOTIC DRINK)

ABSTRACT

The study examined the effect of Marketing Strategies on Sales Growth in the Food Drink Industry: A Study of Chi-Exotic Drink, aims to analyze the impact of various marketing strategies on achieving sales growth in the food drinks sector in Umuahia, Abia State. The primary objectives include examining the relationship between product strategy and sales growth, assessing the effect of pricing policy on sales volume, evaluating the impact of distribution strategy on market share, and determining the effect of promotional strategy on profitability. Employing a descriptive survey design, data were collected using questionnaires from a sample size of 400 respondents, determined through Taro Yamane’s method. The data analysis involved percentages, Pearson Product Moment Correlation, and multiple regression models. The findings revealed that while the price of the product significantly and negatively affects sales growth, quantity sold and advertising positively influence sales growth. Sales promotion, product branding, and product availability were found to be significant factors at a 1% probability level. The study concludes that although pricing must be managed carefully to avoid reducing sales volume, increasing advertising and sales promotion efforts can enhance purchase frequency and sales quantity. Additionally, strategic product branding can foster customer loyalty, and constant product availability is crucial for meeting buyer demand. Based on these conclusions, the study recommends careful price management to prevent potential declines in sales volume, increased advertising and sales promotion campaigns to boost long-term sales, strategic product branding for differentiation and positioning, and ensuring consistent product availability to satisfy consumer demand.

TABLE OF CONTENTS

CHAPTER ONE

INTRODUCTION

1.1      Background to the Study

1.2   Statement of the Problem

1.3   Objectives of the Study

1.4   Research Questions

1.5      Hypothesis of the Study

1.6   Significance of the Study

1.7   Scope of the Study

1.8   Definition of Relevant Terms

CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1     Conceptual Background

2.1.1  Marketing Objectives, Marketing Strategies and Marketing Programs                               

2.1.2  Selecting a Marketing Strategy  l

2.1.2.1          Product

2.1.2.2          Pricing 

2.1.2.3          Place (Distribution)

2.1.2.4          Promotion Mix

2.1.3  Relationship between Marketing Strategies and Consumer Purchasing

Behavior

2.1.4 The Concept of Expanded Marketing Mix (EMM) - 7Ps

2.1.4.1          Physical Aspects

2.1.4.2          People

2.1.4.3          Process information

2.1.5  Reasons for Planning a Marketing Strategy

2.1.6  Determinants of Consumer Patronage

2.1.7  Consumers' Attitude Towards The Product"

2.1.8  Extrinsic Factors of the Product:

2.1.9  Intrinsic Qualities of the Product:

2.1.10 Benefits Accruable to a Firm from the Sustainability of Consumer

Patronage

2.1.11 Problem of Customer Relationship Management

2.2     Theoretical Framework

2.2.1 Gap Theory

2.2.2 The Hidden Message Theory

2.2        Empirical Framework

CHAPTER THREE

RESEARCH METHODOLOGY

3.1     Research Design

3.2     Study Area

3.3     Population of the Study

3.4        Sampling Plan 

3.5     Sample Size Determination

3.6     Data Collection Procedure

3.6.1 Instrument

3.6.2 Source of Data

3.6.3 Validity

3.6.4 Reliability

3.7     Data Analysis Technique

CHAPTER FOUR

RESULTS AND DISCUSSION

4.1   Presentation of Data

Chapter five

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1   Summary

5.2   Conclusions

5.3   Recommendations

References

Appendix: Questionnaire

CHAPTER ONE

INTRODUCTION

1.1      Background to the Study

Marketing is the study of human activities directed at satisfying needs and wants through a profitable exchange. Strategy is borrowed from military literature which refers to a plan of action (Anyanwu, 2003). However, marketing strategy is the broad of principles and plan of action by which the business expects to achieve its marketing objectives in a targeted market (Kotler, 2000).

Of all business activities or functions, none is as interested in the consumer and his purchasing behavior as marketing. Marketing is invariably connected with the research into consumers purchasing behavior, namely what the consumer want, need, prefer and value, who are the prospective consumers and where they live, their income and mode of spending, how and why the make purchase decision and so on. In fact the influencing of the buyer behavior is the primary task of the marketing department in any organization (Inyanga, 2004).

Equally, marketing tries to define the right type of products in terms of the company’s objectives and attempts to make it available at the right place and at the right price, with the right promotions. This performance of marketing functions involves basically marrying consumer wants and with the appropriate products and services. It is the duty of the firm to adopt appropriate marketing strategy to attract customers to its products (Inyanga, 2004).

This is important because in a free market economy, the ultimate judge of the firm performance is the consumer. Consumer purchasing behavior will determine the fate of the enterprise; this behavior can best be described by a marketing manager who can also tell how he will be influence by market variables such as price, promotion, product (variation and distribution and place. Marketing strategy depicts the overall company program for selecting a particular market segment and then satisfying it’s consumer through careful use of elements of the marketing mix-product, price, place (distribution) and promotion(Berger, 2006).

Effective marketing requires decisions that successfully integrate a form marketing program towards satisfying the consumer whose act in obtaining and using goods and services, including his decision process that precede and determine those acts are highly affected by the strategy adopted by the marketing manager in marketing the firm’s products (Kotler and Armstrong, 2006).

Since the performance of marketing functions involves basically marrying consumer needs and wants the appropriate product and services, and since it is generally believed that marketing begins and ends with the consumer, this project therefore attempt to examine how the use of marketing strategies have generated sales for food drinks, following its impact on consumer purchasing behaviors. Efforts are therefore made to show the relationship between sales turnover and amount spent on marketing activities and its resultant impact on consumer purchasing behavior. We shall also concentrate on establishing how consumer purchasing behavior is influenced by a firm’s strategy for accomplishing marketing objectives and plans. Also, the designing of marketing mix strategy, centering on product strategy, distribution policy, pricing and promotional strategies will be examined.

1.2     Statement of the Problem

 Here the researcher attempts to define or describe the research problem. The primary objective of most business enterprise is to make profit. This is because profit ensures growth, survival and continuity in business. Many companies in the food drinks industry recognize this fact but many enterprises still fail to realize that the achievement of this goal depends on their ability to satisfy the needs of their target market using some marketing strategies.

 Besides the primary task of marketing which is to influence the buyers, the proper timing of marketing strategies to achieve sales growth and objectives has not been given adequate attention.

The research is poised to investigate these problems and then find solutions.

1.3     Objectives of the Study

The general objective of the study is to analyze the effect of marketing strategies to achieve sales growth in the food drinks industry in Umuahia Abia state.

However, the specific objectives are to:

     I.         examine any relationship between product strategy and sales growth of the firm.

   II.         ascertain the effect of pricing policy on the firm’s volume.

 III.         examine the effect of distribution strategy on the product market share.

IV.         ascertain the effect of promotional strategy on profitability.

1.4     Research Questions

i.               What is the relationship between product strategy and sales growth of the firm?

ii.             What is the effect of pricing policy on the firm’s sales volume?

iii.           What is the effect of distribution strategy on product market share?

iv.           What is the effect of promotional strategy on profitability?

1.6 Hypothesis of the Study

In the course of this study, there are some hypotheses stated in null form. They are:

HO₁: There is no significant relationship between product strategy and sales growth of the firm.

  HO_2: Pricing policy has no significant effect on the firm’s sales volume.

  HO₃: Distributional strategy has no significant effect on market share.

 HO_4: Promotional strategy has no effect on profitability.

1.6     Significance of the Study

The implementation of effective marketing strategies creates satisfaction for both the procedures and consumers. This is because in Nigeria today there is the need to improve on market orientation among organizations. Companies should realize the importance of strategic planning in the provision of goods and services to ensure guaranteed profits. Good strategies mean lower cost and so lower prices and consumers are encouraged to repeat purchase. This way, the producers realize their aims and objectives and consumers get needed goods and services at affordable prices. It is therefore towards this state of affairs that this research work is oriented.

This research work is also undertaken in the hope that, its finding will enable marketing people to understanding, adapt and apply knowledge of consumers purchasing behavior in tackling their marketing problem.

Again it is hoped that, the study and the recommendation that will be made, will be of benefit to the food drinks marketing department in particular and the entire industry as a whole. It will contribute to determining the strategic requirements for effective marketing and would enable firms serve their customers more effectively and efficiently.

Specifically, the benefits of this study are enormous but in specific term, the study will be of benefit or import to the following groups:

To the business organizations, the result of this study will be significant to business organizations because they will become more aware of the factors that affect and influence marketing strategies, and adopt those factors to get more market share for itself which means higher profits from sales.

To the Investors, if it is noted that a particular food drinks company has a high level of sales resulting from the good marketing strategies, the investors may decide to invest in the food drinks company as its profits will be high as well as dividend.

To the academic, the result of this study will be significant to the academic as it will form the basis for research work in marketing strategies.

1.7     Scope of the Study

Realizing the financial and time constraint that are involved in this type of study, it becomes necessary to limit the scope of the study to consumers of food drinks within Abia State, and to one company. Using one company will limit and reduce the necessity for comparative analysis. The elements in a marketing strategy are common to all the firms hence we shall place emphasis on the marketing mix, that is, price, product, promotion and place. This will help us see how they relate to each other and combine to influence the buyers of food drinks product. However, the study will focus primarily on the Aba and Umuahia metropolis. These cities are located in Abia south and Abia central. They are chosen because they constitute the commercial Centre of the state.

1.8     Definition of Relevant Terms

Marketing: Marketing can also be seen as the process in a society by which the demand structure for economic goods and services is anticipated, or enlarged and satisfied through the conception, promotion, exchange and physical distribution of such goods and services.

Strategy: Strategy is the, means, schemes and methods designed by an organization for operationalizing policies and pursuing its objectives.

Marketing Strategy: Marketing strategy can be defined as the general terms used to describe the overall company program for selecting a particular market segment and then satisfying it’s consumer through careful use of the elements of the marketing mix.

The marketing mix: is that combination of product features, accompanying services, price decision, promotional tools and place for the distribution of these products in reaching, serving and appealing to the target market.

The target market: this is that group of consumers which the company wishes to sell its products.

Consumer Purchasing Behavior: This is the act of individuals in obtaining and using goods and services, including the decision process that precede and determine these acts.

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