IMPACT OF COMPETITIVE MARKETING ON PERFORMANCE OF MULTINATIONAL AND INDIGENOUS FOOD AND BEVERAGE MANUFACTURING COMPANIES IN NIGERIA

THE LEGAL AND INSTITUTIONAL MEASURES IN COMBATING CORRUPTION IN NIGERIA: ISSUES, CHALLENGES AND PROSPECTS
July 31, 2019
INFLUENCE OF NEW MEDIA TECHNOLOGIES IN BROADCASTING: A STUDY OF TELEVISION STATIONS IN PORT-HARCOURT METROPOLIS
July 31, 2019

Price: 3000 Naira (BSC, MSC)

ABSTRACT

The research study evaluated the impact of competitive marketing on the performance of multinational and indigenous food and beverage manufacturing companies in Nigeria. The study investigated how these companies utilized marketing orientation and practices, organizational structure and strategy , marketing strategies on acquisition of market shares, usage of marketing mix elements on returns on capital employed, and how the competitive use of these variables influence the perception of consumers. The research study was developed around the theories of connectionist, personality, innovation diffusion, and cost structure and business performance. These variables were used to evolve a detailed analysis of issues relating to product quality, organizational structures and management theories. Theoretical models were reflected and used in developing five different hypotheses that were investigated through the survey of forty multinational and one-hundred and twenty indigenous foods and beverage manufacturing companies which were respectively randomly selected. Copies of well structured questionnaire were administered to companies sampled. The validity and reliability of the instrument were measured at Cronbach’s alpha of 0.69 and alternative form validity of 0.62. Five hypotheses were raised and tested at 0.05 significant levels. The findings revealed that marketing orientation adopted by multi-national companies (MNCs) yielded better performance than those of indigenous companies (INCs), the structure/strategy adopted by MNCs yielded better performance than those of INCs, marketing strategies adopted by MNCs yielded more market shares than those of INCs, MNCs use of elements of marketing mix yielded higher rates of returns on capital employed than that of INCs, and competitive use of these 4Ps for consumers’ perception by MNCs yielded better performance compared to that of indigenous counterparts. The conclusion from the research findings showed that indigenous companies were unable to compete favourably because of their limited financial resources. It was recommended that indigenous companies should adopt competitive marketing, functional structure and strategy, with five marketing divisions, competitive use of elements of marketing mix, and embark on the production of food and beverages for export.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study: The concept of marketing competitiveness is highly synonymous with the theory of marketing evolution (Kotler, 2006). Robinson (1827) presented an elaborate disposition on the nature and structure of marketing system. Before then, there were only two market conditions explicitly recognized in literature. These market conditions divided market structure between perfect and monopoly markets; and succeeded in impressing that it is the market forms (intermediate) between pure competition and monopoly that are most commonly found in actual business world. Other factions of these divisions are well documented and include workable, effective and potential competitions. (Otokiti, 2000, and Varian, 1999) With reports of the various successes and failures recorded by multinational companies in different continents of the world and in Nigeria particularly, it is necessary to attempt an extensive and intensive study of the strategies adopted in managing these multinationals companies that have resulted in their various successes and failures. Of great significance is the emergence of indigenous companies that are equally attempting either to expand or become multinational companies or grow to compete with the multinationals in food and beverage industry in Nigeria. This comparative study is thus essential, as it is capable of identifying the reasons for successes or failures of multinational and indigenous companies operating in Nigeria. Perhaps lessons could be learnt about the marketing orientation and practices, organizational structure and strategies (mother-daughter matrix), competitive marketing strategies and competitive use of the four elements of marketing mix of both the multinational and indigenous companies. A review of the various multinational companies in 2 Nigeria, for instance, reveals their widespread branches covering major cities in the six geo-political zones with numerous widespread distributors, merchant-houses, and retailers. On the other hand, indigenous companies have very limited spread of operational bases and distributorship channels. This therefore informs the comparative nature of the research conducted and the analysis of these food and beverage companies. According to Awodun (2007) in managing any organization, there are three conventional levels of management that constitute most hierarchical structure. These are the corporate level, the business level, and the functional level. These three levels are equally regarded as the strategic, operational and tactical levels respectively. At each of these levels, different types and sophistication of decisions are made but with diverse scope and intense. Decisions considered as strategic in nature usually required top-level management, large amounts of resource allocation, long-term prosperity, futuristic, multinational or multi-business consequences, and consideration of the external environment usually occupy important positions. For these reasons, Jones, et al., 1998; Harrison & Pelletier, 1998, 2000 asserted that top-level management or corporate managers are said to determine the right things to do, the middle-level management or functional managers do the right things while the low-level managers or functional managers do things right. In a much recent neo-classical discuss, other variables in competitive system and pre-requisites listed against them are effective, potential, and workable competitions. All these are essential for optimal product mix, and provide general availability of necessary information about alternatives, presence of moderately large number of sellers, with each possessing capacity to survive and grow. Again, the preservative conditions to keep alive basis of these competition modes from others, include substantial independence of action whereby each seller is free to adopt own policy concerning production, pricing, and policy to modify changing conditions of demand and supply (Otokiti, 2004). The extent of competitiveness between these monopolistic firms necessitates attention to evaluate longitudinal operations of these enterprises via a comparative inter-firm analysis. This 3 analysis is designed along the long operating years of operations of the foreign companies as against the indigenous counterparts with shorter history, despite owning greater proportion of productive resources like land, labour and unprocessed raw materials are either not fitting into the business realm or are just struggling to exist. It must be mentioned that only Cocoa Industry Limited, amongst other local food and beverage companies has records of substantial longitudinal documentation. Studies (Bennett, 2000, and Dollinger, 2003) have also shown that multi-national companies are indicative of superior performance when compared with their indigenous counterparts, even when the dates of establishment are not too different from the objectives of indigenous enterprises. The need therefore to appraise the modality of achieving corporate objectives between multi-national and indigenous food and beverage manufacturing companies becomes inevitable. With these performance indicators, the focus on these companies’ ‘game plan’ called strategies regarded as the framework for managerial decisions (Goold and Campbell, 1987, Hax, 1990, Boarch and Arthur, 1995, and Manning, 2001), with the four elements of marketing mix viz: product, pricing, positioning, and promotion to highlight how the multinational and indigenous companies in the food and beverage manufacturing industry meet up their performance expectations, is the problem of this study. 1.2: Statement of Research Problem. Nigeria is a country endowed with abundant human and natural resources (Emmanuel, 2003) which include expanse of fertile land, moderate plantation cum irrigation farming, extensive sea-coast, long irrigative water and mineral deposits, etc. This is in addition to geographically located oil-rich belt, gulf of Guinea that is typical of equatorial type of regions. All these notwithstanding, her performance or dismay performance and uncoordinated results in Agricultural production, with partial success in foods and industrial crops such as rubber, cocoa, dye; oil-seeds etc call for actionable research. It is against this background that 4 industrial enterprises are required to convert these resources for industrial usage; particularly as existing studies revealed that the global Agro-industrial linkage has been extensively documented in the literature of developed countries (Otokiti, 2004). Whereas their counterparts from developing countries are reluctant in making use of these abundant resources in enhancing food and beverage industry (Emmanuel, 2003). Consequently, they are associated with sub optimal establishment of autonomous indigenous enterprises that are attempting to effectively participate in the business of food and beverage products from the basis of agro allied capability. For domestic or indigenous food and beverage companies to occupy their appropriate position in any developing economy, it calls for a mixture of industrial development that takes a comprehensive evaluation of essential elements of both an inward cum outward orientation of their production activities (Marketing Orientation). Here, the indigenous companies are expected, like in developed countries, to adopt and operate with marketing orientation and skill that can enable a rapid development of Nigerian industrial sector. The call for an effective mix within marketing orientation and practices involves the role of marketing, its concept and philosophies, understanding of the enabling environment for inward and exportable capacity, and market segmentation. The study of marketing orientation and practices incorporates the mix of marketing roles, marketing concept and its philosophies, marketing environment, and marketing segmentation (Lancaster and Massinghan, 2001). This study, after extensive coverage of literature, revealed that multi-national companies in developed countries have made use of marketing orientation and practices (Baker, 2000). However, the extent and quality of mix are unknown. The usage and adoption by their indigenous counterparts is also an important problem of this research. The relevance of marketing concept according to Ogwo (2000, p.14) is the ability of an organization to satisfy customers’ needs, and that the aim must be reflected in everything the organization does. Incidentally, quite a number of the indigenous companies are reported to 5 have adopted marketing concept in their marketing operations. However, and until very recently, not many operators in indigenous industries see the significance of marketing practices as a basis of identifying the needs and wants of the consuming publics (Ogwo, 2000, p.14), hence their inability to produce and market goods at the right time, place, prices and quantities for the consuming publics. Ogwo equally reported that indigenous companies lack the deep knowledge of the divisions of marketing and their importance viz: marketing research, branding, promotion, marketing services and sales. In so many of these organizations, business tactics are traded with rather than use marketing orientation and practices to achieve organizational goals. (Curran and Blackburn, 1999 in Zontanos and Anderson, 2004). Secondly, the types of organizational structure and strategies put in place by either multinational or indigenous industries are expected to determine the extent of activities and operation of the organizational participants in the food and beverage industry. In most cases, multinational companies adopt diverse and sophisticated strategies and structures that beget the basis of their system (Bennet, 2000). Existing literature has revealed that placement of multinational companies on the Nigerian Stock Exchange is a form of strategic/structural leverage whereby capital adequacy in form of funding and human resource development are ensured by these multinational organizations. On the contrary, one of possible explanations for the above lack of effective participation of indigenous food and beverage companies is the family based characteristic of its ownership. (Bennet, 2000) Bennet further indicated that the indigenous food and beverage companies are affected by the structures and development of major operators of these companies; particularly as they are located within the corridor of selected family members. Consequently, majority are either unwilling, unqualified or could not be listed on stock market. For these reasons, indigenous companies are denied the numerous benefits accruing from such institutional affiliation and the opportunity to transform into multinational status. 6 Thirdly, is the significance of marketing strategies of these two categories of food and beverage companies in determining their market shares in the industry? This is against the background that the food and beverage industry is characterized by monopolistic competition such that this industry is producing similar brands of products, and in some cases substitutes to other products. However, and depending on motive of an organization, the resources can be determined optimally and progressively by applying effective listing of marketing strategies viz: cost leadership, differentiation, focus, defensive, offensive, vertical integration, and first-mover strategies, and investigating to know which of these marketing strategies are normally used by the multi-nationals and their indigenous counterparts. And to what extent can these affect the operations of these companies (MNCs/INCs). Fourthly, McCarthy (1964) regrouped Borden’s twelve elements of marketing mix into what is now known as four traditional elements of marketing mix. They are products, price, place, and promotion. These are the mix that organizations either autonomously use to generate desired sales volume and turn-over, or use along with appropriate competitive marketing strategies to achieve the profit cum sales objectives or to earn higher volume of sales cum turn-over. The effective and efficient use of these elements could yield desired rate on usage of returns on capital employed. Existing practices have shown that multinational food and beverage companies (MNCs) expend extensive amount of fund on these elements differently. The practice of indigenous companies is also not too different. However, the structure and composition of these companies on the elements of markerting mix remained highly unknown. Consequently, the research is interested in the amount appropriated by each category of these companies. To further enhance the performance and operational capacity of companies, the roles of consumer choice pattern cannot be under-estimated. Consequently, consumers are assumed as independent factors and are given the opportunity to determine and develop their perception towards the participants in the food and beverage industry and their products. A favourable image perceived towards these industry’s participants for instance, would induce 7 consumers to patronize the company, make the marketers defend the products prices being charged, and stimulate consumers towards increased demand the companies’ promotional messages. (Kotler). This is further translated to profitable relationship. 1.3: Objectives of the Study. The objectives of this research study are as follows: i. To identify the marketing orientation and practices being used by multinational and indigenous companies in the food and beverages industry. ii. To explore the possible differences in organizational structures and strategies between multinational companies and indigenous companies and how these affect their respective performances. iii. To show how competitive marketing strategies are being used by multinational and indigenous companies in their respective markets and determine the input of their market shares within the industry. iv. To determine how the elements of marketing mix could be autonomously used to yield the desired rate of returns on capital employed. v. To show the effects of corporate image on food and beverage categories of organizations in the study vis –a- vis their industry’s performance. 1.4: Research Questions. The following statements reflected the research questions: i. To what extent does the marketing orientation and practices adopted by both the multinational and indigenous companies affect their level of performances in food and beverage industry? ii. Is there any significant relationship between the organizational structure and strategy adopted by the multinational and indigenous companies, and the determination of differential in their performances? 8 iii. Why is it that despite familiar environment to indigenous food and beverage companies, multi-national companies come into the country and out perform their indigenous counterparts? iv. How do competitive marketing strategies adopted by multinational and indigenous companies account differently for their respective enhanced market shares? v.How would variables of marketing mix be used to yield the desired rate of returns on capital employed? vi. Is there a significant difference in the customer’s perceived image and performances of multinational and indigenous companies? 1.5: Research Hypotheses. The following null hypotheses were formulated for testing. Hypothesis 1 The marketing orientation and practices adopted by multinational companies do not yield better performance than those of their indigenous counterparts Hypothesis 11 The organizational structures and strategies adopted by multinational companies cannot be associated with better performance than the similar structures and strategies adopted by indigenous companies. Hypothesis 111 Competitive marketing strategies adopted by multinational companies in different segments of the market are not responsible for their superior and enhanced market shares over and above indigenous counterparts operating in the same market segment of a nation economy. Hypothesis IV The usage of autonomous determinants of marketing mix (product, price, place, and promotion) by multinational food and beverage companies would result to increase and better returns on capital employed than their indigenous counterparts. 9 Hypothesis V The favourable corporate image of multinational companies as perceived by consumers is not acceptable for better performance of these companies when compared to that of indigenous companies operating in the same business environment. 1.6: The Significance of the Study The significance of this research study was drawn from the aforementioned objectives, research questions, and hypotheses such that when tested, they could assist in the following forms: i. Once competitive marketing is understood by the management and line-managers of multinationals and indigenous companies operating in Nigeria, they will be able to adopt the findings and recommendations for effective marketing planning, implementation and control of their operations. ii. The operators would learn and acquire for adoption, better and more viable types of organizational structure and strategies that will support their operational activities and strategies. With these structures and strategies in place Nigerian populace will be better served with more of the food and beverage products in every part of the country. iii. Federal and State governments would be guided on the appropriate policies to be formulated for effective emancipation of Multinational and indigenous food and beverage companies’ operations in Nigeria which could lead to technological and scientific ways of tapping the abundant human and natural resources for the administration, distribution, and marketing of finished goods. This practice will assist development of small and medium enterprises in diverse areas of food and beverage, consequently the Nigerian economy will improve. iv. Academics would be able to use the gaps identified for criticisms, and propound further concepts and theories in the areas of competitive marketing and management (organizational structure/strategy) 10 v. Marketing consultants and researchers would be opportuned to understand the nature of competitive marketing, and possibly carry out further studies on it. 1.7: Operationalization of Research Variables For competitive marketing, questions covered such components as marketing orientation and practices which comprise marketing roles, marketing concepts, marketing environment, market segmentation, company’s structure, competitive marketing strategies adoptable during periods of free and short supply of products and the traditional four elements of marketing mix viz: product, price, place, and promotion, and corporate image. On performance variables, concerning both multinational and indigenous companies questions covered such components as profitability index, market share, returns on capital employed, (ROCE), and annual growth of sales. Mathematically we say Y = f(X) Where Y = Dependent variables = Organizational Performance of multinational and Indigenous companies. (OPMIC) X = Independent variables = competitive marketing practices of multinational and Indigenous companies. (CMPMIC) OPMIC or Y = y1, y2, y3, y4, y5, …………, yn Where: y1= Company’s profit. y2 = company market share in food and beverage industry. y3 = Returns on capital employed. Y4= Annual growth of sales, CMPMIC or X = f(a, b, c, d, e, f, g ………., n) or competitive marketing practices a = Marketing orientation and practices. b = Organizational structure and strategies. c = Marketing strategies of companies. d = Marketing mix e = Corporate Image 11 1.8: Scope of Study This study covered impact of competitive marketing on performance of multinational and indigenous food and beverage manufacturing companies in Nigeria. Particular attention however was paid to a comparative analysis of the performances of both multinational and indigenous companies in the industry. Geographical spread: Most of the multi-national and indigenous companies producing food and beverage products are located in Lagos area, so this study concentrated mostly on Lagos State. However, quite some efforts were made to gather information from the operating companies in the West, Edo-Delta area, and East and Northern parts of the country during questionnaire administration, to reflect the general views from other parts of Nigeria. Institution: Under the empirical findings in Chapter V of this study, three selected multi-national and three indigenous companies in the food and beverage industry were presented respectively to show their performances in terms of turn-over earned for five years. They had been selected using stratified sampling method by dividing into groups the active population of 45 multinational companies, and 171 indigenous companies based on common characteristics (parameters) among each group. Two major parameters used were; firstly, their five years performances, (that is, 2001 – 2005) as published by the Nigerian Stock Exchange Reports (2006) for the multi-national companies; and the performance reports of the indigenous companies as revealed by their respective Annual Audit Reports, and secondly, analysis by Amanze (2006) in the “Manual of Nigeria’s Top 500 Companies in Nigeria” was chosen to substantiate the choice of the three multinational companies; while the Manual of Goldstar Publication (2006), “The Major 5000 Companies in Nigeria” was used to pick the three topmost indigenous food and beverage companies in Nigeria. The multi-national companies are; i. Cadbury Nigeria Plc. ii. Nestle Nigeria Plc, and iii. Unilever Nigeria Plc. 12 The indigenous companies in the industry are: i. Consolidated Foods and Beverages Company Limited, Okokomaiko. ii. Cocoa Industry Limited, Ikeja; and iii. Lisabi Mills Nigeria Limited, Maryland. Time Period: The display of operating period considered by this thesis for the two categories of the organizations was five years (i.e. 2001 – 2005). People: The respondents were categorized into two groups as follows: i. Top executives, like Chairmen/persons, Managing Directors, and Executive Directors of Departments, Senior Managers like General Managers, Deputy General Managers of Departments, and Junior Managers like Managers of units in the food and beverage industry in the multi-national companies on one hand, and their counterparts in the indigenous organizations, on the other. 1.9: Limitation of the Study The major limitation of the research faced comprises financial, the enormous financial requirement, the co-operation required from the selected respondents from the population of the study, and the time allotted to successfully executing a business research of this magnitude. All these were applicable to this research study, and the researcher, as the researcher could only undertake tour of limited areas in the South-west, Aba, in the East, and Jos, in the North-East. However, the impact of these was reduced because of the low financial assistance given by Covenant University, Ota, as Post-graduate Grants. Also the supports rendered by numerous captains of industry in the food and beverage companies, with the assurance that the results obtained would be relevant in solving most of the marketing challenges being faced by companies went a long way in alleviating the challenges faced by the researcher. Another limitation was the secretive policy adoption of most companies’ executives, hence inability of this researcher to obtain performance figures of most of the food and beverage 13 companies included in this study. Therefore, perception of the participants on performance was used. 1.10: Definition of Operational Terms The following terms were used in the study: •Marketing Mix = The set of controllable tactical marketing tools – products, price, place and promotion that the firm blends to produce the response it wants in the target market. •Marketing Research = The systematic design, collection, analysis and reporting of data relevant to a specific marketing situation facing an organization. • Brand = A name, term, sign, symbol or design, or a combination of these intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. • Perfect Competition = A market structure characterized by an extremely large number of sellers, none of them is strong enough to significantly influence price or supply. • Monopoly = This is a market structure where an organization offers a product that has no close substitute, which makes the organization the sole source of supply. • Monopsony = This occurs when there is only one buyer of a commodity or service. • Duopoly = This is an imperfect competitive environment with only two sellers or producers of a particular commodity. •Monopolistic Competition = Market structure where a firm has many 14 Potential competitors and in order to compete, tries to develop a differential marketing strategy to establish its own market. • Oligopoly = A competitive market structure where a few sellers control the supply of a large proportion of a product. • Return on Investment (ROI) =A common measure of management effectiveness – the ratio of net profit to investment. •Marketing Concept = The marketing management philosophy that holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do. • Direct Marketing = Direct communications with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationship. 1.11: Organization of the Study This research report was divided conventionally into five (5) Chapters. Basically, the first Chapter was the introductory Chapter where the background of study was presented. The research problems were stated along with the objectives of the research study. The research questions were presented and subsequently hypothesized into five clearly stated hypotheses. Dependent and independent variables were identified from the topic of the research study, and operationalized with their components spelt out Also included in this Chapter were the significance, scope of study, limitation of the study, as well as the definition of operational terms. Chapter Two was a review of selected relevant literature on impact of competitive marketing on the performance of multi-national and indigenous food and beverage manufacturing 15 companies in Nigeria. Following a purely conceptual and theoretical expositions, the Chapter considered the views of numerous scholars in marketing relating to marketing orientation and practices, organizational structure/strategy, marketing strategies, competitive use of elements of marketing mix, as they concern their contributions to performance of MNCs and INCs in Nigeria. Theoretical models adopted by this research, mostly from the other authors’ works, while some were generated, assisted in enhancing the study. Gaps in literature were identified. The third Chapter considered the research methods adopted in the conduct of this study. Here the theoretical framework leading to the five hypotheses were presented. The research design, namely the questionnaire, sampling frame, sampling technique adopted and data collection procedure and sources were discussed. Issues of validity and reliability as well as the statistical techniques used in the research were equally presented. The findings of the study were presented and analyzed in the Chapter Four where basic facts and figures derived from the data analysis were subjected to detailed discussion using analysis of variance (ANOVA) tool. The five hypotheses were tested and the results were presented, and meaning given to them in form of interpretation. The implications of the activities and performances of the MNCs and INCs were variously examined. Finally, the fifth Chapter presented the researcher’s summary of his findings from the comparative analysis of the MNCs and INCs in Nigeria, conclusion on the use of marketing orientations and practices, organizational structure/strategies, marketing strategies, and competitive use of marketing mix elements, all to achieve better performance in food and beverage industry in Nigeria. The Chapter ended with general recommendations by the researcher, contributions of the study to knowledge, and suggestions for further research. Each of the Chapters was followed with Chapter reference, while bibliography was included after Chapter Five. The appendix to the study was presented with the letter to respondents sequentially, to support the study and provide submissions presented in the body of the report.

Get Complete Materials
Website Hosting
WeCreativez WhatsApp Support
Our customer support team is here to answer your questions. Ask us anything!
👋 Hi, how can I help?