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

 

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 Nigeria, for instance, reveals their widespread branches covering major cities in the six geopolitical 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 prerequisites 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