THE IMPACT OF NEW PRODUCT MARKETING STRATEGIES ON THE PERFORMANCE OF FIRMS IN NIGERIA (A CASE OF GUINNESS STOUT IN ‘UNIQUE NEW BOTTLE’)

THE IMPACT OF NEW PRODUCT MARKETING STRATEGIES ON THE PERFORMANCE OF FIRMS IN NIGERIA (A CASE OF GUINNESS STOUT IN ‘UNIQUE NEW BOTTLE’)

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CHAPTER ONE

1.1 BACKGROUND OF THE STUDY

Developing and marketing new products are very important for profitability, survival and growth of companies. To develop and market new products, correct approach must be used to ensure that the new product does not fail in the market. A product has to go through proper planning, implementation control of programme designed to create, exchange, sustain mutually beneficial exchanges and relationship with target market to be a successful product. Companies in their bid for market acceptance of their products develop and display combination of market strategies, some having to do with the various promotional tools, others with product quality, pricing, distribution etc. All these for the purpose of maximizing their share of the target market.

Kolter and Armstrong (1996;313) agreed with the above view by saying that because so many new products fail, companies are anxious to learn how to improve on their new products so as to succeed. They affirmed that number one success factor is a unique superior product, one with higher quality, new features and higher values in use.


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Many products have failed to make the expected impact on the consumers because the company did not use the right strategies such as pricing, promotion and high product quality. A company such as Guinness Nigeria Plc. must avoid making mistakes that they may spell danger for its products especially new products.

Guinness Nigeria Plc is one of the foremost brewing companies and leader in the manufacturing sector of the economy. From little beginning through trade importation and distribution in the 1940s and 1950s, the company built its first brewery in 1962 to satisfy the astronomical demand for its products. Significantly, the brewery was the very first out of the British Isles and indeed the encouraging sales volume of those early years stretched and installed capacity of the brewing and promoted an expansions scheme that doubled it by 1970. The company later built another brewery in Benin in 1974 produce Harp Larger beer and the factory was expanded to accommodate a second stout brewery, commissioned in 1978. The company built a brewery in Ogba, Ikeja, and Lagos in 1982 to brew Harp larger beer.

This two was expanded to include Guinness stout and is reputedly one of the most modern and technologically driven breweries in Africa. In order to further increase capacity to meet the growing demand for its products, the company in 2004


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commissioned another brewery at Aba, Abia State. The Aba Brewery has thus given Guinness a strong pressure in the eastern part of the country; thus Enugu Area office is under east division and Aba area sales office.

Guinness Nigeria plc is a member company of Diageo plc, the world’s leading premium drinks business with an outstanding collection of beverages and alcoholic brands across spirits, wines and beer categories such as Johnie Walker, Smirnoff, J

&     B, Baileys, Cuervo, Tanqueray, Capital Morgan, Gordon’s Gin and Beaulieu vineyard and sterling vineyard wines. Diageo is a global company trading in over 180 markets around the world.

Guinness Nigeria plc has in her product portfolio the following acclaimed market leaders and flagship brand Guinness Foreign Extra Stout, Malta Guinness, Harp Larger Beer, Satzenbrau, Gordon’s Spark and the recently introduced Guinness Extra Smooth.

These major growths backed by sustained value delivery and good showing won for the company, “the Nigerian stock exchange president’s merit award”, severally in the last decade. The company’s focus is the enhancement of shareholders value


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through management practices and the sustenance of quality and excellence in its operations. The company has basically three divisional areas thus;

a.      East division and Aba area sales offices

b.      North division and Abuja area sales offices

c.      West division and Lagos sales offices

The company’s focus on value delivery, improved management practices and the sustenance of quality and excellence in its operations led to the improvement in the packaging of Guinness foreign extra stout; therefore, the introduction of the “unique new bottle”. This made Guinness foreign extra stout in a unique new bottle’ a new product in the beer/stout market.

Thus, the basis of the study which is aimed at discovering the impact of new product marketing strategies has on the performance of firms in Nigeria in particular and world at large as witness e.g by Guinness Nigeria plc in the introduction of Guinness foreign extra stout in a “unique new bottle”.


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1.2 STATEMENT OF THE RESEARCH PROBLEM

Every company wants to maintain leadership position, therefore; companies make policies as to achieve sustenance of quality of products and maintenance of their ever-increasing customers (market share) and to prevent adulteration. Based on this, the company, Guinness Nigeria plc introduced the Guinness stout in a “unique New Bottle” by mid-year 2004 and has maintained the product now.

In looking at the impact of marketing strategies used in introducing Guinness Stout in unique Bottle, just every other company with a successful brand in the market, one would like to know how it has fared in terms of:

1.      What strategies were used in the introduced of the product? There are marketing strategies available for companies in the course of introducing new products. In the course of this study, the strategies used by Guinness Nigeria plc. in introducing Guinness Stout in “Unique New Bottle” will be x-rayed.

2.      Have these strategies been effective? When looking at effectiveness of a marketing strategy, the researcher wants to know whether the strategies so applied in the introduction of the new product have positive or negative effect on the company. This would be established by looking at the profit position


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as well as the market share maintained by the company before and after the introduction of new product.

3.      What brought about the development of Guinness stout in ‘unique new bottle’?

4.      Have consumers accepted the product? It tests the impact of the strategy(s) as well as the product from the side of consumers.

There, the researcher wants of find out the extent of consumer’s repeat purchase (loyalty). When consumer repeat –purchase then it tells that the product’s quality is accepted by the consumers.

1.3 OBJECTIVE OF THE STUDY

Specifically, the study is intended at fulfilling the following objectives.

·      To find out the marketing strategies available for firms in introducing new products and the strategies which Guinness Nigeria plc in particular used in introducing Guinness Extra Stout in the market.

·      To determine the effectiveness of these strategies in terms of the profit-position of the company (firm) as well the market share maintained by the firm before and after the introduction of new product.


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·      To find out what prompted the introduction of Guinness stout in ‘unique new bottle’

·      To ascertain the new product’s acceptance level by consumers.

This tests the impact of the marketing strategies in terms of quality of the product. This is because the level of customer’s loyalty could only be high if the quality of the product meets up with what consumers expected and were told about the product during the awareness period

·      To further find out how the marketing strategies used, affected the performance position of middlemen and dealers. If strategies in terms of pricing and promotion are not favorable to middle men, the aim of the new products as well as the strategies will be defeated and the product fails because the dealers are the intermediaries who ought to carry the message about the new product to the consumers by way of convincing the consumers and better display and sampling of the product.

·      1.4 RESEARCH QUESTIONS

1.      What are the strategies available for firms in introduction of new products in the market?

2.      what prompted the introduction of Guinness stout in ‘unique new bottle’?



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