EFFECTIVENESS OF PROMOTIONAL STRATEGIES EMPLOYED BY AGRO ALLIED INDUSTRIES IN NIGERIA
ABSTRACT
This research work traced the effectiveness of promotional strategies employed by Agro- allied Industries in Nigeria in the promotion of their products like meshing, casavita, yam flour, maize flour, animal feeds and vitarice. The researcher selected Olympic maize milling Agro-Allied industries Ltd. Awka as case study. He made an adept study into the various promotional elements and available media with their strategies.
Different structured questions were administered to respondents after reviewing similar literatures. These questionnaire were administered to both consumers and the management of Olympic Maize Milling Agro _ Allied Industries.
The research also conducted oral interview with the manager of the company from where I get much of the information not covered in the questionnaire.
The test of two hypotheses was based on the researcher’s project topic, which tested with “a chi square approach”. The analysis of our data revealed that most consumer of Agro- Allied product (Olympic) Mesolina, Olympic cassvita, Maize flour, animal feed etc became nature of the product through advertising and hence the most effective promotional strategies being through the radio advertising from which was followed by television with its strategically advertising from immediately after national broadcast in the evening.
The same was discovered that the most effective media of promoting the products were radio and television which consumers rated highest and higher respectively. More so, the management also confirmed this through the research’s analysis.
The significant strategies in the promotional tools used by the management as the researcher discovered in her interview with the marketing manager and some customers are the jingles in the radio, that runs thus, the more you buy it and cook for food, the more satisfaction you get, which consumers said they found to be time. The one used in the advertisement is also effective and significant because of the way they cook it after preparing the Olympic mesolina, set it on the table & the family sit round the table and not their heads in affirmation and requested his to be everyday food.
Finally, we recommend what we consider appropriate measures that would enhance a more posit effectiveness on the promotional strategies to employ in the marketing of Agro-Allied products and other similar establishment that will aid the effectiveness like the product research and development, employing the services of promotional experts and strategies and maintain good cooperate citizens through community activities.
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACK GROUND
In the 60s the economy of Nigeria was characterized agro Industries and production of Agricultural goods which were Exported in its raw form or in a semi- processed form to the out side world. The products before they were exported needed storage and protection from decay or deterioration, and that meant more cost to the agricultural products.
The urgent to get more value from agricultural product and this stop importation of import substitution goods enhanced the development emphasis of agro allied industries in various areas of the countries. The agro- allied industries are those industries that use agricultural product as their raw material inputs to reproduce other consumer and industrial finished goods. They are called agro- allied industries because their component raw material good inputs contain 70.80% agricultural produce.
The federal government encouraged the growth of agro- allied products to lesser the importation of raw material or import substitutional goods. The agro-allied industries that needed to be examine here are tabulated below
Industries (Agro- allied Agro- product used
Brewing Industries Wheat sorghum, malt and Barley oranges
Wine industries Grapes and lemon
Meat processing industries Poetry sheep and beef
Biscuit industries Maize wheat and Guinea
Milling industries Corn
Milling industries Maize, wheat, cassava, yam and Rice
Promotional strategies are therefore plan activities to induce customer’s acceptance of any product offering or service. It involves the use of appropriate communication massage through point, media electronic media, bill board vehicle advertising and others. Strategies refer to various devices and methodologies applied in accomplishing promotion objectives.
The preliminary investigation carried out shows that the promotional strategies mainly carries out by these Agro –Allied industries are advertising, sales promotion, personal selling and public relations. It further shows these strategies are used due to the presence of massage carries, which obtain wide audience coverage aid again covers wide geographical area. These carriers of point media (news paper, magazine and business Journs) electroinc media (T.V radio, films and video tapes). These media are used to influence, persuade and attract the consumer to make a favourable purchase in order to increase sales and profit position of given firm.
Advertising is used by Agro- Allied Industries to present a new product and stimulate the patronage of the existing ones. These agro allied companies depends on advertising to move their goods through the channels to distribution (from manufacturer to wholesalers to the local retailers) to develop consumer loyalty to their brands and dealers and to reduce the affect of competition. They need volume to keep their factories operating efficiently.
Advertising without proper distribution of the product is wasteful, when products are vastly distribution of the product and proper media used to advertise the product, the affect can be flexible. The main media used by Agro –Allied companies in the industry to advertise their product are newspaper, magazines, network T.V sport radio and out doors. With the preliminary study carried out, four of six agro companies in the industry proved advertising to be effective in that, they achieve 85% -95% of the expected revenue in after their advertisement though Olympic Agro- Allied industry achieved a peng off in their sales volume it was understood that they may not know the percentage that occurred to advertising as they explained. the positive effect of Olympic advertising made it to still be in business as they use local and national newspaper, radio and TV. The quick patronization by consumer, which the advertising influenced, made the retail and wholesaler to stock more at Olympic company’s products which gave the company sufficient, return on volume sales to repay the cost of the product and the Advertising.
This strategy is used to encourage dealer to stock new item of build up longer stock of an established product. This is by making special after to the trade so that gaps existing in the patchy distribution of a product are flud while extra dealers and gained areas that are poorly represented.
WAYS IN WHICH AGRO-ALLIED USES SALES PROMOTION STRATEGIES
CONSUMER PROMOTION
Sales promotion directed at consumers which include product launch through reduced selling prices, samples, gift and extra breaking consumer loyally and attracts trial of a new product, encourage more usage and the purchases of large sized units by regular buyers. Olympic maize milling Agro-Allied industry is using this strategy extensive and it contributed to its consumer loyalty.
TRADE PROMOTION
The Agro- Allied industry uses trade promotion to secure the co-operation of wholesalers and retailers. For example, Olympic maize milling industries in the sale of corn and cassava flour, this manufacturers offer a buying allowance during a stated period of time. This offer encourage dealers to big a quality to carry a new item that they might not ordinarily buy indeed these companies made the dealers to use the buying allowance for immediate profit.
On this, Agro- Industries gives special incentive to wholesalers and retailers sales people so that they display their product prominently and particularly this by issuing a designed trolley carrier containing a good number of mesoline and vita race which the retailer keep at strategic place in their big store. The affect is that consumer purchase then first before other
PERSONAL SELLING
The promotional strategy is used by Agro-Allied companies when their products used as raw materials to other companies requires demonstration for instance the explain to Biscuit industries the degree to which their granulated corn flour should reach and be suitable for biscuit making. They also use this strategy to provide post –purchase reinforcement to avoid cognitive dissonance companies being dissatisfied after purchasing their input from the Agro- Allied Industries. Arome form uses this where it will supply chicken to breeders and send sales force to check breeding space, housing and drugs given to chickens. They also persuade, motivate and get the order.
As noted, these Agro-Allied industries (beer brewing, wine marketing industry, meat processing industry, livestock industry, biscuit industry and milling industry /employ these strategies in the distribution f their product, and since these product are a bit perishable, they must ensure early distribution and dispersonal of such product. This means that the strategies of such product. This means that the strategies for promoting them must be effective and sustainable.
As Dr. little (1971) rightly maintained, if the objective of advertising (among the promotional elements) is to help sell a product, help the sales force reach hidden buyers, improve market position on create market preference. It means that where these are achieved, the promotion is effective but where are not achieved it is ineffective. These is the evidence that in certain promotional strategies, advertising acting as a partner to the personal selling can generate sales more economical and effective than salesman himself.
Some of the promotional strategies taken by these Agro- Allied industries varies according to the products being promoted; some of the are:
1) Embarking on all radio and TV advertising
2) Participating in all local and national exhibitions
3) Buy space in at least 3 local newspaper
4) Using prime time to get housewives.
5) Showing the advert on local television immediately after national news
6) Maintaining corporate citizenship in the community
7) Maintaining after sales service where necessary .
The main follow up to these strategies taken by Olympic maize milling Agro-Allied Industries is that they are matching them with wide distribution of their products. Or this, consumer just hear or see the advert go to any nearby shop and see the product.
Before the discovery of crude oil in Nigeria, the source of living and earning of Nigeria were agriculture. About 80% of Nigeria were engaged in agricultural through marketing, Nigeria earned foreign exchange by exporting farm products in the natural and semi- processed form products in the natural and semi- processed form abroad. Agricultural marketing encompasses all these activities that dried the flow of agricultural product form the producer to the ultimate consumers and industrial buyers or users at a profit thereby keeping the farmers in continuos operation and at the same time ensuring the promotional movement of these farm product. This act of marketing Nigeria agricultural products was undertaking by marketing and commodity board (now dissolved).
These exported product were in their natural and much the same way as they left the farm through in a preserved state (Ukwu I. Ukwu 1993) since these exported products carn less foreign exchange than it would have been if processed. This now stimulated the federal government into action towards the establishment of Agro- Allied Industries to do the same so as to enhance the processing to agricultural product as show below
Agricultural product Processed form
Cassava Garri, cassavit, cassavaite
Palm product Palm oil and vegetable oil
Orange Orange sguash,, wine
Coca Beverage
Rubber Tyres, plastic products
Maize Mesovita, mesolina
Rice Vitaric
Wheat Flour and animal feeds
Meat Baton, tinned meat frozen meat
So as to more foreign exchange, these are fully processed and package. This giant stride on the part of the government was not only just to earn more foreign exchange but also to produced for local, and domestic consumption by homes and industries who rley one imported processed agriculture produce for their day to day operation followed by individual consumption.
With this objective in mind, government initiated the selling of up of River Basin Authorities in almost all the state of the federation with the duty of producing hamessing and processing of agricultural product both for local consumption and exportation. The government went a step further in barring the importation of Agro-Allied products which otherwise could have be processed in this country of which examples are processed milk, fruit drinks, maize flour, wheat flour animal and chemical manure (fertilizer)
Conclusively, the establishment of Agro-Allied industries in the country became a reality through series of government policies and incentives like importation of Agro-Allied plant, equipment without duty tax free holidays, and subsidizing of capital equipment where necessary to be used in the Agro- Allied industries establishment.
PROFILE OF OLYMPIC MAIZE MILLING/AGRO-ALLIED INDUSTRIES LIMITED AWKA
When we talk of Agro- Allied Industries, we refer to those industries engaged in the processing and utilization of agricultural based products as raw material for further production. For instance maize is processed used in the production of semolina, mesolina, biscuit and animal feed or it is processed into flour and exported.
The most identical mark of an Agro- Allied industries is that 80% of their raw material will be obtained from Agricultural is that products while the twenty percent (20%) is made of chemical additive products and preservative used in the further production and processing functions.
Olympic maize milling industries, which is an Agro- Allied Industry, was established in 1988 by Chief Sir (Dr) Joe Nwankwn who is the chairman of the company. This Agro- Allied is one of the establishment in Nwankwu group of companies. It was as a result of his wide experience in business management and also business conglomerates that earned sisr Joe Nwankwu his Doctorate Degree In Business Management.
Sir Joe in 1993 market and celebrated his fifty (50) years in business 1943-1993). Olympic maize milling Agro- Allied Industry is located at Awka industrial layout along old Enugu- Onitsha Road Awka, Anambra state. The company has its administrative head quarters at Abagana also in Anambra state with the incorporation of the company under the company act of 19j4 (amended and supplemented by the company Acts of 1967 and 1976) 12 staff members were employed of which two of them were graduates of masters degree celebrities, five of them were Higher National Diploma holders
According to chief sir (Dr) Joe Nwankwu the objective of the company are to respond to the federal government’s call towards local production and self-reliance instead of depending on foreign made or impede product. He also maintained that the company was established to help in boosting the economic growth of the country. Processed Agro –Allied based material and products for consumption and Exportation, ensure consumer satisfaction, provide employment and maximize profit for the survival of the business.
The Agro- inputs of the industry are maize, barely guinea corn, wheat and sorghum. Most of these inputs are supplied by the industry’s farm which is about one hundred hectares has a yearly output of about five hundred metric tonnes. The output of the industry are offal for animal feeds, flour for baking and confectionery industries, Semolina as foods, germ same as offal sorghum offal consumption.
The promotional strategies adopted by Olympic industries
1. Extensively placing of advert massages on both electronic (radio and television) and print (news paper, magazines, bill boards posters).
2. Personal selling by visiting industrial users of the products, taking their orders and making sure their other get to users customers in the right state.
3. Sales promotion through novelties giving out of key holder with the company’s name, address, pens with calendars. These gifts are give on every one hundred thousand naria (N1000000) purchase.
4. Public relation through projection of the company image in the eyes of the community, telling the community the importance of the company giving scholarship, contribution to the repairing of roads and selling of consumer product at moderate price.
PROMOTIONAL BUDGET BREAK –DOWN
Promotion Budget in percentage
Advertising 50%
Personal selling 20%
Sales promotion 20%
Public relation 10%
The sales manager of Olympic industry gave the rough estimate of promotional budget to the thirty (N30,000) annually depending on the introduction of raw products.
MANAGEMENT:
As a result of the size of the organization, it become possible for some of the management job to be merged together like that of the chairman and managing director, secretary and public relation officer
The current organizational structure of the company is shown diagrammatically in figure 1.1 below
Chairman/ managing Director
General manager
Organizational structure of Olympic maze Agro – Base at the apex of the organizational chart is he chairman and managing Director of the company who also is the chief executive of the organization. The company secretary has the advisory role and projection of the organization image to the public as his major task and supply, is not within the line of authority of the company.
Directly below the chief is the central manager, who coordinates the entire general mangers and day to day activities of the company. Below the manager are the live managers of the various departments. The production manager has the dual role of overseeing production and giving technical and production instructions and advice to others and managers.
From the little conversation, the researcher had with the marketing manager who is also charge of advertising, there is the problem of curbing other companies from initiating the product of the industry in the market. A part from the remaining raw materials which the company imports, getting foreign exchange poses another problem to the agricultural extension segment of the company. This problem is now taken care of.
In relation to the managing director statement, the company has a brighter prospect in view of the future as most of their raw materials are sourced locally and their products are among the best and again no negative report has so far been received from the numerous customer of the company.
THE PROMOTIONAL PROBLEM FACING THE OLYMPIC MAIZE INDUSTRY
In the early 90s the company has been the emergence of competition both within the state and out side. The major competitors with in the state include jaluch Agro mill industries Awka and union oak Agro –Allied industry Awka most of new and old competitor come with Aggressive advertising and promotional support as well as intensive distribution strategy.
Olympic maize milling Agro- Allied Industry has been faced with the problem of promotional support, as our short study seems. Another problem is the inadequate field contacts. Again the promotional media are not well researched to come out with the most effective ones.
It was also noticed that the advertisement, buyer spends time looking for Olympic products and this means not meeting distribution and demand schedule.
STATEMENT OF THE PROBLEM
In Nigeria today Agro- Allied Industry is attracting a lot of investors. This is partly in response to the federal government deliberate policy of encouraging sustain indigenous enterprenurship in the productive sectors of the Nigerian economy and as a result of the realization on the part of the investor. The strategic importance of agriculture and the relevance of its processed product in the economic substance of the country more especially now that the steady unsolving of the exchange rate of naira has rendered the available Agro-Allied products exhibiting.
One would have anticipated that with current scaring exchange rate of naira and the consequent difficulty faced in the importation of foreign Agro- Allied product in the country. Market for these products would have been totally taken over by Nigeria enterprises but this has not been possible as a result of some factors.
Prominent among these factors may be the attitude of some Nigerian to promotion. The result is that the demand for Agro- Allied products has not been adequately boosted. Another problem seem to be orientation of the producer or manufacture to promotion. These may be observed tendency on their part to overly emphasis and pursue their profit maximization motive in isolation of the consumers satisfaction.
The net effect of all these being that the inadequately promoted product will not attract customers patronage and as such militating against the achievement of the promotional goal which often are respect purchases, company good will, increased sales and revenue and consumers loyalty.
Another problem could be that the manufacturers have not realized the importance of the various promotional in stimulating product patronage effective package or package design as a function of promotion and inducement factor towards purchase seems also not understood by some Agro-Allied Industries and therefore disregarded.
The researcher infer as it seems that adequate promotional factors and strategies has not been fully utilized by firms in the industry and is thus bent on unmary kind the effectiveness of promotional strategies towards the achievement of most company goal using a case study of Olympic maize milling Agro- Allied Industry Awka
OBJECTIVES OF THE STUDY
The objective of this study is to identify the effectiveness of promotional strategies in Agro –Allied Industries. The study shall focus on:
Finding out how effective promotions has been to the company (Olympic maize milling Agro- Alied industries in boosting sales and sales revenue).
2. Examine whether consumer rely on promotional massage of the industries for adequate information following their purchase of the company’s products.
3. Highlight to the management of the company the importance of promotion mix element in the promotion of their product and company’s image with a view of generating greater sales and return on investment
4. Find out the effect of promotion towards building of good will be customer for the promotion towards building of good will by customer for the company
5. Determine way of improving the promotional compaign strategies for the company as to enhance the market ability of its products.
1.3 SIGNIFICANE OF THE STUDY
A research on this topic is important because it will help us draw a careful analysis and revaluation of the promotion strategies adopted by the Agro- Alling (Agro-Allied) Industry Awka so that effect one will be retained and ineffective ones media fixed or dropped totally.
This research work will serve as reference point and consultative material to other organization firms wishing to gain entry into the industry on the most efficient and affective promotional tool and strategies to adopt so as to improve on their sales potent and revenue generation.
Since the aims of any marketing strategy is to offer a product or service that is appropriately priced to satisfy the four utilities ie form utility, times utility, place utility and possession utility which will meet the important desires of the buyer of the product. This could only be achieved through the proper understanding of the customers and their motive for buying
This a proper understanding of the effectiveness of promotional strategies in Agro-Allied products will help for better understanding and plan his message and product so as to meet the consumer ideal and on the other hand, help consumers to have a better understanding of the producer and it product.
This study is great importance as it will help the management of Olympic maize milling and other Agro- Allied establishment to lay more emphasis on these promotional element that influences consumer most. To this end, marketing research becomes an important tool to help the organization find who their potential customers are and would their different needs and wants, their tastes levels (what kind of product they will be distribution strategies to adopt. Their levels of awareness and what promotional tools to be mix and media to use and the scientific price fixing method.
Finally, subsequent research will find this useful when researching on similar topics.
This study covers Awka capital Territory and environment. These are Awka town, Enugu Ukwu, Abagana, Onitsha, Agulu, and Nnewi. Consumers outside Awka town and Nnewi are taken for the purpose of ensuring that the questionnaire administration reaches every area in Awka capital territory.
1.4 LIMITATION OF THE STUDY
The preliminary study carried out by research was limited of financial constraint beyond her control in using transportation to other Agro-Allied industries and Arroma foundation limited that are located at Awka.
The time within which the research was to carry out the research job and submit her repot was not enough. There was not enough time for the work to be done, coupled with the fact that the researcher also had some other academic work lying in wait to be completed. This factor to hold seriously on the information got.
Also some respect calls were necessary as some times the sales people were never around and also they were around, they may regrets you to call again, as they did not have time to attend to you.
Furthermore, the uncooperative attitude of some of the respondents hindered greatly the smooth gathering of some relevant data that could have been helpful many occasions a respondents could refuse answering some questions passed on to the promise on the grounds that it is not yet time for visitor to come in no matter mission and when they intended seeing
1.5 HYPOTHESIS FORMULATION
1 Promotional strategies do not influence the purchase or sales of Agro-Allied products.
1b. Promotional strategies influence the purchase of sales of Agro- Allied product.
2. affective of promotional strategies dried not help in building respect purchase for the product of the Agro – Allied industry.
3. Effective of promotion strategies help in building repeat purchase for the product of the Agro-Allied industry.
1.6 EXPLANTION OF KEY TERMS
For the purpose of this study and easy digestion of the content, the researcher made use of the following key terms:
MARKETING: Pride and Ferrel (1989) defined marketing as consisting of individual an organizational activities that facilitate the expedites satisfying exchange relationship in a dynamic environment through the creation, distribution, promotion and policy of goods, services and ideas.
MARKETING COMMUNICATION: Lie Boone and D.R. Kute (1980) defined marketing communication as the massage that deals with buyer and seller relationship and it include words of mouth and other forms of unsystematic communication.
PROMOTION: According to Adirika (1992) promotion is one of the component of marketing mix used by an organization to inform, educate and persuade the market regarding the company’s offering.
Advertising, personal selling, sales promotion and public relation are the major variable to promotion.
ADVERTISING: Ralphs Alexander etal (1963) defined Advertising as any paid form of non- personal presentation and promotion of goods, information, ideas by an identify sponsor.
SALES PROMOTION: This consists of all activities aimed at promoting immediate sales. It is a short- term special offer advertising promgramme directed to consumer, dealers. It is designed to achieve fast sales or consumer response.
PERSONAL SELLING: Pride and Ferrel (1959) sees personal selling as an activity which is undertaken to inform and persuade customers to purchase products through personal or face to face communication which invariable will calumniate into an exchange situation.
PUBLIC RELATION: The international public relation association (IRRA) defined public relation as the act science of analyzing trends predicting their consequences, counseling, organizational leader and implementing planned programmes of actions which will serve the public interest.
PUBLICTY: Dow James etal (1995) maintained that basically publicity is a freedom. it includes those promotional activities out of pocket cost. This implies the combination of different variable or element of encompassing factor example marketing and promotion in such a way as to achieve set out objectives.
EFFECTIVENESS OF PROMOTIONAL STRATEGIES EMPLOYED BY AGRO ALLIED INDUSTRIES IN NIGERIA
