BRAND EQUITY AND MARKETING PERFORMANCE OF BEVERAGE FIRMS IN PORT HARCOURT


BRAND EQUITY AND MARKETING PERFORMANCE OF BEVERAGE FIRMS IN PORT HARCOURT

CHAPTER ONE

INTRODUCTION

1.1   Background of the Study

Today, company′s real value lies outside the business itself, in the minds of potential buyers (Kapferer, 2002). This is reflected in the value of brands, which are the anchors of company’s value. Products are introduced, they live and disappear but brands endure (Kapferer, 2002). The term ``brand’’ holds multiple meanings. According to John Murphy, founder of Interbrand (Ingham, 2003), a brand is not only an actual product, but also the unique property of a specific owner. Brands are increasingly considered to be the primary capital in many businesses. The brand is “a name, sign, symbol, or design, or a combination of them, intended for the goods and services of one seller or group of sellers to differentiate them from other sellers competitively” (Kevin & Keller 2006).

Brand facilitates customers to cater their needs in the best possible way, having a perfect confidence in the quality of the product as they had relied on that particular product before. In addition, it is expected that this practice will increase the chances of repeat purchase. If people become loyal to a brand it is surely a great advantage for a company. For example, a repeat purchase relates to the fact, that the company has done something good with its consumers, therefore that holds them to stick with a brand.

Financial professionals have developed the notion that a brand has an equity which exceeds its conventional asset value. Therefore, the phenomenon of brand and brand equity valuation became the centre of interest of both academic and business experts. The main issues are how a company can build, nurture and use a brand in order to obtain and sustain the competitive advantage in the marketplace.

Brand equity is a measure of the health of the brand. Thus, it can be used for marketing decision-making. In addition, brand equity cannot be viewed only from the companies’ perspective, but one must be concerned with the way customers perceive product or service brands. In the marketing literature, operationalisation of consumer-based brand equity usually falls into two groups (Cobb-Walgren et al., 2005, Yoo and Donthu, 2001): consumer perception (brand awareness, brand associations, perceived quality) and consumer behaviour (brand loyalty, willingness to pay a high price).

The key sources of brand equity suggested by Aaker (2001) incorporate both perceptual and behavioural dimensions in the definition, whereas Lassar et al. (2005) strictly distinguish the perceptual dimension from the behavioural dimension, so that behaviour is a consequence of brand equity rather than the brand itself.

1.2   Statement of the Problems

Beverage firms are playing an important role in the economy of every country.  As the beverage industry is growing faster and it is also expected that future growth June be higher than present. Therefore, it presents to the marketers some opportunities and threats. As far as opportunities are concerned, in growing industry firms have chances to increase their market shares. But this rewarding opening is also with some threats as this June attract many other local, national and international firms jump into that business. Therefore, in order to maintain their competitive position firms have to work on their brand loyalties. As these are low involvement products, therefore consumers June switch to other brands more often. Thus, marketers and brand managers need to be more interested in knowing about the antecedents of brand loyalty in Port Harcourt market.

The determinants of brand loyalty cannot be consistent in developing and developed economies. Some of the manufacturing firms, especially the food and beverage companies that are still in business and are listed in Nigeria stock exchange find it difficult pay dividend to their shareholders. Notable example include Champion Breweries which has not paid dividend since1988, Golden Breweries has not paid since 1997 (salandeen, 2001). Some Nigeria workers were forcefully disengaged from their services, example Ajaokuta steel industry reduced their staff from five thousand to one thousand in 2007, despite the above scenario, the companies post huge figures of their accounts receivables. It is as a result of the above problem that the researchers deemed it necessary to examine the effect of receivables management on corporate profitability of food and beverages manufacturing firms quoted on the Nigerian stock exchange.

Substantial research has been done to analyze a brand loyalty for various categories of products and services around the globe. As, Nguyen, Barrett and miller (2010) found that due to dissimilarity in developing and developed markets, to manage international brands in emerging markets and to design loyalty programs, and to understand those markets is necessary for global companies. Therefore, it is necessary to probe out different antecedents of brand loyalty and their significance. Growth in the beverage industry and customer loyalty to the firm is imperative to be learned. Firms can be possibly taking advantage of growth if their

managers are able to formulate strategies to keep their customers and encourage them for repeat purchases, thus makes them loyal (Porter, 2008; Nwokah, 2008). Therefore, working on brand loyalty can be helpful for many firms. Due to the importance of brand loyalty for the competitive advantage of different companies, this study explicitly investigates the determinants of brand loyalty in the context of beverage Firm in Port Harcourt.

1.3 Purpose of the Study

The main purpose of the study is to examine Brand Equity and Marketing Performance of Beverage firms in Port Harcourt. The specific objectives of the study are to:

1)     To examine the relationship between Brand Awareness and marketing Performance of beverage firms in Port Harcourt.

2)     To examine the relationship between Brand Loyalty and marketing Performance of beverage firms in Port Harcourt

3)     To examine the relationship between Brand Associations and marketing Performance of beverage firms in Port Harcourt.

1.4 Research Question

The following research questions will guide the study.

1)     How does Brand Awareness affect marketing Performance of beverage firms in Port Harcourt?

2)     How does Brand Loyalty affect marketing Performance of beverage firms in Port Harcourt?

3)     How does Brand Associations affect marketing Performance of beverage firms in Port Harcourt?

1.5   CONCEPTUAL FRAMEWORK OF BRAND EQUITY AND MARKETING PERFORMANCE

Market share

Brand Awareness

Sales Growth

Brand Loyalty

Brand Associations

1.6 Hypotheses

The following hypothesis will be used in guiding the analysis of our findings

Ho1. There is no significant relationship between Brand Awareness and Market Share.

Ho2. There is no significant relationship between Brand Awareness and Sales Growth.

Ho3. There is no significant relationship between Brand Loyalty and Market Share.

H04. There is no significant relationship between Brand Loyalty and Sales Growth.

H05. There is no significant relationship between Brand Associations and Market Share

H06. There is no significant relationship between Brand Associations and Sales Growth.

1.6   Significance of the Study

The studies will a source of secondary data to other researchers who wish to conduct studies on related issues. It will again act as mainstream for generating, keeping and maintaining customers.

The research will also provide the management of Beverages in Nigeria with a better understanding of the CRM concept and assisted them to improve their own service quality.

The study will also serve as a useful reference material for students, academicians, institutions, corporate bodies and corporate managers who are interested in the subject of Beverages in Nigeria.

1.7   Scope of the Study

The general scope of this study covers Brand Equity and Marketing Performance of Beverage firms in Port Harcourt. The geographical scope is Rivers State of Nigeria. The units of analysis cover Beverages Industry in Rivers State.

1.9   Definition of Terms

Brand Equity: brand equity is defined as the incremental cash flows which accrue to branded products over unbranded products

Brand Loyalty:Aaker (1991) defines brand loyalty as ‘the attachment that a customer has to a brand’.

Brand Associations: Brand associations are mostly grouped into a product-related attribute like brand performance and non product

related attributes like brand personality and organizational associations.

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1    SUMMARY OF FINDINGS

The objectives of the study are;

1)     To examine the relationship between Brand Awareness and marketing Performance of beverage firms in Port Harcourt.

2)     To examine the relationship between Brand Loyalty and marketing Performance of beverage firms in Port Harcourt

3)     To examine the relationship between Brand Associations and marketing Performance of beverage firms in Port Harcourt.

Findings from the study reveals that majority of the respondents are of the opinion that brand awareness improves the market share of beverage firms. Another finding from the study reveals that there is a significant relationship between brand equity and marketing performance of beverage firms in Port Harcourt.

5.2    CONCLUSION

The relationship between brand equity and business performance is an area that has not received much research attention. Few studies have empirically tried to prove the relationship between financial performance and brand equity. It was found that product’s brand equity positively affects future profits and long term cash flow (Srivastava & Shocker 1991). One of the important considerations in defining brand equity was brand equity positively influences financial performance (Lassar et al. 1995). Webster (2000) provided conceptual support for the relationship between brand equity dimensions and brand market performance. Evidence was provided on the effect of brand equity on the financial performance in the hotel industry (Kim et al. 2003). Strong brand equity was significantly correlated with revenues for quick-service restaurants (Kim & Kim 2004) . Prasad & Dev (2000) suspected a positive correlation between brand equity and financial performance. The impact of a brand’s equity on the leading brand’s market share and contribution are substantial (Srinivasan et al. 2005). Customer-based brand equity constructs are correlated with brand market performance (Tolba & Hassan 2009). In a study investigating the influences of brand equity on competitive advantage and performance of Spa business in Thailand, the results indicated that the brand equity has a significant positive relationship with competitive advantage and performance (Nurittamont & Ussahawanitchakit 2008). In order to ideally represent the business performance, the study incorporates both financial and operational performance of beverage firms in Port Harcourt.

5.3    RECOMMENDATIONS

It has been suggested that brand management should be strategic and holistic, as this is conducive to longevity. As discussed earlier, the marketing mix should function in a way that supports the brand message. This approach rejects, for example, discounting as a short-term sales promotion for a premium brand. That is, the decision to reposition a premium brand as a value brand should be a strategic one, rather than as the outcome of tactical marketing mix decisions. The suggestion that brands should be managed as long-term assets is not new (see Dean, 1966), but getting stronger and more widespread. Davis (1995) indicated that brand management should take a long-term perspective and suggested that: . . . management wants to change its ways and start managing its brands much more like assets ± increasing their value over time. Wood (1995) suggested that the management of brands should be a higher level function than currently exists in many companies. This is an argument supported by Uncles et brands therefore, is to maximise the long-term value of that earnings stream. This will require expenditure on the marketing mix to support brands, and may lead to short term sub-optimization (even to profit and loss account losses) to ensure the long-term brand building. Brand value has an additional advantage over other measures, in that it addresses the health of the market, as well as the health of the brand within a market.

Performance measures that encourage decisions that promote the long-term health of the brand, are considered to be better than measures that do not encourage strategic decision making. A key benefit of adopting brand value as a performance measure is that it creates a long-term focus for management. If brand strength is the degree of attachment to a brand, and brand value is based on the future earnings of a brand then the higher the brand strength the higher the brand value. Managers of brands (not necessarily marketers alone) should therefore manage, and seek to maximise, both brand strength and brand value. The natural long-term outcome of this should be increased profitability.

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BRAND EQUITY AND MARKETING PERFORMANCE OF BEVERAGE FIRMS IN PORT HARCOURT



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