EFFECTIVE PRICING STRATEGY OF NEW PRODUCTS

EFFECTIVE PRICING STRATEGY OF NEW PRODUCTS

ABSTRACT

Previous to our current era, Nigerian Bottling Company Plc’s products dominated the bottling sector.

Lately, 7-up bottling firm Plc reemerged on the market to compete with Nigerian bottling company Plc, both of which struggle with other mineral soft drink makers. The scenario was compounded further by the country’s dismal economic status.

As a result, marketing innovation, dynamism, and efficiency are essential not only to survive, but also to ensure profitability and cooperative growth. Implementation of marketing tactics as well as good sales force collaboration.

As a result, the purpose of this research was to assess the significance of successful salesperson performance as an indicator of corporate growth potentials (a case study of 7- up bottling companies) used.

Based on the data collected and evaluated, the hypothesis was tested, and the following findings were accepted.

The consumption pattern of 7-up drink customers is determined by the performance of the company’s sales personnel.
The profits made by the 7-Up bottling company are directly proportional to the effectiveness of the salespeople.
7-up soft drinks are well-liked by consumers.
In addition, judgments and recommendations were made; the conclusions are as follows:

– The average 7-up bottling firm salesperson is professionally inept.
– Sales force effectiveness has a direct association with a company’s increasing sales potentials and profitability.
– The 7-up salespersons do not effectively and intensively distribute their items.
– Customers have a favorable attitude regarding 7-Up drinks.
– The corporation should make an effort to increase its market share.
– Salespeople must be well trained and oriented.
– The 7-Up bottling company’s distribution network should be expanded.
– It is hoped that if the 7-up bottling company implements these ideas, the effectiveness of its salespeople will be improved.

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF THE STUDY

After conducting some research and determining what the customers want, specifications, and needs are, the firm translates these discoveries into product concepts and, finally, goods and services that can satisfy these identified demands, in their exact specification and requirement. As a result, “the ordinary firm can be viewed as an input-output system” (Okeke C. I 1993).

It is not enjoyable to examine a company, especially in the context of marketing, as an input-output system. This is due to the fact that multiple other chains of events precede both the input and the output.

A holistic viewpoint takes into account all of the interconnected and interrelated activities that occur before and after input. For example, the output must be in the proper proportion, efficiently priced, promoted, and distributed.

All of this, however, does not ensure the exchange and transfer of title from the firm to the buyers, nor does it guarantee a compensation or profit to the firm.

In other words, all of these activities can be effectively integrated, blended, and used to construct the foundations of a business.

“Excellent distribution, innovative products, increased production resources, competent advertising and many other variables in marketing must surely fail if a manager is unable to establish a team of men ready to battle with fierce competition and sell efficient to every sort of buyers”. (Jack 1983 P.80) as a result, the common marketing adage “nothing happens until a sale is made” applies (Okeke 1993)

To implement these marketing variables, the sales manager must use the sales force, who must demonstrate their primary salesmanship functions by acting as intermediaries between the company and prospective customers, acting as the company’s voice to the customers and directing the voice of the customers to the company.

As a result, personal selling puts the consumer and vendor in direct contact. It is critical that every firm have a sales team whose role it is to ensure that customers and prospects are reached and persuaded to purchase the things given in exchange for a  value needed by the organization.

There is no amount of advertising, sales promotion and publicity that can be equal to personal selling. This is because, contacts must be established by somebody with buyers some where for market transactions to take place. The sales force in modern marketing do not only perform the current sales, they are also concerned with laying the foundation for further sales through the performance of information gathering function. To properly carry out this, there should always exists in an organization, a skilled manager who manages the sales force efficiently and effectively. As a result, sales management is defined “as the organization efforts necessary in planning sales objectives, specifying selling efforts needed in realizing the objectives, selecting, training and motivating appropriate sales force and controlling their operations towards ensuring the full realization of sales objectives (Okeke 1993: 40). Salespersons are trained in a method of analysis and customer management.

Today, selling is a profession that involves mastering and applying a whole set of principles, personal selling has some different styles, some antithetical to the spirit of the marketing concept. Three major aspects of personal selling are sales manship, negotiation and relationship management (Kotler 1993). Sales manship is the act of the sales persons persuading the customer or prospect to see his point of view or do something the way he wants. Negotiation means the act of two or more parties reacting an agreement on the price and the other terms of sales. Most business selling involves negotiating skills. Price is the issue being negotiated always, others include contract completion time, quality of goods and service offered, purchase volume, responsibility for financing risk taking, promotion, product safety etc. Relationship management is a larger concept that guide the seller’s dealings with customers. Sales manship and negotiation are transaction or rented.

The company has continued to grow from strength to strength both in plant expansion and product popularity amongst customers. By 1990, the company has had plant location within it short period of operation in Lagos, Ibadan, Kano, Kaduna, Aba, Ilorin, Benin and that of Enugu (9th Mile Corner). A new glass industry for the manufacture of bottles was also constructed in the Northern part of the country. New Deposits are opened in many parts of the country to ensure that their products react their products reached their ultimate customers even in tar-flung places. The company commitment to quality is consistent and unsurpassed in the soft drink industry. This they develop over the years and lately enhanced by their partnership with Pepsi-Cola international. The company have remained stead fast in their effort to maintain the quality and excellence of their product. Furthermore, it’s marketing strategies have been geared towards making their products acceptable, available and affordable through creation of awareness and aggressive sales of sales promotion by the sales persons.

Their objective therefore is to establish a steady consumer trend in the soft drink business. This is endorsed by their innovative and modest promotional campaign in which the people benefit immensely by getting added value for their money. In terms of sales, the company has made an appreciable volume and profit margin growth over the years. The head of corporate affairs, (Promotion Division) claimed that the company has an appreciable percentage of the market share. It c an be however adduced that the company has a strong capital base. The company has been competed to increase the price of it’s brands for so many times now, the current price of their product is N25. This according to them is to keep to their marketing strategies and objectives to it’s target customers. It is interesting to note therefore, that these development has no visible effects on the volume and sales return to the firm. The company has come along way hence their slogan upholds. “The Difference is Clear” because it is the clear choice for a new generation. Their interest is to help marketers close a particular sales with a customer.

As regards relationship management, any seller who builds and manages strong relationships with key customers will have a reasonable turnover from the customers and mostly important to those customers who can typically affect the company’s future. Furthermore, sales representative covers a broad range of positions in our economy. The following classification of sales positions was devised by many as quoted by Kotler 1993. Delivery Sales man/Deliveries: Positions where the salesperson’s job is predominantly to deliver products to buyers. Inside order taker: The salesperson here is predominantly an inside order taker. Where the salesperson stands behind the counter and serves buyers. Field order taker: This is the kind of sales position where the sales person is predominantly an order taker but goes outside to meet buyers. For example, shampoo salesperson calling on the super market manger. Missionary: This is a position where the salesperson is not expected or permitted to take an order but to build goodwill for his company or to educate the actual or potential user. He does not do direct selling. As a result, the phrase “nothing happens until a sale is made” applies (Okeke 1993)

The sales manager must use the sales force to implement these marketing variables, who must demonstrate their primary salesmanship functions by acting as intermediaries between the company and prospective customers, acting as the company’s voice to the customers, and directing the voice of the customers to the company.

As a result, personal selling brings the buyer and vendor face to face. Every company must have a sales team whose job it is to reach out to clients and prospects and persuade them to buy the items offered in exchange for a value needed by the company. The then-Niagara Civil War was one of the factors that contributed to the demise of most soft drink industries.
The founder, a well-known and respected character, Late Sheikh Mohammed CL Khalil, established the seven-up bottling company Plc in the Nigerian business scene in 1959.
The company that was franchised to bottle seven-up bottling international, incorporating of the United States, came up with a soft drink brand called “7-up” in 1960, and in 1986, the franchise for “change crush” was added; thus began their gradual incursion into the Nigeria market with only two brands, 7-up and orange crush.

Overview of the Company

The production of soft drinks in Nigeria started off in 1933 when a foreign concern established the Nigeria mineral waters Limited.

Since then many other companies have established various brands of soft drink companies.  Some of the early companies to make an impact in the industry in Nigeria then was the Pesi-Cola  company (franchised by seven-up  bottling company), the London and  Kano trading company with it’s “sword brand”, the Nigerian bottling company with it’s Coca-Cola, Fanta, Sprite and others.

Some other soft drink companies  existed, however most of them collapsed under the weight of heavy and aggressive competition in the  industry.  One of the contributing factor which led  to the extinction of most soft drink  companies was the then Niagara Civil War.

The seven-up bottling company Plc came into the Nigerian Business Scene in 1959 through the efforts of the founder, a well known and respected figure, Late Sheikh Mohammed CL Khalil.

The company which was franchised to bottle seven –up bottling international, incorporating of US came up with a brand of softdrink “7-up” in 1960, in 1986, the franchise for “change crush” was added; thus began  their gradual  incursion into the Nigeria market with just two brands, 7-up and orange crush.

With the acquisition of Messrs John Holt soft drink business in Nigeria in 1989, the company’s future skyrocketed. This resulted in the successful acquisition of a new franchise from Messrs Pepsi-Cola, Merinda orange, Merinda Soda, and tonic. This full complement of flavors provides the company with a tremendous competitive advantage in their expansion program and future growth, as these products now compete with other soft drinks, particularly the products of the Nigerian Bottling Company, which has dominated and enjoyed a large percentage of the industry’s market share.

Despite the apparent expansion in the number of soft drink firms in the country today, the seven-up bottling company, with its goal targeted strong marketing methods, significant promotional and distributional network, the company having ten plats as opposed to twenty-six of the industry’s major challenge to NBC. Because of the activities of the salespeople, the company’s products are in high demand, and it is sustaining and increasing its efforts in these areas.

1.2 OBJECTIVE OF THE STUDY

Some basic data are required in order to correctly evaluate the effective performance of salespeople as indicators of cooperative growth potentials; the objectives focus on how the study’s goals are to be fulfilled.

The aims for determining them are as follows:

– Determine the nature and scope of the company’s sales force
– To assess the salesperson’s performance in relation to the attainment of the organization’s corporate growth.
– To ascertain the impact that the salespeople have had on the customer’s act of patronage.
– To determine the type and justification for allocating quotes to salespeople.
– To analyze whether the company’s sales justify the investment in its spending.

– Determine the association between salesperson performance and corporate growth potentials.

Purpose To ascertain how efficiently 7-up bottling   company Plc organizes and manages it’s sales force.

1.3  SIGNIFICANCE OF THE STUDY

Personal selling is a distinct promotional instrument in that it is the marketing function tasked with turning the organization’s produce to cash.
Personal selling is usually the moment at which a firm’s efforts either fail or succeed. It is the salesperson’s action that turns a prospect into a customer, and the consumer into a user and brand loyalist. Personal selling, in other words, is not only the key to a company’s success, but also a critical and important marketing function.
Personal selling puts the buyer and vendor in close contact with one another. It is the heart of marketing, representing market interactions with their underlying exchange and value issues.
The study is further of great significance in the sense that every product or service marketed, no matter how technical or non-technical it is.

The skill and performance of the salespeople is the final analysis for its success.

Lastly, the key aspect in marketing is trade, and this exchange is a function of personal selling. Whether industrial products are used or not, a connection of exchange must exist between the business organization and its clients. Personal selling is used to effect exchange. As a result, personal selling may have a strategic impact on the corporate entity’s performance.

Based on the foregoing, there is an urgent need to ascertain the extent to which the quality and other related earnings of the sales force impact corporate performance.

1.4   HYPOTHESIS FORMATION

The following are the basic assumptions for the research.

Consumption pattern of seven-up soft drinks  customers is dependent on the company’s salespersons performance.

Consumers have favourable attitude towards 7-up soft drinks.

Returns generated to 7-up bottling company is directly proportionate to the effective performance of the salespersons on the sales of the  products.

1.5 SCOPE OF THE STUDY

The study is expected to cover the activities of the salesperson of the seven up bottling company, Enugu plant.

Competitors of the seven-up bottling company was also considered as they make up  the major players in the study.

1.6 DEFINITION OF TERMS

Sales Team, They are sales representatives who deal with consumers on behalf of the entire firm.

Selling entails receiving orders from clients and fulfilling those orders. It entails the act of selling.
Salesmanship, This is the act of persuading people to buy, and so it may be considered as the capacity to persuade, convince, and encourage a customer to take action.
Prospecting, This is the process of looking for future clients.