Academic journal article International Journal of Marketing Studies

Trade Sales Promotion Strategies and Marketing Performance in the Soft Drink Industries in Nigeria

Academic journal article International Journal of Marketing Studies

Trade Sales Promotion Strategies and Marketing Performance in the Soft Drink Industries in Nigeria

Article excerpt

Abstract

Rapid changes in technology, over production, shortened product life cycles, increased competition owing to reduced barriers to domestic and international trade, mass communication and globalization have all contributed to the need for a firm to have distinctive capabilities; which create a competitive advantage over others. We are inclined to believe that fully utilized, competent and well-articulated trade sales promotion strategies constitute a competitive advantage. With the notion that trade sales promotion strategies positively correlates with marketing performance, firms view trade sales promotion strategy incompetence with grave concern. The effect of poor trade promotion strategy performance is not limited to firms alone since organizations can and do experience sub-optimal or out-right poor performance; but also to the economy as a whole. The aggregate business performance of a country's economic unit shapes its economy, since a nation's wealth is measured mostly in terms of its GDP. Among the factors critical to business profitability; fresh concerns about the efficacy of trade promotion strategies is sparsely researched. This informs the research interest in this regard, recognizing the unique role of trade sales promotion strategies that distinguishes it from other marketing communication methods, and its critical roles in pushing and creating traffic for the manufacturer's product. With a survey research design, a regression model was formulated to incorporate eleven hypotheses of interests. Quantitative data were collected through a 5-point Likert-type scale questionnaire. A total of 234 copies of questionnaire were completed by senior promotion and sales executives of two major soft drink manufacturing firms and their accredited distributors in Nigeria. We adopted Pearson's 'r' and stepwise regression with its constituents-ANOVA and T-test to determine the trade sales promotion activities that actually influence marketing performance activities in these firms. Two of the hypothesized trade sales promotion strategies were retained and adjudged relevant in determining marketing performance levels. Our findings reveal that Trade promotion strategies affect marketing performance through the use of trade allowances and trade contests. Notwithstanding this fact, the study notes that the firms are not at their optimal levels in both their trade promotion strategies and marketing performance. We therefore recommend that for optimal levels to be achieved, they should adopt trade promotion strategies that emphasize trade allowances and trade contests.

Keywords: trade sales promotion, push strategy, marketing performance, regression model

1. Introduction

The warm climate in Nigeria is compatible with cool drink consumption, but with soft drinks per capita consumption of just a little under thirty five liters there is considerable untapped potentials. Soft drinks also make up the bulk of commercial beverage in the country and now account for around 6.5 of every 10 liters of beverages traded up from 5.5 liters ten years ago (Corbett, 2009). Also, some investments are helping to facilitate future carbonate expansions in the country (www.prosharen.com) accessed 20 June, 2011. This has led to competition between major industry actors like Nigerian Bottling and 7-Up Bottling Companies and other local players.

Therefore in such a competitive business environment, organizations need to constantly stimulate sales through adoption of incentive marketing techniques (Chevron, 1998); particularly those directed at channel members (Narasimhan, 1990). These include trade contests, Trade fairs and Trade allowances; which when properly applied can lead to marketing performance in terms of sales turnover, market share and profitability; and other marketing objectives (Buyline Report, 2008; Jackson, et al.. 1995; Narasimhan, 1989) however, to achieve this, firms must operate within the boundaries of core competences of its strategies (Prahad and Hamel, 1990); and within an understanding of the firm's environment which can change over time (Uzor, 2011)

Therefore, rapid changes in technology, shortened product life cycles, increased competitions owing to reduced barriers to international trade and globalization (Ohmae, 1985) have all contributed to the need for a firm to have distinctive capabilities or core-competences; which when successfully applied to firms markets become competitive advantages (Kay, 1983). …

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