Strategic Marketing Practice Considerations in Family Business in Nigeria

By Adegbuyi, Omotayo | New England Journal of Entrepreneurship, Fall 2009 | Go to article overview

Strategic Marketing Practice Considerations in Family Business in Nigeria


Adegbuyi, Omotayo, New England Journal of Entrepreneurship


The purpose of this study is to fill a gap in the literature by examining a medium-sized firm. Most modern economies are characterized by a significant group of middle-sized firms, still owner-managed, but with multimillion naira turnovers. Many of these remain family companies and constitute an important reservoir of business initiative. One such family business is the focus of this research. The results of the study suggest that neither the existing typologies of small firm approaches to marketing nor the formal models of marketing attributed to big companies necessarily characterize the marketing planning and management of family business in Nigeria.

Keywords: Depth evaluation, family companies, medium-sized firm, modern economies, multimillion naira turnovers.

For sustained profitability, business has to identify and approach its potential customers in an informed, organized, and controlled way. Business has to offer customers some benefit at a price they are willing to pay and at the same time organize its affairs to ensure that it makes adequate profit. Irrespective of the people involved and the methods adopted, success requires analysis, planning, and control (Kotier 1984). This paper is concerned with the strategic marketing activities.

Family firms are rarely recognized as aggressive growth companies (Blake and Saleh 1995), yet growth is important to family firm survival (Ward 1987). Poza (1989) indicated that family firms must consider growth strategies to avoid the decline or loss of the family business, to promote continuity and family unity, and to save jobs and create wealth. Unique challenges arise in achieving growth while also maintaining control of the family business (Goffee 1996). To date, research-based insights into family firm growth strategies and implementation approaches are quite limited (Sharma, Chrisman, and Chua 1997), and comparative studies are rare (Dyer and Handler 1994). The current study seeks to address this shortcoming by examining the strategic marketing practice considerations in family business. Specifically, the research seeks to explore the following questions: What are the strategies family firms use to pursue growth? Are these strategies different than those used by large and small firms? What specific marketing tools do family firms use to implement the strategies?

Background

When the austerity measures failed to work in Nigeria in 1986, the Structural Adjustment Programme (SAP) prescribed by the World Bank and the International Monetary Fund (IMF) was introduced. SAP was the all-powerful prescription, which the World Bank and IMF recommended as the last resort for bailing developing nations out of their strangulating debts. It is normally a very bitter purgative pill. It is gratifying to say that SAP, in spite of all the criticisms against it, has succeeded to some extent in correcting the anomalies in the Nigerian economy.

Among the reasons for the introduction of SAP by the Babangida administration in 1986 was to restructure and diversify the productive base of the economy in order to reduce dependence on the oil sector and imports. The expected impact of these measures was the discouragement and consequent reduction of importation on the one hand and the stimulation and consequent increase in the local production of goods and services formerly imported on the other.

Active persuasive measures by the SAP helped Nigeria to ban items such as bottled water, soft drinks, carbonated drinks, and stout. This opened the way for indigenous industries, which are mostly family-owned businesses, to take on the challenge to turn out new local alternatives to foreignmade goods. Thus, marketing outlets today display innovations of invariably all types of consumer goods formerly imported into the country. In particular, the recent growth in the soft drink chain industry has resulted in fierce competition. Classic Beverages Nigeria Limited (a family-owned business) has responded to this challenge with the introduction of Lacasera to compete with other soft drinks in the market. …

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